PAWTUCKET, R.I. -- Feb. 6, 2006
Fourth Quarter Highlights
- Net earnings per diluted share of $0.48 (including a repatriation tax cost of $0.13) vs. prior year of $0.44;
- Net revenues increased 1.2% to $1.1 billion or 3.2% in local currency;
- Continuing strong performance from STAR WARS drove revenue increases of 15.9% in U.S. Toys segment.
Full Year Highlights- Net earnings per diluted share of $1.09 (including a repatriation tax cost of $0.13) vs. prior year of $0.96;
- Net revenues of $3.1 billion, up 3% for the year;
- STAR WARS exceeded Company expectations, generating $494.1 million in global revenue;
- Strong operating cash flow over the last 12 months of $496.6 million.
Hasbro, Inc. (NYSE: HAS) today reported its 2005 full year and fourth quarter results. For the year, the Company reported net earnings of $212.1 million or $1.09 per diluted share, compared to $196.0 million or $0.96 per diluted share in 2004. Excluding the $25.8 million impact of the tax on the repatriation of foreign earnings, 2005 full year earnings were $237.9 million or $1.22 per diluted share. For the fourth quarter, the Company reported net earnings of $94.3 million, or $0.48 per diluted share, compared to $81.9 million or $0.44 per diluted share last year. Excluding the tax on the repatriation, fourth quarter earnings were $120.1 million or $0.61 per diluted share.
For the year, worldwide net revenues were $3.1 billion, compared to $3.0 billion a year ago. The 2005 results included $494.1 million in STAR WARS revenue. For the fourth quarter, the Company reported worldwide net revenues of $1.1 billion, an increase of $12.7 million, which includes a $21.0 million negative impact of exchange rates, compared to the prior year.
"Hasbro performed well in 2005. In a challenging environment we delivered solid revenue growth, strong earnings growth and operating cash flow was up significantly," said Alfred J. Verrecchia, President and Chief Executive Officer.
"While I am pleased with our overall performance, in particular our STAR WARS product line, the Games segment performance was below our expectations and clearly there is opportunity for improvement this year," Verrecchia concluded.
Revenues in the U.S. Toys segment were $1.1 billion for the year and $305.6 million for the quarter, compared to $952.9 million and $263.7 million in 2004, respectively. The results reflect the tremendous success of Hasbro's line of licensed STAR WARS products, as well as strength from a number of other Hasbro owned brands including LITTLEST PET SHOP, FURBY and NERF. Core PLAYSKOOL performed well, although pre-school licenses, such as BOOHBAH and SHREK were down. Full year operating profit was $80.0 million, compared to $7.2 million last year, primarily due to higher volume and improved product mix, as well as lower advertising and product development costs.
Revenues in the Games segment were $730.6 million for the year and $235.8 million for the quarter, compared to $796.0 million and $270.3 million in 2004, respectively. The segment revenue decline can be attributed to lower trading card and board game volume. Full year operating profit decreased to $69.5 million, compared with $137.6 million last year, reflecting lower overall segment volume - in particular high margin trading card games. In addition, there were inventory obsolescence and customer allowance charges associated with some of the new plug and play initiatives.
International segment revenues were $1.2 billion for the year and $510.6 million for the quarter, an increase of 3.1% or $37.1 million for the year and 1.5% or $7.4 million for the fourth quarter. The revenues include the negative impact of foreign exchange of approximately $0.7 million for the year and $21.2 million for the quarter. Absent this impact, revenues increased 3.2% for the year to $1.2 billion and increased 5.7% for the quarter to $531.8 million. The results also reflect strong performance from STAR WARS, and new product introductions such as FURBY and LITTLEST PET SHOP. There were also a number of games that did well, including MONOPOLY HERE AND NOW and TRIVIAL PURSUIT. Partially offsetting this was a $62.6 million decline in revenue from BEYBLADE, as well as declines in VIDEONOW and trading card games. Full year operating profit increased to $148.1 million, compared with $140.8 million last year, due primarily to higher volume and lower advertising expenses.
"In addition to growing our top and bottom line in a difficult retail environment, we continued to strengthen the balance sheet and delivered $496.6 million in operating cash flow. Going forward, we will continue to operate with the financial discipline that has served us well and created value for our shareholders," said David Hargreaves, Chief Financial Officer.
Investors and the media are also invited to listen to a conference call Hasbro will be web casting on Friday, February 10, 2006 at 8:00 a.m. Eastern Standard Time, at which time management will be discussing its strategy and new product line for 2006 and talking more about the recently announced organizational changes.
Hasbro is a worldwide leader in children's and family leisure time 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, 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.
