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Hasbro Inc – ‘10-Q’ for 6/28/98

As of:  Wednesday, 8/12/98   ·   For:  6/28/98   ·   Accession #:  46080-98-11   ·   File #:  1-06682   ·   Correction:  This Filing was Corrected by the SEC on 9/15/98. ®

Previous ‘10-Q’:  ‘10-Q’ on 5/13/98 for 3/29/98   ·   Next:  ‘10-Q’ on 11/12/98 for 9/27/98   ·   Latest:  ‘10-Q’ on 11/1/23 for 10/1/23

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  As Of                Filer                Filing    For·On·As Docs:Size

 8/12/98  Hasbro Inc                        10-Q®       6/28/98    5:37K

Quarterly Report   —   Form 10-Q
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-Q        10-Q Document                                         18     66K 
 2: EX-11       Exhibit 11.1                                           1      7K 
 3: EX-11       Exhibit 11.2                                           1      7K 
 4: EX-12       Statement re: Computation of Ratios                    1      7K 
 5: EX-27       Financial Data Schedule (Pre-XBRL)                     1      8K 


10-Q   —   10-Q Document
Document Table of Contents

Page (sequential) | (alphabetic) Top
 
11st Page   -   Filing Submission
15Item 1. Legal Proceedings
"Item 2. Changes in Securities
"Item 3. Defaults Upon Senior Securities
"Item 4. Submission of Matters to a Vote of Security Holders
"Item 5. Other Information
16Item 6. Exhibits and Reports on Form 8-K
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SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the period ended June 28, 1998 Commission file number 1-6682 HASBRO, INC. -------------------- (Name of Registrant) Rhode Island O5-0155090 ------------------------ ------------------------------------ (State of Incorporation) (I.R.S. Employer Identification No.) 1027 Newport Avenue, Pawtucket, Rhode Island 02861 --------------------------------------------------- (Principal Executive Offices) (401) 431-8697 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes X or No --- --- The number of shares of Common Stock, par value $.50 per share, outstanding as of August 7, 1998 was 131,534,304.
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[Download Table] HASBRO, INC. AND SUBSIDIARIES Consolidated Balance Sheets (Thousands of Dollars Except Share Data) (Unaudited) Jun. 28, Jun. 29, Dec. 28, Assets 1998 1997 1997 --------- --------- --------- Current assets Cash and cash equivalents $ 180,595 82,510 361,785 Accounts receivable, less allowance for doubtful accounts of $52,400, $49,600 and $51,700 600,254 714,212 783,008 Inventories: Finished products 277,608 302,213 198,215 Work in process 17,215 16,025 12,208 Raw materials 36,815 49,983 32,279 --------- --------- --------- Total inventories 331,638 368,221 242,702 Deferred income taxes 92,929 78,461 96,489 Prepaid expenses 130,811 110,452 89,890 --------- --------- --------- Total current assets 1,336,227 1,353,856 1,573,874 Property, plant and equipment, net 281,327 296,139 280,603 --------- --------- --------- Other assets Cost in excess of acquired net assets, less accumulated amortization of $138,162, $123,524 and $128,237 615,297 508,439 486,502 Other intangibles, less accumulated amortization of $154,513, $114,346 and $135,467 707,775 419,439 478,798 Other 87,139 68,922 79,940 --------- --------- --------- Total other assets 1,410,211 996,800 1,045,240 --------- --------- --------- Total assets $3,027,765 2,646,795 2,899,717 ========= ========= =========
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[Download Table] HASBRO, INC. AND SUBSIDIARIES Consolidated Balance Sheets, continued (Thousands of Dollars Except Share Data) (Unaudited) Jun. 28, Jun. 29, Dec. 28, Liabilities and Shareholders' Equity 1998 1997 1997 --------- --------- --------- Current liabilities Short-term borrowings $ 527,259 314,288 122,024 Trade payables 124,479 89,967 179,156 Accrued liabilities 486,715 336,112 596,033 Income taxes 65,666 91,151 106,333 --------- --------- --------- Total current liabilities 1,204,119 831,518 1,003,546 Long-term debt, excluding current installments - 149,040 - Deferred liabilities 77,886 67,206 58,054 --------- --------- --------- Total liabilities 1,282,005 1,047,764 1,061,600 --------- --------- --------- Shareholders' equity Preference stock of $2.50 par value. Authorized 5,000,000 shares; none issued - - - Common stock of $.50 par value. Authorized 300,000,000 shares; issued 139,799,011, 132,176,967 and 139,799,011 69,900 66,088 69,900 Additional paid-in capital 488,374 279,798 489,447 Retained earnings 1,449,609 1,382,557 1,457,495 Accumulated other comprehensive income (20,076) (7,075) (3,903) Treasury stock, at cost; 7,786,821, 4,735,697 and 6,357,948 shares (242,047) (122,337) (174,822) --------- --------- --------- Total shareholders' equity 1,745,760 1,599,031 1,838,117 --------- --------- --------- Total liabilities and shareholders' equity $3,027,765 2,646,795 2,899,717 ========= ========= ========= See accompanying condensed notes to consolidated financial statements.
