- Net revenues increased 3% to $1.31 billion compared to $1.28
billion a year ago; absent the $16.2 million negative impact of
foreign exchange net revenues grew 4%;
- Net earnings up 3% year-over-year to $155.2 million, or $1.09 per
diluted share, versus $150.4 million, or $0.99 per diluted share, a
year ago;
- Operating profit of $237.8 million or 18.1% of net revenues, a 3%
increase from $230.7 million or 18.0% of net revenues in 2009;
- Revenue grew in the Preschool, Boys and Games & Puzzles categories;
- Repurchased 6.1 million shares of common stock at a total cost of
$260.1 million during the third quarter.
Company Website:
http://www.hasbro.com/
PAWTUCKET, R.I. -- (Business Wire)
Hasbro,
Inc. (NYSE: HAS) today reported revenue and earnings growth for
the third quarter 2010. Third quarter 2010 net revenues grew 3% to $1.31
billion compared to $1.28 billion a year ago. Excluding the negative
$16.2 million impact of foreign exchange, net revenues grew 4%. Net
earnings grew 3% to $155.2 million, or $1.09 per diluted share, compared
to $150.4 million or $0.99 per diluted share a year ago.
“Innovation across Hasbro’s portfolio of world class brands, backed by
continued strong execution from our teams globally, drove the third
quarter performance,” said Brian Goldner, Hasbro President and Chief
Executive Officer. “Our unwavering commitment to our strategy of
re-imagining, re-inventing and re-igniting Hasbro’s global brand
portfolio continues to unlock profitability in our business while
delivering great toys and games and immersive experiences to consumers.
We are well positioned for the holiday season with innovative and fun
offerings at all price points for global consumers, supported by
comprehensive programs with retailers.”
“We continue to believe we should be able to grow revenues and earnings
per share for the full year 2010, including the dilution from our
television investments and barring a further decline in consumer
spending, global economic conditions or foreign exchange,” added Deborah
Thomas, Hasbro Chief Financial Officer. “The fourth quarter will reflect
the largest percentage this year of our anticipated $0.25 to $0.30 per
share of full-year dilution related to our television investments
supporting the launch of The Hub earlier this month. The execution of
our strategy continues to deliver strong financial performance and a
healthy balance sheet. We are putting these results to work by investing
in our future growth and sharing this success with our shareholders
through share buyback and dividend programs.”
Worldwide net revenues grew in three of the four major product
categories. The Preschool category grew 9% to $184.7 million; the Boys
product category increased 4% to $472.3 million; and the Games and
Puzzles category increased 2% to $387.0 million; while the Girls
category declined 1% to $269.1 million.
U.S. and Canada segment net revenues grew 4% to $825.5 million compared
to $791.9 million in 2009. The results reflect growth in the
Boys, Preschool and Games & Puzzles categories that more than offset a
decline in the Girls category. The U.S. and Canada segment reported an
operating profit of $158.8 million up 23% compared to $129.1 million in
2009.
International segment net revenues increased 3% to $458.9 million
compared to $444.1 million in 2009. Revenues in the International
segment grew 7% absent a $17.8 million negative foreign exchange impact.
The results reflect growth in the Girls, Preschool and Games & Puzzles
categories that more than offset a decline in the Boys category. The
International segment operating profit grew 10% to $70.8 million
compared to $64.1 million in 2009.
Entertainment and Licensing segment net revenues were $27.5 million
compared to $41.6 million in 2009. The results primarily reflect a
decline in TRANSFORMERS and G.I. JOE movie-related revenue. The
Entertainment and Licensing segment reported an operating profit of $5.9
million compared to $19.8 million in 2009. The Hub, Hasbro's joint
venture television network with Discovery Communications, successfully
launched on 10-10-10.
