-----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, J14uYF/6fW20QPv7zYuZ5ftr4RY0BJBqA5N8mjxvn+6FH6nw9kFhGoRDvCjJm7HT i49K0L2OPsmvddCP2qbkpA== 0000046080-96-000009.txt : 19960918 0000046080-96-000009.hdr.sgml : 19960918 ACCESSION NUMBER: 0000046080-96-000009 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960814 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: HASBRO INC CENTRAL INDEX KEY: 0000046080 STANDARD INDUSTRIAL CLASSIFICATION: 3944 IRS NUMBER: 050155090 STATE OF INCORPORATION: RI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-06682 FILM NUMBER: 96613621 BUSINESS ADDRESS: STREET 1: 1027 NEWPORT AVE STREET 2: P O BOX 1059 CITY: PAWTUCKET STATE: RI ZIP: 02861 BUSINESS PHONE: 4014318697 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 10-Q 1 10-Q DOCUMENT SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the period ended June 30, 1996 Commission file number 1-6682 HASBRO, INC. -------------------- (Name of Registrant) Rhode Island O5-0155090 - - ------------------------ ------------------------------------ (State of Incorporation) (I.R.S. Employer Identification No.) 1027 Newport Avenue, Pawtucket, Rhode Island 02861 --------------------------------------------------- (Principal Executive Offices) (401) 431-8697 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes X or No --- --- The number of shares of Common Stock, par value $.50 per share, outstanding as of August 9, 1996 was 86,323,230. HASBRO, INC. AND SUBSIDIARIES Consolidated Balance Sheets (Thousands of Dollars Except Share Data) (Unaudited) Jun. 30, Jul. 2, Dec. 31, Assets 1996 1995 1995 --------- --------- --------- Current assets Cash and cash equivalents $ 69,998 86,213 161,030 Accounts receivable, less allowance for doubtful accounts of $51,200, $45,800 and $48,800 683,906 654,216 791,111 Inventories: Finished products 290,769 272,182 240,126 Work in process 26,619 29,987 22,093 Raw materials 80,711 61,873 53,401 --------- --------- --------- Total inventories 398,099 364,042 315,620 Deferred income taxes 83,115 81,173 85,849 Prepaid expenses 77,721 79,920 71,888 --------- --------- --------- Total current assets 1,312,839 1,265,564 1,425,498 Property, plant and equipment, net 305,772 309,571 313,240 --------- --------- --------- Other assets Cost in excess of acquired net assets, less accumulated amortization of $107,321, $91,499 and $99,404 473,594 486,034 473,388 Other intangibles, less accumulated amortization of $90,281, $68,363 and $79,648 370,129 351,852 343,624 Other 65,180 46,747 60,638 --------- --------- --------- Total other assets 908,903 884,633 877,650 --------- --------- --------- Total assets $2,527,514 2,459,768 2,616,388 ========= ========= ========= HASBRO, INC. AND SUBSIDIARIES Consolidated Balance Sheets, Continued (Thousands of Dollars Except Share Data) (Unaudited) Jun. 30, Jul. 2, Dec. 31, Liabilities and Shareholders' Equity 1996 1995 1995 --------- --------- --------- Current liabilities Short-term borrowings $ 288,872 353,051 119,987 Trade payables 106,444 115,321 198,328 Accrued liabilities 293,937 314,563 433,567 Income taxes 79,891 57,905 117,982 --------- --------- --------- Total current liabilities 769,144 840,840 869,864 Long-term debt, excluding current installments 149,920 149,993 149,991 Deferred liabilities 72,066 66,292 70,921 --------- --------- --------- Total liabilities 991,130 1,057,125 1,090,776 --------- --------- --------- Shareholders' equity Preference stock of $2.50 par value. Authorized 5,000,000 shares; none issued - - - Common stock of $.50 par value. Authorized 300,000,000 shares; issued 88,088,526, 88,086,040 and 88,086,108 44,044 44,043 44,043 Additional paid-in capital 305,915 279,933 279,288 Retained earnings 1,211,565 1,064,150 1,201,242 Cumulative translation adjustments 17,137 24,464 23,450 Treasury stock, at cost; 1,251,853, 335,435 and 741,237 shares (42,277) (9,947) (22,411) --------- --------- --------- Total shareholders' equity 1,536,384 1,402,643 1,525,612 --------- --------- --------- Total liabilities and shareholders' equity $2,527,514 2,459,768 2,616,388 ========= ========= ========= See accompanying condensed notes to consolidated financial statements. HASBRO, INC. AND SUBSIDIARIES Consolidated Statements of Earnings (Thousands of Dollars Except Share Data) (Unaudited) Quarter Ended Six Months Ended ------------------- -------------------- Jun. 30, Jul. 2, Jun. 30, Jul. 2, 1996 1995 1996 1995 -------- -------- --------- --------- Net revenues $511,609 481,854 1,050,294 1,008,357 Cost of sales 234,184 214,085 471,955 446,657 ------- ------- --------- --------- Gross profit 277,425 267,769 578,339 561,700 ------- ------- --------- --------- Expenses Amortization 