8-K

UNITED STATES

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 (Date of earliest event reported):

January 25, 2015

MATTEL, INC.

(Exact name of registrant as specified in its charter)

Delaware	001-05647	95-1567322
(State or other jurisdiction of incorporation)	(Commission File No.)	(I.R.S. Employer 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)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Section 2 – Financial Information

Item 2.02 Results of Operations and Financial Condition.

On January 26, 2015, Mattel, Inc. (“Mattel” or the “Company”) issued a press release regarding its preliminary fourth quarter and full-year 2014 financial results, a copy of which is furnished as Exhibit 99.1 hereto. This exhibit is incorporated herein by reference.

In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Section 5 – Corporate Governance and Management

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On January 25, 2015, Bryan G. Stockton resigned as Chief Executive Officer of the Company and as Chairman and a member of the Company’s Board of Directors (the “Board”). In connection with his Covered Termination, as defined in the Mattel, Inc. Executive Severance Plan (the “Severance Plan”), Mr. Stockton will receive severance payments and benefits pursuant to the Severance Plan.

Christopher A. Sinclair, a current director of the Company, is assuming the role of Chairman of the Board and Interim Chief Executive Officer, effective as of January 25, 2015. Mr. Sinclair has served on the Board since 1996 and has served as Independent Lead Director and Chairman of the Audit Committee of the Board since 2011. While serving as Interim Chief Executive Officer, Mr. Sinclair will no longer serve as Lead Director or a member of the Board’s independent Audit Committee or Executive Committee. The Board has appointed Vasant M. Prabhu to replace Mr. Sinclair as Chairman of the Audit Committee and a member of the Executive Committee.

Mr. Sinclair, 64, has served as Executive Chairman of Scandent Holdings, an information technology investment company from 2002 to 2008. Mr. Sinclair also served as Executive Chairman of Cambridge Solutions Corporation Ltd., a leader in providing information technology and business process outsourcing services from 2005 to 2009. He also served as a Managing Director of Manticore Partners, LLC, a venture capital advisory firm, from 2000 to 2005, as an Operating Partner of Pegasus Capital Advisors, LP, a private equity firm, from 2000 to 2002, and as Chairman of the Board and Chief Executive Officer of Caribiner International, Inc., from 1999 to 2000. Earlier, he served as President and Chief Executive Officer of Quality Food, Inc., Chairman and Chief Executive Officer of Pepsi-Cola Company and President and Chief Executive Officer of PepsiCo Foods & Beverages International and Pepsi-Cola International, for more than five years.

Mr. Sinclair has extensive board experience, having served on the boards of numerous companies. In January 2015, he began serving on the board and the Nominating and Audit Committees at Reckitt Benckiser Group plc. His other board experience includes Scandent Holdings (Executive Chairman), Cambridge Solutions Corporation, Ltd. (Executive Chairman and member of the Compensation and Audit Committees), Foot Locker, Inc. (Chairman of the Finance Committee and member of Compensation Committee) and Perdue Farms.

On January 29, 2015, the Compensation Committee of the Board approved the material terms of Mr. Sinclair’s compensation arrangement as Interim Chief Executive Officer, which includes (i) a monthly base salary of $200,000; (ii) a special equity grant award of restricted stock units, granted on January 29, 2015, with a grant value of $1,500,000, which shall vest as to 100% of the shares on the first anniversary of the date of grant, subject to continued service with the Company and (iii) special transition/mobility allowance in the amount of $60,000 per month, intended to assist Mr. Sinclair with his living and commuting expenses while working on Company matters. The dollar value for the restricted stock unit grant was converted into a number of restricted stock units by dividing the dollar value by the closing stock price on the date of grant. Mr. Sinclair is eligible for periodic personal use of a private aircraft up to a maximum of 25 hours per year. As an executive, Mr. Sinclair is eligible to participate in certain executive benefits programs, such as a car allowance and financial counseling; however, he will not be eligible to participate in the Mattel Incentive Plan, Mattel’s Long-Term Incentive Program or Mattel’s annual equity award program. Mr. Sinclair also will not be eligible to participate in any Mattel severance program, plan or arrangement and will not be compensated for his position as Chairman of the Board.

On January 26, 2015, the Company issued a press release announcing these management changes, a copy of which is included as Exhibit 99.1 hereto.

Section 8 – Other Events

Item 8.01 Other Events.

In the same press release described in Items 2.02 and 5.02 above, Mattel also announced that the Board has declared a first quarter dividend of $0.38 per share on the Company’s common stock, to be paid on March 6, 2015 to stockholders of record on February 19, 2015.

Section 9 – Financial Statements and Exhibits

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits: Press release dated January 26, 2015, issued by Mattel, Inc.

