For Immediate Contact:
Release
February 8, 2001 Karen A. Warren (Investor 401-727-5401
Relations)
Wayne S. Charness (News Media) 401-727-5983
HASBRO REPORTS FULL-YEAR AND FOURTH QUARTER 2000 RESULTS
In-line with Previously Announced Guidance
Pawtucket, RI (February 8, 2001) -- Hasbro, Inc. (NYSE:HAS)
today reported fourth quarter and full-year 2000 results in line with
previously announced guidance in December. Prior to charges, the
net loss for the year was $23.0 million compared to earnings of
$286.6 million in 1999, and diluted loss per share was $0.13 compared
to earnings of $1.42 in 1999. These results include a loss from
operations of $0.40 per share attributable to Hasbro Interactive and
Games.com and exclude $146.1 million of pre-tax charges ($93.5
million after-tax) related to the previously announced Consolidation
Programs and a pre-tax charge of $44.0 million ($28.2 million after-
tax) associated with the sale of Hasbro Interactive and Games.com.
"2000 was an extremely disappointing year for Hasbro," said Alan
G. Hassenfeld, Chairman and Chief Executive Officer. "A host of
factors contributed to a loss year that we view as an aberration when
you look at our performance over the long term and the record results
of 1999. However, our international business continued to be strong,
with revenues from international customers up almost 17.8% in local
currencies and 8.7% in U.S. dollars. Worldwide, core brands that
performed well were G.I. Joe, Action Man, Tonka, Play-Doh, games and
robotic pets."
For the year, net revenues worldwide were $3.8 billion compared
to $4.2 billion in 1999, reflecting a significant decline in Furby
and Star Wars. Total fourth quarter net revenues were $1.2 billion
compared to $1.6 billion a year ago. The decline in fourth quarter
revenues primarily reflects a decline in Pokemon, including trading
card games, as well as weakness in the U.S. toy group.
Prior to charges, the net loss for the fourth quarter was $58.4
million compared to earnings of $155.4 million a year ago, and
diluted loss per share of $0.34 per share compared to earnings of
$0.79 in 1999. These results exclude $146.1 million of pre-tax
charges ($93.5 million after-tax) related to the Consolidation
Programs and the write-down of $44.0 million associated with the sale
of Hasbro Interactive and Games.com. The attached schedule "Impact
of Consolidation Program" sets forth earnings before and after these
charges. Including charges, the reported net loss for the fourth
quarter was $180.1 million or $1.05 diluted loss per share and the
net loss for the year was $144.6 million or $0.82 diluted loss per
share.
Full year Earnings Before Interest, Taxes, Depreciation and
Amortization (EBITDA) was $267.9 million compared to $669.1 million
in 1999. Full year EBITDA before any charges was $325.0 million in
2000 and $708.0 million in 1999.
"As we look to 2001 we are very focused on enhancing shareholder
value by continuing to reduce our expenses, lower our break-even and
bring more focus on growing our own brands and new product
development," said Alfred J. Verrecchia, President and Chief
Operating Officer. "As part of our program to improve long-term
profitability we are significantly reducing overhead throughout the
Company. We are reducing headcount by approximately 850 across all
divisions of Hasbro, not counting Hasbro Interactive and Games.com.
Our goal continues to be lowering our break even by reducing fixed
expenses in product development, sales and marketing, and
administrative functions. We are working to make Hasbro more
efficient so we can better leverage our revenue and earnings streams
going forward," Verrecchia noted.
"We are very pleased to report that we completed the sale of
Hasbro Interactive and Games.com to Infogrames Entertainment, SA in
January. The write-down associated with the sale was $44.0 million,
consisting of $39 million in asset write-down and $5 million from the
reduction in the market value of Infogrames Entertainment, SA common
stock from the time the transaction was announced to the market price
at the time of the closing," added Verrecchia.
Mr. Hassenfeld added, "We are confident that we are making the
right moves to make Hasbro leaner and more consistently profitable
for shareholders. While 2000 has been a very painful year, we are
looking forward to returning Hasbro to profitability in 2001 and
beyond."
