EX-99.0 3 dex990.htm PRESS RELEASE Press Release

Exhibit 99.0

 

For Immediate Release    Contacts:    News Media
Lisa Marie Bongiovanni
310-252-3524
LisaMarie.Bongiovanni@mattel.com		    Securities Analysts
Dianne Douglas
310-252-2703
Dianne.Douglas@mattel.com

 

MATTEL REPORTS 2003 FINANCIAL RESULTS

 

Fourth Quarter Highlights

•   Worldwide net sales up 4 percent;
•   Domestic gross sales down by 5 percent and international gross sales up 17 percent;
•   Worldwide gross sales for core brands: Barbie® down 5 percent; Hot Wheels® up 22 percent; core Fisher-Price® up 16 percent and American Girl® brands flat;
•   Gross margin decreased 40 basis points of net sales; SG&A improvement of 320 basis points of net sales;
•   Operating income as a percentage of net sales was 17.5 percent, down 100 basis points;
•   Earnings per share, excluding charges, of $0.50 vs. prior year of $0.43 and
•   GAAP earnings per share of $0.49 vs. prior year of $0.42

 

Full-Year Highlights

•   Worldwide net sales up 2 percent;
•   Domestic gross sales down by 6 percent and international gross sales up 15 percent;
•   Worldwide gross sales for core brands: Barbie® flat; Hot Wheels® up 3 percent; core Fisher-Price® up 5 percent and American Girl® brands down 2 percent;
•   Gross margin increased 60 basis points of net sales; SG&A improvement of 110 basis points of net sales;
•   Operating income as a percentage of net sales was 16.2 percent, up 20 basis points;
•   Earnings per share, excluding charges, of $1.25 vs. prior year of $1.10; and
•   GAAP earnings per share of $1.22 vs. prior year of $0.52.

 

EL SEGUNDO, Calif., February 3, 2004 – Mattel, Inc. (NYSE:MAT) today reported 2003 fourth quarter and full year financial results. For the quarter, the company reported GAAP (Generally Accepted Accounting Principles) net income of $213.9 million, or $0.49 per share, compared to last year’s fourth quarter income of $186.1 million, or $0.42 per share. For the quarter, net sales were $1.74 billion, a 4 percent increase from $1.67 billion last year, which included a benefit from changes in currency exchange rates of 4 percentage points. Operating income, excluding charges, was down 2 percent at $304.0 million. On a regional basis, fourth quarter gross sales decreased 5 percent in the U.S., and in

 

 
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international markets, fourth quarter gross sales were up 17 percent, which included a benefit from changes in currency exchange rates of 10 percentage points.

 

For the year, the company reported GAAP net income of $537.6 million, or $1.22 per share, compared to last year’s income of $230.1 million, or $0.52 per share. For the year, net sales were $4.96 billion, a 2 percent increase from $4.89 billion last year, which included a benefit from changes in currency exchange rates of 4 percentage points. Operating income, excluding charges, was up 3 percent at $803.2 million. On a regional basis, full-year gross sales decreased 6 percent in the U.S., and in international markets, full-year gross sales were up 15 percent, which included a benefit from changes in currency exchange rates of 10 percentage points.

 

“Results for the year were mixed. While sales in the U.S. were below expectations, we continued to grow internationally, improve profit margins and generate significant cash flow,” said Robert A. Eckert, chairman and chief executive officer of Mattel. “We also began executing our capital deployment framework by using our strong cash flow to significantly increase the cash dividend and initiate a share buy-back program.”

 

Mattel Brands Business Unit: Fourth Quarter

 

For the fourth quarter, worldwide gross sales for the Mattel Brands business unit were $1.07 billion, a 2 percent increase. Worldwide gross sales for the Barbie® brand were down 5 percent. Worldwide gross sales for Other Girls Brands were up 2 percent. Worldwide gross sales for the Wheels category, which includes the Hot Wheels®, Matchbox® and Tyco® R/C brands, were up 17 percent. Worldwide gross sales for the Entertainment category, which includes the Games and Puzzles segment, were up 4 percent for the quarter.

 

Mattel Brands Business Unit: Full Year

 

For the year, worldwide gross sales for the Mattel Brands business unit were $3.26 billion, or up 1 percent. Worldwide gross sales for the Barbie® brand were flat with double-digit international gains offset by declines in domestic sales. Worldwide gross sales for Other Girls Brands were up 5 percent for the year with strong sales of the Polly Pocket!® and ello™ brands which more than offset sales declines in the What’s Her Face!™ and Diva Starz™ brands.

 

 
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Full year, worldwide gross sales for the Wheels category were down 2 percent. Gains in international sales for Hot Wheels® and Tyco® R/C were offset by declines in domestic Hot Wheels® and Tyco® R/C sales and worldwide sales declines in Matchbox®.

