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Q4 2009 Earnings Call
January 29, 2010 8:30 am ET
Dianne Douglas - Investor Relations
Robert A. Eckert - Chairman of the Board, Chief Executive Officer
Kevin M. Farr - Chief Financial Officer
Timothy Conder - Wells Fargo
Tony Gikas - Piper Jaffray
Felicia Hendrix - Barclays Capital
Greg Badishkanian - Citigroup
Linda Bolton-Weiser - Caris & Company
Sean McGowan - Needham & Company
John Taylor - Arcadia Investments
Margaret Whitfield - Sterne, Agee & Leach
Drew Crum - Stifel Nicolaus & Co.
Gerrick Johnson - BMO Capital Markets
Previous Statements by MAT
» Mattel Q3 2009 Earnings Call Transcript
» Mattel Q2 2009 Earnings Call Transcript
» Mattel, Inc. Q1 2009 Earnings Call Transcript
Dianne Douglas Evans
Thank you. As you know, this morning we reported Mattel's fourth quarter and full year 2009 financial results. In a few minutes, Bob Eckert, Mattel's Chairman and CEO, and Kevin Farr, Mattel's CFO, will provide comments on the results and then the call will be opened for your questions.
Certain statements Bob and Kevin make during the call may include forward-looking statements related to the future performance of our overall business, brands and product lines. These statements are based on currently available operating, financial, economic and competitive information and they are subject to a number of significant risks and uncertainties which could cause our actual results to differ materially from those projected in the forward-looking statements.
We describe some of these uncertainties in the risk factors section of our 2008 annual report on Form 10-K, as well as in our 2009 quarterly reports on Form 10-Q and in other filings we make with the SEC from time to time. Mattel does not update forward-looking statements and expressly disclaims any obligation to do so.
Information required by Regulation G regarding non-GAAP financial measures is available on the investor and media section of our corporate website, Mattel.com, under the subheading Financial Information and Earnings Releases.
Now I would like to turn the call over to Bob.
Robert A. Eckert
Thank you Diane and good morning everyone. At the beginning of 2009 I made some promises on behalf of the thousands of employees who work at Mattel. I said, “Our agenda is clear. To deliver improved execution to position the company for the future and our promise is simple; to reward investors, run the business well and responsible and make kids’ lives fun.”
In 2009 we accomplished just that. We improved execution across the supply chain and throughout the company by realigning our infrastructure, controlling costs and expenses, tightly managing working capital especially inventories and reducing capital spending by doing only business critical projects and doing them exceptionally well. The result was improved profitability, a stronger balance sheet and improved cash flow which we used to lower debt, increase cash balances and continue to reward shareholders through our strong annual dividend.
We were also successful in bringing magic to the lives of children through innovative new toys including the revitalization of some of our classic and time honored brands such as Barbie and Hot Wheels. Last year as you know we celebrated the 50th anniversary of the world’s most iconic doll and the world celebrated with us. This incredible milestone for the Barbie brand allowed us a unique platform to reconnect girls of all ages with the legacy of the brand; fashion, aspiration and cultural relevance.
We connected with girls beyond the traditional 30-second television spot. Barbie was everywhere. We hosted global events like fashion shows and birthday bashes, made breakthrough partnerships with fashion icons like Karl Lagerfeld and Christian Louboutin as well as specialty retail outlets like Pottery Barn and Sephora and talked to girls in their own voice through social media outlets like Facebook and Twitter.
The result of all of this cultural conversation I am proud to say is that for the first time in years all three brand health indicators are headed in the right direction for Barbie. Our US shipments into retailers are up. Retail takeaway is up. Share is up. That is the trifecta. Barbie is back. In 2010 we expect to build on the momentum we created in 2009.
I am also pleased to report growth across much of our portfolio. In our wheels business both Hot Wheels and Matchbox experienced strong global performance driven by continued strength in the core product lines which includes basic cars and track and play sets as well as key innovations such as Hot Wheels’ color shifters and Matchbox’s Rocky the Robot truck which was a sell out by the holidays.
In our other girls business the Little Mommy large doll line did very well in the holiday season driven by the successful launch of our innovative Walk and Giggle doll. As for our games business we saw growth in core products like Uno and Apples to Apples as well as with our adult and family games like Pictionary and Blokus. But the most exciting news in the games arena was Mind Flex, an early sell out and ultimately one of the hottest toys of the year.
Max Steel also enjoyed another year of record sales as Latin America’s number one boy’s action brand. We also experienced success with our partners with outstanding performance in our Disney Princess line driven by core dolls, fashions and accessories including robust sales late in the year of the Princess and the Frog line. Disney Pixar’s re-launch of the Toy Story franchise in fall 2009 drove performance in our Toy Story line of toys. Additionally, Disney Pixar Cars had another strong year further establishing it as an ever green brand. As you are well aware, we were awarded new toy licenses last year that are coming to life in 2010. WWE wrestling and hit entertainment’s Thomas and Friends have already hit store shelves with Disney Pixar’s Toy Story 3 hitting in early summer.
Even though 2009 was a year of sacrifice and hard work for Mattel employees I am extremely proud that for the third consecutive year Fortune Magazine has named Mattel to its 100 Best Companies to Work For list. Think about it. A year with essentially no performance bonus payouts, no merit or promotional salary increases and a significant reduction in force and our employees continue to proclaim their dedication and loyalty to our company. Like me, I know they are really looking forward to seizing the opportunities this year.