Mattel Reports Fourth Quarter and Full Year 2020 Financial Results
Mattel, Inc. (NASDAQ: MAT) reported strong fourth quarter and full-year 2020 financial results, achieving a 10% increase in net sales in Q4, and 2% growth for the full year, despite pandemic challenges. The operating income for Q4 rose to $192.7 million, and EPS improved to $0.37. The company highlighted the effectiveness of its product offerings and supply chain. Looking ahead, Mattel anticipates continued growth driven by its new 'Optimizing for Growth' program, aiming for $250 million in cost savings by 2023.
- Q4 net sales up 10%, full year up 2%.
- Q4 operating income at $192.7 million, up $125.1 million.
- Reported EPS improved to $0.37 for Q4 and $0.36 for the full year.
- Gross margin increased to 51.4% in Q4, up from 48.4%.
- Full year international net sales decreased 4%.
- Infant, Toddler, and Preschool categories down 9% for the year.
Mattel, Inc. (NASDAQ: MAT) today reported fourth quarter and full year 2020 financial results.
Ynon Kreiz, Chairman and CEO of Mattel said: “This was a banner quarter for the company with our best performance in years. In the midst of a pandemic and very challenging market conditions, our results exceeded expectations, with another major upswing in topline and a significant increase in profitability, as we gained global market share and continued to transform Mattel into an IP-driven, high performing toy company. The fourth quarter and full year demonstrated the resilience of the toy industry and the priority that parents place on quality toys, trusted brands and purposeful play.
Our momentum was driven by the quality and breadth of our product offering, enduring strength of our brands, highly efficient supply chain, world-class commercial capabilities and very effective demand creation, in close collaboration with our retail partners. The continuous improvement in our performance puts us in a strong position from which we believe we can accelerate our growth.
I could not be more proud of the entire Mattel global team for having stepped up in an extremely tumultuous year to support our consumers, customers, business partners and communities where we live and work.”
Anthony DiSilvestro, CFO of Mattel said: “Mattel delivered another outstanding quarter of double-digit growth with broad-based gains across the portfolio and continued improvement in gross margin, and we are pleased with our performance for the full year. With a strong finish and positive start to 2021, we are providing guidance for the new year reflecting continued improvement in both our top and bottom line. Mattel also stands to benefit from our newly announced ‘Optimizing for Growth’ program and we believe we are well-positioned to continue this momentum.”
For the fourth quarter, Net Sales were up
For the year, Net Sales were up
COVID-19 Business Update
Mattel’s top priority continues to be the health and safety of its people, and at the same time, mitigating the disruption of the COVID-19 pandemic to the business. Mattel remains mindful of the COVID-19 volatility and other macro-economic uncertainties, which could negatively impact performance, and continues to work closely with its retail partners.
Financial Overview
Fourth Quarter 2020
Net Sales in the North America segment increased
Gross Billings in the North America segment increased
Net Sales in the International segment increased
Gross Billings in the International segment increased
Net Sales in the American Girl® segment increased
Reported Gross Margin increased to
Reported Other Selling and Administrative Expenses decreased by
Full Year 2020
Net Sales in the North America segment were up
Gross Billings in the North America segment increased
Net Sales in the International segment decreased
Gross Billings in the International segment decreased
Net Sales in the American Girl segment increased by
Reported Gross Margin increased to
Reported Other Selling and Administrative Expenses decreased by
For the twelve months ended December 31, 2020, Cash Flows provided by Operating Activities improved by
Gross Billings by Categories
Fourth Quarter 2020
Worldwide Gross Billings for Dolls were
Worldwide Gross Billings for Infant, Toddler, and Preschool were
Worldwide Gross Billings for Vehicles were
Worldwide Gross Billings for Action Figures, Building Sets, Games, and Other were
Full Year 2020
Worldwide Gross Billings for Dolls were
Worldwide Gross Billings for Infant, Toddler, and Preschool were
Worldwide Gross Billings for Vehicles were
Worldwide Gross Billings for Action Figures, Building Sets, and Games were
“Optimizing for Growth” Program
Mattel is implementing a new “Optimizing for Growth” program to optimize operations and drive greater productivity to accelerate growth, and at the same time, further reduce its cost base. This new program integrates the Capital Light program going forward with several new productivity opportunities that leverage Mattel’s scale and streamline key processes and is expected to deliver in aggregate
Conference Call and Live Webcast
At 5:00 p.m. (Eastern Time) today, Mattel will host a conference call with investors and financial analysts to discuss its fourth quarter and full year 2020 financial results. The conference call will be webcast on Mattel's Investor Relations website, https://investors.mattel.com/. To listen to the live call, log on to the website at least 10 minutes early to register, download and install any necessary audio software. An archive of the webcast will be available on Mattel's Investor Relations website for 90 days and may be accessed beginning approximately two hours after the completion of the live call. A telephonic replay of the call will be available beginning at 8:30 p.m. Eastern time the evening of the call until Tuesday, February 16, 2021 and may be accessed by dialing +1-404-537-3406. The passcode is 4894534.
