For Immediate Release | Contacts: | News Media Jules Andres 310-252-3529 Jules.Andres@mattel.com | Securities Analysts Dianne Douglas 310-252-2703 Dianne.Douglas@mattel.com |
• | Worldwide net sales up 4 percent; |
• | International gross sales up 12 percent; 11 percent in local currency; |
• | Worldwide gross sales for core brands: Barbie® up 6 percent; Hot Wheels® up 3 percent; American Girl® up 3 percent; and core Fisher-Price® up 9 percent; |
• | Gross margin improvement of 210 basis points of net sales; SG&A increased by 90 basis points of net sales; |
• | Operating income up 14 percent; |
• | Earnings per share, excluding charges, of $1.10 vs. prior year of $0.89; and |
• | GAAP earnings per share of $0.52 vs. prior year of $0.68. |
• | Worldwide net sales up 7 percent; |
• | International gross sales up 11 percent; 8 percent in local currency; |
• | Worldwide gross sales for core brands: Barbie® up 17 percent; Hot Wheels® up 5 percent; American Girl® down 1 percent; and core Fisher-Price® up 8 percent; |
• | Gross margin improvement of 220 basis points of net sales; SG&A increased by 70 basis points of net sales; |
• | Operating income up 14 percent; |
• | Earnings per share, excluding charges, of $0.43 vs. prior year of $0.35; and |
• | GAAP earnings per share of $0.42 vs. prior year of $0.31. |
• | To maintain $800 million to $1 billion in year-end cash available to fund a substantial portion of seasonal working capital. |
• | To maintain a year-end debt to total capital ratio of approximately 25 percent with the goal of achieving a long-term debt rating of single-A. |
• | To invest about $180 million to $200 million in capital expenditures annually to maintain and grow the business. |
• | To make strategic acquisitions within the company’s vision of providing “the world’s premier toy brands for today and tomorrow.” |
• | To return funds to shareholders through cash dividends and share repurchases. |
Three Months Ended or At | Year Ended | |||||||||||||||||||||
12/31/2002 | 12/31/2001 | % Change | 12/31/2002 | 12/31/2001 | % Change | |||||||||||||||||
(In millions, except per share amounts) | ||||||||||||||||||||||
Key P&L Data: | ||||||||||||||||||||||
Net Sales | $ | 1,669.5 | $ | 1,561.2 | 7 | % | $ | 4,885.3 | $ | 4,687.9 | 4 | % | ||||||||||
Gross Margin | $ | 836.0 | $ | 747.4 | 12 | % | $ | 2,371.4 | $ | 2,177.1 | 9 | % | ||||||||||
% of Net Sales | 50.1 | % | 47.9 | % | 48.5 | % | 46.4 | % | ||||||||||||||
Advertising | $ | 199.9 | $ | 204.0 | -2 | % | $ | 552.5 | $ | 543.2 | 2 | % | ||||||||||
% of Net Sales | 12.0 | % | 13.1 | % | 11.3 | % | 11.6 | % | ||||||||||||||
SG&A | $ | 315.6 | $ | 284.8 | 11 | % | $ | 1,018.1 | $ | 934.6 | 9 | % | ||||||||||
% of Net Sales | 18.9 | % | 18.2 | % | 20.8 | % | 19.9 | % | ||||||||||||||
Operating Income | $ | 291.1 | $ | 254.3 | 14 | % | $ | 783.7 | $ | 686.9 | 14 | % | ||||||||||
% of Net Sales | 17.4 | % | 16.3 | % | 16.0 | % | 14.6 | % | ||||||||||||||
Income Before Charges & Goodwill | $ | 190.3 | $ | 154.9 | $ | 486.9 | $ | 386.3 | ||||||||||||||
