March 8, 2021

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Business is my step

Hasbro Reports Fourth Quarter and Full-Year 2020 Financial Results

24 min read

Board of Directors Declares Quarterly Dividend of $0.68 per share

Fourth Quarter 2020

  • Net revenues increased 4% to $1.72 billion, including a favorable $12.2 million impact of foreign exchange

    • U.S. and Canada segment revenues up 16%; eOne segment revenues up 10%
    • Revenues up 21% in Hasbro Gaming and 27% across the total gaming category, 20% in TV/Film/Entertainment and 7% in Franchise Brands
  • Operating profit of $186.4 million; Net earnings for the fourth quarter 2020 were $105.2 million or $0.76 per diluted share

    • Adjusted operating profit increased 51% to $261.4 million, or 15.2% of revenues, an expansion of 480 basis points year-over-year
    • Adjusted net earnings of $175.3 million, or $1.27 per diluted share

Full-Year 2020

  • Year-end cash of $1.45 billion; Generated $976.3 million in operating cash flow for the full-year 2020
  • Net revenues of $5.47 billion decreased 8%, including an unfavorable $16.2 million impact of foreign exchange

    • Over $1 billion in ecomm revenues globally, an increase of 43%
    • Revenue grew 4% in the U.S. and Canada segment
    • Revenue up 15% in Hasbro Gaming and the total gaming category
  • Operating profit of $501.8 million; Net earnings were $222.5 million or $1.62 per diluted share

    • Adjusted operating profit of $826.7 million, or 15.1% of revenue, an expansion of 110 basis points year-over-year
    • Adjusted net earnings of $514.6 million, or $3.74 per diluted share

Hasbro, Inc. (NASDAQ:HAS), a global play and entertainment company, today reported financial results for the fourth quarter and full-year 2020. 2019 pro forma results reflect the combination of the results of Hasbro and Entertainment One Ltd. (eOne) for periods prior to Hasbro’s acquisition of eOne at the start of the first quarter of 2020.

“In 2020, we lived our purpose of making the world a better place for all children and all families. In what was a most challenging year, the global Hasbro team fully demonstrated its resilience, tenacity, creativity, flexibility, and empathy,” said Brian Goldner, Hasbro’s chairman and chief executive officer. “Our teams successfully drove demand for several product categories across our portfolio including our entire gaming portfolio from Wizards of the Coast brands to face-to-face gaming. They found ways to reach the global consumer despite retail closures throughout the year, delivering over $1 billion in ecomm revenues for the first time. We leveraged our global supply chain capabilities and our evolving geographic manufacturing supplier base to get products made and distributed. We integrated our acquisition of eOne and while live-action TV and film production was limited, we made substantial progress developing Hasbro IP for storytelling that we believe will lead to enhanced revenues and earnings power from Hasbro brands from multiple income streams. We developed toy and game lines for valuable preschool brands PEPPA PIG and PJ MASKS to launch later this year. We concentrated on managing expenses and cash, growing adjusted operating profit margin and finishing the year with $1.45 billion in cash on our balance sheet.

“Importantly, we focused on our numerous communities, including our most important Hasbro community of employees worldwide and their families,” continued Goldner. “This emphasis included engaging on critically important issues of racial equality and justice, and a company-wide re-commitment to diversity, inclusion, and engagement. We are on strong footing to grow in 2021 as we continue to navigate through COVID-19 and leverage our unparalleled portfolio of brands and capabilities in consumer products, gaming and entertainment.”

“Throughout 2020, the global Hasbro team did an excellent job executing in a challenging environment,” said Deborah Thomas, Hasbro’s chief financial officer. “In the fourth quarter, we grew revenues and adjusted operating profit, overcoming tough comparisons within the Partner Brand category and last year’s theatrical releases. Our focus on working capital and expense management delivered $976.3 million in operating cash flow for the year, and as part of our commitment to paying down our debt, we repaid $123 million of the debt that we raised to finance the eOne acquisition. We continue to see strong retail, consumer and audience support for our brands and content as we look to the coming year. Global point of sale increased last year, despite lockdowns and retail disruption, and 2021 is starting with strong year-over-year momentum.”

Fourth Quarter and Full-Year 2020 Financial Results

$ Millions, except earnings per share

Q4 2020

Q4 2019

% Change

FY 2020

FY 2019

% Change

Net Revenues

$

1,723.0

 

$

1,663.2

 

4%

$

5,465.4

 

$

5,936.0

 

-8%

 

 

 

 

 

 

 

Operating Profit

$

186.4

 

$

136.8

 

36%

$

501.8

 

$

689.8

 

-27%

Adjusted Operating Profit1

$

261.4

 

$

173.4

 

51%

$

826.7

 

$

832.8

 

-1%

 

 

 

 

 

 

 

Net Earnings

$

105.2

 

$

95.5

 

10%

$

222.5

 

$

345.9

 

-36%

Net Earnings per Diluted Share

$

0.76

 

$

0.69

 

10%

$

1.62

 

$

2.51

 

-35%

 

 

 

 

 

 

 

Adjusted Net Earnings1

$

175.3

 

$

124.0

 

41%

$

514.6

 

$

542.7

 

-5%

Adjusted Net Earnings per Diluted Share1

$

1.27

 

$

0.90

 

41%

$

3.74

 

$

3.94

 

-5%

1See the financial tables accompanying this press release for a reconciliation of as reported to pro forma and adjusted results, and a reconciliation of GAAP and non-GAAP financial measures.

