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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): February 7, 2002
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HASBRO, INC.
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(Name of Registrant)
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)
Item 5. Other Events and Regulation FD Disclosure
The February 7, 2002 Press Release of the Registrant attached
hereto as EXHIBIT 99 is incorporated herein by reference.
Item 7(c) Exhibits
99 Press Release, dated February 7, 2002, of Hasbro, Inc.
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: February 7, 2002 By: /s/ David D. R. Hargreaves
--------------------------
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 February 7, 2002
Exhibit Index
Exhibit
No. Exhibits
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99 Press Release dated February 7, 2002
EXHIBIT 99
For Immediate Contact:
Release
February 7, 2002 Karen A. Warren (Investor Relations) 401-727-5401
Wayne S. Charness (News Media) 401-727-5983
HASBRO REPORTS FULL-YEAR AND FOURTH QUARTER 2001 EARNINGS
RETURNS TO FULL YEAR PROFITABILITY
Pawtucket, RI (February 7, 2002) -- Hasbro, Inc. (NYSE:HAS) today
announced net earnings for the year of $72.1 million or $0.42 per diluted
share, excluding an $11.3 million or $0.07 per diluted share loss in
Argentina related to the deteriorating business environment and the impact of
the peso devaluation. These results also exclude a $1.1 million cumulative
effect of an accounting change that was implemented under FASB 133.
Excluding these items, the results are in line with consensus estimates for
the year. On a reported basis, net earnings for the year were $59.7 million
or $0.35 per diluted share. In the comparable period last year the company
reported a net loss of $144.6 million or $0.82 per diluted share; these
results included $146.1 million of pre-tax charges related to Consolidation
Programs, and a pre-tax charge of $44 million associated with the sale of
Hasbro Interactive and Games.com.
For the year, net revenues worldwide were $2.9 billion compared to $3.8
billion in 2000. Reductions in revenue from POKEMON, Furby and the sale of
Hasbro Interactive were $1.1 billion for the year. Excluding these three
product lines, revenue increased $127 million or 5% for the year. Total
fourth quarter net revenues were $988.7 million compared to $1.2 billion a
year ago. Reductions in revenue from POKEMON, Furby and the sale of Hasbro
Interactive were $215 million. Excluding these three product lines, revenue
increased $41.3 million or 5% for the quarter.
"2001 was a year of significant accomplishments for Hasbro. We
delivered on our commitment to return to profitability this year, in spite of
a very challenging economic and retail environment, particularly in the
fourth quarter," said Alan G. Hassenfeld, Chairman and Chief Executive
Officer.
"As we previously stated, we became a smaller but more profitable
company in 2001, as we continued to reduce our dependency on major licensing
products. In addition, we delivered a strong portfolio of products in Hasbro
owned and controlled brands during the second half of the year," Hassenfeld
continued.
Reported net earnings for the fourth quarter were $52.5 million or
$0.30 per diluted share, including the impact of Argentina. In the
comparable period last year the company reported a net loss of $180.1 million
or $1.05 per diluted share. The 2000 results include $146.1 million of pre-
tax charges related to Consolidation Programs and the write-down of $44.0
million associated with the sale of Hasbro Interactive and Games.com.
In the fourth quarter the Company completed the sale of $250 million in
original principal amount of 2.75% Convertible Senior Debentures due in 2021.
The Company used the proceeds to purchase $225 million in principal amount of
7.95% Notes due in March 2003, with the remaining proceeds used to reduce
debt with longer maturities.
As part of the company's focus on cash, Hasbro has managed inventories
and receivables at a lower level and reduced capital expenditures. The
Company ended the year with debt net of cash down by $300 million.
For the year, the U.S. Toys segment increased revenues and was
profitable, compared to a substantial loss last year. The Games segment
continued to be profitable, although revenue declined due to POKEMON trading
card games, the sale of Hasbro Interactive and weakness in lifestyle
electronic products. International segment revenue declined year over year,
resulting in lower operating profit versus the comparable period last year.
Excluding POKEMON, FURBY and Hasbro Interactive, International revenue
increased approximately 5%.
Full year Earnings Before Interest, Taxes, Depreciation and Amortization
(EBITDA) was $435 million, compared to $325 million before any charges and
$267.9 million after charges in 2000.
"As part of our program to improve long-term profitability and lower our
break-even, we reduced expenses in continuing businesses in sales and
marketing; research and development; and administrative functions by
approximately $100 million. This is in addition to the reductions associated
with the sale of Hasbro Interactive and exceeded the target we set at the end
of 2000," said Alfred J. Verrecchia, President and Chief Operating Officer.