Forward-Looking Statements
This press release contains a number of forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. The use of words such as “anticipates,” “expects,” “intends,” “plans,” “confident that” and “believes,” among others, generally identify forward-looking statements. These forward-looking statements are based on currently available operating, financial, economic and other information and assumptions, 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 forward-looking statements, and are currently, or in the future could be, amplified by the COVID-19 pandemic. Specific factors that might cause such a difference include, but are not limited to: (i) potential impacts of and uncertainty regarding the COVID-19 pandemic (and actions taken in response to it by governments, businesses, and individuals) on our business operations, financial results and financial position and on the global economy, including its impact on our sales; (ii) Mattel’s ability to design, develop, produce, manufacture, source and ship products on a timely and cost-effective basis, as well as interest in and purchase of those products by retail customers and consumers in quantities and at prices that will be sufficient to profitably recover Mattel’s costs; (iii) downturns in economic conditions affecting Mattel’s markets which can negatively impact retail customers and consumers, and which can result in lower employment levels, lower consumer disposable income and spending, including lower spending on purchases of Mattel’s products; (iv) other factors which can lower discretionary consumer spending, such as higher costs for fuel and food, drops in the value of homes or other consumer assets, and high levels of consumer debt; (v) potential difficulties or delays Mattel may experience in implementing cost savings and efficiency enhancing initiatives; (vi) other economic and public health conditions or regulatory changes in the markets in which Mattel and its customers and suppliers operate, which could create delays or increase Mattel’s costs, such as higher commodity prices, labor costs or transportation costs, or outbreaks of disease; (vii) currency fluctuations, including movements in foreign exchange rates, which can lower Mattel’s net revenues and earnings, and significantly impact Mattel’s costs; (viii) the concentration of Mattel’s customers, potentially increasing the negative impact to Mattel of difficulties experienced by any of Mattel’s customers, or changes in their purchasing or selling patterns; (ix) the future willingness of licensors of entertainment properties for which Mattel currently has licenses or would seek to have licenses in the future to license those products to Mattel; (x) the inventory policies of Mattel’s retail customers, including retailers’ potential decisions to lower their inventories, even if it results in lost sales, as well as the concentration of Mattel’s revenues in the second half of the year, which coupled with reliance by retailers on quick response inventory management techniques increases the risk of underproduction of popular items, overproduction of less popular items and failure to achieve compressed shipping schedules; (xi) legal, reputational, and financial risks related to security breaches or cyberattacks; (xii) the increased costs of developing more sophisticated digital and smart technology products, and the corresponding supply chain and design challenges associated with such products; (xiii) work disruptions, which may impact Mattel’s ability to manufacture or deliver product in a timely and cost-effective manner; (xiv) the bankruptcy and liquidation of Mattel’s significant retailers, or the general lack of success of one of Mattel’s significant retailers which could negatively impact Mattel’s revenues or bad debt exposure; (xv) the impact of competition on revenues, margins and other aspects of Mattel’s business, including the ability to offer products which consumers choose to buy instead of competitive products, the ability to secure, maintain and renew popular licenses and the ability to attract and retain talented employees; (xvi) the risk of product recalls or product liability suits and costs associated with product safety regulations; (xvii) changes in laws or regulations in the United States and/or in other major markets, such as China, in which Mattel operates, including, without limitation, with respect to taxes, tariffs, trade policies, or product safety, which may increase Mattel’s product costs and other costs of doing business, and reduce Mattel’s earnings; (xviii) failure to realize the planned benefits from any investments or acquisitions made by Mattel; (xix) the impact of other market conditions, third party actions or approvals and competition which could reduce demand for Mattel’s products or delay or increase the cost of implementation of Mattel’s programs or alter Mattel’s actions and reduce actual results; (xx) changes in financing markets or the inability of Mattel to obtain financing on attractive terms; (xxi) the impact of litigation, arbitration, or regulatory decisions or settlement actions; (xxii) uncertainty from the expected discontinuance of LIBOR and transition to any other interest rate benchmark; and (xxiii) other risks and uncertainties as may be described in Mattel’s periodic filings with the Securities and Exchange Commission, including the “Risk Factors” section of Mattel’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, as amended, and Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, as well as in Mattel’s other public statements. Mattel does not update forward-looking statements and expressly disclaims any obligation to do so, except as required by law.
Non-GAAP Financial Measures
To supplement our financial results presented in accordance with generally accepted accounting principles in the United States (“GAAP”), Mattel presents certain non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission. The non-GAAP financial measures that Mattel uses in this earnings release include Adjusted Gross Profit, Adjusted Gross Margin, Adjusted Other Selling and Administrative Expenses, Adjusted Operating Income (Loss), Adjusted Operating Income (Loss) Margin, Adjusted Earnings (Loss) Per Share, earnings before interest expense, taxes, depreciation and amortization (“EBITDA”), Adjusted EBITDA, Leverage Ratio (Debt / Adjusted EBITDA), Free Cash Flow, and constant currency. Mattel uses these measures to analyze its continuing operations and to monitor, assess, and identify meaningful trends in its operating and financial performance, and each is discussed below. Mattel believes that the disclosure of non-GAAP financial measures provides useful supplemental information to investors to be able to better evaluate ongoing business performance and certain components of Mattel’s results. These measures are not, and should not be viewed as, substitutes for GAAP financial measures and may not be comparable to similarly titled measures used by other companies. Reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures are attached to this earnings release as exhibits and to our earnings slide presentation as an appendix.
This earnings release and our earnings slide presentation are available on Mattel's Investor Relations website, https://investors.mattel.com/, under the subheading “Financial Information – Earnings Releases.”
