Mattel 2000 Annual Report Download - page 20

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Mattel, Inc. and Subsidiaries
CAUTIONARY STATEMENT
Certain written and oral statements made or incorporated by reference
from time to time by Mattel, Inc. and its subsidiaries (“Mattel”) or its repre-
sentatives in this Annual Report, other filings or reports filed with the
Securities and Exchange Commission, press releases, conferences, or other-
wise, are “forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. Mattel is including this caution-
ary statement to make applicable and take advantage of the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995 for any
such forward-looking statements. Forward-looking statements include
any statement that may predict, forecast, indicate, or imply future results,
performance, or achievements. Forward-looking statements can be identi-
fied by the use of terminology such as “believe”, “anticipate”, “expect”,
“estimate”, “may”, “will”, “should”, “project”, “continue”, “plans”, “aims”,
“intends”, “likely”, or other words or phrases of similar terminology.
Management cautions you that forward-looking statements involve risks
and uncertainties that may cause actual results to differ materially from
the forward-looking statements. In addition to the risk factors listed in
Mattel’s Annual Report on Form 10-K and other important factors detailed
herein and from time to time in other reports filed by Mattel with the
Securities and Exchange Commission, including Forms 8-K, 10-Q and 10-K,
the following important factors could cause actual results to differ materi-
ally from those suggested by any forward-looking statements.
Marketplace Risks
- Increased competitive pressure, both domestically and internation-
ally, which may negatively affect the sales of Mattel’s products
- Changes in public and consumer preferences, which may negatively
affect Mattel’s business
- Significant changes in the play patterns of children, whereby they
are increasingly attracted to more developmentally advanced prod-
ucts at younger ages, which may affect brand loyalty and the per-
ceived value of and demand for Mattel’s products
- Possible weaknesses in economic conditions, both domestically and
internationally, which may negatively affect the sales of Mattel’s
products and the costs associated with manufacturing and distrib-
uting these products
- Concentration of Mattel’s business with a small group of major
customers
- Significant changes in the buying patterns of major customers
- Shortages of raw materials or components, which may affect
Mattel’s ability to produce product in time to meet customer demand
- Mattel’s inability to accurately predict future consumer demand,
including during the peak holiday season
Financing Considerations
- Foreign currency exchange fluctuations, which may affect Mattel’s
reportable income
- Significant increases in interest rates, both domestically and inter-
nationally, which may negatively affect Mattel’s cost of financing
both its operations and investments
- Reductions in Mattel’s credit ratings, which may negatively impact
the cost of satisfying its financing requirements
Other Risks
- Mattel’s inability to ensure successful implemention of all phases
of its financial realignment plan and realization of the anticipated
cost savings and improved cash flows
- Development of new technologies, including digital media and the
Internet, which may create new risks to Mattel’s ability to protect
its intellectual property rights or affect the development, marketing
and sales of Mattel’s products
- Changes in laws or regulations, both domestically and internation-
ally, including those affecting the Internet, consumer products,
environmental activities, import and export laws or trade restrictions,
which may lead to increased costs or interruption of normal business
operations of Mattel
- Current and future litigation, governmental proceedings or environ-
mental matters, which may lead to increased costs or interruption
of normal business operations of Mattel
- Labor disputes, which may lead to increased costs or disruption of
any of Mattel’s operations
The risks included herein are not exhaustive. Other sections of
this Annual Report may include additional factors, which could materi-
ally and adversely impact Mattel’s business, financial condition and
results of operations. Moreover, Mattel operates in a very competitive
and rapidly changing environment. New risk factors emerge from time
to time and it is not possible for management to predict the impact of
all such risk factors on Mattel’s business, financial condition or results
of operations or the extent to which any factor, or combination of fac-
tors, may cause actual results to differ materially from those contained
in any forward-looking statements. Given these risks and uncertainties,
investors should not place undue reliance on forward-looking state-
ments as a prediction of actual results.
SUMMARY
The following discussion should be read in conjunction with the consoli-
dated financial statements and the related notes that appear elsewhere
in this Annual Report. Mattel’s consolidated financial statements for all
periods present the Consumer Software segment as a discontinued opera-
tion. Unless otherwise indicated, the following discussion relates only to
Mattel’s continuing operations. Additionally, the segment and brand
category information was restated from prior year presentation to
conform to the current management structure.
Mattel designs, manufactures, and markets a broad variety of toy
products on a worldwide basis through both sales to retailers (i.e. “cus-
tomers”) and direct to consumers. Mattel’s business is dependent in
great part on its ability each year to redesign, restyle and extend existing
core products and product lines, to design and develop innovative new
products and product lines, and to successfully market those products
and product lines. Mattel plans to continue to focus on its portfolio
of traditional brands that have historically had worldwide sustainable
appeal, to create new brands utilizing its knowledge of children’s play
patterns and to target customer and consumer preferences around the
world. Mattel also intends to expand its core brands through the
Internet, and licensing and entertainment partnerships.