EXHIBIT 99.0
For Immmediate Release Contacts: News Media Securities Analysts
Lisa Marie Bongiovanni Dianne Douglas
310-252-3524 310-252-2703
LisaMarie.Bongiovanni@mattel.com Dianne.Douglas@mattel.com
MATTEL REPORTS 2001 FOURTH QUARTER AND FULL YEAR RESULTS
Full-Year Highlights
. Worldwide net sales up 3 percent;
. International gross sales up 10 percent; 13 percent in local currency;
. Worldwide gross sales for core brands: Barbie(R) down 3 percent; Hot
Wheels(R) up 9 percent; American Girl(R) up 5 percent; and core Fisher-
Price(R) up 5 percent;
. Gross margin improvement of 110 basis points of net sales; SG&A increased by
10 basis points of net sales driven by higher bad debt expense;
. Operating income up 15 percent; and
. Earnings per share of $0.81, excluding charges.
Fourth Quarter Highlights
. Worldwide net sales up 2 percent;
. International gross sales up 17 percent; 16 percent in local currency;
. Worldwide gross sales for core brands: Barbie down 2 percent; Hot Wheels up 2
percent; American Girl up 4 percent; and core Fisher-Price down 1 percent;
. Gross margin improvement of 90 basis points of net sales; SG&A increased by
80 basis points of net sales driven by higher bad debt expense;
. Operating income up 12 percent; and
. Earnings per share of $0.33, excluding charges.
EL SEGUNDO, Calif., January 31, 2002 - Mattel, Inc. (NYSE:MAT) today reported
2001 full year and fourth quarter financial results. For the year, excluding
non-recurring charges, income from continuing operations was $351.6 million, or
$0.81 per diluted share, an increase of 20 percent over last year's $293.3
million, or $0.69 per diluted share. Included in the full year income from
continuing operations is pre-tax bad debt expense of $22.1 million recorded in
the fourth quarter related to the write-down of receivables as a result of Kmart
Corporation's bankruptcy filing. Including non-recurring charges, income from
continuing operations was $310.9 million, or $0.71 per diluted share, compared
to last year's $170.2 million, or $0.40 per diluted share.
(more)
Mattel Reports 2001 Fourth Quarter and Full Year Results/Page 2
For the year, net sales from continuing operations were $4.8 billion, a 3
percent increase, or 4 percent in local currency, from $4.7 billion last year.
Operating income was up 15 percent at $640.8 million. On a regional basis, full
year gross sales from continuing operations decreased 1 percent in the U.S. In
international markets, full year gross sales from continuing operations were up
10 percent, or 13 percent in local currency.
For the fourth quarter, excluding non-recurring charges, income from continuing
operations was $146.0 million, or $0.33 per diluted share, an increase of 21
percent over last year's $120.6 million, or $0.28 per diluted share. Included
in the fourth quarter income from continuing operations is pre-tax bad debt
expense of $22.1 million related to the write-down of receivables as a result of
Kmart Corporation's bankruptcy filing. Including non-recurring charges, fourth
quarter income from continuing operations was $138.0 million, or $0.31 per
diluted share, compared to last year's $105.1 million, or $0.25 per diluted
share. Fourth quarter net sales from continuing operations were $1.6 billion,
up 2 percent compared to last year's fourth quarter. Operating income was up 12
percent at $242.7 million. During the fourth quarter, domestic gross sales from
continuing operations fell 8 percent, while international gross sales from
continuing operations increased 17 percent, or 16 percent in local currency.
"I am pleased with our performance for the year, despite modest sales growth in
the fourth quarter," said Robert A. Eckert, chairman and chief executive officer
of Mattel. "I am also very encouraged by the double-digit growth of our
international business, which was largely offset by declines in our domestic
sales as retailers canceled holiday reorders as they continued to manage their
inventories in light of uncertain consumer demand. In spite of the tough retail
environment and higher bad debt expense, our cash flow and profitability were
strong and virtually all of our brands grew at point of sale and gained market
share."
