Hasbro Announces Preliminary Results for the Fourth Quarter and Full-Year 2012

  Hasbro Announces Preliminary Results for the Fourth Quarter and Full-Year
  2012

Business Wire

PAWTUCKET, R.I. -- January 25, 2013

Hasbro, Inc. (NASDAQ: HAS) today announced preliminary full-year 2012 results.

“In 2012, we met many of the objectives we set for Hasbro,” said Brian
Goldner, Hasbro’s President and Chief Executive Officer. “Based on preliminary
results, we returned the U.S. and Canada segment to historical operating
profit levels; we grew revenues in the Games category against our 2012
objective of stabilizing revenues; and we grew revenues in our Girls category.
We also experienced double digit growth in our emerging markets business and
achieved profitability in most major emerging markets a year ahead of our
plan.”

“We had a number of strong product initiatives, but consumer demand through
much of the holiday season was less than anticipated in both the U. S. and
certain international markets. As a result, fourth quarter revenues did not
meet our expectations. Despite the lower than anticipated revenue, we grew our
operating profit margin and earnings per share absent fourth quarter
restructuring charges and the impact of foreign exchange,” continued Goldner.

Based on preliminary full-year results, the Company expects to report earnings
per diluted share for 2012, excluding fourth quarter restructuring charges, in
the range of $2.73 to $2.75. This includes an approximate $0.10 per diluted
share negative impact from foreign exchange in 2012. Absent the unfavorable
impact of foreign exchange, earnings per diluted share excluding fourth
quarter restructuring charges are expected to be in the range of $2.83 to
$2.85.

Final 2012 reported earnings will reflect pre-tax restructuring charges of
approximately $37 million recorded in the fourth quarter, or approximately
$0.21 per diluted share, associated with the commencement of a cost savings
initiative the Company is implementing. Additionally, 2012 earnings include
$11.1 million, or $0.06 per diluted share, of previously announced severance
costs recorded in the first quarter 2012. Reported 2012 earnings per diluted
share are expected to be in the range of $2.52 to $2.54.

The Company’s reported 2011 earnings per diluted share of $2.82, which
included the impact of a $20.5 million favorable tax adjustment, or $0.15 per
diluted share, and pre-tax expense of $14.4 million, or $0.07 per diluted
share, related to costs associated with establishing Hasbro’s Gaming Center of
Excellence in Rhode Island. Earnings per diluted share for 2011 excluding
these two items were $2.74.


                                                       Adjusted
              As         Approximate                   EPS                     EPS
Per diluted   Reported   Impact of     Q4 12           Excluding     Other,    Excluding
share        Earnings  Foreign      Restructuring  Impact of    Net (1)  Charges
              Per        Exchange      Charges         FX &                    and
              Share      (FX)                          Q4 12                   Benefit
                                                       Charges
2012         $2.52 -   ($0.10)      ($0.21)        $2.83-$2.85  ($0.06)  $2.89 -
(Estimated)   $2.54                                                            $2.91
2011         $2.82     N/A          N/A            $2.82        $0.08    $2.74
(Actual)

The Company expects to report full-year 2012 revenues of approximately $4.09
billion, compared to $4.29 billion in 2011. Absent a $99 million negative
impact from foreign exchange, full year 2012 revenues declined 2%. For the
fourth quarter 2012, the Company anticipates revenues to be approximately
$1.28 billion, including a negative $8 million impact from foreign exchange,
compared to $1.33 billion in 2011.

“As we execute our branded play strategy, we are doing so in an industry with
challenging growth prospects in certain geographies. During the fourth quarter
we established a plan to deliver $100 million of annual cost savings by 2015.
This plan focuses our efforts around developing content-rich brand initiatives
consumers and retailers are responding to, thereby enabling Hasbro to focus on
fewer, more significant global initiatives and enhancing shareholder returns
in the coming years,” said Goldner.

