Revenue growth in all segments highlighting
strength of the Brand Blueprint
Company provides updated full-year guidance
including mid-single digit adjusted operating profit
growth
First Quarter
2022
- Net revenues increased 4% to $1.16 billion
- Revenues up 6% absent an unfavorable $17.4 million impact of
foreign exchange
- Wizards of the Coast and Digital Gaming segment revenues up 9%;
up 10% absent the impact of foreign exchange
- Consumer Products segment revenues up 3%; up 5% absent the
impact of foreign exchange
- Entertainment segment revenues up 4%; up 5% absent the impact
of foreign exchange
- Entertainment segment revenues increased 22% excluding the
Music business which was sold in the beginning of the third quarter
2021
- Operating profit of $120.0 million, or 10.3% of
revenues
- Adjusted operating profit of $141.8 million, or 12.2% of
revenues
- Net earnings of $61.2 million, or $0.44 per diluted
share
- Adjusted net earnings of $79.4 million, or $0.57 per diluted
share
- EBITDA of $174.0 million
- Adjusted EBITDA of $192.1 million
- Strong cash position with quarter-end cash of $1.06
billion
- Paid $94.5 million in dividends to shareholders during the
quarter
- Plan to repurchase $75 to $150 million of Hasbro common stock
in the open market during 2022
Hasbro, Inc. (NASDAQ: HAS), a global play and entertainment
company, today reported financial results for the first quarter
2022.
"The Hasbro teams executed well in the first quarter, growing
revenue across segments and positioning us to increase our profit
outlook for the year. Based on our current plans, we now believe
mid-single digit adjusted operating profit growth and a 16%
adjusted operating profit margin is achievable on revenue growth of
low-single digits," said Chris Cocks, Hasbro chief executive
officer. "As I assumed the role of Hasbro CEO on February 25, we
began a thorough review of our business with a theme of focus and
scale. We are leaning into our strengths and greatest growth
opportunities, including in gaming, multi-generational brands and
direct to consumer.
"Hasbro has carefully assembled an unmatched portfolio of
brand-building capabilities and valuable brands to drive profitable
growth and long-term shareholder returns," continued Cocks.
"Our first quarter results were in line with our plans, as the
team continued to manage supply chain disruptions, positioning us
to meet or exceed our outlook for the year," said Deborah Thomas,
Hasbro chief financial officer. "As we discussed at year end,
pricing increases went into effect in our consumer products
business at the beginning of the second quarter and will help
offset the higher input and freight costs in future quarters. Given
our cash position and positive outlook, we are resuming our share
repurchase program with a plan to repurchase $75 to $150 million
this year and remain on target to reach our gross debt to adjusted
EBITDA target of 2.0 to 2.5X during 2023."
First Quarter 2022 Financial
Results
$ Millions, except earnings per
share
Q1 2022
Q1 2021
% Change
Net Revenues1
$
1,163.1
$
1,114.8
4
%
Operating Profit
$
120.0
$
147.3
-19
%
Adjusted Operating Profit2
$
141.8
$
174.1
-19
%
Net Earnings
$
61.2
$
116.2
-47
%
Net Earnings per Diluted Share
$
0.44
$
0.84
-48
%
Adjusted Net Earnings2
$
79.4
$
138.4
-43
%
Adjusted Net Earnings per Diluted
Share2
$
0.57
$
1.00
-43
%
EBITDA2
$
174.0
$
235.3
-26
%
Adjusted EBITDA2
$
192.1
$
252.0
-24
%
1Foreign exchange had a negative $17.4
million impact, or 2%, on first quarter 2022 revenue 2See the
financial tables accompanying this press release for a
reconciliation of GAAP and non-GAAP financial measures.
