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PAWTUCKET, R.I.–(BUSINESS WIRE)–$HAS #HASQ2–Hasbro, Inc. (NASDAQ: HAS), a global play and entertainment company, today reported financial results for the second quarter 2021.
“Hasbro delivered an excellent second quarter, with revenues up 54% versus the second quarter of last year and 9% versus pro forma second quarter 2019,” said Brian Goldner, Hasbro’s chairman and chief executive officer. “Wizards continued to generate outstanding results behind a compelling analog and digital release schedule for MAGIC: THE GATHERING. Consumer products revenue increased as demand remains robust for Hasbro toys and games and entertainment revenue grew as we are producing entertainment with strong deliveries. The Hasbro team is performing at a high level and Supercharging our Brand Blueprint to drive demand for our brands and content slate as we track to our target of double-digit revenue growth for the full-year and position us for profitable growth not just this year but also in future years.”
“Strength across Hasbro’s brands and business backed by strong execution from the entire team drove superb results for our second quarter,” said Deborah Thomas, Hasbro’s chief financial officer. “As we invest to unlock value from our brands across the blueprint, we are on track to reach our objectives for the year while expanding the reach of our business, reducing debt and paying our dividend. The discipline in our business is evident from the $1.2 billion in cash we had on hand at quarter end, reporting the lowest days sales outstanding in our recent history, and repaying $250 million in debt.”
Second Quarter 2021 Financial Results
$ Millions, except earnings per share |
Q2 2021 |
Q2 2020 |
% Change |
||||
Net Revenues1 |
$ |
1,322.2 |
|
$ |
860.3 |
|
54% |
|
|
|
|
||||
Operating Profit |
$ |
76.6 |
|
$ |
2.2 |
|
>100% |
Adjusted Operating Profit2 |
$ |
211.6 |
|
$ |
46.6 |
|
>100% |
|
|
|
|
||||
Net Loss |
$ |
(22.9 |
) |
$ |
(33.9 |
) |
32% |
Net Loss per Diluted Share |
$ |
(0.17 |
) |
$ |
(0.25 |
) |
32% |
|
|
|
|
||||
Adjusted Net Earnings2 |
$ |
145.4 |
|
$ |
2.7 |
|
>100% |
Adjusted Net Earnings per Diluted Share2 |
$ |
1.05 |
|
$ |
0.02 |
|
>100% |
|
|
|
|
||||
EBITDA2 |
$ |
159.5 |
|
$ |
73.5 |
|
>100% |
Adjusted EBITDA2 |
$ |
289.6 |
|
$ |
110.8 |
|
>100% |
1Foreign exchange had a positive $35.1 million impact, or 4%, on second quarter 2021 revenue. |
|||||||
2See the financial tables accompanying this press release for a reconciliation of GAAP and non-GAAP financial measures. |
Adjusted second quarter 2021 net earnings exclude the following after-tax amounts:
Second Quarter 2021 Major Segment and Brand Performance
Beginning with the first quarter 2021, Hasbro realigned its financial reporting segments and business units, in order to align its segment financial reporting more closely with its current business structure. The three principal reportable segments are: Consumer Products, Wizards of the Coast and Digital Gaming, and Entertainment. Reclassifications of certain prior year segment results have been made to conform to the current-year presentation. None of the segment changes impact the Company’s previously reported consolidated net revenue, operating profits, EBITDA, net earnings or net earnings per share.
Major Segments ($ Millions) |
Net Revenues |
Operating Profit (Loss) |
Adjusted Operating Profit (Loss) 1 |
||||||||||||||||
Q2 2021 |
Q2 2020 |
% Change |
Q2 2021 |
Q2 2020 |
Q2 2021 |
Q2 2020 |
|||||||||||||
Consumer Products |
$ |
689.2 |
$ |
519.5 |
33% |
$ |
17.8 |
|
$ |
(45.3 |
) |
$ |
17.8 |
$ |
(45.3 |
) |
|||
Wizards of the Coast and Digital Gaming |
$ |
406.3 |
$ |
186.7 |
>100% |
$ |
192.9 |
|
$ |
74.1 |
|
$ |
192.9 |
$ |
74.1 |
|
|||
Entertainment |
$ |
226.7 |
$ |
154.1 |
47% |
$ |
(113.7 |
) |
$ |
(13.5 |
) |
$ |
9.9 |
$ |
9.1 |
|
|||
1Reconciliations are included in the attached schedules under the heading “Reconciliation of Adjusted Operating Profit.” |
Brand Portfolio |
Net Revenues ($ Millions) |
||||||
Q2 2021 |
Q2 2020 |
% Change |
|||||
Franchise Brands |
$ |
649.9 |
$ |
376.9 |
72% |
||
Partner Brands |
$ |
212.0 |
$ |
138.3 |
53% |
||
Hasbro Gaming1 |
$ |
147.1 |
$ |
137.0 |
7% |
||
Emerging Brands |
$ |
117.0 |
$ |
75.9 |
54% |
||
TV/Film/Entertainment |
$ |
196.2 |
$ |
132.2 |
48% |
||
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 $519.4 million for the second quarter 2021, up 63% compared to the respective period in 2020. |
Revenues grew in each Brand Portfolio category. Franchise Brand revenues increased with gains in MAGIC: THE GATHERING, NERF, TRANSFORMERS, PLAY-DOH, BABY ALIVE and MY LITTLE PONY. Partner Brands revenue increased behind growth in Hasbro products for the Marvel portfolio, Lucasfilm’s Star Wars and The Mandalorian, Disney Princess and Beyblade. Hasbro Gaming revenue increased versus the strong second quarter last year and versus 2019, led by DUNGEONS & DRAGONS and DUEL MASTERS, as well as the launch of FOOSKETBALL. Emerging Brands revenue was up including growth in PJ MASKS, PEPPA PIG, GI JOE, FURREAL FRIENDS and several other properties. TV/Film/Entertainment revenues grew with increased deliveries in scripted, unscripted and animated television as well as Music.
