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Hasbro Reports Growth in Revenues, Operating Profit, Net Earnings and EBITDA

July 19, 2022 6:30 AM

Second Quarter 2022

PAWTUCKET, R.I.--(BUSINESS WIRE)-- Hasbro, Inc. (NASDAQ: HAS), a global play and entertainment company, today reported financial results for the second quarter 2022, including growth in revenues, operating profit, net earnings and EBITDA.

"The Hasbro team delivered strong second quarter results, driving mid-single digit revenue growth absent foreign exchange and 200 basis points of adjusted operating margin expansion," said Chris Cocks, Hasbro chief executive officer. "Wizards of the Coast turned in its biggest quarter ever, led by 15% growth in tabletop gaming and 11% growth in MAGIC: THE GATHERING across platforms. We also significantly enhanced our digital play and direct-to-fan capabilities with the acquisition of D&D Beyond which will serve as an important growth driver for Hasbro's industry leading fantasy gaming portfolio.

"We are making significant progress in our strategic plan review and are identifying and realizing cost savings across the business," continued Cocks. "Our teams are driving focus and scale in gaming, multi-generational brands and direct to consumer. Backed by Hasbro's unmatched portfolio of brands and brand-building capabilities, we have confidence in the strength of our initiatives for the second half and we are positioned to deliver profitable growth and long-term shareholder returns."

"In the first half of the year, we took significant steps to secure inventory to help ensure product availability for upcoming product launches, major entertainment releases and the holiday season," said Deborah Thomas, Hasbro chief financial officer. "Foreign exchange is impacting our top line revenue growth, but our teams are executing well to meet demand and drive profit. We successfully closed an acquisition supporting a key growing brand, returned cash to shareholders through dividends and share repurchases and anticipate higher operating cash generation in the second half of the year as our major new innovations and entertainment-driven initiatives come to market."

Second Quarter 2022 Financial Results

$ Millions, except earnings per share

Q2 2022

Q2 2021

% Change

Net Revenues1

$

1,339.2

$

1,322.2

1

%

Operating Profit

$

219.1

$

76.6

>100%

Adjusted Operating Profit2

$

241.0

$

211.6

14

%

Net Earnings

$

142.0

$

(22.9

)

>100%

Net Earnings per Diluted Share

$

1.02

$

(0.17

)

>100%

Adjusted Net Earnings2

$

160.6

$

145.4

10

%

Adjusted Net Earnings per Diluted Share2

$

1.15

$

1.05

10

%

EBITDA2

$

285.4

$

159.5

79

%

Adjusted EBITDA2

$

308.3

$

289.6

6

%

1Foreign exchange had a negative $32.7 million impact, or 3%, on second quarter 2022 revenue

2See the financial tables accompanying this press release for a reconciliation of GAAP and non-GAAP financial measures.

Second Quarter 2022 Major Segment Performance

Q2 2022 Major Segments
($ Millions)

Net Revenues

Operating Profit
(Loss)

Adjusted
Operating Profit1

Q2 2022

Q2 2021

% Change

Q2 2022

Q2 2021

Q2 2022

Q2 2021

Consumer Products

$

734.2

$

689.2

7

%

$

(6.5

)

$

17.8

$

3.1

$

17.8

Wizards of the Coast and Digital Gaming

$

419.8

$

406.3

3

%

$

225.6

$

192.9

$

225.6

$

192.9

Entertainment

$

185.2

$

226.7

-18

%

$

14.3

$

(113.7

)

$

23.0

$

9.9

Q2 2022 Major Segments
($ Millions)

EBITDA

Adjusted EBITDA1

Q2 2022

Q2 2021

Q2 2022

Q2 2021

Consumer Products

$

41.8

$

46.6

$

50.2

$

54.7

Wizards of the Coast and Digital Gaming

$

225.9

$

206.9

$

231.0

$

210.0

Entertainment

$

24.2

$

(87.2

)

$

30.4

$

19.5

1Reconciliations are included in the attached schedules under the heading "Reconciliation of Adjusted Operating Profit" and “Reconciliation of EBITDA and Adjusted EBITDA.”

