0000046080-13-000092.txt : 20131021 0000046080-13-000092.hdr.sgml : 20131021 20131021072813 ACCESSION NUMBER: 0000046080-13-000092 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20131021 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20131021 DATE AS OF CHANGE: 20131021 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: 1230 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-06682 FILM NUMBER: 131160476 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 oct218k.htm CURRENT REPORT ON FORM 8-K DATED OCTOBER 21, 2013
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 21, 2013
 
Hasbro, Inc.
(Exact name of registrant as specified in its charter)
Rhode Island
 
1-6682
 
05-0155090
(State or other jurisdiction
of incorporation)
 
(Commission File Number)
 
(IRS Employer
Identification No.)
 
1027 Newport Ave., Pawtucket, Rhode Island
 
02862
(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))

Item 2.02 Results of Operations and Financial Condition.

On October 21, 2013, Hasbro, Inc. ("Hasbro" or "we") announced our financial results for the fiscal quarter ended September 29, 2013, and certain other financial information. The press release, attached as Exhibit 99.1, includes a financial measure, Earnings before Interest, Taxes, Depreciation and Amortization ("EBITDA"), that is considered a non-GAAP financial measure as defined under Securities and Exchange Commission ("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 GAAP. 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 GAAP as more fully discussed in our financial statements and filings with the SEC. The EBITDA measures included in the press release have been reconciled to the most directly comparable GAAP measures as is required under SEC rules regarding the use of non-GAAP financial measures.     
The press release also includes the Company's 2013 and 2012 costs and expenses, operating profit, net earnings and diluted earnings per share excluding the impact of restructuring and pension settlement charges, and 2013 net earnings and diluted earnings per share excluding a benefit from a tax settlement. Management believes that presenting this data excluding these charges and tax benefit assists investors understanding of the underlying performance of the results of operations.
As used herein, "GAAP" refers to accounting principles generally accepted in the United States of America.  

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 21, 2013.


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:
Deborah Thomas
 
Title:
Executive Vice President and Chief Financial Officer
(Duly Authorized Officer and Principal Financial Officer)
Date: October 21, 2013
 
 


EXHIBIT INDEX
Exhibit No.
 
Description
 
99.1
 
Hasbro, Inc. Press Release, dated October 21, 2013.
 


EX-99 2 exhibit991.htm HASBRO, INC. PRESS RELEASE DATED OCTOBER 21, 2013 Exhibit 99.1
 
 
For Immediate Release
October 21, 2013
Contacts:          Debbie Hancock
(Investor Relations)
401-727-5401
 
Wayne Charness
(News Media)
401-727-5983
 
 
Hasbro Reports Growth in Revenues and Earnings
for the Third Quarter 2013

·
Net revenues for the third quarter 2013 increased 2% to $1.37 billion compared to $1.35 billion in 2012;
·
Revenues grew in International and Entertainment and Licensing segments as well as Girls and Games categories;
·
Operating profit for the third quarter 2013 increased 3% to $255.9 million, or 18.7% of revenues, compared to $249.6 million, or 18.6% of revenues, in 2012;  Reported 2013 operating profit includes $4.1 million pre-tax restructuring and partial pension settlement charges associated with the Company's ongoing Cost Savings Initiative; Excluding those costs, third quarter 2013 operating profit increased 4% to $260.0 million or 19.0% of revenues;
·
Net earnings for the third quarter 2013 were $193.0 million, or $1.46 per diluted share, compared to $164.9 million, or $1.24 per diluted share, in 2012; Reported net earnings include a favorable tax adjustment of $23.6 million, or $0.18 per diluted share, in addition to the restructuring and pension charges;  Excluding both factors, adjusted net earnings for the third quarter 2013 were $172.5 million, or $1.31 per diluted share.

Pawtucket, RI (October 21, 2013) -- Hasbro, Inc. (NASDAQ: HAS) today reported financial results for the third quarter 2013.  Net revenues for the third quarter increased 2% to $1.37 billion, compared to $1.35 billion in 2012.  Third quarter net revenues include a favorable $3.8 million impact of foreign exchange.