% of Net Sales | 11.4 | % | 10.0 | % | 10.0 | % | 8.2 | % | ||||||||||||||
EPS Before Charges—Diluted | $ | 0.43 | $ | 0.35 | $ | 1.10 | $ | 0.89 | ||||||||||||||
Average Number of Common Shares—Diluted | 442.2 | 437.5 | 441.3 | 436.2 | ||||||||||||||||||
Key Balance Sheet Data: | ||||||||||||||||||||||
Accounts Receivable, Net | $ | 490.8 | $ | 665.8 | ||||||||||||||||||
Days of Sales Outstanding (DSO) | 26 | 38 | ||||||||||||||||||||
Inventories | $ | 338.6 | $ | 487.5 | ||||||||||||||||||
Days of Supply (DOS) | 74 | 107 | ||||||||||||||||||||
Total Debt Outstanding | $ | 847.6 | $ | 1,269.1 | ||||||||||||||||||
Total Debt-to-Total Capitalization | 30.0 | % | 42.2 | % | ||||||||||||||||||
Worldwide Gross Sales: | ||||||||||||||||||||||
Girls | $ | 838.4 | $ | 765.3 | $ | 2,314.7 | $ | 2,193.2 | ||||||||||||||
% As Reported | 10 | % | 1 | % | 6 | % | 3 | % | ||||||||||||||
% Local Currency | 8 | % | 1 | % | 5 | % | 4 | % | ||||||||||||||
Boys/Entertainment | $ | 418.1 | $ | 430.6 | $ | 1,299.6 | $ | 1,269.1 | ||||||||||||||
% As Reported | -3 | % | 5 | % | 2 | % | 6 | % | ||||||||||||||
% Local Currency | -3 | % | 5 | % | 2 | % | 7 | % | ||||||||||||||
Infant & Preschool | $ | 548.7 | $ | 482.6 | $ | 1,701.2 | $ | 1,621.3 | ||||||||||||||
% As Reported | 14 | % | -8 | % | 5 | % | -1 | % | ||||||||||||||
% Local Currency | 13 | % | -9 | % | 4 | % | -1 | % | ||||||||||||||
Total Company | $ | 1,821.4 | $ | 1,690.8 | $ | 5,342.5 | $ | 5,104.1 | ||||||||||||||
% As Reported | 8 | % | 0 | % | 5 | % | 2 | % | ||||||||||||||
% Local Currency | 7 | % | 0 | % | 4 | % | 3 | % |
EXHIBIT II
MATTEL, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended Dec. 31, 2002 | Year Ended Dec. 31, 2002 | ||||||||||||||||||||
As Reported (a) | Impact of Charges | Pro Forma | As Reported (a) | Impact of Charges | Pro Forma | ||||||||||||||||
(In millions, except per share amounts) | |||||||||||||||||||||
Net Sales | $ | 1,669.5 | $ | 0.0 |
| $ | 1,669.5 | $ | 4,885.3 |
| $ | 0.0 |
| $ | 4,885.3 | ||||||
Cost of sales |
| 835.2 |
| 1.7 |
|
| 833.5 |
| 2,524.3 |
|
| 10.4 |
|
| 2,513.9 | ||||||
Gross Profit |
| 834.3 |
| (1.7 | ) |
| 836.0 |
| 2,361.0 |
|
| (10.4 | ) |
| 2,371.4 | ||||||
Advertising and promotion expenses |
| 199.9 |
| 0.0 |
|
| 199.9 |
| 552.5 |
|
| 0.0 |
|
| 552.5 | ||||||
Other selling and administrative expenses |
| 318.4 |
| 2.8 |
|
| 315.6 |
| 1,026.2 |
|
| 8.1 |
|
| 1,018.1 | ||||||
Restructuring and other charges |
| 2.9 |
| 2.9 |
|
| 0.0 |
| 24.6 |
|
| 24.6 |
|
| 0.0 | ||||||
Other expense, net |
| 29.2 |
| (0.2 | ) |
| 29.4 |
| 22.3 |
|
| 5.2 |
|
| 17.1 | ||||||
Operating Income |
| 283.9 |
| (7.2 | ) |
| 291.1 |
| 735.4 |
|
| (48.3 | ) |
| 783.7 | ||||||
Interest expense |
| 28.6 |
| 0.0 |
|
| 28.6 |
| 113.9 |
|
| 0.0 |
|
| 113.9 | ||||||
Income From Continuing Operations Before Income Taxes |
| 255.3 |
| (7.2 | ) |
| 262.5 |
| 621.5 |
|
| (48.3 | ) |
| 669.8 | ||||||
Provision for income taxes |
| 69.2 |
| (3.0 | ) |
| 72.2 |
| 166.5 |
|
| (16.4 | ) |
| 182.9 | ||||||
Income From Continuing Operations |
