-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, L7GqQNnfcXrtm/QvW+9wqLZcYLpnw1u4rLAMApuy3YZ5UFMn7s2FOK4DO1I82uDy zD+PRmbdDzy+aczmj9Xtyg== 0000063276-98-000017.txt : 19981030 0000063276-98-000017.hdr.sgml : 19981030 ACCESSION NUMBER: 0000063276-98-000017 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19981029 ITEM INFORMATION: FILED AS OF DATE: 19981029 SROS: NYSE SROS: PCX FILER: COMPANY DATA: COMPANY CONFORMED NAME: MATTEL INC /DE/ CENTRAL INDEX KEY: 0000063276 STANDARD INDUSTRIAL CLASSIFICATION: DOLLS & STUFFED TOYS [3942] IRS NUMBER: 951567322 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-05647 FILM NUMBER: 98733250 BUSINESS ADDRESS: STREET 1: 333 CONTINENTAL BLVD CITY: EL SEGUNDO STATE: CA ZIP: 90245 BUSINESS PHONE: 3102522000 8-K 1 THIRD QUARTER 1998 EARNINGS RELEASE SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K Current Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 Date of Report: October 29, 1998 MATTEL, INC. ------------ (Exact name of registrant as specified in its charter) Delaware 001-05647 95-1567322 - ------------------------------------------------------------------------------ (State or other jurisdiction (Commission (I.R.S. Employer of incorporation) File No.) Identification No.) 333 Continental Boulevard, El Segundo, California 90245-5012 - ------------------------------------------------------------------------------ (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (310) 252-2000 ---------------------------- N/A - ------------------------------------------------------------------------------ (Former name or former address, if changed since last report) Item 5. Other Events - ------- ------------ On October 22, 1998, the Company announced that earnings for the third quarter ended September 30, 1998 totaled $226.9 million or $0.75 per share, before a one-time, after-tax charge of $27 million or $0.09 per share related to a voluntary recall of certain Power Wheels brand ride-on vehicles. Earnings for the 1997 third quarter were $223.7 million or $0.73 per share before charges. The Power Wheels recall is not the result of any serious injury, but involves the replacement of electronic components that may overheat, particularly when consumers make alterations to the product. Net sales for the 1998 third quarter were $1.67 billion, up 8 percent from $1.56 billion in the 1997 quarter. Barbie sales were flat as compared to the same quarter last year, a significant turnaround from the decline reported in the first half of 1998. The earnings results were in line with a September 24 press release, which stated that further reductions in buying by Toys 'R' Us would result in earnings per share of approximately $0.75 per share for the quarter and $1.80 to $1.85 per share for the year. The Company believes it is still on track to achieve these results, before the non-recurring charge. For the first nine months of 1998, earnings totaled $299.9 million or $0.98 per share before the special one-time charge, compared with $304.4 million or $1.00 per share in 1997, before charges. Net sales for the period were $3.24 billion, up 1 percent from $3.22 billion for the 1997 nine months. Note: Forward-looking statements included in this release with respect to the financial condition, results of operations and business of the Company, which include, but are not limited to, sales levels, the Mattel and Tyco restructuring charge, special charges, other non-recurring charges, cost savings and profitability, are subject to certain risks and uncertainties that could cause actual results to differ materially from those set forth in such statements. These include without limitation: the Company's dependence on the timely development, introduction and customer acceptance of new products; significant changes in buying patterns of major customers; possible weaknesses of international markets; the impact of competition on revenues and margins; the effect of currency fluctuations on reportable income; unanticipated negative results of litigation, governmental proceedings or environmental matters; and other risks and uncertainties as may be detailed from time to time in the Company's public announcements and SEC filings. MATTEL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME
FOR THE FOR THE THREE MONTHS ENDED NINE MONTHS ENDED ------------------------- ------------------------- Sept. 30, Sept. 30, Sept. 30, Sept. 30, (In thousands, except per share amounts) 1998 1997 1998 1997(a) - ---------------------------------------- ---------- ---------- ---------- ---------- Net Sales $1,672,120 $1,555,347 $3,238,810 $3,221,523 Cost of sales 819,883 755,070 1,657,907 1,639,598 ---------- ---------- ---------- ---------- Gross Profit 852,237 800,277 1,580,903 1,581,925 Advertising and promotion expenses 253,493 244,231 461,449 478,570 Other selling and administrative expenses 218,543 198,767 593,023 576,760 Special charge (b) 38,000 - 38,000 - Integration/restructuring costs (d) - - - 275,000 Other expense, net 25,057 14,892 36,897 30,733 ---------- ---------- ---------- ---------- Operating Profit 317,144 342,387 451,534 220,862 Interest expense 37,658 24,632 69,675 62,782 ---------- ---------- ---------- ---------- Income Before Income Taxes 279,486 317,755 381,859 158,080 Provision for income taxes 79,821 94,100 109,141 63,415 ---------- ---------- ---------- ---------- Income Before Extraordinary Item 199,665 223,655 272,718 94,665 Extraordinary item, net of tax - (4,610) - (4,610) ---------- ---------- ---------- ---------- Net Income 199,665 219,045 272,718 90,055 Less: dividends on convertible preferred stock 1,990 2,838 5,970 8,515 ---------- ---------- ---------- ---------- Net Income Applicable to Common Shares $ 197,675 $ 216,207 $ 266,748 $ 81,540 ========== ========== ========== ========== Income Per Share - Basic Income Before Extraordinary Item, Net of Tax $ 0.68 $ 0.76 $ 0.91 $ 0.30 Extraordinary Item - Debt Retirement - (0.02) - (0.02) ---------- ---------- ---------- ---------- Net Income Per Share - Basic $ 0.68 $ 0.74 $ 0.91 $ 0.28 ========== ========== ========== ========== Average Number of Common Shares Outstanding - Basic 291,870 290,650 292,779 290,278 ========== ========== ========== ========== Income Per Share - Diluted (c)(e) Income Before Extraordinary Item, Net of Tax $ 0.66 $ 0.73 $ 0.89 $ 0.30 Extraordinary Item - Debt Retirement - (0.02) - (0.02) ---------- ---------- ---------- ---------- Net Income Per Share - Diluted $0.66 $ 0.71 $ 0.89 $ 0.28 ========== ========== ========== ========== Average Number of Common and Common Equivalent Shares Outstanding - Diluted 303,551 306,870 304,962 294,437 ========== ========== ========== ==========
MATTEL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
Sept. 30, Sept. 30, Dec. 31, (In thousands) 1998 1997 1997 - -------------- ----------- ----------- ----------- ASSETS Cash $ 142,589 $ 68,171 $ 694,947 Accounts receivable, net 1,781,696 1,846,994 1,091,416 Inventories 764,048 552,661 428,844 Prepaid expenses and other current assets 283,924 183,522 246,529 ----------- ----------- ----------- Total current assets 2,972,257 2,651,348 2,461,736 Property, plant and equipment, net 714,297 609,648 601,597 Other assets 1,471,311 813,622 740,458 ----------- ----------- ----------- Total Assets $ 5,157,865 $ 4,074,618 $ 3,803,791 =========== =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Short-term borrowings $ 852,228 $ 352,833 $ 17,468 Current portion of long-term liabilities 3,500 13,522 13,659 Accounts payable and accrued liabilities 1,068,616 1,041,409 939,562 Income taxes payable 209,671 162,142 202,735 ----------- ----------- ----------- Total current liabilities 2,134,015 1,569,906 1,173,424 Long-term debt 143,154 155,787 155,036 Medium-Term notes 820,500 460,500 520,500 Other long-term liabilities 139,228 124,166 132,761 Shareholders' equity 1,920,968 1,764,259 1,822,070 ----------- ----------- ----------- Total Liabilities and Shareholders' Equity $ 5,157,865 $ 4,074,618 $ 3,803,791 =========== =========== =========== (a) Consolidated results are restated for the March 1997 merger with Tyco Toys, Inc. (b) Represents a one-time charge related to a voluntary recall of Power Wheels brand ride-on vehicles. The related tax benefit of $11 million is included in the provision for income taxes. (c) Diluted income per share for the three and nine months ended September 30, 1998 was $0.75 and $0.98 per share, before the $0.09 per share effect in each period of a one-time charge of $27 million after taxes related to a voluntary recall of Power Wheels brand ride-on vehicles. (d) Represents a nonrecurring charge for transaction, integration and restructuring costs related to the Tyco merger. The related tax benefit of $65 million is included in the provision for income taxes. (e) Diluted income per share for the nine months ended September 30, 1997 was $1.00, before the $0.70 per share effect of the merger-related nonrecurring charge of $210 million after taxes.
SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. MATTEL, INC. Registrant By: /s/ Robert Normile ----------------------------- Robert Normile Vice President, Associate Date: October 29, 1998 General Counsel and Secretary ---------------------- -----END PRIVACY-ENHANCED MESSAGE-----