Consumer Products segment revenues increased 7%. Revenue increased 9% excluding a negative $19.1 million impact of foreign exchange, $14.9 million of which was in Europe.

Wizards of the Coast and Digital Gaming segment revenues increased 3%. Revenues increased 5% excluding a negative $8.2 million impact of foreign exchange.

Entertainment segment revenue decreased 18%, or a decline of 16% excluding a negative $5.4 million impact of foreign exchange.

Second Quarter 2022 Brand Portfolio Performance

Brand Performance ($ Millions)

Net Revenues

Q2 2022

Q2 2021

% Change

Franchise Brands1

$

743.9

$

677.2

10

%

Partner Brands

$

219.4

$

212.0

3

%

Hasbro Gaming2

$

125.8

$

147.1

-14

%

Emerging Brands

$

92.0

$

89.7

3

%

TV/Film/Entertainment3

$

158.1

$

196.2

-19

%

1Effective in the first quarter of 2022, the Company moved PEPPA PIG into Franchise Brands from Emerging Brands. For comparability, second quarter 2021 net revenues have been restated to reflect the elevation of PEPPA PIG from Emerging Brands into Franchise Brands resulting in a change of $27.3 million.

2Hasbro's total gaming category, including all gaming revenue, most notably MAGIC: THE GATHERING and MONOPOLY, totaled $528.3 million for the second quarter 2022, up 2% versus the second quarter 2021.

3Second quarter 2021 TV/Film/Entertainment includes $33.4 million of music revenue which was sold at the beginning of the third quarter 2021.

Brand Blueprint Leadership
Hasbro is executing significant campaigns around the Brand Blueprint, investing in growth initiatives, refocusing on the highest potential brands and positioning the Company for continued profitable growth. The second half of 2022 features significant new launches for NERF with the NERF Pro GelFire and Elite2.0 Motoblitz and for Gaming, including Wordle: The Party Game and MAGIC: THE GATHERING releases Dominaria United, Unfinity and Universes Beyond: Warhammer 40,000; All new STARTING LINEUP on Hasbro Pulse and across the Fanatics network of online sites, including Fanatics.com and official league stores; Hasbro Selfie Series exclusively on the Hasbro Pulse Mobile App; Hasbro products for Marvel Studios' Black Panther: Wakanda Forever and the Star Wars™ series Obi-Wan Kenobi™ streaming on Disney+; Preschool expansion with PEPPA PIG, PJ MASKS and Marvel's Spidey and His Amazing Friends; as well as significant retail activations including two Amazon Prime Days.

For the second quarter 2022, revenues grew in Franchise Brands, Partner Brands and Emerging Brands. Hasbro Gaming and TV/Film/Entertainment revenues declined in the quarter. Top brand performances included MAGIC: THE GATHERING, PEPPA PIG, PLAY-DOH and MY LITTLE PONY. Hasbro products for the Marvel portfolio were strong performers.

Industry-leading Gaming Portfolio

End-to-End Brand Executions

Company Outlook

Hasbro has a plan for continued growth in 2022, including low-single digit revenue growth on a constant currency basis; mid-single digit growth in operating profit to achieve adjusted operating profit margin of 16%; and operating cash flow at the low end of the range of $700 to $800 million.

Dividend and Share Repurchase Plan

During the second quarter, Hasbro paid $97.4 million in cash dividends to shareholders. The next dividend of $0.70 per common share was previously declared and will be payable on August 15, 2022 to shareholders of record at the close of business on August 1, 2022.

Given the progress made toward reducing debt, the Company repurchased 1.4 million shares of Hasbro common stock at a total price of $124.0 million during the quarter. $242.6 million remains available in the Company's share repurchase program. The Company remains on track to achieve its target gross debt to adjusted EBITDA of 2.0 to 2.5X in the second half of 2023 or sooner, depending on business performance and other factors.

