Issues 2024 Guidance with Improved Profit
Growth and Declares Quarterly Dividend
Hasbro, Inc. (NASDAQ: HAS), a leading toy and game company,
today reported financial results for the fourth quarter and full
year 2023.
“Guided by our strategy of “Fewer, Bigger, Better,” we had
important wins across both toys and games while making progress in
our transformation during a challenging 2023. Despite the
macroeconomic backdrop, we are entering 2024 with a healthier
balance sheet, a leaner cost structure, and a diverse portfolio of
industry-leading toy and game brands that support our capacity to
invest in the business and maintain our commitment to returning
cash to shareholders via our category-leading dividend,” said Chris
Cocks, Hasbro chief executive officer. “Our refreshed leadership
team is bringing innovative new products to our fans. At the same
time, we are taking the necessary actions to transform Hasbro and
deliver long-term profitable growth starting with driving
significant profit growth across our segments in 2024 and building
momentum in our innovation pipeline between now and 2025.”
"2023 was a productive year for Hasbro, although not without
some challenges." said Gina Goetter, Hasbro chief financial
officer. “As we navigated the current environment, we took
aggressive steps to optimize our inventory, reset the cost
structure, and sharpen our portfolio focus on play with the eOne
film and TV divestiture. Taken together, the actions throughout the
full year have positioned the company for improved financial
performance in 2024 and beyond. We are encouraged by our recent
progress and remain laser focused on execution to deliver on our
transformation objectives.”
Full Year 2023 Highlights
- Full year Hasbro, Inc. revenue declined 15% with growth in the
Wizards of the Coast and Digital Gaming segment (+10%) more than
offset by declines in the Consumer Products segment (-19%) and
Entertainment segment (-31%).
- Operating loss of $1,539 million includes $1.3 billion of
non-cash goodwill and intangible asset impairment charges
associated with eOne film and TV, a change in outlook for the
balance of our owned and operated production efforts and
non-recurring inventory costs.
- Adjusted operating profit of $477 million and adjusted
operating margin of 9.5%, including non-recurring inventory
costs.
- Reported Net loss of $10.73 per share; adjusted net earnings of
$2.51 per diluted share.
- Delivered approximately $220 million of gross savings in 2023
as part of the Operational Excellence program.
- Reduced owned inventory by 51% versus last year, including a
56% decline in Consumer Products inventory.
- Completed sale of eOne Film and TV business to Lionsgate in
December 2023.
- Paid $388 million in cash dividends to shareholders for the
full year 2023 and reduced debt by $506 million.
- Operating cash flow of $726 million positively impacted by
working capital improvements.
Full Year 2023 Segment Details
- Consumer Products Segment
- Revenue decrease of 19% driven by business exits, category
trends and inventory management.
- Full year growth in TRANSFORMERS and G.I. JOE; FURBY performed
well in launch year.
- Operating margin of -2.2% and adjusted operating margin of
-0.7% were driven by lower revenues and actions focused on
inventory reduction to reset the business.
- Wizards of the Coast and Digital Gaming Segment
- Revenue increase of 10% driven by increase in Licensed Digital
Gaming revenue behind Baldur's Gate III from Larian Studios and
Monopoly Go! from Scopely.
- Tabletop revenue increased 1% behind growth in MAGIC: THE
GATHERING with a strong performance from the Universes Beyond Lord
of the Rings: Tales of Middle-earth sets.
- Operating profit declined 2% and operating profit margin of
36.1% due to higher royalty costs associated with Universes
Beyond.
- Entertainment Segment
- Revenue decline of 31% driven by lower Film and TV revenue due
to the writers' and actors' strikes; Family Brands revenue grew
6%.
- Operating loss of $1,912 million compared to operating profit
of $23 million in 2022. 2023 loss includes $1,846 million
(non-cash) of goodwill and intangible asset impairment associated
with the eOne Film and TV business and within Family Brands to
align with a change in entertainment strategy.
- Adjusted operating loss of $46 million compared to adjusted
operating profit of $83 million in 2022 due to the impact of
industry strikes on content deliveries.
Fourth Quarter 2023 Highlights
- Q4 revenue declined 23% with growth in the Wizards of the Coast
and Digital Gaming segment (+7%) more than offset by declines in
the Consumer Products segment (-25%) and Entertainment segment
(-49%).
- Operating loss of $1,199 million includes the goodwill and
intangible asset impairment charges and non-recurring inventory
charges described above; Adjusted operating loss of $50
million.
- Net loss of $7.64 per share; adjusted net earnings of $0.38 per
diluted share.
See the financial tables accompanying the press release for a
reconciliation of GAAP to non-GAAP financial measures.
2024 Company Outlook1
For the full year, the Company expects:
- Consumer Products Segment revenue down 7% to 12% with 4 points
of the decline coming from businesses shifting to an out-license
model; Operating margin 4% to 6%.
- Wizards of the Coast Segment revenue down 3% to 5% decline
largely driven by second half comp in licensed digital gaming;
Operating margin 38% to 40%.
