Board of Directors Increases Quarterly Dividend 11%, or $0.06 per
share, to $0.63 per share
Full-Year 2017
- 2017 full-year net revenues of $5.21 billion increased 4%,
including a favorable $79.2 million impact of foreign exchange;
Operating profit margin of 15.6%;
- 2017 revenues grew in all major operating segments: 5% in the U.S.
and Canada segment; 2% in the International segment; and 8% in the
Entertainment and Licensing segment;
- Franchise Brand revenues increased 10%; Hasbro Gaming revenues up
10%; Emerging Brands grew 2%; Partner Brands declined 10%;
- U.S. tax reform, passed in December 2017, resulted in a $296.5
million net charge, or $2.33 per diluted share;
- Adjusted net earnings, excluding the impact of U.S. tax reform,
were $693.1 million or $5.46 per diluted share; Reported net earnings
of $396.6 million or $3.12 per diluted share;
- $724.4 million in operating cash flow generated during the year;
Year-end cash and cash equivalents of $1.58 billion;
- Company returned $427.0 million to shareholders in 2017; $277.0
million in dividends and $150.0 million in share repurchases.
Fourth Quarter 2017
- Fourth Quarter net revenues decreased 2% to $1.60 billion,
including a favorable $44.3 million impact of foreign exchange;
Operating profit margin of 17.0%;
- U.S. tax reform resulted in a $296.5 million net charge, or $2.35
per diluted share;
- Adjusted net earnings, excluding the impact of U.S. tax reform,
were $291.2 million or $2.30 per diluted share; Reported net loss of
$5.3 million, or $0.04 per diluted share;
Company Website:
http://www.hasbro.com/
PAWTUCKET, R.I. -- (Business Wire)
Hasbro,
Inc. (NASDAQ: HAS) today reported financial results for the
full-year and fourth quarter 2017. Net revenues for the full-year 2017
increased 4% to $5.21 billion versus $5.02 billion in 2016. 2017 net
revenues include a favorable $79.2 million impact from foreign exchange.
As reported net earnings for the full-year 2017 of $396.6 million, or
$3.12 per diluted share, compared to $551.4 million, or $4.34 per
diluted share in 2016. Adjusted 2017 net earnings were $693.1 million,
or $5.46 per diluted share, excluding a $296.5 million, or $2.33 per
diluted share, impact from U.S. tax reform. Adjusted net earnings for
the full-year 2016 were $566.1 million, or $4.46 per diluted share,
excluding a post-tax $14.7 million, or $0.12 per diluted share, non-cash
fourth quarter 2016 goodwill impairment charge related to Backflip
Studios.
In December 2017, the U.S. enacted the Tax Cuts and Jobs Act that
provided significant changes to the U.S. tax code, including a one-time
repatriation tax payable over eight years. As a result of the Act, the
Company recognized a net charge of $296.5 million. Given the significant
complexities associated with the changes in the U.S. tax code, the
estimated financial impact for the fourth-quarter and full year 2017 are
provisional and subject to further analysis which could result in
changes to this estimate during 2018 as further guidance is issued.
2017 net earnings also include a $0.25 per diluted share benefit versus
full-year 2016 from the adoption of FASB ASU No. 2016-09, Improvements
to Employee Share-Based Payment Accounting.
“Hasbro’s global team’s execution of our Brand Blueprint drove revenue
gains in Franchise Brands, Hasbro Gaming and Emerging Brands, including
immersive brand experiences across consumer products and digital
gaming,” said Brian Goldner, Hasbro’s chairman and chief executive
officer. “Our strong performance ranked Hasbro #1 across the G11 markets
for the full-year 20171. In the fourth quarter, Hasbro
Franchise Brand revenues increased 11%. However, overall consumer demand
slowed in November and December both for the industry and for Hasbro. A
decline in Partner Brands and Europe revenues resulted in us not meeting
our fourth quarter revenue expectations. Looking ahead, our innovative
lines are supported by robust storytelling and digital initiatives that
position us well for 2018 and beyond.”
“Over the past five years, we added over $1 billion in revenues to our
top line, growing revenues four consecutive years, while meaningfully
increasing operating profit, net earnings and generating significant
cash flow,” said Deborah Thomas, Hasbro’s chief financial officer.
“Hasbro is in a strong financial position with the cash and
profitability to invest in growing our business for the long term. Our
team’s excellent job of understanding and assessing the global tax
environment and managing associated risks contributed to strong
underlying net earnings growth. In addition, our 2017 year-end results
include an estimate for the expense associated with U.S. tax reform. We
expect an on-going benefit to our tax rate in future periods and will
discuss this further at our Toy Fair Investor Event.”
Fourth Quarter 2017 Financial Results
Fourth quarter 2017 net revenues of $1.60 billion compared to $1.63
billion in 2016. 2017 net revenues include a favorable $44.3 million
from foreign exchange.
As reported net loss for the fourth quarter 2017 totaled $5.3 million,
or $0.04 per diluted share, compared to net earnings of $192.7 million,
or $1.52 per diluted share in 2016. Fourth quarter 2017 net earnings
include a $0.09 per diluted share benefit versus fourth quarter 2016
from the adoption of FASB ASU No. 2016-09, Improvements to Employee
Share-Based Payment Accounting. Adjusted net earnings for the fourth
quarter 2017 were $291.2 million, or $2.30 per diluted share, excluding
$296.5 million or $2.35 per diluted share, from U.S. tax reform.
Adjusted net earnings for the fourth quarter 2016 were $207.4 million,
or $1.64 per diluted share, excluding a post-tax $14.7 million, or $0.12
per diluted share, non-cash fourth quarter 2016 goodwill impairment
charge related to Backflip Studios.