Fourth Quarter and Full-Year 2020 Major Segment and Brand Performance

Q4 2020 Major Segments ($ Millions)

Net Revenues

Operating Profit

(Loss)

Adjusted

Operating Profit (Loss)

Q4 2020

Q4 2019

% Change

Q4 2020

Q4 2019

Q4 2020

Q4 2019

U.S. and Canada

$

790.6

 

$

682.6

 

16

%

$

180.7

 

 

$

101.6

 

 

$

180.7

 

$

101.6

 

 

International

$

561.8

 

$

615.1

 

-9

%

$

30.1

 

 

$

55.9

 

 

$

30.1

 

$

55.9

 

 

Entertainment, Licensing and Digital

$

111.0

 

$

130.2

 

-15

%

$

27.2

 

 

$

37.1

 

 

$

27.2

 

$

37.1

 

 

eOne1

$

259.6

 

$

235.2

 

10

%

$

(14.2

)

 

$

(71.4

)

 

$

46.0

 

$

(34.8

)

 

FY 2020 Major Segments ($ Millions)

Net Revenues

Operating Profit

(Loss)

Adjusted Operating Profit

FY 2020

FY 2019

% Change

FY 2020

FY 2019

FY 2020

FY 2019

U.S. and Canada

$

2,556.1

 

$

2,449.3

 

4

%

$

539.7

 

 

$

415.4

 

$

539.7

 

$

415.4

 

International

$

1,579.0

 

$

1,836.4

 

-14

%

$

42.5

 

 

$

107.3

 

$

42.5

 

$

107.3

 

Entertainment, Licensing and Digital1

$

373.9

 

$

434.5

 

-14

%

$

93.0

 

 

$

99.7

 

$

113.8

 

$

99.7

 

eOne1

$

956.5

 

$

1,215.8

 

-21

%

$

(79.2

)

 

$

20.0

 

$

131.1

 

$

163.0

 

Brand Performance ($ Millions)

Net Revenues

Q4 2020

Q4 2019

% Change

FY 2020

FY 2019

% Change

Franchise Brands

$

705.2

 

$

661.9

 

7%

$

2,286.1

 

$

2,411.8

 

-5%

Partner Brands

$

349.6

 

$

408.5

 

-14%

$

1,079.4

 

$

1,221.0

 

-12%

Hasbro Gaming2

$

298.5

 

$

246.5

 

21%

$

814.8

 

$

709.8

 

15%

Emerging Brands3

$

155.3

 

$

167.4

 

-7%

$

480.4

 

$

578.7

 

-17%

TV/Film/Entertainment4

$

214.5

 

$

178.9

 

20%

$

804.8

 

$

1,014.7

 

-21%

1Reconciliations are included in the attached schedules under the headings “Reconciliation of As reported to Adjusted Operating Results” and “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 $561.2 million and $1.76 billion for the quarter and full-year 2020, respectively, up 27% and 15% compared to the respective periods in 2019.

3Emerging Brands portfolio includes revenues from eOne brands PEPPA PIG, PJ MASKS and RICKY ZOOM as of first quarter 2020. For comparability, the quarter and full-year 2019 results include the pro forma revenues for those brands, which amounted to $56.3 million and $201.1 million, respectively.

4TV/Film/Entertainment represents the remaining eOne revenues. For comparability, 2019 includes the pro forma revenues.

Fourth quarter 2020 revenues grew 4% (3% on a constant currency basis) behind gains in the U.S. and Canada segment, as well as the eOne segment. This included growth in Franchise Brands MAGIC: THE GATHERING, MONOPOLY and NERF; Hasbro products for Lucasfilm’s Star Wars and The Mandalorian; and Hasbro Gaming across many games in the gaming portfolio, including DUNGEONS AND DRAGONS. Revenues for Hasbro’s products for Disney’s Frozen 2 declined when compared to product revenues related to 2019’s theatrical release. The return to production in TV and film drove improved deliveries and revenue growth for eOne.

  • U.S. and Canada segment revenue and operating profit grew due to gains in Franchise Brands, Hasbro Gaming and Emerging Brands. Operating profit grew primarily as a result of higher revenues and the favorable mix of those revenues, including MAGIC: THE GATHERING.
  • International segment revenues and operating profit declined, driven by declines in Latin America and Asia. Revenues grew in the European region. For the segment, Hasbro Gaming revenue grew as did MAGIC:THE GATHERING and Star Wars. The International segment operating profit declined as result of the lower revenues and efforts to clear retail inventory in Latin America. This was partially offset by favorable product mix in Europe and cost management throughout the segment.
  • Entertainment, Licensing and Digital segment revenues declined on lower consumer products revenues as well as lower entertainment revenues compared to 2019 which included the Transformers Bumblebee film revenue, partially offset by growth in digital gaming. Operating profit decreased due to lower revenues, partially offset by growth in licensed digital gaming and cost management.
  • eOne segment pro forma revenues increased for the quarter as live-action TV and film production resumed. 2020 operating profit included $34.7 million of acquisition and related charges, and $25.5 million of purchased intangible amortization associated with the fair value of acquired intangible assets. 2019 pro forma operating profit included $24.6 million of purchased intangible amortization, $11.5 million of prior restructuring and other costs and $0.5 million of acquisition and related costs. Excluding these items, adjusted pro forma operating profit for the eOne segment was $46.0 million, an increase of $80.8 million, on higher revenues and lower advertising expense.

For the full-year 2020, revenues declined 8% on an as reported and constant currency basis. This reflected growth in the U.S. and Canada segment, but declines in all other segments. Franchise Brands MAGIC: THE GATHERING and MONOPOLY grew as did revenue in Hasbro Gaming across many gaming brands, including DUNGEONS AND DRAGONS. Hasbro products for Lucasfilm’s Star Wars and The Mandalorian also contributed to growth for the year. While TV and film production was limited, the teams have a robust development slate of over 200 active scripted television and film projects including more than 30 Hasbro properties. Full-year results were impacted by COVID-19 related shutdowns globally at retail, in manufacturing and in live-action entertainment.

