☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Rhode Island
|
05-0155090
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
|
|
|
|
1027 Newport Avenue
|
|
|
Pawtucket,
|
Rhode Island
|
02861
|
(Address of Principal Executive Offices)
|
(Zip Code)
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common Stock, $0.50 par value per share
|
HAS
|
The NASDAQ Global Select Market
|
Large accelerated filer
|
x
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☐
|
Smaller reporting company
|
☐
|
|
|
Emerging growth company
|
☐
|
|
March 29,
2020 |
|
March 31,
2019 |
|
December 29,
2019 |
||||
ASSETS
|
|
|
|
|
|
||||
Current assets
|
|
|
|
|
|
||||
Cash and cash equivalents including restricted cash of $86,177, $0 and $0
|
$
|
1,237,884
|
|
|
1,196,634
|
|
|
4,580,369
|
|
Accounts receivable, less allowance for doubtful accounts of $16,900
$12,100 and $17,200
|
963,823
|
|
|
638,417
|
|
|
1,410,597
|
|
|
Inventories
|
444,406
|
|
|
491,751
|
|
|
446,105
|
|
|
Prepaid expenses and other current assets
|
672,390
|
|
|
305,056
|
|
|
310,450
|
|
|
Total current assets
|
3,318,503
|
|
|
2,631,858
|
|
|
6,747,521
|
|
|
Property, plant and equipment, less accumulated depreciation of $513,200
$484,200 and $505,900
|
455,945
|
|
|
395,624
|
|
|
382,248
|
|
|
Other assets
|
|
|
|
|
|
||||
Goodwill
|
3,572,650
|
|
|
485,528
|
|
|
494,584
|
|
|
Other intangible assets, net of accumulated amortization of $608,500
$747,800 and $895,200
|
1,615,778
|
|
|
682,063
|
|
|
646,305
|
|
|
Other
|
1,461,483
|
|
|
739,700
|
|
|
584,970
|
|
|
Total other assets
|
6,649,911
|
|
|
1,907,291
|
|
|
1,725,859
|
|
|
Total assets
|
$
|
10,424,359
|
|
|
4,934,773
|
|
|
8,855,628
|
|
LIABILITIES, NONCONTROLLING INTERESTS AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
||||
Current liabilities
|
|
|
|
|
|
||||
Short-term borrowings
|
$
|
9,405
|
|
|
13,409
|
|
|
503
|
|
Current portion of long-term debt
|
64,441
|
|
|
—
|
|
|
—
|
|
|
Accounts payable
|
308,496
|
|
|
234,262
|
|
|
343,927
|
|
|
Accrued liabilities
|
1,356,214
|
|
|
701,054
|
|
|
912,652
|
|
|
Total current liabilities
|
1,738,556
|
|
|
948,725
|
|
|
1,257,082
|
|
|
Long-term debt
|
5,156,290
|
|
|
1,695,462
|
|
|
4,046,457
|
|
|
Other liabilities
|
738,965
|
|
|
636,055
|
|
|
556,559
|
|
|
Total liabilities
|
7,633,811
|
|
|
3,280,242
|
|
|
5,860,098
|
|
|
Redeemable noncontrolling interests
|
26,041
|
|
|
—
|
|
|
—
|
|
|
Shareholders' equity
|
|
|
|
|
|
||||
Preference stock of $2.50 par value. Authorized 5,000,000 shares; none issued
|
—
|
|
|
—
|
|
|
—
|
|
|
Common stock of $0.50 par value. Authorized 600,000,000 shares; issued 220,286,736 at March 29, 2020, 209,694,630 at March 31, 2019, and 220,286,736 at December 29, 2019
|
110,143
|
|
|
104,847
|
|
|
110,143
|
|
|
Additional paid-in capital
|
2,282,379
|
|
|
1,269,230
|
|
|
2,275,726
|
|
|
Retained earnings
|
4,191,810
|
|
|
4,125,686
|
|
|
4,354,619
|
|
|
Accumulated other comprehensive loss
|
(294,772
|
)
|
|
(282,339
|
)
|
|
(184,220
|
)
|
|
Treasury stock, at cost; 83,279,734 shares at March 29, 2020; 83,830,809 shares at March 31, 2019; and 83,424,129 shares at December 29, 2019
|
(3,560,336
|
)
|
|
(3,562,893
|
)
|
|
(3,560,738
|
)
|
|
Noncontrolling interests
|
35,283
|
|
|
—
|
|
|
—
|
|
|
Total shareholders' equity
|
2,764,507
|
|
|
1,654,531
|
|
|
2,995,530
|
|
|
Total liabilities, noncontrolling interests and shareholders' equity
|
$
|
10,424,359
|
|
|
4,934,773
|
|
|
8,855,628
|
|
|
Quarter Ended
|
|||||
|
March 29,
2020 |
|
March 31,
2019 |
|||
Net revenues
|
$
|
1,105,570
|
|
|
732,510
|
|
Costs and expenses:
|
|
|
|
|||
Cost of sales
|
262,694
|
|
|
259,987
|
|
|
Program cost amortization
|
132,146
|
|
|
6,575
|
|
|
Royalties
|
112,822
|
|
|
59,888
|
|
|
Product development
|
53,829
|
|
|
56,260
|
|
|
Advertising
|
101,641
|
|
|
76,604
|
|
|
Amortization of intangibles
|
36,811
|
|
|
11,816
|
|
|
Selling, distribution and administration
|
279,128
|
|
|
225,253
|
|
|
Acquisition and related costs
|
149,782
|
|
|
—
|
|
|
Total costs and expenses
|
1,128,853
|
|
|
696,383
|
|
|
Operating profit (loss)
|
(23,283
|
)
|
|
36,127
|
|
|
Non-operating (income) expense:
|
|
|
|
|||
Interest expense
|
54,725
|
|
|
22,314
|
|
|
Interest income
|
(4,667
|
)
|
|
(7,682
|
)
|
|
Other expense (income), net
|
(1,459
|
)
|
|
(8,100
|
)
|
|
Total non-operating expense, net
|
48,599
|
|
|
6,532
|
|
|
Earnings (loss) before income taxes
|
(71,882
|
)
|
|
29,595
|
|
|
Income tax (benefit) expense
|
(4,072
|
)
|
|
2,868
|
|
|
Net earnings (loss)
|
(67,810
|
)
|
|
26,727
|
|
|
Net earnings attributable to noncontrolling interests
|
1,827
|
|
|
—
|
|
|
Net earnings (loss) attributable to Hasbro, Inc.
|
(69,637
|
)
|
|
26,727
|
|
|
|
|
|
|
|||
Net earnings (loss) per common share:
|
|
|
|
|||
Basic
|
$
|
(0.51
|
)
|
|
0.21
|
|
Diluted
|
$
|
(0.51
|
)
|
|
0.21
|
|
Cash dividends declared per common share
|
$
|
0.68
|
|
|
0.68
|
|
|
Quarter Ended
|
|||||
|
March 29,
2020 |
|
March 31,
2019 |
|||
Net earnings (loss)
|
$
|
(67,810
|
)
|
|
26,727
|
|
Other comprehensive earnings (loss):
|
|
|
|
|||
Foreign currency translation adjustments
|
(131,767
|
)
|
|
6,993
|
|
|
Unrealized holding (losses) gains on available-for-sale securities, net of tax
|
(410
|
)
|
|
265
|
|
|
Net gains on cash flow hedging activities, net of tax
|
25,015
|
|
|
6,592
|
|
|
Reclassifications to earnings (loss), net of tax:
|
|
|
|
|||
Net gains on cash flow hedging activities
|
(3,664
|
)
|
|
(2,814
|
)
|
|
Amortization of unrecognized pension and postretirement amounts
|
274
|
|
|
1,139
|
|
|
Total other comprehensive earnings (loss), net of tax
|
(110,552
|
)
|
|
12,175
|
|
|
Total comprehensive earnings attributable to noncontrolling interests
|
1,827
|
|
|
—
|
|
|
Total comprehensive earnings (loss) attributable to Hasbro, Inc.
