- First quarter Net Sales of $594 million, down 14% as
reported, and down 12% in constant currency, versus prior
year.
- Gross Sales of $670 million, down 14% as reported, and down
12% in constant currency.
- Reported Gross Margin of 43.0%, an improvement of 820 basis
points; Adjusted Gross Margin of 43.5%, an improvement of 550 basis
points.
- Reported Operating Loss of $150 million, compared to a prior
year loss of $127 million; Adjusted Operating Loss of $133 million,
compared to a prior year loss of $97 million.
- Cash Flows Used for Operating Activities of $174 million, an
improvement of $19 million.
- Global manufacturing and distribution capacity largely
restored, expect to meet product demand for the second half of the
year.
- Liquidity, including cash on hand and access to $1.6 billion
senior secured revolving credit facilities, is expected to be
sufficient to effectively manage through COVID-19 disruption and to
continue to execute strategy.
- Withdrawing previous 2020 guidance due to uncertainty
related to COVID-19.
- Mattel dedicated to community support through producing
personal protective equipment for medical professionals and
providing grants and toy donations.
Mattel, Inc. (NASDAQ: MAT) today reported first quarter 2020
financial results.
Ynon Kreiz, Chairman and CEO, Mattel said: “While the world has
been facing the unprecedented health and economic impact of
COVID-19, we have been quickly adjusting the way we operate and how
we manage the Company. Our top priority has been to protect the
health and safety of our people and at the same time mitigate the
disruption to our business. I am proud of how our team has embraced
uncertainty and change and demonstrated resilience in the face of
this challenge.”
“Our work over the past two years to develop a flexible and
results-oriented organization is serving us well during this time,”
Mr. Kreiz continued. “We remain focused on transforming Mattel into
an IP-driven, high-performing toy company and creating long-term
shareholder value. Looking beyond the second quarter, with supply
chain and retail distribution continuing to improve and markets
reopening, we are planning for increased demand for our products in
expectation of a much-improved second half and holiday season. We
are confident in our ability to navigate through the balance of the
year and believe our assets, resources, and capabilities position
us well to succeed in the recovery.”
Joseph Euteneuer, CFO, Mattel said: “Our accomplishments over
the past two years position us well to respond to changing market
conditions. In the first quarter, we delivered significant Gross
Margin improvement with our highest first quarter Gross Margin
since 2016, despite the COVID-19 disruption. Additionally, the
cumulative savings from Structural Simplification, Capital Light,
and our additional 2020 actions are expected to exceed $1 billion
exiting the year. With our cash on hand and access to our $1.6
billion senior secured revolving credit facilities, we expect to
have sufficient liquidity to effectively manage through the
disruption and to continue to execute our strategy.”
For the first quarter, Net Sales were down 14% as reported, and
down 12% in constant currency, versus the prior year’s first
quarter. Gross Sales were down 14% as reported, and down 12% in
constant currency. Reported Operating Loss was $149.8 million,
compared to a prior year loss of $127.1 million, and Adjusted
Operating Loss was $133.0 million, compared to a prior year loss of
$96.5 million. Reported Loss Per Share was $0.61, compared to a
prior year loss per share of $0.51, and Adjusted Loss Per Share was
$0.56, compared to a prior year loss per share of $0.42.
COVID-19 Business Update
Mattel has taken preventative actions to protect the health and
safety of the organization and mitigate the disruption to the
business. This includes the successful transition to a remote work
structure for employees working in 35 countries, the implementation
of stringent measures to safeguard personnel at plants and
distribution centers, and the temporary closure of Mattel’s
American Girl® retail stores.
The global supply chain organization has rapidly responded to
the frequent and unpredictable changes occurring in various
locations where Mattel operates. The team has taken mitigating
actions to return manufacturing and distribution operations to
near-normal operating capacity, including China, and are taking
similar actions in other parts of the world where necessary. Mattel
believes operations are on the right path to meet production needs
for the second half of the year, leading up to and including the
holiday season.
