Differentiated business model drives growth led
by Entertainment and Wizards of the Coast and Digital Gaming
segments
- Third quarter 2021 revenues up 11% to $1.97 billion
- Entertainment segment revenue up 76%
- Wizards of the Coast and Digital Gaming segment revenue up
32%
- Consumer Products segment revenue down 3%
- Operating profit of $367.9 million, or 18.7% of revenues, up
9%
- Adjusted operating profit of $389.6 million, or 19.8% of
revenues, up 6%
- Net earnings of $253.2 million, up 15%, or $1.83 per diluted
share
- Adjusted net earnings of $271.2 million, up 5%, or $1.96 per
diluted share
- Nine-month operating cash flow of $685.6 million
- Further reduced debt and maintained a strong cash
position
- Repaid $400.0 million of debt and funded the quarterly
dividend
- Quarter ending cash of $1.18 billion
Hasbro, Inc. (NASDAQ: HAS), a global play and
entertainment company, today reported financial results for the
third quarter 2021.
"The Hasbro team performed at an extremely high level to deliver
double-digit revenue growth, strong earnings and cash flow for the
quarter, driven by our diversified business model," said Rich
Stoddart, interim chief executive officer. "While we mourn the
passing of our long-time leader and friend Brian Goldner, our
performance is a testament to the power and potential of the Brand
Blueprint strategy he architected. Entertainment revenues were up
significantly, as the business returns to pre-pandemic levels, and
the momentum of the Wizards of the Coast business continued. These
performances more than overcame a small decline in our Consumer
Product shipments amidst global supply chain challenges in the
quarter. Our teams continue to work around the clock to secure
transport for our goods to meet the robust demand for Hasbro
brands."
"The strength of the business is evident in the quarter's
results, highlighting the benefits of our Brand Blueprint strategy
to deliver strong revenue, earnings and cash flow," said Deborah
Thomas, Hasbro’s chief financial officer. "Our established and
experienced leadership team continues to execute on the vision we
all share. We are also working tirelessly to ensure product for the
holiday, and are pleased that, through today, we have delivered
much of what was delayed in the third quarter despite continued
supply chain challenges. Given the strength across our diversified
business model, for the full year we continue to target
double-digit revenue growth, currently expected in the range of 13%
to 16%, and operating margins in line with last year's adjusted
level of approximately 15%. We have orders to support the high end
of the revenue growth range, but there are supply chain factors out
of our control which could impact our ability to fully achieve the
upside."
Third Quarter 2021 Financial
Results
$ Millions, except earnings per
share
Q3 2021
Q3 2020
% Change
Net Revenues1
$
1,970.0
$
1,776.6
11%
Operating Profit
$
367.9
$
336.6
9%
Adjusted Operating Profit2
$
389.6
$
367.2
6%
Net Earnings
$
253.2
$
220.9
15%
Net Earnings per Diluted Share
$
1.83
$
1.61
14%
Adjusted Net Earnings2
$
271.2
$
258.9
5%
Adjusted Net Earnings per Diluted
Share2
$
1.96
$
1.88
4%
EBITDA2
$
443.0
$
422.3
5%
Adjusted EBITDA2
$
462.1
$
442.1
5%
1Foreign exchange had a positive $13.1
million impact, or 1%, on third quarter 2021 revenue.
2See the financial tables accompanying
this press release for a reconciliation of GAAP and non-GAAP
financial measures.
Third Quarter 2021 Major Segment
Performance
Beginning with the first quarter 2021, Hasbro realigned its
financial reporting segments and business units, in order to align
its segment financial reporting more closely with its current
business structure. The three principal reportable segments are:
Consumer Products, Wizards of the Coast and Digital Gaming, and
Entertainment.
Reclassifications of certain prior year segment results have
been made to conform to the current-year presentation. None of the
segment changes impact the Company's previously reported
consolidated net revenue, operating profits, EBITDA, net earnings
or net earnings per share.
Major Segments ($ Millions)
Net Revenues
Operating Profit
(Loss)
Adjusted Operating
Profit (Loss)1
Q3 2021
Q3 2020
% Change
Q3 2021
Q3 2020
Q3 2021
Q3 2020
Consumer Products
$
1,282.7
$
1,317.8
-3%
$
210.4
$
226.2
$
210.4
$
226.2
Wizards of the Coast and Digital
Gaming
$
360.2
$
273.4
32%
$
159.4
$
141.6
$
159.4
$
141.6
Entertainment
$
327.1
$
185.4
76%
$
22.4
$
(28.3)
$
42.1
$
(3.6)
1Reconciliations are included in the
attached schedules under the heading "Reconciliation of Adjusted
Operating Profit."