Adjusted Gross Profit and Adjusted Gross Margin
Adjusted Gross Profit and Adjusted Gross Margin represent reported Gross Profit and reported Gross Margin, respectively, adjusted to exclude severance and restructuring expenses and the impact of the inclined sleeper product recalls. Adjusted Gross Margin represents Mattel’s Adjusted Gross Profit, as a percentage of Net Sales. Adjusted Gross Profit and Adjusted Gross Margin are presented to provide additional perspective on underlying trends in Mattel’s core Gross Profit and Gross Margin, which Mattel believes is useful supplemental information for investors to be able to gauge and compare Mattel’s current business performance from one period to another.
Adjusted Other Selling and Administrative Expenses
Adjusted Other Selling and Administrative Expenses represents Mattel’s reported Other Selling and Administrative Expenses, adjusted to exclude severance and restructuring expenses, the impact of the inclined sleeper product recalls, and the impact of asset impairments, which are not part of Mattel’s core business. Adjusted Other Selling and Administrative Expenses is presented to provide additional perspective on underlying trends in Mattel’s core other selling and administrative expenses, which Mattel believes is useful supplemental information for investors to be able to gauge and compare Mattel’s current business performance from one period to another.
Adjusted Operating Income (Loss) and Adjusted Operating Income (Loss) Margin
Adjusted Operating Income (Loss) and Adjusted Operating Income (Loss) Margin represent reported Operating Income (Loss) and reported Operating Income (Loss) Margin, respectively, adjusted to exclude severance and restructuring expenses, the impact of the inclined sleeper product recalls, and the impact of asset impairments, which are not part of Mattel’s core business. Adjusted Operating Income (Loss) Margin represents Mattel’s Adjusted Operating Income (Loss), as a percentage of Net Sales. Adjusted Operating Income (Loss) and Adjusted Operating Income (Loss) Margin are presented to provide additional perspective on underlying trends in Mattel’s core operating results, which Mattel believes is useful supplemental information for investors to be able to gauge and compare Mattel’s current business performance from one period to another.
Adjusted Earnings (Loss) Per Share
Adjusted Earnings (Loss) Per Share represents Mattel’s reported Diluted Earnings (Loss) Per Common Share, adjusted to exclude severance and restructuring expenses, the impact of the inclined sleeper product recalls, and the impact of asset impairments, which are not part of Mattel’s core business. The aggregate tax effect of the adjustments is calculated by tax effecting the adjustments by the current effective tax rate, adjusting for certain discrete tax items, and dividing by the reported weighted-average number of common shares. Adjusted Earnings (Loss) Per Share is presented to provide additional perspective on underlying trends in Mattel’s core business. Mattel believes it is useful supplemental information for investors to gauge and compare Mattel’s current earnings results from one period to another. Adjusted Earnings (Loss) Per Share is a performance measure and should not be used as a measure of liquidity.
EBITDA and Adjusted EBITDA
EBITDA represents Mattel’s Net Income (Loss), adjusted to exclude the impact of interest expense, taxes, depreciation, and amortization. Adjusted EBITDA represents EBITDA adjusted to exclude share-based compensation, severance, and restructuring expenses, the impact of the inclined sleeper product recalls, and the impact of asset impairments, which are not part of Mattel’s core business. Mattel believes EBITDA and Adjusted EBITDA are useful supplemental information for investors to gauge and compare Mattel’s business performance to other companies in its industry with similar capital structures. The presentation of Adjusted EBITDA differs from how Mattel calculates EBITDA for purposes of covenant compliance under the indenture governing its
Free Cash Flow
Free Cash Flow represents Mattel’s net cash flows from operating activities less capital expenditures. Mattel believes Free Cash Flow is useful supplemental information for investors to gauge Mattel’s liquidity and performance and to compare Mattel’s business performance to other companies in our industry. Free Cash Flow does not represent cash available to Mattel for discretionary expenditures.
Leverage Ratio (Debt / Adjusted EBITDA)
The leverage ratio is calculated by dividing Debt by adjusted EBITDA. Debt represents the aggregate of Mattel’s current portion of long-term debt, short-term borrowings, and long-term debt, excluding the impact of debt issuance costs and debt discount. Mattel believes the leverage ratio is useful supplemental information for investors to gauge trends in Mattel’s business and to compare Mattel’s business performance to other companies in its industry.
Constant Currency
Percentage changes in results expressed in constant currency are presented excluding the impact from changes in currency exchange rates. To present this information, Mattel calculates constant currency information by translating current period and prior period results for entities reporting in currencies other than the US dollar using consistent exchange rates. The constant currency exchange rates are determined by Mattel at the beginning of each year and are applied consistently during the year. They are generally different from the actual exchange rates in effect during the current or prior period due to volatility in actual foreign exchange rates. Mattel considers whether any changes to the constant currency rates are appropriate at the beginning of each year. The exchange rates used for these constant currency calculations are generally based on prior year actual exchange rates. The difference between the current period and prior period results using the consistent exchange rates reflects the changes in the underlying performance results, excluding the impact from changes in currency exchange rates. Mattel analyzes constant currency results to provide additional perspective on changes in underlying trends in Mattel’s operating performance. Mattel believes that the disclosure of the percentage change in constant currency is useful supplemental information for investors to be able to gauge Mattel’s current business performance and the longer-term strength of its overall business since foreign currency changes could potentially mask underlying sales trends. The disclosure of the percentage change in constant currency enhances investor’s ability to compare financial results from one period to another.
