EXHIBIT 99.0
For Immediate Release Contacts: News Media Securities Analysts
Lisa Marie Bongiovanni Dianne Douglas
310-252-3524 310-252-2703
bongiovl@mattel.com dianne.douglas@mattel.com
MATTEL REPORTS FIRST QUARTER RESULTS
First Quarter Highlights
. Worldwide revenue up 6 percent;
. International sales up 7 percent; 13 percent in local currency;
. Worldwide sales for core brands: Barbie(R) unchanged versus year ago; Hot
Wheels(R) up 24 percent; American Girl(R) up 14 percent; and core Fisher-
Price(R) up 8 percent;
. Gross margin improvement of .3 percent of net sales and SG&A improvement of 1
percent of net sales;
. Operating income up 15 percent; and
. First quarter loss from continuing operations of $.03 per share.
LOS ANGELES, April 19, 2001 - Mattel, Inc. (NYSE:MAT) today reported a 2001
first quarter loss from continuing operations excluding one-time charges of
$12.1 million, or $.03 per share, versus a loss of $6.2 million, or $.01 per
share, in the 2000 first quarter. Net sales from continuing operations were
$731.9 million, a 6 percent increase, or 8 percent in local currency, from
$693.3 million in last year's first quarter. Operating income was up 15 percent
at $18.2 million.
"Coming off a very successful fourth quarter, we have remained focused on our
strategies and this effort is reflected in continued strong operating results
for the first quarter," said Robert A. Eckert, chairman and chief executive
officer of Mattel. "I am also encouraged by our growth in international
markets, improved margins and continued execution of the financial realignment
program."
(more)
Mattel Reports first Quarter Results/Page 2
On a regional basis, sales from continuing operations increased 5 percent in the
U.S., and were up 7 percent in international markets, or up 13 percent in local
currency.
Girls
To better align the financial reporting structure with the current business
organization, reporting for the Girls division will now include Pleasant Company
sales. The Girls division, which includes the Barbie(R), Diva Starz(TM) and
American Girl(R) brands, achieved worldwide gross sales of $338.0 million for
the quarter, an increase of 7 percent. (Excluding Pleasant Company, the Girls
Division achieved sales growth of 5.5 percent.)
Worldwide Barbie sales were flat, or up 2 percent in local currency. Consumer
demand for the brand continues to be strong as evidenced by healthy growth in
over-the-counter sales. U.S. shipments to customers, however, declined in the
quarter due to changes in retailer buying patterns. This was offset by strong
international Barbie sales. Diva Starz and Polly Pocket(R) also performed well
in the quarter, as did Pleasant Company, with sales advancing 14 percent.
Infant and Preschool
Continuing on the momentum from the fourth quarter, core Fisher-Price(R) brands
continue to be strong with worldwide sales up 8 percent. Worldwide gross sales
for the Infant and Preschool division, which includes the Fisher-Price, Sesame
Street(R) and Disney(R) character brands, were $243.1 million, or flat for the
quarter, due to weaknesses in licensed character brands sales.
(more)
Mattel Reports first Quarter Results/Page 3
Boys-Entertainment
The Boys-Entertainment division, which consists of the Wheels and Entertainment
categories, achieved worldwide sales of $195.5 million, a 9 percent increase.
Led by double-digit growth in both Hot Wheels(R) and Tyco R/C(R), the Wheels
category experienced growth of 15 percent, while the Entertainment category
decreased by 2 percent.
Financial Realignment Plan
Mattel recorded one-time charges of $7.0 million in the quarter as part of the
$250 million financial realignment plan. These charges are included in Cost of
Sales ($6.6 million), Advertising ($0.3 million), and Selling and Administrative
Expenses ($0.1 million) in the consolidated statement of operations. Since the
announcement of the plan in September 2000, Mattel has recorded $132.2 million
in pre-tax charges. The company is on target to deliver cumulative cost savings
of approximately $200 million over the next three years.
Adoption of Financial Accounting Standard 133
Effective January 1, 2001, Mattel adopted Statement of Financial Accounting
Standards No. 133, Accounting for Derivative Instruments and Hedging Activities.
As a result of the adoption of this statement, Mattel recorded a one-time
transition adjustment of $12.0 million, net of tax, in the consolidated
statement of operations for the quarter, consistent with the amount disclosed in
the SEC Form 10-K for 2000. Additionally, a $5.5 million pre-tax loss on
derivative instruments was recorded in Other Expense related to the decline in
fair value of the instruments during the quarter.
(more)
Mattel Reports first Quarter Results/Page 4
Live Webcast
Mattel will webcast its first quarter earnings conference call at 8:30 a.m.
Pacific Time (11:30 a.m. Eastern Time) today. The conference call will be
simulcast on the Investors section of www.mattel.com. To listen to the call,
--------------
log on to the website at least 15 minutes early to register, download and
install any necessary audio software. An archive of the call may be accessed
for up to 90 days beginning two hours after the completion of the live call.
