- Net Sales of $1,762 million, up 8% as reported, and 7% in
constant currency, versus prior year
- Reported Gross Margin of 47.8%, a decrease of 280 basis
points; Adjusted Gross Margin of 47.8%, a decline of 280 basis
points
- Reported Operating Income of $389 million, an increase of
$10 million; Adjusted Operating Income of $401 million, an
improvement of $4 million
- Reported Net Income of $813 million, which includes a
non-cash benefit of $510 million resulting from the release of
valuation allowances on deferred tax assets
- Adjusted EBITDA of $463 million, a decline of $2
million
- Company raises 2021 guidance for Net Sales in constant
currency and Adjusted EBITDA
Mattel, Inc. (NASDAQ: MAT) today reported third quarter 2021
financial results.
Ynon Kreiz, Chairman and CEO of Mattel, said: “This was another
strong quarter for Mattel, with increased consumer demand for our
products and results exceeding expectations. We successfully
navigated ongoing global supply chain disruption, achieved sales
growth and, per The NPD Group, continued to gain market share. We
expect to grow for the balance of the year and have a strong
holiday season. Our strength is foundational and broad-based, and
we are on a clear path to improve profitability and accelerate top
line growth. The Mattel team continues to execute on our strategy,
and we are operating as an IP-driven, high-performing toy
company.”
Anthony DiSilvestro, CFO of Mattel, said: “We are very pleased
with our overall financial performance and are consistently
generating higher levels of cash flow, strengthening the balance
sheet, and improving our credit metrics as we progress towards
investment grade metrics.”
For the third quarter, Net Sales were up 8% as reported, and 7%
in constant currency, versus the prior year’s third quarter.
Reported Operating Income was $389 million, an increase of $10
million, and Adjusted Operating Income was $401 million, an
improvement of $4 million. Reported Earnings Per Share was $2.29,
an improvement of $1.40 per share, which includes a benefit of
$1.44 resulting from the release of valuation allowances on
deferred tax assets, and Adjusted Earnings Per Share was $0.84, a
decrease of $0.10 per share.
For the first nine months of the year, Net Sales were up 24% as
reported, and 22% in constant currency, versus the prior year’s
first nine months. Reported Operating Income was $472 million, an
increase of $285 million, and Adjusted Operating Income was $499
million, an improvement of $258 million. Reported Earnings Per
Share was $1.96, an improvement of $1.98, which includes a benefit
of $1.44 resulting from the release of valuation allowances on
deferred tax assets, and Adjusted Earnings Per Share was $0.78, an
improvement of $0.65 per share.
Financial Overview
Net Sales in the North America segment increased 12% as reported
and in constant currency, versus the prior year’s third
quarter.
Gross Billings in the North America segment increased 12% as
reported, and 11% in constant currency, driven by growth in Action
Figures, Building Sets, Games, and Other (including Jurassic
World™, Masters of the Universe®, WWE™, Plush, and MEGA®), Vehicles
(including Hot Wheels®), Dolls (including Barbie®, Spirit™, and
Polly Pocket®), and Infant, Toddler, and Preschool (including
Fisher-Price® and Thomas & Friends™).
Net Sales in the International segment increased 2% as reported
and were flat in constant currency.
Gross Billings in the International segment increased 3% as
reported, and 1% in constant currency, driven by growth in Action
Figures, Building Sets, Games, and Other (including Masters of the
Universe, Jurassic World, Plush, MEGA, and Games) and Dolls
(including Barbie and Spirit), partially offset by declines in
Infant, Toddler, and Preschool (including Fisher-Price and Thomas
& Friends) and Vehicles (including Hot Wheels and CARS™).
Net Sales in the American Girl® segment increased 1% as reported
and in constant currency.
Gross Billings in the American Girl segment were flat as
reported and in constant currency. Sales performance was impacted
by declines in non-proprietary channels, offset by growth in
proprietary channels.
