UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported):
January 31, 2012
MATTEL, INC.
(Exact name of registrant as specified in its charter)
Delaware | 001-05647 | 95-1567322 | ||
(State or other jurisdiction of incorporation) |
(Commission File No.) | (I.R.S. Employer Identification No.) |
333 Continental Boulevard, El Segundo, California | 90245-5012 | |
(Address of principal executive offices) | (Zip Code) |
Registrants telephone number, including area code
(310) 252-2000
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Section 2 - Financial Information
Item 2.02 Results of Operations and Financial Condition.
On January 31, 2012, Mattel, Inc. (Mattel or the Company) issued a press release regarding its fourth quarter and full-year 2011 financial results, a copy of which is furnished as Exhibit 99.1 hereto. This exhibit is incorporated herein by reference.
In its fourth quarter and full-year 2011 press release, Mattel includes a non-GAAP financial measure, gross sales, which it uses to analyze its operations and to monitor, assess and identify meaningful trends in its operating and financial performance. Net sales, as reported in the consolidated statements of operations, include the impact of sales adjustments, such as trade discounts and other allowances. Gross sales represent sales to customers, excluding the impact of sales adjustments. Consistent with its segment reporting, Mattel presents changes in gross sales as a metric for comparing its aggregate, business unit, brand and geographic results to highlight significant trends in Mattels business. Changes in gross sales are discussed because, while Mattel records the detail of such sales adjustments in its financial accounting systems at the time of sale, such sales adjustments are generally not associated with individual products, making net sales less meaningful. A reconciliation of gross sales to the most directly comparable GAAP financial measure, net sales, is provided in Exhibit II to the press release furnished as Exhibit 99.1 to this Form 8-K.
In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Section 8 Other Events
Item 8.01 Other Events.
In the same press release described in Item 2.02 above, Mattel also announced that the Companys Board of Directors has declared a quarterly dividend of $0.31 per share on the Companys common stock, to be paid on March 9, 2012 to stockholders of record on February 23, 2012.
Section 9 Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits.
(a) | Financial statements of businesses acquired: None |
(b) | Pro forma financial information: None |
(c) | Shell company transactions: None |
(d) | Exhibits: Press release dated January 31, 2012, issued by Mattel, Inc. |
Exhibit No. |
Exhibit Description | |||
99.1 | ** | Press release dated January 31, 2012. |
** | Furnished herewith. |
2
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
MATTEL, INC. Registrant | ||
By: | /s/ Robert Normile | |
Robert Normile | ||
Executive Vice President, Chief Legal Officer and Secretary |
Dated: January 31, 2012
3
Exhibit 99.1
For Immediate Release | Contacts: | News Media Lisa Marie Bongiovanni 310-252-3524 LisaMarie.Bongiovanni@mattel.com |
Securities Analysts Drew Vollero 310-252-2703 Drew.Vollero@mattel.com |
MATTEL REPORTS 2011 FINANCIAL RESULTS AND DECLARES QUARTERLY DIVIDEND
Fourth Quarter Highlights
| Worldwide net sales up 1% from the prior year; |
| Domestic gross sales down 2% and international gross sales up 5%; |
| Worldwide gross sales for core brands: Barbie® up 6%; Hot Wheels® up 11%; Core Fisher-Price® down 3% and American Girl® up 4%; |
| Gross margin increased 230 basis points of net sales; SG&A decreased 110 basis points of net sales; |
| Operating income was $497.5 million compared to operating income of $428.6 million in the fourth quarter of 2010; and |
| Earnings per share of $1.07 vs. prior year of $0.89. |
Full-Year Highlights
| Worldwide net sales up 7% from the prior year; |
| Domestic gross sales up 3% and international gross sales up 12%; |
| Worldwide gross sales for core brands: Barbie® up 12%; Hot Wheels® up 6%; Core Fisher-Price® up 2%; and American Girl® up 5%; |
| Gross margin decreased 30 basis points of net sales; SG&A decreased 160 basis points of net sales; |
| Operating income was $1.04 billion compared to operating income of $901.9 million for the full-year 2010; and |
| Earnings per share of $2.18 vs. prior year of $1.86 (includes tax benefit of $0.05 per share). |
Capital Deployment
| Board declared 2012 first quarter cash dividend of $0.31 per share, reflecting an annualized dividend of $1.24 per share, which represents a 35% increase to last years total dividends; and |
| For the 2011 fourth quarter, the company repurchased 4.0 million shares of its common stock at a cost of approximately $112 million and for the year, the company repurchased 20.4 million shares of its common stock at a cost of approximately $536 million. |
EL SEGUNDO, Calif., January 31, 2012 Mattel, Inc. (NASDAQ:MAT) today reported 2011 fourth quarter and full-year financial results. For the fourth quarter, the company reported net income of $370.6 million, or $1.07 per share, compared to last years fourth quarter net income of $325.2 million, or $0.89 per share. For the year, the company reported net income of $768.5 million, or $2.18 per share, compared to last years net income of $684.9 million, or $1.86 per share.
