SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report: July 17, 1996
MATTEL, INC.
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(Exact name of registrant as specified in its charter)
Delaware 001-05647 95-1567322
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File No.) Identification No.)
333 Continental Boulevard, El Segundo, California 90245-5012
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (310) 252-2000
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N/A
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(Former name or former address, if changed since last report)
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Item 5. Other Events
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Mattel, Inc. hereby incorporates by reference herein a press
release dated July 16, 1996, regarding the recently completed
investigation of its accounting practices, a copy of which is
included as Exhibit 99.1 attached hereto.
Mattel, Inc. hereby incorporates by reference herein its press
release dated July 16, 1996, regarding its response to the
conclusions reached in connection with the investigation of
its accounting practices, a copy of which is included as
Exhibit 99.2 attached hereto.
Item 7. Financial Statements and Exhibits
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(a) Financial statements of businesses acquired: None
(b) Pro forma financial information: None
(c) Exhibits:
99.1 Press release dated July 16, 1996.
99.2 Press release dated July 16, 1996.
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SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
MATTEL, INC.
Registrant
By: /s/ Leland P. Smith
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Leland P. Smith
Assistant General Counsel
Date: July 17, 1996 and Assistant Secretary
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EXHIBIT 99.1
FOR IMMEDIATE RELEASE CONTACT: David Kronfeld
Kekst and Company
(212) 593-2655
INDEPENDENT INVESTIGATION FINDS MATTEL'S
PRACTICES CONSISTENT WITH
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
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New York, NY, July 16, 1996 -- On July 16, 1996, the Audit Committee
of the Board of Directors of Mattel, Inc. received and accepted a report
prepared by the law firm of Davis Polk & Wardwell concerning allegations of
accounting irregularities at Mattel. Starting with Davis Polk's retention
in early April 1996, Davis Polk, with the expert assistance of the accounting
firm of Ernst & Young LLP, conducted an investigation into allegations raised
by Michelle Greenwald, a former Senior Vice President at Mattel, who was
terminated in July 1995.
Greenwald's allegations of accounting irregularities fall into two
categories - (1) general allegations that Mattel did not account properly
for sales and certain costs associated with sales; and (2) more specific
allegations that Mattel failed to account properly for certain royalty
obligations to The Walt Disney Company.
Davis Polk and Ernst & Young found no evidence that Mattel accounted
for sales and costs associated with sales in a manner which is inconsistent
with generally accepted accounting principles ("GAAP"). Davis Polk and
Ernst & Young conducted a factual investigation and analysis of Mattel's
policies and practices with respect to accounting for sales recognition,
sales incentives, and customer-related costs. Davis Polk and Ernst & Young
also investigated whether Mattel had entered into any consignment sales
with customers. Davis Polk and Ernst & Young found that none of the issues
raised by Greenwald concerning consignment sales or improper accounting
treatment for sales and costs associated with sales is supported by the
facts.
With respect to the Disney royalty obligations, Davis Polk and Ernst &
Young concluded that Mattel's accounting treatment for the Disney royalties
represented a reasonable application of GAAP given the facts and
circumstances as they existed at the time the accounting decisions were
made. Davis Polk and Ernst & Young noted that the determination not to
accrue for the royalties at issue was considered by Mattel with its outside
auditor, Price Waterhouse, at the time the accounting decisions were made
and that Price Waterhouse concurred with the Company's judgment.
Furthermore, Davis Polk and Ernst & Young have concluded that the
amount of royalties at issue is clearly immaterial to Mattel's earnings for
fiscal year 1994.
The Audit Committee will submit the report to the Board of Directors
and considers the inquiry closed.
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EXHIBIT 99.2
FOR IMMEDIATE RELEASE CONTACT: Glenn Bozarth
July 16, 1996 Mattel, Inc.
(310) 252-3521
MATTEL CHAIRMAN SAYS INDEPENDENT REVIEW
HAS SET THE RECORD STRAIGHT
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LOS ANGELES, July 16 -- Mattel Chairman John W. Amerman said today that the
recently completed independent review conducted by Davis Polk & Wardwell
and Ernst & Young proves that allegations of accounting irregularities are
wholly without merit.
"The conclusion of this investigation shows that the company's
accounting treatment of the transactions in question is in conformance with
generally accepted accounting principles," Amerman said. "From the
beginning of this process, we have stated that each and every allegation
was entirely without merit.
"We are very happy to set the record straight, and to get this issue
behind us once and for all," Amerman said. "We can now turn all of our
energies toward increasing Mattel's shareholder value."
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