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Mattel Reports Fourth Quarter and Full Year 2014 Financial Results
Fourth Quarter Highlights
- Worldwide net sales down 6% (including an unfavorable impact from changes in currency exchange rates of 3%);
-
North American Region 1 gross sales down 2% andInternational Region gross sales down 5% (including an unfavorable impact from changes in currency exchange rates of 8%); - Worldwide gross sales by core brands: Barbie® down 12%; Hot Wheels® up 5%; Fisher-Price® down 11% and American Girl® down 4%;
- Gross margin decreased 410 basis points of net sales, partially due to the acquisition of MEGA® Brands;
-
SG&A increased 390 basis points of net sales, including the impact
of the acquisition of
MEGA Brands ; -
Operating income of
$237.0 million compared to operating income of$479.3 million in the fourth quarter of 2013; and -
Earnings per share of
$0.44 (includes a negative impact of$0.05 per share fromMEGA Brands integration costs2 and a negative tax impact of$0.03 per share) vs. prior year earnings per share of$1.07 .
Full Year Highlights
- Worldwide net sales down 7% (including an unfavorable impact from changes in currency exchange rates of 2%);
-
North American Region 1 gross sales down 5% andInternational Region gross sales down 7% (including an unfavorable impact from changes in currency exchange rates of 4%); - Worldwide gross sales by core brands: Barbie down 16%; Hot Wheels up 3%; Fisher-Price down 13% and American Girl down 2%;
-
Gross margin decreased 380 basis points of net sales, partially due
to the acquisition of
MEGA Brands ; -
SG&A increased 270 basis points of net sales, including the impact
of the acquisition of
MEGA Brands ; -
Operating income of
$653.7 million compared to operating income of$1.17 billion in 2013; and -
Earnings per share of
$1.45 (includes a negative impact of$0.16 per share fromMEGA Brands acquisition and integration costs3 and a tax benefit of$0.13 per share) vs. prior year earnings per share of$2.58 (included a tax benefit of$0.09 ).
Capital Deployment
-
Board declared 2015 first quarter cash dividend of
$0.38 per share, which is flat compared to the first quarter of 2014; and -
For the 2014 fourth quarter, the Company repurchased 1.6 million
shares of its common stock at a cost of approximately
$49 million , and for the year the Company repurchased 4.9 million shares of its common stock at a cost of approximately$177 million .
"We are disappointed with our results but moving forward with a
heightened sense of urgency to make the necessary changes to enhance our
brand relevance and improve our execution," said
Financial Overview
For the quarter, net sales were
For the year, net sales were
The Company's debt-to-total capital ratio as of
For the year, net cash flows from operating activities were
approximately
Capital Deployment
The Board of Directors declared a first quarter cash dividend of
For 2014, a portion of Mattel's dividend will be classified as a
non-dividend distribution for U.S. federal income tax purposes. Although
In the fourth quarter 2014, the Company repurchased 1.6 million shares
of its common stock at a cost of approximately
Sales by Brand
Mattel Girls and Boys Brands
For the fourth quarter, worldwide gross sales for Mattel Girls & Boys
Brands were
For the year, worldwide gross sales for Mattel Girls & Boys Brands were
Fisher-Price Brands
Fourth quarter worldwide gross sales for Fisher-Price Brands, which
includes the Fisher-Price Core, Fisher-Price Friends and Power Wheels®
brands, were
Fourth quarter gross sales for
Construction and Arts & Crafts Brands
Fourth quarter gross sales for Construction and Arts & Crafts Brands,
which includes the MEGA BLOKS® and RoseArt®
brands, were
Live Webcast
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" section of http://corporate.mattel.com/, under the sub-heading "Financial Information."
About
The
Forward-looking Statements
This press release contains forward-looking statements on a variety of
matters. 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 forward-looking
statements. Some of these factors are described in the Company's
periodic filings with the
1 Consists of
2
Consists of integration costs, including amortization of acquired
intangible assets.
3 Consists of acquisition and
integration costs, including amortization of acquired intangible assets
and inventory fair value markup above cost.
