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 14, 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 October 14, 1999 Press Release of the Registrant attached
hereto as EXHIBIT 99 is incorporated herein by reference.
Item 7(c) Exhibits
99 Press Release, dated October 14, 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: October 14, 1999 By: /s/ Alfred J. Verrecchia
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Alfred J. Verrecchia
Executive Vice President,
Global Operations and Chief
Financial Officer
(Duly Authorized Officer and
Principal Financial Officer)
HASBRO, INC.
Current Report on Form 8-K
Dated October 14, 1999
Exhibit Index
Exhibit
No. Exhibits
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99 Press Release dated October 14, 1999
EXHIBIT 99
For Immediate Release Contact: Alfred J. Verrecchia
October 14, 1999 401-727-5100
Renita E. O'Connell
401-727-5401
HASBRO REPORTS RECORD THIRD QUARTER RESULTS
ON TRACK TO DELIVER EPS GROWTH OF APPROXIMATELY 30% THIS YEAR
Pawtucket, RI (October 14, 1999) -- Hasbro, Inc. (NYSE:HAS) today reported
record third quarter revenues, earnings and earnings per share. The Company
also reaffirmed it is on track to deliver approximately 30% growth in
recurring earnings per share in 1999.
Worldwide net revenues increased approximately 16% to $1.098 billion,
compared to $945.5 million a year ago. Revenue growth was driven primarily by
significantly higher shipments of STAR WARS, FURBY and computer-based games,
plus POKEMON toys and games. Net earnings and diluted earnings per share
increased approximately 14% and 16%, respectively, to $85.2 million and
$0.43, respectively. This compares to $74.9 million and $0.37, respectively,
last year prior to a $20.0 million pre-tax charge ($13.6 million after tax)
to write-off acquired in-process research and development of MicroProse, Inc.
Net earnings and diluted earnings per share in 1999 increased 39% and 43%,
respectively, over last year's reported results of $61.3 million and $0.30,
respectively, including the one-time charge.
The Company also reported record third quarter Earnings Before Interest,
Taxes, Depreciation and Amortization (EBITDA) of $200.3 million, up 22% from
the year-ago EBITDA of $164.2 million.
For the first nine months of 1999, worldwide net revenues increased
approximately 32% to a record $2.641 billion, compared to $2.000 billion a
year ago. Net earnings and diluted earnings per share increased approximately
49% to $131.3 million and $0.64, respectively, compared to $88.2 million and
$0.43 last year prior to the one-time charge. Net earnings and diluted
earnings per share increased over 76% compared to $74.6 million and $0.36,
respectively, reported last year including the one-time charge.
"We are very pleased to report another record quarter in all respects,"
said Alan G. Hassenfeld, Chairman and Chief Executive Officer. "Our business
is strong overall, and we achieved double-digit revenue growth in the U.S.
and internationally. Our global STAR WARS product line is tracking to our
high expectations for this year. The retail sell-through rate of STAR WARS
action figures, the cornerstone of our line, remains strong and we have a
major advertising campaign underway to drive overall sales in the all-
important holiday season," Hassenfeld explained.
"Our interactive FURBY continues to be a smash hit worldwide,"
Hassenfeld continued. "Hasbro's interactive games again achieved significant
double-digit revenue increases with popular titles like ROLLER COASTER
TYCOON, MECHWARRIOR 3 and FROGGER. Plus, our expanded POKEMON offering
continues to be highly successful."
"We continue to enhance shareholder value with acquisitions like Wizards
of the Coast, which closed on September 30 and will enable us to
significantly expand in the fast-growing games arena," Hassenfeld added.
"This acquisition, plus our acquisition of Europress, a veteran European
publisher of educational and lifestyle software, brings us many exciting
growth opportunities as we transition Hasbro to a company which is much more
driven by technology and game play. While acquisitions are a priority use of
our cash flow, we believe in our future and continue to repurchase our stock.
During the third quarter, we invested almost $16 million to repurchase more
than 0.6 million shares. This brings our total investment, under the $500
million repurchase authorization of December 1997, to almost $400 million to
repurchase over 15 million shares."
