Hasbro reports good financial position; Q2 will see impact from virus

By Devika Patel

Knoxville, Tenn., April 29 – Hasbro, Inc. has sizable liquidity and access to cash, including cash of $1.2 billion and $1.5 billion of availability under its revolving credit facility as of March 29.

The company is in a good financial position but is conserving capital in light of the Covid-19 pandemic, which management expects will affect second quarter results, in order to ensure the company can meet the increased demand expected in the second half of the year.

“We have substantial liquidity and we are taking prudent steps to ensure Hasbro remains in a strong financial position by aligning expenses to today's environment and preserving cash, while paying our dividend, meeting our debt commitments and making essential investments for the long term,” chairman and chief executive officer Brian D. Goldner said on the company’s first quarter ended March 29 earnings conference call on Wednesday.

Executive vice president and chief financial officer Deborah M. Thomas described the company’s financial position as “good” on the call.

“Consumers and audiences are engaging with our brands and content. We are profitable,” she said.

“We have substantial liquidity and we continue to take the necessary steps to align our expenses and cash spend with the current environment.”

The company expects second quarter results will be affected by the Covid-19 pandemic, Thomas said, due to retail store closures, supply chain disruption, live-action production shutdowns and changing theatrical release schedules.”

“However, consumer demand through April has continued to be up, and we're working aggressively and creatively to meet that demand.

“We've seen high viewership for our content, which is driving brand engagement,” she said.

The company can’t be certain how the pandemic is going to impact the company this year, so it has withdrawn guidance for 2020.

“We've done extensive scenario planning to understand the impact of Covid-19 on our business, mapping out the implications for various returns to more normalized activities, as well as the impact of operating in a global recession,” Thomas said.

“Despite having a good understanding of the factors and how to manage them, the outcomes vary widely, and that drove our decision to withdraw our full-year 2020 guidance,” she said.

The company is cutting expenses and holding on to capital in order to meet the demand it expects to see in the second half of the year.

“As we move toward reopening economies, we are planning for a good holiday season, with great innovation and entertainment across our portfolio,” Thomas said on the call.

The next major debt maturity is $300 million in May 2021.

The toy and game company is based in Pawtucket, R.I.

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