Provides Business Update Related to
COVID-19
- Second quarter 2020 revenues were $860.3 million, down 29%
on a pro forma basis
- Strong consumer demand for Hasbro products hampered by
temporary store closures, product shortages in fast growing
categories and lower retail inventory
- High-single digit global point of sale growth in Q2, remains
strong entering Q3 and broadening across the portfolio
- Hasbro Gaming revenues up 11%
- eOne entertainment revenue negatively impacted by live action
production shutdowns
- Factories and warehouses now open in nearly all markets and
positioned to meet full-year product demand requirements
- Digital-first orientation delivering significant revenue and
point of sale ecomm growth
- Net loss of $33.9 million or $0.25 per diluted share;
excluding eOne acquisition-related expenses, severance and
purchased intangible amortization, adjusted net earnings were $2.7
million, or $0.02 per diluted share
- Substantial liquidity and access to cash, including quarter
ending cash of $1.0 billion; operating cash flow of $258.3 million;
and availability of $1.5 billion under revolving credit
facility
Hasbro, Inc. (NASDAQ: HAS), a global play and entertainment
company, today reported financial results for the second quarter
2020 and provided a business update on COVID-19 related matters.
Hasbro completed its acquisition of Entertainment One Ltd. (eOne)
at the beginning of the first quarter 2020. 2020 results are those
of the combined company, and 2019 results referenced herein reflect
the pro forma combined results. See the financial tables
accompanying this press release for a reconciliation of as reported
to pro forma and adjusted results.
Net revenues for the second quarter 2020 were $860.3 million
versus $1.2 billion pro forma revenues in 2019, a decline of 29%.
Foreign exchange had a $15.8 million negative impact on second
quarter 2020 revenues.
Net loss for the second quarter 2020 was $33.9 million, or $0.25
per diluted share, versus pro forma net loss of $42.6 million, or
$0.31 per diluted share, in 2019. Second quarter 2020 net loss
included $8.5 million after tax of acquisition-related expenses,
$10.1 million after tax of severance charges associated with
cost-savings initiatives within the Company's commercial and TV and
Film businesses and $17.9 million after tax of purchased intangible
amortization associated with the eOne acquisition. Excluding these
items, adjusted net earnings for the second quarter 2020 were $2.7
million, or $0.02 per diluted share. Second quarter 2019 pro forma
net loss included charges of $19.1 million after tax of purchased
intangible amortization at eOne, $12.4 million after tax associated
with non-GAAP adjustments at eOne and $85.9 million after tax from
the settlement of Hasbro's U.S. pension plan liability. Excluding
these items, adjusted pro forma net earnings for the second quarter
2019 were $74.7 million, or $0.54 per diluted share.
"The global Hasbro team is executing our playbook amidst a
dynamic and challenging environment. They are doing so with
creativity and agility, identifying new and efficient ways to
operate, capitalizing on our investments in creating a
digital-first orientation while keeping our innovation engines
moving and leveraging the expertise of a management team that has
led through challenges in the past," said Brian Goldner, Hasbro’s
chairman and chief executive officer. "The second quarter was much
as we expected: strong point of sale for Hasbro brands countered by
a very challenging revenue period due to global closures in our
supply chain, across retailers as well as in entertainment
production. We believe the outlook improves from here. Consumers -
children, families, fans and audiences - are relying on Hasbro
brands and stories to connect and entertain themselves throughout
this period. While the full-year COVID-19 impact geographically
remains unpredictable, as stores reopen and we begin to return to
production for entertainment we expect the environment to improve
in the third quarter and set us up to execute a good holiday
season.
"Over the next few years, we are positioned to benefit from the
investments we have made in ecomm, entertainment and digital
gaming," continued Goldner. "We have a strong entertainment lineup
for 2021, through internally developed as well as third-party
entertainment. We will also begin to see a greater benefit of
synergies from the acquisition of eOne as we remain on track to
deliver against our plan of $130 million in synergies by year-end
2022."
"Hasbro remains in a strong financial position, with over $1
billion in cash on our balance sheet and a $1.5 billion revolving
credit facility available to us, should we need it," said Deborah
Thomas, Hasbro’s chief financial officer. "Our team is executing
well and we are reducing expenses, including in our commercial
business where we are simplifying our go to market approach, and
our TV and Film businesses where certain operations have not
resumed. In some markets and channels, our customers remained
closed throughout the second quarter and with certain customers
cash collections have been extended. We continue to see improvement
as stores reopen, and we are working closely with our customers to
successfully navigate this period. Working capital needs increase
in the second half of the year, with early fourth quarter the peak
period and we are positioned to support our plans for a good
holiday season."
COVID-19 Business Update
Demand
- Consumers continue to seek out Hasbro brands and content at
high levels, resulting in strong point of sale gains, a dramatic
shift to ecomm and high viewership engagement with eOne stories.
Revenue from shipments to brick and mortar customers and delivery
of content to meet demand will continue to be impacted by COVID-19
closures.
Second Quarter Consumer Demand Up for
Hasbro Brands, Led by Games
- Global consumer point of sale increased high-single digits,
including double-digit gains in the U.S., U.K., France, Italy and
Australia. Led by strength in ecomm where consumers have broad
access to Hasbro brands.
- Retail inventories declined reflecting the shift to ecomm,
temporary store closures and retailers' management of inventory and
cash levels.
- Hasbro's Gaming revenues grew 11% and gaming point of sale was
up globally over 50% (Note: Point of sale does not include Wizards
of the Coast brands). JENGA, CONNECT 4, BATTLESHIP, MOUSETRAP and
TWISTER were among the top revenue increases in the quarter. Supply
chain disruption led to in stock levels below normal thresholds and
limited shipments in the quarter.
- Shipments and point of sale remained strong for Hasbro's
products for Disney's Frozen 2 and Lucasfilm's Star Wars.
- Several other brands, including PLAY-DOH and NERF, had positive
point of sale for the quarter.
- MAGIC: THE GATHERING revenues declined as expected in the
quarter, reflecting a difficult comparison with a major release in
the second quarter of 2019 and the previously disclosed accelerated
shipments into Q1 2020 to minimize disruption from COVID-19.
Digital revenues for MAGIC: THE GATHERING, including Arena,
increased slightly in the quarter. Strong analog and digital
releases are expected to support the brand in the second half of
2020.
Leveraging Digital-First
Orientation
- Hasbro successfully executed amidst a rapid shift to ecomm,
with nearly 30% of global toy and game revenues being transacted
online in the second quarter.
- Retailers and regions with developed ecomm businesses were
better able to meet consumer demand, while retailers and countries
which rely on physical stores, such as toy specialty retail and in
Latin America, experienced greater difficulties.
- As stores began to reopen late in the second quarter, shipments
and point of sale improved. A trend which has continued into
July.
- Latin America revenues and point of sale declined in the second
quarter and is expected to be remain challenged in the second half
of the year given the low penetration of ecomm and the impact of
COVID-19 on its markets and economies and high levels of retail
inventory to start the year.