 

Full year, worldwide gross sales for the Entertainment category were up 3 percent, with sales declines in the Harry Potter™ property more than offset by strong performances of the new Warner Bros. properties, Yu-Gi-Oh!™ and Games and Puzzles.

 

Fisher-Price® Brands Business Unit: Fourth Quarter

 

Fourth quarter worldwide gross sales for the Fisher-Price® Brands business unit, which includes the Fisher-Price®, Little People®, Rescue Heroes™ and Power Wheels® brands, were $601.2 million, up 10 percent due to strong worldwide sales of core Fisher-Price® and Fisher-Price Friends.

 

Fisher-Price® Brands Business Unit: Full Year

 

For the year, worldwide gross sales for the Fisher-Price® Brands business unit were $1.77 billion, up 4 percent driven by double-digit international growth for Fisher-Price® core and double-digit worldwide sales of Fisher-Price Friends.

 

American Girl® Brands Business Unit: Fourth Quarter

 

Fourth quarter gross sales for the American Girl® Brands business unit, which offers American Girl® branded products direct to consumers, were $200.1 million, or flat.

 

American Girl® Brands Business Unit: Full Year

 

For the full year, gross sales for the American Girl® Brands business unit were $344.4 million, down 2 percent. Declines in Angelina Ballerina®, Bitty Baby® and last year’s highly successful launch of the historical Kaya® doll were partially offset by strong performances in this year’s American Girl Today® brand, driven by the launch of the Kailey® doll, as well as the introduction of the Hopscotch Hill School™ brand.

 

Financial Realignment

 

Mattel recorded pre-tax charges of $0.4 million in the quarter as part of its $250 million financial realignment plan. The fourth quarter charges are related to the consolidation of two manufacturing facilities in Mexico and are included in Restructuring and Other Charges in the consolidated statement of operations.

 

 
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For the year, Mattel recorded pre-tax charges of $26.3 million as part of the financial realignment plan. The full year charges are largely related to the consolidation of the Girls and Boys/Entertainment divisions; termination of a licensing arrangement; the consolidation of two manufacturing facilities in Mexico; streamlining backoffice functions; and restructuring Corolle, the company’s French doll business. These charges are included in Cost of Sales ($4.1 million), Other Selling and Administrative Expenses ($8.6 million), Restructuring and Other Charges ($12.7 million) and Other Non-operating (Income), Net ($0.9 million) in the consolidated statement of operations. The financial realignment plan is now complete and the company has delivered an amount in excess of the targeted initial cumulative pre-tax cost savings of approximately $200 million over the three-year duration of the plan.

 

Change in Classification of Close Out Sales

 

Close out sales are sales of certain products that are no longer included in current product lines. Effective October 1, 2003, close out sales previously classified as a reduction of cost of sales are now classified as net sales in the company’s consolidated statements of operations. This change in classification has no impact on gross profit, net income, EPS, balance sheets or cash flows. For the fourth quarter, close out sales, which are included in the reported net sales, were $19.2 million representing 1 percentage point of sales growth for the quarter and 40 basis points of sales growth for the year. For analytical purposes, exhibit IV provides the quarterly detail of worldwide close out sales by business unit for the last two years and the annual amount of worldwide close out sales by business unit for the last five years.

 

Live Webcast

 

Mattel will webcast its 2003 fourth quarter and year-end earnings conference call at 5:30 a.m. Pacific time (8:30 a.m. Eastern time) today. The conference call will be simulcast on the “Investors & Media” section of www.mattel.com. To listen to the live call, logon to the Website at least 15 minutes early to register, download and install any necessary audio software. An archive of the call may be accessed beginning two hours after the completion of the live call. To listen to a replay of the call via telephone, dial + (719) 457-0820. The passcode is 769315. The telephonic playback will be available beginning at 8:30 a.m. Pacific time the morning of the call, until Wednesday, February 4 at 9 p.m. Pacific time.

 

Information required by Securities and Exchange Commission Regulation G, regarding non-GAAP financial measures, as well as other financial and statistical information, will be available at the time of the webcast on the “Investors & Media” section of www.mattel.com, under the headings “Financial Information” – “Earnings Releases.”

 

 
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About Mattel

 

Mattel, Inc., (NYSE: MAT, www.mattel.com) is the worldwide leader in the design, manufacture and marketing of toys and family products, including Barbie®, the most popular fashion doll ever created. Leading the toy and game market, the Mattel family is comprised of such best-selling brands as Hot Wheels®, Matchbox®, American Girl®, and Tyco® R/C, as well as Fisher-Price brands (www.fisher-price.com), including Little People®, Rescue Heroes™, Power Wheels® and a wide array of entertainment-inspired toy lines. With worldwide headquarters in El Segundo, Calif., Mattel employs more than 25,000 people in 36 countries and sells products in more than 150 nations throughout the world. The Mattel vision is to be the world’s premier toy brands — today and tomorrow.