Full-Year 2017 Major Segment Performance
|
|
|
|
|
|
|
|
|
| Net Revenues ($ Millions) |
|
| Operating Profit ($ Millions) |
|
| FY 2017 |
|
| FY 2016 |
|
| % Change |
|
| FY 2017 |
|
| FY 2016 |
|
| % Change |
U.S. and Canada |
|
|
$2,690.5
|
|
|
$2,559.9
|
|
|
+5%
|
|
|
$509.9
|
|
|
$522.3
|
|
|
-2%
|
International |
|
|
$2,233.6
|
|
|
$2,194.7
|
|
|
+2%
|
|
|
$228.7
|
|
|
$294.5
|
|
|
-22%
|
Entertainment and Licensing |
|
|
$285.6
|
|
|
$265.2
|
|
|
+8%
|
|
|
$96.4
|
|
|
$49.9
|
|
|
+93%
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
Note: Full-year 2016 Entertainment and Licensing segment operating
profit includes a pre-tax $32.9 million fourth quarter 2016 non-cash
goodwill impairment charge. The impact of that charge is outlined in the
attached schedule “Net Earnings and Earnings per Share Excluding the
Impact of Tax Reform and Goodwill Impairment.”
Full-year 2017 U.S. and Canada segment net revenues increased 5% to
$2.69 billion compared to $2.56 billion in 2016. The U.S. and Canada
segment operating profit declined 2% to $509.9 million, or 19.0% of net
revenues, compared to $522.3 million, or 20.4% of net revenues in 2016,
primarily driven by increased advertising as well as higher bad debt
expense related to the Toys“R”Us bankruptcy filing in the third quarter
of 2017.
Full-year International segment net revenues increased 2% to $2.23
billion compared to $2.19 billion in 2016. Full-year 2017 International
segment revenues include a favorable $75.3 million impact of foreign
exchange. On a regional basis, Europe net revenues decreased 2%, Latin
America increased 5% and Asia Pacific increased 12%. Emerging markets
net revenues increased 5% in the year. International segment operating
profit decreased 22% to $228.7 million, or 10.2% of net revenues,
compared to $294.5 million, or 13.4% of net revenues in 2016. The
decline in operating profit was driven by higher sales allowances and
unfavorable product mix, as well as higher advertising costs.
Entertainment and Licensing segment net revenues increased 8% to $285.6
million compared to $265.2 million in 2016. Full-year gains were driven
by growth in consumer products and digital gaming, as well as the
addition of Boulder Media. Operating profit was $96.4 million, or 33.8%
of net revenues, compared to $49.9 million, or 18.8% of net revenues, in
2016. 2016 adjusted operating profit was $82.7 million, or 31.2% of net
revenues, excluding a pre-tax $32.9 million non-cash fourth quarter 2016
goodwill impairment charge related to Backflip Studios.
Fourth Quarter and Full-Year 2017 Brand
Portfolio Performance
|
|
|
|
|
|
| Net Revenues ($ Millions) |
|
| Q4 2017 |
|
| Q4 2016 |
|
| % Change |
|
| FY 2017 |
|
| FY 2016 |
|
| % Change |
Franchise Brands |
|
|
$764.2
|
|
|
$685.6
|
|
|
+11%
|
|
|
$2,568.0
|
|
|
$2,327.7
|
|
|
+10%
|
Partner Brands |
|
|
$342.9
|
|
|
$433.7
|
|
|
-21%
|
|
|
$1,271.6
|
|
|
$1,412.8
|
|
|
-10%
|
Hasbro Gaming* |
|
|
$343.3
|
|
|
$356.9
|
|
|
-4%
|
|
|
$893.0
|
|
|
$813.4
|
|
|
+10%
|
Emerging Brands |
|
|
$145.7
|
|
|
$153.7
|
|
|
-5%
|
|
|
$477.2
|
|
|
$466.0
|
|
|
+2%
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
*Hasbro’s total gaming category, including all gaming revenue, most
notably MAGIC: THE GATHERING and MONOPOLY, which are included in
Franchise Brands in the table above, totaled $546.4 million for the
fourth quarter 2017, up 5%, versus $518.7 million in the fourth quarter
2016 and up 8% to $1,497.8 million for full-year 2017 versus $1,387.1
million for full-year 2016. Hasbro believes its gaming portfolio is a
competitive differentiator and views it in its entirety.
Full-year 2017 Franchise Brand net revenues increased 10% to $2.57
billion driven by revenue growth in TRANSFORMERS, NERF, MONOPOLY and MY
LITTLE PONY. Franchise Brand revenue grew in all three major operating
segments.
Partner Brand net revenues decreased 10% to $1.27 billion. An increase
in BEYBLADE, MARVEL and SESAME STREET revenues was more than offset by a
revenue decline in STAR WARS and to a lesser extent declines in YO-KAI
WATCH and DISNEY FROZEN. Partner Brand revenues decreased in the U.S.
and Canada and International segments.
Hasbro Gaming net revenues grew 10% to $893.0 million. Hasbro’s diverse
gaming portfolio includes a broad spectrum of gaming experiences from
face-to-face gaming, social gaming and digital gaming. New social games,
such as SPEAK OUT, TOILET TROUBLE and FANTASTIC GYMNASTICS, were among
many which contributed to growth. In addition, several other gaming
brands grew, including DUNGEONS & DRAGONS, the launch of DROPMIX and
growth in digital gaming. Hasbro Gaming net revenues grew in the U.S.
and Canada and International segments. Hasbro’s total gaming category
grew 8% to $1.50 billion, including revenue growth from MONOPOLY.
Emerging Brands net revenues increased 2% to $477.2 million, behind
strong growth in BABY ALIVE and FURREAL FRIENDS. Emerging Brand net
revenues grew in the U.S. and Canada segment.
