EL SEGUNDO, Calif.,
Feb. 7, 2019 /PRNewswire/ -- Mattel,
Inc. (NASDAQ: MAT) today reported 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."
Joseph Euteneuer, CFO of Mattel,
added: "Our key financial metrics, including gross margin,
operating income, and earnings per share, are all moving in the
right direction and our cost savings initiative is ahead of plan
entering 2019. Looking forward, we have ample opportunities to
improve our financial performance across the board as our business
strategy continues to gain traction in the marketplace."
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 China
business. Reported Operating Loss was $237
million, an improvement of $103
million versus the prior year, and Adjusted Operating Loss
was $115 million, an improvement of
$92 million versus the prior year.
Reported Loss Per Share was $1.54, an
improvement of $1.53 versus the prior
year, and Adjusted Loss Per Share was $1.14, an improvement of $0.07 versus the prior year.
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 Toys "R" Us liquidation
and a negative 2% impact from the slowdown in our China business. Reported Operating Income was
$107 million, an improvement of
$358 million, and Adjusted Operating
Income was $113 million, an
improvement of $276 million, versus
the prior year's fourth quarter. Reported Earnings Per Share were
$0.04, an improvement of $0.86 versus the prior year's fourth
quarter.
Financial Overview
For the year, Net Sales in the North
America segment decreased by 4% as reported and in constant
currency, versus the prior year. Gross Sales in the North America segment decreased by 5% as
reported, and by 4% in constant currency primarily driven by a 12%
impact from the Toys "R" Us liquidation. Net Sales in the
International segment decreased by 7% as reported, and 5% in
constant currency, versus the prior year. Gross Sales in the
International Region decreased by 8% as reported, and by 6% in
constant currency versus the prior year. Net Sales for the American
Girl® segment decreased by 27% as reported and in constant currency
versus the prior year. Gross Sales for the American Girl segment
decreased by 28% as reported and in constant currency.
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 $177
million and lower obsolescence expense, partially offset by
inflation in the cost of raw materials and plant labor. Reported
Other Selling and Administrative Expenses decreased by $13.1
million versus the prior year to $1.5
billion. Adjusted Other Selling and Administrative Expenses
decreased by $10.8 million versus the
prior year to $1.4 billion, primarily
driven by Structural Simplification cost savings of $165 million, partially offset by incremental
incentive compensation of $65 million
and Toys "R" Us net bad debt expense of $32
million.
For the fourth quarter, Net Sales in the North America segment decreased by 6% as
reported and in constant currency, versus the prior year's fourth
quarter. Gross Sales in the North
America segment decreased by 10% as reported, and 10% in
constant currency primarily driven by a 17% impact from the Toys
"R" Us liquidation. Net Sales in the International segment
increased 2% as reported, and 7% in constant currency, versus the
prior year's fourth quarter. Gross Sales in the International
segment decreased by 7% as reported, and 2% in constant currency
reflecting a negative 4% impact from the slowdown in our
China business and a 3% impact
from the Toys "R" Us liquidation. Net Sales for the American Girl
segment decreased by 26% as reported, and 25% in constant currency,
versus the prior year's fourth quarter. Gross Sales for the
American Girl segment decreased by 27% as reported and in constant
currency.
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 $114 million benefit from Structural
Simplification cost savings and lower inventory obsolescence
expense, partially offset by a negative 350 basis point impact from
inflation in the cost of raw materials and plant labor. Reported
Other Selling and Administrative Expenses decreased by $58 million versus the prior year's fourth
quarter to $394 million primarily
driven by a $66 million benefit from
Structural Simplification cost savings and lower severance and
restructuring costs of $38 million,
partially offset by incremental incentive compensation of
$68 million. Adjusted Other Selling
and Administrative Expenses increased by $3
million versus the prior year's fourth quarter to
$388 million, primarily driven by
incentive compensation, partially offset by Structural
Simplification cost savings.
For the year, Cash Flows Used for Operating Activities were
$27 million, which was in-line with
the prior year. Cash Flows Used for Investing Activities were
approximately $161 million, a
decrease of approximately $75
million, versus the prior year, primarily driven by lower
capital spending. Cash Flows Used for Financing Activities and
Other were approximately $297
million, which included a debt repayment of $250 million in the first quarter of 2018.
Sales by Brand
Power Brands
For the year, Gross Sales for Mattel
Power Brands were $3.45
billion, down 3% as reported, and 2% in constant currency,
versus the prior year. Gross Sales for Barbie were up 14% as
reported, and 15% in constant currency, primarily driven by
positive POS brand momentum. Gross Sales for Hot Wheels were up 7%
as reported, and 9% in constant currency, primarily driven by Hot
Wheels' 50th anniversary. Gross Sales for Fisher-Price
and Thomas & Friends were down 13% as reported, and in constant
currency, primarily driven by lower sales of Fisher-Price infant
and Thomas & Friends products. Gross Sales for American Girl
were down 28% as reported and in constant currency, primarily due
to lower sales in proprietary retail and direct channels, and a
strategic shift away from external distribution channels.
For the fourth quarter, Gross Sales for Mattel Power Brands were $1.2 billion, down 6% as reported, and 3% in
constant currency, versus the prior year's fourth quarter. Gross
Sales for Barbie were up 12% as reported, and 15% in constant
currency, primarily driven by positive POS brand momentum. Gross
Sales for Hot Wheels were up 9% as reported, and 12% in constant
currency, driven by Hot Wheels' 50th anniversary. Gross
Sales for Fisher-Price and Thomas & Friends were down 17% as
reported, and 15% in constant currency, primarily driven by lower
sales of Fisher-Price infant and Thomas & Friends products.
