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Mattel Reports Full Year And Fourth Quarter 2018 Financial Results
Ynon Kreiz, Chairman and CEO of Mattel, said: "Our fourth quarter results demonstrate meaningful progress in executing our strategy and significant improvement over last year. We remain focused on advancing our strategy to restore profitability and regain top-line growth in the short-to-mid-term and are laying the groundwork to capture the full value of our IP in the mid-to-long-term. After three consecutive quarters of solid, disciplined execution, we are well on our way to becoming an IP-driven, high-performing toy company and creating long-term value for our shareholders. Among all the achievements in 2018, I would like to applaud our team for regaining the #1 toy company position globally in a year full of challenges and headwinds. This is a great moment to celebrate, before we go back and continue the hard work of implementing our multi-year turnaround."
For the year, Net Sales were down 8% as reported, and down 7% in constant currency, versus the prior year. Gross Sales were down 8% as reported, and 7% in constant currency reflecting a negative 6% impact from the Toys "R" Us™ liquidation and a negative 2% impact from the slowdown in our
For the fourth quarter, Net Sales were down 5% as reported, and 3% in constant currency, versus the prior year's fourth quarter. Gross Sales were down 11% as reported, and 9% in constant currency reflecting a negative 8% impact from the
Financial Overview
For the year, Net Sales in the
For the year, Reported Gross Margin improved to 39.8% versus 37.3% in the prior year. Adjusted Gross Margin improved to 40.0% versus 37.7% in the prior year. The increases in Reported and Adjusted Gross Margin were primarily driven by Structural Simplification cost savings of
For the fourth quarter, Net Sales in the
For the fourth quarter, Reported Gross Margin improved to 46.6% versus 30.7% in the prior year. Adjusted Gross Margin improved to 46.6% versus 32.0% in the prior year. The improvements in Reported and Adjusted Gross Margin were primarily driven by a
For the year, Cash Flows Used for Operating Activities were
Sales by Brand
Power Brands
For the year, Gross Sales for
For the fourth quarter, Gross Sales for
Toy Box
For the year, Gross Sales for Mattel Toy Box brands, which includes Owned Brands and Partner Brands, were
For the fourth quarter, Gross Sales for Mattel Toy Box brands were
Conference Call and Live Webcast
At
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. 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 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. Specific factors that might cause such a difference include, but are not limited to: (i) 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; (ii) 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; (iii) 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; (iv) potential difficulties or delays Mattel may experience in implementing cost savings and efficiency enhancing initiatives; (v) 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; (vi) currency fluctuations, including movements in foreign exchange rates, which can lower Mattel's net revenues and earnings, and significantly impact Mattel's costs; (vii) the concentration of Mattel's customers, potentially increasing the negative impact to Mattel of difficulties experienced by any of Mattel's customers, including the bankruptcy of
Non-GAAP Financial Measures
To supplement our financial results presented in accordance with generally accepted accounting principles in
This earnings release and our earnings slide presentation are available on Mattel's Investor Relations website, https://mattel.gcs-web.com/, under the subheading "Financial Information – Earnings Releases."
Gross Sales
Gross Sales represent sales to customers, excluding the impact of Sales Adjustments. Net Sales, as reported, include the impact of Sales Adjustments, such as trade discounts and other allowances. Mattel presents changes in gross sales as a metric for comparing its aggregate, brand and geographic results to highlight significant trends in Mattel's business. Changes in gross sales 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 brands and individual products, making Net Sales less meaningful. Since Sales Adjustments are determined by customer rather than at the brand level, Mattel believes that the disclosure of Gross Sales by brand is useful supplemental information for investors to be able to assess the performance of its underlying brands (e.g., Barbie) and also enhances their ability to compare sales trends over time.