"We are confident that we are making the right moves to make Hasbro
leaner and more consistently profitable for our shareholders. We are pleased
with achieving full year profitability in a difficult retail environment.
Going forward, we continue to believe we can grow the business three to five
percent per annum and we expect operating margins to return to historical
levels of 10-11% by 2003 and would anticipate doing better in the long term.
However, we continue to be concerned with the retail and economic environment
in the first half of the year," Verrecchia concluded.
The company will webcast its fourth quarter earnings conference call at
9:00 a.m. Eastern time today. Investors and the media are invited to listen
at http://www.hasbro.com (select "Corporate Info" from the home page, then
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 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; 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, and the risk that anticipated benefits of acquisitions may not occur
or be delayed or reduced in their realization. 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.
EBITDA (earnings before interest, taxes, depreciation and amortization)
represents operating profit less restructuring, plus depreciation and all
amortization. EBITDA is not adjusted for all noncash expenses or for working
capital, capital expenditures or other investment requirements and,
accordingly, is not necessarily indicative of amounts that may be available
for discretionary uses. Thus, EBITDA should not be considered in isolation or
as a substitute for net earnings or cash provided by operating activities,
each prepared in accordance with generally accepted accounting principles,
when measuring Hasbro's profitability or liquidity as more fully discussed in
the Company's financial statements and securities filings.
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HASBRO, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Thousands of Dollars)
Dec. 30, Dec. 31,
2001 2000
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Assets
Cash and Cash Equivalents $ 233,095 $ 127,115
Accounts Receivable, Net 572,499 685,975
Inventories 217,479 335,493
Other 345,545 431,630
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Total Current Assets 1,368,618 1,580,213
Property, Plant and Equipment, Net 235,360 296,729
Other Assets 1,765,001 1,951,517
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Total Assets $3,368,979 $3,828,459
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Liabilities and Shareholders' Equity
Short-term Borrowings $ 34,024 $ 226,292
Current Installments of Long-term Debt 2,304 1,793
Payables and Accrued Liabilities 722,263 1,011,727
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Total Current Liabilities 758,591 1,239,812
Long-term Debt 1,165,649 1,167,838
Deferred Liabilities 91,875 93,403
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Total Liabilities 2,016,115 2,501,053
Total Shareholders' Equity 1,352,864 1,327,406
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Total Liabilities and Shareholders' Equity $3,368,979 $3,828,459
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HASBRO, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Thousands of Dollars and Shares Except Per Share Data)
Quarter Ended Year Ended
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Dec. 30, Dec 31, Dec 30, Dec. 31,
2001 2000 2001 2000
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Net Revenues $ 988,729 1,162,744 $2,856,339 3,787,215
Cost of Sales 427,515 616,094 1,223,483 1,673,973
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Gross Profit 561,214 546,650 1,632,856 2,113,242
Amortization 33,608 59,118 121,652 157,763
Royalties, Research and
Development 111,573 209,265 335,358 635,366
Advertising 101,496 171,256 290,829 452,978
Selling, Distribution and
Administration 194,628 237,043 675,482 863,496
Restructuring Charge (1,795) 63,951 (1,795) 63,951
Loss on Sale of Business Units - 43,965 - 43,965
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Operating Profit (Loss) 121,704 (237,948) 211,330 (104,277)
Interest Expense 26,361 34,215 103,688 114,421
Other (Income) Expense, Net 11,369 5,213 11,443 7,288
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Earnings (Loss) Before Income
Taxes and Cumulative Effect of
Accounting Change 83,974 (277,376) 96,199 (225,986)
Income Taxes 31,489 (97,286) 35,401 (81,355)
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Earnings (Loss) Before
Cumulative Effect of
Accounting Change 52,485 (180,090) 60,798 (144,631)
Cumulative Effect of Accounting
Change - - (1,066) -
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Net Earnings (Loss) $ 52,485 $(180,090) $ 59,732 $(144,631)
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Per Common Share
Earnings (Loss) Before Cumulative
Effect of Accounting Change
Basic $ 0.30 $ (1.05) $ 0.35 $ (0.82)
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Diluted $ 0.30 $ (1.05) $ 0.35 $ (0.82)
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Net Earnings (Loss)
Basic $ 0.30 $ (1.05) $ 0.35 $ (0.82)
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Diluted $ 0.30 $ (1.05) $ 0.35 $ (0.82)
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Cash Dividends Declared $ 0.03 $ 0.03 $ 0.12 $ 0.21
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Weighted Average Number of shares
Basic 172,428 171,820 172,131 176,437
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Diluted 174,123 171,820 173,018 176,437
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