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[Download Table] HASBRO, INC. AND SUBSIDIARIES Consolidated Statements of Earnings (Thousands of Dollars Except Share Data) (Unaudited) Quarter Ended Six Months Ended ------------------ -------------------- Jun. 28, Jun. 29, Jun. 28, Jun. 29, 1998 1997 1998 1997 -------- -------- --------- --------- Net Revenues $ 572,057 583,886 1,054,877 1,139,670 Cost of Sales 247,095 252,917 451,407 488,288 -------- -------- --------- --------- Gross Profit 324,962 330,969 603,470 651,382 -------- -------- --------- --------- Expenses Amortization 15,880 11,194 30,023 21,226 Royalties, Research and Development 82,129 87,864 149,465 151,756 Advertising 73,213 66,908 128,970 138,210 Selling, Distribution and Administration 141,479 142,289 276,728 277,070 -------- -------- --------- --------- Total Expenses 312,701 308,255 585,186 588,262 -------- -------- --------- --------- Operating Profit 12,261 22,714 18,284 63,120 -------- -------- --------- --------- Nonoperating (income) expense Interest Expense 6,416 5,493 8,728 9,923 Other (Income) Expense, Net (2,417) (3,062) (10,514) (7,233) -------- -------- --------- --------- Total nonoperating (income) expense 3,999 2,431 (1,786) 2,690 -------- -------- --------- --------- Earnings Before Income Taxes 8,262 20,283 20,070 60,430 Income Taxes 2,809 7,302 6,824 21,755 -------- -------- --------- --------- Net Earnings $ 5,453 12,981 13,246 38,675 ======== ======== ========= ========= Per Common Share Net Earnings Basic $ .04 .10 .10 .30 ======== ======== ========= ========= Diluted $ .04 .10 .10 .30 ======== ======== ========= ========= Cash Dividends Declared $ .08 .08 .16 .16 ======== ======== ========= ========= See accompanying condensed notes to consolidated financial statements.
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[Download Table] HASBRO, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows Six Months Ended June 28, 1998 and June 29, 1997 (Thousands of Dollars) (Unaudited) 1998 1997 ------- ------- Cash flows from operating activities Net earnings $ 13,246 38,675 Adjustments to reconcile net earnings to net cash utilized by operating activities: Depreciation and amortization of plant and equipment 43,857 48,297 Other amortization 30,023 21,226 Deferred income taxes (1,153) (2,325) Change in operating assets and liabilities (other than cash and cash equivalents): Decrease in accounts receivable 176,595 87,426 Increase in inventories (69,208) (78,110) (Increase) Decrease in prepaid expenses (30,447) 1 Decrease in trade payables and accrued liabilities (254,312) (185,664) Other (1,739) 739 ------- ------- Net cash utilized by operating activities (93,138) (69,735) ------- ------- Cash flows from investing activities Additions to property, plant and equipment (47,969) (34,655) Investments and acquisitions, net of cash acquired (355,000) (164,153) Other 9,019 1,166 ------- ------- Net cash utilized by investing activities (393,950) (197,642) ------- ------- Cash flows from financing activities Proceeds from borrowings with original maturities of more than three months 850 70,446 Repayments of borrowings with original maturities of more than three months (25,775) (31,721) Net proceeds of other short-term borrowings 433,825 160,646 Purchase of common stock (107,647) (63,539) Stock option transactions 39,350 18,978 Dividends paid (21,268) (18,801) ------- ------- Net cash provided by financing activities 319,335 136,009 ------- ------- Effect of exchange rate changes on cash (13,437) (5,093) ------- ------- Decrease in cash and cash equivalents (181,190) (136,461) Cash and cash equivalents at beginning of year 361,785 218,971 ------- ------- Cash and cash equivalents at end of period $180,595 82,510 ======= =======
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[Download Table] HASBRO, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows (continued) Six Months Ended June 28, 1998 and June 29, 1997 (Thousands of Dollars) (Unaudited) 1998 1997 ------- ------- Supplemental information Cash paid during the period for: Interest $ 8,033 8,017 Income taxes $ 33,495 74,875 See accompanying condensed notes to consolidated financial statements.
