FOR IMMEDIATE RELEASE CONTACT: Glenn Bozarth July 21, 1994 Mattel, Inc. (310) 524-3521 MATTEL SECOND QUARTER EARNINGS INCREASE 40 PERCENT; DEMAND FOR TIME-TESTED CORE BRANDS IS STRONG -------------------------------------------- LOS ANGELES, July 21 -- Mattel, Inc. today reported record second quarter net income of $57.1 million or $.31 per share, up 40 percent from $40.8 million or $.23 per share in the 1993 quarter. Net sales were a record $650 million, up 13 percent from $577 million last year. "This outstanding performance reflects strong worldwide demand for our core brand products of Barbie, Fisher-Price, Hot Wheels and Disney, fueled by a new toy line tied to the excellent new animated Disney movie 'The Lion King,'" John W. Amerman, Mattel's chairman and chief executive officer, said. "The response to our product lines, combined with advantages provided by our dedicated global manufacturing network, allowed us to meet the challenges of difficult worldwide economic conditions and delays in retail ordering," Amerman said. -more- 2-2-2-2-2 For the first half of 1994, net income increased 37 percent to a record $81.2 million or $.44 per share, versus $59.3 million or $.33 per share in the first six months of 1993 before accounting changes. Year-to-date sales were a record $1.138 billion, up 8 percent from $1.054 billion in 1993. "Our excellent earnings performance in the quarter and first half reflect significant efficiencies resulting from the integration of Fisher-Price and Mattel, as well as some benefit from the acquisition of the assets of Kransco, completed on May 31," Amerman said. "Results for the quarter also include the contribution of newly-established marketing organizations in Argentina, Venezuela and Portugal." Mattel, Inc. is a worldwide leader in the design, manufacture and marketing of children's toys. With headquarters in El Segundo, California, Mattel has offices and facilities in 34 foreign countries and sells its products in more than 140 nations throughout the world. -###- MATTEL, INC. AND SUBSIDIARIES CONSOLIDATED RESULTS 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) 1994 1993 (a) 1994 1993 (a) - - ---------------------------------------- ---------- ---------- ---------- ---------- Net Sales $ 650,263 $ 576,618 $1,137,534 $1,053,802 Cost of sales 335,758 297,605 584,925 556,019 ---------- ---------- ---------- ---------- Gross Profit 314,505 279,013 552,609 497,783 Advertising and promotion expenses 94,010 83,390 165,640 151,879 Other selling and administrative expenses 118,608 113,652 235,405 223,149 Other expense, net 1,315 3,819 4,600 4,379 ---------- ---------- ---------- ---------- Operating Profit 100,572 78,152 146,964 118,376 Interest expense 11,490 14,929 19,613 28,138 ---------- ---------- ---------- ---------- Income Before Income Taxes 89,082 63,223 127,351 90,238 Provision for income taxes 32,000 22,453 46,200 30,988 ---------- ---------- ---------- ---------- Income Before Cumulative Effect of Changes in Accounting Principles 57,082 40,770 81,151 59,250 Cumulative effect of changes in accounting principles (b) - - - (4,022) ---------- ---------- ---------- ---------- Net Income $ 57,082 $ 40,770 $ 81,151 $ 55,228 ========== ========== ========== ========== Income Per Share (c) Income before cumulative effect of changes in accounting principles $ 0.31 $ 0.23 $ 0.44 $ 0.33 Cumulative effect of changes in accounting principles - - - (0.02) ---------- ---------- ---------- ---------- Net Income Per Share $ 0.31 $ 0.23 $ 0.44 $ 0.31 ========== ========== ========== ========== Average Number of Common and Common Equivalent Shares Outstanding 179,779 170,685 177,934 170,999 ========== ========== ========== ========== MATTEL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS June 30, June 30, Dec. 31, (In thousands) 1994 1993 (a) 1993 (a) - - -------------- ----------- ----------- ----------- ASSETS Cash, cash equivalents and marketable securities $ 117,190 $ 89,765 $ 523,581 Accounts receivable, net 879,276 744,655 580,313 Inventories 323,364 312,094 219,993 Prepaid expenses 150,318 128,915 146,863 ----------- ----------- ----------- Total current assets 1,470,148 1,275,429 1,470,750 Property, plant and equipment, net 377,407 323,021 326,877 Other assets 414,165 200,373 202,450 ----------- ----------- ----------- Total Assets $ 2,261,720 $ 1,798,823 $ 2,000,077 =========== =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Notes payable to banks $ 342,326 $ 87,411 $ - Current portion of long-term liabilities 3,301 8,675 104,862 Accounts payable and accrued liabilities 474,521 354,624 573,224 Income taxes payable 109,462 52,602 105,243 ----------- ----------- ----------- Total current liabilities 929,610 503,312 783,329 Long-term debt 258,683 362,399 254,159 Other long-term liabilities 80,266 58,946 70,827 Convertible debt - 97,652 73,953 Shareholders' equity 993,161 776,514 817,809 ----------- ----------- ----------- Total Liabilities and Shareholders' Equity $ 2,261,720 $ 1,798,823 $ 2,000,077 =========== =========== =========== <FN> (a) Consolidated results are restated for the merger with Fisher-Price, Inc. (b) A $20.0 million net-of-tax charge related to the adoption of FAS No. 106, partially offset by a $16.0 million credit related to the adoption of FAS No. 109. (c) Share and per share data for the quarter and six months ended June 30, 1993 reflect the retroactive effect of shares issued pursuant to the Fisher-Price merger and a 5/4 stock split declared in November 1993. </FN>