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 asset impairments and severance and restructuring expenses. 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 asset impairments, non-recurring executive compensation, severance and restructuring expenses, and sale of assets, 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)
Adjusted Operating Income (Loss) represents Mattel's reported operating loss, adjusted to exclude the impact of asset impairments, non-recurring executive compensation, severance and restructuring expenses, and sale of assets, which are not part of Mattel's core business. Adjusted Operating Income (Loss) is 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 the impact of asset impairments, non-recurring executive compensation, severance and restructuring expenses, and
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 the impact of asset impairments, share-based compensation, severance and restructuring expenses, sale of assets, and
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.
About Mattel
Mattel is a leading global children's entertainment company that specializes in design and production of quality toys and consumer products. We create innovative products and experiences that inspire, entertain and develop children through play. We engage consumers through our portfolio of iconic franchises, including Barbie®, Hot Wheels®, American Girl®, Fisher-Price®, Thomas & Friends® and Mega®, as well as other popular brands 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 40 locations and sell products in more than 150 countries in collaboration with the world's leading retail and technology companies. Since its founding in 1945, Mattel is proud to be a trusted partner in exploring the wonder of childhood and empowering kids to reach their full potential. Visit us online at www.mattel.com.
Contacts: |
|
News Media |
Securities Analysts |
Dena Cook for Mattel |
Whitney Steininger |
310-600-7160 |
310-252-2703 |
MAT-FIN MAT-CORP
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, |
|||||||||||||||||||||||||
Yr / Yr |
Yr / Yr |
Yr / Yr |
Yr / Yr |
|||||||||||||||||||||||
% Change |
% Change |
% Change |
% Change |
|||||||||||||||||||||||
(In millions, except per share and |
2018 |
20172 |
as |
in Constant |
2018 |
20172 |
as |
in Constant |
||||||||||||||||||
percentage information) |
$ Amt |
% Net Sales |
$ Amt |
% Net Sales |
Reported |
Currency |
$ Amt |
% Net Sales |
$ Amt |
% Net Sales |
Reported |
Currency |
||||||||||||||
Net Sales |
$ |
1,524.3 |
$ |
1,610.9 |
-5% |
-3% |
$ |
4,510.9 |
$ |
4,882.0 |
-8% |
-7% |
||||||||||||||
Cost of sales |
814.7 |
53.4% |
1,115.7 |
69.3% |
-27% |
2,716.1 |
60.2% |
3,061.1 |
62.7% |
-11% |
||||||||||||||||
Gross Profit |
709.6 |
46.6% |
495.1 |
30.7% |
43% |
45% |
1,794.7 |
39.8% |
1,820.8 |
37.3% |
-1% |
0% |
||||||||||||||
Advertising and promotion expenses |
