has-20201026
0000046080false00000460802020-10-262020-10-26
UNITED STATES
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): October 26, 2020
 Hasbro, Inc.
(Exact name of registrant as specified in its charter)
Rhode Island
1-6682
05-0155090
(State or other jurisdiction of incorporation or organization)
(Commission File Number)
(I.R.S. Employer Identification No.)
1027 Newport Avenue
Pawtucket,
Rhode Island
02861
(Address of Principal Executive Offices)
(Zip Code)
Registrant’s telephone number, including area code:   (401) 431-8697

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act.
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.50 par value per shareHASThe NASDAQ Global Select Market
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.

Emerging growth company   

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period provided pursuant to Section 13(a) of the Exchange Act. 




Item 2.02              Results of Operations and Financial Condition.
 
On October 26, 2020, Hasbro, Inc. ("Hasbro" or "we") announced its financial results for the fiscal quarter and nine months ended September 27, 2020, and certain other financial information. A copy of the press release is furnished herewith as Exhibit 99.1 and is incorporated by reference herein.
 
The information furnished in Item 2.02, including the Exhibit attached hereto, shall not be deemed "filed" for any purpose, and shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, regardless of any general incorporation language in any such filing.
 
 
Item 9.01              Financial Statements and Exhibits.
 
(d)  Exhibits
 
99.1      Hasbro, Inc. Press Release, dated October 26, 2020.



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.
   
 
 
 By:/s/ Deborah Thomas
 Name:
 Title:Executive Vice President and Chief Financial Officer
(Duly Authorized Officer and Principal Financial Officer)
Date: October 26, 2020  


Document

EXHIBIT 99.1
https://cdn.kscope.io/6a1dc18aae6d7e72b31a8d7050b1a132-hasbro20logo11.jpg

For Immediate Release

Hasbro Reports Third Quarter 2020 Financial Results
Third quarter 2020 revenues were $1.78 billion, down 4% on a pro forma basis
Revenue grew 9% in the U.S. and Canada segment and 7% in the European region; revenue grew 50% in ecomm channels globally
eOne TV and Film revenue decline reflects entertainment delivery delays due to live-action production shutdowns and the ongoing, gradual return to production
Operating profit of $336.6 million or 18.9% of revenues; Net earnings of $220.9 million or $1.61 per diluted share
Adjusted operating profit of $367.2 million or 20.7% of revenues, an expansion of 230 basis points year-over-year
Adjusted net earnings of $258.9 million, or $1.88 per diluted share
Substantial liquidity and access to cash, including quarter ending cash of $1.13 billion and year-to-date operating cash flow of $494.3 million
Pawtucket, R.I., October 26, 2020 -- Hasbro, Inc. (NASDAQ: HAS), a global play and entertainment company, today reported financial results for the third quarter 2020.

Net revenues for the third quarter 2020 were $1.78 billion versus $1.86 billion pro forma revenues in 2019, a decline of 4%. Foreign exchange had a $1.0 million negative impact on third quarter 2020 revenues. 2019 pro forma results reflect the combination of the results of Hasbro and Entertainment One Ltd. (eOne) for periods prior to Hasbro’s acquisition of eOne in the first quarter of 2020.

Net earnings for the third quarter 2020 were $220.9 million, or $1.61 per diluted share, versus pro forma net earnings of $216.5 million, or $1.57 per diluted share, in 2019. Third quarter 2020 net earnings included $19.6 million after tax of purchased intangible amortization associated with the eOne acquisition, $13.7 million of incremental tax expense related to a change in the U.K. tax code and $4.7 million after tax of acquisition and related costs. Excluding these items, adjusted net earnings for the third quarter 2020 were $258.9 million, or $1.88 per diluted share. Third quarter 2019 pro forma net earnings included $19.1 million after tax of purchased intangible amortization at eOne and $3.5 million after tax associated with non-GAAP adjustments at eOne. Excluding these items, adjusted pro forma net earnings for the third quarter 2019 were $239.1 million, or $1.74 per diluted share. See the financial tables accompanying this press release for a reconciliation of as reported to pro forma and adjusted results, and a reconciliation of GAAP and non-GAAP financial measures.

"Hasbro's third quarter performance was the result of great work from our global team and continued growing consumer demand for Hasbro brands in most markets," said Brian Goldner,
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Hasbro’s chairman and chief executive officer. "Our broad, innovative product line, including leadership in gaming, excellence in global ecomm and compelling marketing campaigns drove meaningfully better performance in the third quarter. Building off this quarter's growth in toys, games and digital we are positioned to deliver a good holiday season. Live-action entertainment production is returning, and we are set to improve deliveries in the fourth quarter with some moving into 2021. While COVID-19 remains a factor in our global operations, consumers remain engaged in activities that create joy and personal connections and we are working purposefully to deliver them the world's best play and entertainment experiences, while remaining focused on the safety and well-being of our global teams and communities."
"Our teams delivered a very good third quarter, showcasing the breadth of Hasbro's portfolio, the benefits of our cost management efforts and the strength of our balance sheet," said Deborah Thomas, Hasbro’s chief financial officer. "Hasbro's partner factories and warehouses are open and operating and production is largely in line with demand. With a strong focus on cash collections, DSOs are down year-over-year and sequentially, and we ended the quarter with $1.13 billion in cash on the balance sheet. Importantly, as we look to the future, we remain focused on executing a good holiday, managing our expenses and investing to support our business plans for future years."


