- Net Sales of $1,026 million, up 40% as reported, and 36% in
constant currency, versus prior year
- Reported Gross Margin of 47.5%, an improvement of 390 basis
points; Adjusted Gross Margin of 47.5%, an improvement of 370 basis
points
- Reported Operating Income of $49 million, an improvement of
$97 million; Adjusted Operating Income of $67 million, an
improvement of $94 million
- Reported Net Loss of $6 million, an improvement of $106
million
- Adjusted EBITDA of $131 million, an increase of $102
million
- Updated 2021 guidance to be provided on the Company’s Q2
2021 conference call and live webcast
Mattel, Inc. (NASDAQ: MAT) today reported second quarter 2021
financial results.
Ynon Kreiz, Chairman and CEO of Mattel said: “This was another
exceptional quarter for Mattel, with outstanding consumer demand
for our product. Our strength is foundational and broad-based. We
believe we are in the strongest position we have been in many years
to improve profitability and accelerate topline growth. This is an
exciting time for Mattel.”
Mr. Kreiz continued: “Our overall performance this quarter and
comprehensive topline growth is adding momentum to our
transformation strategy. We are now firmly in growth mode and
establishing Mattel as an IP-driven, high-performing toy
company.”
Anthony DiSilvestro, CFO of Mattel said: “Mattel continued its
strong performance this quarter, with substantial gains in net
sales, further expansion of gross margin, and more than quadrupling
our Adjusted EBITDA. We are meaningfully increasing our cash flow
generation and free cash flow conversion as well as strengthening
the balance sheet. We are pleased to raise guidance as we continue
to improve profitability and accelerate topline growth.”
For the second quarter, Net Sales were up 40% as reported, and
36% in constant currency, versus the prior year’s second quarter.
Reported Operating Income was $49 million, an improvement of $97
million, and Adjusted Operating Income was $67 million, an
improvement of $94 million. Reported Loss Per Share was $0.02, an
improvement of $0.30 per share, and Adjusted Earnings Per Share was
$0.03, an improvement of $0.29 per share.
For the first six months of the year, Net Sales were up 43% as
reported, and 41% in constant currency, versus the prior year’s
first six months. Reported Operating Income was $83 million, an
increase of $276 million versus the prior year’s first six month’s
Reported Operating Loss of $193 million, and Adjusted Operating
Income was $98 million, an increase of $253 million. Reported Loss
Per Share was $0.34, an improvement of $0.57, and Adjusted Loss Per
Share was $0.06, an improvement of $0.75 per share.
Financial Overview
Net Sales in the North America segment increased 30% as
reported, and 29% in constant currency, versus the prior year’s
second quarter.
Gross Billings in the North America segment increased 30% as
reported, and 29% in constant currency, driven by growth in
Vehicles (including Hot Wheels®, CARS™, and Matchbox®), Dolls
(including Barbie®, Spirit™, and Polly Pocket®), Action Figures,
Building Sets, Games, and Other (including Jurassic World™, Master
of the Universe®, WWE™, and MEGA®), and Infant, Toddler, and
Preschool (including Fisher-Price® and Thomas & Friends™).
Net Sales in the International segment increased 57% as reported
and 47% in constant currency.
Gross Billings in the International segment increased 57% as
reported, and 47% in constant currency, driven by growth in Dolls
(including Barbie, Spirit, and Polly Pocket), Vehicles (including
Hot Wheels, Matchbox, and CARS), Action Figures, Building Sets,
Games, and Other (including Jurassic World, Masters of the
Universe, MEGA, and Games), and Infant, Toddler, and Preschool
(including Fisher-Price and Thomas & Friends).
Net Sales in the American Girl® segment increased 44% as
reported and in constant currency.
Gross Billings in the American Girl segment increased 43% as
reported and in constant currency, driven by higher billings of
proprietary retail channels, partially offset by lower
direct-to-consumer billings.
Reported Gross Margin increased to 47.5%, versus 43.6% in the
prior year’s second quarter, and Adjusted Gross Margin increased to
47.5%, versus 43.8%. The increase in Reported and Adjusted Gross
Margin was primarily driven by fixed cost absorption benefit
associated with high sales growth in the quarter and savings from
the Optimizing for Growth program, partially offset by input cost
inflation in cost of goods sold.
Reported Other Selling and Administrative Expenses increased by
$44 million, or 14%, to $351 million. Adjusted Other Selling and
Administrative Expenses increased by $45 million, or 16%, to $333
million. The increase in Reported and Adjusted Other Selling and
Administrative Expenses was primarily due to above target incentive
compensation expense accrued in the quarter given expectations of
performance this year and comparisons to cost-saving actions taken
in the prior year in response to the COVID-19 pandemic.
For the six months ended June 30, 2021, Cash Flows Used for
Operating Activities were $241 million, an improvement of $225
million, versus the prior year’s first six months, primarily driven
by current year lower net loss, excluding the impact of non-cash
charges. Cash Flows Used for Investing Activities improved by $51
million to $27 million, primarily driven by proceeds from the
disposal of assets and a business and higher proceeds from foreign
currency forward contracts. Cash Flows Used for Financing
Activities and Other were $109 million, an increase of $484
million, primarily due to the partial redemption of long-term
borrowings in 2021 as compared to proceeds from short-term
borrowings in 2020.
