EXHIBIT 99
For Immediate Release Contact: Karen A. Warren (Investor Relations)
April 22, 2002 401-727-5401
Wayne S. Charness (News Media)
401-727-5983
HASBRO REPORTS FIRST QUARTER RESULTS
Pawtucket, RI (April 22, 2002) - Hasbro, Inc. (NYSE: HAS) today
reported first quarter results. Worldwide net revenues were $452.3 million,
compared to $463.3 million a year ago. The net loss for the quarter was $17.1
million or $0.10 per diluted share, compared to a loss of $24.0 million or
$0.14 per diluted share in 2001. The 2001 results exclude a $1.07 million or
$0.01 per diluted share charge related to the adoption of SFAS No.133. The
Company also reported first quarter Earnings Before Interest, Taxes,
Depreciation and Amortization (EBITDA) of $32.1 million, compared to $34.4
million in 2001.
"We believe we are well positioned and on track to achieve our financial
goals for the year," said Alan G. Hassenfeld, Chairman and Chief Executive
Officer.
"We are very encouraged by the strong retail sales performance of many
of our key brands and products - - evidence that our strategy of growing core
brands continues to do well. Although revenue is down marginally for the
quarter, it is consistent with our full year plan and in line with retailers'
shifting buying patterns, as they and we continue to focus on supply chain
management," Hassenfeld continued.
"We delivered strong sales of TRANSFORMERS and G.I. JOE - including our
new 3 3/4 inch kid-directed line, G.I. JOE VS. COBRA. A couple of new
additions to the boys' category - ZOIDS and BEYBLADES - enjoyed a very solid
first quarter. PLAYSKOOL was up significantly for the quarter, with both BOB
THE BUILDER and MR. POTATO HEAD, who is celebrating his 50th birthday this
year, driving the growth. In the Games segment, several products performed
well, including ELECTRONIC CATCH PHRASE, and the SORRY and MONOPOLY: DISNEY
EDITIONS. In addition, all three major segments began shipping products
based on STAR WARS EPISODE II: ATTACK OF THE CLONES this quarter," added
Hassenfeld.
In the U.S. Toys segment, revenues increased year over year and the
segment was profitable compared to a prior year loss. Both the Games and
International segment revenue declined year over year, attributable in part
to the decline in licensed trading card games. The Games and International
segments had pre-tax losses for the quarter. Despite the overall Games
segment revenue decline in the quarter, retail sales data indicate that the
traditional board games business is strong.
"We remain focused on driving innovation and growth in our overall
business, in particular our core brands, as well as improving operating
margins," said Alfred J. Verrecchia, President and Chief Operating Officer.
"In addition to the $100 million in expense reductions realized in 2001,
we are also planning to reduce expenses by an additional $100 million over
the next three years. In the first quarter, we continued to make progress,
with Selling, Distribution and Administration expenses down $14.6 million or
9.5%. As we indicated previously, many of the costs associated with
implementing the new cost reduction program will offset the financial
benefits in 2002, with savings beginning in 2003," Verrecchia noted.
"We have maintained our focus on managing the balance sheet as we
continue to reduce inventory levels and increase cash. Inventories decreased
by $74.5 million or 24% and total debt, net of cash, decreased $232.8 million
as compared to the first quarter last year," Verrecchia concluded.
Effective January 1, 2001, Hasbro adopted the 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 in the consolidated
statement of operations for the first quarter 2001.
Effective in 2002, Hasbro adopted the Statements of Financial Accounting
Standards No. 141 and 142, "Accounting for Business Combinations" and
"Goodwill and Other Intangible Assets." As a result of the adoption of these
statements, goodwill and other indefinite life intangibles are no longer
being amortized. Amortization of these assets in the first quarter of 2001
amounted to $13.0 million. Removing this amortization and its related tax
effect would have resulted in a net loss of $17.2 million in the first
quarter of 2001. Hasbro is in the process of evaluating any additional
potential impact that the adoption of SFAS No. 142 will have on its
consolidated financial position and results of operations.
The Company will webcast its first quarter earnings conference call at
9:00 a.m. Eastern Standard Time today. Investors and the media are invited to
listen at http://www.hasbro.com (select "Corporate Info" from the home page,
click on "Investors," and 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 bankruptcy or other lack of success of one
of the Company's significant retailers which could negatively impact the
Company's revenues or bad debt exposure; 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 (loss) excluding, restructuring, 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 filings with the Securities and
Exchange Commission.
# # #
(Tables Attached)
HASBRO, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Thousands of Dollars and Shares Except Per Share Data)
Quarter Ended
-------------------------
March 31, Apr. 1,
2002 2001
-------- --------
Net Revenues $452,267 $463,286
Cost of Sales 166,414 189,805
-------- --------
Gross Profit 285,853 273,481
Amortization 21,449 29,421
Royalties, Research and Development 84,669 56,735
Advertising 46,889 47,613
Selling, Distribution and Administration 139,191 153,819
-------- --------
Operating Profit (Loss) (6,345) (14,107)
Interest Expense 19,542 25,890
Other (Income) Expense, Net (2,835) (4,765)
-------- --------
Earnings (Loss) Before Income Taxes and
Cumulative Effect of Accounting Change (23,052) (35,232)
Income Taxes (5,994) (11,274)
-------- --------
Earnings (loss) before Cumulative
Effect of Accounting Change (17,058) (23,958)
Cumulative Effect of Accounting Change - (1,066)
-------- --------
Net Earnings (Loss) $(17,058) $(25,024)
======== ========
Per Common Share
Earnings (Loss) before Cumulative Effect
of Accounting Change
Basic and Diluted $ (.10) $ (.14)
======== ========
Cumulative Effect of Accounting Change
Basic and Diluted $ .00 $ (.01)
======== ========
Net Earnings (Loss)
Basic and Diluted $ (.10) $ (.15)
======== ========
Cash Dividends Declared $ .03 $ .03
======== ========
Weighted Average Number
of Shares
Basic and Diluted 172,594 171,933
======== ========
HASBRO, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Thousands of Dollars)
March 31, Apr. 1,
2002 2001
--------- ---------
Assets
Cash and Cash Equivalents $ 355,112 $ 180,766
Accounts Receivable, Net 287,379 255,450
Inventories 232,170 306,624
Other Current Assets 323,748 390,596
--------- ---------
Total Current Assets 1,198,409 1,133,436
Property, Plant and Equipment, Net 227,086 279,184
Other Assets 1,709,053 1,950,338
--------- ---------
Total Assets $3,134,548 $3,362,958
========= =========
Liabilities and Shareholders' Equity
Short-term Borrowings $ 33,728 $ 90,483
Current Installments of Long-Term Debt 327,167 1,746
Payables and Accrued Liabilities 513,368 713,034
--------- ---------
Total Current Liabilities 874,263 805,263
Long-term Debt 840,399 1,167,528
Deferred Liabilities 94,567 116,784
--------- ---------
Total Liabilities 1,809,229 2,089,575
Total Shareholders' Equity 1,325,319 1,273,383
--------- ---------
Total Liabilities and Shareholders' Equity $3,134,548 $3,362,958
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