Second Quarter 2024 Highlights Versus
Prior Year
- Net Sales of $1,080 million, down 1% as reported, and
comparable in constant currency
- Gross Margin of 49.2%, an increase of 410 basis points;
Adjusted Gross Margin of 49.2%, an increase of 430 basis
points
- Operating Income of $83 million, an improvement of $20 million;
Adjusted Operating Income of $96 million, an improvement of $21
million
- Net Income of $57 million, an improvement of $30 million
- Earnings per Share of $0.17 compared to $0.08 per share;
Adjusted Earnings per Share of $0.19 compared to $0.10 per
share
- Adjusted EBITDA of $171 million, an improvement of $23
million
- Repurchased $100 million of shares, bringing first half total
to $200 million
- Company reiterates 2024 guidance
Mattel, Inc. (NASDAQ: MAT) today reported second quarter 2024
financial results.
Ynon Kreiz, Chairman and CEO of Mattel, said: “This was a good
quarter for Mattel, where we achieved significant gross margin
expansion, and growth in Adjusted EBITDA and Adjusted EPS. We
further strengthened our balance sheet and more than doubled free
cash flow in the trailing twelve-month period. Mattel is well
positioned for the second half, with new product innovation and
increased retail support. We are in a strong financial position to
execute our strategy to grow our IP-driven toy business and expand
our entertainment offering.”
Anthony DiSilvestro, CFO of Mattel, added: “Mattel achieved
another quarter of increased profitability. We continue to generate
significant cash flow and are executing our capital allocation
priorities, with the expectation to continue share repurchases in
the second half of the year. We expect to achieve our 2024 guidance
and grow both sales and earnings in 2025.”
Financial Overview
For the second quarter, Net Sales were down 1% as reported, and
comparable in constant currency, versus the prior year’s second
quarter. Reported Operating Income was $83 million, an improvement
of $20 million, and Adjusted Operating Income was $96 million, an
improvement of $21 million. Reported Earnings Per Share were $0.17,
an improvement of $0.09 per share, and Adjusted Earnings Per Share
were $0.19, an improvement of $0.09 per share.
For the first six months of the year, Net Sales declined 1% as
reported and in constant currency, versus the prior year’s first
six months. Reported Operating Income was $48 million, an
improvement of $100 million, and Adjusted Operating Income was $73
million, an improvement of $85 million. Reported Earnings Per Share
were $0.08, an improvement of $0.30, and Adjusted Earnings Per
Share were $0.14, an improvement of $0.28.
Net Sales in the North America segment decreased 3% as reported
and in constant currency.
Gross Billings in the North America segment decreased 3% as
reported and in constant currency, due to declines in Infant,
Toddler, and Preschool (primarily Preschool Entertainment and Baby
Gear & Power Wheels, partially offset by growth in
Fisher-Price), Dolls (primarily Barbie), and Vehicles (primarily
Matchbox and Hot Wheels), partly offset by growth in Action
Figures, Building Sets, Games, and Other (primarily Games).
Net Sales in the International segment increased 2% as reported,
or 3% in constant currency.
Gross Billings in the International segment decreased 1% as
reported and were comparable in constant currency, due to declines
in Dolls (primarily Barbie and Disney Princess and Frozen), and
Action Figures, Building Sets, Games, and Other (primarily Action
Figures, partially offset by growth in Games), partly offset by
growth in Vehicles (primarily Hot Wheels), and Infant, Toddler, and
Preschool (primarily Fisher-Price).
Reported Gross Margin increased to 49.2%, versus 45.1% in the
prior year’s second quarter, and Adjusted Gross Margin increased to
49.2%, versus 44.9%. The increase in Gross Margin was primarily
driven by savings from the Optimizing for Profitable Growth
program, cost deflation, lower sales adjustments, and lower
inventory management costs.
Reported Other Selling and Administrative Expenses increased $37
million, to $374 million, primarily due to market-related pay
increases and investments. Adjusted Other Selling and
Administrative Expenses increased $37 million, to $361 million,
primarily due to the same factors.
For the six months ended June 30, 2024, Cash Flows Used for
Operating Activities were $217 million, an improvement of $108
million, primarily driven by higher net earnings. Cash Flows Used
for Investing Activities were $73 million, an increase of $11
million, primarily due to lower proceeds from foreign currency
forward contracts. Cash Flows Used for Financing Activities and
Other were $249 million, an increase of $175 million, primarily due
to $150 million of higher share repurchases in the first six months
of 2024.
