SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the period ended September 25, 1994 Commission file number 1-6682
HASBRO, INC.
--------------------
(Name of Registrant)
Rhode Island O5-0155090
- - ------------------------ ------------------------------------
(State of Incorporation) (I.R.S. Employer Identification No.)
1027 Newport Avenue, Pawtucket, Rhode Island 02861
- - ---------------------------------------------------
(Principal Executive Offices)
(401) 431-8697
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.
Yes X or No
--- ---
The number of shares of Common Stock, par value $.50 per share,
outstanding as of October 28, 1994 was 87,619,877.
HASBRO, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Thousands of Dollars Except Share Data)
(Unaudited)
Sep. 25, Sep. 26, Dec. 26,
Assets 1994 1993 1993
-------- -------- --------
Current assets
Cash and cash equivalents $ 43,234 48,466 186,254
Marketable securities available
for sale 16,810 - -
Accounts receivable, less allowance
for doubtful accounts of $52,500,
$58,300 and $54,200 1,118,622 1,087,653 720,442
Inventories:
Finished products 260,407 244,289 183,899
Work in process 20,163 29,359 22,486
Raw materials 52,519 59,883 43,682
--------- --------- ---------
Total inventories 333,089 333,531 250,067
Deferred income taxes 89,165 81,429 78,413
Prepaid expenses 58,002 64,463 65,959
--------- --------- ---------
Total current assets 1,658,922 1,615,542 1,301,135
Property, plant and equipment, net 296,986 258,919 279,803
--------- --------- ---------
Other assets
Cost in excess of acquired net assets,
less accumulated amortization of
$79,926, $63,736 and $68,122 553,745 481,507 475,607
Other intangibles, less accumulated
amortization of $99,499, $80,520 and
$85,290 170,695 190,818 185,953
Other 35,966 48,256 50,520
--------- --------- ---------
Total other assets 760,406 720,581 712,080
--------- --------- ---------
Total assets $2,716,314 2,595,042 2,293,018
========= ========= =========
HASBRO, INC. AND SUBSIDIARIES
Consolidated Balance Sheets, Continued
(Thousands of Dollars Except Share Data)
(Unaudited)
Sep. 25, Sep. 26, Dec. 26,
Liabilities and Shareholders' Equity 1994 1993 1993
-------- -------- --------
Current liabilities
Short-term borrowings $ 486,252 469,355 62,242
Current installments of long-term debt 3,204 141 3,236
Trade payables 133,060 134,307 170,309
Accrued liabilities 413,741 412,964 420,476
Income taxes 108,515 93,635 92,051
--------- --------- ---------
Total current liabilities 1,144,772 1,110,402 748,314
Long-term debt, excluding current
installments 150,437 203,642 200,510
Deferred liabilities 73,057 69,170 67,511
--------- --------- ---------
Total liabilities 1,368,266 1,383,214 1,016,335
--------- --------- ---------
Shareholders' equity
Preference stock of $2.50 par
value. Authorized 5,000,000
shares; none issued - - -
Common stock of $.50 par value.
Authorized 300,000,000 shares; issued
88,085,802, 87,635,774 and 87,795,251 44,043 43,818 43,898
Additional paid-in capital 283,872 294,670 296,823
Retained earnings 1,001,730 855,511 920,956
Cumulative translation adjustments 32,049 17,829 15,006
Treasury stock, at cost, 451,900
shares in 1994 (13,646) - -
--------- --------- ---------
Total shareholders' equity 1,348,048 1,211,828 1,276,683
--------- --------- ---------
Total liabilities and
shareholders' equity $2,716,314 2,595,042 2,293,018
========= ========= =========
See accompanying condensed notes to consolidated financial statements.
