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 March 31, 1996 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 April 26, 1996 was 87,046,187.
HASBRO, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Thousands of Dollars Except Share Data)
(Unaudited)
Mar. 31, Apr. 2, Dec. 31,
Assets 1996 1995 1995
-------- -------- --------
Current assets
Cash and cash equivalents $ 136,860 189,777 161,030
Accounts receivable, less allowance
for doubtful accounts of $49,800,
$49,700 and $48,800 528,632 475,813 791,111
Inventories:
Finished products 246,270 198,587 240,126
Work in process 18,145 22,334 22,093
Raw materials 70,652 56,017 53,401
--------- --------- ---------
Total inventories 335,067 276,938 315,620
Deferred income taxes 85,131 83,474 85,849
Prepaid expenses 90,830 86,849 71,888
--------- --------- ---------
Total current assets 1,176,520 1,112,851 1,425,498
Property, plant and equipment, net 307,217 308,469 313,240
--------- --------- ---------
Other assets
Cost in excess of acquired net assets,
less accumulated amortization of
$103,332, $87,335 and $99,404 478,264 489,918 473,388
Other intangibles, less accumulated
amortization of $84,421, $62,761 and
$79,648 373,514 357,373 343,624
Other 68,345 61,152 60,638
--------- --------- ---------
Total other assets 920,123 908,443 877,650
--------- --------- ---------
Total assets $2,403,860 2,329,763 2,616,388
========= ========= =========
HASBRO, INC. AND SUBSIDIARIES
Consolidated Balance Sheets, Continued
(Thousands of Dollars Except Share Data)
(Unaudited)
Mar. 31, Apr. 2, Dec. 31,
Liabilities and Shareholders' Equity 1996 1995 1995
-------- -------- --------
Current liabilities
Short-term borrowings $ 93,402 162,736 119,987
Trade payables 107,607 115,259 198,328
Accrued liabilities 315,601 309,950 433,567
Income taxes 111,270 106,007 117,982
--------- --------- ---------
Total current liabilities 627,880 693,952 869,864
Long-term debt, excluding current
installments 149,987 150,000 149,991
Deferred liabilities 72,409 65,809 70,921
--------- --------- ---------
Total liabilities 850,276 909,761 1,090,776
--------- --------- ---------
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
88,087,198, 88,085,802 and 88,086,108 44,044 44,043 44,043
Additional paid-in capital 306,327 280,896 279,288
Retained earnings 1,215,639 1,086,070 1,201,242
Cumulative translation adjustments 20,148 22,473 23,450
Treasury stock, at cost, 1,019,161,
450,559 and 741,237 shares (32,574) (13,480) (22,411)
--------- --------- ---------
Total shareholders' equity 1,553,584 1,420,002 1,525,612
--------- --------- ---------
Total liabilities and
shareholders' equity $2,403,860 2,329,763 2,616,388
========= ========= =========
See accompanying condensed notes to consolidated financial statements.
HASBRO, INC. AND SUBSIDIARIES
Consolidated Statements of Earnings
(Thousands of Dollars Except Share Data)
(Unaudited)
Quarter Ended
--------------------
Mar. 31, Apr. 2,
1996 1995
-------- --------
Net revenues $538,685 526,503
Cost of sales 237,771 232,572
------- -------
Gross profit 300,914 293,931
------- -------
Expenses
Amortization 9,799 9,243
Royalties, research and
development 54,422 55,084
Advertising 70,276 70,233
Selling, distribution and
administration 125,365 120,803
------- -------
Total expenses 259,862 255,363
------- -------
Operating profit 41,052 38,568
------- -------
Nonoperating (income) expense
Interest expense 4,906 5,823
Other (income), net (2,963) (2,512)
------- -------
Total nonoperating expense 1,943 3,311
------- -------
Earnings before income taxes 39,109 35,257
Income taxes 14,744 13,574
------- -------
Net earnings $ 24,365 21,683
======= =======
Per common share
Net earnings $ .28 .25
======= =======
Cash dividends declared $ .10 .08
======= =======
See accompanying condensed notes to consolidated financial statements.