10,007 9,725 19,806 18,968 Royalties, research and development 64,356 62,085 118,778 117,169 Discontinued development project - 31,100 - 31,100 Advertising 66,171 68,164 136,447 138,397 Selling, distribution and administration 124,909 119,005 250,274 239,808 ------- ------- --------- --------- Total expenses 265,443 290,079 525,305 545,442 ------- ------- --------- --------- Operating profit (loss) 11,982 (22,310) 53,034 16,258 ------- ------- --------- --------- Nonoperating (income) expense Interest expense 5,353 7,384 10,259 13,207 Other (income), net (2,514) (5,477) (5,477) (7,989) ------- ------- --------- --------- Total nonoperating expense 2,839 1,907 4,782 5,218 ------- ------- --------- --------- Earnings (loss) before income taxes 9,143 (24,217) 48,252 11,040 Income taxes 3,157 (9,324) 17,901 4,250 ------- ------- --------- --------- Net earnings (loss) $ 5,986 (14,893) 30,351 6,790 ======= ======= ========= ========= Per common share Net earnings (loss) $ .07 (.17) .34 .08 ======= ======= ========= ========= Cash dividends declared $ .10 .08 .20 .16 ======= ======= ========= ========= See accompanying condensed notes to consolidated financial statements. HASBRO, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows Six Months Ended June 30, 1996 and July 2, 1995 (Thousands of Dollars) (Unaudited) 1996 1995 ------- ------- Cash flows from operating activities Net earnings $ 30,351 6,790 Adjustments to reconcile net earnings to net cash utilized by operating activities: Depreciation and amortization of plant and equipment 45,843 40,415 Other amortization 19,806 18,968 Deferred income taxes 2,882 (3,521) Change in operating assets and liabilities (other than cash and cash equivalents): Decrease in accounts receivable 101,284 79,057 Increase in inventories (83,079) (108,054) Increase in prepaid expenses (6,145) (8,323) Decrease in trade payables and accrued liabilities (266,450) (208,513) Other 3,553 12,016 ------- ------- Net cash utilized by operating activities (151,955) (171,165) ------- ------- Cash flows from investing activities Additions to property, plant and equipment (40,943) (38,752) Investments and acquisitions, net of cash acquired (21,300) (102,413) Other (8,310) 2,215 ------- ------- Net cash utilized by investing activities (70,553) (138,950) ------- ------- Cash flows from financing activities Proceeds from borrowings with original maturities of more than three months 96,026 185,000 Repayments of borrowings with original maturities of more than three months (30,990) (10) Net proceeds of other short-term borrowings 106,278 76,332 Purchase of common stock (28,869) (312) Stock option transactions 7,991 4,866 Dividends paid (15,688) (13,147) ------- ------- Net cash provided by financing activities 134,748 252,729 ------- ------- Effect of exchange rate changes on cash (3,272) 6,571 ------- ------- Decrease in cash and cash equivalents (91,032) (50,815) Cash and cash equivalents at beginning of year 161,030 137,028 ------- ------- Cash and cash equivalents at end of period $ 69,998 86,213 ======= ======= Supplemental information Cash paid during the period for: Interest $ 8,799 10,279 Income taxes $ 48,790 45,982 See accompanying condensed notes to consolidated financial statements. HASBRO, INC. AND SUBSIDIARIES Condensed Notes to Consolidated Financial Statements (Thousands of Dollars) (Unaudited) (1) In the opinion of management and subject to year-end audit, the accompanying unaudited interim financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position of the Company as of June 30, 1996 and July 2, 1995, and the results of operations and cash flows for the periods then ended. The six months ended June 30, 1996 consisted of 26 weeks while the six months ended July 2, 1995 consisted of 27 weeks. The results of operations for the six months ended June 30, 1996, are not necessarily indicative of results to be expected for the full year. (2) During the second quarter of 1995, the Company discontinued its efforts, begun in 1992, related to the development of a mass-market virtual reality game system. The impact of this decision on the quarter was a pretax charge of $31,100. (See further discussion in Management's Discussion and Analysis of Financial Condition and Results of Operations.) (3) Earnings per common share are based on the weighted average number of shares of common stock and dilutive common stock equivalents outstanding during each period. Common stock equivalents include stock options and warrants for the period prior to their exercise. Under the treasury stock method, the unexercised options and warrants are assumed to be exercised at the beginning of the period or at issuance, if