Key Performance Indicator
Gross Billings
Gross Billings represent amounts invoiced to customers. It does not include the impact of sales adjustments, such as trade discounts and other allowances. Mattel presents changes in gross billings as a metric for comparing its aggregate, categorical, brand, and geographic results to highlight significant trends in Mattel’s business. Changes in Gross Billings are discussed because, while Mattel records the details of such sales adjustments in its financial accounting systems at the time of sale, such sales adjustments are generally not associated with categories, brands, and individual products.
About Mattel
Mattel is a leading global toy company and owner of one of the strongest catalogs of children’s and family entertainment franchises in the world. We create innovative products and experiences that inspire, entertain and develop children through play. We engage consumers through our portfolio of iconic brands, including Barbie, Hot Wheels, Fisher-Price, American Girl, Thomas & Friends, UNO, and MEGA, as well as other popular intellectual properties that we own or license in partnership with global entertainment companies. Our offerings include film and television content, gaming, music and live events. We operate in 35 locations and our products are available in more than 150 countries in collaboration with the world’s leading retail and e-commerce companies. Since its founding in 1945, Mattel is proud to be a trusted partner in empowering children to explore the wonder of childhood and reach their full potential.
| MATTEL, INC. AND SUBSIDIARIES | EXHIBIT I |
|||||||||||||||||||||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)1 | ||||||||||||||||||||||||||||||||||||||||
For the Three Months Ended December 31, |
For the Year Ended December 31, |
|||||||||||||||||||||||||||||||||||||||
2020 |
2019 |
% Change as
|
% Change
|
2020 |
2019 |
% Change as
|
% Change
|
|||||||||||||||||||||||||||||||||
| (In millions, except per share and percentage information) | $ Amt |
% Net Sales |
$ Amt |
% Net Sales |
$ Amt |
% Net Sales |
$ Amt |
% Net Sales |
||||||||||||||||||||||||||||||||
| Net Sales | $ |
1,625.8 |
|
$ |
1,473.7 |
|
10 |
% |
10 |
% |
$ |
4,583.7 |
|
$ |
4,504.6 |
|
2 |
% |
3 |
% |
||||||||||||||||||||
| Cost of sales |
|
790.6 |
|
48.6 |
% |
|
760.5 |
|
51.6 |
% |
4 |
% |
|
2,340.1 |
|
51.1 |
% |
|
2,523.8 |
|
56.0 |
% |
-7 |
% |
||||||||||||||||
| Gross Profit |
|
835.2 |
|
51.4 |
% |
|
713.2 |
|
48.4 |
% |
17 |
% |
20 |
% |
|
2,243.6 |
|
48.9 |
% |
|
1,980.8 |
|
44.0 |
% |
13 |
% |
16 |
% |
||||||||||||
| Advertising and promotion expenses |
|
277.8 |
|
17.1 |
% |
|
227.2 |
|
15.4 |
% |
22 |
% |
|
516.8 |
|
11.3 |
% |
|
551.5 |
|
12.2 |
% |
-6 |
% |
||||||||||||||||
| Other selling and administrative expenses |
|
364.7 |
|
22.4 |
% |
|
418.4 |
|
28.4 |
% |
-13 |
% |
|
1,345.9 |
|
29.4 |
% |
|
1,390.0 |
|
30.9 |
% |
-3 |
% |
||||||||||||||||
| Operating Income |
|
192.7 |
|
11.9 |
% |
|
67.6 |
|
4.6 |
% |
185 |
% |
221 |
% |
|
380.9 |
|
8.3 |
% |
|
39.2 |
|
0.9 |
% |
871 |
% |
912 |
% |
||||||||||||
| Interest expense |
|
49.3 |
|
3.0 |
% |
|
60.2 |
|
4.1 |
% |
-18 |
% |
|
198.3 |
|
4.3 |
% |
|
201.0 |
|
4.5 |
% |
-1 |
% |
||||||||||||||||
| Interest (income) |
|
(0.4 |
) |
0.0 |
% |
|
(1.5 |
) |
-0.1 |
% |
-75 |
% |
|
(3.9 |
) |
-0.1 |
% |
|
(6.2 |
) |
-0.1 |
% |
-36 |
% |
||||||||||||||||
| Other non-operating (income) expense, net |
|
(4.3 |
) |
|
0.2 |
|
|
2.7 |
|
|
1.9 |
|
||||||||||||||||||||||||||||
| Income (Loss) Before Income Taxes |
|
148.1 |
|
9.1 |
% |
|
8.7 |
|
0.6 |
% |
n/m |
|
n/m |
|
|
183.8 |
|
4.0 |
% |
|
(157.5 |
) |
-3.5 |
% |
n/m |
|
n/m |