As adjusted, net earnings for the third quarter 2013 increased 5% to $172.5 million, or $1.31 per diluted share, versus $164.9 million, or $1.24 per diluted share, in 2012.  As reported, net earnings for the third quarter 2013 were $193.0 million, or $1.46 per diluted share.  These include a favorable tax adjustment of $23.6 million, or $0.18 per diluted share, as well as pre-tax restructuring and partial pension settlement charges of $4.1 million, or $0.03 per diluted share, associated with the Company's Cost Savings Initiative.

"Our brand initiatives for holiday 2013 are resonating with consumers and retailers globally as we enter the all important fourth quarter," said Brian Goldner, Hasbro's President and Chief Executive Officer.  "In addition to our innovative holiday launches, our expanded presence in faster growing geographies is delivering growth, including emerging markets growth of 22% in the third quarter.  We've also streamlined our organization and focused on the opportunities within our franchise and partner brand portfolio which offer the greatest long-term potential across our global brand blueprint.  These strategic steps are increasingly important as we continue to operate in a challenging consumer environment in developed economies."

Third Quarter 2013 Major Segment Performance

 
Net Revenues ($ Millions)
Operating Profit ($ Millions)
Q3 2013
Q3 2012
% Change
Q3 2013
Q3 2012
% Change
U.S. and Canada
$735.6
$774.5
-5%
$147.0
$154.2
-5%
International
$582.7
$524.1
+11%
$105.7
$85.5
+24%
Entertainment and Licensing
$48.6
$43.1
+13%
$7.6
$10.7
-29%

Note:  Third quarter 2013 restructuring and pension charges are in Corporate and Eliminations.  See attached table: Supplemental Financial Data, Restructuring and Pension Settlement Charges – by Segment.

U.S. and Canada segment net revenues were $735.6 million compared to $774.5 million in 2012.  The results reflect growth in the Girls category and a flat Games category offset by declines in the Boys and Preschool categories.  The U.S. and Canada segment reported operating profit of $147.0 million compared to $154.2 million in 2012.

International segment net revenues increased 11% to $582.7 million compared to $524.1 million in 2012.  Net revenues in the International segment include a favorable $5.0 million impact of foreign exchange.  Revenues in Europe, Latin America and Asia Pacific grew in the quarter, including 22% growth in emerging markets.  Additionally, the Games, Girls and Preschool categories were up in the third quarter.  The International segment reported 24% operating profit growth to $105.7 million compared to $85.5 million in 2012.

Entertainment and Licensing segment net revenues increased 13% to $48.6 million compared to $43.1 million in 2012, primarily driven by higher entertainment revenues as well as the addition of Backflip Studios to the segment.  The Entertainment and Licensing segment reported operating profit of $7.6 million compared to $10.7 million in 2012.  Segment profitability was impacted by the acquisition of Backflip Studios in July 2013.

Third Quarter 2013 Product Category Performance

 
Net Revenues ($ Millions)
Q3 2013
Q3 2012
% Change
YTD 2013
YTD 2012
% Change
Boys
$392.0
$471.1
-17%
$888.5
$1,163.0
-24%
Games
$387.4
$365.7
+6%
$873.8
$763.5
+14%
Girls
$388.7
$302.3
+29%
$652.9
$499.7
+31%
Preschool
$202.2
$206.0
-2%
$385.2
$379.3
+2%

For the third quarter 2013, net revenues in the Boys category decreased 17% to $392.0 million.  TRANSFORMERS and STAR WARS revenues grew in the quarter; however, several brands, including MARVEL and BEYBLADE, continued to face difficult comparisons with 2012.

The Games category posted its fourth consecutive quarter of growth, increasing revenues 6% in the third quarter 2013 versus last year.  MAGIC: THE GATHERING, JENGA, the ELEFUN & FRIENDS collection and the launch of the new TELEPODS gaming platform, featuring the ANGRY BIRDSTM STAR WARS® II game, were among the brands which posted higher revenues in the quarter.  

The Girls category posted its fifth straight quarter of growth, increasing 29% in the third quarter.  FURBY, MY LITTLE PONY, including the highly successful launch of MY LITTLE PONY EQUESTRIA GIRLS, and the launch of NERF REBELLE contributed to the continued growth in the Girls category.