The global commercial organization has also been working with
retail partners daily to navigate the dynamic landscape and
evolving consumer path to purchase. The team developed and launched
new promotions and marketing activation initiatives that were
tailored to the new consumer behaviors. Additionally, joint
business plans with retailers are being accelerated to compensate
for the disruption and adapt to the retail environment, including
transition to online retail and omni-channel experience.
The design and category management organizations have been quick
to respond to consumer needs and find new ways to engage with
Mattel’s brands. The Company recently launched the Mattel Playroom,
a free online platform that offers parents and caregivers a
centralized resource for activities, expert advice, games, and
content from our iconic brands.
Mattel will continue to benefit from cost savings related to the
Structural Simplification and Capital Light programs and from
additional actions taken in 2020 in response to COVID-19.
Liquidity, including cash on hand and access to the $1.6 billion
senior secured revolving credit facilities, is expected to be
sufficient to effectively manage through the COVID-19 disruption
and to continue to execute Mattel’s strategy.
Given the high level of uncertainty around the impact of
COVID-19, Mattel is withdrawing its previous 2020 guidance.
COVID-19 Community Support
Mattel is leveraging its expertise, products and resources to
support communities, those in need, and frontline heroes. Design
teams across campuses are partnering with Mattel’s manufacturing
facilities to make personal protective equipment, including 500,000
face shields, for donation to medical professionals. In addition,
Mattel launched its “Thank You Heroes” collection, with all net
proceeds being donated to First Responders First. Globally, Mattel
has given grants to Feed the Children and Save the Children.
Domestically, the Mattel Children’s Foundation has donated art
supplies, games, and other toys to the Los Angeles Unified School
District’s “LA Students Most in Need” charitable effort.
Financial Overview
For the first quarter, Net Sales in the North America segment
decreased 16% as reported and in constant currency, versus the
prior year’s first quarter.
Gross Sales in the North America segment decreased 17% as
reported and in constant currency, primarily driven by declines in
Infant, Toddler and Preschool (including Fisher-Price and Thomas
& Friends, and Fisher-Price Friends), Action Figures, Building
Sets and Games (including Toy Story 4 and MEGA®, partially offset
by growth in UNO® and Pictionary®), and Dolls (including owned
brands and Barbie®). This was partially offset by growth in
Vehicles (including Hot Wheels®, partially offset by lower sales of
CARS® and Jurassic World® vehicles).
Net Sales in the International segment decreased 11% as
reported, and 8% in constant currency.
Gross Sales in the International segment decreased 11% as
reported, and 7% in constant currency, primarily driven by declines
in Infant, Toddler and Preschool (including Fisher-Price and Thomas
& Friends, and Fisher-Price Friends), Dolls (including Barbie,
partially offset by growth in owned brands), and Action Figures,
Building Sets and Games (including DC Comics™ and Jurassic World,
partially offset by growth in UNO).
Net Sales in the American Girl segment decreased 16% as reported
and in constant currency. Gross Sales in the American Girl segment
decreased by 16% as reported and in constant currency, primarily
driven by lower sales in proprietary retail channels, partially
offset by higher direct-to-consumer sales.
Reported Gross Margin increased to 43.0%, versus 34.8% in the
prior year’s first quarter, and Adjusted Gross Margin increased to
43.5%, versus 38.0%. The increase in Reported Gross Margin was
primarily driven by the benefit of cost savings programs and the
absence of the impact of the inclined sleeper product recalls. The
increase in Adjusted Gross Margin was primarily driven by the
benefit of Mattel’s cost savings programs.
Reported Other Selling and Administrative Expenses increased by
$31.3 million, or 11%, to $328.7 million, versus the prior year’s
first quarter. Adjusted Other Selling and Administrative Expenses
increased by $26.2 million, or 9%, to $314.9 million. The increase
in Reported and Adjusted Other Selling and Administrative Expenses
was primarily driven by higher incentive compensation expense and
employee-related costs, partially offset by the benefit of the
Structural Simplification cost savings program.