Dividend and Share Repurchase
The Company paid $277.0 million in cash dividends to shareholders during
2017. Hasbro’s Board of Directors has declared a quarterly cash dividend
of $0.63 per common share. This represents an increase of $0.06 per
share, or 11%, from the previous quarterly dividend of $0.57 per common
share. The dividend will be payable on May 15, 2018 to shareholders of
record at the close of business on May 1, 2018.
For the full-year 2017, Hasbro repurchased 1.58 million shares of common
stock at a total cost of $150.0 million and an average price of $94.74
per share. At year end, $178.0 million remained available in the current
share repurchase authorization.
Conference Call Webcast
Hasbro will webcast its fourth quarter and full-year 2017 earnings
conference call at 8:30 a.m. Eastern Time today. To listen to the live
webcast and access the accompanying presentation slides, please go to http://investor.hasbro.com.
The replay of the call will be available on Hasbro’s web site
approximately 2 hours following completion of the call.
About Hasbro
Hasbro (NASDAQ: HAS) is a global play and entertainment company
committed to Creating the World's Best Play Experiences. From toys and
games to television, movies, digital gaming and consumer products,
Hasbro offers a variety of ways for audiences to experience its iconic
brands, including NERF, MY LITTLE PONY, TRANSFORMERS, PLAY-DOH,
MONOPOLY, LITTLEST PET SHOP and MAGIC: THE GATHERING, as well as premier
partner brands. Through Hasbro Studios and its film labels, Allspark
Pictures and Allspark Animation, the Company is building its brands
globally through great storytelling and content on all screens. Hasbro
is committed to making the world a better place for children and their
families through corporate social responsibility and philanthropy.
Hasbro ranked No. 1 on the 2017 100 Best Corporate Citizens list by CR
Magazine, and has been named one of the World’s Most Ethical Companies®
by Ethisphere Institute for the past six years. Learn more at www.hasbro.com,
and follow us on Twitter (@Hasbro & @HasbroNews) and Instagram (@Hasbro).
© 2018 Hasbro, Inc. All Rights Reserved.
Certain statements in this release contain "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of
1995. These statements include expectations concerning the Company’s
potential performance in the future and the Company’s ability to achieve
its financial and business goals and may be identified by the use of
forward-looking words or phrases. The Company's actual actions or
results may differ materially from those expected or anticipated in the
forward-looking statements due to both known and unknown risks and
uncertainties. Specific factors that might cause such a difference
include, but are not limited to: (i) the Company's ability to design,
develop, produce, manufacture, source and ship products on a timely and
cost-effective basis, as well as interest in and purchase of those
products by retail customers and consumers in quantities and at prices
that will be sufficient to recover the Company’s costs and earn a
profit; (ii) downturns in economic conditions impacting one or more of
the markets in which the Company sells products, such as the economic
downturns which impacted the United Kingdom and Brazil in 2017, which
can negatively impact the Company’s retail customers and consumers, and
which can result in lower employment levels, lower consumer disposable
income, lower retailer inventories and lower spending, including lower
spending on purchases of the Company’s products; (iii) other factors
which can lower discretionary consumer spending, such as higher costs
for fuel and food, drops in the value of homes or other consumer assets,
and high levels of consumer debt; (iv) consumer interest in
entertainment properties, such as motion pictures, for which the Company
is developing and marketing products, and the ability to drive sales of
products associated with such entertainment properties, (v) potential
difficulties or delays the Company may experience in implementing cost
savings and efficiency enhancing initiatives; (vi) other economic and
public health conditions or regulatory changes in the markets in which
the Company and its customers and suppliers operate which could create
delays or increase the Company’s costs, such as higher commodity prices,
labor costs or transportation costs, or outbreaks of disease; (vii)
currency fluctuations, including movements in foreign exchange rates,
which can lower the Company’s net revenues and earnings, and
significantly impact the Company’s costs; (viii) the concentration of
the Company's customers, potentially increasing the negative impact to
the Company of difficulties experienced by any of the Company’s
customers or changes in their purchasing or selling patterns; (ix)
consumer interest in and acceptance of the Discovery Family Channel, and
programming created by Hasbro Studios, and other factors impacting the
financial performance of the network and Hasbro Studios; (x) the
inventory policies of the Company’s retail customers, including
retailers’ potential decisions to lower their inventories, even if it
results in lost sales, as well as the concentration of the Company's
revenues in the second half and fourth quarter of the year, which
coupled with reliance by retailers on quick response inventory
management techniques increases the risk of underproduction of popular
items, overproduction of less popular items and failure to achieve
compressed shipping schedules; (xi) delays, increased costs or
difficulties associated with any of our or our partners’ planned digital
applications or media initiatives; (xii) work disruptions, which may
impact the Company's ability to manufacture or deliver product in a
timely and cost-effective manner; (xiii) the bankruptcy or other lack of
success of one of the Company's significant retailers, such as the
bankruptcy of Toys “R” Us in the United States and Canada in the fourth
quarter of 2017, which could negatively impact the Company's revenues or
bad debt exposure; (xiv) the impact of competition on revenues, margins
and other aspects of the Company's business, including the ability to
offer Company products which consumers choose to buy instead of
competitive products, the ability to secure, maintain and renew popular
licenses and the ability to attract and retain talented employees; (xv)
concentration of manufacturing for many of the Company’s products in the
People’s Republic of China and the associated impact to the Company of
social, economic or public health conditions and other factors affecting
China, the movement of products into and out of China, the cost of
producing products in China and exporting them to other countries; (xvi)
the risk of product recalls or product liability suits and costs
associated with product safety regulations; (xvii) the impact of other
market conditions, third party actions or approvals and competition
which could reduce demand for the Company’s products or delay or
increase the cost of implementation of the Company's programs or alter
the Company's actions and reduce actual results; (xviii) changes in tax
laws or regulations, or the interpretation and application of such laws
and regulations, such as what may occur as the U.S. Tax Cuts and Jobs
Act is interpreted and applied, which may cause the Company to alter tax
reserves or make other changes which significantly impact its reported
financial results; (xix) the impact of litigation or arbitration
decisions or settlement actions; and (xx) other risks and uncertainties
as may be detailed from time to time in the Company's public
announcements and Securities and Exchange Commission (“SEC”) filings.
