EXHIBIT 99.0
For Immediate Release CONTACTS: NEWS MEDIA SECURITIES ANALYSTS
Lisa Marie Bongiovanni Dianne Douglas
310-252-3524 310-252-2703
LisaMarie.Bongiovanni@mattel.com Dianne.Douglas@mattel.com
MATTEL REPORTS SECOND QUARTER RESULTS
Second Quarter Highlights
. Worldwide net sales up 4 percent;
. International gross sales up 16 percent; 22 percent in local currency;
. Worldwide gross sales for core brands: Barbie(R) up 2 percent; Hot Wheels(R)
up 3 percent; American Girl(R) up 6 percent; and core Fisher-Price(R) up
9 percent;
. Gross margin improvement of .7 percent of net sales and SG&A improvement of
1.6 percent of net sales;
. Operating income up 27 percent; and
. EPS of $.02 per share.
LOS ANGELES, July 19, 2001 - Mattel, Inc. (NYSE:MAT) today reported 2001 second
quarter income from continuing operations excluding one-time charges of $10.1
million, or $.02 per share, versus income of $4.6 million, or $.01 per share, in
the 2000 second quarter. Including one-time charges, the second quarter 2001 net
loss was $4.9 million, or $.01 share.
Net sales from continuing operations were $854.3 million, a 4 percent increase,
or 6 percent in local currency, from $817.8 million in last year's second
quarter. Operating income was up 27 percent at $53.6 million.
"We continued to make good progress during the quarter," said Robert A. Eckert,
chairman and chief executive officer of Mattel. "Revenues were solid, led by
the continued turnaround of our international business, while margins benefited
from our cost reduction programs."
(more)
Mattel Reports Second Quarter Results/Page 2
On a regional basis, gross sales increased 1 percent in the U.S., and were up
16 percent in international markets, or up 22 percent in local currency.
Girls
The Girls division, which includes the Barbie(R), Diva Starz(TM) and American
Girl(R) brands, achieved worldwide gross sales of $379.5 million for the
quarter, an increase of 7 percent. Excluding Pleasant Company, the Girls
Division achieved sales growth of 7 percent.
Worldwide Barbie gross sales increased 2 percent. As expected, US shipments to
customers declined in the quarter compared to last year's unusually strong
shipments and were offset by strong international Barbie sales. Diva Starz and
Polly Pocket(R) also performed well in the quarter. Pleasant Company gross
sales advanced 6 percent.
Infant and Preschool
Worldwide gross sales for the Infant and Preschool division, which includes the
Fisher-Price(R), Sesame Street(R) and Disney(R) character brands, were $316.8
million, or up 4 percent for the quarter. Core Fisher-Price brands continued to
be strong with worldwide gross sales up 9 percent.
Boys-Entertainment
The Boys-Entertainment division, which consists of the Wheels and Entertainment
categories, achieved worldwide gross sales of $219.8 million, a 9 percent
increase. Led by growth in both Hot Wheels(R) and Tyco R/C(R), the Wheels
category experienced growth of 2 percent, while the Entertainment category
increased by 21 percent.
(more)
Mattel Reports Second Quarter Results/Page 3
Financial Realignment Plan
Mattel recorded pre-tax charges of $20.8 million in the quarter as part of its
$250 million financial realignment plan. The second quarter charges are largely
related to the planned closure of its North American distribution and
manufacturing facilities. These charges are included in Cost of Sales ($7.2
million), Restructuring and Other Charges ($13.0 million) and Other Expense
($0.6 million) in the consolidated statement of operations. Since the
announcement of the plan in September of 2000, Mattel has recorded $153.0
million in pre-tax charges. The company is on target to deliver cumulative cost
savings of approximately $200 million over the next three years.
Live Webcast
Mattel will webcast its second 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
beginning two hours after the completion of the live call. To listen to an
archive of the call via telephone, please call 1 (888) 203-1112 for domestic
callers and 1 (719) 457-0820 for international callers. The passcode for both
numbers is 433264. The telephonic playback will be available beginning at 11
a.m. Pacific time (2 p.m. Eastern time) today for 72 hours.
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.