| 186.1 |
| (4.2 | ) |
| 190.3 |
| 455.0 |
|
| (31.9 | ) |
| 486.9 | ||||||
Gain from discontinued operations, net of tax |
| 0.0 |
| 0.0 |
|
| 0.0 |
| 27.3 |
|
| 27.3 |
|
| 0.0 | ||||||
Income Before Cumulative Effect of Change in Accounting Principles |
| 186.1 |
| (4.2 | ) |
| 190.3 |
| 482.3 |
|
| (4.6 | ) |
| 486.9 | ||||||
Cumulative effect of change in accounting principles, net of tax |
| 0.0 |
| 0.0 |
|
| 0.0 |
| (252.2 | ) |
| (252.2 | ) |
| 0.0 | ||||||
Net Income | $ | 186.1 | $ | (4.2 | ) | $ | 190.3 | $ | 230.1 |
| $ | (256.8 | ) | $ | 486.9 | ||||||
Income Per Share—Basic | |||||||||||||||||||||
Income from continuing operations | $ | 0.43 | $ | (0.01 | ) | $ | 0.44 | $ | 1.04 |
| $ | (0.08 | ) | $ | 1.12 | ||||||
Gain from discontinued operations |
| 0.00 |
| 0.00 |
|
| 0.00 |
| 0.06 |
|
| 0.06 |
|
| 0.00 | ||||||
Cumulative effect of change in accounting principles |
| 0.00 |
| 0.00 |
|
| 0.00 |
| (0.58 | ) |
| (0.58 | ) |
| 0.00 | ||||||
$ | 0.43 | $ | (0.01 | ) | $ | 0.44 | $ | 0.52 |
| $ | (0.60 | ) | $ | 1.12 | |||||||
Average Number of Common Shares Outstanding—Basic |
| 437.4 |
| 437.4 |
|
| 437.4 |
| 435.8 |
|
| 435.8 |
|
| 435.8 | ||||||
Income Per Share—Diluted | |||||||||||||||||||||
Income from continuing operations | $ | 0.42 | $ | (0.01 | ) | $ | 0.43 | $ | 1.03 |
| $ | (0.07 | ) | $ | 1.10 | ||||||
Gain from discontinued operations |
| 0.00 |
| 0.00 |
|
| 0.00 |
| 0.06 |
|
| 0.06 |
|
| 0.00 | ||||||
Cumulative effect of change in accounting principles |
| 0.00 |
| 0.00 |
|
| 0.00 |
| (0.57 | ) |
| (0.57 | ) |
| 0.00 | ||||||
$ | 0.42 | $ | (0.01 | ) | $ | 0.43 | $ | 0.52 |
| $ | (0.58 | ) | $ | 1.10 | |||||||
Average Number of Common and Common Equivalent Shares Outstanding—Diluted |
| 442.2 |
| 442.2 |
|
| 442.2 |
| 441.3 |
|
| 441.3 |
|
| 441.3 | ||||||
Three Months Ended Dec. 31, 2001 | Year Ended Dec. 31, 2001 | ||||||||||||||||||||
As Reported (a) | Impact of Charges & Goodwill | Pro Forma | As Reported (a) | Impact of Charges & Goodwill | Pro Forma | ||||||||||||||||
(In millions, except per share amounts) | |||||||||||||||||||||
Net Sales | $ | 1,561.2 | $ | 0.0 |
| $ | 1,561.2 | $ | 4,687.9 |
| $ | 0.0 |
| $ | 4,687.9 | ||||||
Cost of sales |
| 818.0 |
| 4.2 |
|
| 813.8 |
| 2,539.0 |
|
| 28.2 |
|
| 2,510.8 | ||||||
Gross Profit |
| 743.2 |
| (4.2 | ) |
| 747.4 |
| 2,148.9 |
|
| (28.2 | ) |
| 2,177.1 | ||||||
Advertising and promotion expenses |
| 204.0 |
| 0.0 |
|
| 204.0 |
| 543.5 |
|
| 0.3 |
|
| 543.2 | ||||||
Other selling and administrative expenses |
| 286.2 |
| 1.4 |
|
| 284.8 |
| 936.1 |
|
| 1.5 |
|
| 934.6 | ||||||
Restructuring and other charges |
| 2.7 |
| 2.7 |
|
| 0.0 |
| 15.7 |
|
| 15.7 |
|
| 0.0 | ||||||
Other expense, net |
| 7.2 |
| 2.9 |
|
| 4.3 |
| 22.4 |
|
| 10.0 |
|
| 12.4 | ||||||
Operating Income Before Amortization of Goodwill |
| 243.1 |
| (11.2 | ) |
| 254.3 |
| 631.2 |
|
| (55.7 | ) |
| 686.9 | ||||||
Amortization of goodwill |
| 11.6 |
| 11.6 |
|
| 0.0 |
| 46.1 |
|
| 46.1 |
|
| 0.0 | ||||||
Operating Income |
| 231.5 |
| (22.8 | ) |
