-----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, UG2VTGErwk62wzh3W0fY1q91XcS0b8dsl+RIqKh83yGmsjD/RH54jhXE7Riewxm3 it6Ncnoyy/jj0NB8BMHdSA== 0000063276-99-000005.txt : 19990723 0000063276-99-000005.hdr.sgml : 19990723 ACCESSION NUMBER: 0000063276-99-000005 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990722 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990722 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: 99668881 BUSINESS ADDRESS: STREET 1: 333 CONTINENTAL BLVD CITY: EL SEGUNDO STATE: CA ZIP: 90245 BUSINESS PHONE: 3102522000 8-K 1 SECOND QUARTER 1999 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: July 22, 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 - ------- ------------ Mattel, Inc. hereby incorporates by reference herein its press release dated July 22, 1999 regarding its 1999 second quarter results of operations, a copy of which is included as Exhibit 99.0 attached hereto. Item 7. Financial Statements and Exhibits - ------- --------------------------------- (a) Financial statements of businesses acquired: None (b) Pro forma financial information: None (c) Exhibits: 99.0 Press release dated July 22, 1999. 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/ KEVIN M. FARR ----------------------------- Kevin M. Farr Senior Vice President and Corporate Controller (Chief Accounting Officer and Duly Authorized Officer of the Registrant) Date: July 22, 1999 ------------------- EX-99.0 2 PRESS RELEASE DATED JULY 22, 1999 EXHIBIT 99.0 FOR IMMEDIATE RELEASE CONTACT: Mattel, Inc. July 22, 1999 News Media Investor Relations Glenn Bozarth Jessica Fisher 310-252-3521 310-252-2703 MATTEL SECOND QUARTER EARNINGS INCREASE 88 PERCENT TO $.15, BEFORE CHARGES ------------------------------------------- LOS ANGELES, July 22 - Mattel, Inc. (NYSE:MAT) today reported 1999 second quarter income before charges of $62.5 million, an 81 percent increase from last year's $34.6 million. Earnings per share for the quarter, before charges, were $.15, up 88 percent from $.08 per share in the 1998 quarter. Net sales were $1.04 billion, up 1 percent from $1.03 billion last year. Mattel stated in April that it would incur a 1999 second quarter pre- tax charge, and today announced $345 million in charges related to integration, restructuring and other non-recurring costs. For the first half of 1999, income before charges was $70.5 million or $.17 per share, more than double last year's $30.1 million or $.07 per share. Sales for the 1999 six months were equal with last year at $1.92 billion. "Our growth in EPS reflects a continuing strong gross margin and a 190 basis point reduction in SG&A as a percent of sales, which clearly demonstrates that we are focused on profitability," Jill E. Barad, Mattel's chairman and chief executive officer, said. "Our volume growth was less than we originally projected, due in large part to a very difficult European environment. As a result, we saw sales decline 9 percent in our markets outside of the United States. "Our U.S. business was up 5 percent in the quarter, driven by increases in Fisher-Price(R), American Girl(R), Mattel Media and The Learning Company," Barad said. "This was offset by a decrease in Entertainment and a small decline in Barbie(R) and Wheels, although shipping for both of them was up for the first six months. "Our new Barbie products are fueling strong over-the-counter sales, as evidenced by a 9 percent increase in retail sales for the second quarter at our key accounts. And Barbie consumer takeaway has improved even more in the first two weeks of July," she said. -more- 2-2-2-2-2 "U.S. Fisher-Price has made an excellent comeback, and Worldwide Wheels continues to be one of our fastest growing categories through the first half," she said. "Our Entertainment business will get a big boost with Disney and Pixar's much anticipated `Toy Story 2,' which now appears to be the #1 entertainment property of the second half. "Our combined software business had exceptionally strong growth, exceeding $400 million in shipping in the first six months, and the X3 Computer Microscope from Intel(R)Play(TM) looks to be one of the most successful new technology products of the holiday season," Barad said. "And, as we expected, The Learning Company is producing above average growth in both revenue and margin, which was one of the reasons this merger made so much sense for Mattel. "We are now well underway with the integration of TLC and the more efficient alignment of our $6 billion company," she said. The $345 million in charges announced today include approximately $75 million related to merger transaction costs, $40 million related to merger integration and $200 million associated with Mattel restructuring. These combined actions are expected to result in estimated cost savings of $50 million in 1999 and at least $400 million over the following three years. The $345 million in charges also includes an additional $16 million related to the October 1998 voluntary recall of the company's Power Wheels(R) vehicles and $14 million for environmental remediation. "We remain firmly committed to delivering $1.50 in earnings per share for the year, before charges," Barad said. "We look forward to a