  • U.S. and Canada segment revenue and operating profit grew due to gains in Franchise Brands, led by MAGIC: THE GATHERING, and Hasbro Gaming. Operating profit increased on favorable product mix partially offset by higher freight costs for increased domestic shipments in the U.S. and higher product development and other costs at Wizards of the Coast to support future digital game launches.
  • International segment revenues and operating profit declined, primarily driven by declines in Latin America and Asia. European region revenues were flat. Hasbro Gaming revenues increased, as did MAGIC: THE GATHERING revenues. The International segment operating profit declined as result of the lower revenues partially offset by lower spending, most notably in advertising and marketing, as well as lower royalties.
  • Entertainment, Licensing and Digital segment revenues declined led by declines in entertainment as compared to 2019 which included the Transformers Bumblebee film revenue and declines in licensed consumer products revenues. 2020 operating profit included $20.8 million for acquisition and related costs. Adjusted operating profit increased to $113.8 million behind growth in higher margin licensed digital gaming and cost savings.
  • eOne segment pro forma revenues declined for the year primarily due to lower TV and Film revenues due to COVID-19 related shut downs during the year of live-action productions and theaters, as well as lower Family Brands revenue due to retail disruption. For the eOne segment, full-year 2020 operating profit included $112.4 million of acquisition and integration costs and $97.9 million of purchased intangible amortization associated with the fair value of acquired intangible assets. Full-year 2019 pro forma operating profit included $98.4 million of purchased intangible amortization, $33.4 million of prior restructuring and other costs and $11.2 million of acquisition and related costs. Adjusted pro forma operating profit for the eOne segment decreased to $131.1 million due to the decline in revenues, partially offset by lower advertising and royalty expense.

Dividend

The Company announced today that the Board of Directors has declared a quarterly cash dividend of $0.68 per common share. The dividend will be payable on May 17, 2021 to shareholders of record at the close of business on May 3, 2021.

Conference Call Webcast

Hasbro will webcast its fourth quarter and full-year 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 website 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, has been named one of the World’s Most Ethical Companies® by Ethisphere Institute for the past nine years, and one of America’s Most JUST Companies by Forbes and JUST Capital for the past four years. We routinely share important business and brand updates on our Investor Relations website, Newsroom and social channels (@Hasbro on Twitter and Instagram, and @Hasbro on Facebook.)

© 2021 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: our future performance and prospects for growth in 2021; our ability to enhance our revenues and earnings power through development of Hasbro IP by eOne; our ability to achieve our financial and business goals; and our 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. Specific factors that might cause such a difference include, but are not limited to:

  • our ability to successfully develop and execute plans to mitigate the negative impact of the coronavirus on our business;
  • 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 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 of our customers and increased emphasis on ecommerce;
  • 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 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, 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 and diverse 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 and related costs, purchased intangible amortization, other severance costs and income tax expense associated with U.K tax reform. 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 other acquisitions. 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, Pro Forma Adjusted net earnings, Adjusted earnings per diluted share, Pro Forma Adjusted net earnings per diluted share, Adjusted operating profit, and Pro Forma 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

(Tables Attached)

HASBRO, INC.

 

 

 

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

(Unaudited)

 

 

 

(Thousands of Dollars)

 

 

 

 

 

 

 

 

December 27, 2020

 

December 29, 2019

ASSETS

 

 

 

Cash and Cash Equivalents (1)

$

1,449,676

 

 

$

4,580,369

 

Accounts Receivable, Net

1,391,726

 

 

1,410,597

 

Inventories

395,633

 

 

446,105

 

Prepaid Expenses and Other Current Assets

609,610

 

 

310,450

 

Total Current Assets

3,846,645

 

 

6,747,521

 

Property, Plant and Equipment, Net

489,041

 

 

382,248

 

Goodwill

3,691,709

 

 

494,584

 

Other Intangible Assets, Net

1,530,835

 

 

646,305

 

Other Assets

1,260,155

 

 

584,970

 

Total Assets

$

10,818,385

 

 

$

8,855,628

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

Short-Term Borrowings

$

6,642

 

 

$

503

 

Current Portion of Long-Term Debt

432,555

 

 

 

Accounts Payable and Accrued Liabilities

1,964,144

 

 

1,256,579

 

Total Current Liabilities

2,403,341

 

 

1,257,082

 

Long-Term Debt (1)

4,660,015

 

 

4,046,457

 

Other Liabilities

793,866

 

 

556,559

 

Total Liabilities

7,857,222

 

 

5,860,098

 

Redeemable Noncontrolling Interests

24,426

 

 

 

Total Shareholders’ Equity (1)

2,936,737

 

 

2,995,530

 

Total Liabilities, Noncontrolling Interests and Shareholders’ Equity

$

10,818,385

 

 

$

8,855,628

 

(1) Cash and Cash Equivalents, Long-Term Debt and Total Shareholders’ Equity balances as of December 29, 2019 were impacted by the eOne acquisition financing, which included proceeds from the issuance of long-term debt of $2,354,957 and proceeds from the issuance of common stock of $975,185.

 

HASBRO, INC.

 

 

 

 

 

 

 

 

 

 

CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

 

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Thousands of Dollars and Shares Except Per Share Data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

Year Ended

 

 

December 27,

2020

 

% Net

Revenues

 

December 29,

2019

 

% Net

Revenues

 

December 27,

2020

 

% Net

Revenues

 

December 29,

2019

 

% Net

Revenues

Net Revenues

 

$

1,722,971

 

 

100.0

%

 

$

1,428,007

 

 

 

100.0

%

 

$

5,465,443

 

 

 

100.0

%

 

$

4,720,227

 

 

 

100.0

%

Costs and Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of Sales

 

592,844

 

 

34.4

%

 

577,049

 

 

 

40.4

%

 

1,718,888

 

 

 

31.5

%

 

1,807,849

 

 

 

38.3

%

Program Cost Amortization

 

118,811

 

 

6.9

%

 

27,480

 

 

 

1.9

%

 

387,056

 

 

 

7.1

%

 

85,585

 

 

 

1.8

%

Royalties

 

182,884

 

 

10.6

%

 

155,592

 

 

 

10.9

%

 

569,981

 

 

 

10.4

%

 

414,549

 

 

 

8.8

%

Product Development

 

84,659

 

 

4.9

%

 

72,910

 

 

 

5.1

%

 

259,522

 

 

 

4.7

%

 

262,156

 

 

 

5.6

%

Advertising

 

101,315

 

 

5.9

%

 

104,017

 

 

 

7.3

%

 

412,730

 

 

 

7.6

%

 

413,676

 

 

 

8.8

%

Amortization of Intangibles

 

37,061

 

 

2.2

%

 

11,814

 

 

 

0.8

%

 

144,746

 

 

 

2.6

%

 

