What a nice day we had on October 9th, 1998. It was 70 degress and sunny, and it also happened to be the day of our October ATARI Club meeting. Well, I guess a lot of our members took advantage of the great weather and decided to forego the meeting. We had eight members present for the meeting and I was a little disappointed since this was the meeting that we were going to ask for nominations for our November elections. I guess I must have scared a lot of you away. The only nomination we got was for the Secretary's position and that was from Mike Current. He will be challenging Brian Little for that position. The other positions are either open or unopposed. Please come to the meeting in November so that we can fulfill our duty to elect our officers. I think we would all want to have our paying members present to vote.
With that said, I am very pleased to announce that we had three membership renewals in October and we also sold five DOM's. Our receipts totaled $80.00. The expenses for the month were for the Newsletter and the room rental. The amounts are $9.20 and $195.00 respectively, and this means that our Treasury dropped about $125.00 for the month to $826.03. This is still a very encouraging balance in that we have now paid almost $600.00 in room rental fees this year. With the next big expense not coming now until January 1999, we have a great opportunity to increase our treasury in the upcoming two months.
One of the ways we are going to do this is with another Club Auction. This will take place next month at our November meeting, right after the meeting and elections. We had an old ST member drop by at the end of the October meeting and he may be bringing some 8-Bit stuff for the Auction. I already have a couple of other donations for the Auction and I know we will have much more. You don't want to miss this because you never know if that one thing that you could never find before just might show up at this Auction. So there.
Also, don't forget that we need to make plans for the December Xmas party. A pot luck will probably rule but the Club is in a Financial position to contribute something to the party if the members so decide. If you want your vote counted and your decisions counted you have to show up for the meeting next month. See you all there.
PAWTUCKET, R.I.--(BUSINESS WIRE)--Oct. 15, 1998--Hasbro, Inc. (ASE:HAS) today reported third quarter results consistent with its September 28, 1998 announcement regarding the impact of ongoing and recently accelerated changes in inventory flow policies at Toys `R Us. ``We are very pleased to report record third quarter revenues despite lower sales to this key customer,'' said Alan G. Hassenfeld, Chairman and Chief Executive Officer.
Reported net revenues reached $945.5 million, or approximately 3% above the $915.5 million reported last year, in part due to the acquisition of Tiger Electronics in April and increased sales at Hasbro Interactive. As previously announced, the Company took a one-time pre-tax charge to write-off acquired in-process research and development of MicroProse, Inc., which was acquired for approximately $70 million in September 1998. Prior to this $20.0 million pre-tax charge ($13.6 million after tax), net earnings and diluted earnings per share were $74.9 million and $0.55, respectively, compared to $77.4 million and $0.57, respectively, a year ago. Including the charge, net earnings were $61.3 million and diluted earnings per share were $0.45.
``In addition to revenue growth this quarter, we are also very pleased about two acquisitions that will fuel future growth in revenue and earnings well into the next century. The acquisition of MicroProse significantly enhances Hasbro Interactive in three key strategic growth areas going forward: brands and content, R&D assets, and European distribution,'' Hassenfeld added. ``In addition, the pending acquisition of Galoob Toys, with its highly successful MICRO MACHINES and STAR WARS small-scale figures and vehicles, will be a tremendous addition to our rich brand portfolio,'' Hassenfeld continued.
For the first nine months of 1998, revenues were $2.0 billion compared to $2.1 billion in 1997. Excluding the one-time charge, net earnings and diluted earnings per share were $88.2 million and $0.64, respectively, compared to $116.1 million and $0.87 a year ago. Including the charge, net earnings were $74.6 million and diluted earnings per share were $0.54.
During the third quarter, the Company invested $65 million to repurchase 1.8 million shares. Under the $500 million share repurchase authorization announced on December 9, 1997, the Company has invested approximately $185 million to repurchase 5.1 million shares.
``Looking ahead to the fourth quarter, we continue building sales and earnings momentum in several product lines,'' Hassenfeld noted. ``These include Tiger Electronics' FURBY - an electronic interactive pet being introduced nationwide to great acclaim; TELETUBBIES; new releases from Hasbro Interactive and MicroProse - including our CD-ROM version of the ATARI game classic, CENTIPEDE, and our first Nintendo 64 game title, GLOVER; as well as a range of POKEMON offerings. Building excitement for 1999, we are shipping the first new product from STAR WARS Episode One - a MACE WINDU exclusive mail-in figure offer and a STAP vehicle with BATTLE DROID figure. In 1999, we look forward to a tremendous product line-up, led by STAR WARS, with Hasbro and Galoob teaming up with the Power of the Force. We are also on track to realize planned incremental cost savings from the Global Integration and Profit Enhancement Program next year, enabling us to continue to add value for our shareholders,'' Hassenfeld concluded.
