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: February 5, 1998
MATTEL, INC.
------------
(Exact name of registrant as specified in its charter)
Delaware 001-05647 95-1567322
- ------------------------------------------------------------------------------
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File No.) Identification No.)
333 Continental Boulevard, El Segundo, California 90245-5012
- ------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (310) 252-2000
----------------------------
N/A
- ------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other Events
- ------- ------------
Mattel, Inc. hereby incorporates by reference herein its
press release dated February 3, 1998, regarding its 1997 fourth
quarter results of operations, a copy of which is included
as Exhibit 99.0 attached hereto.
Item 7. Financial Statements and Exhibits
- ------- ---------------------------------
(a) Financial statements of businesses acquired: None
(b) Pro forma financial information: None
(c) Exhibits:
99.0 Press release dated February 3, 1998.
<PAGE>
SIGNATURES
----------
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
-------------------------
Leland P. Smith
Assistant General Counsel
Date: February 5, 1998 and Secretary
----------------------
<PAGE>
FOR IMMEDIATE RELEASE CONTACT:
February 3, 1998 Mattel, Inc.
News Media Investor Relations
Glenn Bozarth Mike Salop
310-252-3521 310-252-2703
MATTEL 1997 EARNINGS INCREASE 34 PERCENT
----------------------------------------
LOS ANGELES, February 3 -- Mattel, Inc. today reported that income for the full-
year 1997 increased 34 percent to $499.5 million or $1.68 per basic share ($1.65
per diluted share), before previously announced charges related to the Tyco
integration and Mattel restructuring and a note redemption. Earnings per
primary share were $1.66. Net income for 1996 was $372.2 million, or $1.26 per
basic share.
Net sales for 1997 were up 10 percent in local currency, before a $139 million
negative impact of foreign exchange. In U.S. dollars, sales totaled $4.835
billion, up 7 percent from $4.535 billion in 1996.
Net income for the 1997 fourth quarter totaled $195.1 million or $.66 per basic
share ($.64 per diluted share), up 82 percent from $106.9 million or $.36 per
basic share in the 1996 quarter. Earnings per primary share were $.65. Net
sales for the 1997 fourth quarter were up 17 percent in local currency. In U.S.
dollars, sales increased 13 percent to $1.613 billion, versus $1.432 billion in
1996.
"We're very proud of this performance," said Jill Barad, chairman and chief
executive officer. "In a difficult economic environment, we achieved our
targets, expanding Mattel's record to nine consecutive years of profitable
growth.
-more-
2-2-2-2-2-
"These results demonstrate the advantage we have in our diverse and well-
balanced brand portfolio," she said. "Worldwide Barbie sales increased 12
percent in local currency and 9 percent in U.S. dollars. Our Disney sales were
up 17 percent, and our Wheels brands were up a very strong 21 percent, both in
U.S. dollars. And we achieved an increase of 15 percent in our worldwide Infant
and Preschool category, despite a 15 percent decline at Fisher-Price.
"Our margins are some of the healthiest in our history, and our balance sheet
has never been stronger," Barad said. "Demand for our brands remains very
strong in the first quarter. This, along with the $100 million in incremental
savings we expect this year from the Tyco integration and Mattel restructuring,
puts us in an excellent position as we enter 1998."
Mattel, Inc. is the worldwide leader in the design, manufacture 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 150
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.
-###-
<PAGE>
<TABLE>
MATTEL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<CAPTION>
FOR THE FOR THE
THREE MONTHS ENDED YEAR ENDED
------------------------- -------------------------
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
(In thousands, except per share amounts) 1997 1996 (a) 1997 (a) 1996 (a)
- ---------------------------------------- ----------- ----------- ---------- ---------
<S> <C> <C> <C> <C>
Net Sales $ 1,613,093 $ 1,431,834 $4,834,616 $4,535,332
Cost of sales 795,018 721,747 2,434,616 2,315,574
----------- ---------- ---------- ----------
Gross Profit 818,075 710,087 2,400,000 2,219,758
Advertising and promotion expenses 300,569 308,988 779,139 778,919
Other selling and administrative expenses 220,192 214,954 796,952 772,335
Integration/restructuring costs (b) - - 275,000 -
Other expense, net 2,964 8,860 33,697 31,522
----------- ---------- ---------- ----------
Operating Profit 294,350 177,285 515,212 636,982
Interest expense 27,348 30,092 90,130 100,226
----------- ---------- ---------- ----------