|
$
|
(180,189
|
)
|
|
38,902
|
|
|
Three Months Ended
|
|||||
|
March 29,
2020 |
|
March 31,
2019 |
|||
Cash flows from operating activities:
|
|
|
|
|||
Net earnings (loss)
|
$
|
(67,810
|
)
|
|
26,727
|
|
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities:
|
|
|
|
|||
Depreciation of plant and equipment
|
23,666
|
|
|
27,028
|
|
|
Amortization of intangibles
|
36,811
|
|
|
11,816
|
|
|
Asset impairments
|
40,878
|
|
|
—
|
|
|
Program cost amortization
|
132,146
|
|
|
6,575
|
|
|
Deferred income taxes
|
(3,127
|
)
|
|
11,795
|
|
|
Stock-based compensation
|
10,651
|
|
|
5,285
|
|
|
Other non-cash items
|
8,418
|
|
|
(3,503
|
)
|
|
Change in operating assets and liabilities net of acquired balances:
|
|
|
|
|||
Decrease in accounts receivable
|
653,687
|
|
|
558,888
|
|
|
Increase in inventories
|
(13,933
|
)
|
|
(50,109
|
)
|
|
Increase in prepaid expenses and other current assets
|
(22,965
|
)
|
|
(33,934
|
)
|
|
Program production costs, net
|
(168,043
|
)
|
|
(17,728
|
)
|
|
Decrease in accounts payable and accrued liabilities
|
(315,781
|
)
|
|
(273,955
|
)
|
|
Other
|
(22,971
|
)
|
|
(4,391
|
)
|
|
Net cash provided by operating activities
|
291,627
|
|
|
264,494
|
|
|
Cash flows from investing activities:
|
|
|
|
|||
Additions to property, plant and equipment
|
(30,833
|
)
|
|
(25,201
|
)
|
|
Acquisitions, net of cash acquired
|
(4,403,929
|
)
|
|
—
|
|
|
Other
|
4,271
|
|
|
(1,800
|
)
|
|
Net cash utilized by investing activities
|
(4,430,491
|
)
|
|
(27,001
|
)
|
|
Cash flows from financing activities:
|
|
|
|
|||
Proceeds from borrowings with maturity greater than three months
|
1,017,689
|
|
|
—
|
|
|
Repayments of borrowings with maturity greater than three months
|
(50,186
|
)
|
|
—
|
|
|
Net repayments of other short-term borrowings
|
(1,424
|
)
|
|
3,419
|
|
|
Purchases of common stock
|
—
|
|
|
(47,479
|
)
|
|
Stock-based compensation transactions
|
1,830
|
|
|
2,335
|
|
|
Dividends paid
|
(93,162
|
)
|
|
(79,274
|
)
|
|
Payments related to tax withholding for share-based compensation
|
(5,307
|
)
|
|
(11,880
|
)
|
|
Redemption of equity instruments
|
(47,399
|
)
|
|
—
|
|
|
Deferred acquisition payments
|
—
|
|
|
(87,500
|
)
|
|
Other
|
(2,572
|
)
|
|
—
|
|
|
Net cash provided (utilized) by financing activities
|
819,469
|
|
|
(220,379
|
)
|
|
Effect of exchange rate changes on cash
|
(23,090
|
)
|
|
(2,851
|
)
|
|
(Decrease) increase in cash, cash equivalents and restricted cash
|
(3,342,485
|
)
|
|
14,263
|
|
|
Cash, cash equivalents and restricted cash at beginning of year
|
4,580,369
|
|
|
1,182,371
|
|
|
Cash, cash equivalents and restricted cash at end of period
|
$
|
1,237,884
|
|
|
1,196,634
|
|
|
|
|
|
|||
Supplemental information
|
|
|
|
|||
Cash paid during the period for:
|
|
|
|
|||
Interest
|
$
|
13,479
|
|
|
28,576
|
|
Income taxes
|
$
|
19,915
|
|
|
13,019
|
|
|
Quarter Ended March 29, 2020
|
|
|
|
||||||||||||||||||||||||||||
|
Common
Stock
|
|
Additional
Paid-in Capital
|
|
Retained
Earnings
|
|
Accumulated Other
Comprehensive
Loss
|
|
Treasury
Stock
|
|
Noncontrolling Interests
|
|
Total
Shareholders'
Equity
|
|
|
Redeemable Noncontrolling Interests
|
||||||||||||||||
Balance, December 29, 2019
|
$
|
110,143
|
|
|
2,275,726
|
|
|
4,354,619
|
|
|
(184,220
|
)
|
|
(3,560,738
|
)
|
|
—
|
|
|
$
|
2,995,530
|
|
|
|
$
|
—
|
|
|||||
Noncontrolling interests related to acquisition of Entertainment One Ltd.
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
39,925
|
|
|
39,925
|
|
|
|
23,596
|
|
||||||||
Net loss attributable to Hasbro, Inc.