The Preschool category declined 2% in the quarter despite growth in PLAY-DOH, SESAME STREET and TRANSFORMERS RESCUE BOTS products.

Cost Savings Initiative

As previously announced, the Company is undertaking a cost savings initiative designed to better align resources and costs while targeting $100 million in annual savings by 2015.

During the third quarter 2013, the Company incurred $4.1 million in pre-tax restructuring and partial pension settlement charges, or $0.03 per diluted share, associated with this initiative.  Pre-tax restructuring charges in the quarter were $3.0 million and partial pension settlement charges were $1.1 million.

The Company continues to expect full-year restructuring charges to be as much as $35 million, prior to pension charges.  Year-to-date, the Company recorded $32.0 million in restructuring charges.

Potential additional pension settlement charges could be $3 to $5 million dependent on the amount and type of benefit payments pension participants request during the remainder of 2013.  Year-to-date, pre-tax pension settlement charges are $3.5 million.

The expectation for gross savings in 2013 continues to be $45 to $48 million, resulting in expected net savings of $13 to $15 million for the full-year, prior to pension charges.

Dividend and Share Repurchase

Year-to-date, the Company has paid $104.2 million in cash dividends to shareholders, including $52.0 million in the third quarter.   As announced on August 1, the next quarterly cash dividend of $0.40 per common share will be payable on November 15, 2013 to shareholders of record at the close of business on November 1, 2013.

Also announced on August 1, the Board of Directors authorized the Company to repurchase an additional $500 million of its common stock.  During the third quarter 2013, the Company repurchased a total of 643,559 shares of common stock at a total cost of $30.0 million and an average price of $46.62 per share.  At quarter end, the Company had repurchased a total of 1.93 million shares of common stock year-to-date and $541.8 million remained available in the current share repurchase authorizations.

Conference Call Webcast

 Hasbro will webcast its third quarter 2013 earnings conference call at 8:30 a.m. Eastern Time today.  To listen to the live webcast, please go to http://investor.hasbro.com.   The replay of the call will be available on Hasbro's web site approximately 2 hours following completion of the call.  Additionally, presentation slides associated with today's conference call are available on Hasbro's website at http://investor.hasbro.com.

About Hasbro, Inc.

Hasbro, Inc. (NASDAQ: HAS) is a branded play company dedicated to fulfilling the fundamental need for play for children and families through the creative expression of the Company's world class brand portfolio, including TRANSFORMERS, MONOPOLY, PLAY-DOH, MY LITTLE PONY, MAGIC: THE GATHERING, NERF and LITTLEST PET SHOP.  From toys and games, to television programming, motion pictures, digital gaming and a comprehensive licensing program, Hasbro strives to delight its global customers with innovative play and entertainment experiences, in a variety of forms and formats, anytime and anywhere. The Company's Hasbro Studios develops and produces television programming for more than 170 markets around the world, and for the U.S. on Hub Network, part of a multi-platform joint venture between Hasbro and Discovery Communications (NASDAQ: DISCA, DISCB, DISCK). Through the Company's deep commitment to corporate social responsibility, including philanthropy, Hasbro is helping to build a safe and sustainable world for future generations and to positively impact the lives of millions of children and families every year. It has been recognized for its efforts by being named one of the "World's Most Ethical Companies" and is ranked as one of Corporate Responsibility Magazine's "100 Best Corporate Citizens." Learn more at www.hasbro.com.

© 2013 Hasbro, Inc. All Rights Reserved.

