Hasbro sees record revenue and earnings, returns cash to shareholders

By Devika Patel

Knoxville, Tenn., Oct. 17 – Hasbro, Inc. had a strong third quarter, reporting record-high earnings and revenue growth, which has bolstered the company’s balance sheet. The company said it is using the extra cash to return value to its shareholders through stock repurchases and dividend payments.

“The Hasbro team delivered a tremendous third quarter – the highest revenue and earnings quarter in Hasbro’s history,” chairman, president and chief executive officer Brian Goldner said at the company’s earnings conference on Monday.

“Revenues grew 14%, increasing across all major operating segments and geographies.

“Operating profit increased faster than revenues, up 19%, and we continued investing to profitably grow for years to come.

“Our financial position is strong, and we returned $112 million in cash to shareholders during the quarter,” Goldner said.

Goldner’s remarks were echoed by chief financial officer Deb Thomas, who noted that the company is targeting up to $150 million in share repurchases this year.

“Our balance sheet remains strong,” Thomas said during the call.

“Strong cash generation enabled us not only to invest in growing Hasbro but also to return cash to our shareholders. During the third quarter, we returned $112.4. million to shareholders, $64 million in dividends and $48.4 million in share repurchases.

“We’ve spent $106 million in share repurchases through the first three quarters of 2016. This is in line with our full year target of repurchasing $100 to $150 million, which as always is subject to market conditions.”

Highlights

The Pawtucket, R.I.-based game and toy company generated $637 million in operating cash flow over the last 12 months.

Hasbro ended the quarter with $830 million in cash on its balance sheet.

Net revenues for the third quarter of 2016 increased 14% to $1.68 billion versus $1.47 billion in 2015. Third quarter 2016 revenues include a negative $2.8 million impact from foreign exchange.

Net earnings for the third quarter increased 24% to $257.8 million, or $2.03 per diluted share, compared to $207.6 million, or $1.64 per diluted share, in 2015.

Adjusted net earnings for the third quarter of 2015 were $200.5 million, or $1.58 per diluted share. These exclude a pre-tax gain of $9.9 million, or $0.06 per diluted share, from the third quarter 2015 sale of the company’s manufacturing operations in East Longmeadow, Mass., and Waterford, Ireland.

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