Hasbro will webcast its fourth quarter conference call at 9:00
a.m. Eastern time today. The webcast will review financial results
for the fourth quarter and full year 2000. Investors and the media
are invited to listen at http://www.hasbro.com (select "Investors &
Media" from the home page, then click on the webcast icon).
Hasbro is a worldwide leader in children's and family leisure
time and entertainment products and services, including the design,
manufacture and marketing of games and toys ranging from traditional
to high-tech. Both internationally and in the U.S., its PLAYSKOOL,
TONKA, SUPER SOAKER, MILTON BRADLEY, PARKER BROTHERS, TIGER, and
WIZARDS OF THE COAST brands and products provide the highest quality
and most recognizable play experiences 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. These statements may be identified by the use of
forward-looking words or phrases such as "anticipate", "believe",
"could", "expect", "intend", "look forward", "may", "planned",
"potential", "should", "will" and "would". 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 Company's ability to
manufacture, source and ship new and continuing products on a timely
basis and the acceptance of those products by customers and consumers
at prices that will be sufficient to profitably recover development,
manufacturing, marketing, royalty and other costs of products;
economic conditions, including higher fuel prices and availability of
electronic components, 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 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, including the ability to secure, maintain and renew popular
licenses and the ability to attract and retain talented employees in
a competitive environment; market conditions, third party actions or
approvals and the impact of competition that could delay or increase
the cost of implementation of the Company's consolidation programs or
alter the Company's actions and reduce actual results, 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.
EBITDA (earnings before interest, taxes, depreciation and
amortization) represents operating profit plus loss on the sale of a
business unit, restructuring charges, 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.
###
HASBRO, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(Thousands of Dollars and Shares Except Per Share Data)
Quarter Ended Year Ended
-------------------- --------------------
Dec. 31, Dec. 26, Dec. 31, Dec. 26,
2000 1999 2000 1999
--------- --------- --------- ---------
Net Revenues $1,162,744 1,591,112 $3,787,215 4,232,263
Cost of Sales 616,094 652,686 1,673,973 1,698,242
--------- --------- --------- ---------
Gross Profit 546,650 938,426 2,113,242 2,534,021
Amortization 59,118 84,559 157,763 173,533
Royalties, Research and
Development 209,265 249,294 635,366 711,790
Advertising 171,256 157,053 452,978 456,978
Selling, Distribution and
Administration 237,043 284,688 863,496 799,919
Restructuring Charge 63,951 64,232 63,951 64,232
Loss on Sale of Business Units 43,965 - 43,965 -
--------- ------- --------- ---------
Operating Profit (Loss) (237,948) 98,600 (104,277) 327,569
Interest Expense 34,215 24,552 114,421 69,340
Other (Income) Expense, Net 5,213 (9,574) 7,288 (15,616)
--------- --------- --------- ---------
Earnings (Loss) Before
Income Taxes (277,376) 83,622 (225,986) 273,845
Income Taxes (97,286) 25,923 (81,355) 84,892
--------- --------- --------- ---------
Net Earnings (Loss) $ (180,090) 57,699 $ (144,631) 188,953
========= ========= ========= =========
Per Common Share
Net Earnings (Loss)
Basic $ (1.05)$ .30 $ (0.82)$ .97
========= ========= ========= =========
Diluted $ (1.05)$ .29 $ (0.82)$ .93
========= ========= ========= =========
Cash Dividends Declared $ .03 $ .06 $ .21 $ .24
========= ========= ========= =========
Weighted Average Number
of Shares
Basic 171,820 193,828 176,437 194,917
========= ========= ========= =========
Diluted 171,820 196,395 176,437 202,103
========= ========= ========= =========
HASBRO, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Thousands of Dollars)
Dec. 31, Dec. 26,
2000 1999
--------- ---------
Assets
Cash and Cash Equivalents $ 127,115 $ 280,159
Accounts Receivable, Net 685,975 1,084,118
Inventories 335,493 408,571
Other 431,630 358,804
--------- ---------
Total Current Assets 1,580,213 2,131,652
Property, Plant and Equipment, Net 296,729 318,825
Other Assets 1,951,517 2,012,871
--------- ---------
Total Assets $3,828,459 $4,463,348
========= =========
Liabilities and Shareholders' Equity
Short-term Borrowings $ 228,085 $ 714,669
Payables and Accrued Liabilities 1,011,727 1,356,658
--------- ---------
Total Current Liabilities 1,239,812 2,071,327
Long-term Debt 1,167,838 420,654
Deferred Liabilities 93,403 92,392
--------- ---------
Total Liabilities 2,501,053 2,584,373
Total Shareholders' Equity 1,327,406 1,878,975
--------- ---------
Total Liabilities and Shareholders' Equity $3,828,459 $4,463,348
========= =========
HASBRO, INC.