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.
This press release includes non-GAAP financial measures as defined under
SEC rules, specifically Adjusted net earnings and earnings per share,
excluding the impact of U.S. tax reform in 2017 and the impact of a
goodwill impairment charge associated with Backflip Studios in 2016, as
well as adjusted operating profit absent the impact of the goodwill
impairment charge. Also included in the financial tables attached to
this release are the non-GAAP financial measures of EBITDA and Adjusted
EBITDA. EBITDA represents net earnings attributable to Hasbro, Inc.
excluding net loss attributable to noncontrolling interests, interest
expense, income taxes, depreciation and amortization. Adjusted EBITDA
also excludes the impact of re-measuring a liability as a result of U.S.
tax reform in 2017 and the impact of a goodwill impairment charge in
2016. As required by SEC rules, we have provided reconciliation on the
attached schedule of these measures to the most directly comparable GAAP
measure. Management believes that Adjusted net earnings, Adjusted
earnings per share and adjusted operating profit absent the impact of
U.S. tax reform and the goodwill impairment charge provides investors
with an understanding of the underlying performance of the Company’s
business absent these unusual events. Management believes that EBITDA
and Adjusted EBITDA are appropriate measures for evaluating the
operating performance of the Company because they reflect the resources
available for strategic opportunities including, among others, to invest
in the business, strengthen the balance sheet and make strategic
acquisitions. These non-GAAP measures should be considered in addition
to, not as a substitute for, or superior to, net earnings or other
measures of financial performance prepared in accordance with GAAP as
more fully discussed in the Company's financial statements and filings
with the SEC. As used herein, "GAAP" refers to accounting principles
generally accepted in the United States of America.
HAS-E
1 According to NPD and SIM
| | | |
|
|
| |
|
| |
HASBRO, INC. | | | | | | | | | | |
CONDENSED CONSOLIDATED BALANCE SHEETS | | | | | |
(Unaudited) | | | | | | | | | | |
| | | | | | | | | |
|
(Thousands of Dollars)
| | | | | | | | | | |
| | | | | | |
Dec. 31, 2017
| | |
Dec. 25, 2016
|
ASSETS | | | | | | | | | | |
Cash and Cash Equivalents
| | | | | | |
$
|
1,581,234
| | |
$
|
1,282,285
|
Accounts Receivable, Net
| | | | | | | |
1,405,399
| | | |
1,319,963
|
Inventories
| | | | | | | |
433,293
| | | |
387,675
|
Other Current Assets
| | | | | | |
|
214,000
| | |
|
237,684
|
Total Current Assets
| | | | | | | |
3,633,926
| | | |
3,227,607
|
Property, Plant and Equipment, Net
| | | | | | |
259,710
| | | |
267,398
|
Other Assets
| | | | | | |
|
1,396,347
| | |
|
1,596,361
|
Total Assets
| | | | | | |
$
|
5,289,983
| | |
$
|
5,091,366
|
| | | | | | | | | |
|
| | | | | | | | | |
|
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS | | | | | | | |
AND SHAREHOLDERS' EQUITY | | | | | | | | | |
Short-term Borrowings
| | | | | | |
$
|
154,957
| | |
$
|
172,582
|
Current Portion of Long-term Debt
| | | | | | |
-
| | | |
349,713
|
Payables and Accrued Liabilities
| | | | | | |
|
1,096,740
| | |
|
1,095,564
|
Total Current Liabilities
| | | | | | | |
1,251,697
| | | |
1,617,859
|
Long-term Debt
| | | | | | | |
1,693,609
| | | |
1,198,679
|
Other Liabilities
| | | | | | |
|
514,720
| | |
|
389,388
|
Total Liabilities
| | | | | | | |
3,460,026
| | | |
3,205,926
|
Redeemable Noncontrolling Interests
| | | | | |
-
| | | |
22,704
|
Total Shareholders' Equity
| | | | | | |
|
1,829,957
| | |
|
1,862,736
|
Total Liabilities, Redeemable Noncontrolling Interests
| | | | | | | |
and Shareholders' Equity
| | | | | | |
$
|
5,289,983
| | |
$
|
5,091,366
|
| | | | | | | | | | | |
|
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
HASBRO, INC. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
CONSOLIDATED STATEMENTS OF OPERATIONS | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(Unaudited) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
| | | | | | |
Quarter Ended
| | | |
Year Ended
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
(Thousands of Dollars and Shares Except Per Share Data)
| | | |
Dec. 31, 2017
| | | |
% Net Revenues
| | | |
Dec. 25, 2016
| | | |
% Net Revenues
| | | |
Dec. 31, 2017
| | | |