47,259

 

 

 

1.0

%

Selling, Distribution and Administration

 

366,460

 

 

21.3

%

 

288,765

 

 

 

20.2

%

 

1,252,140

 

 

 

22.9

%

 

1,037,103

 

 

 

22.0

%

Acquisition and Related Costs

 

52,573

 

 

3.1

%

 

 

 

 

0.0

%

 

218,566

 

 

 

4.0

%

 

 

 

 

0.0

%

Operating Profit

 

186,364

 

 

10.8

%

 

190,380

 

 

 

13.3

%

 

501,814

 

 

 

9.2

%

 

652,050

 

 

 

13.8

%

Interest Expense

 

47,428

 

 

2.8

%

 

34,782

 

 

 

2.4

%

 

201,130

 

 

 

3.7

%

 

101,878

 

 

 

2.2

%

Other Expense (Income), Net

 

462

 

 

0.0

%

 

(143,163

)

 

 

-10.0

%

 

(21,378

)

 

 

-0.4

%

 

(44,038

)

 

 

-0.9

%

Earnings before Income Taxes

 

138,474

 

 

8.0

%

 

298,761

 

 

 

20.9

%

 

322,062

 

 

 

5.9

%

 

594,210

 

 

 

12.6

%

Income Tax Expense

 

32,308

 

 

1.9

%

 

31,416

 

 

 

2.2

%

 

96,621

 

 

 

1.8

%

 

73,756

 

 

 

1.6

%

Net Earnings

 

106,166

 

 

6.2

%

 

267,345

 

 

 

18.7

%

 

225,441

 

 

 

4.1

%

 

520,454

 

 

 

11.0

%

Net Earnings Attributable to Noncontrolling Interests

 

993

 

 

0.1

%

 

$

 

 

 

0.0

%

 

$

2,922

 

 

 

0.1

%

 

 

 

 

0.0

%

Net Earnings Attributable to Hasbro, Inc.

 

$

105,173

 

 

6.1

%

 

$

267,345

 

 

 

18.7

%

 

$

222,519

 

 

 

4.1

%

 

$

520,454

 

 

 

11.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per Common Share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Earnings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.77

 

 

 

 

$

2.02

 

 

 

 

 

$

1.62

 

 

 

 

 

$

4.07

 

 

 

 

Diluted

 

$

0.76

 

 

 

 

$

2.01

 

 

 

 

 

$

1.62

 

 

 

 

 

$

4.05

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Dividends Declared

 

$

0.68

 

 

 

 

$

0.68

 

 

 

 

 

$

2.72

 

 

 

 

 

$

2.72

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Number of Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

137,398

 

 

 

 

132,516

 

 

 

 

 

137,260

 

 

 

 

 

127,896

 

 

 

 

Diluted

 

137,819

 

 

 

 

133,128

 

 

 

 

 

137,554

 

 

 

 

 

128,499

 

 

 

 

 

HASBRO, INC.

 

 

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

(Thousands of Dollars)

 

 

 

 

 

 

 

 

Year Ended

 

December 27, 2020

 

December 29, 2019

Cash Flows from Operating Activities:

 

 

 

Net Earnings

$

225,441

 

 

 

$

520,454

 

 

Non-Cash Pension Charge

 

 

 

110,962

 

 

Other Non-Cash Adjustments

811,031

 

 

 

225,276

 

 

Changes in Operating Assets and Liabilities

(60,132

)

 

 

(203,631

)

 

Net Cash Provided by Operating Activities

976,340

 

 

 

653,061

 

 

 

 

 

 

Cash Flows from Investing Activities:

 

 

 

Additions to Property, Plant and Equipment

(125,754

)

 

 

(133,636

)

 

Investments and Acquisitions, Net of Cash Acquired

(4,412,948

)

 

 

(8,761

)

 

Proceeds from Foreign Currency Hedges

 

 

 

79,990

 

 

Other

38,471

 

 

 

1,452

 

 

Net Cash Utilized by Investing Activities

(4,500,231

)

 

 

(60,955

)

 

 

 

 

 

Cash Flows from Financing Activities:

 

 

 

Proceeds from Long-Term Debt

1,112,640

 

 

 

2,354,957

 

 

Repayments of Long-Term Debt

(275,514

)

 

 

 

 

Net Repayments of Short-Term Borrowings

(8,617

)

 

 

(8,828

)

 

Purchases of Common Stock

 

 

 

(61,387

)

 

Stock-Based Compensation Transactions

16,592

 

 

 

31,786

 

 

Dividends Paid

(372,652

)

 

 

(336,604

)

 

Employee Taxes Paid for Shares Withheld

(6,040

)

 

 

(13,123

)

 

Redemption of Equity Instruments

(47,399

)

 

 

 

 

Deferred Acquisition Payments

 

 

 

(100,000

)

 

Proceeds from Equity Issuance

 

 

 

975,185

 

 

Payments of Financing Costs

 

 

 

(26,653

)

 

Other

(13,061

)

 

 

(4,760

)

 

Net Cash Provided by Financing Activities

405,949

 

 

 

2,810,573

 

 

 

 

 

 

Effect of Exchange Rate Changes on Cash

(12,751

)

 

 

(4,681

)

 

 

 

 

 

Cash and Cash Equivalents at Beginning of Year

4,580,369

 

 

 

1,182,371

 

 

 

 

 

 

Cash and Cash Equivalents at End of Year

$

1,449,676

 

 

 

$

4,580,369

 

 

 

HASBRO, INC.

