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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): April 21, 2003
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HASBRO, INC.
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(Exact name of registrant as specified in its charter)
RHODE ISLAND 1-6682 05-0155090
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(State of (Commission (IRS Employer
Incorporation) File Number) Identification No.)
1027 NEWPORT AVE., PAWTUCKET, RHODE ISLAND 02862
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(Address of Principal Executive Offices) (Zip Code)
(401) 431-8697
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(Registrant's telephone number, including area code)
Item 5. Other Events and Regulation FD Disclosure.
The April 21, 2003 Press Release of the Company attached
hereto as EXHIBIT 99 is incorporated herein by reference.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
99 Press Release, dated April 21, 2003, of Hasbro, Inc.
Item 12. Results of Operations and Financial Condition.
On April 21, 2003, we announced our financial results for the
fiscal quarter ended March 30, 2003, and certain other
information. The press release, which has been attached as
Exhibit 99 discloses a financial measure, Earnings before
Interest, Taxes, Depreciation and Amortization ("EBITDA"), that
is considered a non-GAAP financial measure as defined under SEC
rules. Generally, a non-GAAP financial measure is a numerical
measure of a company's performance, financial position, or cash
flows that either excludes or includes amounts that are not
normally excluded or included in the most directly comparable
measure calculated and presented in accordance with generally
accepted accounting principles. In order to fully assess our
financial operating results, management believes that EBITDA is
an appropriate measure of evaluating our operating performance,
because it reflects the resources available for strategic
opportunities including, among others, to invest in the
business, strengthen the balance sheet and make strategic
acquisitions. However, this measure should be considered in
addition to, and not as a substitute for, or superior to,
operating income or other measures of financial performance
prepared in accordance with generally accepted accounting
principles as more fully discussed in our financial statements
and filings with the SEC. The non-GAAP measure included in our
press release has been reconciled to the nearest GAAP measure as
is now required under new SEC rules regarding the use of non-GAAP
financial measures.
As used herein, "GAAP" refers to accounting principles generally
accepted in the United States
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
HASBRO, INC.
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(Registrant)
Date: April 21, 2003 By: /s/ David D. R. Hargreaves
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David D. R. Hargreaves
Senior Vice President and
Chief Financial Officer
(Duly Authorized Officer and
Principal Financial Officer)
HASBRO, INC.
Current Report on Form 8-K
Dated April 21, 2003
Exhibit Index
Exhibit
No. Exhibits
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99 Press Release, dated April 21, 2003, of Hasbro, Inc.
EXHIBIT 99
For Immediate Release Contact: Karen A. Warren (Investor Relations)
April 21, 2003 401-727-5401
Wayne S. Charness (News Media)
401-727-5983
HASBRO REPORTS STRONG FIRST QUARTER RESULTS
Highlights:
- -----------
- Net revenues up 2.1%, to $461.8 million compared to $452.3 million a
year ago
- Net earnings of $1.2 million or $.01 per share, versus a net loss before
cumulative effect of accounting change of $17.1 million, or $.10 per
share in 2002
- Repaid the remaining $200 million in outstanding notes due in March and
ended the quarter with $310 million in cash
- Games segment net revenues up 21%, led by TRIVIAL PURSUIT 20th
Anniversary Edition
- International segment net revenues up 12% in local currency and 29% in
U.S. dollars
- Strong performances by both core brands and new, innovative products
such as BEYBLADE and FURREAL FRIENDS
Pawtucket, RI (April 21, 2003) - Hasbro, Inc. (NYSE: HAS) today
reported first quarter results. Worldwide net revenues were $461.8 million,
compared to $452.3 million a year ago. Net earnings for the quarter were $1.2
million or $0.01 per diluted share, compared to a loss before cumulative
effect of accounting change of ($17.1) million or ($0.10) per diluted share
in 2002. Including the cumulative effect of a change in accounting principle
related to the adoption of FAS 142 "Goodwill and Other Intangibles," the net
loss for the first quarter of 2002 was ($262.8) million or ($1.52) per
diluted share. The Company also reported first quarter Earnings Before
Interest, Taxes, Depreciation and Amortization (EBITDA) of $46.7 million,
compared to $32.1 million in 2002. The Company's operating profit of $16
million compared to an operating loss of ($6.3) million in 2002. The
attached schedules provide a reconciliation of operating profit (loss) to
EBITDA for the first quarters of 2003 and 2002.
