``Improving Hasbro's profitability is our highest priority,'' said Alan G. Hassenfeld, Chairman and Chief Executive Officer. ``Our intellectual property portfolio of toy and game assets represents our crown jewels. With our new management team in place, led by Al Verrecchia, we are focusing more of our efforts on growing our own brands and new product development to enhance shareholder value by generating sustainable revenue and earnings growth.''

``We have generated significant operating efficiencies and savings by consolidating our global manufacturing operations in recent years,'' said Alfred J. Verrecchia, President and Chief Operating Officer. ``Now we must focus on the product development, sales and marketing, and administrative functions. Our first step is to close our toy facilities in Cincinnati, Ohio and in Napa and San Francisco, California, and to consolidate the U.S. toy group into Rhode Island. This will reduce fixed overhead, enhance our speed to market, and improve the product development process, helping us grow our core brands. We value our relationships with our key entertainment partners and recognize they will always be important. However, to generate sustainable revenue and earnings growth, we must reduce our reliance on licensed properties and improve our core profitability,'' Verrecchia explained.

In addition to consolidating the U.S. toy group, the Company plans significant overhead reductions in other areas to further reduce costs. Together, these moves are expected to eliminate approximately 500 to 550 positions worldwide, or approximately 5% of the Company's global workforce. Charges under these programs relate primarily to severance and lease terminations and are expected to be approximately $70 million pre-tax, primarily in the fourth quarter. In addition, the Company is assessing its 2001 product line and has yet to determine the impact of discontinued product lines and product lines with reduced expectations. This assessment is planned to be completed in the fourth quarter and may likely result in additional charges, primarily non-cash. Based upon management's experience, this additional amount could be in the range of $70 to $100 million pre-tax. These actions are expected to begin generating savings in the year 2001 and to payback in less than 3 years.

Prior to these profit improvement charges, the Company's second half results have been impacted by several challenges previously cited in July. POKEMON trading card games continue selling briskly worldwide, while POKEMON toy demand remains strong internationally but soft in the U.S. STAR WARS revenues are now expected to be minimal this year. While POO-CHI is still the best-selling interactive electronic puppy, some of the anticipated second-half new product introductions from Tiger Electronics have been delayed. External factors contributing to the anticipated shortfall in revenue and earnings include continued high oil prices that impact resin and transportation costs, the continued relative strength of the U.S. dollar, availability of electronic components, and the overall lackluster retailing environment. In addition, the interactive games business is not performing to already reduced expectations. However, the Company is exploring strategic alternatives for this business.

As a result, prior to the charges announced today, the Company expects to report third quarter earnings per share in the range of approximately $0.06 to $0.10. Under current market conditions, the Company's revised outlook for full-year 2000 earnings per share is in the range of $0.40 to $0.50 prior to restructuring and other charges. Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) for full-year 2000 are expected to be approximately $540 to $575 million, or $3.05 to $3.25 per share.

``I am confident we are making the right moves to help make Hasbro leaner and more consistently profitable for our shareholders,'' Hassenfeld concluded.

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, HASBRO INTERACTIVE, MICROPROSE and WIZARDS OF THE COAST brands and products provide the highest quality and most recognizable play experiences in the world.

[Posted 10/12/2000]