Gross Billings by Categories
Worldwide Gross Billings for Dolls were $395 million, up 51% as
reported, and 47% in constant currency, versus the prior year’s
second quarter, primarily driven by growth in Barbie, American
Girl, Spirit, and Polly Pocket.
Worldwide Gross Billings for Infant, Toddler, and Preschool were
$229 million, up 15% as reported, and 12% in constant currency,
primarily driven by growth in Fisher-Price and Thomas &
Friends.
Worldwide Gross Billings for Vehicles were $266 million, up 68%
as reported, and 62% in constant currency, driven by growth in Hot
Wheels, Matchbox, and CARS.
Worldwide Gross Billings for Action Figures, Building Sets,
Games, and Other were $258 million, up 32% as reported, and 28% in
constant currency, primarily driven by growth in Jurassic World,
Masters of the Universe, WWE, and MEGA, partially offset by Games,
including UNO®.
COVID-19 Business Update
Mattel’s top priority continues to be the health and safety of
its people, and at the same time, mitigating the disruption of the
COVID-19 pandemic to the business. Mattel remains mindful of the
COVID-19 volatility and other macro-economic uncertainties, which
could negatively impact performance.
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 second
quarter financial results. The conference call will be webcast on
Mattel's Investor Relations website, https://investors.mattel.com.
To listen to the live call, log on to the website at least 10
minutes early to register, download, and install any necessary
audio software. An archive of the webcast will be available on
Mattel's Investor Relations website for 90 days and may be accessed
beginning approximately two hours after the completion of the live
call. A telephonic replay of the call will be available beginning
at 8:30 p.m. Eastern time the evening of the call until Tuesday,
August 3, 2021 and may be accessed by dialing +1-404-537-3406. The
passcode is 3897244.
Forward-Looking Statements
This press release contains a number of forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements can be identified by
the fact that they do not relate strictly to historical or current
facts. The use of words such as “anticipates,” “expects,”
“intends,” “plans,” “confident that,” “believes,” and “targeted,”
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
Mattel’s control, could cause actual future results to differ
materially from those projected in the forward-looking statements,
and are currently, and in the future may be, amplified by the
COVID-19 pandemic. Specific factors that might cause such a
difference include, but are not limited to: (i) potential impacts
of and uncertainty regarding the COVID-19 pandemic (and actions
taken in response to it by governments, businesses, and
individuals) on Mattel’s business operations, financial results and
financial position and on the global economy, including its impact
on Mattel’s sales; (ii) Mattel’s ability to design, develop,
produce, manufacture, source, ship, and distribute products on a
timely and cost-effective basis; (iii) sufficient interest in and
demand for the products and entertainment we offer by retail
customers and consumers to profitably recover Mattel’s costs; (iv)
downturns in economic conditions affecting Mattel’s markets which
can negatively impact retail customers and consumers, and which can
result in lower employment levels and lower consumer disposable
income and spending, including lower spending on purchases of
Mattel’s products; (v) 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; (vi) potential difficulties or delays Mattel may
experience in implementing cost savings and efficiency enhancing
initiatives; (vii) 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; (viii) currency
fluctuations, including movements in foreign exchange rates and
inflation, which can lower Mattel’s net revenues and earnings, and
significantly impact Mattel’s costs; (ix) the concentration of
Mattel’s customers, potentially increasing the negative impact to
Mattel of difficulties experienced by any of Mattel’s customers,
such as bankruptcies or liquidations or a general lack of success,
or changes in their purchasing or selling patterns; (x) the
inventory policies of Mattel’s retail customers, 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, overproduction , and shipping delays; (xi) legal,
reputational, and financial risks related to security breaches or
cyberattacks; (xii) work disruptions, including as a result of
supply chain disruption and plant shutdowns, which may impact
Mattel’s ability to manufacture or deliver product in a timely and
cost-effective manner; (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 competitive products, the ability to secure,
maintain, and renew popular licenses from licensors of
entertainment properties, 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 or third party actions
or approvals, including that result in any significant failure,
inadequacy, or interruption from vendors or outsourcers, which
could reduce demand for Mattel’s products, delay or increase the
cost of implementation of Mattel’s programs, 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, arbitration, or
regulatory decisions or settlement actions; (xx) uncertainty from
the expected discontinuance of LIBOR and transition to any other
interest rate benchmark; and (xxi) other risks and uncertainties as
may be described in Mattel’s 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, 2020 and subsequent periodic filings, 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 may include Adjusted Gross
Profit, Adjusted Gross Margin, Adjusted Other Selling and
Administrative Expenses, Adjusted Operating Income (Loss), Adjusted
Operating Income (Loss) Margin, Adjusted Earnings (Loss) Per Share,
earnings before interest expense, taxes, depreciation and
amortization (“EBITDA”), Adjusted EBITDA, Free Cash Flow, Free Cash
Flow Conversion, Leverage Ratio (Debt / Adjusted EBITDA), and
constant currency. Mattel uses these measures to analyze its
continuing operations and to monitor, assess, and identify
meaningful trends in its operating and financial performance, and
each is discussed below. Mattel believes that the disclosure of
non-GAAP financial measures provides useful supplemental
information to investors to be able to better evaluate ongoing
business performance and certain components of Mattel’s results.