- Pro-Forma Entertainment segment revenue down $15 million;
Adjusted operating margin of approximately 60%.
- Total Hasbro, Inc Adjusted EBITDA of $925M to $1B.
- Increased mid-term gross savings target to $750M by year end
2025 from previous target of $350M to $400M.
2024 Capital Allocation priorities:
- Invest in core business.
- Return cash to shareholders through the dividend.
- Continue to pay down debt and progress towards leverage
target.
1The Company is not able to reconcile its forward-looking
non-GAAP adjusted operating profit margin and adjusted EBITDA
measures because the Company cannot predict with certainty the
timing and amounts of discrete items such as charges associated
with its cost-savings program, which could impact GAAP results.
Dividend Announcement The
Company’s Board of Directors has declared a quarterly cash dividend
of $0.70 per common share. The dividend will be payable on May 15,
2024 to shareholders of record at the close of business on May 1,
2024. In 2024, to align with industry best practice, the Company
expects future dividend declarations will be made closer to the
record date.
Conference Call Webcast
Hasbro will webcast its fourth quarter and full year 2023 earnings
conference call at 8:30 a.m. Eastern Time today. To listen to the
live webcast and access the accompanying presentation slides,
please go to https://investor.hasbro.com. The replay of the call
will be available on Hasbro’s website approximately 2 hours
following completion of the call.
About Hasbro Hasbro is a leading toy and game company
whose mission is to entertain and connect generations of fans
through the wonder of storytelling and exhilaration of play. Hasbro
delivers engaging brand experiences for global audiences through
toys, consumer products, gaming and entertainment, with a portfolio
of iconic brands including MAGIC: THE GATHERING, DUNGEONS &
DRAGONS, Hasbro Gaming, NERF, TRANSFORMERS, PLAY-DOH and PEPPA PIG,
as well as premier partner brands.
Hasbro is guided by our Purpose to create joy and community for
all people around the world, one game, one toy, one story at a
time. For more than a decade, Hasbro has been consistently
recognized for its corporate citizenship, including being named one
of the 100 Best Corporate Citizens by 3BL Media, one of the World’s
Most Ethical Companies by Ethisphere Institute and one of the 50
Most Community-Minded Companies in the U.S. by the Civic 50. For
more information, visit https://corporate.hasbro.com.
© 2024 Hasbro, Inc. All Rights Reserved.
Forward Looking Statement Safe Harbor Certain statements
in this press release contain “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of
1995. These statements, which may be identified by the use of
forward-looking words or phrases, include statements relating to
our business strategies and plans; expectations relating to
products, gaming and entertainment; anticipated cost savings;
financial targets; dividend declarations and anticipated financial
performance for 2024. Our 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. Factors that might cause such a difference include,
but are not limited to:
- our ability to successfully execute on our business strategy
and transformation initiatives, including to focus on and scale
select business initiatives and brands to drive profitability and
to achieve anticipated cost savings;
- our ability to successfully compete in the play industry;
- our ability to transform our business and capabilities to
address the changing global consumer landscape;
- our ability to design, develop, manufacture, and ship products
on a timely, cost-effective and profitable basis;
- the concentration of our customers, potentially increasing the
negative impact to our business of difficulties experienced by any
of our customers or changes in their purchasing or selling
patterns;
- inflation and downturns in global and regional economic
conditions impacting one or more of the markets in which we sell
products, which can negatively impact our customers and consumers,
result in lower employment levels, consumer disposable income,
retailer inventories and spending, including lower spending on
purchases of our products;
- risks related to economic and public health conditions or
regulatory changes in the markets in which we and our customers,
partners, licensees, suppliers and manufacturers operate, such as
inflation, rising interest rates, higher commodity prices, labor
costs or transportation costs, or outbreaks of illness or disease,
the occurrence of which could create work slowdowns, delays or
shortages in production or shipment of products, increases in costs
or delays in revenue;
- our dependence on third party relationships, including with
third party partners, manufacturers, distributors, studios, content
producers, licensors, and outsourcers, which creates reliance on
others and loss of control;
- risks relating to the concentration of manufacturing for many
of our products in the People’s Republic of China and our ability
to successfully diversify sourcing of our products to reduce
reliance on sources of supply in China;
- risks associated with international operations, such as
conflict in territories in which we operate, currency conversion,
currency fluctuations, the imposition of tariffs, quotas, shipping
delays or difficulties, border adjustment taxes or other
protectionist measures, and other challenges in the territories in
which we operate;
- the success of our key partner brands, including the ability to
secure, maintain and extend agreements with our key partners or the
risk of delays, increased costs or difficulties associated with any
of our or our partners’ planned digital applications or media
initiatives;
- risks related to our leadership changes;
- our ability to attract and retain talented and diverse
employees, particularly following recent workforce reductions;
- our ability to realize the benefits of cost-savings and
efficiency and/or revenue and operating profit enhancing
initiatives;
- risks relating to the impairment and/or write-offs of
businesses, products and content we acquire and/or produce;
- the risk that acquisitions, dispositions and other investments
we complete may not provide us with the benefits we expect, or the
realization of such benefits may be significantly delayed. We may
not achieve a successful or timely sale or license of non-core
assets;
- our ability to protect our assets and intellectual property,
including as a result of infringement, theft, misappropriation,
cyber-attacks or other acts compromising the integrity of our
assets or intellectual property;
- fluctuations in our business due to seasonality;
- the risk of product recalls or product liability suits and
costs associated with product safety regulations;
- changes in tax laws or regulations, or the interpretation and
application of such laws and regulations, which may cause us to
alter tax reserves or make other changes which significantly impact
our reported financial results;
- the impact of litigation or arbitration decisions or settlement
actions;
- the bankruptcy or other lack of success of one or more of our
significant retailers, licensees and other partners; and
- other risks and uncertainties as may be detailed in our public
announcements and U.S. Securities and Exchange Commission (“SEC”)
filings.
