=Mattel (MAT) reported earnings on Tue 29 Oct 2019 (a/h)

• #1, 4, 5, 19-22, 26, 49, 50, 52, 61, 85, 95

Mattel beats by $0.07, beats on revs; raises FY19 rev and EBITDA guidance; completes audit investigation which resulted in changes to the timing of income tax in 2017; CFO Joseph Euteneuer to step down

Reports Q3 (Sep) earnings of $0.26 per share, excluding non-recurring items, $0.07 better than the S&P Capital IQ Consensus of $0.19; revenues rose 3.1% year/year to $1.48 bln vs the $1.44 bln S&P Capital IQ Consensus.

Co raises full year revenue guidance to "slightly up" from prior guidance of flat, both in constant currency. Increases 2019 adjusted EBITDA margin to $400-425 mln vs prior guidance of $350-400 mln.

Co also announces that the Audit Committee of its Board of Directors has completed an independent investigation into the allegations contained in a whistleblower letter disclosed on August 8, 2019. The Letter, which had been sent to Mattel's outside auditors, questioned whether there were accounting errors in historical periods and whether Mattel's outside auditor was independent. The investigation determined that income tax expense was understated by $109 mln in 3Q17, and overstated by $109 mln in 4Q19, with no impact for the full year. The errors were non-cash, did not affect operating income or EBITDA, and had no impact on Mattel's full year financial results for 2017 or subsequent periods.

The investigation also determined that Mattel has certain material weaknesses in its internal control over financial reporting. The Audit Committee concluded that the objectivity and impartiality of Mattel's outside auditor has not been impaired, and that Mattel's outside auditor can continue as its independent auditor. Mattel's outside auditor agrees with that conclusion. Mattel will undertake a series of remedial actions, including the amendment of its 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.

Co also announces that CFO Joseph Euteneuer will leave the company after a transition period of up to six months. Mattel is conducting a search for its next CFO.