The Company repurchased a total of 6.1 million shares of common stock
during the third quarter of 2010 at a total cost of $260.1 million and
an average price of $42.39 per share. For the first three quarters of
2010, the Company repurchased a total of 15.6 million shares of common
stock at a total cost of $629.2 million and an average price of $40.32
per share. As of quarter end, $157.5 million remained in the Company’s
current share repurchase authorization. During the first half of 2010,
the Company issued 11.6 million shares of common stock in connection
with the redemption of its convertible debentures, which were called in
April 2010.
The Company will webcast its third quarter 2010 earnings conference call
at 8:30 a.m. Eastern Time today. To listen to the live webcast, go to http://investor.hasbro.com,
and click on the webcast microphone. The replay will be on Hasbro’s web
site approximately 2 hours following completion of the call.
About Hasbro
Hasbro,
Inc. (NYSE:HAS) is a branded play company providing children and
families around the world with a wide-range of immersive entertainment
offerings based on the Company’s world class brand portfolio. From toys
and games, to television programming, motion pictures, video games and a
comprehensive licensing program, Hasbro strives to delight its customers
through the strategic leveraging of well-known and beloved brands such
as TRANSFORMERS, LITTLEST PET SHOP, NERF, PLAYSKOOL, MY LITTLE PONY,
G.I. JOE, MAGIC: THE GATHERING and MONOPOLY. The Hub, Hasbro’s
multi-platform joint venture with Discovery Communications (NASDAQ:
DISCA, DISCB, DISCK) launched on October 10, 2010. The online home of
The Hub is www.hubworld.com.
The Hub logo and name are trademarks of Hub Television Networks, LLC.
All rights reserved.
Certain statements contained 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 2010, including with respect to its
revenues and earnings per share, potential future dilution associated
with the joint venture with Discovery Communications, future
opportunities and the Company’s ability to achieve its other 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, manufacture, source and
ship new and continuing 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 profitably recover the Company’s development,
manufacturing, marketing, royalty and other costs; (ii) recessions or
other economic downturns which negatively impact the retail and credit
markets, and the financial health of the Company’s retail customers and
consumers, and which can result in lower employment levels, less
consumer disposable income, lower consumer confidence and, as a
consequence, lower consumer spending, including lower spending on
purchases of the Company’s products, (iii) other economic and public
health conditions in the markets in which the Company and its customers
and suppliers operate which impact the Company's ability and cost to
manufacture and deliver products, such as higher fuel and other
commodity prices, higher labor costs, higher transportation costs,
outbreaks of disease which affect public health and the movement of
people and goods, and other factors, including government regulations,
which can create potential manufacturing and transportation delays or
impact costs, (iv) 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; (v) 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; (vi) greater than expected costs, or unexpected delays or
difficulties, associated with the Company’s investment in its joint
venture with Discovery Communications, LLC, the rebranding of the joint
venture network, development of Hasbro Studios, and the creation of new
content to appear on the network and elsewhere, (vii) consumer interest
in and acceptance of the joint venture network, and programming created
by Hasbro Studios, and other factors impacting the financial performance
of the joint venture and Hasbro Studios, (viii) the inventory policies
of the Company’s retail customers, 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; (ix)
work stoppages, slowdowns or strikes, which may impact the Company's
ability to manufacture or deliver product in a timely and cost-effective
manner; (x) 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; (xi) 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; (xii) 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 public health conditions and other factors
affecting social and economic activity in China, affecting the movement
of products into and out of China, and impacting the cost of producing
products in China and exporting them to other countries; (xiii) the risk
of product recalls or product liability suits and costs associated with
product safety regulations; (xiv) other market conditions, third party
actions or approvals and the impact of 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; (xv) the risk that anticipated benefits of
acquisitions may not occur or be delayed or reduced in their
realization; and (xvi) other risks and uncertainties as may be detailed
from time to time in the Company's public announcements and 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 presentation includes a non-GAAP financial measure as defined under
rules of the Securities and Exchange Commission (“SEC”), specifically
EBITDA. As required by SEC rules, we have provided reconciliation on the
attached schedule of this measure to the most directly comparable GAAP
measure. EBITDA (earnings before interest, taxes, depreciation and
amortization) represents net earnings excluding interest expense, income
taxes, depreciation and amortization. Management believes that EBITDA is
one of the appropriate measures for evaluating the operating performance
of the Company because it reflects the resources available for strategic
opportunities including, among others, to invest in the business,
strengthen the balance sheet, and make strategic acquisitions. However,
this measure 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. This presentation also includes the Company’s
Consolidated and International segment net revenues excluding the impact
of changes in exchange rates. Management believes that the presentation
of Consolidated and International segment net revenues minus the impact
of exchange rate changes provides information that is helpful to an
investor’s understanding of the underlying business performance absent
exchange rate fluctuations which are beyond the Company’s control.