Third Quarter 2020 Major Segment and Brand Performance

Major SegmentsNet Revenues Operating Profit (Loss)
($ Millions)($ Millions)
Pro FormaPro Forma
Q3 2020Q3 2019% ChangeQ3 2020Q3 2019% Change
U.S. and Canada
$977.1$898.39%$263.0$193.736%
International$517.0$561.1-8%$63.9$67.2
-5%
Entertainment, Licensing and Digital
$89.0$115.8-23%$32.8$24.633%
eOne1
$193.5$283.3
-32%
$(25.9)$15.8>-100%

Brand Portfolio Net Revenues ($ Millions)
Pro Forma
Q3 2020Q3 2019% Change
Franchise Brands$807.6$779.74%
Partner Brands$409.2$427.0-4%
Hasbro Gaming2
$239.2$232.33%
Emerging Brands3
$155.0$188.6-18%
TV/Film/Entertainment4
$165.7$230.9-28%

1Both periods above are as reported, with 2019 including the pro forma results from eOne. eOne incurred certain Non-GAAP adjustments in both periods, which are discussed below. A reconciliation is included the attached schedule under the heading “Reconciliation of As Reported to Pro Forma Adjusted Operating Results.”

2Hasbro's total gaming category, including all gaming revenue, most notably MAGIC: THE GATHERING and MONOPOLY, totaled $543.1 million for the third quarter 2020, up 21% from revenues of $449.4 million for the third quarter 2019.

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3Emerging Brands portfolio includes revenues from eOne brands PEPPA PIG, PJ MASKS and RICKY ZOOM as of first quarter 2020. For comparability, third quarter 2019 includes the pro forma revenues for those brands, which amounted to $52.4 million.

4TV/Film/Entertainment represents the remaining eOne revenues. For comparability, third quarter 2019 includes the pro forma revenues.

Revenue grew in Franchise Brands, led by MAGIC: THE GATHERING, and Hasbro Gaming, with growth in numerous games properties. Hasbro products for Lucasfilm's Star Wars and The Mandalorian also delivered strong revenue growth in the quarter.

Global consumer point of sale increased mid-single digits, including double-digit gains in the U.S., U.K., Germany/Austria/Switzerland, Australia and New Zealand. Point of sale declined in Latin America.

U.S. and Canada segment revenue and operating profit grew due to gains in Franchise Brands, led by MAGIC: THE GATHERING, as well as growth in Emerging Brands and Hasbro Gaming. Operating profit grew primarily as a result of higher revenues and the favorable mix of those revenues, including MAGIC: THE GATHERING.
International segment revenues and operating profit declined, primarily driven by declines in Latin America. Revenues grew in the European region. The International segment operating profit declined as result of the lower revenues and efforts to clear retail inventory in Latin America. This was partially offset by favorable product mix and cost management.
Entertainment, Licensing and Digital segment revenues declined as compared to 2019 which included the Transformers Bumblebee film revenue, partially offset by growth in digital gaming. Operating profit increased due to favorable mix from growth in licensed digital gaming, lower advertising related to the launch of Magic: The Gathering Arena in 2019 and lower development expenses due to the closure of Backflip Studios in late 2019.
eOne segment pro forma revenues declined in the quarter primarily due to lower TV and Film revenues as well as lower Family Brands revenue. Within TV and Film, due to COVID-19 live-action productions and theaters globally were shut down for most of the quarter, and these are gradually reopening, depending on geography. Demand for stories and content as well as viewership remain high. The teams have a robust development slate of over 150 active television and film projects including more than 30 Hasbro properties. Within television, produced/acquired content half hours decreased due to production shutdowns. Within film, box office revenues declined as a result of theater closures. Within Family Brands, engagement in animated content for PEPPA PIG and PJ MASKS remains strong, but revenues declined on lower consumer licensee revenues and lower advertising revenue from the YouTube platform. In music, revenue was negatively impacted by the loss of live events and associated artist promotions, as well as lower royalties from licensed and publishing music rights.

For the eOne segment, third quarter 2020 operating profit included $24.7 million of purchased intangible amortization associated with the fair value of acquired intangible assets. Third quarter 2019 pro forma operating profit included $24.6 million of purchased intangible amortization and $4.6 million of prior restructuring and other costs. Adjusted pro forma operating profit for the eOne segment decreased due to the decline in revenues, partially offset by the related declines in program amortization, advertising expense and royalty expense.
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Conference Call Webcast
Hasbro will webcast its third quarter 2020 earnings conference call at 8:30 a.m. Eastern Time today. To listen to the live webcast and access the accompanying presentation slides, please go to https://investor.hasbro.com. The replay of the call will be available on Hasbro’s web site approximately 2 hours following completion of the call.
About Hasbro
Hasbro (NASDAQ: HAS) is a global play and entertainment company committed to Creating the World's Best Play and Entertainment Experiences. From toys, games and consumer products to television, movies, digital gaming, live-action, music, and virtual reality experiences, Hasbro connects to global audiences by bringing to life great innovations, stories and brands across established and inventive platforms. Hasbro’s iconic brands include NERF, MAGIC: THE GATHERING, MY LITTLE PONY, TRANSFORMERS, PLAY-DOH, MONOPOLY, BABY ALIVE, POWER RANGERS, PEPPA PIG and PJ MASKS, as well as premier partner brands. Through its global entertainment studio, eOne, Hasbro is building its brands globally through great storytelling and content on all screens. Hasbro is committed to making the world a better place for all children and all families through corporate social responsibility and philanthropy. Hasbro ranked among the 2020 100 Best Corporate Citizens by 3BL Media, has been named one of the World’s Most Ethical Companies® by Ethisphere Institute for the past nine years, and one of America’s Most JUST Companies by Forbes and JUST Capital for the past four years. We routinely share important business and brand updates on our Investor Relations website, Newsroom and social channels (@Hasbro on Twitter and Instagram, and @HasbroOfficial on Facebook.)

© 2020 Hasbro, Inc. All Rights Reserved.