later. The assumed proceeds are then used to purchase common stock at the average market price during the period. For each of the reported periods the difference between primary and fully diluted earnings per share was not significant. HASBRO, INC. AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations (Thousands of dollars) NET REVENUES - - ------------ Net revenues for the second quarter and six months of 1996 were $511,609 and $1,050,294, respectively, up from the $481,854 and $1,008,357 reported for the same periods of 1995. Continuing the first quarter 1996 trends, the increased volumes were primarily attributable to growth in boys' toys and games experienced within the United States. During the quarter, the Company's international operations reported increased local currency revenues in most of the major markets, although these were insufficient to overcome the approximate $7,000 adverse impact of the strengthened U.S. dollar and the decreased revenues in France and Germany. COST OF SALES - - ------------- The Company is receiving the anticipated benefits from reduced prices on certain raw material commodities, including plastics and paper. In spite of this, the 1996 gross profit margin, expressed as a percentage of net revenues, decreased in comparison to the 1995 levels; for the quarter to 54.2% from 55.6%, and for the six months to 55.1% from 55.7%. During the quarter, the Company had an increased amount of sales made at less than normal margins. Absent the impact of such second quarter sales in the major markets, the gross profit margins for the quarter and six months of 1996 were 57.3% and 56.5%, respectively, up from 56.7% and 56.2% for the same periods of 1995. EXPENSES - - -------- Royalties, research and development expenses for both the second quarter and six months decreased when expressed as a percentage of net revenues although increasing in amount. The royalty component increased in both percentage and amount. In addition to reflecting the Company's revenue growth, the increases can also be attributed to the mix of products sold with more revenue being derived from items carrying higher royalty rates. Research and development was $35,391 and $65,510 for the quarter and six months of 1996, respectively, compared with $34,864 and $67,428 for the same periods of 1995. HASBRO, INC. AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations (Thousands of dollars) During the second quarter of 1995, the Company discontinued its efforts, begun in 1992, related to the development of a mass-market virtual reality game system. The impact of this decision on the second quarter of 1995 was a charge of $31,100, the estimated costs associated with such action. Approximately half of the charge resulted from the expensing of software development costs related to both the operating system and games for the system. These costs were previously capitalized under the provisions of Statement of Financial Accounting Standards No. 86. The remaining amount represented provisions for discontinuation costs, including the termination of contractual agreements relating to the development of the system and games, the write-off of certain fixed assets and various other cancellation/termination costs. Substantially all of these costs have now been paid. Advertising expense for both the quarter and six months decreased in amount and also when expressed as a percentage of net revenues. For the second quarter and six months of 1996, the amounts were $66,171 and $136,447, respectively, compared with $68,164 and $138,397 in the same periods of 1995. Expressed as a percentage of net revenues, 1996 was 12.9% and 13.0% while 1995 was 14.1% and 13.7%. The decreases in the current year reflect the lower proportion of the Company's revenues arising from the international marketing units, which generally have a higher advertising to sales ratio than the domestic groups, as well as the impact of sales made at less than normal margins, which products are generally not advertised. The Company's selling distribution and administration expenses increased in amount during both the second quarter and six months of 1996, when compared with the same periods of 1995. When expressed as a percentage of net revenues, in the second quarter of 1996 it decreased from the 1995 level and for the six months, remained constant. The decrease in percentage reflects the Company's efforts to better leverage these costs. NONOPERATING (INCOME) EXPENSE - - ----------------------------- Interest expense during the second quarter and six months of 1996 decreased from the comparable 1995 levels reflecting both lower interest rates and the Company's reduced borrowing requirements. Other