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HASBRO, INC. AND SUBSIDIARIES Condensed Notes to Consolidated Financial Statements (Thousands of Dollars and Shares Except Per share Data) (Unaudited) (1) In the opinion of management and subject to year-end audit, the accompanying unaudited interim financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position of the Company as of June 28, 1998 and June 29, 1997, and the results of operations and cash flows for the periods then ended. The results of operations for the six months ended June 28, 1998, are not necessarily indicative of results to be expected for the full year. (2) On May 2, 1997, the Company purchased certain assets of OddzOn Products and Cap Toys, Inc. (OddzOn). The consideration for this purchase was $167,379. This acquisition was accounted for using the purchase accounting method and, based on estimates of fair market value, $43,582 was allocated to net tangible assets, $76,700 to product rights and $47,097 to goodwill. (3) On April 1, 1998, the Company acquired substantially all of the business and operating assets of Tiger Electronics, Inc. and certain affiliates (Tiger) for an initial payment of $335,000, subject to post- closing adjustment, plus the closing date value of inventory, tooling, equipment and prepaid assets. The estimated total cost of this acquisition approximates $395,000 and is being accounted for using the purchase accounting method. Based on current estimates of fair market value, approximately $42,000 has been allocated to net tangible assets, $213,000 to product rights and $140,000 to goodwill. (4) Late in the fourth quarter of 1997, the Company announced a global integration and profit enhancement program which anticipated the redundancy of approximately 2,500 employees, principally in manufacturing, and provided for actions in three principal areas: a continued consolidation of the Company's manufacturing operations; the streamlining of marketing and sales, while exiting from certain underperforming markets and product lines; and the further leveraging of overheads. Of the $140,000 estimated costs related to these actions, $125,000 was reported as a nonrecurring charge and $15,000 was reflected in cost of sales. Of the nonrecurring amount, approximately $54,000 related to severance and people costs, $52,000 to property, plant and equipment and leases and $19,000 to product line related costs. During the first six months of 1998, approximately 1,900 employees were terminated. The approximate $100,000 accrual remaining at June 28, 1998, is principally attributable to severance costs, which will be disbursed over the employee's entitlement period, and property, plant and equipment costs, which will not be incurred prior to the cessation of production at the various facilities. The program remains on schedule to be substantially completed by the end of 1998.