Gross Sales for American Girl were down 27% as reported and in
constant currency, primarily due to lower sales in proprietary
retail and direct channels, and a strategic shift away from
external distribution channels.
Toy Box
For the year, Gross Sales for Mattel Toy Box brands, which
includes Owned Brands and Partner Brands, were $1.62 billion, down 16% as reported, and 15% in
constant currency, versus the prior year. Gross Sales for Owned
Brands were down 10% as reported, and down 8% in constant currency,
primarily driven by lower sales of MEGA™ products. Gross Sales for
Partner Brands were down 23% as reported, and 22% in constant
currency, primarily driven by lower sales of CARS™ products,
partially offset by initial sales of Jurassic World™ products.
For the fourth quarter, Gross Sales for Mattel Toy Box brands
were $519 million, down 21% as
reported, and 19% in constant currency, versus the prior year's
fourth quarter. Gross Sales for Owned Brands were down 17% as
reported, and 15% in constant currency, primarily driven by lower
sales of MEGA products. Gross Sales for Partner Brands were down
25% as reported, and 23% in constant currency, primarily driven by
lower sales of CARS products, partially offset by initial sales of
Jurassic World products.
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 2018 full year and fourth quarter financial
results. The conference call will be webcast
on Mattel's Investor Relations
website, https://mattel.gcs-web.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 Thursday, February 14, 2019, and may be accessed
by dialing +1-404-537-3406. The passcode is 6689495.
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 Toys "R" Us, Inc., or changes in their
purchasing or selling patterns; (viii) 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; (ix) 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; (x) the
increased costs of developing more sophisticated digital and smart
technology products, and the corresponding supply chain and design
challenges associated with such products; (xi) work disruptions,
which may impact Mattel's ability to manufacture or deliver product
in a timely and cost-effective manner; (xii) the bankruptcy of Toys
"R" Us, Inc. or other 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; (xiii) 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 competitor's
products, the ability to secure, maintain and renew popular
licenses and the ability to attract and retain talented
employees; (xiv) the risk of product recalls or product
liability suits and costs associated with product safety
regulations; (xv) 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, (xvi) failure to realize the planned
benefits from any investments or acquisitions made by Mattel,
(xvii) 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 initiatives or alter Mattel's actions and reduce actual
results; (xviii) changes in financing markets or the inability of
Mattel to obtain financing on attractive terms (xix) the impact of
litigation or arbitration decisions or settlement actions; and (xx)
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, 2017, and Mattel's Quarterly Reports on Form 10-Q for
fiscal year 2018, as well as in Mattel's other public statements.
Mattel does not update forward-looking statements and expressly
disclaims any obligation to do so.
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 gross sales, adjusted gross profit, adjusted gross
margin, adjusted other selling and administrative expenses,
adjusted operating income (loss), adjusted earnings (loss) per
share, earnings before interest expense, taxes, depreciation and
amortization ("EBITDA"), Adjusted EBITDA, and constant currency.
Mattel uses these metrics to analyze its continuing operations and
to monitor, assess and identify meaningful trends in its operating
and financial performance, and each is discussed in detail 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 the Company's results. These measures are not, and should not be
viewed as, substitutes for GAAP financial measures. 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://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 Venezuela matters, 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 also excludes the impact of 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. 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
the impact of asset impairments, share-based compensation,
severance and restructuring expenses, sale of assets, and
Venezuela matters, 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 our
industry with similar capital structures. The presentation of
Adjusted EBITDA differs from how we will calculate EBITDA for
purposes of covenant compliance under the indenture governing our
6.75% senior notes due 2025 and the syndicated facility agreement
governing our senior secured revolving credit facilities. Because
of these limitations, EBITDA and Adjusted EBITDA should not be
considered as measures of discretionary cash available to us to
invest in the growth of our business. As a result, we rely
primarily on our GAAP results and use EBITDA and Adjusted EBITDA
only supplementally.
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
|
dena@brewpr.com
|
whitney.steininger@mattel.com
|
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
as Reported
|
|
% Change in
Constant
Currency
|
|
|
2018
|
|
2017
|
|
% Change
as Reported
|
|
% Change in
Constant
Currency
|
|
|
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
as Reported
|
|
% Change in
Constant
Currency
|
|
2018
|
|
2017
|
|
% Change
as Reported
|
|
% Change in
Constant
Currency
|
|
|
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
as Reported
|
|
% Change in
Constant
Currency
|
|
|
2018
|
|
2017
|
|
% Change
as Reported
|
|
% Change in
Constant
Currency
|
|
|
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
as Reported
|
|
% Change in
Constant
Currency
|
|
2018
|
|
2017
|
|
% Change
as Reported
|
|
% Change in
Constant
Currency
|
|
|
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.
|
![Mattel Logo (PRNewsFoto/Mattel) Mattel Logo (PRNewsFoto/Mattel)](https://mma.prnewswire.com/media/226835/mattel_logo.jpg)
View original content to download
multimedia:http://www.prnewswire.com/news-releases/mattel-reports-full-year-and-fourth-quarter-2018-financial-results-300792093.html
SOURCE Mattel, Inc.