income, net, also declined during both the quarter and six months, again reflecting the lower interest rates being experienced. Also impacting the comparison of this category of expense during the quarter was the negative impact of foreign currency transactions. HASBRO, INC. AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations (Thousands of dollars) INCOME TAXES - - ------------ Income tax expense as a percentage of pretax earnings for the six months of 1996 and 1995 was 37.1% and 38.5%, respectively. The decrease in the effective rate in 1996 reflects changes in the Company's operations as well as the impact of certain strategies implemented during 1996. The lower rate for the second quarter results from the adjustment to the new effective tax rate. OTHER INFORMATION - - ----------------- During the past several years the Company has experienced a shift in its revenue pattern wherein the second half of the year has grown in significance to its overall business and within that half the fourth quarter has become more prominent. The Company expects that this trend will continue. This concentration increases the risk of (a) underproduction of popular items, (b) overproduction of less popular items and (c) failure to achieve tight and compressed shipping schedules. The business of the Company is characterized by customer order patterns which vary from year to year largely because of differences in the degree of consumer acceptance of a product line, product availability, marketing strategies and inventory levels of retailers and differences in overall economic conditions. Also, more retailers are using quick response inventory management practices which results in fewer orders being placed in advance and more orders, when placed, for immediate delivery. As a result, comparisons of unshipped orders on any date in a given year with those at the same date in a prior year are not necessarily indicative of sales for the entire year. In addition, it is a general industry practice that orders are subject to amendment or cancellation by customers prior to shipment. At the end of its fiscal July (July 28, 1996 and July 30, 1995) the Company's unshipped orders were approximately $890,000 and $930,000, respectively. LIQUIDITY AND CAPITAL RESOURCES - - ------------------------------- Because of the seasonality of the Company's business coupled with certain customer incentives, mainly in the form of extended payment terms, the interim cash flow statements are not representative of those which may be expected for the full year. As a result of these extended payment terms, the majority of the Company's cash collections occur late in the fourth quarter and early in the first quarter of the subsequent year. While a large portion of these receivables are of a quality which would allow their sale, alleviating the need for much of its interim financing, the Company believes it to be more cost effective to use its available funds and short- term borrowings to finance them. As receivables are collected late in the fourth quarter and through the first quarter of the subsequent year, cash flow from operations becomes positive and is used to repay a significant portion of the short-term borrowings. HASBRO, INC. AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations (Thousands of dollars) As a result, management believes that on an interim basis, rather than discussing its cash flows, a better understanding of its liquidity and capital resources can be obtained through a discussion of the various balance sheet categories. Also, as several of the major categories, including cash and cash equivalents, accounts receivable, inventories and short-term borrowings, fluctuate significantly from quarter to quarter, again due to the seasonality of its business and the extended payment terms offered, management believes that a comparison to the comparable period in the prior year is generally more meaningful than a comparison to the prior year-end. Receivables were approximately $30,000 greater than at the same time in 1995, largely reflecting the Company's increased revenues in 1996. When expressed as days sales outstanding, current year receivables are the same as those of a year ago, which is an improvement from the first quarter when days sales outstanding were almost 10% greater than 1995. The growth in inventories which has been evident during the past year moderated somewhat during the second quarter. The approximate $34,000 increase from the prior year reflects the Company's planned actions necessary to have available product to provide faster and more complete shipment of customer orders. Other assets, as a group, increased from their level