SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): October 15, 1998
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HASBRO, INC.
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(Name of Registrant)
RHODE ISLAND 1-6682 05-0155090
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(State of (Commission (IRS Employer
Incorporation) File Number) Identification No.)
1027 NEWPORT AVE., PAWTUCKET, RHODE ISLAND 02861
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(Address of Principal Executive Offices) (Zip Code)
(401) 431-8697
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(Registrant's Telephone Number)
Item 5. Other Events
The October 15, 1998 Press Release of the Registrant attached
hereto as EXHIBIT 99 is incorporated herein by reference.
Item 7(c) Exhibits
99 Press Release, dated October 15, 1998, of Hasbro, Inc.
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.
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(Registrant)
Date: October 15, 1998 By: /s/ John T. O'Neill
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John T. O'Neill
Executive Vice President and
Chief Financial Officer
(Duly Authorized Officer and
Principal Financial Officer)
HASBRO, INC.
Current Report on Form 8-K
Dated October 15, 1998
Exhibit Index
Exhibit
No. Exhibits
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99 Press Release dated October 15, 1998
EXHIBIT 99
For Immediate Release Contact: John T. O'Neill
October 15, 1998 401-727-5600
Renita E. O'Connell
401-727-5401
HASBRO REPORTS RECORD THIRD QUARTER REVENUES
QUARTERLY RESULTS IN LINE WITH PRE-ANNOUNCEMENT
Pawtucket, RI (October 15, 1998) - Hasbro, Inc. (ASE:HAS) today reported
third quarter results consistent with its September 28, 1998 announcement
regarding the impact of ongoing and recently accelerated changes in inventory
flow policies at Toys `R Us. "We are very pleased to report record third
quarter revenues despite lower sales to this key customer," said Alan G.
Hassenfeld, Chairman and Chief Executive Officer.
Reported net revenues reached $945.5 million, or approximately 3% above
the $915.5 million reported last year, in part due to the acquisition of
Tiger Electronics in April and increased sales at Hasbro Interactive. As
previously announced, the Company took a one-time pre-tax charge to write-off
acquired in-process research and development of MicroProse, Inc., which was
acquired for approximately $70 million in September 1998. Prior to this $20.0
million pre-tax charge ($13.6 million after tax), net earnings and diluted
earnings per share were $74.9 million and $0.55, respectively, compared to
$77.4 million and $0.57, respectively, a year ago. Including the charge, net
earnings were $61.3 million and diluted earnings per share were $0.45.
"In addition to revenue growth this quarter, we are also very pleased
about two acquisitions that will fuel future growth in revenue and earnings
well into the next century. The acquisition of MicroProse significantly
enhances Hasbro Interactive in three key strategic growth areas going
forward: brands and content, R&D assets, and European distribution,"
Hassenfeld added. "In addition, the pending acquisition of Galoob Toys, with
its highly successful MICRO MACHINES and STAR WARS small-scale figures and
vehicles, will be a tremendous addition to our rich brand portfolio,"
Hassenfeld continued.
For the first nine months of 1998, revenues were $2.0 billion compared to
$2.1 billion in 1997. Excluding the one-time charge, net earnings and diluted
earnings per share were $88.2 million and $0.64, respectively, compared to
$116.1 million and $0.87 a year ago. Including the charge, net earnings were
$74.6 million and diluted earnings per share were $0.54.
During the third quarter, the Company invested $65 million to repurchase
1.8 million shares. Under the $500 million share repurchase authorization
announced on December 9, 1997, the Company has invested approximately $185
million to repurchase 5.1 million shares.
"Looking ahead to the fourth quarter, we continue building sales and
earnings momentum in several product lines," Hassenfeld noted. "These include
Tiger Electronics' FURBY - an electronic interactive pet being introduced
nationwide to great acclaim; TELETUBBIES; new releases from Hasbro
Interactive and MicroProse - including our CD-ROM version of the ATARI game
classic, CENTIPEDE, and our first Nintendo 64 game title, GLOVER; as well as
a range of POKEMON offerings. Building excitement for 1999, we are shipping
the first new product from STAR WARS Episode One - a MACE WINDU exclusive
mail-in figure offer and a STAP vehicle with BATTLE DROID figure. In 1999, we
look forward to a tremendous product line-up, led by STAR WARS, with Hasbro
and Galoob teaming up with the Power of the Force. We are also on track to
realize planned incremental cost savings from the Global Integration and
Profit Enhancement Program next year, enabling us to continue to add value
for our shareholders," Hassenfeld concluded.
