Mattel Reports Q2 Results
Mattel, Inc., reported 2013 second quarter financial results. For the quarter, the company reported net income of $73.3 million, or $0.21 per share, compared to last year’s second quarter net income of $96.2 million, or $0.28 per share.
For the quarter, net sales were $1.17 billion, up 1 percent compared to last year, with no impact from changes in currency exchange rates. On a regional basis, second quarter gross sales decreased 2 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. In the International region, gross sales increased 4 percent, with no impact from changes in currency exchange rates. Operating income for the quarter was $94.8 million, compared to prior year’s operating income for the quarter of $131.4 million.
The company’s debt-to-total-capital ratio was 36.7 percent. For the first half of the year, the company’s cash and equivalents declined by approximately $513 million, compared with a decline of approximately $997 million in last year’s first half.
For the first half of the year, cash flows used for operating activities were approximately $286 million, an increase of $224 million compared to approximately $62 million of cash flows used for operating activities in the first half of 2012. The increase is primarily due to higher working capital usage. Cash flows used for investing activities were approximately $132 million, a decrease of $683 million driven primarily by the prior year acquisition of HIT Entertainment. Cash flows used for financing and other activities were approximately $95 million, a decrease of $25 million, compared to approximately $120 million in 2012, primarily due to net proceeds received from the issuance of long-term debt, partially offset by repayments of long-term debt and higher share repurchases.
Mattel announced that its Board of Directors declared a third quarter cash dividend of $0.36 per share on the company’s common stock. The dividend will be payable on September 20, 2013, to stockholders of record on August 28, 2013. The dividend is the third 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 second quarter of 2013, the company repurchased 2.7 million shares of its common stock at a cost of approximately $119 million. Additionally, the Stock Repurchase Program was increased by $500 million.
Sales by Brand
Mattel Girls and Boys Brands
For the second quarter, worldwide gross sales for Mattel Girls & Boys Brands were $792.4 million, up 1 percent versus the prior year. Worldwide gross sales for the Barbie brand were down 12 percent. Worldwide gross sales for Other Girls brands were up 23 percent, primarily 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 flat versus the prior year.
Second quarter worldwide gross sales for Fisher-Price Brands, which includes the Fisher-Price Core, Fisher-Price Friends, and Power Wheels brands, were $396.7 million, or down 3 percent versus the prior year.
American Girl Brands
Second quarter gross sales for American Girl Brands, which offers American Girl-branded products directly to consumers, were $78.2 million, up 14 percent versus the prior year, driven by strong sales of Saige, the 2013 Girl of the Year, and Caroline, the newest historical character.