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Cover and table of contents
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 25, 2022
Commission file number 1-6682
Hasbro, Inc.
(Exact Name of Registrant As Specified in its Charter)
| Rhode Island | 05-0155090 | |||||||
| (State of Incorporation) | (I.R.S. Employer Identification No.) | |||||||
| 1027 Newport Avenue | ||||||||
| Pawtucket, | Rhode Island | 02861 | ||||||
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code (401) 431-8697
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
| Common Stock | HAS | The NASDAQ Global Select Market |
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ or No ☐.
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ or No ☒.
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ or No ☐.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ or No ☐.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large Accelerated Filer | ☒ | Accelerated Filer | ☐ | Non-Accelerated Filer | ☐ | Smaller Reporting Company | ☐ | ||||||||||||||||
| Emerging Growth Company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ or No ☒.
The aggregate market value on June 24, 2022 (the last business day of the Company’s most recently completed second quarter) of the voting common stock held by non-affiliates of the registrant, computed by reference to the closing price of the stock on that date, was approximately $11,751,405,393. The registrant does not have non-voting common stock outstanding.
The number of shares of common stock outstanding as of February 16, 2023 was 138,219,857.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of our definitive proxy statement for our 2023 Annual Meeting of Shareholders are incorporated by reference into Part III of this Report.
Special Note Regarding Forward-Looking Statements
From time to time, including in this Annual Report on Form 10-K (“Form 10-K”) and in our annual report to shareholders, we publish “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These “forward-looking statements” may relate to matters such as: our business and marketing strategies; anticipated financial performance or business prospects in future periods; expected technological and product developments; relationships with business partners, customers and suppliers; purchasing patterns of our customers and consumers; efforts to expand ecommerce capabilities; the expected timing for scheduled new product introductions or our expectations concerning the future acceptance of products by customers; expected benefits and plans relating to acquired brands, properties and businesses; the development and timing of planned consumer and digital gaming products and entertainment releases; changes in the methods of content distribution, including increased reliance on streaming outlets; marketing and promotional efforts; goals relating to our Environmental Social Governance (ESG) activities; research and development activities; geographic plans, adequacy of supply; manufacturing capacity; expectations related to our manufacturing; the potential for tariffs and their impact on our business; impact of the coronavirus pandemic and other public health conditions; adequacy of our properties; expected benefits and cost-savings resulting from the Company’s Operational Excellence Program; expected benefits and cost-reductions from certain restructuring actions and divestiture of non-core businesses or assets; capital expenditures; working capital; liquidity; timing of and amount of repayment of indebtedness; capital allocation strategy, including plans for dividends and share repurchases; and other financial, tax, accounting and similar matters. Forward-looking statements are inherently subject to risks and uncertainties. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. These statements may be identified by the use of forward-looking words or phrases such as “anticipate,” “believe,” “could,” “expect,” “intend,” “looking forward,” “may,” “planned,” “potential,” “should,” “will” and “would” or any variations of words with similar meanings. We note that a variety of factors could cause our actual results and experience to differ materially from the anticipated results or other expectations expressed or anticipated in our forward-looking statements. The factors listed in the risk factors below and in Part I, Item 1A. Risk Factors, of this Form 10-K are illustrative and other risks and uncertainties may arise as are or may be detailed from time to time in our public announcements and our filings with the Securities and Exchange Commission, such as on Forms 8-K, 10-Q and 10-K. We undertake no obligation to make any revisions to the forward-looking statements contained in this Form 10-K or in our annual report to shareholders to reflect events or circumstances occurring after the date of the filing of this report.
RISK FACTORS SUMMARY
We are subject to a variety of risks and uncertainties, which could have a material adverse effect on our business, financial condition, results of operations and cash flows. These include strategic, operational, global economic, financial, governmental, regulatory and legal risks related to our business. Risks that we deem material are described under “Risk Factors” in Item 1A of this Form 10-K. These risks include, but are not limited to, the following:
Strategic Risks
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We may not successfully implement and execute our Blueprint 2.0 strategy and transformation initiatives.
