EX-99.0 2 0002.txt PRESS RELEASE DATED JULY 20, 2000 EXHIBIT 99.0 For Immediate Contacts: News Media Investor Relations Release Lisa Marie Bongiovanni Jessica Fisher 7/19/00 310-252-3524 310-252-2703 bongiovl@mattel.com fisherje@mattel.com MATTEL REPORTS SECOND QUARTER RESULTS ------------------------------------- Barbie and Other Core Brands Demonstrate Strength LOS ANGELES, July 20, 2000 - Mattel, Inc. (NYSE:MAT) today reported 2000 second quarter income from continuing operations of $6.0 million or $.01 per share, versus underlying income of $16.5 million or $.04 per share in the 1999 second quarter. Net sales from continuing operations were $817.8 million, a 2 percent increase, or 4 percent in local currency, from $802.3 million in last year's second quarter. "Led by growth in our core brands, including Barbie, Fisher-Price and Hot Wheels, Mattel has experienced increased sales domestically for the third quarter in a row," said Robert A. Eckert, chairman and chief executive officer of Mattel. "International markets proved to be difficult in the first half of this year as retailers, specifically in Europe, continue to adjust to just-in-time inventories and the impact of a strong dollar. Based on retail sell through, we expect to see an improvement in international sales during the second half of the year." On a regional basis, sales from continuing operations increased 7 percent in the U.S., and were down 9 percent in international markets, or down 3 percent in local currency. GIRLS With worldwide gross sales at $315.3 million for the quarter, the Girls division, which includes the Barbie, Polly Pocket!, and Cabbage Patch Kids brands, grew by 1 percent. Barbie sales advanced 5 percent worldwide. INFANT AND PRESCHOOL Worldwide gross sales for the Infant and Preschool division, which includes the Fisher-Price, Sesame Street and Disney brands, were $305.1 million, or flat, for the quarter. Robust domestic growth in core Fisher-Price brands offset declines in international sales and licensed character products. BOYS-ENTERTAINMENT Consisting of the Wheels and Entertainment categories, the Boys- Entertainment division experienced a 2 percent increase in worldwide sales, with flat domestic sales and increased international sales. The Wheels category, with worldwide quarterly gross sales at $130.1 million, grew by 1 percent; and the Entertainment category, with worldwide quarterly gross sales at $67.1 million, grew by 4 percent. Available in U.S. markets only, gross sales for the Direct Marketing division, which includes Pleasant Company, and the Barbie Collector and Fisher-Price catalogs, were $41.8 million for the quarter, an increase of 15 percent. As previously announced, Mattel Interactive is being treated as a discontinued operation in the company's financial statements. The sales process continues for Mattel's software business. Mattel, Inc. is a worldwide leader in the design, manufacture and marketing of family products. With headquarters in El Segundo, Calif., Mattel has offices and facilities in 36 foreign countries and sells its products in more than 150 nations throughout the world. 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, restructuring and integration charges, special charges, other non-recurring charges, cost savings, operating efficiencies 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, manufacture, introduction and customer acceptance of new products; significant changes in buying patterns of major customers; uncertainty regarding the sale of the company's software business; 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 OPERATIONS
FOR THE FOR THE THREE MONTHS ENDED SIX MONTHS ENDED ------------------------- ------------------------- June 30, June 30, June 30, June 30, (In thousands, except per share amounts) 2000 1999 2000 1999 ---------------------------------------- ---------- ---------- ---------- ---------- Net Sales $ 817,797 $ 802,271 $1,511,058 $1,490,586 Cost of sales 453,918 442,612 832,822 815,553 ---------- ---------- ---------- ---------- Gross Profit 363,879 359,659 678,236 675,033 Advertising and promotion expenses 98,586 96,875 189,873 188,036 Other selling and administrative expenses (a) 218,711 198,511 472,910 400,030 Restructuring and other charges (b) (2,000) 293,100 (2,000) 293,100 Other (income) expense, net (9,026) 985 (15,399) 3,229 ---------- ---------- ---------- ---------- Operating Income (Loss) Before Amortization 57,608 (229,812) 32,852 (209,362) Amortization of intangibles 13,373 12,960 25,905 25,972 ---------- ---------- ---------- ---------- Operating Income (Loss) 44,235 (242,772) 6,947 (235,334) Interest expense 35,945 27,614 60,301 52,472 ---------- ---------- ---------- ---------- Income (Loss) Before Income Taxes 8,290 (270,386) (53,354) (287,806) Provision (benefit) for income taxes 2,285 (59,405) (14,729) (64,195) ---------- ---------- ---------- ---------- Income (Loss) From Continuing Operations 6,005 (210,981) (38,625) (223,611) Income (Loss) From Discontinued Operations (c) - 6,647 (126,606) 24,326 ---------- ---------- ---------- ---------- Net Income (Loss) 6,005 (204,334) (165,231) (199,285) Less: dividends on convertible preferred stock - 1,990 - 3,980 ---------- ---------- ---------- ---------- Net Income (Loss) Applicable to Common Shares $ 6,005 $ (206,324) $ (165,231) $ (203,265) ========== ========== ========== ========== Income (Loss) Per Share - Basic (c) Income (Loss) From Continuing Operations $ 0.01 $ (0.52) $ (0.09) $ (0.56) Income (Loss) From Discontinued Operations - 0.02 (0.30) 0.06 ---------- ---------- ---------- ---------- Net Income (Loss) Per Share - Basic $ 0.01 $ (0.50) $ (0.39) $ (0.50) ========== ========== ========== ========== Average Number of Common Shares Outstanding - Basic 425,818 409,040 425,655 402,786 ========== ========== ========== ========== Income (Loss) Per Share - Diluted (c) Income (Loss) From Continuing Operations $ 0.01 $ (0.52) $ (0.09) $ (0.56) Income (Loss) From Discontinued Operations - 0.02 (0.30) 0.06 ---------- ---------- ---------- ---------- Net Income (Loss) Per Share - Diluted $ 0.01 $ (0.50) $ (0.39) $ (0.50) ========== ========== ========== ========== Average Number of Common and Common Equivalent Shares Outstanding - Diluted 427,782 409,040 425,655 402,786 ========== ========== ========== ==========
MATTEL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, June 30, Dec. 31, (In thousands) 2000 1999 1999 -------------- ----------- ----------- ----------- ASSETS Cash $ 129,693 $ 53,922 $ 247,354 Accounts receivable, net 1,057,388 1,064,066 1,001,972 Inventories 633,513 615,188 436,316 Prepaid expenses and other current assets 206,743 240,602 166,217 ----------- ----------- ----------- Total current assets 2,027,337 1,973,778 1,851,859 Property, plant and equipment, net 678,643 710,460 724,791 Other assets 1,716,192 1,453,259 1,635,328 Net investment in discontinued operations (c) 378,571 509,353 461,986 ----------- ----------- ----------- Total Assets $ 4,800,743 $ 4,646,850 $ 4,673,964 =========== =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Short-term borrowings $ 1,220,185 $ 658,719 $ 369,549 Current portion of long-term liabilities 2,708 133,344 3,173 Accounts payable and accrued liabilities 653,418 819,017 1,007,910 Income taxes payable 163,397 90,718 184,789 ----------- ----------- ----------- Total current liabilities 2,039,708 1,701,798 1,565,421 Senior notes 300,000 300,000 400,000 Medium-term notes 540,500 540,500 540,500 Long-term debt 42,042 42,701 42,380 Other long-term liabilities 182,660 158,301 162,976 Stockholders' equity 1,695,833 1,903,550 1,962,687 ----------- ----------- ----------- Total Liabilities and Stockholders' Equity $ 4,800,743 $ 4,646,850 $ 4,673,964 =========== =========== =========== (a) Includes a $38.4 million after-tax charge for compensation expense, including forgiveness of certain executive loans, related to the departure of certain senior executives in the first quarter of 2000. The impact of this charge on earnings was $0.09 per share. (b) The nonrecurring credit in the second quarter of 2000 represents net adjustments made to the restructuring and nonrecurring charges recorded in 1999. In the second quarter of 1999, Mattel incurred a $227 million after-tax charge for integration, restructuring and other charges. The impact of this charge on earnings was $0.56 per share for both the quarter and six month periods. (c) The Consumer Software segment is being reported as a discontinued operation effective March 31, 2000, and the consolidated financial statements have been reclassified to segregate the net investment in and operating results of the Consumer Software segment.