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Mattel Reports Third Quarter 2015 Financial Results AND DECLARES QUARTERLY DIVIDEND Third Quarter Highlights

The following excerpt is from the company's SEC filing.

Worldwide gross sales down 3% in constant currency and down 11% as reported.

Global retail sales continue to outpace shipping, and were down 1% in the quarter, up 1% year-to-date

Adjusted operating income of $321.6 million, compared to adjusted operating income of $434.5 million in the third quarter of 2014

and reported operating income of $300.8 million, compared to reported operating income of $409.5 million in the third quarter of 2014, down 7% in constant currency and down 27% as reported.

Adjusted earnings per share of $0.71, compared to prior year adjusted earnings per share of $ 0.98

and reported earnings per share of $0.66, compared to prior year earnings per share of $0.97. Adjusted and reported earnings per share reflect the negative impact from changes in currency exchange rates of $0.20.

Board declared 2015 fourth quarter cash dividend of $0.38 per share, which is flat compared to the fourth quarter of 2014.

EL SEGUNDO, Calif., October 15, 2015

For the third quarter of 2015, Mattel, Inc. (NASDAQ: MAT) today reported worldwide net sales down 4% in constant currency, adjusted operating income of $321.6 million and adjusted earnings per share of $0.71.

Our results for the quarter, excluding the significant impact from currency exchange rates, were broadly in line with our expectations at this stage of our turnaround, said Christopher Sinclair, Mattel Chairman and CEO. Importantly, were very encouraged by the progress we are making on reenergizing the company, building momentum in our core brands, improving retail execution, reducing costs and building scale in key emerging markets. As we continue our turnaround efforts, we remain comfortable with our full-year outlook.

Please refer to Non-GAAP Financial Measures for a glossary of definitions of non-GAAP financial measures used herein, including gross sales, constant currency, adjusted operating income, adjusted earnings (loss) per share, adjusted gross margin and adjusted other selling and administrative expenses.

Mattel Internal Analysis; excludes American Girl and MEGA Brands.

Financial Overview

For the quarter, worldwide net sales were down 4% in constant currency compared to last year. In the North American Region, which consists of the United States, Canada and American Girl, third quarter gross sales decreased by 4% in constant currency, and 5% as reported. In the International Region, gross sales decreased by 2% in constant currency, and decreased 19% as reported. Adjusted gross margin decreased 170 basis points and 140 basis points as reported, primarily from the negative impact from changes in currency exchange rates. Adjusted other selling and administrative expenses decreased $30 million, reflecting continued cost improvement initiatives. Adjusted operating income for the quarter was $321.6 million, compared to prior years adjusted operating income of $434.5 million, reflecting the negative impact from changes in currency exchange rates and lower sales, partially offset by lower other selling and administrative expenses.

The Companys debt-to-total capital ratio as of September 30, 2015 was 46.8%.

Cash flows used for operating activities were approximately $222 million, compared to approximately $144 million in 2014. Cash flows used for investing activities were approximately $206 million, a decrease of approximately $398 million, primarily due to the prior-year acquisition of MEGA Brands. Cash flows used for financing activities and other were approximately $254 million, compared to approximately $29 million in 2014. The change was primarily driven by prior year net proceeds from long-term borrowings, partially offset by prior year share repurchases.

Capital Deployment

The Board of Directors declared a fourth quarter cash dividend of $0.38 per share, which is flat compared to the fourth quarter of 2014. The dividend will be payable on December 11, 2015 to stockholders of record on November 25, 2015.

Sales by Brand

Mattel Girls and Boys Brands

For the third quarter, worldwide gross sales for Mattel Girls & Boys Brands were $1.12 billion, down 5% in constant currency versus the prior year. Worldwide gross sales for the Barbie brand were down 4% in constant currency. Year-to-date retail sales for Barbie are up slightly on a global basis, driven by strong performance in the United States, partially offset by a decline in international markets. Worldwide gross sales for Other Girls brands were down 20% in constant currency. Worldwide gross sales for the Wheels category, which includes the Hot Wheels and Matchbox

brands, were up 19% in constant currency. Worldwide gross sales for the Entertainment business, which includes Radica

and Games, were down 4% in constant currency.

Fisher-Price Brands

Third quarter worldwide gross sales for Fisher-Price Brands, which includes the Fisher-Price Core, Fisher-Price Friends and Power Wheels

brands, were $625.3 million, up 1% in constant currency versus the prior year.

American Girl Brands

Third quarter gross sales for American Girl Brands, which offers American Girl-branded products directly to consumers, were $109.9 million, down 2% in constant currency...


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