SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): February 12, 2003
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HASBRO, INC.
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(Exact name of registrant as specified in its charter)
RHODE ISLAND 1-6682 05-0155090
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(State of (Commission (IRS Employer
Incorporation) File Number) Identification No.)
1027 NEWPORT AVE., PAWTUCKET, RHODE ISLAND 02862
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(Address of Principal Executive Offices) (Zip Code)
(401) 431-8697
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(Registrant's telephone number, including area code)
Item 5. Other Events and Regulation FD Disclosure.
During 2001, the Company received two inquiries from the Office of Fair
Trading in the United Kingdom (the "OFT") into allegedly anti-competitive
pricing practices by the Company's United Kingdom subsidiary ("Hasbro
U.K."). The first of these inquiries (the "wholesaler case"), begun in May
of 2001, related to Hasbro U.K.'s interactions with certain of its
wholesale distributors. The second inquiry (the "retailer case"), begun in
August of 2001, related to Hasbro U.K.'s trading arrangements with certain
of its direct retail accounts.
On November 29, 2002, the OFT issued a decision in the wholesaler case,
finding that Hasbro U.K. had entered into agreements with certain
distributors to fix prices in violation of U.K. competition laws. The OFT
assessed a fine in that case of approximately GBP4.95 million. The Company
filed an appeal of this decision on January 29, 2003 with the U.K.
Competition Commission Appeals Tribunal (the "CCAT"), arguing, among other
things, that the amount of the fine was disproportionate to the offense.
On appeal, the CCAT will have the power to reconsider any factual findings
made by the OFT, and to vary the amount of the fine imposed by the OFT.
No payment of a fine will be required until the Company's appeal is
concluded.
Although the OFT has yet to issue its final decision in the retailer case,
it has advised the Company that while there may be a fine assessed in the
retailer case, because of its cooperation in the OFT's investigation, the
OFT will not require the Company to pay any of that fine.
Before receiving the OFT's decisions in the wholesaler and retailer cases,
the Company had disclosed an estimated range of aggregate loss for the two
cases of approximately GBP160,000 to GBP26,000,000, and had concluded that
there was no amount within that range that was a better estimate of the
loss than any other amount within the range. As such, in accordance with
the applicable accounting requirements, in 2001 the Company accrued a
charge to earnings of GBP160,000, equaling the low end of this range. In
light of the OFT's decision in the wholesaler case, the Company currently
believes that the amount of GBP4.95 million is the best estimate of the
expected loss from that case. To reflect this determination, the Company
will take an additional charge to earnings in the fourth quarter of 2002 of
approximately GBP4.8 million, or approximately U.S.$7,566,000 at exchange
rates as of December 29, 2002. The amount of this charge may have to be
adjusted up or down in the future depending on the result of the Company's
appeal before the CCAT. In light of the OFT's decision in the retailer
case, no charge will be taken in connection with that case.
Certain statements contained in this Form 8-K and the attached press
release contain "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. These statements may be
identified by the use of forward-looking words or phrases such as
"anticipate", "believe", "could", "expect", "intend", "look forward",
"may", "planned", "potential", "should", "will" and "would". Such forward-
looking statements are inherently subject to known and unknown risks and
uncertainties. The Company's actual actions or results may differ
materially from those expected or anticipated in the forward-looking
statements. Specific factors that might cause such a difference include,
but are not limited to: the Company's ability to manufacture, source and
ship new and continuing products on a timely basis and the acceptance of
those products by customers and consumers at prices that will be sufficient
to profitably recover development, manufacturing, marketing, royalty and
other costs of products; economic conditions, including the retail market,
higher fuel prices, currency fluctuations and government regulation and
other actions in the various markets in which the Company operates
throughout the world; the inventory policies of retailers, including the
concentration of the Company's revenues in the second half and fourth
quarter of the year, together with increased reliance by retailers on quick
response inventory management techniques, which increases the risk of
underproduction of popular items, overproduction of less popular items and
failure to achieve tight and compressed shipping schedules; work stoppages,
slowdowns or strikes, which may impact the Company's ability to manufacture
or deliver product; the bankruptcy or other lack of success of one of the
Company's significant retailers which could negatively impact the Company's
revenues or bad debt exposure; the impact of competition on revenues,
margins and other aspects of the Company's business, including the ability
to secure, maintain and renew popular licenses and the ability to attract
and retain talented employees in a competitive environment; market
conditions, third party actions or approvals and the impact of competition
that could delay or increase the cost of implementation of the Company's
consolidation programs or alter the Company's actions and reduce actual
results; the risk that anticipated benefits of acquisitions may not occur
or be delayed or reduced in their realization; and other risks and
uncertainties as may be detailed from time to time in the Company's public
announcements and SEC filings. The Company undertakes no obligation to make
any revisions to the forward-looking statements contained in this Form 8-K
or the attached release or to update them to reflect events or
circumstances occurring after the date of this filing.
The February 12, 2003 Press Release of the Registrant attached hereto as
EXHIBIT 99 is incorporated herein by reference.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
99 Press Release, dated February 12, 2003, of Hasbro, Inc.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
HASBRO, INC.
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(Registrant)
Date: February 12, 2003 By: /s/ David D. R. Hargreaves
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David D. R. Hargreaves
Senior Vice President and
Chief Financial Officer
(Duly Authorized Officer and
Principal Financial Officer)
HASBRO, INC.
Current Report on Form 8-K
Dated February 12, 2003
Exhibit Index
Exhibit
No. Exhibits
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99 Press Release, dated February 12, 2003, of Hasbro, Inc.