Mattel To Restate Last Two Quarters Of 2017; Announces CFO Transition Plan

(RTTNews) - Mattel, Inc. (MAT) said the Audit Committee's investigation found errors in the company's publicly-filed financial statements for the last two quarters of 2017. The investigation found that income tax expense was understated by $109 million in the third quarter of 2017, and overstated by $109 million in the fourth quarter of 2017, with no impact for the full year. The company noted that these errors had no impact on its gross profit, operating income, EPS, adjusted EPS, EBITDA, adjusted EBITDA, or cash flows for the year ended December 31, 2017.

Mattel said the investigation found that the error was not reported to the company's then-CEO, Margaret Georgiadis, and the Audit Committee, and was also not disclosed in the 2017 10-K. The investigation did not find that management engaged in fraud.

Mattel said the company will undertake a series of remedial actions, including the amendment of the 2018 Form 10-K to restate the last two quarters of 2017, and certain related information, and the strengthening of its internal control over financial reporting.

Also Mattel announced that Chief Financial Officer Joseph Euteneuer will leave the company after a transition period of up to six months. The company is conducting a search for next CFO.

For the third-quarter, adjusted earnings per share was $0.26, compared to $0.18, prior year. On average, 14 analysts polled by Thomson Reuters expected the company to report profit per share of $0.16, for the quarter. Analysts' estimates typically exclude special items.

For the third quarter, net sales were up 3 percent as reported, and up 4 percent in constant currency to $1.48 billion, from a year ago. Analysts expected revenue of $1.43 billion, for the quarter.

Shares of Mattel, Inc. were up nearly 20% after hours.