 

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL FINANCIAL DATA

 

 

 

 

 

 

 

 

PRO FORMA SEGMENT RESULTS

 

 

 

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

(Thousands of Dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For comparability, the quarter and year ended December 29, 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

 

 

 

Year Ended

 

 

 

December 27,

2020

 

Pro Forma

December 29,

2019

 

%

Change

 

December 27,

2020

 

Pro Forma

December 29,

2019

 

%

Change

Segment Results

 

 

 

 

 

 

 

 

 

 

 

U.S. and Canada Segment:

 

 

 

 

 

 

 

 

 

 

 

External Net Revenues

$

790,622

 

 

$

682,631

 

 

16

%

 

$

2,556,104

 

 

$

2,449,280

 

 

4

%

Operating Profit

180,699

 

 

101,641

 

 

78

%

 

539,727

 

 

415,436

 

 

30

%

Operating Margin

22.9

%

 

14.9

%

 

 

 

21.1

%

 

17.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

International Segment (1):

 

 

 

 

 

 

 

 

 

 

 

External Net Revenues

561,767

 

 

615,136

 

 

-9

%

 

1,578,989

 

 

1,836,360

 

 

-14

%

Operating Profit

30,133

 

 

55,894

 

 

-46

%

 

42,466

 

 

107,304

 

 

-60

%

Operating Margin

5.4

%

 

9.1

%

 

 

 

2.7

%

 

5.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Entertainment, Licensing and Digital Segment:

 

 

 

 

 

 

 

 

 

 

External Net Revenues

110,975

 

 

130,201

 

 

-15

%

 

373,854

 

 

434,467

 

 

-14

%

Operating Profit

27,199

 

 

37,136

 

 

-27

%

 

92,957

 

 

99,686

 

 

-7

%

Operating Margin

24.5

%

 

28.5

%

 

 

 

24.9

%

 

22.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

eOne Segment (2):

 

 

 

 

 

 

 

 

 

 

External Net Revenues

259,607

 

 

235,160

 

 

10

%

 

956,496

 

 

1,215,773

 

 

-21

%

Operating (Loss) Profit

(14,223

)

 

(71,380

)

 

80

%

 

(79,185

)

 

19,987

 

 

> -100

%

Operating Margin

-5.5

%

 

-30.4

%

 

 

 

-8.3

%

 

1.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) International Segment Net Revenues by Major Geographic Region

 

 

 

 

 

 

Europe

$

382,311

 

 

$

369,489

 

 

3

%

 

$

1,045,411

 

 

$

1,043,217

 

 

0

%

Latin America

83,583

 

 

130,634

 

 

-36

%

 

241,611

 

 

435,740

 

 

-45

%

Asia Pacific

95,873

 

 

115,013

 

 

-17

%

 

291,967

 

 

357,403

 

 

-18

%

Total

$

561,767

 

 

$

615,136

 

 

 

 

$

1,578,989

 

 

$

1,836,360

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2) eOne Segment Net Revenues by Category

 

 

 

 

 

 

Film and TV

$

180,825

 

 

$

140,581

 

 

29

%

 

$

684,884

 

 

$

888,411

 

 

-23

%

Family Brands

46,376

 

 

58,677

 

 

-21

%

 

152,445

 

 

210,345

 

 

-28

%

Music and Other

32,406

 

 

35,902

 

 

-10

%

 

119,167

 

 

117,017

 

 

2

%

Total

$

259,607

 

 

$

235,160

 

 

 

 

$

956,496

 

 

$

1,215,773

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Revenues by Brand Portfolio

 

 

 

 

 

 

Franchise Brands

$

705,201

 

 

$

661,899

 

 

7

%

 

$

2,286,079

 

 

$

2,411,847

 

 

-5

%

Partner Brands

349,583

 

 

408,516

 

 

-14

%

 

1,079,355

 

 

1,220,982

 

 

-12

%

Hasbro Gaming (3)

298,461

 

 

246,478

 

 

21

%

 

814,798

 

 

709,750

 

 

15

%

Emerging Brands (4)

155,270

 

 

167,376

 

 

-7

%

 

480,371

 

 

578,747

 

 

-17

%

TV/Film/Entertainment (5)

214,456

 

 

178,898

 

 

20

%

 

804,840

 

 

1,014,674

 

 

-21

%

Total

$

1,722,971

 

 

$

1,663,167

 

 

 

 

$

5,465,443

 

 

$

5,936,000

 

 

 

(3) Hasbro’s total gaming category, including all gaming revenue, most notably MAGIC: THE GATHERING and MONOPOLY, totaled $561,189 and $1,763,793 for the quarter and year ended December 27, 2020, respectively, up 27% and 15%, respectively, from revenues of $442,132 and $1,528,283 for the quarter and year ended December 29, 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 year ended December 29, 2019 includes the pro forma net revenues for those brands, which amounted to $56,262 and $201,099, 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 year ended December 29, 2019 includes the pro forma net revenues of $178,898 and $1,014,674, respectively.

 

HASBRO, INC.

 

 

 

 

 

 

 

SUPPLEMENTAL FINANCIAL DATA

 

 

 

 

 

 

RECONCILIATION OF AS REPORTED TO ADJUSTED OPERATING RESULTS

(Unaudited)

 

 

 

 

 

 

 

(Thousands of Dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For comparability, the quarter and year ended December 29, 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

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

December 27, 2020

 

Pro Forma

December 29, 2019

 

Pre-tax

Adjustments

 

Post-tax

Adjustments

 

Pre-tax

Adjustments

 

Post-tax

Adjustments

Acquisition and Related Costs (1)

$

52,573

 

 

 

$

47,866

 

 

 

$

 

 

$

 

Acquired Intangible Amortization (2)

25,520

 

 

 

23,260

 

 

 

24,597

 

 

19,063

 

Severance (3)

(3,084

)

 

 

(2,703

)

 

 

 

 

 

Pro Forma eOne Adjustments

 

 

 

 

 

 

11,984

 

 

9,288

 

Total

$

75,009

 

 

 

$

68,423

 

 

 

$

36,581

 

 

$

28,351

 

 

 

 

 

 

 

 

 

 

Year Ended

 

December 27, 2020

 

Pro Forma

December 29, 2019

 

Pre-tax

Adjustments

 

Post-tax

Adjustments

 

Pre-tax

Adjustments

 

Post-tax

Adjustments

Acquisition and Related Costs (1)

$

218,566

 

 

 

$

188,557

 

 

 

$

 

 

$

 

Acquired Intangible Amortization (2)

97,856

 

 

 

80,731

 

 

 

98,388

 

 

76,251

 

Severance (3)

8,470

 

 

 

7,422

 

 

 

 

 

 

Pro Forma eOne Adjustments

 

 

 

 

 

 

44,583

 

 

34,552

 

Total

$

324,892

 

 

 

$

276,710

 

 

 

$

142,971

 

 

$

110,803

 

(1) In association with the Company’s acquisition of eOne, the Company incurred related expenses of $52,573 and $218,566, respectively, in the quarter and year ended December 27, 2020, comprised of the following:

(i) Acquisition and integration costs of $40,886 and $145,169 for the quarter and year ended December 27, 2020, respectively, including expense associated with the acceleration of eOne stock-based compensation and advisor fees settled at the closing of the acquisition, integration costs and impairment charges in the fourth quarter of 2020 for certain definite-lived intangible and other assets; and

(ii) Restructuring and related costs of $11,687 and $73,397 for the quarter and year ended December 27, 2020, respectively, 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) The Company incurred incremental intangible amortization costs related to the intangible assets acquired in the eOne Acquisition.

