EL SEGUNDO, Calif., April 23, 2024 (BUSINESS WIRE) --
Mattel, Inc. (NASDAQ: MAT) today reported first quarter 2024 financial results.
Ynon Kreiz, Chairman and CEO of Mattel, said: "We are off to a good start to the year with significant gross margin expansion, positive Adjusted EBITDA, and very strong improvement in free cash flow. Trends in consumer demand for our product improved through the quarter and we expect to outpace the industry and gain market share in 2024. We are executing our strategy to grow our IP-driven toy business and expand our entertainment offering."
Anthony DiSilvestro, CFO of Mattel, added: "We achieved strong bottom-line results, primarily driven by margin expansion, repurchased $100 million of shares in the quarter, and are on track to meet our full year guidance. We expect to continue to benefit from the Optimizing for Profitable Growth program, which is targeting $60 million in cost savings in 2024 and a total of $200 million in cost savings by 2026."
Financial Overview
For the first quarter, Net Sales were down 1% as reported and in constant currency, versus the prior year's first quarter. Reported Operating Loss was $36 million, an improvement of $80 million, and Adjusted Operating Loss was $23 million, an improvement of $63 million. Reported Loss Per Share was $0.08, an improvement of $0.22 per share, and Adjusted Loss Per Share was $0.05, an improvement of $0.19 per share.
Net Sales in the North America segment increased 2% as reported and in constant currency.
Gross Billings in the North America segment increased 1% as reported and in constant currency, driven by growth in Vehicles (primarily Hot Wheels) and Action Figures, Building Sets, Games, and Other (primarily Action Figures), partly offset by declines in Infant, Toddler, and Preschool (primarily Baby Gear) and Dolls (primarily Disney Princess and Disney Frozen).
Net Sales in the International segment decreased 4% as reported or 5% in constant currency.
Gross Billings in the International segment decreased 4% as reported, or 6% in constant currency, due to declines in Dolls (primarily Disney Princess and Disney Frozen), Infant, Toddler, and Preschool (primarily Fisher-Price and Preschool Entertainment), and Action Figures, Building Sets, Games, and Other (primarily Action Figures), partly offset by growth in Vehicles (primarily Hot Wheels).
Reported Gross Margin increased to 48.0%, versus 40.0% in the prior year's first quarter, and Adjusted Gross Margin increased to 48.3%, versus 40.0%. The increase in Gross Margin was primarily driven by lower inventory management costs, cost deflation, savings from the Optimizing for Profitable Growth program, favorable mix, and foreign exchange and lower other supply chain costs.
Reported Other Selling and Administrative Expenses decreased $12 million, to $353 million, primarily driven by lower severance costs and the benefit from cost savings actions, partly offset by market-related pay increases. Adjusted Other Selling and Administrative Expenses increased $6 million, to $343 million, primarily due to market-related pay increases and investments, partly offset by cost savings.
For the three months ended March 31, 2024, Cash Flows Provided by Operating Activities were $35 million, an improvement of $242 million, versus a use of $206 million in the prior year's first quarter, primarily driven by working capital improvements and favorable changes in net earnings. Cash Flows Used for Investing Activities were $28 million, an improvement of $14 million, primarily driven by lower capital expenditures. Cash Flows Used for Financing Activities and Other were $138 million, an increase of $88 million, primarily due to higher share repurchases in the first quarter of 2024.
Gross Billings by Categories
For the first quarter, Worldwide Gross Billings for Dolls were $295 million, down 4% as reported, or 5% in constant currency, versus the prior year's first quarter. The decline in Gross Billings was primarily due to Disney Princess and Disney Frozen and Polly Pocket, partly offset by growth in Trolls and Monster High.
Worldwide Gross Billings for Infant, Toddler, and Preschool were $135 million, down 10% as reported, or 11% in constant currency. The decline in Gross Billings was primarily due to declines in Baby Gear and Preschool Entertainment.
Worldwide Gross Billings for Vehicles were $298 million, up 5% as reported, or 4% in constant currency, primarily driven by growth in Hot Wheels.
Worldwide Gross Billings for Action Figures, Building Sets, Games, and Other were $172 million, flat as reported and in constant currency, primarily due to growth in Games offset by declines in Other.