Gross Billings by Categories
For the second quarter, Worldwide Gross Billings for Dolls were
$414 million, down 6% as reported, or 5% in constant currency,
versus the prior year’s second quarter, primarily due to declines
in Barbie and Disney Princess and Frozen.
Worldwide Gross Billings for Infant, Toddler, and Preschool were
$190 million, down 4% as reported, or 3% in constant currency,
primarily due to declines in Preschool Entertainment and Baby Gear
& Power Wheels, partially offset by growth in Fisher-Price.
Worldwide Gross Billings for Vehicles were $370 million, up 2%
as reported, and in constant currency, primarily driven by growth
in Hot Wheels.
Worldwide Gross Billings for Action Figures, Building Sets,
Games, and Other were $227 million, up 1% as reported, and in
constant currency, primarily driven by growth in Games, partially
offset by declines in Action Figures.
2024 Guidance
Mattel’s full year 2024 guidance remains:
(in millions,except EPS and percentages)
FY2024 Guidance
FY2023
Net Sales
Comparable (Constant
Currency)
$5,441
Adjusted Gross Margin
48.5 - 49%
47.5%
Adjusted EPS
$1.35 - $1.45
$1.23
Adjusted EBITDA
$975 - $1,025
$948
Adjusted Tax Rate
23 - 24%
23%
Capital Expenditures
$175 - $200
$160
Free Cash Flow
~ $500
$709
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 EPS, Adjusted EBITDA,
Adjusted Tax Rate, and Free Cash Flow is not available without
unreasonable effort. Mattel is unable to predict with sufficient
certainty items that would be excluded from the corresponding GAAP
measures, 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.
We are operating in a macro-economic environment that may impact
consumer demand. The guidance considers what the company is aware
of today, but remains subject to market volatility, unexpected
disruptions, and other risks and uncertainties.
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 latest 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 12
months and may be accessed beginning approximately three hours
after the completion of the live call.
Cautionary Note Regarding Forward-Looking Statements
Mattel cautions the reader that this press release contains a
number of forward-looking statements, which are statements that
relate to the future and are, by their nature, uncertain.
Forward-looking statements can be identified by the fact that they
do not relate strictly to historical or current facts and include
statements regarding Mattel’s guidance and goals for future periods
and other future events. The use of words such as “anticipates,”
“expects,” “intends,” “plans,” “projects,” “look forward,”
“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.
Specific factors that might cause such a difference include, but
are not limited to: (i) Mattel’s ability to design, develop,
produce, manufacture, source, ship, and distribute products on a
timely and cost-effective basis; (ii) sufficient interest in and
demand for the products and entertainment Mattel offers by retail
customers and consumers to profitably recover Mattel’s costs; (iii)
downturns in economic conditions affecting Mattel’s markets which
can negatively impact retail customers and consumers, and which can
result in lower employment levels and lower consumer disposable
income and spending, including lower spending on purchases of
Mattel’s products; (iv) other factors which can lower discretionary
consumer spending, such as higher costs for fuel and food, drops in
the value of homes or other consumer assets, and high levels of
consumer debt; (v) potential difficulties or delays Mattel may
experience in implementing cost savings and efficiency enhancing
initiatives; (vi) other economic and public health conditions or
regulatory changes in the markets in which Mattel and its customers
and suppliers operate, which could create delays or increase
Mattel’s costs, such as higher commodity prices, labor costs or
transportation costs, or outbreaks of disease; (vii) the effect of
inflation on Mattel’s business, including cost inflation in supply
chain inputs and increased labor costs, as well as pricing actions
taken in an effort to mitigate the effects of inflation; (viii)
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, in which Mattel operates, including, without
limitation, with respect to taxes, tariffs, trade policies, product
safety, or sustainability, which may increase Mattel’s product
costs and other costs of doing business, and reduce Mattel’s
earnings and liquidity; (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 and geopolitical developments in the Middle
East), natural and man-made disasters, pandemics or other public
health crises, 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 artificial intelligence, non-fungible tokens, and
cryptocurrency; (xxii) an inability to remediate the material
weakness in Mattel's internal control over financial reporting, or
additional material weaknesses or other deficiencies in the future
or the failure to maintain an effective system of internal control;
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, 2023 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 include Adjusted Gross Profit,
Adjusted Gross Margin, Adjusted Other Selling and Administrative
Expenses, Adjusted Operating Income/Loss, Adjusted Operating
Income/Loss Margin, Adjusted Earnings 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 (Total Debt / Adjusted
EBITDA), Net Debt, 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, and the
impact of the inclined sleeper product recalls, which are not part
of Mattel’s core business. Adjusted Other Selling and
Administrative Expenses is presented to provide additional
perspective on underlying trends in Mattel’s core other selling and
administrative expenses, which Mattel believes is useful
supplemental information for investors to be able to gauge and
compare Mattel’s current business performance from one period to
another.