(more)
Mattel Reports 2001 Fourth Quarter and Full Year Results/Page 3
Girls
For the year, the Girls division, which includes the Barbie, Polly Pocket!(R),
and American Girl brands, achieved worldwide gross sales of $2.2 billion, an
increase of 3 percent, driven primarily by double-digit sales growth of Barbie
in international markets, as well as strong performances by the Polly Pocket!,
What's Her Face!(TM) and Diva Starz(R) brands. Additionally, American Girl,
which is part of the Girls division, experienced a 5 percent increase in sales
for the year. Barbie sales declined domestically, driven by a convergence of
factors, including the continuation of retailer inventory management, tighter
management of Holiday Celebration Barbie shipments, and a softening demand for
higher-priced, adult-targeted collector dolls.
During the fourth quarter, the Girls division realized worldwide gross sales of
$765.3 million, a 1 percent increase, which included a 2 percent decrease in
Barbie sales. American Girl realized a 4 percent increase in sales for the
quarter.
Boys-Entertainment
Full year, worldwide gross sales for the Boys-Entertainment division, which
consists of the Wheels and Entertainment categories, were up 6 percent for the
year at $1.3 billion. The Wheels category experienced a 1 percent increase in
worldwide sales due to 9 percent growth in the Hot Wheels brand, which was
partially offset by declines in the Matchbox(R) and Tyco R/C(R) brands. The
Entertainment category experienced worldwide sales growth of 14 percent, due in
large part to the successful global introduction of Harry Potter(R) branded
products.
For the fourth quarter, worldwide gross sales for the Boys-Entertainment
division increased by 5 percent to $430.6 million, with the Entertainment
division's sales growing by 14 percent, offset by a 2 percent sales decline in
the Wheels division.
(more)
Mattel Reports 2001 Fourth Quarter and Full Year Results/Page 4
Infant and Preschool
Full year, worldwide gross sales for the Infant and Preschool division, which
includes the Fisher-Price, Sesame Street(R) and Disney(R) brands, were $1.6
billion, down 1 percent. Worldwide sales for core Fisher-Price brands increased
by 5 percent and were offset by declines in character brand sales. While the
successful launch of Tickle Me Elmo Surprise(R) has begun to reinvigorate the
Sesame Street brand, its performance was offset by declines in other character
brand lines.
For the fourth quarter, the Infant and Preschool division experienced an 8
percent decline at $482.6 million in worldwide gross sales, with core Fisher-
Price brands down 1 percent worldwide.
"As I've said before, every year brings with it new challenges -- some planned,
others unexpected," said Eckert. "With that said, over the next three to five
years, we expect our revenue to grow moderately in the mid-single-digit range
and EPS growth to be in the low double-digits at the low end of the range to
mid-teens at the high end of the range."
Financial Realignment
Mattel recorded pre-tax charges of $11.2 million in the quarter as part of its
$250 million financial realignment plan. The fourth quarter charges are largely
related to the planned closure of its North American distribution and
manufacturing facilities, and closure of international offices. These charges
are included in Cost of Sales ($4.2 million), Other Selling and Administrative
Expense ($1.4 million), Restructuring and Other Charges ($2.7 million) and Other
Expense ($2.9 million) in the consolidated statement of operations. Since the
announcement of the plan in September 2000, Mattel has recorded $175.4 million
in pre-tax charges. The company is on target to deliver cumulative cost savings
of approximately $200 million from the financial realignment plan.
(more)
Mattel Reports 2001 Fourth Quarter and Full Year Results/Page 5
Live Webcast
Mattel will webcast its 2001 fourth quarter and full year earnings conference
call at 5:30 a.m. Pacific time (8:30 a.m. Eastern time) today. The conference
call will be simulcast on the "Investors & Media" section of www.mattel.com. To
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listen to the call, log on to the Web site at least 15 minutes early to
register, download and install any necessary audio software. An archive of the
call may be accessed beginning three hours after the completion of the live
call. To listen to a replay of the call via telephone, interested parties
should call on the following numbers: domestic (888) 203-1112 and international
+ (719) 457-0820. The passcode is 459533. The telephonic playback will be
available beginning at 8:30 a.m. Pacific time (11:30 a.m. Eastern time) today
for 72 hours.