Safe Harbor
Certain statements in this release contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements, which may be identified by the use of forward-looking words or phrases, include statements relating to: the impact of, and actions and initiatives taken and planned to be taken to, try and manage the negative impact of the global coronavirus outbreak on our business; our expectations concerning the upcoming holiday season and our future results; and our working capital and liquidity. Our actual actions or results may differ materially from those expected or anticipated in the forward-looking statements due to both known and unknown risks and uncertainties. Factors that might cause such a difference include, but are not limited to:
our ability to successfully develop and execute plans to mitigate the negative impact of the coronavirus on our business;
our ability to design, develop, produce, manufacture, source and ship products on a timely and cost-effective and profitable basis;
rapidly changing consumer interests in the types of products and entertainment we offer;
the challenge of developing and offering products and storytelling experiences that are sought after by children, families and audiences given increasing technology and entertainment offerings available;
our ability to develop and distribute engaging storytelling across media to drive brand awareness;
our dependence on third party relationships, including with third party manufacturers, licensors of brands, studios, content producers and entertainment distribution channels;
our ability to successfully compete in the global play and entertainment industry, including with manufacturers, marketers, and sellers of toys and games, digital gaming products and digital media, as well as with film studios, television production companies and independent distributors and content producers;
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our ability to successfully evolve and transform our business and capabilities to address a changing global consumer landscape and retail environment, including changing inventories policies of our customers and increased emphasis on ecommerce;
our ability to develop new and expanded areas of our business, such as through eOne, Wizards of the Coast, and our other entertainment, digital gaming and esports initiatives;
risks associated with international operations, such as currency conversion, currency fluctuations, the imposition of tariffs, quotas, border adjustment taxes or other protectionist measures, and other challenges in the territories in which we operate;
our ability to successfully implement actions to lessen the impact of potential and enacted tariffs imposed on our products, including any changes to our supply chain, inventory management, sales policies or pricing of our products;
downturns in global and regional economic conditions impacting one or more of the markets in which we sell products, which can negatively impact our retail customers and consumers, result in lower employment levels, consumer disposable income, retailer inventories and spending, including lower spending on purchases of our products;
other economic and public health conditions or regulatory changes in the markets in which we and our customers, suppliers and manufacturers operate, such as higher commodity prices, labor costs or transportation costs, or outbreaks of disease, such as the coronavirus, the occurrence of which could create work slowdowns, delays or shortages in production or shipment of products, increases in costs or delays in revenue;
the success of our key partner brands, including the ability to secure, maintain and extend agreements with our key partners or the risk of delays, increased costs or difficulties associated with any of our or our partners’ planned digital applications or media initiatives;
fluctuations in our business due to seasonality;
the concentration of our customers, potentially increasing the negative impact to our business of difficulties experienced by any of our customers or changes in their purchasing or selling patterns;
the bankruptcy or other lack of success of one of our significant retailers, licensees and other business partners;
risks relating to the use of third party manufacturers for the manufacturing of our products, including the concentration of manufacturing for many of our products in the People’s Republic of China and our ability to successfully diversify sourcing of our products to reduce reliance on sources of supply in China;
our ability to attract and retain talented employees;
our ability to realize the benefits of cost-savings and efficiency and/or revenue efficiency enhancing initiatives including initiatives to integrate eOne into our business;
our ability to protect our assets and intellectual property, including as a result of infringement, theft, misappropriation, cyber-attacks or other acts compromising the integrity of our assets or intellectual property;
risks relating to the impairment and/or write-offs of acquired products and films and television programs we acquire and produce;
risks relating to investments and acquisitions, such as our acquisition of eOne, which risks include: integration difficulties; inability to retain key personnel; diversion of management time and resources; failure to achieve anticipated benefits or synergies of acquisitions or investments; and risks relating to the additional indebtedness incurred in connection with a transaction;
the risk of product recalls or product liability suits and costs associated with product safety regulations;
changes in tax laws or regulations, or the interpretation and application of such laws and regulations, which may cause us to alter tax reserves or make other changes which significantly impact our reported financial results;
the impact of litigation or arbitration decisions or settlement actions; and
other risks and uncertainties as may be detailed from time to time in our public announcements and U.S. Securities and Exchange Commission (“SEC”) filings.

5


The statements contained herein are based on our current beliefs and expectations. We undertake 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.

Non-GAAP Financial Measures
The financial tables accompanying this press release include non-GAAP financial measures as defined under SEC rules, specifically Adjusted operating profit, Adjusted net earnings and Adjusted earnings per diluted share, which exclude, where applicable, the 2020 impact of eOne acquisition and related costs, purchased intangible amortization, other severance costs and income tax expense associated with U.K tax reform. For 2019, Pro Forma Adjusted operating profit, Pro Forma Adjusted net earnings and Pro Forma Adjusted earnings per diluted share exclude the impact of charges associated with the settlement of the Company’s U.S. pension plan, purchased intangible amortization and certain charges incurred by eOne related to prior restructuring programs and acquisition-related charges. Also included in the financial tables are the non-GAAP financial measures of EBITDA, Adjusted EBITDA and Pro Forma Adjusted EBITDA. EBITDA represents net earnings attributable to Hasbro, Inc. excluding interest expense, income taxes, depreciation and amortization. Adjusted EBITDA also excludes the impact of the charges/gains noted above. As required by SEC rules, we have provided reconciliations on the attached schedules of these measures to the most directly comparable GAAP measure. Management believes that Adjusted net earnings, Adjusted earnings per diluted share and Adjusted operating profit provides investors with an understanding of the underlying performance of our business absent unusual events. Management believes that EBITDA and Adjusted EBITDA are appropriate measures for evaluating the operating performance of our business because they reflect the resources available for strategic opportunities including, among others, to invest in the business, strengthen the balance sheet and make strategic acquisitions. These non-GAAP measures should be considered in addition to, not as a substitute for, or superior to, net earnings or other measures of financial performance prepared in accordance with GAAP as more fully discussed in our consolidated financial statements and filings with the SEC. As used herein, "GAAP" refers to accounting principles generally accepted in the United States of America.
HAS-E
Investor Contact: Debbie Hancock | Hasbro, Inc. | (401) 727-5401 | debbie.hancock@hasbro.com
Press Contact: Julie Duffy | Hasbro, Inc. | (401) 727-5931 | julie.duffy@hasbro.com