First Quarter 2022 Major Segment
Performance
Q1 2022 Major Segments ($
Millions)
Net Revenues
Operating Profit
Adjusted
Operating Profit1
Q1 2022
Q1 2021
% Change
Q1 2022
Q1 2021
Q1 2022
Q1 2021
Consumer Products
$
672.8
$
653.9
3
%
$
8.6
$
32.3
$
18.9
$
32.3
Wizards of the Coast and Digital
Gaming
$
262.8
$
242.2
9
%
$
106.4
$
110.0
$
106.4
$
110.0
Entertainment
$
227.5
$
218.7
4
%
$
12.2
$
17.0
$
21.0
$
41.9
Q1 2022 Major Segments ($
Millions)
EBITDA
Adjusted EBITDA1
Q1 2022
Q1 2021
Q1 2022
Q1 2021
Consumer Products
$
41.3
$
59.4
$
48.8
$
65.9
Wizards of the Coast and Digital
Gaming
$
107.6
$
112.3
$
112.2
$
114.9
Entertainment
$
25.9
$
68.2
$
31.4
$
72.3
1Reconciliations are included in the
attached schedules under the heading "Reconciliation of Adjusted
Operating Profit" and “Reconciliation of EBITDA and Adjusted
EBITDA.”
Consumer Products segment revenues increased 3%. Revenue
increased 5% excluding a negative $13.5 million impact of foreign
exchange, $12.0 million of which was in Europe.
- North America and Latin America posted positive revenue growth,
offsetting declines in Europe, which was up 1% absent foreign
exchange, and a decline in Asia Pacific.
- Operating profit declined to $8.6 million in the traditionally
low profit quarter for toys and games. Supply chain disruptions
impacted product availability, which caused delays in spring sets
at retail. In addition, higher freight and inventory costs
negatively impacted profits year over year. To offset these
headwinds, product price increases go into effect in the second
quarter.
- While inventory was of high quality, general supply chain
disruptions caused longer in transit times, and earlier purchasing
to mitigate out-of-stock situations, lead to an increase in
inventory.
- For the full-year, we continue to expect revenue growth in the
low-single digits. Operating profit growth is expected to outpace
revenue growth to drive higher adjusted operating profit margin in
the segment.
Wizards of the Coast and Digital Gaming segment revenues
increased 9%. Revenues increased 10% excluding a negative $2.9
million impact of foreign exchange.
- Tabletop revenues grew 10% and digital and licensed gaming grew
6%.
- Operating profit of $106.4 million was 40.5% of revenue which
includes continued significant investments in Wizards of the Coast,
such as product development and administrative costs, as well as
higher paper and freight costs, partially offset by lower
advertising expense versus last year which featured several digital
gaming launches.
- Increased inventory levels to mitigate potential supply
challenges.
- For the full-year, we now expect revenue growth at the upper
end of the previously communicated growth range of mid-single
digits with a potential to reach low-double digits, with adjusted
operating profit margin down slightly from 42.5% in full-year 2021
as we continue investing in growing these valuable brands.
Entertainment segment revenue increased 4%. Revenue
increased 5% excluding a negative $1.0 million impact of foreign
exchange.
- Entertainment segment revenue grew 22%, excluding $31.8 million
of revenue from the Music business which was sold at the beginning
of the third quarter last year.
- Film and TV revenues increased 14% driven by deliveries of the
television shows The Rookie for ABC, which was recently renewed for
season 5, and Graymail for Netflix; as well as the film Deepwater
for Amazon and Hulu, and several unscripted shows.
- Family Brands revenues were up 23% driven by a multi-title
renewal with Netflix for MY LITTLE PONY, TRANSFORMERS and POWER
RANGERS franchises, as well as revenue from the delivery of
Transformers BotBots to Netflix in the quarter.
- Adjusted operating profit declined, reflecting the sale of the
Music business as well as higher program amortization associated
with higher deliveries as well as the mix of titles delivered.
- Excluding the 2021 results from the Music business, for the
full-year, we continue to expect underlying revenue growth in the
mid-single digits and adjusted operating profit margin to outpace
revenue growth and deliver margin expansion.