2024 Guidance
Mattel's full year 2024 guidance remains:
(in millions, FY2024 Guidance FY2024 Guidance FY2023 FY2023
except EPS and percentages)
Net Sales Comparable Comparable $5,441 $5,441
(Constant Currency) (Constant Currency)
Adjusted Gross Margin 48.5 - 49% 48.5 - 49% 47.5% 47.5%
Adjusted EPS $1.35 - $1.45 $1.35 - $1.45 $1.23 $1.23
Adjusted EBITDA $975 - $1,025 $975 - $1,025 $948 $948
Adjusted Tax Rate 23 - 24% 23 - 24% 23% 23%
Capital Expenditures $175 - $200 $175 - $200 $160 $160
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, the impact of the inclined sleeper product recalls, and the impact of sale of assets, 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, the impact of the inclined sleeper product recalls, and the impact of sale of assets, 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, the impact of sale of assets, the impact of changes to certain deferred tax assets, and loss on liquidation of a subsidiary, 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 senior 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, the impact of inclined sleeper product recalls, the impact of sale of assets, and loss on liquidation of a subsidiary. The Adjusted Provision for Income Taxes represents reported Provision for Income Taxes, adjusted to exclude the impact of changes to certain deferred tax assets and 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(R), Hot Wheels(R), Fisher-Price(R), American Girl(R), Thomas & Friends(TM), UNO(R), Masters of the Universe(R), Matchbox (R), Monster High(R), MEGA(R) and Polly Pocket(R), as well as other popular properties that we own or license in partnership with global entertainment companies. Our offerings include toys, content, consumer products, and digital and live experiences. Our products are sold in collaboration with the world's leading retail and e-commerce 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 EXHIBIT I EXHIBIT I EXHIBIT I EXHIBIT I EXHIBIT I EXHIBIT I EXHIBIT I EXHIBIT I EXHIBIT I EXHIBIT I
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CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)(1)
For the Three Months Ended March 31, For the Three Months Ended March 31,
---------------------------------------------------------------- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(In millions, except per share and percentage information) 2024 2023 2023 % Change % Change % Change % Change
as as in in
Reported Reported Constant Constant
Currency Currency
-------------------------------------------------------------------------------------- -------------------- -------------------------------------------------------------------------------------
% Net % Net $ Amt $ Amt % Net % Net
Sales Sales Sales Sales
-------------------- ------------------------------ ---------- ---------------------------------------------- -------------------- ------------------------------
Net Sales $ 809.5 $ $ $ $ 814.6 -1 -1 -1 -1 % -1 -1 %
Cost of Sales 420.6 52.0 52.0 % 488.8 60.0 60.0 % -14 -14 %
-------------------- ------ -------------------- -------------------- -------------------- ------ --------------------
Gross Profit 388.9 48.0 48.0 % 325.8 40.0 40.0 % 19 19 % 17 17 %
Advertising and Promotion Expenses 71.4 8.8 8.8 % 76.0 9.3 9.3 % -6 -6 %
Other Selling and Administrative Expenses 352.9 43.6 43.6 % 364.8 44.8 44.8 % -3 -3 %
-------------------- ------ -------------------- -------------------- -------------------- ------ --------------------
Operating Loss (35.5 ) -4.4 -4.4 % (115.0 ) -14.1 -14.1 % -69 -69 % -60 -60 %
Interest Expense 30.1 3.7 3.7 % 31.1 3.8 3.8 % -3 -3 %
Interest (Income) (17.3 ) -2.1 -2.1 % (6.5 ) -0.8 -0.8 % 165 165 %
Other Non-Operating Expense (Income), Net 5.6 (1.4 )
-------------------- ------ -------------------- -------------------- -------------------- -------------------- -------------------- ------ --------------------
Loss Before Income Taxes (53.9 ) -6.7 -6.7 % (138.2 ) -17.0 -17.0 % -61 -61 % -54 -54 %
Benefit from Income Taxes (20.8 ) (27.0 )
(Income) from Equity Method Investments (4.8 ) (4.7 )
-------------------- ------ -------------------- -------------------- -------------------- -------------------- -------------------- ------ --------------------
Net Loss $ (28.3 ) -3.5 -3.5 % $ $ (106.5 ) -13.1 -13.1 % -73 -73 %
==================== ====== ==================== ==================== ==================== ====== ====================
Net Loss Per Common Share - Basic $ (0.08 ) $ $ $ $ (0.30 )
==================== ====== ==================== ==================== ==================== ==================== ==================== ====== ====================
Weighted-Average Number of Common Shares 346.9 354.9
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Net Loss Per Common Share - Diluted $ (0.08 ) $ $ $ $ (0.30 )
==================== ====== ==================== ==================== ==================== ==================== ==================== ====== ====================
Weighted-Average Number of Common and Potential Common Shares 346.9 354.9
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MATTEL, INC. AND SUBSIDIARIES EXHIBIT II EXHIBIT II EXHIBIT II EXHIBIT II EXHIBIT II
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CONDENSED CONSOLIDATED BALANCE SHEETS(1)
March 31, March 31, December 31, December 31,
