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): February 5, 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 February 5, 1998 Press Release of the Registrant attached
hereto as EXHIBIT 99 is incorporated herein by reference.
Item 7(c) Exhibits
99 Press Release, dated February 5, 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: February 5, 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 February 5, 1998
Exhibit Index
Exhibit
No. Exhibits
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99 Press Release dated February 5, 1998
EXHIBIT 99
For Immediate Release Contact: John T. O'Neill
February 5, 1998 401-727-5600
Renita E. O'Connell
401-727-5401
HASBRO REPORTS 15% INCREASE IN 1997 EARNINGS PER SHARE
COMPANY ACHIEVES RECORD RESULTS BEFORE RESTRUCTURING CHARGES
Pawtucket, RI (February 5, 1998) -- Hasbro, Inc. (HAS:ASE) today
reported record fourth quarter and full-year revenues and earnings for 1997,
prior to taking $140.0 million of one-time, pre-tax charges ($92.4 million
after-tax) related to the previously announced Global Integration and Profit
Enhancement Program. Net earnings increased 14% to $227.4 million and
earnings per share increased 15% to $1.77, excluding the one-time charges.
The $140.0 million of charges relate to continued consolidation of
manufacturing operations, streamlining of marketing and sales, and the
further leveraging of overheads, and are shown on the Restructuring Charge
line ($125.0 million) and included in Cost of Sales ($15.0 million).
"I am pleased to report that 1997 was a record year for Hasbro," said Alan G.
Hassenfeld, Chairman and Chief Executive Officer, "as we achieved our best-
ever fourth quarter and full-year revenues, earnings and earnings per share
excluding the one-time charges. We are pleased to deliver a second year of
15% growth in earnings per share for our shareholders, consistent with our
long-term target."
The Company is providing Basic and Diluted earnings per share in compliance
with Statement of Financial Accounting Standards No. 128, Earnings per Share,
and has restated all prior period amounts.
For the full year, net revenues in local currencies increased 9%, partly
offset by the $91 million, or 3%, adverse impact of the stronger U.S. dollar.
Reported revenues were $3.2 billion, up 6% from $3.0 billion in 1996.
Excluding the one-time charges, net earnings for the year increased 14% to
$227.4 million from $199.9 million in 1996. Basic and diluted earnings per
share each rose 15% from 1996, increasing to $1.77 from $1.54 and to $1.69
from $1.47, respectively. After the one-time charges, 1997 net earnings were
$135.0 million, and basic and diluted earnings per share were $1.05 and
$1.02, respectively.
In the fourth quarter, net revenues in local currencies increased 6%, partly
offset by the $45 million, or 4%, adverse impact of the continued strength of
the U.S. dollar, resulting in reported net revenues of $1.1 billion.
Excluding the one-time charges, net earnings for the fourth quarter increased
12% to $111.3 million from $99.1 million reported a year ago. Basic earnings
per share increased 10% to $0.85 from $0.77 in 1996, while diluted earnings
per share increased 14% to $0.82 from $0.72. After the one-time charges,
fourth quarter 1997 net earnings were $18.9 million, and basic and diluted
earnings per share each were $0.14.
"Our revenue growth throughout 1997 was primarily driven by our United States
operations, including our growing CD-ROM business, where sales more than
doubled over 1996," said Mr. Hassenfeld. "Other contributors were products
associated with our three major entertainment properties, Star Wars(R),
Jurassic Park(TM) and Batman(TM) as well as the recently acquired OddzOn toy
and interactive candy items. Internationally, growth continued to be led by
Canada, Mexico and Latin America but was moderated by the effects of the
stronger U.S. dollar, particularly on our European operations."
"Our earnings growth for the fourth quarter and the year, prior to the one-
time charges, followed the revenue pattern and was largely attributable to
North American operations," continued Hassenfeld. "We also added value for
our shareholders by investing $135 million during 1997 to buy back 4.8
million shares. In December, our Board of Directors authorized a $500 million
stock buyback program. We expect to utilize this authorization over the next
two to three years."
"As we enter 1998, we will further leverage our costs and continue to invest
in our stock and our future," added Hassenfeld. "Our library of brands is
unmatched. We look forward to the debut of Teletubbies on PBS in April, and
the summer movie release of DreamWorks' `Small Soldiers'. Also, this year we
will introduce more than 100 new Star Wars items that will help set the stage
for 1999, when the much-anticipated first Star Wars prequel will debut.
Hasbro is on track and stronger than ever."
# # #
(Tables Attached)
HASBRO, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(Thousands of Dollars and Shares Except Per Share Data)
Quarter Ended Year Ended
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Dec. 28, Dec. 29, Dec. 28, Dec. 29,
1997 1996 1997 1996
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Net Revenues $1,133,356 $1,106,928 $3,188,559 $3,002,370
Cost of Sales 467,743 484,669 1,359,058 1,328,897
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Gross Profit 665,613 622,259 1,829,501 1,673,473
Amortization 20,800 10,319 53,767 40,064
Royalties, Research and
Development 132,573 114,787 386,912 319,494
Advertising 157,156 165,110 411,574 418,003
Selling, Distribution and
Administration 183,855 166,430 617,140 563,645
Restructuring Charge 125,000 - 125,000 -
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Operating Profit 46,229 165,613 235,108 332,267
Interest Expense 8,366 11,787 27,486 31,465
Other (Income) Expense, Net 9,209 119 3,097 (6,091)
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Earnings Before Income Taxes 28,654 153,707 204,525 306,893
Income Taxes 9,743 54,615 69,539 106,981
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Net Earnings $ 18,911 99,092 $ 134,986 199,912
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Per Common Share
Net Earnings
Basic $ .14 $ .77 $ 1.05 $ 1.54
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Diluted $ .14 $ .72 $ 1.02 $ 1.47
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Cash Dividends Declared $ .08 $ .07 $ .32 $ .27
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Weighted Average Number
of Shares
Basic 131,537 129,205 128,726 130,041
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Diluted 136,857 139,221 137,569 139,522
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HASBRO, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Thousands of Dollars)
Dec. 28, Dec. 29,
1997 1996
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Assets
Cash and Temporary Investments $ 361,785 $ 218,971
Accounts Receivable, Net 783,008 807,149
Inventories 242,702 273,247
Other 186,379 187,222
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Total Current Assets 1,573,874 1,486,589
Property, Plant and Equipment, Net 280,603 313,545
Other Assets 1,045,240 901,375
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Total Assets $2,899,717 $2,701,509
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Liabilities and Shareholders' Equity
Short-term Borrowings $ 122,024 $ 120,736
Payables and Accrued Liablities 881,522 710,082
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Total Current Liabilities 1,003,546 830,818
Long-term Debt - 149,382
Deferred Liabilities 58,054 69,263
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Total Liabilities 1,061,600 1,049,463
Total Shareholders' Equity 1,838,117 1,652,046
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Total Liabilities and Shareholders' Equity $2,899,717 $2,701,509
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