Fourth Quarter 2021 Highlights Versus Prior Year
- Net Sales of $1,795 million, up 10% as reported, and 11% in constant currency
- Reported Operating Income of $257 million, an increase of $69 million; Adjusted Operating Income of $264 million, an increase of $64 million
- Reported Net Income of $226 million, an increase of $97 million, which includes a non-cash benefit of $49 million resulting from the release of valuation allowances on certain deferred tax assets
- Adjusted EBITDA of $321 million, an increase of $48 million
Full Year 2021 Highlights Versus Prior Year
- Net Sales of $5,458 million, up 19% as reported, and 18% in constant currency
- Reported Gross Margin of 48.1%, a decrease of 80 basis points; Adjusted Gross Margin of 48.2%, a decrease of 80 basis points
- Reported Operating Income of $730 million, an increase of $355 million; Adjusted Operating Income of $763 million, an increase of $322 million
- Reported Net Income of $903 million, an increase of $779 million, which includes a non-cash benefit of $541 million resulting from the release of valuation allowances on certain deferred tax assets
- Reported EPS of $2.53, an increase of $2.18 per share, which includes a benefit of $1.51 resulting from the release of valuation allowances on certain deferred tax assets
- Adjusted EBITDA of $1,007 million, an increase of $301 million
- Cash Flows Provided by Operating Activities of $485 million, an increase of $200 million; Free Cash Flow of $334 million, an increase of $167 million
- Company announces 2022 guidance and 2023 goals
EL SEGUNDO, Calif., Feb. 9, 2022 – Mattel, Inc. (NASDAQ: MAT) today reported fourth quarter and full year financial results.
Ynon Kreiz, Chairman and CEO of Mattel, said: “Mattel’s results for the quarter and full year came in well ahead of expectations, capping another exceptional performance for the company. We have made significant progress on our transformation strategy over the last few years, and our turnaround is now complete. We are in growth mode and believe we are well-positioned to continue our momentum, with 2022 guidance exceeding prior goals and an even stronger outlook for 2023.”
Mr. Kreiz continued: “In 2021, our products resonated with consumers at levels we have not seen in years and, per The NPD Group, we continued to gain market share. We also strengthened our position as a partner of choice for the major entertainment companies and, in addition to our own IP, have a formidable line-up of evergreen properties to drive future growth. The Mattel team stayed committed to our purpose to empower the next generation to explore the wonder of childhood and reach their full potential, and to our mission to create innovative products and experiences that inspire, entertain, and develop children through play.”
Anthony DiSilvestro, CFO of Mattel, said: “2021 was another year of strong financial performance. We generated significant free cash flow, reduced debt, and further improved our balance sheet. We remain focused on executing our strategy and creating long-term shareholder value.”
For the fourth quarter, Net Sales were up 10% as reported, and 11% in constant currency, versus the prior year’s fourth quarter. Reported Operating Income was $257 million, an increase of $69 million, and Adjusted Operating Income was $264 million, an increase of $64 million. Reported Earnings Per Share were $0.63, an increase of $0.26 per share, which includes a benefit of $0.14 resulting from the release of valuation allowances on certain deferred tax assets, and Adjusted Earnings Per Share were $0.53, an increase of $0.13 per share.
For the year, Net Sales were up 19% as reported, and 18% in constant currency, versus the prior year. Reported Operating Income was $730 million, an increase of $355 million, and Adjusted Operating Income was $763 million, an increase of $322 million. Reported Earnings Per Share were $2.53, an increase of $2.18 per share, which includes a benefit of $1.51 resulting from the release of valuation allowances on certain deferred tax assets, and Adjusted Earnings Per Share were $1.30, an increase of $0.76 per share.
Financial Overview
Fourth Quarter 2021
Net Sales in the North America segment increased 14% as reported and in constant currency, versus the prior year’s fourth quarter.
Gross Billings in the North America segment increased 13% as reported and in constant currency, driven by growth in Dolls (including Barbie®, Polly Pocket®, and Spirit™), Action Figures, Building Sets, Games, and Other (including Masters of the Universe®, Jurassic World™, and Plush), Vehicles (including CARS™), and Infant, Toddler, and Preschool (including Power Wheels®).
Net Sales in the International segment increased 9% as reported, and 12% in constant currency.
Gross Billings in the International segment increased 7% as reported, and 9% in constant currency, driven by growth in Action Figures, Building Sets, Games, and Other (including Jurassic World, Masters of the Universe, Plush, Games, and MEGA®) and Dolls (including Barbie, Spirit, Enchantimals®, and Polly Pocket), partially offset by decreases in Vehicles (including Hot Wheels® and CARS) and Infant, Toddler, and Preschool (including Fisher-Price® and Thomas & Friends™).
Net Sales in the American Girl® segment decreased 6% as reported and in constant currency.
Gross Billings in the American Girl segment decreased 6% as reported and in constant currency, primarily due to a successful Historical Girl launch that benefitted the prior year, partially offset by growth across other segments.