--------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------- --------------------------------
2024 2023 2023
(In millions) (Unaudited)
--------------------------------------------------------------------------- -------------------------------------------------------------------------------------
Assets
Cash and Equivalents $ 1,130.2 $ $ 461.7 $ $ 1,261.4
Accounts Receivable, Net 673.3 673.8 1,081.8
Inventories 669.3 961.0 571.6
Prepaid Expenses and Other Current Assets 262.7 269.7 207.5
-------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ----------
Total Current Assets 2,735.5 2,366.3 3,122.3
Property, Plant, and Equipment, Net 452.2 471.2 465.5
Right-of-Use Assets, Net 308.5 304.5 313.2
Goodwill 1,383.8 1,381.0 1,384.5
Other Noncurrent Assets 1,185.4 1,308.7 1,150.2
-------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ----------
Total Assets $ 6,065.4 $ $ 5,831.7 $ $ 6,435.8
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Liabilities and Stockholders' Equity
Accounts Payable and Accrued Liabilities $ 1,084.2 $ $ 955.5 $ $ 1,308.6
Income Taxes Payable 14.9 13.5 33.9
-------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ----------
Total Current Liabilities 1,099.1 969.0 1,342.5
Long-Term Debt 2,331.1 2,326.7 2,330.0
Noncurrent Lease Liabilities 256.2 257.4 259.5
Other Noncurrent Liabilities 353.7 341.0 354.6
Stockholders' Equity 2,025.3 1,937.7 2,149.2
-------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ----------
Total Liabilities and Stockholders' Equity $ 6,065.4 $ $ 5,831.7 $ $ 6,435.8
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MATTEL, INC. AND SUBSIDIARIES EXHIBIT II EXHIBIT II EXHIBIT II EXHIBIT II EXHIBIT II
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SUPPLEMENTAL BALANCE SHEET AND CASH FLOW DATA (Unaudited)(1)
March 31, March 31, March 31, March 31,
-------------------------------------------------------- ------------------------------------ ------------------------------------ -----------------------------------------------------------------------------------------------------------------------
2024 2023
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Key Balance Sheet Data:
--------------------------------------------------------
Accounts Receivable, Net Days of Sales Outstanding (DSO) 75 74
For the Three Months Ended March 31, For the Three Months Ended March 31, For the Three Months Ended March 31, For the Three Months Ended March 31,
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(In millions) 2024 2023
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Condensed Cash Flow Data:
--------------------------------------------------------
Cash Flows Provided by (Used for) Operating Activities $ $ $ 35 $ $ (206 )
Cash Flows (Used for) Investing Activities (28 ) (43 )
Cash Flows (Used for) Financing Activities and Other (138 ) (51 )
------------------------------------ ------------------------------------ -------------------- ------ -------------------- -------------------- -------------------- ------ --------------------
Decrease in Cash and Equivalents $ $ $ (131 ) $ $ (300 )
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MATTEL, INC. AND SUBSIDIARIES EXHIBIT III EXHIBIT III EXHIBIT III EXHIBIT III EXHIBIT III
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SUPPLEMENTAL FINANCIAL INFORMATION (Unaudited)(1)
RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL MEASURES
For the Three Months Ended March 31, For the Three Months Ended March 31,
------------------------------------------------------ -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(In millions, except percentage information) 2024 2023 Change Change
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Gross Profit
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Gross Profit, As Reported $ 388.9 $ $ 325.8
Gross Margin 48.0 % 40.0 % 800 bps 800 bps
Adjustments:
Severance and Restructuring Expenses 2.2 --
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Gross Profit, As Adjusted $ 391.1 $ $ 325.8
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Adjusted Gross Margin 48.3 % 40.0 % 830 bps 830 bps
Other Selling and Administrative Expenses
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Other Selling and Administrative Expenses, As Reported $ 352.9 $ $ 364.8 -3 -3 %
% of Net Sales 43.6 % 44.8 % -120 bps -120 bps
Adjustments:
Severance and Restructuring Expenses (6.3 ) (23.9 )
Inclined Sleeper Product Recalls (3.7 ) (4.3 )
-------------------- ------ -------------------- -------------------- -------------------- -------------- --------------------
Other Selling and Administrative Expenses, As Adjusted $ 342.9 $ $ 336.5 2 2 %
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% of Net Sales 42.4 % 41.3 % 110 bps 110 bps
Operating Loss
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Operating Loss, As Reported $ (35.5 ) $ $ (115.0 ) -69 -69 %
Operating Loss Margin -4.4 % -14.1 % 970 bps 970 bps
Adjustments:
Severance and Restructuring Expenses 8.5 23.9
Inclined Sleeper Product Recalls 3.7 4.3
-------------------- ------ -------------------- -------------------- -------------------- -------------- --------------------
Operating Loss, As Adjusted $ (23.3 ) $ $ (86.7 ) -73 -73 %