MAT-FIN
|
EXHIBIT I | ||||||||||||||||||||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) | |||||||||||||||||||||||||||||||||||||||||
For the Three Months Ended |
For the Year Ended |
||||||||||||||||||||||||||||||||||||||||
(In millions, except per share and |
2014 | 2013 | Yr / Yr | 2014 | 2013 | Yr / Yr | |||||||||||||||||||||||||||||||||||
percentage information) |
$ Amt | % Net Sales | $ Amt | % Net Sales | % Change | $ Amt | % Net Sales | $ Amt | % Net Sales | % Change | |||||||||||||||||||||||||||||||
Net Sales | $ | 1,994.0 | $ | 2,113.2 | -6 | % | $ | 6,023.8 | $ | 6,484.9 | -7 | % | |||||||||||||||||||||||||||||
Cost of sales | 988.2 | 49.6 | % | 962.4 | 45.5 | % | 3 | % | 3,022.8 | 50.2 | % | 3,006.0 | 46.4 | % | 1 | % | |||||||||||||||||||||||||
Gross Profit | 1,005.8 | 50.4 | % | 1,150.8 | 54.5 | % | -13 | % | 3,001.0 | 49.8 | % | 3,478.9 | 53.6 | % | -14 | % | |||||||||||||||||||||||||
Advertising and promotion expenses | 323.8 | 16.2 | % | 282.9 | 13.4 | % | 14 | % | 733.2 | 12.2 | % | 750.2 | 11.6 | % | -2 | % | |||||||||||||||||||||||||
Other selling and administrative expenses | 445.0 | 22.3 | % | 388.6 | 18.4 | % | 14 | % | 1,614.1 | 26.8 | % | 1,560.6 | 24.1 | % | 3 | % | |||||||||||||||||||||||||
Operating Income | 237.0 | 11.9 | % | 479.3 | 22.7 | % | -51 | % | 653.7 | 10.9 | % | 1,168.1 | 18.0 | % | -44 | % | |||||||||||||||||||||||||
Interest expense | 22.1 | 1.1 | % | 20.3 | 1.0 | % | 8 | % | 79.3 | 1.3 | % | 78.5 | 1.2 | % | 1 | % | |||||||||||||||||||||||||
Interest (income) | (2.1 | ) | -0.1 | % | (1.5 | ) | -0.1 | % | 46 | % | (7.4 | ) | -0.1 | % | (5.6 | ) | -0.1 | % | 33 | % | |||||||||||||||||||||
Other non-operating expense (income), net | 0.5 | (1.4 | ) | (5.1 | ) | (3.9 | ) | ||||||||||||||||||||||||||||||||||
Income Before Income Taxes | 216.5 | 10.9 | % | 461.9 | 21.9 | % | -53 | % | 586.9 | 9.7 | % | 1,099.1 | 16.9 | % | -47 | % | |||||||||||||||||||||||||
Provision for income taxes | 66.6 | 92.7 | 88.0 | 195.2 | |||||||||||||||||||||||||||||||||||||
Net Income | $ | 149.9 | 7.5 | % | $ | 369.2 | 17.5 | % | -59 | % | $ | 498.9 | 8.3 | % | $ | 903.9 | 13.9 | % | -45 | % | |||||||||||||||||||||
Net Income Per Common Share - Basic | $ | 0.44 | $ | 1.08 | $ | 1.46 | $ | 2.61 | |||||||||||||||||||||||||||||||||
Weighted average number of common shares | 338.4 | 339.4 | 339.0 | 343.4 | |||||||||||||||||||||||||||||||||||||
Net Income Per Common Share - Diluted | $ | 0.44 | $ | 1.07 | $ | 1.45 | $ | 2.58 | |||||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||||||||||
Weighted average number of common and potential common shares |
339.5 | 343.2 | 340.8 | 347.5 | |||||||||||||||||||||||||||||||||||||
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EXHIBIT II | ||||||||||||||||||||||||||||||||||||
WORLDWIDE GROSS SALES INFORMATION (Unaudited) | |||||||||||||||||||||||||||||||||||||
Three Months Ended |
Year Ended |
||||||||||||||||||||||||||||||||||||
(In millions, except percentage information) |
2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||||||||||||||
Worldwide Gross Sales: |
|||||||||||||||||||||||||||||||||||||
Mattel Girls & Boys Brands | $ | 1,228.1 | $ | 1,350.6 | $ | 3,897.2 | $ | 4,315.9 | |||||||||||||||||||||||||||||
% Change |
-9 | % | -4 | % | -10 | % | 3 | % | |||||||||||||||||||||||||||||
Pos./(Neg.) Impact of Currency (in % pts) | -5 | 0 | -2 | -1 | |||||||||||||||||||||||||||||||||
Fisher-Price Brands | 578.9 | 647.4 | 1,842.6 | 2,120.7 | |||||||||||||||||||||||||||||||||
% Change |
-11 | % | -13 | % | -13 | % | -6 | % | |||||||||||||||||||||||||||||