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MATTEL REPORTS 2011 FINANCIAL RESULTS/PAGE 2 2 2 2
Mattel delivered another strong year, our third consecutive year of solid performance, which I am especially pleased about given the soft global economic backdrop and the highly promotional environment, particularly in the U.S., said Bryan G. Stockton, Mattel Chief Executive Officer. Despite these challenges, for the year we delivered strong revenue growth and record operating income. Our portfolio of brands performed around the globe; our point-of-sale grew nicely; and we gained category share according to NPDs most recent data. In fact, four of the top five properties for the 2011 holiday season were Mattel properties1.
Financial Overview
For the fourth quarter, net sales were $2.15 billion, a 1% increase from $2.12 billion last year, and included an unfavorable impact from changes in currency exchange rates of 1 percentage point. On a regional basis, fourth quarter gross sales were down 2% in the U.S. and were up 5% in international markets, which included an unfavorable impact from changes in currency exchange rates of 3 percentage points. Operating income for the quarter was $497.5 million, or 23.1% of net sales, compared to the prior year of 20.2% of net sales.
For the year, net sales were $6.27 billion, a 7% increase from $5.86 billion last year, and included a favorable impact from changes in currency exchange rates of 1 percentage point. On a regional basis, full-year gross sales were up 3% in the U.S. and were up 12% in international markets, which included a favorable impact from changes in currency exchange rates of 3 percentage points. Operating income for the year was $1.04 billion, or 16.6% of net sales, compared to the prior year of 15.4% of net sales.
The companys debt-to-total-capital ratio of 37.4% is in line with the companys capital and investment framework, and its year-end cash balance was $1.37 billion.
Net cash flows from operating activities were approximately $665 million, an increase of $137 million compared with approximately $528 million in 2010. The increase is primarily driven by improved earnings and the decision not to factor domestic receivables in 2010, partially offset by higher working capital usage. Cash flows used for financing and other activities were approximately $402 million, an increase of $185 million, compared with approximately $217 million in 2010, primarily due to higher debt maturities and share repurchases in 2011, partially offset by higher net proceeds from the issuance of debt.
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1 | NPD Data, US Toy Industry, Q4 2011 |
MATTEL REPORTS 2011 FINANCIAL RESULTS/PAGE 3 3 3 3
Capital Deployment
The company announced today that its Board of Directors declared a first quarter cash dividend of $0.31 per share on the companys common stock. The dividend will be payable on March 9, 2012, to stockholders of record on Feb. 23, 2012. The dividend is the first of four quarterly dividends the company expects to make this year, reflecting an annualized dividend of $1.24 per share, which represents an increase of $0.32, or 35% versus last years total dividends of $0.92 per share. For the fourth quarter 2011, the company repurchased 4.0 million shares of its common stock at a cost of approximately $112 million and for the year, the company repurchased 20.4 million shares of its common stock at a cost of approximately $536 million.
Mattel Girls & Boys Brands
Fourth quarter worldwide gross sales for the Mattel Girls & Boys Brands business unit were $1.36 billion, up 7% versus a year ago. Worldwide gross sales for the Barbie® brand were up 6% and worldwide gross sales for Other Girls Brands were up 19%. Worldwide gross sales for the Wheels business, which includes the Hot Wheels®, Matchbox® and Tyco R/C® brands, were up 5%. Worldwide gross sales for the Entertainment business, which includes Radica® and Games, were up 3% for the quarter.
For the year, worldwide gross sales for the Mattel Girls & Boys Brands business unit were $4.15 billion, or up 13%. Worldwide gross sales for the Barbie® brand were up 12%. Worldwide gross sales for Other Girls Brands were up 27% for the year. Worldwide gross sales for the Wheels business, which includes the Hot Wheels®, Matchbox® and Tyco R/C® brands, were up 2%. Worldwide gross sales for the Entertainment business, including Radica® and Games, were up 16%.