Sales by Categories
For the first quarter, Worldwide Gross Sales for Dolls were
$225.9 million, down 11% as reported, and down 9% in constant
currency, versus the prior year’s first quarter, primarily driven
by declines in Barbie and American Girl.
Worldwide Gross Sales for Infant, Toddler and Preschool were
$140.3 million, down 28% as reported, and down 26% in constant
currency, primarily driven by declines in Fisher-Price and Thomas
& Friends, and Fisher-Price Friends.
Worldwide Gross Sales for Vehicles were $185.7 million, up 1% as
reported, and up 4% in constant currency, primarily driven by
growth in Hot Wheels, partially offset by expected declines in CARS
vehicles, given the non-movie year.
Worldwide Gross Sales for Action Figures, Building Sets and
Games were $118.1 million, down 21% as reported, and down 20% in
constant currency, primarily driven by declines in Toy Story 4,
post its movie launch year, and DC Comics, partially offset by
growth in UNO.
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 first
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 Tuesday,
May 12, 2020 and may be accessed by dialing +1-404-537-3406. The
passcode is 4767309.
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
assumptions, and are subject to a number of significant risks and
uncertainties. A variety of factors, many of which are beyond our
control, could cause actual future results to differ materially
from those projected in the forward-looking statements, and are
currently, or in the future could be, amplified by the COVID-19
pandemic. Specific factors that might cause such a difference
include, but are not limited to: (i) potential impacts of the
COVID-19 pandemic on our business operations, financial results and
financial position and on the global economy, including its impact
on our sales; (ii) Mattel’s ability to design, develop, produce,
manufacture, source and ship products on a timely and
cost-effective basis, as well as interest in and purchase of those
products by retail customers and consumers in quantities and at
prices that will be sufficient to profitably recover Mattel’s
costs; (iii) downturns in economic conditions affecting Mattel’s
markets which can negatively impact retail customers and consumers,
and which can result in lower employment levels, lower consumer
disposable income and spending, including lower spending on
purchases of Mattel’s products; (iv) other factors which can lower
discretionary consumer spending, such as higher costs for fuel and
food, drops in the value of homes or other consumer assets, and
high levels of consumer debt; (v) potential difficulties or delays
Mattel may experience in implementing cost savings and efficiency
enhancing initiatives; (vi) other economic and public health
conditions or regulatory changes in the markets in which Mattel and
its customers and suppliers operate, which could create delays or
increase Mattel’s costs, such as higher commodity prices, labor
costs or transportation costs, or outbreaks of disease; (vii)
currency fluctuations, including movements in foreign exchange
rates, which can lower Mattel’s net revenues and earnings, and
significantly impact Mattel’s costs; (viii) the concentration of
Mattel’s customers, potentially increasing the negative impact to
Mattel of difficulties experienced by any of Mattel’s customers,
such as the bankruptcy and liquidation of Toys “R” Us, Inc., or
changes in their purchasing or selling patterns; (ix) the future
willingness of licensors of entertainment properties for which
Mattel currently has licenses or would seek to have licenses in the
future to license those products to Mattel; (x) the inventory
policies of Mattel’s retail customers, including retailers’
potential decisions to lower their inventories, even if it results
in lost sales, as well as the concentration of Mattel’s revenues in
the second half of the year, which coupled with reliance by
retailers on quick response inventory management techniques
increases the risk of underproduction of popular items,
overproduction of less popular items and failure to achieve
compressed shipping schedules; (xi) the increased costs of
developing more sophisticated digital and smart technology
products, and the corresponding supply chain and design challenges
associated with such products; (xii) work disruptions, which may
impact Mattel’s ability to manufacture or deliver product in a
timely and cost-effective manner; (xiii) the bankruptcy and
liquidation of Mattel’s significant retailers, such as Toys “R” Us,
Inc., or the general lack of success of one of Mattel’s significant
