Hasbro Reports Growth in Revenues and Earnings for the Third Quarter 2013
Net revenues for the third quarter 2013 increased 2% to $1.37 billion compared to $1.35 billion in 2012;
Revenues grew in International and Entertainment and Licensing segments as well as Girls and Games categories;
Operating profit for the third quarter 2013 increased 3% to $255.9 million, or 18.7% of revenues, compared to $249.6 million, or 18.6% of revenues, in 2012; Reported 2013 operating profit includes $4.1 million pre-tax restructuring and partial pension settlement charges associated with the Company's ongoing Cost Savings Initiative; Excluding those costs, third quarter 2013 operating profit increased 4% to $260.0 million or 19.0% of revenues;
Net earnings for the third quarter 2013 were $193.0 million, or $1.46 per diluted share, compared to $164.9 million, or $1.24 per diluted share, in 2012; Reported net earnings include a favorable tax adjustment of $23.6 million, or $0.18 per diluted share, in addition to the restructuring and pension charges; Excluding both factors, adjusted net earnings for the third quarter 2013 were $172.5 million, or $1.31 per diluted share.
PAWTUCKET, R.I.--(BUSINESS WIRE)-- Hasbro, Inc. (NASDAQ: HAS) today reported financial results for the third quarter 2013. Net revenues for the third quarter increased 2% to $1.37 billion, compared to $1.35 billion in 2012. Third quarter net revenues include a favorable $3.8 million impact of foreign exchange.
As adjusted, net earnings for the third quarter 2013 increased 5% to $172.5 million, or $1.31 per diluted share, versus $164.9 million, or $1.24 per diluted share, in 2012. As reported, net earnings for the third quarter 2013 were $193.0 million, or $1.46 per diluted share. These include a favorable tax adjustment of $23.6 million, or $0.18 per diluted share, as well as pre-tax restructuring and partial pension settlement charges of $4.1 million, or $0.03 per diluted share, associated with the Company's Cost Savings Initiative.
"Our brand initiatives for holiday 2013 are resonating with consumers and retailers globally as we enter the all important fourth quarter," said Brian Goldner, Hasbro's President and Chief Executive Officer. "In addition to our innovative holiday launches, our expanded presence in faster growing geographies is delivering growth, including emerging markets growth of 22% in the third quarter. We've also streamlined our organization and focused on the opportunities within our franchise and partner brand portfolio which offer the greatest long-term potential across our global brand blueprint. These strategic steps are increasingly important as we continue to operate in a challenging consumer environment in developed economies."
Third Quarter 2013 Major Segment Performance
Note: Third quarter 2013 restructuring and pension charges are in Corporate and Eliminations. See attached table: Supplemental Financial Data, Restructuring and Pension Settlement Charges — by Segment.
U.S. and Canada segment net revenues were $735.6 million compared to $774.5 million in 2012. The results reflect growth in the Girls category and a flat Games category offset by declines in the Boys and Preschool categories. The U.S. and Canada segment reported operating profit of $147.0 million compared to $154.2 million in 2012.
International segment net revenues increased 11% to $582.7 million compared to $524.1 million in 2012. Net revenues in the International segment include a favorable $5.0 million impact of foreign exchange. Revenues in Europe, Latin America and Asia Pacific grew in the quarter, including 22% growth in emerging markets. Additionally, the Games, Girls and Preschool categories were up in the third quarter. The International segment reported 24% operating profit growth to $105.7 million compared to $85.5 million in 2012.
Entertainment and Licensing segment net revenues increased 13% to $48.6 million compared to $43.1 million in 2012, primarily driven by higher entertainment revenues as well as the addition of Backflip Studios to the segment. The Entertainment and Licensing segment reported operating profit of $7.6 million compared to $10.7 million in 2012. Segment profitability was impacted by the acquisition of Backflip Studios in July 2013.
Third Quarter 2013 Product Category Performance
For the third quarter 2013, net revenues in the Boys category decreased 17% to $392.0 million. TRANSFORMERS and STAR WARS revenues grew in the quarter; however, several brands, including MARVEL and BEYBLADE, continued to face difficult comparisons with 2012.
The Games category posted its fourth consecutive quarter of growth, increasing revenues 6% in the third quarter 2013 versus last year. MAGIC: THE GATHERING, JENGA, the ELEFUN & FRIENDS collection and the launch of the new TELEPODS gaming platform, featuring the ANGRY BIRDSTM STAR WARS® II game, were among the brands which posted higher revenues in the quarter.