Entertainment Release Schedule Shifting;
High Viewer Engagement
- Viewership and demand for content were high in the second
quarter.
- Live action production in the TV and Film space was shutdown
throughout the second quarter, delaying the completion and delivery
of productions and timing of revenues to both later in 2020 and
into 2021.
- Live action TV and Film production is returning gradually,
beginning this quarter. This varies by location and certain
projects will resume sooner than others.
- Animation production has continued, including for PEPPA PIG, PJ
MASKS and the 2021 MY LITTLE PONY animated feature film.
- The team is supporting a robust 2021 entertainment slate for
eOne productions and from our Partner Brands.
Supply Chain
- Nearly all of Hasbro's partner factories and warehouses are
currently open and operating.
- China: Third-party factories in
China represent approximately 55% of the Company's manufacturing
production. These factories have been operating at normal levels
since early in the second quarter, are caught up on missed
production and are picking up capacity from other locations closed
during the second quarter.
- Outside of China: From mid-March
to mid-May, manufacturing production outside of China, namely in
the U.S., Ireland and India, was shutdown. These locations are
operating and anticipate catching up on missed production by the
latter part of the third quarter 2020, assuming no major future
shutdowns in production. India production is continuing but there
have been further lockdowns within the country in recent
weeks.
Liquidity
- Hasbro ended the second quarter with $1.0 billion in cash.
- The Company's $1.5 billion revolving credit facility is also
available.
- The Company remains well within its financial covenants for its
$1 billion term loan and revolving credit facility.
- The next major debt maturity is $300 million in May 2021.
- The Board remains committed to the dividend. Hasbro paid $93.1
million in cash dividends to shareholders during the second quarter
2020. The next quarterly cash dividend payment of $0.68 per common
share is scheduled for August 17, 2020 to shareholders of record at
the close of business on August 3, 2020.
- The Company had previously suspended its share repurchase
program as it prioritizes deleveraging.
- Walmart, Target and Amazon were the Company's largest customers
in the second quarter.
- Hasbro remains very focused on managing credit risk of its
customers.
- The Company has reduced expenses and taken steps to preserve
cash, including managing variable costs and rightsizing the
organization.
- Given the timing of when content production is expected to
resume, the Company now expects 2020 content production cash spend
to be in the range of approximately $450-$550 million. The Company
spent $220.4 million on content production in the first half
2020.
Community
- Our global teams are focused on supporting our people, health
and safety workplace protocols and supporting work-at-home
arrangements.
- Our focus on our purpose to make the world a better place for
all children and all families has never been more important. Hasbro
has continued to support global philanthropic initiatives that
bring relief to children and their families worldwide during this
crisis by providing meals as well as learning resources to those
most in need. We’ve also donated thousands of toys and games to
children around the globe during the pandemic. We remain deeply
committed to using our brands, our resources and our expertise to
help make a difference in our local communities and around the
world.
- During the past several months, the teams have successfully
executed global events virtually and redeveloped innovation
processes for executing in a virtual world. There has been
significant progress in the integration of Hasbro and eOne,
including integration the licensed consumer products and
entertainment teams.
- The team is managing the business to navigate through this
difficult environment and remain nimble as the impacts of the
pandemic remain. This includes simplifying our organization and
reducing costs in areas of the business that are shutdown.
Second Quarter 2020 Major Segment and
Brand Performance
Major Segments
Net Revenues
Operating Profit
(Loss)
($ Millions)
($ Millions)
Pro Forma
Pro Forma
Q2 2020
Q2 2019
% Change
Q2 2020
Q2 2019
% Change
U.S. and Canada
$359.7
$510.5
-30%
$24.3
$106.6
-77%
International
$249.8
$377.4
-34%
$(24.9)
$14.6
>-100%
Entertainment, Licensing and
Digital
$89.8
$96.5
-7%
$27.8
$7.9
>100%
eOne1
$160.9
$231.1
-30%
$(6.0)
$(27.6)
78%
Brand Portfolio
Net Revenues ($
Millions)
Pro Forma
Q2 2020
Q2 2019
% Change
Franchise Brands
$376.8
$576.7
-35%
Partner Brands
$138.2
$213.4
-35%
Hasbro Gaming2
$137.0
$123.4
11%
Emerging Brands3
$76.0
$106.6
-29%
TV/Film/Entertainment4
$132.2
$195.4
-32%
1Both periods above are as reported, with 2019 including the pro
forma results from eOne. eOne incurred certain Non-GAAP adjustments
in both periods, which are discussed below. A reconciliation is
included the attached schedule under the heading “Reconciliation of
As Reported to Pro Forma Adjusted Operating Results.”
2Hasbro's total gaming category, including all gaming revenue,
most notably MAGIC: THE GATHERING and MONOPOLY, totaled $319.0
million and $659.5 million for the quarter and six months ended
June 28, 2020, respectively, down 19% and up 4%, respectively, from
revenues of $393.4 million and $636.8 million for the quarter and
six months ended June 30, 2019, respectively. Hasbro believes its
gaming portfolio is a competitive differentiator and views it in
its entirety.
3Emerging Brands portfolio includes revenues from eOne brands
PEPPA PIG, PJ MASKS and RICKY ZOOM as of first quarter 2020. For
comparability, Q2 2019 includes the pro forma revenues for those
brands, which amounted to $35.7 million.
4TV/Film/Entertainment represents the remaining eOne revenues.
For comparability, Q2 2019 includes the pro forma revenues.
- U.S. and Canada segment revenue and operating profit
declined due to temporary store closures, product shortages and
lower retail inventories as a result of COVID-19. Both pure play
and omni-channel ecomm retail grew rapidly. Operating profit
declined as a result of lower revenues, including lower MAGIC: THE
GATHERING revenues, partially offset by lower expenses.
- International segment revenues and operating profit
declined. Revenues declined in the European, Asia Pacific and Latin
American regions, with the Latin American decline the most
meaningful. Similar to the U.S. and Canada segment, temporary store
closures, product shortages and lower retail inventories impacted
shipments in the quarter. The International segment reported an
operating loss versus operating profit last year as a result of the
lower revenues partially offset by lower expenses.
- Entertainment, Licensing and Digital segment revenues
declined on lower consumer products revenues and lower digital
gaming revenues from the closure of Backflip Studios in late 2019.
Operating profit increased due to lower program production expense
as well as lower advertising and development expenses due to the
closure of Backflip Studios.
- eOne pro forma revenues declined in the quarter. Within
TV and Film, COVID-19 shut down live action productions and
theaters globally. There is high demand and engagement in stories
and content and the development slate is strong, currently with
over 100 active development projects in television and over 60
projects in the film pipeline, including projects around more than
30 Hasbro IPs. Within television, produced/acquired content half
hours increased, driven by unscripted programming. Within film, box
office revenues were not meaningful given theater closures. An
active development pipeline is further supported by a successful
virtual Cannes film festival. In music, revenue was negatively
impacted by the loss of live events and associated artist
promotions, as well as lower royalties from licensed and publishing
music rights. Engagement in animated content for PEPPA PIG and PJ
MASKS is extremely strong, but revenues declined on lower consumer
products sales and lower advertising from the YouTube platform.