eOne Music Business
The sale of the eOne Music business was completed in early fiscal third quarter 2021. The results of the eOne Music business have been included in operating results for the second quarter 2021. Proceeds from the sale, which will be reflected in third quarter results, were approximately $397 million. In anticipation of the closing of the transaction, the Company repaid $250 million of debt at the end of the second quarter, and following the completion of the transaction, an additional $100 million at the beginning of the third quarter.
Dividend
The next quarterly cash dividend of $0.68 per common share was declared on May 20, 2021 and is payable on August 16, 2021 to shareholders of record at the close of business on August 2, 2021. During the second quarter, Hasbro paid $94.1 million in cash dividends to shareholders, bringing the year-to-date payments to $187.5 million.
Conference Call Webcast
Hasbro will webcast its first 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 and in future quarters; the ability to achieve our financial and business goals and objectives, including continued profitable growth; the expected adequacy and delivery of supply and operation of our third-party manufacturing facilities; product and entertainment plans, including the content and timing of product and content releases; marketing and promotional efforts; anticipated expenses; working capital; liquidity; and the anticipated impact of acquisitions and dispositions. 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:
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 assets held for sale 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 and restructuring charges. 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) |
|
|
||||
|
|
|
||||
|
June 27, 2021 |
June 28, 2020 |
||||
ASSETS |
|
|
||||
Cash and Cash Equivalents |
$ |
1,228.2 |
$ |
1,038.0 |
||
Accounts Receivable, Net |
|
865.9 |
|
911.3 |
||
Inventories |
|
499.6 |
|
564.2 |
||
Prepaid Expenses and Other Current Assets |
|
543.2 |
|
672.2 |
||
Assets Held for Sale |
|
479.5 |
|
— |
||
Total Current Assets |
|
3,616.4 |
|
3,185.7 |
||
Property, Plant and Equipment, Net |
|
466.2 |
|
482.2 |
||
Goodwill |
|
3,420.8 |
|
3,666.0 |
||
Other Intangible Assets, Net |
|
1,248.3 |
|
1,559.1 |
||
Other Assets |
|
1,350.5 |
|
1,329.1 |
||
Total Assets |
$ |
10,102.2 |
$ |
10,222.1 |
||
|
|
|
||||
LIABILITIES, NONCONTROLLING INTERESTS AND SHAREHOLDERS’ EQUITY |
|
|
||||
Short-Term Borrowings |
$ |
0.8 |
$ |
6.4 |
||
Current Portion of Long-Term Debt |
|
189.6 |
|
378.6 |
||
Accounts Payable and Accrued Liabilities |
|
1,778.9 |
|
1,596.6 |
||
Liabilities Held for Sale |
|
76.3 |
|
— |
||
Total Current Liabilities |
|
2,045.6 |
|
1,981.6 |
||
Long-Term Debt |
|
4,388.7 |
|
4,802.5 |
||
Other Liabilities |
|
753.0 |
|
771.7 |
||
Total Liabilities |
|
7,187.3 |
|
7,555.8 |
||
Redeemable Noncontrolling Interests |
|
24.5 |
|
24.1 |
||
Total Shareholders’ Equity |
|
2,890.4 |
|
2,642.2 |
||