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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, 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
JUNE 30, 2001
THREE MONTHS ENDED OR AT SIX MONTHS ENDED
(In millions, except per ---------------------------------- ---------------------------------------------
share amounts) 6/30/01 6/30/00 % CHANGE 6/30/01 6/30/00 % CHANGE
- ------------------------ ---------------------------------- ---------------------------------------------
KEY P&L DATA:
-------------
Net Sales $ 854.3 $ 817.8 4% $1,586.2 $1,511.1 5%
Gross Margin $ 386.1 $ 363.9 6% $ 719.9 $ 678.3 6%
% of Net Sales 45.2% 44.5% 45.4% 44.9 %
Advertising $ 103.4 $ 98.6 5% $ 200.0 $ 189.9 5%
% of Net Sales 12.1% 12.1% 12.6% 12.6 %
SG&A $ 214.3 $ 218.7 -2% $ 419.5 $ 419.8 0%
% of Net Sales 25.1% 26.7% 26.4% 27.8 %
Operating Income $ 53.6 $ 42.2 27% $ 71.8 $ 58.1 24%
% of Net Sales 6.3% 5.2% 4.5% 3.8 %
Net Income (Loss) Before
Charges $ 10.1 $ 4.6 $ (2.0) $ (1.6)
% of Net Sales 1.2% 0.6% (0.1)% (0.1)%
EPS Before Charges -
Diluted $ 0.02 $ 0.01 $ 0.00 $ 0.00
KEY BALANCE SHEET DATA:
-----------------------
Accounts Receivable, Net $ 947.8 $1,057.4
Days of Sales
Outstanding (DSO) 94 113
Inventories $ 692.8 $ 633.5
Days of Supply (DOS) 73 74
Total Debt Outstanding $1,873.8 $2,105.4
Total Debt-to-Total
Capitalization 57.1% 55.4%
WORLDWIDE GROSS SALES:
----------------------
Girls $ 379.5 $ 355.7 $ 717.5 $ 672.7
% As Reported 7% 2% 7% 1%
% Local Currency 8% 5% 9% 4%
Boys/Entertainment $ 219.8 $ 202.1 $ 415.3 $ 382.2
% As Reported 9% 5% 9% 3%
% Local Currency 10% 4% 11% 4%
Infant & Preschool $ 316.8 $ 306.1 $ 559.9 $ 549.1
% As Reported 4% 1% 2% 2%
% Local Currency 5% 2% 3% 2%
Total Company $ 919.5 $ 870.7 $1,699.9 $1,610.7
% As Reported 6% 2% 6% 1%
% Local Currency 7% 4% 7% 3%
MATTEL, INC. AND SUBSIDIARIES EXHIBIT II
===================================================================================================================================
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
JUNE 30, 2001
Three Months Ended June 30, 2001 Six Months Ended June 30, 2001
--------------------------------------------- -------------------------------------------
(In millions, Pro Forma Pro Forma
except per share As Impact of Before As Impact of Before
amounts) Reported Charges Charges Reported Charges Charges
- -------------------- ----------- ------------ ------------ ----------- ------------ ------------
NET SALES $ 854.3 $ 0.0 $ 854.3 $ 1,586.2 $ 0.0 $ 1,586.2
Cost of sales 475.4 7.2 468.2 880.1 13.8 866.3
----------- ------------ ------------ ----------- ------------ ------------
GROSS PROFIT 378.9 (7.2) 386.1 706.1 (13.8) 719.9
Advertising and promotion
expenses 103.4 0.0 103.4 200.3 0.3 200.0
Other selling and
administrative expenses 214.3 0.0 214.3 419.6 0.1 419.5
Restructuring and other
charges 13.0 13.0 0.0 13.0 13.0 0.0
Other expense, net 2.7 0.6 2.1 9.2 6.1 3.1
----------- ------------ ------------ ----------- ------------ ------------
OPERATING INCOME
BEFORE AMORTIZATION 45.5 (20.8) 66.3 64.0 (33.3) 97.3
Amortization of intangibles 12.7 0.0 12.7 25.5 0.0 25.5
----------- ------------ ------------ ----------- ------------ ------------
OPERATING INCOME 32.8 (20.8) 53.6 38.5 (33.3) 71.8
Interest expense 39.6 0.0 39.6 74.5 0.0 74.5
----------- ------------ ------------ ----------- ------------ ------------
(LOSS) INCOME
BEFORE INCOME TAXES (6.8) (20.8) 14.0 (36.0) (33.3) (2.7)
(Benefit) provision for
income taxes (1.9) (5.8) 3.9 (9.1) (8.4) (0.7)
----------- ------------ ------------ ----------- ------------ ------------
(LOSS) INCOME FROM
CONTINUING OPERATIONS (4.9) (15.0) 10.1 (26.9) (24.9) (2.0)
Cumulative effect of
change in accounting
principles, net of tax 0.0 0.0 0.0 (12.0) (12.0) 0.0
----------- ------------ ------------ ----------- ------------ ------------
NET (LOSS) INCOME $ (4.9) $ (15.0) $ 10.1 $ (38.9) $ (36.9) $ (2.0)