% Net Revenues
| | | |
Dec. 25, 2016
| | | |
% Net Revenues
|
Net Revenues
| | | | | |
$
|
1,596,111
| | | | |
100.0
|
%
| | | |
$
|
1,629,940
| | | | |
100.0
|
%
| | | |
$
|
5,209,782
| | | | |
100.0
|
%
| | | |
$
|
5,019,822
| | | | |
100.0
|
%
|
Costs and Expenses:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cost of Sales
| | | | | | |
628,722
| | | | |
39.4
|
%
| | | | |
634,572
| | | | |
38.9
|
%
| | | | |
2,033,693
| | | | |
39.0
|
%
| | | | |
1,905,474
| | | | |
38.0
|
%
|
Royalties
| | | | | | |
122,734
| | | | |
7.7
|
%
| | | | |
135,851
| | | | |
8.3
|
%
| | | | |
405,488
| | | | |
7.8
|
%
| | | | |
409,522
| | | | |
8.2
|
%
|
Product Development
| | | | | |
76,255
| | | | |
4.8
|
%
| | | | |
75,457
| | | | |
4.6
|
%
| | | | |
269,020
| | | | |
5.2
|
%
| | | | |
266,375
| | | | |
5.3
|
%
|
Advertising
| | | | | | |
159,577
| | | | |
10.0
|
%
| | | | |
147,992
| | | | |
9.1
|
%
| | | | |
501,813
| | | | |
9.6
|
%
| | | | |
468,940
| | | | |
9.3
|
%
|
Amortization of Intangibles
| | | | | |
6,564
| | | | |
0.4
|
%
| | | | |
8,690
| | | | |
0.5
|
%
| | | | |
28,818
| | | | |
0.6
|
%
| | | | |
34,763
| | | | |
0.7
|
%
|
Program Production Cost Amortization
| | | | |
19,646
| | | | |
1.2
|
%
| | | | |
18,430
| | | | |
1.1
|
%
| | | | |
35,798
| | | | |
0.7
|
%
| | | | |
35,931
| | | | |
0.7
|
%
|
Selling, Distribution and Administration
| | | |
|
311,525
|
| | | |
19.5
|
%
| | | |
|
353,791
|
| | | |
21.7
|
%
| | | |
|
1,124,793
|
| | | |
21.6
|
%
| | | |
|
1,110,769
|
| | | |
22.1
|
%
|
Operating Profit
| | | | | |
271,088
| | | | |
17.0
|
%
| | | | |
255,157
| | | | |
15.7
|
%
| | | | |
810,359
| | | | |
15.6
|
%
| | | | |
788,048
| | | | |
15.7
|
%
|
Interest Expense
| | | | | | |
24,516
| | | | |
1.5
|
%
| | | | |
25,142
| | | | |
1.5
|
%
| | | | |
98,268
| | | | |
1.9
|
%
| | | | |
97,405
| | | | |
1.9
|
%
|
Other (Income) Expense, Net
| | | | |
|
(32,014
|
)
| | | |
-2.0
|
%
| | | |
|
10,083
|
| | | |
0.6
|
%
| | | |
|
(74,059
|
)
| | | |
-1.4
|
%
| | | |
|
(1,846
|
)
| | | |
0.0
|
%
|
Earnings before Income Taxes
| | | | | |
278,586
| | | | |
17.5
|
%
| | | | |
219,932
| | | | |
13.5
|
%
| | | | |
786,150
| | | | |
15.1
|
%
| | | | |
692,489
| | | | |
13.8
|
%
|
Income Taxes
| | | | | |
|
283,884
|
| | | |
17.8
|
%
| | | |
|
39,333
|
| | | |
2.4
|
%
| | | |
|
389,543
|
| | | |
7.5
|
%
| | | |
|
159,338
|
| | | |
3.2
|
%
|
Net Earnings (Loss)
| | | | | | |
(5,298
|
)
| | | |
-0.3
|
%
| | | | |
180,599
| | | | |
11.1
|
%
| | | | |
396,607
| | | | |
7.6
|
%
| | | | |
533,151
| | | | |
10.6
|
%
|
Net Loss Attributable to Noncontrolling Interests
| | | |
|
-
|
| | | |
0.0
|
%
| | | |
|
(12,126
|
)
| | | |
-0.7
|
%
| | | |
|
-
|
| | | |
0.0
|
%
| | | |
|
(18,229
|
)
| | | |
-0.4
|
%
|
Net Earnings (Loss) Attributable to Hasbro, Inc.
| | | |
$
|
(5,298
|
)
| | | |
-0.3
|
%
| | | |
$
|
192,725
|
| | | |
11.8
|
%
| | | |
$
|
396,607
|
| | | |
7.6
|
%
| | | |
$
|
551,380
|
| | | |
11.0
|
%
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Per Common Share
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Net Earnings (Loss) Attributable to Hasbro, Inc.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| |
Basic
| | | | | |
$
|
(0.04
|
)
| | | | | | | |
$
|
1.54
|
| | | | | | | |
$
|
3.17
|
| | | | | | | |
$
|
4.40
|
| | | | |
| |
Diluted
| | | | | |
$
|
(0.04
|
)
| | | | | | | |
$
|
1.52
|
| | | | | | | |
$
|
3.12
|
| | | | | | | |
$
|
4.34
|
| | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
|
Cash Dividends Declared
| | | | |
$
|
0.57
|
| | | | | | | |
$
|
0.51
|
| | | | | | | |
$
|
2.28
|
| | | | | | | |
$
|
2.04
|
| | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Weighted Average Number of Shares
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Basic
| | | | | |
|
124,528
|
| | | | | | | |
|
124,927
|
| | | | | | | |
|
125,039
|
| | | | | | | |
|
125,292
|
| | | | |
|
Diluted
| | | | | |
|
124,528
|
| | | | | | | |
|
126,699
|
| | | | | | | |
|
127,031
|
| | | | | | | |
|
126,966
|
| | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
|
|
|
| |
|
| |
HASBRO, INC. | | | | | | | |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | | | | |
(Unaudited) | | | | | | | |
(Thousands of Dollars)
| | | | | | | |
| | | | | | |
|
| | | |
Year Ended
|
| | | |
Dec. 31, 2017
| | |
Dec. 25, 2016
|
Cash Flows from Operating Activities:
| | | | | | | |
Net Earnings
| | | |
$
|
396,607
| | | |
$
|
533,151
