-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NHCFiH6AQ759hLel4L6Cb3i+OtdgXOe4lUFujwQTkg5SKh/ahGRH0nOGdrQv1dYb qK2YiG1Wv7ZVVCKfWNOpjg== 0000046080-03-000039.txt : 20031020 0000046080-03-000039.hdr.sgml : 20031020 20031020082555 ACCESSION NUMBER: 0000046080-03-000039 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20031020 ITEM INFORMATION: ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20031020 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HASBRO INC CENTRAL INDEX KEY: 0000046080 STANDARD INDUSTRIAL CLASSIFICATION: GAMES, TOYS & CHILDREN'S VEHICLES (NO DOLLS & BICYCLES) [3944] IRS NUMBER: 050155090 STATE OF INCORPORATION: RI FISCAL YEAR END: 1227 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-06682 FILM NUMBER: 03947028 BUSINESS ADDRESS: STREET 1: 1027 NEWPORT AVE STREET 2: P O BOX 1059 CITY: PAWTUCKET STATE: RI ZIP: 02861 BUSINESS PHONE: 4014318697 MAIL ADDRESS: STREET 1: 200 NARRAGANSETT PARK DRIVE CITY: PAWTUCKET STATE: RI ZIP: 02862-0200 FORMER COMPANY: FORMER CONFORMED NAME: HASBRO BRADLEY INC DATE OF NAME CHANGE: 19850814 FORMER COMPANY: FORMER CONFORMED NAME: HASBRO INDUSTRIES INC DATE OF NAME CHANGE: 19840917 FORMER COMPANY: FORMER CONFORMED NAME: HASSENFELD BROTHERS INC DATE OF NAME CHANGE: 19720615 8-K 1 oct20_038k.txt FORM 8-K DATED OCTOBER 20, 2003 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 20, 2003 ------------------------- HASBRO, INC. -------------------- (Exact name of registrant as specified in its charter) RHODE ISLAND 1-6682 05-0155090 - -------------- ------------ ------------------- (State of (Commission (IRS Employer Incorporation) File Number) Identification No.) 1027 NEWPORT AVE., PAWTUCKET, RHODE ISLAND 02862 - ------------------------------------------ ------------------- (Address of Principal Executive Offices) (Zip Code) (401) 431-8697 ------------------------------- (Registrant's telephone number, including area code) Item 5. Other Events and Regulation FD Disclosure. The October 20, 2003 Press Release of the Company attached hereto as EXHIBIT 99 is incorporated herein by reference. Item 7. Financial Statements and Exhibits. (c) Exhibits 99 Press Release, dated October 20, 2003, of Hasbro, Inc. Item 12. Results of Operations and Financial Condition. On October 20, 2003, we announced our financial results for the fiscal quarter ended September 28, 2003, and certain other information. The press release, which has been attached as Exhibit 99, discloses a financial measure, Earnings before Interest, Taxes, Depreciation and Amortization ("EBITDA"), that is considered a non-GAAP financial measure as defined under SEC rules. Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles. Management believes that EBITDA is one of the appropriate measures for evaluating our operating performance, because it reflects the resources available for strategic opportunities including, among others, to invest in the business, strengthen the balance sheet and make strategic acquisitions. However, this measure should be considered in addition to, and not as a substitute for, or superior to, net earnings or other measures of financial performance prepared in accordance with generally accepted accounting principles as more fully discussed in our financial statements and filings with the SEC. The EBITDA measures included in our press release have been reconciled to the nearest GAAP measures as is required under SEC rules regarding the use of non- GAAP financial measures. As used herein, "GAAP" refers to accounting principles generally accepted in the United States. 