About Mattel
Mattel, Inc. is the worldwide leader in the design, manufacture and marketing of
toy products. The company's best-selling brands include Barbie(R), Hot
Wheels(R), Fisher-Price(R) and American Girl(R). 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. The company's
website can be found at www.mattel.com.
--------------
-###-
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; 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. This release includes a
forward-looking statement about anticipated cost savings under the company's
financial realignment plan.
MATTEL, INC. AND SUBSIDIARIES EXHIBIT I
==========================================================================================================================
FINANCIAL HIGHLIGHTS
CONTINUING OPERATIONS - PRO FORMA BEFORE CHARGES
FOR THE QUARTER ENDED MARCH 31, 2001
(In millions, except per share amounts) 2001 2000 % Change
- --------------------------------------- ------------ -------------- ------------
Key P&L Data:
--------------
Net Sales $ 731.9 $ 693.3 6%
Gross Margin $ 333.8 $ 314.4 6%
% of Net Sales 45.6 % 45.3 %
Advertising $ 96.6 $ 91.3 6%
% of Net Sales 13.2 % 13.2 %
SG&A $ 205.2 $ 201.1 2%
% of Net Sales 28.0 % 29.0 %
Operating Income $ 18.2 $ 15.9 15%
% of Net Sales 2.5 % 2.3 %
Net Loss Before Charges $ (12.1) $ (6.2)
% of Net Sales (1.7)% (0.9)%
EPS Before Charges - Diluted $ (0.03) $ (0.01)
Key Balance Sheet Data:
----------------------
Accounts Receivable, Net $ 890.8 $ 897.2
Days of Sales Outstanding (DSO) 96 99
Inventories $ 574.0 $ 522.3
Days of Supply (DOS) 98 97
Total Debt Outstanding $ 1,778.0 $ 1,834.2
Total Debt-to-Total Capitalization 55.9 % 51.3 %
WORLDWIDE GROSS SALES
---------------------
Growth %
-----------------------------
Actual Local Curr. % of Total
----------- ------------ --------------
Girls 7% 9% 44 %
Boys/Entertainment 9% 11% 25 %
Infant & Preschool 0% 2% 31 %
Total Company 5% 7% 100 %
MATTEL, INC. AND SUBSIDIARIES EXHIBIT II
================================================================================================================================
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE QUARTER ENDED MARCH 31, 2001
Impact of Pro Forma
(In millions, except per share amounts) As Reported Charges Before Charges
- --------------------------------------- ------------- ------------ ---------------
Net Sales $ 731.9 $ 0.0 $ 731.9
Cost of sales 404.7 6.6 398.1
---------- --------- ----------
Gross Profit 327.2 (6.6) 333.8
Advertising and promotion expenses 96.9 0.3 96.6
Other selling and administrative expenses 205.3 0.1 205.2
Other expense (income), net 6.5 5.5 1.0
---------- --------- ----------
Operating Income Before Amortization 18.5 (12.5) 31.0
Amortization of intangibles 12.8 0.0 12.8
---------- --------- ----------
Operating Income 5.7 (12.5) 18.2
Interest expense 34.9 0.0 34.9
---------- --------- ----------
Loss Before Income Taxes (29.2) (12.5) (16.7)
Benefit for income taxes (7.2) (2.6) (4.6)
---------- --------- ----------
Loss From Continuing Operations (22.0) (9.9) (12.1)
Cumulative effect of change in accounting principles,
net of tax (12.0) (12.0) 0.0
---------- --------- ----------
Net Loss $ (34.0) $ (21.9) $ (12.1)
========== ========= ==========
Income Per Share - Basic
Loss from continuing operations $ (0.05) $ (0.02) $ (0.03)
Cumulative effect of change in accounting principles (0.03) (0.03) 0.00
---------- --------- ----------
$ (0.08) $ (0.05) $ (0.03)
========== ========= ==========
Average Number of Common Shares
Outstanding - Basic 429.9 429.9 429.9
========== ========= ==========
Income Per Share - Diluted
Loss from continuing operations $ (0.05) $ (0.02) $ (0.03)
Cumulative effect of change in accounting principles (0.03) (0.03) 0.00
---------- --------- ----------
$ (0.08) $ (0.05) $ (0.03)
========== ========= ==========
Average Number of Common and Common
Equivalent Shares Outstanding - Diluted 429.9 429.9 429.9
========== ========= ==========
FOR THE QUARTER ENDED MARCH 31, 2000
Net Sales $ 693.3 $ 0.0 $ 693.3
Cost of sales 378.9 0.0 378.9
---------- --------- ----------
Gross Profit 314.4 0.0 314.4
Advertising and promotion expenses 91.3 0.0 91.3
Other selling and administrative expenses 254.2 53.1 201.1