|
||||||||||||
| Provision for income taxes |
|
21.8 |
|
|
9.0 |
|
|
68.6 |
|
|
55.2 |
|
||||||||||||||||||||||||||||
| Income (loss) from equity method investments |
|
4.3 |
|
|
0.4 |
|
|
11.5 |
|
|
(0.8 |
) |
||||||||||||||||||||||||||||
| Net Income (Loss) | $ |
130.5 |
|
8.0 |
% |
$ |
0.2 |
|
0.0 |
% |
n/m |
|
$ |
126.6 |
|
2.8 |
% |
$ |
(213.5 |
) |
-4.7 |
% |
n/m |
|
||||||||||||||||
| Net Income (Loss) Per Common Share - Basic | $ |
0.38 |
|
$ |
0.00 |
|
$ |
0.36 |
|
$ |
(0.62 |
) |
||||||||||||||||||||||||||||
| Weighted-average number of common shares |
|
347.7 |
|
|
346.7 |
|
|
347.5 |
|
|
346.1 |
|
||||||||||||||||||||||||||||
| Net Income (Loss) per Common Share - Diluted | $ |
0.37 |
|
$ |
0.00 |
|
$ |
0.36 |
|
$ |
(0.62 |
) |
||||||||||||||||||||||||||||
| Weighted-average number of common and potential common shares |
|
351.0 |
|
|
348.3 |
|
|
349.1 |
|
|
346.1 |
|
||||||||||||||||||||||||||||
| 1 Amounts may not foot due to rounding. |
| n/m - Not Meaningful |
| MATTEL, INC. AND SUBSIDIARIES | EXHIBIT II |
|||||
| CONDENSED CONSOLIDATED BALANCE SHEETS1 | ||||||
December 31, |
||||||
2020 |
2019 |
|||||
| (In millions) | (Unaudited) |
|||||
| Assets | ||||||
| Cash and equivalents | $ |
762.2 |
$ |
630.0 |
||
| Accounts receivable, net |
|
1,034.0 |
|
936.4 |
||
| Inventories |
|
514.7 |
|
495.5 |
||
| Prepaid expenses and other current assets |
|
172.1 |
|
186.1 |
||
| Total current assets |
|
2,482.9 |
|
2,248.0 |
||
| Property, plant, and equipment, net |
|
473.8 |
|
550.1 |
||
| Right-of-use assets, net |
|
291.6 |
|
303.2 |
||
| Other noncurrent assets |
|
2,272.8 |
|
2,223.9 |
||
| Total Assets | $ |
5,521.1 |
$ |
5,325.2 |
||
| Liabilities and Stockholders' Equity | ||||||
| Short-term borrowings | $ |
1.0 |
$ |
- |
||
| Accounts payable and accrued liabilities |
|
1,327.3 |
|
1,228.9 |
||
| Income taxes payable |
|
27.1 |
|
48.0 |
||
| Total current liabilities |
|
1,355.4 |
|
1,276.9 |
||
| Long-term debt |
|
2,854.7 |
|
2,846.8 |
||
| Noncurrent lease liabilities |
|
249.4 |
|
270.9 |
||
| Other noncurrent liabilities |
|
465.4 |
|
439.0 |
||
| Stockholders' equity |
|
596.3 |
|
491.7 |
||
| Total Liabilities and Stockholders' Equity | $ |
5,521.1 |
$ |
5,325.2 |
||
| MATTEL, INC. AND SUBSIDIARIES | EXHIBIT II |
|||||||
| SUPPLEMENTAL BALANCE SHEET AND CASH FLOW DATA (Unaudited)1 | ||||||||
December 31, |
||||||||
2020 |
2019 |
|||||||
| Key Balance Sheet Data: | ||||||||
| Accounts receivable, net days of sales outstanding (DSO) |
|
57 |
|
|
57 |
|
||
For the Year Ended December 31, |
||||||||
| (In millions) | 2020 |
2019 |
||||||
| Condensed Cash Flow Data: | ||||||||
| Cash flows provided by operating activities | $ |
289 |
|
$ |
181 |
|
||
| Cash flows used for investing activities |
|
(135 |
) |
|
(114 |
) |
||
| Cash flows used for financing activities and other |
|
(21 |
) |
|
(31 |
) |
||
| Increase in cash and equivalents | $ |
132 |
|
$ |
36 |
|
||
| 1 Amounts may not foot due to rounding. |
| MATTEL, INC. AND SUBSIDIARIES | EXHIBIT III |
|||||||||||||||||||||
| SUPPLEMENTAL FINANCIAL INFORMATION (Unaudited)1 | ||||||||||||||||||||||
| RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL MEASURES | ||||||||||||||||||||||
For the Three Months Ended December 31, |
For the Year Ended December 31, |
|||||||||||||||||||||
| (In millions, except per share and percentage information) | 2020 |
2019 |
Change |
2020 |
2019 |
Change |
||||||||||||||||
| Gross Profit | ||||||||||||||||||||||
| Gross Profit, As Reported | $ |
835.2 |
|
$ |
713.2 |
|
$ |
2,243.6 |
|
$ |
1,980.8 |
|
||||||||||
| Gross Margin |
|
51.4 |
% |
|
48.4 |
% |
+ 300 bps |
|
48.9 |
% |
|
44.0 |
% |
+ 490 bps | ||||||||