Consumer Products segment revenue and operating profit
declined slightly. The team executed major new launches for MY
LITTLE PONY, PEPPA PIG, and PJ MASKS. Hasbro Gaming and Emerging
Brands revenue increased. Revenue also grew in licensing and Latin
America. Global consumer point of sale declined mid-single digits
as in stock levels were below targets. The team worked tirelessly
to ship product to meet a higher level of demand, delivering most
of the orders. Supply chain disruption, including limited capacity
and port congestion resulted in approximately $100 million of
orders that were not filled in the quarter with the majority of
that fulfilled in early Q4. Operating profit and margin were
negatively impacted by the lower revenue due to shipping challenges
as well as higher freight costs to facilitate product
deliveries.
Wizards of the Coast and Digital Gaming segment revenue
grew led by tabletop and digital gaming revenues for MAGIC: THE
GATHERING, DUNGEONS & DRAGONS and licensed digital gaming.
Successful MAGIC: THE GATHERING releases of Adventures in the
Forgotten Realms and Innistrad: Midnight Hunt have continued to
drive strong demand for MAGIC. Operating profit grew behind
increased revenues which were partially offset by higher expenses
to support new game launches, including incremental product
development and advertising, as well as higher digital game
depreciation.
Entertainment segment revenue increased across the
segment as production and deliveries were strong and were ahead of
third quarter levels both last year and in 2019. Television
revenues grew with deliveries of Yellowjackets and The Rookie, as
well as sales of Fear the Walking Dead among other scripted and
unscripted programs. Film revenue grew behind Come from Away and
Finch. Family Brands revenue growth was highlighted by the delivery
of My Little Pony: A New Generation to Netflix as well as content
deals for PEPPA PIG and PJ MASKS, along with growth in YouTube
advertising revenues. Third quarter 2021 Entertainment segment
revenue does not include any eOne music revenues due to the
completion of the sale of the eOne music business at the beginning
of the quarter, as compared to $28.7 million of eOne music revenues
included in the Entertainment segment for the third quarter of
2020. Adjusted operating profit increased on the higher revenue and
lower administrative costs, partially offset by higher program cost
amortization associated with higher deliveries as well as royalty
and advertising in support of those deliveries.
Third Quarter 2021 Brand Performance:
Supercharging the Brand Blueprint
Brand Portfolio
Net Revenues ($
Millions)
Q3 2021
Q3 2020
% Change
Franchise Brands
$
882.0
$
807.5
9%
Partner Brands
$
366.7
$
409.2
-10%
Hasbro Gaming1
$
281.9
$
239.2
18%
Emerging Brands
$
177.5
$
155.0
15%
TV/Film/Entertainment
$
261.9
$
165.7
58%
1Hasbro's total gaming category, including
all gaming revenue, most notably MAGIC: THE GATHERING and MONOPOLY,
which are reported in the Franchise Brands portfolio, totaled
$658.6 million for the third quarter 2021, up 21% compared to the
respective period in 2020.
Showcasing the power and potential of the Brand Blueprint,
Hasbro's MY LITTLE PONY came to life on film in My Little Pony: A
New Generation, which premiered on Netflix in September. The film
delighted fans and audiences, coming in at number one for kids in
viewership over the debut weekend in over 80 markets. As one of the
top revenue growers in the quarter, MY LITTLE PONY'S relaunch is
well underway with innovative toy, game and licensing merchandise
in support of an all new cast of ponies, in addition to the
successful animated film and robust content road map to follow. In
other examples of the power and connectivity of our brands and
segments, Hasbro launched its first toy and game line for PEPPA PIG
and PJ MASKS during the quarter, bringing approximately 100 new
items to retailers for families around the world inspired by the
new stories playing out in entertainment.
Revenues grew in the Franchise Brands, Hasbro Gaming, Emerging
Brands and TV/Film/Entertainment categories, and declined in
Partner Brands. Franchise Brand revenues increased with gains in
MAGIC: THE GATHERING, MY LITTLE PONY and TRANSFORMERS. Partner
Brands revenue declined as growth in Hasbro products for the Marvel
portfolio, including the Spider-Man franchise, and Ghostbusters was
more than offset by declines in other properties. Hasbro Gaming
revenue increased, led by tabletop and digital gaming growth
including DUNGEONS & DRAGONS as well as many classic games such
as THE GAME OF LIFE, CONNECT 4 and GUESS WHO. Emerging Brands
revenue growth reflected the launch of Hasbro products for PEPPA
PIG and PJ MASKS at retail, as well as continued fan engagement for
GI JOE product. TV/Film/Entertainment revenues grew with increased
deliveries in scripted, unscripted and animated television and film
inclusive of the loss of revenues from the sale of the Music
business.
