Item 2.04. Triggering Events That Accelerate or Increase a Direct Financial
Obligation or an Obligation under an Off-Balance Sheet Arrangement
On November 30, 2022, Mattel, Inc. ("Mattel") issued an irrevocable notice of
redemption to holders of its 3.150% Notes due 2023 (the "2023 Notes") for the
redemption of all $250 million outstanding aggregate principal amount of the
2023 Notes. The redemption date for the 2023 Notes will be December 30, 2022.
The redemption price for the 2023 Notes will be calculated in accordance with
the indenture governing the 2023 Notes and will be equal to 100% of the
principal amount of the 2023 Notes being redeemed plus accrued and unpaid
interest to but excluding the redemption date.
Cautionary Note Regarding Forward-Looking Statements
Mattel cautions investors that this Current Report on Form 8-K contains
forward-looking statements, which are statements that relate to the future and
are, by their nature, uncertain. Forward-looking statements can be identified by
the fact that they do not relate strictly to historical or current facts. The
use of words such as "anticipates," "expects," "intends," "plans," "look
forward," "confident that," "believes" and "targeted," among others, generally
identify forward-looking statements. These forward-looking statements are based
on currently available operating, financial, economic and other information and
assumptions, and are subject to a number of significant risks and uncertainties.
A variety of factors, many of which are beyond Mattel's control, could cause
actual future results to differ materially from those projected in the
forward-looking statements, and are currently, and in the future may be,
amplified by the COVID-19 pandemic. Specific factors that might cause such a
difference include, but are not limited to: (i) potential impacts of and
uncertainty regarding the COVID-19 pandemic (and actions taken in response to it
by governments, businesses, and individuals) on Mattel's business operations,
financial results and financial position and on the global economy, including
its impact on Mattel's sales; (ii) Mattel's ability to design, develop, produce,
manufacture, source, ship and distribute products on a timely and cost-effective
basis; (iii) sufficient interest in and demand for the products and
entertainment Mattel offers by retail customers and consumers to profitably
recover Mattel's costs; (iv) downturns in economic conditions affecting Mattel's
markets which can negatively impact retail customers and consumers, and which
can result in lower employment levels and lower consumer disposable income and
spending, including lower spending on purchases of Mattel's products; (v) other
factors which can lower discretionary consumer spending, such as higher costs
for fuel and food, drops in the value of homes or other consumer assets, and
high levels of consumer debt; (vi) potential difficulties or delays Mattel may
experience in implementing cost savings and efficiency enhancing initiatives;
(vii) other economic and public health conditions or regulatory changes in the
markets in which Mattel and its customers and suppliers operate, which could
create delays or increase Mattel's costs, such as higher commodity prices, labor
costs or transportation costs, or outbreaks of disease; (viii) inflation and
currency fluctuations, including movements in foreign exchange rates, which can
lower Mattel's net revenues and earnings, and significantly impact Mattel's
costs; (ix) the concentration of Mattel's customers, potentially increasing the
negative impact to Mattel of difficulties experienced by any of Mattel's
customers, such as bankruptcies or liquidations or a general lack of success, or
changes in their purchasing or selling patterns; (x) the inventory policies of
Mattel's retail customers, as well as the concentration of Mattel's revenues in
the second half of the year, which coupled with reliance by retailers on quick
response inventory management techniques, increases the risk of underproduction,
overproduction, and shipping delays; (xi) legal, reputational, and financial
risks related to security breaches or cyberattacks; (xii) work disruptions,
including as a result of supply chain disruption such as plant or port closures,
which may impact Mattel's ability to manufacture or deliver product in a timely
and cost-effective manner; (xiii) the impact of competition on revenues, margins
and other aspects of Mattel's business, including the ability to offer products
that consumers choose to buy instead of competitive products, the ability to
secure, maintain, and renew popular licenses from licensors of entertainment
properties, and the ability to attract and retain talented employees and adapt
to evolving workplace models; (xiv) the risk of product recalls or product
liability suits and costs associated with product safety regulations;
(xv) changes in laws or regulations in the United States and/or in other major
markets, such as China, in which Mattel operates, including, without limitation,
with respect to taxes, tariffs, trade policies, or product safety, which may
increase Mattel's product costs and other costs of doing business, and reduce
Mattel's earnings and liquidity; (xvi) business disruptions or other unforeseen
impacts due to economic instability, political instability, civil unrest, armed
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hostilities (including the impact of the war in Ukraine), natural and man-made
disasters, or other catastrophic events; (xvii) failure to realize the planned
benefits from any investments or acquisitions made by Mattel; (xviii) the impact
of other market conditions or third party actions or approvals, including those
that result in any significant failure, inadequacy, or interruption from vendors
or outsourcers, which could reduce demand for Mattel's products, delay or
increase the cost of implementation of Mattel's programs, or alter Mattel's
actions and reduce actual results; (xix) changes in financing markets or the
inability of Mattel to obtain financing on attractive terms; (xx) the impact of
litigation, arbitration, or regulatory decisions or settlement actions;
(xxi) Mattel's ability to navigate regulatory frameworks in connection with new
areas of investment, product development, or other business activities, such as
non-fungible tokens and cryptocurrency; (xxii) uncertainty from the expected
discontinuance of London Interbank Offer Rate (LIBOR) and transition to any
other interest rate benchmark; and (xxiii) other risks and uncertainties as may
be described in Mattel's periodic filings with the Securities and Exchange
Commission, including the "Risk Factors" section of Mattel's Annual Report on
Form 10-K for the fiscal year ended December 31, 2021 and Quarterly Reports on
Form 10-Q for the quarters ended March 31, 2022, June 30, 2022, and
September 30, 2022, as well as in Mattel's other public statements. Mattel does
not update forward-looking statements and expressly disclaims any obligation to
do so, except as required by law.
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