Mattel, Inc. (NASDAQ: MAT) today reported 2014 second quarter financial results. For the quarter, the Company reported net income of $28.3 million, or $0.08 per share, which includes a tax benefit of $0.11 per share and a negative impact of $0.06 per share of MEGA Brands acquisition and integration costs 2, compared to last year’s second quarter net income of $73.3 million, or $0.21 per share. “In the second quarter, we made significant progress across a number of initiatives to better position Mattel in the second half of the year and beyond," said Bryan G. Stockton, Mattel Chairman and Chief Executive Officer. “For example, we completed the acquisition of MEGA Brands, reduced inventories, strengthened our management team, shifted marketing spend to the back half of the year, and exercised strong controls on SG&A expenses. And while results for the quarter did not meet our expectations, we did see improving POS trends. As we move into the second half of the year and the all-important holiday season, we need to drive POS higher by bringing innovative products to market, making additional advertising investments and optimizing the effectiveness of our marketing spend.” Financial Overview For the quarter, net sales were $1.06 billion, down 9% compared to $1.17 billion last year. On a regional basis, second quarter gross sales decreased 8% in the North American Region, which consists of the U.S., Canada and American Girl, including a 1 percentage point unfavorable impact from changes in currency exchange rates. For the International Region, gross sales decreased 9%, including a 2 percentage point unfavorable impact from changes in currency exchange rates. Operating income for the quarter was $1.0 million, compared to prior year’s operating income for the quarter of $94.8 million. The Company’s debt-to-total capital ratio as of June 30, 2014 was 41.8%. Cash flows used for operating activities were approximately $79 million, compared to approximately $286 million in 2013, driven by lower working capital usage. Cash flows used for investing activities were approximately $525 million, an increase of approximately $393 million, driven by the acquisition of MEGA Brands. Cash flows from financing activities and other were approximately $83 million, compared to cash flows used for financing activities and other of approximately $95 million in 2013. The change was primarily due to lower repayments of long-term debt, partially offset by lower proceeds from stock option exercises.