 

###

 

Note: Forward-looking statements with respect to the financial condition, results of operations and business of the company are subject to certain risks and uncertainties that could cause actual results to differ materially from those set forth in such statements. These include without limitation: the company’s dependence on the timely development, manufacture, introduction and customer acceptance of new products; the seasonality of the toy business; customer concentration; significant changes in buying and payment patterns of major customers, including as a result of bankruptcy; adverse changes in general economic conditions in the U.S. and internationally, including adverse changes in the retail environment, employment and the stock market; order predictability and supply chain management; the impact of competition on revenues and margins; the supply and cost of raw materials, components, employee benefits and various services; the success of new initiatives; the effect of currency fluctuations on reportable income; risks associated with acquisitions and mergers; risks associated with foreign operations; negative results of litigation, governmental proceedings or environmental matters; possible work stoppages, slowdowns or strikes; possible outbreaks of SARS; political developments and the threat or occurrence of war or terrorist acts; and other risks and uncertainties as may be detailed from time to time in the company’s public announcements and SEC filings. Mattel does not update forward-looking statements and expressly disclaims any obligation to do so.

 

 
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MATTEL, INC. AND SUBSIDIARIES   EXHIBIT I

FINANCIAL HIGHLIGHTS

PRO FORMA BEFORE CHARGES

DECEMBER 31, 2003

 

     Three Months Ended
     Year Ended
  

(In millions, except per share amounts)

    12/31/2003
           12/31/2002
           % Change
     12/31/2003
           12/31/2002
           % Change
  
Key P&L Data:                                                                     

Net Sales

    $ 1,741.1           $ 1,669.5           4 %   $ 4,960.1           $ 4,885.3           2 %

Gross Profit

    $ 865.1           $ 836.0           3 %   $ 2,433.6           $ 2,371.4           3 %

% of Net Sales

      49.7 %           50.1 %                 49.1 %           48.5 %            

Advertising

    $ 274.9           $ 199.9           38 %   $ 636.1           $ 552.5           15 %

% of Net Sales

      15.8 %           12.0 %                 12.8 %           11.3 %            

SG&A

    $ 286.2           $ 326.5           -12 %   $ 994.3           $ 1,037.0           -4 %

% of Net Sales

      16.4 %           19.6 %                 20.1 %           21.2 %            

Operating Income

    $ 304.0           $ 309.6           -2 %   $ 803.2           $ 781.9           3 %

% of Net Sales

      17.5 %           18.5 %                 16.2 %           16.0 %            

Income Before Charges

    $ 215.7           $ 190.3                 $ 552.6           $ 486.9              

% of Net Sales

      12.4 %           11.4 %                 11.1 %           10.0 %            

EPS Before Charges—Diluted

    $ 0.50           $ 0.43                 $ 1.25           $ 1.10              

Average Number of Common Shares—Diluted

      435.3             442.2                   442.2             441.3              
Key Balance Sheet Data:                                                                     

Accounts Receivable, Net

    $ 543.9           $ 490.8                                                

Days of Sales Outstanding (DSO)

      28             26                                                

Inventories

    $ 388.7           $ 338.6                                                

Days of Supply (DOS)

      90             74                                                

Total Debt Outstanding

    $ 661.0           $ 847.6                                                

Total Debt-to-Total Capitalization

      23.0 %           30.0 %                                              
Worldwide Gross Sales:                                                                     

Mattel Brands

    $ 1,068.4           $ 1,045.1                 $ 3,255.6           $ 3,236.3              

% Change

            2 %           6 %                 1 %           5 %      

Pos./(Neg.) Impact of Currency (in % pts)

            5             1                   5             1        

Fisher-Price Brands

      601.2             548.3                   1,771.2             1,699.9              

% Change

            10 %           14 %                 4 %           5 %      

Pos./(Neg.) Impact of Currency (in % pts)

            4             1                   2             0        

American Girl Brands

      200.1             199.5                   344.4             350.2              

% Change

            0 %           -1 %                 -2 %           3 %      

Other

      2.7             16.1                   8.2             26.9              
    
       
             
       
           

Gross Sales

      1,872.4             1,809.0                   5,379.4             5,313.3              

% Change

            4 %           8 %                 1 %           5 %      

Pos./(Neg.) Impact of Currency (in % pts)