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. ------------ (Registrant) Date: October 20, 2003 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 October 20, 2003 Exhibit Index Exhibit No. Exhibits - ------- -------- 99 Press Release, dated October 20, 2003, of Hasbro, Inc. EX-99 3 exhibit_99.txt PRESS RELEASE DATED OCTOBER 20, 2003 EXHIBIT 99 For Immediate Release Contact: Karen A. Warren (Investor Relations) October 20, 2003 401-727-5401 Wayne S. Charness (News Media) 401-727-5983 HASBRO DELIVERS STRONG THIRD QUARTER RESULTS Highlights: - Net revenues up 18%, to $971.1 million compared to $820.5 million a year ago - Earnings before a cumulative effect of accounting change of $85.8 million or $0.48 per diluted share compared to net earnings of $55.8 million, or $0.32 per diluted share in 2002 - International segment net revenues up 13% in local currency and 22% in U.S. dollars - U. S. Toys segment net revenues up 23% - Continued strong performances from core brands such as TRANSFORMERS, PLAYSKOOL and TRIVIAL PURSUIT, plus innovative products such as BEYBLADE, FURREAL FRIENDS and VIDEONOW Pawtucket, RI (October 20, 2003) - Hasbro, Inc. (NYSE: HAS) today reported strong third quarter results. Worldwide net revenues were $971.1 million, up 18% from $820.5 million a year ago. Earnings for the quarter, before cumulative effect of accounting change, were $85.8 million, compared to net earnings of $55.8 million last year. Third quarter earnings, before cumulative effect of accounting change, were $0.48 per diluted share, an increase of 50%, compared to net earnings of $0.32 per diluted share in 2002. Including the effect of accounting change the Company recorded net earnings of $68.5 million or $0.38 per diluted share. The Company reported third quarter Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) of $170.3 million for the quarter, compared to $142.7 million in 2002. The attached schedules provide a reconciliation of EBITDA to net earnings for the third quarter and year to date. "I am very pleased that our strategy of focusing on Hasbro's core brands and product innovation continues to deliver strong results," said Alfred J. Verrecchia, President and Chief Executive Officer. "Our third quarter performance and progress year to date reflects growth in many of our core brands, such as TRANSFORMERS, PLAYSKOOL and TRIVIAL PURSUIT, as well as innovative products such as BEYBLADE, FURREAL FRIENDS and VIDEONOW, leading to substantial gains in shelf space." For the nine months, worldwide net revenues were $2.0 billion, compared to $1.8 billion a year ago. Earnings before the cumulative effect of accounting change for the nine months, were $98.4 million or $0.55 per diluted share, compared to earnings of $12.9 million or $0.07 per diluted share a year ago before the effect of the accounting change related to the adoption of FASB Statement No. 142 "Goodwill and Other Intangibles". Including the impact of accounting changes in both years, the Company recorded net earnings of $81.1 million, compared to a net loss of $232.8 million for the year-ago nine-month period. For the nine months EBITDA was $284.5 million, compared to $207.0 million last year. Effective as of the beginning of the third quarter 2003, Hasbro adopted FASB Statement No. 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity." As a result of adopting this statement, Hasbro recorded a one-time non-cash charge from the cumulative effect of this accounting change totaling $17.4 million, or $0.10 per diluted share, in the consolidated statement of operations for the quarter related to certain instruments that were previously classified as equity that are now required to be recorded as a liability at fair value. Revenues in the U.S. Toys segment increased in the quarter to $377.3 million, up 23% compared to $307.2 million a year ago. The segment reported improved operating profit of $45.8 million compared to $25.5 million last year. The segment experienced strength in many brands, including BEYBLADE, TRANSFORMERS, PLAYSKOOL and VIDEONOW, as well as continuing strong sales of FURREAL FRIENDS, including GO GO MY WALKIN' PUP. Revenues in the Games segment were $250.2 million for the quarter, up 11% compared to $225.9 million a year ago. The segment experienced strength in many brands and products, including MONOPOLY, TRIVIAL PURSUIT 20TH ANNIVERSARY EDITION, BULLS-EYE BALL and MAGIC: THE GATHERING trading card games. The Games segment reported improved operating profit of $58.3 million compared to $48.4 million last year. International segment revenues were $328.1 million for the quarter, up 22% compared to $268.5 million a year ago. This increase includes the positive impact of foreign exchange of approximately $26 million. Absent this impact, revenues increased 