Reported Gross Margin and Adjusted Gross Margin decreased to
47.8%, versus 50.6% in the prior year’s third quarter. The decrease
was primarily due to input cost inflation partially offset by
pricing. Other negative factors, such as product mix and
unfavorable foreign exchange, were largely offset by the fixed cost
absorption benefit and savings from the Optimizing for Growth
program.
Reported Other Selling and Administrative Expenses decreased by
$10 million, or 3%, to $336 million. Adjusted Other Selling and
Administrative Expenses decreased by $5 million, or 2%, to $324
million. The decrease in Reported and Adjusted Other Selling and
Administrative Expenses was primarily driven by benefits from our
cost savings programs and lower incentive compensation expense.
For the nine months ended September 30, 2021, Cash Flows Used
for Operating Activities were $256 million, an improvement of $186
million, versus the prior year’s first nine months, primarily
driven by higher net income, excluding the impact of non-cash
items. Cash Flows Used for Investing Activities improved by $36
million to $71 million, primarily driven by proceeds from the
disposal of assets and a business and lower payments for foreign
currency forward contracts, partially offset by higher capital
expenditures. Cash Flows Used for Financing Activities and Other
were $286 million, as compared to Cash Flows Provided by Financing
Activities and Other of $371 million in the prior year, with the
decrease primarily due to the redemption of long-term borrowings
and lower short-term borrowings in 2021.
Gross Billings by Categories
Worldwide Gross Billings for Dolls were $720 million, up 4% as
reported, and 3% in constant currency, versus the prior year’s
third quarter, driven by growth in Barbie, Spirit, and Polly
Pocket, partially offset by a decline in Cave Club®.
Worldwide Gross Billings for Infant, Toddler, and Preschool were
$407 million, flat as reported, and down 1% in constant currency,
primarily due to a decline in Fisher-Price and Thomas &
Friends, partially offset by growth in Power Wheels®.
Worldwide Gross Billings for Vehicles were $390 million, up 6%
as reported, and 5% in constant currency, primarily driven by
growth in Hot Wheels.
Worldwide Gross Billings for Action Figures, Building Sets,
Games, and Other were $446 million, up 26% as reported, and 25% in
constant currency, primarily driven by growth in Action Figures
(including Jurassic World, Masters of the Universe, and WWE),
Plush, and Building Sets (including MEGA), partially offset by a
decline in Games.
Updated 2021 Full-Year Guidance
Full-year Net Sales, in constant currency, are expected to
increase by approximately 15% versus the prior year, up from prior
guidance range of 12-14%. Adjusted Gross Margin guidance remains
unchanged at a range of 47.6% to 48.1%. Adjusted EBITDA guidance is
increasing by $25 million to a range of $900 to $925 million.
Capital expenditures guidance remains unchanged at a range of $150
to $175 million.
(In millions, except
percentages) FY2020 Prior FY2021E(as of Q2
2021) Revised FY2021E Net Sales
4,588
Up 12-14% (Constant currency)
Up approx. 15% (Constant
currency)
Adjusted Gross Margin
49.0%
47.6-48.1%
47.6-48.1%
Adjusted EBITDA
706
875-900
900-925
Capital Expenditures
119
150-175
150-175
A reconciliation of Mattel’s non-GAAP financial measures on a
forward-looking basis, including Net Sales on a constant currency
basis, Adjusted Gross Margin, and Adjusted EBITDA, is not available
without unreasonable effort. Mattel is unable to predict with
sufficient certainty items that would be excluded from the
corresponding GAAP measure, including the effect of foreign
currency exchange rate fluctuations, unusual gains and losses or
charges, and severance and restructuring charges, due to the
unpredictable nature of such items, which may have a significant
impact on Mattel’s GAAP measures.
This guidance takes into account anticipated supply chain
disruption that Mattel is aware of today but remains subject to any
unexpected supply chain disruption, market volatility, and other
macro-economic risks and uncertainties, including those associated
with COVID-19, 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 third
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 Thursday,
October 28, 2021 and may be accessed by dialing +1-404-537-3406.