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HASBRO, INC. AND SUBSIDIARIES Condensed Notes to Consolidated Financial Statements, continued (Thousands of Dollars and Shares Except Per share Data) (Unaudited) (5) Earnings per share data for the fiscal quarters and six months ended June 28, 1998 and June 29, 1997 were computed as follows: 1998 1997 ----------------- ----------------- Basic Diluted Basic Diluted ------- ------- ------- ------- Quarter ------- Net earnings $ 5,453 5,453 12,981 12,981 Effect of dilutive securities; 6% Convertible Notes due 1998 - - - 1,437 ------- ------- ------- ------- Adjusted net earnings $ 5,453 5,453 12,981 14,418 ======= ======= ======= ======= Average shares outstanding 132,560 132,560 127,847 127,847 Effect of dilutive securities; 6% Convertible Notes due 1998 - - - 7,630 Options and warrants - 5,668 - 2,129 ------- ------- ------- ------- Equivalent Shares 132,560 138,228 127,847 137,606 ======= ======= ======= ======= Earnings per share $ .04 .04 .10 .10 ======= ======= ======= ======= Six Months ---------- Net earnings $ 13,246 13,246 38,675 38,675 Effect of dilutive securities; 6% Convertible Notes due 1998 - - - 2,875 ------- ------- ------- ------- Adjusted net earnings $ 13,246 13,246 38,675 41,550 ======= ======= ======= ======= Average shares outstanding 132,835 132,835 128,223 128,223 Effect of dilutive securities; 6% Convertible Notes due 1998 - - - 7,633 Options and warrants - 5,383 - 2,302 ------- ------- ------- ------- Equivalent Shares 132,835 138,218 128,223 138,158 ======= ======= ======= ======= Earnings per share $ .10 .10 .30 .30 ======= ======= ======= =======
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HASBRO, INC. AND SUBSIDIARIES Condensed Notes to Consolidated Financial Statements, continued (Thousands of Dollars and Shares Except Per share Data) (Unaudited) (6) Effective for fiscal 1998, Hasbro adopted Statement of Financial Accounting Standards No. 130, Reporting Comprehensive Income (SFAS 130). SFAS 130 requires that all items recognized under accounting standards as components of comprehensive earnings be reported in a financial statement that is displayed with the same prominence as other financial statements. SFAS 130 also requires that an entity classify items of other comprehensive earnings by their nature in the financial statements and display the accumulated amount thereof separately within the equity section of the balance sheet. The Company's other comprehensive earnings (loss) primarily results from foreign currency translation adjustments. Hasbro's total comprehensive earnings (loss) for the fiscal quarters and six months ended June 28, 1998 and June 29, 1997 were as follows: 1998 1997 ---- ---- Quarter ------- Net earnings $ 5,453 12,981 Other comprehensive earnings (loss) (7,891) (11,608) ------- ------- Total comprehensive earnings (loss) $ (2,438) 1,373 ======= ======= Six Months ---------- Net earnings $ 13,246 38,675 Other comprehensive earnings (loss) (16,173) (27,068) ------- ------- Total comprehensive earnings (loss) $ (2,927) 11,607 ======= =======
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HASBRO, INC. AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations (Thousands of dollars) NET REVENUES ------------ Worldwide net revenues in local currencies for the second quarter of 1998 were essentially unchanged from the second quarter of 1997. The acquisition of the operating assets of Tiger Electronics, Inc. and certain affiliates thereof (Tiger), on April 1, 1998 (see note 3), added approximately $40,000 to net revenues. This increase, however, was offset by ongoing changes in inventory flow policies at Toys `R Us, coupled with year-over-year differences in the timing of movie releases of some of the Company's major entertainment properties. In addition, the adverse impact of the stronger U.S. dollar reduced revenues by approximately $9,000, resulting in reported revenues of $572,057, compared to $583,886 reported last year. For the six months, revenues were $1,054,877 and $1,139,670 in 1998 and 1997, respectively. In addition to the second quarter factors noted above, the 1998 six month amounts reflect an approximate $10,000 impact of the strengthened U.S. dollar during the first quarter as well as that quarter's impact of the Toys `R Us inventory flow policy change. GROSS PROFIT ------------ While the Company's gross margin for the quarter and six months of 1998, at 56.8% and 57.2%, were both essentially flat with the 1997 amounts of 56.7% and 57.2%, certain of the Company's global integration and profit enhancement program initiatives have increased margins. Offsetting this favorable movement, however, was the decrease in sales of certain higher margin boys action toys, many of which are tied to entertainment properties which had more visibility in 1997 as a result of various motion picture releases. EXPENSES -------- Amortization expense in both periods of 1998 was greater than in the comparable periods of 1997, reflecting the Company's recent acquisitions, including OddzOn in May of 1997 (see note 2) and Tiger in April of 1998. Royalties, research and development expenses for the quarter decreased in both amount and as a percentage of net revenues from comparable 1997 levels. The royalty component decreased in both dollars and as a percentage of net revenues to rates more comparable with those experienced during the later quarters of 1997. Research and development, at $39,103 and $74,379 for the quarter and six months of 1998, respectively, increased in both dollars and as a percentage of net revenues from $37,376 and $68,433 a year ago. These increases reflect both the inclusion of new units, OddzOn in May 1997, and Tiger in April 1998, and the continuing impact of increased development efforts within the Company's Interactive unit as it builds for the future.