HASBRO, INC. AND SUBSIDIARIES
Consolidated Statements of Earnings
(Thousands of Dollars Except Share Data)
(Unaudited)
Thirteen Weeks Ended Thirty-Nine Weeks Ended
-------------------- -----------------------
Sep. 25, Sep. 26, Sep. 25, Sep. 26,
1994 1993 1994 1993
-------- -------- -------- --------
Net revenues $796,222 812,393 1,729,679 1,814,980
Cost of sales 352,129 351,064 763,507 780,605
------- ------- --------- ---------
Gross profit 444,093 461,329 966,172 1,034,375
------- ------- --------- ---------
Expenses
Amortization 9,598 8,797 27,196 26,173
Royalties, research and
development 75,359 81,991 180,781 185,274
Advertising 116,307 111,868 241,294 247,480
Selling, distribution and
administrative 123,067 126,364 343,337 349,730
Restructuring charges 12,500 - 12,500 -
------- ------- --------- ---------
Total expenses 336,831 329,020 805,108 808,657
------- ------- --------- ---------
Operating profit 107,262 132,309 161,064 225,718
------- ------- --------- ---------
Nonoperating (income) expense
Interest expense 8,776 9,111 18,821 19,659
Other (income), net (23,710) 333 (26,053) (3,468)
------- ------- --------- ---------
Total nonoperating expense (14,934) 9,444 (7,232) 16,191
------- ------- --------- ---------
Earnings before income taxes and
cumulative effect of change in
accounting principles 122,196 122,865 168,296 209,527
Income taxes 47,045 47,317 64,794 80,249
------- ------- --------- ---------
Net earnings before cumulative
effect of change in accounting
principles 75,151 75,548 103,502 129,278
Cumulative effect of change in
accounting principles - - (4,282) -
------- ------- --------- ---------
Net earnings $ 75,151 75,548 99,220 129,278
======= ======= ========= =========
Per common share
Net earnings before cumulative
effect of change in
accounting principles $ .85 .84 1.16 1.44
======= ======= ========= =========
Net earnings $ .85 .84 1.11 1.44
======= ======= ========= =========
Cash dividends declared $ .07 .06 .21 .18
======= ======= ========= =========
See accompanying condensed notes to consolidated financial statements.
HASBRO, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Thirty-Nine Weeks Ended September 25, 1994 and September 26, 1993
(Thousands of Dollars)
(Unaudited)
1994 1993
---- ----
Cash flows from operating activities
Net earnings $ 99,220 129,278
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization of plant and equipment 59,710 48,953
Other amortization 27,196 26,173
Deferred income taxes (11,102) (6,006)
Gain on investments (23,291) -
Change in operating assets and liabilities (other
than cash and cash equivalents):
(Increase) in accounts receivable (368,304) (450,621)
(Increase) in inventories (73,557) (114,140)
(Increase) decrease in prepaid expenses 9,318 (6,540)
(Decrease) increase in trade payables and
accrued liabilities (41,936) 11,201
Other (786) (3,158)
------- -------
Net cash utilized by operating activities (323,532) (364,860)
------- -------
Cash flows from investing activities
Additions to property, plant and equipment (73,019) (60,955)
Purchase of marketable securities - (141,411)
Proceeds from sale of investments 24,449 141,839
Acquisitions, net of cash acquired (98,411) (30,644)
Other 444 2,520
------- -------
Net cash utilized by investing activities (146,537) (88,651)
------- -------
Cash flows from financing activities
Net proceeds of short-term borrowings 418,409 394,313
Repayment of long-term debt (50,105) (11,668)
Stock option and warrant transactions (8,498) 7,422
Purchase of common stock (17,954) -
Dividends paid (17,577) (14,865)
------- -------
Net cash provided by financing activities 324,275 375,202
------- -------
Effect of exchange rate changes on cash 2,774 822
------- -------
Decrease in cash and cash equivalents (143,020) (77,487)
Cash and cash equivalents at beginning of year 186,254 125,953
------- -------
Cash and cash equivalents at end of period $ 43,234 48,466
======= =======
Supplemental information
Cash paid during the period for:
Interest $ 16,636 18,053
Income taxes $ 45,931 69,105
See accompanying condensed notes to consolidated financial statements.