The Girls category posted its fifth straight quarter of growth, increasing 29% in the third quarter. FURBY, MY LITTLE PONY, including the highly successful launch of MY LITTLE PONY EQUESTRIA GIRLS, and the launch of NERF REBELLE contributed to the continued growth in the Girls category.
The Preschool category declined 2% in the quarter despite growth in PLAY-DOH, SESAME STREET and TRANSFORMERS RESCUE BOTS products.
Cost Savings Initiative
As previously announced, the Company is undertaking a cost savings initiative designed to better align resources and costs while targeting $100 million in annual savings by 2015.
During the third quarter 2013, the Company incurred $4.1 million in pre-tax restructuring and partial pension settlement charges, or $0.03 per diluted share, associated with this initiative. Pre-tax restructuring charges in the quarter were $3.0 million and partial pension settlement charges were $1.1 million.
The Company continues to expect full-year restructuring charges to be as much as $35 million, prior to pension charges. Year-to-date, the Company recorded $32.0 million in restructuring charges.
Potential additional pension settlement charges could be $3 to $5 million dependent on the amount and type of benefit payments pension participants request during the remainder of 2013. Year-to-date, pre-tax pension settlement charges are $3.5 million.
The expectation for gross savings in 2013 continues to be $45 to $48 million, resulting in expected net savings of $13 to $15 million for the full-year, prior to pension charges.
Dividend and Share Repurchase
Year-to-date, the Company has paid $104.2 million in cash dividends to shareholders, including $52.0 million in the third quarter. As announced on August 1, the next quarterly cash dividend of $0.40 per common share will be payable on November 15, 2013 to shareholders of record at the close of business on November 1, 2013.
Also announced on August 1, the Board of Directors authorized the Company to repurchase an additional $500 million of its common stock. During the third quarter 2013, the Company repurchased a total of 643,559 shares of common stock at a total cost of $30.0 million and an average price of $46.62 per share. At quarter end, the Company had repurchased a total of 1.93 million shares of common stock year-to-date and $541.8 million remained available in the current share repurchase authorizations.
Conference Call Webcast
Hasbro will webcast its third quarter 2013 earnings conference call at 8:30 a.m. Eastern Time today. To listen to the live webcast, please go to http://investor.hasbro.com. The replay of the call will be available on Hasbro's web site approximately 2 hours following completion of the call. Additionally, presentation slides associated with today's conference call are available on Hasbro's website at http://investor.hasbro.com.
About Hasbro, Inc.
Hasbro, Inc. (NASDAQ: HAS) is a branded play company dedicated to fulfilling the fundamental need for play for children and families through the creative expression of the Company's world class brand portfolio, including TRANSFORMERS, MONOPOLY, PLAY-DOH, MY LITTLE PONY, MAGIC: THE GATHERING, NERF and LITTLEST PET SHOP. From toys and games, to television programming, motion pictures, digital gaming and a comprehensive licensing program, Hasbro strives to delight its global customers with innovative play and entertainment experiences, in a variety of forms and formats, anytime and anywhere. The Company's Hasbro Studios develops and produces television programming for more than 170 markets around the world, and for the U.S. on Hub Network, part of a multi-platform joint venture between Hasbro and Discovery Communications (NASDAQ: DISCA, DISCB, DISCK). Through the Company's deep commitment to corporate social responsibility, including philanthropy, Hasbro is helping to build a safe and sustainable world for future generations and to positively impact the lives of millions of children and families every year. It has been recognized for its efforts by being named one of the "World's Most Ethical Companies" and is ranked as one of Corporate Responsibility Magazine's "100 Best Corporate Citizens." Learn more at http://www.hasbro.com.
© 2013 Hasbro, Inc. All Rights Reserved.