            4             1                   3             1        

Sales Adjustments

      (131.3 )           (139.5 )                 (419.3 )           (428.0 )            
    
       
             
       
           

Net Sales

    $ 1,741.1           $ 1,669.5                 $ 4,960.1           $ 4,885.3              
    
       
             
       
           

% Change

            4 %           7 %                 2 %           4 %      

 

MATTEL, INC. AND SUBSIDIARIES   EXHIBIT II

 

PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

 

     Three Months Ended Dec. 31, 2003
     Year Ended Dec. 31, 2003
  

(In millions, except per share amounts)

    As Reported (a)
    

Impact of

Charges

     Pro Forma
     As Reported (a)
     

Impact of

Charges

      Pro Forma
  

Net Sales

    $ 1,741.1     $ 0.0     $ 1,741.1     $ 4,960.1      $ 0.0      $ 4,960.1  

Cost of sales

      876.0       0.0       876.0       2,530.6        4.1        2,526.5  
    
 
 
 
  
  

Gross Profit

      865.1       0.0       865.1       2,429.5        (4.1 )      2,433.6  

Advertising and promotion expenses

      274.9       0.0       274.9       636.1        0.0        636.1  

Other selling and administrative expenses

      286.2       0.0       286.2       1,002.9        8.6        994.3  

Restructuring and other charges

      0.4       0.4       0.0       4.8        4.8        0.0  
    
 
 
 
  
  

Operating Income

      303.6       (0.4 )     304.0       785.7        (17.5 )      803.2  

Interest expense

      23.8       0.0       23.8       80.6        0.0        80.6  

Interest (income)

      (4.2 )     0.0       (4.2 )     (18.9 )      0.0        (18.9 )

Other non-operating (income), net

      (10.0 )     0.0       (10.0 )     (16.8 )      0.9        (17.7 )
    
 
 
 
  
  

Income Before Income Taxes

      294.0       (0.4 )     294.4       740.8        (18.4 )      759.2  

Provision for income taxes

      80.1       1.4       78.7       203.2        (3.4 )      206.6  
    
 
 
 
  
  

Net Income

    $ 213.9     $ (1.8 )   $ 215.7     $ 537.6      $ (15.0 )    $ 552.6  
    
 
 
 
  
  

Income Per Share—Basic

    $ 0.50     $ 0.00     $ 0.50     $ 1.23      $ (0.03 )    $ 1.26  
    
 
 
 
  
  

Average Number of Common Shares Outstanding—Basic

      430.8       430.8       430.8       437.0        437.0        437.0  
    
 
 
 
  
  

Income Per Share—Diluted

    $ 0.49     $ 0.01     $ 0.50     $ 1.22      $ (0.03 )    $ 1.25  
    
 
 
 
  
  

Average Number of Common and Common Equivalent Shares Outstanding—Diluted

      435.3       435.3       435.3       442.2        442.2        442.2  
    
 
 
 
  
  
     Three Months Ended Dec. 31, 2002
     Year Ended Dec. 31, 2002
  

(In millions, except per share amounts)

    As Reported (a)
    

Impact of

Charges

     Pro Forma
     As Reported (a)
     

Impact of

Charges

      Pro Forma
  

Net Sales

    $ 1,669.5     $ 0.0     $ 1,669.5     $ 4,885.3      $ 0.0      $ 4,885.3  

Cost of sales

      835.2       1.7       833.5       2,524.3        10.4        2,513.9  
    
 
 
 
  
  

Gross Profit

      834.3       (1.7 )     836.0       2,361.0        (10.4 )      2,371.4  

Advertising and promotion expenses

      199.9       0.0       199.9       552.5        0.0        552.5  

Other selling and administrative expenses

      329.1       2.6       326.5       1,050.3        13.3        1,037.0  

Restructuring charges

      2.9       2.9       0.0       24.6        24.6        0.0  
    
 
 
 
  
  

Operating Income

      302.4       (7.2 )     309.6       733.6        (48.3 )      781.9  

Interest expense

      28.6       0.0       28.6       113.9        0.0        113.9  

Interest (income)

      (4.1 )     0.0       (4.1 )     (17.7 )      0.0        (17.7 )

Other non-operating (income), net

      22.6       0.0       22.6       15.9        0.0        15.9  
    
 
 
 
  
  

Income From Continuing Operations Before Income Taxes

      255.3       (7.2 )     262.5       621.5        (48.3 )      669.8  

Provision for income taxes

      69.2       (3.0 )     72.2       166.5        (16.4 )      182.9  
    
 
 
 
  
  