(3) 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. In the fourth quarter of 2020, the Company reclassified the Film & TV severance charge to the eOne integration restructuring charge discussed above. The $8,470 of severance was recorded in Corporate and Eliminations.

 

Reconciliation of Operating Profit (Loss) Results

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended December 27, 2020

 

Pro Forma

Quarter Ended December 29, 2019

 

 

 

As Reported

 

Non-GAAP

Adjustments

 

Adjusted

 

As Reported

 

Non-GAAP

Adjustments

 

Adjusted

 

% Change

Adjusted Company Results

 

 

 

 

 

 

 

 

 

 

External Net Revenues

$

1,722,971

 

 

 

$

 

 

$

1,722,971

 

 

$

1,663,167

 

 

 

$

 

 

$

1,663,167

 

 

 

4

%

Operating Profit

186,364

 

 

 

75,009

 

 

261,373

 

 

136,778

 

 

 

36,581

 

 

173,359

 

 

 

51

%

Operating Margin

10.8

 

%

 

4.4

%

 

15.2

%

 

8.2

 

%

 

2.2

%

 

10.4

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Segment Results

 

 

 

 

 

 

 

 

 

 

U.S. and Canada Segment:

 

 

 

 

 

 

 

 

 

 

External Net Revenues

$

790,622

 

 

 

$

 

 

$

790,622

 

 

$

682,631

 

 

 

$

 

 

$

682,631

 

 

 

16

%

Operating Profit

180,699

 

 

 

 

 

180,699

 

 

101,641

 

 

 

 

 

101,641

 

 

 

78

%

Operating Margin

22.9

 

%

 

 

 

22.9

%

 

14.9

 

%

 

 

 

14.9

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

International Segment:

 

 

 

 

 

 

 

 

 

 

External Net Revenues

561,767

 

 

 

 

 

561,767

 

 

615,136

 

 

 

 

 

615,136

 

 

 

-9

%

Operating Profit

30,133

 

 

 

 

 

30,133

 

 

55,894

 

 

 

 

 

55,894

 

 

 

-46

%

Operating Margin

5.4

 

%

 

 

 

5.4

%

 

9.1

 

%

 

 

 

9.1

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Entertainment, Licensing and Digital Segment:

 

 

 

 

 

 

 

 

 

 

External Net Revenues

110,975

 

 

 

 

 

110,975

 

 

130,201

 

 

 

 

 

130,201

 

 

 

-15

%

Operating Profit

27,199

 

 

 

 

 

27,199

 

 

37,136

 

 

 

 

 

37,136

 

 

 

-27

%

Operating Margin

24.5

 

%

 

 

 

24.5

%

 

28.5

 

%

 

 

 

28.5

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

eOne Segment:

 

 

 

 

 

 

 

 

 

 

External Net Revenues

259,607

 

 

 

 

 

259,607

 

 

235,160

 

 

 

 

 

235,160

 

 

 

10

%

Operating (Loss) Profit

(14,223

)

 

 

60,208

 

 

45,985

 

 

(71,380

)

 

 

36,581

 

 

(34,799

)

 

 

>100

%

Operating Margin

-5.5

 

%

 

23.2

%

 

17.7

%

 

-30.4

 

%

 

15.6

%

 

-14.8

 

%

 

 

Corporate and Eliminations:

The Corporate and Eliminations segment included non-GAAP adjustments of $14,801 for the quarter ended December 27, 2020 consisting of eOne acquisition and related costs.

Reconciliation of Operating Profit (Loss) Results (continued)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 27, 2020

 

Pro Forma

Year Ended December 29, 2019

 

 

 

As Reported

 

Non-GAAP

Adjustments

 

Adjusted

 

As Reported

 

Non-GAAP

Adjustments

 

Adjusted

 

% Change

Adjusted Company Results

 

 

 

 

 

 

 

 

 

 

External Net Revenues

$

5,465,443

 

 

 

$

 

 

$

5,465,443

 

 

$

5,936,000

 

 

$

 

 

$

5,936,000

 

 

-8

%

Operating Profit

501,814

 

 

 

324,892

 

 

826,706

 

 

689,815

 

 

142,971

 

 

832,786

 

 

-1

%

Operating Margin

9.2

 

%

 

5.9

%

 

15.1

%

 

11.6

%

 

2.4

%

 

14.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Segment Results

 

 

 

 

 

 

 

 

 

 

U.S. and Canada Segment:

 

 

 

 

 

 

 

 

 

 

External Net Revenues

$

2,556,104

 

 

 

$

 

 

$

2,556,104

 

 

$

2,449,280

 

 

$

 

 

$

2,449,280

 

 

4

%

Operating Profit

539,727

 

 

 

 

 

539,727

 

 

415,436

 

 

 

 

415,436

 

 

30

%

Operating Margin

21.1

 

%

 

 

 

21.1

%

 

17.0

%

 

 

 

17.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

International Segment:

 

 

 

 

 

 

 

 

 

 

External Net Revenues

1,578,989

 

 

 

 

 

1,578,989

 

 

1,836,360

 

 

 

 

1,836,360

 

 

-14

%

Operating Profit

42,466

 

 

 

 

 

42,466

 

 

107,304

 

 

 