=========== ============ ============ =========== ============ ============
INCOME PER SHARE - BASIC
(Loss) income from
continuing operations $ (0.01) $ (0.03) $ 0.02 $ (0.06) $ (0.06) $ 0.00
Cumulative effect of
change in accounting
principles 0.00 0.00 0.00 (0.03) (0.03) 0.00
----------- ------------ ------------ ----------- ------------ ------------
$ (0.01) $ (0.03) $ 0.02 $ (0.09) $ (0.09) $ 0.00
=========== ============ ============ =========== ============ ============
AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING - BASIC 430.9 430.9 430.9 430.4 430.4 430.4
=========== ============ ============ =========== ============ ============
INCOME PER SHARE - DILUTED
(Loss) income from
continuing operations $ (0.01) $ (0.03) $ 0.02 $ (0.06) $ (0.06) $ 0.00
Cumulative effect of
change in accounting
principles 0.00 0.00 0.00 (0.03) (0.03) 0.00
----------- ------------ ------------ ----------- ------------ ------------
$ (0.01) $ (0.03) $ 0.02 $ (0.09) $ (0.09) $ 0.00
=========== ============ ============ =========== ============ ============
AVERAGE NUMBER OF
COMMON AND COMMON
EQUIVALENT SHARES
OUTSTANDING - DILUTED 430.9 430.9 430.9 430.4 430.4 430.4
=========== ============ ============ =========== ============ ============
Three Months Ended June 30, 2000 Six Months Ended June 30, 2000
--------------------------------------------- --------------------------------------------
Pro Forma Pro Forma
As Impact of Before As Impact of Before
Reported Charges Charges Reported Charges Charges
----------- ------------ ------------ ----------- ------------ ------------
Net Sales $ 817.8 $ 0.0 $ 817.8 $ 1,511.1 $ 0.0 $ 1,511.1
Cost of sales 453.9 0.0 453.9 832.8 0.0 832.8
----------- ------------ ------------ ----------- ------------ ------------
GROSS PROFIT 363.9 0.0 363.9 678.3 0.0 678.3
Advertising and promotion
expenses 98.6 0.0 98.6 189.9 0.0 189.9
Other selling and
administrative expenses 218.7 0.0 218.7 472.9 53.1 419.8
Restructuring and other
charges (2.0) (2.0) 0.0 (2.0) (2.0) 0.0
Other (income), net (9.0) 0.0 (9.0) (15.4) 0.0 (15.4)
----------- ------------ ------------ ----------- ------------ ------------
OPERATING INCOME
BEFORE AMORTIZATION 57.6 2.0 55.6 32.9 (51.1) 84.0
Amortization of intangibles 13.4 0.0 13.4 25.9 0.0 25.9
----------- ------------ ------------ ----------- ------------ ------------
OPERATING INCOME 44.2 2.0 42.2 7.0 (51.1) 58.1
Interest expense 35.9 0.0 35.9 60.3 0.0 60.3
----------- ------------ ------------ ----------- ------------ ------------
INCOME (LOSS)
BEFORE INCOME TAXES 8.3 2.0 6.3 (53.3) (51.1) (2.2)
Provision (benefit) for
income taxes 2.3 0.6 1.7 (14.7) (14.1) (0.6)
----------- ------------ ------------ ----------- ------------ ------------
INCOME (LOSS) FROM
CONTINUING OPERATIONS 6.0 1.4 4.6 (38.6) (37.0) (1.6)
Loss from discontinued
operations, net of tax 0.0 0.0 0.0 (126.6) (126.6) 0.0
----------- ------------ ------------ ----------- ------------ ------------
NET INCOME (LOSS) $ 6.0 $ 1.4 $ 4.6 $ (165.2) $ (163.6) $ (1.6)
=========== ============ ============ =========== ============ ============
INCOME PER SHARE - BASIC
Income (loss) from
continuing operations $ 0.01 $ 0.00 $ 0.01 $ (0.09) $ (0.09) $ 0.00
Loss from discontinued
operations 0.00 0.00 0.00 (0.30) (0.30) 0.00
----------- ------------ ------------ ----------- ------------ ------------
$ 0.01 $ 0.00 $ 0.01 $ (0.39) $ (0.39) $ 0.00
=========== ============ ============ =========== ============ ============
AVERAGE NUMBER OF
COMMON SHARES
OUTSTANDING - BASIC 425.8 425.8 425.8 425.7 425.7 425.7
=========== ============ ============ =========== ============ ============
INCOME PER SHARE - DILUTED
Income (loss) from
continuing operations $ 0.01 $ 0.00 $ 0.01 $ (0.09) $ (0.09) $ 0.00
Loss from discontinued
operations 0.00 0.00 0.00 (0.30) (0.30) 0.00
----------- ------------ ------------ ----------- ------------ ------------
