EXHIBIT 99.0
For Immediate Release
Contact: Lisa Marie Bongiovanni
Mattel, Inc.
310-252-3524
MATTEL OUTLINES FINANCIAL REALIGNMENT
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-- Announces Sale of The Learning Company;
Restructuring and Special Charges; Dividend Reduction --
EL SEGUNDO, Calif., September 29, 2000 - Mattel, Inc. (NYSE:MAT)
today announced a comprehensive financial realignment plan that
is expected to generate substantial cost savings and improve the
company's profitability and cash flow. Following a thorough
evaluation and analysis of the company's operations and financial
structure, the program, outlined by Mattel's Chairman and Chief
Executive Officer, Robert A. Eckert, is consistent with his
previously articulated strategic plan to focus on Mattel's core
brands.
"Since joining the company in May, my highest priority has been
the job of repositioning Mattel for profitable growth. To achieve
this goal, we will focus on growing our core brands and lowering
operating costs and interest," said Eckert. "I realize that these
objectives involve difficult decisions, as they have a very real
and human component, but these measures are necessary to enable
Mattel to realize its potential. I believe our committed team of
managers and employees at Mattel recognize this."
The key components of the financial realignment program include:
o The Sale and Writedown of The Learning Company: Mattel
signed a definitive agreement for the sale of The Learning
Company to an affiliate of Gores Technology Group. Under the
agreement, Mattel will have a contractual right to receive future
consideration. "Gores Technology Group is uniquely capable of
managing the day-to-day operations of The Learning Company and
unlocking future value," said Eckert.
Upon closing, which is pending government approval, the
agreement provides that Mattel will sell The Learning Company
to a limited liability company that is 100 percent owned by
Gores Technology Group. Under the purchase agreement, Mattel
has no further obligation to fund the operations of The
Learning Company.
A writedown primarily related to the net book value of The
Learning Company will result in an after tax loss from
discontinued operations of approximately $430 million.
o Restructuring and Special Charges: In order to improve gross
margin and Selling, General and Administrative expenses (SG&A),
the restructuring includes actions designed to lower production
and manufacturing costs; reduce royalty payments under licensing
contracts; and streamline its U.S.-based headquarter locations by
10 percent, or approximately 350 positions.
o Reducing Cash Dividend: A reduction in the company's cash
dividend from a quarterly $.09 per share to an annual $.05 per
share, effective immediately, which will result in annual cash
savings of $130 million.
Over the next three years, the restructuring and special charges
will generate approximately $200 million in pre-tax savings. The
$250 million of pre-tax costs associated with the restructuring
and special charges will be recorded over a two-and-a-half-year
period, of which $150 million will be cash. Approximately $100
million of pre-tax costs will be recorded in the third quarter of
2000.
Eckert further noted that the impact of the financial program
will be a stronger, more profitable company. "We expect that as
a result of the actions announced today, we will generate
increased earnings and cash flow."
The dividend reduction will also add to the company's performance
by improving cash flow and reducing debt. "We are returning the
dividend to a ratio that is appropriate for the company. Mattel
is not facing a liquidity issue. Reducing the dividend will give
us more capital flexibility going forward, which will in turn
lead to a stronger balance sheet and increased shareholder
value," said Eckert.
In conjunction with today's announcement, Mattel will be hosting
an analyst conference call today at 7 a.m. (PDT). The call* will
be broadcast live over the internet on the Investors section of
www.mattel.com. The call will be archived on the Investors page
of Mattel's website (www.mattel.com) for 90 days.
With headquarters in Los Angeles, Gores Technology Group (GTG) is
a privately held international acquisition and management firm
that pursues an aggressive strategy of acquiring promising high-
technology organizations and managing them for growth and
profitability.
Mattel, Inc. 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.
* Minimum Requirements to listen to broadcast: The RealPlayer
software (downloadable free from www.real.com/products/player/index.html)
and at least a 14.4Kbps connection to the Internet. If you
experience problems listening to the broadcast, send an email to
webmaster@vdat.com.
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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
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