Mattel: Protecting Dividend Is Priority; Sees '09 Capex Down
02 Fevereiro 2009 - 2:08PM
Dow Jones News
Mattel Corp. (MAT) expects to cut 2009 capital expenditures to
below $150 million after spending $199 million last year as the toy
maker focuses on reducing debt and boosting cash, Chief Executive
Robert A. Eckert said.
"Our priority is to protect the dividend, so you won't see a lot
of activity from us in either repurchasing shares" or mergers and
acquisitions, Eckert said during a conference call following
disappointing fourth-quarter results. "This is a year really to
hunker down and run the cash machine for cash."
The annual dividend, which was 75 cents in 2008, is ultimately
up to the board, Eckert noted.
Mattel in 2008 generated about $436 million in cash flow from
operations, officials said. The toy maker spent $58 million on
acquisitions and $91 million on share repurchases. With 358 million
basic shares outstanding as of Dec. 31, the dividend would cost
$268.5 million.
Earlier Monday, Mattel posted a worse-than-expected 46% drop in
net income on an 11% revenue decline and falling margins as
consumers pulled back on toy spending. Foreign currency exchange
also had a negative impact.
Shares of Mattel fell sharply and pulled down other toy makers.
Mattel recently traded down 15% at $12.03, and Hasbro Inc. (HAS)
declined 8.5% to $22.09. Leapfrog Enterprises (LF) fell 5.5% to
$1.90, Rc2 Corp. (RCRC) was off 5% to $5.52, and Jakks Pacific Inc.
(JAKK) was down 3.8% to $17.65.
-By Mary Ellen Lloyd, Dow Jones Newswires; 704-948-9145;
maryellen.lloyd@dowjones.com
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