Debt Repayment
Year-to-date, the Company has retired $972.5 million of
Long-term debt. In the third quarter 2021, the Company repaid
approximately $400 million of debt, including its $300 million
aggregate principal amount of 2.60% notes due November 19, 2022,
using, in part, the proceeds from sale the eOne music business
completed at the beginning of the third quarter.
Dividend
The next quarterly cash dividend of $0.68 per common share was
declared on July 28, 2021 and is payable on November 15, 2021 to
shareholders of record at the close of business on November 1,
2021. During the third quarter, Hasbro paid $93.3 million in cash
dividends to shareholders, bringing the year-to-date payments to
$280.7 million.
Conference Call Webcast
Hasbro will webcast its third quarter 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 making the world a better place for all children, fans
and families. Hasbro delivers immersive brand experiences for
global audiences through consumer products, including toys and
games; entertainment through eOne, its independent studio; and
gaming, led by the team at Wizards of the Coast, an award-winning
developer of tabletop and digital games best known for fantasy
franchises MAGIC: THE GATHERING and DUNGEONS & DRAGONS.
The company’s unparalleled portfolio of approximately 1,500
brands includes MAGIC: THE GATHERING, NERF, MY LITTLE PONY,
TRANSFORMERS, PLAY-DOH, MONOPOLY, BABY ALIVE, DUNGEONS &
DRAGONS, POWER RANGERS, PEPPA PIG and PJ MASKS, as well as premier
partner brands. For the past decade, Hasbro has been consistently
recognized for its corporate citizenship, including being named one
of the 100 Best Corporate Citizens by 3BL Media and one of the
World’s Most Ethical Companies by Ethisphere Institute. Important
business and brand updates are routinely shared on our Investor
Relations website, Newsroom and social channels (@Hasbro on
Twitter, Instagram, Facebook and LinkedIn).
© 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 expectations for growth in
2021; the ability to achieve our financial and business goals and
objectives; our efforts to ship sufficient product to meet demand
due to supply chain issues affecting businesses globally; product
and entertainment plans, including the content and timing of
product and content releases; marketing and promotional efforts;
anticipated expenses; 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. 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, cost-effective and profitable
basis;
- our ability to implement shipping strategies to lessen the
impact of any increased shipping costs due to shipping delays or
changes in required methods of shipping, as well as our ability to
take any price increases to offset shipping costs, increases in
prices of raw materials or other increases in costs of our
products;
- 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 technological and
entertainment offerings that are available and that compete with
our offerings for consumers’ attention;
- 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 inventory policies and
practices of our customers and supply chain challenges;
- our ability to develop and grow areas of our brand blueprint,
such as through eOne, Wizards of the Coast, and our other
entertainment and digital gaming initiatives;
- our ability to successfully develop and execute plans to
mitigate the negative impact of the coronavirus on our business,
including, without limitation, negative impacts to our supply chain
and costs that have occurred and could continue to occur in
countries where we source significant amounts of product;
- risks associated with international operations, such as
currency conversion, currency fluctuations, the imposition of
tariffs, quotas, shipping delays or difficulties, 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, partners,
licensees, suppliers and manufacturers operate, such as inflation,
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 or more of our
significant retailers, our licensees or 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;
- risks related to sourcing of products from countries outside of
China, such as India and Vietnam, where the Covid-19 pandemic has
negatively impacted our vendors and the ability to transport
products to our markets;
- our ability to successfully implement our succession plans to
appoint a permanent CEO following the passing of Brian Goldner, our
former Chairman and CEO;
- our ability to attract and retain talented officers and
employees;
- our ability to realize the benefits of cost-savings and
efficiency and/or revenue 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 production of entertainment due to
strikes, lockouts or other union actions that could halt or delay
productions;
- risks relating to the impairment and/or write-offs of products
and films and television programs we acquire and produce;
- risks relating to investments, acquisitions and
dispositions;
- 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 would 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 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 presentation or
to update them to reflect events or circumstances occurring after
the date of this presentation.