The passcode is 6941839.
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 (Free Cash Flow / Adjusted EBITDA), 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,
loss on debt extinguishment, and releases of valuation allowances,
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 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.
MAT-FIN MAT-CORP
MATTEL, INC. AND SUBSIDIARIES EXHIBIT I
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)1
For the Three Months Ended September 30, For the Nine
Months Ended September 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
$
1,762.3
$
1,636.5
8
%
7
%
$
3,662.9
$
2,962.7
24
%
22
%
Cost of sales
919.8
52.2
%
808.7
49.4
%
14
%
1,920.5
52.4
%
1,555.8
52.5
%
23
%
Gross Profit
842.5
47.8
%
827.7
50.6
%
2
%
2
%
1,742.4
47.6
%
1,406.9
47.5
%
24
%
25
%
Advertising and promotion expenses
117.6
6.7
%
102.5
6.3
%
15
%
280.1
7.6
%
239.0
8.1
%
17
%
Other selling and administrative expenses
335.8
19.1
%
345.7
21.1
%
-3
%
990.2
27.0
%
981.2
33.1
%
1
%
Operating Income
389.1
22.1
%
379.5
23.2
%
3
%
4
%
472.1
12.9
%
186.7
6.3
%
153
%
169
%
Interest expense
52.1
3.0
%
50.4
3.1
%
3
%
220.7
6.0
%
149.0
5.0
%
48
%
Interest (income)
(0.8
)
0.0
%
(0.5
)
0.0
%
65
%
(2.2
)
-0.1
%
(3.6
)
-0.1
%
-39
%
Other non-operating expense, net
3.9
1.3
3.3
7.0
Income Before Income Taxes
333.9
18.9
%
328.2
20.1
%
2
%
4
%
250.2
6.8
%
34.2
1.2
%
632
%
628
%
(Benefit) provision for income taxes
(474.3
)
22.1
(433.4
)
46.8
Income from equity method investments
4.5
5.2
11.1
7.1
Net Income (Loss)
$
812.6
46.1
%
$
311.3
19.0
%
161
%
$
694.7
19.0
%
$
(5.5
)
-0.2
%
n/m
Net Income (Loss) Per Common Share - Basic
$
2.32
$
0.90
$
1.99
$
(0.02
)
Weighted-average number of common shares
350.4
347.6
349.6
347.2
Net Income (Loss) per Common Share - Diluted
$
2.29
$
0.89
$
1.96
$
(0.02
)
Weighted-average number of common and potential common shares
354.2
348.7
354.3
347.2
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
September 30,
December 31,
20212
20202
20202
(In millions)
(Unaudited) Assets Cash and equivalents
$
148.5
$
452.2
$
762.2
Accounts receivable, net
1,437.9
1,326.1
1,034.0
Inventories
854.5
679.5
528.5
Prepaid expenses and other current assets
188.3
157.9
172.1
Total current assets
2,629.2
2,615.7
2,496.7
Property, plant, and equipment, net
455.9
462.5
473.8
Right-of-use assets, net
325.9
291.1
291.6
Other noncurrent assets
2,783.7
2,244.2
2,272.8
Total Assets
$
6,194.6
$
5,613.5
$
5,534.9
Liabilities and Stockholders'
Equity Short-term borrowings
$
128.0
$
400.0
$
1.0
Accounts payable and accrued liabilities
1,371.2
1,228.2
1,327.3
Income taxes payable
101.6