First Quarter 2022 Brand Portfolio
Performance
Brand Performance ($ Millions)
Net Revenues
Q1 2022
Q1 2021
% Change
Franchise Brands1
$
543.1
$
523.1
4
%
Partner Brands
$
206.5
$
188.0
10
%
Hasbro Gaming2
$
143.6
$
136.3
5
%
Emerging Brands
$
76.4
$
73.1
5
%
TV/Film/Entertainment3
$
193.5
$
194.3
0
%
1Effective in the first quarter of 2022,
the Company moved PEPPA PIG into Franchise Brands from Emerging
Brands. For comparability, the quarter ended March 28, 2021 net
revenues have been restated to reflect the elevation of PEPPA PIG
from Emerging Brands into Franchise Brands resulting in a change of
$31.6 million. 2Hasbro's total gaming category, including all
gaming revenue, most notably MAGIC: THE GATHERING and MONOPOLY,
which are reported in the Franchise Brands portfolio, totaled
$378.8 million for the first quarter 2022, up 4% compared to the
respective period in 2021. 3First quarter 2021
TV/Film/Entertainment includes $31.8 million of Music revenue which
was sold at the beginning of the third quarter 2021.
Brand Blueprint Leadership
Hasbro is executing significant campaigns around the Brand
Blueprint, investing in key growth initiatives and positioning the
Company for continued profitable growth.
For the first quarter 2022, revenues grew in Franchise Brands,
Partner Brands, Hasbro Gaming, and Emerging Brands.
TV/Film/Entertainment revenues were flat, but increased 19%
excluding Music revenues. Top brand performances included MAGIC:
THE GATHERING, MY LITTLE PONY, PEPPA PIG and Hasbro products for
the Marvel portfolio, led by the Spider-Man franchise including
products in support of Marvel Studios' Spider-Man: No Way Home and
the new animated show Marvel's Spidey and His Amazing Friends, plus
Avengers franchise support with the upcoming Marvel Studios' Doctor
Strange in the Multiverse of Madness.
Industry-leading Gaming Portfolio
- Hasbro's total gaming portfolio revenue, including Franchise
Brands MAGIC: THE GATHERING and MONOPOLY, grew 4% to $378.8
million.
- MAGIC: THE GATHERING revenue grew 7%, including growth in
tabletop and digital.
- Kamigawa: Neon Dynasty became the best-selling Winter set of
all time, increasing 28% over last year's set.
- Neon Dynasty is the fifth MAGIC set of all time to generate in
excess of $100 million and is already one of the top three MAGIC
sets ever.
- DUNGEONS & DRAGONS revenue grew in both tabletop and
digital.
- Recently announced strategic acquisition of D&D Beyond from
Fandom strengthens Hasbro's capabilities in the fast-growing
digital tabletop category, delivering a direct relationship with
nearly 10 million fans; providing valuable, data-driven insights to
unlock opportunities for growth in new product development, live
services and tools; and opportunity for regional expansion.
- Digital gaming revenues, including licensed digital gaming,
increased 6%.
- Magic: The Gathering Arena and D&D digital tabletop revenue
growth led this increase.
- Hasbro Gaming revenues, which exclude Franchise Brand gaming
brands, grew 5% year-over-year.
- DUNGEONS & DRAGONS, AVALON HILL's HeroQuest and DUEL
MASTERS led this growth, further supplemented by additional classic
game titles.
End-to-End Brand Executions
- DUNGEONS & DRAGONS
- Strategic investment to advance digital play with D&D
Beyond
- Executing an end-to-end Brand Blueprint activation
- Major theatrical release slated for March 2023
- Scripted television series from Rawson Marshall Thurber (RED
NOTICE) in development
- AAA video games in development
- Robust consumer products launch and significant marketing
tie-ins coming
- MY LITTLE PONY
- Revenue nearly doubled in the quarter and point of sale
increased in the mid-teens globally year-over-year
- Licensed consumer products revenue grew year-over-year
- New licensed digital game, My Little Pony: A Maretime Bay
Adventure, with Outright Games
- eOne is delivering approximately 500 minutes of new animated
programming for digital and streaming, including a new special and
series for Netflix, this year
- PEPPA PIG
- Began its first quarter as a Franchise Brand and first full
year of Hasbro toy and game lines
- Remains most streamed preschool brand globally with additional
new content launching
- Opened PEPPA PIG Land Theme Park in Florida in partnership with
Merlin Entertainments
- eOne's Round Room live entertainment is currently touring Peppa
Pig Live! Peppa Pig’s Adventure
- POWER RANGERS
- Revenue up in the first quarter
- The first 11 episodes of Season 2 of the Power Rangers Dino
Fury live-action TV series premiered in select markets around the
world.
