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Mattel Reports Second Quarter 2012 Financial Results

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Mattel Reports Second Quarter 2012 Financial Results and Declares Third Quarter Dividend

Second Quarter Highlights

Capital Deployment

EL SEGUNDO, Calif. -- July 17, 2012 -- Mattel, Inc. (MAT) today reported 2012 second quarter financial results. For the quarter, the Company reported net income of $96.2 million, or $0.28 per share, compared to last year's second quarter net income of $80.5 million, or $0.23 per share.

"In the second quarter, we delivered solid performance as we continued to build momentum with key brands, such as Barbie, Monster High, American Girl and Hot Wheels, as well as the Batman - The Dark Night Rises property, despite a continued cautious global retail environment and a strengthening U.S. dollar," said Bryan G. Stockton, Mattel Chief Executive Officer. "As we look forward, we remain focused on executing our portfolio of strong brands, countries and customers to deliver in the all-important holiday season."

Financial Overview

For the quarter, net sales were $1.16 billion, flat compared to last year, including an unfavorable change in currency exchange rates of 4 percentage points. On a regional basis, second quarter gross sales increased 1% in the North American region, which consists of the U.S., Canada and American Girl, with no impact from changes in currency exchange rates. For the International region, gross sales decreased 1%, including an unfavorable impact of currency exchange rates of 10 percentage points. Operating income for the quarter was $131.4 million, compared to prior year's operating income for the quarter of $109.3 million.

The Company's debt-to-total-capital ratio was 38.1%. For the first half of the year, the Company's cash and equivalents declined by approximately $997 million, compared with a decline of approximately $863 million in last year's first half.

For the first half of the year, cash flows used for operating activities were approximately $61 million, a decrease of $166 million compared to approximately $227 million of cash flows used for operating activities in the first half of 2011. The decrease is primarily due to lower working capital usage. Cash flows used for investing activities were approximately $816 million, an increase of $772 million, driven primarily by the acquisition of HIT Entertainment. Cash flows used for financing and other activities were approximately $120 million, a decrease of $472 million, compared to approximately $592 million in 2011, primarily due to the 2011 repayments of long-term debt and lower share repurchases.

Capital Deployment

The Company announced today that its Board of Directors declared a third quarter cash dividend of $0.31 per share on the Company's common stock. The dividend will be payable on Sept. 21, 2012, to stockholders of record on Aug. 29, 2012. The dividend is the third of four quarterly dividends the Company expects to pay this year, reflecting an annualized dividend of $1.24 per share, which represents a 35% increase to last year's total dividends. During the second quarter of 2012, the Company repurchased 70,000 shares of its common stock at a cost of approximately $2 million.

Sales by Brand

Mattel Girls and Boys Brands

For the second quarter, worldwide gross sales for Mattel Girls & Boys Brands were $781.6 million, down 1% versus the prior year. Worldwide gross sales for the Barbie brand were up 5%. Worldwide gross sales for Other Girls Brands were up 96%, primarily driven by Monster High®. Worldwide gross sales for the Wheels category, which includes the Hot Wheels, Matchbox® and Tyco R/C® brands, were up 9%, primarily driven by Hot Wheels. Worldwide gross sales for the Entertainment business, which also includes Radica® and Games, were down 36%, primarily driven by decreases in the CARS 2® movie property.

Fisher-Price Brands

Second quarter worldwide gross sales for Fisher-Price Brands, which includes the Fisher-Price Core, Fisher-Price Friends and Power Wheels® brands, were $407.3 million, or up 2% versus the prior year, driven by strength in Fisher-Price Friends with the addition of the HIT Entertainment portfolio and Disney's Jake and the Never Land Pirates property.

American Girl Brands

Second quarter gross sales for American Girl Brands, which offers American Girl branded products directly to consumers, were $68.7 million, up 3% versus the prior year, primarily driven by strong sales of McKennaâ„¢, the 2012 Girl of the Year.

About Mattel:

Mattel, Inc. (NASDAQ: MAT) (http://www.mattel.com) is the worldwide leader in the design, manufacture and marketing of toys and family products. The Mattel family is comprised of such best-selling brands as Barbie®, the most popular fashion doll ever introduced, Hot Wheels®, Matchbox®, American Girl®, Radica® and Tyco® R/C, as well as Fisher-Price® brands, including Thomas & Friends®, Little People®, Power Wheels® and a wide array of entertainment-inspired toy lines. In 2012, Mattel was named as one of FORTUNE Magazine's "100 Best Companies to Work For" for the fifth year in a row. Mattel also is ranked among Corporate Responsibility Magazine's "100 Best Corporate Citizens." With worldwide headquarters in El Segundo, Calif., Mattel employs approximately 28,000 people in 43 countries and territories and sells products in more than 150 nations. At Mattel, we are "Creating the Future of Play." Follow Mattel on Facebook: http://www.facebook.com/mattel.

Submitted by News on Tue, 2012-07-17 15:24

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