| Adjustments: | ||||||||||||||||||||||
| Severance and Restructuring Expenses |
|
0.8 |
|
|
6.7 |
|
|
5.7 |
|
|
18.6 |
|
||||||||||
| Inclined Sleeper Product Recalls2 |
|
- |
|
|
0.4 |
|
|
- |
|
|
21.7 |
|
||||||||||
| Gross Profit, As Adjusted | $ |
836.0 |
|
$ |
720.3 |
|
$ |
2,249.3 |
|
$ |
2,021.1 |
|
||||||||||
| Adjusted Gross Margin |
|
51.4 |
% |
|
48.9 |
% |
+ 250 bps |
|
49.1 |
% |
|
44.9 |
% |
+ 420 bps | ||||||||
| Other Selling and Administrative Expenses | ||||||||||||||||||||||
| Other Selling and Administrative Expenses, As Reported | $ |
364.7 |
|
$ |
418.4 |
|
-13 |
% |
$ |
1,345.9 |
|
$ |
1,390.0 |
|
-3 |
% |
||||||
| % of Net Sales |
|
22.4 |
% |
|
28.4 |
% |
|
29.4 |
% |
|
30.9 |
% |
||||||||||
| Adjustments: | ||||||||||||||||||||||
| Severance and Restructuring Expenses |
|
(4.5 |
) |
|
(6.1 |
) |
|
(34.9 |
) |
|
(40.5 |
) |
||||||||||
| Inclined Sleeper Product Recalls2 |
|
(7.0 |
) |
|
(2.6 |
) |
|
(26.2 |
) |
|
(10.3 |
) |
||||||||||
| Asset Impairments3 |
|
- |
|
|
(25.9 |
) |
|
- |
|
|
(25.9 |
) |
||||||||||
| Other Selling and Administrative Expenses, As Adjusted | $ |
353.2 |
|
$ |
383.8 |
|
-8 |
% |
$ |
1,284.8 |
|
$ |
1,313.4 |
|
-2 |
% |
||||||
| % of Net Sales |
|
21.7 |
% |
|
26.0 |
% |
|
28.0 |
% |
|
29.2 |
% |
||||||||||
| Operating Income | ||||||||||||||||||||||
| Operating Income, As Reported | $ |
192.7 |
|
$ |
67.6 |
|
185 |
% |
$ |
380.9 |
|
$ |
39.2 |
|
871 |
% |
||||||
| Operating Income Margin |
|
11.9 |
% |
|
4.6 |
% |
|
8.3 |
% |
|
0.9 |
% |
||||||||||
| Adjustments: | ||||||||||||||||||||||
| Severance and Restructuring Expenses |
|
5.3 |
|
|
12.7 |
|
|
40.6 |
|
|
59.1 |
|
||||||||||
| Inclined Sleeper Product Recalls2 |
|
7.0 |
|
|
3.1 |
|
|
26.2 |
|
|
32.0 |
|
||||||||||
| Asset Impairments3 |
|
- |
|
|
25.9 |
|
|
- |
|
|
25.9 |
|
||||||||||
| Operating Income, As Adjusted | $ |
205.0 |
|
$ |
109.3 |
|
88 |
% |
$ |
447.6 |
|
$ |
156.2 |
|
187 |
% |
||||||
| Adjusted Operating Income Margin |
|
12.6 |
% |
|
7.4 |
% |
|
9.8 |
% |
|
3.5 |
% |
||||||||||
| Other Information | ||||||||||||||||||||||
| Inclined Sleeper Product Recalls2 | $ |
7.0 |
|
$ |
3.5 |
|
$ |
26.2 |
|
$ |
37.8 |
|
||||||||||
| 1 Amounts may not foot due to rounding. | ||||||||||||||
| 2 For the three months and year ended December 31, 2020, Mattel recorded expenses related to inclined sleeper product recall litigation of |
||||||||||||||
| 3 For the three months and year ended December 31, 2019, asset impairments represent write-offs of American Girl retail store assets of |
| MATTEL, INC. AND SUBSIDIARIES | EXHIBIT III |
||||||||||||||||||||
| SUPPLEMENTAL FINANCIAL INFORMATION (Unaudited)1 | |||||||||||||||||||||
| RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL MEASURES | |||||||||||||||||||||
For the Three Months Ended December 31, |
For the Year Ended December 31, |
||||||||||||||||||||
| (In millions, except per share and percentage information) | 2020 |
2019 |
Change |
2020 |
2019 |
Change |
|||||||||||||||
| Earnings Per Share | |||||||||||||||||||||
| Net Income (Loss) Per Common Share, As Reported | $ |
0.37 |
$ |
0.00 |
|
n/m |
|
$ |
0.36 |
|
$ |
(0.62 |
) |
n/m |
|
||||||
| Adjustments: | |||||||||||||||||||||
| Severance and Restructuring Expenses |
|
0.02 |
|
0.04 |
|
|
0.12 |
|
|
0.17 |
|
||||||||||
| Inclined Sleeper Product Recalls2 |
|
0.02 |
|
0.01 |
|
|
0.07 |
|
|
0.09 |
|
||||||||||
| Asset Impairments3 |
|
- |
|
0.07 |
|
|
- |
|
|
0.07 |
|
||||||||||
| Tax Effect of Adjustments4 |
|
- |
|
(0.01 |
) |
|
(0.01 |
) |
|
(0.02 |
) |
||||||||||
| Net Income (Loss) Per Common Share, As Adjusted | $ |
0.40 |
$ |
0.11 |
|
264 |
% |
$ |
0.54 |
|
$ |
(0.30 |
) |
n/m |
|
||||||