HASBRO, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Quarters Ended March 31, 1996 and April 2, 1995
(Thousands of Dollars)
(Unaudited)
1996 1995
---- ----
Cash flows from operating activities
Net earnings $ 24,365 21,683
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization of plant and equipment 18,678 19,224
Other amortization 9,799 9,243
Deferred income taxes 1,991 (5,112)
Change in operating assets and liabilities (other
than cash and cash equivalents):
Decrease in accounts receivable 258,408 257,841
Increase in inventories (18,196) (22,261)
Increase in prepaid expenses (18,678) (15,843)
Decrease in trade payables and accrued liabilities (215,994) (162,280)
Other 1,658 (6,958)
------- -------
Net cash provided by operating activities 62,031 95,537
------- -------
Cash flows from investing activities
Additions to property, plant and equipment (13,811) (16,044)
Investments and acquisitions, net of cash acquired (21,296) (102,413)
Other (7,228) 168
------- -------
Net cash utilized by investing activities (42,335) (118,289)
------- -------
Cash flows from financing activities
Proceeds from borrowings with original maturities
of more than three months 5,778 -
Repayments of borrowings with original maturities
of more than three months (21,905) (10)
Net (repayments) proceeds of other short-term
borrowings (8,851) 72,338
Purchase of common stock (14,969) (312)
Stock option transactions 4,380 2,296
Dividends paid (6,977) (6,130)
------- -------
Net cash (utilized) provided by financing
activities (42,544) 68,182
------- -------
Effect of exchange rate changes on cash (1,322) 7,319
------- -------
(Decrease) increase in cash and cash equivalents (24,170) 52,749
Cash and cash equivalents at beginning of year 161,030 137,028
------- -------
Cash and cash equivalents at end of period $136,860 189,777
======= =======
Supplemental information
Cash paid during the period for:
Interest $ 2,206 2,951
Income taxes $ 10,890 10,827
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 March 31, 1996 and April 2, 1995,
and the results of operations and cash flows for the periods then ended.
The quarter ended March 31, 1996 consisted of thirteen weeks while
the quarter ended April 2, 1995 consisted of fourteen weeks.
The results of operations for the quarter ended March 31, 1996, are
not necessarily indicative of results to be expected for the full year.
(2) During the first quarter of 1996, the Company adopted Statement of
Financial Accounting Standards No. 121, Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of (SFAS 121).
The adoption of SFAS 121 did not have a material impact on either the
Company's financial condition or its results of operations.
(3) 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 are assumed to be exercised at
the beginning of the period or at issuance, if later. The assumed proceeds
are then used to purchase common stock at the average market price during the
period.
For each of the reported periods the difference between primary and
fully diluted earnings per share was not significant.
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 first quarter of 1996 were $538,685, compared with the
$526,503 reported for the same period of 1995. Increased United States
volume, particularly within the Hasbro Toy Group, was the major factor in
this growth. In the major international markets, the Company's revenues, both
in local currencies and dollars, were generally lower than during the same
period of a year ago. The first quarter of 1996 included 13 weeks while 1995
included 14.
GROSS PROFIT
- - ------------
The gross profit margin, expressed as a percentage of net revenues, increased
marginally to 55.9% from the 1995 level of 55.8%. While the Company's cost of
certain raw materials, primarily plastics and paper, is decreasing in 1996,
the impact of these decreases are not fully realized as the inventories sold
during the first quarter were substantially purchased or produced during the
fourth quarter of 1995.
EXPENSES
- - --------
Royalties, research and development expenses for the quarter decreased in
both amount and as a percentage of revenues from 1995 levels. The royalty
component increased in both, reflecting the increased revenues and the change
in mix of products sold. Research and development was $30,119 for the quarter
compared to $32,564 in 1995. This decrease reflects the Company's efforts to
better manage such expenses as well as the second quarter 1995 discontinuance
by the Company of its efforts to develop a mass-market virtual reality game
system.