retailers which could negatively impact Mattel’s revenues or bad
debt exposure; (xiv) the impact of competition on revenues, margins
and other aspects of Mattel’s business, including the ability to
offer products which consumers choose to buy instead of competitive
products, the ability to secure, maintain and renew popular
licenses and the ability to attract and retain talented employees;
(xv) the risk of product recalls or product liability suits and
costs associated with product safety regulations; (xvi) 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; (xvii)
failure to realize the planned benefits from any investments or
acquisitions made by Mattel; (xviii) the impact of other market
conditions, third party actions or approvals and competition which
could reduce demand for Mattel’s products or delay or increase the
cost of implementation of Mattel’s programs or alter Mattel’s
actions and reduce actual results; (xix) changes in financing
markets or the inability of Mattel to obtain financing on
attractive terms; (xx) the impact of litigation, arbitration, or
regulatory decisions or settlement actions; (xxi) uncertainty from
the expected discontinuance of LIBOR and transition to any other
interest rate benchmark; and (xxii) other risks and uncertainties
as may be described in Mattel’s periodic filings with the
Securities and Exchange Commission, including the “Risk Factors”
section of Mattel’s Annual Report on Form 10-K for the fiscal year
ended December 31, 2019, as well as in Mattel’s other public
statements. Mattel does not update forward-looking statements and
expressly disclaims any obligation to do so, except as required by
law.
Non-GAAP Financial Measures
To supplement our financial results presented in accordance with
generally accepted accounting principles in the United States
(“GAAP”), Mattel presents certain non-GAAP financial measures
within the meaning of Regulation G promulgated by the Securities
and Exchange Commission. The non-GAAP financial measures that
Mattel uses in this earnings release include 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 Mattel’s
results. These measures are not, and should not be viewed as,
substitutes for GAAP financial measures and may not be comparable
to similarly titled measures used by other companies.
Reconciliations of the non-GAAP financial measures to the most
directly comparable GAAP financial measures are attached to this
earnings release as exhibits and to our earnings slide presentation
as an appendix.
This earnings release and our earnings slide presentation are
available on Mattel's Investor Relations website,
https://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, categorical, 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 categories and 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 severance and restructuring expenses and the
impact of the inclined sleeper product recalls. Adjusted Gross
Margin represents Mattel’s Adjusted Gross Profit, as a percentage
of Net Sales. Adjusted Gross Profit and Adjusted Gross Margin are
presented to provide additional perspective on underlying trends in
Mattel’s core Gross Profit and Gross Margin, which Mattel believes
is useful supplemental information for investors to be able to
gauge and compare Mattel’s current business performance from one
period to another.
Adjusted Other Selling and Administrative Expenses
Adjusted Other Selling and Administrative Expenses represents
Mattel’s Reported Other Selling and Administrative Expenses,
adjusted to exclude severance and restructuring expenses and the
impact of the inclined sleeper product recalls, 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 Income (Loss), adjusted to exclude severance and
restructuring expenses and the impact of the inclined sleeper
product recalls, 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
severance and restructuring expenses and the impact of the inclined
sleeper product recalls, which are not part of Mattel’s core
business. The aggregate tax effect of the adjustments is calculated
by tax effecting the adjustments by the current effective tax rate,
adjusting for certain discrete tax items, and dividing by the
reported weighted average number of common shares. Adjusted
Earnings (Loss) Per Share is presented to provide additional
perspective on underlying trends in Mattel’s core business. Mattel
believes it is useful supplemental information for investors to
gauge and compare Mattel’s current earnings results from one period
to another. Adjusted Earnings (Loss) Per Share is a performance
measure and should not be used as a measure of liquidity.