Animation work has continued including for the 2021 MY LITTLE PONY
feature film and development continues on a number of new
properties with greenlights for new shows expected in the coming
months. Second quarter 2020 operating loss includes $22.6 million
of purchased intangible amortization associated with the fair value
of acquired intangible assets. Second quarter 2019 pro forma
operating profit includes prior restructuring and other costs of
$16.0 million and purchased intangible amortization of $24.6
million. Adjusted pro forma operating profit increased due to lower
program production amortization, royalties and advertising
expense.
Conference Call Webcast
Hasbro will webcast its second quarter 2020 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
https://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 and Entertainment
Experiences. From toys, games and consumer products to television,
movies, digital gaming, live action, music, and virtual reality
experiences, Hasbro connects to global audiences by bringing to
life great innovations, stories and brands across established and
inventive platforms. Hasbro’s iconic brands include NERF, MAGIC:
THE GATHERING, MY LITTLE PONY, TRANSFORMERS, PLAY-DOH, MONOPOLY,
BABY ALIVE, POWER RANGERS, PEPPA PIG and PJ MASKS, as well as
premier partner brands. Through its global entertainment studio,
eOne, Hasbro is building its brands globally through great
storytelling and content on all screens. Hasbro is committed to
making the world a better place for all children and all families
through corporate social responsibility and philanthropy. Hasbro
ranked among the 2020 100 Best Corporate Citizens by 3BL Media and
has been named one of the World’s Most Ethical Companies® by
Ethisphere Institute for the past nine years. We routinely share
important business and brand updates on our Investor Relations
website, Newsroom and social channels (@Hasbro on Twitter and
Instagram.)
© 2020 Hasbro, Inc. All Rights Reserved.
Safe Harbor
Certain statements in this release contain "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. These statements, which may be identified by
the use of forward-looking words or phrases, include statements
relating to: the impact of, and actions and initiatives taken and
planned to be taken to, try and manage the negative impact of the
global coronavirus outbreak on our business, including on the
negative impact on supply of products and production of
entertainment content, demand for our products and entertainment,
our liquidity and our community; the expected adequacy of supply
and operation of our manufacturing facilities; our outlook on and
the ability to achieve our financial and business goals; expected
benefits of our investments in ecommerce, entertainment and digital
gaming; expected synergies by 2022 in connection with our
acquisition of eOne; and our working capital and liquidity. Our
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. For example, the global
coronavirus outbreak has resulted, and may continue to result, in
significant disruptions in the markets in which we and our
employees, consumers, customers, licensors, licensees, partners,
suppliers and manufacturers operate. We have experienced, and
expect to continue to experience, disruptions in supply of products
and production of entertainment content, negative impact on sales
due to changes in consumer purchasing behavior and availability of
product to consumers, including due to retail store closures or
limited re-openings and limitations on the capacity of e-commerce,
such as in Latin America; delays or postponements of productions
and releases of entertainment content both internally and by our
partners; and challenges of working remotely. Our efforts to
develop and execute plans to help mitigate the negative impact of
the coronavirus to our business will not prevent our business from
being adversely affected. The longer the outbreak continues, or
continues to surge or reemerge in markets in which we operate, the
more negative the impact will be on our business, revenues,
earnings and liquidity, and the more limited our ability will be to
try and make up for delayed or lost product development, production
and sales. Other factors that might cause such a difference
include, but are not limited to:
- our ability to design, develop, produce, manufacture, source
and ship products on a timely and cost-effective and profitable
basis;
- rapidly changing consumer interests in the types of products
and entertainment we offer;
- the challenge of developing and offering products and
storytelling experiences that are sought after by children,
families and audiences given increasing technology and
entertainment offerings available;
- our ability to develop and distribute engaging storytelling
across media to drive brand awareness;
- our dependence on third party relationships, including with
third party manufacturers, licensors of brands, studios, content
producers and entertainment distribution channels;
- our ability to successfully compete in the global play and
entertainment industry, including with manufacturers, marketers,
and sellers of toys and games, digital gaming products and digital
media, as well as with film studios, television production
companies and independent distributors and content producers;
- our ability to successfully evolve and transform our business
and capabilities to address a changing global consumer landscape
and retail environment, including changing inventories policies and
practices of our customers;
- our ability to develop new and expanded areas of our business,
such as through eOne, Wizards of the Coast, and our other
entertainment, digital gaming and esports initiatives;
- risks associated with international operations, such as
currency conversion, currency fluctuations, the imposition of
tariffs, quotas, border adjustment taxes or other protectionist
measures, and other challenges in the territories in which we
operate;
- our ability to successfully implement actions to lessen the
impact of potential and enacted tariffs imposed on our products,
including any changes to our supply chain, inventory management,
sales policies or pricing of our products;
- downturns in global and regional economic conditions impacting
one or more of the markets in which we sell products, which can
negatively impact our retail customers and consumers, result in
lower employment levels, consumer disposable income, retailer
inventories and spending, including lower spending on purchases of
our products;
- other economic and public health conditions or regulatory
changes in the markets in which we and our customers, suppliers and
manufacturers operate, such as higher commodity prices, labor costs
or transportation costs, or outbreaks of disease, such as the
coronavirus, the occurrence of which could create work slowdowns,
delays or shortages in production or shipment of products,
increases in costs or delays in revenue;
- the success of our key partner brands, including the ability to
secure, maintain and extend agreements with our key partners or the
risk of delays, increased costs or difficulties associated with any
of our or our partners’ planned digital applications or media
initiatives;
- fluctuations in our business due to seasonality;
- the concentration of our customers, potentially increasing the
negative impact to our business of difficulties experienced by any
of our customers or changes in their purchasing or selling
patterns;
- the bankruptcy or other lack of success of one of our
significant retailers, such as the bankruptcy of Toys“R”Us in the
United States and Canada;
- the bankruptcy or other lack of success of one or more of our
licensees and other business partners;
- risks relating to the use of third party manufacturers for the
manufacturing of our products, including the concentration of
manufacturing for many of our products in the People’s Republic of
China and our ability to successfully diversify sourcing of our
products to reduce reliance on sources of supply in China;
- our ability to attract and retain talented employees;
- our ability to realize the benefits of cost-savings and
efficiency and/or revenue efficiency enhancing initiatives
including initiatives to integrate eOne into our business;
- our ability to protect our assets and intellectual property,
including as a result of infringement, theft, misappropriation,
cyber-attacks or other acts compromising the integrity of our
assets or intellectual property;
- risks relating to the impairment and/or write-offs of acquired
products and films and television programs we acquire and
produce;
- risks relating to investments and acquisitions, such as our
acquisition of eOne, which risks include: integration difficulties;
inability to retain key personnel; diversion of management time and
resources; failure to achieve anticipated benefits or synergies of
acquisitions or investments; and risks relating to the additional
indebtedness incurred in connection with a transaction;
- the risk of product recalls or product liability suits and
costs associated with product safety regulations;
- changes in tax laws or regulations, or the interpretation and
application of such laws and regulations, which may cause us to
alter tax reserves or make other changes which significantly impact
our reported financial results;
- the impact of litigation or arbitration decisions or settlement
actions; and
- other risks and uncertainties as may be detailed from time to
time in our public announcements and U.S. Securities and Exchange
Commission (“SEC”) filings.