207.9 |
13.6% |
293.5 |
18.2% |
-29% |
526.4 |
11.7% |
642.3 |
13.2% |
-18% |
||||||||||||||||
Other selling and administrative expenses |
394.3 |
25.9% |
452.6 |
28.1% |
-13% |
1,504.8 |
33.4% |
1,517.9 |
31.1% |
-1% |
||||||||||||||||
Operating Income (Loss) |
107.4 |
7.0% |
(251.0) |
-15.6% |
-143% |
-142% |
(236.5) |
-5.2% |
(339.4) |
-7.0% |
-30% |
-37% |
||||||||||||||
Interest expense |
49.2 |
3.2% |
36.7 |
2.3% |
34% |
181.9 |
4.0% |
105.2 |
2.2% |
73% |
||||||||||||||||
Interest (income) |
(0.8) |
-0.1% |
(1.4) |
-0.1% |
-42% |
(6.5) |
-0.1% |
(7.8) |
-0.2% |
-17% |
||||||||||||||||
Other non-operating expense, net |
3.0 |
60.6 |
7.3 |
68.1 |
||||||||||||||||||||||
Income (Loss) Before Income Taxes |
56.1 |
3.7% |
(346.8) |
-21.5% |
-116% |
-116% |
(419.3) |
-9.3% |
(505.0) |
-10.3% |
-17% |
-21% |
||||||||||||||
Provision for (benefit from) income taxes |
41.2 |
(65.6) |
111.7 |
548.8 |
||||||||||||||||||||||
Net Income (Loss) |
$ |
14.9 |
1.0% |
$ |
(281.3) |
-17.5% |
-105% |
$ |
(531.0) |
-11.8% |
$ |
(1,053.8) |
-21.6% |
-50% |
||||||||||||
Net Income (Loss) Per Common Share - Basic |
$ |
0.04 |
$ |
(0.82) |
$ |
(1.54) |
$ |
(3.07) |
||||||||||||||||||
Weighted average number of common shares |
345.7 |
344.3 |
345.0 |
343.6 |
||||||||||||||||||||||
Net Income (Loss) Per Common Share - Diluted |
$ |
0.04 |
$ |
(0.82) |
$ |
(1.54) |
$ |
(3.07) |
||||||||||||||||||
Weighted average number of common and potential common shares |
345.8 |
344.3 |
345.0 |
343.6 |
1 Amounts may not foot due to rounding. |
|||||||||||||||||||||||||||||
2Other selling and administrative expenses, operating income (loss), and other non-operating expense, net have been retrospectively restated to reflect the adoption of Accounting Standards Update 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. |
MATTEL, INC. AND SUBSIDIARIES |
EXHIBIT II |
||||
CONDENSED CONSOLIDATED BALANCE SHEETS1 |
|||||
December 31, |
|||||
20182 |
2017 |
||||
(In millions) |
(Unaudited) |
||||
Assets |
|||||
Cash and equivalents |
$ |
594.5 |
$ |
1,079.2 |
|
Accounts receivable, net |
970.1 |
1,128.6 |
|||
Inventories |
542.9 |
600.7 |
|||
Prepaid expenses and other current assets |
245.0 |
303.1 |
|||
Total current assets |
2,352.4 |
3,111.6 |
|||
Property, plant, and equipment, net |
657.6 |
785.3 |
|||
Other noncurrent assets |
2,233.4 |
2,341.6 |
|||
Total Assets |
$ |
5,243.5 |
$ |
6,238.5 |
|
Liabilities and Stockholders' Equity |
|||||
Short-term borrowings |
$ |
4.2 |
$ |
- |
|
Current portion of long-term debt |
- |
250.0 |
|||
Accounts payable and accrued liabilities |
1,238.4 |
1,364.3 |
|||
Income taxes payable |
10.0 |
9.5 |
|||
Total current liabilities |
1,252.6 |
1,623.8 |
|||
Long-term debt |
2,851.7 |
2,873.1 |
|||
Other noncurrent liabilities |
469.7 |
484.1 |
|||
Stockholders' equity |
669.5 |
1,257.5 |
|||
Total Liabilities and Stockholders' Equity |
$ |
5,243.5 |
