Mattel Reports Q4, 2013 Results
Last week, Mattel, Inc., reported 2013 fourth quarter and full year financial results. For the fourth quarter, the company reported net income of $369.2 million, or $1.07 per share, compared to last year’s fourth quarter net income of $306.5 million, or $0.87 per share, and last year’s fourth quarter adjusted net income of $393.6 million, or adjusted earnings per share of $1.12, excluding the impact of the litigation charge referenced at the end. For the year, the company reported net income of $903.9 million, or $2.58 per share, compared to last year’s net income of $776.5 million, or $2.22 per share, and last year’s adjusted net income of $863.6 million, or adjusted earnings per share of $2.47, excluding the impact of the litigation charge.
“By every account, 2013 was a challenging and transformative year at retail,” said Bryan G. Stockton, Mattel chairman and CEO. “Overall, the global toy industry held up pretty well, but we did not meet our growth expectations for the fourth quarter, or the full year, mainly driven by weakness in the U.S. market. That said, Mattel did deliver a fourth consecutive year of sales and earnings growth. We saw global strength in our girls’ portfolio, expanded gross margins, returned nearly $1 billion to our shareholders and continued to invest in emerging markets like China and Russia, which experienced significant growth. Looking ahead, Mattel enters 2014 with the strongest global portfolio of brands, countries, and customers in the toy industry. We must now effectively execute against our strategy to grow the business and deliver superior shareholder value.”
For the fourth quarter, net sales were $2.11 billion, a 6 percent decrease from $2.26 billion last year, with no impact from changes in currency exchange rates. On a regional basis, fourth quarter gross sales were down 10 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 were flat to last year, including an unfavorable impact from changes in currency exchange rates of 1 percentage point. Operating income for the quarter was $479.3 million, or 22.7 percent of net sales. The prior year’s operating income for the quarter was $373.5 million and adjusted operating income was $511.3 million, excluding the impact of the litigation charge.
For the year, net sales were $6.48 billion, a 1 percent increase from $6.42 billion last year, including an unfavorable impact from changes in currency exchange rates of 1 percentage point. On a regional basis, full year gross sales were down 2 percent in the North American region, with no impact from changes in currency exchange rates. For the International Region, gross sales were up 5 percent, including an unfavorable impact from changes in currency exchange rates of 1 percentage point. Operating income for the year was $1.17 billion, or 18 percent of net sales. The prior year’s operating income was $1.02 billion, and adjusted operating income was $1.16 billion, excluding the impact of the litigation charge.
The company’s debt-to-total capital ratio of 33 percent is in line with its capital and investment framework, and its year-end cash balance was $1.04 billion.
For the year, net cash flows from operating activities were approximately $698 million, a decrease of $578 million compared with approximately $1.28 billion in 2012. The decrease is primarily driven by higher working capital usage, partially offset by higher net income. Cash flows used for investing activities were approximately $242 million, a decrease of $658 million, compared to approximately $900 million in 2012, driven primarily by the prior year acquisition of HIT Entertainment. Cash flows used for financing and other activities were approximately $752 million, an increase of $343 million, compared with approximately $409 million in 2012, primarily due to higher share repurchases and higher repayments of long-term debt, partially offset by net proceeds received from the issuance of long-term debt.
The company announced that its board of directors declared a first quarter cash dividend of $0.38 per share on the company’s common stock, which represents an increase of 6 percent versus last year’s dividend of $0.36 per share. The dividend will be payable on March 7, 2014, to stockholders of record on February 20, 2014. For the fourth quarter 2013, the company repurchased 2 million shares of its common stock at a cost of approximately $83 million, and for the year, the company repurchased 11million shares of its common stock at a cost of approximately $469 million.
Mattel Girls & Boys Brands
For the fourth quarter, worldwide gross sales for the Mattel Girls & Boys Brands business unit were $1.35 billion, down 4 percent versus a year ago. Worldwide gross sales for the Barbie brand were down 13 percent and worldwide gross sales for Other Girls Brands were up 12 percent, primarily driven by Disney Princess. Worldwide gross sales for the Wheels business, which includes the Hot Wheels, Matchbox, and Tyco R/C brands, were down 11 percent for the quarter. Worldwide gross sales for the Entertainment business, which includes Radica and Games, were down 6 percent for the quarter, driven by lower sales of Radica and Games, partially offset by the Disney Planes movie property.