Reported Gross Margin decreased to 49.3%, versus 51.4% in the prior year’s fourth quarter. Adjusted Gross Margin decreased to 49.3%, versus 51.5% in the prior year’s fourth quarter. The decrease in Reported and Adjusted Gross Margin was primarily due to input cost inflation, partially offset by pricing, favorable fixed cost absorption, and savings from the Optimizing for Growth program.
Reported Other Selling and Administrative Expenses were flat versus the prior year at $361 million. Adjusted Other Selling and Administrative Expenses increased by $5 million to $355 million. The increase in Adjusted Other Selling and Administrative Expenses was primarily due to investments in the business while effectively managing the company’s cost structure.
Full Year 2021
Net Sales in the North America segment increased 22% as reported and in constant currency, versus the prior year.
Gross Billings in the North America segment increased 22% as reported, and 21% in constant currency, driven by growth in Dolls (including Barbie, Spirit, and Polly Pocket), Action Figures, Building Sets, Games, and Other (including Jurassic World, Masters of the Universe, WWE™, Plush, and MEGA), Vehicles (including Hot Wheels and CARS), and Infant, Toddler, and Preschool (including Fisher-Price and Thomas & Friends and Power Wheels).
Net Sales in the International segment increased 17% as reported, and 15% in constant currency.
Gross Billings in the International segment increased 16% as reported, and 14% in constant currency, driven by growth in Dolls (including Barbie, Spirit, and Polly Pocket), Action Figures, Building Sets, Games, and Other (including Jurassic World, Masters of the Universe, Plush, Games, and MEGA), Vehicles (including Hot Wheels and Matchbox®), and Infant, Toddler, and Preschool (including Fisher-Price and Thomas & Friends).
Net Sales in the American Girl segment increased 5% as reported and in constant currency.
Gross Billings in the American Girl segment increased 4% as reported and in constant currency, driven by growth in owned retail channels as COVID-19-related restrictions subsided.
Reported Gross Margin decreased to 48.1%, versus 48.9% in the prior year. Adjusted Gross Margin decreased to 48.2%, versus 49.0% in the prior year. The decrease was primarily due to input cost inflation and unfavorable foreign exchange, partially offset by favorable fixed cost absorption, savings from the Optimizing for Growth program, and pricing.
Reported Other Selling and Administrative Expenses increased by $9 million, or 1%, to $1,351 million. Adjusted Other Selling and Administrative Expenses increased by $39 million, or 3%, to $1,321 million. The increase in Reported and Adjusted Other Selling and Administrative Expenses was primarily due to higher compensation, investments in the business, and foreign exchange, partially offset by benefits from the Optimizing for Growth program.
For the year ended December 31, 2021, Cash Flows Provided by Operating Activities were $485 million, an increase of $200 million, versus the prior year, primarily driven by higher net income, adjusted for the non-cash release of valuation allowance on deferred tax assets, partially offset by higher working capital usage. Cash Flows Used for Investing Activities improved by $27 million to $105 million, primarily driven by proceeds from the disposal of assets and a business, and proceeds from foreign currency forward contracts, partially offset by higher capital expenditures. Cash Flows Used for Financing Activities and Other were $411 million, as compared to $21 million in the prior year, with the increase primarily due to cash used for repayment and refinancing of senior notes.
Gross Billings by Categories
Fourth Quarter 2021
Worldwide Gross Billings for Dolls were $804 million, up 13% as reported, and 14% in constant currency, versus the prior year’s fourth quarter, driven by growth in Barbie, Spirit, Polly Pocket, and Enchantimals, partially offset by a decrease in Cave Club®.
Worldwide Gross Billings for Infant, Toddler, and Preschool were $401 million, down 1% as reported and in constant currency, primarily due to a decrease in Fisher-Price and Thomas & Friends, partially offset by growth in Power Wheels.
Worldwide Gross Billings for Vehicles were $381 million, down 4% as reported, and 3% in constant currency, primarily due to a decrease in Hot Wheels, partially offset by growth in Matchbox.
Worldwide Gross Billings for Action Figures, Building Sets, Games, and Other were $405 million, up 25% as reported, and 26% in constant currency, primarily driven by growth in Action Figures (including Jurassic World and Masters of the Universe), Plush, and Games.
Full Year 2021
Worldwide Gross Billings for Dolls were $2,299 million, up 22% as reported, and 21% in constant currency, versus the prior year, primarily driven by growth in Barbie, Spirit, and Polly Pocket.
Worldwide Gross Billings for Infant, Toddler, and Preschool were $1,221 million, up 6% as reported, and 5% in constant currency, primarily driven by growth in Fisher-Price and Thomas & Friends and Power Wheels.
Worldwide Gross Billings for Vehicles were $1,253 million, up 13% as reported, and 12% in constant currency, primarily driven by growth in Hot Wheels and Matchbox.
Worldwide Gross Billings for Action Figures, Building Sets, Games, and Other were $1,309 million, up 32% as reported, and 31% in constant currency, primarily driven by growth in Action Figures (including Jurassic World, Masters of the Universe, and WWE), Plush, and Building Sets (including MEGA).