Total Liabilities, Noncontrolling Interests and Shareholders’ Equity |
$ |
10,102.2 |
$ |
10,222.1 |
||
HASBRO, INC. |
|
|
|
|
|
|||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS |
|
|
|
|
||||||||||||||||||||||||
(Unaudited) |
|
|
|
|
|
|
|
|
||||||||||||||||||||
(Millions of Dollars and Shares, Except Per Share Data) |
|
|
|
|
|
|
|
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Quarter Ended |
Six Months Ended |
||||||||||||||||||||||||||
|
June 27, 2021 |
% Net Revenues |
June 28, 2020 |
% Net Revenues |
June 27, 2021 |
% Net Revenues |
June 28, 2020 |
% Net Revenues |
||||||||||||||||||||
Net Revenues |
$ |
1,322.2 |
|
100.0 |
% |
$ |
860.3 |
|
100.0 |
% |
$ |
2,437.0 |
|
100.0 |
% |
$ |
1,965.9 |
|
100.0 |
% |
||||||||
Costs and Expenses: |
|
|
|
|
|
|
|
|
||||||||||||||||||||
Cost of Sales |
|
345.0 |
|
26.1 |
% |
|
253.2 |
|
29.4 |
% |
|
634.9 |
|
26.1 |
% |
|
515.9 |
|
26.2 |
% |
||||||||
Program Cost Amortization |
|
110.7 |
|
8.4 |
% |
|
50.6 |
|
5.9 |
% |
|
208.2 |
|
8.5 |
% |
|
182.8 |
|
9.3 |
% |
||||||||
Royalties |
|
111.5 |
|
8.4 |
% |
|
97.4 |
|
11.3 |
% |
|
220.4 |
|
9.0 |
% |
|
210.2 |
|
10.7 |
% |
||||||||
Product Development |
|
87.2 |
|
6.6 |
% |
|
58.4 |
|
6.8 |
% |
|
149.0 |
|
6.1 |
% |
|
112.2 |
|
5.7 |
% |
||||||||
Advertising |
|
105.4 |
|
8.0 |
% |
|
72.3 |
|
8.4 |
% |
|
193.3 |
|
7.9 |
% |
|
174.0 |
|
8.9 |
% |
||||||||
Amortization of Intangibles |
|
29.7 |
|
2.2 |
% |
|
34.7 |
|
4.0 |
% |
|
62.6 |
|
2.6 |
% |
|
71.5 |
|
3.6 |
% |
||||||||
Selling, Distribution and Administration |
|
354.3 |
|
26.8 |
% |
|
281.2 |
|
32.7 |
% |
|
642.9 |
|
26.4 |
% |
|
560.3 |
|
28.5 |
% |
||||||||
Loss on Assets Held for Sale |
|
101.8 |
|
7.7 |
% |
|
— |
|
0.0 |
% |
|
101.8 |
|
4.2 |
% |
|
— |
|
0.0 |
% |
||||||||
Acquisition and Related Costs |
|
— |
|
0.0 |
% |
|
10.3 |
|
1.2 |
% |
|
— |
|
0.0 |
% |
|
160.1 |
|
8.1 |
% |
||||||||
Operating Profit (Loss) |
|
76.6 |
|
5.8 |
% |
|
2.2 |
|
0.3 |
% |
|
223.9 |
|
9.2 |
% |
|
(21.1 |
) |
-1.1 |
% |
||||||||
Interest Expense |
|
46.1 |
|
3.5 |
% |
|
49.6 |
|
5.8 |
% |
|
94.0 |
|
3.9 |
% |
|
104.3 |
|
5.3 |
% |
||||||||
Other Income, Net |
|
(10.6 |
) |
-0.8 |
% |
|
(3.7 |
) |
-0.4 |
% |
|
(40.7 |
) |
-1.7 |
% |
|
(9.7 |
) |
-0.5 |
% |
||||||||
Earnings (Loss) before Income Taxes |
|
41.1 |
|
3.1 |
% |
|
(43.7 |
) |
-5.1 |
% |
|
170.6 |
|
7.0 |
% |
|
(115.7 |
) |
-5.9 |
% |
||||||||
Income Tax Expense (Benefit) |
|
63.0 |
|
4.8 |
% |
|
(10.8 |
) |
-1.3 |
% |
|
75.0 |
|
3.1 |
% |
|
(14.9 |
) |
-0.8 |
% |
||||||||
Net (Loss) Earnings |
|
(21.9 |
) |
-1.7 |
% |
|
(32.9 |
) |
-3.8 |
% |
|
95.6 |
|
3.9 |
% |
|
(100.8 |
) |
-5.1 |
% |
||||||||
Net Earnings Attributable to Noncontrolling Interests |
|
1.0 |
|
0.1 |
% |
|
1.0 |
|
0.1 |
% |
|
2.3 |
|
0.1 |
% |
|
2.8 |
|
0.1 |
% |
||||||||
Net (Loss) Earnings Attributable to Hasbro, Inc. |
$ |
(22.9 |
) |
-1.7 |
% |
$ |
(33.9 |
) |
-3.9 |
% |
$ |
93.3 |
|
3.8 |
% |
$ |
(103.6 |
) |
-5.3 |
% |
||||||||
|
|
|
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|
|
||||||||||||||||||||