These measures are not, and should not be viewed as, substitutes
for GAAP financial measures and may not be comparable to similarly
titled measures used by other companies. Reconciliations of the
non-GAAP financial measures to the most directly comparable GAAP
financial measures are attached to this earnings release as
exhibits and to our earnings slide presentation as an appendix.
This earnings release and our earnings slide presentation are
available on Mattel's Investor Relations website,
https://investors.mattel.com/, under the subheading “Financial
Information – Earnings Releases.”
Adjusted Gross Profit and Adjusted Gross Margin
Adjusted Gross Profit and Adjusted Gross Margin represent
reported Gross Profit and reported Gross Margin, respectively,
adjusted to exclude severance and restructuring expenses. Adjusted
Gross Margin represents Mattel’s Adjusted Gross Profit, as a
percentage of Net Sales. Adjusted Gross Profit and Adjusted Gross
Margin are presented to provide additional perspective on
underlying trends in Mattel’s core Gross Profit and Gross Margin,
which Mattel believes is useful supplemental information for
investors to be able to gauge and compare Mattel’s current business
performance from one period to another.
Adjusted Other Selling and Administrative Expenses
Adjusted Other Selling and Administrative Expenses represents
Mattel’s reported Other Selling and Administrative Expenses,
adjusted to exclude severance and restructuring expenses, the
impact of the inclined sleeper product recalls, and the impact of
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) and Adjusted Operating Income
(Loss) Margin
Adjusted Operating Income (Loss) and Adjusted Operating Income
(Loss) Margin represent reported Operating Income (Loss) and
reported Operating Income (Loss) Margin, respectively, adjusted to
exclude severance and restructuring expenses, the impact of the
inclined sleeper product recalls, and the impact of sale of assets,
which are not part of Mattel’s core business. Adjusted Operating
Income (Loss) Margin represents Mattel’s Adjusted Operating Income
(Loss), as a percentage of Net Sales. Adjusted Operating Income
(Loss) and Adjusted Operating Income (Loss) Margin are presented to
provide additional perspective on underlying trends in Mattel’s
core operating results, which Mattel believes is useful
supplemental information for investors to be able to gauge and
compare Mattel’s current business performance from one period to
another.
Adjusted Earnings (Loss) Per Share
Adjusted Earnings (Loss) Per Share represents Mattel’s reported
Diluted Earnings (Loss) Per Common Share, adjusted to exclude
severance and restructuring expenses, the impact of the inclined
sleeper product recalls, the impact of sale of assets/business, and
loss on debt extinguishment, which are not part of Mattel’s core
business. The aggregate tax effect of the adjustments is calculated
by tax effecting the adjustments by the current effective tax rate,
adjusting for certain discrete tax items, and dividing by the
reported weighted-average number of common shares. Adjusted
Earnings (Loss) Per Share is presented to provide additional
perspective on underlying trends in Mattel’s core business. Mattel
believes it is useful supplemental information for investors to
gauge and compare Mattel’s current earnings results from one period
to another. Adjusted Earnings (Loss) Per Share is a performance
measure and should not be used as a measure of liquidity.
EBITDA and Adjusted EBITDA
EBITDA represents Mattel’s Net Income (Loss), adjusted to
exclude the impact of interest expense, taxes, depreciation, and
amortization. Adjusted EBITDA represents EBITDA adjusted to exclude
share-based compensation, severance and restructuring expenses, the
impact of the inclined sleeper product recalls, and the impact of
sale of assets/business, which are not part of Mattel’s core
business. Mattel believes EBITDA and Adjusted EBITDA are useful
supplemental information for investors to gauge and compare
Mattel’s business performance to other companies in its industry
with similar capital structures. The presentation of Adjusted
EBITDA differs from how Mattel calculates EBITDA for purposes of
covenant compliance under the indentures governing its high yield
senior notes and the syndicated facility agreement governing its
senior secured revolving credit facilities. Because of these
limitations, EBITDA and Adjusted EBITDA should not be considered as
measures of discretionary cash available to invest in the growth of
Mattel’s business. As a result, Mattel relies primarily on its GAAP
results and uses EBITDA and Adjusted EBITDA only
supplementally.
Free Cash Flow and Free Cash Flow Conversion
Free Cash Flow represents Mattel’s net cash flows from operating
activities less capital expenditures. Free Cash Flow Conversion
represents Mattel’s free cash flow divided by Adjusted EBITDA.