Conference Call Webcast

Hasbro will webcast its second quarter 2022 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 (NASDAQ: HAS) is a global play and entertainment company committed to making the world a better place for all children, fans and families. Hasbro delivers immersive brand experiences for global audiences through consumer products, including toys and games; entertainment through eOne, its independent studio; and gaming, led by the team at Wizards of the Coast, an award-winning developer of tabletop and digital games best known for fantasy franchises MAGIC: THE GATHERING and DUNGEONS & DRAGONS.

The Company’s unparalleled portfolio of approximately 1,500 brands includes MAGIC: THE GATHERING, NERF, MY LITTLE PONY, TRANSFORMERS, PLAY-DOH, MONOPOLY, BABY ALIVE, DUNGEONS & DRAGONS, POWER RANGERS, PEPPA PIG and PJ MASKS, as well as premier partner brands. For the past decade, Hasbro has been consistently recognized for its corporate citizenship, including being named one of the 100 Best Corporate Citizens by 3BL Media and one of the World’s Most Ethical Companies by Ethisphere Institute. Important business and brand updates are routinely shared on our Investor Relations website, Newsroom and social channels (@Hasbro on Twitter, Instagram, Facebook and LinkedIn.)

© 2022 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; the ability to achieve our financial and business goals and objectives; anticipated financial performance or business prospects in our business and our segments in future periods; expectations relating to products, gaming and entertainment to be developed and delivered throughout the year; expectations relating to inventory; our debt to EBITDA targets; expected cash generation; and our liquidity. 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:

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, as well as 2021 losses on the music sale and charges from UK tax reform. 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. Segment EBITDA represents segment operating profit (loss) plus other income or expense, less depreciation and amortization of intangibles. Adjusted EBITDA also excludes 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

(Unaudited)

(Millions of Dollars)

June 26, 2022

June 27, 2021

ASSETS

Cash and Cash Equivalents

$

628.2

$

1,228.2

Accounts Receivable, Net

870.5

865.9

Inventories

867.5

499.6

Prepaid Expenses and Other Current Assets

719.2

543.2

Assets Held for Sale

479.5

Total Current Assets

3,085.4

3,616.4

Property, Plant and Equipment, Net

409.9

466.2

Goodwill

3,483.2

3,420.8

Other Intangible Assets, Net

1,156.9

1,248.3

Other Assets

1,367.6

1,350.5

Total Assets

$

9,503.0

$

10,102.2

LIABILITIES, NONCONTROLLING INTERESTS AND SHAREHOLDERS' EQUITY

Short-Term Borrowings

$

98.0

$

0.8

Current Portion of Long-Term Debt

137.0

189.6

Accounts Payable and Accrued Liabilities

1,923.2

1,778.9

Liabilities Held for Sale

76.3

Total Current Liabilities

2,158.2

2,045.6

Long-Term Debt

3,739.0

4,388.7

Other Liabilities

570.0

753.0

Total Liabilities

6,467.2

7,187.3

Redeemable Noncontrolling Interests

23.0

24.5

Total Shareholders' Equity

3,012.8

2,890.4

Total Liabilities, Noncontrolling Interests and Shareholders' Equity

$

9,503.0

$

10,102.2

HASBRO, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(Millions of Dollars and Shares Except Per Share Data)

Quarter Ended

Six Months Ended

June 26, 2022

% Net
Revenues

June 27, 2021

% Net
Revenues

June 26, 2022

% Net
Revenues

June 27, 2021

% Net
Revenues

Net Revenues

$

1,339.2

100.0

%

$

1,322.2

100.0

%

$

2,502.3

100.0

%

$

2,437.0

100.0

%

Costs and Expenses:

Cost of Sales

411.5

30.7

%

345.0

26.1

%

744.6

29.8

%

634.9

26.1

%

Program Cost Amortization

80.7

6.0

%

110.7

8.4

%

219.2

8.8

%

208.2

8.5

%

Royalties

110.1

8.2

%

111.5

8.4

%

200.2

8.0

%

220.4

9.0

%

Product Development

79.2

5.9

%

87.2

6.6

%

148.8

5.9

%

149.0

6.1

%

Advertising

84.2

6.3

%

105.4

8.0

%

161.8

6.5

%

193.3

7.9

%

Amortization of Intangibles

27.2

2.0

%

29.7

2.2

%

54.3

2.2

%

62.6

2.6

%

Selling, Distribution and Administration

327.2

24.4

%

354.3

26.8

%

634.3

25.3

%

642.9

26.4

%

Loss on Assets Held for Sale

0.0

%

101.8

7.7

%

0.0

%

101.8

4.2

%

Operating Profit

219.1

16.4

%

76.6

5.8

%

339.1

13.6

%

223.9

9.2

%

Interest Expense

41.7

3.1

%

46.1

3.5

%

83.3

3.3

%

94.0

3.9

%

Other Expense (Income), Net

(2.5

)

-0.2

%

(10.6

)

-0.8

%

(4.3

)

-0.2

%

(40.7

)

-1.7

%

Earnings before Income Taxes

179.9

13.4

%

41.1

3.1

%

260.1

10.4

%

170.6

7.0

%

Income Tax Expense

39.4

2.9

%

63.0

4.8

%

56.7

2.3

%

75.0

3.1

%

Net Earnings

140.5

10.5

%

(21.9

)

-1.7

%

203.4

8.1

%

95.6

3.9

%

Net Earnings Attributable to Noncontrolling Interests

(1.5

)

-0.1

%

1.0

0.1

%

0.2

0.0

%

2.3

0.1

%

Net Earnings Attributable to Hasbro, Inc.

$

142.0

10.6

%

$

(22.9

)

-1.7

%

$

203.2

8.1

%

$

93.3

3.8

%

Per Common Share

Net Earnings

Basic

$

1.02

$

(0.17

)

$

1.46

$

0.68

Diluted

$

1.02

$

(0.17

)

$

1.46

$

0.68

Cash Dividends Declared

$

0.70

$

0.68

$

1.40

$

1.36

Weighted Average Number of Shares

Basic

139.0

137.8

139.2

137.8

Diluted

139.2

137.8

139.4

138.2

HASBRO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Millions of Dollars)

Six Months Ended

June 26, 2022

June 27, 2021

Cash Flows from Operating Activities:

Net Earnings

$

203.4

$

95.6

Other Non-Cash Adjustments

337.3

521.1

Changes in Operating Assets and Liabilities

(392.9

)

(39.6

)

Net Cash Provided by Operating Activities

147.8

577.1

Cash Flows from Investing Activities:

Additions to Property, Plant and Equipment

(75.8

)

(63.1

)

Investments and Acquisitions

(146.3

)

Other

9.5

(3.2

)

Net Cash Utilized by Investing Activities

(212.6

)

(66.3

)

Cash Flows from Financing Activities:

Proceeds from Long-Term Debt

2.1

114.7

Repayments of Long-Term Debt

(152.5

)

(635.0

)

Net Proceeds from Short-Term Borrowings

97.2

(6.3

)

Purchases of Common Stock

(124.0

)

Stock-Based Compensation Transactions

74.2

9.4

Dividends Paid

(191.9

)

(187.5

)

Payments Related to Tax Withholding for Share-Based Compensation

(19.6

)

(9.5

)

Other

(5.4

)

(4.2

)

Net Cash Utilized by Financing Activities

(319.9

)

(718.4

)

Effect of Exchange Rate Changes on Cash

(6.3

)

4.3

Net Decrease in Cash Balances Classified as Held for Sale

(18.2

)

Cash and Cash Equivalents at Beginning of Year

1,019.2

1,449.7

Cash and Cash Equivalents at End of Period

$

628.2

$

1,228.2

HASBRO, INC.