 

107,304

 

 

-60

%

Operating Margin

2.7

 

%

 

 

 

2.7

%

 

5.8

%

 

 

 

5.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Entertainment, Licensing and Digital Segment:

 

 

 

 

 

 

 

 

 

 

External Net Revenues

373,854

 

 

 

 

 

373,854

 

 

434,467

 

 

 

 

434,467

 

 

-14

%

Operating Profit

92,957

 

 

 

20,831

 

 

113,788

 

 

99,686

 

 

 

 

99,686

 

 

14

%

Operating Margin

24.9

 

%

 

5.6

%

 

30.4

%

 

22.9

%

 

 

 

22.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

eOne Segment:

 

 

 

 

 

 

 

 

 

 

External Net Revenues

956,496

 

 

 

 

 

956,496

 

 

1,215,773

 

 

 

 

1,215,773

 

 

-21

%

Operating (Loss) Profit

(79,185

)

 

 

210,273

 

 

131,088

 

 

19,987

 

 

142,971

 

 

162,958

 

 

-20

%

Operating Margin

-8.3

 

%

 

22.0

%

 

13.7

%

 

1.6

%

 

11.8

%

 

13.4

%

 

 

Corporate and Eliminations:

The Corporate and Eliminations segment included non-GAAP adjustments of $93,788 for the year ended December 27, 2020 consisting of eOne acquisition and related costs 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 year ended December 29, 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 December 29, 2019

 

Hasbro

As Reported

 

eOne

(under U.S.

GAAP)

 

Pro Forma

Adjustments (1)

 

Pro Forma

Combined

Net Revenues

$

1,428,007

 

 

 

$

235,160

 

 

 

$

 

 

 

$

1,663,167

 

 

 

 

 

 

 

 

 

 

Hasbro Operating Profit

$

190,380

 

 

 

$

 

 

 

$

17,778

 

 

 

$

208,158

 

 

eOne Operating Loss

 

 

 

(66,580

)

 

 

(4,800

)

 

 

(71,380

)

 

Operating Profit (Loss)

190,380

 

 

 

(66,580

)

 

 

12,978

 

 

 

136,778

 

 

Non-GAAP Adjustments

17,778

 

 

 

31,781

 

 

 

(12,978

)

 

 

36,581

 

 

Adjusted Operating Profit (Loss) *

$

208,158

 

 

 

$

(34,799

)

 

 

$

 

 

 

$

173,359

 

 

 

 

 

 

 

 

 

 

* Reconciliation to Pro Forma Adjusted results is as follows:

 

 

 

 

Net Earnings (Loss)

$

267,345

 

 

 

$

(50,266

)

 

 

$

(121,611

)

 

 

$

95,468

 

 

Interest Expense

34,782

 

 

 

10,772

 

 

 

18,035

 

 

 

63,589

 

 

Other Income, Net

(143,163

)

 

 

(759

)

 

 

120,097

 

 

 

(23,825

)

 

Income Tax Expense (Benefit)

31,416

 

 

 

(26,815

)

 

 

(3,543

)

 

 

1,058

 

 

Net Earnings Attributable to Noncontrolling Interests

 

 

 

488

 

 

 

 

 

 

488

 

 

Operating Profit (Loss)

190,380

 

 

 

(66,580

)

 

 

12,978

 

 

 

136,778

 

 

 

 

 

 

 

 

 

 

Non-GAAP Adjustments

 

 

 

 

 

 

 

Hasbro:

 

 

 

 

 

 

 

eOne Acquisition Costs

17,778

 

 

 

 

 

 

(17,778

)

 

 

 

 

eOne:

 

 

 

 

 

 

 

Restructuring and Related Charges

 

 

 

11,526

 

 

 

 

 

 

11,526

 

 

Acquisition Costs – eOne Deals

 

 

 

458

 

 

 

 

 

 

458

 

 

Hasbro Transaction Costs

 

 

 

3,245

 

 

 

(3,245

)

 

 

 

 

Acquired Intangible Amortization

 

 

 

16,552

 

 

 

8,045

 

 

 

24,597

 

 

 

17,778

 

 

 

31,781

 

 

 

(12,978

)

 

 

36,581

 

 

 

 

 

 

 

 

 

 

Adjusted Operating Profit (Loss)

$

208,158

 

 

 

$

(34,799

)

 

 

$

 

 

 

$

173,359

 

 

 

 

 

 

 

 

 

 

(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:

  • elimination of acquisition and deal costs of $17,778 incurred by Hasbro and $3,245 incurred by eOne related to the eOne acquisition, included in Selling, Distribution and Administration;
  • additional amortization expense of $8,045 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 $18,035 as a result of incurring new debt and extinguishing historical eOne debt;
  • elimination of $120,097 gain in Other Income, net, related to the mark to market of foreign exchange forward and option contracts, which the Company entered into in order to hedge a portion of the British pound sterling purchase price for the eOne acquisition; and
  • the income tax effect of the pro forma adjustments in the amount of $3,543, calculated using a blended statutory income tax rate of 22.5% for the eOne adjustments and 21% for the Hasbro interest adjustments.

 

Year Ended December 29, 2019

 

Hasbro As

Reported

 

eOne

(under U.S.

