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 October 1, 1995 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 November 10, 1995 was 87,672,905.
HASBRO, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Thousands of Dollars Except Share Data) (Unaudited)
Oct. 1, Sep. 25, Dec. 25,
Assets 1995 1994 1994
-------- -------- --------
Current assets
Cash and cash equivalents $ 53,785 43,234 137,028
Marketable securities available
for sale - 16,810 -
Accounts receivable, less allowance
for doubtful accounts of $49,000,
$52,500 and $51,000 1,128,119 1,118,622 717,890
Inventories:
Finished products 296,358 260,407 181,202
Work in process 28,374 20,163 19,342
Raw materials 65,363 52,519 43,863
--------- --------- ---------
Total inventories 390,095 333,089 244,407
Deferred income taxes 84,175 89,165 83,730
Prepaid expenses 74,089 58,002 69,408
--------- --------- ---------
Total current assets 1,730,263 1,658,922 1,252,463
Property, plant and equipment, net 306,464 296,986 308,879
--------- --------- ---------
Other assets
Cost in excess of acquired net assets,
less accumulated amortization of
$95,438, $79,926 and $82,949 480,749 553,745 479,960
Other intangibles, less accumulated
amortization of $73,959, $99,499 and
$58,178 346,383 170,695 295,333
Other 53,650 35,966 41,740
--------- --------- ---------
Total other assets 880,782 760,406 817,033
--------- --------- ---------
Total assets $2,917,509 2,716,314 2,378,375
========= ========= =========
HASBRO, INC. AND SUBSIDIARIES
Consolidated Balance Sheets, Continued
(Thousands of Dollars Except Share Data) (Unaudited)
Oct. 1, Sep. 25, Dec. 25,
Liabilities and Shareholders' Equity 1995 1994 1994
-------- -------- --------
Current liabilities
Short-term borrowings $ 566,820 486,252 81,805
Current installments of long-term debt - 3,204 10
Trade payables 140,743 133,060 165,368
Accrued liabilities 448,243 413,741 417,763
Income taxes 84,635 108,515 98,786
--------- --------- ---------
Total current liabilities 1,240,441 1,144,772 763,732
Long-term debt, excluding current
installments 149,991 150,437 150,000
Deferred liabilities 65,143 73,057 69,226
--------- --------- ---------
Total liabilities 1,455,575 1,368,266 982,958
--------- --------- ---------
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
88,086,108, 88,085,802 and 88,085,802 44,043 44,043 44,043
Additional paid-in capital 279,320 283,872 282,151
Retained earnings 1,120,707 1,001,730 1,071,416
Cumulative translation adjustments 25,588 32,049 14,526
Treasury stock, at cost, 262,653,
451,900 and 557,455 shares (7,724) (13,646) (16,719)
--------- --------- ---------
Total shareholders' equity 1,461,934 1,348,048 1,395,417
--------- --------- ---------
Total liabilities and
shareholders' equity $2,917,509 2,716,314 2,378,375
========= ========= =========
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 Nine Months Ended
------------------- --------------------
Oct. 1, Sep. 25, Oct. 1, Sep. 25,
1995 1994 1995 1994
-------- -------- --------- ---------
Net revenues $826,165 796,222 1,834,522 1,729,679
Cost of sales 360,852 352,129 807,509 763,507
------- ------- --------- ---------
Gross profit 465,313 444,093 1,027,013 966,172
------- ------- --------- ---------
Expenses
Amortization 9,718 9,598 28,686 27,196
Royalties, research and
development 78,318 75,359 195,487 180,781
Discontinued development
project - - 31,100 -
Advertising 123,537 116,307 261,934 241,294
Selling, distribution and
administration 142,977 123,067 382,785 343,337
Restructuring charges - 12,500 - 12,500
------- ------- --------- ---------
Total expenses 354,550 336,831 899,992 805,108
------- ------- --------- ---------
Operating profit 110,763 107,262 127,021 161,064
------- ------- --------- ---------
Nonoperating (income) expense
Interest expense 10,932 8,776 24,139 18,821
Other (income), net (3,539) (23,710) (11,528) (26,053)
------- ------- --------- ---------
Total nonoperating expense 7,393 (14,934) 12,611 (7,232)
------- ------- --------- ---------
Earnings before income taxes
and cumulative effect of change
in accounting principles 103,370 122,196 114,410 168,296
Income taxes 39,798 47,045 44,048 64,794
------- ------- --------- ---------
Net earnings before cumulative
effect of change in accounting
principles 63,572 75,151 70,362 103,502
Cumulative effect of change in
accounting principles - - - (4,282)
------- ------- --------- ---------
Net earnings $ 63,572 75,151 70,362 99,220
======= ======= ========= =========
Per common share
Net earnings before
cumulative effect of change
in accounting principles $ .72 .85 .80 1.16
======= ======= ========= =========
Net earnings $ .72 .85 .80 1.11
======= ======= ========= =========
Cash dividends declared $ .08 .07 .24 .21
======= ======= ========= =========
See accompanying condensed notes to consolidated financial statements.
