EXHIBIT 99
For Immediate Release
Contact: Karen A. Warren
(Investor Relations)
April 23, 2001 401-727-5401
Wayne S. Charness
(News Media)
401-727-5983
HASBRO REPORTS FIRST QUARTER RESULTS
OUTLOOK FOR FULL-YEAR 2001 ON TRACK TO RETURN TO PROFITABILITY
Pawtucket, RI (April 23, 2001) - Hasbro, Inc. (NYSE:HAS) today reported
first quarter results. Worldwide net revenues were $463.3 million, compared
to a record $773.5 million a year ago. The net loss for the quarter was $25.0
million, compared to earnings of $15.1 million in 2000, and diluted loss per
share was $0.15, compared to earnings of $0.08 in 2000. The Company also
reported first quarter Earnings Before Interest, Taxes, Depreciation and
Amortization (EBITDA) of $34.4 million, compared to $95.5 million a year ago.
"Today we announced first quarter revenues which were $310 million or
40% lower than a year ago. This was not unexpected. We knew coming into the
year that comparisons for the first two quarters would be very difficult.
The decline in revenue can be attributed to POKEMON, Furby and the sale of
Hasbro Interactive. Although we are reporting a loss today, it is in line
with our expectations, and we are on track to deliver on our profitability
goal for the year. However, as we had stated previously, it will not be until
the second half, when the majority of our new product lines ship, that we
will see the real benefits to the bottom line," said Alan G. Hassenfeld,
Chairman and Chief Executive Officer.
Revenue from the Game and U.S. Toys segments declined year over year,
primarily due to POKEMON trading card games and toys and the sale of Hasbro
Interactive. Both the Game and U.S. Toys segments had pre-tax losses, but
there was improvement year over year in the U. S. Toys segment.
International revenue declined year over year, primarily due to POKEMON and
Furby. This decline in international segment revenue resulted in a pre-tax
loss for the international segment in the first quarter.
"We've made significant progress in our cost savings initiatives, with
reductions in all operating expense categories. These reductions were
primarily attributable to our ongoing cost reduction program that we
announced last year and the sale of Hasbro Interactive and Games.com," said
Alfred J. Verrecchia, President and Chief Operating Officer.
"In addition, we finished the quarter with minimal usage of our bank
lines and significant cash on hand. Adjusted for the $313 million payment
made in early April 2000 to fund the "Modified Dutch Auction" tender offer,
cash increased $150 million year over year. As a further indication of
strong financial management, we reduced our inventory levels and accounts
receivable. Hasbro's management team remains focused and the expense
reduction initiatives we began last year are a major step towards our most
important objective of returning as quickly as possible to the profitability
levels we have had historically," Verrecchia noted.
Effective January 1, 2001, Hasbro adopted Statement of Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments and
Hedging Activities." As a result of the adoption of this statement, Hasbro
recorded a one-time transition adjustment charge of $1.07 million or $0.01
per share, net of tax, in the consolidated statement of operations for the
quarter.
The company will webcast its first quarter earnings conference call at
9:00 a.m. Eastern time today. 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,
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 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 OPERATIONS
(Thousands of Dollars and Shares Except Per Share Data)
Quarter Ended
-------------------------
Apr. 1, Apr. 2,
2001 2000
-------- --------
Net Revenues $463,286 $773,481
Cost of Sales 189,805 300,301
-------- --------
Gross Profit 273,481 473,180
Amortization 29,421 32,856
Royalties, Research and Development 56,735 126,039
Advertising 47,613 69,359
Selling, Distribution and Administration 153,819 204,736
-------- --------
Operating Profit (Loss) (14,107) 40,190
Interest Expense 25,890 21,443
Other (Income) Expense, Net (4,765) (3,176)
-------- --------
Earnings (Loss) Before Income Taxes and
Cumulative Effect of Accounting Change (35,232) 21,923
Income Taxes (11,274) 6,796
-------- --------
Earnings (loss) before Cumulative
Effect of Accounting Change (23,958) 15,127
Cumulative Effect of Accounting Change (1,066) -
-------- --------
Net Earnings (Loss) $(25,024) $ 15,127
======== ========
Per Common Share
Earnings (Loss) before Cumulative Effect
of Accounting Change
Basic and Diluted $ (.14) $ .08
======== ========
Cumulative Effect of Accounting Change
Basic and Diluted $ (.01) $ -
======== ========
Net Earnings (Loss) per share
Basic and Diluted $ (.15) $ .08
======== ========
Cash Dividends Declared $ .03 $ .06
======== ========
Weighted Average Number
of Shares
Basic 171,933 189,563
======== ========
Diluted 171,933 190,341
======== ========
HASBRO, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Thousands of Dollars)
Apr. 1, Apr. 2,
2001 2000
--------- ---------
Assets
Cash and Cash Equivalents $ 180,766 $ 343,643
Accounts Receivable, Net 255,450 455,374
Inventories 306,624 442,150
Other Current Assets 390,596 451,596
--------- ---------
Total Current Assets 1,133,436 1,692,763
Property, Plant and Equipment, Net 279,184 315,091
Other Assets 1,950,338 1,998,832
--------- ---------
Total Assets $3,362,958 $4,006,686
========= =========
Liabilities and Shareholders' Equity
Short-term Borrowings $ 92,229 $ 79,597
Payables and Accrued Liabilities 713,034 1,138,429
--------- ---------
Total Current Liabilities 805,263 1,218,026
Long-term Debt 1,167,528 1,169,406
Deferred Liabilities 116,784 105,180
--------- ---------
Total Liabilities 2,089,575 2,492,612
Total Shareholders' Equity 1,273,383 1,514,074
--------- ---------
Total Liabilities and Shareholders' Equity $3,362,958 $4,006,686
========= =========