| |
Non-Cash Adjustments
| | | | |
331,770
| | | | |
268,210
| |
Changes in Operating Assets and Liabilities
| | | |
|
(3,999
|
)
| | |
|
15,952
|
|
Net Cash Provided by Operating Activities
| | | |
|
724,378
|
| | |
|
817,313
|
|
| | | | | | |
|
Cash Flows from Investing Activities:
| | | | | | | |
Additions to Property, Plant and Equipment
| | | | |
(134,877
|
)
| | | |
(154,900
|
)
|
Acquisitions
| | | | |
-
| | | | |
(12,436
|
)
|
Other
| | | |
|
3,396
|
| | |
|
28,945
|
|
Net Cash Utilized by Investing Activities
| | | |
|
(131,481
|
)
| | |
|
(138,391
|
)
|
| | | | | | |
|
Cash Flows from Financing Activities:
| | | | | | | |
Proceeds from Borrowings with Maturity Greater Than 3 Months
| | | | |
493,878
| | | | |
-
| |
Repayments of Borrowings with Maturity Greater Than 3 Months
| | | | |
(350,000
|
)
| | | |
-
| |
Net Proceeds from (Repayments of) Short-term Borrowings
| | | | |
(18,419
|
)
| | | |
8,978
| |
Purchases of Common Stock
| | | | |
(151,311
|
)
| | | |
(150,075
|
)
|
Stock-based Compensation Transactions
| | | | |
29,431
| | | | |
42,207
| |
Dividends Paid
| | | | |
(276,973
|
)
| | | |
(248,881
|
)
|
Employee Taxes Paid for Shares Withheld
| | | | |
(31,994
|
)
| | | |
(21,969
|
)
|
Other
| | | |
|
(6,785
|
)
| | |
|
(5,758
|
)
|
Net Cash Utilized by Financing Activities
| | | |
|
(312,173
|
)
| | |
|
(375,498
|
)
|
| | | | | | |
|
Effect of Exchange Rate Changes on Cash
| | | | |
18,225
| | | | |
2,111
| |
| | | | | | |
|
Cash and Cash Equivalents at Beginning of Year
| | | |
|
1,282,285
|
| | |
|
976,750
|
|
| | | | | | |
|
Cash and Cash Equivalents at End of Year
| | | |
$
|
1,581,234
|
| | |
$
|
1,282,285
|
|
Certain reclassifications have been made to the prior year cash flow
statement to conform to the current year presentation.
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
HASBRO, INC. | | | | | | | | | | | | | | | | | | | |
SUPPLEMENTAL FINANCIAL DATA | | | | | | | | | | | | | | | |
(Unaudited) | | | | | | | | | | | | | | | | | | | |
(Thousands of Dollars)
| | | |
Quarter Ended
| | | | | |
Year Ended
| | | |
|
| | | | | |
Dec. 31, 2017
| | |
Dec. 25, 2016
| | |
% Change
| |
|
Dec. 31, 2017
| | |
Dec. 25, 2016
| | |
% Change
|
Major Segment Results | | | | | | | | | | | | | | | | | | | |
U.S. and Canada Segment: | | | | | | | | | | | | | | | | | | | |
External Net Revenues
| | | |
$
|
750,690
| | | |
$
|
757,516
| | | |
-1
|
%
| | |
$
|
2,690,527
| | | |
$
|
2,559,907
| | | |
5
|
%
|
Operating Profit
| | | | |
146,353
| | | | |
157,965
| | | |
-7
|
%
| | | |
509,942
| | | | |
522,287
| | | |
-2
|
%
|
Operating Margin
| | | | |
19.5
|
%
| | | |
20.9
|
%
| | | | | | |
19.0
|
%
| | | |
20.4
|
%
| | | |
| | | | | | | | | | | | | | | | | | | | | |
|
International Segment: | | | | | | | | | | | | | | | | | | | |
External Net Revenues
| | | | |
722,505
| | | | |
757,740
| | | |
-5
|
%
| | | |
2,233,579
| | | | |
2,194,651
| | | |
2
|
%
|
Operating Profit
| | | | |
79,234
| | | | |
128,915
| | | |
-39
|
%
| | | |
228,669
| | | | |
294,497
| | | |
-22
|
%
|
Operating Margin
| | | | |
11.0
|
%
| | | |
17.0
|
%
| | | | | | |
10.2
|
%
| | | |
13.4
|
%
| | | |
| | | | | | | | | | | | | | | | | | | | | |
|
Entertainment and Licensing Segment: | | | | | | | | | | | | | | | | | | | |
External Net Revenues
| | | | |
122,916
| | | | |
114,684
| | | |
7
|
%
| | | |
285,579
| | | | |
265,205
| | | |
8
|
%
|
Operating Profit
| | | | |
56,820
| | | | |
16,509
| | | |
244
|
%
| | | |
96,400
| | | | |
49,876
| | | |
93
|
%
|
Operating Margin
| | | | |
46.2
|
%
| | | |
14.4
|
%
| | | | | | |
33.8
|
%
| | | |
18.8
|
%
| | | |
| | | | | | | | | | | | | | | | | | | | | |
|
International Segment Net Revenues by
Major Geographic Region | | | | | | | | | | |
Europe
| | | | |
$
|
460,482
| | | |
$
|
499,397
| | | |
-8
|
%
| | |
$
|
1,381,949
| | | |
$
|
1,404,478
| | | |
-2
|
%
|
Latin America
| | | | |
146,017
| | | | |
155,689
| | | |
-6
|
%
| | | |
485,088
| | | | |
463,638
| | | |
5
|
%
|
Asia Pacific
| | | | |
|
116,006
|
| | |
|
102,654
|
| | |
13
|
%
| | |
|
366,542
|
| | |
|
326,535
|
| | |
12
|
%
|
Total
| | | | |
$
|
722,505
|
| | |
$
|
757,740
|
| | | | | |
$
|
2,233,579
|
| | |
$
|
2,194,651
|
| | | |
| | | | | | | | | | | | | | | | | | | | | |
|
Brand Portfolio Performance | | | | | | | | | | | | | | | | | | | |
Franchise Brands
| | | |
$
|
764,218
| | | |
$
|
685,611
| | | |
11
|
%
| | |
$
|
2,567,962
| | | |
$
|