HASBRO, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Nine Months Ended October 1, 1995 and September 25, 1994
(Thousands of Dollars) (Unaudited)
1995 1994
---- ----
Cash flows from operating activities
Net earnings $ 70,362 99,220
Adjustments to reconcile net earnings to net cash
utilized by operating activities:
Depreciation and amortization of plant and equipment 65,652 59,710
Other amortization 28,686 27,196
Deferred income taxes (6,652) (11,102)
Gain on investments - (23,291)
Change in operating assets and liabilities (other
than cash and cash equivalents):
(Increase) in accounts receivable (397,487) (368,304)
(Increase) in inventories (137,331) (73,557)
(Increase) decrease in prepaid expenses (3,227) 9,318
(Decrease) in trade payables and accrued
liabilities (8,437) (41,936)
Other 12,346 (786)
------- -------
Net cash utilized by operating activities (376,088) (323,532)
------- -------
Cash flows from investing activities
Additions to property, plant and equipment (62,813) (73,019)
Acquisitions, net of cash acquired (112,531) (98,411)
Proceeds from sale of investments - 24,449
Other 4,912 444
------- -------
Net cash utilized by investing activities (170,432) (146,537)
------- -------
Cash flows from financing activities
Proceeds from borrowings with original maturities
of more than three months 413,953 -
Repayments of borrowings with original maturities
of more than three months (32,071) (50,105)
Net proceeds from other borrowings 89,733 418,409
Stock option and warrant transactions 6,476 (8,498)
Purchase of common stock (312) (17,954)
Dividends paid (20,170) (17,577)
------- -------
Net cash provided by financing activities 457,609 324,275
------- -------
Effect of exchange rate changes on cash 5,668 2,774
------- -------
Decrease in cash and cash equivalents (83,243) (143,020)
Cash and cash equivalents at beginning of year 137,028 186,254
------- -------
Cash and cash equivalents at end of period $ 53,785 43,234
======= =======
Supplemental information
Cash paid during the period for:
Interest $ 15,558 16,636
Income taxes $ 60,320 45,931
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 October 1, 1995 and September
25, 1994, and the results of operations and cash flows for the periods then
ended.
The nine months ended October 1, 1995 consisted of 40 weeks while the nine
months ended September 25, 1994 consisted of 39 weeks.
The results of operations for the nine months ended October 1, 1995, are
not necessarily indicative of results to be expected for the full year.
(2) 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 were assumed to be exercised
at the beginning of the period or at issuance, if later. The assumed
proceeds were then used to purchase common stock at the average market
price during the period.
For each of the reported periods except the quarter ended September 25,
1994, the difference between primary and fully diluted earnings per share
was not significant. For the quarter ended September 25, 1994, the primary
and fully diluted earnings per share were $.85 and $.82, respectively
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 third quarter and nine months of 1995 were $826,165 and
$1,834,522, respectively, up from the $796,222 and $1,729,679 reported for
the same periods of 1994. During the quarter, international revenues
increased by approximately 12% from those of a year ago, while domestically,
they marginally declined. Included in both the international and domestic
1995 revenues was the positive impact of the Company's recent acquisitions.
Additionally, international revenues benefited by approximately $11,000 from
changed foreign currency translation rates during the quarter, net of the
approximate $5,000 negative impact from the weakened Mexican peso. Within
both geographic areas, the Company's revenues from its games and boys' toys
were greater than those of the comparable period of 1994, while revenues
from its girls' toys were less. Revenues from the Company's preschool and
activity items approximated those of a year ago. The growth pattern for the
nine months was similar to that of the quarter.
COST OF SALES
- - -------------
The gross profit margin, expressed as a percentage of net revenues, for the
quarter increased to 56.3% from the 1994 level of 55.8%, and the nine months
to 56.0% from 55.9% a year ago. The improvement in both periods reflects the
more favorable mix of products sold, the efficiencies from recent plant
consolidations, the effect of GATT, all partially offset by the impact of
increased material costs, specifically paper board and plastic resin.