HASBRO, INC. AND SUBSIDIARIES
Condensed Notes to Consolidated Financial Statements
(Thousands of Dollars)
(Unaudited)
(1) In the opinion of management and subject to year-end audit, the
accompanying unaudited interim financial statements contain all adjustments
(consisting of only normal recurring accruals) necessary to present fairly the
financial position of the Company as of September 25, 1994 and September 26,
1993, and the results of operations and cash flows for the periods then ended.
The results of operations for the thirty-nine week period ended September 25,
1994, are not necessarily indicative of results to be expected for the full
year.
(2) Earnings per common share are based on the weighted average number of
shares of common stock and dilutive common stock equivalents outstanding
during each period. Common stock equivalents include stock options and
warrants for the period prior to their exercise. Under the treasury stock
method, the unexercised options and warrants were assumed to be exercised at
the beginning of the period or at issuance, if later. The assumed proceeds
were then used to purchase common stock at the average market price during the
period.
For each of the reported periods except the thirteen weeks ended September 25,
1994 and September 26, 1993, the difference between primary and fully diluted
earnings per share was not significant. For the thirteen weeks ended September
25, 1994, the primary and fully diluted earnings per share were $.85 and $.82,
respectively. For the thirteen weeks ended September 26, 1993, the primary and
fully diluted earnings per share were $.84 and $.81, respectively.
(3) During October 1994, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 119, Disclosure About
Derivative Financial Instruments and Fair Value of Financial Instruments (SFAS
119). SFAS 119 requires disclosures about derivative financial instruments
including futures, forward, swap and option contracts and other financial
instruments with similar characteristics and is effective for fiscal years
ending after December 15, 1994.
HASBRO, INC. AND SUBSIDIARIES
Management's Discussion and Analysis of Financial
Condition and Results of Operations
(Thousands of dollars)
NET REVENUES
- - ------------
Net revenues for the third quarter and nine months of 1994 were $796,222 and
$1,729,679, compared to the $812,393 and $1,814,980 reported for the same
periods of 1993. For the quarter, the Company's revenues returned to a level
comparable with those of a year ago. This occurred in spite of the loss of
approximately $80,000 of worldwide volume from two successful 1993 product
ranges, Barney(R) and Jurassic Park(TM). Internationally, most of the Company's
units showed modest growth from their 1993 levels and also benefited from a
$9,000 favorable effect of the weakened U.S. dollar. Domestically, the record
volume of the third quarter of 1993, buoyed by the two product ranges noted
above, could not be sustained.
COST OF SALES
- - -------------
The gross profit margin, expressed as a percentage of net revenues, for the
quarter decreased to 55.8% from the 1993 level of 56.8% and for the nine months
to 55.9% from 57.0%. This deterioration is largely attributable to the effect
of the decreased domestic volume, principally in the promotional product area.
Generally, promotional items, which carry higher royalty rates, provide a
higher gross margin than do games and other items.
EXPENSES
- - --------
Royalties, research and development expenses for the third quarter and nine
months decreased in amount and, for the third quarter, as a percentage of
revenues from 1993 levels. The royalty component decreased in both categories,
reflecting both the effect of reduced revenues and rates on certain 1993
products which carried higher than traditional royalty rates. Research and
development was $35,193 and $96,655 for the third quarter and nine months of
1994 compared to $33,423 and $87,524 in the same periods of 1993. These
increases were largely attributable to the Company's domestic units whose
development efforts have been expanded.
The current quarter advertising increased approximately $4,400 from the
comparable 1993 level while for the nine months it decreased approximately
$6,200. As a percentage of net revenues, for the quarter and nine months it
increased to 14.6% from 13.8% and to 14.0% from 13.6%, respectively. The
increased percentages are largely the result of higher spending to establish
selected core brands in certain international markets coupled with the lower
than normal advertising requirements of Jurassic Park and Barney in 1993,
reflecting the amount of exposure given these two brands by other parties.
Both in dollars and as a percentage of net revenues, third quarter selling,
distribution and administrative expenses showed a minor decrease from the
respective 1993 amounts, which is partially the result of lower distribution
costs resulting from the lower revenues, coupled with a reduced requirement for
doubtful accounts. The nine month decrease in amount can be attributed to the
same causes while the increase in percentage is reflective of the fact that
most other expenses in this category are relatively fixed.