of a year ago, primarily resulting from the Company's acquisitions of product rights and licenses during the most recent twelve months, partially offset by twelve additional months of amortization expense. The Company attempts to keep its cash and cash equivalents at the lowest level possible whenever it has short-term borrowings, although at times the cash available and the borrowing requirement may be in different countries and currencies which may make it impractical to substitute one for the other. The Company's net borrowings (short-term borrowings less cash and cash equivalents), at $218,874 were approximately $48,000, or 18% less than last year, again reflecting funds generated from operations within the most recent twelve months available to reduce such borrowings. This decrease occurred even after the repurchase of approximately 1,300,000 shares of the Company's common stock during the past twelve months. At June 30, 1996, the Company had committed unsecured lines of credit totaling approximately $440,000 available to it. It also had available uncommitted lines approximating $900,000. The Company believes that these amounts are adequate for its needs. Of these available lines, approximately $315,000 was in use at June 30, 1996. HASBRO, INC. AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations (Thousands of dollars) RECENT EVENT - - ------------ On July 30, 1996, the Company announced two steps taken to provide strategic direction as it moves to become more brands driven and globally focused. First, the establishment of an Office of the Chairman and second, plans for a new Global Brands Board and a Global Operations Board. To this point, the Company has been structured as a multi-national company, with the focus on developing product and programs for individual countries and regions. The new focus will allow the development of brands globally, while still recognizing regional differences. The new Global Brands Board will provide greater coordination of key brands from a world-wide perspective while the Global Operations Board will develop a blueprint for the global coordination of production and sourcing requirements. In addition to Chairman and Chief Executive Officer, Alan G. Hassenfeld, the Office of the Chairman will consist of: Alfred J. Verrecchia, Executive Vice President and President of Global Operations, who will also chair the Global Operations Board; George Ditomassi, Executive Vice President and President Global Innovation; Harold P. Gordon, Vice Chairman; John T. O'Neill, Executive Vice President and Chief Financial Officer, and Norman Walker, Executive Vice President and President International, who will also chair the Global Brands Board. Another member of the Office of the Chairman is Adam Klein, who has been elected Executive Vice President of Corporate Strategy. Mr Klein comes to the Company after eighteen years of strategy consulting, including time with the Boston Consulting Group and teaching at Harvard Business School. Also to become a member of the Office of the Chairman will be the President of Global Marketing, a new position for which an executive search is in progress. PART II. Other Information Item 1. Legal Proceedings. None. Item 2. Changes in Securities. None Item 3. Defaults Upon Senior Securities. None. Item 4. Submission of Matters to a Vote of Security Holders. At the Company's Annual Meeting of Shareholders held on May 15, 1996, the Company's Shareholders reelected the following persons to the Board of Directors of the Company: Sylvia K. Hassenfeld (72,124,405 votes for, 3,349,819 votes withheld); Norma T. Pace (72,122,434 votes for, 3,351,790 votes withheld); E. John Rosenwald, Jr. (71,416,036 votes for, 4,058,188 votes withheld; and Alfred J. Verrecchia (72,152,743 votes for, 3,321,481 votes withheld). There were no votes against any nominee and no broker nonvotes. In addition, the Company's Shareholders ratified the selection of KPMG Peat Marwick LLP as the independent public accountants for the Company for the 1996 fiscal year by a vote of 75,286,949 for, 41,025 against, 146,250 abstentions and no broker nonvotes. Item 5. Other Information None. Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits. 11.1 Computation of Earnings Per Common Share - Six Months Ended June 30, 1996 and July 2, 1995. 11.2 Computation of Earnings Per Common Share - Quarter Ended June 30, 1996 and July 2, 1995. 12 Computation of Ratio of Earnings to Fixed Charges - Six Months and Quarter Ended June 30, 1996. 