EXHIBIT 99.1
For Immediate Release Contact:
July 23, 2001 Karen A. Warren (Investor Relations) 401-727-5401
Wayne S. Charness (News Media) 401-727-5983
HASBRO REPORTS SECOND QUARTER RESULTS
OUTLOOK FOR FULL-YEAR ON TRACK TO RETURN TO PROFITABILITY
Pawtucket, RI (July 23, 2001) - Hasbro, Inc. (NYSE:HAS) today reported
second quarter results. Worldwide net revenues were $511.0 million compared
to $778.4 million a year ago. The net loss for the quarter was $18.3
million, compared to earnings of $6.5 million in 2000, and the diluted loss
per share was $0.11, compared to earnings of $0.04 in 2000. The Company also
reported second quarter Earnings Before Interest, Taxes, Depreciation and
Amortization (EBITDA) of $51.3 million, compared to $95.2 million in the
second quarter of 2000.
For the first half, worldwide net revenues were $974.3 million compared
to $1.55 billion a year ago. Net loss and diluted loss per share in the
first half were $43.4 million and $0.25, respectively, compared to earnings
of $21.6 million and $0.12 last year. First-half EBITDA was $85.8 million
compared to $190.6 million last year.
"These results are in line with our expectations and we continue to
believe we are on track to deliver on our profitability goal for this year.
As we have stated previously, we knew that comparisons to the first half of
2000 would be very difficult. The decline in revenue for the quarter and
year to date can be attributed to POKEMON, FURBY and the sale of Hasbro
Interactive," said Alan G. Hassenfeld, Chairman and Chief Executive Officer.
"As we enter the second half, we have a strong portfolio of diversified
products, with a great mix of Hasbro owned core brands and licenses. We are
excited about our kid directed line in G.I. JOE - - DOUBLE DUTY; several new
products from TONKA including DUSTY MY TALKING TOOL BENCH; B.I.O. BUGS from
Wow Wee; MAGIC SCREEN LEARNING DESK from Playskool; TRANSFORMERS; several
new games including WHEELS ON THE BUS and from Wizards of the Coast, MAGIC:
THE GATHERING and HARRY POTTER trading card games. We are also pleased with
both JURASSIC PARK III and BOB THE BUILDER which have had strong initial
sales and we look forward to MONSTERS, INC, the first movie in which we will
have a full product line as part of our new Disney alliance," Hassenfeld
concluded.
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Page Two
The U.S. Toy segment increased revenue marginally for the quarter and
achieved break-even on a pre-tax basis, compared to a substantial loss last
year. The Games segment continued to be profitable, although revenue and
pre-tax earnings declined due to POKEMON trading card games and the sale of
Hasbro Interactive. International segment revenue declined year over year,
primarily due to POKEMON and FURBY. This decline in International segment
revenue resulted in a greater pre-tax loss for the International segment in
the second quarter than last year.
"We've accomplished a lot in the first half. The results demonstrate
that our focus on reducing expenses is working, with substantial reductions
in all operating expense categories," said Alfred J. Verrecchia, President
and Chief Operating Officer.
"These cost savings were primarily attributable to our ongoing cost
reduction program and the sale of Hasbro Interactive and Games.com. In
addition, we maintained our focus on managing the balance sheet as we
continued to reduce inventory levels and short-term debt. In fact, short-term
debt declined $188.4 million from a year ago. We are on track and management
is focussed on our most important objective of returning as quickly as
possible to the profitability levels we have had historically," Verrecchia
concluded.
The company will webcast its second 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
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, 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.
# # #
(Tables Attached)
HASBRO, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Thousands of Dollars and Shares Except Per Share Data)
Quarter Ended Six Months Ended
------------------ --------------------
July 1, July 2, July 1, July 2,
2001 2000 2001 2000
-------- -------- --------- ---------
Net Revenues $ 510,971 778,373 $ 974,257 1,551,854
Cost of Sales 204,008 298,043 393,813 598,344
-------- ------- --------- ---------
Gross Profit 306,963 480,330 580,444 953,510
Amortization 28,862 31,928 58,283 64,784
Royalties, Research and
Development 69,868 135,150 126,603 261,189
Advertising 51,065 77,732 98,678 147,091
Selling, Distribution and
Administration 157,209 198,974 311,028 403,710
-------- ------- --------- ---------
Operating Profit (Loss) (41) 36,546 (14,148) 76,736
Interest Expense 25,321 28,198 51,211 49,641
Other (Income) Expense, Net 1,595 (1,073) (3,170) (4,249)
-------- ------- --------- ---------
Earnings (Loss) Before Income
Taxes and Cumulative Effect of
Accounting Change (26,957) 9,421 (62,189) 31,344
Income Taxes (8,626) 2,921 (19,900) 9,717
-------- ------- --------- ---------
Earnings (Loss) before
Cumulative Effect of
Accounting Change (18,331) 6,500 (42,289) 21,627
Cumulative Effect of Accounting
Change - - (1,066) -
-------- ------- --------- ---------
Net Earnings (Loss) $(18,331) $ 6,500 $ (43,355) $ 21,627
======== ======= ========= =========
Per Common Share
Earnings (Loss) before Cumulative
Effect of Accounting Change
Basic and Diluted $ (.11) $ .04 $ (.25) $ .12
======== ======= ========= =========
Net Earnings (Loss) per Share
Basic and Diluted $ (.11) $ .04 $ (.25) $ .12
======= ======= ========= =========
Cash Dividends Declared $ .03 $ .06 $ .06 $ .12
======= ======= ========= =========
Weighted Average Number of shares
Basic 172,023 171,621 171,978 180,925
======= ======= ========= =========
Diluted 172,023 172,739 171,978 181,872
======= ======= ========= ========
HASBRO, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Thousands of Dollars)
July 1, July 2,
2001 2000
--------- ---------
Assets
Cash and Cash Equivalents $ 56,819 $ 188,545
Accounts Receivable, Net 399,402 573,869
Inventories 336,638 508,160
Other Current Assets 385,422 456,279
--------- ---------
Total Current Assets 1,178,281 1,726,853
Property, Plant and Equipment, Net 268,054 320,176
Other Assets 1,887,454 1,968,187
--------- ---------
Total Assets $3,333,789 $4,015,216
========= =========
Liabilities and Shareholders' Equity
Short-term Borrowings $ 174,982 $ 363,375
Payables and Accrued Liabilities 616,841 881,204
--------- ---------
Total Current Liabilities 791,823 1,244,579
Long-term Debt 1,167,035 1,168,959
Deferred Liabilities 117,000 99,857
--------- ---------
Total Liabilities 2,075,858 2,513,395
Total Shareholders' Equity 1,257,931 1,501,821
--------- ---------
Total Liabilities and Shareholders' Equity $3,333,789 $4,015,216
========= =========