Income From Continuing Operations

      186.1       (4.2 )     190.3       455.0        (31.9 )      486.9  

Gain from discontinued operations, net of tax

      0.0       0.0       0.0       27.3        27.3        0.0  

Income Before Cumulative Effect of Change in Accounting Principles

      186.1       (4.2 )     190.3       482.3        (4.6 )      486.9  

Cumulative effect of change in accounting principles, net of tax

      0.0       0.0       0.0       (252.2 )      (252.2 )      0.0  
    
 
 
 
  
  

Net Income

    $ 186.1     $ (4.2 )   $ 190.3     $ 230.1      $ (256.8 )    $ 486.9  
    
 
 
 
  
  

Income (Loss) Per Share—Basic

                                                   

Income from continuing operations

    $ 0.43     $ (0.01 )   $ 0.44     $ 1.04      $ (0.08 )    $ 1.12  

Gain from discontinued operations

      0.00       0.00       0.00       0.06        0.06        0.00  

Cumulative effect of change in accounting principles

      0.00       0.00       0.00       (0.58 )      (0.58 )      0.00  
    
 
 
 
  
  
     $ 0.43     $ (0.01 )   $ 0.44     $ 0.52      $ (0.60 )    $ 1.12  
    
 
 
 
  
  

Average Number of Common Shares Outstanding—Basic

      437.4       437.4       437.4       435.8        435.8        435.8  
    
 
 
 
  
  

Income (Loss) Per Share—Diluted

                                                   

Income from continuing operations

    $ 0.42     $ (0.01 )   $ 0.43     $ 1.03      $ (0.07 )    $ 1.10  

Gain from discontinued operations

      0.00       0.00       0.00       0.06        0.06        0.00  

Cumulative effect of change in accounting principles

      0.00       0.00       0.00       (0.57 )      (0.57 )      0.00  
    
 
 
 
  
  
     $ 0.42     $ (0.01 )   $ 0.43     $ 0.52      $ (0.58 )    $ 1.10  
    
 
 
 
  
  

Average Number of Common and Common Equivalent Shares Outstanding—Diluted

      442.2       442.2       442.2       441.3        441.3        441.3  
    
 
 
 
  
  

 

(a)   Reported in accordance with generally accepted accounting principles.

 

MATTEL, INC. AND SUBSIDIARIES   EXHIBIT III

CONSOLIDATED STATEMENTS OF OPERATIONS

PRO FORMA BEFORE CHARGES

 

     For The Three Months Ended Dec. 31,
     For the Year Ended Dec. 31,
  
     2003
     2002
    

Yr / Yr

% Change

     2003
      2002
     

Yr / Yr

% Change

  

(In millions, except per share amounts)

    $ Amt
     % Net Sales
     $ Amt
     % Net Sales
       $ Amt
     % Net Sales
      $ Amt
      % Net Sales
     

Net Sales

    $ 1,741.1           $ 1,669.5           4 %   $ 4,960.1            $ 4,885.3             2 %

Cost of sales

      876.0     50.3 %     833.5     49.9 %   5 %     2,526.5     50.9 %      2,513.9      51.5 %    1 %
    
       
             
        
             

Gross Profit

      865.1     49.7 %     836.0     50.1 %   3 %     2,433.6     49.1 %      2,371.4      48.5 %    3 %

Advertising and promotion expenses

      274.9     15.8 %     199.9     12.0 %   38 %     636.1     12.8 %      552.5      11.3 %    15 %

Other selling and administrative expenses

      286.2     16.4 %     326.5     19.6 %   -12 %     994.3     20.1 %      1,037.0      21.2 %    -4 %
    
       
             
        
             

Operating Income

      304.0     17.5 %     309.6     18.5 %   -2 %     803.2     16.2 %      781.9      16.0 %    3 %

Interest expense

      23.8     1.4 %     28.6     1.7 %   -17 %     80.6     1.6 %      113.9      2.3 %    -29 %

Interest (income)

      (4.2 )   -0.2 %     (4.1 )   -0.3 %           (18.9 )   -0.4 %      (17.7 )    -0.3 %    7 %

Other non-operating (income) expense, net

      (10.0 )   -0.6 %     22.6     1.4 %           (17.7 )   -0.3 %      15.9      0.3 %       
    
       
             
        
             

Income Before Income Taxes

      294.4     16.9 %     262.5     15.7 %   12 %     759.2     15.3 %      669.8      13.7 %    13 %

Provision for income taxes

      78.7             72.2                   206.6              182.9                
    
       
             
        
             

Income Before Charges

    $ 215.7     12.4 %   $ 190.3     11.4 %   13 %   $ 552.6     11.1 %    $ 486.9      10.0 %    13 %
    
       
             
        
             