Certain statements in this release contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include expectations concerning the Company's potential performance in the future, including with respect to its planned cost savings initiative and profitability, 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, develop, produce, manufacture, source and ship products on a timely and cost-effective basis, as well as interest in and purchase of those products by retail customers and consumers in quantities and at prices that will be sufficient to profitably recover the Company's costs; (ii) downturns in economic conditions affecting the Company's markets which can negatively impact the Company's retail customers and consumers, and which can result in lower employment levels, lower consumer disposable income and spending, including lower spending on purchases of the Company's products; (iii) other factors which can lower discretionary consumer spending, such as higher costs for fuel and food, drops in the value of homes or other consumer assets, and high levels of consumer debt; (iv) potential difficulties or delays the Company may experience in implementing cost savings and efficiency enhancing initiatives; (v) other economic and public health conditions or regulatory changes in the markets in which the Company and its customers and suppliers operate which could create delays or increase the Company's costs, such as higher commodity prices, labor costs or transportation costs, or outbreaks of disease; (vi) 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; (vii) the concentration of the Company's customers, potentially increasing the negative impact to the Company of difficulties experienced by any of the Company's customers or changes in their purchasing or selling patterns; (viii) greater than expected costs, or unexpected delays or difficulties, associated with Hub Network, Hasbro Studios, or the creation of new content to appear on Hub Network and elsewhere; (ix) consumer interest in and acceptance of Hub Network, and programming created by Hasbro Studios, and other factors impacting the financial performance of the network and Hasbro Studios; (x) the inventory policies of the Company's retail customers, including retailers' potential decisions to lower their inventories, even if it results in lost sales, as well as the concentration of the Company's revenues in the second half and fourth quarter of the year, which coupled with reliance by retailers on quick response inventory management techniques increases the risk of underproduction of popular items, overproduction of less popular items and failure to achieve compressed shipping schedules; (xi) delays, increased costs or difficulties associated with any of our or our partners' planned digital applications or media initiatives; (xii) work disruptions, which may impact the Company's ability to manufacture or deliver product in a timely and cost-effective manner; (xiii) the bankruptcy or other lack of success of one of the Company's significant retailers which could negatively impact the Company's revenues or bad debt exposure; (xiv) the impact of competition on revenues, margins and other aspects of the Company's business, including the ability to offer Company products which consumers choose to buy instead of competitive products, the ability to secure, maintain and renew popular licenses and the ability to attract and retain talented employees; (xv) concentration of manufacturing for many of the Company's products in the People's Republic of China and the associated impact to the Company of social, economic or public health conditions and other factors affecting China, the movement of products into and out of China, the cost of producing products in China and exporting them to other countries; (xvi) the risk of product recalls or product liability suits and costs associated with product safety regulations; (xvii) the impact of other market conditions, third party actions or approvals and competition which could reduce demand for the Company's products or delay or increase the cost of implementation of the Company's programs or alter the Company's actions and reduce actual results; and (xviii) other risks and uncertainties as may be detailed from time to time in the Company's public announcements and Securities and Exchange Commission ("SEC") filings. The Company undertakes no obligation to make any revisions to the forward-looking statements contained in this release or to update them to reflect events or circumstances occurring after the date of this release.
This press release includes a non-GAAP financial measure as defined under SEC rules, specifically EBITDA. EBITDA represents net earnings attributable to Hasbro, Inc. excluding net loss attributable to noncontrolling interests, interest expense, income taxes, depreciation and amortization. As required by SEC rules, we have provided reconciliation on the attached schedule of this measure to the most directly comparable GAAP measure. 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 press release also includes the Company's 2013 and 2012 costs and expenses, operating profit, net earnings and diluted earnings per share excluding the impact of restructuring and pension settlement charges and 2013 net earnings and diluted earnings per share excludes a benefit from a tax exam settlement. Management believes that presenting this data excluding these charges and tax benefit assists investors' understanding of the underlying performance of the results of operations.
Publisher To Host 5 Must-See Panels At This Year’s Sold-Out Convention
San Diego, CA (October 8, 2013) –New York Comic-Con will be the east coast’s largest gathering of comic fans, creators and publishers alike! IDW will be joining the list of big names at this fan-favorite convention with a number of panels that will be the talk of the show!
In addition to these stellar panels Taran Killam and Marc Andreyko will be selling NYCC exclusive variants with cover art by the legendary Bill Willingham of the debut issue of their new series The Illegitimates, a full month before they go on sale! Find them at Kevin Sharpe’s table in artist’s alley, #U15!
Now, check out the list, and join IDW’s all-star creators at these four-star events!
IDW: The Most Explosive Panel of 2013!
Saturday, October 12 -- 11:15 AM - 12:15 PM, Room 1A10
Join IDW's Dirk Wood, Chris Ryall, and Scott Dunbier, along with acclaimed creator DARWYN COOKE and another surprise legendary guest, as they set off an explosion of exciting new projects for 2014 and beyond. Includes three announcements that are sure to set the Con on fire! This panel will be a true one-of-a-kind experience that has to be seen to be believed!
IDW Presents: Taran Killam’s Illegitimates
Sunday, October 13 -- 10:45 AM - 11:45 AM, Room 1A14
Fresh off his "night job" the evening before, SNL actor/comedian Taran Killam is appearing alongside co-writer Marc Andreyko and IDW's Dirk Wood and Chris Ryall, to discuss his exciting new comic-book series, The Illegitimates! Come get the lowdown on the new series, the new SNL season, and plenty o' laughs at this special panel delivered Live from New York!