Fisher-Price Brands
Fourth quarter worldwide gross sales for the Fisher-Price Brands business unit, which includes the Fisher-Price® Core, Fisher-Price® Friends and Power Wheels® brands, were $700.4 million, down 10%. For the year, worldwide gross sales for the Fisher-Price Brands business unit were $2.16 billion, down 3%.
American Girl Brands
Fourth quarter gross sales for the American Girl Brands business unit, which offers American Girl® branded products direct to consumers, were $283.9 million, up 4%. For the year, gross sales for the American Girl Brands business unit were $510.9 million, up 5%.
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MATTEL REPORTS 2011 FINANCIAL RESULTS/PAGE 4 4 4 4
Acquisition of HIT Entertainment
Mattels acquisition of HIT Entertainment is expected to close tomorrow. Mattel will announce the closing in a separate press release shortly after it occurs.
Live Webcast
Mattel will webcast its 2011 fourth quarter and full-year financial results conference call at 8:30 a.m. Eastern time today. The conference call will be webcast on the Investors & Media section of the companys corporate Web site: http://corporate.mattel.com/. To listen to the live call, log on to the Web site at least 15 minutes early to register, download and install any necessary audio software. An archive of the webcast will be available on the companys Web site for 90 days and may be accessed beginning two hours after the completion of the live call. A telephonic replay of the call will be available beginning at 11:30 a.m. Eastern time the morning of the call until Friday, Feb. 3 at midnight Eastern time and may be accessed by dialing + 1 (404) 537-3406. The passcode is 40640038.
Presentation slides relating to the conference call, 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 http://corporate.mattel.com/, under the sub-headings Financial Information Earnings Releases.
About Mattel
Mattel, Inc. (NASDAQ:MAT - News) (www.mattel.com) is the worldwide leader in the design, manufacture and marketing of toys and family products. The Mattel family is comprised of such best-selling brands as Barbie®, the most popular fashion doll ever introduced, Hot Wheels®, Matchbox®, American Girl®, Radica® and Tyco R/C®, as well as Fisher-Price® brands, including Little People®, Power Wheels® and a wide array of entertainment-inspired toy lines. In 2012, Mattel was named as one of FORTUNE Magazines 100 Best Companies to Work For for the fifth year in a row. Mattel also is ranked among Corporate Responsibility Magazines 100 Best Corporate Citizens and the Worlds Most Ethical Companies. With worldwide headquarters in El Segundo, Calif., Mattel employs approximately 28,000 people in 43 countries and territories and sells products in more than 150 nations. At Mattel, we are Creating the Future of Play. Follow Mattel on Facebook: www.facebook.com/mattel
###
Note: This press release contains forward-looking statements on a variety of matters, including without limitation, the companys expected quarterly cash dividend payments in 2012 and the timeframe in which the transaction with HIT Entertainment will be completed. These forward-looking statements are based on currently available operating, financial, economic and other information and are subject to a number of significant risks and uncertainties. A variety of factors, many of which are beyond our control, could cause actual future results to differ materially from those projected in the
MATTEL REPORTS 2011 FINANCIAL RESULTS/PAGE 5 5 5 5
forward looking statements. Some of these factors are described in the Companys periodic filings with the Securities and Exchange Commission, including the Risk Factors section of Mattels Annual Report on Form 10-K for the fiscal year ended December 31, 2010 and Mattels Quarterly Reports on Form 10-Q for fiscal year 2011, as well as in Mattels other public statements. Mattel does not update forward-looking statements and expressly disclaims any obligation to do so.
