Mattel, Inc.

any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press star followed by the number one on your telephone keypad. And if you would like to withdraw that question, again, press star one. Thank you. I will now turn the conference over to David Sopanovich, Head of Investor Relations. David, you may begin your conference.

Thank you, Operator, and good afternoon, everyone. Joining me today are Enon Crise, Mattel's Chairman and Chief Executive Officer, and Anthony DiSilvestro, Mattel's Chief Financial Officer. As you know, this afternoon we reported Mattel's first quarter 2024 financial results. We will begin today's call with Enon and Anthony providing commentary on our results, after which we will provide some time for questions. To help supplement our discussion today, we have provided you with a slide presentation. Our discussion, slide presentation, and earnings release may reference non-GAAP financial measures, including adjusted gross profit and adjusted gross margin, adjusted other selling and administrative expenses, adjusted operating income or loss, and adjusted operating income or loss margin, adjusted earnings per share, Adjusted tax rate, earnings before interest, taxes, depreciation, and amortization, or EBITDA, adjusted EBITDA, free cash flow, free cash flow conversion, leverage ratio, net debt, and constant currency. In addition, we present changes in gross billings, a key performance indicator. Please note that we may refer to gross billings as billings in our presentation and that gross billings figures referenced on this call will be stated in constant currency unless stated otherwise. For today's presentation, references to POS and consumer demand exclude the impact related to our Russia business, given our decision to pause all shipments into Russia in 2022. Our slide presentation can be viewed in sync with today's call when you access it through the investor section of our corporate website, corporate.mattel.com. The information required by Regulation G regarding non-GAAP financial measures, as well as information regarding our key performance indicator, is included in our earnings release and slide presentation. And both documents are also available in the investor section of our corporate website. The preliminary financial results included in the press release and slide presentation represent the most current information available to management. The company's actual results, when disclosed in its Form 10Q, may differ from these preliminary results as a result of the completion of the company's financial closing procedures, final adjustments, completion of the review by the company's independent registered public accounting firm, and other developments that may arise between now and the disclosure of the final results. Before we begin, I'd like to caution you that certain statements made during the call are forward looking, including statements related to the future performance of our business, brands, categories, and product lines. Any statements we make about the future are, by their nature, uncertain. These statements are based on currently available information and assumptions, and they are subject to a number of significant risks and uncertainties that could cause our actual results to differ from those projected in the forward-looking statements. We describe some of these uncertainties in the risk factor section of our 2023 annual report on Form 10-K, our earnings release and presentation, and other filings we make with the SEC from time to time. as well as in other public statements. Mattel does not update forward-looking statements and expressly disclaims any obligation to do so, except as required by law. Now, I'd like to turn the call over to Enoch.

Thank you for joining our first quarter 2024 earnings call. We're off to a good start for the year with significant gross margin expansion, positive adjusted EBITDA, very strong improvement in free cash flow, and are on track to achieve full-year guidance. Looking at key financial metrics for the first quarter as compared to last year, net sales declined 1% as reported and in constant currency. Adjusted gross margin increased 830 basis points to 48.3%. Adjusted EBITDA improved $67 million from a negative $14 million to a positive $54 million, and free cash flow improved by $254 million. Gross billings increased in North America, Latin America, and Asia Pacific with a decline in EMEA. Total company POS increased low single digits with improving trends through the quarter, and growth in dolls, vehicles, games, and building sets. Mattel maintains share globally and gains share in its three leader categories, dolls, vehicles, and infant, toddler, and preschool, as well as in games per second. With our strong cash flow generation, we improved our financial position, ending the quarter with a cash balance of $1.1 billion. after repurchasing $100 million of shares in the quarter. Consistent with our stated capital allocation priorities, we plan to continue share repurchases in 2024. We believe the industry benefited in the first quarter from an early Easter. That said, this does not change our expectation that the toy industry will decline in 2024 although at a lesser rate than 2023. We expect to outpace the industry and gain market share in 2024. We are executing our strategy to grow Mattel's IP-driven toy business and expand our entertainment offering. We expect to continue benefiting from innovation across the toy portfolio and market share gains, meaningful progress on entertainment projects following the success of the Barbie movie, and greater efficiencies and productivity improvements with our Optimizing for Profitable Growth program, which is targeted to achieve $200 million of annualized cost savings between 2024 and 2026. On the toy side of the company, Barbie was the number one doll's property globally and continued to gain significant share per circana. We kicked off Barbie's 65th anniversary celebration and are bringing new innovation to the brand, such as the recently launched Mini Barbie Land segment. Hot Wheels led the vehicle's category per circana, with further expansion of its die-cast line and new offerings for race-averse RC and skate. Fisher-Price is launching its new wood segment next month, and this week we welcomed a new head of Fisher-Price based at our East Aurora, New York campus. Game's performance was strong, and Uno was once again the number one card game property per Circona. Mattel Creations, a rapidly growing D2C channel serving adult collectors, is expanding fan engagement. We recently hosted Mattel Creations Revealed, a two-day virtual fan event featuring six hours of exclusive behind-the-scenes content and nearly 100 new collectible toys and exclusive consumer products with multiple same-day sellouts. We also made progress in capturing value of RIP outside the toy aisle. Following the successful award season for the Barbie movie, highlighted by Grammy, Golden Globe, and Oscar wins, its cultural impact continues to reverberate around the world. The film is a showcase for our strategy, bringing together the global resonance of our brands, our ability to attract and collaborate with leading partners and demand creation expertise. We continue to make meaningful progress, advancing our theatrical slate of 15 announced films in development with more news to share soon. In television, Barbie and Stacey to the Rescue, an animated movie, launched globally on Netflix. Season two of Barbie, A Touch of Magic, premiered last week. Hot Wheels Let's Race, our new animated series, debuted on Netflix and became a top 10 program in 69 countries. In digital gaming, we announced a new licensing partnership with Take-Two Interactive to publish a new Barbie mobile game planned for release later this year. In location-based entertainment, We announced a second Mattel Adventure Park through our licensing partnership with Epic Resort Destinations, which is scheduled to open in Kansas City in 2026. In closing, our first quarter performance was highlighted by significant margin expansion and very strong improvement in cash flow with positive consumer demand and improving trends. Mattel is in the strongest financial position it has been in years, and we are on track to achieve our full-year guidance. Beyond this year, we expect to grow sales and earnings in 2025. We are executing our strategy to grow our IP-driven toy business and expand our entertainment offering and are well-positioned to create long-term shareholder value. And now I will turn the call over to Anthony.