$ |
6,238.5 |
|
SUPPLEMENTAL BALANCE SHEET AND CASH FLOW DATA (Unaudited)1 |
|||||
December 31, |
|||||
2018 |
2017 |
||||
Key Balance Sheet Data: |
|||||
Accounts receivable, net days of sales outstanding (DSO) |
57 |
63 |
|||
Year Ended December 31, |
|||||
(In millions) |
20182 |
2017 |
|||
Condensed Cash Flow Data: |
|||||
Cash flows (used for) operating activities |
$ |
(27) |
$ |
(28) |
|
Cash flows (used for) investing activities |
(161) |
(236) |
|||
Cash flows (used for) provided by financing activities and other |
(297) |
473 |
|||
(Decrease) increase in cash and equivalents |
$ |
(485) |
$ |
210 |
1Amounts may not foot due to rounding. |
||||||||
2Amounts shown are preliminary estimates. Actual amounts will be reported in Mattel's Annual Report on Form 10-K for the |
||||||||
year ended 2018. |
MATTEL, INC. AND SUBSIDIARIES |
EXHIBIT III |
||||||||||||||||||
WORLDWIDE GROSS SALES 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 percentage information) |
2018 |
2017 |
% Change |
% Change in |
2018 |
2017 |
% Change |
% Change in |
|||||||||||
Worldwide Gross Sales: |
|||||||||||||||||||
Net Sales |
$ 1,524.3 |
$ 1,610.9 |
-5 |
% |
-3 |
% |
$ 4,510.9 |
$ 4,882.0 |
-8 |
% |
-7 |
% |
|||||||
Sales Adjustments2 |
190.5 |
309.9 |
564.7 |
632.2 |
|||||||||||||||
Gross Sales |
$ 1,714.8 |
$ 1,920.8 |
-11 |
% |
-9 |
% |
$ 5,075.5 |
$ 5,514.1 |
-8 |
% |
-7 |
% |
|||||||
Worldwide Gross Sales by Brand: |
|||||||||||||||||||
Power Brands |
|||||||||||||||||||
Barbie |
$ 390.8 |
$ 349.7 |
12 |
% |
15 |
% |
$ 1,089.0 |
$ 954.9 |
14 |
% |
15 |
% |
|||||||
Hot Wheels |
286.8 |
263.3 |
9 |
12 |
834.1 |
777.3 |
7 |
9 |
|||||||||||
Fisher-Price and Thomas & Friends |
352.2 |
425.9 |
-17 |
-15 |
1,185.7 |
1,370.5 |
-13 |
-13 |
|||||||||||
American Girl |
165.5 |
226.4 |
-27 |
-27 |
342.4 |
473.3 |
-28 |
-28 |
|||||||||||
Total Power Brands |
$ 1,195.4 |
$ 1,265.3 |
-6 |
-3 |
$ 3,451.1 |
$ 3,576.1 |
-3 |
-2 |
|||||||||||
Toy Box |
|||||||||||||||||||
Owned Brands |
$ 305.9 |
$ 369.5 |
-17 |
-15 |
$ 887.4 |
$ 980.6 |
-10 |
-8 |
|||||||||||
Partner Brands |
213.5 |
286.0 |
-25 |
-23 |
737.0 |
957.5 |
-23 |
-22 |
|||||||||||
Total Toy Box |
$ 519.4 |
$ 655.5 |
-21 |
-19 |
$ 1,624.4 |
$ 1,938.0 |
-16 |
-15 |
|||||||||||
Total Gross Sales |
$ 1,714.8 |
$ 1,920.8 |
-11 |
% |
-9 |
% |
$ 5,075.5 |
$ 5,514.1 |
-8 |
% |
-7 |
% |
1 Amounts may not foot due to rounding. |
|||||||||||||||||||
2 Sales Adjustments are not allocated to individual products. As such, Net Sales are not presented on a brand level. |
MATTEL, INC. AND SUBSIDIARIES |
EXHIBIT IV |
|||||||||||||||||
GROSS SALES BY SEGMENT (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 percentage information) |
2018 |
2017 |
% Change |
% Change in |
2018 |
2017 |
% Change |
% Change in |
||||||||||
North America Segment Gross Sales: |
||||||||||||||||||
Net Sales |
$ 708.3 |
$ 753.0 |
-6 |
% |
-6 |
