First Quarter 2022 Highlights Versus
Prior Year
- Net Sales of $1,041 million, up 19% as reported, and 22% in
constant currency
- Reported Gross Margin of 46.4%, a decrease of 70 basis points;
Adjusted Gross Margin of 46.6%, a decrease of 70 basis points
- Reported Operating Income of $80 million, up 136%, an increase
of $46 million; Adjusted Operating Income of $90 million, up 190%,
an increase of $59 million
- Reported Net Income of $21 million, an improvement of $134
million
- Reported EPS of $0.06, an improvement of $0.38 per share;
Adjusted EPS of $0.08, an improvement of $0.18 per share
- Adjusted EBITDA of $152 million, up 65%, an increase of $60
million
- Company reiterates 2022 guidance and 2023 goals
Mattel, Inc. (NASDAQ: MAT) today reported first quarter
financial results.
Ynon Kreiz, Chairman and CEO of Mattel, said: “Mattel achieved
its highest first quarter results we have on record for net sales,
operating income, and EBITDA. Our strong performance continued,
with growth across regions, categories, and our three power brands.
These results are in line with our strategy to grow Mattel’s
IP-driven toy business. Having completed our turnaround in 2021, we
are firmly in growth mode and operating as an IP-driven,
high-performing toy company.”
Mr. Kreiz continued: “Mattel’s supply chain is playing a key
role in our success. All of our factories are fully operational,
and we are working with our retail partners to ensure product is
available on shelves to meet consumer demand. The full-year outlook
is strong, we expect to grow market share, and we are reiterating
our 2022 guidance and 2023 goals.”
Anthony DiSilvestro, CFO of Mattel, said: “Mattel executed
another outstanding quarter, and we are very pleased with the start
of the year. Our topline performance benefited from increased
points of distribution, as well as retailers restocking low
inventories following the strong holiday season and gearing up to
support product launches tied to the upcoming theatrical releases.
Looking ahead, we continue to expect to grow net sales in 2022 by
8-10% in constant currency, driven by growth in our leader
categories, led by our power brands and American Girl, as well as
our Challenger categories. We expect to achieve strong growth in
the second quarter, and to continue to improve free cash flow,
conversion rate, and leverage ratio for the full year.”
Financial Overview
First Quarter 2022
For the first quarter, Net Sales were up 19% as reported, and
22% in constant currency, versus the prior year’s first quarter.
Reported Operating Income was $80 million, an increase of $46
million, and Adjusted Operating Income was $90 million, an increase
of $59 million. Reported Earnings Per Share were $0.06, an
improvement of $0.38 per share, and Adjusted Earnings Per Share
were $0.08, an improvement of $0.18 per share.
Net Sales in the North America segment increased 26% as reported
and in constant currency, versus the prior year’s first
quarter.
Gross Billings in the North America segment increased 25% as
reported and in constant currency, driven by growth in Action
Figures, Building Sets, Games, and Other (including Jurassic
World™, Lightyear, and MEGA®), Vehicles (including Hot Wheels®),
Infant, Toddler, and Preschool (including Fisher-Price® and Thomas
& Friends™), and Dolls (including Barbie® and Polly
Pocket®).
Net Sales in the International segment increased 16% as
reported, and 24% in constant currency.
Gross Billings in the International segment increased 16% as
reported, and 24% in constant currency, driven by growth in
Vehicles (including Hot Wheels), Dolls (including Barbie and Polly
Pocket), and Action Figures, Building Sets, Games, and Other
(including Jurassic World, MEGA, and Lightyear).
Net Sales in the American Girl® segment decreased 22% as
reported and in constant currency.
Gross Billings in the American Girl segment decreased 22% as
reported and in constant currency, compared to a very strong prior
year.
Reported Gross Margin decreased to 46.4%, versus 47.1% in the
prior year’s first quarter. Adjusted Gross Margin decreased to
46.6%, versus 47.3% in the prior year’s first quarter. The decrease
in Reported and Adjusted Gross Margin was primarily due to input
cost inflation, partially offset by favorable foreign exchange,
pricing, favorable fixed cost absorption, and savings from the
Optimizing for Growth program.
Reported Other Selling and Administrative Expenses increased by
$25 million versus the prior year to $329 million. Adjusted Other
Selling and Administrative Expenses increased by $13 million to
$322 million. The increase in Adjusted Other Selling and
Administrative Expenses was primarily due to higher
employee-related expenses, partially offset by savings from the
Optimizing for Growth program.