# # #

(Tables Attached)
6



HASBRO, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Thousands of Dollars)
September 27, 2020September 29, 2019
ASSETS
Cash and Cash Equivalents$1,132,405 $1,060,432 
Accounts Receivable, Net1,438,360 1,416,879 
Inventories540,039 589,132 
Prepaid Expenses and Other Current Assets648,158 346,687 
  Total Current Assets3,758,962 3,413,130 
Property, Plant and Equipment, Net
477,154 371,881 
Goodwill3,644,118 485,042 
Other Intangible Assets, Net1,546,810 658,350 
Other Assets1,276,133 626,221 
  Total Assets$10,703,177 $5,554,624 
LIABILITIES, NONCONTROLLING INTERESTS AND SHAREHOLDERS' EQUITY
Short-term Borrowings$10,032 $7,903 
Current Portion of Long-term Debt369,269 — 
Accounts Payable and Accrued Liabilities
1,936,248 1,458,832 
  Total Current Liabilities2,315,549 1,466,735 
Long-term Debt4,777,807 1,696,204 
Other Liabilities
778,514 550,778 
  Total Liabilities7,871,870 3,713,717 
Redeemable Noncontrolling Interests22,876 — 
Total Shareholders' Equity2,808,431 1,840,907 
  Total Liabilities, Noncontrolling Interests and Shareholders' Equity$10,703,177 $5,554,624 


7



HASBRO, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Thousands of Dollars and Shares, Except Per Share Data)
Quarter EndedNine Months Ended
September 27, 2020% Net RevenuesSeptember 29, 2019% Net RevenuesSeptember 27, 2020% Net RevenuesSeptember 29, 2019% Net Revenues
Net Revenues$1,776,623 100.0 %$1,575,173 100.0 %$3,742,472 100.0 %$3,292,220 100.0 %
Costs and Expenses:
  Cost of Sales610,105 34.3 %627,119 39.8 %1,126,044 30.1 %1,230,800 37.4 %
  Program Cost Amortization85,424 4.8 %28,028 1.8 %268,245 7.2 %58,105 1.8 %
  Royalties176,938 10.0 %128,008 8.1 %387,097 10.3 %258,957 7.9 %
  Product Development62,709 3.5 %67,354 4.3 %174,863 4.7 %189,246 5.7 %
  Advertising137,408 7.7 %140,256 8.9 %311,415 8.3 %309,659 9.4 %
  Amortization of Intangibles36,172 2.0 %11,814 0.8 %107,685 2.9 %35,445 1.1 %
  Selling, Distribution and Administration325,360 18.3 %275,384 17.5 %885,680 23.7 %748,338 22.7 %
  Acquisition and Related Costs5,949 0.3 %— 0.0 %165,993 4.4 %— 0.0 %
      Operating Profit336,558 18.9 %297,210 18.9 %315,450 8.4 %461,670 14.0 %
Interest Expense49,400 2.8 %22,764 1.4 %153,702 4.1 %67,096 2.0 %
Other (Income) Expense, Net(12,040)-0.7 %14,700 0.9 %(21,840)-0.6 %99,125 3.0 %
      Earnings before Income Taxes299,198 16.8 %259,746 16.5 %183,588 4.9 %295,449 9.0 %
Income Tax Expense79,215 4.5 %46,797 3.0 %64,313 1.7 %42,340 1.3 %
     Net Earnings219,983 12.4 %212,949 13.5 %119,275 3.2 %253,109 7.7 %
Net (Loss) Earnings Attributable to Noncontrolling Interests(915)-0.1 %— 0.0 %1,929 0.1 %— 0.0 %
     Net Earnings Attributable to Hasbro, Inc.$220,898 12.4 %$212,949 13.5 %$117,346 3.1 %$253,109 7.7 %
Per Common Share
Net Earnings
Basic$1.61 $1.68 $0.86 $2.00 
Diluted$1.61 $1.67 $0.85 $1.99 
Cash Dividends Declared$0.68 $0.68 $2.04 $2.04 
Weighted Average Number of Shares
Basic137,258 126,453 137,214 126,356 
Diluted137,490 127,204 137,465 126,956 





HASBRO, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Thousands of Dollars)
Nine Months Ended
September 27, 2020September 29, 2019
Cash Flows from Operating Activities:
  Net Earnings$119,275 $253,109 
  Non-Cash Pension Charge— 110,777 
  Other Non-Cash Adjustments561,826 204,726 
  Changes in Operating Assets and Liabilities(186,791)(179,044)
    Net Cash Provided by Operating Activities494,310 389,568 
Cash Flows from Investing Activities:
  Additions to Property, Plant and Equipment(92,059)(90,800)
  Acquisition, Net of Cash Acquired(4,403,929)— 
  Other24,297 4,340 
   Net Cash Utilized by Investing Activities(4,471,691)(86,460)
Cash Flows from Financing Activities:
  Proceeds from Long-term Debt1,036,037 — 
  Repayments of Long-term Debt(147,324)— 
  Net Repayments of Short-term Borrowings(319)(1,425)
  Purchases of Common Stock— (60,137)
  Stock-Based Compensation Transactions1,830 29,737 
  Dividends Paid(279,423)(250,760)
  Employee Taxes Paid for Shares Withheld(5,935)(13,061)
  Redemption of Equity Instruments(47,399)— 
  Deferred Acquisition Payments— (100,000)
  Debt Issuance Costs— (21,534)
  Other(6,949)— 
   Net Cash Provided (Utilized) by Financing Activities550,518 (417,180)
Effect of Exchange Rate Changes on Cash(21,101)(7,867)
Cash and Cash Equivalents at Beginning of Year4,580,369 1,182,371 
Cash and Cash Equivalents at End of Period$1,132,405 $1,060,432 





