EX-99.0 2 dex990.txt PRESS RELEASE DATED 7/19/01 EXHIBIT 99.0 For Immediate Release CONTACTS: NEWS MEDIA SECURITIES ANALYSTS Lisa Marie Bongiovanni Dianne Douglas 310-252-3524 310-252-2703 LisaMarie.Bongiovanni@mattel.com Dianne.Douglas@mattel.com
MATTEL REPORTS SECOND QUARTER RESULTS Second Quarter Highlights . Worldwide net sales up 4 percent; . International gross sales up 16 percent; 22 percent in local currency; . Worldwide gross sales for core brands: Barbie(R) up 2 percent; Hot Wheels(R) up 3 percent; American Girl(R) up 6 percent; and core Fisher-Price(R) up 9 percent; . Gross margin improvement of .7 percent of net sales and SG&A improvement of 1.6 percent of net sales; . Operating income up 27 percent; and . EPS of $.02 per share. LOS ANGELES, July 19, 2001 - Mattel, Inc. (NYSE:MAT) today reported 2001 second quarter income from continuing operations excluding one-time charges of $10.1 million, or $.02 per share, versus income of $4.6 million, or $.01 per share, in the 2000 second quarter. Including one-time charges, the second quarter 2001 net loss was $4.9 million, or $.01 share. Net sales from continuing operations were $854.3 million, a 4 percent increase, or 6 percent in local currency, from $817.8 million in last year's second quarter. Operating income was up 27 percent at $53.6 million. "We continued to make good progress during the quarter," said Robert A. Eckert, chairman and chief executive officer of Mattel. "Revenues were solid, led by the continued turnaround of our international business, while margins benefited from our cost reduction programs." (more) Mattel Reports Second Quarter Results/Page 2 On a regional basis, gross sales increased 1 percent in the U.S., and were up 16 percent in international markets, or up 22 percent in local currency. Girls The Girls division, which includes the Barbie(R), Diva Starz(TM) and American Girl(R) brands, achieved worldwide gross sales of $379.5 million for the quarter, an increase of 7 percent. Excluding Pleasant Company, the Girls Division achieved sales growth of 7 percent. Worldwide Barbie gross sales increased 2 percent. As expected, US shipments to customers declined in the quarter compared to last year's unusually strong shipments and were offset by strong international Barbie sales. Diva Starz and Polly Pocket(R) also performed well in the quarter. Pleasant Company gross sales advanced 6 percent. Infant and Preschool Worldwide gross sales for the Infant and Preschool division, which includes the Fisher-Price(R), Sesame Street(R) and Disney(R) character brands, were $316.8 million, or up 4 percent for the quarter. Core Fisher-Price brands continued to be strong with worldwide gross sales up 9 percent. Boys-Entertainment The Boys-Entertainment division, which consists of the Wheels and Entertainment categories, achieved worldwide gross sales of $219.8 million, a 9 percent increase. Led by growth in both Hot Wheels(R) and Tyco R/C(R), the Wheels category experienced growth of 2 percent, while the Entertainment category increased by 21 percent. (more) Mattel Reports Second Quarter Results/Page 3 Financial Realignment Plan Mattel recorded pre-tax charges of $20.8 million in the quarter as part of its $250 million financial realignment plan. The second quarter charges are largely related to the planned closure of its North American distribution and manufacturing facilities. These charges are included in Cost of Sales ($7.2 million), Restructuring and Other Charges ($13.0 million) and Other Expense ($0.6 million) in the consolidated statement of operations. Since the announcement of the plan in September of 2000, Mattel has recorded $153.0 million in pre-tax charges. The company is on target to deliver cumulative cost savings of approximately $200 million over the next three years. Live Webcast Mattel will webcast its second quarter earnings conference call at 8:30 a.m. Pacific time (11:30 a.m. Eastern time) today. The conference call will be simulcast on the Investors section of www.mattel.com. To listen to the call, -------------- log on to the website at least 15 minutes early to register, download and install any necessary audio software. An archive of the call may be accessed beginning two hours after the completion of the live call. To listen to an archive of the call via telephone, please call 1 (888) 203-1112 for domestic callers and 1 (719) 457-0820 for international callers. The passcode for both numbers is 433264. The telephonic playback will be available beginning at 11 a.m. Pacific time (2 p.m. Eastern time) today for 72 hours. About Mattel Mattel, Inc. is the worldwide leader in the design, manufacture and marketing of toy products. The company's best-selling brands include Barbie(R), Hot Wheels(R), Fisher-Price(R) and American Girl(R). 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. The company's website can be found at www.mattel.com. -------------- -###- 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, 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; 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. This release includes a forward-looking statement about anticipated cost savings under the company's financial realignment plan.
