-----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, BmxGMUrSqgV8w3C34Z/9IRu8pCgji9AdwWt0GBrJl6V4pzHlTtSR5Nen9Tqd8zAv EYDDbK6yKVVIaqZ05FZ74g== 0000063276-99-000001.txt : 19990204 0000063276-99-000001.hdr.sgml : 19990204 ACCESSION NUMBER: 0000063276-99-000001 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990203 ITEM INFORMATION: FILED AS OF DATE: 19990203 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: 99520224 BUSINESS ADDRESS: STREET 1: 333 CONTINENTAL BLVD CITY: EL SEGUNDO STATE: CA ZIP: 90245 BUSINESS PHONE: 3102522000 8-K 1 YEAR END 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: February 3, 1999 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 February 2, 1999, the Company announced that results for the full-year 1998 were in line with reduced expectations cited in a December 14, 1998 press release. Income for the year ended December 31 totaled $363.8 million or $1.20 per share, before a previously announced, after-tax charge of $27 million or $0.09 per share related to a voluntary recall of certain Power Wheels ride-on vehicles and an additional one-time, after-tax charge of $4 million or $0.01 per share. This second charge, incurred in the fourth quarter, is related to an expected settlement of litigation stemming from a Federal Trade Commission action involving Toys "R" Us. Earnings for the full year 1997 were $499.5 million or $1.65 per share before charges. Net sales for 1998 were $4.782 billion, down 1 percent from $4.835 billion in 1997. Net income for the 1998 fourth quarter totaled $63.8 million or $0.21 per share, before the $0.01 charge, down from $195.1 million or $0.64 per share in the 1997 quarter. Net sales for the 1998 fourth quarter were $1.543 billion, down from $1.613 billion in 1997. U.S. revenues were down 2 percent for the year, and international volume was down 1 percent in U.S. dollars and up 1 percent in local currency. 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 Company's ability to successfully integrate the operations of The Learning Company following its merger into the Company; 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 OPERATIONS
FOR THE FOR THE THREE MONTHS ENDED YEAR ENDED ------------------------- ------------------------- Dec. 31, Dec. 31, Dec. 31, Dec. 31, (In thousands, except per share amounts) 1998 1997 1998 1997 (a) - ---------------------------------------- ----------- ----------- ---------- --------- Net Sales $ 1,543,082 $ 1,613,093 $4,781,892 $4,834,616 Cost of sales 760,992 795,018 2,418,899 2,434,616 ----------- ---------- ---------- ---------- Gross Profit 782,090 818,075 2,362,993 2,400,000 Advertising and promotion expenses 351,844 300,569 813,293 779,139 Other selling and administrative expenses 289,104 220,192 882,127 796,952 Amortization of intangibles 13,761 7,932 41,929 32,179 Special charge (b) 6,000 - 44,000 - Integration/restructuring costs (c) - - - 275,000 Other (income) expense, net (2,981) (4,968) 5,748 1,518 ----------- ---------- ---------- ---------- Operating Profit 124,362 294,350 575,896 515,212 Interest expense 41,158 27,348 110,833 90,130 ----------- ---------- ---------- ---------- Income Before Income Taxes 83,204 267,002 465,063 425,082 Provision for income taxes 23,658 71,873 132,799 135,288 ----------- ---------- ---------- ---------- Income Before Extraordinary Item 59,546 195,129 332,264 289,794 Extraordinary item, net of tax - - - (4,610) ----------- ---------- ---------- ---------- Net Income 59,546 195,129 332,264 285,184 Less: dividends on convertible preferred stock 1,990 1,990 7,960 10,505 ----------- ---------- ---------- ---------- Net Income Applicable to Common Shares $ 57,556 $ 193,139 $ 324,304 $ 274,679 =========== ========== ========== ========== Income Per Share - Basic Income Before Extraordinary Item, Net of Tax $ 0.20 $ 0.66 $ 1.11 $ 0.96 Extraordinary Item - Debt Retirement - - - (0.01) ----------- ---------- ---------- ---------- Net Income Per Share - Basic $ 0.20 $ 0.66 $ 1.11 $ 0.95 =========== ========== ========== ========== Average Number of Common Shares Outstanding - Basic 287,630 290,962 291,481 290,450 =========== ========== ========== ========== Income Per Share - Diluted (d)(e) Income Before Extraordinary Item, Net of Tax $ 0.20 $ 0.64 $ 1.10 $ 0.94 Extraordinary Item - Debt Retirement - - - (0.01) ----------- ---------- ---------- ---------- Net Income Per Share - Diluted $ 0.20 $ 0.64 $ 1.10 $ 0.93 =========== ========== ========== ========== Average Number of Common and Common Equivalent Shares Outstanding - Diluted 290,399 306,053 303,243 295,653 =========== ========== ========== ==========
MATTEL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
Dec. 31, Dec. 31, (In thousands) 1998 1997 - -------------- ----------- ----------- ASSETS Cash $ 212,454 $ 694,947 Accounts receivable, net 983,050 1,091,416 Inventories 584,358 428,844 Prepaid expenses and other current assets 277,948 246,529 ----------- ----------- Total current assets 2,057,810 2,461,736 Property, plant and equipment, net 736,457 601,597 Other assets 1,467,898 740,458 ----------- ----------- Total Assets $ 4,262,165 $ 3,803,791 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Short-term borrowings $ 134,006 $ 17,468 Current portion of long-term liabilities 33,518 13,659 Accounts payable and accrued liabilities 944,434 939,562 Income taxes payable 205,253 202,735 ----------- ----------- Total current liabilities 1,317,211 1,173,424 Senior notes 400,000 100,000 Medium-term notes 540,500 520,500 Long-term debt 43,007 55,036 Other long-term liabilities 141,249 132,761 Shareholders' equity 1,820,198 1,822,070 ----------- ----------- Total Liabilities and Shareholders' Equity $ 4,262,165 $ 3,803,791 =========== =========== (a) Consolidated results are restated for the March 1997 merger with Tyco Toys, Inc. (b) For the year ended December 1998, 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. For the quarter and year ended December 1998, represents a one-time charge in connection with the Toys R Us-related antitrust litigation settlement. The related tax benefit of $2 million is included in the provision for income taxes. (c) 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. (d) Diluted income per share for the year ended December 1998 was $1.20 per share, after absorbing $0.11 per share related to the amortization of intangibles, before the $0.09 per share effect of a one-time charge of $27 million after taxes related to a voluntary recall of Power Wheels brand ride-on vehicles, and the $0.01 per share effect of a nonrecurring charge of $4 million after-tax settlement in connection with the Toys R Us-related antitrust litigation. (e) Diluted income per share for the year ended December 1997 was $1.65 per share, after absorbing $0.09 per share related to the amortization of intangibles, before the $0.71 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/ Lee B. Essner ------------------------- Lee B. Essner Assistant General Counsel and Assistant Secretary Date: February 3, 1999 ----------------------
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