FOR IMMEDIATE RELEASE CONTACT:
Mattel, Inc.
News Media Investor Relations
Glenn Bozarth Mike Salop
310-252-3521 310-252-2703
MATTEL REPORTS SALES AND EARNINGS INCREASES
FOR 1997 SECOND QUARTER
-----------------------
LOS ANGELES, July 22 -- Mattel, Inc. [NYSE:MAT] today reported second
quarter net income of $75.6 million or $.25 per share, up 19 percent
from $63.4 million or $.21 per share in 1996. Net sales for the
quarter reached $972.7 million, up 6 percent from $921.6 million last
year.
"Our sales and margins are strong, our earnings are clearly on
track and our assets are being well managed," Jill Barad, Mattel's
president and chief executive officer, said. "Demand for our core
brands continues to increase. Barbie, Hot Wheels and Matchbox are all
experiencing double-digit growth.
"While our Fisher-Price business was down, we did see
significant improvement in the second quarter," she said. "We will
make further progress in the second half, as already evidenced by
strong over-the-counter sales momentum for Fisher-Price products.
Based on the incredible strength of our Sesame Street brand and
Disney's Winnie the Pooh, our overall Infant and Preschool business
was up.
"Total U.S. sales were up 10 percent for the quarter. Sales in
international markets were up 1 percent in local currency, but were
down 5 percent in U.S. dollars due to the impact of exchange," she
said. "We're now achieving growth in most of our international
markets, except for France and the U.K., both of which should rebound
in the second half. We're seeing particularly strong performance in
Asia Pacific and Latin America, which were up 12 percent and 30
percent, respectively."
For the first half of 1997, net income was $80.7 million or $.26
per share before a first quarter pre-tax charge of $275 million
related to the Tyco integration and Mattel restructuring. This action
is expected to result in savings of $700 million over the next five
years, with $60 million to be realized this year. Net income for the
1996 first half was $83.9 million or $.28 per share. After the
charge, Mattel reported a 1997 year-to-date net loss of $129 million.
Sales for the 1997 six months were $1.67 billion, up from $1.61
billion in 1996.
"The second half looks to be very exciting, and our second
quarter results put us well on our way to achieving our full-year
targets," Barad said.
Mattel, Inc. is the worldwide leader in the design, manufacturing
and marketing of children's toys. 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.
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, the restructuring
charge, cost savings 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,
introduction and customer acceptance of new products; possible
weaknesses of international markets; the impact of competition on
revenues and margins; the effect of currency fluctuations on
reportable income; and other risks and uncertainties as may be
detailed from time to time in the company's public announcements and
SEC filings.
-###-
MATTEL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE FOR THE
THREE MONTHS ENDED SIX MONTHS ENDED
------------------------- -------------------------
June 30, June 30, June 30, June 30,
(In thousands, except per share amounts) 1997 (a) 1996 (a) 1997 (a) 1996 (a)
- ---------------------------------------- ---------- ---------- ---------- ----------
Net Sales $ 972,656 $ 921,583 $1,666,176 $1,605,582
Cost of sales 513,819 485,559 884,528 846,684
---------- ---------- ---------- ----------
Gross Profit 458,837 436,024 781,648 758,898
Advertising and promotion expenses 131,713 129,524 234,339 229,628
Other selling and administrative expenses 192,707 183,216 377,993 352,797
Integration/restructuring costs (b) - - 275,000 -
Other expense, net 7,959 8,704 15,841 13,203
---------- ---------- ---------- ----------
Operating Profit (Loss) 126,458 114,580 (121,525) 163,270
Interest expense 18,514 21,990 38,150 41,883
---------- ---------- ---------- ----------
Income (Loss) Before Income Taxes 107,944 92,590 (159,675) 121,387
Provision (benefit) for income taxes 32,310 29,220 (30,685) 37,483
---------- ---------- ---------- ----------
Net Income (Loss) 75,634 63,370 (128,990) 83,904
Less: dividends on convertible preferred stock 2,837 889 5,677 1,716
---------- ---------- ---------- ----------
Net Income (Loss) Applicable to Common Shares $ 72,797 $ 62,481 $ (134,667) $ 82,188
========== ========== ========== ==========
Net Income (Loss) Per Share (c) (d) $ 0.25 $ 0.21 $ (0.46) $ 0.28
========== ========== ========== ==========
Average Number of Common and Common
Equivalent Shares Outstanding (d) 295,716 297,916 290,069 298,345
========== ========== ========== ==========
MATTEL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, June 30, Dec. 31,
(In thousands) 1997 (a) 1996 (a) 1996 (a)
- -------------- ----------- ----------- -----------
ASSETS
Cash $ 58,989 $ 91,996 $ 550,271
Accounts receivable, net 1,315,815 1,135,765 948,940
Inventories 552,463 562,922 444,178
Prepaid expenses and other current assets 194,962 225,602 195,673
----------- ----------- -----------
Total current assets 2,122,229 2,016,285 2,139,062
Property, plant and equipment, net 618,351 577,168 616,281
Other assets 826,842 784,245 825,799
----------- ----------- -----------
Total Assets $ 3,567,422 $ 3,377,698 $ 3,581,142
=========== =========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Short-term borrowings $ 164,991 $ 263,772 $ 28,924
Current portion of long-term liabilities 231,708 2,101 106,596
Accounts payable and accrued liabilities 739,238 548,368 823,069
Income taxes payable 120,033 149,384 183,288
----------- ----------- -----------
Total current liabilities 1,255,970 963,625 1,141,877
Long-term debt 169,579 406,878 299,806
Medium-Term notes 380,000 220,000 220,000
Other long-term liabilities 117,715 103,894 113,536
Shareholders' equity 1,644,158 1,683,301 1,805,923
----------- ----------- -----------
Total Liabilities and Shareholders' Equity $ 3,567,422 $ 3,377,698 $ 3,581,142
=========== =========== ===========
<FN>
(a) Consolidated results for all periods are restated for the merger with Tyco Toys, Inc.
(b) Represents a nonrecurring charge for transaction, integration and restructuring
costs related to the Tyco merger. The related tax benefit of $65 million is included
in the provision for income taxes.
(c) Primary income per share for the six months, before the $0.72 per share effect of
the merger-related nonrecurring charge of $210 million after taxes, was $0.26 per share.
(d) Share and per share data for all periods presented reflect the retroactive effect of
shares issued pursuant to the Tyco merger.