Hasbro, Inc 8-K, filed Jan 3, 2024

Hasbro, Inc. (HAS)

8-K 2024-01-03 For: 2023-12-27

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Added on April 09, 2026

About this 8-K

Hasbro, Inc filed this 8-K on January 3, 2024, reporting on events of December 27, 2023.

Items reported

Item 2.01: Completed an acquisition or sale of assets
Item 8.01: Other events
Item 9.01: Financial statements and exhibits

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Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.50 par value per share	HAS	The NASDAQ Global Select Market


2.01			Equity Purchase Agreement, dated as of August 3, 2023, by and among Hasbro, Inc., Lions Gate Entertainment Corp., Lions Gate Entertainment Inc. and Lions Gate International Motion Pictures S.à.r.l (incorporated by reference to Exhibit 2.01 filed with the Company’s Current Report on Form 8-K filed with the SEC on August 7, 2023)
99.1			Hasbro, Inc. Press Release, dated December 27, 2023
99.2			Unaudited Pro Forma Condensed Financial Statements
104			Cover Page Interactive Data File (embedded within the Inline XBRL document)


		HASBRO, INC.

	By:	/s/ Gina Goetter
	Name:	Gina Geotter
	Title:	Executive Vice President and Chief Financial Officer (Duly Authorized Officer and Principal Financial Officer)
Date: January 3, 2024


	Reported			Removal of						Pro Forma
	October 1,			eOne Film &			Pro Forma			October 1,
	2023			TV Business			Adjustments			2023
ASSETS
Current assets
Cash and cash equivalents	$	185.5		$	—		$	394.4	(3A)	$	579.9
Accounts receivable, less allowance for credit losses	1,102.0			—			—			1,102.0
Inventories	617.7			—			—			617.7
Prepaid expenses and other current assets	286.2		(3F)	—			5.6		(3F)	291.8
Assets held for sale	1,048.7			(1,048.7)		(3B)	—			—
Total current assets	3,240.1			(1,048.7)			400.0			2,591.4
Property, plant and equipment, less accumulated depreciation	474.6			—			—			474.6
Other assets
Goodwill	3,238.8			—			—			3,238.8
Other intangibles, net of accumulated amortization	655.1			—			—			655.1
Other	731.6		(3F)	—			14.0		(3F)	745.6
Total other assets	4,625.5			—			14.0			4,639.5
Total assets	$	8,340.2		$	(1,048.7)		$	414.0		$	7,705.5
LIABILITIES, NONCONTROLLING INTERESTS AND SHAREHOLDERS’ EQUITY
Current liabilities

Current portion of long-term debt	$	60.0		$	—		$	—		$	60.0
Accounts payable and accrued liabilities	1,356.8		(3F)	—			51.0		(3C) (3F)	1,407.8

Liabilities held for sale	607.4			(607.4)		(3B)	—			—
Total current liabilities	2,024.2			(607.4)			51.0			1,467.8
Long-term debt	3,654.6						—			3,654.6
Other liabilities	438.2		(3F)				(7.9)		(3F)	430.3
Total liabilities	6,117.0			(607.4)			43.2			5,552.8


Shareholders’ equity
Preference stock of $2.50 par value. Authorized 5,000,000 shares; none issued	—						—			—
Common stock of $0.50 par value. Authorized 600,000,000 shares; issued 220,286,736 shares	110.1						—			110.1
Additional paid-in capital	2,574.1						—			2,574.1
Retained earnings	3,348.3		(3D)	(441.3)		(3E)	370.8		(3C) (3E)	3,277.8
Accumulated other comprehensive loss	(208.4)		(3D)				—			(208.4)
Treasury stock, at cost, 81,541,637 shares	(3,626.3)						—			(3,626.3)
Noncontrolling interests	25.4						—			25.4
Total shareholders’ equity	2,223.2			(441.3)			370.8			2,152.7
Total liabilities, noncontrolling interests and shareholders’ equity	8,340.2			(1,048.7)			414.0			7,705.5


	Reported			Removal of						Pro Forma
	October 1,			eOne Film &			Pro Forma			October 1,
	2023			TV Business			Adjustments			2023
Net revenues	$	3,714.4		(419.3)		(4A)	—			3,295.1
Costs and expenses:
Cost of sales	1,132.0			(4.7)		(4A)	—			1,127.3
Program cost amortization	325.3			(249.8)		(4A)	—			75.5
Royalties	295.8			(65.9)		(4A)	—			229.9
Product development	232.4			—		(4A)	—			232.4
Advertising	249.8			(28.4)		(4A)	—			221.4
Amortization of intangible assets	65.1			(9.9)		(4A)	(7.0)		(4F)	48.2
Selling, distribution and administration	1,050.0		(4E)	(158.1)		(4A)	(11.3)		(4F)	880.6
Impairment of goodwill	231.2			(231.2)		(4B)	—			—
Loss on assets held for sale	473.0		(4C)	—			—			473.0

Total costs and expenses	4,054.6			(748.0)			(18.3)			3,288.3
Operating profit (loss)	(340.2)			328.7			18.3			6.8
Non-operating expense (income):
Interest expense, net	124.4			(9.6)		(4A)	—			114.8

Other income, net	(0.7)			(24.8)		(4A)	—			(25.5)
Total non-operating expense (income), net	123.7			(34.4)			—			89.3
Earnings (loss) before income taxes	(463.9)			363.1			18.3			(82.5)
Income taxes (benefit)	(36.9)			38.3		(4D)	(15.0)		(4D)	(13.6)
Net earnings (loss)	(427.0)			324.8			33.3			(68.9)
Net earnings attributable to noncontrolling interests	1.2			—			—			1.2
Net earnings (loss) attributable to Hasbro, Inc.	$	(428.2)		$	324.8		$	33.3		$	(70.1)