- The show ranked among the Top 10 Most Watched Kids Shows on
Netflix in all the markets it launched in and, in the U.S.,
maintained its position for 2 consecutive weeks post-launch
- Compelling new content supported with new kid and fan focused
product
- Hasbro products for the Marvel portfolio delivered revenue
growth
- Hasbro products in support of Marvel Studios' Spider-Man: No
Way Home and the animated show Marvel's Spidey and His Amazing
Friends
- New product shipments in support of the upcoming Marvel
Studios' Doctor Strange in the Multiverse of Madness
- Hasbro's line of Star Wars products grew revenue
- HASLAB campaign for the Vintage Collection Razor CrestTM
deliveries
- New product shipments in support of upcoming May the 4th Star
Wars Celebration and Lucasfilm series Obi-Wan KenobiTM on
Disney+
Company Outlook
Coming off a strong year in 2021, the Company has a plan for
continued growth in 2022, including low-single digit revenue growth
despite the strengthening of the U.S. dollar and potential risk of
approximately $100 million in Russia; mid-single digit growth in
operating profit to achieve adjusted operating profit margin of
16%, which is above prior guidance; and operating cash flow in the
range of $700 to $800 million.
Dividend and Share Repurchase
Plan
During the first quarter, Hasbro paid $94.5 million in cash
dividends to shareholders. As previously announced in February, the
Board of Directors approved an increase of 3% to $0.70 per common
share for the next quarterly dividend. This dividend will be
payable on May 16, 2022 to shareholders of record at the close of
business on May 2, 2022.
A share repurchase program continues to be an important
long-term component of Hasbro’s capital allocation strategy and
Hasbro has $367 million available under its authorized share
repurchase programs. Given the progress made toward reducing debt,
we plan to resume repurchases this quarter, with a target of
repurchasing $75-$150 million of Hasbro common stock in the open
market this year. This repurchase does not change the expectation
of returning to the gross debt to adjusted EBITDA target of 2.0 to
2.5X in the second half of 2023 or sooner, depending on business
performance and other factors.
Conference Call Webcast
Hasbro will webcast its first quarter 2022 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 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.)
© 2022 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 outlook for growth in 2022;
expectations relating to products, gaming and entertainment to be
developed and delivered throughout the year; our plans relating to
our share repurchase program; our ability to achieve our other
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 design, develop, 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;
- our ability to develop and distribute engaging storytelling
across media to drive brand awareness;
- 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 changes to our supply chain,
changing inventory and sales policies and practices of our
customers and increased emphasis on ecommerce;
- our dependence on third party relationships, including with
third party manufacturers, licensors of brands, studios, content
producers and entertainment distribution channels;
- risks relating to 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 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,
- the impact of the crisis between Russia and Ukraine on our
business, including on receivables;
- 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,
rising interest rates, 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, licensees and other partners;
- risks related to our recent leadership changes;
- our ability to attract and retain talented and diverse
employees;
- our ability to realize the benefits of cost-savings and
efficiency and/or revenue enhancing initiatives;
- 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 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 net earnings per diluted share, which exclude, where
applicable, acquisition and related costs and, acquired intangible
amortization. Also included in this press release are the non-GAAP
financial measures of EBITDA and Adjusted EBITDA. EBITDA represents
net earnings attributable to Hasbro, Inc. excluding interest
expense, income tax expense, net earnings (loss) attributable to
noncontrolling interests, depreciation and amortization of
intangibles. Segment EBITDA represents segment operating profit
(loss) plus other income or expense, less depreciation and
amortization of intangibles. Adjusted EBITDA also excludes the
impact of stock compensation (including acquisition-related stock
expense). 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 net earnings per diluted share and
Adjusted operating profit provide 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.