Mattel believes Free Cash Flow and Free Cash Flow Conversion are
useful supplemental information for investors to gauge Mattel’s
liquidity and performance and to compare Mattel’s business
performance to other companies in our industry. Free Cash Flow does
not represent cash available to Mattel for discretionary
expenditures.
Leverage Ratio (Debt / Adjusted EBITDA)
The leverage ratio is calculated by dividing Debt by Adjusted
EBITDA. Debt represents the aggregate of Mattel’s current portion
of long-term debt, short-term borrowings, and long-term debt,
excluding the impact of debt issuance costs and debt discount.
Mattel believes the leverage ratio is useful supplemental
information for investors to gauge trends in Mattel’s business and
to compare Mattel’s business performance to other companies in its
industry.
Constant Currency
Percentage changes in results expressed in constant currency are
presented excluding the impact from changes in currency exchange
rates. To present this information, Mattel calculates constant
currency information by translating current period and prior period
results for entities reporting in currencies other than the US
dollar using consistent exchange rates. The constant currency
exchange rates are determined by Mattel at the beginning of each
year and are applied consistently during the year. They are
generally different from the actual exchange rates in effect during
the current or prior period due to volatility in actual foreign
exchange rates. Mattel considers whether any changes to the
constant currency rates are appropriate at the beginning of each
year. The exchange rates used for these constant currency
calculations are generally based on prior year actual exchange
rates. The difference between the current period and prior period
results using the consistent exchange rates reflects the changes in
the underlying performance results, excluding the impact from
changes in currency exchange rates. Mattel analyzes constant
currency results to provide additional perspective on changes in
underlying trends in Mattel’s operating performance. Mattel
believes that the disclosure of the percentage change in constant
currency is useful supplemental information for investors to be
able to gauge Mattel’s current business performance and the
longer-term strength of its overall business since foreign currency
changes could potentially mask underlying sales trends. The
disclosure of the percentage change in constant currency enhances
investor’s ability to compare financial results from one period to
another.
Key Performance Indicator
Gross Billings
Gross Billings represent amounts invoiced to customers. It does
not include the impact of sales adjustments, such as trade
discounts and other allowances. Mattel presents changes in gross
billings as a metric for comparing its aggregate, categorical,
brand, and geographic results to highlight significant trends in
Mattel’s business. Changes in Gross Billings are discussed because,
while Mattel records the details of such sales adjustments in its
financial accounting systems at the time of sale, such sales
adjustments are generally not associated with categories, brands,
and individual products.
About Mattel
Mattel is a leading global toy company and owner of one of the
strongest catalogs of children’s and family entertainment
franchises in the world. We create innovative products and
experiences that inspire, entertain and develop children through
play. We engage consumers through our portfolio of iconic brands,
including Barbie, Hot Wheels, Fisher-Price, American Girl, Thomas
& Friends, UNO, and MEGA, as well as other popular intellectual
properties that we own or license in partnership with global
entertainment companies. Our offerings include film and television
content, gaming, music and live events. We operate in 35 locations
and our products are available in more than 150 countries in
collaboration with the world’s leading retail and e-commerce
companies. Since its founding in 1945, Mattel is proud to be a
trusted partner in empowering children to explore the wonder of
childhood and reach their full potential.
MATTEL, INC. AND SUBSIDIARIES
EXHIBIT I
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)1
For the Three Months Ended June 30, For the Six
Months Ended June 30,
2021
20202
% Change as Reported
% Change in Constant
Currency
20212
20202
% Change as Reported
% Change in Constant
Currency
(In millions, except per share and
percentage information)
$ Amt
% Net Sales
$ Amt
% Net Sales
$ Amt
% Net Sales
$ Amt
% Net Sales
Net Sales
$
1,026.4
$
732.1
40
%
36
%
$
1,900.6
$
1,326.2
43
%
41
%
Cost of sales
538.4
52.5
%
413.2
56.4
%
30
%
1,000.7
52.7
%
747.1
56.3
%
34