MAT-FIN
MATTEL, INC. AND SUBSIDIARIES |
EXHIBIT I |
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
For the Three Months Ended December 31, | For the Year Ended December 31, | |||||||||||||||||||||||||||||||||||||||
(In millions, except per share and percentage information) |
2011 | 2010 | Yr /
Yr % Change |
2011 | 2010 | Yr /
Yr % Change |
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$ Amt | % Net Sales |
$ Amt | % Net Sales |
$ Amt | % Net Sales |
$ Amt | % Net Sales |
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Net Sales |
$ | 2,153.8 | $ | 2,124.6 | 1 | % | $ | 6,266.0 | $ | 5,856.2 | 7 | % | ||||||||||||||||||||||||||||
Cost of sales |
993.4 | 46.1 | % | 1,028.6 | 48.4 | % | -3 | % | 3,120.2 | 49.8 | % | 2,901.2 | 49.5 | % | 8 | % | ||||||||||||||||||||||||
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Gross Profit |
1,160.4 | 53.9 | % | 1,096.0 | 51.6 | % | 6 | % | 3,145.8 | 50.2 | % | 2,955.0 | 50.5 | % | 6 | % | ||||||||||||||||||||||||
Advertising and promotion expenses |
261.4 | 12.1 | % | 249.6 | 11.7 | % | 5 | % | 699.2 | 11.2 | % | 647.3 | 11.1 | % | 8 | % | ||||||||||||||||||||||||
Other selling and administrative expenses |
401.5 | 18.6 | % | 417.8 | 19.7 | % | -4 | % | 1,405.5 | 22.4 | % | 1,405.8 | 24.0 | % | 0 | % | ||||||||||||||||||||||||
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Operating Income |
497.5 | 23.1 | % | 428.6 | 20.2 | % | 16 | % | 1,041.1 | 16.6 | % | 901.9 | 15.4 | % | 15 | % | ||||||||||||||||||||||||
Interest expense |
23.5 | 1.1 | % | 23.9 | 1.1 | % | -2 | % | 75.3 | 1.2 | % | 64.8 | 1.1 | % | 16 | % | ||||||||||||||||||||||||
Interest (income) |
(1.4 | ) | -0.1 | % | (1.4 | ) | -0.1 | % | 4 | % | (8.1 | ) | -0.1 | % | (8.4 | ) | -0.1 | % | -4 | % | ||||||||||||||||||||
Other non-operating expense (income), net |
6.5 | 1.3 | 3.2 | (1.3 | ) | |||||||||||||||||||||||||||||||||||
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Income Before Income Taxes |
468.9 | 21.8 | % | 404.8 | 19.1 | % | 16 | % | 970.7 | 15.5 | % | 846.8 | 14.5 | % | 15 | % | ||||||||||||||||||||||||
Provision for income taxes |
98.3 | 79.6 | 202.2 | 161.9 | ||||||||||||||||||||||||||||||||||||
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Net Income |
$ | 370.6 | 17.2 | % | $ | 325.2 | 15.3 | % | 14 | % | $ | 768.5 | 12.3 | % | $ | 684.9 | 11.7 | % | 12 | % | ||||||||||||||||||||
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EPS - Basic |
$ | 1.08 | $ | 0.90 | $ | 2.20 | $ | 1.88 | ||||||||||||||||||||||||||||||||
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Average Number of Common Shares |
339.4 | 355.7 | 344.7 | 360.6 | ||||||||||||||||||||||||||||||||||||
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EPS - Diluted |
$ | 1.07 | $ | 0.89 | $ | 2.18 | $ | 1.86 | ||||||||||||||||||||||||||||||||
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Average Number of Common and Potential Common Shares |
343.5 | 360.6 | 348.4 | 364.6 | ||||||||||||||||||||||||||||||||||||
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MATTEL, INC. AND SUBSIDIARIES | EXHIBIT II | |
WORLDWIDE GROSS SALES INFORMATION (Unaudited) |
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||||||||||
(In millions, except percentage information) |
2011 | 2010 | 2011 | 2010 | ||||||||||||||||||||||||||||
Worldwide Gross Sales: |
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Mattel Girls & Boys Brands |
$ | 1,357.0 | $ | 1,265.2 | $ | 4,152.0 | $ | 3,660.5 | ||||||||||||||||||||||||
% Change |
7 | % | 9 | % | 13 | % | 11 | % | ||||||||||||||||||||||||
Pos./(Neg.) Impact of Currency (in % pts) |
-2 | -4 | 1 | -3 | ||||||||||||||||||||||||||||
Fisher-Price Brands |
700.4 | 775.8 | 2,159.2 | 2,220.5 | ||||||||||||||||||||||||||||
% Change |
-10 | % | 6 | % | -3 | % | 2 | % | ||||||||||||||||||||||||
Pos./(Neg.) Impact of Currency (in % pts) |
-1 | -2 | 0 | -2 | ||||||||||||||||||||||||||||
American Girl Brands |