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HASBRO, INC. AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations (Thousands of dollars) Advertising expense for the second quarter increased both in dollars and as a percentage of net revenues. The increase in dollars reflects the inclusion of Tiger while the increase in percentage reflects the mix of more non-entertainment based product in 1998, in the absence of major movie support. For the six months, it remained essentially unchanged as a percentage of net revenues while decreasing in amount. This decrease was the result of the greater proportion of first quarter revenues which arose from products not as extensively advertised as many of the Company's other offerings. Selling, distribution and administration expenses, which are largely fixed, decreased marginally in amount during both the second quarter and six months of 1998 from comparable 1997 levels. This, despite the inclusion of both OddzOn and Tiger for a full second quarter of 1998. The increase in percentage terms is principally a function of the lower level of 1998 revenues. NONOPERATING (INCOME) EXPENSE ----------------------------- Interest expense during the quarter, $6,416 in 1998 compared with $5,493 in 1997, reflects both the conversion of the Company's 6% Notes into common stock during the fourth quarter of 1997 and the increased borrowing requirements relating to the funding of the Tiger acquisition. For the six months of 1998, interest expense was lower than in 1997, reflecting the lower first quarter borrowing requirements as well as the two factors previously noted for the second quarter. The change in other nonoperating income, in both the quarter and six months, reflects the earnings differential resulting from changes in levels of short-term investments, the impact of minority investments in certain subsidiaries, as well as foreign exchange transactions and translation. INCOME TAXES ------------ Income tax expense for the second quarter and six months of 1998 remained constant with the full year 1997 rate of 34%, while decreasing from 36% in the second quarter and six months of 1997. The decrease in the period to period rates resulted principally from the continued reorganization of the Company's global business, which reduced the tax on international earnings. OTHER INFORMATION ----------------- During the past several years, the Company has experienced a shift in its revenue pattern wherein the second half of the year has grown in significance to its overall business and within that half the fourth quarter has become more prominent. The Company expects that this trend will continue. This concentration increases the risk of (a) underproduction of
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HASBRO, INC. AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations (Thousands of dollars) popular items, (b) overproduction of less popular items and (c) failure to achieve tight and compressed shipping schedules. The business of the Company is characterized by customer order patterns which vary from year to year largely because of differences in the degree of consumer acceptance of a product line, product availability, marketing strategies, and inventory levels of retailers and differences in overall economic conditions. Also, quick response inventory management practices now being used results in fewer orders being placed in advance of shipment and more orders, when placed, for immediate delivery. As a result, comparisons of unshipped orders on any date in a given year with those at the same date in a prior year are not necessarily indicative of sales for the entire year. In addition, it is a general industry practice that orders are subject to amendment or cancellation by customers prior to shipment. At the end of its fiscal July (July 26, 1998 and July 27, 1997) the Company's unshipped orders were approximately $670,000 and $860,000. Late in the fourth quarter of 1997, the Company announced a global integration and profit enhancement program which anticipated the redundancy of approximately 2,500 employees, principally in manufacturing, and provided for actions in three principal areas: a continued consolidation of the Company's manufacturing operations; the streamlining of marketing and sales, while exiting from certain underperforming markets and product lines; and the further leveraging of overheads. Of the $140,000 estimated costs related to these actions, $125,000 was reported as a nonrecurring charge and $15,000 was reflected in cost of sales. Of the nonrecurring amount, approximately $54,000 related to severance and people costs, $52,000 to property, plant and equipment and leases and $19,000 to product line related costs. During the first six months of 1998, approximately 1,900 employees were terminated. The approximate $100,000 accrual remaining at June 28, 1998, is principally attributable to severance, which will be disbursed over the employee's entitlement period, and property, plant and equipment costs, which will not be incurred prior to the cessation of production at the various facilities. The program remains on schedule to be substantially completed by the end of 1998. LIQUIDITY AND CAPITAL RESOURCES ------------------------------- The seasonality of the Company's business coupled with certain customer incentives, mainly in the form of extended payment terms, result in the interim cash flow statements being not representative of that which may be expected for the full year. As a result of these extended payment terms, the majority of the Company's cash collections occur late in the fourth quarter and early in the first quarter of the subsequent year. As receivables are collected late in the fourth quarter and through the first quarter of the subsequent year, cash flow from operations becomes positive and is used to repay a significant portion of the short-term borrowings.