HASBRO, INC.
SUPPLEMENTAL FINANCIAL DATA
PRO FORMA SEGMENT RESULTS
(Unaudited)
(Thousands of Dollars)
For comparability, the quarter and nine months ended September 29, 2019 include the pro forma results for the eOne Segment. See "Reconciliation of 2019 As Reported to Pro Forma Results" for the pro forma adjustments.
Quarter EndedNine Months Ended
September 27, 2020Pro Forma
September 29, 2019
% ChangeSeptember 27, 2020Pro Forma
September 29, 2019
% Change
Segment Results
 U.S. and Canada Segment:
   External Net Revenues$977,115 $898,269 %$1,765,482 $1,766,649 %
   Operating Profit262,977 193,686 36 %359,028 313,795 14 %
   Operating Margin26.9 %21.6 %20.3 %17.8 %
 International Segment (1):
   External Net Revenues517,007 561,137 -8 %1,017,222 1,221,224 -17 %
   Operating Profit63,924 67,238 -5 %12,333 51,410 -76 %
   Operating Margin12.4 %12.0 %1.2 %4.2 %
 Entertainment, Licensing and Digital Segment:
   External Net Revenues89,027 115,766 -23 %262,879 304,266 -14 %
   Operating Profit32,791 24,594 33 %65,758 62,550 %
   Operating Margin36.8 %21.2 %25.0 %20.6 %
eOne Segment (2):
   External Net Revenues193,474 283,310 -32 %696,889 980,613 -29 %
   Operating (Loss) Profit(25,914)15,812 >-100%(64,962)91,367 >-100%
   Operating Margin-13.4 %5.6 %-9.3 %9.3 %
(1) International Segment Net Revenues by Major Geographic Region
Europe$343,179 $319,277 %$663,100 $673,728 -2 %
Latin America91,619 151,987 -40 %158,028 305,106 -48 %
Asia Pacific82,209 89,873 -9 %196,094 242,390 -19 %
Total$517,007 $561,137 $1,017,222 $1,221,224 



Quarter EndedNine Months Ended
September 27, 2020Pro Forma
September 29, 2019
% ChangeSeptember 27, 2020Pro Forma
September 29, 2019
% Change
(2) eOne Segment Net Revenues by Category
Film and TV$138,514 $199,949 -31 %$504,059 $747,830 -33 %
Family Brands26,252 53,828 -51 %106,069 151,668 -30 %
Music and Other28,708 29,533 -3 %86,761 81,115 %
Total$193,474 $283,310 $696,889 $980,613 
Net Revenues by Brand Portfolio
Franchise Brands$807,555 $779,659 %$1,580,878 $1,749,948 -10 %
Partner Brands409,214 427,029 -4 %729,772 812,466 -10 %
Hasbro Gaming (3)
239,222 232,287 %516,337 463,272 11 %
Emerging Brands (4)
154,965 188,589 -18 %325,101 411,371 -21 %
TV/Film/Entertainment (5)
165,667 230,919 -28 %590,384 835,776 -29 %
Total$1,776,623 $1,858,483 $3,742,472 $4,272,833 

(3) Hasbro's total gaming category, including all gaming revenue, most notably MAGIC: THE GATHERING and MONOPOLY, totaled $543,107 and $1,202,604 for the quarter and nine months ended September 27, 2020, respectively, up 21% and 11%, respectively, from revenues of $449,393 and $1,086,151 for the quarter and nine months ended September 29, 2019, respectively.
(4) Emerging Brands includes the preschool brands, PEPPA PIG, PJ MASKS and RICKY ZOOM, acquired as part of the eOne Acquisition. For comparability, the quarter and nine months ended September 29, 2019 includes the pro forma net revenues for those brands, which amounted to $52,391 and $144,837, respectively.
(5) TV/Film/Entertainment includes all other brands not detailed in (4) above acquired as part of the eOne Acquisition. For comparability, the quarter and nine months ended September 29, 2019 includes the pro forma net revenues of $230,919 and $835,776, respectively.




HASBRO, INC.
SUPPLEMENTAL FINANCIAL DATA
RECONCILIATION OF AS REPORTED TO PRO FORMA ADJUSTED OPERATING RESULTS
(Unaudited)
(Thousands of Dollars)
For comparability, the quarter and nine months ended September 29, 2019 include the pro forma results for the eOne Segment. See "Reconciliation of 2019 As Reported to Pro Forma Results" for the pro forma and non-GAAP adjustments.
Non-GAAP Adjustments Impacting Operating Profit
Quarter Ended
September 27, 2020Pro Forma
September 29, 2019
Pre-tax AdjustmentsPost-tax AdjustmentsPre-tax AdjustmentsPost-tax Adjustments
   Acquisition and Related Costs (1)
$5,949 $4,726 $— $— 
   Acquired Intangible Amortization (2)
24,716 19,637 24,597 19,063 
   Pro Forma eOne Adjustments
— — 4,558 3,532 
Total$30,665 $24,363 $29,155 $22,595 
Nine Months Ended
September 27, 2020Pro Forma
September 29, 2019
Pre-tax AdjustmentsPost-tax AdjustmentsPre-tax AdjustmentsPost-tax Adjustments
   Acquisition and Related Costs (1)
$165,993 $140,691 $— $— 
   Acquired Intangible Amortization (2)
72,336 57,471 73,791 57,188 
   Severance (3)
11,554 10,125 — — 
   Pro Forma eOne Adjustments
— — 32,599 25,264 
Total$249,883 $208,287 $106,390 $82,452 


(1) In association with the Company's acquisition of eOne, the Company incurred related expenses of $5,949 and $165,993, respectively, in the quarter and nine months ended September 27, 2020, comprised of the following:

(i) Acquisition and integration costs of $4,599 and $104,283 for the quarter and nine months ended September 27, 2020, respectively, including expense associated with the acceleration of eOne stock-based compensation and advisor fees settled at the closing of the acquisition, as well as integration costs; and

(ii) Restructuring and related costs of $1,350 and $61,710 for the quarter and nine months ended September 27, 2020, respectively, including severance and retention costs, as well as impairment charges in the first quarter of 2020 for certain definite-lived intangible and production assets.