MATTEL, INC. AND SUBSIDIARIES EXHIBIT I ================================================================================================================================ FINANCIAL HIGHLIGHTS CONTINUING OPERATIONS - PRO FORMA BEFORE CHARGES JUNE 30, 2001 THREE MONTHS ENDED OR AT SIX MONTHS ENDED (In millions, except per ---------------------------------- --------------------------------------------- share amounts) 6/30/01 6/30/00 % CHANGE 6/30/01 6/30/00 % CHANGE ------------------------ ---------------------------------- --------------------------------------------- KEY P&L DATA: ------------- Net Sales $ 854.3 $ 817.8 4% $1,586.2 $1,511.1 5% Gross Margin $ 386.1 $ 363.9 6% $ 719.9 $ 678.3 6% % of Net Sales 45.2% 44.5% 45.4% 44.9 % Advertising $ 103.4 $ 98.6 5% $ 200.0 $ 189.9 5% % of Net Sales 12.1% 12.1% 12.6% 12.6 % SG&A $ 214.3 $ 218.7 -2% $ 419.5 $ 419.8 0% % of Net Sales 25.1% 26.7% 26.4% 27.8 % Operating Income $ 53.6 $ 42.2 27% $ 71.8 $ 58.1 24% % of Net Sales 6.3% 5.2% 4.5% 3.8 % Net Income (Loss) Before Charges $ 10.1 $ 4.6 $ (2.0) $ (1.6) % of Net Sales 1.2% 0.6% (0.1)% (0.1)% EPS Before Charges - Diluted $ 0.02 $ 0.01 $ 0.00 $ 0.00 KEY BALANCE SHEET DATA: ----------------------- Accounts Receivable, Net $ 947.8 $1,057.4 Days of Sales Outstanding (DSO) 94 113 Inventories $ 692.8 $ 633.5 Days of Supply (DOS) 73 74 Total Debt Outstanding $1,873.8 $2,105.4 Total Debt-to-Total Capitalization 57.1% 55.4% WORLDWIDE GROSS SALES: ---------------------- Girls $ 379.5 $ 355.7 $ 717.5 $ 672.7 % As Reported 7% 2% 7% 1% % Local Currency 8% 5% 9% 4% Boys/Entertainment $ 219.8 $ 202.1 $ 415.3 $ 382.2 % As Reported 9% 5% 9% 3% % Local Currency 10% 4% 11% 4% Infant & Preschool $ 316.8 $ 306.1 $ 559.9 $ 549.1 % As Reported 4% 1% 2% 2% % Local Currency 5% 2% 3% 2% Total Company $ 919.5 $ 870.7 $1,699.9 $1,610.7 % As Reported 6% 2% 6% 1% % Local Currency 7% 4% 7% 3%
MATTEL, INC. AND SUBSIDIARIES EXHIBIT II =================================================================================================================================== PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS JUNE 30, 2001 Three Months Ended June 30, 2001 Six Months Ended June 30, 2001 --------------------------------------------- ------------------------------------------- (In millions, Pro Forma Pro Forma except per share As Impact of Before As Impact of Before amounts) Reported Charges Charges Reported Charges Charges -------------------- ----------- ------------ ------------ ----------- ------------ ------------ NET SALES $ 854.3 $ 0.0 $ 854.3 $ 1,586.2 $ 0.0 $ 1,586.2 Cost of sales 475.4 7.2 468.2 880.1 13.8 866.3 ----------- ------------ ------------ ----------- ------------ ------------ GROSS PROFIT 378.9 (7.2) 386.1 706.1 (13.8) 719.9 Advertising and promotion expenses 103.4 0.0 103.4 200.3 0.3 200.0 Other selling and administrative expenses 214.3 0.0 214.3 419.6 0.1 419.5 Restructuring and other charges 13.0 13.0 0.0 13.0 