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 16, 1998
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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On July 16, 1998, the Company announced that net income for
the quarter ended June 30, 1998 totaled $60.4 million or
$.20 per share, down from $75.6 million or $.25 per share in
the year-ago quarter. Net sales for the same period were
$861.5 million, versus $972.7 million in the same quarter in
1997, down 10 percent in local currency or 11 percent in
U.S. dollars.
The second quarter was negatively impacted by a $72 million
reduction in sales to Toys "R" Us, a $28 million decrease
related to discontinued product lines, and a negative
exchange impact of $16 million.
For the first half of 1998, net income was $73.1 million or
$.23 per share, down from $80.7 million or $.26 per share in
the 1997 first half before a 1997 first quarter charge of
$275 million related to the integration of Tyco into Mattel
and the related Mattel restructuring. Sales for the six
months ended June 30, 1998 were $1.57 billion, versus $1.67
billion for the same period in 1997, down four percent in
local currency and six percent in U.S. dollars.
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<TABLE>
MATTEL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<CAPTION>
FOR THE FOR THE
THREE MONTHS ENDED SIX MONTHS ENDED
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June 30, June 30, June 30, June 30,
(In thousands, except per share amounts) 1998 1997 1998 1997(a)(b)
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<S> <C> <C> <C> <C>
Net Sales $ 861,526 $ 972,656 $1,566,690 $1,666,176
Cost of sales 456,778 513,819 838,024 884,528
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Gross Profit 404,748 458,837 728,666 781,648
Advertising and promotion expenses 109,875 131,713 207,956 234,339
Other selling and administrative expenses 190,689 192,707 374,480 377,993
Integration/restructuring costs (c) - - - 275,000
Other expense, net 3,942 7,959 11,840 15,841
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Operating Profit (Loss) 100,242 126,458 134,390 (121,525)
Interest expense 15,625 18,514 32,017 38,150
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Income (Loss) Before Income Taxes 84,617 107,944 102,373 (159,675)
Provision (benefit) for income taxes 24,233 32,310 29,320 (30,685)
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Net Income (Loss) 60,384 75,634 73,053 (128,990)
Less: dividends on convertible preferred stock 1,990 2,837 3,980 5,677
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Net Income (Loss) Applicable to Common Shares $ 58,394 $ 72,797 $ 69,073 $ (134,667)
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Net Income (Loss) Per Share - Basic $ 0.20 $ 0.25 $ 0.24 $ (0.46)
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Average Number of Common Shares
Outstanding - Basic 293,433 291,737 293,242 290,069
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Net Income (Loss) Per Share - Diluted $ 0.20 $ 0.25 $ 0.23 $ (0.46)
========== ========== ========== ==========
Average Number of Common and Common
Equivalent Shares Outstanding - Diluted 297,720 296,609 297,943 290,069
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</TABLE>
<TABLE>
MATTEL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<CAPTION>
June 30, June 30, Dec. 31,
(In thousands) 1998 1997 1997
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ASSETS
<S> <C> <C> <C>
Cash $ 151,949 $ 58,989 $ 694,947
Accounts receivable, net 1,249,205 1,315,815 1,091,416
Inventories 627,534 552,463 428,844
Prepaid expenses and other current assets 255,288 194,962 246,529
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Total current assets 2,283,976 2,122,229 2,461,736
Property, plant and equipment, net 607,659 618,351 601,597
Other assets 785,317 826,842 740,458
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Total Assets $ 3,676,952 $ 3,567,422 $ 3,803,791
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LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C> <C>
Short-term borrowings $ 191,454 $ 164,991 $ 17,468
Current portion of long-term liabilities 12,341 231,708 13,659
Accounts payable and accrued liabilities 725,528 739,238 939,562
Income taxes payable 147,101 120,033 202,735
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Total current liabilities 1,076,424 1,255,970 1,173,424
Long-term debt 143,297 169,579 155,036
Medium-Term notes 520,500 380,000 520,500
Other long-term liabilities 134,540 117,715 132,761
Shareholders' equity 1,802,191 1,644,158 1,822,070
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Total Liabilities and Shareholders' Equity $ 3,676,952 $ 3,567,422 $ 3,803,791
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<FN>
(a) Consolidated results are restated for the March 1997 merger with Tyco Toys, Inc.
(b) Income per share for the six months ended June 30, 1997, before the $0.72 per share
effect of the merger-related nonrecurring charge of $210 million after taxes, was $0.26
per share.
(c) 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.
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</TABLE>
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/ Robert Normile
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Robert Normile
Vice President, Associate
Date: July 16, 1998 General Counsel and Secretary
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