2,327,668
| | | |
10
|
%
|
Partner Brands
| | | | |
342,873
| | | | |
433,719
| | | |
-21
|
%
| | | |
1,271,597
| | | | |
1,412,770
| | | |
-10
|
%
|
Hasbro Gaming
| | | | |
343,283
| | | | |
356,918
| | | |
-4
|
%
| | | |
893,019
| | | | |
813,433
| | | |
10
|
%
|
Emerging Brands
| | | |
|
145,737
|
| | |
|
153,692
|
| | |
-5
|
%
| | |
|
477,204
|
| | |
|
465,951
|
| | |
2
|
%
|
Total Net Revenues
| | | |
$
|
1,596,111
|
| | |
$
|
1,629,940
|
| | | | | |
$
|
5,209,782
|
| | |
$
|
5,019,822
|
| | | |
Hasbro's total gaming category, including all gaming revenue, most
notably MAGIC: THE GATHERING and MONOPOLY, totaled
$546,397 for the
fourth quarter of 2017, up 5%, from revenues of $518,704 for the fourth
quarter of 2016. For the full year 2017,
the total gaming business
totaled $1,497,794, up 8%, from revenues of $1,387,077 for the full year
2016.
|
|
|
| |
|
|
| |
|
|
| |
| |
|
| |
|
| |
HASBRO, INC. | | | | | | | | | | | | | | | | | | | | |
SUPPLEMENTAL FINANCIAL DATA | | | | | | | | | | | | | | | | | | | | |
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES | | | | | | | | | | | | | | |
(Unaudited) | | | | | | | | | | | | | | | | | | | | |
(Thousands of Dollars)
| | | | | | | | | | | | | | | | | | | | |
Net Earnings and Earnings per Share
Excluding the Impact of Tax Reform and Goodwill Impairment | | | | | | |
| | | |
Quarter Ended
| | | |
| | | |
Dec. 31, 2017
| | | |
Diluted Per Share Amount (1) | | | |
Dec. 25, 2016
| | | | |
Diluted Per Share Amount
| | | |
Net Earnings (Loss) Attributable to Hasbro, Inc., as Reported
| | | |
$
|
(5,298
|
)
| | | |
$
|
(0.04
|
)
| | | |
$
|
192,725
| | | | | |
$
|
1.52
| | | | |
Impact of Tax Reform
| | | | |
296,512
| | | | | |
2.35
| | | | | |
-
| | | | | | |
-
| | | | |
Goodwill Impairment Charge
| | | |
|
-
|
| | | |
|
-
|
| | | |
|
14,674
|
| | | | |
|
0.12
|
| | | |
Net Earnings Attributable to Hasbro, Inc., as Adjusted
| | | |
$
|
291,214
|
| | | |
$
|
2.30
|
| | | |
$
|
207,399
|
| | | | |
$
|
1.64
|
| | | |
| | | | | | | | | | | | | | | | | | | |
|
(1) Diluted Per Share Amount for the impact of tax reform
and net earnings, as adjusted, for Q4 2017 are calculated using
dilutive shares of 126,369 for the quarter.
| | | | | |
| | | | | | | | | | | | | | | | | | | |
|
| | | |
Year Ended
| | | |
| | | |
Dec. 31, 2017
| | | |
Diluted Per Share Amount
| | | |
Dec. 25, 2016
| | | | |
Diluted Per Share Amount
| | | |
Net Earnings Attributable to Hasbro, Inc., as Reported
| | | |
$
|
396,607
| | | | |
$
|
3.12
| | | | |
$
|
551,380
| | | | | |
$
|
4.34
| | | | |
Impact of Tax Reform
| | | | |
296,512
| | | | | |
2.33
| | | | | |
-
| | | | | | |
-
| | | | |
Goodwill Impairment Charge
| | | |
|
-
|
| | | |
|
-
|
| | | |
|
14,674
|
| | | | |
|
0.12
|
| | | |
Net Earnings Attributable to Hasbro, Inc., as Adjusted
| | | |
$
|
693,119
|
| | | |
$
|
5.46
|
| | | |
$
|
566,054
|
| | | | |
$
|
4.46
|
| | | |
| | | | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | |
|
The line items impacted by tax reform and the goodwill impairment
charge as well as these line items excluding these amounts as a
percentage
| | | | | |
of revenues is as follows:
| | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
|
2017
|
|
|
|
As Reported
| | | |
% Net Revenues
| | | |
Less Impact of Tax Reform
| | | | |
Excluding Impact of Tax Reform
| | |
% Net Revenues
|
Quarter Ended December 31, 2017 | | | | | | | | | | | | | | | | | | | | |
Other (Income) Expense, Net
| | | |
$
|
(32,014
|
)
| | | | |
-2.0
|
%
| | | |
$
|
19,911
| | |
(1a)
| | |
$
|
(12,103
|
)
| | |
-0.8
|
%
|
Income Taxes
| | | | |
283,884
| | | | | |
17.8
|
%
| | | | |
(316,423
|
)
| |
(1b)
| | | |
(32,539
|
)
| | |
-2.0
|
%
|
| | | | | | | | | | | | | | | | | | | |
|
Year Ended December 31, 2017 | | | | | | | | | | | | | | | | | | | | |
Other (Income) Expense, Net
| | | |
$
|
(74,059
|
)
| | | | |
-1.4
|
%
| | | |
$
|
19,911
| | |
(1a)
| | |
$
|
(54,148
|
)
| | |
-1.0
|
%
|
Income Taxes
| | | | |
389,543
| | | | | |
7.5
|
%
| | | | |
(316,423
|
)
| |
(1b)
| | | |
73,120
| | | |
1.4
|
%
|
| | | | | | | | | | | | | | | | | | | |
|
(1) As a result of the U.S. tax reform that was passed in December
2017, the Company made the following non-operating adjustments to
its financials:
|
(1a) An estimated gain of $19.9 million related to a change in the
value of a long-term liability due to the change in corporate tax
rate that takes effect in 2018.