Adjusted Operating Income/Loss 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, and the impact of the
inclined sleeper product recalls, 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 Per Share
Adjusted Earnings Per Share represents Mattel’s reported Diluted
Earnings Per Common Share, adjusted to exclude severance and
restructuring expenses, the impact of the inclined sleeper product
recalls, and the impact of changes to certain deferred tax assets,
which are not part of Mattel’s core business. The aggregate tax
effect of the adjustments was determined using the effective tax
rates on a jurisdictional basis of the respective adjustments and
dividing by the reported weighted-average number of common shares.
Adjusted Earnings 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 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, the impact of sale
of assets, and loss on liquidation of a subsidiary, 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 revolving credit agreement
governing its revolving credit facility. 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 (Total Debt / Adjusted EBITDA)
The leverage ratio is calculated by dividing Total Debt by
Adjusted EBITDA. Total 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.
Net Debt
Net Debt represents the aggregate of Mattel’s current portion of
long-term debt, short-term borrowings, and long-term debt, less
cash and cash equivalents. Mattel believes Net Debt is useful
supplemental information for investors to monitor Mattel’s
liquidity and evaluate its balance sheet.
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 Income Taxes represents reported Income
Before Income Taxes, adjusted to exclude severance and
restructuring expenses, and the impact of inclined sleeper product
recalls. The Adjusted Provision for Income Taxes represents
reported Provision for Income Taxes, adjusted to exclude 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 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 and family entertainment company
and owner of one of the most iconic brand portfolios in the world.
We engage consumers and fans through our franchise brands,
including Barbie®, Hot Wheels®, Fisher-Price®, American Girl®,
Thomas & Friends™, UNO®, Masters of the Universe®, Matchbox®,
Monster High®, MEGA® and Polly Pocket®, as well as other popular
properties that we own or license in partnership with global
entertainment companies. Our offerings include toys, content,
consumer products, digital and live experiences. Our products are
sold in collaboration with the world’s leading retail and ecommerce
companies. Since its founding in 1945, Mattel is proud to be a
trusted partner in empowering generations to explore the wonder of
childhood and reach their full potential. Visit us at
mattel.com.
MAT-FIN MAT-CORP
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,
(In millions, except per share and
percentage information)
2024
2023
% Change as Reported
% Change in Constant
Currency
2024
2023
% Change as Reported
% Change in Constant
Currency
$ Amt