Additional Information and Where to Find It
Hasbro has filed with the SEC a preliminary proxy statement on
Schedule 14A, containing a form of WHITE proxy card, with respect
to its solicitation of proxies for Hasbro’s 2022 Annual Meeting of
Shareholders (the “2022 Annual Meeting”). The proxy statement is in
preliminary form and Hasbro intends to file and mail a definitive
proxy statement to stockholders of Hasbro. This communication is
not a substitute for any proxy statement or other document that
Hasbro has filed or may file with the SEC in connection with any
solicitation by Hasbro. INVESTORS AND SECURITY HOLDERS ARE URGED TO
READ THE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS
THERETO) FILED BY HASBRO AND ANY OTHER RELEVANT DOCUMENTS FILED
WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN
OR WILL CONTAIN IMPORTANT INFORMATION ABOUT ANY SOLICITATION.
Investors and security holders may obtain copies of these documents
and other documents filed with the SEC by Hasbro free of charge
through the website maintained by the SEC at www.sec.gov. Copies of
the documents filed by Hasbro are also available free of charge by
accessing Hasbro’s website at www.hasbro.com.
Participants
This communication is neither a solicitation of a proxy or
consent nor a substitute for any proxy statement or other filings
that may be made with the SEC. Nonetheless, Hasbro, its directors
and executive officers and other members of management and
employees may be deemed to be participants in the solicitation of
proxies with respect to a solicitation by Hasbro. Information about
Hasbro’s executive officers and directors is available in Hasbro’s
preliminary proxy statement for the 2022 Annual Meeting, which was
filed with the SEC on April 4, 2022, and will be included in
Hasbro’s definitive proxy statement, once available. To the extent
holdings of Hasbro securities reported in the proxy statement for
the 2022 Annual Meeting have changed, such changes have been or
will be reflected on Statements of Change in Ownership on Forms 3,
4 or 5 filed with the SEC. These documents are or will be available
free of charge at the SEC’s website at www.sec.gov.
HAS-E
(Tables Attached)
HASBRO, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited)
(Millions of Dollars)
March 27, 2022
March 28, 2021
ASSETS
Cash and Cash Equivalents
$
1,057.9
$
1,430.4
Accounts Receivable, Net
931.7
810.4
Inventories
644.3
429.2
Prepaid Expenses and Other Current
Assets
621.4
566.0
Total Current Assets
3,255.3
3,236.0
Property, Plant and Equipment, Net
422.6
482.7
Goodwill
3,419.3
3,691.4
Other Intangible Assets, Net
1,136.6
1,513.0
Other Assets
1,284.9
1,266.0
Total Assets
$
9,518.7
$
10,189.1
LIABILITIES, NONCONTROLLING INTERESTS
AND SHAREHOLDERS' EQUITY
Short-Term Borrowings
$
104.1
$
8.8
Current Portion of Long-Term Debt
155.8
148.9
Accounts Payable and Accrued
Liabilities
1,783.1
1,595.7
Total Current Liabilities
2,043.0
1,753.4
Long-Term Debt
3,737.9
4,674.1
Other Liabilities
633.6
777.7
Total Liabilities
6,414.5
7,205.2
Redeemable Noncontrolling Interests
23.5
24.0
Total Shareholders' Equity
3,080.7
2,959.9
Total Liabilities, Noncontrolling
Interests and Shareholders' Equity
$
9,518.7
$
10,189.1
HASBRO, INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
(Millions of Dollars and Shares Except Per
Share Data)
Quarter Ended
March 27, 2022
% Net Revenues
March 28, 2021
% Net Revenues
Net Revenues
$
1,163.1
100.0
%
$
1,114.8
100.0
%
Costs and Expenses:
Cost of Sales
333.1
28.6
%
289.9
26.0
%
Program Cost Amortization
138.5
11.9
%
97.5
8.7
%
Royalties
90.1
7.7
%
108.9
9.8
%
Product Development
69.6
6.0
%
61.8
5.5
%
Advertising
77.6
6.7
%
87.9
7.9
%
Amortization of Intangibles
27.1
2.3
%
32.9
3.0
%
Selling, Distribution and
Administration
307.1
26.4
%
288.6
25.9
%
Operating Profit
120.0
10.3
%
147.3
13.2
%
Interest Expense
41.6
3.6
%
47.9
4.3
%
Other Expense (Income), Net
(1.8
)
-0.2
%
(30.1
)
-2.7
%
Earnings before Income Taxes
80.2
6.9
%
129.5
11.6
%
Income Tax Expense
17.3
1.5
%
12.0
1.1
%
Net Earnings
62.9
5.4
%
117.5
10.5
%
Net Earnings Attributable to
Noncontrolling Interests
1.7
0.1
%
1.3
0.1
%
Net Earnings Attributable to Hasbro,
Inc.
