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Mattel Reports Q1 2011 Results
Mattel, Inc., reported its 2011 first quarter financial results last week. For the quarter, the company reported net income of $16.6 million, or $0.05 per share, compared to last year’s first quarter net income of $24.8 million, or $0.07 per share.
For the quarter, net sales were $951.9 million, up eight percent compared to $880.1 million last year, including favorable changes in currency exchange rates of 1 percentage point. On a regional basis, first quarter gross sales increased seven percent in the U.S. and 10 percent in international markets, including favorable changes in currency exchange rates of two percentage points. Operating income for the quarter was $36.8 million, compared to prior year’s operating income for the quarter of $45.2 million.
The company’s debt-to-total-capital ratio was 32.3 percent. Consistent with the seasonality of the business, during the quarter the company’s cash and equivalents declined by approximately $232 million, compared with a decline of approximately $245 million in last year’s first quarter.
Net cash flows used for operating activities were approximately $42 million, a decrease of $203 million compared with approximately $245 million in 2010. The decrease is primarily due to the collection of $300 million of domestic receivables not factored in 2010, partially offset by higher working capital usage.
Cash flows used for financing and other activities were $181 million, a decrease of $216 million, compared to approximately $35 million provided by financing activities in 2010, primarily reflecting share repurchases and first quarter dividend payments.
For the first quarter, worldwide gross sales for the Girls & Boys Brands business unit were $656.4 million, up 15 percent versus a year ago. Worldwide gross sales for the Barbie brand were up 14 percent. Worldwide gross sales for Other Girls Brands were up 38 percent, driven by the Monster High and Disney Princess doll lines. Worldwide gross sales for the Wheels category, which includes the Hot Wheels, Matchbox, and Tyco R/C brands, were up four percent. Worldwide gross sales for the Entertainment business, which includes Radica and Games and Puzzles, were up 13 percent for the quarter, primarily driven by growth in the Cars, Green Lantern, and Toy Story properties.
First quarter worldwide gross sales for the Fisher-Price Brands business unit, which includes the Fisher-Price Core, Fisher-Price Friends, and Power Wheels brands, were $309.9 million, or down two percent versus the prior year due primarily to the discontinuation of the Sesame Street product line.
First quarter gross sales for the American Girl Brands business unit were $73 million, up four percent versus last year, primarily driven by strong sales of Kanani, girl of the year 2011.
Additionally, Mattel announced a second quarter cash dividend of $0.23 per share on the company’s common stock. The dividend will be payable on June 17, 2011, to stockholders of record on May 25, 2011. The dividend is the second of four quarterly dividends the company expects to pay this year, reflecting an annualized dividend of $0.92 per share, which represents an increase of $0.09, or 11 percent, versus last year’s annual dividend of $0.83 per share.
Hasbro Reports Q1 2011 Results
Hasbro, Inc., reported 2011 first quarter results last week. The company reported net revenues of $672 million compared to $672.4 million in the first quarter 2010. First quarter 2011 net revenues include a positive $4.8 million impact of foreign exchange. Hasbro reported net earnings for the first quarter 2011 of $17.2 million or $0.12 per diluted share versus $58.9 million or $0.40 per diluted share in 2010. First quarter 2010 net earnings were $0.26 per diluted share, excluding a favorable tax adjustment of $21.2 million or $0.14 per diluted share.
In the first quarter, worldwide net revenues in the Boys product category increased 25 percent to $290.2 million; the Games and Puzzles category decreased 12 percent to $200.4 million; the Girls category declined 13 percent to $113.2 million; and the Preschool category was down 18 percent to $68.2 million.
U.S. and Canada segment net revenues were $391.2 million, a decrease of $33.6 million or 8 percent, compared to $424.7 million in 2010. The results reflect growth in the Boys category offset by declines in the other major product categories. The U.S. and Canada segment reported an operating profit of $41 million, compared to $61.1 million in 2010.
International segment net revenues were $254.3 million, an increase of $32.6 million or 15 percent, compared to $221.7 million in 2010. Net revenues in the International segment grew 13 percent absent the positive $3.1 million impact of foreign exchange. Revenue in the International segment reflects growth in the Boys category slightly offset by declines in the other major product categories. The International segment reported an operating loss of $1.7 million, compared to an operating loss of $2.4 million in 2010.
Entertainment and Licensing segment net revenues declined 2 percent to $24.6 million, compared to $25.1 million in 2010. Revenue in the Entertainment and Licensing segment reflects lower licensing revenue primarily associated with the 2009 movie, Transformers: Revenge of the Fallen, mostly offset by increases in other brands’ licensing revenue as well as movie and television related revenues. The Entertainment and Licensing segment reported an operating profit of $5.4 million compared to $9.4 million in 2010.
Hasbro repurchased a total of 1.4 million shares of common stock during the first quarter 2011 at a total cost of $63.7 million and an average price of $45.48 per share. At quarter end, $86.4 million remained available under the current share repurchase authorization.
Walmart Acquires Kosmix, Digging Deeper into Social Media/Shopping Mix
Wal-Mart Stores, Inc., announced that it has signed a definitive agreement to acquire Kosmix a social media technology platform that filters and organizes content in social networks to connect people with real-time information that matters to them.
Kosmix was founded by Venky Harinarayan and Anand Rajaraman, early pioneers of online shopping. The duo’s first company, Junglee, was acquired by Amazon.com in 1998. Walmart said in a statement that the founders and the Kosmix team will operate as part of the newly formed @WalmartLabs and continue to be based in Silicon Valley. Walmart plans to expand the @WalmartLabs team and expects this new group will create technologies and businesses around social and mobile commerce that will support Walmart’s global multi-channel strategy, which integrates the shopping experience between bricks and mortar stores and e-commerce. Walmart operates retail businesses in 15 countries and e-commerce businesses in nine countries.
Kosmix’s technology platform searches and analyzes connections in real-time data streams to deliver highly personalized insights to users. The platform powers TweetBeat, a real-time social media filter for live events with more than five million visits last month; Kosmix.com, a site to discover social content by topic; and RightHealth, one of the top three health and medical information sites by global reach.
“We are expanding our capabilities in today’s rapidly growing social commerce environment,” said Eduardo Castro-Wright, Walmart’s vice-chairman, in a statement. “Social networking and mobile applications are increasingly becoming a part of our customers’ day-to-day lives globally, influencing how they think about shopping, both online and in retail stores.”