SUPPLEMENTAL FINANCIAL DATA

SEGMENT RESULTS - AS REPORTED AND AS ADJUSTED

(Unaudited)

(Millions of Dollars)

Operating Results

Quarter Ended June 26, 2022

Quarter Ended June 27, 2021

As Reported

Non-GAAP
Adjustments

Adjusted

As Reported

Non-GAAP
Adjustments

Adjusted

%
Change

Total Company Results

External Net Revenues (1)

$

1,339.2

$

$

1,339.2

$

1,322.2

$

$

1,322.2

1

%

Operating Profit

219.1

21.9

241.0

76.6

135.0

211.6

14

%

Operating Margin

16.4

%

1.6

%

18.0

%

5.8

%

10.2

%

16.0

%

EBITDA

285.4

22.9

308.3

159.5

130.1

289.6

6

%

Segment Results

Consumer Products:

External Net Revenues (2)

$

734.2

$

$

734.2

$

689.2

$

$

689.2

7

%

Operating Profit

(6.5

)

9.6

3.1

17.8

17.8

-83

%

Operating Margin

-0.9

%

1.3

%

0.4

%

2.6

%

2.6

%

EBITDA

41.8

8.4

50.2

46.6

8.1

54.7

-8

%

Wizards of the Coast and Digital Gaming:

External Net Revenues (3)

$

419.8

$

$

419.8

$

406.3

$

$

406.3

3

%

Operating Profit

225.6

225.6

192.9

192.9

17

%

Operating Margin

53.7

%

53.7

%

47.5

%

47.5

%

EBITDA

225.9

5.1

231.0

206.9

3.1

210.0

10

%

Entertainment:

External Net Revenues (4)

$

185.2

$

$

185.2

$

226.7

$

$

226.7

-18

%

Operating Profit

14.3

8.7

23.0

(113.7

)

123.6

9.9

>100%

Operating Margin

7.7

%

4.7

%

12.4

%

-50.2

%

54.5

%

4.4

%

EBITDA

24.2

6.2

30.4

(87.2

)

106.7

19.5

56

%

Corporate and Other:

Operating (Loss) Profit

$

(14.3

)

$

3.6

$

(10.7

)

$

(20.4

)

$

11.4

$

(9.0

)

-19

%

EBITDA

(6.5

)

3.2

(3.3

)

(6.8

)

12.2

5.4

>-100%

Quarter Ended

June 26, 2022

June 27, 2021

% Change

(1) Net Revenues by Brand Portfolio

Franchise Brands (i)

$

743.9

$

677.2

10

%

Partner Brands

219.4

212.0

3

%

Hasbro Gaming (ii)

125.8

147.1

-14

%

Emerging Brands (i)

92.0

89.7

3

%

TV/Film/Entertainment

158.1

196.2

-19

%

Total

$

1,339.2

$

1,322.2

(i) Effective in the first quarter of 2022, the Company moved PEPPA PIG into Franchise Brands from Emerging Brands. For comparability, the quarter ended June 27, 2021 net revenues have been restated to reflect the elevation of PEPPA PIG from Emerging Brands into Franchise Brands resulting in a change of $27.3.

(ii) Hasbro's total gaming category, including all gaming revenue, most notably MAGIC: THE GATHERING and MONOPOLY, totaled $528.3 for the quarter ended June 26, 2022, up 1.7% from revenues of $519.4 for the quarter ended June 27, 2021.

Quarter Ended

June 26, 2022

June 27, 2021

% Change

(2) Consumer Products Segment Net Revenues by Major Geographic Region

North America

$

433.3

$

391.4

11

%

Europe

162.1

176.5

-8

%

Asia Pacific

66.6

68.4

-3

%

Latin America

72.2

52.9

36

%

Total

$

734.2

$

689.2

Quarter Ended

June 26, 2022

June 27, 2021

(3) Wizards of the Coast and Digital Gaming Net Revenues by Category

Tabletop Gaming

$

361.8

$

315.4

15

%

Digital and Licensed Gaming

58.0

90.9

-36

%

Total

$

419.8

$

406.3

Quarter Ended

June 26, 2022

June 27, 2021

% Change

(4) Entertainment Segment Net Revenues by Category

Film and TV

$

148.2

$

164.3

-10

%

Family Brands

22.8

26.1

-13

%

Music and Other

14.2

36.3

-61

%

Total

$

185.2

$

226.7

Operating Results

Six Months Ended June 26, 2022

Six Months Ended June 27, 2021

As Reported

Non-GAAP
Adjustments

Adjusted

As Reported

Non-GAAP
Adjustments

Adjusted

%
Change

Total Company Results

External Net Revenues (5)