The statements contained herein are based on our current beliefs
and expectations. We undertake no obligation to make any revisions
to the forward-looking statements contained in this press release
or to update them to reflect events or circumstances occurring
after the date of this press release.
Non-GAAP Financial Measures The financial tables
accompanying this press release include non-GAAP financial measures
as defined under SEC rules, specifically Adjusted operating profit,
Adjusted net earnings and Adjusted net earnings per diluted share,
which exclude, where applicable, acquisition and related costs,
acquired intangible amortization, Operational Excellence and
Blueprint 2.0 implementation charges; and certain non-cash asset
impairment charges. Also included in this press release are the
non-GAAP financial measures of EBITDA and Adjusted EBITDA. EBITDA
represents net earnings attributable to Hasbro, Inc. excluding
interest expense, income tax expense, net earnings (loss)
attributable to noncontrolling interests, depreciation and
amortization of intangibles. Adjusted EBITDA also excludes
Operational Excellence and Blueprint 2.0 implementation charges,
certain non-cash asset impairment charges and the impact of stock
compensation (including acquisition-related stock expense). As
required by SEC rules, we have provided reconciliations on the
attached schedules of these measures to the most directly
comparable GAAP measure. Management believes that Adjusted net
earnings, Adjusted net earnings per diluted share and Adjusted
operating profit provide investors with an understanding of the
underlying performance of our business absent unusual events.
Management believes that EBITDA and Adjusted EBITDA are appropriate
measures for evaluating the operating performance of our business
because they reflect the resources available for strategic
opportunities including, among others, to invest in the business,
strengthen the balance sheet and make strategic acquisitions. These
non-GAAP measures should be considered in addition to, not as a
substitute for, or superior to, net earnings or other measures of
financial performance prepared in accordance with GAAP as more
fully discussed in our consolidated financial statements and
filings with the SEC. As used herein, "GAAP" refers to accounting
principles generally accepted in the United States of America.
HAS-E
(Tables Attached)
HASBRO, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(1)
(Unaudited)
(Millions of Dollars)
December 31, 2023
December 25, 2022
ASSETS
Cash and Cash Equivalents
$
545.4
$
513.1
Accounts Receivable, Net
1,029.3
1,132.4
Inventories
332.0
676.8
Prepaid Expenses and Other Current
Assets
416.9
676.8
Total Current Assets
2,323.6
2,999.1
Property, Plant and Equipment, Net
488.6
422.8
Goodwill
2,279.2
3,470.1
Other Intangible Assets, Net
587.5
814.6
Other Assets
862.0
1,589.3
Total Assets
$
6,540.9
$
9,295.9
LIABILITIES, NONCONTROLLING INTERESTS
AND SHAREHOLDERS' EQUITY
Short-Term Borrowings
$
—
$
142.4
Current Portion of Long-Term Debt
500.0
113.2
Accounts Payable and Accrued
Liabilities
1,556.4
1,934.1
Total Current Liabilities
2,056.4
2,189.7
Long-Term Debt
2,965.8
3,711.2
Other Liabilities
431.7
533.1
Total Liabilities
5,453.9
6,434.0
Total Shareholders' Equity
1,087.0
2,861.9
Total Liabilities, Noncontrolling
Interests and Shareholders' Equity
$
6,540.9
$
9,295.9
(1) Amounts may not sum due to
rounding
HASBRO, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(1)
(Unaudited)