|
—
|
|
|
—
|
|
|
(69,637
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(69,637
|
)
|
|
|
—
|
|
||||||||
Net earnings (loss) attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,864
|
)
|
|
(1,864
|
)
|
|
|
37
|
|
||||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(110,552
|
)
|
|
—
|
|
|
—
|
|
|
(110,552
|
)
|
|
|
—
|
|
||||||||
Stock-based compensation transactions
|
—
|
|
|
(3,998
|
)
|
|
—
|
|
|
—
|
|
|
402
|
|
|
—
|
|
|
(3,596
|
)
|
|
|
—
|
|
||||||||
Stock-based compensation expense
|
—
|
|
|
10,651
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,651
|
|
|
|
—
|
|
||||||||
Dividends declared
|
—
|
|
|
—
|
|
|
(93,172
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(93,172
|
)
|
|
|
—
|
|
||||||||
Distributions paid to noncontrolling owners
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,778
|
)
|
|
(2,778
|
)
|
|
|
2,408
|
|
||||||||
Balance, March 29, 2020
|
$
|
110,143
|
|
|
$
|
2,282,379
|
|
|
$
|
4,191,810
|
|
|
$
|
(294,772
|
)
|
|
$
|
(3,560,336
|
)
|
|
$
|
35,283
|
|
|
$
|
2,764,507
|
|
|
|
$
|
26,041
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Quarter Ended March 31, 2019
|
|
|
|
||||||||||||||||||||||||||||
|
Common
Stock
|
|
Additional
Paid-in Capital
|
|
Retained
Earnings
|
|
Accumulated Other
Comprehensive
Loss
|
|
Treasury
Stock
|
|
Noncontrolling Interests
|
|
Total
Shareholders'
Equity
|
|
|
Redeemable Noncontrolling Interests
|
||||||||||||||||
Balance, December 30, 2018
|
$
|
104,847
|
|
|
1,275,059
|
|
|
4,184,374
|
|
|
(294,514
|
)
|
|
(3,515,280
|
)
|
|
—
|
|
|
$
|
1,754,486
|
|
|
|
$
|
—
|
|
|||||
Net earnings
|
—
|
|
|
—
|
|
|
26,727
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
26,727
|
|
|
|
—
|
|
||||||||
Other comprehensive earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
12,175
|
|
|
—
|
|
|
—
|
|
|
12,175
|
|
|
|
—
|
|
||||||||
Stock-based compensation transactions
|
—
|
|
|
(11,114
|
)
|
|
—
|
|
|
—
|
|
|
1,569
|
|
|
—
|
|
|
(9,545
|
)
|
|
|
—
|
|
||||||||
Purchases of common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(49,182
|
)
|
|
—
|
|
|
(49,182
|
)
|
|
|
—
|
|
||||||||
Stock-based compensation expense
|
—
|
|
|
5,285
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,285
|
|
|
|
—
|
|
||||||||
Dividends declared
|
—
|
|
|
—
|
|
|
(85,415
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(85,415
|
)
|
|
|
—
|
|
||||||||
Balance, March 31, 2019
|
$
|
104,847
|
|
|
$
|
1,269,230
|
|
|
$
|
4,125,686
|
|
|
$
|
(282,339
|
)
|
|
$
|
(3,562,893
|
)
|
|
$
|
—
|
|
|
$
|
1,654,531
|
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Country of Incorporation
|
|
Proportion held
|
|
Principal activity
|
|
Astley Baker Davies Limited
|
|
England and Wales
|
|
70
|
%
|
|
Ownership of intellectual property
|
Whizz Kid Entertainment Limited
|
|
England and Wales
|
|
70
|
%
|
|
Production of television programs
|
MR Productions Holdings, LLC
|
|
United States
|
|
77
|
%
|
|
Film development
|
Renegade Entertainment, LLC
|
|
United States
|
|
65
|
%
|
|
Production of television programs
|
Round Room Live, LLC
|
|
United States
|
|
60
|
%
|
|
Production of live events
|
|
March 29, 2020
|
|
March 31, 2019
|
|||
Assets
|
|
|
|
|||
Contract assets - current
|
$
|
271,120
|
|
|
23,857
|
|
Contract assets - long term
|
87,496
|
|
|
3,434
|
|
|
Total
|
$
|
358,616
|
|
|
27,291
|
|
Liabilities
|
|
|
|
|||
Contract liabilities
|
184,064
|
|
|
47,678
|
|
|
Total
|
$
|
184,064
|
|
|
47,678
|
|
Acquisition Consideration
|
|
||
eOne common shares outstanding as of December 30, 2019
|
498,040
|
|
|
Cash consideration per share
|
$
|
7.35
|
|
Total consideration for shares outstanding
|
3,658,345
|
|
|
Cash consideration for employee share based payment awards outstanding
|
145,566
|
|
|
Cash consideration for extinguishment of debt
|
831,130
|
|
|
Total cash consideration
|
4,635,041
|
|
|
Less: Employee awards to be recorded as future stock compensation expense
|
47,399
|
|
|
Total consideration transferred
|
$
|
4,587,642
|
|
|
Estimated Fair Value
|
||
Cash, cash equivalents and restricted cash
|
$
|
183,713
|
|
Accounts receivable, net
|
259,061
|
|
|
Inventories
|
7,029
|
|
|
Other current assets
|
286,270
|
|
|
Property, plant and equipment (including right of use assets)
|
90,339
|
|
|
Intangible assets
|
1,055,249
|
|
|
Content assets - IIC and IIP
|
751,524
|
|
|
Other assets
|
183,209
|
|
|
Short-term borrowings
|
(60,533
|
)
|
|
Accounts payable, and accrued liabilities
|
(772,097
|
)
|
|
Long-term debt (including current portion)
|
(149,118
|
)
|
|
Other liabilities
|
(262,644
|
)
|
|
Noncontrolling interests
|
(63,541
|
)
|
|
Estimated fair value of net assets acquired
|
1,508,461
|
|
|
Goodwill
|
3,079,181
|
|
|
Total purchase price
|
$
|
4,587,642
|
|
(in thousands of dollars)
|
U.S and Canada
|
|
International
|
|
Entertainment, Licensing and Digital
|
|
eOne
|
|
Total
|
|||||||
|
|
|
|
|
|
|
|
|
|
|||||||
Balance at December 29,2019
|
$
|
291,577
|
|
|
170,218
|
|
|
32,789
|
|
|
—
|
|
|
$
|
494,584
|
|
Acquired during the period
|
—
|
|
|
—
|
|
|
—
|
|
|
3,079,181
|
|
|
3,079,181
|
|
||
Foreign exchange translation
|
—
|
|
|
(321
|
)
|
|
(794
|
)
|
|
—
|
|
|
(1,115
|
)
|
||
Balance at March 29, 2020
|
$
|
291,577
|
|
|
169,897
|
|
|
31,995
|
|
|
3,079,181
|
|
|
$
|
3,572,650
|
|
|
Quarter Ended
|
||
|
March 29, 2020
|
||
eOne:
|
|
||
Net revenues
|
$
|
342,493
|
|
Loss before income taxes
|
(33,620
|
)
|
•
|
Acquisition and integration costs of $95,718, including $47,339 of expense associated with the acceleration of eOne stock-based compensation and $38,168 of advisor fees settled at the closing of the acquisition, as well as integration costs; and
|
•
|
Restructuring and related costs of $54,064, including severance and retention costs of $13,186, as well as $40,878 in impairment charges for certain definite-lived intangible and production assets. The impairment charges of $40,878 were driven by the change in strategy for the combined company’s entertainment assets.
|
|
Unaudited
|
||
|
March 31, 2019
|
||
Revenues
|
$
|
1,198,722
|
|
Net earnings
|
79,134
|
|
|
Net earnings attributable to Hasbro, Inc.
|
76,405
|
|
|
|
|
||
Net earnings per common share:
|
|
||
Diluted
|
$
|
0.56
|
|
Basic
|
$
|
0.56
|
|
•
|
additional amortization expense of $12,480 that would have been recognized as a result of the allocation of purchase consideration to definite-lived intangible assets subject to amortization;
|
•
|
estimated differences in interest expense of $19,105 as a result of incurring new debt and extinguishing historical eOne debt; and
|
•
|
the income tax effect of the pro forma adjustments in the amount of $6,570, calculated using a blended statutory income tax rate of 22.5% for the eOne amortization and elimination of historical interest adjustments, and a blended statutory tax rate of 21% for the new debt interest.
|
|
2020
|
|
2019
|
|||||||||
Quarter
|
Basic
|
|
Diluted
|
|
Basic
|
|
Diluted
|
|||||
Net earnings (loss) attributable to Hasbro, Inc.
