EXHIBIT 99.0
For Immediate Contacts: News Media Investor Relations
Release Lisa Marie Bongiovanni Jessica Fisher
7/19/00 310-252-3524 310-252-2703
[email protected] [email protected]
MATTEL REPORTS SECOND QUARTER RESULTS
-------------------------------------
Barbie and Other Core Brands Demonstrate Strength
LOS ANGELES, July 20, 2000 - Mattel, Inc. (NYSE:MAT) today
reported 2000 second quarter income from continuing operations of
$6.0 million or $.01 per share, versus underlying income of $16.5
million or $.04 per share in the 1999 second quarter. Net sales
from continuing operations were $817.8 million, a 2 percent
increase, or 4 percent in local currency, from $802.3 million in
last year's second quarter.
"Led by growth in our core brands, including Barbie, Fisher-Price
and Hot Wheels, Mattel has experienced increased sales
domestically for the third quarter in a row," said Robert A.
Eckert, chairman and chief executive officer of Mattel.
"International markets proved to be difficult in the first half
of this year as retailers, specifically in Europe, continue to
adjust to just-in-time inventories and the impact of a strong
dollar. Based on retail sell through, we expect to see an
improvement in international sales during the second half of the
year."
On a regional basis, sales from continuing operations increased 7
percent in the U.S., and were down 9 percent in international
markets, or down 3 percent in local currency.
GIRLS
With worldwide gross sales at $315.3 million for the quarter, the
Girls division, which includes the Barbie, Polly Pocket!, and
Cabbage Patch Kids brands, grew by 1 percent. Barbie sales
advanced 5 percent worldwide.
INFANT AND PRESCHOOL
Worldwide gross sales for the Infant and Preschool division,
which includes the Fisher-Price, Sesame Street and Disney brands,
were $305.1 million, or flat, for the quarter. Robust domestic
growth in core Fisher-Price brands offset declines in
international sales and licensed character products.
BOYS-ENTERTAINMENT
Consisting of the Wheels and Entertainment categories, the Boys-
Entertainment division experienced a 2 percent increase in
worldwide sales, with flat domestic sales and increased
international sales. The Wheels category, with worldwide quarterly
gross sales at $130.1 million, grew by 1 percent; and the
Entertainment category, with worldwide quarterly gross sales at
$67.1 million, grew by 4 percent.
Available in U.S. markets only, gross sales for the Direct
Marketing division, which includes Pleasant Company, and the
Barbie Collector and Fisher-Price catalogs, were $41.8 million
for the quarter, an increase of 15 percent.
As previously announced, Mattel Interactive is being treated as a
discontinued operation in the company's financial statements.
The sales process continues for Mattel's software business.
Mattel, Inc. is a worldwide leader in the design, manufacture and
marketing of family products. With headquarters in El Segundo,
Calif., Mattel has offices and facilities in 36 foreign 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 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; uncertainty regarding
the sale of the company's software business; 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.
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MATTEL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<CAPTION>
FOR THE FOR THE
THREE MONTHS ENDED SIX MONTHS ENDED
------------------------- -------------------------
June 30, June 30, June 30, June 30,
(In thousands, except per share amounts) 2000 1999 2000 1999
---------------------------------------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net Sales $ 817,797 $ 802,271 $1,511,058 $1,490,586
Cost of sales 453,918 442,612 832,822 815,553
---------- ---------- ---------- ----------
Gross Profit 363,879 359,659 678,236 675,033
Advertising and promotion expenses 98,586 96,875 189,873 188,036
Other selling and administrative expenses (a) 218,711 198,511 472,910 400,030
Restructuring and other charges (b) (2,000) 293,100 (2,000) 293,100
Other (income) expense, net (9,026) 985 (15,399) 3,229
---------- ---------- ---------- ----------
Operating Income (Loss) Before Amortization 57,608 (229,812) 32,852 (209,362)
Amortization of intangibles 13,373 12,960 25,905 25,972