$

2,502.3

$

$

2,502.3

$

2,437.0

$

$

2,437.0

3

%

Operating Profit

339.1

43.7

382.8

223.9

161.8

385.7

-1

%

Operating Margin

13.6

%

1.7

%

15.3

%

9.2

%

6.6

%

15.8

%

EBITDA

459.4

41.0

500.4

394.8

146.8

541.6

-8

%

Segment Results

Consumer Products:

External Net Revenues (6)

$

1,407.0

$

$

1,407.0

$

1,343.1

$

$

1,343.1

5

%

Operating Profit

2.1

19.9

22.0

50.1

50.1

-56

%

Operating Margin

0.1

%

1.4

%

1.6

%

3.7

%

3.7

%

EBITDA

83.1

15.9

99.0

106.0

14.6

120.6

-18

%

Wizards of the Coast and Digital Gaming:

External Net Revenues (7)

$

682.6

$

$

682.6

$

648.5

$

$

648.5

5

%

Operating Profit

332.0

332.0

302.9

302.9

10

%

Operating Margin

48.6

%

48.6

%

46.7

%

46.7

%

EBITDA

333.5

9.7

343.2

319.2

5.7

324.9

6

%

Entertainment:

External Net Revenues (8)

$

412.7

$

$

412.7

$

445.4

$

$

445.4

-7

%

Operating (Loss) Profit

26.5

17.5

44.0

(96.7

)

148.5

51.8

-15

%

Operating Margin

6.4

%

4.2

%

10.7

%

-21.7

%

33.3

%

11.6

%

EBITDA

50.1

11.7

61.8

(19.0

)

110.8

91.8

-33

%

Corporate and Other:

Operating (Loss) Profit

$

(21.5

)

$

6.3

$

(15.2

)

$

(32.4

)

$

13.3

$

(19.1

)

20

%

EBITDA

(7.3

)

3.7

(3.6

)

(11.4

)

15.7

4.3

>-100%

Six Months Ended

June 26, 2022

June 27, 2021

% Change

(5) Net Revenues by Brand Portfolio

Franchise Brands (i)

$

1,287.0

$

1,200.3

7

%

Partner Brands

425.9

400.0

6

%

Hasbro Gaming (ii)

269.4

283.4

-5

%

Emerging Brands (i)

168.4

162.8

3

%

TV/Film/Entertainment

351.6

390.5

-10

%

Total

$

2,502.3

$

2,437.0

(i) Effective in the first quarter of 2022, the Company moved PEPPA PIG into Franchise Brands from Emerging Brands. For comparability, the six months ended June 27, 2021 net revenues have been restated to reflect the elevation of PEPPA PIG from Emerging Brands into Franchise Brands resulting in a change of $58.9.

(ii) Hasbro's total gaming category, including all gaming revenue, most notably MAGIC: THE GATHERING and MONOPOLY, totaled $907.1 for the year ended June 26, 2022, up 2.5% from revenues of $884.7 for the year ended June 27, 2021.

Six Months Ended

June 26, 2022

June 27, 2021

% Change

(6) Consumer Products Segment Net Revenues by Major Geographic Region

North America

$

838.5

$

754.1

11

%

Europe

338.8

365.0

-7

%

Asia Pacific

118.8

133.2

-11

%

Latin America

110.9

90.8

22

%

Total

$

1,407.0

$

1,343.1

Six Months Ended

June 26, 2022

June 27, 2021

(7) Wizards of the Coast and Digital Gaming Net Revenues by Category

Tabletop Gaming

$

554.0

$

490.7

13

%

Digital and Licensed Gaming

128.6

157.8

-19

%

Total

$

682.6

$

648.5

Six Months Ended

June 26, 2022

June 27, 2021

% Change

(8) Entertainment Segment Net Revenues by Category

Film and TV

$

338.4

$

330.7

2

%

Family Brands

46.0

44.9

2

%

Music and Other

28.3

69.8

-59

%

Total

$

412.7

$

445.4

HASBRO, INC.

