Mattel Reports Q1 2012
Mattel, Inc., reported 2012 first quarter financial results. For the quarter, the company reported net income of $7.8 million, or $0.02 per share (which includes the negative impact of $0.04 of HIT Entertainment acquisition and integration costs), compared to last year’s first quarter net income of $16.6 million, or $0.05 per share.
“The first quarter played out much as we had anticipated. We gained overall NPD toy category share across the U.S. and in Europe, with Barbie and Hot Wheels gaining share in both regions and we continue to experience strong growth internationally and with American Girl,” said Bryan G. Stockton, Mattel CEO, in a statement. “That said, as is often the case this time of year, we have work to do in certain areas across our portfolio of brands, countries, and customers as we prepare to successfully execute the all-important holiday season.”
For the quarter, net sales were $928.4 million, down 2 percent compared to $951.9 million last year, including an unfavorable change in currency exchange rates of 1 percentage point. On a regional basis, first quarter gross sales decreased 9 percent in the North American region, which consists of the U.S., Canada, and American Girl, with no impact from changes in currency exchange rates. For the International region, gross sales increased 7 percent, including unfavorable changes in currency exchange rates of 4 percentage points. Operating income for the quarter was $28.7 million, compared to prior year’s operating income for the quarter of $36.8 million.
The Company’s debt-to-total-capital ratio was 37 percent. During the quarter, the Company’s cash and equivalents declined by approximately $584 million, compared with a decline of approximately $232 million in last year’s first quarter, primarily due to the acquisition of HIT Entertainment, as well as the seasonality of the business.
Cash flows from operating activities were approximately $172 million, an increase of $214 million compared to approximately $42 million of cash flows used for operating activities in 2011. The increase is primarily due to lower working capital usage. Cash flows used for investing activities were approximately $703 million, an increase of $694 million, driven primarily by the acquisition of HIT Entertainment. Cash flows used for financing and other activities were approximately $53 million, a decrease of $128 million, compared to approximately $181 million in 2011, primarily reflecting lower share repurchases and higher proceeds from the exercise of stock options.
The Company announced that its Board of Directors declared a second quarter cash dividend of $0.31 per share on the Company’s common stock. The dividend will be payable on June 15, 2012, to stockholders of record on May 23, 2012. The dividend is the second of four quarterly dividends the Company expects to pay this year, reflecting an annualized dividend of $1.24 per share, which represents a 35 percent increase to last year’s total dividends. During the first quarter of 2012, the Company acquired HIT Entertainment for $680 million, subject to customary adjustments, and repurchased 700,000 shares of its common stock at a cost of approximately $20 million.
Mattel Girls and Boys Brands
For the first quarter, worldwide gross sales for Mattel Girls & Boys Brands were $622.2 million, down 4 percent versus the prior year. Worldwide gross sales for the Barbie brand were down 6 percent. Worldwide gross sales for Other Girls Brands were up 22 percent, driven by Monster High. Worldwide gross sales for the Wheels category, which includes the Hot Wheels, Matchbox, and Tyco R/C brands, were down 6 percent. Worldwide gross sales for the Entertainment business, which includes Radica and Games, were down 17 percent, primarily driven by decreases in the Cars property.
First quarter worldwide gross sales for Fisher-Price Brands, which includes the Fisher-Price Core, Fisher-Price Friends, and Power Wheels brands, were $310.2 million, or flat versus the prior year.
American Girl Brands
First quarter gross sales for American Girl Brands, which offers American Girl-branded products directly to consumers, were $76 million, up 4 percent versus the prior year, primarily driven by strong sales of McKenna 2012 Girl of the Year.
Marvel Partners with TRU for The Avengers
Marvel Entertainment announced that it is partnering with Toys “R” Us in support of the summer blockbuster film Marvel’s The Avengers, which is expected in theaters on May 4. Toys “R” Us has unveiled in-store boutiques dedicated to the major, multi-character movie event in nearly 600 stores across the country, as well as a dedicated Marvel’s The Avengers online destination at Toysrus.com/Avengers.
Showcased prominently at the front of every Toys “R” Us store in the United States, fans can now find boutiques filled with products showcasing Iron Man, Captain America, Thor, The Incredible Hulk, Black Widow, and Hawkeye from the epic adventure. Toys “R” Us Times Square is also showcasing products based on the heroes in a dedicated boutique on Level Two.
Toys “R” Us has launched an online experience at Toysrus.com/Avengers, which will also showcase products inspired by the upcoming film as well as feature video content, character bios, downloadable coloring sheets, and desktop images. Toys “R” Us will also support this initiative through its social media platforms.
Funnybone Toys Signed Keena as Rep Group
Funnybone Toys, creator of the Array, CUBU, and Spectrix color-based card games, recently signed Keena, a San Francisco-based manufacturing rep group, to represent the entire line of Funnybone Toys all across the western United States.
Funnybone Toys products will also be featured at the Keena booths of the California Gift Show in Los Angeles, July 25–30, and the San Francisco International Gift Fair, August 4–7; and on permanent display in Keena’s San Francisco showroom at its Fulton Street location, as well as their new Los Angeles permanent showroom at the LA Mart.