(Millions of Dollars and Shares Except Per
Share Data)
Quarter Ended
Year Ended
December 31, 2023
% Net Revenues
December 25, 2022
% Net Revenues
December 31, 2023
% Net Revenues
December 25, 2022
% Net Revenues
Net Revenues
$
1,288.9
100.0
%
$
1,678.5
100.0
%
$
5,003.3
100.0
%
$
5,856.7
100.0
%
Costs and Expenses:
Cost of Sales
574.0
44.5
%
580.6
34.6
%
1,706.0
34.1
%
1,911.8
32.6
%
Program Cost Amortization
123.6
9.6
%
189.8
11.3
%
448.9
9.0
%
555.5
9.5
%
Royalties
132.5
10.3
%
157.7
9.4
%
428.3
8.6
%
493.0
8.4
%
Product Development
74.5
5.8
%
76.7
4.6
%
306.9
6.1
%
307.9
5.3
%
Advertising
108.6
8.4
%
110.3
6.6
%
358.4
7.2
%
387.3
6.6
%
Amortization of Intangibles
17.9
1.4
%
24.1
1.4
%
83.0
1.7
%
105.3
1.8
%
Selling, Distribution and
Administration
430.4
33.4
%
666.0
39.7
%
1,480.4
29.6
%
1,666.1
28.4
%
Impairment of Goodwill
960.0
74.5
%
—
0.0
%
1,191.2
23.8
%
—
0.0
%
Loss on Disposal of Business
66.0
5.1
%
(1.0
)
-0.1
%
539.0
10.8
%
22.1
0.4
%
Operating Profit (Loss)
(1,198.6
)
-93.0
%
(125.7
)
-7.5
%
(1,538.8
)
-30.8
%
407.7
7.0
%
Interest Expense
46.3
3.6
%
45.8
2.7
%
186.3
3.7
%
171.0
2.9
%
Other Expense (Income), Net
0.3
0.0
%
(7.3
)
-0.4
%
(16.0
)
-0.3
%
(24.8
)
-0.4
%
Earnings (Loss) before Income Taxes
(1,245.2
)
-96.6
%
(164.2
)
-9.8
%
(1,709.1
)
-34.2
%
261.5
4.5
%
Income Tax Expense (Benefit)
(184.4
)
-14.3
%
(35.6
)
-2.1
%
(221.3
)
-4.4
%
58.5
1.0
%
Net Earnings (Loss)
(1,060.8
)
-82.3
%
(128.6
)
-7.7
%
(1,487.8
)
-29.7
%
203.0
3.5
%
Net Earnings (Loss) Attributable to
Noncontrolling Interests
0.3
0.0
%
0.3
0.0
%
1.5
0.0
%
(0.5
)
0.0
%
Net Earnings (Loss) Attributable to
Hasbro, Inc.
$
(1,061.1
)
-82.3
%
$
(128.9
)
-7.7
%
$
(1,489.3
)
-29.8
%
$
203.5
3.5
%
Per Common Share
Net Earnings (Loss)
Basic
$
(7.64
)
$
(0.93
)
$
(10.73
)
$
1.47
Diluted
$
(7.64
)
$
(0.93
)
$
(10.73
)
$
1.46
Cash Dividends Declared
$
0.70
$
0.70
$
2.80
$
2.80
Weighted Average Number of Shares
Basic
138.9
138.3
138.8
138.7
Diluted
139.1
138.5
139.0
138.9
(1) Amounts may not sum due to
rounding
HASBRO, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS (1)
(Unaudited)
(Millions of Dollars)
Year Ended
December 31, 2023
December 25, 2022
Cash Flows from Operating Activities:
Net Earnings (Loss)
$
(1,487.8
)
$
203.0
Impairment of Goodwill
1,191.2
—
Loss on Disposal of Business
539.0
22.1
Other Non-Cash Adjustments
689.6
1,070.8
Changes in Operating Assets and
Liabilities
(206.4
)
(923.0
)
Net Cash Provided by Operating
Activities
725.6
372.9
Cash Flows from Investing Activities:
Additions to Property, Plant and
Equipment
(209.3
)
(174.2
)
Investments and Acquisitions
—
(146.3
)
Proceeds from Sale of Business, Net of
Cash
329.6
—
Other
(2.7
)
7.5
Net Cash Provided (Utilized) by Investing
Activities
117.6
(313.0
)
Cash Flows from Financing Activities:
Proceeds from Long-Term Debt
2.6
3.8
Repayments of Long-Term Debt
(359.6
)
(206.0
)
Net (Repayments of) Proceeds from
Short-Term Borrowings
(41.6
)
141.7
Purchases of Common Stock
—
(125.0
)
Stock-Based Compensation Transactions
—
74.2
Dividends Paid
(388.0
)
(385.3
)
Payments Related to Tax Withholding for
Share-Based Compensation
(16.8
)
(24.0
)
Other
(14.7
)
(32.7
)
Net Cash Utilized by Financing
Activities
(818.1
)
(553.3
)
Effect of Exchange Rate Changes on
Cash
7.2
(12.7
)
Net Increase (Decrease) in Cash and Cash
Equivalents
32.3
(506.1
)
Cash and Cash Equivalents at Beginning of
Year
513.1
1,019.2
Cash and Cash Equivalents at End of
Year
$
545.4
$
513.1
(1) Amounts may not sum due to
rounding
HASBRO, INC.