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 2021 impact of loss on disposal of business and
related transaction costs, income tax expense associated with the
U.K. Finance Act 2021, purchased intangible amortization and stock
compensation expense associated with acquisition-related grants,
and for 2020, the impact of the eOne acquisition-related costs,
purchased intangible amortization, restructuring charges and income
tax expense associated with the U.K. Finance Act of 2020. Also
included in the financial tables are the non-GAAP financial
measures of EBITDA, and 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 well as
non-cash stock compensation. 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
(Tables Attached)
HASBRO, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited)
(Millions of Dollars)
September 26, 2021
September 27, 2020
ASSETS
Cash and Cash Equivalents
$
1,181.2
$
1,132.4
Accounts Receivable, Net
1,476.6
1,438.4
Inventories
544.1
540.0
Prepaid Expenses and Other Current
Assets
528.5
648.2
Total Current Assets
3,730.4
3,759.0
Property, Plant and Equipment, Net
441.9
477.2
Goodwill
3,420.2
3,644.1
Other Intangible Assets, Net
1,209.5
1,546.8
Other Assets
1,428.4
1,276.1
Total Assets
$
10,230.4
$
10,703.2
LIABILITIES, NONCONTROLLING INTERESTS
AND SHAREHOLDERS' EQUITY
Short-Term Borrowings
$
0.9
$
10.0
Current Portion of Long-Term Debt
187.6
369.3
Accounts Payable and Accrued
Liabilities
2,261.9
1,936.3
Total Current Liabilities
2,450.4
2,315.6
Long-Term Debt
3,977.4
4,777.8
Other Liabilities
722.5
778.5
Total Liabilities
7,150.3
7,871.9
Redeemable Noncontrolling Interests
22.9
22.9
Total Shareholders' Equity
3,057.2
2,808.4
Total Liabilities, Noncontrolling
Interests and Shareholders' Equity
$
10,230.4
$
10,703.2
HASBRO, INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
(Millions of Dollars and Shares, Except
Per Share Data)
Quarter Ended
Nine Months Ended
September 26, 2021
% Net Revenues
September 27, 2020
% Net Revenues
September 26, 2021
% Net Revenues
September 27, 2020
% Net Revenues
Net Revenues
$
1,970.0
100.0
%
$
1,776.6
100.0
%
$
4,407.0
100.0
%
$
3,742.5
100.0
%
Costs and Expenses:
Cost of Sales
609.5
30.9
%
610.1
34.3
%
1,244.4
28.2
%
1,126.0
30.1
%
Program Cost Amortization
187.9
9.5
%
85.4
4.8
%
396.1
9.0
%
268.2
7.2
%
Royalties
171.8
8.7
%
176.9
10.0
%
392.2
8.9
%
387.1
10.3
%
Product Development
80.1
4.1
%
62.7
3.5
%
229.1
5.2
%
174.9
4.7
%
Advertising
163.3
8.3
%
137.4
7.7
%
356.6
8.1
%
311.4
8.3
%
Amortization of Intangibles
27.7
1.4
%
36.2
2.0
%
90.3
2.0
%
107.7
2.9
%
Selling, Distribution and
Administration
361.8
18.4
%
325.4
18.3
%
1,004.7
22.8
%
885.7
23.7
%
Loss on Disposal of Business
—
0.0
%
—
0.0
%
101.8
2.3
%
—
0.0
%
Acquisition and Related Costs
—
0.0
%
5.9
0.3
%
—
0.0
%
166.0
4.4
%
Operating Profit
367.9
18.7
%
336.6
18.9
%
591.8
13.4
%
315.5
8.4
%
Interest Expense
43.3
2.2
%
49.4
2.8
%
137.3
3.1
%
153.7
4.1
%
Other Expense (Income), Net
1.2
0.1
%
(12.0)
-0.7
%
(39.5)
-0.9
%
(21.7)
-0.6
%
Earnings before Income Taxes
323.4
16.4
%
299.2
16.8
%
494.0
11.2
%
183.5
4.9
%
Income Tax Expense
68.5
3.5
%
79.2
4.5
%
143.5
3.3
%
64.3
1.7
%
Net Earnings
254.9
12.9
%
220.0
12.4
%
350.5
8.0
%
119.2
3.2
%
Net Earnings (Loss) Attributable to
Noncontrolling Interests
1.7
0.1
%
(0.9)
-0.1
%
4.0
0.1
%
1.9
0.1
%
Net Earnings Attributable to Hasbro,
Inc.