HASBRO, INC. AND SUBSIDIARIES
Management's Discussion and Analysis of Financial
Condition and Results of Operations, Continued
(Thousands of dollars)
The Company recently completed a restructuring of its Domestic Toy group,
merging its Hasbro Toy, Playskool, Playskool Baby, Kenner and Kid Dimension
units into one organization, the Hasbro Toy Group, and also announced a
consolidation of its domestic manufacturing facilities. To provide for these
and other immaterial restructuring costs, the Company recorded a $12,500 pretax
charge during the quarter.
NONOPERATING (INCOME) EXPENSE
- - -----------------------------
Interest expense decreased approximately 4% from 1993 levels in both the third
quarter and the nine months. This decrease reflects the Company's lower
borrowing requirements, partially offset by higher interest rates. During the
quarter, the Company liquidated its investment in J.W. Spear & Sons PLC (Spear)
and sold its investment in Virgin Interactive Entertainment plc (Virgin) to
Blockbuster Entertainment (Blockbuster). The Company realized an aggregate
pretax gain of approximately $23,000 from these transactions, which is
responsible for the large change in other income, net. Also included are
various other items, none of which are material, of both income and expense.
INCOME TAXES
- - ------------
Income tax expense, as a percentage of pretax earnings, was 38.5% for both the
third quarter and nine months of 1994, compared with 38.5% and 38.3% in the
third quarter and nine months of 1993. This increase in the nine month rate
primarily results from the third quarter 1993 increase in the U. S. federal
income tax rate from 34% to 35%.
OTHER INFORMATION
- - -----------------
The business of the Company is characterized by customer order patterns which
vary from year to year largely because of differences in the degree of consumer
acceptance of a product line, product availability, marketing strategies and
inventory levels of retailers and differences in overall economic conditions.
Also, more retailers are using quick response inventory management practices
which results in fewer orders being placed in advance of shipment and more
orders, when placed, for immediate delivery. As a result, comparisons of
unshipped orders on any date in a given year with those at the same date in a
prior year are not necessarily indicative of sales for the entire year. In
addition, it is a general industry practice that orders are subject to
amendment or cancellation by customers prior to shipment. The Company's
unshipped orders were approximately $490,000 at October 23, 1994 compared to
$520,000 at October 24, 1993. During the past several years the Company has
experienced a shift in its revenue pattern wherein the second half of the year
has grown in significance to its overall business and within that half the
fourth quarter has become more prominent. The Company expects that this trend
will continue.
HASBRO, INC. AND SUBSIDIARIES
Management's Discussion and Analysis of Financial
Condition and Results of Operations, Continued
(Thousands of dollars)
During the fourth quarter of 1993, the Company recorded a restructuring charge
of $15,500, primarily relating to the planned closure of the Company's
manufacturing facility in The Netherlands, as announced on January 13, 1994.
The Company had initially planned to cease production at this facility during
the second quarter of 1994 but has not yet been able to do so. The actions
necessary to comply with local regulations relating to such a closure have
taken longer than anticipated and the Company now believes that the shut down
of production at this facility will take place late in the fourth quarter of
1994. As a result, no anticipated benefits have yet been obtained and only
minimal amounts of the liability accrued for this closure have been satisfied.
The remaining amount provided in 1993 related to several items, none of which
were significant, either in cost or anticipated benefits. A majority of the
liabilities established for such items has been satisfied and the expected
benefits are being obtained.
Included in the restructuring charges recorded during the current quarter,
noted above, for the Domestic Toy restructuring, was a provision of
approximately $4,400 for the costs associated with the termination of
approximately 100 management employees. Substantially all of these employees
have been terminated and approximately $921 of the liability has been
satisfied. It is anticipated that no material benefits from this restructuring
will be experienced until 1995. Also included, and related to the consolidation
of domestic manufacturing operations as announced on November 8, 1994, and
further discussed below, was a provision of approximately $3,400 for costs
associated with the termination of approximately 485 manufacturing employees.