SUPPLEMENTAL FINANCIAL DATA
SEGMENT RESULTS - AS REPORTED AND AS
ADJUSTED (9)
(Unaudited)
(Millions of Dollars)
Operating
Results
Quarter Ended December 31,
2023
Quarter Ended December 25,
2022
As Reported
Non-GAAP Adjustments
Adjusted
As Reported
Non-GAAP Adjustments
Adjusted
% Change
Total Company
Results
External Net Revenues (1)
$
1,288.9
$
—
$
1,288.9
$
1,678.5
$
—
$
1,678.5
-23
%
Operating Profit (Loss)
(1,198.6
)
1,148.5
(50.1
)
(125.7
)
394.9
269.2
>-100
%
Operating Margin
-93.0
%
89.1
%
-3.9
%
-7.5
%
23.5
%
16.0
%
Segment
Results
Consumer
Products:
External Net Revenues (2)
$
753.9
$
—
$
753.9
$
1,004.7
$
—
$
1,004.7
-25
%
Operating Profit (Loss)
(126.2
)
11.0
(115.2
)
78.4
23.7
102.1
>-100
%
Operating Margin
-16.7
%
1.5
%
-15.3
%
7.8
%
2.4
%
10.2
%
Wizards of the Coast
and Digital Gaming:
External Net Revenues (3)
$
363.2
$
—
$
363.2
$
339.0
$
—
$
339.0
7
%
Operating Profit
103.2
—
103.2
104.1
—
104.1
-1
%
Operating Margin
28.4
%
—
28.4
%
30.7
%
—
30.7
%
Entertainment:
External Net Revenues (4)
$
171.8
$
—
$
171.8
$
334.8
$
—
$
334.8
-49
%
Operating Profit (Loss)
(1,110.1
)
1,079.3
(30.8
)
25.1
7.6
32.7
>-100
%
Operating Margin
>-100
%
>100
%
-17.9
%
7.5
%
2.3
%
9.8
%
Corporate and
Other:
Operating Profit (Loss)
$
(65.5
)
$
58.2
$
(7.3
)
$
(333.3
)
$
363.6
$
30.3
>-100
%
(1) Effective in the first quarter of
2023, the Company realigned our brand portfolios to correspond with
the Blueprint 2.0 strategy. Net Revenues by Brand Portfolio below
have been restated to present the realigned structure.
Net Revenues
Quarter Ended
December 31, 2023
December 25, 2022
% Change
Net Revenues by
Brand Portfolio
Franchise Brands (a)
$
843.7
$
934.6
-10
%
Partner Brands
154.0
276.2
-44
%
Portfolio Brands
151.9
167.8
-9
%
Non-Hasbro Branded Film & TV
139.3
299.9
-54
%
Total
$
1,288.9
$
1,678.5
(a) Franchise Brands include: DUNGEONS
& DRAGONS, Hasbro Gaming, MAGIC: THE GATHERING, NERF, PEPPA
PIG, PLAY-DOH and TRANSFORMERS.
Net Revenues
Quarter Ended
December 31, 2023
December 25, 2022
% Change
MAGIC: THE GATHERING
$
258.3
$
263.2
-2
%
Hasbro Total Gaming (b)
568.7
581.8
-2
%
(b) Hasbro Total Gaming includes all
gaming revenue, most notably DUNGEONS & DRAGONS, MAGIC: THE
GATHERING and Hasbro Gaming.
Net Revenues
Quarter Ended
December 31, 2023
December 25, 2022
% Change
(2)
Consumer Products Segment Net Revenues by
Major Geographic Region
North America
$
414.4
$
533.0
-22
%
Europe
197.3
289.1
-32
%
Asia Pacific
64.8
91.8
-29
%
Latin America
77.4
90.8
-15
%
Total
$
753.9
$
1,004.7
Net Revenues
Quarter Ended
December 31, 2023
December 25, 2022
% Change
(3)
Wizards of the Coast and Digital Gaming Net
Revenues by Category
Tabletop Gaming
$
265.6
$
266.7
0
%
Digital and Licensed Gaming
97.6
72.3
35
%
Total
$
363.2
$
339.0
Net Revenues
Quarter Ended
December 31, 2023
December 25, 2022
% Change
(4)
Entertainment Segment Net Revenues by
Category
Film and TV
$
151.7
$
310.6
-51
%
Family Brands
20.1
19.8
2
%
Music and Other
—
4.4
-100
%
Total
$
171.8
$
334.8
Operating
Results
Year Ended December 31,
2023
Year Ended December 25,
2022
As Reported
Non-GAAP Adjustments
Adjusted
As Reported
Non-GAAP Adjustments
Adjusted
% Change
Total Company
Results
External Net Revenues (5)
$
5,003.3
$
—
$
5,003.3
$
5,856.7
$
—
$
5,856.7
-15
%
Operating Profit (Loss)
(1,538.8
)
2,015.3
476.5
407.7
514.8
922.5
-48
%
Operating Margin
-30.8
%
40.3
%
9.5
%
7.0
%
8.8
%
15.8
%
Segment
Results
Consumer
Products:
External Net Revenues (6)
$
2,886.4
$
—
$
2,886.4
$
3,572.5
$
—
$
3,572.5
-19
%
Operating Profit (Loss)
(64.7
)
43.3
(21.4
)
217.3
52.6
269.9
>-100
%
Operating Margin
(2.2
)%
1.5
%
(0.7
)%
6.1
%
1.5
%
7.6
%
Wizards of the Coast
and Digital Gaming:
External Net Revenues (7)
$
1,457.6
$
—
$
1,457.6
$
1,325.1
$
—
$
1,325.1
10
%
Operating Profit
525.7
—
525.7
538.3
—
538.3
-2
%
Operating Margin
36.1
%
—
36.1
%
40.6
%
—
40.6
%
Entertainment:
External Net Revenues (8)
$
659.3
$
—
$
659.3
$
959.1
$
—
$
959.1
-31
%
Operating Profit (Loss)
(1,911.5
)
1,865.5
(46.0
)
22.7
59.9
82.6
>-100
%
Operating Margin
>-100
%
>100
%
-7.0
%
2.4
%
6.2
%
8.6
%
Corporate and
Other:
Operating Profit (Loss)
$
(88.3
)
$
106.5
$
18.2
$
(370.6
)
$
402.3
$
31.7
-43
%
(5) Effective in the first quarter of
2023, the Company realigned our brand portfolios to correspond with
the Blueprint 2.0 strategy. Net Revenues by Brand Portfolio below
have been restated to present the realigned structure.