Per Common Share |
|
|
|
|
|
|
|
|
||||||||||||||||||||
Net (Loss) Earnings |
|
|
|
|
|
|
|
|
||||||||||||||||||||
Basic |
$ |
(0.17 |
) |
|
$ |
(0.25 |
) |
|
$ |
0.68 |
|
|
$ |
(0.75 |
) |
|
||||||||||||
Diluted |
$ |
(0.17 |
) |
|
$ |
(0.25 |
) |
|
$ |
0.68 |
|
|
$ |
(0.75 |
) |
|
||||||||||||
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Cash Dividends Declared |
$ |
0.68 |
|
|
$ |
0.68 |
|
|
$ |
0.68 |
|
|
$ |
1.36 |
|
|
||||||||||||
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||||||||||||||||||||
Weighted Average Number of Shares |
|
|
|
|
|
|
|
|
||||||||||||||||||||
Basic |
|
137.8 |
|
|
|
137.2 |
|
|
|
137.8 |
|
|
|
137.2 |
|
|
||||||||||||
Diluted |
|
137.8 |
|
|
137.2 |
|
|
138.2 |
|
|
137.2 |
|
|
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HASBRO, INC. |
|
|
||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||
(Unaudited) |
|
|
||||||
(Millions of Dollars) |
|
|
||||||
|
|
|
||||||
|
Six Months Ended |
|||||||
|
June 27, 2021 |
June 28, 2020 |
||||||
Cash Flows from Operating Activities: |
|
|
||||||
Net Earnings (Loss) |
$ |
95.6 |
|
$ |
(100.8 |
) |
||
Other Non-Cash Adjustments |
|
419.3 |
|
|
366.9 |
|
||
Changes in Operating Assets and Liabilities |
|
(39.6 |
) |
|
(7.8 |
) |
||
Net Cash Provided by Operating Activities |
|
577.1 |
|
|
258.3 |
|
||
|
|
|
||||||
Cash Flows from Investing Activities: |
|
|
||||||
Additions to Property, Plant and Equipment |
|
(63.1 |
) |
|
(64.0 |
) |
||
Acquisition, Net of Cash Acquired |
|
— |
|
|
(4,403.9 |
) |
||
Other |
|
(3.2 |
) |
|
13.1 |
|
||
Net Cash Utilized by Investing Activities |
|
(66.3 |
) |
|
(4,454.8 |
) |
||
|
|
|
||||||
Cash Flows from Financing Activities: |
|
|
||||||
Proceeds from Long-Term Debt |
|
114.7 |
|
|
1,023.5 |
|
||
Repayments of Long-Term Debt |
|
(635.0 |
) |
|
(98.2 |
) |
||
Net Repayments of Short-Term Borrowings |
|
(6.3 |
) |
|
(4.5 |
) |
||
Stock-Based Compensation Transactions |
|
9.4 |
|
|
1.8 |
|
||
Dividends Paid |
|
(187.5 |
) |
|
(186.2 |
) |
||
Payments Related to Tax Withholding for Share-Based Compensation |
|
(9.5 |
) |
|
(5.7 |
) |
||
Redemption of Equity Instruments |
|
— |
|
|
(47.4 |
) |
||
Other |
|
(4.2 |
) |
|
(4.8 |
) |
||
Net Cash (Utilized) Provided by Financing Activities |
|
(718.4 |
) |
|
678.5 |
|
||
|
|
|
||||||
Effect of Exchange Rate Changes on Cash |
|
4.3 |
|
|
(24.4 |
) |
||
|
|
|
||||||
Net Decrease in Cash Balances Classified as Held for Sale |
|
(18.2 |
) |
|
— |
|
||
|
|
|
||||||
Net Decrease in Cash and Cash Equivalents |
|
(221.5 |
) |
|
(3,542.4 |
) |
||
|
|
|
||||||
Cash and Cash Equivalents at Beginning of Year |
|
1,449.7 |
|
|
4,580.4 |
|
||
|
|
|
||||||
Cash and Cash Equivalents at End of Quarter |
$ |
1,228.2 |
|
$ |
1,038.0 |
|
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Contacts
Investor Contact: Debbie Hancock | Hasbro, Inc. | (401) 727-5401 | debbie.hancock@hasbro.com
Press Contact: Erin Pensa | Hasbro, Inc. | (401) 440-7627 | erin.pensa@hasbro.com
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