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HASBRO, INC. AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations (Thousands of dollars) As a result, management believes that on an interim basis, rather than discussing its cash flows, a better understanding of its liquidity and capital resources can be obtained through a discussion of the various balance sheet categories. Also, as several of the major categories, including cash and cash equivalents, accounts receivable, inventories and short-term borrowings, fluctuate significantly from quarter to quarter, again due to the seasonality of its business and the extended payment terms offered, management believes that a comparison to the comparable period in the prior year is generally more meaningful than a comparison to the prior year-end. Receivables, both in dollars and in days sales outstanding, decreased from June 1997 levels. In amount, receivables were approximately $114,000, or 16% lower and, at 95 days sales outstanding, 16 days less than the 111 days sales outstanding at the same point in 1997. These improvements reflect the increased impact of the Company's letter of credit business and its non- traditional toy and game businesses, both of which have shorter payment terms. Inventories decreased from 1997 levels despite the inclusion of Tiger in 1998, reflecting the Company's efforts to manage them more efficiently. Other assets, as a group, increased approximately $415,000 from their June 1997 levels reflecting the acquisition of Tiger as well as other acquisitions of product rights and licenses during the most recent twelve months, all partially offset by an additional year of amortization expense. Net borrowings (short- and long-term borrowings less cash and cash equivalents) decreased by approximately $34,000 to $346,664 from $380,818 at June 29, 1997. This decrease occurred despite the fact that more than $500,000 of cash was utilized during the last twelve months for acquisitions and the continuation of the Company's share repurchase program. At June 28, 1998, the Company had committed unsecured lines of credit totaling approximately $550,000 available to it. It also had available uncommitted lines approximating $750,000. The Company believes that these amounts are adequate for its needs. Of these available lines, approximately $540,000 was in use at June 28, 1998. Trade payables and accrued liabilities both increased from the comparable 1997 levels, reflecting the impact of the unpaid amounts relating to the Tiger acquisition and the Company's global integration and profit enhancement program. RECENT INFORMATION ------------------ During the quarter, The Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activities (SFAS 133). The Company is currently reviewing the provisions of SFAS 133, which must be adopted not
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HASBRO, INC. AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations (Thousands of dollars) later than the beginning of the Company's fiscal 2000, but does not believe that it will have a material impact on either the Company's financial condition or its results of operations. On July 15, 1998, in a public offering, the Company issued $150,000 of 6.15% notes due July 15, 2008 and $150,000 of 6.60% debentures due July 15, 2028. The net proceeds from the sale of these notes will be used to repay a portion of the Company's outstanding short-term debt, primarily incurred in connection with the acquisition of Tiger. On August 12, 1998, the Company announced that it had entered into a definitive agreement to acquire MicroProse, Inc. (MicroProse), a 17-year publisher of popular simulation, 3-D action and strategy games for the personal computer. The purchase price is $6.00 per common share of MicroProse, payable in cash. The total value of the transaction is approximately $70 million, including assumed debt and redeemable preferred stock. Closing is expected in September of 1998. The agreement calls for a wholly owned subsidiary of the Company to commence a tender offer no later than August 18, 1998 for all of MicroProse's outstanding common shares. The offer will be conditioned upon, among other things, the expiration or earlier termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvement Act of 1976 and the tender of a majority of the common shares outstanding on a fully diluted basis of MicroProse. Following the consummation of the offer, the Company's subsidiary will be merged with MicroProse and any remaining MicroProse common shares will be converted into the right to receive $6.00 per share in cash.