Net Revenues
Year Ended
December 31, 2023
December 25, 2022
% Change
Net Revenues by Brand Portfolio
Franchise Brands (a)
$
3,256.5
$
3,350.8
-3
%
Partner Brands
687.8
1,052.0
-35
%
Portfolio Brands
521.3
625.2
-17
%
Non-Hasbro Branded Film & TV
537.7
828.7
-35
%
Total
$
5,003.3
$
5,856.7
(a) Franchise Brands include: DUNGEONS
& DRAGONS, Hasbro Gaming, MAGIC: THE GATHERING, NERF, PEPPA
PIG, PLAY-DOH and TRANSFORMERS
Net Revenues
Year Ended
December 31, 2023
December 25, 2022
% Change
MAGIC: THE GATHERING
$
1,085.8
$
1,065.2
2
%
Hasbro Total Gaming (b)
2,074.4
1,997.5
4
%
(b) Hasbro Total Gaming includes all
gaming revenue, most notably DUNGEONS & DRAGONS, MAGIC: THE
GATHERING and Hasbro Gaming.
Net Revenues
Year Ended
December 31, 2023
December 25, 2022
% Change
(6)
Consumer Products Segment Net Revenues by
Major Geographic Region
North America
$
1,649.1
$
2,064.8
-20
%
Europe
669.5
899.5
-26
%
Asia Pacific
256.3
293.4
-13
%
Latin America
311.5
314.8
-1
%
Total
$
2,886.4
$
3,572.5
Net Revenues
Year Ended
December 31, 2023
December 25, 2022
% Change
(7)
Wizards of the Coast and Digital Gaming Net
Revenues by Category
Tabletop Gaming
$
1,072.5
$
1,067.0
1
%
Digital and Licensed Gaming
385.1
258.1
49
%
Total
$
1,457.6
$
1,325.1
Net Revenues
Year Ended
December 31, 2023
December 25, 2022
% Change
(8)
Entertainment Segment Net Revenues by
Category
Film and TV
$
575.5
$
837.6
-31
%
Family Brands
83.8
79.4
6
%
Music and Other
—
42.1
-100
%
Total
$
659.3
$
959.1
(9) Amounts within this section may not
sum due to rounding
HASBRO, INC.
SUPPLEMENTAL FINANCIAL DATA
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES
(Unaudited)
(Millions of Dollars)
Reconciliation of
EBITDA and Adjusted EBITDA (1)
Quarter Ended
Year Ended
December 31, 2023
December 25, 2022
December 31, 2023
December 25, 2022
Net Earnings (Loss) Attributable to
Hasbro, Inc.
$
(1,061.1
)
$
(128.9
)
$
(1,489.3
)
$
203.5
Interest Expense
46.3
45.8
186.3
171.0
Income Tax Expense (Benefit)
(184.4
)
(35.6
)
(221.3
)
58.5
Net Earnings (Loss) Attributable to
Noncontrolling Interests
0.3
0.3
1.5
(0.5
)
Depreciation
39.8
32.9
127.8
127.3
Amortization of Intangibles
17.9
24.1
83.0
105.3
EBITDA
$
(1,141.2
)
$
(61.4
)
$
(1,312.0
)
$
665.1
Non-GAAP Adjustments and Stock
Compensation (2)
1,151.8
388.6
2,021.4
508.0
Adjusted EBITDA
$
10.6
$
327.2
$
709.4
$
1,173.1
(2) Non-GAAP Adjustments and Stock
Compensation are comprised of the following:
Stock compensation
$
16.5
$
15.1
$
70.6
$
79.2
Operational Excellence charges
40.1
77.9
69.5
106.4
Blueprint 2.0 implementation charges
84.2
295.6
574.1
322.4
Impairment of goodwill and intangible
Assets
1,011.0
—
1,307.2
—
Total
$
1,151.8
$
388.6
$
2,021.4
$
508.0
(1) Amounts may not sum due to
rounding
HASBRO, INC.