EXPENSES
- - --------
Royalties, research and development expenses for the quarter increased from
prior year's amount but remained constant as a percentage of net revenues.
The royalty component increased both in amount and when expressed as a
percentage of net revenues. In addition to reflecting the growth in volume
during the quarter, 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 $34,576 and $102,004 for the
quarter and nine months of 1995 while $35,193 and $96,655 for the same
periods of 1994.
Earlier this year, the Company discontinued its efforts, begun in 1992,
related to the development of a mass-market virtual reality game system.
These efforts produced such a game system, but at a price judged to be too
expensive for the mass-market. The impact of this decision was a second
quarter charge of $31,100, the estimated costs associated with such action.
Approximately half of the charge resulted from the expensing of software
development costs, previously capitalized under the provisions of Statement
of Financial Accounting Standards No. 86, related to both the operating
system and games for the system. The remaining amount represented provisions
for costs associated with discontinuance of this project, 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.
HASBRO, INC. AND SUBSIDIARIES
Management's Discussion and Analysis of Financial
Condition and Results of Operations, Continued
(Thousands of dollars)
Advertising expense in the current quarter increased both in amount and as a
percentage of net revenues. For the third quarter and nine months of 1995,
the amounts were $123,537 and $261,934, respectively, compared with $116,307
and $241,294 in the same periods of 1994. Expressed as a percentage of net
revenues, the third quarter and nine months of 1995 was 15.0% and 14.3%,
respectively, while 1994 was 14.6% and 14.0%. The increases during the
current year reflect the higher proportion of the Company's revenues coming
from the international marketing units which generally have higher
advertising to sales ratios than do the domestic groups. Also contributing
to the increase is the impact of expanded efforts to support products in
certain of the Company's domestic operations.
For the quarter, selling distribution and administration expense increased
from the level of the comparable period of 1994. As in the prior quarter,
this increase was the result of a combination of factors including the
impact of the weakened U.S. dollar, new organizations, principally Larami,
Waddington Games, Scandinavia and the K'NEX joint venture, higher
distribution costs, a higher bad debt charge and a general increase in
expense levels. The nine month increase is primarily attributable to the
same factors.
During the third quarter of 1994, the Company restructured its Domestic Toy
Group, merging the five units into one organization, the Hasbro Toy Group,
and also announced the consolidation of certain of its domestic
manufacturing facilities. To provide for these and other immaterial
restructuring costs, the Company recorded a $12,500 pretax charge during
that quarter. In excess of 90% of this charge was related to severance and
other costs associated with terminated employees.
NONOPERATING (INCOME) EXPENSE
- - -----------------------------
Interest expense for the third quarter increased approximately $2,100 from
that of the same period of 1994, reflecting the use of funds to finance the
Company's recent acquisitions and geographic expansion. The nine month
increase can also be attributed to the same factors.
Other income, net, decreased significantly for the quarter. During the third
quarter of 1994, the Company disposed of certain investments, as described
in Management's Discussion and Analysis of Financial Condition and Results
of Operations in the Company's Annual Report on Form 10-K for the year ended
December 25, 1994, realizing an aggregate pretax gain of approximately
$23,000. Absent the impact of this gain, other income in the third quarter
of 1995 increased approximately $2,800 reflecting both the impact of foreign
currency transaction gains and increased earnings from available funds.
These funds, principally in the international units, are invested on a
short-term basis locally. (See Liquidity and Capital Resources later in this
document for further discussion related to short-term investments.)
HASBRO, INC. AND SUBSIDIARIES
Management's Discussion and Analysis of Financial
Condition and Results of Operations, Continued
(Thousands of dollars)
OTHER INFORMATION
- - -----------------
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, quick response inventory management practices now
being used results in fewer orders being placed in advance of shipment 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 October (October 29, 1995 and October 23, 1994), the Company's
unshipped orders were approximately $550,000 and $490,000, respectively. The
revenue pattern of the Company continues to shift with the second half of
the year growing in significance to its overall business and, within that
half, the fourth quarter becoming much more prominent. The Company expects
that this trend will continue.
During the fourth quarter of 1993, the Company recorded a restructuring
charge of $15,500, primarily relating to the planned closure of the
Company's manufacturing facility in The Netherlands. The Company had
initially planned to cease production at this facility during the second
quarter of 1994 but was unable to do so. The actions necessary to comply
with local regulations relating to such a closure took longer than
anticipated and the Company did not cease production at this facility until
the first quarter of 1995. A majority of the liability established for this
closure has now been satisfied and the Company has begun to experience the
positive results from this action including both the elimination of costs
associated with the previously existing excess production capacity and the
transfer of production to a lower-cost manufacturing facility. The remaining
amount provided in 1993 related to several items, none of which were
significant, either in cost or anticipated benefits. All of the liabilities
established for such items have been satisfied and the expected benefits are
being obtained.