The current quarter advertising remained constant in amount with that of the
comparable period of 1995 while decreasing as a percentage of net revenues to
13.0% from 13.3%. This can largely be attributed to the lower portion of the
Company's revenues coming from the international marketing units which
generally have higher advertising to sales ratios than do the United States
groups.
The Company's selling, distribution and administration expenses increased,
both in amount and as a percentage of net revenues, from their respective
1995 amounts. Contributing to the increases was approximately $2,400 of
third-party costs associated with an unsolicited business combination
proposal. Also contributing was the impact of the Company's new operations
including Larami, acquired in February 1995, and the K'nex units and
Scandinavia, which were not fully operational during the first quarter of
1995.
NONOPERATING (INCOME) EXPENSE
- - -----------------------------
Interest expense decreased approximately 16% from the 1995 first quarter
amount, reflecting lower interest rates in the international markets, the
primary area of first quarter borrowings.
HASBRO, INC. AND SUBSIDIARIES
Management's Discussion and Analysis of Financial
Condition and Results of Operations, Continued
(Thousands of dollars)
OTHER INFORMATION
- - -----------------
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. This
concentration increases the risk of (a) underproduction of popular items, (b)
overproduction of less popular items and (c) failure to achieve tight and
compressed shipping schedules. 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 requested 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. At the end of its fiscal April
(April 28, 1996 and April 30, 1995) the Company's unshipped orders were
approximately $380,000 and $400,000, respectively.
During both 1994 and 1993, the Company incurred certain restructuring costs.
The 1994 actions, completed in the first quarter of 1995, resulted in the
termination of approximately 600 employees, of which approximately 100 were
management positions. The closure of the Company's Netherlands manufacturing
facility, which was the major portion of the 1993 charge, originally planned
for the second quarter of 1994, was delayed until the first quarter of 1995
due to the time necessary to comply with local requirements. This resulted in
the severance of approximately 200 additional employees. While impractical to
quantify, the Company believes that it is receiving the anticipated benefits
from these actions. Substantially all of the liabilities established for
these restructurings have been satisfied.
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 at March 31, 1996, were approximately 25% less than
their 1995 level. The Company attempts to keep its cash and cash equivalents
at the lowest level possible whenever it has short-term borrowings, although
at times 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. Receivables were approximately $53,000 greater than at the same
time in 1995, largely due to the increased United States sales occurring in
the latter portion of the fourth quarter of 1995 and the first quarter of
1996. Inventories, up approximately the same amount from the prior year
reflects the Company's planned actions necessary to have available product to
provide faster and more complete shipment of customer orders. Other assets,
as a group, increased marginally from their level a year ago, primarily
resulting from the Company's acquisitions of product rights and licenses
during the most recent twelve months, largely offset by twelve additional
months of amortization expense.
Short-term borrowings, at $93,402 were approximately $70,000, or 43% less
than last year, again reflecting funds generated from operations within the
most recent twelve months available to reduce such borrowings. At March 31,
1996, the Company had committed unsecured lines of credit totaling
approximately $590,000 available to it. It also had available uncommitted
lines approximating $930,000. The Company believes that these amounts are
adequate for its needs. Of these available lines, approximately $110,000 was
in use at March 31, 1996.
RECENT INFORMATION
- - ------------------
During 1996, the Company will adopt Statement of Financial Accounting
Standards No. 123, Accounting for Stock-Based Compensation (SFAS 123). SFAS
123 encourages, but does not require, companies to adopt a new accounting
method, recording the estimated fair value of employee stock options as
compensation expense. If such new method is not adopted, proforma disclosure
must be provided in a note to the financial statements. As the Company plans
to provide the required proforma disclosure only, the adoption of SFAS 123,
will not have a material impact on either the Company's financial condition
or its results of operations.
PART II. Other Information
Item 1. Legal Proceedings.
None.
Item 2. Changes in Securities.
None.
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.
4 Amendment No. 3 to Revolving Credit Agreement, dated as of
May 10, 1996, among the Company, certain banks (the
"Banks") and The First National Bank of Boston, as agent
for the Banks.
11 Computation of Earnings Per Common Share - Quarters Ended
March 31, 1996 and April 2, 1995.