(2) The Company incurred incremental intangible amortization costs related to the intangible assets acquired in the eOne Acquisition.

(3) In the second quarter of 2020, the Company incurred $11,554 of severance charges, associated with cost-savings initiatives within the Company's commercial and Film and TV businesses. These charges were included in Corporate and Eliminations.






Reconciliation of Operating Profit (Loss) Results
Quarter Ended September 27, 2020Pro Forma
Quarter Ended September 29, 2019
As ReportedNon-GAAP AdjustmentsAdjustedAs ReportedNon-GAAP AdjustmentsAdjusted% Change
Adjusted Company Results
   External Net Revenues$1,776,623 $— $1,776,623 $1,858,483 $— $1,858,483 -4%
   Operating Profit336,558 30,665 367,223 313,022 29,155 342,177 7%
   Operating Margin18.9 %1.7 %20.7 %16.8 %1.6 %18.4 %
Adjusted Segment Results
 U.S. and Canada Segment:
   External Net Revenues$977,115 $— $977,115 $898,269 $— $898,269 9%
   Operating Profit262,977 — 262,977 193,686 — 193,686 36%
   Operating Margin26.9 %— 26.9 %21.6 %— 21.6 %
 International Segment:
   External Net Revenues517,007 — 517,007 561,137 — 561,137 -8%
   Operating Profit63,924 — 63,924 67,238 — 67,238 -5%
   Operating Margin12.4 %— 12.4 %12.0 %— 12.0 %
 Entertainment, Licensing and Digital Segment:
   External Net Revenues89,027 — 89,027 115,766 — 115,766 -23%
   Operating Profit32,791 — 32,791 24,594 — 24,594 33%
   Operating Margin36.8 %— 36.8 %21.2 %— 21.2 %
 eOne Segment:
   External Net Revenues193,474 — 193,474 283,310 — 283,310 -32%
   Operating (Loss) Profit(25,914)24,716 (1,198)15,812 29,155 44,967 >-100%
   Operating Margin-13.4 %12.8 %-0.6 %5.6 %10.3 %15.9 %

Corporate and Eliminations:
The Corporate and Eliminations segment included non-GAAP adjustments of $5,949 for the quarter ended September 27, 2020, consisting of eOne acquisition and related costs.









Nine Months Ended September 27, 2020Pro Forma
Nine Months Ended September 29, 2019
As ReportedNon-GAAP AdjustmentsAdjustedAs ReportedNon-GAAP AdjustmentsAdjusted% Change
Adjusted Company Results
   External Net Revenues$3,742,472 $— $3,742,472 $4,272,833 $— $4,272,833 -12%
   Operating Profit315,450 249,883 565,333 553,037 106,390 659,427 -14%
   Operating Margin8.4 %6.7 %15.1 %12.9 %2.5 %15.4 %
Adjusted Segment Results
U.S. and Canada Segment:
   External Net Revenues$1,765,482 $— $1,765,482 $1,766,649 $— $1,766,649 0%
   Operating Profit359,028 — 359,028 313,795 — 313,795 14%
   Operating Margin20.3 %— 20.3 %17.8 %— 17.8 %
International Segment:
   External Net Revenues1,017,222 — 1,017,222 1,221,224 — 1,221,224 -17%
   Operating Profit12,333 — 12,333 51,410 — 51,410 -76%
   Operating Margin1.2 %— 1.2 %4.2 %— 4.2 %
Entertainment, Licensing and Digital Segment:
   External Net Revenues262,879 — 262,879 304,266 — 304,266 -14%
   Operating Profit65,758 20,831 86,589 62,550 — 62,550 38%
   Operating Margin25.0 %7.9 %32.9 %20.6 %— 20.6 %
eOne Segment:
   External Net Revenues696,889 — 696,889 980,613 — 980,613 -29%
   Operating (Loss) Profit(64,962)150,065 85,103 91,367 106,390 197,757 -57%
   Operating Margin-9.3 %21.5 %12.2 %9.3 %10.8 %20.2 %


Corporate and Eliminations:
The Corporate and Eliminations segment included non-GAAP adjustments of $78,987 for the nine months ended September 27, 2020, consisting of eOne acquisition and related costs and other severance expenses.




HASBRO, INC.
SUPPLEMENTAL FINANCIAL DATA
RECONCILIATION OF 2019 AS REPORTED TO PRO FORMA RESULTS
(Unaudited)
(Thousands of Dollars)
Pro forma results were prepared by combining the results of Hasbro and eOne for the quarter and nine months ended September 29, 2019, after giving effect to the eOne Acquisition as if it had been consummated on December 31, 2018.

These pro forma results do not represent financial results that would have been realized had the acquisition actually occurred on December 31, 2018, nor are they intended to be a projection of future results. The pro forma financial information is presented for illustrative purposes only and does not reflect the costs of any integration activities or cost savings or synergies that may be achieved as a result of the acquisition.
 Quarter Ended September 29, 2019
Hasbro
As Reported
eOne
(under U.S. GAAP)
Pro Forma Adjustments (1)
Pro Forma Combined
Net Revenues$1,575,173 $283,310 $— $1,858,483 
Operating Profit$297,210 $22,294 $(6,482)$313,022 
   Non-GAAP Adjustments— 22,673 6,482 29,155 
Adjusted Operating Profit *
$297,210 $44,967 $— $342,177 
* Reconciliation to Pro Forma Adjusted results is as follows:
Net Earnings$212,949 $2,958 $629 $216,536 
   Interest Expense22,764 10,302 19,105 52,171 
   Other Expense (Income), Net
14,700 2,687 (25,533)(8,146)
   Income Tax Expense46,797 4,025 (683)50,139 
   Net Earnings Attributable to Noncontrolling Interests
— 2,322 — 2,322 
Operating Profit297,210 22,294 (6,482)313,022 
Non-GAAP Adjustments
   eOne:
       Restructuring and Related Charges— 3,234 — 3,234 
       Acquisition Costs - eOne Deals— 1,324 — 1,324 
       Hasbro Transaction Costs— 3,244 (3,244)— 
       Acquired Intangible Amortization— 14,871 9,726 24,597 
— 22,673 6,482 29,155 
Adjusted Operating Profit$297,210 $44,967 $— $342,177 