SUPPLEMENTAL FINANCIAL DATA

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(Unaudited)

(Millions of Dollars)

Reconciliation of Adjusted Operating Profit

Quarter Ended

Six Months Ended

June 26, 2022

June 27, 2021

June 26, 2022

June 27, 2021

Operating Profit (Loss)

$

219.1

$

76.6

$

339.1

$

223.9

Consumer Products

(6.5

)

17.8

2.1

50.1

Wizards of the Coast and Digital Gaming

225.6

192.9

332.0

302.9

Entertainment

14.3

(113.7

)

26.5

(96.7

)

Corporate and Other

(14.3

)

(20.4

)

(21.5

)

(32.4

)

Non-GAAP Adjustments (1)

$

21.9

$

135.0

$

43.7

$

161.8

Consumer Products (ii)

9.6

19.9

Entertainment (ii)

8.7

123.6

17.5

148.5

Corporate and Other

3.6

11.4

6.3

13.3

Adjusted Operating Profit (Loss)

$

241.0

$

211.6

$

382.8

$

385.7

Consumer Products

3.1

17.8

22.0

50.1

Wizards of the Coast and Digital Gaming

225.6

192.9

332.0

302.9

Entertainment

23.0

9.9

44.0

51.8

Corporate and Other

(10.7

)

(9.0

)

(15.2

)

(19.1

)

(1) Non-GAAP Adjustments include the following:

Acquisition-related costs (i)

$

3.6

$

1.9

$

6.3

$

3.8

Acquired intangible amortization (ii)

18.3

21.8

37.4

46.7

Loss on assets held for sale and related costs (iii)

111.3

111.3

Total

$

21.9

$

135.0

$

43.7

$

161.8

(i) In association with the Company's acquisition of eOne, the Company incurred stock compensation expenses of $3.6 ($3.2 after-tax) and $6.3 ($5.6 after-tax) in the quarter and year ended June 26, 2022, respectively, and $1.9 ($1.6 after-tax) and $3.8 ($3.3 after-tax) in the quarter and year ended June 27, 2021, respectively. The expense is included within Selling, Distribution and Administration.

(ii) Represents intangible amortization costs related to the intangible assets acquired in the eOne acquisition. Beginning in 2022, 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. In 2021, the intangible amortization costs were recorded within the Entertainment segment.

(iii) On April 25, 2021, the Company entered into a definitive agreement to sell the eOne music business for an aggregate sales price of $385.0, subject to certain closing adjustments related to working capital and net debt. As such, the assets and liabilities of eOne music were revalued in the second quarter of 2021 and disclosed separately on the balance sheet. The charge of $111.3 is comprised of a goodwill impairment loss of $101.8 (included within Loss on Assets Held for Sale) and transaction costs of $9.5 (included within Selling, Distribution and Administration). The after-tax combined charge is $109.1.

HASBRO, INC.

SUPPLEMENTAL FINANCIAL DATA

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(Unaudited)

(Millions of Dollars)

Reconciliation of EBITDA and Adjusted EBITDA

Quarter Ended

Six Months Ended

June 26, 2022

June 27, 2021

June 26, 2022

June 27, 2021

Net Earnings Attributable to Hasbro, Inc.

$

142.0

$

(22.9

)

$

203.2

$

93.3

Interest Expense

41.7

46.1

83.3

94.0

Income Tax Expense

39.4

63.0

56.7

75.0

Net Earnings Attributable to Noncontrolling Interests

(1.5

)

1.0

0.2

2.3

Depreciation

36.6

42.6

61.7

67.6

Amortization of Intangibles

27.2

29.7

54.3

62.6

EBITDA

$

285.4

$

159.5

$

459.4

$

394.8

Non-GAAP Adjustments and Stock Compensation (1)

22.9

130.1

41.0

146.8

Adjusted EBITDA

$

308.3

$

289.6

$

500.4

$

541.6

(1) Non-GAAP Adjustments and Stock Compensation are comprised of the following:

Stock compensation

$

22.9

$

18.8

$

41.0

$

35.5

Loss on assets held for sale and related costs

111.3

111.3

Total

$

22.9

$

130.1

$

41.0

$

146.8

Adjusted EBITDA by Segment:

Consumer Products

$

50.2

$

54.7

$

99.0

$

120.6

Wizards of the Coast and Digital Gaming

231.0

210.0

343.2

324.9

Entertainment

30.4

19.5

61.8

91.8

Corporate and Other

(3.3

)

5.4

(3.6

)

4.3

Total Adjusted EBITDA

$

308.3

$

289.6

$

500.4

$

541.6

Consumer Products:

Operating Profit

$

(6.5

)

$

17.8

$

2.1

$

50.1

Other (Expense) Income

5.6

1.5

6.4

7.7

Depreciation

25.5

19.5

39.4

32.6

Amortization of Intangibles

17.2

7.8

35.2

15.6

EBITDA

$

41.8

$

46.6

$

83.1

$

106.0

Non-GAAP Adjustments and Stock Compensation

8.4

8.1

15.9

14.6

Adjusted EBITDA

$

50.2

$

54.7

$

99.0

$

120.6

Wizards of the Coast and Digital Gaming:

Operating Profit

$

225.6

$

192.9

$

332.0

$

302.9

Other (Expense) Income

(2.6

)

(0.6

)

(3.3

)

(0.9

)

Depreciation

1.9

14.6

3.8

17.2

Amortization of Intangibles

1.0

1.0

EBITDA

$

225.9

$

206.9

$

333.5

$

319.2

Non-GAAP Adjustments and Stock Compensation

5.1

3.1

9.7

5.7

Adjusted EBITDA

$

231.0

$

210.0

$

343.2

$

324.9

Entertainment:

Operating Profit

$

14.3

$

(113.7

)

$

26.5

$

(96.7

)

Other (Expense) Income

(1.3

)

2.3

0.6

25.6

Depreciation

2.3

2.2

5.1

5.0

Amortization of Intangibles

8.9

22.0

17.9

47.1

EBITDA

$

24.2

$

(87.2

)

$

50.1

$

(19.0

)

Non-GAAP Adjustments and Stock Compensation

6.2

106.7

11.7

110.8

Adjusted EBITDA

$

30.4

$

19.5

$

61.8

$

91.8

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

Quarter Ended

(all adjustments reported after-tax)

June 26, 2022

Diluted Per
Share Amount

June 27, 2021

Diluted Per
Share Amount

Net Earnings Attributable to Hasbro, Inc.

$

142.0

$

1.02

$

(22.9

)

$

(0.17

)

Acquisition and Related Costs

3.3

0.02

1.6

0.01

Acquired Intangible Amortization

15.3

0.11

18.2

0.13

Loss on assets held for sale and related costs

109.1

0.79

UK Tax Reform (1)

39.4

0.29

Net Earnings Attributable to Hasbro, Inc., as Adjusted

$

160.6

$

1.15

$

145.4

$

1.05

Six Months Ended

(all adjustments reported after-tax)

June 26, 2022

Diluted Per
Share Amount

June 27, 2021

Diluted Per
Share Amount

Net Earnings Attributable to Hasbro, Inc.

$

203.2

$

1.46

$

93.3

$

0.68

Acquisition and Related Costs

5.6

0.04

3.3

0.02

Acquired Intangible Amortization

31.2

0.22

38.7

0.28

Loss on assets held for sale and related costs

109.1

0.79

UK Tax Reform (1)

39.4

0.29

Net Earnings Attributable to Hasbro, Inc., as Adjusted

$

240.0

$

1.72

$

283.8

$

2.05

(1) In the second quarter of 2021, the Company recorded income tax expense of $39.4 as a result of the revaluation of the Company's UK deferred taxes in accordance with Finance Act 2021 enacted by the United Kingdom on June 10, 2021. Effective April 1, 2023, the new law increases the corporate income tax rate to 25% from 19%.

Investors: Debbie Hancock | Hasbro, Inc. | (401) 727-5401 | [email protected]

Media: Carrie Ratner | Hasbro, Inc. | (401) 556-2720 | [email protected]

Source: Hasbro, Inc.

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