12 Computation of Ratio of Earnings to Fixed Charges -
Quarter Ended March 31, 1996.
27 Financial Data Schedule.
(b) Reports on Form 8-K
A Current Report on Form 8-K dated April 18, 1996 was filed by
the Company and included the Press Release dated April 18, 1996
announcing the Company's results for the current quarter.
Consolidated Statements of Earnings (without notes) for the
quarters ended March 31, 1996 and April 2, 1995 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: May 14, 1996 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 March 31, 1996
Exhibit Index
Exhibit
No. Exhibits
- - ------- --------
4 Amendment No. 3 to Revolving Credit Agreement
11 Statement re computation of per share earnings - quarter
12 Statement re computation of ratios
27 Financial Data Schedule
EXHIBIT 4
AMENDMENT NO. 3
TO
REVOLVING CREDIT AGREEMENT
This Amendment (the "Amendment"), dated as of May 10, 1996, among
Hasbro, Inc., a Rhode Island corporation (the "Company") and The First
National Bank of Boston, The Bank of Nova Scotia, Citibank, N.A., Fleet
National Bank, Bank of America Illinois (as successor to Continental Bank,
N.A.), Mellon Bank, N.A. and Union Bank of Switzerland, (collectively, the
"Banks") and The First National Bank of Boston, as agent for the Banks (the
"Agent"), amends the Revolving Credit Agreement dated as of June 22, 1992, as
amended by Amendment No. 1 thereto dated as of April 1, 1994 and Amendment
No. 2 thereto dated as of May 1, 1995, among the Company, the Banks and the
Agent (as so amended and as may be further amended and in effect from time to
time, the "Credit Agreement"). Capitalized terms used herein without
definition that are defined in the Credit Agreement shall have the meanings
set forth in the Credit Agreement.
WHEREAS, the Company has requested that the Banks and the Agent make
certain amendments to the Credit Agreement in order, among other things, to
change certain margins and rates, to extend the maturity date thereof, and to
reflect the merger of Tonka Corporation into the Company which became
effective on December 31, 1995; and
WHEREAS, the Banks and the Agent have agreed to make such amendments
upon the terms and conditions described herein;
NOW, THEREFORE, in consideration of the foregoing premises, the parties
hereby agree as follows:
1. Definitions.
-----------
Section 1 of the Credit Agreement is hereby amended as follows:
1.1. Commitment Fee Rate.
-------------------
The definition of "Commitment Fee Rate" is hereby amended by deleting
clause (a) thereof in its entirety and by replacing it with the following new
clause (a):
"(a) With respect to the Revolving Credit Commitment Fee, effective
May 10, 1996, the applicable annual percentage rate set forth in the table
below opposite the Debt Ratings with respect to Long Term Senior Debt of the
Company then in effect, subject to the provisions set forth in clauses (i)
through (iv) of the definition of "Margin":
Debt Rating Applicable Commitment
----------- ---------------------
Standard & Poors Moody's Fee Rate
---------------- ------- --------
AA- or better Aa3 or better 0.070%
A or A+ A2 or A1 0.080%
A- A3 0.090%
BBB+ Baa1 0.105%
BBB Baa2 0.135%
BBB- or below Baa3 or below 0.185%"
1.2. Final Maturity Date.
-------------------
The definition of Final Maturity Date is hereby amended by substituting
the date "May 31, 1999" for the date "May 31, 1998" appearing therein.
1.3. Hasbro Companies.
----------------
The definition of Hasbro Companies is hereby deleted in its entirety and
replaced with the following new definition:
"Hasbro Companies.
----------------
Collectively, the Company and the Significant Subsidiaries, including
without limitation Hasbro International, Inc. (a Delaware corporation)."