13.0 0.0 Other expense, net 2.7 0.6 2.1 9.2 6.1 3.1 ----------- ------------ ------------ ----------- ------------ ------------ OPERATING INCOME BEFORE AMORTIZATION 45.5 (20.8) 66.3 64.0 (33.3) 97.3 Amortization of intangibles 12.7 0.0 12.7 25.5 0.0 25.5 ----------- ------------ ------------ ----------- ------------ ------------ OPERATING INCOME 32.8 (20.8) 53.6 38.5 (33.3) 71.8 Interest expense 39.6 0.0 39.6 74.5 0.0 74.5 ----------- ------------ ------------ ----------- ------------ ------------ (LOSS) INCOME BEFORE INCOME TAXES (6.8) (20.8) 14.0 (36.0) (33.3) (2.7) (Benefit) provision for income taxes (1.9) (5.8) 3.9 (9.1) (8.4) (0.7) ----------- ------------ ------------ ----------- ------------ ------------ (LOSS) INCOME FROM CONTINUING OPERATIONS (4.9) (15.0) 10.1 (26.9) (24.9) (2.0) Cumulative effect of change in accounting principles, net of tax 0.0 0.0 0.0 (12.0) (12.0) 0.0 ----------- ------------ ------------ ----------- ------------ ------------ NET (LOSS) INCOME $ (4.9) $ (15.0) $ 10.1 $ (38.9) $ (36.9) $ (2.0) =========== ============ ============ =========== ============ ============ INCOME PER SHARE - BASIC (Loss) income from continuing operations $ (0.01) $ (0.03) $ 0.02 $ (0.06) $ (0.06) $ 0.00 Cumulative effect of change in accounting principles 0.00 0.00 0.00 (0.03) (0.03) 0.00 ----------- ------------ ------------ ----------- ------------ ------------ $ (0.01) $ (0.03) $ 0.02 $ (0.09) $ (0.09) $ 0.00 =========== ============ ============ =========== ============ ============ AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC 430.9 430.9 430.9 430.4 430.4 430.4 =========== ============ ============ =========== ============ ============ INCOME PER SHARE - DILUTED (Loss) income from continuing operations $ (0.01) $ (0.03) $ 0.02 $ (0.06) $ (0.06) $ 0.00 Cumulative effect of change in accounting principles 0.00 0.00 0.00 (0.03) (0.03) 0.00 ----------- ------------ ------------ ----------- ------------ ------------ $ (0.01) $ (0.03) $ 0.02 $ (0.09) $ (0.09) $ 0.00 =========== ============ ============ =========== ============ ============ AVERAGE NUMBER OF COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING - DILUTED 430.9 430.9 430.9 430.4 430.4 430.4 =========== ============ ============ =========== ============ ============ Three Months Ended June 30, 2000 Six Months Ended June 30, 2000 --------------------------------------------- -------------------------------------------- Pro Forma Pro Forma As Impact of Before As Impact of Before Reported Charges Charges Reported Charges Charges ----------- ------------ ------------ ----------- ------------ ------------ Net Sales $ 817.8 $ 0.0 $ 817.8 $ 1,511.1 $ 0.0 $ 1,511.1 Cost of sales 453.9 0.0 453.9 832.8 0.0 832.8 ----------- ------------ ------------ ----------- ------------ ------------ GROSS PROFIT 363.9 0.0 363.9 678.3 0.0 678.3 Advertising and promotion expenses 98.6 0.0 98.6 189.9 0.0 189.9 Other selling and administrative