---------- ---------- ---------- ----------
Operating Income (Loss) 44,235 (242,772) 6,947 (235,334)
Interest expense 35,945 27,614 60,301 52,472
---------- ---------- ---------- ----------
Income (Loss) Before Income Taxes 8,290 (270,386) (53,354) (287,806)
Provision (benefit) for income taxes 2,285 (59,405) (14,729) (64,195)
---------- ---------- ---------- ----------
Income (Loss) From Continuing Operations 6,005 (210,981) (38,625) (223,611)
Income (Loss) From Discontinued Operations (c) - 6,647 (126,606) 24,326
---------- ---------- ---------- ----------
Net Income (Loss) 6,005 (204,334) (165,231) (199,285)
Less: dividends on convertible preferred stock - 1,990 - 3,980
---------- ---------- ---------- ----------
Net Income (Loss) Applicable to Common Shares $ 6,005 $ (206,324) $ (165,231) $ (203,265)
========== ========== ========== ==========
Income (Loss) Per Share - Basic (c)
Income (Loss) From Continuing Operations $ 0.01 $ (0.52) $ (0.09) $ (0.56)
Income (Loss) From Discontinued Operations - 0.02 (0.30) 0.06
---------- ---------- ---------- ----------
Net Income (Loss) Per Share - Basic $ 0.01 $ (0.50) $ (0.39) $ (0.50)
========== ========== ========== ==========
Average Number of Common Shares
Outstanding - Basic 425,818 409,040 425,655 402,786
========== ========== ========== ==========
Income (Loss) Per Share - Diluted (c)
Income (Loss) From Continuing Operations $ 0.01 $ (0.52) $ (0.09) $ (0.56)
Income (Loss) From Discontinued Operations - 0.02 (0.30) 0.06
---------- ---------- ---------- ----------
Net Income (Loss) Per Share - Diluted $ 0.01 $ (0.50) $ (0.39) $ (0.50)
========== ========== ========== ==========
Average Number of Common and Common
Equivalent Shares Outstanding - Diluted 427,782 409,040 425,655 402,786
========== ========== ========== ==========
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MATTEL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<CAPTION>
June 30, June 30, Dec. 31,
(In thousands) 2000 1999 1999
-------------- ----------- ----------- -----------
ASSETS
<S> <C> <C> <C>
Cash $ 129,693 $ 53,922 $ 247,354
Accounts receivable, net 1,057,388 1,064,066 1,001,972
Inventories 633,513 615,188 436,316
Prepaid expenses and other current assets 206,743 240,602 166,217
----------- ----------- -----------
Total current assets 2,027,337 1,973,778 1,851,859
Property, plant and equipment, net 678,643 710,460 724,791
Other assets 1,716,192 1,453,259 1,635,328
Net investment in discontinued operations (c) 378,571 509,353 461,986
----------- ----------- -----------
Total Assets $ 4,800,743 $ 4,646,850 $ 4,673,964
=========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C> <C>
Short-term borrowings $ 1,220,185 $ 658,719 $ 369,549
Current portion of long-term liabilities 2,708 133,344 3,173
Accounts payable and accrued liabilities 653,418 819,017 1,007,910
Income taxes payable 163,397 90,718 184,789
----------- ----------- -----------
Total current liabilities 2,039,708 1,701,798 1,565,421
Senior notes 300,000 300,000 400,000
Medium-term notes 540,500 540,500 540,500
Long-term debt 42,042 42,701 42,380
Other long-term liabilities 182,660 158,301 162,976
Stockholders' equity 1,695,833 1,903,550 1,962,687
----------- ----------- -----------
Total Liabilities and Stockholders' Equity $ 4,800,743 $ 4,646,850 $ 4,673,964
=========== =========== ===========
<FN>
(a) Includes a $38.4 million after-tax charge for compensation expense, including forgiveness
of certain executive loans, related to the departure of certain senior executives in the
first quarter of 2000. The impact of this charge on earnings was $0.09 per share.
(b) The nonrecurring credit in the second quarter of 2000 represents net adjustments made
to the restructuring and nonrecurring charges recorded in 1999. In the second quarter
of 1999, Mattel incurred a $227 million after-tax charge for integration, restructuring
and other charges. The impact of this charge on earnings was $0.56 per share for both
the quarter and six month periods.
(c) The Consumer Software segment is being reported as a discontinued operation effective
March 31, 2000, and the consolidated financial statements have been reclassified to
segregate the net investment in and operating results of the Consumer Software segment.
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