(Tables Attached)
|
| |
|
|
| |
| | | | | |
|
HASBRO, INC. | | | | | | |
CONDENSED CONSOLIDATED BALANCE SHEETS | | | | | | |
(Unaudited) | | | | | | |
| | | | | |
|
(Thousands of Dollars)
| | | | | | |
| |
Sept. 26, 2010
| | | |
Sept. 27, 2009
|
ASSETS | | | | | | |
Cash and Cash Equivalents
| |
$
|
497,903
| | | |
$
|
297,358
|
Accounts Receivable, Net
| | |
1,210,460
| | | | |
1,116,033
|
Inventories
| | |
467,953
| | | | |
399,917
|
Other Current Assets
| |
|
170,394
| | | |
|
178,597
|
Total Current Assets
| | |
2,346,710
| | | | |
1,991,905
|
Property, Plant and Equipment, Net
| | |
221,165
| | | | |
216,256
|
Other Assets
| |
|
1,647,742
| | | |
|
1,653,166
|
Total Assets
| |
$
|
4,215,617
| | | |
$
|
3,861,327
|
| | | | | |
|
| | | | | |
|
| | | | | |
|
LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | |
Short-term Borrowings
| |
$
|
103,625
| | | |
$
|
33,062
|
Payables and Accrued Liabilities
| |
|
874,861
| | | |
|
854,053
|
Total Current Liabilities
| | |
978,486
| | | | |
887,115
|
Long-term Debt
| | |
1,404,556
| | | | |
1,134,723
|
Other Liabilities
| |
|
345,264
| | | |
|
351,557
|
Total Liabilities
| | |
2,728,306
| | | | |
2,373,395
|
Total Shareholders' Equity
| |
|
1,487,311
| | | |
|
1,487,932
|
Total Liabilities and Shareholders' Equity
| |
$
|
4,215,617
| | | |
$
|
3,861,327
|
|
|
HASBRO, INC. |
CONSOLIDATED STATEMENTS OF OPERATIONS |
(Unaudited) |
(Thousands of Dollars and Shares Except Per Share Data)
|
|
|
| |
|
| |
| | |
Quarter Ended
| | |
Nine Months Ended
|
| | |
Sept. 26, 2010
|
|
|
Sept. 27, 2009
| | |
Sept. 26, 2010
|
|
|
Sept. 27, 2009
|
Net Revenues
| | |
$ 1,313,302
| | |
$ 1,279,221
| | |
$ 2,723,464
| | |
$ 2,692,763
|
Costs and Expenses:
| | | | | | | | | | | | |
Cost of Sales
| | |
596,634
| | |
550,026
| | |
1,159,635
| | |
1,114,231
|
Royalties
| | |
75,620
| | |
99,725
| | |
169,454
| | |
228,004
|
Product Development
| | |
51,618
| | |
43,870
| | |
139,408
| | |
124,530
|
Advertising
| | |
133,742
| | |
134,950
| | |
276,914
| | |
278,936
|
Amortization
| | |
15,611
| | |
20,955
| | |
38,310
| | |
59,634
|
Selling, Distribution and Administration
| | |
202,320
| | |
198,986
| | |
552,933
| | |
542,429
|
Operating Profit
| | |
237,757
| | |
230,709
| | |
386,810
| | |
344,999
|
Interest Expense
| | |
21,657
| | |
17,609
| | |
60,371
| | |
44,827
|
Other (Income) Expense, Net
| | |
(2,973)
| | |
(4,759)
| | |
(7,901)
| | |
(3,128)
|
Earnings before Income Taxes
| | |
219,073
| | |
217,859
| | |
334,340
| | |
303,300
|
Income Taxes
| | |
63,909
| | |
67,497
| | |
76,602
| | |