The Company expects to incur charges of approximately $37 million pre-tax in
2012, and an additional estimated $20-$30 million in 2013 associated with
these planned actions to reduce ongoing expenses, including an approximate 10%
reduction in workforce, facility consolidation and process improvements. These
actions are anticipated to begin to deliver savings in 2013, with full
recognition in 2015 as all aspects of the plan are implemented.

“We fundamentally believe our strategy is sound and we remain confident in our
ability to drive profitable long-term growth through brand innovation,” said
Deb Thomas, Chief Financial Officer. “We believe a reduction in ongoing costs
in a challenging environment will deliver the greatest long-term return to our
shareholders.”

(1) Other, net for 2012 includes the impact of the $11.1 million severance
costs recognized during the first quarter of 2012. 2011 includes the impact of
the $20.5 million favorable tax adjustment and $14.4 million of costs
associated with establishing Hasbro’s gaming center of excellence.

Fourth Quarter and Full-Year 2012 Earnings Conference Call

The Company will provide more detailed information about its fourth quarter
and full-year results, as well as its cost savings initiative, on Thursday,
February 7, 2013 through its regularly scheduled financial results
announcement and conference call. The call will be held at 5:00 PM the same
day and the webcast will be available to investors and the media on Hasbro's
Investor Relations home page at http://investor.hasbro.com. A replay of the
call will be available at the same location approximately 2 hours following
completion of the call.

Certain financial and statistical information included in the webcast, such as
information required by Regulation G, will be available at the time of the
webcast in the “Press Releases” section of Hasbro’s website at www.hasbro.com,
under “Investor Relations.”

HAS-E

About Hasbro

Hasbro, Inc. (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, digital gaming and a
comprehensive licensing program, Hasbro strives to delight its global
customers with innovative, 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 Company’s Hasbro Studios develops and produces
television programming for markets around the world. The Hub TV Network is
part of a multi-platform joint venture between Hasbro and Discovery
Communications (NASDAQ: DISCA, DISCB, DISCK), in the U.S. Through the
Company's deep commitment to corporate social responsibility, including
philanthropy, Hasbro is helping to build a safe and sustainable world for
future generations and to positively impact the lives of millions of children
and families every year. It has been recognized for its efforts by being named
one of the “World’s Most Ethical Companies” and is ranked as one of Corporate
Responsibility Magazine’s “100 Best Corporate Citizens.” Learn more at
www.hasbro.com.

© 2013 Hasbro, Inc. All Rights Reserved.