%
Gross Profit
488.0
47.5
%
318.9
43.6
%
53
%
52
%
899.8
47.3
%
579.1
43.7
%
55
%
58
%
Advertising and promotion expenses
88.3
8.6
%
60.2
8.2
%
47
%
162.4
8.5
%
136.5
10.3
%
19
%
Other selling and administrative expenses
350.5
34.2
%
306.8
41.9
%
14
%
654.4
34.4
%
635.5
47.9
%
3
%
Operating Income (Loss)
49.1
4.8
%
(48.1
)
-6.6
%
n/m
n/m
83.0
4.4
%
(192.8
)
-14.5
%
n/m
n/m
Interest expense
38.1
3.7
%
49.6
6.8
%
-23
%
168.6
8.9
%
98.6
7.4
%
71
%
Interest (income)
(0.6
)
-0.1
%
(1.0
)
-0.1
%
-43
%
(1.4
)
-0.1
%
(3.1
)
-0.2
%
-55
%
Other non-operating expense (income), net
0.5
2.7
(0.6
)
5.7
Income (Loss) Before Income Taxes
11.0
1.1
%
(99.3
)
-13.6
%
n/m
n/m
(83.7
)
-4.4
%
(294.0
)
-22.2
%
-72
%
-82
%
Provision for income taxes
20.6
12.8
40.9
24.7
Income from equity method investments
4.1
1.1
6.7
1.9
Net Loss
$
(5.5
)
-0.5
%
$
(111.1
)
-15.2
%
-95
%
$
(117.9
)
-6.2
%
$
(316.8
)
-23.9
%
-63
%
Net Loss Per Common Share - Basic
$
(0.02
)
$
(0.32
)
$
(0.34
)
$
(0.91
)
Weighted-average number of common shares
349.4
346.9
349.2
346.8
Net Loss per Common Share - Diluted
$
(0.02
)
$
(0.32
)
$
(0.34
)
$
(0.91
)
Weighted-average number of common and potential common shares
349.4
346.9
349.2
346.8
1 Amounts may not sum due to rounding. 2 Reflects the impact
of immaterial revisions to the financial statements. n/m - Not
meaningful
MATTEL, INC. AND SUBSIDIARIES
EXHIBIT II
CONDENSED CONSOLIDATED BALANCE SHEETS1
June 30,
December 31,
20212
20202
20202
(In millions)
(Unaudited) Assets Cash and equivalents
$
384.7
$
461.6
$
762.2
Accounts receivable, net
784.1
650.5
1,034.0
Inventories
818.0
727.9
528.5
Prepaid expenses and other current assets
187.0
174.2
172.1
Total current assets
2,173.8
2,014.1
2,496.7
Property, plant, and equipment, net
459.8
471.9
473.8
Right-of-use assets, net
343.8
282.5
291.6
Other noncurrent assets
2,263.6
2,230.2
2,272.8
Total Assets
$
5,241.1
$
4,998.7
$
5,534.9
Liabilities and Stockholders' Equity Short-term
borrowings
$
0.2
$
400.0
$
1.0
Accounts payable and accrued liabilities
1,086.3
944.1
1,327.3
Income taxes payable
35.8
15.7
27.1
Total current liabilities
1,122.4
1,359.8
1,355.4
Long-term debt
2,839.1
2,850.8
2,854.7
Noncurrent lease liabilities
306.1
246.4
249.4
Other noncurrent liabilities
445.7
435.6
465.4
Stockholders' equity
527.7
106.1
610.1
Total Liabilities and Stockholders' Equity
$
5,241.1
$
4,998.7
$
5,534.9
MATTEL, INC. AND SUBSIDIARIES
SUPPLEMENTAL BALANCE SHEET AND CASH FLOW DATA (Unaudited)1
June 30,
2021
2020
Key Balance Sheet Data:
Accounts receivable, net days of sales outstanding (DSO)
69
80
Six Months Ended June
30,
(In millions)
20212
20202
Condensed Cash Flow Data: Cash
flows used for operating activities
$
(241
)
$
(466
)
Cash flows used for investing activities
(27
)
(78
)
Cash flows (used for) provided by financing activities and other
(109
)
375
Decrease in cash and equivalents
$
(377
)
$
(168
)
1 Amounts may not sum due to rounding. 2 Reflects the impact
of immaterial revisions to the financial statements.
MATTEL,
INC. AND SUBSIDIARIES
EXHIBIT III
SUPPLEMENTAL FINANCIAL INFORMATION (Unaudited)1
RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL MEASURES
For the Three Months Ended June 30, For the Six
Months Ended June 30, (In millions,
except per share and percentage information)
2021
20202
Change
20212
20202
Change
Gross Profit Gross Profit, As
Reported
$
488.0
$
318.9
$
899.8
$
579.1
Gross Margin
47.5
%
43.6
%
+ 390 bps
47.3
%
43.7
%
+ 360 bps Adjustments: Severance and Restructuring Expenses
(0.2
)
1.4
1.8
4.5
Gross Profit, As Adjusted
$
487.9
$
320.3
$
901.6
$
583.6
Adjusted Gross Margin
47.5
%
43.8
%
+ 370 bps
47.4
%
44.0
%
+ 340 bps
Other Selling and
Administrative Expenses Other Selling and Administrative
Expenses, As Reported
$
350.5
$
306.8
14
%
$
654.4
$
635.5
3
%
% of Net Sales
34.2
%
41.9
%
34.4
%
47.9
%
Adjustments: Severance and Restructuring Expenses
(10.7
)
(16.2
)
(16.5
)
(23.8
)
Inclined Sleeper Product Recalls3
(6.8
)
(2.9
)
(12.1
)
(9.1
)
Sale of Assets4
-
-
15.8
-
Other Selling and Administrative Expenses, As Adjusted
$
332.9
$
287.7
16
%
$
641.6
$
602.6
6
%
% of Net Sales
32.4
%
39.3
%
33.8
%
45.4
%
Operating Income (Loss)
Operating Income (Loss), As Reported
$
49.1
$
(48.1
)
n/m
$
83.0
$
(192.8
)
n/m
Operating Income (Loss) Margin
4.8
%
-6.6
%
4.4
%
-14.5
%
Adjustments: Severance and Restructuring Expenses
10.6
17.7
18.2
28.2
Inclined Sleeper Product Recalls3
6.8
2.9
12.1
9.1
Sale of Assets4
-
-
(15.8
)
-
Operating Income (Loss), As Adjusted
$
66.6
$
(27.6
)
n/m
$
97.6
$
(155.5
)
n/m
Adjusted Operating Income (Loss) Margin
6.5
%
-3.8
%
5.1
%
-11.7
%
1 Amounts may not sum due to rounding.
2 Reflects the impact of immaterial
revisions to the financial statements.