Per common share
Net earnings (loss) attributable to Hasbro, Inc.
Basic	$	(3.09)		2.35			0.24			(0.50)
Diluted	$	(3.09)		2.35			0.24			(0.50)
Weighted average common shares outstanding
Basic	138.7			—			—			138.7
Diluted	138.7			—			—			138.7


(A)			Adjustments reflect the increase in cash and cash equivalents resulting from the cash consideration of $375.0 million received, net of customary purchase price adjustments, less closing transaction expenses. Cash and Cash Equivalents in the Reported October 1, 2023 and Pro Forma October 1, 2023 columns each include restricted cash of $1.1 million. As of October 1, 2023, $4.1 million of restricted cash was transferred to Assets Held for Sale in connection with the Sale.




(B)			Represents the elimination of Entertainment One Film and Television assets and liabilities previously classified as held for sale as of October 1, 2023, to Lionsgate under the terms of the Agreement.


	October 1, 2023
	(in millions of Dollars)
Assets:
Cash and cash equivalents including restricted cash of $4.1 million (1)	$	70.4
Accounts receivable, less allowance for doubtful accounts of $1.4 million	85.2
Inventories	2.7
Prepaid expenses and other current assets	402.6
Property, plant and equipment, less accumulated depreciation of $21.3 million	53.6
Other assets	891.5
Write-down loss allowance (2)	(457.3)
Total assets held for sale	$	1,048.7

Liabilities:
Short-term borrowings	$	141.9
Current portion of long-term debt	8.2
Accounts payable and accrued liabilities	404.4
Long-term debt	0.8
Other liabilities	52.1
Total liabilities held for sale	$	607.4


(C)			Represents adjustments to recognize transaction-related expenses and liabilities of $21.1 million. In total, the Company's transaction related expenses were $38.0 million, $16.9 million of which were included within the Company's historical financial statements for the period ended October 1, 2023.
(D)			Retained Earnings for the “Reported October 1, 2023” column reflects currency translation losses directly attributable to the eOne Film and TV Business in the amount of $15.7 million that were reclassified from Accumulated Other Comprehensive Loss to the Statement of Operations. The impacts in the Statement of Operations are included in the total estimated loss on disposal.
(E)			Represents the impacts of removing the assets and liabilities held for sale and recording the impacts of the net proceeds received.
(F)			The "Reported October 1, 2023" column includes the following U.S. income tax balances: prepaid income taxes of $26.3 million within Prepaid Expenses and Other Current Assets, $251.7 million of deferred tax assets within Other Assets, $27.3 million of accrued income taxes within Accounts Payable and Accrued Liabilities and $84.1 million of deferred tax liabilities within Other Liabilities. The associated "Pro Forma Adjustments" represent the tax consequences of the Sale and the transactions between the parties under the agreements summarized in Notes (1) and (2), as well as the tax impacts corresponding to all other pro forma adjustments noted within.


(A)			Represents the elimination of Revenue, Operating Costs and Expenses including; Costs of Sales, Program Cost Amortization, Royalty Expense, Product Development Expense, Advertising Expense, Amortization of Intangible Assets and Selling, Distribution and Administration Expenses as well as Interest Expense net of Interest Income, attributable to the eOne Film & TV Business for the periods presented.
(B)			Represents the elimination of a pre-tax non-cash goodwill impairment charge recorded during the second quarter of 2023 to reduce the carrying value of the Company's Film and Television reporting unit to its estimated fair value, as determined using a discounted cash flow model based on management’s future revenue and cost estimates.
(C)			Represents the reported loss on disposal of the eOne Film and TV Business of $473.0 million for the nine months ended October 1, 2023.
(D)			These adjustments represent an estimate of the tax impact of the Divestiture and the transactions between the parties under the agreements summarized in Notes (1) and (2), as well as the tax impacts corresponding to all other pro forma adjustments noted within. In determining the tax provision for the adjustments under the “Removal of the eOne Film & TV Business” heading, the Company calculated the tax provision for the both the nine months ended October 1, 2023 and year ended December 26, 2022 using the separate return method for the Film & TV business. In determining the tax provision for the adjustments under the “Pro Forma Adjustments” heading, the Company calculated the tax provision for both the nine months ended October 1, 2023 and year ended December 26, 2022 using the separate return method for the remaining Hasbro business units.
(E)			Represents adjustments to recognize transaction related expenses of $21.1 million. In total, the Company's transaction related expenses were $38.0 million, $16.9 million of which were included within the Company's historical financial statements for the period ended October 1, 2023.
(F)			Effective with the designation of the eOne Film and Television Business as held for sale on of August 3, 2023, the Company suspended recording depreciation of property, plant and equipment and amortization of finite-lived intangible assets and right-of-use assets while these assets were classified as held for sale. For the year ended December 25, 2022, we recognized $29.9 million of depreciation and amortization (comprised of $13.3 million reported in the Amortization of intangible assets line item and $16.6 million of depreciation reported in Selling, distribution and administration) and for the nine month period ended October 1, 2023, we recognized $18.3 million of depreciation and amortization (comprised of $7.0 million reported in the Amortization of intangible assets line item and $11.3 million of depreciation reported in Selling, distribution and administration). These adjustments include the removal of depreciation and amortization expense that was recognized in the historical periods presented prior to the designation of the assets as held for sale.