EBITDA and Adjusted EBITDA
EBITDA represents Mattel’s Net Income (Loss), adjusted to
exclude the impact of interest expense, taxes, depreciation and
amortization. Adjusted EBITDA represents EBITDA adjusted to exclude
share-based compensation, severance and restructuring expenses, and
the impact of the inclined sleeper product recalls, 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, the indenture governing our 5.875%
senior notes due 2027, 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.
MAT-FIN MAT-CORP
MATTEL, INC. AND SUBSIDIARIES EXHIBIT I
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)1
For the Three Months Ended March 31,
2020
2019
% ChangeasReported % Changein ConstantCurrency
(In millions, except per share and
percentage information) $ Amt % Net Sales
$ Amt % Net Sales Net Sales
$
594.1
$
689.2
-14
%
-12
%
Cost of sales
338.9
57.0
%
449.5
65.2
%
-25
%
Gross Profit
255.2
43.0
%
239.8
34.8
%
6
%
8
%
Advertising and promotion expenses
76.3
12.8
%
69.5
10.1
%
10
%
Other selling and administrative expenses
328.7
55.3
%
297.4
43.1
%
11
%
Operating Loss
(149.8
)
-25.2
%
(127.1
)
-18.4
%
18
%
20
%
Interest expense
49.0
8.2
%
47.0
6.8
%
4
%
Interest (income)
(2.1
)
-0.4
%
(2.3
)
-0.3
%
-8
%
Other non-operating expense, net
2.1
1.9
Loss Before Income Taxes
(198.8
)
-33.5
%
(173.6
)
-25.2
%
15
%
15
%
Provision for income taxes
11.9
2.7
Net Loss
$
(210.7
)
-35.5
%
$
(176.3
)
-25.6
%
20
%
Net Loss Per Common Share - Basic
$
(0.61
)
$
(0.51
)
Weighted-average number of common shares
346.9
345.9
Net Loss Per Common Share - Diluted
$
(0.61
)
$
(0.51
)
Weighted-average number of common and potential common shares
346.9
345.9
1 Amounts may not foot due to rounding.
MATTEL, INC. AND
SUBSIDIARIES EXHIBIT II CONDENSED CONSOLIDATED
BALANCE SHEETS1 March 31, December 31,
2020
2019
2019
(In millions)
(Unaudited) Assets Cash and equivalents
$
499.4
$
380.1
$
630.0
Accounts receivable, net
528.5
624.5
936.4
Inventories
560.6
615.8
495.5
Prepaid expenses and other current assets
218.5
274.7
186.1
Total current assets
1,807.1
1,895.1
2,248.0
Property, plant, and equipment, net
519.8
622.3
550.1
Right-of-use assets, net
298.3
327.4
303.2
Other noncurrent assets
2,179.2
2,237.6
2,223.9
Total Assets
$
4,804.4
$
5,082.4
$
5,325.2
Liabilities and Stockholders' Equity Short-term
borrowings
$
150.0
$
-
$
-
Accounts payable and accrued liabilities
963.7
982.0
1,228.9
Income taxes payable
12.3
19.4
48.0
Total current liabilities
1,126.0
1,001.4
1,276.9
Long-term debt
2,848.9
2,853.5
2,846.8
Noncurrent lease liabilities
262.6
294.8
270.9
Other noncurrent liabilities
408.9
409.3
439.0
Total stockholders' equity
157.9
523.4
491.7
Total Liabilities and Stockholders' Equity
$
4,804.4
$
5,082.4
$
5,325.2
SUPPLEMENTAL BALANCE SHEET AND CASH FLOW DATA
(Unaudited)1 March 31,
2020
2019
Key Balance Sheet Data:
Accounts receivable, net days of sales outstanding (DSO)
80
82
Three Months Ended March 31, (In millions)
2020
2019
Condensed Cash Flow Data: Cash
flows used for operating activities
$
(174
)
$
(193
)
Cash flows used for investing activities
(81
)
(19
)
Cash flows provided by (used for) financing activities and other
125
(2
)
Decrease in cash and equivalents
$
(131
)
$
(214
)