|
$
|
(69,637
|
)
|
|
(69,637
|
)
|
|
26,727
|
|
|
26,727
|
|
|
|
|
|
|
|
|
|
|||||
Average shares outstanding
|
137,147
|
|
|
137,147
|
|
|
126,287
|
|
|
126,287
|
|
|
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|||||
Options and other share-based awards
|
—
|
|
|
—
|
|
|
—
|
|
|
529
|
|
|
Equivalent Shares
|
137,147
|
|
|
137,147
|
|
|
126,287
|
|
|
126,816
|
|
|
|
|
|
|
|
|
|
|
|||||
Net earnings (loss) attributable to Hasbro, Inc. per common share
|
$
|
(0.51
|
)
|
|
(0.51
|
)
|
|
0.21
|
|
|
0.21
|
|
|
Quarter Ended
|
|||||
|
March 29,
2020 |
|
March 31,
2019 |
|||
|
|
|
|
|||
Other comprehensive earnings (loss), tax effect:
|
|
|
|
|||
Tax benefit (expense) on unrealized holding gains (losses)
|
$
|
118
|
|
|
(77
|
)
|
Tax expense on cash flow hedging activities
|
(7,203
|
)
|
|
(3
|
)
|
|
Reclassifications to earnings, tax effect:
|
|
|
|
|||
Tax expense on cash flow hedging activities
|
267
|
|
|
346
|
|
|
Tax benefit on unrecognized pension and postretirement amounts reclassified to the consolidated statements of operations
|
(80
|
)
|
|
(331
|
)
|
|
Total tax effect on other comprehensive earnings (loss)
|
$
|
(6,898
|
)
|
|
(65
|
)
|
|
Pension and
Postretirement
Amounts
|
|
Gains
(Losses) on
Derivative
Instruments
|
|
Unrealized
Holding
Gains
(Losses) on
Available-
for-Sale
Securities
|
|
Foreign
Currency
Translation
Adjustments
|
|
Total
Accumulated
Other
Comprehensive
Loss
|
||||||
2020
|
|
|
|
|
|
|
|
|
|
||||||
Balance at December 29, 2019
|
$
|
(36,129
|
)
|
|
(5,232
|
)
|
|
(230
|
)
|
|
(142,629
|
)
|
|
(184,220
|
)
|
Current period other comprehensive earnings (loss)
|
274
|
|
|
21,351
|
|
|
(410
|
)
|
|
(131,767
|
)
|
|
(110,552
|
)
|
|
Balance at March 29, 2020
|
$
|
(35,855
|
)
|
|
16,119
|
|
|
(640
|
)
|
|
(274,396
|
)
|
|
(294,772
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||
2019
|
|
|
|
|
|
|
|
|
|
||||||
Balance at December 30, 2018
|
$
|
(143,134
|
)
|
|
1,549
|
|
|
(744
|
)
|
|
(152,185
|
)
|
|
(294,514
|
)
|
Current period other comprehensive earnings (loss)
|
1,139
|
|
|
3,778
|
|
|
265
|
|
|
6,993
|
|
|
12,175
|
|
|
Balance at March 31, 2019
|
$
|
(141,995
|
)
|
|
5,327
|
|
|
(479
|
)
|
|
(145,192
|
)
|
|
(282,339
|
)
|
|
March 29, 2020
|
|
March 31, 2019
|
|
December 29, 2019
|
|||||||||||||
|
Carrying
Cost
|
|
Fair
Value
|
|
Carrying
Cost
|
|
Fair
Value
|
|
Carrying
Cost
|
|
Fair
Value
|
|||||||
3.90% Notes Due 2029
|
$
|
900,000
|
|
|
774,540
|
|
|
—
|
|
|
—
|
|
|
900,000
|
|
|
893,430
|
|
3.55% Notes Due 2026
|
675,000
|
|
|
641,588
|
|
|
—
|
|
|
—
|
|
|
675,000
|
|
|
680,670
|
|
|
3.00% Notes Due 2024
|
500,000
|
|
|
480,600
|
|
|
—
|
|
|
—
|
|
|
500,000
|
|
|
502,150
|
|
|
6.35% Notes Due 2040
|
500,000
|
|
|
498,200
|
|
|
500,000
|
|
|
548,200
|
|
|
500,000
|
|
|
581,600
|
|
|
3.50% Notes Due 2027
|
500,000
|
|
|
465,400
|
|
|
500,000
|
|
|
479,450
|
|
|
500,000
|
|
|
500,550
|
|
|
2.60% Notes Due 2022
|
300,000
|
|
|
295,320
|
|
|
—
|
|
|
—
|
|
|
300,000
|
|
|
300,960
|
|
|
5.10% Notes Due 2044
|
300,000
|
|
|
251,670
|
|
|
300,000
|
|
|
285,990
|
|
|
300,000
|
|
|
301,980
|
|
|
3.15% Notes Due 2021
|
300,000
|
|
|
299,880
|
|
|
300,000
|
|
|
301,440
|
|
|
300,000
|
|
|
303,900
|
|
|
6.60% Debentures Due 2028
|
109,895
|
|
|
122,643
|
|
|
109,895
|
|
|
129,445
|
|
|
109,895
|
|
|
130,610
|
|
|
Variable % Notes Due December 30, 2022
|
400,000
|
|
|
400,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Variable % Notes Due December 30, 2024
|
600,000
|
|
|
600,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Production Financing Facilities
|
175,572
|
|
|
175,572
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total long-term debt
|
$
|
5,260,467
|
|
|
5,005,413
|
|
|
1,709,895
|
|
|
1,744,525
|
|
|
4,084,895
|
|
|
4,195,850
|
|
Less: Deferred debt expenses
|
39,736
|
|
|
—
|
|
|
14,433
|
|
|
—
|
|
|
38,438
|
|
|
—
|
|
|
Less: Current portion
|
64,441
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Long-term debt
|
$
|
5,156,290
|
|
|
5,005,413
|
|
|
1,695,462
|
|
|
1,744,525
|
|
|
4,046,457
|
|
|
4,195,850
|
|
|
Quarter Ended
|
||
|
March 29, 2020
|
||
Production financing held by production subsidiaries
|
$
|
175,572
|
|
Other loans
|
9,405
|
|
|
Total
|
$
|
184,977
|
|
|
|
||
Production financing shown in the consolidated balance sheet as:
|
|
||
Non-current
|
$
|
141,131
|
|
Current
|
34,441
|
|
|
Total
|
$
|
175,572
|
|
|
Canadian Dollars
|
|
U.S. Dollars
|
|
Total
|
||||
As of March 29, 2020
|
$
|
73,485
|
|
|
111,492
|
|
|
184,977
|
|
|
Production Financing
|
|
Other Loans
|
|
Total
|
|||||
December 30, 2019
|
$
|
209,651
|
|
|
9,102
|
|
|
$
|
218,753
|
|
Drawdowns
|
20,511
|
|
|
7,996
|
|
|
28,507
|
|
||
Repayments
|
(50,186
|
)
|
|
(8,916
|
)
|
|
(59,102
|
)
|
||
Foreign exchange differences
|
(4,404
|
)
|
|
1,223
|
|
|
(3,181
|
)
|
||
Balance at March 29, 2020
|
$
|
175,572
|
|
|
9,405
|
|
|
184,977
|
|
|
|
Quarter Ended
|
||
|
|
March 29, 2020
|
||
Film Programming
|
|
|
||
Released, less amortization
|
|
$
|
300,619
|
|
Completed and not released
|
|
63,100
|
|
|
In production
|
|
25,702
|
|
|
Pre-production
|
|
20,248
|
|
|
|
|
409,669
|
|
|
TV Programming
|
|
|
||
Released, less amortization
|
|
101,925
|
|
|
Completed and not released
|
|
74,900
|
|
|
In production
|
|
64,188
|
|
|
Pre-production
|
|
59,863
|
|
|
|
|
300,876
|
|
|
Other Programming
|
|
|
||
Released, less amortization
|
|
10,112
|
|
|
In production
|
|
2,177
|
|
|
|
|
12,289
|
|
|
|
|
|
||
Total program costs
|
|
$
|
722,834
|
|
|
|
Investment in Production
|
|
Investment in Content
|
|
Total
|
||||
Program cost amortization
|
|
$
|
83,404
|
|
|
39,979
|
|
|
123,383
|
|
•
|
during the quarter ended March 29, 2020, the Company recorded a discrete net tax benefit of $20,081, of which $22,332 is a result of the eOne acquisition and related costs incurred. Additionally, our estimated annual ETR increased to 20.6% from 18.5% as a result of the eOne acquisition during the first quarter of 2020, and a change in the mix of forecasted income by jurisdiction.
