EX-99 2 exhibit99_1.txt EXHIBIT 99.1 EXHIBIT 99.1 For Immediate Release Contact: July 23, 2001 Karen A. Warren (Investor Relations) 401-727-5401 Wayne S. Charness (News Media) 401-727-5983 HASBRO REPORTS SECOND QUARTER RESULTS OUTLOOK FOR FULL-YEAR ON TRACK TO RETURN TO PROFITABILITY Pawtucket, RI (July 23, 2001) - Hasbro, Inc. (NYSE:HAS) today reported second quarter results. Worldwide net revenues were $511.0 million compared to $778.4 million a year ago. The net loss for the quarter was $18.3 million, compared to earnings of $6.5 million in 2000, and the diluted loss per share was $0.11, compared to earnings of $0.04 in 2000. The Company also reported second quarter Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) of $51.3 million, compared to $95.2 million in the second quarter of 2000. For the first half, worldwide net revenues were $974.3 million compared to $1.55 billion a year ago. Net loss and diluted loss per share in the first half were $43.4 million and $0.25, respectively, compared to earnings of $21.6 million and $0.12 last year. First-half EBITDA was $85.8 million compared to $190.6 million last year. "These results are in line with our expectations and we continue to believe we are on track to deliver on our profitability goal for this year. As we have stated previously, we knew that comparisons to the first half of 2000 would be very difficult. The decline in revenue for the quarter and year to date can be attributed to POKEMON, FURBY and the sale of Hasbro Interactive," said Alan G. Hassenfeld, Chairman and Chief Executive Officer. "As we enter the second half, we have a strong portfolio of diversified products, with a great mix of Hasbro owned core brands and licenses. We are excited about our kid directed line in G.I. JOE - - DOUBLE DUTY; several new products from TONKA including DUSTY MY TALKING TOOL BENCH; B.I.O. BUGS from Wow Wee; MAGIC SCREEN LEARNING DESK from Playskool; TRANSFORMERS; several new games including WHEELS ON THE BUS and from Wizards of the Coast, MAGIC: THE GATHERING and HARRY POTTER trading card games. We are also pleased with both JURASSIC PARK III and BOB THE BUILDER which have had strong initial sales and we look forward to MONSTERS, INC, the first movie in which we will have a full product line as part of our new Disney alliance," Hassenfeld concluded. - more - Page Two The U.S. Toy segment increased revenue marginally for the quarter and achieved break-even on a pre-tax basis, compared to a substantial loss last year. The Games segment continued to be profitable, although revenue and pre-tax earnings declined due to POKEMON trading card games and the sale of Hasbro Interactive. International segment revenue declined year over year, primarily due to POKEMON and FURBY. This decline in International segment revenue resulted in a greater pre-tax loss for the International segment in the second quarter than last year. "We've accomplished a lot in the first half. The results demonstrate that our focus on reducing expenses is working, with substantial reductions in all operating expense categories," said Alfred J. Verrecchia, President and Chief Operating Officer. "These cost savings were primarily attributable to our ongoing cost reduction program and the sale of Hasbro Interactive and Games.com. In addition, we maintained our focus on managing the balance sheet as we continued to reduce inventory levels and short-term debt. In fact, short-term debt declined $188.4 million from a year ago. We are on track and management is focussed on our most important objective of returning as quickly as possible to the profitability levels we have had historically," Verrecchia concluded. The company will webcast its second 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 "Investors & Media" from the home page, 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. # # # (Tables Attached) HASBRO, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Thousands of Dollars and Shares Except Per Share Data) Quarter Ended Six Months Ended ------------------ -------------------- July 1, July 2, July 1, July 2, 2001 2000 2001 2000 -------- -------- --------- --------- Net Revenues $ 510,971 778,373 $ 974,257 1,551,854 Cost of Sales 204,008 298,043 393,813 598,344 -------- ------- --------- --------- Gross Profit 306,963 480,330 580,444 953,510 Amortization 28,862 31,928 58,283 64,784 Royalties, Research and Development 69,868 135,150 126,603 261,189 Advertising 51,065 77,732 98,678 147,091 Selling, Distribution and Administration 157,209 198,974 311,028 403,710 -------- ------- --------- --------- Operating Profit (Loss) (41) 36,546 (14,148) 76,736 Interest Expense 25,321 28,198 51,211 49,641 Other (Income) Expense, Net 1,595 (1,073) (3,170) (4,249) -------- ------- --------- --------- Earnings (Loss) Before Income Taxes and Cumulative Effect of Accounting Change (26,957) 9,421 (62,189) 31,344 Income Taxes (8,626) 2,921 (19,900) 9,717 -------- ------- --------- --------- Earnings (Loss) before Cumulative Effect of Accounting Change (18,331) 6,500 (42,289) 21,627 Cumulative Effect of Accounting Change - - (1,066) - -------- ------- --------- --------- Net Earnings (Loss) $(18,331) $ 6,500 $ (43,355) $ 21,627 ======== ======= ========= ========= Per Common Share Earnings (Loss) before Cumulative Effect of Accounting Change Basic and Diluted $ (.11) $ .04 $ (.25) $ .12 ======== ======= ========= ========= Net Earnings (Loss) per Share Basic and Diluted $ (.11) $ .04 $ (.25) $ .12 ======= ======= ========= ========= Cash Dividends Declared $ .03 $ .06 $ .06 $ .12 ======= ======= ========= ========= Weighted Average Number of shares Basic 172,023 171,621 171,978 180,925 ======= ======= ========= ========= Diluted 172,023 172,739 171,978 181,872 ======= ======= ========= ======== HASBRO, INC. CONSOLIDATED CONDENSED BALANCE SHEETS (Thousands of Dollars) July 1, July 2, 2001 2000 --------- --------- Assets Cash and Cash Equivalents $ 56,819 $ 188,545 Accounts Receivable, Net 399,402 573,869 Inventories 336,638 508,160 Other Current Assets 385,422 456,279 --------- --------- Total Current Assets 1,178,281 1,726,853 Property, Plant and Equipment, Net 268,054 320,176 Other Assets 1,887,454 1,968,187 --------- --------- Total Assets $3,333,789 $4,015,216 ========= ========= Liabilities and Shareholders' Equity Short-term Borrowings $ 174,982 $ 363,375 Payables and Accrued Liabilities 616,841 881,204 --------- --------- Total Current Liabilities 791,823 1,244,579 Long-term Debt 1,167,035 1,168,959 Deferred Liabilities 117,000 99,857 --------- --------- Total Liabilities 2,075,858 2,513,395 Total Shareholders' Equity 1,257,931 1,501,821 --------- --------- Total Liabilities and Shareholders' Equity $3,333,789 $4,015,216 ========= =========