$
61.2
5.3
%
$
116.2
10.4
%
Per Common Share
Net Earnings
Basic
$
0.44
$
0.84
Diluted
$
0.44
$
0.84
Cash Dividends Declared
$
0.70
$
0.68
Weighted Average Number of Shares
Basic
139.3
137.7
Diluted
139.6
138.1
HASBRO, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
(Unaudited)
(Millions of Dollars)
Quarter Ended
March 27, 2022
March 28, 2021
Cash Flows from Operating Activities:
Net Earnings
$
62.9
$
117.5
Other Non-Cash Adjustments
179.3
193.8
Changes in Operating Assets and
Liabilities
(107.5
)
66.3
Net Cash Provided by Operating
Activities
134.7
377.6
Cash Flows from Investing Activities:
Additions to Property, Plant and
Equipment
(29.2
)
(23.9
)
Other
5.3
(1.6
)
Net Cash Utilized by Investing
Activities
(23.9
)
(25.5
)
Cash Flows from Financing Activities:
Proceeds from Long-Term Debt
1.3
72.4
Repayments of Long-Term Debt
(133.9
)
(344.9
)
Net Proceeds from Short-Term
Borrowings
103.3
2.0
Stock-Based Compensation Transactions
70.2
4.7
Dividends Paid
(94.5
)
(93.4
)
Payments Related to Tax Withholding for
Share-Based Compensation
(19.3
)
(9.3
)
Other
(4.6
)
(2.3
)
Net Cash Utilized by Financing
Activities
(77.5
)
(370.8
)
Effect of Exchange Rate Changes on
Cash
5.4
(0.6
)
Cash and Cash Equivalents at Beginning of
Year
1,019.2
1,449.7
Cash and Cash Equivalents at End of
Period
$
1,057.9
$
1,430.4
HASBRO, INC.