% Net Sales
$ Amt
% Net Sales
$ Amt
% Net Sales
$ Amt
% Net Sales
Net Sales
$
1,079.7
$
1,087.2
-1
%
—
%
$
1,889.2
$
1,901.7
-1
%
-1
%
Cost of Sales
549.0
50.8
%
597.4
54.9
%
-8
%
969.6
51.3
%
1,086.1
57.1
%
-11
%
Gross Profit
530.7
49.2
%
489.8
45.1
%
8
%
10
%
919.6
48.7
%
815.6
42.9
%
13
%
13
%
Advertising and Promotion Expenses
73.7
6.8
%
90.0
8.3
%
-18
%
145.2
7.7
%
166.1
8.7
%
-13
%
Other Selling and Administrative Expenses
373.8
34.6
%
337.0
31.0
%
11
%
726.8
38.5
%
701.8
36.9
%
4
%
Operating Income (Loss)
83.2
7.7
%
62.8
5.8
%
33
%
68
%
47.7
2.5
%
(52.3
)
-2.7
%
-191
%
-130
%
Interest Expense
30.0
2.8
%
30.6
2.8
%
-2
%
60.0
3.2
%
61.8
3.2
%
-3
%
Interest (Income)
(12.4
)
-1.1
%
(4.3
)
-0.4
%
187
%
(29.7
)
-1.6
%
(10.8
)
-0.6
%
174
%
Other Non-Operating Expense (Income), Net
6.1
(2.1
)
11.7
(3.6
)
Income (Loss) Before Income Taxes
59.5
5.5
%
38.6
3.6
%
54
%
130
%
5.6
0.3
%
(99.6
)
-5.2
%
-106
%
-87
%
Provision (Benefit) from Income Taxes
9.2
14.4
(11.6
)
(12.6
)
(Income) from Equity Method Investments
(6.5
)
(3.0
)
(11.4
)
(7.7
)
Net Income (Loss)
$
56.9
5.3
%
$
27.2
2.5
%
109
%
$
28.6
1.5
%
$
(79.3
)
-4.2
%
-136
%
Net Income (Loss) Per Common Share - Basic
$
0.17
$
0.08
$
0.08
$
(0.22
)
Weighted-Average Number of Common Shares
342.2
354.6
344.6
354.7
Net Income (Loss) Per Common Share - Diluted
$
0.17
$
0.08
$
0.08
$
(0.22
)
Weighted-Average Number of Common and Potential Common Shares
344.4
357.2
347.4
354.7
1 Amounts may not sum due to rounding.
MATTEL, INC. AND
SUBSIDIARIES EXHIBIT II CONDENSED CONSOLIDATED
BALANCE SHEETS1
June 30,
December 31,
2024
2023
2023
(In millions)
(Unaudited)
Assets Cash and Equivalents
$
722.4
$
299.9
$
1,261.4
Accounts Receivable, Net
839.4
890.9
1,081.8
Inventories
776.9
971.6
571.6
Prepaid Expenses and Other Current Assets
265.7
261.3
207.5
Total Current Assets
2,604.4
2,423.7
3,122.3
Property, Plant, and Equipment, Net
444.9
464.1
465.5
Right-of-Use Assets, Net
292.4
296.2
313.2
Goodwill
1,383.4
1,384.2
1,384.5
Other Noncurrent Assets
1,180.8
1,329.5
1,150.2
Total Assets
$
5,905.8
$
5,897.8
$
6,435.8
Liabilities and Stockholders’ Equity Accounts Payable
and Accrued Liabilities
$
1,005.4
$
1,021.7
$
1,308.6
Income Taxes Payable
5.7
9.4
33.9
Total Current Liabilities
1,011.2
1,031.1
1,342.5
Long-Term Debt
2,332.2
2,327.8
2,330.0
Noncurrent Lease Liabilities
243.2
243.8
259.5
Other Noncurrent Liabilities
346.1
332.8
354.6
Stockholders’ Equity
1,973.1
1,962.4
2,149.2
Total Liabilities and Stockholders’ Equity
$
5,905.8
$
5,897.8
$
6,435.8
1 Amounts may not sum due to rounding.
MATTEL, INC. AND
SUBSIDIARIES EXHIBIT II SUPPLEMENTAL BALANCE
SHEET AND CASH FLOW DATA (Unaudited)1
June 30,
2024
2023
Key Balance Sheet Data:
Accounts Receivable, Net Days of Sales Outstanding (DSO)
70
74
For the Six Months Ended June
30,
(In millions)
2024
2023
Condensed Cash Flow Data: Cash
Flows (Used for) Operating Activities
$
(217
)
$
(326
)
Cash Flows (Used for) Investing Activities
(73
)
(62
)
Cash Flows (Used for) Financing Activities and Other
(249
)
(74
)
Decrease in Cash and Equivalents
$
(539
)
$
(461
)