expenses 218.7 0.0 218.7 472.9 53.1 419.8 Restructuring and other charges (2.0) (2.0) 0.0 (2.0) (2.0) 0.0 Other (income), net (9.0) 0.0 (9.0) (15.4) 0.0 (15.4) ----------- ------------ ------------ ----------- ------------ ------------ OPERATING INCOME BEFORE AMORTIZATION 57.6 2.0 55.6 32.9 (51.1) 84.0 Amortization of intangibles 13.4 0.0 13.4 25.9 0.0 25.9 ----------- ------------ ------------ ----------- ------------ ------------ OPERATING INCOME 44.2 2.0 42.2 7.0 (51.1) 58.1 Interest expense 35.9 0.0 35.9 60.3 0.0 60.3 ----------- ------------ ------------ ----------- ------------ ------------ INCOME (LOSS) BEFORE INCOME TAXES 8.3 2.0 6.3 (53.3) (51.1) (2.2) Provision (benefit) for income taxes 2.3 0.6 1.7 (14.7) (14.1) (0.6) ----------- ------------ ------------ ----------- ------------ ------------ INCOME (LOSS) FROM CONTINUING OPERATIONS 6.0 1.4 4.6 (38.6) (37.0) (1.6) Loss from discontinued operations, net of tax 0.0 0.0 0.0 (126.6) (126.6) 0.0 ----------- ------------ ------------ ----------- ------------ ------------ NET INCOME (LOSS) $ 6.0 $ 1.4 $ 4.6 $ (165.2) $ (163.6) $ (1.6) =========== ============ ============ =========== ============ ============ INCOME PER SHARE - BASIC Income (loss) from continuing operations $ 0.01 $ 0.00 $ 0.01 $ (0.09) $ (0.09) $ 0.00 Loss from discontinued operations 0.00 0.00 0.00 (0.30) (0.30) 0.00 ----------- ------------ ------------ ----------- ------------ ------------ $ 0.01 $ 0.00 $ 0.01 $ (0.39) $ (0.39) $ 0.00 =========== ============ ============ =========== ============ ============ AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC 425.8 425.8 425.8 425.7 425.7 425.7 =========== ============ ============ =========== ============ ============ INCOME PER SHARE - DILUTED Income (loss) from continuing operations $ 0.01 $ 0.00 $ 0.01 $ (0.09) $ (0.09) $ 0.00 Loss from discontinued operations 0.00 0.00 0.00 (0.30) (0.30) 0.00 ----------- ------------ ------------ ----------- ------------ ------------ $ 0.01 $ 0.00 $ 0.01 $ (0.39) $ (0.39) $ 0.00 =========== ============ ============ =========== ============ ============ AVERAGE NUMBER OF COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING - DILUTED 427.8 427.8 427.8 425.7 425.7 425.7 =========== ============ ============ =========== ============ ============
MATTEL, INC. AND SUBSIDIARIES EXHIBIT III =================================================================================================================================== CONSOLIDATED STATEMENTS OF OPERATIONS BEFORE CHARGES For Three Months For Six Months Ended June 30, Ended June 30, -------------------------------------------------- --------------------------------------------------- 2001 2000 2001 2000 ------------------ ------------------ -------------------- ------------------ (In millions, except % Net % Net % Net % Net per share amounts) $ Amt Sales $ Amt Sales % Change $ Amt Sales $ Amt Sales % Change ----------- --------- ------- --------- ------- -------- --------- ------- --------- ------ -------- NET SALES $ 854.3 $ 817.8 4.5% $ 1,586.2 $ 1,511.1 5.0% Cost of sales 468.2 54.8% 453.9 55.5% 3.1% 866.3 54.6% 832.8 55.1% 4.0% -------- ------- --------- ------- GROSS PROFIT 386.1 45.2% 363.9 44.5% 6.1% 719.9 45.4% 678.3 44.9% 6.1% Advertising and promotion expenses 103.4 12.1% 98.6 12.1% 4.8% 200.0 12.6% 189.9 12.6% 5.3% Other selling and administrative expenses 214.3 25.1% 218.7 26.7% -2.0% 419.5 26.4% 419.8 27.8% -0.1% Other expense (income), net 2.1 0.2% (9.0) -1.1% 3.1 0.2% (15.4) -1.0% -------- ------- --------- ------- OPERATING INCOME BEFORE AMORTIZATION 66.3 7.8% 55.6 6.8% 19.3% 97.3 6.1% 84.0 5.6% 16.0% Amortization of intangibles 12.7 1.5% 13.4 1.6% -4.8% 25.5 1.6% 25.9 1.7% -1.4% -------- ------- --------- ------- OPERATING INCOME 53.6 6.3% 42.2 5.2% 27.0% 71.8 4.5% 58.1 3.8% 23.8% Interest expense 39.6 4.6% 35.9 4.4% 10.1% 74.5 4.7% 60.3 4.0% 23.6% -------- ------- --------- ------- INCOME (LOSS) BEFORE INCOME TAXES 14.0 1.6% 6.3 0.8% (2.7) -0.2% (2.2) -0.1% Provision (benefit) for income taxes 3.9 1.7 (0.7) (0.6) -------- ------- --------- ------- INCOME (LOSS) FROM CONTINUING OPERATIONS $ 10.1 1.2% $ 4.6 0.6% $ (2.0) -0.1% $ (1.6) -0.1% ======== ======== ========= ========= EFFECTIVE TAX RATE 27.6% 27.6% 27.6% 27.6% BASIC INCOME PER SHARE FROM CONTINUING OPERATIONS $ 0.02 $ 0.01 $ 0.00 $ 0.00 ======== ======== ========= ========= DILUTED INCOME PER SHARE FROM CONTINUING OPERATIONS $ 0.02 $ 0.01 $ 0.00 $ 0.00 ======== ======== ========= ========= =================================================================================================================================== CONDENSED CONSOLIDATED BALANCE SHEETS At June 30, ----------------------- At Dec. 31, (In Millions) 2001 2000 2000 ----------- --------- ---------- --------- Assets Cash and short-term investments $ 40.7 $ 129.7 $ 232.4 Accounts receivable, net 947.8 1,057.4 839.6 Inventories 692.8 633.5 489.7 Prepaid expenses and other current assets 182.0 206.7 189.8 -------- ---------- -------- Total current assets 1,863.3 2,027.3 1,751.5 Property, plant and equipment, net 618.4 678.6 647.8 Other assets 1,914.5 1,716.2 1,902.6 Net investment in discontinued operations - 378.6 11.5 -------- ---------- -------- TOTAL ASSETS $4,396.2 $ 4,800.7 $4,313.4 ======== ========== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Short-term borrowings $ 620.1 $ 1,220.2 $ 226.4 Current portion of long-term liabilities 62.6 2.7 32.7 Accounts payable and accrued liabilities 743.7 653.4 1,042.4 Income taxes payable 182.5 163.4 200.9 -------- ---------- -------- Total current liabilities 1,608.9 2,039.7 1,502.4 Long-term debt 1,191.1 882.5 1,242.4 Other long-term liabilities 189.3 182.7 165.5 Stockholders' equity 1,406.9 1,695.8 1,403.1 -------- ---------- -------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $4,396.2 $ 4,800.7 $4,313.4 ======== ========== ========