Mattel Reports Second Quarter Earnings
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 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.”
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 |
$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.
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.
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 |
|
% Change |
|
2024 |
|
2023 |
|
% Change |
|
% Change |
||||||||||||||||||||||||
|
$ Amt |
|
% Net |
|
$ Amt |
|
% Net |
|
$ Amt |
|
% Net |
|
$ Amt |
|
% Net |
|||||||||||||||||||||||||
| 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 |
|
% Change |
|
2024 |
|
2023 |
|
% Change |
|
% Change |
|||||||||||||
| (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 |
|
% Change |
|
2024 |
|
2023 |
|
% Change |
|
% Change |
|||||||||||||
| (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 |
|
% Change |
|
2024 |
|
2023 |
|
% Change |
|
% Change |
|||||||||||||
| (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. |
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