1 Amounts may not sum due to rounding.
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 percentage
information)
2024
2023
Change
2024
2023
Change
Gross Profit Gross Profit, As
Reported
$
530.7
$
489.8
$
919.6
$
815.6
Gross Margin
49.2
%
45.1
%
410 bps
48.7
%
42.9
%
580 bps Adjustments: Severance and Restructuring Expenses
0.4
(1.2
)
2.6
(1.2
)
Gross Profit, As Adjusted
$
531.1
$
488.6
$
922.2
$
814.4
Adjusted Gross Margin
49.2
%
44.9
%
430 bps
48.8
%
42.8
%
600 bps
Other Selling and
Administrative Expenses Other Selling and Administrative
Expenses, As Reported
$
373.8
$
337.0
11
%
$
726.8
$
701.8
4
%
% of Net Sales
34.6
%
31.0
%
360 bps
38.5
%
36.9
%
160 bps Adjustments: Severance and Restructuring Expenses
(10.4
)
(9.8
)
(16.7
)
(33.7
)
Inclined Sleeper Product Recalls
(2.2
)
(3.4
)
(5.9
)
(7.7
)
Other Selling and Administrative Expenses, As Adjusted
$
361.2
$
323.8
12
%
$
704.1
$
660.3
7
%
% of Net Sales
33.5
%
29.8
%
370 bps
37.3
%
34.7
%
260 bps
Operating Income
(Loss) Operating Income (Loss), As Reported
$
83.2
$
62.8
33
%
$
47.7
$
(52.3
)
n/m
Operating Income (Loss) Margin
7.7
%
5.8
%
190 bps
2.5
%
-2.7
%
520 bps Adjustments: Severance and Restructuring Expenses
10.8
8.6
19.3
32.5
Inclined Sleeper Product Recalls
2.2
3.4
5.9
7.7
Operating Income (Loss), As Adjusted
$
96.2
$
74.7
29
%
$
72.9
$
(12.0
)
n/m
Adjusted Operating Income (Loss) Margin
8.9
%
6.9
%
200 bps
3.9
%
-0.6
%
450 bps 1 Amounts may not sum due to rounding. 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)
2024
2023
Change
2024
2023
Change
Earnings Per Share Net Income
(Loss) Per Common Share, As Reported
$
0.17
$
0.08
113
%
$
0.08
$
(0.22
)
n/m
Adjustments: Severance and Restructuring Expenses
0.03
0.02
0.06
0.09
Inclined Sleeper Product Recalls
0.01
0.01
0.02
0.02
Tax Effect of Adjustments2
(0.01
)
(0.01
)
(0.02
)
(0.03
)
Net Income (Loss) Per Common Share, As Adjusted
$
0.19
$
0.10
90
%
$
0.14
$
(0.14
)
n/m
EBITDA and Adjusted
EBITDA Net Income (Loss), As Reported
$
56.9
$
27.2
109
%
$
28.6
$
(79.3
)
n/m
Adjustments: Interest Expense
30.0
30.6
60.0
61.8
Provision (Benefit) from Income Taxes
9.2
14.4
(11.6
)
(12.6
)
Depreciation
34.1
34.3
68.6
68.0
Amortization
7.8
9.5
15.6
19.0
EBITDA
138.0
116.1
161.3
56.9
Adjustments: Share-Based Compensation
19.8
20.0
37.8
36.9
Severance and Restructuring Expenses
10.8
8.6
19.3
32.5
Inclined Sleeper Product Recalls
2.2
3.4
5.9
7.7
Adjusted EBITDA
$
170.8
$
148.0
15
%
$
224.3
$
134.1
67
%
Free Cash Flow Net Cash
Flows (Used for) Operating Activities
$
(217.4
)
$
(325.6
)
Capital Expenditures
(65.4
)
(73.4
)
Free Cash Flow
$
(282.9
)
$
(399.0
)
1 Amounts may not sum due to rounding. 2 The aggregate tax effect
of adjustments was determined using the effective tax rates on a
jurisdictional basis of the respective adjustments, 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
For the Three Months Ended
June 30,
(In millions, except percentage and pts
information)
2024
2023
Change
Tax Rate Income Before Income
Taxes, As Reported
$
59.5
$
38.6
Adjustments: Severance and Restructuring Expenses
10.8
8.6
Inclined Sleeper Product Recalls
2.2
3.4
Income Before Income Taxes, As Adjusted
$
72.5
$
50.6
Provision for Income Taxes, As Reported
$
9.2
$
14.4
Adjustments: Tax Effect of Adjustments2
3.1
2.8
Provision for Income Taxes, As Adjusted
$
12.3
$
17.2
Tax Rate, As Reported
15
%
37
%
-22 pts Tax Rate, As Adjusted
17
%
34
%
-17 pts
June 30,
2024
2023
Net Debt Long-Term Debt
$
2,332.2
$
2,327.8
Adjustments: Cash and Equivalents
(722.4
)
(299.9
)
Net Debt
$
1,609.8
$
2,027.9
1 Amounts may not sum due to rounding. 2 Tax effect of adjustments
was determined using the effective tax rates on a jurisdictional
basis of the respective adjustments.
