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): November 29, 2002
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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 the inquiries (the "wholesaler case"), begun in May
of 2001, related to Hasbro U.K. 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
has assessed a fine in that case of approximately GBP4.95 million or
approximately U.S.$7.7 million at current exchange rates. The Company
believes that the amount of this fine is disproportionate to the offense
and is improper, and plans to appeal the fine to the U.K. Competition
Commission Appeals Tribunal (the "CCAT"). The CCAT will consider the
matter on a "de novo" basis, with the power to reconsider any factual
findings made by the OFT, and to revoke or vary the amount of the fine
imposed by the OFT.
The OFT has yet to issue a final decision in the retailer case, although it
had issued a preliminary decision in May of 2002 proposing to find that
Hasbro U.K. had entered into unlawful pricing agreements with two of its
retail accounts. The Company expects the OFT to announce a final decision
in the retailer case within the next several months. In the case of appeal
by the Company, no payment of any fine in either the wholesaler or retailer
case will be required unless and until such fine is upheld on appeal.
The Company is in the process of analyzing the OFT's decision and whether
that decision affects the previously disclosed range of loss for the two
cases of approximately GBP160,000 to GBP26,000,000. In light of the OFT
decision in the wholesaler case, the Company now believes that once it
completes its analysis of the OFT's decision, it will accrue a charge to
earnings above and beyond the GBP160,000 charge originally taken in 2001.
The Company is working with counsel to complete its analysis of the OFT's
decision and the status of the cases, and anticipates taking this charge in
the fourth quarter of 2002. Currently, the Company does not expect the
amount of the charge to exceed approximately GBP13.5 million or
approximately $20.9 million at current exchange rates.
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 November 29, 2002 press release of the Company attached hereto as
Exhibit 99 is incorporated herein by reference.
Item 7. Financial Statements and Exhibits
(c) Exhibits
99 Press Release, dated November 29, 2002, 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: November 29, 2002 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 November 29, 2002
Exhibit Index
Exhibit
No. Exhibits
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99 Press Release, dated November 29, 2002, of Hasbro, Inc.