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Adjusted Operating Loss Margin -2.9 % -10.6 % 770 bps 770 bps
MATTEL, INC. AND SUBSIDIARIES EXHIBIT III EXHIBIT III EXHIBIT III EXHIBIT III EXHIBIT III
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SUPPLEMENTAL FINANCIAL INFORMATION (Unaudited)(1)
RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL MEASURES
For the Three Months Ended March 31, For the Three Months Ended March 31,
---------------------------------------------------------- ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(In millions, except per share and percentage information) 2024 2023 Change Change
---------------------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- ------------------------------------------
Earnings Per Share
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Net Loss Per Common Share, As Reported $ (0.08 ) $ $ (0.30 ) -73 -73 %
Adjustments:
Severance and Restructuring Expenses 0.02 0.07
Inclined Sleeper Product Recalls 0.01 0.01
Tax Effect of Adjustments(2) (0.01 ) (0.02 )
--------------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Net Loss Per Common Share, As Adjusted $ (0.05 ) $ $ (0.24 ) -79 -79 %
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EBITDA and Adjusted EBITDA
----------------------------------------------------------
Net Loss, As Reported $ (28.3 ) $ $ (106.5 ) -73 -73 %
Adjustments:
Interest Expense 30.1 31.1
Benefit from Income Taxes (20.8 ) (27.0 )
Depreciation 34.5 33.7
Amortization 7.8 9.5
--------------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
EBITDA 23.3 (59.1 )
Adjustments:
Share-Based Compensation 17.9 16.9
Severance and Restructuring Expenses 8.5 23.9
Inclined Sleeper Product Recalls 3.7 4.3
--------------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Adjusted EBITDA $ 53.5 $ $ (13.9 ) n/m n/m
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Free Cash Flow
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Net Cash Flows Provided by (Used for) Operating Activities $ 35.5 $ $ (206.4 )
Capital Expenditures (30.5 ) (43.0 )
--------------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Free Cash Flow $ 5.0 $ $ (249.4 )
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(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.
MATTEL, INC. AND SUBSIDIARIES EXHIBIT III EXHIBIT III EXHIBIT III EXHIBIT III EXHIBIT III
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SUPPLEMENTAL FINANCIAL INFORMATION (Unaudited)(1)
RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL MEASURES
For the Three Months Ended March 31, For the Three Months Ended March 31,
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(In millions, except percentage and pts information) 2024 2023 Change Change
---------------------------------------------------- -------------------- -------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- --------------------
Tax Rate
----------------------------------------------------
Loss Before Income Taxes, As Reported $ (53.9 ) $ $ (138.2 )
Adjustments:
Severance and Restructuring Expenses 8.5 23.9
Inclined Sleeper Product Recalls 3.7 4.3
-------------------- -------- -------------------- -------------------- -------------------- ------- --------------------
Loss Before Income Taxes, As Adjusted $ (41.7 ) $ $ (109.9 )
==================== ======== ==================== ==================== ==================== ======= ====================
Benefit from Income Taxes, As Reported $ (20.8 ) $ $ (27.0 )
Adjustments:
Tax Effect of Adjustments(2) 2.8 6.6
-------------------- -------- -------------------- -------------------- -------------------- ------- --------------------
Benefit from Income Taxes, As Adjusted $ (18.0 ) $ $ (20.4 )
==================== ======== ==================== ==================== ==================== ======= ====================
Tax Rate, As Reported 39 % 20 % 19 pts 19 pts
-------------------- -------- -------------------- -------------------- -------------------- ------- --------------------
Tax Rate, As Adjusted 43 % 19 % 24 pts 24 pts
==================== ======== ==================== ==================== ==================== ======= ====================
March 31, March 31,
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2024 2023
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Net Debt
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Long-Term Debt $ 2,331.1 $ $ 2,326.7
Adjustments:
Cash and Equivalents (1,130.2 ) (461.7 )
-------------------- -------- -------------------- -------------------- -------------------- ------- --------------------
Net Debt $ 1,200.9 $ $ 1,865.0
==================== ======== ==================== ==================== ==================== ======= ====================
(1) Amounts may not sum due to rounding.
MATTEL, INC. AND SUBSIDIARIES EXHIBIT III EXHIBIT III EXHIBIT III EXHIBIT III EXHIBIT III
============================================================ ============================================================================= ====================================================================== =====================
SUPPLEMENTAL FINANCIAL INFORMATION (Unaudited)(1)
RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL MEASURES
For the Trailing Twelve Months Ended March 31, For the Trailing Twelve Months Ended March 31,
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