|
•
|
during the quarter ended March 31, 2019, we recorded a discrete net tax benefit of $2,607 primarily associated with the decrease to our liability for uncertain tax positions that resulted from statute of limitations expiring in certain jurisdictions.
|
|
Fair Value Measurements Using:
|
|||||||||||
|
Fair
Value
|
|
Quoted
Prices in
Active
Markets
for
Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|||||
March 29, 2020
|
|
|
|
|
|
|
|
|||||
Assets:
|
|
|
|
|
|
|
|
|||||
Available-for-sale securities
|
$
|
768
|
|
|
768
|
|
|
—
|
|
|
—
|
|
Derivatives
|
46,781
|
|
|
—
|
|
|
46,781
|
|
|
—
|
|
|
Total assets
|
$
|
47,549
|
|
|
768
|
|
|
46,781
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|||||
Liabilities:
|
|
|
|
|
|
|
|
|||||
Derivatives
|
$
|
13,131
|
|
|
—
|
|
|
13,131
|
|
|
—
|
|
Option agreement
|
20,836
|
|
|
—
|
|
|
—
|
|
|
20,836
|
|
|
Total liabilities
|
$
|
33,967
|
|
|
—
|
|
|
13,131
|
|
|
20,836
|
|
|
|
|
|
|
|
|
|
|||||
March 31, 2019
|
|
|
|
|
|
|
|
|||||
Assets:
|
|
|
|
|
|
|
|
|||||
Available-for-sale securities
|
$
|
975
|
|
|
975
|
|
|
—
|
|
|
—
|
|
Derivatives
|
32,296
|
|
|
—
|
|
|
32,296
|
|
|
—
|
|
|
Total assets
|
$
|
33,271
|
|
|
975
|
|
|
32,296
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|||||
Liabilities:
|
|
|
|
|
|
|
|
|||||
Derivatives
|
$
|
45
|
|
|
—
|
|
|
45
|
|
|
—
|
|
Option agreement
|
23,144
|
|
|
—
|
|
|
—
|
|
|
23,144
|
|
|
Total liabilities
|
$
|
23,189
|
|
|
—
|
|
|
45
|
|
|
23,144
|
|
|
|
|
|
|
|
|
|
|||||
December 29, 2019
|
|
|
|
|
|
|
|
|||||
Assets:
|
|
|
|
|
|
|
|
|||||
Available-for-sale securities
|
$
|
1,296
|
|
|
1,296
|
|
|
—
|
|
|
—
|
|
Derivatives
|
48,973
|
|
|
—
|
|
|
48,973
|
|
|
—
|
|
|
Total assets
|
$
|
50,269
|
|
|
1,296
|
|
|
48,973
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|||||
Liabilities:
|
|
|
|
|
|
|
|
|||||
Derivatives
|
$
|
5,733
|
|
|
—
|
|
|
5,733
|
|
|
—
|
|
Option agreement
|
22,145
|
|
|
—
|
|
|
—
|
|
|
22,145
|
|
|
Total Liabilities
|
$
|
27,878
|
|
|
—
|
|
|
5,733
|
|
|
22,145
|
|
|
2020
|
|
2019
|
|||
Balance at beginning of year
|
$
|
(22,145
|
)
|
|
(23,440
|
)
|
Gain from change in fair value
|
1,309
|
|
|
296
|
|
|
Balance at end of first quarter
|
$
|
(20,836
|
)
|
|
(23,144
|
)
|
|
March 29, 2020
|
|
March 31, 2019
|
|
December 29, 2019
|
|||||||||||||
Hedged transaction
|
Notional
Amount
|
|
Fair
Value
|
|
Notional
Amount
|
|
Fair
Value
|
|
Notional
Amount
|
|
Fair
Value
|
|||||||
Inventory purchases
|
$
|
343,227
|
|
|
32,186
|
|
|
486,999
|
|
|
21,649
|
|
|
398,800
|
|
|
8,727
|
|
Sales
|
101,120
|
|
|
4,761
|
|
|
263,221
|
|
|
8,358
|
|
|
124,920
|
|
|
4,037
|
|
|
Production financing and other
|
161,303
|
|
|
6,687
|
|
|
26,422
|
|
|
190
|
|
|
19,499
|
|
|
140
|
|
|
Total
|
$
|
605,650
|
|
|
43,634
|
|
|
776,642
|
|
|
30,197
|
|
|
543,219
|
|
|
12,904
|
|
|
March 29,
2020 |
|
March 31,
2019 |
|
December 29,
2019 |
||||
Prepaid expenses and other current assets
|
|
|
|
|
|
||||
Unrealized gains
|
$
|
40,376
|
|
|
22,737
|
|
|
12,133
|
|
Unrealized losses
|
(1,893
|
)
|
|
(2,008
|
)
|
|
(3,955
|
)
|
|
Net unrealized gains
|
$
|
38,483
|
|
|
20,729
|
|
|
8,178
|
|
|
|
|
|
|
|
||||
Other assets
|
|
|
|
|
|
||||
Unrealized gains
|
$
|
7,128
|
|
|
9,752
|
|
|
6,652
|
|
Unrealized losses
|
—
|
|
|
(239
|
)
|
|
—
|
|
|
Net unrealized gains
|
$
|
7,128
|
|
|
9,513
|
|
|
6,652
|
|
|
|
|
|
|
|
||||
Accrued liabilities
|
|
|
|
|
|
||||
Unrealized gains
|
$
|
—
|
|
|
—
|
|
|
293
|
|
Unrealized losses
|
(1,974
|
)
|
|
(45
|
)
|
|
(2,219
|
)
|
|
Net unrealized losses
|
$
|
(1,974
|
)
|
|
(45
|
)
|
|
(1,926
|
)
|
|
|
|
|
|
|
||||
Other liabilities
|
|
|
|
|
|
||||
Unrealized gains
|
$
|
—
|
|
|
—
|
|
|
—
|
|
Unrealized losses
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
Net unrealized losses
|
$
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
Quarter Ended
|
|||||
|
March 29,
2020 |
|
March 31,
2019 |
|||
Statements of Operations Classification
|
|
|
|
|||
Cost of sales
|
$
|
3,957
|
|
|
2,614
|
|
Net revenues
|
343
|
|
|
878
|
|
|
Other
|
81
|
|
|
118
|
|
|
Net realized gains
|
$
|
4,381
|
|
|
3,610
|
|
|
March 29,
2020 |
|
March 31,
2019 |
|
December 29,
2019 |
||||
Prepaid expenses and other current assets
|
|
|
|
|
|
||||
Unrealized gains
|
$
|
1,170
|
|
|
2,391
|
|
|
—
|
|
Unrealized losses
|
—
|
|
|
(337
|
)
|
|
—
|
|
|
Net unrealized gains
|
$
|
1,170
|
|
|
2,054
|
|
|
—
|
|
|
|
|
|
|
|
||||
Accrued liabilities
|
|
|
|
|
|
||||
Unrealized gains
|
$
|
1,252
|
|
|
—
|
|
|
13
|
|
Unrealized losses
|
(12,406
|
)
|
|
—
|
|
|
(3,820
|
)
|
|
Net unrealized losses
|
$
|
(11,154
|
)
|
|
—
|
|
|
(3,807
|
)
|
|
|
|
|
|
|
||||
Total unrealized (losses) gains, net
|
$
|
(9,984
|
)
|
|
2,054
|
|
|
(3,807
|
)
|
|
Quarter Ended
|
||||||
|
March 29,
2020 |
|
March 31,
2019 |
||||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
|
|
||||
Operating cash flows from operating leases
|
$
|
11,602
|
|
|
$
|
9,574
|
|
Right-of-use assets obtained in exchange for lease obligations:
|
|
|
|
||||
Operating leases
|
$
|
64,214
|
|
|
$
|
23,680
|
|
|
|
|
|
||||
Weighted Average Remaining Lease Term
|
|
|
|
||||
Operating leases
|
6.0 years
|
|
|
6.7 years
|
|
||
Weighted Average Discount Rate
|
|
|
|
||||
Operating leases