$
253.2
12.9
%
$
220.9
12.4
%
$
346.5
7.9
%
$
117.3
3.1
%
Per Common Share
Net Earnings
Basic
$
1.83
$
1.61
$
2.51
$
0.86
Diluted
$
1.83
$
1.61
$
2.51
$
0.85
Cash Dividends Declared
$
0.68
$
0.68
$
2.04
$
2.04
Weighted Average Number of Shares
Basic
138.1
137.3
137.9
137.2
Diluted
138.5
137.5
138.3
137.5
HASBRO, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
(Unaudited)
(Millions of Dollars)
Nine Months Ended
September 26, 2021
September 27, 2020
Cash Flows from Operating Activities:
Net Earnings
$
350.5
$
119.2
Other Non-Cash Adjustments
814.2
561.8
Changes in Operating Assets and
Liabilities
(479.1
)
(186.7
)
Net Cash Provided by Operating
Activities
685.6
494.3
Cash Flows from Investing Activities:
Additions to Property, Plant and
Equipment
(98.1
)
(92.1
)
Acquisition, Net of Cash Acquired
—
(4,403.9
)
Proceeds From Sale of Business, Net of
Cash
379.2
—
Other
(3.6
)
24.3
Net Cash Provided (Utilized) by Investing
Activities
277.5
(4,471.7
)
Cash Flows from Financing Activities:
Proceeds from Long-Term Debt
127.6
1,036.0
Repayments of Long-Term Debt
(1,062.1
)
(147.3
)
Net Repayments of Short-Term
Borrowings
(6.2
)
(0.3
)
Stock-Based Compensation Transactions
24.6
1.8
Dividends Paid
(280.7
)
(279.4
)
Payments Related to Tax Withholding for
Share-Based Compensation
(10.8
)
(5.9
)
Redemption of Equity Instruments
—
(47.4
)
Debt Extinguishment Costs
(9.1
)
—
Other
(6.8
)
(7.0
)
Net Cash (Utilized) Provided by Financing
Activities
(1,223.5
)
550.5
Effect of Exchange Rate Changes on
Cash
(8.1
)
(21.1
)
Cash and Cash Equivalents at Beginning of
Year
1,449.7
4,580.4
Cash and Cash Equivalents at End of
Quarter
$
1,181.2
$
1,132.4
HASBRO, INC.
SUPPLEMENTAL FINANCIAL DATA
SEGMENT RESULTS - AS REPORTED AND AS
ADJUSTED
(Unaudited)
(Millions of Dollars)
Effective in the first quarter of 2021,
the Company reorganized its reportable segments to Consumer
Products, Wizards of the Coast and Digital Gaming, Entertainment,
and Corporate and Other. For comparability, segment results for the
quarter and nine months ended September 27, 2020 are presented to
align with the new reportable segments.
Operating Results
Quarter Ended September 26,
2021
Quarter Ended September 27,
2020
As Reported
Non-GAAP Adjustments
Adjusted
As Reported
Non-GAAP Adjustments
Adjusted
% Change
Total Company
Results
External Net Revenues (1)
$
1,970.0
$
—
$
1,970.0
$
1,776.6
$
—
$
1,776.6
11%
Operating Profit
367.9
21.7
389.6
336.6
30.6
367.2
6%
Operating Margin
18.7
%
1.1
%
19.8
%
18.9
%
1.7
%
20.7
%
EBITDA
443.0
19.1
462.1
422.3
19.8
442.1
5%
Segment
Results
Consumer
Products:
External Net Revenues (2)
$
1,282.7
$
—
$
1,282.7
$
1,317.8
$
—
$
1,317.8
-3%
Operating Profit
210.4
—
210.4
226.2
—
226.2
-7%
Operating Margin
16.4
%
—
16.4
%
17.2
%
—
17.2
%
EBITDA
253.5
9.0
262.5
267.0
10.1
277.1
-5%
Wizards of the Coast
and Digital Gaming:
External Net Revenues
360.2
—
360.2
273.4
—
273.4
32%
Operating Profit
159.4
—
159.4
141.6
—
141.6
13%
Operating Margin
44.3
%
—
44.3
%
51.8
%
—
51.8
%
EBITDA
170.9
3.3
174.2
149.6
2.6
152.2
14%
Entertainment:
External Net Revenues (3)
327.1
—
327.1
185.4
—
185.4
76%
Operating Profit (Loss)
22.4
19.7
42.1
(28.3)
24.7
(3.6)
>100%
Operating Margin
6.8
%
6.0
%
12.9
%
-15.3
%
13.3
%
-1.9
%
EBITDA
44.1
5.5
49.6
(0.4)
2.0
1.6
>100%
Corporate and
Other:
Operating (Loss) Profit
(24.3)
2.0
(22.3)
(2.9)
5.9
3.0
>-100%
EBITDA
(25.5)
1.3
(24.2)
6.1
5.1
11.2
>-100%
Quarter Ended
September 26, 2021
September 27, 2020
% Change
(1)
Net Revenues by Brand
Portfolio
Franchise Brands
$
882.0
$
807.5
9
%
Partner Brands
366.7
409.2
-10
%
Hasbro Gaming (i)
281.9
239.2
18
%
Emerging Brands
177.5
155.0
15
%
TV/Film/Entertainment
261.9
165.7
58
%
Total
$
1,970.0
$
1,776.6
(i) Hasbro's total gaming category,
including all gaming revenue, most notably MAGIC: THE GATHERING and
MONOPOLY, which are reported in the Franchise Brands portfolio,
totaled $658.6 for the quarter ended September 26, 2021, up 21%
from revenues of $543.1 for the quarter ended September 27,
2020.