SUPPLEMENTAL FINANCIAL DATA
SEGMENT RESULTS - AS REPORTED AND AS
ADJUSTED
(Unaudited)
(Millions of Dollars)
Operating Results
Quarter Ended March 27,
2022
Quarter Ended March 28,
2021
As Reported
Non-GAAP Adjustments
Adjusted
As Reported
Non-GAAP Adjustments
Adjusted
% Change
Total Company
Results
External Net Revenues (1)
$
1,163.1
$
—
$
1,163.1
$
1,114.8
$
—
$
1,114.8
4
%
Operating Profit
120.0
21.8
141.8
147.3
26.8
174.1
-19
%
Operating Margin
10.3
%
1.9
%
12.2
%
13.2
%
2.4
%
15.6
%
EBITDA
174.0
18.1
192.1
235.3
16.7
252.0
-24
%
Segment
Results
Consumer
Products:
External Net Revenues (2)
$
672.8
$
—
$
672.8
$
653.9
$
—
$
653.9
3
%
Operating Profit
8.6
10.3
18.9
32.3
—
32.3
-41
%
Operating Margin
1.3
%
1.5
%
2.8
%
4.9
%
—
4.9
%
EBITDA
41.3
7.5
48.8
59.4
6.5
65.9
-26
%
Wizards of the Coast
and Digital Gaming:
External Net Revenues (3)
$
262.8
$
—
$
262.8
$
242.2
$
—
$
242.2
9
%
Operating Profit
106.4
—
106.4
110.0
—
110.0
-3
%
Operating Margin
40.5
%
—
40.5
%
45.4
%
—
45.4
%
EBITDA
107.6
4.6
112.2
112.3
2.6
114.9
-2
%
Entertainment:
External Net Revenues (4)
$
227.5
$
—
$
227.5
$
218.7
$
—
$
218.7
4
%
Operating Profit
12.2
8.8
21.0
17.0
24.9
41.9
-50
%
Operating Margin
5.4
%
3.9
%
9.2
%
7.8
%
11.4
%
19.2
%
EBITDA
25.9
5.5
31.4
68.2
4.1
72.3
-57
%
Corporate and
Other:
Operating (Loss) Profit
$
(7.2
)
$
2.7
$
(4.5
)
$
(12.0
)
$
1.9
$
(10.1
)
55
%
EBITDA
(0.8
)
0.5
(0.3
)
(4.6
)
3.5
(1.1
)
73
%
Quarter Ended
March 27, 2022
March 28, 2021
% Change
(1)
Net Revenues by Brand
Portfolio
Franchise Brands (i)
$
543.1
$
523.1
4
%
Partner Brands
206.5
188.0
10
%
Hasbro Gaming (ii)
143.6
136.3
5
%
Emerging Brands (i)
76.4
73.1
5
%
TV/Film/Entertainment
193.5
194.3
0
%
Total
$
1,163.1
$
1,114.8
(i) Effective in the first quarter of
2022, the Company moved Peppa Pig into Franchise Brands from
Emerging Brands. For comparability, the quarter ended March 28,
2021 net revenues have been restated to reflect the elevation of
Peppa Pig from Emerging Brands in to Franchise Brands resulting in
a change of $31.6.
(ii) Hasbro's total gaming category,
including all gaming revenue, most notably MAGIC: THE GATHERING and
MONOPOLY, totaled $378.8 for the quarter ended March 27, 2022, up
3.7% from revenues of $365.3 for the quarter ended March 28,
2021.
Quarter Ended
March 27, 2022
March 28, 2021
% Change
(2)
Consumer Products Segment Net Revenues by
Major Geographic Region
North America
$
405.2
$
362.7
12
%
Europe
176.7
188.5
-6
%
Asia Pacific
52.2
64.8
-19
%
Latin America
38.7
37.9
2
%
Total
$
672.8
$
653.9
Quarter Ended
March 27, 2022
March 28, 2021
(3) Wizards of the Coast and Digital
Gaming Net Revenues by Category
Tabletop Gaming
$
192.2
$
175.3
10
%
Digital and Licensed Gaming
70.6
66.9
6
%
Total
$
262.8
$
242.2
Quarter Ended
March 27, 2022
March 28, 2021
% Change
(4)
Entertainment Segment Net Revenues by
Category
Film and TV
$
190.2
$
166.4
14
%
Family Brands
23.2
18.8
23
%
Music and Other
14.1
33.5
-58
%
Total
$
227.5
$
218.7
HASBRO, INC.