YOE! Books Presents: Fiends, Ghouls & Haunted Horror!
Saturday, October 12 -- 4:15 - 5:15 PM, Room 1A06
Join the award-winning comics historian Craig Yoe for a lively discussion and Q&A session about the pre-code classic comics that gave you night terrors! And make sure and swing by Craig Yoe’s booth at the show, #588!
IDW Publishing: Creator Visions
Sunday, October 12 -- 2:45 PM - 3:45 PM, Room 1A10
Join IDW's VP of Marketing, Dirk Wood, and a virtual cavalcade of today's most exciting creators. Featuring rising stars from David Wohl's Darby Pop imprint, the creative team from the hit digital "America's Army" comics, and much more, come down and witness Wood and company pulling back the curtain on IDW's most exciting new projects for 2014!
WILL.I.AM's Wizards & Robots
Friday, October 11 -- 1:45 - 2:45 PM, Room 1A23
Musician and visionary creative Will.i.am is launching a special project with IDW, Wizards and Robots. Will is making his first-ever comic-con appearance to discuss the comic, chat about futurism, and how he just might change the comic-book world through this unique project.
Be sure to catch all of the amazing IDW panels filled with surprise guests to hear the biggest news of the year first!
Site Will Offer Several One-Of-A-Kind Items and Limited Time Discount On In-Stock Items.
(October 8th, 2013) To celebrate their first twelve months of deluxe hardcover offerings, today IDW Limited (www.idwlimited.com) announced a 72-hour flash sale event. For the next three days IDW Limited will offer discounts on the remaining copies of several of its rare limited-edition titles. Ranging from Transformers to My Little Pony to creator-owned projects like Monocyte and Crawl To Me, the sale will have something for everyone. There will also be several never-before-seen items available only during this three day period including hand-drawn sketch covers from rock poster artist, Munk One.
“The fans have been so supportive during this first year.” Said IDW Limited director, Jerry Bennington. “We wanted to celebrate that support in a big way. This sale felt like the perfect way to do that. Hopefully fans who are missing a title or two from their collection will be able to get that special book they want this week. We've got a few surprises planned for the next few days, so make sure you're keeping up with all our announcements and offerings.”
Besides the sale there will also be several giveaways and contests designed around fan interaction, culminating in a fan art contest featuring one of IDW’s marquee series. New items will be added each day, with announcements being made through IDW Limited's social media channels (www.facebook.com/idwlimited & twitter.com/idwlimited).
With discounts as steep as 50%, the already limited inventory on the deluxe hardcover site is likely to move fast. Fans would be wise to start shopping early if they hope to take part in the sale.
The layoffs will affect about 5 percent of the studio's 2,200 employees that work on the Los Angeles movie lot or in international locations.
The job cuts will occur primarily in the areas of finance, human resources, information technology, international home media distribution, legal and marketing, according to the memo from Paramount Pictures Chief Operating Officer Frederick Huntsberry.
Paramount studio's second-quarter revenues were down 29 percent, year over year. But profit was off only six percent due to cost cutting, reported the Los Angeles Times in August. In fact, last year at about the same time Paramount laid off 120 employees.
Paramount is the studio behind the "Transformers," movie franchise and this summer's zombie thriller "World War Z," starring Brad Pitt, which grossed $539 million worldwide, according the Box Office Mojo website.
MSN Money wrote:Lego, which has overtaken Hasbro Inc and is now behind only Barbie maker Mattel Inc in terms of sales, also boosted its share of the global toy market to about 8.8 percent from 8.6 percent at the end of 2012.
Bloomberg wrote:Lego’s first-half sales were higher than those of Hasbro Inc. (HAS) The Pawtucket, Rhode Island-based toymaker reported sales of $1.43 billion for the same six-month period on July 22. Mattel Inc. (MAT), the world’s largest toymaker which is based in El Segundo, California, on July 17 reported a 4 percent advance in first half revenue to $2.16 billion.
Following the revelation that ‘Transformers 4’ will be titled Transformers: Age of Extinction (and of course, that there will be Dinobots), Madman is proud to announce that a new collection of fan-favourite Transformers releases, consisting of the Transformers Animated series and the Transformers Unicron Trilogy, will begin hitting DVD shelves and digital platforms from November, 2013.
The first release on November 20 will be the complete first season of Transformers Animated, the 2007 marquee Cartoon Network series which was the basis for Hasbro’s toyline of the same year leading into the release of the first Transformers live action movie..