| EBITDA and Adjusted EBITDA | |||||||||||||||||||||
| Net Income (Loss), As Reported | $ |
130.5 |
$ |
0.2 |
|
n/m |
|
$ |
126.6 |
|
$ |
(213.5 |
) |
n/m |
|
||||||
| Adjustments: | |||||||||||||||||||||
| Interest Expense |
|
49.3 |
|
60.2 |
|
|
198.3 |
|
|
201.0 |
|
||||||||||
| Provision for Income Taxes |
|
21.8 |
|
9.0 |
|
|
68.6 |
|
|
55.2 |
|
||||||||||
| Depreciation |
|
40.9 |
|
48.2 |
|
|
161.0 |
|
|
204.4 |
|
||||||||||
| Amortization |
|
9.5 |
|
10.0 |
|
|
38.9 |
|
|
40.1 |
|
||||||||||
| EBITDA | $ |
252.1 |
$ |
127.5 |
|
$ |
593.5 |
|
$ |
287.3 |
|
||||||||||
| Adjustments: | |||||||||||||||||||||
| Share-based Compensation |
|
20.2 |
|
16.8 |
|
|
60.2 |
|
|
56.0 |
|
||||||||||
| Severance and Restructuring Expenses |
|
4.5 |
|
12.0 |
|
|
39.1 |
|
|
52.0 |
|
||||||||||
| Inclined Sleeper Product Recalls2 |
|
7.0 |
|
3.1 |
|
|
26.2 |
|
|
32.0 |
|
||||||||||
| Asset Impairments3 |
|
- |
|
25.9 |
|
|
- |
|
|
25.9 |
|
||||||||||
| Adjusted EBITDA | $ |
283.8 |
$ |
185.2 |
|
53 |
% |
$ |
719.0 |
|
$ |
453.1 |
|
59 |
% |
||||||
| Leverage Ratio (Debt / Adjusted EBITDA) | |||||||||||||||||||||
| Long-term debt | $ |
2,854.7 |
|
$ |
2,846.8 |
|
|||||||||||||||
| Current portion of long-term debt |
|
- |
|
|
- |
|
|||||||||||||||
| Short-term borrowings |
|
1.0 |
|
|
- |
|
|||||||||||||||
| Adjustments: | |||||||||||||||||||||
| Debt issuance costs and debt discount |
|
45.3 |
|
|
53.2 |
|
|||||||||||||||
| Debt | $ |
2,901.0 |
|
$ |
2,900.0 |
|
|||||||||||||||
| Debt / Net Income (Loss) | 22.9x | (13.6)x | |||||||||||||||||||
| Leverage Ratio (Debt / Adjusted EBITDA) | 4.0x | 6.4x | |||||||||||||||||||
| Free Cash Flow | |||||||||||||||||||||
| Net Cash Flows Provided by Operating Activities | $ |
288.5 |
|
$ |
181.0 |
|
|||||||||||||||
| Capital Expenditures |
|
(121.6 |
) |
|
(116.4 |
) |
|||||||||||||||
| Free Cash Flow | $ |
166.9 |
|
$ |
64.6 |
|
|||||||||||||||
1 Amounts may not foot due to rounding. |
2 For the three months and year ended December 31, 2020, Mattel recorded expenses related to inclined sleeper product recall litigation of |
3 For the three months and year ended December 31, 2019, asset impairments represent write-offs of American Girl retail store assets of |
4 The aggregate tax effect of the adjustments is calculated by tax effecting the adjustments by the current effective tax rate, and dividing by the reported weighted average number of common and potential common shares. Adjustments for the U.S. and certain International affiliates were not tax effected because of the valuation allowance on deferred tax assets. |
n/m - Not meaningful |
| MATTEL, INC. AND SUBSIDIARIES | EXHIBIT IV |
|||||||||||||||||||||||
| WORLDWIDE GROSS BILLINGS1 (Unaudited)3 | ||||||||||||||||||||||||
| SUPPLEMENTAL KEY PERFORMANCE INDICATOR | ||||||||||||||||||||||||
For the Three Months Ended December 31, |
For the Year Ended December 31, |
|||||||||||||||||||||||
(In millions, except percentage information) |
2020 |
2019 |
% Change
|
% Change in
|
2020 |
2019 |
% Change
|
% Change in
|
||||||||||||||||
| Worldwide Gross Billings: | ||||||||||||||||||||||||
| Net Sales | $ |
1,625.8 |
$ |
1,473.7 |
10 |
% |
10 |
% |
$ |
4,583.7 |
$ |
4,504.6 |
2 |
% |
3 |
% |
||||||||
| Sales Adjustments2 |
|
209.1 |
|
191.6 |
|
554.2 |
|
560.0 |
||||||||||||||||
| Gross Billings | $ |
1,834.9 |
$ |
1,665.3 |
10 |
% |
10 |
% |
$ |
5,137.8 |
$ |
5,064.6 |
1 |
% |
3 |
% |
||||||||
| Worldwide Gross Billings by Categories: | ||||||||||||||||||||||||
| Dolls | $ |
709.1 |
$ |
630.1 |
13 |
% |
13 |
% |
$ |
1,886.4 |
$ |
1,724.0 |
9 |
% |
11 |
% |
||||||||
| Infant, Toddler and Preschool |
|
405.5 |
|
381.1 |
6 |
|
7 |
|
|
