PAWTUCKET, R.I. -- July 21, 2003 -- Highlights:- Net revenues up 7%, to $581.5 million compared to $546.0 million a year ago
- Net earnings of $11.4 million or $0.06 per diluted share, versus a net loss of $25.9 million, or ($.15) per diluted share in 2002
- International segment net revenues up 3% in local currency and 17% in U.S. dollars
- U. S. Toys segment net revenues up 4%, despite tough Star Wars comparisons
- Continued strong performances by core brands such as TRANSFORMERS and TRIVIAL PURSUIT and new, innovative products such as BEYBLADE and FURREAL FRIENDS
Hasbro, Inc. today reported strong second quarter results. Worldwide net revenues were $581.5 million, up 7% from $546.0 million a year ago. The net income for the quarter was $11.4 million, compared to a loss of $25.9 million last year, and the net income per diluted share was $0.06, compared to a loss of ($0.15) per diluted share in 2002. The 2002 results include a net, after-tax charge of $21.0 million, or $0.12 per diluted share, related to a decline in the value of the Company's investment in Infogrames Entertainment SA, as partially offset by interest income on a tax settlement from the Internal Revenue Service. The Company reported second quarter Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) of $66.8 million for the quarter, compared to $29.4 million in 2002. The attached schedules provide a reconciliation of EBITDA to net income for the second quarter and year to date.
For the first half, worldwide net revenues were $1.043 billion, compared to $998.3 million a year ago. Net income for the first half was $12.6 million or $0.07 per diluted share, compared to a loss of $42.9 million or ($0.25) per diluted share a year ago before the effect of an accounting change. First half EBITDA was $114.2 million, compared to $64.3 million last year.
"I am pleased with our second quarter performance and our progress for the first half of the year," said Alfred J. Verrecchia, Hasbro's President and Chief Executive Officer. "We had good growth in many of our core brands, as well as in new products such as BEYBLADE and FURREAL FRIENDS. All of this increases my confidence in our ability to deliver on our plan for the year."
"Our innovation is paying off as we create and enter new categories and segments in both toys and games, and reinvent existing brands. With new products running the gamut from BEYBLADE to the latest in TRANSFORMERS and VIDEO NOW -- a personal, disc based video player, we are successfully gaining shelf space and growing the top line," Verrecchia concluded.
Revenues in the U.S. Toys segment increased in the quarter to $208.4 million, compared to $199.6 million a year ago. The segment reported operating profit of $12.9 million compared to $14.6 million last year. The expected revenue decline due to STAR WARS was offset by strength in BEYBLADE and sales of certain core product lines including TRANSFORMERS and PLAYSKOOL, as well as continuing strong sales of FURREAL FRIENDS.
Revenues in the Games segment were $148.6 million for the quarter, compared to $152.0 million a year ago. Board game revenues remained strong, led by TRIVIAL PURSUIT 20TH ANNIVERSARY EDITION. Non-licensed trading card games were up, but licensed trading card games including POKEMON were down. The Games segment reported improved operating profit of $25.4 million compared to $22.4 million last year.
International segment revenues were $203.8 million for the quarter, compared to $174.3 million a year ago. This increase of 17% includes the positive impact of foreign exchange of $23.6 million. Absent this impact, revenues increased 3% to $180.3 million. The segment experienced strength in BEYBLADE and sales of certain core product lines including MAGIC: THE GATHERING trading card games, TRANSFORMERS and PLAYSKOOL. The International segment operating loss declined to $4.8 million compared to a loss of $17.3 million a year ago.
"We are pleased with the financial progress we have made this year and we remain on target with our cost cutting and debt reduction initiatives," said David Hargreaves, Hasbro's Chief Financial Officer.
"Our second quarter revenue growth of 7% was a significant achievement given the difficult year-over-year comparison associated with the decline in revenues from major entertainment properties. In fact, the growth in our core brands and new products more than offset the anticipated -- and realized -- reduction in Star Wars revenue."
"Looking forward, because of the challenging economic and retail environments and with approximately two-thirds of our business yet to ship, we have not significantly changed our expectations for the year," Hargreaves concluded.
The Company will webcast its second quarter earnings conference call at 9:00 a.m. Eastern Standard Time today. Investors and the media are invited to listen at http://www.hasbro.com (select "Corporate Info" from the home page, click on "Investor Information," and then click on the webcast microphone).
Hasbro is a worldwide leader in children's and family leisure time and entertainment products and services, including the design, manufacture and marketing of games and toys ranging from traditional to high-tech. Both internationally and in the U.S., its PLAYSKOOL, TONKA, SUPER SOAKER, MILTON BRADLEY, PARKER BROTHERS, TIGER and WIZARDS OF THE COAST brands and products provide the highest quality and most recognizable play experiences in the world.
