Hasbro, Inc. (NASDAQ:HAS) announced our financial results for the fiscal quarter ended September 25, 2016, and certain other financial information. The press release, attached as Exhibit 99.1, includes certain financial measures considered non-GAAP financial measures as defined under Securities and Exchange Commission (“SEC”) rules. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. Other companies may calculate these measures differently. These measures include Earnings before Interest, Taxes, Depreciation and Amortization (“EBITDA”). Management believes that EBITDA is one of the appropriate measures for evaluating our operating performance, because it reflects the resources available for strategic opportunities including, among others, to invest in the business, strengthen the balance sheet and make strategic acquisitions. The EBITDA measures included in the press release have been reconciled to the most directly comparable GAAP measures as is required under SEC rules regarding the use of non-GAAP financial measures.
The press release also includes certain of the Company’s 2015 cost and expenses, income tax expense, net earnings, and diluted earnings per share excluding the impact of the sale of the Company’s manufacturing operations in East Longmeadow, MA and Waterford, Ireland. Management believes that the presentation excluding the impact of the sale better reflects the results of the underlying operations of the Company. In addition, the press release includes the increases in the Company’s International segment and certain region net revenues excluding the impact of changes in exchange rates. The impact of changes in exchange rates is calculated by translating the 2016 local currency revenues at 2015 actual rates and comparing this amount to the 2016 reported revenues. Management believes that the presentation excluding the impact of exchange rate changes provides information that is helpful to an investor’s understanding of the underlying business performance absent exchange rate fluctuations which are beyond the Company’s control.
These measures should be considered in addition to, not as a substitute for, or superior to, net earnings or other measures of financial performance prepared in accordance with GAAP as more fully discussed in the Company’s financial statements and filings with the SEC. As used herein, “GAAP” refers to accounting principles generally accepted in the United States of America.