Mattel 2000 Annual Report Download - page 5

three
movie-related products. Additionally, we restruc-
tured our relationship with Disney in 2000 to focus
on infant and preschool products, which is a more
profitable business for us. Finally, we introduced our
Harry Potter products late in 2000, which registered
strong sales during the holiday season, and we are
optimistic about the potential of these products
given the upcoming worldwide release of the first
Harry Potter movie in the fall of 2001.
Looking at our international performance,
our business in Europe, the world’s second largest
toy market, grew slightly in local currencies, revers-
ing a four-year decline. Latin America sales grew at
double-digit rates for the year, led by exceptional
performance in Mexico. Our Canadian business,
benefiting from new strategies, also performed well
to achieve nearly double-digit growth. While more
work needs to be done to complete the turnaround
of our international business, we are increasingly
confident about our future, as second-half 2000
sales advanced 10 percent in local currencies, follow-
ing two years of decline.
For 2000, worldwide income from continu-
ing operations was $293.3 million or $0.69 per
share, excluding restructuring and non-recurring
charges, compared with $326.7 million or $0.76 per
share in 1999. Including non-recurring charges,
full-year earnings per share from continuing opera-
tions were $0.40.
Throughout the company, we are increasing
our focus on profitability and cost reduction. Our
margins have deteriorated in recent years, and we
intend to reverse that trend. To jump start our cost
reduction initiative, we announced a financial realign-
ment plan in September, which will achieve $200
million in savings during the next three years. Early
progress is on-track with the established targets.
The deployment of our cash flow has also
been scrutinized. As a result, 2000 capital spending
was cut and we took the painful action of reducing
the dividend paid to shareholders. The cash we save
will be used to reduce debt, and thereby strengthen
our balance sheet, providing substantial benefits to
shareholders in the years to come.
Going forward, we will not only invest in
our brands, we will also invest in our people. It
takes talented people to innovate and execute better
than the competition, and we are fortunate to have
the very best employees in the toy industry. In order
to achieve this objective, we recently launched a new,
comprehensive Strategic Plan for Human Resources,
a first in Mattel’s history.
We also added depth to the Board of
Directors, with the election in 2000 of board mem-
bers Eugene Beard and Ralph Whitworth, and the
recently announced election of G. Craig Sullivan,
Chairman and Chief Executive Officer of The
Clorox Company. The Board supports strong