The statements contained herein are based on our current beliefs
and expectations. We undertake 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.
Non-GAAP Financial Measures
The financial tables accompanying this press release include
non-GAAP financial measures as defined under SEC rules,
specifically Adjusted operating profit, Adjusted net earnings and
Adjusted earnings per diluted share, which exclude, where
applicable, the 2020 impact of eOne acquisition-related expenses,
purchased intangible amortization and other severance costs. For
2019, Pro Forma Adjusted operating profit, Pro Forma Adjusted net
earnings and Pro Forma Adjusted earnings per diluted share exclude
the impact of charges associated with the settlement of the
Company’s U.S. pension plan, purchased intangible amortization and
certain charges incurred by eOne related to prior restructuring
programs and acquisition-related charges. Also included in the
financial tables are the non-GAAP financial measures of EBITDA,
Adjusted EBITDA and Pro Forma Adjusted EBITDA. EBITDA represents
net earnings attributable to Hasbro, Inc. excluding interest
expense, income taxes, depreciation and amortization. Adjusted
EBITDA also excludes the impact of the charges/gains noted above.
As required by SEC rules, we have provided reconciliations on the
attached schedules of these measures to the most directly
comparable GAAP measure. Management believes that Adjusted net
earnings, Adjusted earnings per diluted share and Adjusted
operating profit provides investors with an understanding of the
underlying performance of our business absent unusual events.
Management believes that EBITDA and Adjusted EBITDA are appropriate
measures for evaluating the operating performance of our business
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 our consolidated 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
HASBRO, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited)
(Thousands of Dollars)
June 28, 2020
June 30, 2019
ASSETS
Cash and Cash Equivalents
$
1,038,016
$
1,151,042
Accounts Receivable, Net
911,320
805,288
Inventories
564,168
564,769
Prepaid Expenses and Other Current
Assets
672,163
308,996
Total Current Assets
3,185,667
2,830,095
Property, Plant and Equipment, Net
482,215
387,372
Goodwill
3,666,045
485,765
Other Intangible Assets, Net
1,559,050
670,214
Other Assets
1,329,073
665,164
Total Assets
$
10,222,050
$
5,038,610
LIABILITIES, NONCONTROLLING INTERESTS
AND SHAREHOLDERS' EQUITY
Short-term Borrowings
$
6,419
$
12,787
Current Portion of Long-term Debt
378,558
—
Accounts Payable and Accrued
Liabilities
1,596,588
1,059,909
Total Current Liabilities
1,981,565
1,072,696
Long-term Debt
4,802,509
1,695,833
Other Liabilities
771,692
554,212
Total Liabilities
7,555,766
3,322,741
Redeemable Noncontrolling Interests
24,133
—
Total Shareholders' Equity
2,642,151
1,715,869
Total Liabilities, Noncontrolling
Interests and Shareholders' Equity
$
10,222,050
$
5,038,610
HASBRO, INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
(Thousands of Dollars and Shares, Except
Per Share Data)
Quarter Ended
Six Months Ended
June 28, 2020
% Net Revenues
June 30, 2019
% Net Revenues
June 28, 2020
% Net Revenues
June 30, 2019
% Net Revenues
Net Revenues
$
860,279
100.0%
$
984,537
100.0%
$
1,965,849
100.0%
$
1,717,047
100.0%
Costs and Expenses:
Cost of Sales
253,245
29.4%
343,694
34.9%
515,939
26.2%
603,681
35.2%
Program Production Cost Amortization
50,675
5.9%
23,502
2.4%
182,821
9.3%
30,077
1.8%
Royalties
97,337
11.3%
71,061
7.2%
210,159
10.7%
130,949
7.6%
Product Development
58,325
6.8%
65,632
6.7%
112,154
5.7%
121,892
7.1%
Advertising
72,366
8.4%
92,799
9.4%
174,007
8.9%
169,403
9.9%
Amortization of Intangibles
34,702
4.0%
11,815
1.2%
71,513
3.6%
23,631
1.4%
Selling, Distribution and
Administration
281,192
32.7%
247,701
25.2%
560,320
28.5%
472,954
27.5%
Acquisition-Related Expenses
10,262
1.2%
—
0.0%
160,044
8.1%
—
0.0%
Operating Profit (Loss)
2,175
0.3%
128,333
13.0%
(21,108
)
-1.1%
164,460
9.6%
Interest Expense
49,577
5.8%
22,018
2.2%
104,302
5.3%
44,332
2.6%
Other (Income) Expense, Net
(3,674
)
-0.4%
100,207
10.2%
(9,800
)
-0.5%
84,425
4.9%
(Loss) Earnings before Income Taxes
(43,728
)
-5.1%
6,108
0.6%
(115,610
)
-5.9%
35,703
2.1%
Income Tax Benefit
(10,830
)
-1.3%
(7,325
)
-0.7%
(14,902
)
-0.8%
(4,457
)
-0.3%
Net (Loss) Earnings
(32,898
)
-3.8%
13,433
1.4%
(100,708
)
-5.1%
40,160
2.3%
Net Earnings Attributable to
Noncontrolling Interests
1,017
0.1%
—
0.0%
2,844
0.1%
—
0.0%
Net (Loss) Earnings Attributable to
Hasbro, Inc.
$
(33,915
)
-3.9%
$
13,433
1.4%
$
(103,552
)
-5.3%
$
40,160
2.3%
Per Common Share
Net (Loss) Earnings
Basic
$
(0.25
)
$
0.11
$
(0.75
)
$
0.32
Diluted
$
(0.25
)
$
0.11
$
(0.75
)
$
0.32
Cash Dividends Declared
$
0.68
$
0.68
$
1.36
$
1.36
Weighted Average Number of Shares
Basic
137,238
126,329
137,193
126,308
Diluted
137,238
126,847
137,193
126,831
HASBRO, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
(Unaudited)
(Thousands of Dollars)
Six Months Ended
June 28, 2020
June 30, 2019
Cash Flows from Operating Activities:
Net (Loss) Earnings
$
(100,708
)
$
40,160
Non-Cash Pension Charge
—
110,777
Other Non-Cash Adjustments
366,850
108,533
Changes in Operating Assets and
Liabilities
(7,803
)
76,806
Net Cash Provided by Operating
Activities
258,339
336,276
Cash Flows from Investing Activities:
Additions to Property, Plant and
Equipment
(64,009
)
(58,195
)
Acquisition, Net of Cash Acquired
(4,403,929
)
—
Other
13,152
(2,281
)
Net Cash Utilized by Investing
Activities
(4,454,786
)
(60,476
)
Cash Flows from Financing Activities:
Proceeds from Long-term Debt
1,023,453
—
Repayments of Long-term Debt
(98,193
)
—
Net (Repayments of) Proceeds from
Short-term Borrowings
(4,480
)
3,095
Purchases of Common Stock
—
(58,633
)
Stock-Based Compensation Transactions
1,830
25,779
Dividends Paid
(186,243
)
(164,908
)
Employee Taxes Paid for Shares
Withheld
(5,669
)
(11,889
)
Redemption of Equity Instruments
(47,399
)
—
Deferred Acquisition Payments
—
(100,000
)
Other
(4,835
)
—
Net Cash Provided (Utilized) by Financing
Activities
678,464
(306,556
)
Effect of Exchange Rate Changes on
Cash
(24,370
)
(573
)
Cash and Cash Equivalents at Beginning of
Year
4,580,369
1,182,371
Cash and Cash Equivalents at End of
Period
$
1,038,016
$
1,151,042
HASBRO, INC.