HAS-E

Certain statements in this release contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include expectations concerning the Company's potential performance in the future, including with respect to its planned cost savings initiative and profitability, and the Company's ability to achieve its other financial and business goals and may be identified by the use of forward-looking words or phrases. The Company's 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. Specific factors that might cause such a difference include, but are not limited to: (i) the Company's ability to design, develop, produce, manufacture, source and ship products on a timely and cost-effective basis, as well as interest in and purchase of those products by retail customers and consumers in quantities and at prices that will be sufficient to profitably recover the Company's costs; (ii) downturns in economic conditions affecting the Company's markets which can negatively impact the Company's retail customers and consumers, and which can result in lower employment levels, lower consumer disposable income and spending, including lower spending on purchases of the Company's products; (iii) other factors which can lower discretionary consumer spending, such as higher costs for fuel and food, drops in the value of homes or other consumer assets, and high levels of consumer debt; (iv) potential difficulties or delays the Company may experience in implementing cost savings and efficiency enhancing initiatives; (v) other economic and public health conditions or regulatory changes in the markets in which the Company and its customers and suppliers operate which could create delays or increase the Company's costs, such as higher commodity prices, labor costs or transportation costs, or outbreaks of disease; (vi) currency fluctuations, including movements in foreign exchange rates, which can lower the Company's net revenues and earnings, and significantly impact the Company's costs; (vii) the concentration of the Company's customers, potentially increasing the negative impact to the Company of difficulties experienced by any of the Company's customers or changes in their purchasing or selling patterns; (viii) greater than expected costs, or unexpected delays or difficulties, associated with Hub Network, Hasbro Studios, or the creation of new content to appear on Hub Network and elsewhere; (ix) consumer interest in and acceptance of Hub Network, and programming created by Hasbro Studios, and other factors impacting the financial performance of the network and Hasbro Studios; (x) the inventory policies of the Company's retail customers, including retailers' potential decisions to lower their inventories, even if it results in lost sales, as well as the concentration of the Company's revenues in the second half and fourth quarter of the year, which coupled with reliance by retailers on quick response inventory management techniques increases the risk of underproduction of popular items, overproduction of less popular items and failure to achieve compressed shipping schedules; (xi) delays, increased costs or difficulties associated with any of our or our partners' planned digital applications or media initiatives; (xii) work disruptions, which may impact the Company's ability to manufacture or deliver product in a timely and cost-effective manner; (xiii) 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; (xiv) the impact of competition on revenues, margins and other aspects of the Company's business, including the ability to offer Company products which consumers choose to buy instead of competitive products, the ability to secure, maintain and renew popular licenses and the ability to attract and retain talented employees; (xv) concentration of manufacturing for many of the Company's products in the People's Republic of China and the associated impact to the Company of social, economic or public health conditions and other factors affecting China, the movement of products into and out of China, the cost of producing products in China and exporting them to other countries; (xvi) the risk of product recalls or product liability suits and costs associated with product safety regulations; (xvii) the impact of other market conditions, third party actions or approvals and competition which could reduce demand for the Company's products or delay or increase the cost of implementation of the Company's programs or alter the Company's actions and reduce actual results; and (xviii) other risks and uncertainties as may be detailed from time to time in the Company's public announcements and Securities and Exchange Commission ("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 press release includes a non-GAAP financial measure as defined under SEC rules, specifically EBITDA.  EBITDA represents net earnings attributable to Hasbro, Inc. excluding net loss attributable to noncontrolling interests, interest expense, income taxes, depreciation and amortization. As required by SEC rules, we have provided reconciliation on the attached schedule of this measure to the most directly comparable GAAP measure. 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 GAAP as more fully discussed in the Company's financial statements and filings with the SEC. As used herein, "GAAP" refers to accounting principles generally accepted in the United States of America.


This press release also includes the Company's 2013 and 2012 costs and expenses, operating profit, net earnings and diluted earnings per share excluding the impact of restructuring and pension settlement charges and 2013 net earnings and diluted earnings per share excludes a benefit from a tax exam settlement. Management believes that presenting this data excluding these charges and tax benefit assists investors' understanding of the underlying performance of the results of operations.

# # #
(Tables Attached)




HASBRO, INC.
 
