Mattel Reports Q1 2013
Mattel, Inc., reported its 2013 first quarter financial results. For the quarter, the company reported net income of $38.5 million, or $0.11 per share, compared to last year’s first quarter net income of $7.8 million, or $0.02 per share.
“Overall, 2013 is off to a solid start, demonstrating the strength of our global portfolio of brands, countries, and customers,” said Bryan G. Stockton, Mattel Chairman and CEO, in a statement. “We are very pleased with the performance of our Girls portfolio and the strong results across all regions, particularly Europe. We continue to see the first quarter as our pre-season and we remain focused on a strong 2013 and delivering in the all-important holiday season.”
Financial Overview
For the quarter, net sales were $995.6 million, up 7 percent compared to $928.4 million last year. On a regional basis, first quarter gross sales increased 5 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 9 percent, including a 2-percentage point unfavorable impact from changes in currency exchange rates. Operating income for the quarter was $65.8 million, compared to prior year’s operating income for the quarter of $28.7 million. The Company’s debt-to-total-capital ratio of 35.2 percent is in line with its capital investment framework.
Cash flows used for operating activities were approximately $62 million, compared to approximately $171 million of cash flows from operating activities in 2012. The change is primarily due to higher working capital usage, partially offset by higher net income. Cash flows used for investing activities were approximately $66 million, a decrease of $637 million, driven primarily by the prior year acquisition of HIT Entertainment. Cash flows from financing and other activities were approximately $52 million, compared to cash flows used for financing and other activities of approximately $53 million in 2012. The change was primarily due to the net proceeds received from the issuance of long-term debt, partially offset by repayments of long-term debt and higher dividend payments.
Capital Deployment
The Company announced that its board of directors declared a second quarter cash dividend of $0.36 per share on the Company’s common stock. The dividend will be payable on June 14, 2013, to stockholders of record on May 23, 2013. The dividend is the second of four quarterly dividends the Company expects to pay this year, reflecting an annualized dividend of $1.44 per share, which represents a 16 percent increase to last year’s total dividends. During the first quarter of 2013, the Company repurchased 240,000 shares of its common stock at a cost of approximately $9 million.
Mattel Girls and Boys Brands
For the first quarter, worldwide gross sales for Mattel Girls and Boys Brands were $692.2 million, up 11 percent versus the prior year. Worldwide gross sales for the Barbie brand were down 2 percent. Worldwide gross sales for Other Girls Brands were up 56 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 2 percent. Worldwide gross sales for the Entertainment business, which includes Radica and Games, were up 1 percent.
Fisher-Price Brands
First quarter worldwide gross sales for Fisher-Price Brands, which includes the Fisher-Price Core, Fisher-Price Friends, and Power Wheels brands, were $287.3 million, down 7 percent versus the prior year, primarily driven by Fisher-Price Core, partially offset by Fisher-Price Friends.
American Girl Brands
First quarter gross sales for American Girl Brands, which offers American Girl-branded products directly to consumers, were $100.5 million, up 32 percent versus the prior year. This was driven primarily by increases in all core doll segments, led by Saige, 2013 Girl of the Year, and strong performance at retail, including the three new stores opened in 2012.
Consumer Strategies Signs Celeb Chef Feniger
Licensing firm Consumer Strategies, Inc., has signed celebrity chef, restaurateur, and TV personality Susan Feniger. The company is seeking merchandise partners in categories such as food, culinary, cooking accessories, travel, and home goods. Feniger is the other half of Food Network’s Too Hot Tamales. She co-founded The Border Grill in Santa Monica, Las Vegas’ Mandalay Bay (a licensing industry favorite during Licensing Show), and Downtown L.A. She also opened Susan Feniger’s Street, the first L.A. restaurant based on street food from all over the world.
Feniger joins Consumer Strategies’ extensive list of health and fitness and food brands that includes Contessa Premium Foods, The Biggest Loser, and Kathy Smith to name a few.
Harold Chizick Launches ChizComm
Harold Chizick, formerly of Spin Master, launches ChizComm Ltd. with the signing of Tech 4 Kids.
Chizick’s company will provide full-service marketing communication support in the children’s product and entertainment space. ChizComm specializes in the following services:
• Public relations campaigns
• Event marketing
• Digital marketing
• Social media
• Media strategies
• Promotion and premium partnerships
Chizick spent nearly 14 years at Spin Master leading marketing communication strategies for the company’s complete roster of brands. Some key product launches that Chizick was involved in include Air Hogs, Bakugan, Zoobles, Liv, La Dee Da, Shrinky Dinks, Aquadoodle, Moon Dough and Sand, and many others.
He also secured many promotions for Spin Master with partners such as McDonald’s and Subway restaurants.