|
4.2
|
%
|
|
4.5
|
%
|
||
|
|
|
|
|
March 29,
2020 |
||
2020 (excluding the three months ended March 29, 2020)
|
$
|
35,280
|
|
2021
|
45,207
|
|
|
2022
|
41,609
|
|
|
2023
|
33,842
|
|
|
2024
|
22,266
|
|
|
2025 and thereafter
|
66,743
|
|
|
Total future lease payments
|
244,947
|
|
|
Less imputed interest
|
49,151
|
|
|
Present value of future operating lease payments
|
195,796
|
|
|
Less current portion of operating lease liabilities (1)
|
43,263
|
|
|
Non-current operating lease liability (2)
|
152,533
|
|
|
Operating lease right-of-use assets, net (3)
|
$
|
168,805
|
|
|
Quarter Ended
|
||||||||||||
|
March 29, 2020
|
|
March 31, 2019
|
||||||||||
Net revenues
|
External
|
|
Affiliate
|
|
External
|
|
Affiliate
|
||||||
U.S. and Canada
|
$
|
428,647
|
|
|
3,328
|
|
|
$
|
357,851
|
|
|
1,849
|
|
International
|
250,403
|
|
|
—
|
|
|
282,649
|
|
|
41
|
|
||
Entertainment, Licensing and Digital
|
84,027
|
|
|
971
|
|
|
91,994
|
|
|
1,974
|
|
||
eOne
|
342,493
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Global Operations (a)
|
—
|
|
|
194,856
|
|
|
16
|
|
|
229,425
|
|
||
Corporate and Eliminations (b)
|
—
|
|
|
(199,155
|
)
|
|
—
|
|
|
(233,289
|
)
|
||
|
$
|
1,105,570
|
|
|
—
|
|
|
$
|
732,510
|
|
|
—
|
|
|
Quarter Ended
|
||||||
Operating profit (loss)
|
March 29,
2020 |
|
March 31,
2019 |
||||
U.S. and Canada
|
$
|
71,780
|
|
|
$
|
13,532
|
|
International
|
(26,691
|
)
|
|
(30,411
|
)
|
||
Entertainment, Licensing and Digital
|
5,174
|
|
|
30,020
|
|
||
eOne
|
(33,081
|
)
|
|
—
|
|
||
Global Operations (a)
|
4,649
|
|
|
1,254
|
|
||
Corporate and Eliminations (b)
|
(45,114
|
)
|
|
21,732
|
|
||
|
$
|
(23,283
|
)
|
|
$
|
36,127
|
|
Total assets
|
March 29,
2020 |
|
March 31,
2019 |
|
December 29,
2019 |
||||
U.S. and Canada
|
$
|
3,335,131
|
|
|
2,600,873
|
|
|
3,244,950
|
|
International
|
2,016,267
|
|
|
2,019,800
|
|
|
2,482,170
|
|
|
Entertainment, Licensing and Digital
|
869,645
|
|
|
804,288
|
|
|
695,898
|
|
|
eOne
|
5,850,529
|
|
|
—
|
|
|
—
|
|
|
Global Operations (a)
|
3,658,540
|
|
|
706,701
|
|
|
3,334,190
|
|
|
Corporate and Eliminations (b)
|
(5,305,753
|
)
|
|
(1,196,889
|
)
|
|
(901,580
|
)
|
|
|
$
|
10,424,359
|
|
|
4,934,773
|
|
|
8,855,628
|
|
|
Quarter Ended
|
|||||
|
March 29,
2020 |
|
March 31,
2019 |
|||
Europe
|
$
|
162,249
|
|
|
153,379
|
|
Latin America
|
33,921
|
|
|
62,777
|
|
|
Asia Pacific
|
54,233
|
|
|
66,493
|
|
|
Net revenues
|
$
|
250,403
|
|
|
282,649
|
|
|
Quarter Ended
|
||||||
|
March 29,
2020 |
|
March 31,
2019 |
||||
Franchise Brands
|
$
|
396,497
|
|
|
$
|
393,574
|
|
Partner Brands
|
182,331
|
|
|
171,989
|
|
||
Hasbro Gaming (1)
|
140,084
|
|
|
107,565
|
|
||
Emerging Brands (2)
|
94,145
|
|
|
59,382
|
|
||
TV/Film/Entertainment (3)
|
292,513
|
|
|
—
|
|
||
Total
|
$
|
1,105,570
|
|
|
732,510
|
|
Remaining amounts to be paid as of December 29, 2019
|
$
|
31,113
|
|
eOne restructuring charges
|
13,186
|
|
|
Payments made in the first quarter of 2020
|
(9,876
|
)
|
|
Remaining amounts as of March 29, 2020
|
$
|
34,423
|
|
•
|
First quarter net revenues of $1,105.6 million increased 51% compared to $732.5 million in the first quarter of 2019 and reflects the 2020 acquisition of eOne. The increase in net revenues included an unfavorable foreign currency translation of $11.7 million.
|
•
|
Net revenues in the U.S. and Canada segment increased 20% to $428.6 million; International segment net revenues decreased 11% to $250.4 million, including an unfavorable foreign currency translation impact of $9.3 million; Entertainment, Licensing and Digital segment net revenues decreased 9% to $84.0 million; and eOne segment net revenues were $342.5 million.
|
•
|
Net revenues from Hasbro Gaming increased 30%; Partner Brands increased 6%; Franchise Brands increased 1%; Emerging Brands net revenues increased 58% and include the addition of preschool brands, PEPPA PIG, PJ MASKS and RICKY ZOOM, acquired as part of the eOne Acquisition; and eOne TV Film and Entertainment portfolio net revenues were $292.5 and represented 26% of total net revenues in the first quarter of 2020.
|
•
|
Operating losses were $23.3 million, or 2.1% of net revenue, in the first quarter of 2020 compared to operating profit of $36.1 million, or 4.9% of net revenue, in the first quarter of 2019.
|
•
|
First quarter 2020 operating losses were negatively impacted by acquisition and related expenses of $149.8 million ($127.5 million after-tax) and $25.0 million ($19.9 million after-tax) of eOne acquired intangible asset amortization.
|
•
|
The net loss attributable to Hasbro, Inc. of $69.6 million, or $0.51 per diluted share, in the first quarter of 2020 compared to net earnings of $26.7 million, or $0.21 per diluted share, in the first quarter of 2019.
|
|
Quarter Ended
|
||||||
|
March 29, 2020
|
|
March 31, 2019
|
||||
Net revenues
|
$
|
1,105.6
|
|
|
$
|
732.5
|
|
Operating profit (loss)
|
(23.3
|
)
|
|
36.1
|
|
||
Earnings (loss) before income taxes
|
(71.9
|
)
|
|
29.6
|
|
||
Income tax expense (benefit)
|
(4.1
|
)
|
|
2.9
|
|
||
Net earnings (loss)
|
(67.8
|
)
|
|
26.7
|
|
||
Net earnings attributable to noncontrolling interests
|
1.8
|
|
|
—
|
|
||
Net earnings (loss) attributable to Hasbro, Inc.
