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 4, 1999
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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 4, 1999 Press Release of the Registrant attached
hereto as EXHIBIT 99 is incorporated herein by reference.
Item 7(c) Exhibits
99 Press Release, dated February 4, 1999, 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 4, 1999 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 4, 1999
Exhibit Index
Exhibit
No. Exhibits
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99 Press Release dated February 4, 1999
EXHIBIT 99
For Immediate Release Contact: John T. O'Neill
February 4, 1999 401-727-5600
Renita E. O'Connell
401-727-5401
HASBRO REPORTS RECORD FOURTH QUARTER AND
FULL YEAR 1998 RESULTS WHICH EXCEEDED EXPECTATIONS
OUTLOOK FOR 1999 IS VERY POSITIVE
Pawtucket, RI (February 4, 1999) - Hasbro, Inc. (ASE:HAS) today reported
record fourth quarter sales and earnings, and full-year 1998 results which
exceeded expectations. The Company remains committed to 15% earnings per
share growth over the long-term, and expects to outperform that target in
1999.
Net revenues in the fourth quarter increased 15 percent to $1.3 billion,
compared to $1.1 billion a year ago. Revenue growth was led by Tiger
Electronics, which had the year's hottest toy - Furby(TM), and computer-based
games from Hasbro Interactive and MicroProse. Net earnings for the fourth
quarter increased 18% to $131.8 million, compared to $111.3 million a year
ago. Diluted earnings per share increased 20% to $0.98, compared to $0.82 in
1997. Both 1997 amounts exclude $140 million of one-time pre-tax charges
($92.4 million after tax) to implement the Global Integration and Profit
Enhancement Program.
"I am pleased to report another record fourth quarter" said Alan G.
Hassenfeld, Chairman and Chief Executive Officer. "Hasbro's record fourth
quarter performance is especially significant given the challenging industry
and retail environment throughout 1998. In addition, 1998 was a pivotal year
for Hasbro as we delivered on our other key goals to build for profitable
growth into our new millennium," Hassenfeld added.
For the full year, net revenues increased 4% to $3.3 billion compared to
$3.2 billion in 1997. Net earnings and diluted earnings per share were
$220.0 million and $1.61, respectively, excluding the $20.0 million third
quarter charge ($13.6 million after tax) to write-off acquired in-process
research and development of MicroProse. Including this charge, 1998 reported
net earnings and diluted earnings per share were $206.4 million and $1.51,
respectively. In 1997, net earnings and diluted earnings per share were
$227.4 million and $1.69, respectively, prior to the one-time charges.
Reported net earnings and diluted earnings per share in 1997 were $135.0
million and $1.02, respectively.
Through year-end 1998, the Company invested approximately $190 million to
repurchase 5.3 million shares under the $500 million repurchase authorization
announced on December 9, 1997.
"We built significant momentum during the fourth quarter in several
product lines and ended the year with very clean inventory levels at our
major retail customers," said Alan G. Hassenfeld. "The enthusiastic response
to Furby(TM) exceeded even our expectations, and other best-sellers included
Teletubbies(TM), Chuck, My Talkin' Truck(TM), the Barney Song Magic
Banjo(TM), Winner's Circle(R), Beast Wars(R) Transformers(TM), Bop It(R), and
Hasbro Interactive's new Tonka Playset," Hassenfeld noted.
"For 1999, we welcome the first episode of the awesome new Star Wars(TM)
trilogy - "The Phantom Menace" - with Hasbro and Galoob teaming up with the
global Power of the Force. Other exciting new products in 1999 include an
expanded range of Pokemon(TM) and Tiger Electronics products, Animorphs(TM),
several new interactive games, and so very much more," noted Hassenfeld. "In
addition, our strategy of extending our key brands into new entertainment
formats with partners - such as the highly successful Monopoly(R) slot
machines - will contribute directly to the bottom line. We are also on track
to realize planned incremental cost savings from the Global Integration and
Profit Enhancement Program, and our 1998 acquisitions are expected to be
accretive to earnings, helping us deliver a very strong year. I am also
thrilled to have added an executive of Herb Baum's caliber to our senior
management team in the new position of President and Chief Operating Officer.
Herb will help us find new ways to drive our unrivalled brands into the next
millennium," Hassenfeld concluded.
Hasbro is a worldwide leader in the design, manufacture and marketing of
toys, games, interactive software, puzzles and infant products. Both
internationally and in the U.S., its Playskool(R), Kenner(R), Tonka(R),
OddzOn(R), Super Soaker(R), Milton Bradley(R), Parker Brothers(R), Tiger(TM),
Hasbro Interactive(TM), and Galoob(R) products provide children and families
with the highest quality and most recognizable toys and games in the world.
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, currency
fluctuations and government regulation and other actions 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; the Company's incurring higher than expected costs to achieve, or
not achieving, "Year 2000" readiness with respect to the Company's systems,
or the Company's customers, vendors or service providers failing to achieve
such readiness; 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 Year Ended
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Dec. 27, Dec. 28, Dec. 27, Dec. 28,
1998 1997 1998 1997
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Net Revenues $1,304,079 1,133,356 $3,304,454 3,188,559
Cost of Sales 512,285 467,743 1,366,061 1,359,058
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Gross Profit 791,794 665,613 1,938,393 1,829,501
Amortization 22,910 20,800 72,208 53,767
Royalties, Research and
Development 161,453 132,573 424,673 386,912
Advertising 183,669 157,156 440,692 411,574
Selling, Distribution and
Administration 216,505 183,855 655,938 617,140
Nonrecurring Charges - 125,000 20,000 125,000
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Operating Profit 207,257 46,229 324,882 235,108
Interest Expense 16,075 8,366 36,111 27,486
Other (Income) Expense, Net (2,625) 9,209 (14,707) 3,097
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Earnings Before Income Taxes 193,807 28,654 303,478 204,525
Income Taxes 62,018 9,743 97,113 69,539
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Net Earnings $ 131,789 18,911 $ 206,365 134,986
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Per Common Share
Net Earnings
Basic $ 1.01 $ .14 $ 1.56 $ 1.05
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Diluted $ .98 $ .14 $ 1.51 $ 1.02
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Cash Dividends Declared $ .08 $ .08 $ .32 $ .32
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Weighted Average Number
of Shares
Basic 130,768 131,537 131,951 128,726
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Diluted 134,975 136,857 136,946 137,569
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HASBRO, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Thousands of Dollars)
Dec. 27, Dec. 28,
1998 1997
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Assets
Cash and Temporary Investments $ 177,748 $ 361,785
Accounts Receivable, Net 958,826 783,008
Inventories 334,801 242,702
Other 318,611 186,379
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Total Current Assets 1,789,986 1,573,874
Property, Plant and Equipment, Net 330,355 280,603
Other Assets 1,673,504 1,045,240
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Total Assets $3,793,845 $2,899,717
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Liabilities and Shareholders' Equity
Short-term Borrowings $ 372,509 $ 122,024
Payables and Accrued Liablities 993,791 881,522
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Total Current Liabilities 1,366,300 1,003,546
Long-term Debt 407,180 -
Deferred Liabilities 75,570 58,054
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Total Liabilities 1,849,050 1,061,600
Total Shareholders' Equity 1,944,795 1,838,117
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Total Liabilities and Shareholders' Equity $3,793,845 $2,899,717
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