IMPACT OF CONSOLIDATION PROGRAM
(Thousands of Dollars and Shares Except Per Share Data)
Quarter Ended December 31, 2000
---------------------------------------
Impact of Excluding
Consolidation Consolidation
Program and Program and
Loss on Sale Loss on Sale
As of Business of Business
Reported Units Units
--------- --------- ---------
Net Revenues $1,162,744 - $1,162,744
Cost of Sales 616,094 (6,625) 609,469
--------- --------- ---------
Gross Profit 546,650 6,625 553,275
Amortization 59,118 (25,046) 34,072
Royalties, Research and
Development 209,265 (42,270) 166,995
Advertising 171,256 (3,155) 168,101
Selling, Distribution and
Administration 237,043 (5,095) 231,948
Restructuring Charge 63,951 (63,951) -
Loss on Sale of Business Units 43,965 (43,965) -
--------- --------- ---------
Operating Profit (Loss) (237,948) 190,107 (47,841)
Interest Expense 34,215 - 34,215
Other (Income) Expense, Net 5,213 - 5,213
--------- --------- ---------
Earnings (Loss) Before Income Taxes (277,376) 190,107 (87,269)
Income Taxes (97,286) 68,438 (28,848)
--------- --------- ---------
Net Earnings (Loss) $ (180,090) 121,669 $ (58,421)
========= ========= =========
Per Common Share
Net Earnings (Loss)
Basic $ (1.05) .71 $ (0.34)
========= ========= =========
Diluted $ (1.05) .71 $ (0.34)
========= ========= =========
Weighted Average Number
of Shares
Basic 171,820
=========
Diluted 171,820
=========
HASBRO, INC.
IMPACT OF CONSOLIDATION PROGRAM
(Thousands of Dollars and Shares Except Per Share Data)
Year Ended December 31, 2000
---------------------------------------
Impact of Excluding
Consolidation Consolidation
Program and Program and
Loss on Sale Loss on Sale
As of Business of Business
Reported Units Units
--------- --------- ---------
Net Revenues $3,787,215 - $3,787,215
Cost of Sales 1,673,973 (6,625) 1,667,348
--------- --------- ---------
Gross Profit 2,113,242 6,625 2,119,867
Amortization 157,763 (25,046) 132,717
Royalties, Research and
Development 635,366 (42,270) 593,096
Advertising 452,978 (3,155) 449,823
Selling, Distribution and
Administration 863,496 (5,095) 858,401
Restructuring Charge 63,951 (63,951) -
Loss on Sale of Business Units 43,965 (43,965) -
--------- --------- ---------
Operating Profit (Loss) (104,277) 190,107 85,830
Interest Expense 114,421 - 114,421
Other (Income) Expense, Net 7,288 - 7,288
--------- --------- ---------
Earnings (Loss) Before Income Taxes (225,986) 190,107 (35,879)
Income Taxes (81,355) 68,438 (12,917)
--------- --------- ---------
Net Earnings (Loss) $ (144,631) 121,669 $ (22,962)
========= ========= =========
Per Common Share
Net Earnings (Loss)
Basic $ (0.82) .69 $ (0.13)
========= ========= =========
Diluted $ (0.82) .69 $ (0.13)
========= ========= =========
Weighted Average Number
of Shares
Basic 176,437
=========
Diluted 176,437
=========