SUPPLEMENTAL FINANCIAL DATA
PRO FORMA SEGMENT RESULTS
(Unaudited)
(Thousands of Dollars)
For comparability, the quarter and six
months ended June 30, 2019 include the pro forma results for the
eOne Segment. See "Reconciliation of 2019 As Reported to Pro Forma
Results" for the pro forma adjustments.
Quarter Ended
Six Months Ended
June 28, 2020
Pro Forma June 30,
2019
% Change
June 28, 2020
Pro Forma June 30,
2019
% Change
Segment
Results
U.S. and Canada
Segment:
External Net Revenues
$
359,720
$
510,529
-30
%
$
788,367
$
868,380
-9
%
Operating Profit
24,271
106,577
-77
%
96,051
120,109
-20
%
Operating Margin
6.7
%
20.9
%
12.2
%
13.8
%
International
Segment (1):
External Net Revenues
249,812
377,438
-34
%
500,215
660,087
-24
%
Operating (Loss) Profit
(24,900
)
14,583
>-100
%
(51,591
)
(15,828
)
>-100
%
Operating Margin
-10.0
%
3.9
%
-10.3
%
-2.4
%
Entertainment,
Licensing and Digital Segment:
External Net Revenues
89,825
96,506
-7
%
173,852
188,500
-8
%
Operating Profit
27,793
7,936
>100
%
32,967
37,956
-13
%
Operating Margin
30.9
%
8.2
%
19.0
%
20.1
%
eOne Segment
(2):
External Net Revenues
160,922
231,091
-30
%
503,415
697,303
-28
%
Operating (Loss) Profit
(5,967
)
(27,612
)
78
%
(39,048
)
75,555
>-100
%
Operating Margin
-3.7
%
-11.9
%
-7.8
%
10.8
%
1)
International Segment Net Revenues by Major
Geographic Region
Europe
$
157,672
$
201,072
-22
%
$
319,921
$
354,451
-10
%
Latin America
32,488
90,342
-64
%
66,409
153,119
-57
%
Asia Pacific
59,652
86,024
-31
%
113,885
152,517
-25
%
Total
$
249,812
$
377,438
$
500,215
$
660,087
Quarter Ended
Six Months Ended
June 28, 2020
Pro Forma June 30,
2019
% Change
June 28, 2020
Pro Forma June 30,
2019
% Change
(2)
eOne Segment Net Revenues by
Category
Film and TV
$
106,018
$
160,270
-34
%
$
365,545
$
547,881
-33
%
Family Brands
29,020
41,228
-30
%
79,817
97,840
-18
%
Music and Other
25,884
29,593
-13
%
58,053
51,582
13
%
Total
$
160,922
$
231,091
$
503,415
$
697,303
Net Revenues by
Brand Portfolio
Franchise Brands
$
376,826
$
576,715
-35
%
$
773,323
$
970,289
-20
%
Partner Brands
138,227
213,448
-35
%
320,558
385,437
-17
%
Hasbro Gaming (3)
137,031
123,420
11
%
277,115
230,985
20
%
Emerging Brands (4)
75,991
106,647
-29
%
170,136
222,782
-24
%
TV/Film/Entertainment (5)
132,204
195,398
-32
%
424,717
604,857
-30
%
Total
$
860,279
$
1,215,628
$
1,965,849
$
2,414,350
(3) Hasbro's total gaming category, including all gaming
revenue, most notably MAGIC: THE GATHERING and MONOPOLY, totaled
$319,017 and $659,497 for the quarter and six months ended June 28,
2020, respectively, down 19% and up 4%, respectively, from revenues
of $393,367 and $636,758 for the quarter and six months ended June
30, 2019, respectively.
(4) Emerging Brands includes the preschool brands, PEPPA PIG, PJ
MASKS and RICKY ZOOM, acquired as part of the eOne Acquisition. For
comparability, the quarter and six months ended June 30, 2019
includes the pro forma net revenues for those brands, which
amounted to $35,693 and $92,446, respectively.
(5) TV/Film/Entertainment includes all other brands not detailed
in (4) above acquired as part of the eOne Acquisition. For
comparability, the quarter and six months ended June 30, 2019
includes the pro forma net revenues of $195,398 and $604,857,
respectively.
HASBRO, INC.
SUPPLEMENTAL FINANCIAL DATA
RECONCILIATION OF AS REPORTED TO PRO
FORMA ADJUSTED OPERATING RESULTS
(Unaudited)
(Thousands of Dollars)
For comparability, the quarter and six
months ended June 30, 2019 include the pro forma results for the
eOne Segment. See "Reconciliation of 2019 As Reported to Pro Forma
Results" for the pro forma and non-GAAP adjustments.
Non-GAAP
Adjustments Impacting Operating Profit (Loss)
Quarter Ended
June 28, 2020
Pro Forma June 30,
2019
Pre-tax Adjustments
Post-tax Adjustments
Pre-tax Adjustments
Post-tax Adjustments
Acquisition-Related Expenses (1)
$
10,262
$
8,514
$
—
$
—
Severance (2)
11,554
10,125
—
—
Acquired Intangible Amortization (3)
22,592
17,949
24,597
19,063
Pro Forma eOne Adjustments
—
—
16,037
12,429
Total
$
44,408
$
36,588
$
40,634
$
31,492
Six Months Ended
June 28, 2020
Pro Forma June 30,
2019
Pre-tax Adjustments
Post-tax Adjustments
Pre-tax Adjustments
Post-tax Adjustments
Acquisition-Related Expenses (1)
$
160,044
$
135,965
$
—
$
—
Severance (2)
11,554
10,125
—
—
Acquired Intangible Amortization (3)
47,620
37,834
49,194
38,125
Pro Forma eOne Adjustments
—
—
28,041
21,732
Total
$
219,218
$
183,924
$
77,235
$
59,857
(1) In association with the Company's acquisition of eOne, the
Company incurred related expenses of $10,262 and $160,044,
respectively, in the quarter and six months ended June 28, 2020,
comprised of the following:
(i) Acquisition and integration costs of
$3,966 and $99,684, respectively, for the quarter and six months
ended June 28, 2020, including expense associated with the
acceleration of eOne stock-based compensation and advisor fees
settled at the closing of the acquisition, as well as integration
costs; and
(ii) Restructuring and related costs of
$6,296 and $60,360, respectively, for the quarter and six months
ended June 28, 2020, including severance and retention costs, as
well as impairment charges in the first quarter of 2020 for certain
definite-lived intangible and production assets.