MATTEL, INC. AND
SUBSIDIARIES
EXHIBIT III
SUPPLEMENTAL FINANCIAL INFORMATION (Unaudited)1
RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL MEASURES
For the Trailing Twelve Months
Ended June 30,
(In millions, except percentage and pts
information)
2024
2023
Change
Leverage Ratio (Total Debt/Adjusted
EBITDA) Total Debt
Long-Term Debt
$
2,332.2
$
2,327.8
Adjustments: Debt Issuance Costs and Debt Discount
17.8
22.2
Total Debt
$
2,350.0
$
2,350.0
EBITDA and Adjusted EBITDA Net Income,
As Reported
$
322.2
$
226.7
42
%
Adjustments: Interest Expense
122.1
128.7
Provision for Income Taxes
270.5
72.8
Depreciation
140.1
140.9
Amortization
34.5
37.9
EBITDA
889.4
607.0
Adjustments: Share-Based Compensation
84.2
68.1
Severance and Restructuring Expenses
46.5
46.3
Inclined Sleeper Product Recalls
16.2
6.9
Sale of Assets
1.8
(8.3
)
Loss on Liquidation of Argentina Subsidiary2
—
45.4
Adjusted EBITDA
$
1,038.0
$
765.3
36
%
Total Debt / Net Income 7.3x 10.4x Leverage Ratio (Total
Debt / Adjusted EBITDA) 2.3x 3.1x
Free Cash Flow Net Cash Flows Provided by
Operating Activities
$
978.0
$
542.2
80
%
Capital Expenditures
(152.3
)
(181.4
)
Free Cash Flow
$
825.7
$
360.8
129
%
Net Cash Flows Provided by Operating Activities / Net Income
304
%
239
%
65 pts Free Cash Flow Conversion (Free Cash Flow/Adjusted EBITDA)
80
%
47
%
33 pts 1 Amounts may not sum due to rounding. 2 During the trailing
twelve months ended June 30, 2023, the liquidation of Mattel’s
subsidiary in Argentina was substantially completed, and Mattel
recognized its cumulative translation adjustments of $45.4 million
as a loss 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 Year Ended
December 31,
(In millions, except percentage and per
share information)
2023
Gross Profit Gross Profit, As
Reported
$
2,583.7
Gross Margin
47.5
%
Adjustments: Severance and Restructuring Expenses
(1.2
)
Gross Profit, As Adjusted
$
2,582.6
Adjusted Gross Margin
47.5
%
Earnings Per Share Net
Income Per Common Share, As Reported
$
0.60
Adjustments: Severance and Restructuring Expenses
0.17
Inclined Sleeper Product Recalls
0.05
Changes to Deferred Tax Assets2
0.45
Tax Effect of Adjustments3
(0.04
)
Net Income Per Common Share, As Adjusted
$
1.23
EBITDA and Adjusted
EBITDA Net Income, As Reported
$
214.4
Adjustments: Interest Expense
123.8
Provision for Income Taxes
269.5
Depreciation
139.5
Amortization
37.9
EBITDA
785.0
Adjustments: Share-Based Compensation
83.3
Severance and Restructuring Expenses
59.7
Inclined Sleeper Product Recalls
18.1
Sale of Assets
1.8
Adjusted EBITDA
$
947.8
1 Amounts may not sum due to rounding. 2 For the year ended
December 31, 2023, Mattel recorded an expense of $212.4 million
related to the release of foreign deferred tax assets and a benefit
of $51.0 million upon the establishment of deferred tax assets
related to an intra-group transfer of certain IP rights. 3 The
aggregate tax effect of adjustments was determined using the
effective tax rates on a jurisdictional basis of the respective
adjustments and dividing by the reported weighted average number of
common and potential common shares.