21.3
27.1
Total current liabilities
1,600.8
1,649.4
1,355.4
Long-term debt
2,569.8
2,852.8
2,854.7
Noncurrent lease liabilities
288.2
252.0
249.4
Other noncurrent liabilities
404.5
439.6
465.4
Stockholders' equity
1,331.2
419.8
610.1
Total Liabilities and Stockholders' Equity
$
6,194.6
$
5,613.5
$
5,534.9
MATTEL, INC. AND SUBSIDIARIES
SUPPLEMENTAL BALANCE SHEET AND CASH
FLOW DATA (Unaudited)1
September 30,
2021
20202
Key Balance Sheet Data:
Accounts receivable, net days of sales
outstanding (DSO)
73
73
Nine Months Ended
September 30, (In
millions)
20212
20202
Condensed Cash Flow
Data: Cash flows used for operating
activities
$
(256
)
$
(442
)
Cash flows used for investing activities
(71
)
(107
)
Cash flows (used for) provided by financing activities and
other
(286
)
371
Decrease in cash and equivalents
$
(614
)
$
(178
)
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
September 30,
For the Nine Months Ended
September 30,
(In millions, except per share and
percentage information)
2021
20202
Change
20212
20202
Change Gross
Profit Gross
Profit, As Reported
$
842.5
$
827.7
$
1,742.4
$
1,406.9
Gross Margin
47.8
%
50.6
%
-280 bps
47.6
%
47.5
%
+ 10 bps Adjustments:
Severance and Restructuring Expenses
0.1
0.3
1.9
4.8
Gross Profit, As Adjusted
$
842.7
$
828.1
$
1,744.3
$
1,411.7
Adjusted Gross Margin
47.8
%
50.6
%
-280 bps
47.6
%
47.6
%
flat
Other Selling and Administrative
Expenses Other
Selling and Administrative Expenses, As Reported
$
335.8
$
345.7
-3%
$
990.2
$
981.2
1%
% of Net Sales
19.1
%
21.1
%
27.0
%
33.1
%
Adjustments:
Severance and Restructuring Expenses
(9.2
)
(6.7
)
(25.7
)
(30.5
)
Inclined Sleeper Product Recalls3
(2.8
)
(10.1
)
(14.9
)
(19.2
)
Sale of Assets4
-
-
15.8
-
Other Selling and Administrative Expenses, As Adjusted
$
323.8
$
328.9
-2%
$
965.4
$
931.6
4%
% of Net Sales
18.4
%
20.1
%
26.4
%
31.4
%
Operating Income
Operating Income, As Reported
$
389.1
$
379.5
3%
$
472.1
$
186.7
153%
Operating Income Margin
22.1
%
23.2
%
12.9
%
6.3
%
Adjustments:
Severance and Restructuring Expenses
9.3
7.0
27.6
35.3
Inclined Sleeper Product Recalls3
2.8
10.1
14.9
19.2
Sale of Assets4
-
-
(15.8
)
-
Operating Income, As Adjusted
$
401.2
$
396.6
1%
$
498.8
$
241.1
107%
Adjusted Operating Income Margin
22.8
%
24.2
%
13.6
%
8.1
%
1 Amounts may not sum due to rounding. 2 Reflects the impact
of immaterial revisions to the financial statements. 3 For the
three and nine months ended September 30, 2021 and 2020, represents
expenses related to inclined sleeper product recall litigation. 4
For the nine months ended September 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, net.
MATTEL, INC.