These terminations will occur during the fourth quarter of 1994 and the first
quarter of 1995. As a result, none of the liability has been satisfied and the
Company expects that no material benefits from this consolidation will be
experienced until 1995.
LIQUIDITY AND CAPITAL RESOURCES
- - -------------------------------
Because of the seasonality of the Company's business coupled with certain
customer incentives, mainly in the form of extended payment terms, the interim
cash flow statements are not representative of that which may be expected for
the full year. As a result of these extended payment terms, the majority of the
Company's cash collections occur late in the fourth quarter and early in the
first quarter of the subsequent year. While a large portion of these
receivables are of a quality which would allow their sale, alleviating the need
for much of its interim financing, the Company believes it to be more cost
effective to use its available funds and short-term borrowings to finance them.
Late in its fourth quarter and through the first quarter of the subsequent
year, as receivables are collected, cash flow from operations becomes positive
and is used to repay a significant portion of the short-term borrowings.
HASBRO, INC. AND SUBSIDIARIES
Management's Discussion and Analysis of Financial
Condition and Results of Operations, Continued
(Thousands of dollars)
As a result, management believes that on an interim basis, rather than
discussing its cash flows, a better understanding of its liquidity and capital
resources can be obtained through a discussion of the various balance sheet
categories. Also, as several of the major categories, including cash and cash
equivalents, accounts receivable, inventories and short-term borrowings,
fluctuate significantly from quarter to quarter, again due to the seasonality
of its business and the extended payment terms offered, management believes
that a comparison to the comparable period in the prior year is generally more
meaningful than a comparison to the prior year-end.
Cash and cash equivalents were approximately 10% below their 1993 level. The
Company attempts to keep its cash at the lowest level possible whenever it has
short-term borrowings. At times, however, the cash available and the borrowing
requirement may be in different countries and currencies which may make it
impractical to substitute one for the other. Marketable securities at
September 25, 1994 represent shares of Blockbuster, received from the sale of
the Company's investment in Virgin, which had not been liquidated. Subsequent
to the balance sheet date, such shares were sold, with a resulting immaterial
gain. Receivables were approximately $31,000 greater than at the same time in
1993. More than half of the increase relates to a non-trade amount due from the
Blockbuster shares sold prior to balance sheet date but having a settlement
date of September 30. The remaining increase reflects the change in the
Company's sales mix with a larger percentage being made to customers with
extended payment terms. Inventories approximated those of a year ago. Other
assets, as a group, increased approximately $40,000 from their level a year
ago. This increase reflects the Company's acquisition of the game and puzzle
business of Western Publishing and its investment made in Connector Set Limited
Partnership in conjunction with the joint venture to market the K'NEX(R) line
of construction toys internationally, both partially offset by the disposition,
or transfer to current assets, of the Company's investments in Spear and Virgin
and twelve months of amortization expense.
Short-term borrowings, at $486,252 were approximately $16,900 greater than last
year. This reflects the net of several significant items including the election
by the Company to pay exercising holders of its warrants, which expired on July
12, 1994, approximately $17,000 in cash rather than shares, the repurchase of
shares of the Company's common stock in the amount of approximately $18,000,
the early redemption by the Company of its $50,000 of Subordinated Variable
Notes Due 1995, the net cash requirements of the change in other assets noted
above and the funds generated from operations within the most recent twelve
months. Other current liabilities increased marginally, primarily due to timing
differences on payments. At September 25, 1994, the Company had committed
unsecured lines of credit totaling approximately $450,000 available to it. It
also had available uncommitted lines exceeding $950,000. The Company believes
that these amounts are adequate for its needs. Of these available lines,
approximately $500,000 was in use at September 25, 1994.
HASBRO, INC. AND SUBSIDIARIES
Management's Discussion and Analysis of Financial
Condition and Results of Operations, Continued
(Thousands of dollars)
RECENT DEVELOPMENTS
- - -------------------
As discussed in Management's Discussion and Analysis of Financial Condition and
Results of Operations in the Company's Form 10-K filing for the year ended
December 26, 1993, the Company was engaged in legal action against CBS Inc.