27 Article 5 Financial Data Schedule - Second Quarter 1996 (b) Reports on Form 8-K A Current Report on Form 8-K, dated July 18, 1996, was filed by the Company and included the Press Release dated July 18, 1996, announcing the Company's results for the current quarter. Consolidated Statements of Earnings (without notes) for the quarters and six months ended June 30, 1996 and July 2, 1995 and Consolidated Condensed Balance Sheets (without notes) as of said dates were also filed. 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 thereunto duly authorized. HASBRO, INC. ------------ (Registrant) Date: August 14, 1996 By: /s/ John T. O'Neill --------------------- John T. O'Neill Executive Vice President and Chief Financial Officer (Duly Authorized Officer and Principal Financial Officer) HASBRO, INC. AND SUBSIDIARIES Quarterly Report on Form 10-Q For the Period Ended June 30, 1996 Exhibit Index Exhibit No. Exhibits - - ------- -------- 11.1 Computation of Earnings Per Common Share - Six Months Ended June 30, 1996 and July 2, 1995 11.2 Computation of Earnings Per Common Share - Quarter Ended June 30, 1996 and July 2, 1995 12 Computation of Ratio of Earnings to Fixed Charges - Six Months and Quarter Ended June 30, 1996 27 Article 5 Financial Data Schedule - Second Quarter 1996 EX-11 2 EXHIBIT 11.1 EXHIBIT 11.1 HASBRO, INC. AND SUBSIDIARIES Computation of Earnings Per Common Share Six Months Ended June 30, 1996 and July 2, 1995 (Thousands of Dollars and Shares Except Per Share Data) 1996 1995 ----------------- ----------------- Fully Fully Primary Diluted Primary Diluted ------- ------- ------- ------- Net earnings $ 30,351 30,351 6,790 6,790 Interest and amortization on 6% convertible notes, net of taxes (a) - - - - ------- ------- ------- ------- Net earnings applicable to common shares $ 30,351 30,351 6,790 6,790 ======= ======= ======= ======= Weighted average number of shares outstanding:(b) Outstanding at beginning of period 87,345 87,345 87,528 87,528 Actual exercise of stock options and warrants 155 155 122 122 Assumed exercise of stock options and warrants 1,086 1,086 619 726 Actual conversion of 6% convertible notes 1 1 - - Assumed conversion of 6% convertible notes (a) - - - - Purchase of common stock (340) (340) (6) (6) ------- ------- ------- ------- Total 88,247 88,247 88,263 88,370 ======= ======= ======= ======= Per common share: Net earnings $ .34 .34 .08 .08 ======= ======= ======= ======= (a) The effect of these notes is antidilutive and as such is not included. (b) Computation to arrive at the average number is a weighted average computation. EX-11 3 EXHIBIT 11.2 EXHIBIT 11.2 HASBRO, INC. AND SUBSIDIARIES Computation of Earnings Per Common Share Quarter Ended June 30, 1996 and July 2, 1995 (Thousands of Dollars and Shares Except Per Share Data) 1996 1995 ----------------- ----------------- Fully Fully Primary Diluted Primary Diluted ------- ------- ------- ------- Net earnings (loss) $ 5,986 5,986 (14,893) (14,893) Interest and amortization on 6% convertible notes, net of taxes (a) - - - - ------- ------- ------- ------- Net earnings (loss) applicable to common shares $ 5,986 5,986 (14,893) (14,893) ======= ======= ======= ======= Weighted average number of shares outstanding:(b) Outstanding at beginning of period 87,068 87,068 87,635 87,635 Actual exercise of stock options and warrants 76 76 84 84 Assumed exercise of stock options and warrants 1,313 1,313 - - Actual conversion of 6% convertible notes 1 1 - - Assumed conversion of 6% convertible notes (a) - - - - Purchase of common stock (71) (71) - - ------- ------- ------- ------- Total 88,387 88,387 87,719 87,719 ======= ======= ======= ======= Per common share: Net earnings (loss) $ .07 .07 (.17) (.17) ======= ======= ======= ======= (a) The effect of these notes is antidilutive and as such is not included. (b) Computation to arrive at the average number is a weighted average computation. EX-12 4 EXHIBIT 12 EXHIBIT 12 HASBRO, INC. AND SUBSIDIARIES Computation of Ratio of Earnings to Fixed Charges Six Months and Quarter Ended June 30, 1996 (Thousands of Dollars) Six Months Quarter ------- ------- Earnings available for fixed charges: Net earnings $ 30,351 5,986 Add: Fixed charges 17,949 9,328 Income taxes 17,901 3,157 ------- ------- Total $ 66,201 18,471 ======= ======= Fixed Charges: Interest on long-term debt $ 4,632 2,315 Other interest charges 5,627 3,038 Amortization of debt expense 170 85 Rental expense representative of interest factor 7,520 3,890 ------- ------- Total $ 17,949 9,328 ======= ======= Ratio of earnings to fixed charges 3.69 1.98 ======= ======= EX-27 5 EXHIBIT 27
5 1000 6-MOS DEC-29-1996 JUN-30-1996 69998 0 735106 51200 398099 1312839 552020 246248 2527514 769144 149920 0 0 44044 1492340 2527514 1050294 1050294 471955 471955 275031 3118 10259 48252 17901 30351 0 0 0 30351 .34 0
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