1.4 Margin.
------
The definition of Margin is hereby amended by substituting the following
table for the table appearing therein:
"Debt Rating Applicable Margin
----------- -----------------
Euro-
Base currency CD
Standard Rate Rate Rate
& Poors Moody's Amounts Amounts Amounts
-------- ------- ------- -------- -------
AA- or better Aa3 or better 0% .20% .325%
A or A+ A2 or A1 0% .25% .375%
A- A3 0% .27% .400%
BBB+ Baa1 0% .35% .475%
BBB Baa2 0% .40% .525%
BBB- Baa3 0% .50% .625%
Below BBB- Below Baa3 The applicable Margins for Debt
Ratings of BBB-/Baa3 subject to
Clause (vii) below"
2. Conditions to Effectiveness.
---------------------------
The effectiveness of this Amendment shall be conditioned upon the
satisfaction of the following conditions precedent:
2.1. Delivery of Documents.
---------------------
(a) The Company shall have delivered to the Agent, contemporaneously with
the execution hereof, the following, in form and substance satisfactory to
the Banks:
(i) this Amendment signed by the Company;
(ii) certified copies of the resolutions of the Company approving this
Amendment together with Officer's Certificates as to the incumbency and true
signatures of officers; and
(iii) Officer's Certificates of the Company certifying as to the legal
existence, good standing, and qualification to do business of the Company.
(b) each Bank shall have delivered to the Agent this Amendment, signed by
such Bank.
2.2. Legality of Transaction.
-----------------------
No change in applicable law shall have occurred as a consequence of
which it shall have become and continue to be unlawful on the date this
Amendment is to become effective (a) for the Agent or any Bank to perform any
of its obligations under any of the Loan Documents or (b) for the Company to
perform any of its agreements or obligations under any of the Loan Documents.
2.3. Performance.
-----------
The Company shall have duly and properly performed, complied with and
observed in all material respects its covenants, agreements and obligations
contained in the Loan Documents required to be performed, complied with or
observed by it on or prior to the date this Amendment is to become effective.
No event shall have occurred on or prior to the date this Amendment is to
become effective and be continuing, and no condition shall exist on the date
this Amendment is to become effective which constitutes a Default or Event of
Default under any of the Loan Documents.
2.4. Proceedings and Documents.
-------------------------
All corporate, governmental and other proceedings in connection with the
transactions contemplated by this Amendment and all instruments and documents
incidental thereto shall be in the form and substance reasonably satisfactory
to the Agent and the Agent shall have received all such counterpart originals
or certified or other copies of all such instruments and documents as the
Agent shall have reasonably requested.
3. Representations and Warranties.
------------------------------
The Company hereby represents and warrants to the Banks as follows:
(a) The representations and warranties of the Company contained in the
Credit Agreement, as amended hereby, were true and correct in all material
respects when made and continue to be true and correct in all material
respects on the date hereof, except that the financial statements referred to
therein shall be the financial statements of the Company most recently
delivered to the Agent, and except as such representations and warranties are
affected by the transactions contemplated hereby;
(b) The execution, delivery and performance by the Company of this
Amendment and the consummation of the transactions contemplated hereby; (i)
are within the corporate powers of the Company and have been duly authorized
by all necessary corporate action on the part of the Company, (ii) do not
require any approval, consent of, or filing with, any governmental agency or
authority, or any other person, association or entity, which bears on the
validity of this Amendment and which is required by law or the regulation or
rule of any agency or authority, or other person, association or entity,
(iii) do not violate any provisions of any order, writ, judgment, injunction,
decree, determination or award presently in effect in which the Company is
named, or any provision of the charter documents or by-laws of the Company,
(iv) do not result in any breach of or constitute a default under any
agreement or instrument to which the Company is a party or to which it or any
of its properties are bound, including without limitation any indenture, loan
or credit agreement, lease, debt instrument or mortgage, except for such
breaches and defaults which would not have a material adverse effect on the
Company and its subsidiaries taken as a whole, and (v) do not result in or
require the creation or imposition of any mortgage, deed of trust, pledge or
encumbrance of any nature upon any of the assets or properties of the
Company; and
(c) This Amendment, the Credit Agreement as amended hereby, and the other
Loan Documents constitute the legal, valid and binding obligations of the
Company, enforceable against the Company in accordance with their respective
terms, provided that (i) enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws of general application
affecting the rights and remedies of creditors, and (ii) enforcement may be
subject to general principles of equity, and the availability of the remedies
of specific performance and injunctive relief may be subject to the
discretion of the court before which any proceeding for such remedies may be
brought.