CONDENSED CONSOLIDATED BALANCE SHEETS
 
(Unaudited)
 
 
(Thousands of Dollars)
 
Sept. 29, 2013
   
Sept. 30, 2012
 
ASSETS
 
   
 
Cash and Cash Equivalents
 
$
588,668
   
$
696,733
 
Accounts Receivable, Net
   
1,215,289
     
1,195,517
 
Inventories
   
447,113
     
463,433
 
Other Current Assets
   
346,215
     
263,297
 
  Total Current Assets
   
2,597,285
     
2,618,980
 
Property, Plant and Equipment, Net
   
231,199
     
217,636
 
Other Assets
   
1,761,661
     
1,609,671
 
  Total Assets
 
$
4,590,145
   
$
4,446,287
 
 
               
 
               
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND SHAREHOLDERS' EQUITY
               
Short-term Borrowings
 
$
212,926
   
$
264,745
 
Current Portion of Long-term Debt
   
430,424
     
-
 
Payables and Accrued Liabilities
   
939,082
     
861,874
 
  Total Current Liabilities
   
1,582,432
     
1,126,619
 
Long-term Debt
   
959,895
     
1,398,906
 
Other Liabilities
   
410,672
     
393,873
 
  Total Liabilities
   
2,952,999
     
2,919,398
 
Redeemable Noncontrolling Interests
   
47,269
     
-
 
Total Shareholders' Equity
   
1,589,877
     
1,526,889
 
  Total Liabilities, Redeemable Noncontrolling Interests an Shareholders' Equity
 
$
4,590,145
   
$
4,446,287
 



HASBRO, INC.
 
CONSOLIDATED STATEMENTS OF OPERATIONS
 
(Unaudited)
 
 
 
Quarter Ended
   
Nine Months Ended
 
(Thousands of Dollars and Shares Except Per Share Data)
 
Sept. 29, 2013
   
% Net Revenues
   
Sept. 30, 2012
   
% Net Revenues
   
Sept. 29, 2013
   
% Net Revenues
   
Sept. 30, 2012
   
% Net Revenues
 
Net Revenues
 
$
1,370,348
     
100.0
%
 
$
1,345,137
     
100.0
%
 
$
2,800,384
     
100.0
%
 
$
2,805,454
     
100.0
%
Costs and Expenses:
                                                               
  Cost of Sales
   
568,582
     
41.5
%
   
586,516
     
43.6
%
   
1,136,724
     
40.6
%
   
1,155,536
     
41.2
%
  Royalties
   
86,783
     
6.3
%
   
89,224
     
6.6
%
   
186,404
     
6.7
%
   
212,551
     
7.6
%
  Product Development
   
59,366
     
4.3
%
   
48,472
     
3.6
%
   
154,455
     
5.5
%
   
143,511
     
5.1
%
  Advertising
   
136,487
     
10.0
%
   
134,997
     
10.0
%
   
277,278
     
9.9
%
   
279,339
     
10.0
%
  Amortization of Intangibles
   
14,224
     
1.0
%
   
12,636
     
0.9
%
   
37,677
     
1.3
%
   
34,792
     
1.2
%
  Program Product Cost Amortization
   
17,991
     
1.3
%
   
12,794
     
1.0
%
   
34,023
     
1.2
%
   
25,950
     
0.9
%
  Selling, Distribution and Administration
   
231,045
     
16.9
%
   
210,876
     
15.7
%
   
633,238
     
22.6
%
   
602,145
     
21.5
%
    Operating Profit
   
255,870
     
18.7
%
   
249,622
     
18.6
%
   
340,585
     
12.2
%
   
351,630
     
12.5
%
Interest Expense
   
22,812
     
1.7
%
   
23,043
     
1.7
%
   
68,016
     
2.4
%
   
68,568
     
2.4
%
Other (Income) Expense, Net
   
1,599
     
0.1
%
   
1,630
     
0.1
%
   
6,527
     
0.3
%
   
3,320
     
0.1
%
    Earnings before Income Taxes
   
231,459
     
16.9
%
   
224,949
     
16.8
%
   
266,042
     
9.5
%
   
279,742
     
10.0
%
Income Taxes
   
39,169
     
2.9
%
   
60,097
     
4.5
%
   
43,943
     
1.6
%
   
74,042
     
2.7
%
    Net Earnings
   
192,290
     
14.0
%
   
164,852
     
12.3
%
   
222,099
     
7.9
%
   
205,700
     
7.3
%
Net Loss Attributable to Noncontrolling Interests
   
(731
)
   
-0.1
%
   
-
     
0.0
%
   
(731
)
   
-0.1
%
   
-
     
0.0
%
    Net Earnings Attributable to Hasbro, Inc.
 