(CBS) to recover all costs associated with the environmental clean-up of the
Company's former manufacturing facility in Lancaster, Pennsylvania. On August
10, 1994, the U.S. District Court for the Eastern Division of Pennsylvania
entered judgment in favor of the Company, awarding the Company all of its past
and future costs associated with such environmental remediation. The Company
and CBS are currently negotiating the manner in which this judgment will be
satisfied.
On November 8, the Company announced that it would close its Wayne, New Jersey
manufacturing plant, effective March 5, 1995, and was reducing the number of
manufacturing jobs at its facilities in Rhode Island. The New Jersey facility
employs approximately 85 employees while approximately 400 people will be
affected in Rhode Island, of which approximately 280 are currently on
traditional seasonal layoffs.
PART II. Other Information
Item 1. Legal Proceedings.
None.
Item 2. Changes in Securities.
On September 22, 1994, pursuant to notice given on
September 7, 1994, the Company redeemed all $50,000,000 of
its outstanding Subordinated Variable Rate Notes Due 1995
(the Notes) at a redemption price of 100% of their principal
amount plus accrued interest through that date. Shawmut Bank
Connecticut, N.A. is the Trustee and Paying Agent for the
Notes.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
11.1 Computation of Earnings Per Common Share - Thirty-Nine
Weeks Ended September 25, 1994 and September 26, 1993.
11.2 Computation of Earnings Per Common Share - Thirteen
Weeks Ended September 25, 1994 and September 26, 1993.
12 Computation of Ratio of Earnings to Fixed Charges -
Thirty-Nine and Thirteeen Weeks Ended September
25, 1994.
27 Article 5 Financial Data Schedule - Third Quarter 1994
(b) Reports on Form 8-K
A current Report on Form 8-K dated October 13, 1994, as
amended by Form 8-K/A of the same date, was filed by the
Company and included the Press Release dated October 13, 1994
announcing the Company's results for the current quarter.
Consolidated Statements of Earnings (without notes) for the
quarters and nine months ended September 25, 1994 and
September 26, 1993 and Consolidated Condensed Balance Sheets
(without notes) as of said dates were also filed.
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 thereunto duly authorized.
HASBRO, INC.
------------
(Registrant)
Date: November 9, 1994 By: /s/ John T. O'Neill
---------------------
John T. O'Neill
Executive Vice President and
Chief Financial Officer
(Duly Authorized Officer and
Principal Financial Officer)
HASBRO, INC. AND SUBSIDIARIES
Quarterly Report on Form 10-Q
For the Period Ended September 25, 1994
Exhibit Index
Exhibit
No. Exhibits
- - ------- --------
11.1 Computation of Earnings Per Common Share -
Thirty-Nine Weeks Ended September 25, 1994
and September 26, 1993
11.2 Computation of Earnings Per Common Share -
Thirteen Weeks Ended September 25, 1994 and
September 26, 1993
12 Computation of Ratio of Earnings to Fixed
Charges - Thirty-Nine and Thirteen Weeks
Ended September 25, 1994
27 Article 5 Financial Data Schedule - Third
Quarter 1994.