| 254.3 |
| 585.1 |
|
| (101.8 | ) |
| 686.9 | ||||||
Interest expense |
| 41.1 |
| 0.0 |
|
| 41.1 |
| 155.1 |
|
| 0.0 |
|
| 155.1 | ||||||
Income Before Income Taxes |
| 190.4 |
| (22.8 | ) |
| 213.2 |
| 430.0 |
|
| (101.8 | ) |
| 531.8 | ||||||
Provision for income taxes |
| 52.4 |
| (5.9 | ) |
| 58.3 |
| 119.1 |
|
| (26.4 | ) |
| 145.5 | ||||||
Income Before Cumulative Effect of Change in Accounting Principles |
| 138.0 |
| (16.9 | ) |
| 154.9 |
| 310.9 |
|
| (75.4 | ) |
| 386.3 | ||||||
Cumulative effect of change in accounting principles, net of tax |
| 0.0 |
| 0.0 |
|
| 0.0 |
| (12.0 | ) |
| (12.0 | ) |
| 0.0 | ||||||
Net Income | $ | 138.0 | $ | (16.9 | ) | $ | 154.9 | $ | 298.9 |
| $ | (87.4 | ) | $ | 386.3 | ||||||
Income Per Share—Basic | |||||||||||||||||||||
Income before cumulative effect of change in accounting principles | $ | 0.32 | $ | (0.04 | ) | $ | 0.36 | $ | 0.72 |
| $ | (0.18 | ) | $ | 0.90 | ||||||
Cumulative effect of change in accounting principles |
| 0.00 |
| 0.00 |
|
| 0.00 |
| (0.03 | ) |
| (0.03 | ) |
| 0.00 | ||||||
$ | 0.32 | $ | (0.04 | ) | $ | 0.36 | $ | 0.69 |
| $ | (0.21 | ) | $ | 0.90 | |||||||
Average Number of Common Shares Outstanding—Basic |
| 431.8 |
| 431.8 |
|
| 431.8 |
| 431.0 |
|
| 431.0 |
|
| 431.0 | ||||||
Income Per Share—Diluted | |||||||||||||||||||||
Income before cumulative effect of change in accounting principles | $ | 0.31 | $ | (0.04 | ) | $ | 0.35 | $ | 0.71 |
| $ | (0.18 | ) | $ | 0.89 | ||||||
Cumulative effect of change in accounting principles |
| 0.00 |
| 0.00 |
|
| 0.00 |
| (0.03 | ) |
| (0.03 | ) |
| 0.00 | ||||||
$ | 0.31 | $ | (0.04 | ) | $ | 0.35 | $ | 0.68 |
| $ | (0.21 | ) | $ | 0.89 | |||||||
Average Number of Common and Common Equivalent Shares Outstanding—Diluted |
| 437.5 |
| 437.5 |
|
| 437.5 |
| 436.2 |
|
| 436.2 |
|
| 436.2 | ||||||
(a) | Reported in accordance with generally accepted accounting principles. |
Note—Certain financial information for prior years has been reclassified to conform to the current year's presentation.
For The Three Months Ended Dec. 31, | For The Year Ended Dec. 31, | ||||||||||||||||||||||||||||||||||
2002 | 2001 | 2002 | 2001 | ||||||||||||||||||||||||||||||||
$ Amt | % Net Sales | $ Amt | % Net Sales | % Change | $ Amt | % Net Sales | $ Amt | % Net Sales | % Change | ||||||||||||||||||||||||||
(In millions, except per share amounts) | |||||||||||||||||||||||||||||||||||
Net Sales | $ | 1,669.5 | $ | 1,561.2 | 6.9 | % | $ | 4,885.3 | $ | 4,687.9 | 4.2 | % | |||||||||||||||||||||||
Cost of sales | 833.5 | 49.9 | % | 813.8 | 52.1 | % | 2.4 | % | 2,513.9 | 51.5 | % | 2,510.8 | 53.6 | % | 0.1 | % | |||||||||||||||||||
Gross Profit | 836.0 | 50.1 | % | 747.4 | 47.9 | % | 11.8 | % | 2,371.4 | 48.5 | % | 2,177.1 | 46.4 | % | 8.9 | % | |||||||||||||||||||
Advertising and promotion expenses | 199.9 | 12.0 | % | 204.0 | 13.1 | % | -2.0 | % | 552.5 | 11.3 | % | 543.2 | 11.6 | % | 1.7 | % | |||||||||||||||||||
Other selling and administrative expenses | 315.6 | 18.9 | % | 284.8 | 18.2 | % | 10.8 | % | 1,018.1 | 20.8 | % | 934.6 | 19.9 | % | 8.9 | % | |||||||||||||||||||