% |
$ 2,272.8 |
$ 2,373.9 |
-4 |
% |
-4 |
% |
||||||
Sales Adjustments2 |
36.2 |
74.8 |
149.3 |
162.8 |
||||||||||||||
Gross Sales |
$ 744.5 |
$ 827.8 |
-10 |
% |
-10 |
% |
$ 2,422.1 |
$ 2,536.7 |
-5 |
% |
-4 |
% |
||||||
North America Segment Gross Sales by Brand: |
||||||||||||||||||
Power Brands |
||||||||||||||||||
Barbie |
$ 197.3 |
$ 165.4 |
19 |
% |
20 |
% |
$ 535.7 |
$ 450.9 |
19 |
% |
19 |
% |
||||||
Hot Wheels |
125.2 |
114.4 |
9 |
10 |
380.2 |
340.0 |
12 |
12 |
||||||||||
Fisher-Price and Thomas & Friends |
182.4 |
220.2 |
-17 |
-17 |
665.9 |
737.4 |
-10 |
-10 |
||||||||||
Total Power Brands |
$ 504.8 |
$ 499.9 |
1 |
1 |
$ 1,581.8 |
$ 1,528.3 |
4 |
4 |
||||||||||
Toy Box |
||||||||||||||||||
Owned Brands |
$ 137.4 |
$ 183.4 |
-25 |
-25 |
$ 434.0 |
$ 506.8 |
-14 |
-14 |
||||||||||
Partner Brands |
102.4 |
144.4 |
-29 |
-29 |
406.3 |
501.5 |
-19 |
-19 |
||||||||||
Total Toy Box |
$ 239.7 |
$ 327.8 |
-27 |
-27 |
$ 840.3 |
$ 1,008.3 |
-17 |
-17 |
||||||||||
Total Gross Sales |
$ 744.5 |
$ 827.8 |
-10 |
% |
-10 |
% |
$ 2,422.1 |
$ 2,536.7 |
-5 |
% |
-4 |
% |
1 Amounts may not foot due to rounding. |
||||||||||||||||
2 Sales Adjustments are not allocated to individual products. As such, Net Sales are not presented on a brand level. |
MATTEL, INC. AND SUBSIDIARIES |
EXHIBIT V |
||||||||||||||||||
GROSS SALES BY SEGMENT (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 percentage information) |
2018 |
2017 |
% Change |
% Change in |
2018 |
2017 |
% Change |
% Change in |
|||||||||||
Total International Segment Gross Sales: |
|||||||||||||||||||
Net Sales |
$ 658.1 |
$ 645.4 |
2 |
% |
7 |
% |
$ 1,911.2 |
$ 2,060.8 |
-7 |
% |
-5 |
% |
|||||||
Sales Adjustments2 |
146.8 |
221.1 |
401.0 |
442.7 |
|||||||||||||||
Gross Sales |
$ 805.0 |
$ 866.5 |
-7 |
% |
-2 |
% |
$ 2,312.2 |
$ 2,503.5 |
-8 |
% |
-6 |
% |
|||||||
International Segment Gross Sales: |
|||||||||||||||||||
Europe3 |
|||||||||||||||||||
Net Sales |
$ 287.1 |
$ 262.9 |
9 |
% |
12 |
% |
$ 826.5 |
$ 853.5 |
-3 |
% |
-5 |
% |
|||||||
Sales Adjustments2 |
70.1 |
100.8 |
187.5 |
201.3 |
|||||||||||||||
Gross Sales |
$ 357.2 |
$ 363.7 |
-2 |
% |
1 |
% |
$ 1,014.0 |
$ 1,054.8 |
-4 |
% |
-5 |
% |
|||||||
Latin America |
|||||||||||||||||||
Net Sales |
$ 206.7 |
$ 196.6 |
5 |
% |
10 |
% |
$ 554.1 |
$ 568.1 |
-2 |
% |
4 |
% |
|||||||
Sales Adjustments2 |
35.5 |
57.8 |
99.9 |
107.2 |
|||||||||||||||
Gross Sales |
$ 242.2 |
$ 254.5 |
-5 |
% |
0 |
% |
$ 654.0 |
$ 675.3 |
-3 |
% |
3 |
% |
|||||||
Global Emerging Markets3 |
|||||||||||||||||||
Net Sales |
$ 164.4 |
$ 185.8 |
-12 |
% |
-4 |
% |
$ 530.6 |
$ 639.3 |
-17 |
% |
-14 |
% |
|||||||
Sales Adjustments2 |
41.2 |
62.6 |
113.7 |
134.2 |
|||||||||||||||
Gross Sales |
$ 205.5 |
$ 248.3 |
-17 |
% |
-10 |
% |
$ 644.3 |
$ 773.5 |
-17 |
% |
-13 |
% |
|||||||
International Segment Gross Sales by Brand: |
|||||||||||||||||||
Power Brands |
|||||||||||||||||||