Certain statements contained in this release contain "forward-looking
statements" within the meaning of the Private Securities Litigation Reform
Act of 1995. Such forward-looking statements are inherently subject to known
and unknown risks and uncertainties. The Company's actual actions or results
may differ materially from those expected or anticipated in the forward-
looking statements. Specific factors that might cause such a difference
include, but are not limited to, the timely manufacture and shipping by the
Company of new and continuing products and their acceptance by customers and
consumers in a competitive product environment; economic conditions and
currency fluctuations in the various markets in which the Company operates
throughout the world; the inventory policies of retailers, including the
continuing trend of increased concentration of the Company's revenues in the
second half and fourth quarter of the year, together with increased reliance
by retailers on quick response inventory management techniques, which
increases the risk of underproduction of popular items, overproduction of
less popular items and failure to achieve tight and compressed shipping
schedules; the impact of competition on revenues, margins and other aspects
of the Company's business; third party actions or approvals that could delay,
modify or increase the cost of implementation of, the Company's Global
Integration and Profit Enhancement program; and the risk that anticipated
benefits of acquisitions may not occur or be delayed or reduced in their
realization. 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.
# # #
(Tables Attached)
HASBRO, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(Thousands of Dollars and Shares Except Per Share Data)
Quarter Ended Nine Months Ended
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Sep. 27, Sep. 28, Sep. 27, Sep. 28,
1998 1997 1998 1997
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Net Revenues $945,498 $915,533 $2,000,375 $2,055,203
Cost of Sales 402,369 403,027 853,776 891,315
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Gross Profit 543,129 512,506 1,146,599 1,163,888
Amortization 19,275 11,741 49,298 32,967
Royalties, Research and
Development 113,755 102,583 263,220 254,339
Advertising 128,053 116,208 257,023 254,418
Selling, Distribution and
Administration 162,705 156,215 439,433 433,285
Acquired Research and Development 20,000 - 20,000 -
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Operating Profit 99,341 125,759 117,625 188,879
Interest Expense 11,308 9,197 20,036 19,120
Other (Income) Expense, Net (1,568) 1,121 (12,082) (6,112)
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Earnings Before Income Taxes 89,601 115,441 109,671 175,871
Income Taxes 28,271 38,041 35,095 59,796
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Net Earnings $ 61,330 $ 77,400 $ 74,576 $ 116,075
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Per Common Share
Net Earnings
Basic $ .47 $ .61 $ .56 $ .91
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Diluted $ .45 $ .57 $ .54 $ .87
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Cash Dividends Declared $ .08 $ .08 $ .24 $ .24
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Weighted Average Number of shares
Basic 131,368 126,922 132,346 127,789
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Diluted 136,375 137,103 137,604 137,806
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HASBRO, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Thousands of Dollars)
Sep. 27, Sep. 28,
1998 1997
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Assets
Cash and Temporary Investments $ 176,486 $ 80,030
Accounts Receivable, Net 1,030,751 1,153,910
Inventories 383,809 347,779
Other 336,261 175,534
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Total Current Assets 1,927,307 1,757,253
Property, Plant and Equipment, Net 287,872 279,916
Other Assets 1,461,125 986,782
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Total Assets $3,676,304 $3,023,951
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Liabilities and Shareholders' Equity
Short-term Borrowings $ 507,596 $ 462,894
Payables and Accrued Liabilities 1,029,906 708,278
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Total Current Liabilities 1,537,502 1,171,172
Long-term Debt 300,000 148,751
Deferred Liabilities 80,010 68,924
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Total Liabilities 1,917,512 1,388,847
Total Shareholders' Equity 1,758,792 1,635,104
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Total Liabilities and Shareholders' Equity $3,676,304 $3,023,951
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