About Mattel
Mattel, Inc. is the world's largest toy company and the leader in the design,
manufacture and marketing of toys. The company's best-selling brands include
Barbie(R), Hot Wheels(R), Fisher-Price(R) and American Girl(R). With
headquarters in El Segundo, California, Mattel has offices and facilities in 36
countries and sells its products in more than 150 nations throughout the world.
The company's corporate Web site can be found at www.mattel.com.
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Note: Forward-looking statements included in this release with respect to the
financial condition, results of operations and business of the company, which
include, but are not limited to sales levels, restructuring, special charges,
other non-recurring charges, cost savings, operating efficiencies and
profitability, are subject to certain risks and uncertainties that could cause
actual results to differ materially from those set forth in such statements.
These include without limitation: the company's dependence on the timely
development, manufacture, introduction and customer acceptance of new products;
significant changes in buying patterns of major customers; adverse changes in
general economic conditions in the U.S. and internationally, including adverse
changes in the retail environment; the impact of competition on revenues and
margins; the effect of currency fluctuations on reportable income; risks
associated with foreign operations; unanticipated negative results of
litigation, governmental proceedings or environmental matters; and other risks
and uncertainties as may be detailed from time to time in the company's public
announcements and SEC filings. This release includes forward-looking statements
about anticipated revenue and earnings per share growth and cost savings under
the company's financial realignment plan. Mattel does not update forward-looking
statements and expressly disclaims any obligation to do so.
MATTEL, INC. AND SUBSIDIARIES EXHIBIT I
================================================================================
FINANCIAL HIGHLIGHTS
CONTINUING OPERATIONS - PRO FORMA BEFORE CHARGES
DECEMBER 31, 2001
Three Months Ended or At Year Ended
------------------------------------- --------------------------------------
(In millions, except per share amounts) 12/31/2001 12/31/2000 % Change 12/31/2001 12/31/2000 % Change
- --------------------------------------- ---------- ---------- -------- ---------- ---------- --------
Key P&L Data:
-------------
Net Sales $ 1,605.1 $ 1,575.1 2% $ 4,804.1 $ 4,669.9 3%
Gross Margin $ 791.7 $ 762.5 4% $ 2,295.1 $ 2,179.4 5%
% of Net Sales 49.3% 48.4% 47.8% 46.7%
Advertising $ 248.3 $ 269.8 -8% $ 661.2 $ 681.1 -3%
% of Net Sales 15.5% 17.1% 13.8% 14.6%
SG&A $ 284.8 $ 265.6 7% $ 934.6 $ 908.0 3%
% of Net Sales 17.7% 16.9% 19.5% 19.4%
Operating Income $ 242.7 $ 216.8 12% $ 640.8 $ 558.1 15%
% of Net Sales 15.1% 13.8% 13.3% 12.0%
Net Income Before Charges $ 146.0 $ 120.6 21% $ 351.6 $ 293.3 20%
% of Net Sales 9.1% 7.7% 7.3% 6.3%
EPS Before Charges - Diluted $ 0.33 $ 0.28 $ 0.81 $ 0.69
Key Balance Sheet Data:
-----------------------
Accounts Receivable, Net $ 696.6 $ 839.6
Days of Sales Outstanding (DSO) 37 45
Inventories $ 487.5 $ 489.7
Days of Supply (DOS) 107 106
Total Debt Outstanding $ 1,269.1 $ 1,501.5
Total Debt-to-Total Capitalization 42.2% 51.7%
Worldwide Gross Sales:
----------------------
Girls $ 765.3 $ 754.9 $ 2,193.2 $ 2,130.2
% As Reported 1% 11% 3% 5%
% Local Currency 1% 15% 4% 8%
Boys/Entertainment $ 430.6 $ 409.2 $ 1,269.1 $ 1,195.7
% As Reported 5% -2% 6% 0%
% Local Currency 5% 3% 7% 2%
Infant & Preschool $ 482.6 $ 525.3 $ 1,621.3 $ 1,636.4
% As Reported -8% 1% -1% 0%
% Local Currency -9% 5% -1% 3%
Total Company $ 1,690.8 $ 1,693.3 $ 5,104.1 $ 4,981.7
% As Reported 0% 5% 2% 2%
% Local Currency 0% 8% 3% 5%
MATTEL, INC. AND SUBSIDIARIES EXHIBIT II
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PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
DECEMBER 31, 2001
Three Months Ended Dec. 31, 2001 Year Ended Dec. 31, 2001
-------------------------------- -----------------------------------
Pro Forma Pro Forma
As Impact of Before As Impact of Before
(In millions, except per share amounts) Reported Charges Charges Reported Charges Charges
- --------------------------------------- -------- --------- --------- ------------ --------- ------------
Net Sales $ 1,605.1 $ 0.0 $ 1,605.1 $ 4,804.1 $ 0.0 $ 4,804.1
Cost of sales 817.6 4.2 813.4 2,537.2 28.2 2,509.0
-------- --------- --------- ------------ -------- -----------
Gross Profit 787.5 (4.2) 791.7 2,266.9 (28.2) 2,295.1
Advertising and promotion expenses 248.3 0.0 248.3 661.5 0.3 661.2
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 5.9 2.9 3.0 17.4 10.0 7.4
-------- --------- --------- ------------ -------- -----------
Operating Income Before Amortization 244.4 (11.2) 255.6 636.2 (55.7) 691.9
Amortization of intangibles 12.9 0.0 12.9 51.1 0.0 51.1
-------- --------- --------- ------------ -------- -----------
Operating Income 231.5 (11.2) 242.7 585.1 (55.7) 640.8
Interest expense 41.1 0.0 41.1 155.1 0.0 155.1
--------- --------- --------- ------------ -------- -----------
Income Before Income Taxes 190.4 (11.2) 201.6 430.0 (55.7) 485.7
Provision for income taxes 52.4 (3.2) 55.6 119.1 (15.0) 134.1
--------- --------- --------- ------------ -------- -----------
Income From Continuing Operations 138.0 $ (8.0) $ 146.0 $ 310.9 $ (40.7) $ 351.6
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 $ (8.0) $ 146.0 $ 298.9 $ (52.7) $ 351.6
========= ========= ========= ============ ======== ===========
Income Per Share - Basic
Income from continuing operations $ 0.32 $ (0.02) $ 0.34 $ 0.72 $ (0.10) $ 0.82
Cumulative effect of change in accounting principles 0.00 0.00 0.00 (0.03) (0.03) 0.00
--------- --------- --------- ------------ -------- -----------
$ 0.32 $ (0.02) $ 0.34 $ 0.69 $ (0.13) $ 0.82
========= ======== ========= ============ ======== ===========
Average Number of Common Shares
Outstanding - Basic 431.8 431.8 431.8 431.0 431.0 431.0
========= ======== ========= ============ ======== ===========
Income Per Share - Diluted
Income from continuing operations $ 0.31 $ (0.02) $ 0.33 $ 0.71 $ (0.10) $ 0.81
Cumulative effect of change in accounting principles 0.00 0.00 0.00 (0.03) (0.03) 0.00
--------- --------- --------- ------------ -------- -----------
$ 0.31 $ (0.02) $ 0.33 $ 0.68 $ (0.13) $ 0.81
========= ======== ========= ============ ======== ===========
Average Number of Common and Common
Equivalent Shares Outstanding - Diluted 437.5 437.5 437.5 436.2 436.2 436.2
========= ======== ========= ============ ======== ===========
Three Months Ended Dec. 31, 2000 Year Ended Dec. 31, 2000
-------------------------------- -----------------------------------