Certain statements in this release contain "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. These
statements include expectations concerning the Company’s potential performance
in 2012 and beyond, including with respect to its revenues, earnings per
share, costs and profitability, and the Company’s ability to achieve its other
financial and business goals and may be identified by the use of
forward-looking words or phrases. The Company's actual actions or results may
differ materially from those expected or anticipated in the forward-looking
statements due to both known and unknown risks and uncertainties. Specific
factors that might cause such a difference include, but are not limited to:
(i) the Company's ability to design, manufacture, source and ship new and
continuing products on a timely and cost-effective basis, as well as interest
in and purchase of those products by retail customers and consumers in
quantities and at prices that will be sufficient to profitably recover the
Company’s development, manufacturing, marketing, royalty and other costs; (ii)
global economic conditions, including recessions, credit crises or other
economic shocks or downturns affecting the United States, Europe or any of the
Company’s other markets which can negatively impact the retail and/or credit
markets, the financial health of the Company’s retail customers and consumers,
and consumer and business confidence, and which can result in lower employment
levels, less consumer disposable income, and lower consumer spending,
including lower spending on purchases of the Company’s products; (iii) other
factors which can lower discretionary consumer spending, such as higher costs
for fuel and food, drops in the value of homes or other consumer assets, and
high levels of consumer debt; (iv) potential difficulties or delays the
Company may experience in implementing cost savings and efficiency enhancing
initiatives in an effective manner, (v) other economic and public health
conditions in the markets in which the Company and its customers and suppliers
operate which impact the Company's ability and cost to manufacture and deliver
products, such as higher fuel and other commodity prices, higher labor costs,
higher transportation costs, outbreaks of disease which affect public health
and the movement of people and goods, and other factors, including government
regulations, which can create potential manufacturing and transportation
delays or impact costs; (vi) currency fluctuations, including movements in
foreign exchange rates, which can lower the Company’s net revenues and
earnings, and significantly impact the Company’s costs; (vii) the
concentration of the Company's customers, potentially increasing the negative
impact to the Company of difficulties experienced by any of the Company’s
customers or changes by the Company’s customers in their purchasing or selling
patterns; (viii) greater than expected costs, or unexpected delays or
difficulties, associated with THE HUB TV Network, the Company’s joint venture
television network with Discovery Communications, LLC, Hasbro Studios, or the
creation of new content to appear on THE HUB TV Network and elsewhere; (ix)
consumer interest in and acceptance of THE HUB TV Network, and programming
created by Hasbro Studios, and other factors impacting the financial
performance of the network and Hasbro Studios; (x) greater than expected costs
or unexpected delays or difficulties associated with the creation of Hasbro’s
Gaming Center of Excellence and the execution of the Company’s strategy for
driving innovation and immersive play experiences in its gaming business; (xi)
unexpected delays or difficulties in the Company’s execution of its plans to
drive growth and increased profitability in its U.S. and Canada business;
(xii) the inventory policies of the Company’s retail customers, including
retailers’ potential decisions to lower the inventories they are willing to
carry, even if it results in lost sales, as well as the concentration of the
Company's revenues in the second half and fourth quarter of the year, which
coupled with reliance by retailers on quick response inventory management
techniques increases the risk of underproduction of popular items,
overproduction of less popular items and failure to achieve tight and
compressed shipping schedules; (xiii) delays, increased costs or difficulties
associated with any of our planned entertainment initiatives; (xiv) work
stoppages, slowdowns or strikes, which may impact the Company's ability to
manufacture or deliver product in a timely and cost-effective manner; (xv) the
bankruptcy or other lack of success of one of the Company's significant
retailers which could negatively impact the Company's revenues or bad debt
exposure; (xvi) the impact of competition on revenues, margins and other
aspects of the Company's business, including the ability to secure, maintain
and renew popular licenses and the ability to attract and retain talented
employees in a competitive environment; (xvii) concentration of manufacturing
for many of the Company’s products in the People’s Republic of China and the
associated impact to the Company of public health conditions and other factors
affecting social and economic activity in China, affecting the movement of
products into and out of China, and impacting the cost of producing products
in China and exporting them to other countries; (xviii) the risk of product
recalls or product liability suits and costs associated with product safety
regulations; (xix) other market conditions, third party actions or approvals
and the impact of competition which could reduce demand for the Company’s
products or delay or increase the cost of implementation of the Company's
programs or alter the Company's actions and reduce actual results; (xx) the
risk that anticipated benefits of acquisitions may not occur or be delayed or
reduced in their realization; and (xxi) other risks and uncertainties as may
be detailed from time to time in the Company's public announcements and
Securities and Exchange Commission (“SEC”) filings. The Company undertakes no
obligation to make any revisions to the forward-looking statements contained
in this release or to update them to reflect events or circumstances occurring
after the date of this release.

This press release includes diluted earnings per share excluding the impact of
changes in foreign exchange rates, restructuring charges recognized in both
2012 and 2011, and certain discrete income tax benefits related to the
settlement of a tax examination in 2011. Management believes that the
presentation of diluted earnings per share excluding the impact of exchange
rates provides information that is helpful to an investor’s understanding of
the underlying business performance absent exchange rate fluctuations which
are beyond the Company’s control. Further, the Company provided the 2012 and
2011 diluted earnings per share absent restructuring charges and favorable tax
adjustment to assist investors in understanding the comparability of the
Company’s results.

Contact:

Hasbro, Inc.
Debbie Hancock, 401-727-5401 (Investor Relations)
or
Wayne S. Charness, 401-727-5983 (News Media)
 
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