Hasbro keeps paying down debt incrementally, aims for 2.5x leverage

By Devika Patel

Knoxville, Tenn., July 26 – Hasbro, Inc. has been paying down debt with proceeds from a recent divestiture and revenue growth last quarter.

The company’s leverage ratio is getting closer to management’s targeted range, and Hasbro said it intends to keep its balance sheet strong and its credit ratings investment-grade by continuing to evaluate incremental opportunities to decrease debt, thereby driving down leverage.

“The second quarter was another very good quarter for Hasbro,” executive vice president and chief financial officer Deborah M. Thomas said on the company’s second quarter ended June 27 earnings conference call on Monday.

“The team executed at a high level to drive revenue growth, profit and margin improvement, manage a complex supply chain, while reducing debt and delivering a strong balance sheet,” she said.

The company has retired $650 million of debt thus far in 2021, with $250 million repaid in the second quarter and another $100 million repaid in July.

“The strength of our balance sheet and the sale of the [Entertainment One, or eOne] Music Business, which was completed early in the third quarter [on June 29 for $385 million in cash], enabled us to pay off $250 million of long-term debt prior to quarter-end and another $100 million in July,” Thomas said on the call.

“Through today, we’ve retired $650 million of debt this year and are evaluating incremental opportunities for further reductions,” she said.

The company has good liquidity, and Hasbro’s leverage ratio is getting closer to management’s target of 2x to 2.5x debt to EBITDA.

Cash and cash equivalents were $1,228,200,000 as of June 27, 2021, compared to $1,038,000,000 as of June 28, 2020.

“At quarter-end, cash on hand was $1.2 billion and we’re making good progress on our goal of returning to our target of 2x to 2.5x debt to EBITDA and maintaining our investment-grade ratings,” Thomas said.

Long-term debt was $4,388,700,000 as of June 27, 2021, compared to $4,802,500,000 as of June 28, 2020.

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

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