AND SUBSIDIARIES EXHIBIT III
SUPPLEMENTAL FINANCIAL INFORMATION
(Unaudited)1
RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL MEASURES
For the Three
Months Ended September 30, For the Nine Months Ended
September 30, (In millions, except per
share and percentage information)
2021
20202
Change
20212
20202
Change Earnings Per
Share
Net Income (Loss) Per Common Share, As Reported
$
2.29
$
0.89
157%
$
1.96
$
(0.02
)
n/m
Adjustments:
Severance and Restructuring Expenses
0.03
0.02
0.08
0.10
Inclined Sleeper Product Recalls3
0.01
0.03
0.04
0.06
Sale of Assets/Business4
-
-
(0.06
)
-
Loss on Debt Extinguishment
0.05
-
0.29
-
Valuation Allowance Releases5
(1.44
)
-
(1.44
)
-
Tax Effect of Adjustments6
(0.10
)
-
(0.10
)
(0.01
)
Net Income Per Common Share, As Adjusted
$
0.84
$
0.94
-11%
$
0.78
$
0.13
500%
EBITDA and Adjusted EBITDA
Net Income (Loss),
As Reported
$
812.6
$
311.3
161%
$
694.7
$
(5.5
)
n/m
Adjustments:
Interest Expense
52.1
50.4
220.7
149.0
(Benefit) Provision for Income Taxes
(474.3
)
22.1
(433.4
)
46.8
Depreciation
36.1
38.1
108.8
120.1
Amortization
9.5
9.8
28.6
29.5
EBITDA
$
436.0
$
431.7
$
619.5
$
339.9
Adjustments:
Share-based Compensation
16.2
16.5
46.5
39.9
Severance and Restructuring Expenses
8.3
6.8
24.9
34.6
Inclined Sleeper Product Recalls3
2.8
10.1
14.9
19.2
Sale of Assets/Business4
-
-
(19.7
)
-
Adjusted EBITDA
$
463.3
$
465.1
0%
$
686.0
$
433.6
58%
Free Cash Flow
Net Cash Flows Used for
Operating Activities
$
(255.9
)
$
(442.0
)
Capital Expenditures
(115.2
)
(82.4
)
Free Cash Flow
$
(371.1
)
$
(524.4
)
1 Amounts may not sum due to rounding. 2 Reflects the impact
of immaterial revisions to the financial statements. 3 For the
three and nine months ended September 30, 2021 and 2020, represents
expenses related to inclined sleeper product recall litigation. 4
For the nine months ended September 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, net. 5 For the three and
nine months ended September 30, 2021, the amount includes a net
benefit of approximately $510 million related to the release of
valuation allowances against deferred tax assets of the U.S. and
certain International affiliates. 6 During the first half 2021,
adjustments for the U.S. and certain International affiliates were
not tax effected because of the valuation allowance on deferred tax
assets, which were released during the three months ended September
30, 2021. For the three months ended September 30, 2021, the tax
effect of adjustments includes an $0.08 impact related to
adjustments not previously tax effected during the first half of
2021 and a $0.02 impact related to adjustments during the three
months ended September 30, 2021. 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. 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 September 30,
Leverage Ratio (Debt / Adjusted
EBITDA)
20212
20202
Change Debt
Long-term debt
$
2,569.8
$
2,852.8
Current portion of long-term debt
-
-
Short-term borrowings
128.0
400.0
Adjustments: Debt
issuance costs and debt discount
30.2
47.2
Debt
$
2,728.0
$
3,300.0
EBITDA and Adjusted EBITDA
Net Income (Loss), As Reported
$
823.8
$
(9.1
)
n/m
Adjustments: Interest Expense
270.0
209.2
(Benefit) Provision for Income Taxes
(414.6
)
58.9
Depreciation
143.3
168.2
Amortization
38.0
39.4
EBITDA
$
860.5
$
466.7
Adjustments: Share-based
Compensation
66.7
56.8
Severance and Restructuring Expenses
29.5
46.6
Inclined Sleeper Product Recalls
21.9
22.2
Sale of Assets/Business
(19.7
)
-
Asset Impairments
-
25.9
Adjusted EBITDA
$
958.8
$
618.1
55%
Debt / Net Income (Loss)
3.3x
(364.5)x