(1) The pro forma results include certain pro forma adjustments to net earnings that were directly attributable to the acquisition, as if the acquisition had occurred on December 31, 2018, including the following:
deal costs of $3,244 incurred by eOne related to the eOne acquisition, included in Selling, Distribution and Administration;
additional amortization expense of $9,726 that would have been recognized as a result of the allocation of purchase consideration to definite-lived intangible assets subject to amortization;
estimated differences in interest expense of $19,105 as a result of incurring new debt and extinguishing historical eOne debt;
reduction in Other Expense of $25,533 related to the mark to market of foreign exchange forward and option contracts, which the Company entered into in order to hedge a portion of the British pound sterling purchase price for the eOne acquisition; and
the income tax effect of the pro forma adjustments in the amount of $683, calculated using a blended statutory income tax rate of 22.5% for the eOne adjustments and 21% for the Hasbro interest adjustments.







Nine Months Ended September 29, 2019
Hasbro As ReportedeOne
(under U.S. GAAP)
Pro Forma Adjustments (2)
Pro Forma Combined
Net Revenues$3,292,220 $980,613 $— $4,272,833 
Operating Profit$461,670 $118,901 $(27,534)$553,037 
Non-GAAP Adjustments— 78,856 27,534 106,390 
Adjusted Operating Profit *$461,670 $197,757 $— $659,427 
* Reconciliation to Pro Forma Adjusted results is as follows:
Net Earnings$253,109 $28,132 $(30,798)$250,443 
   Interest Expense67,096 35,073 57,316 159,485 
   Other Expense, Net99,125 28,479 (45,345)82,259 
   Income Tax Expense42,340 22,303 (8,707)55,936 
   Net Earnings Attributable to Noncontrolling Interests— 4,914 — 4,914 
Operating Profit461,670 118,901 (27,534)553,037 
Non-GAAP Adjustments
   eOne:
       Restructuring and Related Charges— 21,882 — 21,882 
       Acquisition Costs - eOne Deals— 10,717 — 10,717 
       Hasbro Transaction Costs— 3,244 (3,244)— 
       Acquired Intangible Amortization— 43,013 30,778 73,791 
— 78,856 27,534 106,390 
Adjusted Operating Profit$461,670 $197,757 $— $659,427 

(2) The pro forma results include certain pro forma adjustments to net earnings that were directly attributable to the acquisition, as if the acquisition had occurred on December 31, 2018, including the following:
deal costs of $3,244 incurred by eOne related to the eOne acquisition, included in Selling, Distribution and Administration;
additional amortization expense of $30,778 that would have been recognized as a result of the allocation of purchase consideration to definite-lived intangible assets subject to amortization;
estimated differences in interest expense of $57,316 as a result of incurring new debt and extinguishing historical eOne debt;
total reduction in Other Expense of $45,345, consisting of:
$19,812 related to premiums paid by eOne in connection with the early redemption of its senior secured notes and the related write-off of unamortized deferred finance charges associated with the senior secured notes, and
$25,533 related to the mark to market of foreign exchange forward and option contracts, which the Company entered into in order to hedge a portion of the British pound sterling purchase price for the eOne acquisition; and
the income tax effect of the pro forma adjustments in the amount of $8,707, calculated using a blended statutory income tax rate of 22.5% for the eOne adjustments and 21% for the Hasbro interest adjustments.





HASBRO, INC.
SUPPLEMENTAL FINANCIAL DATA
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(Unaudited)
(Thousands of Dollars and Shares, Except Per Share Data)
For comparability, the quarter and nine months ended September 29, 2019 includes the pro forma results for the eOne Segment. See "Reconciliation of 2019 As Reported to Pro Forma Results" for the pro forma and non-GAAP adjustments.
Reconciliation of Net Earnings and Earnings per Share
 Quarter Ended
(all adjustments reported after-tax)September 27, 2020Diluted Per Share AmountPro Forma
September 29, 2019
Pro Forma Diluted Per Share Amount (1)
Net Earnings Attributable to Hasbro, Inc.$220,898 $1.61 $216,536 $1.57 
   Acquisition and Related Costs4,726 0.03 — — 
   Acquired Intangible Amortization19,637 0.14 19,063 0.14 
   UK Tax Reform (2)
13,680 0.10 — — 
   Pro Forma eOne Adjustments— — 3,532 0.03 
Net Earnings Attributable to Hasbro, Inc., as Adjusted$258,941 $1.88 $239,131 $1.74 
Nine Months Ended
(all adjustments reported after-tax)September 27, 2020Diluted
Per Share Amount
Pro Forma
September 29, 2019
Pro Forma Diluted Per Share Amount (1)
Net Earnings Attributable to Hasbro, Inc.$117,346 $0.85 $250,443 $1.82 
   Acquisition and Related Costs140,691 1.02 — — 
   Acquired Intangible Amortization57,471 0.42 57,188 0.42 
   Severance10,125 0.07 — — 
   UK Tax Reform (2)
13,680 0.10 — — 
   Pro Forma eOne Adjustments— — 25,264 0.18 
   Pension (3)
— — 85,852 0.62 
Net Earnings Attributable to Hasbro, Inc., as Adjusted$339,313 $2.47 $418,747 $3.04 

(1) 2019 Pro Forma Diluted Per Share Amount is calculated using weighted average shares outstanding of 137,586 for the quarter and nine months
ended September 29, 2019, which includes the pro forma impact of issuing shares associated with the financing of the eOne Acquisition.
(2) In the third quarter of 2020, the Company recorded income tax expense of $13,680 as a result of revaluation of Hasbro’s UK tax attributes in
accordance with the Finance Act of 2020 enacted by the United Kingdom on July 22, 2020. Effective back to April 1, 2020, the new law maintains the
corporate income tax rate at 19% instead of the planned reduction to 17% that was previously enacted in the UK Finance Act of 2016.
(3) In the second quarter of 2019, the Company recognized a non-cash charge of $110,777 ($85,852 after-tax) related to the settlement of its U.S.
defined benefit pension plan.