strong second half, and have therefore resumed our share repurchase program after a suspension related to our merger with The Learning Company. We plan to buy back a total of 4 million shares this year." Mattel is a worldwide leader in the design, manufacture and marketing of family products. With headquarters in El Segundo, California, Mattel has offices and facilities in 36 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, 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 SIX MONTHS ENDED ------------------------- ------------------------- June 30, June 30, June 30, June 30, (In thousands, except per share amounts) 1999 (a) 1998 (a) 1999 (a) 1998 (a) - ---------------------------------------- ---------- ---------- ---------- ---------- Net Sales $1,040,154 $1,033,509 $1,919,113 $1,918,009 Cost of sales 527,653 524,269 968,115 968,881 ---------- ---------- ---------- ---------- Gross Profit 512,501 509,240 950,998 949,128 Advertising and promotion expenses 136,475 135,030 253,234 254,205 Other selling and administrative expenses 245,134 263,402 504,628 505,494 Charge for incomplete technology (b) - 16,826 - 56,826 Restructuring and other charges (b) 345,000 20,887 348,889 36,117 Other income, net (3,961) (7,922) (7,999) (10,069) ---------- ---------- ---------- ---------- Operating (Loss) Profit Before Amortization (210,147) 81,017 (147,754) 106,555 Amortization of intangibles 19,419 33,091 42,428 82,691 ---------- ---------- ---------- ---------- Operating (Loss) Profit (229,566) 47,926 (190,182) 23,864 Interest expense 32,314 18,169 61,444 41,263 ---------- ---------- ---------- ---------- (Loss) Income Before Income Taxes (261,880) 29,757 (251,626) (17,399) (Benefit) provision for income taxes (57,546) 25,179 (52,341) 33,980 ---------- ---------- ---------- ---------- Net (Loss) Income (204,334) 4,578 (199,285) (51,379) Less: dividends on convertible preferred stock 1,990 1,990 3,980 3,980 ---------- ---------- ---------- ---------- Net (Loss) Income Applicable to Common Shares $ (206,324) $ 2,588 $ (203,265) $ (55,359) ========== ========== ========== ========== Net (Loss) Income Per Share - Basic (c)(d) $ (0.50) $ 0.01 $ (0.50) $ (0.15) ========== ========== ========== ========== Average Number of Common Shares Outstanding - Basic (d) 409,040 384,596 402,786 380,674 ========== ========== ========== ========== Net (Loss) Income Per Share - Diluted (c)(d) $ (0.50) $ 0.01 $ (0.50) $ (0.15) ========== ========== ========== ========== Average Number of Common and Common Equivalent Shares Outstanding - Diluted (d) 409,040 423,407 402,786 380,674 ========== ========== ========== ==========
MATTEL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, June 30, Dec. 31, (In thousands) 1999 (a) 1998 (a) 1998 (a) - -------------- ----------- ----------- ----------- ASSETS Cash $ 88,915 $ 373,788 $ 469,213 Accounts receivable, net 1,387,949 1,361,351 1,150,051 Inventories 717,275 671,271 644,270 Prepaid expenses and other current assets 416,654 349,476 371,772 ----------- ----------- ----------- Total current assets 2,610,793 2,755,886 2,635,306 Property, plant and equipment, net 736,474 645,471 763,121 Other assets 1,729,537 1,076,803 1,748,958 ----------- ----------- ----------- Total Assets $ 5,076,804 $ 4,478,160 $ 5,147,385 =========== =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Short-term borrowings $ 658,719 $ 256,454 $ 199,006 Current portion of long-term liabilities 133,348 22,802 33,666 Accounts payable and accrued liabilities 944,722 856,992 1,111,304 Income taxes payable 193,033 176,848 299,058 ----------- ----------- ----------- Total current liabilities 1,929,822 1,313,096 1,643,034 Senior notes 500,955 290,955 600,955 Medium-term notes 540,500 520,500 540,500 Long-term debt 43,054 43,297 43,007 Other long-term liabilities 158,923 140,208 149,086 Stockholders' equity 1,903,550 2,170,104 2,170,803 ----------- ----------- ----------- Total Liabilities and Stockholders' Equity $ 5,076,804 $ 4,478,160 $ 5,147,385 =========== =========== =========== (a) Consolidated results are restated for the May 1999 merger with The Learning Company. (b) Represents nonrecurring charges of $267 million and $270 million, net of taxes, for integration, restructuring and other charges recorded in the second quarter and the first half of 1999, respectively. Charges for the second quarter and the first half of 1998 represent restructuring and other nonrecurring charges of $30 million and $81 million, net of taxes, respectively. (c) Income per share for the 1999 quarter, before the $0.65 per share effect of the nonrecurring charges, was $0.15 per share. Income per share for the 1998 quarter, before the $0.07 per share effect of the nonrecurring charges, was $0.08 per share. Income per share for the six months ended June 1999, before the $0.67 per share effect of the nonrecurring charges, was $0.17 per share. Income per share for the six months ended June 1998, before the $0.22 per share effect of the nonrecurring charges, was $0.07 per share. (d) Share and per share data for all periods presented reflect the retroactive effect of shares issued pursuant to the merger with The Learning Company.
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