Thursday October 14, 8:05 am Eastern Time

Company Press Release

Hasbro Reports Record Third Quarter Results

On Track to Deliver EPS Growth of Approximately 30% This Year

PAWTUCKET, R.I.--(BUSINESS WIRE)--Oct. 14, 1999--Hasbro, Inc. (NYSE:HAS - news) today reported record third quarter revenues, earnings and earnings per share. The Company also reaffirmed it is on track to deliver approximately 30% growth in recurring earnings per share in 1999.

Worldwide net revenues increased approximately 16% to $1.098 billion, compared to $945.5 million a year ago. Revenue growth was driven primarily by significantly higher shipments of STAR WARS, FURBY and computer-based games, plus POKEMON toys and games. Net earnings and diluted earnings per share increased approximately 14% and 16%, respectively, to $85.2 million and $0.43, respectively. This compares to $74.9 million and $0.37, respectively, last year prior to a $20.0 million pre-tax charge ($13.6 million after tax) to write-off acquired in-process research and development of MicroProse, Inc. Net earnings and diluted earnings per share in 1999 increased 39% and 43%, respectively, over last year's reported results of $61.3 million and $0.30, respectively, including the one-time charge.

The Company also reported record third quarter Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) of $200.3 million, up 22% from the year-ago EBITDA of $164.2 million.

For the first nine months of 1999, worldwide net revenues increased approximately 32% to a record $2.641 billion, compared to $2.000 billion a year ago. Net earnings and diluted earnings per share increased approximately 49% to $131.3 million and $0.64, respectively, compared to $88.2 million and $0.43 last year prior to the one-time charge. Net earnings and diluted earnings per share increased over 76% compared to $74.6 million and $0.36, respectively, reported last year including the one-time charge.

``We are very pleased to report another record quarter in all respects,'' said Alan G. Hassenfeld, Chairman and Chief Executive Officer. ``Our business is strong overall, and we achieved double-digit revenue growth in the U.S. and internationally. Our global STAR WARS product line is tracking to our high expectations for this year. The retail sell-through rate of STAR WARS action figures, the cornerstone of our line, remains strong and we have a major advertising campaign underway to drive overall sales in the all-important holiday season,'' Hassenfeld explained.

``Our interactive FURBY continues to be a smash hit worldwide,'' Hassenfeld continued. ``Hasbro's interactive games again achieved significant double-digit revenue increases with popular titles like ROLLER COASTER TYCOON, MECHWARRIOR 3 and FROGGER. Plus, our expanded POKEMON offering continues to be highly successful.''

``We continue to enhance shareholder value with acquisitions like Wizards of the Coast, which closed on September 30 and will enable us to significantly expand in the fast-growing games arena,'' Hassenfeld added. ``This acquisition, plus our acquisition of Europress, a veteran European publisher of educational and lifestyle software, brings us many exciting growth opportunities as we transition Hasbro to a company which is much more driven by technology and game play. While acquisitions are a priority use of our cash flow, we believe in our future and continue to repurchase our stock. During the third quarter, we invested almost $16 million to repurchase more than 0.6 million shares. This brings our total investment, under the $500 million repurchase authorization of December 1997, to almost $400 million to repurchase over 15 million shares.''

``We look forward to a strong holiday season, with many of the must-have toys and games. Our expanded POKEMON offerings - including the electronic interactive plush 'I CHOOSE YOU PIKACHU', POKEMON MONOPOLY, the POKEDEX organizer, and new trading card games - are shipping now, and POKEMON is being introduced internationally. Plus, the U.S. release of the first animated POKEMON feature film on November 12 will extend the excitement of POKEMANIA into next year. In STAR WARS, we are releasing new twelve-inch electronic action figures and other terrific EPISODE I product worldwide. A limited edition Halloween FURBY is at stores now, and a Millennium FURBY will ring in the new century. Hasbro Interactive plans several new titles, including PONG, CATDOG, TONKA CONSTRUCTION 2, Q*BERT and a TRIVIAL PURSUIT MILLENNIUM edition, plus the first titles from its new Hasbro Sports unit: TRIVIAL PURSUIT NASCAR CD-ROM and two em@il games - NFL FOOTBALL and NASCAR. Looking ahead to next year, with POKEMON, our soon to be announced online games initiative, plus other wonderful new product including NASCAR and FORMULA ONE, BEAST MACHINES, TITAN AE, DRAGON TALES and TWEENIES, we have even more visibility,'' Hassenfeld concluded.