Leverage Ratio (Debt / Adjusted EBITDA)
2.8x
5.3x
Free Cash Flow
Net Cash Flows Provided by Operating Activities
$
471.8
$
251.0
88%
Capital Expenditures
(151.6
)
(121.4
)
Free Cash Flow
$
320.3
$
129.5
147%
Net Cash Flows Provided
by Operating Activities / Net Income (Loss)
57
%
-2758
%
Free Cash Flow Conversion (Free Cash Flow/Adjusted EBITDA)
33
%
21
%
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)4
SUPPLEMENTAL KEY
PERFORMANCE INDICATOR
For the Three Months Ended September
30, For the Nine Months Ended September 30,
(In millions, except percentage
information)
2021
20202
% Changeas Reported % Change
inConstantCurrency
2021
20202
% Changeas Reported % Change
inConstantCurrency Worldwide Gross
Billings:
Net Sales
$
1,762.3
$
1,636.5
8
%
7
%
$
3,662.9
$
2,962.7
24
%
22
%
Sales Adjustments3
200.4
186.7
427.4
345.0
Gross Billings
$
1,962.7
$
1,823.2
8
%
7
%
$
4,090.3
$
3,307.7
24
%
22
%
Worldwide Gross Billings by
Categories:
Dolls
$
719.5
$
690.5
4
%
3
%
$
1,495.5
$
1,177.4
27
%
25
%
Infant, Toddler and Preschool
406.9
408.8
0
-1
819.4
749.0
9
8
Vehicles
389.9
369.4
6
5
871.6
713.7
22
20
Action Figures, Building Sets, Games, and Other
446.4
354.5
26
25
903.7
667.6
35
33
Gross Billings
$
1,962.7
$
1,823.2
8
%
7
%
$
4,090.3
$
3,307.7
24
%
22
%
Supplemental Gross Billings
Disclosure
Worldwide Gross Billings by
Top 3 Power Brands:
Barbie
$
555.2
$
532.2
4
%
3
%
$
1,122.7
$
879.0
28
%
26
%
Hot Wheels
329.9
312.8
5
4
741.9
607.9
22
20
Fisher-Price and Thomas & Friends
383.7
387.6
-1
-2
763.0
692.7
10
9
Other
693.9
590.5
18
16
1,462.6
1,128.1
30
28
Gross Billings
$
1,962.7
$
1,823.2
8
%
7
%
$
4,090.3
$
3,307.7
24
%
22
%
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 Reflects the impact of immaterial revisions to
the financial statements. 3 Sales Adjustments are not allocated to
individual products. As such, Net Sales are not presented on a
categories or brand level. 4 Amounts may not sum due to rounding.
MATTEL, INC. AND SUBSIDIARIES EXHIBIT V
GROSS
BILLINGS1 BY SEGMENT (Unaudited)4
SUPPLEMENTAL KEY PERFORMANCE
INDICATOR
For the Three Months Ended September 30,
For the Nine Months Ended September 30,
(In millions, except percentage
information)
2021
20202
% Changeas Reported % Change
inConstantCurrency
2021
20202
% Changeas Reported % Change
inConstantCurrency North America
Segment Gross Billings:
Net Sales
$
1,037.0
$
926.6
12
%
12
%
$
2,077.5
$
1,647.1
26
%
26
%
Sales Adjustments3
73.1
66.9
142.2
113.8
Gross Billings
$
1,110.1
$
993.5
12
%
11
%
$
2,219.7
$
1,760.8
26
%
26
%
North America Gross Billings by
Categories:
Dolls
$
349.6
$
328.6
6
%
6
%
$
698.4
$
523.6
33
%
33
%
Infant, Toddler and Preschool
271.8
257.2
6
5
520.2
466.2
12
11
Vehicles
216.7
189.6
14
14
457.8
356.2
29
28
Action Figures, Building Sets, Games, and Other
272.0
218.1
25
24
543.3
414.8
31
31
Gross Billings
$
1,110.1
$
993.5
12
%
11
%
$
2,219.7
$
1,760.8
26
%
26
%
Supplemental Gross Billings
Disclosure
North America Gross Billings
by Top 3 Power Brands:
Barbie
$
308.8
$
297.6
4
%
4
%
$
617.1
$
477.7
29
%
29
%
Hot Wheels
181.1
156.5
16
15
383.5
296.8
29
29
Fisher-Price and Thomas & Friends
252.4
241.6
4
4
476.1
423.2
13
12
Other
367.8
297.8
23
23
743.0
563.2
32
31
Gross Billings
$
1,110.1
$
993.5
12
%
11
%
$
2,219.7
$
1,760.8
26
%
26
%
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 Reflects the impact of immaterial revisions to
the financial statements. 3 Sales Adjustments are not allocated to
individual products. As such, Net Sales are not presented on a
categories or brand level. 4 Amounts may not sum due to rounding.