"We look forward to a strong holiday season, with many of the must-have
toys and games. Our expanded POKEMON offerings - including the electronic
interactive plush "I CHOOSE YOU PIKACHU", POKEMON MONOPOLY, the POKEDEX
organizer, and new trading card games - are shipping now, and POKEMON is
being introduced internationally. Plus, the U.S. release of the first
animated POKEMON feature film on November 12 will extend the excitement of
POKEMANIA into next year. In STAR WARS, we are releasing new twelve-inch
electronic action figures and other terrific EPISODE I product worldwide. A
limited edition Halloween FURBY is at stores now, and a Millennium FURBY will
ring in the new century. Hasbro Interactive plans several new titles,
including PONG, CATDOG, TONKA CONSTRUCTION 2, Q*BERT and a TRIVIAL PURSUIT
MILLENNIUM edition, plus the first titles from its new Hasbro Sports unit:
TRIVIAL PURSUIT NASCAR CD-ROM and two em@il games - NFL FOOTBALL and NASCAR.
Looking ahead to next year, with POKEMON, our soon to be announced online
games initiative, plus other wonderful new product including NASCAR and
FORMULA ONE, BEAST MACHINES, TITAN AE, DRAGON TALES and TWEENIES, we have
even more visibility," 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, KENNER, TONKA, ODDZON, SUPER
SOAKER, MILTON BRADLEY, PARKER BROTHERS, TIGER, HASBRO INTERACTIVE, GALOOB
and WIZARDS OF THE COAST 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
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; 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 or the Company's
Global Integration and Profit Enhancement program 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.
EBITDA (earnings before interest, taxes, depreciation and amortization)
represents operating profit plus acquired in-process research and
development, depreciation and all amortization. EBITDA is not adjusted for
all noncash expenses or for working capital, capital expenditures or other
investment requirements and, accordingly, is not necessarily indicative of
amounts that may be available for discretionary uses. Thus, EBITDA should not
be considered in isolation or as a substitute for net earnings or cash
provided by operating activities, each prepared in accordance with generally
accepted accounting principles, when measuring Hasbro's profitability or
liquidity as more fully discussed in the Company's financial statements and
securities filings.
# # #
(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. 26, Sep. 27, Sep. 26, Sep. 27,
1999 1998 1999 1998
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Net Revenues $1,098,179 945,498 $2,641,151 2,000,375
Cost of Sales 444,013 402,369 1,045,556 853,776
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Gross Profit 654,166 543,129 1,595,595 1,146,599
Amortization 31,130 19,275 88,974 49,298
Royalties, Research and
Development 170,778 113,755 462,496 263,220
Advertising 117,567 128,053 299,925 257,023
Selling, Distribution and
Administration 193,582 162,705 515,231 439,433
Acquired Research and Development - 20,000 - 20,000
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Operating Profit 141,109 99,341 228,969 117,625
Interest Expense 19,190 11,308 44,788 20,036
Other (Income) Expense, Net (1,515) (1,568) (6,042) (12,082)
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Earnings Before Income Taxes 123,434 89,601 190,223 109,671
Income Taxes 38,264 28,271 58,969 35,095
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Net Earnings $ 85,170 61,330 $ 131,254 74,576
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Per Common Share
Net Earnings
Basic $ .44 .31 $ .67 .38
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Diluted $ .43 .30 $ .64 .36
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Cash Dividends Declared $ .06 .05 $ .18 .15
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Weighted Average Number of shares
Basic 194,612 197,503 195,280 198,519
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Diluted 200,344 204,562 204,006 206,406
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HASBRO, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Thousands of Dollars)
Sep. 26, Sep. 27,
1999 1998
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Assets
Cash and Temporary Investments $ 108,627 $ 176,486
Accounts Receivable, Net 1,167,660 1,030,751
Inventories 438,662 383,809
Other 552,274 336,261
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Total Current Assets 2,267,223 1,927,307
Property, Plant and Equipment, Net 303,667 287,872
Other Assets 1,622,379 1,461,125
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Total Assets $4,193,269 $3,676,304
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Liabilities and Shareholders' Equity
Short-term Borrowings $ 889,405 $ 507,596
Payables and Accrued Liabilities 949,704 1,029,906
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Total Current Liabilities 1,839,109 1,537,502
Long-term Debt 407,584 300,000
Deferred Liabilities 82,451 80,010
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Total Liabilities 2,329,144 1,917,512
Total Shareholders' Equity 1,864,125 1,758,792
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Total Liabilities and Shareholders' Equity $4,193,269 $3,676,304
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