283.9 | 273.2 | 510.9 | 486.6 | ||||||||||||||||||||||||||||
% Change |
4 | % | 8 | % | 5 | % | 5 | % | ||||||||||||||||||||||||
Other |
11.3 | 13.2 | 19.0 | 19.0 | ||||||||||||||||||||||||||||
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Gross Sales |
$ | 2,352.6 | $ | 2,327.4 | $ | 6,841.1 | $ | 6,386.6 | ||||||||||||||||||||||||
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% Change |
1 | % | 8 | % | 7 | % | 8 | % | ||||||||||||||||||||||||
Pos./(Neg.) Impact of Currency (in % pts) |
-1 | -3 | 1 | -2 | ||||||||||||||||||||||||||||
Reconciliation of Non-GAAP to GAAP Financial Measure: |
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Gross Sales |
$ | 2,352.6 | $ | 2,327.4 | $ | 6,841.1 | $ | 6,386.6 | ||||||||||||||||||||||||
Sales Adjustments |
(198.8 | ) | (202.8 | ) | (575.1 | ) | (530.4 | ) | ||||||||||||||||||||||||
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Net Sales |
$ | 2,153.8 | $ | 2,124.6 | $ | 6,266.0 | $ | 5,856.2 | ||||||||||||||||||||||||
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% Change |
1 | % | 9 | % | 7 | % | 8 | % | ||||||||||||||||||||||||
Pos./(Neg.) Impact of Currency (in % pts) |
-1 | -2 | 1 | -2 |
MATTEL, INC. AND SUBSIDIARIES |
EXHIBIT III |
CONDENSED CONSOLIDATED BALANCE SHEETS
At December 31, | ||||||||
2011 | 2010 | |||||||
(In millions) |
(Unaudited) | |||||||
Assets |
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Cash and equivalents |
$ | 1,369.1 | $ | 1,281.1 | ||||
Accounts receivable, net |
1,246.7 | 1,146.1 | ||||||
Inventories |
487.0 | 463.8 | ||||||
Prepaid expenses and other current assets |
340.9 | 335.6 | ||||||
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Total current assets |
3,443.7 | 3,226.6 | ||||||
Property, plant and equipment, net |
523.9 | 484.7 | ||||||
Other noncurrent assets |
1,704.0 | 1,706.4 | ||||||
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Total Assets |
$ | 5,671.6 | $ | 5,417.7 | ||||
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Liabilities and Stockholders Equity |
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Short-term borrowings |
$ | 8.0 | $ | | ||||
Current portion of long-term debt |
50.0 | 250.0 | ||||||
Accounts payable and accrued liabilities |
953.8 | 1,048.5 | ||||||
Income taxes payable |
27.1 | 51.8 | ||||||
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Total current liabilities |
1,038.9 | 1,350.3 | ||||||
Long-term debt |
1,500.0 | 950.0 | ||||||
Other noncurrent liabilities |
522.1 | 488.8 | ||||||
Stockholders equity |
2,610.6 | 2,628.6 | ||||||
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Total Liabilities and Stockholders Equity |
$ | 5,671.6 | $ | 5,417.7 | ||||
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SUPPLEMENTAL BALANCE SHEET AND CASH FLOW DATA (Unaudited)
At December 31, | ||||||||
(In millions, except days and percentage information) |
2011 | 2010 | ||||||
Key Balance Sheet Data: |
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Accounts Receivable, Net |
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Days of Sales Outstanding (DSO) |
52 | 48 | ||||||
Total Debt Outstanding |
$ | 1,558.0 | $ | 1,200.0 | ||||
Total Debt-to-Total-Capital Ratio |
37.4 | % | 31.3 | % | ||||
Year Ended December 31, | ||||||||
(In millions) |
2011 (a) | 2010 | ||||||
Condensed Cash Flow Data: |
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Cash Flows From Operating Activities |
$ | 665 | $ | 528 | ||||
Cash Flows (Used For) Investing Activities |
(175 | ) | (147 | ) | ||||
Cash Flows (Used For) Financing Activities and Other |
(402 | ) | (217 | ) | ||||
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Increase in Cash and Equivalents |
$ | 88 | $ | 164 | ||||
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(a) | Amounts shown are preliminary estimates. Actual amounts will be reported in Mattels Annual Report on Form 10-K for the year ended December 31, 2011. |