Effective Tax Rate

      26.7 %           27.5 %                 27.2 %            27.3 %              

EPS Before Charges – Basic

    $ 0.50           $ 0.44                 $ 1.26            $ 1.12                
    
       
             
        
             

Average Number of Common Shares – Basic

      430.8             437.4                   437.0              435.8                

EPS Before Charges – Diluted

    $ 0.50           $ 0.43                 $ 1.25            $ 1.10                
    
       
             
        
             

Average Number of Common Shares – Diluted

      435.3             442.2                   442.2              441.3                

 

CONDENSED CONSOLIDATED BALANCE SHEETS

 

     At Dec. 31,

(In millions)

    2003
    2002

Assets

              

Cash and short-term investments

    $ 1,152.7    $ 1,267.0

Accounts receivable, net

      543.9      490.8

Inventories

      388.7      338.6

Prepaid expenses and other current assets

      309.6      292.6
    
  

Total current assets

      2,394.9      2,389.0

Property, plant and equipment, net

      625.9      599.6

Other assets

      1,490.2      1,471.1
    
  

Total Assets

    $ 4,511.0    $ 4,459.7
    
  

Liabilities and Stockholders’ Equity

              

Short-term borrowings

    $ 19.6    $ 25.2

Current portion of long-term liabilities

      52.3      182.3

Accounts payable and accrued liabilities

      1,142.7      1,238.3

Income taxes payable

      253.2      203.0
    
  

Total current liabilities

      1,467.8      1,648.8

Long-term debt

      589.1      640.1

Other long-term liabilities

      237.9      192.1

Stockholders’ equity

      2,216.2      1,978.7
    
  

Total Liabilities and Stockholders’ Equity

    $ 4,511.0    $ 4,459.7
    
  

 

 

MATTEL, INC. AND SUBSIDIARIES   EXHIBIT IV

QUANTIFICATION OF WORLDWIDE CLOSE OUT SALES AMOUNTS (a)

 

     2003
   2002

(In millions)

    First
Quarter
   

Second

Quarter

   

Third

Quarter

   

Fourth

Quarter (b)

   

First

Quarter

   

Second

Quarter

   

Third

Quarter

   

Fourth

Quarter

Mattel Brands

    $ 6.8    $ 9.1    $ 9.6    $ 13.9    $ 15.6    $ 14.8    $ 17.9    $ 15.8

Fisher-Price Brands

      6.5      2.9      3.1      5.0      8.3      13.1      12.1      12.6

American Girl Brands

      0.0      0.0      0.0      0.0      0.0      0.0      0.0      0.0

Other

      0.0      0.0      0.1      0.3      1.2      0.8      0.1      0.4
    
  
  
  
  
  
  
  

Worldwide

    $ 13.3    $ 12.0    $ 12.8    $ 19.2    $ 25.1    $ 28.7    $ 30.1    $ 28.8
    
  
  
  
  
  
  
  
     Year Ended
     

(In millions)

    2003
    2002
    2001
    2000
    1999
    1998
    1997
     

Mattel Brands

    $ 39.4    $ 64.1    $ 107.8    $ 77.5    $ 65.8                     

Fisher-Price Brands

      17.5      46.1      53.4      20.0      29.1                     

American Girl Brands

      0.0      0.0      0.0      0.0      0.0                     

Other

      0.4      2.5      2.2      0.9      0.8                     
    
  
  
  
  
  
  
      

Worldwide

    $ 57.3    $ 112.7    $ 163.4    $ 98.4    $ 95.7    $ 79.9    $ 97.2       
    
  
  
  
  
  
  
      

 

(a)   During the fourth quarter of 2003, Mattel changed the way certain close out sales are classified in its consolidated statement of operations. Close out sales are sales of certain products that are no longer included in current product lines. These sales were previously classified as a reduction of cost of sales. Commencing October 1, 2003, close out sales are reported as net sales in Mattel’s consolidated statements of operations. This change in classification has no impact on gross profit, operating income, net income, EPS, balance sheets or cash flows.

 

(b)   All close out sales for the three months ended December 31, 2003 are included in reported sales. In all other periods, close out sales in the amounts shown above are classified as a reduction of cost of sales.