$
193,021
     
14.1
%
 
$
164,852
     
12.3
%
 
$
222,830
     
8.0
%
 
$
205,700
     
7.3
%
 
Per Common Share
 
             Net Earnings Attributable to Hasbro, Inc.
                                                               
                       Basic
 
$
1.48
           
$
1.26
           
$
1.71
           
$
1.58
         
                       Diluted
 
$
1.46
           
$
1.24
           
$
1.69
           
$
1.56
         
 
                                                               
             Cash Dividends Declared
 
$
0.40
           
$
0.36
           
$
1.20
           
$
1.08
         
 
                                                               
Weighted Average Number of Shares
                                                               
             Basic
   
130,253
             
130,619
             
129,972
             
130,146
         
             Diluted
   
131,845
             
132,483
             
131,573
             
132,039
         


HASBRO, INC.
 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 
(Unaudited)
 
 
 
Nine Months Ended
 
(Thousands of Dollars)
 
Sept. 29, 2013
   
Sept. 30, 2012
 
Cash Flows from Operating Activities:
 
   
 
   Net Earnings
 
$
222,099
   
$
205,700
 
   Non-cash Adjustments
   
168,429
     
152,201
 
   Changes in Operating Assets and Liabilities
   
(343,211
)
   
(214,285
)
    Net Cash Provided by Operating Activities
   
47,317
     
143,616
 
 
               
Cash Flows from Investing Activities:
               
   Additions to Property, Plant and Equipment
   
(78,246
)
   
(74,896
)
   Investments and Acquisitions, Net of Cash Acquired
   
(109,955
)
   
-
 
   Other
   
3,121
     
2,558
 
    Net Cash Utilized by Investing Activities
   
(185,080
)
   
(72,338
)
 
               
Cash Flows from Financing Activities:
               
   Net (Repayments of) Proceeds from Short-term Borrowings
   
(11,235
)
   
83,380
 
   Purchases of Common Stock
   
(86,972
)
   
(15,079
)
   Stock-based Compensation Transactions
   
87,172
     
49,182
 
   Dividends Paid
   
(104,164
)
   
(132,231
)
    Net Cash Utilized by Financing Activities
   
(115,199
)
   
(14,748
)
 
               
Effect of Exchange Rate Changes on Cash
   
(8,071
)
   
(1,485
)
 
               
Cash and Cash Equivalents at Beginning of Year
   
849,701
     
641,688
 
Cash and Cash Equivalents at End of Period
 
$
588,668
   
$
696,733
 


HASBRO, INC.
 
SUPPLEMENTAL FINANCIAL DATA
 
(Unaudited)
 
(Thousands of Dollars)
 
 
 
 
Quarter Ended
   
Nine Months Ended
 
 
 
Sept. 29, 2013
   
Sept. 30, 2012
   
% Change
   
Sept. 29, 2013
   
Sept. 30, 2012
   
% Change
 
Major Segment Results
 
   
   
   
   
   
 
U.S. and Canada Segment:
 
   
   
   
   
   
 
  External Net Revenues
 
$
735,619
   
$
774,539
     
-5
%
 
$
1,466,921
   
$
1,510,112
     
-3
%
  Operating Profit
   
146,991
     
154,239
     
-5
%
   
243,738
     
229,578
     
6
%
  Operating Margin
   
20.0
%
   
19.9
%
           
16.6
%
   
15.2
%
       
 
                                               
International Segment:
                                               
  External Net Revenues
   
582,676
     
524,144
     
11
%
   
1,212,665
     
1,174,366
     
3
%
  Operating Profit
   
105,663
     
85,498
     
24
%
   
115,951
     
110,265
     
5
%
  Operating Margin
   
18.1
%
   
16.3
%
           
9.6
%
   
9.4
%
       
 
                                               
Entertainment and Licensing Segment:
                                         
  External Net Revenues
   
48,637
     
43,066
     
13
%
   
114,747
     
115,618
     
-1
%
  Operating Profit
   
7,625
     
10,722
     
-29
%
   
16,622
     
26,652
     
-38
%
  Operating Margin
   
15.7
%
   
24.9
%
           
14.5
%
   
23.1
%
       
 
                                               
