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

Mattel, Inc. (NASDAQ: 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.

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