1 Amounts may not foot due to rounding.
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 March
31, (In millions, except percentage
information)
2020
2019
% Changeas Reported % Change inConstantCurrency
Worldwide Gross Sales: Net Sales
$
594.1
$
689.2
-14
%
-12
%
Sales Adjustments2
75.9
90.9
Gross Sales
$
670.0
$
780.1
-14
%
-12
%
Worldwide Gross Sales by
Categories: Dolls
$
225.9
$
252.9
-11
%
-9
%
Infant, Toddler and Preschool
140.3
193.6
-28
-26
Vehicles
185.7
183.4
1
4
Action Figures, Building Sets and Games
118.1
150.3
-21
-20
Gross Sales
$
670.0
$
780.1
-14
%
-12
%
Supplemental Gross Sales
Disclosure Worldwide
Gross Sales by Top 3 Power Brands: Barbie
$
147.5
$
163.5
-10
%
-8
%
Hot Wheels
158.6
150.5
5
8
Fisher-Price and Thomas & Friends
128.8
172.4
-25
-24
Other
235.1
293.7
-20
-19
Gross Sales
$
670.0
$
780.1
-14
%
-12
%
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 categories or 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 March 31, (In millions,
except percentage information)
2020
2019
% Changeas Reported % Change inConstantCurrency
North America Segment Gross Sales: Net Sales
$
287.6
$
341.4
-16
%
-16
%
Sales Adjustments2
18.2
28.0
Gross Sales
$
305.8
$
369.4
-17
%
-17
%
North America Gross Sales by
Categories: Dolls
$
73.9
$
80.3
-8
%
-8
%
Infant, Toddler and Preschool
76.6
108.0
-29
-29
Vehicles
88.7
85.0
4
4
Action Figures, Building Sets and Games
66.5
96.2
-31
-31
Gross Sales
$
305.8
$
369.4
-17
%
-17
%
Supplemental Gross Sales
Disclosure North America
Gross Sales by Top 3 Power Brands: Barbie
$
67.8
$
69.3
-2
%
-2
%
Hot Wheels
74.1
67.1
11
11
Fisher-Price and Thomas & Friends
69.9
96.6
-28
-28
Other
94.0
136.5
-31
-31
Gross Sales
$
305.8
$
369.4
-17
%
-17
%
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 categories or 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 March 31,
(In millions, except percentage
information)
2020
2019
% Changeas Reported % Change inConstantCurrency
International Segment Gross Sales: Net Sales
$
269.4
$
303.4
-11
%
-8
%
Sales Adjustments2
56.8
61.8
Gross Sales
$
326.1
$
365.2
-11
%
-7
%
International Gross Sales by
Geographic Area: EMEA Net Sales
$
173.3
$
174.5
-1
%
2
%
Sales Adjustments2
42.0
41.9
Gross Sales
$
215.3
$
216.3
-
%
3
%
Latin America Net Sales
$
51.3
$
64.5
-20
%
-14
%
Sales Adjustments2
8.4
10.8
Gross Sales
$
59.7
$
75.3
-21
%
-14
%
Asia Pacific Net Sales
$
44.8
$
64.4
-31
%
-28
%
Sales Adjustments2
6.4
9.1
Gross Sales
$
51.2
$
73.6
-30
%
-28
%
International Gross Sales by
Categories: Dolls
$
113.9
$
127.1
-10
%
-7
%
Infant, Toddler and Preschool
63.8
85.6
-26
-22
Vehicles
96.9
98.4
-2
3
Action Figures, Building Sets and Games
51.5
54.1
-5
-1
Gross Sales
$
326.1
$
365.2
-11
%
-7
%
Supplemental Gross Sales
Disclosure International
Gross Sales by Top 3 Power Brands: Barbie
$
79.7
$
94.2
-15
%
-12
%
Hot Wheels
84.5
83.5
1
6
Fisher-Price and Thomas & Friends
58.8
75.8
-22
-19
Other
103.1
111.7
-8
-4
Gross Sales
$
326.1
$
365.2
-11
%
-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 categories or brand level.