SUPPLEMENTAL FINANCIAL DATA
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES
(Unaudited)
(Millions of Dollars)
Reconciliation of Adjusted Operating
Profit (1)
Quarter Ended
Year Ended
December 31, 2023
December 25, 2022
December 31, 2023
December 25, 2022
Operating Profit (Loss)
$
(1,198.6
)
$
(125.7
)
$
(1,538.8
)
$
407.7
Consumer Products
(126.2
)
78.4
(64.7
)
217.3
Wizards of the Coast and Digital
Gaming
103.2
104.1
525.7
538.3
Entertainment
(1,110.1
)
25.1
(1,911.5
)
22.7
Corporate and Other
(65.5
)
(333.3
)
(88.3
)
(370.6
)
Non-GAAP Adjustments (2)
$
1,148.5
$
394.9
$
2,015.3
$
514.8
Consumer Products
11.0
23.7
43.3
52.6
Entertainment
1,079.3
7.6
1,865.5
59.9
Corporate and Other
58.2
363.6
106.5
402.3
Adjusted Operating Profit
(Loss)
$
(50.1
)
$
269.2
$
476.5
$
922.5
Consumer Products
(115.2
)
102.1
(21.4
)
269.9
Wizards of the Coast and Digital
Gaming
103.2
104.1
525.7
538.3
Entertainment
(30.8
)
32.7
(46.0
)
82.6
Corporate and Other
(7.3
)
30.3
18.2
31.7
(2) Non-GAAP Adjustments include the
following:
Acquisition-related costs (i)
$
—
$
4.5
$
1.9
$
14.6
Acquired intangible amortization (ii)
13.2
16.9
62.6
71.4
Operational Excellence charges (iii)
Transformation office and consultant fees
(a)
5.9
5.1
35.3
12.3
Severance and other employee charges
(b)
34.2
72.8
34.2
94.1
Blueprint 2.0 implementation charges
(iv)
eOne TV and Film business sale process
charges (a)
18.2
—
35.1
—
Loss on disposal of business (b)
66.0
(1.0
)
539.0
22.1
Impairment and other asset charges (c)
—
296.6
—
300.3
Impairment of goodwill and intangible
assets (v)
1,011.0
—
1,307.2
—
Total
$
1,148.5
$
394.9
$
2,015.3
$
514.8
(i) In association with the Company's acquisition of eOne, the
Company incurred stock compensation expenses of $1.9 ($1.7
after-tax) for the year ended December 31, 2023, and $4.5 ($4.0
after-tax) and $14.6 ($12.9 after-tax), respectively, in the
quarter and year ended December 25, 2022. The expense is included
within Selling, Distribution and Administration.
(ii) Represents intangible amortization
costs related to the intangible assets acquired in the eOne
acquisition. The Company has allocated certain of these intangible
amortization costs between the Consumer Products and Entertainment
segments, to match the revenue generated from such intangible
assets. While amortization of acquired intangibles is being
excluded from the related GAAP financial measure, the revenue of
the acquired company is reflected within the Company's operating
results to which these assets contribute.
(iii) These costs relate to the
comprehensive review of the Company's operations and development of
a transformation plan to support the organization in identifying,
realizing and capturing savings to create efficiencies and improve
business processes and operations. These charges consists of:
(a) Program related consultant and
transformation office fees of $5.9 ($4.5 after tax) and $35.3
($27.0 after-tax) for the quarter and year ended December 31, 2023
and $5.1 ($4.3 after-tax) and $12.3 ($9.4 after-tax) in the quarter
and year ended December 25, 2022, respectively, are included within
Selling, Distribution and Administration within the Corporate and
Other segment.
(b) Severance and other employee charges
of $34.2 ($28.6 after-tax) in the quarter and year ended December
31, 2023 and $72.8 ($60.8 after-tax) and $94.1 ($79.8 after-tax)
for the quarter and year ended December 25, 2022, respectively,
associated with cost-savings initiatives across the Company.
(iv) The Company announced the results of
its strategic review, Blueprint 2.0, a consumer-centric approach
focusing on fewer, bigger brands, expanded licensing, branded
entertainment, and high-margin growth in games, digital and direct.
As the Company implements the new strategy, charges recognized are
$84.1 ($71.7 after tax) and $574.1 ($453.7 after tax) for the
quarter and year ended December 31, 2023 and $295.6 ($228.2
after-tax) and $322.4 ($253.0 after tax), for the quarter and year
ended December 25,2022, respectively, consisting of:
(a) eOne TV and Film business sale process
charges of $18.2 ($21.0 after tax) and $35.1 ($34.0 after-tax) for
the quarter and year ended December 31, 2023, respectively, as a
result of the sale process for the part of its eOne TV and film
business not directly supporting the Company's Branded
Entertainment Strategy. These charges are included in Selling,
Distribution and Administration.