1,149.7 |
|
1,257.6 |
-9 |
|
-8 |
|
||||||||
| Vehicles |
|
396.3 |
|
356.9 |
11 |
|
12 |
|
|
1,110.0 |
|
1,101.3 |
1 |
|
3 |
|
||||||||
| Action Figures, Building Sets, Games, and Other |
|
324.0 |
|
297.2 |
9 |
|
9 |
|
|
991.6 |
|
981.6 |
1 |
|
2 |
|
||||||||
| Gross Billings | $ |
1,834.9 |
$ |
1,665.3 |
10 |
% |
10 |
% |
$ |
5,137.8 |
$ |
5,064.6 |
1 |
% |
3 |
% |
||||||||
| Supplemental Gross Billings Disclosure | ||||||||||||||||||||||||
| Worldwide Gross Billings by Top 3 Power Brands: | ||||||||||||||||||||||||
| Barbie | $ |
471.1 |
$ |
396.9 |
19 |
% |
18 |
% |
$ |
1,350.1 |
$ |
1,159.8 |
16 |
% |
18 |
% |
||||||||
| Hot Wheels |
|
346.3 |
|
306.8 |
13 |
|
14 |
|
|
954.2 |
|
925.9 |
3 |
|
5 |
|
||||||||
| Fisher-Price and Thomas & Friends |
|
372.8 |
|
340.6 |
9 |
|
10 |
|
|
1,065.5 |
|
1,131.8 |
-6 |
|
-5 |
|
||||||||
| Other |
|
644.6 |
|
620.9 |
4 |
|
4 |
|
|
1,768.0 |
|
1,847.2 |
-4 |
|
-3 |
|
||||||||
| Gross Billings | $ |
1,834.9 |
$ |
1,665.3 |
10 |
% |
10 |
% |
$ |
5,137.8 |
$ |
5,064.6 |
1 |
% |
3 |
% |
||||||||
| 1 Gross Billings represent amounts invoiced to customers. It does not include the impact of sales adjustments, such as trade discounts and other allowances. Mattel presents changes in gross billings as a metric for comparing its aggregate, categorical, brand, and geographic results to highlight significant trends in Mattel's business. |
| 2 Sales Adjustments are not allocated to individual products. As such, Net Sales are not presented on a categories or brand level. |
| 3 Amounts may not foot due to rounding. |
| MATTEL, INC. AND SUBSIDIARIES | EXHIBIT V |
|||||||||||||||||||||||
| GROSS BILLINGS1 BY SEGMENT (Unaudited)3 | ||||||||||||||||||||||||
| SUPPLEMENTAL KEY PERFORMANCE INDICATOR | ||||||||||||||||||||||||
For the Three Months Ended December 31, |
For the Year Ended December 31, |
|||||||||||||||||||||||
| (In millions, except percentage information) | 2020 |
2019 |
% Change
|
% Change in
|
2020 |
2019 |
% Change
|
% Change in
|
||||||||||||||||
| North America Segment Gross Billings: | ||||||||||||||||||||||||
| Net Sales | $ |
779.4 |
$ |
689.6 |
13 |
% |
13 |
% |
$ |
2,424.6 |
$ |
2,275.8 |
7 |
% |
7 |
% |
||||||||
| Sales Adjustments2 |
|
49.5 |
|
45.5 |
|
163.2 |
|
156.5 |
||||||||||||||||
| Gross Billings | $ |
828.9 |
$ |
735.1 |
13 |
% |
13 |
% |
$ |
2,587.8 |
$ |
2,432.3 |
6 |
% |
6 |
% |
||||||||
| North America Gross Billings by Categories: | ||||||||||||||||||||||||
| Dolls | $ |
247.0 |
$ |
211.9 |
17 |
% |
16 |
% |
$ |
770.6 |
$ |
636.2 |
21 |
% |
21 |
% |
||||||||
| Infant, Toddler and Preschool |
|
237.1 |
|
205.1 |
16 |
|
16 |
|
|
701.4 |
|
730.3 |
-4 |
|
-4 |
|
||||||||
| Vehicles |
|
173.0 |
|
166.5 |
4 |
|
4 |
|
|
529.2 |
|
510.8 |
4 |
|
4 |
|
||||||||
| Action Figures, Building Sets, Games, and Other |
|
171.8 |
|
151.6 |
13 |
|
13 |
|
|
586.6 |
|
555.0 |
6 |
|
6 |
|
||||||||
| Gross Billings | $ |
828.9 |
$ |
735.1 |
13 |
% |
13 |
% |
$ |
2,587.8 |
$ |
2,432.3 |
6 |
% |
6 |
% |
||||||||
| Supplemental Gross Billings Disclosure | ||||||||||||||||||||||||
| North America Gross Billings by Top 3 Power Brands: | ||||||||||||||||||||||||
| Barbie | $ |
226.5 |
$ |
189.4 |
20 |
% |
20 |
% |
$ |
704.2 |
$ |
558.3 |
26 |
% |
26 |
% |
||||||||
| Hot Wheels |
|
149.8 |
|
142.6 |
5 |
|
5 |
|
|
446.6 |
|
419.0 |
7 |
|
7 |
|
||||||||
| Fisher-Price and Thomas & Friends |
|
|||||||||||||||||||||||
FAQ
What were Mattel's fourth quarter 2020 earnings results?
How did the COVID-19 pandemic affect Mattel's performance?
What is the outlook for Mattel in 2021?
What are the key growth drivers for Mattel going forward?
How did the North American segment perform for Mattel in 2020?