As discussed above, during the third quarter of 1994 the Company recorded a
restructuring charge of $12,500, primarily to cover costs associated with
the restructuring of certain of its domestic operations. Included in such
amount was a provision of approximately $4,400 for the costs associated with
the termination of approximately 100 management employees. Substantially all
of these employees have been terminated and a majority of the liability has
been satisfied. Also part of this charge was a provision of approximately
$3,400 for costs associated with the termination of approximately 485
domestic manufacturing employees. Substantially all of these employees have
also been terminated and a majority of the liability has been satisfied. The
Company believes that the reorganized units are operating more efficiently
and thus the anticipated savings, although impractical to quantify, are
being experienced.
HASBRO, INC. AND SUBSIDIARIES
Management's Discussion and Analysis of Financial
Condition and Results of Operations, Continued
(Thousands of dollars)
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 that 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. Late in its fourth quarter and through the first
quarter of the subsequent year, as receivables are collected, cash flow from
operations becomes positive and is used to repay a significant portion of
the short-term borrowings.
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.
Cash and cash equivalents at October 1, 1995, were approximately 10% less
than their 1994 level. 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. Receivables were approximately
$10,000 greater than at the same time in 1994, although they would have been
approximately $30,000 lower than those of a year ago if the impact of new
operations and changed foreign currency translation rates were excluded.
Inventories were approximately $57,000 higher than those of September 1994,
reflecting the impact of new operations and changed foreign currency
translation rates as well as the need to have product available for an
anticipated increased fourth quarter demand. Other assets, as a group,
increased by approximately $120,000 from their level a year ago. This
increase results from the Company's investments and acquisitions during the
most recent twelve months, partially offset by twelve additional months of
amortization expense.
HASBRO, INC. AND SUBSIDIARIES
Management's Discussion and Analysis of Financial
Condition and Results of Operations, Continued
(Thousands of dollars)
Short-term borrowings at $566,820 were approximately $80,000 greater than
last year. This increase is the net effect of the cash required for the
Company's recent acquisitions, expanded business operations and the
repurchase of shares of the Company's common stock, all partially offset by
funds generated from operations within the most recent twelve months. In the
aggregate, trade payables, accrued liabilities and accrued income taxes
increased marginally, reflecting both the Company's increased activities and
the impact of changed foreign currency translation rates.
At October 1, 1995, the Company had committed unsecured lines of credit
totaling approximately $590,000 available to it. It also had available
uncommitted lines approximating $990,000. The Company believes that these
amounts are adequate for its needs. Of these available lines, approximately
$590,000 was in use at October 1, 1995.
RECENT DEVELOPMENT
- - ------------------
On October 25, 1995, the Company announced the formation of Hasbro
Interactive Worldwide. This new unit will be an all-family classic game and
edutainment software company with a presence in viable hardware platforms in
the major worldwide markets. It plans to publish edutainment software in
North America, Europe and throughout Asia under the Playskool(R) Software
brand and all CD-ROM and on-line games under the Hasbro Interactive(TM)
brand name. Two of its products, CD-ROM versions of Monopoly(R) and Trivial
Pursuit(R) are currently on the market and it will incorporate additional
Company brands and characters, along with original and licensed properties,
in future products.
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.
None
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
11.1 Computation of Earnings Per Common Share - Nine Months
Ended October 1, 1995 and September 25, 1994.
11.2 Computation of Earnings Per Common Share - Quarter
Ended October 1, 1995 and September 25, 1994.
12 Computation of Ratio of Earnings to Fixed Charges -
Nine Months and Quarter Ended October 1, 1995.
27 Article 5 Financial Data Schedule - Third Quarter 1995
(b) Reports on Form 8-K
A Current Report on Form 8-K, dated October 23, 1995, was filed
by the Company and included the Press Release dated October 23,
1995, announcing the Company's results for the current quarter.