13% to $302.3 million. The segment experienced strength in BEYBLADE, MAGIC: THE GATHERING trading card games, TRANSFORMERS and PLAYSKOOL. The International segment reported significant improvement in operating profit, increasing to $38.5 million compared to $9.9 million a year ago. "We are pleased that all major segments are performing well, with International delivering the anticipated improvement associated with revenue growth and cost reductions," said David Hargreaves, Chief Financial Officer. "However, with much of our business yet to ship, absent the impact of exchange rates, we have not significantly changed our expectations for our full year 2003 performance." "Our cash and balance sheet position continue to improve, with days sales outstanding down six days and inventories also down, excluding the impact of foreign exchange - - this, along with many other indicators of strength in our business are now being recognized by the credit markets," Hargreaves concluded. The Company will webcast its third quarter earnings conference call at 9:00 a.m. Eastern Standard Time today. Investors and the media are invited to listen at http://www.hasbro.com (select "Corporate Info" from the home page, click on "Investor Information," and then click on the webcast microphone). Hasbro is a worldwide leader in children's and family leisure time and 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, SUPER SOAKER, 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 and public health conditions, including factors which impact the retail market or the Company's ability to manufacture and deliver products, higher fuel and commodity prices, higher transportation costs, currency fluctuations and government regulation and other conditions 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; work stoppages, slowdowns or strikes, which may impact the Company's ability to manufacture or deliver product; 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; the risk that anticipated benefits of acquisitions may not occur or be delayed or reduced in their realization; and other risks and uncertainties as may be detailed from time to time in the Company's public announcements and SEC filings. 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. This presentation includes a non-GAAP financial measure as defined under SEC rules, specifically EBITDA. As required by SEC rules, we have provided reconciliation on the attached schedule of this measure to the most directly comparable GAAP measure. EBITDA (earnings before interest, taxes, depreciation and amortization) represents net earnings (loss) before cumulative effect of accounting change, excluding, interest expense, income taxes, depreciation and amortization. Management believes that EBITDA is one of the appropriate measures for evaluating the operating performance of the Company because it reflects the resources available for strategic opportunities including, among others, to invest in the business, strengthen the balance sheet, and make strategic acquisitions. However, this measure 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 generally accepted accounting principles as more fully discussed in the Company's financial statements and filings with the Securities and Exchange Commission. As used herein, "GAAP" refers to accounting principles generally accepted in the United States. This presentation also includes the Company's International segment net revenues excluding the impact of changes in exchange rates. Management believes that the presentation of International segment net revenues minus the impact of exchange rate changes provides information that is helpful to an investor's understanding of the segment's underlying business performance absent exchange rate fluctuations which are beyond the Company's control. # # # (Tables Attached) HASBRO, INC. CONSOLIDATED CONDENSED BALANCE SHEETS (Thousands of Dollars) Sept. 28, Sept. 29, 2003 2002 --------- --------- Assets Cash and Cash Equivalents $ 155,357 $ 43,850 Accounts Receivable, Net 879,669 799,122 Inventories 289,411 282,146 Other Current Assets 222,704 290,600 --------- --------- Total Current Assets 1,547,141 1,415,718 