3 For the three and six months ended June
30, 2021 and 2020, represents expenses related to inclined sleeper
product recall litigation.
4 For the six months ended June 30, 2021,
Mattel recorded a gain on sale of assets of $15.8 million in Other
Selling and Administrative Expenses, and a gain on sale of business
of $3.9 million in Other Non-Operating Expense (Income) , net.
n/m - Not meaningful
MATTEL, INC. AND SUBSIDIARIES
EXHIBIT III
SUPPLEMENTAL FINANCIAL INFORMATION (Unaudited)1
RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL MEASURES
For the Three Months Ended June 30, For the Six
Months Ended June 30, (In millions,
except per share and percentage information)
2021
20202
Change
20212
20202
Change
Earnings Per Share Net Loss Per
Common Share, As Reported
$
(0.02
)
$
(0.32
)
-94
%
$
(0.34
)
$
(0.91
)
-63
%
Adjustments: Severance and Restructuring Expenses
0.03
0.05
0.05
0.08
Inclined Sleeper Product Recalls3
0.02
0.01
0.03
0.03
Sale of Assets/Business4
-
-
(0.06
)
-
Loss on Debt Extinguishment
-
-
0.24
-
Tax Effect of Adjustments5
-
-
-
(0.01
)
Net Income (Loss) Per Common Share, As Adjusted
$
0.03
$
(0.26
)
n/m
$
(0.06
)
$
(0.81
)
-93
%
EBITDA and Adjusted
EBITDA Net Loss, As Reported
$
(5.5
)
$
(111.1
)
-95
%
$
(117.9
)
$
(316.8
)
-63
%
Adjustments: Interest Expense
38.1
49.6
168.6
98.6
Provision for Income Taxes
20.6
12.8
40.9
24.7
Depreciation
36.2
38.3
72.7
82.0
Amortization
9.5
9.7
19.1
19.7
EBITDA
99.0
(0.6
)
183.4
(91.8
)
Adjustments: Share-based Compensation
15.2
9.1
30.3
23.4
Severance and Restructuring Expenses
9.6
17.5
16.6
27.8
Inclined Sleeper Product Recalls3
6.8
2.9
12.1
9.1
Sale of Assets/Business4
-
-
(19.7
)
-
Adjusted EBITDA
$
130.6
$
28.9
353
%
$
222.7
$
(31.6
)
n/m
Free Cash Flow Net Cash
Flows Used for Operating Activities
$
(241.4
)
$
(465.9
)
Capital Expenditures
(74.7
)
(57.4
)
Free Cash Flow
$
(316.0
)
$
(523.2
)
1 Amounts may not sum due to rounding.
2 Reflects the impact of immaterial
revisions to the financial statements.
3 For the three and six months ended June
30, 2021 and 2020, represents expenses related to inclined sleeper
product recall litigation.
4 For the six months ended June 30, 2021,
Mattel recorded a gain on sale of assets of $15.8 million in Other
Selling and Administrative Expenses, and a gain on sale of business
of $3.9 million in Other Non-Operating Expense (Income), net
5 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
n/m - Not meaningful
MATTEL, INC. AND SUBSIDIARIES
EXHIBIT III
SUPPLEMENTAL FINANCIAL
INFORMATION (Unaudited)1
RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL MEASURES
(In millions, except per share and
percentage information) For the Trailing Twelve
Months Ended June 30, Leverage Ratio
(Debt / Adjusted EBITDA)
20212
20202
Change
Debt Long-term debt
$
2,839.1
$
2,850.8
Current portion of long-term debt
-
-
Short-term borrowings
0.2
400.0
Adjustments: Debt issuance costs and debt discount
35.9
49.2
Debt
$
2,875.2
$
3,300.0
EBITDA and Adjusted EBITDA Net Income
(Loss), As Reported
$
322.5
$
(259.5
)
n/m
Adjustments: Interest Expense
268.4
206.4
Provision for Income Taxes
81.8
68.2
Depreciation
145.3
182.8
Amortization
38.3
39.4
EBITDA
856.2
237.4
Adjustments: Share-based Compensation
67.0
55.1
Severance and Restructuring Expenses
28.0
56.6
Inclined Sleeper Product Recalls
29.2
16.1
Sale of Assets/Business
(19.7
)
-
Asset Impairments
-
25.9
Adjusted EBITDA
$
960.6
$
391.0
146
%
Debt / Net Income (Loss) 8.9x (12.7)x Leverage Ratio (Debt /
Adjusted EBITDA) 3.0x 8.4x
Free
Cash Flow Net Cash Flows Provided by Operating
Activities
$
510.2
$
110.5
362
%
Capital Expenditures
(136.1
)
(120.4
)
Free Cash Flow
$
374.1
$
(9.9
)
n/m
Free Cash Flow Conversion (Free Cash Flow/Adjusted EBITDA)
39
%
-3
%
1 Amounts may not sum due to rounding.
2 Reflects the impact of immaterial
revisions to the financial statements.