(2) In the second quarter of 2020, the Company incurred $11,554
of severance charges, associated with cost-savings initiatives
within the Company's commercial and Film and TV businesses. These
charges were included in Corporate and Eliminations.
(3) The Company incurred incremental intangible amortization
costs related to the intangible assets acquired in the eOne
Acquisition.
Reconciliation of
Operating Profit (Loss) Results
Quarter Ended June 28,
2020
Pro Forma Quarter Ended
June 30, 2019
As Reported
Non-GAAP Adjustments
Adjusted
As Reported
Non-GAAP Adjustments
Adjusted
% Change
Adjusted Company
Results
External Net Revenues
$
860,279
$
—
$
860,279
$
1,215,628
$
—
$
1,215,628
-29
%
Operating Profit
2,175
44,408
46,583
100,721
40,634
141,355
-67
%
Operating Margin
0.3
%
5.2
%
5.4
%
8.3
%
3.3
%
11.6
%
Adjusted Segment
Results
U.S. and Canada
Segment:
External Net Revenues
$
359,720
$
—
$
359,720
$
510,529
$
—
$
510,529
-30
%
Operating Profit
24,271
—
24,271
106,577
—
106,577
-77
%
Operating Margin
6.7
%
—
6.7
%
20.9
%
—
20.9
%
International
Segment:
External Net Revenues
249,812
—
249,812
377,438
—
377,438
-34
%
Operating (Loss) Profit
(24,900
)
—
(24,900
)
14,583
—
14,583
>-100
%
Operating Margin
-10.0
%
—
-10.0
%
3.9
%
—
3.9
%
Entertainment,
Licensing and Digital Segment:
External Net Revenues
89,825
—
89,825
96,506
—
96,506
-7
%
Operating Profit
27,793
—
27,793
7,936
—
7,936
>100
%
Operating Margin
30.9
%
—
30.9
%
8.2
%
—
8.2
%
eOne
Segment:
External Net Revenues
160,922
—
160,922
231,091
—
231,091
-30
%
Operating (Loss) Profit
(5,967
)
22,592
16,625
(27,612
)
40,634
13,022
28
%
Operating Margin
-3.7
%
14.0
%
10.3
%
-11.9
%
17.6
%
5.6
%
Corporate and
Eliminations: The Corporate and Eliminations segment
included non-GAAP adjustments of $21,816 for the quarter ended June
28, 2020, consisting of eOne acquisition-related expenses and other
severance expenses.
Six Months Ended June 28,
2020
Pro Forma Six Months
Ended June 30, 2019
As Reported
Non-GAAP Adjustments
Adjusted
As Reported
Non-GAAP Adjustments
Adjusted
% Change
Adjusted Company
Results
External Net Revenues
$
1,965,849
$
—
$
1,965,849
$
2,414,350
$
—
$
2,414,350
-19
%
Operating (Loss) Profit
(21,108
)
219,218
198,110
240,015
77,235
317,250
-38
%
Operating Margin
-1.1
%
11.2
%
10.1
%
9.9
%
3.2
%
13.1
%
Adjusted Segment
Results
U.S. and Canada
Segment:
External Net Revenues
$
788,367
$
—
$
788,367
$
868,380
$
—
$
868,380
-9
%
Operating Profit
96,051
—
96,051
120,109
—
120,109
-20
%
Operating Margin
12.2
%
—
12.2
%
13.8
%
—
13.8
%
International
Segment:
External Net Revenues
500,215
—
500,215
660,087
—
660,087
-24
%
Operating Loss
(51,591
)
—
(51,591
)
(15,828
)
—
(15,828
)
>-100
%
Operating Margin
-10.3
%
—
-10.3
%
-2.4
%
—
-2.4
%
Entertainment,
Licensing and Digital Segment:
External Net Revenues
173,852
—
173,852
188,500
—
188,500
-8
%
Operating Profit
32,967
20,831
53,798
37,956
—
37,956
42
%
Operating Margin
19.0
%
12.0
%
30.9
%
20.1
%
—
20.1
%
eOne
Segment:
External Net Revenues
503,415
—
503,415
697,303
—
697,303
-28
%
Operating (Loss) Profit
(39,048
)
125,349
86,301
75,555
77,235
152,790
-44
%
Operating Margin
-7.8
%
24.9
%
17.1
%
10.8
%
11.1
%
21.9
%
Corporate and
Eliminations: The Corporate and Eliminations segment
included non-GAAP adjustments of $73,038 for the six months ended
June 28, 2020, consisting of eOne acquisition-related expenses and
other severance expenses.
HASBRO, INC.
SUPPLEMENTAL FINANCIAL DATA
RECONCILIATION OF 2019 AS REPORTED TO
PRO FORMA RESULTS
(Unaudited)
(Thousands of Dollars)
Pro forma results were prepared by
combining the results of Hasbro and eOne for the quarter and six
months ended June 30, 2019, after giving effect to the eOne
Acquisition as if it had been consummated on December 31, 2018.
These pro forma results do not represent financial results that
would have been realized had the acquisition actually occurred on
December 31, 2018, nor are they intended to be a projection of
future results. The pro forma financial information is presented
for illustrative purposes only and does not reflect the costs of
any integration activities or cost savings or synergies that may be
achieved as a result of the acquisition.
Quarter Ended June 30,
2019
Hasbro As
Reported
eOne (under U.S.
GAAP)
Pro Forma Adjustments
(1)
Pro Forma Combined
Net Revenues
$
984,537
$
231,091
$
—
$
1,215,628
Operating Profit (Loss)
$
128,333
$
(19,040)
$
(8,572)
$
100,721
Non-GAAP Adjustments
—
32,062
8,572
40,634
Adjusted Operating Profit *
$
128,333
$
13,022
$
—
$
141,355
* Reconciliation to Pro Forma Adjusted
results is as follows:
Net Earnings (Loss)
$
13,433
$
(49,532)
$
(6,522)
$
(42,621)
Interest Expense
22,018
12,208
19,106
53,332
Other Expense (Income), Net
100,207
21,236
(19,812)
101,631
Income Tax Benefit
(7,325)
(3,354)
(1,344)
(12,023)
Net Earnings Attributable to
Noncontrolling Interests
—
402
—
402
Operating Profit (Loss)
128,333
(19,040)
(8,572)
100,721
Non-GAAP
Adjustments
eOne:
Restructuring and Related
Charges
—
7,373
—
7,373
Acquisition Costs - eOne Deals
—
8,664
—
8,664
Acquired Intangible Amortization
—
16,025
8,572
24,597
—
32,062
8,572
40,634
Adjusted Operating Profit
$
128,333
$
13,022
$
—
$
141,355
(1) The pro forma results include certain pro forma adjustments
to net earnings that were directly attributable to the acquisition,
as if the acquisition had occurred on December 31, 2018, including
the following:
- additional amortization expense of $8,572 that would have been
recognized as a result of the allocation of purchase consideration
to definite-lived intangible assets subject to amortization;
- estimated differences in interest expense of $19,106 as a
result of incurring new debt and extinguishing historical eOne
debt;
- reduction in other expense of $19,812 related to premiums paid
by eOne in connection with the early redemption of its senior
secured notes, and the related write-off of unamortized deferred
finance charges associated with the senior secured notes; and
- the income tax effect of the pro forma adjustments in the
amount of $1,344, calculated using a blended statutory income tax
rate of 22.5% for the eOne adjustments and 21% for the Hasbro
interest adjustments.