Pro Forma Pro Forma
As Impact of Before As Impact of Before
(In millions, except per share amounts) Reported Charges Charges Reported Charges Charges
- --------------------------------------- -------- --------- --------- ------------ --------- ------------
Net Sales $ 1,575.1 $ 0.0 $ 1,575.1 $ 4,669.9 $ 0.0 $ 4,669.9
Cost of sales 819.2 6.6 812.6 2,569.1 78.6 2,490.5
--------- --------- --------- ------------ -------- -----------
Gross Profit 755.9 (6.6) 762.5 2,100.8 (78.6) 2,179.4
Advertising and promotion expenses 270.8 1.0 269.8 685.9 4.8 681.1
Other selling and administrative expenses 269.4 3.8 265.6 967.0 59.0 908.0
Restructuring and other charges 0.0 0.0 0.0 15.9 15.9 0.0
Other expense (income), net 9.4 11.9 (2.5) 1.6 20.9 (19.3)
--------- --------- --------- ------------ -------- -----------
Operating Income Before Amortization 206.3 (23.3) 229.6 430.4 (179.2) 609.6
Amortization of intangibles 12.8 0.0 12.8 52.0 0.5 51.5
--------- --------- --------- ------------ -------- -----------
Operating Income 193.5 (23.3) 216.8 378.4 (179.7) 558.1
Interest expense 50.1 0.0 50.1 153.0 0.0 153.0
--------- --------- --------- ------------ -------- -----------
Income Before Income Taxes 143.4 (23.3) 166.7 225.4 (179.7) 405.1
Provision for income taxes 38.3 (7.8) 46.1 55.2 (56.6) 111.8
--------- --------- --------- ------------ -------- -----------
Income From Continuing Operations 105.1 (15.5) 120.6 170.2 (123.1) 293.3
Loss from discontinued operations, net of tax (34.0) (34.0) 0.0 (601.2) (601.2) 0.0
--------- --------- --------- ------------ -------- -----------
Net Income (Loss) $ 71.1 $ (49.5) $ 120.6 $ (431.0) $ (724.3) $ 293.3
========= ======== ========= ============ ======== ===========
Income Per Share - Basic
Income from continuing operations $ 0.25 $ (0.03) $ 0.28 $ 0.40 $ (0.29) $ 0.69
Loss from discontinued operations (0.08) (0.08) 0.00 (1.41) (1.41) 0.00
--------- --------- --------- ------------ -------- -----------
$ 0.17 $ (0.11) $ 0.28 $ (1.01) $ (1.70) $ 0.69
========= ======== ========= ============ ======== ===========
Average Number of Common Shares
Outstanding - Basic 426.9 426.9 426.9 426.2 426.2 426.2
========= ======== ========= ============ ======== ===========
Income Per Share - Diluted
Income from continuing operations $ 0.25 $ (0.03) $ 0.28 $ 0.40 $ (0.29) $ 0.69
Loss from discontinued operations (0.08) (0.08) 0.00 (1.41) (1.41) 0.00
--------- --------- --------- ------------ --------- -----------
$ 0.17 $ (0.11) $ 0.28 $ (1.01) $ (1.70) $ 0.69
========= ======== ========= ============ ======== ===========
Average Number of Common and Common
Equivalent Shares Outstanding - Diluted 428.5 428.5 428.5 427.1 427.1 427.1
========= ======== ========= ============ ======== ===========
MATTEL, INC. AND SUBSIDIARIES EXHIBIT III
================================================================================
CONSOLIDATED STATEMENTS OF OPERATIONS
BEFORE CHARGES
For Three Months Ended Dec. 31,
-----------------------------------------------------------------
2001 2000
-------------------------- -------------------------
(In millions, except per share amounts) $ Amt % Net Sales $ Amt % Net Sales % Change
- --------------------------------------- ------------ ----------- --------- ----------- --------
Net Sales $ 1,605.1 $ 1,575.1 1.9%
Cost of sales 813.4 50.7% 812.6 51.6% 0.1%
---------- ---------
Gross Profit 791.7 49.3% 762.5 48.4% 3.8%