(b) Loss on disposal of a business of
$66.0 ($50.7 after-tax) and $539.0 ($419.7 after-tax) for the
quarter and year ended December 31, 2023 related to the sale of the
eOne Film and TV business not directly supporting the Company's
Entertainment Strategy within the Entertainment segment, which was
executed on December 27, 2023. Loss on disposal of non-core
businesses for the year ended December 25, 2022 of $22.1 ($21.1
after-tax) related to the exit of non-core businesses within the
Entertainment segment. In the quarter ended December 25, 2022, the
Company completed the sale process, which resulted in a reduction
of the loss of $1.0 ($0.1 after-tax). The year to date charge is
comprised of a goodwill impairment loss of $11.8 and asset
impairments of $10.3 (included within Loss on Disposal of
Business)
(c) Assets impairments and charges of
$296.6 ($228.4 after-tax) and $300.3 ($232.0 after-tax) for the
quarter and year ended December 25, 2022, respectively, related to
charges incurred as a result of the Company's focused investment
strategy on fewer, bigger brands. In the fourth quarter of 2022,
the Company incurred a $281.3 impairment within the Corporate and
Other segment, of which, $281.0 related to a partial impairment of
the Company's definite-lived intangible, Power Rangers, in Selling,
Distribution and Administration; and incurred incremental asset
charges related to product cancellations, consisting of inventory
and asset write offs of $14.9 in Cost of Sales within the Consumer
Products segment. Within the Entertainment segment, the company
incurred strategy related asset impairments of certain discontinued
projects of $0.4 and $4.1 within Program Cost Amortization for the
quarter and year ended December 25, 2022, respectively.
(v) Non-cash Goodwill and Asset impairment
charges of $1,011.0 ($998.3 after-tax) and $1,307.2 ($1,278.2
after-tax) for the quarter and year ended December 31, 2023,
respectively, consisting of: $296.2 ($279.9 after tax) incurred
within the Entertainment segment, of which $231.2 related to the
goodwill impairment of Film & TV due to the expected economic
impact of industry factors and $65.0 related to an impairment of
the Company's definite-lived intangible, eOne Trademark, which are
included in Impairment of Goodwill and Selling, Distribution and
Administration, respectively. In the quarter, $51.0 ($38.3 after
tax) was incurred related to the impairment of the Company's
definite-lived intangible, PJ Masks due to challenging retail
conditions and competitive market conditions leading to a reduction
in brand profitability. The goodwill impairment of Family Brands of
$960.0 ($960.0 after-tax) reflects reduced long-term forecast due
to lower profitability of PJ Masks, and a change in outlook for our
owned and operated production efforts that shifted the
Entertainment strategy to an asset lite and partner led model.
These charges are included in Impairment of Goodwill within the
Entertainment segment.
(1) Amounts may not sum due to
rounding
HASBRO, INC.
SUPPLEMENTAL FINANCIAL DATA
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES
(Unaudited)
(Millions of Dollars and Shares, Except
Per Share Data)
Reconciliation of
Net Earnings and Earnings per Share (1)
Quarter Ended
(all adjustments reported after-tax)
December 31, 2023
Diluted Per Share
Amount
December 25, 2022
Diluted Per Share
Amount
Net Earnings (Loss) Attributable to
Hasbro, Inc.
$
(1,061.1
)
$
(7.64
)
$
(128.9
)
$
(0.93
)
Acquisition-related costs
—
—
4.0
0.03
Acquired intangible amortization
10.2
0.07
13.9
0.10
Operational Excellence charges
33.2
0.24
64.6
0.47
Blueprint 2.0 implementation charges
71.7
0.52
228.3
1.65
Impairment of goodwill and intangible
Assets
998.3
7.18
—
—
Net Earnings Attributable to Hasbro, Inc.,
as Adjusted
$
52.3
$
0.38
$
181.9
$
1.31
Year Ended
(all adjustments reported after-tax)
December 31, 2023
Diluted Per Share
Amount
December 25, 2022
Diluted Per Share
Amount
Net Earnings (Loss) Attributable to
Hasbro, Inc.
$
(1,489.3
)
$
(10.73
)
$
203.5
$
1.46
Acquisition-related costs
1.7
0.01
12.9
0.09
Acquired intangible amortization
48.8
0.35
59.4
0.43
Operational Excellence charges
55.7
0.40
89.2
0.64
Blueprint 2.0 implementation charges
453.7
3.26
253.1
1.82
Impairment of goodwill and intangible
assets
1,278.2
9.20
—
—
Net Earnings Attributable to Hasbro, Inc.,
as Adjusted
$
348.8
$
2.51
$
618.1
$
4.45
(1) Amounts may not sum due to
rounding
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240212472255/en/
Investors: Kern Kapoor | Hasbro, Inc. |
hasbro_investor_relations@hasbro.com Media: Roberta Thomson |
Hasbro, Inc. | bertie.thomson@hasbro.com
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