Quarter Ended
September 26, 2021
September 27, 2020
% Change
(2)
Consumer Products Segment Net Revenues by
Major Geographic Region
North America
$
805.0
$
830.1
-3
%
Europe
304.2
316.8
-4
%
Asia Pacific
75.5
78.2
-3
%
Latin America
98.0
92.7
6
%
Total
$
1,282.7
$
1,317.8
Quarter Ended
September 26, 2021
September 27, 2020
% Change
(3)
Entertainment Segment Net Revenues by
Category
Film and TV
$
255.4
$
141.6
80
%
Family Brands
60.5
14.2
>100
%
Music and Other
11.2
29.6
-62
%
Total
$
327.1
$
185.4
Operating
Results
Nine Months Ended September
26, 2021
Nine Months Ended September
27, 2020
As Reported
Non-GAAP Adjustments
Adjusted
As Reported
Non-GAAP Adjustments
Adjusted
% Change
Total Company
Results
External Net Revenues (4)
$
4,407.0
$
—
$
4,407.0
$
3,742.5
$
—
$
3,742.5
18%
Operating Profit
591.8
183.5
775.3
315.5
249.8
565.3
37%
Operating Margin
13.4
%
4.2
%
17.6
%
8.4
%
6.7
%
15.1
%
EBITDA
837.8
165.9
1,003.7
539.1
217.7
756.8
33%
Segment
Results
Consumer
Products:
External Net Revenues (5)
$
2,625.8
$
—
$
2,625.8
$
2,409.8
$
—
$
2,409.8
9%
Operating Profit
260.5
—
260.5
171.2
—
171.2
52%
Operating Margin
9.9
%
—
9.9
%
7.1
%
—
7.1
%
EBITDA
359.5
23.6
383.1
263.2
26.8
290.0
32%
Wizards of the Coast
and Digital Gaming:
External Net Revenues
1,008.7
—
1,008.7
670.7
—
670.7
50%
Operating Profit
462.3
—
462.3
311.5
—
311.5
48%
Operating Margin
45.8
%
—
45.8
%
46.4
%
—
46.4
%
EBITDA
490.1
9.0
499.1
323.3
6.8
330.1
51%
Entertainment:
External Net Revenues (6)
772.5
—
772.5
662.0
—
662.0
17%
Operating (Loss) Profit
(74.3)
168.2
93.9
(106.1)
170.9
64.8
45%
Operating Margin
-9.6
%
21.8
%
12.2
%
-16.0
%
25.8
%
9.8
%
EBITDA
25.1
116.3
141.4
(25.3)
102.7
77.4
83%
Corporate and
Other:
Operating (Loss) Profit
(56.7)
15.3
(41.4)
(61.1)
78.9
17.8
>-100%
EBITDA
(36.9)
17.0
(19.9)
(22.1)
81.4
59.3
>-100%
Nine Months Ended
September 26, 2021
September 27, 2020
% Change
(4)
Net Revenues by Brand
Portfolio
Franchise Brands
$
2,023.4
$
1,580.9
28
%
Partner Brands
766.7
729.8
5
%
Hasbro Gaming (i)
565.3
516.3
9
%
Emerging Brands
399.2
325.1
23
%
TV/Film/Entertainment
652.4
590.4
11
%
Total
$
4,407.0
$
3,742.5
(i) Hasbro's total gaming category,
including all gaming revenue, most notably MAGIC: THE GATHERING and
MONOPOLY, totaled $1,543.3 for the nine months ended September 26,
2021, up 28% from revenues of $1,202.6 for the nine months ended
September 27, 2020.
Nine Months Ended
September 26, 2021
September 27, 2020
% Change
(5)
Consumer Products Segment Net Revenues by
Major Geographic Region
North America
$
1,559.1
$
1,434.9
9
%
Europe
669.2
615.4
9
%
Asia Pacific
208.7
197.1
6
%
Latin America
188.8
162.4
16
%
Total
$
2,625.8
$
2,409.8
Nine Months Ended
September 26, 2021
September 27, 2020
% Change
(6)
Entertainment Segment Net Revenues by
Category
Film and TV
$
586.1
$
514.5
14
%
Family Brands
105.4
58.9
79
%
Music and Other
81.0
88.6
-9
%
Total
$
772.5
$
662.0
HASBRO, INC.