|
(1b) Recognition of a one-time repatriation tax liability and
adjustments to the Company’s deferred tax assets and liabilities to
reflect the lower corporate tax rate that takes effect in 2018.
|
These amounts are provisional based on the information reviewed by
the Company, and may change as new information is reviewed and
analyzed.
|
| | | | | | | | | | | | | | | | | | | |
|
2016
|
|
|
|
As Reported
| | | |
% Net Revenues
| | | |
Less Goodwill Impairment Charge
| | | | |
Excluding Goodwill Impairment Charge
| | |
% Net Revenues
|
Quarter Ended December 25, 2016 | | | | | | | | | | | | | | | | | | | | |
Selling, Distribution and Administration
| | | |
$
|
353,791
| | | | | |
21.7
|
%
| | | |
$
|
(32,858
|
)
| |
(1
|
)
| | |
$
|
320,933
| | | |
19.7
|
%
|
Tax Expense
| | | | |
39,333
| | | | | |
2.4
|
%
| | | | |
8,327
| | | | | | |
47,660
| | | |
2.9
|
%
|
Net Loss Attributable to Noncontrolling Interests
| | | | |
(12,126
|
)
| | | | |
-0.7
|
%
| | | | |
9,857
| | | | | | |
(2,269
|
)
| | |
-0.1
|
%
|
| | | | | | | | | | | | | | | | | | | |
|
Year Ended December 25, 2016 | | | | | | | | | | | | | | | | | | | | |
Selling, Distribution and Administration
| | | |
$
|
1,110,769
| | | | | |
22.1
|
%
| | | |
$
|
(32,858
|
)
| |
(1
|
)
| | |
$
|
1,077,911
| | | |
21.5
|
%
|
Tax Expense
| | | | |
159,338
| | | | | |
3.2
|
%
| | | | |
8,327
| | | | | | |
167,665
| | | |
3.3
|
%
|
Net Loss Attributable to Noncontrolling Interests
| | | | |
(18,229
|
)
| | | | |
-0.4
|
%
| | | | |
9,857
| | | | | | |
(8,372
|
)
| | |
-0.2
|
%
|
| | | | | | | | | | | | | | | | | | | |
|
(1) This charge was recorded in the Entertainment and Licensing
segment. Excluding this charge, operating profit and margin for the
segment for the quarter
|
ended December 25, 2016 would have been $49,367 and 43.0%,
respectively, and $82,734 and 31.2%, respectively, for the year
ended December 25, 2016.
|
| | | | | | | | | | | | | | | | | | | |
|
| | | |
Quarter Ended
| | | |
Year Ended
| | | |
Reconciliation of EBITDA | | | |
Dec. 31, 2017
| | | |
Dec. 25, 2016
| | | |
Dec. 31, 2017
| | | | |
Dec. 25, 2016
| | | |
Net Earnings (Loss) Attributable to Hasbro, Inc.
| | | |
$
|
(5,298
|
)
| | | |
$
|
192,725
| | | | |
$
|
396,607
| | | | | |
$
|
551,380
| | | | |
Net Loss Attributable to Noncontrolling Interests
| | | | |
-
| | | | | |
(12,126
|
)
| | | | |
-
| | | | | | |
(18,229
|
)
| | | |
Interest Expense
| | | | |
24,516
| | | | | |
25,142
| | | | | |
98,268
| | | | | | |
97,405
| | | | |
Income Taxes (including tax reform)
| | | | |
283,884
| | | | | |
39,333
| | | | | |
389,543
| | | | | | |
159,338
| | | | |
Depreciation
| | | | |
35,165
| | | | | |
30,380
| | | | | |
143,018
| | | | | | |
119,707
| | | | |
Amortization of Intangibles
| | | |
|
6,564
|
| | | |
|
8,690
|
| | | |
|
28,818
|
| | | | |
|
34,763
|
| | | |
EBITDA
| | | |
$
|
344,831
|
| | | |
$
|
284,144
|
| | | |
$
|
1,056,254
|
| | | | |
$
|
944,364
|
| | | |
Impact of Tax Reform/Goodwill Impairment
| | | |
|
19,911
|
| | | |
|
(32,858
|
)
| | | |
|
19,911
|
| | | | |
|
(32,858
|
)
| | | |
Adjusted EBITDA
| | | |
$
|
324,920
|
| | | |
$
|
317,002
|
| | | |
$
|
1,036,343
|
| | | | |
$
|
977,222
|
| | | |
| | | | | | | | | | | | | | | | | | | |
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20180207005601/en/
Contacts:
Hasbro, Inc.
Investor Contact:
Debbie Hancock, 401-727-5401
debbie.hancock@hasbro.com
or
Press
Contact:
Julie Duffy, 401-727-5931
julie.duffy@hasbro.com
Source: Hasbro, Inc.
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