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PART II. Other Information Item 1. Legal Proceedings. None. Item 2. Changes in Securities. On July 15, 1998, in a public offering, the Company issued $150,000,000 of 6.15% notes due July 15, 2008 and $150,000,000 of 6.60% debentures due July 15, 2028. Item 3. Defaults Upon Senior Securities. None. Item 4. Submission of Matters to a Vote of Security Holders. At the Company's Annual Meeting of Shareholders held on May 13, 1998, the Company's shareholders reelected the following persons to the Board of Directors of the Company: Claudine B. Malone (110,059,507 votes for, 1,209,763 votes withheld); Alan R. Batkin (110,063,694 votes for, 1,205,576 votes withheld); Morris W. Offit (103,279,297 votes for, 7,989,973 votes withheld; Carl Spielvogel (103,273,532 votes for, 7,995,738 votes withheld; and Paul Wolfowitz (110,156,771 votes for, 1,112,499 votes withheld). There were no votes against any nominee and no broker nonvotes. Item 5. Other Information None.
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Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits. 11.1 Computation of Earnings Per Common Share - Six Months Ended June 28, 1998 and June 29, 1997. 11.2 Computation of Earnings Per Common Share - Quarter Ended June 28, 1998 and June 29, 1997. 12 Computation of Ratio of Earnings to Fixed Charges - Six Months and Quarter Ended June 28, 1998. 27 Article 5 Financial Data Schedule - Second Quarter 1998 (b) Reports on Form 8-K A Current Report on Form 8-K, dated July 14, 1998, was filed by the Company in connection with the issuance of an aggregate amount of $300,000,000 of long-term debt. The filing included the following exhibits: Underwriting Agreement, dated July 14, 1998, by and among the Registrant and Bear, Stearns & Co. Inc. and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated; Terms Agreement dated July 14, 1998, by and among the Registrant and Bear, Stearns & Co. Inc. and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated; Indenture, dated July 17, 1998, by and between the Registrant and Citibank, N.A., as Trustee; Form of Note (Global); Form of Debenture (Global); Opinion of Phillip H. Waldoks, Esq., Senior Vice President - Corporate Legal Affairs and Secretary of the Registrant, as to the legality of the securities being registered; and Consent of Phillip H. Waldoks, Esq., Senior Vice President - Corporate Legal Affairs and Secretary of the Registrant. A Current Report on Form 8-K, dated July 16, 1998, was filed by the Company and included the Press Release dated July 16, 1998, announcing the Company's results for the current quarter. Consolidated Statements of Earnings (without notes) for the quarters and six months ended June 28, 1998 and June 29, 1997 and Consolidated Condensed Balance Sheets (without notes) as of said dates were also filed. A Current Report on Form 8-K, dated July 17, 1998, was filed by the Company in connection with the issuance of an aggregate amount of $300,000,000 of long-term debt. The filing included a Statement of Eligibility under the Trust Indenture Act of 1939 of a Corporation Designated to Act as Trustee on Form T-1, completed by Citibank, N.A.
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SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. HASBRO, INC. ------------ (Registrant) Date: August 12, 1998 By: /s/ John T. O'Neill --------------------- John T. O'Neill Executive Vice President and Chief Financial Officer (Duly Authorized Officer and Principal Financial Officer)
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HASBRO, INC. AND SUBSIDIARIES Quarterly Report on Form 10-Q For the Period Ended June 28, 1998 Exhibit Index Exhibit No. Exhibits ------- -------- 11.1 Computation of Earnings Per Common Share - Six Months Ended June 28, 1998 and June 29, 1997 11.2 Computation of Earnings Per Common Share - Quarter Ended June 28, 1998 and June 29, 1997 12 Computation of Ratio of Earnings to Fixed Charges - Six Months and Quarter Ended June 28, 1998 27 Article 5 Financial Data Schedule - Second Quarter 1998

Dates Referenced Herein   and   Documents Incorporated by Reference

Referenced-On Page
This ‘10-Q’ Filing    Date First  Last      Other Filings
7/15/281415
7/15/081415
Corrected on:9/15/98SC 14D1/A
8/18/9814
Filed on:8/12/981417
8/7/981
7/26/9812
7/17/98168-K
7/16/98168-K
7/15/981415424B2
7/14/98168-K
For Period End:6/28/98118
5/13/981510-Q
4/1/987108-K
7/27/9712
6/29/9751810-Q
5/2/977
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Filing Submission 0000046080-98-000011   –   Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

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