-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VVv8Chol/r7v1jBXVpC9rqsg4w7D71mkcpae4PtSNZEWEa5O9gf+MzPOxKC9KAGz f07fbFYim76OoI/b/85b0w== 0000046080-95-000014.txt : 19951211 0000046080-95-000014.hdr.sgml : 19951211 ACCESSION NUMBER: 0000046080-95-000014 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19951001 FILED AS OF DATE: 19951115 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: HASBRO INC CENTRAL INDEX KEY: 0000046080 STANDARD INDUSTRIAL CLASSIFICATION: 3944 IRS NUMBER: 050155090 STATE OF INCORPORATION: RI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-06682 FILM NUMBER: 95593523 BUSINESS ADDRESS: STREET 1: 1027 NEWPORT AVE STREET 2: P O BOX 1059 CITY: PAWTUCKET STATE: RI ZIP: 02861 BUSINESS PHONE: 4014318697 FORMER COMPANY: FORMER CONFORMED NAME: HASBRO BRADLEY INC DATE OF NAME CHANGE: 19850814 FORMER COMPANY: FORMER CONFORMED NAME: HASBRO INDUSTRIES INC DATE OF NAME CHANGE: 19840917 FORMER COMPANY: FORMER CONFORMED NAME: HASSENFELD BROTHERS INC DATE OF NAME CHANGE: 19720615 10-Q 1 10-Q DOCUMENT 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 October 1, 1995 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 November 10, 1995 was 87,672,905. HASBRO, INC. AND SUBSIDIARIES Consolidated Balance Sheets (Thousands of Dollars Except Share Data) (Unaudited) Oct. 1, Sep. 25, Dec. 25, Assets 1995 1994 1994 -------- -------- -------- Current assets Cash and cash equivalents $ 53,785 43,234 137,028 Marketable securities available for sale - 16,810 - Accounts receivable, less allowance for doubtful accounts of $49,000, $52,500 and $51,000 1,128,119 1,118,622 717,890 Inventories: Finished products 296,358 260,407 181,202 Work in process 28,374 20,163 19,342 Raw materials 65,363 52,519 43,863 --------- --------- --------- Total inventories 390,095 333,089 244,407 Deferred income taxes 84,175 89,165 83,730 Prepaid expenses 74,089 58,002 69,408 --------- --------- --------- Total current assets 1,730,263 1,658,922 1,252,463 Property, plant and equipment, net 306,464 296,986 308,879 --------- --------- --------- Other assets Cost in excess of acquired net assets, less accumulated amortization of $95,438, $79,926 and $82,949 480,749 553,745 479,960 Other intangibles, less accumulated amortization of $73,959, $99,499 and $58,178 346,383 170,695 295,333 Other 53,650 35,966 41,740 --------- --------- --------- Total other assets 880,782 760,406 817,033 --------- --------- --------- Total assets $2,917,509 2,716,314 2,378,375 ========= ========= ========= HASBRO, INC. AND SUBSIDIARIES Consolidated Balance Sheets, Continued (Thousands of Dollars Except Share Data) (Unaudited) Oct. 1, Sep. 25, Dec. 25, Liabilities and Shareholders' Equity 1995 1994 1994 -------- -------- -------- Current liabilities Short-term borrowings $ 566,820 486,252 81,805 Current installments of long-term debt - 3,204 10 Trade payables 140,743 133,060 165,368 Accrued liabilities 448,243 413,741 417,763 Income taxes 84,635 108,515 98,786 --------- --------- --------- Total current liabilities 1,240,441 1,144,772 763,732 Long-term debt, excluding current installments 149,991 150,437 150,000 Deferred liabilities 65,143 73,057 69,226 --------- --------- --------- Total liabilities 1,455,575 1,368,266 982,958 --------- --------- --------- 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 88,086,108, 88,085,802 and 88,085,802 44,043 44,043 44,043 Additional paid-in capital 279,320 283,872 282,151 Retained earnings 1,120,707 1,001,730 1,071,416 Cumulative translation adjustments 25,588 32,049 14,526 Treasury stock, at cost, 262,653, 451,900 and 557,455 shares (7,724) (13,646) (16,719) --------- --------- --------- Total shareholders' equity 1,461,934 1,348,048 1,395,417 --------- --------- --------- Total liabilities and shareholders' equity $2,917,509 2,716,314 2,378,375 ========= ========= ========= See accompanying condensed notes to consolidated financial statements. HASBRO, INC. AND SUBSIDIARIES Consolidated Statements of Earnings (Thousands of Dollars Except Share Data) (Unaudited) Quarter Ended Nine Months Ended ------------------- -------------------- Oct. 1, Sep. 25, Oct. 1, Sep. 25, 1995 1994 1995 1994 -------- -------- --------- --------- Net revenues $826,165 796,222 1,834,522 1,729,679 Cost of sales 360,852 352,129 807,509 763,507 ------- ------- --------- --------- Gross profit 465,313 444,093 1,027,013 966,172 ------- ------- --------- --------- Expenses Amortization 9,718 9,598 28,686 27,196 Royalties, research and development 78,318 75,359 195,487 180,781 Discontinued development project - - 31,100 - Advertising 123,537 116,307 261,934 241,294 Selling, distribution and administration 142,977 123,067 382,785 343,337 Restructuring charges - 12,500 - 12,500 ------- ------- --------- --------- Total expenses 354,550 336,831 899,992 805,108 ------- ------- --------- --------- Operating profit 110,763 107,262 127,021 161,064 ------- ------- --------- --------- Nonoperating (income) expense Interest expense 10,932 8,776 24,139 18,821 Other (income), net (3,539) (23,710) (11,528) (26,053) ------- ------- --------- --------- Total nonoperating expense 7,393 (14,934) 12,611 (7,232) ------- ------- --------- --------- Earnings before income taxes and cumulative effect of change in accounting principles 103,370 122,196 114,410 168,296 Income taxes 39,798 47,045 44,048 64,794 ------- ------- --------- --------- Net earnings before cumulative effect of change in accounting principles 63,572 75,151 70,362 103,502 Cumulative effect of change in accounting principles - - - (4,282) ------- ------- --------- --------- Net earnings $ 63,572 75,151 70,362 99,220 ======= ======= ========= ========= Per common share Net earnings before cumulative effect of change in accounting principles $ .72 .85 .80 1.16 ======= ======= ========= ========= Net earnings $ .72 .85 .80 1.11 ======= ======= ========= ========= Cash dividends declared $ .08 .07 .24 .21 ======= ======= ========= ========= See accompanying condensed notes to consolidated financial statements. HASBRO, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows Nine Months Ended October 1, 1995 and September 25, 1994 (Thousands of Dollars) (Unaudited) 1995 1994 ---- ---- Cash flows from operating activities Net earnings $ 70,362 99,220 Adjustments to reconcile net earnings to net cash utilized by operating activities: Depreciation and amortization of plant and equipment 65,652 59,710 Other amortization 28,686 27,196 Deferred income taxes (6,652) (11,102) Gain on investments - (23,291) Change in operating assets and liabilities (other than cash and cash equivalents): (Increase) in accounts receivable (397,487) (368,304) (Increase) in inventories (137,331) (73,557) (Increase) decrease in prepaid expenses (3,227) 9,318 (Decrease) in trade payables and accrued liabilities (8,437) (41,936) Other 12,346 (786) ------- ------- Net cash utilized by operating activities (376,088) (323,532) ------- ------- Cash flows from investing activities Additions to property, plant and equipment (62,813) (73,019) Acquisitions, net of cash acquired (112,531) (98,411) Proceeds from sale of investments - 24,449 Other 4,912 444 ------- ------- Net cash utilized by investing activities (170,432) (146,537) ------- ------- Cash flows from financing activities Proceeds from borrowings with original maturities of more than three months 413,953 - Repayments of borrowings with original maturities of more than three months (32,071) (50,105) Net proceeds from other borrowings 89,733 418,409 Stock option and warrant transactions 6,476 (8,498) Purchase of common stock (312) (17,954) Dividends paid (20,170) (17,577) ------- ------- Net cash provided by financing activities 457,609 324,275 ------- ------- Effect of exchange rate changes on cash 5,668 2,774 ------- ------- Decrease in cash and cash equivalents (83,243) (143,020) Cash and cash equivalents at beginning of year 137,028 186,254 ------- ------- Cash and cash equivalents at end of period $ 53,785 43,234 ======= ======= Supplemental information Cash paid during the period for: Interest $ 15,558 16,636 Income taxes $ 60,320 45,931 See accompanying condensed notes to consolidated financial statements. HASBRO, INC. AND SUBSIDIARIES Condensed Notes to Consolidated Financial Statements (Thousands of Dollars) (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 October 1, 1995 and September 25, 1994, and the results of operations and cash flows for the periods then ended. The nine months ended October 1, 1995 consisted of 40 weeks while the nine months ended September 25, 1994 consisted of 39 weeks. The results of operations for the nine months ended October 1, 1995, are not necessarily indicative of results to be expected for the full year. (2) Earnings per common share are based on the weighted average number of shares of common stock and dilutive common stock equivalents outstanding during each period. Common stock equivalents include stock options and warrants for the period prior to their exercise. Under the treasury stock method, the unexercised options and warrants were assumed to be exercised at the beginning of the period or at issuance, if later. The assumed proceeds were then used to purchase common stock at the average market price during the period. For each of the reported periods except the quarter ended September 25, 1994, the difference between primary and fully diluted earnings per share was not significant. For the quarter ended September 25, 1994, the primary and