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.
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HASBRO, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
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
Royalties,
Research and
Development 170,778 113,755 462,496 263,220
Advertising 117,567 128,053 299,925 257,023
Selling,
Distribution
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
HASBRO, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
Sept. 26, Sept. 27,
(Thousands of Dollars) 1999 1998
ASSETS
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
LIABILITIES AND SHAREHOLDERS' EQUITY
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
401-727-5100
or
Renita E. O'Connell
401-727-5401
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