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Consumer interests change quickly, making it difficult to develop successful products and entertainment. Consumers may prefer the products and games offered by our competitors to those we offer, harming our business and results.
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A key to our future success will be our ability to further develop digital and technologically advanced products.
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Changes in viewing behaviors and formats in the entertainment industry may harm our business.
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We may lose rights to existing partner brands or fail to secure such rights in the future.
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Our third-party licenses may not be profitable and generate significant royalties for us if licensed material does not achieve sufficient market appeal.
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The industries in which we compete are highly competitive, with low barriers to entry.
- Acquisitions, dispositions and other investments we complete may not provide us with the benefits we expect, or the realization of such benefits may be significantly delayed. We may not achieve a successful sale or license of non-core assets, including certain film and television assets.
Operational Risks
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Our business may be harmed if we are not successful in transforming our supply chain operations.
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We may be unable to develop, introduce and ship products on a timely and cost-effective basis, or we may be unable to successfully navigate through global supply chain challenges.
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We may be unable to successfully adapt to the increasing importance of ecommerce and direct-to-consumer sales.
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Our retail customer base remains highly concentrated, making us susceptible to the success of their businesses.
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Our substantial business, sales and manufacturing outside the U.S. subjects us to risks of international operations.
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Our reliance on third-party manufacturers, particularly in China, presents risks to our business.
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Our digital game offerings and entertainment operations may be dependent on third-party studios, content producers and distribution channels.
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We may be unable to renew certain long-term licensing agreements for access to partner brands and the acquisition of content.
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We have had recent leadership changes and other employee changes. If we lose key management or other employees or are unable to attract and retain talented people with the skillsets we need for our diverse and changing business, our business may be harmed. Similarly, if new members of management and new employees are not successful that will negatively impact our business.
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We may be unable to hire and develop diverse talent, thereby making it difficult to compete.
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Our business may be harmed if we are unable to protect our critical intellectual property rights.
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If we do not successfully operate our information technology systems, or if our electronic data is compromised, our business may be harmed.
Global and Economic Risks
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The global coronavirus outbreak has had and may continue to have an adverse effect on our business, including harming our ability to source and ship products in a timely and cost-effective manner.
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Changes in U.S., global or regional economic conditions can harm our business, such as inflation and rising interest rates, as well as the markets in which we and our employees, consumers, customers, suppliers and manufacturers operate. Such changes can also adversely impact discretionary consumer spending.
Financial Risks
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Seasonality in our business may cause our quarterly and annual operating results to fluctuate.
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Impairment charges related to acquired assets or other investments could harm our results.
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Our financial performance can be impacted by changes in foreign currency rates due to our global business.
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Our indebtedness may limit our availability of cash, cause us to divert cash to fund debt service payments or make it more difficult to take certain other actions.
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We may be unable to obtain or service our external borrowings, or restrictions imposed by such borrowings may be burdensome.
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Our effective tax rate may vary due to changes in or differing tax law and rules in the territories we operate.
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We could lose certain licenses, incentives and tax credits if certain of our subsidiaries lose Canadian status.
Governmental, Regulatory and Legal Risks
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If we were to violate laws or regulations applicable to our business, our business could be harmed.
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Failure to achieve our sustainability goals may result in reputational damage.
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We could be the subject of product liability suits or product recalls, either of which could harm our business.
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Our entertainment business could become the subject to liability claims for media content.
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We are involved in other litigation and similar matters which may entail significant expense or otherwise adversely impact our business.
Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business, financial condition, results of operations and cash flows.
PART I
Except as expressly indicated or unless the context otherwise requires, as used herein, “Hasbro”, the “Company”, “we”, or “us”, means Hasbro, Inc., a Rhode Island corporation organized on January 8, 1926, and its subsidiaries.