Barbie |
$ 193.6 |
$ 184.4 |
5 |
% |
10 |
% |
$ 553.2 |
$ 504.0 |
10 |
% |
12 |
% |
|||||||
Hot Wheels |
161.6 |
149.0 |
9 |
14 |
453.9 |
437.4 |
4 |
7 |
|||||||||||
Fisher-Price and Thomas & Friends |
169.8 |
205.6 |
-17 |
-13 |
519.8 |
633.1 |
-18 |
-16 |
|||||||||||
American Girl |
0.5 |
0.1 |
1.8 |
0.1 |
|||||||||||||||
Total Power Brands |
$ 525.5 |
$ 539.1 |
-3 |
2 |
$ 1,528.6 |
$ 1,574.6 |
-3 |
-1 |
|||||||||||
Toy Box |
|||||||||||||||||||
Owned Brands |
$ 168.3 |
$ 185.8 |
-9 |
-5 |
$ 452.8 |
$ 473.0 |
-4 |
-2 |
|||||||||||
Partner Brands |
111.1 |
141.6 |
-21 |
-18 |
330.7 |
456.0 |
-27 |
-26 |
|||||||||||
Total Toy Box |
$ 279.5 |
$ 327.4 |
-15 |
-10 |
$ 783.6 |
$ 929.0 |
-16 |
-14 |
|||||||||||
Total Gross Sales |
$ 805.0 |
$ 866.5 |
-7 |
% |
-2 |
% |
$ 2,312.2 |
$ 2,503.5 |
-8 |
% |
-6 |
% |
1 Amounts may not foot due to rounding. |
||||||||||||||||||
2 Sales Adjustments are not allocated to individual products. As such, Net Sales are not presented on a brand level. |
||||||||||||||||||
3 Prior period balances have been reclassified to conform with current period presentation. Refer to Note 13, Segment Information, in the Form 10-K for additional information. |
MATTEL, INC. AND SUBSIDIARIES |
EXHIBIT VI |
|||||||||||||||||
GROSS SALES BY SEGMENT (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 percentage information) |
2018 |
2017 |
% Change |
% Change in |
2018 |
2017 |
% Change |
% Change in |
||||||||||
American Girl Segment Gross Sales: |
||||||||||||||||||
Net Sales |
$ 157.8 |
$ 212.5 |
-26 |
% |
-25 |
% |
$ 326.8 |
$ 447.2 |
-27 |
% |
-27 |
% |
||||||
Sales Adjustments |
7.5 |
14.1 |
14.4 |
26.7 |
||||||||||||||
Gross Sales |
$ 165.3 |
$ 226.5 |
-27 |
% |
-27 |
% |
$ 341.2 |
$ 473.9 |
-28 |
% |
-28 |
% |
1 Amounts may not foot due to rounding. |
MATTEL, INC. AND SUBSIDIARIES |
EXHIBIT VII |
|||||||||||
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) |
20183 |
20172, 3 |
20183 |
20172, 3 |
||||||||
Gross Profit |
||||||||||||
Gross Profit, As Reported |
$ |
709.6 |
$ |
495.1 |
$ |
1,794.7 |
$ |
1,820.8 |
||||
Gross Margin |
46.6% |
30.7% |
39.8% |
37.3% |
||||||||
Adjustments: |
||||||||||||
Asset Impairments4 |
- |
20.6 |
5.8 |
20.6 |
||||||||
Severance and Restructuring Expenses5 |
- |
- |
5.7 |
- |
||||||||
Gross Profit, As Adjusted |
$ |
709.6 |
$ |
515.7 |
$ |
1,806.2 |
$ |
1,841.4 |
||||
Adjusted Gross Margin |
46.6% |
32.0% |
40.0% |
37.7% |
||||||||
Other Selling and Administrative Expenses |
||||||||||||
Other Selling and Administrative Expenses, As Reported |
$ |
394.3 |
$ |
452.6 |
$ |
1,504.8 |
$ |
1,517.9 |
||||
% of Net Sales |
25.9% |
28.1% |
33.4% |
31.1% |
||||||||
Adjustments: |
||||||||||||
Asset Impairments |
- |
(20.8) |
(6.1) |
(35.7) |
||||||||
Non-recurring Executive Compensation |
- |
(3.1) |
(1.0) |
(11.3) |
||||||||
Severance and Restructuring Expenses |
(5.9) |
(43.6) |
(104.1) |