Property, Plant and Equipment, Net 206,756 213,628 Other Assets 1,494,597 1,494,852 --------- --------- Total Assets $3,248,494 $3,124,198 ========= ========= Liabilities and Shareholders' Equity Short-term Borrowings $ 104,576 $ 63,392 Current Installments of Long-Term Debt 1,219 255,248 Payables and Accrued Liabilities 867,911 715,658 --------- --------- Total Current Liabilities 973,706 1,034,298 Long-term Debt 856,934 856,257 Deferred Liabilities 146,463 94,561 --------- --------- Total Liabilities 1,977,103 1,985,116 Total Shareholders' Equity 1,271,391 1,139,082 --------- --------- Total Liabilities and Shareholders' Equity $3,248,494 $3,124,198 ========= ========= HASBRO, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Thousands of Dollars and Shares Except Per Share Data) Quarter Ended Nine Months Ended ------------------ -------------------- Sept. 28, Sept. 29, Sept. 28, Sept. 29, 2003 2002 2003 2002 -------- -------- --------- --------- Net Revenues $ 971,071 $ 820,532 $2,014,308 $1,818,789 Cost of Sales 419,869 342,918 822,913 705,497 -------- ------- --------- --------- Gross Profit 551,202 477,614 1,191,395 1,113,292 Amortization 19,319 22,268 53,907 66,483 Royalties 82,535 85,210 169,005 202,378 Research and Product Development 38,811 36,687 102,416 106,670 Advertising 105,039 82,911 225,903 188,307 Selling, Distribution and Administration 168,505 153,821 458,824 445,081 -------- ------- --------- --------- Operating Profit 136,993 96,717 181,340 104,373 Interest Expense 12,570 17,897 39,566 55,756 Other (Income) Expense, Net 6,299 3,350 6,381 31,182 -------- ------- --------- --------- Earnings Before Income Taxes and Cumulative Effect of Accounting Change, Net of Tax 118,124 75,470 135,393 17,435 Income Taxes 32,309 19,622 36,972 4,533 -------- ------- --------- --------- Earnings before Cumulative Effect of Accounting Change 85,815 55,848 98,421 12,902 Cumulative Effect of Accounting Change, Net of Tax (17,351) - (17,351) (245,732) -------- ------- --------- --------- Net Earnings (Loss) $ 68,464 $ 55,848 $ 81,070 $ (232,830) ======== ======= ========= ========= Per Common Share Earnings before Cumulative Effect of Accounting Change Basic $ 0.49 $ 0.32 $ 0.57 $ 0.07 ======== ======= ========= ========= Diluted $ 0.48 $ 0.32 $ 0.55 $ 0.07 ======== ======= ========= ========= Cumulative Effect of Accounting Change, Net of Tax Basic and Diluted $ (0.10) $ - $ (0.10)$ (1.42) ======== ======= ========= ========= Net Earnings (Loss) Basic $ 0.39 $ 0.32 $ 0.47 $ (1.35) ======= ======= ========= ========= Diluted $ 0.38 $ 0.32 $ 0.45 $ (1.34) ======= ======= ========= ========= Cash Dividends Declared $ 0.03 $ 0.03 $ 0.09 $ 0.09 ======= ======= ========= ========= Weighted Average Number of Shares Basic 173,833 172,758 173,359 172,692 ======= ======= ========= ========= Diluted 181,995 173,285 178,569 173,571 ======= ======= ========= ========= HASBRO, INC. SUPPLEMENTAL FINANCIAL DATA Quarter Ended Nine Months Ended ------------------------- ------------------------- Sept 28, Sept. 29, % Sept. 28, Sept. 29, % 2003 2002 Change 2003 2002 Change (Thousands of Dollars) -------- -------- ------ ------- ------- ----- U.S. Toys - --------- External Revenues $ 377,251 $ 307,164 23% $ 739,114 $ 707,659 4 % Operating Profit 45,835 25,489 80% 64,107 66,285 (3)% Games - ----- External Revenues 250,201 225,871 11% 511,024 470,759 9 % Operating Profit 58,310 48,378 21% 101,682 68,321 49 % International - ------------- External Revenues 328,110 268,454 22% 707,342 578,859 22% Operating Profit 38,537 9,937 288% 27,769 (36,451) 176% RECONCILIATION OF EBITDA Net Earnings(Loss) $ 68,464 $ 55,848 $ 81,070 $(232,830) Cumulative Effect of Accounting Change, Net of Tax (17,351) - (17,351) (245,732) ------- ------- -------- -------- Earnings before Cumulative Effect of Accounting Change 85,815 55,848 98,421 12,902 Interest Expense 12,570 17,897 39,566 55,756 Income Taxes 32,309 19,622 36,972 4,533 Depreciation 20,261 27,106 55,627 67,364 Amortization 19,319 22,268 53,907 66,483 ------ ------- -------- -------- EBITDA $170,274 $142,741 $ 284,493 $ 207,038 ======= ======= ======== ======== -----END PRIVACY-ENHANCED MESSAGE-----