Net Revenues by Product Category
                                         
  Boys
 
$
392,014
   
$
471,125
     
-17
%
 
$
888,494
   
$
1,162,958
     
-24
%
  Games
   
387,450
     
365,714
     
6
%
   
873,774
     
763,460
     
14
%
  Girls
   
388,696
     
302,304
     
29
%
   
652,889
     
499,731
     
31
%
  Preschool
   
202,188
     
205,994
     
-2
%
   
385,227
     
379,305
     
2
%
    Total Net Revenues
 
$
1,370,348
   
$
1,345,137
           
$
2,800,384
   
$
2,805,454
         
 
                                               
 
International Segment Net Revenues by Major Geographic Region
                         
  Europe
 
$
376,648
   
$
345,281
     
9
%
 
$
755,097
   
$
751,547
   
<1
%
  Latin America
   
131,914
     
115,342
     
14
%
   
260,443
     
237,090
     
10
%
  Asia Pacific
   
74,114
     
63,521
     
17
%
   
197,125
     
185,729
     
6
%
    Total
 
$
582,676
   
$
524,144
           
$
1,212,665
   
$
1,174,366
         
 
                                               
Reconciliation of EBITDA
                                               
 Net Earnings Attributable to Hasbro,   Inc.
 
$
193,021
   
$
164,852
           
$
222,830
   
$
205,700
         
 Net Loss Attributable to   Noncontrolling Interests
   
(731
)
   
-
             
(731
)
   
-
         
 Interest Expense
   
22,812
     
23,043
             
68,016
     
68,568
         
 Income Taxes
   
39,169
     
60,097
             
43,943
     
74,042
         
 Depreciation
   
32,345
     
31,374
             
75,526
     
75,113
         
 Amortization of Intangibles
   
14,224
     
12,636
             
37,677
     
34,792
         
     EBITDA
 
$
300,840
   
$
292,002
           
$
447,261
   
$
458,215
         


HASBRO, INC.
 
SUPPLEMENTAL FINANCIAL DATA
 
RESTRUCTURING AND PENSION SETTLEMENT CHARGES
 
(Unaudited)
 
(Thousands of Dollars)
 
 
Operating Profit, Excluding Restructuring and Pension Settlement Charges
 
Quarter Ended September 29, 2013
 
As Reported
   
Less
Restructuring and Pension Settlement Charges
   
Excluding Restructuring and Pension Settlement Charges
   
% Net Revenues
 
Net Revenues
 
$
1,370,348
   
$
-
   
$
1,370,348
     
100.0
%
Costs and Expenses:
                               
  Cost of Sales
   
568,582
     
-
     
568,582
     
41.5
%
  Royalties
   
86,783
     
-
     
86,783
     
6.3
%
  Product Development
   
59,366
     
-
     
59,366
     
4.3
%
  Advertising
   
136,487
     
-
     
136,487
     
10.0
%
  Amortization of Intangibles
   
14,224
     
-
     
14,224
     
1.0
%
  Program Production Cost Amortization
   
17,991
     
-
     
17,991
     
1.3
%
  Selling, Distribution and Administration
   
231,045
     
(4,093
)
   
226,952
     
16.6
%
    Operating Profit
 
$
255,870
   
$
(4,093
)
 
$
259,963
     
19.0
%
 
                               
Nine Months Ended September 29, 2013
 
As Reported
   
Less
Restructuring and Pension Settlement Charges
   
Excluding Restructuring and Pension Settlement Charges
   
% Net Revenues
 
Net Revenues
 
$
2,800,384
   
$
-
   
$
2,800,384
     
100.0
%
Costs and Expenses:
                               
  Cost of Sales
   
1,136,724
     
(8,493
)
   
1,128,231
     
40.3
%
  Royalties
   
186,404
     
-
     
186,404
     
6.7
%
  Product Development
   
154,455
     
(3,515
)
   