SUPPLEMENTAL FINANCIAL DATA
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES
(Unaudited)
(Millions of Dollars)
Reconciliation of
Adjusted Operating Profit
Quarter Ended
Nine Months Ended
September 26, 2021
September 27, 2020
September 26, 2021
September 27, 2020
Operating Profit (Loss)
$
367.9
$
336.6
$
591.8
$
315.5
Consumer Products
210.4
226.2
260.5
171.2
Wizards of the Coast and Digital
Gaming
159.4
141.6
462.3
311.5
Entertainment
22.4
(28.3
)
(74.3
)
(106.1
)
Corporate and Other
(24.3
)
(2.9
)
(56.7
)
(61.1
)
Non-GAAP Adjustments (1)
$
21.7
$
30.6
$
183.5
$
249.8
Entertainment
19.7
24.7
168.2
170.9
Corporate and Other
2.0
5.9
15.3
78.9
Adjusted Operating Profit
(Loss)
$
389.6
$
367.2
$
775.3
$
565.3
Consumer Products
210.4
226.2
260.5
171.2
Wizards of the Coast and Digital
Gaming
159.4
141.6
462.3
311.5
Entertainment
42.1
(3.6
)
93.9
64.8
Corporate and Other
(22.3
)
3.0
(41.4
)
17.8
(1) Non-GAAP Adjustments include the
following:
Acquisition-related costs (i)
$
2.0
$
5.9
$
5.8
$
166.0
Acquired intangible amortization (ii)
19.7
24.7
66.4
72.3
Loss on disposal of business and related
costs(iii)
—
—
111.3
—
Severance (iv)
—
—
—
11.5
Total
$
21.7
$
30.6
$
183.5
$
249.8
(i) In association with the Company's
acquisition of eOne, the Company incurred related expenses of $2.0
($1.7 after-tax) and $5.8 ($5.0 after-tax) in the quarter and nine
months ended September 26, 2021, respectively, and $5.9 ($4.7
after-tax) and $166.0 ($140.7 after-tax) in the quarter and nine
months ended September 27, 2020, respectively, comprised of the
following:
(a) In the quarter and nine months ended
September 26, 2021, the Company incurred stock compensation expense
of $2.0 and $5.8 respectively, associated with acquisition-related
grants. In 2021, this expense is included within Selling,
Distribution and Administration.
(b) In the quarter and nine months ended
September 27, 2020, the Company incurred expenses of $5.9 and
$166.0, respectively, comprised of 1) acquisition and integration
costs of $4.6 and $104.3, respectively, 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 2) restructuring and related costs of
$1.3 and $61.7, 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. In
2020, these expenses were included within Acquisition and Related
Costs.
(ii) The Company incurred incremental
intangible amortization costs related to the intangible assets
acquired in the eOne acquisition.
(iii) On April 25, 2021, the Company
entered into a definitive agreement to sell the eOne music business
for an aggregate sales price of $385.0, subject to certain closing
adjustments related to working capital and net debt. As such, the
assets and liabilities of eOne music were revalued in the second
quarter of 2021 and disclosed separately on the balance sheet. The
charge of $111.3 is comprised of a goodwill impairment loss of
$101.8 (included within Loss on Disposal of Business) and
transaction costs of $9.5 (included within Selling, Distribution
and Administration). The after-tax combined charge is $109.1.
(iv) In the quarter ended June 28, 2020,
the Company incurred $11.5 of severance charges, associated with
cost-savings initiatives within the Company's commercial and Film
and TV businesses.
HASBRO, INC.
SUPPLEMENTAL FINANCIAL DATA
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES
(Unaudited)
(Millions of Dollars)
Reconciliation of
EBITDA and Adjusted EBITDA
Quarter Ended
Nine Months Ended
September 26, 2021
September 27, 2020
September 26, 2021
September 27, 2020
Net Earnings Attributable to Hasbro,
Inc.