|
(69.6
|
)
|
|
26.7
|
|
||
Diluted earnings (loss) per share
|
(0.51
|
)
|
|
0.21
|
|
|
Quarter Ended
|
||||||||
|
March 29, 2020
|
|
March 31, 2019
|
|
%
Change |
||||
Franchise Brands
|
$
|
396.5
|
|
|
393.6
|
|
|
1
|
%
|
Partner Brands
|
182.3
|
|
|
172.0
|
|
|
6
|
%
|
|
Hasbro Gaming
|
140.1
|
|
|
107.6
|
|
|
30
|
%
|
|
Emerging Brands
|
94.1
|
|
|
59.4
|
|
|
58
|
%
|
|
TV, Film and Entertainment
|
292.5
|
|
|
—
|
|
|
100
|
%
|
|
Total
|
$
|
1,105.6
|
|
|
732.5
|
|
|
51
|
%
|
|
Quarter Ended
|
|||||||||
|
March 29, 2020
|
|
March 31, 2019
|
|
%
Change |
|||||
Net Revenues
|
|
|
|
|
|
|||||
U.S. and Canada segment
|
$
|
428.6
|
|
|
$
|
357.9
|
|
|
20
|
%
|
International segment
|
250.4
|
|
|
282.6
|
|
|
-11
|
%
|
||
Entertainment, Licensing and Digital segment
|
84.0
|
|
|
92.0
|
|
|
-9
|
%
|
||
eOne segment
|
342.5
|
|
|
—
|
|
|
100
|
%
|
||
|
|
|
|
|
|
|||||
Operating Profit
|
|
|
|
|
|
|||||
U.S. and Canada segment
|
$
|
71.8
|
|
|
$
|
13.5
|
|
|
>100%
|
|
International segment
|
(26.7
|
)
|
|
(30.4
|
)
|
|
12
|
%
|
||
Entertainment, Licensing and Digital segment
|
5.2
|
|
|
30.0
|
|
|
-83
|
%
|
||
eOne segment
|
(33.1
|
)
|
|
—
|
|
|
-100
|
%
|
|
Quarter Ended
|
||||||||
|
March 29, 2020
|
|
March 31, 2019
|
|
%
Change |
||||
Europe
|
$
|
162.2
|
|
|
153.4
|
|
|
6
|
%
|
Latin America
|
33.9
|
|
|
62.8
|
|
|
-46
|
%
|
|
Asia Pacific
|
54.2
|
|
|
66.5
|
|
|
-18
|
%
|
|
Net revenues
|
$
|
250.4
|
|
|
282.6
|
|
|
-11
|
%
|
|
Quarter Ended
|
||||
|
March 29, 2020
|
|
March 31, 2019
|
||
Cost of sales
|
23.8
|
%
|
|
35.5
|
%
|
Program cost amortization
|
12.0
|
|
|
0.9
|
|
Royalties
|
10.2
|
|
|
8.2
|
|
Product development
|
4.9
|
|
|
7.7
|
|
Advertising
|
9.2
|
|
|
10.5
|
|
Amortization of intangibles
|
3.3
|
|
|
1.6
|
|
Selling, distribution and administration
|
25.2
|
|
|
30.8
|
|
Acquisition and related costs
|
13.5
|
|
|
0.0
|
|
|
March 29, 2020
|
|
March 31, 2019
|
|
% Change
|
||||
Cash and cash equivalents (including restricted cash of $86.2 and $0)
|
$
|
1,237.9
|
|
|
1,196.6
|
|
|
3
|
%
|
Accounts receivable, net
|
963.8
|
|
|
638.4
|
|
|
51
|
%
|
|
Inventories
|
444.4
|
|
|
491.8
|
|
|
-10
|
%
|
|
Prepaid expenses and other current assets
|
672.4
|
|
|
305.1
|
|
|
>100%
|
|
|
Other assets
|
1,461.5
|
|
|
739.7
|
|
|
98
|
%
|
|
Accounts payable and accrued liabilities
|
1,664.7
|
|
|
935.3
|
|
|
78
|
%
|
|
Other liabilities
|
739.0
|
|
|
636.1
|
|
|
16
|
%
|
|
March 29, 2020
|
|
|
March 31, 2019
|
|
||
Net cash provided by (used in)
|
|
|
|
||||
Operating activities
|
$
|
291.6
|
|
|
$
|
264.5
|
|
Investing activities
|
(4,430.5
|
)
|
|
(27.0
|
)
|
||
Financing activities
|
819.5
|
|
|
(220.4
|
)
|
|
Remainder 2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
Thereafter
|
|
Total
|
||||||||
Future film and television obligations
|
$
|
75.7
|
|
|
17.1
|
|
|
1.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
94.5
|
|
First-look commitments
|
18.7
|
|
|
15.9
|
|
|
7.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
42.3
|
|
|
Operating lease commitments
|
15.8
|
|
|
13.2
|
|
|
8.9
|
|
|
7.5
|
|
|
6.2
|
|
|
21.7
|
|
|
73.3
|
|
|
|
$
|
110.2
|
|
|
46.2
|
|
|
18.3
|
|
|
7.5
|
|
|
6.2
|
|
|
21.7
|
|
|
210.1
|
|
Item 1.
|
Legal Proceedings.
|
Item 1A.
|
Risk Factors.
|
•
|
the negative impact to our ability to design, develop, manufacture and ship product as well as produce and distribute entertainment content;
|
•
|
delays in entertainment content releases from our partners and licensors, or changes in release plans, that can adversely impact our product sales; examples of releases that have been delayed include Disney’s MULAN, MARVEL’S BLACK WIDOW and SONY PICTURES GHOSTBUSTERS AFTERLIFE;
|
•
|
the negative impact on consumer purchasing behavior and availability of product to consumers, including due to retail store closures, shelter at home instructions and limitations on the capacity of e-commerce;
|
•
|
disruptions or restrictions on the ability of some of our employees to work effectively, including due to illness, quarantines, government actions, and facility closures or other similar restrictions;
|
•
|
closures of, or restrictions on businesses, such as retail stores, in which our products and/or the products or our licensees are sold, as well as studios and theaters in which or for which we produce and distribute entertainment content; and
|
•
|
other negative effects of the coronavirus on our business, including increased risks of accounts receivable collection, delays in payment and negotiations with customers or licensees over payment terms or the ability to perform under contracts or licenses.