fully diluted earnings per share were $.85 and $.82, respectively HASBRO, INC. AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations (Thousands of dollars) NET REVENUES - - ------------ Net revenues for the third quarter and nine months of 1995 were $826,165 and $1,834,522, respectively, up from the $796,222 and $1,729,679 reported for the same periods of 1994. During the quarter, international revenues increased by approximately 12% from those of a year ago, while domestically, they marginally declined. Included in both the international and domestic 1995 revenues was the positive impact of the Company's recent acquisitions. Additionally, international revenues benefited by approximately $11,000 from changed foreign currency translation rates during the quarter, net of the approximate $5,000 negative impact from the weakened Mexican peso. Within both geographic areas, the Company's revenues from its games and boys' toys were greater than those of the comparable period of 1994, while revenues from its girls' toys were less. Revenues from the Company's preschool and activity items approximated those of a year ago. The growth pattern for the nine months was similar to that of the quarter. COST OF SALES - - ------------- The gross profit margin, expressed as a percentage of net revenues, for the quarter increased to 56.3% from the 1994 level of 55.8%, and the nine months to 56.0% from 55.9% a year ago. The improvement in both periods reflects the more favorable mix of products sold, the efficiencies from recent plant consolidations, the effect of GATT, all partially offset by the impact of increased material costs, specifically paper board and plastic resin. EXPENSES - - -------- Royalties, research and development expenses for the quarter increased from prior year's amount but remained constant as a percentage of net revenues. The royalty component increased both in amount and when expressed as a percentage of net revenues. In addition to reflecting the growth in volume during the quarter, the increases can also be attributed to the mix of products sold with more revenue being derived from items carrying higher royalty rates. Research and development was $34,576 and $102,004 for the quarter and nine months of 1995 while $35,193 and $96,655 for the same periods of 1994. Earlier this year, the Company discontinued its efforts, begun in 1992, related to the development of a mass-market virtual reality game system. These efforts produced such a game system, but at a price judged to be too expensive for the mass-market. The impact of this decision was a second quarter charge of $31,100, the estimated costs associated with such action. Approximately half of the charge resulted from the expensing of software development costs, previously capitalized under the provisions of Statement of Financial Accounting Standards No. 86, related to both the operating system and games for the system. The remaining amount represented provisions for costs associated with discontinuance of this project, including the termination of contractual agreements relating to the development of the system and games, the write-off of certain fixed assets and various other cancellation/termination costs. HASBRO, INC. AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations, Continued (Thousands of dollars) Advertising expense in the current quarter increased both in amount and as a percentage of net revenues. For the third quarter and nine months of 1995, the amounts were $123,537 and $261,934, respectively, compared with $116,307 and $241,294 in the same periods of 1994. Expressed as a percentage of net revenues, the third quarter and nine months of 1995 was 15.0% and 14.3%, respectively, while 1994 was 14.6% and 14.0%. The increases during the current year reflect the higher proportion of the Company's revenues coming from the international marketing units which generally have higher advertising to sales ratios than do the domestic groups. Also contributing to the increase is the impact of expanded efforts to support products in certain of the Company's domestic operations. For the quarter, selling distribution and administration expense increased from the level of the comparable period of 1994. As in the prior quarter, this increase was the result of a combination of factors including the impact of the weakened U.S. dollar, new organizations, principally Larami, Waddington Games, Scandinavia and the K'NEX joint venture, higher distribution costs, a higher bad debt charge and a general increase in expense levels. The nine month increase is primarily attributable to the same factors. During the third quarter of 1994, the Company restructured its Domestic Toy Group, merging the five units into one