MATTEL, INC. AND
SUBSIDIARIES EXHIBIT III SUPPLEMENTAL
FINANCIAL INFORMATION (Unaudited)1 RECONCILIATION OF GAAP
AND NON-GAAP FINANCIAL MEASURES
For the Year Ended
December 31,
(In millions, except percentage
information)
2023
Tax Rate Income Before Income
Taxes, As Reported
$
465.4
Adjustments: Severance and Restructuring Expenses
59.7
Inclined Sleeper Product Recalls
18.1
Sale of Assets
1.8
Income Before Income Taxes, As Adjusted
$
544.9
Provision for Income Taxes, As Reported
$
269.5
Adjustments: Changes to Deferred Tax Assets2
(161.4
)
Tax Effect of Adjustments3
15.3
Provision for Income Taxes, As Adjusted
$
123.4
Tax Rate, As Reported
58
%
Tax Rate, As Adjusted
23
%
Free Cash Flow Net Cash
Flows Provided by Operating Activities
$
869.8
Capital Expenditures
(160.3
)
Free Cash Flow
$
709.5
1 Amounts may not sum due to rounding. 2 For the year ended
December 31, 2023, Mattel recorded an expense of $212.4 million
related to the release of foreign deferred tax assets and a benefit
of $51.0 million upon the establishment of deferred tax assets
related to an intra-group transfer of certain IP rights. 3 Tax
effect of adjustments was determined using the effective tax rates
on a jurisdictional basis of the respective adjustments.
MATTEL,
INC. AND SUBSIDIARIES EXHIBIT IV WORLDWIDE NET
SALES AND GROSS BILLINGS1 (Unaudited)2
For the Three Months Ended
June 30,
For the Six Months Ended June
30,
2024
2023
% Change as Reported
% Change in Constant
Currency
2024
2023
% Change as Reported
% Change in Constant
Currency
(In millions, except percentage information) Worldwide Net Sales: Net Sales
$
1,079.7
$
1,087.2
-1
%
—
%
$
1,889.2
$
1,901.7
-1
%
-1
%
Worldwide Gross Billings by
Categories: Dolls
$
414.0
$
440.5
-6
%
-5
%
$
708.5
$
746.6
-5
%
-5
%
Infant, Toddler, and Preschool
190.3
197.3
-4
-3
325.3
347.5
-6
-7
Vehicles
369.7
363.8
2
2
667.4
647.4
3
3
Action Figures, Building Sets, Games, and Other
227.3
225.9
1
1
399.0
397.4
-
-
Gross Billings
$
1,201.3
$
1,227.5
-2
%
-2
%
$
2,100.3
$
2,138.8
-2
%
-2
%
Supplemental Gross Billings
Disclosure Worldwide
Gross Billings by Top 3 Power Brands: Barbie
$
266.1
$
282.7
-6
%
-5
%
$
443.5
$
459.6
-3
%
-3
%
Hot Wheels
327.4
315.2
4
5
585.5
560.1
5
5
Fisher-Price3
135.9
123.3
10
11
229.3
216.4
6
6
Other
471.9
506.3
-7
-6
841.9
902.8
-7
-7
Gross Billings
$
1,201.3
$
1,227.5
-2
%
-2
%
$
2,100.3
$
2,138.8
-2
%
-2
%
1 Gross billings represent amounts invoiced to customers and do 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 Amounts may not sum due to rounding. 3 Beginning in the
first quarter of 2024, the Fisher-Price power brand was revised to
exclude Baby Gear and Imaginext products. Prior period amounts have
been reclassified to conform to the current presentation.