Other expense (income), net (6.4) 0.0 (6.4)
---------- --------- ----------
Operating Income Before Amortization (24.7) (53.1) 28.4
Amortization of intangibles 12.5 0.0 12.5
---------- --------- ----------
Operating Income (37.2) (53.1) 15.9
Interest expense 24.4 0.0 24.4
---------- --------- ----------
Loss Before Income Taxes (61.6) (53.1) (8.5)
Benefit for income taxes (17.0) (14.7) (2.3)
---------- --------- ----------
Loss From Continuing Operations (44.6) (38.4) (6.2)
Loss from discontinued operations, net of tax (126.6) (126.6) 0.0
---------- --------- ----------
Net Loss $ (171.2) $ (165.0) $ (6.2)
========== ========= ==========
Income Per Share - Basic
Loss from continuing operations $ (0.10) $ (0.09) $ (0.01)
Loss from discontinued operations (0.30) (0.30) 0.00
---------- --------- ----------
$ (0.40) $ (0.39) $ (0.01)
========== ========= ==========
Average Number of Common Shares
Outstanding - Basic 425.5 425.5 425.5
========== ========= ==========
Income Per Share - Diluted
Loss from continuing operations $ (0.10) $ (0.09) $ (0.01)
Loss from discontinued operations (0.30) (0.30) 0.00
---------- --------- ----------
$ (0.40) $ (0.39) $ (0.01)
========== ========= ==========
Average Number of Common and Common
Equivalent Shares Outstanding - Diluted 425.5 425.5 425.5
========== ========= ==========
MATTEL, INC. AND SUBSIDIARIES EXHIBIT III
==================================================================================================================================
CONSOLIDATED STATEMENTS OF OPERATIONS
BEFORE CHARGES
FOR THE THREE MONTHS ENDED MARCH 31,
-----------------------------------------------------------------------
2001 2000 Yr/Yr
----------------------------------------------------
(In millions, except per share amounts) $ Amt % Net Sales $ Amt % Net Sales % Change
- --------------------------------------- ---------- ----------- -------- ---------- ---------------
Net Sales $ 731.9 $ 693.3 5.6%
Cost of sales 398.1 54.4% 378.9 54.7% 5.1%
-------- -------
Gross Profit 333.8 45.6% 314.4 45.3% 6.2%
Advertising and promotion expenses 96.6 13.2% 91.3 13.2% 5.8%
Other selling and administrative expenses 205.2 28.0% 201.1 29.0% 2.1%
Other expense (income), net 1.0 0.1% (6.4) -0.9%
-------- -------
Operating Income Before Amortization 31.0 4.2% 28.4 4.1% 9.5%
Amortization of intangibles 12.8 1.8% 12.5 1.8% 2.2%
-------- -------
Operating Income 18.2 2.5% 15.9 2.3% 15.4%
Interest expense 34.9 4.8% 24.4 3.5% 43.5%
-------- -------
Loss Before Income Taxes (16.7) -2.3% (8.5) -1.2%
Benefit for income taxes (4.6) (2.3)
-------- -------
Loss From Continuing Operations $ (12.1) -1.7% $ (6.2) -0.9%
======== =======
Effective Tax Rate 27.6% 27.6%
Basic Income per Share from Continuing Operations $ (0.03) $ (0.01)
======== =======
Diluted Income per Share from Continuing Operations $ (0.03) $ (0.01)
======== =======
==================================================================================================================================
CONDENSED CONSOLIDATED BALANCE SHEETS
At March 31,
------------------------ At Dec. 31,
(In millions) 2001 2000 2000
- ------------- ---------- ---------- -------------
Assets
Cash and short-term investments $ 74.3 $ 214.9 $ 232.4
Accounts receivable, net 890.8 897.2 839.6
Inventories 574.0 522.3 489.7
Prepaid expenses and other current assets 188.9 196.8 189.8
---------- ---------- --------
Total current assets 1,728.0 1,831.2 1,751.5
Property, plant and equipment, net 623.6 693.7 647.8
Other assets 1,879.9 1,728.9 1,902.6
Net investment in discontinued operations - 318.7 11.5
---------- ---------- --------
Total Assets $ 4,231.5 $ 4,572.5 $4,313.4
========== ========== ========
Liabilities and Stockholders' Equity
Short-term borrowings $ 518.5 $ 848.7 $ 226.4
Current portion of long-term liabilities 32.6 2.8 32.7
Accounts payable and accrued liabilities 692.8 656.8 1,042.4
Income taxes payable 176.1 164.5 200.9
---------- ---------- --------
Total current liabilities 1,420.0 1,672.8 1,502.4
Long-term debt 1,226.8 982.7 1,242.4
Other long-term liabilities 179.4 172.5 165.5
Stockholders' equity 1,405.3 1,744.5 1,403.1
---------- ---------- --------
Total Liabilities and Stockholders' Equity $ 4,231.5 $ 4,572.5 $4,313.4
========== ========== ========