Consolidated Statements of Earnings (without notes) for the
quarters and nine months ended October 1, 1995 and September 25,
1994 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: November 15, 1995 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 October 1, 1995
Exhibit Index
Exhibit
No. Exhibits
- - ------- --------
11.1 Computation of Earnings Per Common Share -
Nine Months Ended October 1, 1995 and September 25, 1994
11.2 Computation of Earnings Per Common Share -
Quarter Ended October 1, 1995 and September 25, 1994
12 Computation of Ratio of Earnings to Fixed
Charges - Nine Months and Quarter Ended October 1, 1995
27 Article 5 Financial Data Schedule - Third Quarter 1995
EXHIBIT 11.1
HASBRO, INC. AND SUBSIDIARIES
Computation of Earnings Per Common Share
Nine Months Ended October 1, 1995 and September 25, 1994
(Thousands of Dollars and Shares Except Per Share Data)
1995 1994
----------------- -----------------
Fully Fully
Primary Diluted Primary Diluted
------- ------- ------- -------
Net earnings before cumulative
effect of change in accounting
principles $ 70,362 70,362 103,502 103,502
Interest and amortization on 6%
convertible notes, net of taxes - 4,338 - 4,323
------- ------- ------- -------
Net earnings before cumulative
effect of change in accounting
principles applicable to common
shares 70,362 74,700 103,502 107,825
Cumulative effect of change in
accounting principles - - (4,282) (4,282)
------- ------- ------- -------
Net earnings applicable to
common shares $ 70,362 74,700 99,220 103,543
======= ======= ======= =======
Weighted average number of shares
outstanding:(a)
Outstanding at beginning of
period 87,528 87,528 87,795 87,795
Actual exercise of stock
options and warrants 169 169 221 221
Assumed exercise of stock
options and warrants 600 704 1,720 1,720
Assumed conversion of 6%
convertible notes - 5,114 - 5,114
Purchase of common stock (7) (7) (144) (144)
------- ------- ------- -------
Total 88,290 93,508 89,592 94,706
======= ======= ======= =======
Per common share:
Earnings before cumulative
effect of change in
accounting principles $ .80 .80 1.16 1.14
Cumulative effect of change
in accounting principles - - (.05) (.05)
------- ------- ------- -------
Net earnings $ .80 .80 1.11 1.09
======= ======= ======= =======
(a) Computation to arrive at the average number is a weighted average
computation.
EXHIBIT 11.2
HASBRO, INC. AND SUBSIDIARIES
Computation of Earnings Per Common Share
Quarter Ended October 1, 1995 and September 25, 1994
(Thousands of Dollars and Shares Except Per Share Data)
1995 1994
----------------- -----------------
Fully Fully
Primary Diluted Primary Diluted
------- ------- ------- -------
Net earnings before cumulative
effect of change in accounting
principles $ 63,572 63,572 75,151 75,151
Interest and amortization on 6%
convertible notes, net of taxes - 1,426 - 1,441
------- ------- ------- -------
Net earnings before cumulative
effect of change in accounting
principles applicable to common
shares 63,572 64,998 75,151 76,592
Cumulative effect of change in
accounting principles - - - -
------- ------- ------- -------
Net earnings applicable to
common shares $ 63,572 64,998 75,151 76,592
======= ======= ======= =======
Weighted average number of shares
outstanding:(a)
Outstanding at beginning of
period 87,751 87,751 87,948 87,948
Actual exercise of stock
options and warrants 36 36 42 42
Assumed exercise of stock
options and warrants 560 561 1,143 1,146
Assumed conversion of 6%
convertible notes - 5,114 - 5,114
Purchase of common stock - - (292) (292)
------- ------- ------- -------
Total 88,347 93,462 88,841 93,958
======= ======= ======= =======
Per common share:
Earnings before cumulative
effect of change in
accounting principles $ .72 .70 .85 .82
Cumulative effect of change
in accounting principles - - - -
------- ------- ------- -------
Net earnings $ .72 .70 .85 .82
======= ======= ======= =======
(a) Computation to arrive at the average number is a weighted average
computation.
EXHIBIT 12
HASBRO, INC. AND SUBSIDIARIES
Computation of Ratio of Earnings to Fixed Charges
Nine Months and Quarter Ended October 1, 1995
(Thousands of Dollars)
Nine
Months Quarter
------- -------
Earnings available for fixed charges:
Net earnings $ 70,362 63,572
Add:
Fixed charges 34,425 14,410
Income taxes 44,048 39,798
------- -------
Total $148,835 117,780
======= =======
Fixed Charges:
Interest on long-term debt $ 6,975 2,292
Other interest charges 17,164 8,640
Amortization of debt expense 255 85
Rental expense representative
of interest factor 10,031 3,393
------- -------
Total $ 34,425 14,410
======= =======
Ratio of earnings to fixed charges 4.32 8.17
======= =======
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> OCT-01-1995
<CASH> 53,785
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0
0
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</TABLE>