For the three months ended March 31, 2022, Cash Flows Used for
Operating Activities were $144 million, an increase of $108
million, versus the prior year’s first quarter, primarily due to
higher working capital usage, partially offset by higher net
income, excluding the impact of non-cash charges. Cash Flows Used
for Investing Activities were $55 million, an increase of $56
million, primarily due to the impact of prior year proceeds from
the disposal of assets and a business and higher net payments of
foreign currency forward contracts. Cash Flows Provided by
Financing Activities and Other were $4 million, as compared to a
use of $112 million in the prior year’s first quarter, with the
change primarily due to the cash used for repayment and refinancing
of long-term borrowings in the first quarter of 2021.
Gross Billings by Categories
First Quarter 2022
Worldwide Gross Billings for Dolls were $396 million, up 4% as
reported, and 8% in constant currency, versus the prior year’s
first quarter, primarily driven by growth in Barbie and Polly
Pocket, partially offset by declines in American Girl.
Worldwide Gross Billings for Infant, Toddler, and Preschool were
$206 million, up 12% as reported, and 15% in constant currency,
primarily driven by growth in Fisher-Price and Thomas &
Friends.
Worldwide Gross Billings for Vehicles were $282 million, up 31%
as reported, and 36% in constant currency, primarily driven by
growth in Hot Wheels.
Worldwide Gross Billings for Action Figures, Building Sets,
Games, and Other were $281 million, up 41% as reported, and 44% in
constant currency, primarily driven by growth in Action Figures
(including Jurassic World and Lightyear) and Building Sets
(including MEGA).
2022 Guidance and 2023 Goals
Mattel’s 2022 guidance remains as follows:
(in millions,except EPS and percentages) FY2022
Expected FY2021 Net Sales
+8 - 10% (Constant Currency)
$5,458
Adjusted Gross Margin
~47%
48.2%
Adjusted EBITDA
$1,100 - $1,125
$1,007
Adjusted EPS
$1.42 - $1.48
$1.30
Adjusted Tax Rate
26 - 28%
25%
Capital Expenditures
$175 - $200
$151
Mattel’s 2023 goals remain as follows:
FY2023 Net Sales + High-Single Digit %(Constant
Currency) Adjusted Operating Income Margin ~16 - 17%of Net Sales
Adjusted EPS > $1.90
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, Adjusted Operating Income Margin,
Adjusted EBITDA, and Adjusted EPS 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.
Mattel’s guidance and goals take into account anticipated supply
chain disruption that the company 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 Standard 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://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 Standard time the
evening of the call until Wednesday, May 4, 2022 and may be
accessed by dialing +1-404-537-3406. The passcode is 3845555.
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 Mattel offers 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) inflation and
currency fluctuations, including movements in foreign exchange
rates, 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 such as plant or port closures, 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 that 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 and adapt to evolving workplace models; (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 or Russia, 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)
business disruptions or other unforeseen impacts due to economic
instability, political instability, civil unrest, armed hostilities
(including the impact of the war in Ukraine), natural and manmade
disasters, or other catastrophic events; (xvii) failure to realize
the planned benefits from any investments or acquisitions made by
Mattel; (xviii) the impact of other market conditions or third
party actions or approvals, including those 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; (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) Mattel’s ability
to navigate regulatory frameworks in connection with new areas of
investment, product development, or other business activities, such
as non-fungible tokens and cryptocurrency; (xxii) uncertainty from
the expected discontinuance of the London Interbank Offer Rate and
transition to any other interest rate benchmark; and (xxiii) 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, 2021 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.
Presentation Information / Non-GAAP Financial
Measures
The financial results included herein represent the most current
information available to management and are preliminary until
Mattel’s Form 10-Q is filed with the SEC. Actual results may differ
from these preliminary results.
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, Adjusted
Operating Income 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), Adjusted Tax Rate, 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 – Quarterly Earnings.”
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 and Adjusted Operating Income
Margin
Adjusted Operating Income and Adjusted Operating Income Margin
represent reported Operating Income and reported Operating Income
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 Margin represents
Mattel’s Adjusted Operating Income, as a percentage of Net Sales.
Adjusted Operating Income and Adjusted Operating Income 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.
Adjusted Tax Rate
The Adjusted Tax Rate is calculated by dividing Adjusted
Provision for Income Taxes by Adjusted Income Before Income Taxes.