SUPPLEMENTAL FINANCIAL DATA
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES
(Unaudited)
(Millions of Dollars)
Reconciliation of
Adjusted Operating Profit
Quarter Ended
March 27, 2022
March 28, 2021
Operating Profit (Loss)
$
120.0
$
147.3
Consumer Products
8.6
32.3
Wizards of the Coast and Digital
Gaming
106.4
110.0
Entertainment
12.2
17.0
Corporate and Other
(7.2
)
(12.0
)
Non-GAAP Adjustments (1)
$
21.8
$
26.8
Consumer Products (ii)
10.3
—
Entertainment (ii)
8.8
24.9
Corporate and Other
2.7
1.9
Adjusted Operating Profit
(Loss)
$
141.8
$
174.1
Consumer Products
18.9
32.3
Wizards of the Coast and Digital
Gaming
106.4
110.0
Entertainment
21.0
41.9
Corporate and Other
(4.5
)
(10.1
)
(1) Non-GAAP Adjustments include the
following:
Acquisition-related costs (i)
$
2.7
$
1.9
Acquired intangible amortization (ii)
19.1
24.9
Total
$
21.8
$
26.8
( i ) In association with the Company's acquisition of eOne, the
Company incurred related expenses of $2.7 ($2.3 after-tax) and $1.9
($1.7 after-tax) in the quarter ended March 27, 2022 and March 28,
2021, respectively, associated with acquisition-related grants.
These expenses are included within Selling, Distribution and
Administration.
(ii) Represents intangible amortization costs related to the
intangible assets acquired in the eOne acquisition. Beginning in
2022, the Company has allocated certain of these intangible
amortization costs between the Consumer Products and Entertainment
segments, to match the revenue generated from such intangible
assets. In 2021, the intangible amortization costs were recorded
within the Entertainment segment.
HASBRO, INC.
SUPPLEMENTAL FINANCIAL DATA
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES
(Unaudited)
(Millions of Dollars)
Reconciliation of
EBITDA and Adjusted EBITDA
Quarter Ended
March 27, 2022
March 28, 2021
Net Earnings Attributable to Hasbro,
Inc.
$
61.2
$
116.2
Interest Expense
41.6
47.9
Income Tax Expense
17.3
12.0
Net Earnings Attributable to
Noncontrolling Interests
1.7
1.3
Depreciation
25.1
25.0
Amortization of Intangibles
27.1
32.9
EBITDA
$
174.0
$
235.3
Non-GAAP Adjustments and Stock
Compensation (1)
18.1
16.7
Adjusted EBITDA
$
192.1
$
252.0
(1) Non-GAAP Adjustments and Stock
Compensation are comprised of the following:
Stock compensation
$
18.1
$
16.7
Total
$
18.1
$
16.7
Adjusted EBITDA by Segment:
Consumer Products
$
48.8
$
65.9
Wizards of the Coast and Digital
Gaming
112.2
114.9
Entertainment
31.4
72.3
Corporate and Other
(0.3
)
(1.1
)
Total Adjusted EBITDA
$
192.1
$
252.0
Consumer Products:
Operating Profit
$
8.6
$
32.3
Other (Expense) Income
0.8
6.2
Depreciation
13.9
13.1
Amortization of Intangibles
18.0
7.8
EBITDA
41.3
59.4
Non-GAAP Adjustments and Stock
Compensation
7.5
6.5
Adjusted EBITDA
$
48.8
$
65.9
Wizards of the Coast and Digital
Gaming:
Operating Profit
$
106.4
$
110.0
Other (Expense) Income
(0.7
)
(0.3
)
Depreciation
1.9
2.6
EBITDA
107.6
112.3
Non-GAAP Adjustments and Stock
Compensation
4.6
2.6
Adjusted EBITDA
$
112.2
$
114.9
Entertainment:
Operating Profit
$
12.2
$
17.0
Other (Expense) Income
1.9
23.3
Depreciation
2.8
2.8
Amortization of Intangibles
9.0
25.1
EBITDA
25.9
68.2
Non-GAAP Adjustments and Stock
Compensation
5.5
4.1
Adjusted EBITDA
$
31.4
$
72.3
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)
March 27, 2022
Diluted Per Share
Amount
March 28, 2021
Diluted Per Share
Amount
Net Earnings Attributable to Hasbro,
Inc.
$
61.2
$
0.44
$
116.2
$
0.84
Acquisition and Related Costs
2.3
0.02
1.7
0.01
Acquired Intangible Amortization
15.9
0.11
20.5
0.15
Net Earnings Attributable to Hasbro, Inc.,
as Adjusted
$
79.4
$
0.57
$
138.4
$
1.00
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220418005363/en/
Investors: 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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