Exhibit No.	Exhibit Description
99.1**	Press Release dated January 26, 2015.

** Furnished herewith.

SIGNATURE

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
	Name:	Robert Normile
	Title:	Executive Vice President, Chief Legal Officer and Secretary

Dated: January 29, 2015

INDEX TO EXHIBITS

Exhibit No.	Exhibit Description
99.1	Press Release dated January 26, 2015

EX-99.1

Exhibit 99.1

  NEWS RELEASE

Mattel, Inc.
News Media Alex Clark, 310-252-6397 alex.clark@mattel.com	Securities Analysts Drew Vollero, 310-252-2703 drew.vollero@mattel.com

Mattel Names Christopher Sinclair as Chairman and Interim Chief Executive Officer

Bryan Stockton Resigns as Chairman and Chief Executive Officer

Company Announces Preliminary Fourth Quarter and Full Year 2014 Financial Results

Company Announces Quarterly Dividend

EL SEGUNDO, Calif. – January 26, 2015 – Mattel, Inc. (NASDAQ: MAT) today announced that Christopher A. Sinclair has been named the Company’s Chairman and Interim Chief Executive Officer, effective immediately. The Company also announced that Bryan G. Stockton has resigned as Mattel’s Chairman and Chief Executive Officer and resigned from the Board of Directors.

Mr. Sinclair, who has served as a member of Mattel’s Board of Directors since 1996 and as Independent Lead Director since 2011, has extensive experience in leading global, multi-brand, consumer-focused companies. In addition to leadership roles at prominent venture capital and private equity firms, Mr. Sinclair was Chairman and CEO of Caribiner International, Inc. from 1999-2000, President and CEO of Quality Food, Inc. from 1996-1998, and prior to that served in senior roles at PepsiCo, including as Chairman and CEO of Pepsi-Cola Company, and President and CEO of PepsiCo Foods & Beverages International and Pepsi-Cola International. He also served as Chair of Mattel’s Audit Committee.

“Mattel is an exceptional company with a great future but the Board believes that it is the right time for new leadership to maximize its potential,” said Mr. Sinclair. “We are committed to delivering improved growth and financial performance and remain confident in our ability to leverage our unmatched portfolio of brands, global scale and strong balance sheet as we execute on our strategic plan. I look forward to engaging with the entire Mattel community as we work to deepen our connections with children and parents through expanded product innovation and improved retail execution. We will be working during the coming months to revitalize the business and to identify the right leadership for Mattel as it enters its next phase of growth and value creation.”

Mr. Sinclair continued, “On behalf of the Board and everyone at Mattel, I sincerely thank Bryan for his many valuable contributions over the past 15 years in expanding our business and portfolio of brands and building our executive team.”

Preliminary Fourth Quarter and Full Year 2014 Financial Results

Mattel also announced preliminary fourth quarter and full year 2014 financial results.

For the fourth quarter, the Company reported net income of $149.9 million, or $0.44 per share, which includes a negative impact of $0.05 per share from MEGA Brands integration costs¹ and a negative tax impact of $0.03 per share, compared to net income of $369.2 million, or $1.07 per share, in the fourth quarter of 2013. Worldwide net sales in the fourth quarter were $1.99 billion, down 6%, including an unfavorable impact from changes in currency exchange rates of 3 percentage points, compared to $2.11 billion last year. Gross margin decreased by 410 basis points of net sales to 50.4%, which was partially due to the acquisition of MEGA Brands. SG&A expenses increased by 390 basis points of net

¹  Includes amortization of acquired intangible assets.

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  NEWS RELEASE

sales, including the impact of the acquisition of MEGA Brands. Operating income for the quarter was $237.0 million compared to $479.3 million in the fourth quarter of 2013.

For the year, the Company reported net income of $498.9 million, or $1.45 per share, which includes a negative impact of $0.16 per share from MEGA Brands acquisition and integration costs² and a tax benefit of $0.13 per share, compared to net income of $903.9 million, or $2.58 per share, in 2013, which included a tax benefit of $0.09. Worldwide net sales were $6.02 billion, down 7%, including an unfavorable impact from changes in currency exchange rates of 2% percentage points, compared to $6.48 billion last year. Gross margin decreased by 380 basis points of net sales to 49.8%, which was partially due to the acquisition of MEGA Brands. SG&A expenses increased by 270 basis points of net sales, including the impact of the acquisition of MEGA Brands. Operating income for the year was $653.7 million compared to $1.17 billion in 2013.

For the year, net cash flows from operating activities were approximately $889 million, an increase of $191 million over approximately $698 million in 2013. The increase was primarily driven by reductions in working capital, partially offset by lower net income. The Company ended the year with cash of $971.7 million, which is consistent with our capital and investment framework target of $800 million to $1 billion of year-end cash. The Company’s debt-to-total capital ratio as of December 31, 2014 was 41.6%.

