Hasbro's Earnings Conf. Call Transcript

joethelawyer · Apr 20, 2009

Link here, transcript from seekingalpha:

http://seekingalpha.com/article/131...3-29-09-earnings-call-transcript?source=yahoo

Haven't read it yet. Only mention of WOTC or DND is here, as far as I can tell with a quick word search:

...

John Taylor – Arcadia
Last year you outlined for us a number of strategic initiatives and outlined the cost impact on that. I wonder if you could give us an update on what that delta looked like in Q1 for build out of the offices in developing markets and the Hollywood effort in digital and all that stuff.
David Hargreaves
Those costs haven’t really gone away, although we would characterize them differently. Last year the fact that we had an office in Brazil and a start in Brazil but we actually hadn’t started shipping any product or invoice out of that company. You had the costs but no revenue to go with it so we called it an investment. This year the cost is still there but I don’t think we characterize it as an investment.
Similarly for EA last year we had Mark Blackham and his team that oversee our EA business here probably about 14 or 15 people and they were all in place but there was no revenue. This time last year we were talking about that as an investment spending. Now we’re getting the revenue to go with the costs so the cost is still here but we wouldn’t characterize that as an investment. The costs that we had last year are still here even costs to get digital Dungeons & Dragons and Dracula, some of those costs are still here although there are now revenues to go with D&D inside them.

...

From the site I linked to above, figured I would include it here so there is no confusion as to the source...

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Uzzy · Apr 21, 2009

I think this news piece is talking about the same conference call, so I figure I'd post it here (I would have made a new thread for this anyway, given that it might be of interest)

Hasbro 1st-quarter profit falls 47 percent

Of course, Hasbro insist that they are in a strong position going forwards (and they probably are). But still, a 47% drop in profits is a serious chunk of money.

joethelawyer · Apr 21, 2009

What's that Dracula thing he was talking about in the blurb in the same sentence as D&D? Anyone know?

GAAAHHH · Apr 21, 2009

joethelawyer said:
What's that Dracula thing he was talking about in the blurb in the same sentence as D&D? Anyone know?

Isn't it obvious? They shipped Dracula in because of his experience in dealing with unfavorable critics.

joethelawyer · Apr 21, 2009

GAAAHHH said:
Isn't it obvious? They shipped Dracula in because of his experience in dealing with unfavorable critics.

Well, at the risk of having Vlad the Impaler show up tonight, let the speculation commence. Was it badly worded when he said digital Dungeons and Dragons? Is all digital the future they are trying for with D&D? Or was it just a poorly worded way to say DDI? In other words, I am curious if WOTCBro sees D&D existing as a pen and paper game in 4-5 years, or existing solely digitally? If solely digitally, I am worried, because if the earnings continue to tank, and the digital initiative moves along at the snail's pace it has, it might get axed. And if they don't want to continue with the books, bye bye D&D 4e, 5e, etc. Bye bye good way to get new gamers into the hobby.

How's that for drawing some heavy duty mostly baseless speculation from one sentence?

xechnao · Apr 21, 2009

joethelawyer said:
Well, at the risk of having Vlad the Impaler show up tonight, let the speculation commence. Was it badly worded when he said digital Dungeons and Dragons? Is all digital the future they are trying for with D&D? Or was it just a poorly worded way to say DDI? In other words, I am curious if WOTCBro sees D&D existing as a pen and paper game in 4-5 years, or existing solely digitally? If solely digitally, I am worried, because if the earnings continue to tank, and the digital initiative moves along at the snail's pace it has, it might get axed. And if they don't want to continue with the books, bye bye D&D 4e, 5e, etc. Bye bye good way to get new gamers into the hobby.

How's that for drawing some heavy duty mostly baseless speculation from one sentence?

If I remember correctly they had mentioned digital D&D development in the previous report and I would guess that this is just the follow up.

Derulbaskul · Apr 23, 2009

The remark may have been tailored for his audience (and also tailored for the speaker in the first instance). I would suggest that it's just a sound bite to say we have a known brand and we're updating it for the 21st Century blah, blah, blah....

I hate public company doublespeak/newspeak.

I still think the Hasbro execs must be browned off that they really haven't created any major value with the D&D brand: no computer game franchise; no movies; no mass-market toys. I wonder if the novels still produce more profits than the RPG?

There is some "low hanging fruit" there, too, if you will excuse my use of corporate-ese. The Crystal Shard is crying out to be made into a movie and, executed properly, it has the potential to be a Transformers for Hasbro (and Jon Rogers is already familiar with the property!). I know what I would be doing.

filthgrinder · Apr 23, 2009

There isn't a whole lot of information here, and nothing to really have a reaction one way or another. The question is just regarding costs from last year compared to this year. Last year, they had costs related to D&D Insider. Since they hadn't released DDI yet, they had no revenue from it, so that cost was listed as an investment on their financials. This year, the product is out, and they are receiving revenue from it, so the project's costs are no longer listed as investments.

The question was basically, "Looks like you moved some costs around", and the answer is "we had some costs listed as investments, but now those costs are classified elsewhere since we are seeing revenue."

As for their profit drops, you have to remember there is a transformers and a gi joe movie coming out this summer. They are going to get huge bumps from that. Depending on how the market reacts, it might be a good time to grab some stock and sit on it till the end of the summer.

Anyways, there really is nothing to read into this.

ExploderWizard · Apr 23, 2009

Hasbro is upping the game!!! Its now D&D&D-Dungeons & Dragons & Dracula!! No longer will the lord of darkness have to be overshadowed by a huge winged lizard! :lol:

Badwe · Apr 23, 2009

The article linked also notes that Q1 is the least important quarter for toy manufacturers and that Mattel actually sustained a loss rather than just a shrink in profits. Add to the fact that there is a global economic downturn and toys are probably the easiest thing to shave off the budget and 47% shrinkage in profit probably felt like a dodged bullet to a lot of bookkeepers in Hasbro. I don’t think I’d declare the sky falling yet. This stuff is certainly interesting because the health of Hasbro ties directly to the health of wotc and thus D&D, but it doesn’t really give new insight into the goings on of D&D more than, say, the other thread where scott rouse is taking questions.