|
•
|
our ability to design, develop, produce, manufacture, source and ship products on a timely, cost-effective and profitable basis;
|
•
|
rapidly changing consumer interests in the types of products and entertainment we offer;
|
•
|
the challenge of developing and offering products and storytelling experiences that are sought after by children, families and audiences given increasing technology and entertainment offerings available;
|
•
|
our ability to develop and distribute engaging storytelling across media to drive brand awareness;
|
•
|
our dependence on third party relationships, including with third party manufacturers, licensors of brands, studios, content producers and entertainment distribution channels;
|
•
|
our ability to successfully compete in the global play and entertainment industry, including with manufacturers, marketers, and sellers of toys and games, digital gaming products and digital media, as well as with film studios, television production companies and independent distributors and content producers;
|
•
|
our ability to successfully evolve and transform our business and capabilities to address a changing global consumer landscape and retail environment, including changing inventory policies and practices of our customers;
|
•
|
our ability to develop new and expanded areas of our business, such as through eOne, Wizards of the Coast, and our other entertainment, digital gaming and esports initiatives;
|
•
|
risks associated with international operations, such as currency conversion, currency fluctuations, the imposition of tariffs, quotas, border adjustment taxes or other protectionist measures, and other challenges in the territories in which we operate;
|
•
|
our ability to successfully implement 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 higher commodity prices, labor costs or transportation costs, or outbreaks of disease, such as the coronavirus, the occurrence of which could create work slowdowns, delays or shortages in production or shipment of products, increases in costs or delays in revenue;
|
•
|
the success of our key partner brands, including the ability to secure, maintain and extend agreements with our key partners or the risk of delays, increased costs or difficulties associated with any of our or our partners’ planned digital applications or media initiatives;
|
•
|
fluctuations in our business due to seasonality;
|
•
|
the concentration of our customers, potentially increasing the negative impact to our business of difficulties experienced by any of our customers or changes in their purchasing or selling patterns;
|
•
|
the bankruptcy or other lack of success of one of our significant retailers, such as the bankruptcy of Toys“R”Us in the United States and Canada;
|
•
|
the bankruptcy or other lack of success of one or more of our licensees and other business partners;
|
•
|
risks relating to the use of third party manufacturers for the manufacturing of our products, including the concentration of manufacturing for many of our products in the People’s Republic of China and our ability to successfully diversify sourcing of our products to reduce reliance on sources of supply in China;
|
•
|
our ability to attract and retain talented 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 impairment and/or write-offs of products and films and television programs we acquire and produce;
|
•
|
risks relating to investments and acquisitions, such as our acquisition of eOne, which risks include: integration difficulties; inability to retain key personnel; diversion of management time and resources; failure to achieve anticipated benefits or synergies of acquisitions or investments; and risks relating to the additional indebtedness incurred in connection with a transaction;
|
•
|
the risk of product recalls or product liability suits and costs associated with product safety regulations;
|
•
|
changes in tax laws or regulations, or the interpretation and application of such laws and regulations, which may cause us to alter tax reserves or make other changes which 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.
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds.
|
Period
|
(a) Total
Number of
Shares (or
Units)
Purchased
|
|
(b)
Average
Price Paid
per Share
(or Unit)
|
|
(c) Total
Number of
Shares (or
Units)
Purchased
as Part of
Publicly
Announced
Plans or
Programs
|
|
(d)
Maximum
Number (or
Approximate
Dollar
Value) of
Shares (or
Units) that
May Yet Be
Purchased
Under the
Plans or
Programs
|
||||||
January 2020
|
|
|
|
|
|
|
|
||||||
12/30/19 – 1/26/20
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
366,592,558
|
|
February 2020
|
|
|
|
|
|
|
|
||||||
1/27/20 – 3/1/20
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
366,592,558
|
|
March 2020
|
|
|
|
|
|
|
|
||||||
3/2/20 – 3/29/20
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
366,592,558
|
|
Total
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
366,592,558
|
|
Item 3.
|
Defaults Upon Senior Securities.
|
Item 4.
|
Mine Safety Disclosures.
|
Item 5.
|
Other Information.
|
Item 6.
|
Exhibits
|
|
|
|
3.1
|
|
|
|
|
|
3.2
|
|
|
|
|
|
3.3
|
|
|
|
|
|
3.4
|
|
|
|
|
|
3.5
|
|
|
|
|
|
3.6
|
|
|
|
|
|
3.7
|
|
|
|
|
|
3.8
|
|
|
|
|
|
3.9
|
|
|
|
|
|
4.1
|
|
|
|
|
|
4.2
|
|
|
|
|
|
4.3
|
|
|
|
|
|
4.4
|
|
|
|
|
|
4.5
|
|
|
|
|
|
4.6
|
|
|
|
|
|
4.7
|
|
|
|
|
|
4.8
|
|
|
|
|
|
10.1*
|
|
|
|
|
10.2*
|
|
|
|
|
|
10.3*
|
|
|
|
|
|
10.4*
|
|
|
|
|
|
10.5*
|
|
|
|
|
|
10.6*
|
|
|
|
|
|
10.7*
|
|
|
|
|
|
10.8*
|
|
|
|
|
|
10.9*
|
|
|
|
|
|
10.10*
|
|
|
|
|
|
31.1**
|
|
|
|
|
|
31.2**
|
|
|
|
|
|
32.1**
|
|
|
|
|
|
32.2**
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Labels Linkbase Document
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
HASBRO, INC.
|
|
(Registrant)
|
|
|
Date: May 7, 2020
|
By: /s/ Deborah Thomas
|
|
Deborah Thomas
|
|
Executive Vice President and
Chief Financial Officer
(Duly Authorized Officer and
Principal Financial Officer)
|
Period
|
|
Cumulative Percent of Option Exercisable
|
________ ____ to ________ ____
|
|
0%
|
________ ____ to ________ ____
|
|
33 1/3%
|
________ ____ to ________ ____
|
|
66 2/3%
|
________ ____ to ________ ____
|
|
100%
|
Period
|
|
Cumulative Percent of Option Exercisable
|
________ ____ to ________ ____
|
|
0%
|
________ ____ to ________ ____
|
|
33 1/3%
|
________ ____ to ________ ____
|
|
66 2/3%
|
________ ____ to ________ ____
|
|
100%
|
Period
|
|
Cumulative Percent of Option Exercisable
|
________ ____ to ________ ____
|
|
0%
|
________ ____ to ________ ____
|
|
33 1/3%
|
________ ____ to ________ ____
|
|
66 2/3%
|
________ ____ to ________ ____
|
|
100%
|
EPS
|
|
$
|
Revenues
|
|
$
|
Average ROIC
|
|
$
|
EPS
|
|
$
|
Revenues
|
|
$
|
Average ROIC
|
|
$
|
EPS
|
|
$
|
Revenues
|
|
$
|
Average ROIC
|
|
$
|
Hasbro, Inc.,
|
|
by
|
|
|
/s/ Brian Goldner
|
|
Name: Brian Goldner
|
|
Title:Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)
|
|
|
|
January 10, 2020
|
Hasbro, B.V.,
|
|
by
|
|
|
/s/ Wijnhold Vos
|
|
Name: Wijnhold Vos
|
|
Title: Manager Finance
|
|
|
|
Date: January 21, 2020
|
If to the Company:
|
Hasbro, Inc.
|
Hasbro, Inc.,
|
|
by
|
|
|
/s/ Deborah M. Thomas
|
|
Name: Deborah M. Thomas
|
|
Title: Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)
|
|
|
|
Date: March 5, 2020
|
Hasbro Studios, LLC
|
|
by
|
|
|
/s/ Deborah M. Thomas
|
|
Name: Deborah M. Thomas
|
|
Title: Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)
|
|
|
|
Date: March 5, 2020
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Hasbro, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
/s/ Brian Goldner
|
|
Brian Goldner
Chairman and Chief
Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Hasbro, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
/s/ Deborah Thomas
|
|
Deborah Thomas
Executive Vice President and
Chief Financial Officer
|
1)
|
the Company’s Quarterly Report on Form 10-Q for the quarter ended March 29, 2020, as filed with the Securities and Exchange Commission (the “10-Q Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2)
|
the information contained in the Company's 10-Q Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/ Brian Goldner
Brian Goldner
Chairman and Chief Executive Officer of Hasbro, Inc.
|
1)
|
the Company’s Quarterly Report on Form 10-Q for the quarter ended March 29, 2020, as filed with the Securities and Exchange Commission (the “10-Q Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2)
|
the information contained in the Company's 10-Q Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/ Deborah Thomas
Deborah Thomas
Executive Vice President and Chief Financial Officer of Hasbro, Inc.
|