MATTEL, INC. AND SUBSIDIARIES

EXHIBIT V

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

 

                  Year / Year Change
  
     For the Three Months Ended Dec. 31, 2003
     For the Three Months Ended Dec. 31, 2002
      As Reported
     Pro Forma
  

(In millions, except

per share amounts)

    As
Reported (a)
     %
Net Sales
     Impact of
Charges
     Pro
Forma
     %
Net Sales
     As
Reported (a)
    

%

Net Sales

     Impact of
Charges
     Pro
Forma
    

%

Net Sales

      %
     bpts of
Net Sales
     %
     bpts of
Net Sales
  

Gross Sales

    $ 1,872.4           $ 0.0     $ 1,872.4           $ 1,809.0           $ 0.0     $ 1,809.0            4 %         4 %      

Sales adjustments

      131.3             0.0       131.3             139.5             0.0       139.5                                 
    
       
 
       
       
 
                              

Net Sales

      1,741.1             0.0       1,741.1             1,669.5             0.0       1,669.5            4 %         4 %      

Cost of sales

      876.0     50.3 %     0.0       876.0     50.3 %     835.2     50.0 %     1.7       833.5     49.9 %    5 %   30     5 %   40  
    
       
 
       
       
 
                              

Gross Profit

      865.1     49.7 %     0.0       865.1     49.7 %     834.3     50.0 %     (1.7 )     836.0     50.1 %    4 %   (30 )   3 %   (40 )

Advertising and promotion expenses

      274.9     15.8 %     0.0       274.9     15.8 %     199.9     12.0 %     0.0       199.9     12.0 %    38 %   380     38 %   380  

Other selling and administrative expenses

      286.2     16.4 %     0.0       286.2     16.4 %     329.1     19.7 %     2.6       326.5     19.6 %    -13 %   (330 )   -12 %   (320 )

Restructuring and other charges

      0.4     0.0 %     0.4       0.0     0.0 %     2.9     0.2 %     2.9       0.0     0.0 %                         
    
       
 
       
       
 
                              

Operating Income

      303.6     17.5 %     (0.4 )     304.0     17.5 %     302.4     18.1 %     (7.2 )     309.6     18.5 %    0 %   (60 )   -2 %   (100 )

Interest expense

      23.8     1.4 %     0.0       23.8     1.4 %     28.6     1.7 %     0.0       28.6     1.7 %    -17 %         -17 %      

Interest (income)

      (4.2 )   -0.2 %     0.0       (4.2 )   -0.2 %     (4.1 )   -0.2 %     0.0       (4.1 )   -0.3 %                         

Other non-operating (income) expense, net

      (10.0 )   -0.6 %     0.0       (10.0 )   -0.6 %     22.6     1.3 %     0.0       22.6     1.4 %                         
    
       
 
       
       
 
                              

Income Before Income Taxes

      294.0     16.9 %     (0.4 )     294.4     16.9 %     255.3     15.3 %     (7.2 )     262.5     15.7 %                         

Provision for income taxes

      80.1             1.4       78.7             69.2             (3.0 )     72.2                                 
    
       
 
       
       
 
                              

Net Income

    $ 213.9     12.3 %   $ (1.8 )   $ 215.7     12.4 %   $ 186.1     11.1 %   $ (4.2 )   $ 190.3     11.4 %                         
    
       
 
       
       
 
                              

Income Per Share – Basic

    $ 0.50           $ 0.00     $ 0.50           $ 0.43           $ (0.01 )   $ 0.44                                 
    
       
 
       
       
 
                              

Average Number of Common Shares Outstanding – Basic

      430.8             430.8       430.8             437.4             437.4       437.4                                 
    
       
 
       
       
 
                              

Income Per Share – Diluted

    $ 0.49           $ 0.01     $ 0.50           $ 0.42           $ (0.01 )   $ 0.43                                 
    
       
 
       
       
 
                              

Average Number of Common and Common Equivalent Shares Outstanding – Diluted

      435.3             435.3       435.3             442.2             442.2       442.2                                 
    
       
 
       
       
 
                              

 

(a)   Reported in accordance with generally accepted accounting principles.

 

MATTEL, INC. AND SUBSIDIARIES    EXHIBIT VI

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

 

                                                                        Year /Year Change
  
     For the Year Ended Dec. 31, 2003
      For the Year Ended Dec. 31, 2002
     

As Reported

      Pro Forma
  

(In millions, except

per share amounts)

   

As

Reported (a)

    

%

Net Sales

    

Impact of

Charges

    

Pro

Forma

     

%

Net Sales

     

As

Reported (a)

     

%

Net Sales

     

Impact of

Charges

     

Pro

Forma

     

%

Net Sales

      %
      bpts of
Net Sales
      %
     

bpts of

Net Sales

  

Gross Sales

    $ 5,379.4           $ 0.0     $ 5,379.4             $ 5,313.3             $ 0.0      $ 5,313.3             1 %           1 %       

Sales adjustments

      419.3             0.0       419.3               428.0               0.0        428.0                                     
    
       
 
         
         
  
                                  

Net Sales

      4,960.1             0.0       4,960.1               4,885.3               0.0        4,885.3             2 %           2 %       