Adjusted Income Before for Income Taxes represents Reported Income
Before Income Taxes, adjusted to exclude severance and
restructuring expenses, the impact of inclined sleeper product
recalls, the impact of sale of assets/business, and loss on debt
extinguishment. The Adjusted Provision for Income Taxes represents
Reported (Benefit) for Income Taxes, adjusted to exclude the impact
of releases of valuation allowance and the aggregate tax effect of
adjustments. Mattel believes the adjusted tax rate provides useful
supplemental information for investors to gauge and compare the
impact of tax expense on Mattel's earnings results from one period
to another.
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®, Masters of the Universe®, 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 and digital
experiences, music, and live events. Founded in 1945, we operate in
35 locations and our products are available in more than 150
countries in collaboration with the world’s leading retail and
ecommerce companies. Mattel is proud to be a trusted partner in
empowering children to explore the wonder of childhood and reach
their full potential. Visit us online at 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,
2022
20212
% Change as
Reported
% Change in ConstantCurrency (In
millions, except per share and percentage information)
$ Amt % Net Sales $ Amt % Net Sales
Net Sales
$
1,041.3
$
874.2
19
%
22
%
Cost of Sales
558.4
53.6
%
462.4
52.9
%
21
%
Gross Profit
482.9
46.4
%
411.8
47.1
%
17
%
17
%
Advertising and Promotion Expenses
73.8
7.1
%
74.1
8.5
%
0
%
Other Selling and Administrative Expenses
329.1
31.6
%
303.9
34.8
%
8
%
Operating Income
80.1
7.7
%
33.9
3.9
%
136
%
88
%
Interest Expense
33.0
3.2
%
130.5
14.9
%
-75
%
Interest (Income)
(1.2
)
-0.1
%
(0.8
)
-0.1
%
47
%
Other Non-Operating Expense (Income), Net
9.1
(1.1
)
Income (Loss) Before Income Taxes
39.1
3.8
%
(94.7
)
-10.8
%
n/m
n/m
Provision for Income Taxes
23.9
20.3
(Income) from Equity Method Investments
(6.3
)
(2.6
)
Net Income (Loss)
$
21.5
2.1
%
$
(112.4
)
-12.9
%
n/m
Net Income (Loss) Per Common Share - Basic
$
0.06
$
(0.32
)
Weighted-Average Number of Common Shares
352.2
349.0
Net Income (Loss) Per Common Share - Diluted
$
0.06
$
(0.32
)
Weighted-Average Number of Common and Potential Common Shares
359.0
349.0
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
March 31,
December 31,
2022
20212
2021
(In millions)
(Unaudited) Assets Cash and Equivalents
$
536.6
$
615.2
$
731.4
Accounts Receivable, Net
862.2
680.6
1,072.7
Inventories
969.2
626.5
777.2
Prepaid Expenses and Other Current Assets
267.7
187.2
293.3
Total Current Assets
2,635.7
2,109.5
2,874.5
Property, Plant, and Equipment, Net
452.0
451.0
456.0
Right-of-Use Assets, Net
339.7
294.8
325.5
Goodwill
1,387.1
1,392.3
1,390.2
Other Noncurrent Assets
1,332.9
871.3
1,347.7
Total Assets
$
6,147.4
$
5,118.9
$
6,393.9
Liabilities and Stockholders' Equity Short-Term
Borrowings
$
-
$
0.9
$
-
Current Portion of Long-Term Debt
250.0
-
-
Accounts Payable and Accrued Liabilities
1,278.0
1,051.6
1,570.7
Income Taxes Payable
16.7
30.1
27.5
Total Current Liabilities
1,544.7
1,082.6
1,598.3
Long-Term Debt
2,322.1
2,837.7
2,571.0
Noncurrent Lease Liabilities
296.4
255.7
283.6
Other Noncurrent Liabilities
366.1
452.4
372.2
Stockholders' Equity
1,618.1
490.6
1,568.8
Total Liabilities and Stockholders' Equity
$
6,147.4
$
5,118.9
$
6,393.9
MATTEL, INC. AND SUBSIDIARIES
SUPPLEMENTAL BALANCE SHEET AND CASH FLOW DATA (Unaudited)1
March 31,
2022
2021
Key Balance Sheet Data:
Accounts Receivable, Net Days of Sales Outstanding (DSO)
75
70
For the Three Months Ended
March 31,
(In millions)
2022
20212
Condensed Cash Flow Data: Cash
Flows Used for Operating Activities
$
(144
)
$
(36
)
Cash Flows (Used for) Provided by Investing Activities
(55
)
1
Cash Flows Provided by (Used for) Financing Activities and Other
4
(112
)
Decrease in Cash and Equivalents
$
(195
)
$
(147
)
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
March 31,
(In millions, except percentage
information)
2022
20212
Change
Gross Profit Gross Profit, As
Reported
$ 482.9
$ 411.8
Gross Margin
