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Non-Tech : MAT - Mattel - toysRthem -- Ignore unavailable to you. Want to Upgrade?

To: Neil H who wrote (129)	4/15/1999 10:00:00 AM
From: Duker	Read Replies (1) \| Respond to of 706

Mattel First Quarter Exceeds Per-Share Expectations; Barbie and Other Core Brands Show Strength Announces Restructuring Savings and Internet Initiative Thursday April 15, 9:02 am Eastern Time Company Press Release SOURCE: Mattel, Inc. LOS ANGELES, April 15 /PRNewswire/ -- Mattel, Inc. (NYSE: MAT - news) today reported a net loss of $17.9 million or $.07 per share for the 1999 first quarter, versus net income of $12.7 million or $.04 per share in last year's quarter. Net sales for the quarter were $692.1 million, down 2 percent from $705.2 million in 1998. ''As expected, our profitability was affected by the addition of Pleasant Company, due to the 4-cent impact of goodwill amortization and interest costs related to the acquisition,'' Jill E. Barad, Mattel's chairman and chief executive officer, said. ''While increased SG&A levels were also a factor in the quarter, this is being addressed through a business realignment and a restructuring we're announcing today. ''Our core brands showed their underlying strength in the first quarter,'' Barad said. ''Worldwide Barbie® sales increased 3 percent, but the true power of the brand was demonstrated in the U.S., where shipping was up 11 percent overall, and a very impressive 26 percent for dolls alone. Barbie sales outside of the U.S. were down 7 percent, as we shipped low-priced, non-promoted dolls to international markets in the first quarter,'' she said. ''The TV-promoted dolls that have been so successful in the United States are just now being delivered to international, and we expect them to produce the same positive results for those markets in the second quarter. ''Our core Fisher-Price® business also returned to health, increasing 9 percent worldwide,'' Barad said. ''Power Wheels was down due to the remaining effects of the recall. Character brands were also down, primarily due to last year's success of 'Tickle Me Elmo,' which contributed approximately $60 million to the first quarter of 1998. ''Our Entertainment category sales were up 8 percent, with the majority of the revenue from Disney's 'Tarzan' and Disney and Pixar's 'Toy Story 2' yet to come,'' she said. ''Our American Girl® and Cabbage Patch® businesses were both up, and our Wheels brands were up a very impressive 27 percent, continuing the successful growth trend of this category. ''U.S. sales were down 2 percent, again affected by our character plush success last year, but sales in our key international markets turned around in the quarter,'' Barad said. ''Total international increased by 1 percent, but Europe was up 5 percent, with France up 25 percent, the U.K. up 14 percent and Germany up 6 percent. The Asia/Pacific region was up 2 percent,'' she said. ''And Latin America sales were down by $1 million. ''Our gross margin remained strong at 45.8 percent, versus last year's 45.9 percent, and our balance sheet is in excellent shape,'' Barad said. ''On a comparable basis, before the addition of Pleasant Company, inventories were actually down $31 million from last year's first quarter, and accounts receivable were down by $116 million.'' Mattel had indicated earlier in the year that the company would reduce its overhead and advertising spending, and that it planned a realignment of certain Mattel operations that would result in significant cost savings. Barad today announced that these actions will include the closure of certain facilities and a workforce reduction affecting over 3,000 positions, or more than 10 percent of total employment. The merger of Mattel and The Learning Company, which the companies expect to complete next month, will also provide efficiencies resulting in additional cost savings. Based on these opportunities, Barad said Mattel expects to incur a pre-tax charge of approximately $300 to $350 million, to be taken in the 1999 second quarter. Approximately $75 million of the one-time charge will be related to merger transaction costs, about $90 million will be related to merger integration, and $135 million to $185 million will be related to Mattel restructuring. ''We expect these combined actions to result in cost savings of approximately $50 million in 1999 and at least $400 million over the following three years,'' Barad said. In a separate press release, Barad announced today that the company will spend $50 million on a new Internet initiative, which is expected to result in the creation of a new subsidiary later this year, a portion of which may be offered to the public. ''With Barbie, Fisher-Price and our European business returning to health in the quarter, and the excellent progress we are making in transforming ourselves into a global family products company, we are very bullish on the future of Mattel,'' Barad said. ''Our initiatives to expand our product portfolio, globalize our business and build a more direct relationship with our consumers will begin to produce excellent results going forward. And the completion of our merger with The Learning Company will provide unlimited opportunity to make our products and our distribution more relevant than ever to children and their families all around 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, 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 company's ability to successfully integrate the operations of The Learning Company following its merger into the company; 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. Financials to follow

To: Neil H who wrote (129)	4/15/1999 10:01:00 AM
From: Duker	Respond to of 706

MATTEL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, MARCH 31, (In thousands, except per share amounts) 1999 1998 Net Sales $692,116 $705,164 Cost of sales 375,379 381,246 Gross Profit 316,737 323,918 Advertising and promotion expenses 92,051 98,081 Other selling and administrative expenses 209,414 183,791 Other expense, net 2,269 185 Operating Profit Before Amortization 13,003 41,861 Amortization of intangibles 13,153 7,713 Operating (Loss) Profit (150) 34,148 Interest expense 24,858 16,392 (Loss) Income Before Income Taxes (25,008) 17,756 (Benefit) provision for income taxes (7,152) 5,087 Net (Loss) Income (17,856) 12,669 Less: dividends on convertible preferred stock 1,990 1,990 Net (Loss) Income Applicable to Common Shares $(19,846) $10,679 Net (Loss) Income Per Share - Basic (a) $(0.07) $0.04 Average Number of Common Shares Outstanding - Basic 286,153 293,048 MATTEL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS MARCH 31, MARCH 31, DEC. 31, (In thousands) 1999 1998 1998 Assets Cash $50,215 $331,884 $212,454 Accounts receivable, net 880,360 987,906 983,050 Inventories 567,658 531,623 584,358 Prepaid expenses and other current assets 290,673 251,397 277,948 Total current assets 1,788,906 2,102,810 2,057,810 Property, plant and equipment, net 733,535 602,793 736,457 Other assets 1,454,893 738,191 1,467,898 Total Assets $3,977,334 $3,443,794 $4,262,165 Liabilities and Stockholders' Equity Short-term borrowings $259,435 $18,204 $134,006 Current portion of long-term liabilities 33,401 13,577 33,518 Accounts payable and accrued liabilities 620,385 636,684 944,434 Income taxes payable 175,535 134,284 205,253 Total current liabilities 1,088,756 802,749 1,317,211 Senior notes 400,000 100,000 400,000 Medium-term notes 540,500 520,500 540,500 Long-term debt 42,856 54,089 43,007 Other long-term liabilities 148,953 126,210 141,249 Stockholders' equity 1,756,269 1,840,246 1,820,198 Total Liabilities and Stockholders' Equity $3,977,334 $3,443,794 $4,262,165 (a) The impact of amortization of intangibles, net of taxes, on (loss) income per share for the period ended March 1999 was $0.03 compared to $0.02 in 1998. SOURCE: Mattel, Inc.

To: Neil H who wrote (129)	4/16/1999 9:07:00 AM
From: Labrador	Read Replies (1) \| Respond to of 706

I bought some shares yesterday, adding to my position. I am expecting the company to get the stock price up over the next month to minimize the share issuance to Learning holders. I think that this is a turning point -- the restructuring should get the company's costs in line, and the internet site will improve sales figures. Further, I think that the company can increase margins by direct selling. Regardless of whether the company can succeed with their plan over the next year, I think that the perception is that maybe it can -- stock way down from its lows -- I expect a pickup in price near term.