organization, the Hasbro Toy Group, and also announced the consolidation of certain of its domestic manufacturing facilities. To provide for these and other immaterial restructuring costs, the Company recorded a $12,500 pretax charge during that quarter. In excess of 90% of this charge was related to severance and other costs associated with terminated employees. NONOPERATING (INCOME) EXPENSE - - ----------------------------- Interest expense for the third quarter increased approximately $2,100 from that of the same period of 1994, reflecting the use of funds to finance the Company's recent acquisitions and geographic expansion. The nine month increase can also be attributed to the same factors. Other income, net, decreased significantly for the quarter. During the third quarter of 1994, the Company disposed of certain investments, as described in Management's Discussion and Analysis of Financial Condition and Results of Operations in the Company's Annual Report on Form 10-K for the year ended December 25, 1994, realizing an aggregate pretax gain of approximately $23,000. Absent the impact of this gain, other income in the third quarter of 1995 increased approximately $2,800 reflecting both the impact of foreign currency transaction gains and increased earnings from available funds. These funds, principally in the international units, are invested on a short-term basis locally. (See Liquidity and Capital Resources later in this document for further discussion related to short-term investments.) HASBRO, INC. AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations, Continued (Thousands of dollars) OTHER INFORMATION - - ----------------- 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 October (October 29, 1995 and October 23, 1994), the Company's unshipped orders were approximately $550,000 and $490,000, respectively. The revenue pattern of the Company continues to shift with the second half of the year growing in significance to its overall business and, within that half, the fourth quarter becoming much more prominent. The Company expects that this trend will continue. During the fourth quarter of 1993, the Company recorded a restructuring charge of $15,500, primarily relating to the planned closure of the Company's manufacturing facility in The Netherlands. The Company had initially planned to cease production at this facility during the second quarter of 1994 but was unable to do so. The actions necessary to comply with local regulations relating to such a closure took longer than anticipated and the Company did not cease production at this facility until the first quarter of 1995. A majority of the liability established for this closure has now been satisfied and the Company has begun to experience the positive results from this action including both the elimination of costs associated with the previously existing excess production capacity and the transfer of production to a lower-cost manufacturing facility. The remaining amount provided in 1993 related to several items, none of which were significant, either in cost or anticipated benefits. All of the liabilities established for such items have been satisfied and the expected benefits are being obtained. As discussed above, during the third quarter of 1994 the Company recorded a restructuring charge of $12,500, primarily to cover costs associated with the restructuring of certain of its domestic operations. Included in such amount was a provision of approximately $4,400 for the costs associated with the termination of approximately 100 management employees. Substantially all of these employees have been terminated and a majority of the liability has been satisfied. Also part of this charge was a provision of approximately $3,400 for costs associated with the termination of approximately 485 domestic manufacturing employees. Substantially all of these employees have also been terminated and a majority of the liability has been satisfied. The Company believes that the reorganized units are operating more efficiently and thus the anticipated savings, although impractical to quantify, are being experienced. HASBRO, INC. AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations, Continued (Thousands of dollars) LIQUIDITY AND CAPITAL RESOURCES - - ------------------------------- Because of the seasonality of the Company's business coupled with certain customer incentives, mainly in the form of extended payment terms, the interim cash flow statements are 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. While a large portion of these receivables are of a quality which would allow their sale, alleviating the need for much of its interim financing, the Company believes it to be more cost effective to use its available funds and short-term borrowings to finance them. Late in its fourth quarter and through the first quarter of the subsequent year, as receivables are collected, cash flow from operations becomes positive and is used to repay a significant portion of the short-term borrowings. 