Advertising and promotion expenses 248.3 15.5% 269.8 17.1% -8.0%
Other selling and administrative expenses 284.8 17.7% 265.6 16.9% 7.3%
Other expense (income), net 3.0 0.2% (2.5) -0.2%
---------- ---------
Operating Income Before Amortization 255.6 15.9% 229.6 14.6% 11.3%
Amortization of intangibles 12.9 0.8% 12.8 0.8% 0.5%
---------- ---------
Operating Income 242.7 15.1% 216.8 13.8% 12.0%
Interest expense 41.1 2.6% 50.1 3.2% -18.0%
---------- ---------
Income Before Income Taxes 201.6 12.6% 166.7 10.6% 20.9%
Provision for income taxes 55.6 46.1
---------- ---------
Income From Continuing Operations $ 146.0 9.1% $ 120.6 7.7% 21.0%
========== =========
Effective Tax Rate 27.6% 27.6%
Basic Income per Share from Continuing Operations $ 0.34 $ 0.28
========== =========
Diluted Income per Share from Continuing Operations $ 0.33 $ 0.28
========== =========
For Year Ended Dec. 31,
-----------------------------------------------------
2001 2000
-------------------------- ------------------------
(In millions, except per share amounts) $ Amt % Net Sales $ Amt % Net Sales % Change
- --------------------------------------- ----------- ------------ ---------- ------------ --------
Net Sales $ 4,804.1 $ 4,669.9 2.9%
Cost of sales 2,509.0 52.2% 2,490.5 53.3% 0.7%
----------- ----------
Gross Profit 2,295.1 47.8% 2,179.4 46.7% 5.3%
Advertising and promotion expenses 661.2 13.8% 681.1 14.6% -2.9%
Other selling and administrative expenses 934.6 19.5% 908.0 19.4% 2.9%
Other expense (income), net 7.4 0.2% (19.3) -0.4%
----------- ----------
Operating Income Before Amortization 691.9 14.4% 609.6 13.1% 13.5%
Amortization of intangibles 51.1 1.1% 51.5 1.1% -0.8%
----------- ----------
Operating Income 640.8 13.3% 558.1 12.0% 14.8%
Interest expense 155.1 3.2% 153.0 3.3% 1.4%
----------- ----------
Income Before Income Taxes 485.7 10.1% 405.1 8.7% 19.9%
Provision for income taxes 134.1 111.8
----------- ----------
Income From Continuing Operations $ 351.6 7.3% $ 293.3 6.3% 19.9%
=========== ==========
Effective Tax Rate 27.6% 27.6%
Basic Income per Share from Continuing Operations $ 0.82 $ 0.69
============ ==========
Diluted Income per Share from Continuing Operations $ 0.81 $ 0.69
============ ===========
================================================================================
CONDENSED CONSOLIDATED BALANCE SHEETS
At Dec. 31,
-------------------------
(In millions) 2001 2000
- ------------- ----------- -----------
Assets
Cash and short-term investments $ 616.6 $ 232.4
Accounts receivable, net 696.6 839.6
Inventories 487.5 489.7
Prepaid expenses and other current assets 291.9 189.8
----------- -----------
Total current assets 2,092.6 1,751.5
Property, plant and equipment, net 626.7 647.8
Other assets 1,821.3 1,902.6
Net investment in discontinued operations - 11.5
----------- -----------
Total Assets $ 4,540.6 $ 4,313.4
=========== ===========
Liabilities and Stockholders' Equity
Short-term borrowings $ 38.1 $ 226.4
Current portion of long-term liabilities 210.1 32.7
Accounts payable and accrued liabilities 1,109.0 1,042.4
Income taxes payable 239.8 200.9
----------- -----------
Total current liabilities 1,597.0 1,502.4
Long-term debt 1,020.9 1,242.4
Other long-term liabilities 184.2 165.5
Stockholders' equity 1,738.5 1,403.1
----------- -----------
Total Liabilities and Stockholders' Equity $ 4,540.6 $ 4,313.4
=========== ============