All Transformers Animated releases will be available in widescreen on DVD, as well as HD across digital platforms. Madman will also be exclusively releasing the third season of Transformers Animated, which has been previously unavailable anywhere else in the world.
Closely following in December, Madman will unleash the first stage of the Unicron Trilogy with the first season collection of Transformers Armada, the 2002 series which featured staples Megatron, Optimus Prime and Starscream alongside fan-favourites such as Hot Shot and introduced the world to the ‘Mini-Cons’.
Consisting of Transformers: Armada, Transformers: Energon and Transformers: Cybertron – and named after the big bad villain featured across all three series – the Unicron Trilogy was a collaborative reboot of the Transformers universe, conceived out of America and animated and created in Japan by the likes of Studio Gonzo (Full Metal Panic, Hellsing), Actas Inc (Shin Megami Tensei Devil Children) and 3D graphics specialists, Studio A-CAT.
The series which followed Transformers: Beast Wars, the Unicron Trilogy features 3D computer generated robots and vehicles, along with epic anime-style story arcs.
Both Transformers Animated and the three seasons of the Transformers Unicron Trilogy have previously aired on Australian television on Cartoon Network and Channel 10.
Madman will continue to release further Transformers Animated and Transformers Unicron Trilogy season collections on DVD and digital platforms into 2014, with a new release assured for each month leading up to May – ahead of Michael Bay’s Transformers: Age of Extinction, which will hit cinemas in late June, 2014.
This fresh slate of fan-anticipated releases further cements Madman’s long standing reputation as experts on Transformers lore and will perfectly compliment their extensive catalogue, which includes Transformers Generation 1, Transformers Japan Generation 1 (Headmasters, Super God Masterforce and Victory) Transformers: Prime and Transformers: Beast Wars.
Artist’s Edition Month At IDW
The Acclaimed Imprint Highlighted All Month Long!
San Diego, CA (August 15, 2013) – Throughout the month of November, IDW’s award-winning Artist’s Edition format will be featured on some of the biggest titles hitting comic shops! A number of stellar issues will offer unique variants that showcase the raw art of comics' best and brightest.
Artist’s Editions have transformed the way fans look at original art, and these tongue-in-cheek tribute covers pay homage, as if taken straight from the drawing board! My Little Pony, Judge Dredd, Ghostbusters, Transformers, Doctor Who, G.I. Joe, Teenage Mutant Ninja Turtles, Star Trek, and one of IDW’s newest series, T.H.U.N.D.E.R. Agents will all offer Artist’s Edition variant covers! Andrew Griffith, Dan Duncan, Jim Rugg, Mike Collins, and Andy Price are just a few of the big names that will be showcased.
As the number of conventions across the globe grows each year, the opportunity to get sketches by iconic artists has never been easier. So to help your personal Artist’s Edition library stand out even more, IDW will also be offering blank sketch cover variants for the aforementioned titles as well!
“All the covers done so far look outstanding,” said Artist’s Editions Editor Scott Dunbier, “the artists really captured the spirit we were shooting for. But I’m especially looking forward to seeing what people create on their own Artist’s Edition covers!”
Artist’s Editions have become essential for any collection, and this month everyone will get the chance to see why!
What is an Artist’s Edition?
AN ARTIST'S EDITION PRESENTS COMPLETE STORIES WITH EACH PAGE SCANNED FROM THE ACTUAL ORIGINAL ART. While appearing to be in black & white, each page has been scanned in COLOR to mimic as closely as possible the experience of viewing the actual original art—for example, you are able to clearly see paste-overs, blue pencils in the art, editorial notes, art corrections. Each page is printed the same size as drawn, and the paper selected is as close as possible to the original art board.
DeNA and HASBRO are excited to bring the War Dawn episode to the popular card battle mobile game TRANSFORMERS: LEGENDS.
The TRANSFORMERS: LEGENDS War Dawn episode is available to play beginning today, August 7 through Tuesday, August 13.
After the attack on New York City, the Autobots have gone on the offensive and taken the fight directly to Megatron's minions! An elite group of infiltrators and spies led by Mirage, are on the hunt for the Decepticons, but Starscream has a secret weapon – the Combaticons!
Blastoff, Swindle and Vortex are leading the counterattack, and they need your help! Will they be able to intercept the Autobots? Or is this the only the beginning? Find out in this week's War Dawn episode!
Download TRANSFORMERS: LEGENDS for iPhone, iPad, iPod touch and Android devices for free at: http://mobage.com/games/TRANSFORMERS-LEGENDS
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