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. Cash and cash equivalents at October 1, 1995, were approximately 10% less than their 1994 level. The Company attempts to keep its cash and cash equivalents at the lowest level possible whenever it has short-term borrowings, although at times the cash available and the borrowing requirement may be in different countries and currencies which may make it impractical to substitute one for the other. Receivables were approximately $10,000 greater than at the same time in 1994, although they would have been approximately $30,000 lower than those of a year ago if the impact of new operations and changed foreign currency translation rates were excluded. Inventories were approximately $57,000 higher than those of September 1994, reflecting the impact of new operations and changed foreign currency translation rates as well as the need to have product available for an anticipated increased fourth quarter demand. Other assets, as a group, increased by approximately $120,000 from their level a year ago. This increase results from the Company's investments and acquisitions during the most recent twelve months, partially offset by twelve additional months of amortization expense. HASBRO, INC. AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations, Continued (Thousands of dollars) Short-term borrowings at $566,820 were approximately $80,000 greater than last year. This increase is the net effect of the cash required for the Company's recent acquisitions, expanded business operations and the repurchase of shares of the Company's common stock, all partially offset by funds generated from operations within the most recent twelve months. In the aggregate, trade payables, accrued liabilities and accrued income taxes increased marginally, reflecting both the Company's increased activities and the impact of changed foreign currency translation rates. At October 1, 1995, the Company had committed unsecured lines of credit totaling approximately $590,000 available to it. It also had available uncommitted lines approximating $990,000. The Company believes that these amounts are adequate for its needs. Of these available lines, approximately $590,000 was in use at October 1, 1995. RECENT DEVELOPMENT - - ------------------ On October 25, 1995, the Company announced the formation of Hasbro Interactive Worldwide. This new unit will be an all-family classic game and edutainment software company with a presence in viable hardware platforms in the major worldwide markets. It plans to publish edutainment software in North America, Europe and throughout Asia under the Playskool(R) Software brand and all CD-ROM and on-line games under the Hasbro Interactive(TM) brand name. Two of its products, CD-ROM versions of Monopoly(R) and Trivial Pursuit(R) are currently on the market and it will incorporate additional Company brands and characters, along with original and licensed properties, in future products. PART II. Other Information Item 1. Legal Proceedings. None. Item 2. Changes in Securities. None Item 3. Defaults Upon Senior Securities. None. Item 4. Submission of Matters to a Vote of Security Holders. None Item 5. Other Information None. Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits. 11.1 Computation of Earnings Per Common Share - Nine Months Ended October 1, 1995 and September 25, 1994. 11.2 Computation of Earnings Per Common Share - Quarter Ended October 1, 1995 and September 25, 1994. 12 Computation of Ratio of Earnings to Fixed Charges - Nine Months and Quarter Ended October 1, 1995. 27 Article 5 Financial Data Schedule - Third Quarter 1995 (b) Reports on Form 8-K A Current Report on Form 8-K, dated October 23, 1995, was filed by the Company and included the Press Release dated October 23, 1995, announcing the Company's results for the current quarter. Consolidated Statements of Earnings (without notes) for the quarters and nine months ended October 1, 1995 and September 25, 1994 and Consolidated Condensed Balance Sheets (without notes) as of said dates were also filed. 