FOR IMMEDIATE RELEASE CONTACT: Glenn Bozarth October 17, 1995 (310) 252-3521 MATTEL REPORTS RECORD SALES AND EARNINGS FOR 1995 THIRD QUARTER AND NINE-MONTHS, ANNOUNCES PLANS TO PURCHASE CONVERTIBLE PREFERENCE STOCK -------------------------------------------------------- LOS ANGELES, October 17, 1995 -- Mattel, Inc. today reported that net income for the 1995 third quarter increased 15 percent to a record $151 million or $.67 per share, versus $132 million or $.58 per share in the year-ago quarter. Net sales for the quarter reached the record level of $1.176 billion, up 13 percent from $1.037 billion in the 1994 third quarter. "Worldwide demand is being driven by excellent sales growth for our core Barbie and Fisher-Price brands," John W. Amerman, Mattel's chairman and chief executive officer, said. "In addition, shipments of Pocahontas toys through the end of the third quarter exceeded those for Lion King a year ago." For the first nine months of 1995, net income increased by 15 percent to a record $246 million, or $1.08 per share, versus $213 million or $.94 per share for the same period last year. Year-to-date net sales reached a record $2.484 billion, up 14 percent from $2.175 billion in 1994. -more- 2-2-2-2-2 "The strong retail sales momentum we have experienced since the beginning of the year continued to build in the third quarter," Amerman said. "With substantially increased advertising and promotion support in the fourth quarter compared to a year ago, we look forward to a strong finish that should result in 1995 being our seventh consecutive year of record sales and earnings." The company also announced that it intends to purchase this week all shares of its 12-1/2 percent, Series F Convertible Preference stock for approximately $75 million. The Series F shares would have been convertible into approximately 2.6 million shares of common stock. "We see stock repurchase as an excellent means to demonstrate management's confidence in our company's future," Amerman said. He also said that, including the purchase of the Series F stock, the company expects to increase its 1995 buy-back of common stock and its equivalents by one million shares, to a total of five million shares. Mattel is currently in its third year of a four-year, 15.6 million-share repurchase program. Mattel, Inc. is the worldwide leader in the design, manufacture and marketing of children's toys. Four core brands -- Barbie, Fisher-Price, Disney and Hot Wheels -- account for 80 percent of company sales. With headquarters in El Segundo, California, Mattel has offices and facilities in 36 countries and sells its products in more than 140 nations throughout the world. -###- MATTEL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME FOR THE FOR THE THREE MONTHS ENDED NINE MONTHS ENDED ------------------------- ------------------------- Sept. 30, Sept. 30, Sept. 30, Sept. 30, (In thousands, except per share amounts) 1995 1994 1995 1994 - ---------------------------------------- ---------- ---------- ---------- ---------- Net Sales $1,176,484 $1,037,082 $2,483,528 $2,174,616 Cost of sales 593,535 508,122 1,274,865 1,093,047 ---------- ---------- ---------- ---------- Gross Profit 582,949 528,960 1,208,663 1,081,569 Advertising and promotion expenses 182,355 161,298 367,673 326,938 Other selling and administrative expenses 159,359 140,601 432,775 376,006 Other (income) expense, net (9,025) 5,967 (13,169) 10,567 ---------- ---------- ---------- ---------- Operating Profit 250,260 221,094 421,384 368,058 Interest expense 22,734 18,274 51,804 37,887 ---------- ---------- ---------- ---------- Income Before Income Taxes 227,526 202,820 369,580 330,171 Provision for income taxes 76,200 71,000 123,800 117,200 ---------- ---------- ---------- ---------- Net Income $ 151,326 $ 131,820 $ 245,780 $ 212,971 ========== ========== ========== ========== Net Income Per Share (a) $ 0.67 $ 0.58 $ 1.08 $ 0.94 ========== ========== ========== ========== Average Number of Common and Common Equivalent Shares Outstanding 225,523 225,930 224,771 223,666 ========== ========== ========== ========== MATTEL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS Sept. 30, Sept. 30, Dec. 31, (In thousands) 1995 1994 1994 - -------------- ----------- ----------- ----------- ASSETS Cash and marketable securities $ 100,817 $ 106,642 $ 259,681 Accounts receivable, net 1,313,760 1,251,738 762,024 Inventories 463,037 360,741 339,143 Prepaid expenses and other current assets 201,380 159,235 182,675 ----------- ----------- ----------- Total current assets 2,078,994 1,878,356 1,543,523 Property, plant and equipment, net 486,576 398,890 415,921 Other assets 496,914 508,384 499,582 ----------- ----------- ----------- Total Assets $ 3,062,484 $ 2,785,630 $ 2,459,026 =========== =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Notes payable, net $ 243,390 $ 477,567 $ - Current portion of long-term liabilities 31,939 2,700 3,095 Accounts payable and accrued liabilities 703,921 664,764 748,392 Income taxes payable 229,752 163,959 164,394 ----------- ----------- ----------- Total current liabilities 1,209,002 1,308,990 915,881 Long-term debt 263,262 258,539 264,483 Medium-Term notes 220,000 - 110,500 Other long-term liabilities 86,890 88,107 82,472 Shareholders' equity 1,283,330 1,129,994 1,085,690 ----------- ----------- ----------- Total Liabilities and Shareholders' Equity $ 3,062,484 $ 2,785,630 $ 2,459,026 =========== =========== =========== <FN> (a) Share and per share data for the quarter and nine months ended September 30, 1994 reflect the retroactive effect of a 5/4 stock split declared in December 1994.