Certain statements contained in this release contain ``forward-looking statements'' within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are inherently subject to known and unknown risks and uncertainties. The Company's actual actions or results may differ materially from those expected or anticipated in the forward-looking statements. Specific factors that might cause such a difference include, but are not limited to, the timely manufacture and shipping by the Company of new and continuing products and their acceptance by customers and consumers in a competitive product environment; economic conditions and currency fluctuations in the various markets in which the Company operates throughout the world; the inventory policies of retailers, including the continuing trend of increased concentration of the Company's revenues in the second half and fourth quarter of the year, together with increased reliance by retailers on quick response inventory management techniques, which increases the risk of underproduction of popular items, overproduction of less popular items and failure to achieve tight and compressed shipping schedules; the impact of competition on revenues, margins and other aspects of the Company's business; third party actions or approvals that could delay, modify or increase the cost of implementation of, the Company's Global Integration and Profit Enhancement program; and the risk that anticipated benefits of acquisitions may not occur or be delayed or reduced in their realization. The Company undertakes no obligation to make any revisions to the forward-looking statements contained in this release or to update them to reflect events or circumstances occurring after the date of this release.
-0-
HASBRO, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
Quarter Ended Nine Months Ended
Sept. 27, Sept. 28, Sept. 27, Sept. 28,
(Thousands of Dollars and
Shares Except Per Share Data) 1998 1997 1998 1997
Net Revenues $945,498 $915,533 $2,000,375 $2,055,203
Cost of Sales 402,369 403,027 853,776 891,315
Gross Profit 543,129 512,506 1,146,599 1,163,888
Amortization 19,275 11,741 49,298 32,967
Royalties, Research and
Development 113,755 102,583 263,220 254,339
Advertising 128,053 116,208 257,023 254,418
Selling, Distribution and
Administration 162,705 156,215 439,433 433,285
Acquired Research and
Development 20,000 -- 20,000 --
Operating Profit 99,341 125,759 117,625 188,879
Interest Expense 11,308 9,197 20,036 19,120
Other (Income) Expense, Net (1,568) 1,121 (12,082) (6,112)
Earnings Before Income Taxes 89,601 115,441 109,671 175,871
Income Taxes 28,271 38,041 35,095 59,796
Net Earnings $61,330 $77,400 $74,576 $116,075
Per Common Share
Net Earnings
Basic $.47 $.61 $.56 $.91
Diluted $.45 $.57 $.54 $.87
Cash Dividends Declared $.08 $.08 $.24 $.24
Weighted Average Number of
Shares
Basic 131,368 126,922 132,346 127,789
Diluted 136,375 137,103 137,604 137,806
HASBRO, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Thousands of Dollars) Sept. 27, Sept. 28,
1998 1997
ASSETS
Cash and Temporary Investments $ 176,486 $ 80,030
Accounts Receivable, Net 1,030,751 1,153,910
Inventories 383,809 347,779
Other 336,261 175,534
Total Current Assets 1,927,307 1,757,253
Property, Plant and Equipment, Net 287,872 279,916
Other Assets 1,461,125 986,782
Total Assets 3,676,304 $3,023,951
LIABILITIES AND SHAREHOLDERS' EQUITY
Short-term Borrowings 507,596 $ 462,894
Payables and Accrued Liabilities 1,029,906 708,278
Total Current Liabilities 1,537,502 1,171,172
Long-term Debt 300,000 148,751
Deferred Liabilities 80,010 68,924
Total Liabilities 1,917,512 1,388,847
Total Shareholders' Equity 1,758,792 1,635,104
Total Liabilities and Shareholders' Equity 3,676,304 $3,023,951
----------------
Contact:
Hasbro, Inc.
John T. O'Neill, 401-727-5600
Renita E. O'Connell, 401-727-5401
Subj: Atari auction items
Date: 98-10-28 20:02:41 EST
1200XL Computer
800XL Computer
65XE Computer
520ST Computer
Indus 5 1/4 Drive for 8-bit
SF314 Double Sided Drive for the ST
PR connection
8-bit Diagnostic Cartridge
ST Diagnostic Cartridge
SC1224 Color Monitor for the ST
SM124 Monitor for the ST
Okimate 10 Printer
Okimate 20 Printer
Light Pen for the 8-bit
Much, Much, More
Published by the Saint Paul Atari Computer Enthusiasts (SPACE), an independent organization with no business affiliation with ATARI Corporation. Permission is granted to any similar organization with which SPACE exchanges newsletters to reprint material from this newsletter. We do however ask that credit be given to the authors and to SPACE. Opinions expressed are those of the authors and do not necessarily reflect the views of SPACE, the club officers, club members or ATARI Corporation.