Income Before Income Taxes 267,002 147,193 425,082 536,756
Provision for income taxes 71,873 40,248 135,288 164,532
----------- ---------- ---------- ----------
Income Before Extraordinary Item 195,129 106,945 289,794 372,224
Extraordinary item, net of tax - - (4,610) -
----------- ---------- ---------- ----------
Net Income 195,129 106,945 285,184 372,224
Less: dividends on convertible preferred stock 1,990 2,837 10,505 7,391
----------- ---------- ---------- ----------
Net Income Applicable to Common Shares $ 193,139 $ 104,108 $ 274,679 $ 364,833
=========== ========== ========== ==========
Basic Income Per Share
Income Before Extraordinary Item, Net of Tax $ 0.66 $ 0.36 $ 0.96 $ 1.26
Extraordinary Item - Debt Retirement - - (0.01) -
----------- ---------- ---------- ----------
Net Income Per Share - Basic (c)(d) $ 0.66 $ 0.36 $ 0.95 $ 1.26
=========== ========== ========== ==========
Average Number of Common Shares
Outstanding - Basic (c) 290,962 287,544 290,450 290,393
=========== ========== ========== ==========
Diluted Income Per Share
Income Before Extraordinary Item, Net of Tax $ 0.64 $ 0.35 $ 0.94 $ 1.23
Extraordinary Item - Debt Retirement - - (0.01) -
----------- ---------- ---------- ----------
Net Income Per Share - Diluted (c)(d) $ 0.64 $ 0.35 $ 0.93 $ 1.23
=========== ========== ========== ==========
Average Number of Common and Common
Equivalent Shares Outstanding - Diluted (c) 306,053 303,594 295,653 303,057
=========== ========== ========== ==========
</TABLE>
<TABLE>
MATTEL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<CAPTION>
Dec. 31, Dec. 31,
(In thousands) 1997 1996 (a)
- -------------- ----------- -----------
ASSETS
<S> <C> <C>
Cash $ 694,947 $ 550,271
Accounts receivable, net 1,091,416 948,940
Inventories 428,844 444,178
Prepaid expenses and other current assets 246,529 195,673
----------- -----------
Total current assets 2,461,736 2,139,062
Property, plant and equipment, net 601,597 616,281
Other assets 740,458 825,799
----------- -----------
Total Assets $ 3,803,791 $ 3,581,142
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C>
Short-term borrowings $ 17,468 $ 28,924
Current portion of long-term liabilities 13,659 106,596
Accounts payable and accrued liabilities 939,562 823,069
Income taxes payable 202,735 183,288
----------- -----------
Total current liabilities 1,173,424 1,141,877
Long-term debt 155,036 299,806
Medium-Term notes 520,500 220,000
Other long-term liabilities 132,761 113,536
Shareholders' equity 1,822,070 1,805,923
----------- -----------
Total Liabilities and Shareholders' Equity $ 3,803,791 $ 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) Share and per share data for all periods presented reflect the retroactive effect of
shares issued pursuant to the Tyco merger.
(d) See attached table.
<PAGE>
</TABLE>
<TABLE>
MATTEL, INC. AND SUBSIDIARIES
EARNINGS PER SHARE ANALYSIS
<CAPTION>
FOR THE THREE MONTHS ENDED
DECEMBER 31, 1997
---------------------------------------
Primary Basic Diluted
----------- ----------- -----------
<S> <C> <C> <C>
Net Income Per Share $ 0.65 $ 0.66 $ 0.64
=========== =========== ===========
Average Number of Common and Common Equivalent
Shares Outstanding 296,434 290,962 306,053
=========== =========== ===========
FOR THE YEAR ENDED
DECEMBER 31, 1997
---------------------------------------
Primary Basic Diluted
----------- ----------- -----------
<S> <C> <C> <C>
Income Per Share Before Integration/Restructuring
Costs and Extraordinary Item $ 1.66 $ 1.68 $ 1.65
Integration/Restructuring Costs (0.72) (0.72) (0.71)
Extraordinary Item (0.01) (0.01) (0.01)
----------- ----------- -----------
Net Income Per Share $ 0.93 $ 0.95 $ 0.93
=========== =========== ===========
Average Number of Common and Common Equivalent
Shares Outstanding 295,064 290,450 295,653
=========== =========== ===========
MATTEL, INC. AND SUBSIDIARIES
EARNINGS PER SHARE ANALYSIS
<CAPTION>
FOR THE THREE MONTHS ENDED
DECEMBER 31, 1996
---------------------------------------
Primary Basic Diluted
----------- ----------- -----------
<S> <C> <C> <C>
Net Income Per Share $ 0.36 $ 0.36 $ 0.35
=========== =========== ===========
Average Number of Common and Common Equivalent
Shares Outstanding 292,319 287,544 303,594
=========== =========== ===========
FOR THE YEAR ENDED
DECEMBER 31, 1996
---------------------------------------
Primary Basic Diluted
----------- ----------- -----------
<S> <C> <C> <C>
Income Per Share Before Integration/Restructuring
Costs and Extraordinary Item $ 1.24 $ 1.26 $ 1.23
Integration/Restructuring Costs - - -
Extraordinary Item - - -
----------- ----------- -----------
Net Income Per Share $ 1.24 $ 1.26 $ 1.23
=========== =========== ===========
Average Number of Common and Common Equivalent
Shares Outstanding 295,407 290,393 303,057
=========== =========== ===========
<PAGE>
</TABLE>