46.4%
47.1%
-70 bps Adjustments: Severance and Restructuring Expenses
2.7
1.9
Gross Profit, As Adjusted
$ 485.6
$ 413.8
Adjusted Gross Margin
46.6%
47.3%
-70 bps
Other Selling and
Administrative Expenses Other Selling and Administrative
Expenses, As Reported
$ 329.1
$ 303.9
8%
% of Net Sales
31.6%
34.8%
Adjustments: Severance and Restructuring Expenses
(6.8)
(5.7)
Inclined Sleeper Product Recalls3
(0.6)
(5.3)
Sale of Assets4
-
15.8
Other Selling and Administrative Expenses, As Adjusted
$ 321.7
$ 308.6
4%
% of Net Sales
30.9%
35.3%
Operating Income
Operating Income, As Reported
$ 80.1
$ 33.9
136%
Operating Income Margin
7.7%
3.9%
380 bps Adjustments: Severance and Restructuring Expenses
9.5
7.6
Inclined Sleeper Product Recalls3
0.6
5.3
Sale of Assets4
-
(15.8)
Operating Income, As Adjusted
$ 90.1
$ 31.0
190%
Adjusted Operating Income Margin
8.7%
3.5%
520 bps 1 Amounts may not sum due to rounding. 2 Reflects the
impact of immaterial revisions to the financial statements. 3 For
the three months ended March 31, 2022 and 2021, represents expenses
related to inclined sleeper product recall litigation. 4 For the
three months ended March 31, 2021, Mattel recorded a gain on sale
of assets of $15.8 million in other selling and administrative
expenses.
MATTEL, INC. AND SUBSIDIARIES
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)
2022
20212
Change
Earnings Per Share Net Income
(Loss) Per Common Share, As Reported
$
0.06
$
(0.32
)
n/m
Adjustments: Severance and Restructuring Expenses
0.03
0.02
Inclined Sleeper Product Recalls3
-
0.02
Sale of Assets/Business4
-
(0.06
)
Loss on Debt Extinguishment
-
0.24
Tax Effect of Adjustments5
(0.01
)
0.01
Net Income (Loss) Per Common Share, As Adjusted
$
0.08
$
(0.10
)
n/m
EBITDA and Adjusted
EBITDA Net Income (Loss), As Reported
$
21.5
$
(112.4
)
n/m
Adjustments: Interest Expense
33.0
130.5
Provision for Income Taxes
23.9
20.3
Depreciation
35.9
36.5
Amortization
9.3
9.5
EBITDA
123.6
84.5
Adjustments: Share-Based Compensation
19.3
15.1
Severance and Restructuring Expenses
8.4
7.0
Inclined Sleeper Product Recalls3
0.6
5.3
Sale of Assets/Business4
-
(19.7
)
Adjusted EBITDA
$
152.0
$
92.2
65
%
Free Cash Flow Net Cash
Flows Used for Operating Activities
$
(143.8
)
$
(35.7
)
Capital Expenditures
(36.0
)
(35.8
)
Free Cash Flow
$
(179.8
)
$
(71.5
)
1 Amounts may not sum due to rounding. 2 Reflects the impact of
immaterial revisions to the financial statements. 3 For the three
months ended March 31, 2022 and 2021, represents expenses related
to inclined sleeper product recall litigation. 4 For the three
months ended March 31, 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. n/m
- Not meaningful
MATTEL, INC. AND SUBSIDIARIES
SUPPLEMENTAL FINANCIAL INFORMATION (Unaudited)1
RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL MEASURES
For the Trailing Twelve Months
Ended March 31,
(In millions, except percentage and pts
information)
2022
20212
Change
Leverage Ratio (Debt / Adjusted
EBITDA) Debt Long-Term Debt
$
2,322.1
$
2,837.7
Current Portion of Long-Term Debt
250.0
-
Short-Term Borrowings
-
0.9
Adjustments: Debt Issuance Costs and Debt Discount
27.9
37.3
Debt
$
2,600.0
$
2,875.9
EBITDA and Adjusted EBITDA Net Income,
As Reported
$
1,036.8
$
216.9
378
%
Adjustments: Interest Expense
156.5
279.8
(Benefit) Provision for Income Taxes
(416.8
)
74.0
Depreciation
145.6
147.4
Amortization
37.8
38.5
EBITDA
960.0
756.6
Adjustments: Share-Based Compensation
64.3
61.0
Severance and Restructuring Expenses
32.1
35.9
Inclined Sleeper Product Recalls
10.4
25.2
Sale of Assets/Business
-
(19.7
)
Adjusted EBITDA
$
1,066.8
$
858.9
24
%
Debt / Net Income 2.5x 13.3x Leverage Ratio (Debt / Adjusted
EBITDA) 2.4x 3.3x
Free Cash
Flow Net Cash Flows Provided by Operating Activities
$
377.4
$
427.4
-12
%
Capital Expenditures
(151.6
)
(122.3
)
Free Cash Flow
$
225.8
$
305.2
-26
%
Net Cash Flows Provided by Operating Activities / Net Income
36
%
197
%
(161) pts Free Cash Flow Conversion (Free Cash Flow/Adjusted
EBITDA)
21
%
36
%
(15) pts 1 Amounts may not sum due to rounding. 2 Reflects the
impact of immaterial revisions to the financial statements.