Other expense, net | 29.4 | 1.8 | % | 4.3 | 0.3 | % | 17.1 | 0.4 | % | 12.4 | 0.3 | % | |||||||||||||||||||||||
Operating Income | 291.1 | 17.4 | % | 254.3 | 16.3 | % | 14.4 | % | 783.7 | 16.0 | % | 686.9 | 14.6 | % | 14.1 | % | |||||||||||||||||||
Interest expense | 28.6 | 1.7 | % | 41.1 | 2.6 | % | -30.3 | % | 113.9 | 2.3 | % | 155.1 | 3.3 | % | -26.6 | % | |||||||||||||||||||
Income Before Income Taxes | 262.5 | 15.7 | % | 213.2 | 13.7 | % | 23.0 | % | 669.8 | 13.7 | % | 531.8 | 11.3 | % | 25.9 | % | |||||||||||||||||||
Provision for income taxes | 72.2 | 4.3 | % | 58.3 | 3.7 | % | 23.4 | % | 182.9 | 3.7 | % | 145.5 | 3.1 | % | 25.7 | % | |||||||||||||||||||
Income Before Charges & Goodwill | $ | 190.3 | 11.4 | % | $ | 154.9 | 10.0 | % | 22.8 | % | $ | 486.9 | 10.0 | % | $ | 386.3 | 8.2 | % | 26.0 | % | |||||||||||||||
Effective Tax Rate | 27.5 | % | 27.4 | % | 27.3 | % | 27.4 | % | |||||||||||||||||||||||||||
EPS Before Charges—Basic | $ | 0.44 | $ | 0.36 | $ | 1.12 | $ | 0.90 | |||||||||||||||||||||||||||
Average Number of Common Shares—Basic | 437.4 | 431.8 | 435.8 | 431.0 | |||||||||||||||||||||||||||||||
EPS Before Charges—Diluted | $ | 0.43 | $ | 0.35 | $ | 1.10 | $ | 0.89 | |||||||||||||||||||||||||||
Average Number of Common Shares—Diluted | 442.2 | 437.5 | 441.3 | 436.2 | |||||||||||||||||||||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||||||||||||||||||||||||||||
At Dec. 31, | |||||||||||||||||||||||||||||||||||
2002 | 2001 | ||||||||||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||||
Cash and short-term investments | $ | 1,267.0 | $ | 616.6 | |||||||||||||||||||||||||||||||
Accounts receivable, net | 490.8 | 665.8 | |||||||||||||||||||||||||||||||||
Inventories | 338.6 | 487.5 | |||||||||||||||||||||||||||||||||
Prepaid expenses and other current assets | 292.6 | 291.9 | |||||||||||||||||||||||||||||||||
Total current assets | 2,389.0 | 2,061.8 | |||||||||||||||||||||||||||||||||
Property, plant and equipment, net | 599.6 | 626.7 | |||||||||||||||||||||||||||||||||
Other assets | 1,471.1 | 1,821.3 | |||||||||||||||||||||||||||||||||
Total Assets | $ | 4,459.7 | $ | 4,509.8 | |||||||||||||||||||||||||||||||
Liabilities and Stockholders' Equity | |||||||||||||||||||||||||||||||||||
Short-term borrowings | $ | 25.2 | $ | 38.1 | |||||||||||||||||||||||||||||||
Current portion of long-term liabilities | 182.3 | 210.1 | |||||||||||||||||||||||||||||||||
Accounts payable and accrued liabilities | 1,238.3 | 1,078.2 | |||||||||||||||||||||||||||||||||
Income taxes payable | 203.0 | 239.8 | |||||||||||||||||||||||||||||||||
Total current liabilities | 1,648.8 | 1,566.2 | |||||||||||||||||||||||||||||||||
Long-term debt | 640.1 | 1,020.9 | |||||||||||||||||||||||||||||||||
Other long-term liabilities | 192.1 | 184.2 | |||||||||||||||||||||||||||||||||
Stockholders' equity | 1,978.7 | 1,738.5 | |||||||||||||||||||||||||||||||||
Total Liabilities and Stockholders' Equity | $ | 4,459.7 | $ | 4,509.8 | |||||||||||||||||||||||||||||||