"Our first quarter results are particularly gratifying when
considering many factors that could have worked against us, including a late
Easter, difficult economic conditions exacerbated by the war in Iraq, and the
substantial reductions in Star Wars revenue," said Alan G. Hassenfeld,
Hasbro's Chairman and Chief Executive Officer. "Despite these negative
factors, and thanks to a favorable exchange rate, we grew revenue and posted
a profitable quarter as we stayed disciplined and on strategy."
Revenues in the U.S. Toys segment were $153.4 million for the quarter,
compared to $200.9 million a year ago. The segment reported operating profit
of $5.3 million compared to $26.2 million last year. As expected revenue
declined due to the impact of STAR WARS which was partially offset by
strength in sales of certain core product lines including TRANSFORMERS and
PLAY-DOH, as well as continuing strong sales of FURREAL FRIENDS and BEYBLADE.
Revenues in the Games segment were $112.2 million for the quarter,
compared to $92.8 million a year ago. Board game revenues remained strong,
led by TRIVIAL PURSUIT 20TH ANNIVERSARY EDITION. Non-licensed trading card
games were also up, but licensed trading card games including POKEMON were
down. The Games segment reported operating profit of $18.0 million compared
to an operating loss of ($2.5) million last year.
International segment revenues were $175.4 million for the quarter,
compared to $136.1 million a year ago. This represents an increase of 12% in
local currency and 29% in U.S. dollars. The segment experienced strength in
sales of certain core product lines including PLAY-DOH, TRANSFORMERS,
PLAYSKOOL, and MAGIC: THE GATHERING trading card games, as well as strong
sales of FURREAL FRIENDS and BEYBLADE. The International segment operating
loss declined to ($6.0) million compared to a loss of ($29.1) million a year
ago.
"We remain focused on our strategy of growing core brands, developing
new, innovative products, cutting costs and reducing debt," said Alfred J.
Verrecchia, President and Chief Operating Officer. "We are off to a good
start and we continue to make measurable strides in all of these areas.
However, with nine months to go, our very successful first quarter
performance has not led us to change our expectations for the full year;
rather they have made us more confident in our ability to deliver them."
The Company will webcast its first quarter earnings conference call at
9:00 a.m. Eastern Standard Time today. Investors and the media are invited to
listen at http://www.hasbro.com (select "Corporate Info" from the home page,
click on "Investors," and then click on the webcast icon).
Hasbro is a worldwide leader in children's and family leisure time
entertainment products and services, including the design, manufacture and
marketing of games and toys ranging from traditional to high-tech. Both
internationally and in the U.S., its PLAYSKOOL, TONKA, MILTON BRADLEY, PARKER
BROTHERS, TIGER and WIZARDS OF THE COAST brands and products provide the
highest quality and most recognizable play experiences in the world.
Certain statements contained in this release contain "forward-looking
statements" within the meaning of the Private Securities Litigation Reform
Act of 1995. These statements may be identified by the use of forward-looking
words or phrases such as "anticipate", "believe", "could", "expect",
"intend", "look forward", "may", "planned", "potential", "should", "will" and
"would". Such forward-looking statements are inherently subject to known and
unknown risks and uncertainties. The Company's actual actions or results may
differ materially from those expected or anticipated in the forward-looking
statements. Specific factors that might cause such a difference include, but
are not limited to: the Company's ability to manufacture, source and ship new
and continuing products on a timely basis and the acceptance of those
products by customers and consumers at prices that will be sufficient to
profitably recover development, manufacturing, marketing, royalty and other
costs of products; economic conditions, including the retail market, higher
fuel prices, currency fluctuations and government regulation and other
actions in the various markets in which the Company operates throughout the
world; the inventory policies of retailers, including the concentration of
the Company's revenues in the second half and fourth quarter of the year,
together with increased reliance by retailers on quick response inventory
management techniques, which increases the risk of underproduction of popular
items, overproduction of less popular items and failure to achieve tight and
compressed shipping schedules; work stoppages, slowdowns or strikes, which
may impact the Company's ability to manufacture or deliver product; the
bankruptcy or other lack of success of one of the Company's significant
retailers which could negatively impact the Company's revenues or bad debt
exposure; the impact of competition on revenues, margins and other aspects of
the Company's business, including the ability to secure, maintain and renew
popular licenses and the ability to attract and retain talented employees in
a competitive environment; market conditions, third party actions or
approvals and the impact of competition that could delay or increase the cost
of implementation of the Company's consolidation programs or alter the
Company's actions and reduce actual results; the risk that anticipated
benefits of acquisitions may not occur or be delayed or reduced in their
realization; and other risks and uncertainties as may be detailed from time
to time in the Company's public announcements and SEC filings. The Company
undertakes no obligation to make any revisions to the forward-looking
statements contained in this release or to update them to reflect events or
circumstances occurring after the date of this release.
