Mattel 2002 Annual Report Download - page 31

The following table provides a comparison of the reported results for 2001 and 2000 along with charges
related to the financial realignment plan, goodwill amortization and other nonrecurring charges (in millions):
For the Year
2001 2000
Reported Charges & Reported Charges &
Results Goodwill Results Goodwill
Net sales ............................................... $4,687.9 $ — $4,565.5 $ —
Grossprofit ............................................ $2,148.9 $ (28.2) $1,993.2 $ (78.6)
Advertising and promotion expenses ........................ 543.6 0.3 578.3 4.8
Other selling and administrative expenses .................... 964.2 6.0 981.8 66.4
Amortization of goodwill ................................. 46.1 46.1 46.6 46.6
Restructuring and other charges ............................ 15.7 15.7 15.9 15.9
Operating income ....................................... 579.3 (96.3) 370.6 (212.3)
Interest expense ......................................... 155.1 — 153.0 —
Interest (income) ........................................ (15.5) — (11.0) —
Other non-operating expense, net ........................... 9.7 5.5 3.2 13.9
Income from continuing operations before income taxes ......... $ 430.0 $(101.8) $ 225.4 $(226.2)
Net sales from continuing operations for 2001 increased 3% to $4.7 billion, from $4.6 billion in 2000. Gross
sales within the US decreased by 1% from 2000 and accounted for 67% of consolidated gross sales in 2001
compared to 69% in 2000. In 2001, gross sales internationally increased 10% from 2000. Excluding the
unfavorable impact of foreign currency exchange, international gross sales increased 13% compared to 2000.
Worldwide gross sales in the Girls category increased 3%, or 4% in local currency, to $2.2 billion in 2001.
Domestic sales declined by 4%, while international sales increased by 17%, or 20% in local currency. The
growth in the Girls category was driven by Polly Pocket!®, Diva Starz™, What’s Her Face!™, American Girl®
and international sales of Barbie®. Worldwide Barbie®sales decreased 3%. Barbie®sales in the US declined
12% in 2001 as compared to the strong growth recorded in 2000, when sales increased 9% over 1999. The
decline in US Barbie®sales was largely due to lower shipments of Holiday Celebration™Barbie®in response to
lower demand at retail, lower sales of adult-targeted collector dolls resulting from a weakening retail climate for
higher-priced collectible items, and continuing inventory management by retailers. International sales for
Barbie®were up 12%, or 15% in local currency, reflecting the benefit of early product availability and stronger
alignment of worldwide sales and marketing plans.
Worldwide gross sales in the Boys-Entertainment category grew 6%, or 7% in local currency, to
$1.3 billion. Domestic sales grew by 2%, while international sales increased by 13%, or 16% in local currency.
The worldwide Wheels business increased 1% due to a 9% sales growth in Hot Wheels®products, which was
partially offset by declines in the Matchbox®and Tyco®Radio Control brands. The Entertainment business grew
14%, largely due to the global introduction of Harry Potter™products. Sales generated by the Harry Potter™
brand more than offset the decline of the Disney entertainment business, which has been completely phased out
in 2002. In the second quarter of 2001, Mattel expanded its games business through the acquisition of Pictionary,
Inc., worldwide owner of the Pictionary®game brand and associated rights. Beginning in January 2002, Mattel
started manufacturing, marketing and distributing Pictionary®to international markets. In the US and Canada,
Mattel is the licensor of the property through an independent contractor.
Worldwide gross sales in the Infant & Preschool category were $1.6 billion, down 1%. Domestic sales were
flat, while international sales decreased 4%, or 3% in local currency. Growth in sales of core Fisher-Price®and
Power Wheels®products was offset by a decline in licensed character brands.
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