-----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, DzHs8TK3yiVwxsk8HAhAwjBkTBfTia7BNz0uFvu6uRmVvqSal7ADDQCDIfDgvT5P G0Wu+bSDBQtcWebV0y9Yjg== 0000898430-99-001589.txt : 19990419 0000898430-99-001589.hdr.sgml : 19990419 ACCESSION NUMBER: 0000898430-99-001589 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990416 ITEM INFORMATION: FILED AS OF DATE: 19990416 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: 99595402 BUSINESS ADDRESS: STREET 1: 333 CONTINENTAL BLVD CITY: EL SEGUNDO STATE: CA ZIP: 90245 BUSINESS PHONE: 3102522000 8-K 1 FORM 8-K 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: April 16, 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) Information to be included in the Report ---------------------------------------- Item 5. Other Events - ------- ------------ On April 15, 1999, Mattel, Inc. reported a net loss of $17.9 million or $.07 per share for the quarter ended March 31, 1999, compared to net income of $12.7 million or $.04 per share in the first quarter of 1998. Net sales for the first quarter of 1999 were $692.1 million, down 2.0% from $705.2 million in the first quarter of 1998. Mattel's profitability was affected by the addition of Pleasant Company, due to the $.04 per share impact of goodwill amortization and interest costs related to the acquisition of that company. Increased sales, general and administrative expense levels were also a factor in the first quarter of 1999 and are being addressed through a business realignment and a restructuring described below. Mattel's gross margin was 45.8% for the first quarter of 1999, compared to 45.9% for the first quarter of 1998. On a comparable basis, excluding the impact of Pleasant Company, inventories were down by $31 million from the first quarter of 1998, and accounts receivable were down by $116 million. Mattel also announced that a planned realignment of its operations to reduce overhead and advertising costs would include the closure of certain of its facilities and a workforce reduction affecting over 3,000 positions, or more than 10% of Mattel's current employees. Based on such actions and the anticipated completion of the merger of Mattel and The Learning Company, Inc., Mattel reported that it expects to incur a pre- tax charge of approximately $300 million to $350 million to be taken in the second quarter of 1999. Approximately $75 million of the one-time charge is expected to be related to merger transaction costs, approximately $90 million is expected to be related to merger integration costs, and $135 million to $185 million is expected to be related to Mattel restructuring costs. Mattel expects the combined actions to result in cost savings of approximately $50 million in 1999 and at least $400 million over the following three years. However, the amount of the expected cost savings are preliminary estimates and there can be no assurance that Mattel's actions will result in such cost savings. On April 15, 1999, Mattel also announced that it will spend an initial $50 million to launch an Internet venture, which is expected to result in the creation of a new subsidiary later this year, a portion of which may be offered to the public. Mattel expects that it will be able to offset a portion of its investment in the Internet venture with cost savings from the restructuring discussed above. Mattel's goal is to create a premier online destination and E-commerce site to better serve children and their families. Mattel's strategy to reach this goal is premised on attracting consumers to its sites by bringing together the branded proprietary content of both Mattel and The Learning Company, Inc. at one "Mattel.com" Web destination. After the merger with The Learning Company, Inc., Mattel expects to have over 80 websites and a database of approximately 25 million consumers. 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, costs 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 THREE MONTHS ENDED -------------------------- MARCH 31, MARCH 31, (In thousands, except per share amounts) 1999 1998 - ---------------------------------------- ----------- ----------- Net Sales $ 692,116 $ 705,164 Cost of sales 375,379 381,246 ----------- ----------- Gross Profit 316,737 323,918 Advertising and promotion expenses 92,051 98,081 Other selling and administrative expenses 209,414 183,791 Other expense, net 2,269 185 ----------- ----------- Operating Profit Before Amortization 13,003 41,861 Amortization of intangibles 13,153 7,713 ----------- ----------- Operating (Loss) Profit (150) 34,148 Interest expense 24,858 16,392 ----------- ----------- (Loss) Income Before Income Taxes (25,008) 17,756 (Benefit) provision for income taxes (7,152) 5,087 ----------- ----------- Net (Loss) Income (17,856) 12,669 Less: dividends on convertible preferred stock 1,990 1,990 ----------- ----------- Net (Loss) Income Applicable to Common Shares $ (19,846) $ 10,679 =========== =========== Net (Loss) Income Per Share - Basic (a) $ (0.07) $ 0.04 =========== =========== Average Number of Common Shares Outstanding - Basic 286,153 293,048 =========== ===========
- -------------- (a) The impact of amortization of intangibles, net of taxes, on (loss) income per share for the period ended March 1999 was $0.03 compared to $0.02 in 1998. MATTEL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 31, MARCH 31, DEC. 31, (In thousands) 1999 1998 1998 - -------------- ------------- ------------- ------------ ASSETS Cash $ 50,215 $ 331,884 $ 212,454 Accounts receivable, net 880,360 987,906 983,050 Inventories 567,658 531,623 584,358 Prepaid expenses and other current assets 290,673 251,397 277,948 ----------- ------------ ---------- Total current assets 1,788,906 2,102,810 2,057,810 Property, plant and equipment, net 733,535 602,793 736,457 Other assets 1,454,893 738,191 1,467,898 ----------- ------------ ---------- Total Assets $ 3,977,334 $ 3,443,794 $4,262,165 =========== ============ ========== LIABILITIES AND STOCKHOLDERS' EQUITY Short-term borrowings $ 259,435 $ 18,204 $ 134,006 Current portion of long-term liabilities 33,401 13,577 33,518 Accounts payable and accrued liabilities 620,385 636,684 944,434 Income taxes payable 175,535 134,284 205,253 ----------- ------------ ---------- Total current liabilities 1,088,756 802,749 1,317,211 Senior notes 400,000 100,000 400,000 Medium-term notes 540,500 520,500 540,500 Long-term debt 42,856 54,089 43,007 Other long-term liabilities 148,953 126,210 141,249 Stockholders' equity 1,756,269 1,840,246 1,820,198 ----------- ------------ ---------- Total Liabilities and Stockholders' Equity $ 3,977,334 $ 3,443,794 $4,262,165 =========== ============ ===========
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 Date: April 16, 1999 Vice President and General Counsel -------------- -----END PRIVACY-ENHANCED MESSAGE-----