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Hasbro Reports 2010 Financial Results

Hasbro Reports Fourth Quarter and Full-Year 2010 Financial Results
  • Full-year net revenues of $4.00 billion compared to $4.07 billion in 2009; Foreign exchange had a negative impact of $17.7 million
  • Full-year International segment net revenues up 7% year-over-year to $1.56 billion
  • Full-year operating profit margin increases to 14.7% on improved operating efficiencies and growth across several global brands
  • Tenth consecutive year of full-year earnings per share growth; Full-year 2010 EPS of $2.74 per diluted share, or $2.59 per diluted share absent a $0.15 per share favorable tax impact, versus $2.48 in 2009
  • Repurchased 15.8 million shares of common stock during 2010 at a total cost of $636.7 million

PAWTUCKET, R.I., Feb 07, 2011 -- Hasbro, Inc. today reported financial results for the fourth quarter and full-year 2010. For the full-year 2010, the Company reported revenues of $4.00 billion compared to $4.07 billion in 2009. Foreign exchange had a $17.7 million negative impact on full-year 2010 revenues. Net earnings for the full year were $397.8 million or $2.74 per diluted share, up $22.8 million or 6% versus $374.9 million, or $2.48 per diluted share in 2009. Full-year 2010 net earnings include a favorable tax adjustment of $21.2 million or $0.15 per diluted share recorded in the first quarter 2010. Absent this adjustment, 2010 earnings per share were $2.59. Additionally, the full-year 2010 results include dilution of $0.30 per share related to the Company's television investments compared to $0.12 per share in 2009.

For the fourth quarter 2010, the Company reported net revenues of $1.28 billion, compared to $1.38 billion a year ago. Foreign exchange had a $23.5 million negative impact on revenue in the quarter. The Company reported net earnings for the quarter of $140.0 million or $0.99 per diluted share compared to $165.6 million or $1.09 per diluted share in 2009.

"We have a lot to feel good about for 2010," said Brian Goldner, Hasbro President and Chief Executive Officer. "International revenues grew, driven by a strong performance in the emerging markets; several of Hasbro's core brands performed well, enabling us to grow market share across multiple product categories; and we delivered record net earnings and our tenth consecutive year of earnings per share growth, while continuing to invest in long-term opportunities."

"From the beginning of the year, we recognized the challenge in growing revenues versus 2009, which was driven by TRANSFORMERS and G.I. JOE entertainment. For much of the year, we believed we were on track to accomplish this, however, softness in U.S. consumer demand for games late in the year resulted in our full-year revenues being $66 million less than a year ago," said Goldner.

"2011 will be the first full year in which we have significant initiatives across all the elements of our multi-year branded-play strategy," Goldner added. "This includes a full year of The Hub television network; the return of Hasbro brands to motion pictures with Transformers: Dark of the Moon; further expansion of our emerging markets initiatives; combined with great innovation and imagination within our core toy and game brands. Our teams globally are excited about driving growth in our business by delivering innovative toys and games and immersive brand experiences to our consumers and audiences in 2011 and beyond."

"Over the past several years, Hasbro has leveraged its growing profitability and healthy balance sheet to make significant investments in our future, and in 2010 we achieved our highest operating profit margin in 25 years," said Deborah Thomas, Hasbro's Chief Financial Officer. "In addition, we are sharing our success with our shareholders as evidenced by our recent dividend increase and the $637 million investment we made in buying back shares in 2010. We expect to begin seeing the return from many of our recent investments, supporting our belief that we should be able to grow revenues and earnings per share in 2011."

For the full year 2010, worldwide net revenues grew in the Preschool and Girls categories. The Boys category declined 7% to $1.37 billion; the Games & Puzzles category declined 4% to $1.29 billion; the Girls category increased 5% to $830.4 million; and the Preschool category increased 13% to $509.6 million.

U.S. and Canada segment net revenues were $2.30 billion for the full year, compared to $2.45 billion in 2009. The segment experienced growth in the Preschool category offset by declines in the Boys, Girls and Games & Puzzles categories. The U.S. and Canada segment reported an operating profit of $349.6 million compared to $380.6 million in 2009.

International segment net revenues were $1.56 billion in 2010, an increase of $100 million or 7% compared to $1.46 billion in 2009. Absent a negative $27.6 million impact of foreign exchange, International segment net revenues increased 9% from 2009. Net revenues in the International segment reflect growth in all major product categories. The International segment reported an operating profit of $209.7 million, up $47.5 million or 29% compared to $162.2 million in 2009.

Entertainment and Licensing segment net revenues were $136.5 million compared to $155.0 million in 2009. The results primarily reflect a decline in TRANSFORMERS and G.I. JOE movie-related revenue. The Entertainment and Licensing segment reported an operating profit of $43.2 million compared to $65.6 million in 2009.

The Company repurchased a total of 15.8 million shares of common stock during 2010 at a total cost of $636.7 million and an average price of $40.37 per share. At year end, $150.1 million remained available in the current share repurchase authorization. During the first half of 2010, the Company issued 11.6 million shares of common stock in connection with the redemption of its convertible debentures, which were called in April 2010.

About Hasbro

Hasbro (NASDAQ: HAS) is a branded play company providing children and families around the world with a wide-range of immersive entertainment offerings based on the Company's world class brand portfolio. From toys and games, to television programming, motion pictures, video games and a comprehensive licensing program, Hasbro strives to delight its customers through the strategic leveraging of well-known and beloved brands such as TRANSFORMERS, LITTLEST PET SHOP, NERF, PLAYSKOOL, MY LITTLE PONY, G.I. JOE, MAGIC: THE GATHERING and MONOPOLY. The Hub, Hasbro's multi-platform joint venture with Discovery Communications (NASDAQ: DISCA, DISCB, DISCK) launched on October 10, 2010. The online home of The Hub is www.hubworld.com. The Hub logo and name are trademarks of Hub Television Networks, LLC. All rights reserved. Come see how we inspire play through our brands at http://www.hasbro.com. © 2011 Hasbro, Inc. All Rights Reserved.

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