MATTEL, INC. AND SUBSIDIARIES EXHIBIT V NET
SALES AND GROSS BILLINGS1 BY SEGMENT (Unaudited)2,3
For the Three Months Ended
June 30,
For the Six Months Ended June
30,
2024
2023
% Change as Reported
% Change in Constant
Currency
2024
2023
% Change as Reported
% Change in Constant
Currency
(In millions, except percentage information) North America Net Sales: Net Sales
$
606.5
$
624.5
-3
%
-3
%
$
1,084.3
$
1,094.9
-1
%
-1
%
North America Gross Billings by
Categories: Dolls
$
231.1
$
239.2
-3
%
-3
%
$
395.9
$
406.3
-3
%
-3
%
Infant, Toddler, and Preschool
111.6
119.9
-7
-7
192.1
207.1
-7
-7
Vehicles
166.8
173.5
-4
-4
317.0
315.7
0
0
Action Figures, Building Sets, Games, and Other
137.3
133.0
3
3
248.3
239.3
4
4
Gross Billings
$
646.9
$
665.7
-3
%
-3
%
$
1,153.3
$
1,168.4
-1
%
-1
%
Supplemental Gross Billings
Disclosure North America
Gross Billings by Top 3 Power Brands: Barbie
$
140.0
$
148.1
-5
%
-5
%
$
232.4
$
237.7
-2
%
-2
%
Hot Wheels
144.6
146.9
-2
-1
271.3
266.6
2
2
Fisher-Price4
78.4
70.3
11
12
132.1
119.4
11
11
Other
283.9
300.4
-5
-5
517.5
544.8
-5
-5
Gross Billings
$
646.9
$
665.7
-3
%
-3
%
$
1,153.3
$
1,168.4
-1
%
-1
%
1 Gross billings represent amounts invoiced to customers and do 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 Amounts may not sum due to rounding. 3 In the first
quarter of 2024, Mattel's American Girl business was integrated
into its North America commercial organization and is reported
within the North America operating segment. Prior period amounts
have been reclassified to conform to the current period
presentation. 4 Beginning in the first quarter of 2024, the
Fisher-Price power brand was revised to exclude Baby Gear and
Imaginext products. Prior period amounts have been reclassified to
conform to the current presentation.
MATTEL, INC. AND
SUBSIDIARIES EXHIBIT VI NET SALES AND GROSS
BILLINGS1 BY SEGMENT (Unaudited)2
For the Three Months Ended
June 30,
For the Six Months Ended June
30,
2024
2023
% Change as Reported
% Change in Constant
Currency
2024
2023
% Change as Reported
% Change in Constant
Currency
(In millions, except percentage information) International Net Sales by Geographic Area:
EMEA
$
250.7
$
241.7
4
%
4
%
$
435.9
$
451.0
-3
%
-4
%
Latin America
134.6
138.0
-2
-1
214.2
213.6
0
0
Asia Pacific
88.0
83.0
6
9
154.8
142.2
9
12
Net Sales
$
473.2
$
462.7
2
%
3
%
$
805.0
$
806.8
—
%
—
%
International Gross Billings by
Geographic Area: EMEA
$
296.3
$
303.8
-2
%
-2
%
$
519.7
$
555.7
-6
%
-7
%
Latin America
156.8
160.7
-2
-1
249.4
248.4
0
0
Asia Pacific
101.4
97.3
4
7
177.9
166.2
7
10
Gross Billings
$
554.5
$
561.8
-1
%
—
%
$
947.0
$
970.4
-2
%
-3
%
International Gross Billings by
Categories: Dolls
$
182.9
$
201.4
-9
%
-8
%
$
312.7
$
340.2
-8
%
-8
%
Infant, Toddler, and Preschool
78.7
77.4
2
2
133.2
140.4
-5
-6
Vehicles
202.9
190.2
7
8
350.4
331.7
6
6
Action Figures, Building Sets, Games, and Other
90.0
92.9
-3
-3
150.6
158.1
-5
-5
Gross Billings
$
554.5
$
561.8
-1
%
—
%
$
947.0
$
970.4
-2
%
-3
%
Supplemental Gross Billings
Disclosure International
Gross Billings by Top 3 Power Brands: Barbie
$
126.0
$
134.6
-6
%
-5
%
$
211.1
$
221.9
-5
%
-5
%
Hot Wheels
182.9
168.3
9
10
314.2
293.6
7
7
Fisher-Price3
57.6
53.0
9
9
97.2
97.0
0
-1
Other
188.0
205.9
-9
-8
324.4
358.0
-9
-10
Gross Billings
$
554.5
$
561.8
-1
%
—
%
$
947.0
$
970.4
-2
%
-3
%
1 Gross billings represent amounts invoiced to customers and do 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 Amounts may not sum due to rounding. 3 Beginning in the
first quarter of 2024, the Fisher-Price power brand was revised to
exclude Baby Gear and Imaginext products. Prior period amounts have
been reclassified to conform to the current presentation.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240723995957/en/
Securities Analysts David Zbojniewicz
david.zbojniewicz@mattel.com
News Media Catherine Frymark
catherine.frymark@mattel.com
Mattel (NASDAQ:MAT)
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