$
253.2
$
220.9
$
346.5
$
117.3
Interest Expense
43.3
49.4
137.3
153.7
Income Tax Expense
68.5
79.2
143.5
64.3
Net Earnings (Loss) Attributable to
Noncontrolling Interests
1.7
(0.9
)
4.0
1.9
Depreciation
48.6
37.5
116.2
94.2
Amortization of Intangibles
27.7
36.2
90.3
107.7
EBITDA
443.0
422.3
837.8
539.1
Non-GAAP Adjustments and Stock
Compensation (1)
19.1
19.8
165.9
217.7
Adjusted EBITDA
$
462.1
$
442.1
$
1,003.7
$
756.8
(1) Non-GAAP Adjustments and Stock
Compensation are comprised of the following:
Stock compensation
$
19.1
$
13.9
$
54.6
$
40.2
Acquisition-related costs
—
5.9
—
166.0
Loss on disposal of business and related
costs
—
—
111.3
—
Severance
—
—
—
11.5
Total
$
19.1
$
19.8
$
165.9
$
217.7
Adjusted EBITDA by Segment:
Consumer Products
$
262.5
$
277.1
$
383.1
$
290.0
Wizards of the Coast and Digital
Gaming
174.2
152.2
499.1
330.1
Entertainment
49.6
1.6
141.4
77.4
Corporate and Other
(24.2
)
11.2
(19.9
)
59.3
Total Adjusted EBITDA
$
462.1
$
442.1
$
1,003.7
$
756.8
Consumer Products:
Operating Profit
$
210.4
$
226.2
$
260.5
$
171.2
Other (Expense) Income
5.7
1.6
13.4
(2.9
)
Depreciation
29.6
27.8
62.2
60.7
Amortization of Intangibles
7.8
11.4
23.4
34.2
EBITDA
253.5
267.0
359.5
263.2
Non-GAAP Adjustments and Stock
Compensation
9.0
10.1
23.6
26.8
Adjusted EBITDA
$
262.5
$
277.1
$
383.1
$
290.0
Wizards of the Coast and Digital
Gaming:
Operating Profit
$
159.4
$
141.6
$
462.3
$
311.5
Other (Expense) Income
(0.3
)
5.7
(1.2
)
5.0
Depreciation
11.8
2.3
29.0
6.8
EBITDA
170.9
149.6
490.1
323.3
Non-GAAP Adjustments and Stock
Compensation
3.3
2.6
9.0
6.8
Adjusted EBITDA
$
174.2
$
152.2
$
499.1
$
330.1
Entertainment:
Operating Profit (Loss)
$
22.4
$
(28.3
)
$
(74.3
)
$
(106.1
)
Other (Expense) Income
(1.1
)
0.4
24.5
0.8
Depreciation
2.8
2.8
7.8
6.9
Amortization of Intangibles
20.0
24.7
67.1
73.1
EBITDA
44.1
(0.4
)
25.1
(25.3
)
Non-GAAP Adjustments and Stock
Compensation
5.5
2.0
116.3
102.7
Adjusted EBITDA
$
49.6
$
1.6
$
141.4
$
77.4
HASBRO, INC.
SUPPLEMENTAL FINANCIAL DATA
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES
(Unaudited)
(Millions of Dollars and Shares, Except
Per Share Data)
Reconciliation of
Net Earnings and Earnings per Share
Quarter Ended
(all adjustments reported after-tax)
September 26, 2021
Diluted Per Share
Amount
September 27, 2020
Diluted Per Share
Amount
Net Earnings Attributable to Hasbro,
Inc.
$
253.2
$
1.83
$
220.9
$
1.61
Acquisition-related costs
1.7
0.01
4.7
0.03
Acquired intangible amortization
16.3
0.12
19.7
0.14
UK Tax Reform (1)
—
—
13.6
0.10
Net Earnings Attributable to Hasbro, Inc.,
as Adjusted
$
271.2
$
1.96
$
258.9
$
1.88
Nine Months Ended
(all adjustments reported after-tax)
September 26, 2021
Diluted Per Share
Amount
September 27, 2020
Diluted Per Share
Amount
Net Earnings Attributable to Hasbro,
Inc.
$
346.5
$
2.51
$
117.3
$
0.85
Acquisition-related costs
5.0
0.04
140.7
1.02
Acquired intangible amortization
55.0
0.40
57.5
0.42
Loss on disposal of business and related
costs
109.1
0.79
—
—
Severance
—
—
10.2
0.07
UK Tax Reform (1)
39.4
0.28
13.6
0.10
Net Earnings Attributable to Hasbro, Inc.,
as Adjusted
$
555.0
$
4.01
$
339.3
$
2.47
(1) In the second quarter of 2021, the
Company recorded income tax expense of $39.4 as a result of the
revaluation of the Company's UK deferred taxes in accordance with
Finance Act 2021 enacted by the United Kingdom on June 10, 2021.
Effective April 1, 2023, the new law increases the corporate income
tax rate to 25% from 19%. In the third quarter of 2020, the Company
recorded income tax expense of $13.6 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. Effective back
to April 1, 2020, the law maintained 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211026005626/en/
Investor Contact: Debbie Hancock | Hasbro, Inc. | (401) 727-5401
| debbie.hancock@hasbro.com Media: Carrie Ratner | Hasbro, Inc. |
(401) 556-2720 | carrie.ratner@hasbro.com
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