n/m - Not meaningful
MATTEL, INC. AND SUBSIDIARIES
EXHIBIT IV
WORLDWIDE GROSS BILLINGS1 (Unaudited)3 SUPPLEMENTAL KEY
PERFORMANCE INDICATOR
For the Three Months Ended
June 30,
For the Six Months Ended June
30,
(In millions, except percentage
information)
2021
2020
% Change as Reported
% Change in Constant
Currency
2021
2020
% Change as Reported
% Change in Constant
Currency
Worldwide Gross Billings: Net
Sales
$
1,026.4
$
732.1
40
%
36
%
$
1,900.6
$
1,326.2
43
%
41
%
Sales Adjustments2
122.2
82.4
227.0
158.3
Gross Billings
$
1,148.6
$
814.6
41
%
37
%
$
2,127.6
$
1,484.5
43
%
40
%
Worldwide Gross Billings by
Categories: Dolls
$
394.7
$
261.0
51
%
47
%
$
776.0
$
486.9
59
%
57
%
Infant, Toddler and Preschool
229.4
199.8
15
12
412.5
340.1
21
19
Vehicles
266.3
158.7
68
62
481.7
344.3
40
37
Action Figures, Building Sets, Games, and Other
258.2
195.0
32
28
457.3
313.2
46
42
Gross Billings
$
1,148.6
$
814.6
41
%
37
%
$
2,127.6
$
1,484.5
43
%
40
%
Supplemental Gross Billings
Disclosure Worldwide
Gross Billings by Top 3 Power Brands: Barbie
$
291.3
$
199.3
46
%
41
%
$
567.5
$
346.8
64
%
60
%
Hot Wheels
227.4
136.5
67
61
412.0
295.1
40
37
Fisher-Price and Thomas & Friends
207.8
176.3
18
15
379.3
305.0
24
22
Other
422.2
302.5
40
35
768.7
537.6
43
40
Gross Billings
$
1,148.6
$
814.6
41
%
37
%
$
2,127.6
$
1,484.5
43
%
40
%
1 Gross Billings represent amounts
invoiced to customers. It does not include the impact of sales
adjustments, such as trade discounts and other allowances. Mattel
presents changes in gross billings as a metric for comparing its
aggregate, categorical, brand, and geographic results to highlight
significant trends in Mattel's business.
2 Sales Adjustments are not allocated to
individual products. As such, Net Sales are not presented on a
categories or brand level.
3 Amounts may not sum due to rounding.
MATTEL, INC. AND SUBSIDIARIES
EXHIBIT V
GROSS BILLINGS1 BY SEGMENT (Unaudited)3
SUPPLEMENTAL KEY PERFORMANCE INDICATOR For the
Three Months Ended June 30, For the Six Months Ended June
30, (In millions, except percentage
information)
2021
2020
% Change as Reported
% Change in Constant
Currency
2021
2020
% Change as Reported
% Change in Constant
Currency
North America Segment Gross
Billings: Net Sales
$
560.8
$
432.9
30
%
29
%
$
1,040.5
$
720.4
44
%
44
%
Sales Adjustments2
37.0
28.7
69.1
46.9
Gross Billings
$
597.9
$
461.5
30
%
29
%
$
1,109.6
$
767.3
45
%
44
%
North America Gross Billings by
Categories: Dolls
$
172.6
$
121.2
42
%
42
%
$
348.8
$
195.1
79
%
78
%
Infant, Toddler and Preschool
139.9
132.4
6
5
248.4
208.9
19
18
Vehicles
131.3
77.8
69
68
241.2
166.5
45
44
Action Figures, Building Sets, Games, and Other
154.1
130.2
18
18
271.3
196.7
38
37
Gross Billings
$
597.9
$
461.5
30
%
29
%
$
1,109.6
$
767.3
45
%
44
%
Supplemental Gross Billings
Disclosure North America
Gross Billings by Top 3 Power Brands: Barbie
$
151.4
$
112.3
35
%
34
%
$
308.3
$
180.1
71
%
71
%
Hot Wheels
109.7
66.2
66
65
202.4
140.3
44
44
Fisher-Price and Thomas & Friends
122.9
111.7
10
9
223.7
181.6
23
23
Other
213.9
171.4
25
24
375.2
265.3
41
41
Gross Billings
$
597.9
$
461.5
30
%
29
%
$
1,109.6
$
767.3
45
%
44
%
1 Gross Billings represent amounts
invoiced to customers. It does not include the impact of sales
adjustments, such as trade discounts and other allowances. Mattel
presents changes in gross billings as a metric for comparing its
aggregate, categorical, brand, and geographic results to highlight
significant trends in Mattel's business.