93,933
|
Net Earnings
| | |
$ 155,164
| | |
$ 150,362
| | |
$ 257,738
| | |
$ 209,367
|
| | | | | | | | | | | |
|
Per Common Share
| | | | | | | | | | | | |
Net Earnings
| | | | | | | | | | | | |
Basic
| | |
$ 1.12
| | |
$ 1.08
| | |
$ 1.84
| | |
$ 1.50
|
Diluted
| | |
$ 1.09
| | |
$ 0.99
| | |
$ 1.76
| | |
$ 1.39
|
| | | | | | | | | | | |
|
Cash Dividends Declared
| | |
$ 0.25
| | |
$ 0.20
| | |
$ 0.75
| | |
$ 0.60
|
| | | | | | | | | | | |
|
Weighted Average Number of Shares
| | | | | | | | | | | | |
Basic
| | |
138,199
| | |
139,814
| | |
139,773
| | |
139,943
|
Diluted
| | |
141,715
| | |
152,921
| | |
147,157
| | |
152,952
|
|
|
| |
|
| |
|
| |
|
| |
| | | | | | | | | | | |
|
HASBRO, INC. | | | | | | | | | | | | |
Supplemental Financial Data | | | | | | | | | | | | |
Net Earnings Per Share | | | | | | | | | | | | |
(Unaudited) | | | | | | | | | | | | |
| | | | | | | | | | | |
|
(Thousands of Dollars and Shares Except Per Share Data)
| | | | | | | | | | | | |
| | | Sept. 26, 2010 | | | Sept. 27, 2009 |
| | |
Basic
| | |
Diluted
| | |
Basic
| | |
Diluted
|
Quarter | | | | | | | | | | | | |
Net Earnings
| | |
$ 155,164
| | |
$ 155,164
| | |
$ 150,362
| | |
$ 150,362
|
Effect of Dilutive Securities:
| | | | | | | | | | | | |
Interest Expense on Contingent Convertible Debentures
| | |
-
| | |
-
| | |
-
| | |
1,076
|
Adjusted Net Earnings
| | |
$ 155,164
| | |
$ 155,164
| | |
$ 150,362
| | |
$ 151,438
|
| | | | | | | | | | | |
|
Average Shares Outstanding
| | |
138,199
| | |
138,199
| | |
139,814
| | |
139,814
|
Effect of Dilutive Securities:
| | | | | | | | | | | | |
Contingent Convertible Debentures
| | |
-
| | |
-
| | |
-
| | |
11,566
|
Options and Other Share-Based Awards
| | |
-
| | |
3,516
| | |
-
| | |
1,541
|
Equivalent Shares
| | |
138,199
| | |
141,715
| | |
139,814
| | |
152,921
|
| | | | | | | | | | | |
|
Net Earnings Per Share
| | |
$ 1.12
| | |
$ 1.09
| | |
$ 1.08
| | |
$ 0.99
|
| | | | | | | | | | | |
|
Nine Months | | | | | | | | | | | | |
Net Earnings
| | |
$ 257,738
| | |
$ 257,738
| | |
$ 209,367
| | |
$ 209,367
|
Effect of Dilutive Securities:
| | | | | | | | | | | | |
Interest Expense on Contingent Convertible Debentures
| | |
-
| | |
1,124
| | |
-
| | |
3,250
|
Adjusted Net Earnings
| | |
$ 257,738
| | |
$ 258,862
| | |
$ 209,367
| | |
$ 212,617
|
| | | | | | | | | | | |
|
Average Shares Outstanding
| | |
139,773
| | |
139,773
| | |
139,943
| | |
139,943
|
Effect of Dilutive Securities:
| | | | | | | | | | | | |
Contingent Convertible Debentures
| | |
-
| | |
4,032
| | |
-
| | |
11,566
|