EXHIBIT 11.1
HASBRO, INC. AND SUBSIDIARIES
Computation of Earnings Per Common Share
Thirty-Nine Weeks Ended September 25, 1994 and September 26, 1993
(Thousands of Dollars and Shares Except Per Share Data)
1994 1993
----------------- -----------------
Fully Fully
Primary Diluted Primary Diluted
------- ------- ------- -------
Net earnings before cumulative
effect of change in accounting
principles $103,502 103,502 129,278 129,278
Interest and amortization on 6%
convertible notes, net of taxes - 4,323 - 4,323
------- ------- ------ ------
Net earnings before cumulative
effect of change in accounting
principles applicable to common
shares 103,502 107,825 129,278 133,601
Cumulative effect of change in
accounting principles (4,282) (4,282) - -
------- ------- ------ ------
Net earnings applicable to
common shares $ 99,220 103,543 129,278 133,601
======= ======= ======= =======
Weighted average number of shares
outstanding:(a)
Outstanding at beginning of
period 87,795 87,795 87,176 87,176
Actual exercise of stock
options and warrants 221 221 238 238
Assumed exercise of stock
options and warrants 1,720 1,720 2,522 2,971
Assumed conversion of 6%
convertible notes - 5,114 - 5,114
Purchase of common stock (144) (144) - -
------- ------- ------ ------
Total 89,592 94,706 89,936 95,499
======= ======= ====== ======
Per common share:
Earnings before cumulative
effect of change in
accounting principles $ 1.16 1.14 1.44 1.40
Cumulative effect of change
in accounting principles (.05) (.05) - -
------- ------- ------ ------
Net earnings $ 1.11 1.09 1.44 1.40
======= ======= ====== ======
(a) Computation to arrive at the average number is a weighted average
computation.
EXHIBIT 11.2
HASBRO, INC. AND SUBSIDIARIES
Computation of Earnings Per Common Share
Thirteen Weeks Ended September 25, 1994 and September 26, 1993
(Thousands of Dollars and Shares Except Per Share Data)
1994 1993
----------------- -----------------
Fully Fully
Primary Diluted Primary Diluted
------- ------- ------- -------
Net earnings before cumulative
effect of change in accounting
principles $75,151 75,151 75,548 75,548
Interest and amortization on 6%
convertible notes, net of taxes - 1,441 - 1,394
------ ------ ------ ------
Net earnings before cumulative
effect of change in accounting
principles applicable to common
shares 75,151 76,592 75,548 76,942
Cumulative effect of change in
accounting principles - - - -
------ ------ ------ ------
Net earnings applicable to
common shares $75,151 76,592 75,548 76,942
====== ====== ====== ======
Weighted average number of shares
outstanding:(a)
Outstanding at beginning of
period 87,948 87,948 87,464 87,464
Actual exercise of stock
options and warrants 42 42 114 114
Assumed exercise of stock
options and warrants 1,143 1,146 2,665 2,884
Assumed conversion of 6%
convertible notes - 5,114 - 5,114
Purchase of common stock (292) (292) - -
------ ------ ------ ------
Total 88,841 93,958 90,243 95,576
====== ====== ====== ======
Per common share:
Earnings before cumulative
effect of change in
accounting principles $ .85 .82 .84 .81
Cumulative effect of change
in accounting principles - - - -
------ ------ ------ ------
Net earnings $ .85 .82 .84 .81
====== ====== ====== ======
(a) Computation to arrive at the average number is a weighted average
computation.
EXHIBIT 12
HASBRO, INC. AND SUBSIDIARIES
Computation of Ratio of Earnings to Fixed Charges
Thirty-Nine Weeks and Thirteen Weeks Ended September 25, 1994
(Thousands of Dollars)
Thirty-Nine Thirteen
Weeks Weeks
----------- ----------
Earnings available for fixed charges:
Net earnings $ 99,220 75,151
Add:
Cumulative effect of change
in accounting principles 4,282 -
Fixed charges 28,804 12,181
Income taxes 64,794 47,045
------- -------
Total $197,100 134,377
======= =======
Fixed Charges:
Interest on long-term debt $ 8,855 3,006
Other interest charges 9,966 5,770
Amortization of debt expense 345 152
Rental expense representative
of interest factor 9,638 3,253
------- -------
Total $ 28,804 12,181
======= =======
Ratio of earnings to fixed charges 6.84 11.03
======= =======
5
1,000
9-MOS
DEC-25-1994
SEP-25-1994
43,234
16,810
1,171,122
52,500
333,089
1,658,922
503,657
206,671
2,716,314
1,144,772
150,437
44,043
0
0
1,304,005
2,716,314
1,729,679
1,729,679
763,507
804,066
(26,053)
1,042
18,821
168,296
64,794
103,502
0
0
(4,282)
99,220
1.11
1.09