Six Months Ended June 30,
2019
Hasbro As Reported
eOne (under U.S.
GAAP)
Pro Forma Adjustments
(2)
Pro Forma Combined
Net Revenues
$
1,717,047
$
697,303
$
—
$
2,414,350
Operating Profit
$
164,460
$
96,607
$
(21,052)
$
240,015
Non-GAAP Adjustments
—
56,183
21,052
77,235
Adjusted Operating Profit *
$
164,460
$
152,790
$
—
$
317,250
* Reconciliation to Pro Forma Adjusted
results is as follows:
Net Earnings (Loss)
$
40,160
$
25,174
$
(31,427)
$
33,907
Interest Expense
44,332
24,771
38,211
107,314
Other Expense (Income), Net
84,425
25,792
(19,812)
90,405
Income Tax (Benefit) Expense
(4,457)
18,278
(8,024)
5,797
Net Earnings Attributable to
Noncontrolling Interests
—
2,592
—
2,592
Operating Profit (Loss)
164,460
96,607
(21,052)
240,015
Non-GAAP
Adjustments
eOne:
Restructuring and Related Charges
—
18,648
—
18,648
Acquisition Costs - eOne Deals
—
9,393
—
9,393
Acquired Intangible Amortization
—
28,142
21,052
49,194
—
56,183
21,052
77,235
Adjusted Operating Profit
$
164,460
$
152,790
$
—
$
317,250
(2) The pro forma results include certain pro forma adjustments
to net earnings that were directly attributable to the acquisition,
as if the acquisition had occurred on December 31, 2018, including
the following:
- additional amortization expense of $21,052 that would have been
recognized as a result of the allocation of purchase consideration
to definite-lived intangible assets subject to amortization;
- estimated differences in interest expense of $38,211 as a
result of incurring new debt and extinguishing historical eOne
debt;
- reduction in other expense of $19,812 related to premiums paid
by eOne in connection with the early redemption of its senior
secured notes, and the related write-off of unamortized deferred
finance charges associated with the senior secured notes; and
- the income tax effect of the pro forma adjustments in the
amount of $8,024, calculated using a blended statutory income tax
rate of 22.5% for the eOne adjustments and 21% for the Hasbro
interest adjustments.
HASBRO, INC.
SUPPLEMENTAL FINANCIAL DATA
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES
(Unaudited)
(Thousands of Dollars and Shares, Except
Per Share Data)
For comparability, the quarter and six
months ended June 30, 2019 includes the pro forma results for the
eOne Segment. See "Reconciliation of 2019 As Reported to Pro Forma
Results" for the pro forma and non-GAAP adjustments.
Reconciliation of
Net Earnings and Earnings per Share
Quarter Ended
(all adjustments reported after-tax)
June 28, 2020
Diluted Per Share
Amount
Pro Forma June 30,
2019
Pro Forma Diluted Per Share
Amount (1)
Net Loss Attributable to Hasbro, Inc.
$
(33,915)
$
(0.25)
$
(42,621)
$
(0.31)
Acquisition-Related Expenses
8,514
0.06
—
—
Severance
10,125
0.07
—
—
Acquired Intangible Amortization
17,949
0.13
19,063
0.14
Pro Forma eOne Adjustments
—
—
12,429
0.09
Pension (2)
—
—
85,852
0.62
Net Earnings Attributable to Hasbro, Inc.,
as Adjusted
$
2,673
$
0.02
$
74,723
$
0.54
Six Months Ended
(all adjustments reported after-tax)
June 28, 2020
Diluted Per Share
Amount
Pro Forma June 30,
2019
Pro Forma Diluted Per Share
Amount (1)
Net (Loss) Earnings Attributable to
Hasbro, Inc.
$
(103,552)
$
(0.75)
$
33,907
$
0.25
Acquisition-Related Expenses
135,965
0.99
—
—
Severance
10,125
0.07
—
—
Acquired Intangible Amortization
37,834
0.28
38,125
0.28
Pro Forma eOne Adjustments
—
—
21,732
0.16
Pension (2)
—
—
85,852
0.62
Net Earnings Attributable to Hasbro, Inc.,
as Adjusted
$
80,372
$
0.59
$
179,616
$
1.31
(1) 2019 Pro Forma Diluted Per Share Amount is calculated using
weighted average shares outstanding of 137,586 for the quarter and
six months ended June 30, 2019, which includes the pro forma impact
of issuing shares associated with the financing of the eOne
Acquisition.
(2) In the second quarter of 2019, the Company recognized a
non-cash charge of $110,777 ($85,852 after-tax) related to the
settlement of its U.S. defined benefit pension plan.
Reconciliation of
EBITDA
Quarter Ended
Quarter Ended June 30,
2019
June 28, 2020
Hasbro As
Reported
eOne (under U.S.
GAAP)
Pro Forma Adjustments
(3)
Pro Forma Combined
Net (Loss) Earnings Attributable to
Hasbro, Inc.
$
(33,915
)
$
13,433
$
(49,532
)
$
(6,522
)
$
(42,621
)
Interest Expense
49,577
22,018
12,208
19,106
53,332
Income Tax Benefit
(10,830
)
(7,325
)
(3,354
)
(1,344
)
(12,023
)
Net Earnings Attributable to
Noncontrolling Interests
1,017
—
402
—
402
Depreciation
32,921
35,380
1,247
—
36,627
Amortization of Intangibles
34,702
11,815
16,025
8,572
36,412
EBITDA
$
73,472
$
75,321
$
(23,004
)
$
19,812
$
72,129
Non-GAAP Adjustments (see above)
21,816
110,777
35,849
(19,812
)
126,814
Adjusted EBITDA
$
95,288
$
186,098
$
12,845
$
—
$
198,943
Six Months Ended
Six Months Ended June 30,
2019
June 28, 2020
Hasbro As
Reported
eOne (under U.S.
GAAP)
Pro Forma Adjustments
(3)
Pro Forma Combined
Net (Loss) Earnings Attributable to
Hasbro, Inc.