(65.1) |
||||||||
Sale of Assets |
- |
- |
1.4 |
- |
||||||||
Other Selling and Administrative Expenses, As Adjusted |
$ |
388.4 |
$ |
385.2 |
$ |
1,395.0 |
$ |
1,405.8 |
||||
% of Net Sales |
25.5% |
23.9% |
30.9% |
28.8% |
||||||||
Operating Income (Loss) |
||||||||||||
Operating Income (Loss), As Reported |
$ |
107.4 |
$ |
(251.0) |
$ |
(236.5) |
$ |
(339.4) |
||||
Adjustments: |
||||||||||||
Asset Impairments4 |
- |
41.4 |
11.9 |
56.3 |
||||||||
Non-recurring Executive Compensation |
- |
3.1 |
1.0 |
11.3 |
||||||||
Severance and Restructuring Expenses5 |
5.9 |
43.6 |
109.8 |
65.1 |
||||||||
Sale of Assets |
- |
- |
(1.4) |
- |
||||||||
Operating Income (Loss), As Adjusted |
$ |
113.3 |
$ |
(163.0) |
$ |
(115.2) |
$ |
(206.7) |
||||
Other Information |
||||||||||||
Toys "R" Us Net Sales Reversal6 |
$ |
- |
$ |
- |
$ |
29.5 |
$ |
43.0 |
||||
Toys "R" Us Bad Debt Expense, Net6 |
$ |
(5.1) |
$ |
- |
$ |
32.2 |
$ |
- |
||||
1 Amounts may not foot due to rounding. |
||||||||||||
2Other Selling and Administrative Expenses, Operating Income (Loss), and Other Non-operating Expense, Net have been retrospectively restated to reflect the adoption of Accounting Standards Update 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. |
||||||||||||
3 Toys "R" Us Net Sales Reversal and Toys "R" Us Bad Debt Expense, Net are no longer presented as non-GAAP adjustments for the three months and year ended December 31, 2018 and 2017. |
||||||||||||
4 For the three months and year ended December 31, 2017, Asset Impairments include tooling write-offs of $20.6 million, which were recorded in Cost of Sales. |
||||||||||||
5 Severance and Restructuring Expenses recorded within Cost of Sales include $5.7 million of non-cash plant restructuring costs. |
||||||||||||
6As a result of the Toys "R" Us liquidation, Mattel reversed Net Sales for the estimated uncollectible portion of its outstanding receivables originating from first quarter 2018 sales. As such, Gross Profit, As Reported includes the Cost of Sales for the inventory sold to Toys "R" Us but excludes the corresponding Net Sales. Additionally, Mattel recorded Bad Debt Expense, Net for the estimated uncollectible portion of its outstanding receivables, net of recoveries and other reductions. |
||||||||||||
Earnings Per Share |
||||||||||||
Net Income (Loss) Per Common Share, As Reported |
$ |
0.04 |
$ |
(0.82) |
$ |
(1.54) |
$ |
(3.07) |
||||
Adjustments: |
||||||||||||
Asset Impairments4 |
- |
0.12 |
0.03 |
0.16 |
||||||||
Non-recurring Executive Compensation |
- |
0.01 |
- |
0.03 |
||||||||
Severance and Restructuring Expenses5 |
0.02 |
0.13 |
0.32 |
0.19 |
||||||||
Venezuela Matters7 |
- |
0.17 |
- |
0.17 |
||||||||
Tax Effect of Adjustments8 |
- |
(0.02) |
(0.01) |
(0.03) |
||||||||
Tax Items9 |
(0.02) |
(0.30) |
0.05 |
1.33 |
||||||||
Net Income (Loss) Per Common Share, As Adjusted |
$ |
0.04 |
$ |
(0.72) |
$ |