This presentation includes a non-GAAP financial measure as defined under SEC
rules, specifically EBITDA. As required by SEC rules, we have provided a
reconciliation on the attached schedule of this measure to the most directly
comparable GAAP measure. EBITDA (earnings before interest, taxes,
depreciation and amortization) represents operating profit (loss) excluding,
restructuring, depreciation and all amortization. In order to fully assess
the Company's financial operating results, management believes that EBITDA is
an appropriate measure of evaluating the operating performance of the Company
because it reflects the resources available for strategic opportunities
including, among others, to invest in the business, strengthen the balance
sheet, and make strategic acquisitions. However, this measure should be
considered in addition to, not as a substitute for, or superior to, operating
income or other measures of financial performance prepared in accordance with
generally accepted accounting principles as more fully discussed in the
Company's financial statements and filings with the Securities and Exchange
Commission. As used herein, "GAAP" refers to accounting principles generally
accepted in the United States.
# # #
(Tables Attached)
HASBRO, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Thousands of Dollars and Shares Except Per Share Data)
Quarter Ended
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March 30, March 31,
2003 2002
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Net Revenues $461,768 $452,267
Cost of Sales 172,237 166,414
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Gross Profit 289,531 285,853
Amortization 16,178 21,449
Royalties 33,820 51,456
Research and Product Development 30,500 33,213
Advertising 53,178 46,889
Selling, Distribution and Administration 139,899 139,191
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Operating Profit (Loss) 15,956 (6,345)
Interest Expense 15,022 19,542
Other (Income) Expense, Net (695) (2,835)
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Earnings (Loss) Before Income Taxes and
Cumulative Effect of Accounting Change 1,629 (23,052)
Income Taxes 440 (5,994)
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Earnings (loss) before Cumulative
Effect of Accounting Change 1,189 (17,058)
Cumulative Effect of Accounting Change, Net of Tax - (245,732)
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Net Earnings (Loss) $ 1,189 $(262,790)
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Per Common Share
Earnings (Loss) before Cumulative Effect
of Accounting Change
Basic and Diluted $ .01 $ (.10)
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Cumulative Effect of Accounting Change
Basic and Diluted $ .00 $ (1.42)
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Net Earnings (Loss)
Basic and Diluted $ .01 $ (1.52)
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Cash Dividends Declared $ .03 $ .03
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Weighted Average Number
of Shares
Basic 172,918 172,594
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Diluted 178,689 172,594
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HASBRO, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Thousands of Dollars)
March 30, March 31,
2003 2002
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Assets
Cash and Cash Equivalents $ 310,526 $ 355,112
Accounts Receivable, Net 286,576 287,379
Inventories 222,296 232,170
Other Current Assets 228,300 323,748
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Total Current Assets 1,047,698 1,198,409
Property, Plant and Equipment, Net 210,264 227,086
Other Assets 1,546,044 1,463,321
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Total Assets $2,804,006 $2,888,816
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Liabilities and Shareholders' Equity
Short-term Borrowings $ 18,014 $ 33,728
Current Installments of Long-Term Debt 1,121 327,167
Payables and Accrued Liabilities 532,407 513,368
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Total Current Liabilities 551,542 874,263
Long-term Debt 856,936 840,399
Deferred Liabilities 133,165 94,567
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Total Liabilities 1,541,643 1,809,229
Total Shareholders' Equity 1,262,363 1,079,587
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Total Liabilities and Shareholders' Equity $2,804,006 $2,888,816
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HASBRO, INC.
SUPPLEMENTAL FINANCIAL DATA
Quarter Ended
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March 30, March 31,
2003 2002 % Change
(Thousands of Dollars) --------- --------- --------
U.S. Toys
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External Revenues $ 153,444 200,860 (24)%
Operating Profit 5,326 26,240 (80)%
Games
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External Revenues 112,210 92,849 21%
Operating Profit 18,009 (2,501) 820%
International
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External Revenues 175,383 136,145 29%
Operating Profit (5,975) (29,090) 79%
RECONCILIATION OF EBITDA
Operating Profit (Loss) $ 15,956 $ (6,345)
Depreciation 14,569 16,950
Amortization 16,178 21,449
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EBITDA $ 46,703 $ 32,054
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