Capital Deployment

The Company announced today a first quarter cash dividend of $0.38 per share which is flat compared to the first quarter of 2014. The dividend will be payable on March 6, 2015 to stockholders of record on February 19, 2015.

Conference Call and Live Webcast

As previously announced, the Company plans to release its fourth quarter and year-end financial results for the 2014 fiscal year on Friday, January 30, 2015 at approximately 6:00 a.m. Eastern time. Following this, Christopher A. Sinclair, Mattel’s Interim CEO and Kevin Farr, the Company’s CFO will host a conference call and webcast at 8:30 a.m. Eastern time.

The fourth quarter financial results conference call will be webcast on the “Investors” section of Mattel’s corporate website, http://corporate.mattel.com. To listen to the live call, log on to the website at least 15 minutes early to register, download and install any necessary audio software. An archive of the webcast will be available on the Company’s website for 90 days and may be accessed beginning two hours after the completion of the live call. A telephonic replay of the call will be available beginning at 11:30 a.m. Eastern time the morning of the call until Friday, February 6, 2015, and may be accessed by dialing +1-404-537-3406. The passcode is 61570566.

Information required by Securities and Exchange Commission Regulation G, regarding non-GAAP financial measures, as well as other financial and statistical information, will be available at the time of the webcast on the “Investors” section of http://corporate.mattel.com, under the sub-heading “Financial Information.”

Christopher A. Sinclair Biography

Christopher Sinclair, 64, has served on Mattel’s Board of Directors since 1996 and as Independent Lead Director and Chair of the Audit Committee since 2011. Mr. Sinclair has served as Executive Chairman of Scandent Holdings, an information technology investment company from 2002-2009, and also served as Executive Chairman of Cambridge Solutions Corporation Ltd., a leader in providing information technology and business process outsourcing services, from 2005-2009. Prior to that, he served as an Operating Partner of Pegasus Capital Advisors, LP, a private equity firm, from

²  Includes amortization of acquired intangible assets and inventory fair value markup above cost.

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  NEWS RELEASE

2000-2002. From 1999-2000, he served as Chairman of the Board and Chief Executive Officer of Caribiner International, Inc. Earlier, he served as President and Chief Executive Officer of Quality Food, Inc., Chairman and Chief Executive Officer of Pepsi-Cola Company and President and Chief Executive Officer of PepsiCo Foods & Beverages International and Pepsi-Cola International.

Mr. Sinclair recently joined the board of RB (Reckitt Benckiser Group PLC). He has also served on the Board of Directors of Foot Locker, Inc. from 1995-2008, where he was Chairman of the Finance Committee and a member of the Compensation Committee, Cambridge Solutions Corporation, Ltd. From 2003-2009, and Perdue Farms from 1992-2000.

Mr. Sinclair was born and raised in Asia. He holds a bachelor’s degree in Business Administration from the University of Kansas and an MBA from the Tuck School of Business at Dartmouth College.

About Mattel

The Mattel family of companies (Nasdaq: MAT) is the worldwide leader in the design, manufacture and marketing of toys and family products. Mattel’s portfolio of best-selling brands includes Barbie^®, the most popular fashion doll ever produced, Hot Wheels^®, Monster High^®, American Girl^®, Thomas & Friends^® and Fisher-Price^® brands, including Little People^® and Power Wheels^®, MEGA^® Brands, including MEGA BLOKS^® and RoseArt^®, as well as a wide array of entertainment-inspired toy lines. In 2013, Mattel was named one of the “World’s Most Ethical Companies” by Ethisphere Magazine and in 2014 ranked No. 5 on Corporate Responsibility Magazine’s “100 Best Corporate Citizens” list. With worldwide headquarters in El Segundo, Calif., Mattel’s companies employ nearly 30,000 people in 40 countries and territories and sell products in more than 150 nations. At Mattel, we are Creating the Future of Play. Visit us at www.mattel.com, www.facebook.com/mattel or www.twitter.com/mattel.

Forward-Looking Statements

This press release contains forward-looking statements on a variety of matters. These forward-looking statements are based on currently available operating, financial, economic and other information and are subject to a number of significant risks and uncertainties. A variety of factors, many of which are beyond our control, could cause actual future results to differ materially from those projected in the forward-looking statements. Some of these factors are described in the Company’s periodic filings with the Securities and Exchange Commission, including the “Risk Factors” section of Mattel’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013 and Mattel’s Quarterly Reports on Form 10-Q for fiscal year 2014, as well as in Mattel’s other public statements. Mattel does not update forward-looking statements and expressly disclaims any obligation to do so.

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