(1.14) |
$ |
(1.21) |
||||
EBITDA and Adjusted EBITDA |
||||||||||||
Net Income (Loss), As Reported |
$ |
14.9 |
$ |
(281.3) |
$ |
(531.0) |
$ |
(1,053.8) |
||||
Adjustments: |
||||||||||||
Interest Expense |
49.2 |
36.7 |
181.9 |
105.2 |
||||||||
Provision for (Benefit from) Income Taxes |
41.2 |
(65.6) |
111.7 |
548.8 |
||||||||
Depreciation |
53.2 |
61.0 |
232.8 |
240.8 |
||||||||
Amortization |
9.2 |
17.7 |
39.1 |
33.9 |
||||||||
EBITDA |
167.6 |
(231.5) |
34.6 |
(125.0) |
||||||||
Adjustments: |
||||||||||||
Asset Impairments4 |
- |
41.4 |
11.9 |
56.3 |
||||||||
Shared-based Compensation |
12.7 |
19.5 |
48.9 |
67.1 |
||||||||
Severance and Restructuring Expenses |
5.9 |
43.6 |
104.1 |
65.1 |
||||||||
Sale of Assets |
- |
- |
(1.4) |
- |
||||||||
Venezuela Matters7 |
- |
59.0 |
- |
59.0 |
||||||||
Adjusted EBITDA |
$ |
186.3 |
$ |
(68.0) |
$ |
198.0 |
$ |
122.5 |
1 Amounts may not foot due to rounding. |
||||||||||||||||||
2Other Selling and Administrative Expenses, Operating Income (Loss), and Other Non-operating Expense, Net have been retrospectively restated to reflect the adoption of Accounting Standards Update 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. |
||||||||||||||||||
3 Toys "R" Us Net Sales Reversal and Toys "R" Us Bad Debt Expense, Net are no longer presented as non-GAAP adjustments for the three months and year ended December 31, 2018 and 2017. |
||||||||||||||||||
4 For the three months and year ended December 31, 2017, Asset Impairments include tooling write-offs of $20.6 million, which were recorded in Cost of Sales. |
||||||||||||||||||
5 Severance and Restructuring Expenses recorded within Cost of Sales include $5.7 million of non-cash plant restructuring costs. |
||||||||||||||||||
7 For the three months and year ended December 31, 2017, the amount includes a $59.0 million loss from the discontinuation of Venezuelan operations. |
||||||||||||||||||
8 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. |
||||||||||||||||||
9 For the three months and year ended December 31, 2018, the amount includes a benefit of approximately $6 million and expense of approximately $18 million, respectively, related to the tax for deemed repatriation of accumulated foreign earnings and changes to Mattel's indefinite reinvestment assertion, both as a result of the U.S. Tax Act and the impact of the valuation allowance established for the portion of deferred tax assets Mattel believes will likely not be realized. For the three months ended December 31, 2017, the amount includes a benefit of approximately $105 million related to the estimated impact of the U.S. Tax Act. For the year ended December 31, 2017, the amount includes a net expense of approximately $457 million related to the valuation allowance on deferred tax assets and an estimate of the impact of the U.S. Tax Act. |
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