Options and Other Share-Based Awards
| | |
-
| | |
3,352
| | |
-
| | |
1,443
|
Equivalent Shares
| | |
139,773
| | |
147,157
| | |
139,943
| | |
152,952
|
| | | | | | | | | | | |
|
Net Earnings Per Share
| | |
$ 1.84
| | |
$ 1.76
| | |
$ 1.50
| | |
$ 1.39
|
|
|
HASBRO, INC. |
Supplemental Financial Data |
Major Segment Results, Net Revenues by Product Class and EBITDA |
(Unaudited) |
(Thousands of Dollars)
|
|
|
|
Quarter Ended
|
| |
|
Nine Months Ended
|
| |
| |
Sept. 26, 2010
|
|
Sept. 27, 2009
| |
% Change
| |
Sept. 26, 2010
|
|
Sept. 27, 2009
| |
% Change
|
Major Segment Results | | | | | | | | | | | | |
U.S. and Canada Segment: | | | | | | | | | | | | |
External Net Revenues
| |
$ 825,483
| |
$ 791,896
| |
4%
| |
$ 1,694,713
| |
$ 1,687,275
| |
0%
|
Operating Profit
| |
158,763
| |
129,092
| |
23%
| |
278,635
| |
226,960
| |
23%
|
| | | | | | | | | | | |
|
International Segment: | | | | | | | | | | | | |
External Net Revenues
| |
458,917
| |
444,105
| |
3%
| |
942,047
| |
909,528
| |
4%
|
Operating Profit
| |
70,818
| |
64,147
| |
10%
| |
79,984
| |
66,126
| |
21%
|
| | | | | | | | | | | |
|
Entertainment and Licensing Segment: | | | | | | | | | | | | |
External Net Revenues
| |
27,478
| |
41,554
| |
-34%
| |
83,038
| |
92,940
| |
-11%
|
Operating Profit
| |
5,918
| |
19,820
| |
-70%
| |
28,280
| |
36,386
| |
-22%
|
| | | | | | | | | | | |
|
Net Revenues by Product Class | | | | | | | | | | | | |
Boys
| |
$ 472,260
| |
$ 453,748
| |
4%
| |
$ 947,940
| |
$ 1,046,563
| |
-9%
|
Games and Puzzles
| |
387,041
| |
378,812
| |
2%
| |
876,312
| |
806,045
| |
9%
|
Girls
| |
269,069
| |
273,126
| |
-1%
| |
531,668
| |
518,126
| |
3%
|
Preschool
| |
184,699
| |
169,051
| |
9%
| |
367,115
| |
314,341
| |
17%
|
Other
| |
233
| |
4,484
| |
-95%
| |
429
| |
7,688
| |
-94%
|
Total Net Revenues
| |
$ 1,313,302
| |
$ 1,279,221
| | | |
$ 2,723,464
| |
$ 2,692,763
| | |
| | | | | | | | | | | |
|
Reconciliation of EBITDA | | | | | | | | | | | | |
Net Earnings
| |
$ 155,164
| |
$ 150,362
| | | |
$ 257,738
| |
$ 209,367
| | |
Interest Expense
| |
21,657
| |
17,609
| | | |
60,371
| |
44,827
| | |
Income Taxes
| |
63,909
| |
67,497
| | | |
76,602
| |
93,933
| | |
Depreciation
| |
27,503
| |
30,494
| | | |
72,994
| |
71,004
| | |
Amortization
| |
15,611
| |
20,955
| | | |
38,310
| |
59,634
| | |
EBITDA
| |
$ 283,844
| |
$ 286,917
| | | |
$ 506,015
| |
$ 478,765
| | |
Contacts:
Hasbro, Inc.
Debbie Hancock, 401-727-5401 (Investor Relations)
or
Wayne
S. Charness, 401-727-5983 (News Media)
Source: Hasbro, Inc.
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