150,940
     
5.4
%
  Advertising
   
277,278
     
-
     
277,278
     
9.9
%
  Amortization of Intangibles
   
37,677
     
-
     
37,677
     
1.3
%
  Program Production Cost Amortization
   
34,023
     
-
     
34,023
     
1.2
%
  Selling, Distribution and Administration
   
633,238
     
(23,473
)
   
609,765
     
21.8
%
    Operating Profit
 
$
340,585
   
$
(35,481
)
 
$
376,066
     
13.4
%
 
                               
Nine Months Ended September 30, 2012
 
As Reported
   
Less
Restructuring and Pension Settlement Charges
   
Excluding Restructuring and Pension Settlement Charges
   
% Net Revenues
 
Net Revenues
 
$
2,805,454
   
$
-
   
$
2,805,454
     
100.0
%
Costs and Expenses:
                               
  Cost of Sales
   
1,155,536
     
(2,764
)
   
1,152,772
     
41.1
%
  Royalties
   
212,551
     
-
     
212,551
     
7.6
%
  Product Development
   
143,511
     
(2,479
)
   
141,032
     
5.0
%
  Advertising
   
279,339
     
-
     
279,339
     
10.0
%
  Amortization of Intangibles
   
34,792
     
-
     
34,792
     
1.2
%
  Program Production Cost Amortization
   
25,950
     
-
     
25,950
     
0.9
%
  Selling, Distribution and Administration
   
602,145
     
(5,887
)
   
596,258
     
21.3
%
    Operating Profit
 
$
351,630
   
$
(11,130
)
 
$
362,760
     
12.9
%
 
                               
NOTE: There were no restructuring or pension settlement charges included in the reported amounts for the quarter ended September 30, 2012.
 



Net Earnings and Earnings per Share Excluding Restructuring Charges, Pension Settlement Charges and Benefit from Settlement of Tax Exams
 
 
 
 
 
 
Quarter Ended
 
 
 
Sept. 29, 2013
   
Diluted Per Share Amount
   
Sept. 30, 2012
   
Diluted Per Share Amount
 
Net Earnings Attributable to Hasbro, Inc., as Reported
 
$
193,021
   
$
1.46
   
$
164,852
   
$
1.24
 
Restructuring Charges, Net of Tax
   
2,447
     
0.02
     
-
     
-
 
Pension Settlement Charges, Net of Tax
   
679
     
0.01
     
-
     
-
 
2013 Benefit from Tax Exam Settlement
   
(23,637
)
   
(0.18
)
   
-
     
-
 
Net Earnings Attributable to Hasbro, Inc. as Adjusted
 
$
172,510
   
$
1.31
   
$
164,852
   
$
1.24
 
 
                               
 
 
Nine Months Ended
 
 
 
Sept. 29, 2013
   
Diluted Per Share Amount
   
Sept. 30, 2012
   
Diluted Per Share Amount
 
Net Earnings Attributable to Hasbro, Inc., as Reported
 
$
222,830
   
$
1.69
   
$
205,700
   
$
1.56
 
Restructuring Charges, Net of Tax
   
21,224
     
0.16
     
7,675
     
0.06
 
Pension Settlement Charges, Net of Tax
   
2,469
     
0.02
     
-
     
-
 
2013 Benefit from Tax Exam Settlement
   
(23,637
)
   
(0.18
)
   
-
     
-
 
Net Earnings Attributable to Hasbro, Inc. as Adjusted
 
$
222,886
   
$
1.69
   
$
213,375
   
$
1.62
 

Restructuring and Pension Settlement Charges – by Segment
 
 
Quarter Ended
   
Nine Months Ended
 
 
 
Sept. 29, 2013
   
Sept. 30, 2012
   
Sept. 29, 2013
   
Sept. 30, 2012
 
U.S. and Canada Segment
 
$
-
   
$
-
   
$
-
   
$
2,444
 
International Segment
   
-
     
-
     
-
     
1,628
 
Entertainment and Licensing Segment
   
-
     
-
     
1,729
     
555
 
Global Operations Segment
   
-
     
-
     
-
     
4,307
 
Corporate and Eliminations
   
4,093
     
-
     
33,752
     
2,196
 
  Total Restructuring and Pension Settlement Charges
 
$
4,093
   
$
-
   
$
35,481
   
$
11,130