MATTEL, INC. AND SUBSIDIARIES EXHIBIT VI
GROSS BILLINGS1 BY SEGMENT (Unaudited)4
SUPPLEMENTAL KEY PERFORMANCE
INDICATOR
For the Three Months Ended September 30,
For the Nine Months Ended September 30,
(In millions, except percentage
information)
2021
20202
% Changeas Reported % Change
inConstantCurrency
2021
20202
% Changeas Reported % Change
inConstantCurrency International
Segment Gross Billings:
Net Sales
$
673.3
$
658.4
2
%
0
%
$
1,447.5
$
1,198.8
21
%
17
%
Sales Adjustments3
125.7
117.5
281.6
227.2
Gross Billings
$
799.0
$
775.9
3
%
1
%
$
1,729.1
$
1,426.0
21
%
17
%
International Gross Billings by Geographic
Area:
EMEA
Net Sales
$
420.8
$
410.2
3
%
2
%
$
905.8
$
735.5
23
%
20
%
Sales Adjustments3
83.8
75.2
189.3
149.3
Gross Billings
$
504.7
$
485.5
4
%
3
%
$
1,095.2
$
884.8
24
%
21
%
Latin America
Net Sales
$
180.8
$
159.0
14
%
8
%
$
329.6
$
268.0
23
%
18
%
Sales Adjustments3
30.8
27.7
56.2
46.0
Gross Billings
$
211.6
$
186.6
13
%
8
%
$
385.8
$
314.0
23
%
18
%
Asia
Pacific Net
Sales
$
71.7
$
89.2
-20
%
-21
%
$
212.2
$
195.4
9
%
3
%
Sales Adjustments3
11.0
14.6
36.0
31.9
Gross Billings
$
82.7
$
103.8
-20
%
-22
%
$
248.2
$
227.2
9
%
3
%
International Gross Billings by
Categories:
Dolls
$
316.4
$
308.2
3
%
1
%
$
655.8
$
532.9
23
%
20
%
Infant, Toddler and Preschool
135.1
151.6
-11
-13
299.2
282.8
6
2
Vehicles
173.2
179.8
-4
-5
413.7
357.5
16
12
Action Figures, Building Sets, Games, and Other
174.4
136.4
28
25
360.4
252.7
43
37
Gross Billings
$
799.0
$
775.9
3
%
1
%
$
1,729.1
$
1,426.0
21
%
17
%
Supplemental Gross Billings
Disclosure
International Gross Billings
by Top 3 Power Brands:
Barbie
$
246.4
$
234.6
5
%
3
%
$
505.6
$
401.3
26
%
22
%
Hot Wheels
148.8
156.3
-5
-7
358.4
311.1
15
12
Fisher-Price and Thomas & Friends
131.3
146.1
-10
-12
286.9
269.5
6
3
Other
272.5
238.9
14
11
578.2
444.1
30
26
Gross Billings
$
799.0
$
775.9
3
%
1
%
$
1,729.1
$
1,426.0
21
%
17
%
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 Reflects the impact of immaterial revisions to
the financial statements. 3 Sales Adjustments are not allocated to
individual products. As such, Net Sales are not presented on a
categories or brand level. 4 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 September 30,
For the Nine Months Ended September 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
$
52.0
$
51.4
1
%
1
%
$
137.8
$
116.8
18
%
18
%
Sales Adjustments2
1.6
2.3
3.6
4.1
Gross Billings
$
53.6
$
53.7
0
%
0
%
$
141.4
$
120.9
17
%
17
%
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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211021005883/en/
News Media Catherine Frymark
catherine.frymark@mattel.com
Securities Analysts David Zbojniewicz
david.zbojniewicz@mattel.com
Mattel (NASDAQ:MAT)
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