4. No Other Amendments.
-------------------
Except as expressly provided in this Amendment, all of the terms and
conditions of the Credit Agreement, the Notes and the other Loan Documents
shall remain in full force and effect.
5. Execution in Counterparts.
-------------------------
This Amendment may be executed in any number of counterparts and by each
party on a separate counterpart, each of which when so executed and delivered
shall be an original, but all of which together shall constitute one
instrument. In proving this Amendment, it shall not be necessary to produce
or account for more than one such counterpart signed by the party against
whom enforcement is sought.
6. Effective Date.
--------------
Subject to the satisfaction of the conditions precedent set forth in
Section 2 hereof, this Amendment shall be deemed to be effective as of the
date first set forth above.
IN WITNESS WHEREOF, the Borrower, the Banks and the Agent have duly
executed this Amendment as of the date first above written.
HASBRO, INC.
By: \s\ John T. O'Neill
------------------------
Title: Executive Vice
President and Chief
Financial Officer
THE FIRST NATIONAL BANK OF BOSTON
individually and as Agent
By: \s\ Mitchell B. Feldman
-----------------------------
Title: Managing Director
THE BANK OF NOVA SCOTIA
By: \s\ Michael R. Bradley
-----------------------------
Title: Authorized Signatory
CITIBANK, N.A.
By: \s\ Robert M. Spence
-----------------------------
Title: Managing Director
FLEET NATIONAL BANK
By: \s\ John Webb
------------------------
Title: Vice President
BANK OF AMERICA ILLINOIS
By: \s\ George Poon
-----------------------------
Title: Vice President
MELLON BANK, N.A.
By: \s\ John Paul Marotta
------------------------
Title: Assistant Vice President
UNION BANK OF SWITZERLAND
By: \s\ Robert A. High
------------------------
Title: Assistant Treasurer
By: \s\ Dieter Hoeppli
------------------------
Title: Assistant Vice President
EXHIBIT 11
HASBRO, INC. AND SUBSIDIARIES
Computation of Earnings Per Common Share
Quarters Ended March 31, 1996 and April 2, 1995
(Thousands of Dollars and Shares Except Per Share Data)
1996 1995
----------------- -----------------
Fully Fully
Primary Diluted Primary Diluted
------- ------- ------- -------
Net earnings $24,365 24,365 21,683 21,683
Interest and amortization on 6%
convertible notes, net of taxes - 1,441 - 1,441
------ ------ ------ ------
Net earnings applicable to
common shares $24,365 25,806 21,683 23,124
====== ====== ====== ======
Weighted average number of shares
outstanding:(a)
Outstanding at beginning of
period 87,345 87,345 87,528 87,528
Actual exercise of stock
options 74 74 48 48
Assumed exercise of stock
options and warrants 859 1,053 580 682
Assumed conversion of 6%
convertible notes - 5,114 - 5,114
Purchase of common stock (171) (171) (3) (3)
------ ------ ------ ------
Total 88,107 93,415 88,153 93,369
====== ====== ====== ======
Per common share:
Net earnings $ .28 .28 .25 .25
====== ====== ====== ======
(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
Quarter Ended March 31, 1996
(Thousands of Dollars)
Earnings available for fixed charges:
Net earnings $ 24,365
Add:
Fixed charges 8,621
Income taxes 14,744
-------
Total $ 47,730
=======
Fixed Charges:
Interest on long-term debt $ 2,317
Other interest charges 2,589
Amortization of debt expense 85
Rental expense representative
of interest factor 3,630
-------
Total $ 8,621
=======
Ratio of earnings to fixed charges 5.54
=======
5
1000
3-MOS
DEC-29-1996
MAR-31-1996
136,860
0
578,432
49,800
335,067
1,176,520
551,830
244,613
2,403,860
627,880
149,987
0
0
44,044
1,509,540
2,403,860
538,685
538,685
237,771
237,771
134,497
1,475
4,906
39,109
14,744
24,365
0
0
0
24,365
.28
0