$
(103,552
)
$
40,160
$
25,174
$
(31,427
)
$
33,907
Interest Expense
104,302
44,332
24,771
38,211
107,314
Income Tax (Benefit) Expense
(14,902
)
(4,457
)
18,278
(8,024
)
5,797
Net Earnings Attributable to
Noncontrolling Interests
2,844
—
2,592
—
2,592
Depreciation
56,587
62,408
3,103
—
65,511
Amortization of Intangibles
71,513
23,631
28,142
21,052
72,825
EBITDA
$
116,792
$
166,074
$
102,060
$
19,812
$
287,946
Non-GAAP Adjustments (see above)
171,598
110,777
47,853
(19,812
)
138,818
Adjusted EBITDA
$
288,390
$
276,851
$
149,913
$
—
$
426,764
(3) Pro Forma Adjustments include debt refinancing costs of
$19,812, which are excluded from pro forma results, and also shown
as a Non-GAAP Adjustment in the reported eOne financial statements.
The net impact to Pro Forma Adjusted EBITDA is zero.
HASBRO, INC.
SUPPLEMENTAL FINANCIAL DATA
eOne - FY2019 RESULTS OF OPERATIONS
(REPORTED UNDER U.S. GAAP)
(Unaudited)
(Thousands of Dollars)
Quarter Ended
Year Ended
March 2019
June 2019
September 2019
December 2019
December 2019
Net Revenues (1)
$
466,212
$
231,091
$
283,310
$
235,160
$
1,215,773
Costs and Expenses:
Cost of Sales
14,141
17,053
11,497
24,878
67,569
Program Production Cost Amortization
160,857
64,527
92,662
90,414
408,460
Royalties
81,147
55,865
49,533
39,659
226,204
Advertising
21,173
32,870
30,593
37,241
121,877
Amortization of Intangibles
12,117
16,025
14,871
16,552
59,565
Selling, Distribution and
Administration
61,130
63,791
61,860
92,996
279,777
Operating Profit (Loss)
115,647
(19,040
)
22,294
(66,580
)
52,321
Interest Expense
12,563
12,208
10,302
10,772
45,845
Other Expense (Income), Net
4,556
21,236
2,687
(759
)
27,720
Earnings (Loss) before Income Taxes
98,528
(52,484
)
9,305
(76,593
)
(21,244
)
Income Tax Expense (Benefit)
21,632
(3,354
)
4,025
(26,815
)
(4,512
)
Net Earnings (Loss)
76,896
(49,130
)
5,280
(49,778
)
(16,732
)
Net Income Attributable to Noncontrolling
Interests
2,190
402
2,322
488
5,402
Net Earnings (Loss) Attributable to
eOne
$
74,706
$
(49,532
)
$
2,958
$
(50,266
)
$
(22,134
)
The eOne financial results above include certain charges that
would have been excluded to calculate Adjusted results, as
historically reported by eOne. Those charges are outlined below for
each quarter in fiscal year 2019.
Non-GAAP
Adjustments
Quarter Ended
Year Ended
March 2019
June 2019
September 2019
December 2019
December 2019
Restructuring and Related Charges
$
11,275
$
7,373
$
3,234
$
11,526
$
33,408
Acquisition Costs - eOne Deals
729
8,664
1,324
458
11,175
Hasbro Transaction Costs
—
—
3,244
3,245
6,489
Selling, Distribution and
Administration
12,004
16,037
7,802
15,229
51,072
Debt Refinancing Costs
—
19,812
—
19,812
Other Expense (Income), Net
—
19,812
—
—
19,812
Total
$
12,004
$
35,849
$
7,802
$
15,229
$
70,884
(1) eOne Net Revenues by category are as
follows:
Quarter Ended
Year Ended
March 2019
June 2019
September 2019
December 2019
December 2019
Film and TV
$
387,611
$
160,270
$
199,949
$
140,581
$
888,411
Family Brands
56,612
41,228
53,828
58,677
210,345
Music and Other
21,989
29,593
29,533
35,902
117,017
Total
$
466,212
$
231,091
$
283,310
$
235,160
$
1,215,773
HASBRO, INC.
SUPPLEMENTAL FINANCIAL DATA
FY2019 PRO FORMA AND AS REPORTED NET
REVENUES BY BRAND PORTFOLIO
(Unaudited)
(Thousands of Dollars)
The following unaudited quarterly pro
forma brand portfolio net revenue information presents the
combination of the historical quarterly brand portfolio revenue of
Hasbro and eOne for FY2019 and is intended to provide information
about how the eOne acquisition might have affected the Company’s
historical quarterly revenue. Hasbro’s standalone, as reported
quarterly brand portfolio net revenue for FY2019 is also presented
below. The pro forma net revenue information is not necessarily
indicative of what the combined company’s revenue actually would
have been had the acquisition been completed as of the dates
indicated, nor does it purport to project the future revenue of the
combined company.
Pro Forma 2019
Q1
% of Total
Q2
% of Total
Q3
% of Total
Q4
% of Total
Full Year
% of Total
Franchise Brands
$
393,574
33
%
$
576,715
47
%
$
779,659
42
%
$
661,899
40
%
$
2,411,847
41
%
Partner Brands
171,989
14
%
213,448
18
%
427,029
23
%
408,516
24
%
1,220,982
20
%
Hasbro Gaming
107,565
9
%
123,420
10
%
232,287
13
%
246,478
15
%
709,750
12
%
Emerging Brands (1)
116,135
10
%
106,647
9
%
188,589
10
%
167,376
10
%
578,747
10
%
TV/Film/Entertainment (2)
409,459
34
%
195,398
16
%
230,919
12
%
178,898
11
%
1,014,674
17
%
Total
$
1,198,722
$
1,215,628
$
1,858,483
$
1,663,167
$
5,936,000
(1) Emerging Brands includes the preschool
brands, PEPPA PIG, PJ MASKS and RICKY ZOOM, acquired as part of the
eOne acquisition.
(2) TV/Film/Entertainment includes all
other brands not detailed in (1) above acquired as part of the eOne
acquisition.
As Reported 2019
Q1
% of Total
Q2
% of Total
Q3
% of Total
Q4
% of Total
Full Year
% of Total
Franchise Brands
$
393,574
54
%
$
576,715
59
%
$
779,659
49
%
$
661,899
46
%
$
2,411,847
51
%
Partner Brands
171,989
23
%
213,448
22
%
427,029
27
%
408,516
29
%
1,220,982
26
%
Hasbro Gaming
107,565
15
%
123,420
12
%
232,287
15
%
246,478
17
%
709,750
15
%
Emerging Brands
59,382
8
%
70,954
7
%
136,198
9
%
111,114
8
%
377,648
8
%
TV/Film/Entertainment
—
—
—
—
—
—
—
—
—
—
Total
$
732,510
$
984,537
$
1,575,173
$
1,428,007
$
4,720,227
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200727005310/en/
Investor Contact: Debbie Hancock | Hasbro, Inc. | (401) 727-5401
| debbie.hancock@hasbro.com Press Contact: Julie Duffy | Hasbro,
Inc. | (401) 727-5931 | julie.duffy@hasbro.com
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