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: November 15, 1995 By: /s/ John T. O'Neill --------------------- John T. O'Neill Executive Vice President and Chief Financial Officer (Duly Authorized Officer and Principal Financial Officer) HASBRO, INC. AND SUBSIDIARIES Quarterly Report on Form 10-Q For the Period Ended October 1, 1995 Exhibit Index Exhibit No. Exhibits - - ------- -------- 11.1 Computation of Earnings Per Common Share - Nine Months Ended October 1, 1995 and September 25, 1994 11.2 Computation of Earnings Per Common Share - Quarter Ended October 1, 1995 and September 25, 1994 12 Computation of Ratio of Earnings to Fixed Charges - Nine Months and Quarter Ended October 1, 1995 27 Article 5 Financial Data Schedule - Third Quarter 1995 EX-11 2 EXHIBIT 11-1 EXHIBIT 11.1 HASBRO, INC. AND SUBSIDIARIES Computation of Earnings Per Common Share Nine Months Ended October 1, 1995 and September 25, 1994 (Thousands of Dollars and Shares Except Per Share Data) 1995 1994 ----------------- ----------------- Fully Fully Primary Diluted Primary Diluted ------- ------- ------- ------- Net earnings before cumulative effect of change in accounting principles $ 70,362 70,362 103,502 103,502 Interest and amortization on 6% convertible notes, net of taxes - 4,338 - 4,323 ------- ------- ------- ------- Net earnings before cumulative effect of change in accounting principles applicable to common shares 70,362 74,700 103,502 107,825 Cumulative effect of change in accounting principles - - (4,282) (4,282) ------- ------- ------- ------- Net earnings applicable to common shares $ 70,362 74,700 99,220 103,543 ======= ======= ======= ======= Weighted average number of shares outstanding:(a) Outstanding at beginning of period 87,528 87,528 87,795 87,795 Actual exercise of stock options and warrants 169 169 221 221 Assumed exercise of stock options and warrants 600 704 1,720 1,720 Assumed conversion of 6% convertible notes - 5,114 - 5,114 Purchase of common stock (7) (7) (144) (144) ------- ------- ------- ------- Total 88,290 93,508 89,592 94,706 ======= ======= ======= ======= Per common share: Earnings before cumulative effect of change in accounting principles $ .80 .80 1.16 1.14 Cumulative effect of change in accounting principles - - (.05) (.05) ------- ------- ------- ------- Net earnings $ .80 .80 1.11 1.09 ======= ======= ======= ======= (a) Computation to arrive at the average number is a weighted average computation. EX-11 3 EXHIBIT 11-2 EXHIBIT 11.2 HASBRO, INC. AND SUBSIDIARIES Computation of Earnings Per Common Share Quarter Ended October 1, 1995 and September 25, 1994 (Thousands of Dollars and Shares Except Per Share Data) 1995 1994 ----------------- ----------------- Fully Fully Primary Diluted Primary Diluted ------- ------- ------- ------- Net earnings before cumulative effect of change in accounting principles $ 63,572 63,572 75,151 75,151 Interest and amortization on 6% convertible notes, net of taxes - 1,426 - 1,441 ------- ------- ------- ------- Net earnings before cumulative effect of change in accounting principles applicable to common shares 63,572 64,998 75,151 76,592 Cumulative effect of change in accounting principles - - - - ------- ------- ------- ------- Net earnings applicable to common shares $ 63,572 64,998 75,151 76,592 ======= ======= ======= ======= Weighted average number of shares outstanding:(a) Outstanding at beginning of period 87,751 87,751 87,948 87,948 Actual exercise of stock options and warrants 36 36 42 42 Assumed exercise of stock options and warrants 560 561 1,143 1,146 Assumed conversion of 6% convertible notes - 5,114 - 5,114 Purchase of common stock - - (292) (292) ------- ------- ------- ------- Total 88,347 93,462 88,841 93,958 ======= ======= ======= ======= Per common share: Earnings before cumulative effect of change in accounting principles $ .72 .70 .85 .82 Cumulative effect of change in accounting principles - - - - ------- ------- ------- ------- Net earnings $ .72 .70 .85 .82 ======= ======= ======= ======= (a) Computation to arrive at the average number is a weighted average computation. EX-12 4 EXHIBIT 12 EXHIBIT 12 HASBRO, INC. AND SUBSIDIARIES Computation of Ratio of Earnings to Fixed Charges Nine Months and Quarter Ended October 1, 1995 (Thousands of Dollars) Nine Months Quarter ------- ------- Earnings available for fixed charges: Net earnings $ 70,362 63,572 Add: Fixed charges 34,425 14,410 Income taxes 44,048 39,798 ------- ------- Total $148,835 117,780 ======= ======= Fixed Charges: Interest on long-term debt $ 6,975 2,292 Other interest charges 17,164 8,640 Amortization of debt expense 255 85 Rental expense representative of interest factor 10,031 3,393 ------- ------- Total $ 34,425 14,410 ======= ======= Ratio of earnings to fixed charges 4.32 8.17 ======= ======= EX-27 5 EXHIBIT 27
5 1000 9-MOS DEC-31-1995 OCT-01-1995 53,785 0 1,177,119 49,000 390,095 1,730,263 496,875 190,411 2,917,509 1,240,441 149,991 44,043 0 0 1,417,891 2,917,509 1,834,522 1,834,522 807,509 898,071 (11,528) 1,921 24,139 114,410 44,048 70,362 0 0 0 70,362 .80 .80
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