MATTEL, INC. AND SUBSIDIARIES SUPPLEMENTAL
FINANCIAL INFORMATION (Unaudited)1 RECONCILIATION OF GAAP
AND NON-GAAP FINANCIAL MEASURES
For the Year Ended December
31,
(In millions, except percentage and per
share information)
2021
Gross Profit Gross Profit, As
Reported
$ 2,626.7
Gross Margin
48.1%
Adjustments: Severance and Restructuring Expenses
2.9
Gross Profit, As Adjusted
$ 2,629.5
Adjusted Gross Margin
48.2%
Earnings Per Share Net
Income Per Common Share, As Reported
$ 2.53
Adjustments: Severance and Restructuring Expenses
0.10
Inclined Sleeper Product Recalls2
0.04
Sale of Assets/Business3
(0.06)
Loss on Debt Extinguishment
0.28
Valuation Allowance Releases4
(1.51)
Tax Effect of Adjustments5
(0.08)
Net Income Per Common Share, As Adjusted
$ 1.30
EBITDA and Adjusted
EBITDA Net Income, As Reported
$ 903.0
Adjustments: Interest Expense
253.9
(Benefit) for Income Taxes
(420.4)
Depreciation
146.3
Amortization
38.0
EBITDA
920.9
Adjustments: Share-Based Compensation
60.1
Severance and Restructuring Expenses
30.7
Inclined Sleeper Product Recalls2
15.1
Sale of Assets/Business3
(19.7)
Adjusted EBITDA
$ 1,007.0
1 Amounts may not sum due to rounding. 2 For the year ended
December 31, 2021, represents expenses related to inclined sleeper
product recall litigation. 3 For the year ended December 31, 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. 4 For the year
ended December 31, 2021, the amount includes a net benefit of
approximately $541 million, related to the release of valuation
allowances against deferred tax assets of the U.S. and certain
International affiliates. 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.
MATTEL,
INC. AND SUBSIDIARIES SUPPLEMENTAL FINANCIAL
INFORMATION (Unaudited)1 RECONCILIATION OF GAAP AND NON-GAAP
FINANCIAL MEASURES
For the Year Ended December
31,
(In millions, except percentage
information)
2021
Tax Rate Income before Income
Taxes, As Reported
$
470.8
Adjustments: Severance and Restructuring Expenses
34.4
Inclined Sleeper Product Recalls2
15.1
Sale of Assets/Business3
(19.7
)
Loss on Debt Extinguishment
101.7
Income before Income Taxes, As Adjusted
$
602.2
(Benefit) for Income Taxes, As Reported
$
(420.4
)
Adjustments: Valuation Allowance Releases4
540.8
Tax Effect of Adjustments
27.9
Provision for Income Taxes, As Adjusted
$
148.4
Tax Rate, As Reported
-89
%
Tax Rate, As Adjusted
25
%
1 Amounts may not sum due to rounding. 2 For the year ended
December 31, 2021, represents expenses related to inclined sleeper
product recall litigation. 3 For the year ended December 31, 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. 4 For the year
ended December 31, 2021, the amount includes a net benefit of
approximately $541 million, related to the release of valuation
allowances against deferred tax assets of the U.S. and certain
International affiliates.