Reconciliation of EBITDA
Quarter Ended Quarter Ended September 29, 2019
September 27, 2020Hasbro
As Reported
eOne
(under U.S. GAAP)
Pro Forma Adjustments (4)
Pro Forma Combined
  Net Earnings Attributable to Hasbro, Inc.$220,898 $212,949 $2,958 $629 $216,536 
  Interest Expense49,400 22,764 10,302 19,105 52,171 
  Income Tax Expense79,215 46,797 4,025 (683)50,139 
  Net (Loss) Earnings Attributable to Noncontrolling Interests(915)— 2,322 — 2,322 
  Depreciation37,513 38,608 2,667 — 41,275 
  Amortization of Intangibles36,172 11,814 14,871 9,726 36,411 
     EBITDA$422,283 $332,932 $37,145 $28,777 $398,854 
   Non-GAAP Adjustments5,949 25,533 7,802 (28,777)4,558 
     Adjusted EBITDA$428,232 $358,465 $44,947 $— $403,412 
Nine Months EndedNine Months Ended September 29, 2019
September 27, 2020Hasbro
As Reported
eOne
(under U.S. GAAP)
Pro Forma Adjustments (5)
Pro Forma Combined
  Net Earnings Attributable to Hasbro, Inc.$117,346 $253,109 $28,132 $(30,798)$250,443 
  Interest Expense153,702 67,096 35,073 57,316 159,485 
  Income Tax Expense64,313 42,340 22,303 (8,707)55,936 
  Net Earnings Attributable to Noncontrolling Interests1,929 — 4,914 — 4,914 
  Depreciation94,100 101,016 5,770 — 106,786 
  Amortization of Intangibles107,685 35,445 43,013 30,778 109,236 
     EBITDA$539,075 $499,006 $139,205 $48,589 $686,800 
  Non-GAAP Adjustments177,547 136,310 55,655 (48,589)143,376 
     Adjusted EBITDA$716,622 $635,316 $194,860 $— $830,176 

(4) Pro Forma Adjustments for the quarter ended September 29, 2019 includes the mark to market of acquisition-related foreign exchange forward and option contracts of $25,533 and deal costs of $3,244, which are excluded from pro forma results, and also shown as Non-GAAP Adjustments within Hasbro and eOne. The net impact to Pro Forma Adjusted EBITDA is zero.

(5) Pro Forma Adjustments for the nine months ended September 29, 2019 include debt refinancing costs of $19,812, the mark to market of acquisition-related foreign exchange forward and option contracts of $25,533, and deal costs of $3,244, which are excluded from pro forma results, and also shown as Non-GAAP Adjustments within Hasbro and eOne. The net impact to Pro Forma Adjusted EBITDA is zero.





HASBRO, INC.
SUPPLEMENTAL FINANCIAL DATA
eOne - FY2019 RESULTS OF OPERATIONS (REPORTED UNDER U.S. GAAP)
(Unaudited)
(Thousands of Dollars)
Quarter EndedYear Ended
March 2019June 2019September 2019December 2019December 2019
Net Revenues (1)
$466,212 $231,091 $283,310 $235,160 $1,215,773 
Costs and Expenses:
  Cost of Sales14,141 17,053 11,497 24,878 67,569 
  Program Cost Amortization160,857 64,527 92,662 90,414 408,460 
  Royalties81,147 55,865 49,533 39,659 226,204 
  Advertising21,173 32,870 30,593 37,241 121,877 
  Amortization of Intangibles12,117 16,025 14,871 16,552 59,565 
  Selling, Distribution and Administration61,130 63,791 61,860 92,996 279,777 
      Operating Profit (Loss)115,647 (19,040)22,294 (66,580)52,321 
Interest Expense12,563 12,208 10,302 10,772 45,845 
Other Expense (Income), Net4,556 21,236 2,687 (759)27,720 
      Earnings (Loss) before Income Taxes98,528 (52,484)9,305 (76,593)(21,244)
Income Tax Expense (Benefit)21,632 (3,354)4,025 (26,815)(4,512)
     Net Earnings (Loss)76,896 (49,130)5,280 (49,778)(16,732)
Net Income Attributable to Noncontrolling Interests2,190 402 2,322 488 5,402 
     Net Earnings (Loss) Attributable to eOne$74,706 $(49,532)$2,958 $(50,266)$(22,134)

The eOne financial results above include certain charges that would have been excluded to calculate Adjusted results, as historically    reported by eOne. Those charges are outlined below for each quarter in fiscal year 2019.






Non-GAAP Adjustments
Quarter EndedYear Ended
March 2019June 2019September 2019December 2019December 2019
  Restructuring and Related Charges$11,275 $7,373 $3,234 $11,526 $33,408 
  Acquisition Costs - eOne Deals729 8,664 1,324 458 11,175 
  Hasbro Transaction Costs— — 3,244 3,245 6,489 
Selling, Distribution and Administration12,004 16,037 7,802 15,229 51,072 
  Debt Refinancing Costs— 19,812 — 19,812 
Other Expense (Income), Net— 19,812 — — 19,812 
Total$12,004 $35,849 $7,802 $15,229 $70,884 
(1) eOne Net Revenues by category are as follows:
Quarter EndedYear Ended
March 2019June 2019September 2019December 2019December 2019
  Film and TV$387,611 $160,270 $199,949 $140,581 $888,411 
  Family Brands56,612 41,228 53,828 58,677 210,345 
  Music and Other21,989 29,593 29,533 35,902 117,017 
Total$466,212 $231,091 $283,310 $235,160 $1,215,773