2 Sales Adjustments are not allocated to
individual products. As such, Net Sales are not presented on a
categories or brand level.
3 Amounts may not sum due to rounding.
MATTEL, INC. AND SUBSIDIARIES
EXHIBIT VI
GROSS BILLINGS1 BY SEGMENT (Unaudited)3
SUPPLEMENTAL KEY PERFORMANCE INDICATOR
For the Three Months Ended
June 30,
For the Six Months Ended June
30,
(In millions, except percentage
information)
2021
2020
% Change as Reported
% Change in Constant
Currency
2021
2020
% Change as Reported
% Change in Constant
Currency
International Segment Gross
Billings: Net Sales
$
424.9
$
271.1
57
%
47
%
$
774.3
$
540.4
43
%
37
%
Sales Adjustments2
84.3
52.9
155.9
109.6
Gross Billings
$
509.2
$
323.9
57
%
47
%
$
930.2
$
650.1
43
%
37
%
International Gross Billings by
Geographic Area: EMEA Net Sales
$
246.8
$
151.9
62
%
53
%
$
485.0
$
325.3
49
%
43
%
Sales Adjustments2
52.7
32.1
105.5
74.0
Gross Billings
$
299.5
$
184.0
63
%
54
%
$
590.5
$
399.3
48
%
42
%
Latin America Net Sales
$
92.5
$
57.7
60
%
48
%
$
148.8
$
109.0
36
%
34
%
Sales Adjustments2
16.0
10.0
25.4
18.4
Gross Billings
$
108.5
$
67.7
60
%
48
%
$
174.2
$
127.4
37
%
34
%
Asia Pacific Net Sales
$
85.6
$
61.4
39
%
29
%
$
140.5
$
106.2
32
%
23
%
Sales Adjustments2
15.6
10.8
25.0
17.3
Gross Billings
$
101.3
$
72.2
40
%
29
%
$
165.5
$
123.4
34
%
24
%
International Gross Billings by
Categories: Dolls
$
180.7
$
110.8
63
%
53
%
$
339.4
$
224.7
51
%
45
%
Infant, Toddler and Preschool
89.5
67.4
33
24
164.1
131.2
25
19
Vehicles
135.0
80.9
67
56
240.5
177.8
35
30
Action Figures, Building Sets, Games, and Other
104.1
64.8
61
49
186.1
116.4
60
51
Gross Billings
$
509.2
$
323.9
57
%
47
%
$
930.2
$
650.1
43
%
37
%
Supplemental Gross Billings
Disclosure International
Gross Billings by Top 3 Power Brands: Barbie
$
139.9
$
87.0
61
%
50
%
$
259.2
$
166.7
55
%
49
%
Hot Wheels
117.7
70.3
67
57
209.6
154.8
35
31
Fisher-Price and Thomas & Friends
84.9
64.6
31
23
155.6
123.4
26
21
Other
166.8
102.1
63
52
305.8
205.2
49
42
Gross Billings
$
509.2
$
323.9
57
%
47
%
$
930.2
$
650.1
43
%
37
%
1 Gross Billings represent amounts
invoiced to customers. It does not include the impact of sales
adjustments, such as trade discounts and other allowances. Mattel
presents changes in gross billings as a metric for comparing its
aggregate, categorical, brand, and geographic results to highlight
significant trends in Mattel's business.
2 Sales Adjustments are not allocated to
individual products. As such, Net Sales are not presented on a
categories or brand level.
3 Amounts may not sum due to rounding.
MATTEL, INC. AND SUBSIDIARIES
EXHIBIT VII
GROSS BILLINGS1 BY SEGMENT (Unaudited)3
SUPPLEMENTAL KEY PERFORMANCE INDICATOR
For the Three Months Ended
June 30,
For the Six Months Ended June
30,
(In millions, except percentage
information)
2021
2020
% Change as Reported
% Change in Constant
Currency
2021
2020
% Change as Reported
% Change in Constant
Currency
American Girl Segment Gross
Billings: Net Sales
$
40.6
$
28.2
44
%
44
%
$
85.8
$
65.3
31
%
31
%
Sales Adjustments2
0.8
0.9
2.0
1.8
Gross Billings
$
41.5
$
29.1
43
%
43
%
$
87.8
$
67.2
31
%
31
%
1 Gross Billings represent amounts
invoiced to customers. It does not include the impact of sales
adjustments, such as trade discounts and other allowances. Mattel
presents changes in gross billings as a metric for comparing its
aggregate, categorical, brand, and geographic results to highlight
significant trends in Mattel's business.
2 Sales Adjustments are not allocated to
individual products.
3 Amounts may not sum due to rounding.
MAT-FIN MAT-CORP
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210727006097/en/
News Media Catherine Frymark
catherine.frymark@mattel.com
Securities Analysts David Zbojniewicz
david.zbojniewicz@mattel.com
Mattel (NASDAQ:MAT)
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