MATTEL, INC. AND SUBSIDIARIES
EXHIBIT IV
WORLDWIDE GROSS BILLINGS1 (Unaudited)3
SUPPLEMENTAL KEY PERFORMANCE INDICATOR For the
Three Months Ended March 31, (In
millions, except percentage information)
2022
2021
% Change as Reported
% Change in Constant
Currency
Worldwide Gross Billings: Net
Sales
$ 1,041.3
$ 874.2
19%
22%
Sales Adjustments2
123.1
104.8
Gross Billings
$ 1,164.4
$ 979.0
19%
23%
Worldwide Gross Billings by
Categories: Dolls
$ 396.1
$ 381.3
4%
8%
Infant, Toddler, and Preschool
205.5
183.2
12
15
Vehicles
282.1
215.4
31
36
Action Figures, Building Sets, Games, and Other
280.7
199.2
41
44
Gross Billings
$ 1,164.4
$ 979.0
19%
23%
Supplemental Gross Billings
Disclosure Worldwide
Gross Billings by Top 3 Power Brands: Barbie
$ 298.0
$ 276.2
8%
12%
Hot Wheels
241.4
184.6
31
36
Fisher-Price and Thomas & Friends
189.3
171.6
10
13
Other
435.7
346.6
26
29
Gross Billings
$ 1,164.4
$ 979.0
19%
23%
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
March 31, (In millions, except
percentage information)
2022
2021
% Change as Reported
% Change in Constant
Currency
North America Segment Gross
Billings: Net Sales
$ 602.1
$ 479.7
26%
26%
Sales Adjustments2
39.7
32.1
Gross Billings
$ 641.8
$ 511.8
25%
25%
North America Gross Billings by
Categories: Dolls
$ 182.2
$ 176.2
3%
3%
Infant, Toddler, and Preschool
131.5
108.6
21
21
Vehicles
146.8
109.8
34
34
Action Figures, Building Sets, Games, and Other
181.3
117.2
55
55
Gross Billings
$ 641.8
$ 511.8
25%
25%
Supplemental Gross Billings
Disclosure North America
Gross Billings by Top 3 Power Brands: Barbie
$ 164.0
$ 156.9
5%
5%
Hot Wheels
121.7
92.7
31
31
Fisher-Price and Thomas & Friends
121.3
100.9
20
20
Other
234.8
161.3
46
46
Gross Billings
$ 641.8
$ 511.8
25%
25%
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
March 31, (In millions, except
percentage information)
2022
2021
% Change as Reported
% Change in Constant
Currency
International Segment Gross
Billings: Net Sales
$ 403.8
$ 349.4
16%
24%
Sales Adjustments2
82.4
71.6
Gross Billings
$ 486.3
$ 420.9
16%
24%
International Gross Billings by
Geographic Area: EMEA Net Sales
$ 277.7
$ 238.2
17%
28%
Sales Adjustments2
62.6
52.9
Gross Billings
$ 340.4
$ 291.0
17%
29%
Latin America Net Sales
$ 72.0
$ 56.3
28%
28%
Sales Adjustments2
11.3
9.3
Gross Billings
$ 83.2
$ 65.6
27%
28%
Asia Pacific Net Sales
$ 54.1
$ 54.9
-1%
2%
Sales Adjustments2
8.5
9.3
Gross Billings
$ 62.7
$ 64.3
-2%
1%
International Gross Billings by
Categories: Dolls
$ 177.6
$ 158.7
12%
21%
Infant, Toddler, and Preschool
74.0
74.6
-1
6
Vehicles
135.3
105.5
28
39
Action Figures, Building Sets, Games, and Other
99.4
82.0
21
29
Gross Billings
$ 486.3
$ 420.9
16%
24%
Supplemental Gross Billings
Disclosure International
Gross Billings by Top 3 Power Brands: Barbie
$ 134.0
$ 119.3
12%
22%
Hot Wheels
119.7
91.9
30
40
Fisher-Price and Thomas & Friends
68.1
70.7
-4
3
Other
164.6
139.0
18
27
Gross Billings
$ 486.3
$ 420.9
16%
24%
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 March 31, (In
millions, except percentage information)
2022
2021
% Change as Reported
% Change in Constant
Currency
American Girl Segment Gross
Billings: Net Sales
$ 35.3
$ 45.2
-22%
-22%
Sales Adjustments2
1.0
1.1
Gross Billings
$ 36.3
$ 46.3
-22%
-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 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/20220427005218/en/
News Media Catherine Frymark
catherine.frymark@mattel.com
Securities Analysts David Zbojniewicz
david.zbojniewicz@mattel.com
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