Pos./(Neg.) Impact of Currency (in % pts) | -4 | 0 | -1 | -1 | |||||||||||||||||||||||||||||||||
|
318.3 | 331.6 | 620.7 | 632.5 | |||||||||||||||||||||||||||||||||
% Change |
-4 | % | 3 | % | -2 | % | 11 | % | |||||||||||||||||||||||||||||
Construction and Arts & Crafts Brands | 130.0 | - | 315.0 | - | |||||||||||||||||||||||||||||||||
Other | 18.1 | 19.3 | 42.9 | 48.7 | |||||||||||||||||||||||||||||||||
Gross Sales | $ | 2,273.4 | $ | 2,348.9 | $ | 6,718.4 | $ | 7,117.8 | |||||||||||||||||||||||||||||
% Change |
-3 | % | -6 | % | -6 | % | 1 | % | |||||||||||||||||||||||||||||
Pos./(Neg.) Impact of Currency (in % pts) | -4 | -1 | -2 | 0 | |||||||||||||||||||||||||||||||||
Reconciliation of Non-GAAP to GAAP Financial Measure: |
|||||||||||||||||||||||||||||||||||||
Gross Sales | $ | 2,273.4 | $ | 2,348.9 | $ | 6,718.4 | $ | 7,117.8 | |||||||||||||||||||||||||||||
Sales Adjustments | (279.4 | ) | (235.7 | ) | (694.6 | ) | (632.9 | ) | |||||||||||||||||||||||||||||
Net Sales | $ | 1,994.0 | $ | 2,113.2 | $ | 6,023.8 | $ | 6,484.9 | |||||||||||||||||||||||||||||
% Change |
-6 | % | -6 | % | -7 | % | 1 | % | |||||||||||||||||||||||||||||
Pos./(Neg.) Impact of Currency (in % pts) | -3 | 0 | -2 | -1 | |||||||||||||||||||||||||||||||||
|
EXHIBIT III |
||||||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||||||||||
At |
|||||||||||||||||
2014 | 2013 | ||||||||||||||||
(In millions) |
(Unaudited) | ||||||||||||||||
Assets | |||||||||||||||||
Cash and equivalents | $ | 971.7 | $ | 1,039.2 | |||||||||||||
Accounts receivable, net | 1,093.2 | 1,260.1 | |||||||||||||||
Inventories | 562.0 | 568.8 | |||||||||||||||
Prepaid expenses and other current assets | 559.1 | 509.9 | |||||||||||||||
Total current assets | 3,186.0 | 3,378.0 | |||||||||||||||
Property, plant, and equipment, net | 737.9 | 659.3 | |||||||||||||||
Other noncurrent assets | 2,798.1 | 2,402.3 | |||||||||||||||
Total Assets | $ | 6,722.0 | $ | 6,439.6 | |||||||||||||
Liabilities and Stockholders' Equity | |||||||||||||||||
Short-term borrowings | $ | - | $ | 4.3 | |||||||||||||
Accounts payable and accrued liabilities | 1,070.1 | 1,015.4 | |||||||||||||||
Income taxes payable | 18.8 | 27.7 | |||||||||||||||
Total current liabilities | 1,088.9 | 1,047.4 | |||||||||||||||
Long-term debt | 2,100.0 | 1,600.0 | |||||||||||||||
Other noncurrent liabilities | 584.0 | 540.6 | |||||||||||||||
Stockholders' equity | 2,949.1 | 3,251.6 | |||||||||||||||
Total Liabilities and Stockholders' Equity | $ | 6,722.0 | $ | 6,439.6 | |||||||||||||
SUPPLEMENTAL BALANCE SHEET AND CASH FLOW DATA (Unaudited) | |||||||||||||||||
At |
|||||||||||||||||
(In millions, except days and percentage information) |
2014 | 2013 | |||||||||||||||
Key Balance Sheet Data: |
|||||||||||||||||
Accounts receivable, net days of sales outstanding (DSO) | 49 | 54 | |||||||||||||||
Total debt outstanding | $ | 2,100.0 | $ | 1,604.3 | |||||||||||||
Total debt-to-total capital ratio | 41.6 | % | 33.0 | % | |||||||||||||
Year Ended |
|||||||||||||||||
(In millions) |
2014(a) |
2013 | |||||||||||||||
Condensed Cash Flow Data: |
|||||||||||||||||
Cash flows from operating activities | $ | 889 | $ | 698 | |||||||||||||
Cash flows (used for) investing activities | (709 | ) | (242 | ) | |||||||||||||
Cash flows (used for) financing activities and other | (248 | ) | (752 | ) | |||||||||||||
Decrease in cash and equivalents | $ | (68 | ) | $ | (296 | ) |
(a) |
Amounts shown are preliminary estimates. Actual amounts will be
reported in |
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News Media
alex.clark@mattel.com
or
Securities
Analysts
drew.vollero@mattel.com
Source:
News Provided by Acquire Media