Cost of sales

      2,530.6     51.0 %     4.1       2,526.5      50.9 %      2,524.3      51.7 %      10.4        2,513.9      51.5 %    0 %    (70 )    1 %    (60 )
    
       
 
         
         
  
                                  

Gross Profit

      2,429.5     49.0 %     (4.1 )     2,433.6      49.1 %      2,361.0      48.3 %      (10.4 )      2,371.4      48.5 %    3 %    70      3 %    60  

Advertising and promotion expenses

      636.1     12.8 %     0.0       636.1      12.8 %      552.5      11.3 %      0.0        552.5      11.3 %    15 %    150      15 %    150  

Other selling and administrative expenses

      1,002.9     20.3 %     8.6       994.3      20.1 %      1,050.3      21.5 %      13.3        1,037.0      21.2 %    -5 %    (120 )    -4 %    (110 )

Restructuring and other charges

      4.8     0.1 %     4.8       0.0      0.0 %      24.6      0.5 %      24.6        0.0      0.0 %                            
    
       
 
         
         
  
                                  

Operating Income

      785.7     15.8 %     (17.5 )     803.2      16.2 %      733.6      15.0 %      (48.3 )      781.9      16.0 %    7 %    80      3 %    20  

Interest expense

      80.6     1.6 %     0.0       80.6      1.6 %      113.9      2.3 %      0.0        113.9      2.3 %    -29 %           -29 %       

Interest (income)

      (18.9 )   -0.4 %     0.0       (18.9 )    -0.4 %      (17.7 )    -0.3 %      0.0        (17.7 )    -0.3 %    7 %           7 %       

Other non-operating (income) expense, net

      (16.8 )   -0.3 %     0.9       (17.7 )    -0.3 %      15.9      0.3 %      0.0        15.9      0.3 %                            
    
       
 
         
         
  
                                  

Income From Continuing Operations Before Income Taxes

      740.8     14.9 %     (18.4 )     759.2      15.3 %      621.5      12.7 %      (48.3 )      669.8      13.7 %                            

Provision for income taxes

      203.2             (3.4 )     206.6               166.5               (16.4 )      182.9                                     
    
       
 
         
         
  
                                  

Income From Continuing Operations

      537.6     10.8 %     (15.0 )     552.6      11.1 %      455.0      9.3 %      (31.9 )      486.9      10.0 %                            

Gain from discontinued operations, net of tax

      0.0             0.0       0.0               27.3               27.3        0.0                                     
    
       
 
         
         
  
                                  

Income Before Cumulative Effect of Change in Accounting Principles

      537.6     10.8 %     (15.0 )     552.6      11.1 %      482.3      9.9 %      (4.6 )      486.9      10.0 %                            

Cumulative effect of change in accounting principles, net of tax

      0.0             0.0       0.0               (252.2 )             (252.2 )      0.0                                     
    
       
 
         
         
  
                                  

Net Income

    $ 537.6           $ (15.0 )   $ 552.6             $ 230.1             $ (256.8 )    $ 486.9                                     
    
       
 
         
         
  
                                  

Income (Loss) Per Share – Basic

                                                                                                           

Income from continuing operations

    $ 1.23           $ (0.03 )   $ 1.26             $ 1.04             $ (0.08 )    $ 1.12                                     

Gain from discontinued operations

      0.00             0.00       0.00               0.06               0.06        0.00                                     

Cumulative effect of change in accounting principles

      0.00             0.00       0.00               (0.58 )             (0.58 )      0.00                                     
    
       
 
         
         
  
                                  
     $ 1.23           $ (0.03 )   $ 1.26             $ 0.52             $ (0.60 )    $ 1.12                                     
    
       
 
         
         
  
                                  

Average Number of Common Shares Outstanding – Basic

      437.0             437.0       437.0               435.8               435.8        435.8                                     
    
       
 
         
         
  
                                  

Income (Loss) Per Share – Diluted

                                                                                                           

Income from continuing operations

    $ 1.22           $ (0.03 )   $ 1.25             $ 1.03             $ (0.07 )    $ 1.10                                     

Gain from discontinued operations

      0.00             0.00       0.00               0.06               0.06        0.00                                     

Cumulative effect of change in accounting principles

      0.00             0.00       0.00               (0.57 )             (0.57 )      0.00                                     
    
       
 
         
         
  
                                  
     $ 1.22           $ (0.03 )   $ 1.25             $ 0.52             $ (0.58 )    $ 1.10                                     
    
       
 
         
         
  
                                  

Average Number of Common and Common Equivalent Shares Outstanding – Diluted

      442.2             442.2       442.2               441.3               441.3        441.3                                     
    
       
 
         
         
  
                                  

 

(a)   Reported in accordance with generally accepted accounting principles.