Hasbro is a worldwide leader in the design, manufacture and marketing of toys, games, interactive software, puzzles and infant products. Both internationally and in the U.S., its PLAYSKOOL, KENNER, TONKA, ODDZON, SUPER SOAKER, MILTON BRADLEY, PARKER BROTHERS, TIGER, HASBRO INTERACTIVE, GALOOB and WIZARDS OF THE COAST products provide children and families with the highest quality and most recognizable toys and games 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. 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 timely manufacture and shipping by the Company of new and continuing products and their acceptance by customers and consumers in a competitive product environment; economic conditions, 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 continuing trend of 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; the Company's incurring higher than expected costs to achieve, or not achieving, ``Year 2000'' readiness with respect to the Company's systems, or the Company's customers, vendors or service providers failing to achieve such readiness; and the risk that anticipated benefits of acquisitions or the Company's Global Integration and Profit Enhancement program 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 acquired in-process research and development, 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.

NOTE TO EDITORS: The product name Q*BERT contains an asterisk (*), which may not appear in all databases.




                        Quarter Ended            Nine Months Ended

(Thousands of Dollars

 and Shares Except    Sept. 26,  Sept. 27,    Sept. 26,      Sept. 27,

 Per Share Data)          1999      1998          1999           1998

Net Revenues        $1,098,179  $945,498    $2,641,151    $ 2,000,375

Cost of Sales          444,013   402,369     1,045,556        853,776

Gross Profit           654,166   543,129     1,595,595      1,146,599

Amortization            31,130    19,275        88,974         49,298


 Research and

 Development           170,778   113,755       462,496        263,220

Advertising            117,567   128,053       299,925        257,023



 and Administration    193,582   162,705       515,231        439,433

Acquired Research

 and Development          --      20,000          --           20,000

Operating Profit       141,109    99,341       228,969        117,625

Interest Expense        19,190    11,308        44,788         20,036

Other (Income)

 Expense, Net           (1,515)   (1,568)       (6,042)       (12,082)

Earnings Before

 Income Taxes          123,434    89,601       190,223        109,671

Income Taxes            38,264    28,271        58,969         35,095

Net Earnings           $85,170   $61,330      $131,254        $74,576

Per Common Share

 Net Earnings

   Basic                  $.44      $.31          $.67           $.38

   Diluted                $.43      $.30          $.64           $.36

   Cash Dividends

   Declared               $.06      $.05          $.18           $.15

Weighted Average

 Number of Shares

    Basic              194,612   197,053       195,280        198,519

    Diluted            200,344   204,562       204,006        206,406



                                         Sept. 26,     Sept. 27,

(Thousands of Dollars)                       1999          1998


Cash and Temporary Investments           $  108,627  $   176,486

Accounts Receivable, Net                  1,167,660    1,030,751

Inventories                                 438,662      383,809

Other                                       552,274      336,261

Total Current Assets                      2,267,223    1,927,307

Property, Plant and

 Equipment, Net                             303,667      287,872

Other Assets                              1,622,379    1,461,125

Total Assets                             $4,193,269  $ 3,676,304


Short-term Borrowings                    $  889,405  $   507,596

Payables and Accrued

 Liabilities                                949,704    1,029,906

Total Current Liabilities                 1,839,109    1,537,502

Long-term Debt                              407,584      300,000

Deferred Liabilities                         82,451       80,010

Total Liabilities                         2,329,144    1,917,512

Total Shareholders' Equity                1,864,125    1,758,792

Total Liabilities and

 Shareholders' Equity                    $4,193,269  $ 3,676,304

     Hasbro, Inc.

     Alfred J. Verrecchia



     Renita E. O'Connell


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