GAAP)

 

Pro Forma

Adjustments (2)

 

Pro Forma

Combined

Net Revenues

$

4,720,227

 

 

 

$

1,215,773

 

 

 

$

 

 

 

$

5,936,000

 

 

 

 

 

 

 

 

 

Hasbro Operating Profit

$

652,050

 

 

 

$

 

 

 

$

17,778

 

 

 

$

669,828

 

eOne Operating Profit

 

 

 

52,321

 

 

 

(32,334

)

 

 

19,987

 

Operating Profit

652,050

 

 

 

52,321

 

 

 

(14,556

)

 

 

689,815

 

Non-GAAP Adjustments

17,778

 

 

 

110,637

 

 

 

14,556

 

 

 

142,971

 

Adjusted Operating Profit *

$

669,828

 

 

 

$

162,958

 

 

 

$

 

 

 

$

832,786

 

 

 

 

 

 

 

 

 

* Reconciliation to Pro Forma Adjusted results is as follows:

 

 

 

 

Net Earnings (Loss)

$

520,454

 

 

 

$

(22,134

)

 

 

$

(152,409

)

 

 

$

345,911

 

Interest Expense

101,878

 

 

 

45,845

 

 

 

75,351

 

 

 

223,074

 

Other (Income) Expense, Net

(44,038

)

 

 

27,720

 

 

 

74,752

 

 

 

58,434

 

Income Tax Expense (Benefit)

73,756

 

 

 

(4,512

)

 

 

(12,250

)

 

 

56,994

 

Net Earnings Attributable to Noncontrolling Interests

 

 

 

5,402

 

 

 

 

 

 

5,402

 

Operating Profit

652,050

 

 

 

52,321

 

 

 

(14,556

)

 

 

689,815

 

 

 

 

 

 

 

 

 

Non-GAAP Adjustments

 

 

 

 

 

 

 

Hasbro:

 

 

 

 

 

 

 

eOne Acquisition Costs

17,778

 

 

 

 

 

 

(17,778

)

 

 

 

eOne:

 

 

 

 

 

 

 

Restructuring and Related Charges

 

 

 

33,408

 

 

 

 

 

 

33,408

 

Acquisition Costs – eOne Deals

 

 

 

11,175

 

 

 

 

 

 

11,175

 

Hasbro Transaction Costs

 

 

 

6,489

 

 

 

(6,489

)

 

 

 

Acquired Intangible Amortization

 

 

 

59,565

 

 

 

38,823

 

 

 

98,388

 

 

17,778

 

 

 

110,637

 

 

 

14,556

 

 

 

142,971

 

 

 

 

 

 

 

 

 

Adjusted Operating Profit

$

669,828

 

 

 

$

162,958

 

 

 

$

 

 

 

$

832,786

 

 

 

 

 

 

 

 

 

(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:

  • elimination of acquisition and deal costs of $17,778 incurred by Hasbro and $6,489 incurred by eOne related to the eOne acquisition, included in Selling, Distribution and Administration;
  • additional amortization expense of $38,823 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 $75,351 as a result of incurring new debt and extinguishing historical eOne debt;
  • total adjustments to Other (Income) Expense, net of $74,752, consisting of:

    • elimination of $19,812 expense 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
    • elimination of $94,564 net gain related to the mark to market of foreign exchange forward and option contracts, which the Company entered into in order to hedge a portion of the British pound sterling purchase price for the eOne acquisition; and
  • the income tax effect of the pro forma adjustments in the amount of $12,250, 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 year ended December 29, 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)

December 27,

2020

 

Diluted Per Share

Amount

 

Pro Forma

December 29,

2019

 

Pro Forma

Diluted Per Share

Amount (1)

Net Earnings Attributable to Hasbro, Inc.

$

105,173

 

 

 

$

0.76

 

 

 

$

95,468

 

 

$

0.69

 

Acquisition and Related Costs

47,866

 

 

 

0.35

 

 

 

 

 

 

Acquired Intangible Amortization

23,260

 

 

 

0.17

 

 

 

19,063

 

 

0.14

 

Severance

(2,703

)

 

 

(0.02

)

 

 

 

 

 

UK Tax Reform (2)

1,709

 

 

 

0.01

 

 

 

 

 

 

Pension (3)

 

 

 

 

 

 

143

 

 

 

Pro Forma eOne Adjustments

 

 

 

 

 

 

9,288

 

 

0.07

 

Net Earnings Attributable to Hasbro, Inc., as Adjusted

$

175,305

 

 

 

$

1.27

 

 

 

$

123,962

 

 

$

0.90

 

 

 

 

 

 

 

 

 

 

Year Ended

(all adjustments reported after-tax)

December 27,

2020

 

Diluted Per Share

Amount

 

Pro Forma

December 29,

2019

 

Pro Forma

Diluted Per Share

Amount (1)

Net Earnings Attributable to Hasbro, Inc.

$

222,519

 

 

 

$

1.62

 

 

 

$

345,911

 

 

$

2.51

 

Acquisition and Related Costs

188,557

 

 

 

1.37

 

 

 

 

 

 

Acquired Intangible Amortization

80,731

 

 

 

0.59

 

 

 

76,251

 

 

0.55

 

Severance

7,422

 

 

 

0.05

 

 

 

 

 

 

UK Tax Reform (2)

15,389

 

 

 

0.11

 

 

 

 

 

 

Pension (3)

 

 

 

 

 

 

85,995

 

 

0.63

 

Pro Forma eOne Adjustments

 

 

 

 

 

 

34,552

 

 

0.25

 

Net Earnings Attributable to Hasbro, Inc., as Adjusted

$

514,618

 

 

 

$

3.74

 

 

 

$

542,709

 

 

$

3.94

 

(1) 2019 Pro Forma Diluted Per Share Amount is calculated using weighted average shares outstanding of 137,586 for the quarter and year ended December 29, 2019, which includes the pro forma impact of issuing shares associated with the financing of the eOne Acquisition.

(2) In the third quarter of 2020, the Company recorded income tax expense of $13,680 as a result of the revaluation of Hasbro’s UK tax attributes in accordance with the Finance Act of 2020 enacted by the United Kingdom on July 22, 2020. In the fourth quarter of 2020, the Company recorded additional tax expense of $1,709 related to the revaluation. Effective back to April 1, 2020, the new law maintains the corporate income tax rate at 19% instead of the planned reduction to 17% that was previously enacted in the UK Finance Act of 2016.

(3) 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. In the fourth quarter of 2019, the Company recognized an additional $185 non-cash charge ($143 after-tax) related to the settlement.

Reconciliation of EBITDA

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

Quarter Ended December 29, 2019

 

December 27,

2020

 

Hasbro

As Reported

 

eOne

(under U.S.

GAAP)

 

Pro Forma

Adjustments (4)

 

Pro Forma

Combined

Net Earnings (Loss) Attributable to Hasbro, Inc.

$

105,173

 

 

$

267,345

 

 

 

$

(50,266

)

 

 

$

(121,611

)