For the year, worldwide gross sales for the Mattel Girls & Boys Brands business unit were $4.32 billion, up 3 percent versus a year ago. Worldwide gross sales for the Barbie brand were down 6 percent for the year. Worldwide gross sales for Other Girls Brands were up 25 percent for the year, primarily driven by Monster High. Worldwide gross sales for the Wheels business, which includes the Hot Wheels, Matchbox, and Tyco R/C brands, were down 8 percent for the year. Worldwide gross sales for the Entertainment business, including Radica and Games, were flat for the year, primarily driven by the Disney Planes movie property, offset by decreases in Radica and Games.
Fisher-Price Brands
For the fourth 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 $647.4 million, down 13 percent versus the prior year.
For the year, worldwide gross sales for the Fisher-Price Brands business unit were $2.12 billion, down 6 percent versus the prior year, driven by a decline in Fisher-Price Core, partially offset by strong performance from Thomas & Friends, Octonauts, and new franchises, such as Mike the Knight and Bubble Guppies.
American Girl Brands
For the fourth quarter, gross sales for the American Girl Brands business unit were $331.6 million, up 3 percent versus the prior year, primarily driven by Saige, the 2013 Girl of the Year.
For the year, gross sales for the American Girl Brands business unit were $632.5 million, up 11 percent versus the prior year.
2012 Litigation Charge
On January 24, 2013, the U.S. Ninth Circuit Court of Appeals issued a decision on the litigation related to Carter Bryant and MGA Entertainment, Inc. The Ninth Circuit agreed with Mattel that the verdict and damages on MGA’s toy fair claims must be reversed, and directed the District Court to dismiss the claims without prejudice. The Ninth Circuit’s decision vacated the District Court’s judgment awarding MGA approximately $172 million, consisting primarily of compensatory and punitive damages, for the claims MGA made arising out of conduct at toy fairs. Consistent with the District Court’s affirmance of the award of fees and costs against Mattel arising out of the separate copyright claims, Mattel took a charge of $137.8 million ($87.1 million net of taxes) with respect to the fourth quarter of 2012 to cover these fees and costs.
Top Video Views on TimeToPlayMag.com, January 2014
The team at TimetoPlayMag.com produces countless videos. Those videos live on TimetoPlayMag.com, TimetoPlayMag.com’s YouTube channel, and are shared across TTP’s social media channels as well as the websites and social media channels of numerous toy companies. Today we are sharing the top video views for January 2014.
1 Orbeez Luxury Spa from The Maya Group – 106,201 views
2 My First Disney Princess Under the Sea Surprise Ariel from Tollytots – 89,395 views
3 Disney Frozen Castle & Ice Palace Playset from Mattel – 86,609 views
4 Boom Boom Balloon from Spin Master – 82,614 views
5 Doc McStuffins Rockin’ Doc Sing-Along Boom Box from eKids – 77,380 views
6 Ever After High Secret Hearts Diary from Mattel – 57,867 views
7 Style Me Up! Sweet Key Charms from Wooky – 55,865 views
8 Monster High Create-A-Monster Color-Me-Creepy Design Chamber from Mattel – 54,778 views
9 Barbie Digital Makeover from Mattel – 51,193 views
10 Disney Princess Ariel’s 2-in-1 Royal Ship from Mattel – 50,154 views
11 Glitzi Globes Starter Kit from Moose Toys – 43,069 views
12 Imaginext DC Super Friends Batcave from Fisher-Price – 42,666 views
13 Doc McStuffins All Better! Game from Wonder Forge – 40,989 views
14 Shimmer N Sparkle Cra-Z-Loom Bracelet Maker from Cra-Z-Art – 40,696 views
15 Bubble Guppies Swim-sational School from Fisher-Price – 39,682 views
16 Disney Frozen Musical Magic Elsa from Mattel – 39,151 views
17 Barbie & Her Sisters in A Pony Tale Train & Ride Horse from Mattel – 36,951 views
18 Strawberry Shortcake Baby Doll Care Center from Hauck – 35,814 views
19 Sofia the First 2-in-1 Sea Palace from Mattel – 34,200 views
20 Gelarti Foils Activity Pack from Moose Toys – 31,859 views
Trending on TimetoPlayMag.com: Fashion Dolls
TimetoPlayMag.com is showcasing what’s trending in each specific product category. Today it’s FASHION DOLLS. This trending list is determined by consumers. It’s the number of page views for that item in the previous 30 days and is updated every 24 hours.