$ 0.01 $ 0.00 $ 0.01 $ (0.39) $ (0.39) $ 0.00
=========== ============ ============ =========== ============ ============
AVERAGE NUMBER OF
COMMON AND COMMON
EQUIVALENT SHARES
OUTSTANDING - DILUTED 427.8 427.8 427.8 425.7 425.7 425.7
=========== ============ ============ =========== ============ ============
MATTEL, INC. AND SUBSIDIARIES EXHIBIT III
===================================================================================================================================
CONSOLIDATED STATEMENTS OF OPERATIONS
BEFORE CHARGES
For Three Months For Six Months
Ended June 30, Ended June 30,
-------------------------------------------------- ---------------------------------------------------
2001 2000 2001 2000
------------------ ------------------ -------------------- ------------------
(In millions, except % Net % Net % Net % Net
per share amounts) $ Amt Sales $ Amt Sales % Change $ Amt Sales $ Amt Sales % Change
- ----------- --------- ------- --------- ------- -------- --------- ------- --------- ------ --------
NET SALES $ 854.3 $ 817.8 4.5% $ 1,586.2 $ 1,511.1 5.0%
Cost of sales 468.2 54.8% 453.9 55.5% 3.1% 866.3 54.6% 832.8 55.1% 4.0%
-------- ------- --------- -------
GROSS PROFIT 386.1 45.2% 363.9 44.5% 6.1% 719.9 45.4% 678.3 44.9% 6.1%
Advertising and
promotion expenses 103.4 12.1% 98.6 12.1% 4.8% 200.0 12.6% 189.9 12.6% 5.3%
Other selling and
administrative
expenses 214.3 25.1% 218.7 26.7% -2.0% 419.5 26.4% 419.8 27.8% -0.1%
Other expense
(income), net 2.1 0.2% (9.0) -1.1% 3.1 0.2% (15.4) -1.0%
-------- ------- --------- -------
OPERATING INCOME
BEFORE AMORTIZATION 66.3 7.8% 55.6 6.8% 19.3% 97.3 6.1% 84.0 5.6% 16.0%
Amortization of
intangibles 12.7 1.5% 13.4 1.6% -4.8% 25.5 1.6% 25.9 1.7% -1.4%
-------- ------- --------- -------
OPERATING INCOME 53.6 6.3% 42.2 5.2% 27.0% 71.8 4.5% 58.1 3.8% 23.8%
Interest expense 39.6 4.6% 35.9 4.4% 10.1% 74.5 4.7% 60.3 4.0% 23.6%
-------- ------- --------- -------
INCOME (LOSS)
BEFORE INCOME TAXES 14.0 1.6% 6.3 0.8% (2.7) -0.2% (2.2) -0.1%
Provision (benefit) for
income taxes 3.9 1.7 (0.7) (0.6)
-------- ------- --------- -------
INCOME (LOSS) FROM
CONTINUING OPERATIONS $ 10.1 1.2% $ 4.6 0.6% $ (2.0) -0.1% $ (1.6) -0.1%
======== ======== ========= =========
EFFECTIVE TAX RATE 27.6% 27.6% 27.6% 27.6%
BASIC INCOME PER SHARE
FROM CONTINUING
OPERATIONS $ 0.02 $ 0.01 $ 0.00 $ 0.00
======== ======== ========= =========
DILUTED INCOME PER
SHARE FROM CONTINUING
OPERATIONS $ 0.02 $ 0.01 $ 0.00 $ 0.00
======== ======== ========= =========
===================================================================================================================================
CONDENSED CONSOLIDATED BALANCE SHEETS
At June 30,
----------------------- At Dec. 31,
(In Millions) 2001 2000 2000
- ----------- --------- ---------- ---------
Assets
Cash and short-term
investments $ 40.7 $ 129.7 $ 232.4
Accounts
receivable, net 947.8 1,057.4 839.6
Inventories 692.8 633.5 489.7
Prepaid expenses
and other current
assets 182.0 206.7 189.8
-------- ---------- --------
Total current
assets 1,863.3 2,027.3 1,751.5
Property, plant
and equipment, net 618.4 678.6 647.8
Other assets 1,914.5 1,716.2 1,902.6
Net investment
in discontinued
operations - 378.6 11.5
-------- ---------- --------
TOTAL ASSETS $4,396.2 $ 4,800.7 $4,313.4
======== ========== ========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Short-term
borrowings $ 620.1 $ 1,220.2 $ 226.4
Current portion
of long-term
liabilities 62.6 2.7 32.7
Accounts payable
and accrued
liabilities 743.7 653.4 1,042.4
Income taxes payable 182.5 163.4 200.9
-------- ---------- --------
Total current
liabilities 1,608.9 2,039.7 1,502.4
Long-term debt 1,191.1 882.5 1,242.4
Other long-term
liabilities 189.3 182.7 165.5
Stockholders' equity 1,406.9 1,695.8 1,403.1
-------- ---------- --------
TOTAL LIABILITIES
AND STOCKHOLDERS'
EQUITY $4,396.2 $ 4,800.7 $4,313.4
======== ========== ========