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 March 31,
(In millions, except percentage
information)
2020
2019
% Changeas Reported % Change inConstantCurrency
American Girl Segment Gross Sales: Net Sales
$
37.2
$
44.4
-16
%
-16
%
Sales Adjustments
0.9
1.1
Gross Sales
$
38.1
$
45.6
-16
%
-16
%
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 March 31, (In millions, except
per share and percentage information)
2020
2019
Gross Profit Gross Profit, As
Reported
$
255.2
$
239.8
Gross Margin
43.0
%
34.8
%
Adjustments: Severance and Restructuring Expenses
3.1
-
Inclined Sleeper Product Recalls2
-
21.9
Gross Profit, As Adjusted
$
258.2
$
261.7
Adjusted Gross Margin
43.5
%
38.0
%
Other Selling and Administrative
Expenses Other Selling and Administrative Expenses, As
Reported
$
328.7
$
297.4
% of Net Sales
55.3
%
43.1
%
Adjustments: Severance and Restructuring Expenses
(7.5
)
(8.7
)
Inclined Sleeper Product Recalls2
(6.3
)
-
Other Selling and Administrative Expenses, As Adjusted
$
314.9
$
288.7
% of Net Sales
53.0
%
41.9
%
Operating Loss Operating
Loss, As Reported
$
(149.8
)
$
(127.1
)
Adjustments: Severance and Restructuring Expenses
10.6
8.7
Inclined Sleeper Product Recalls2
6.3
21.9
Operating Loss, As Adjusted
$
(133.0
)
$
(96.5
)
Other Information
Inclined Sleeper Product Recalls2
$
6.3
$
27.3
1 Amounts may not foot due to rounding.
2 For the three months ended March 31,
2020, Mattel recorded expenses related to inclined sleeper product
recall litigation of $6.3 million. For the three months ended March
31, 2019, Mattel recorded an estimated impact of $27.3 million
related to the inclined sleeper product recalls, including $5.4
million as a reduction to Net Sales for estimated retailer
returns.
For the Three Months Ended March 31, (In millions, except per share and percentage
information)
2020
2019
Earnings Per Share Net Loss Per
Common Share, As Reported
$
(0.61
)
$
(0.51
)
Adjustments: Severance and Restructuring Expenses
0.03
0.03
Inclined Sleeper Product Recalls2
0.02
0.06
Net Loss Per Common Share, As Adjusted
$
(0.56
)
$
(0.42
)
EBITDA and Adjusted
EBITDA Net Loss, As Reported
$
(210.7
)
$
(176.3
)
Adjustments: Interest Expense
49.0
47.0
Provision for Income Taxes
11.9
2.7
Depreciation
43.7
52.1
Amortization
10.0
10.4
EBITDA
(96.2
)
(64.1
)
Adjustments: Share-based Compensation
14.3
11.9
Severance and Restructuring Expenses
10.3
8.7
Inclined Sleeper Product Recalls2
6.3
21.9
Adjusted EBITDA
$
(65.4
)
$
(21.7
)
1 Amounts may not foot due to rounding.
2 For the three months ended March 31,
2020, Mattel recorded expenses related to inclined sleeper product
recall litigation of $6.3 million. For the three months ended March
31, 2019, Mattel recorded an estimated impact of $27.3 million
related to the inclined sleeper product recalls, including $5.4
million as a reduction to Net Sales for estimated retailer
returns.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200505005926/en/
News Media Dena Cook dena.cook@mattel.com 310-252-4247
Securities Analysts David Zbojniewicz
david.zbojniewicz@mattel.com 310-252-2703
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