Hasbro, Inc.
Q1 2017 Earnings Call Transcript

Published: 24 Apr 2017

[Operator:]

Good morning and welcome to the Hasbro First Quarter 2017 Earnings Conference Call. At this time, all parties will be in a listen-only mode. A brief question-and-answer session will follow the formal presentation. Today's conference is being recorded. If you have any objections, you may disconnect at this time. At this time I'd like to turn the call over to Ms. Debbie Hancock, Vice President of Investor Relations. Please go ahead.

[Debbie Hancock:]

Thank you and good morning, everyone. Joining me this morning are Brian Goldner, Hasbro's Chairman and Chief Executive Officer and Deb Thomas, Hasbro's Chief Financial Officer. Today, we will begin with Brian and Deb providing commentary on the company's performance and then we will take your questions. Our first quarter earnings release was issued this morning and is available on our website. Additionally, presentation slides containing information covered in today's earnings release and call are also available on our site. The press release and presentation include information regarding non-GAAP financial measures. Please note that whenever we discuss earnings per share or EPS, we are referring to earnings per diluted share. Before we begin, I would like to remind you that during this call and the question-and-answer session that follows, members of Hasbro management may make forward-looking statements concerning management's expectations, goals, objectives and similar matters. There are many factors that could cause actual results or events to differ materially from the anticipated results or other expectations expressed in these forward-looking statements. Some of those factors are set forth in our annual report on Form 10-K, our most recent 10-Q, in today's press release and in our other public disclosures. We undertake no obligation to update any forward-looking statements made today to reflect events or circumstances occurring after the date of this call. I would now like to introduce Brian Goldner. Brian?

[Brian D. Goldner:]

Thank you, Debbie. Good morning, everyone and thank you for joining us today. The Hasbro team's continued strong execution of our Brand Blueprint strategy is building immersive 360 degree experiences for our fans, children and their families. We continuously identify proprietary insight, create engaging storytelling, invent innovative new play experiences and execute in collaboration with global omni-channel retailers. Through our investment in brands and capabilities around the Blueprint, we are connecting with more consumer groups across more platforms and screens than at any time in our history. Our first quarter results were consistent with the expectations we shared with you in February, and position us well to execute against the major theatrical and content releases as well as innovative new play experiences planned for the full year. Revenues grew 2% against a very strong first quarter last year, and the negative impact of the Easter shift into this year's second quarter. In the first quarter, where small shifts have a big impact, operating profit was impacted by an extra week of expenses, and to a lesser extent, a shift in product mix. The mix included a shift to partner brand products with a higher cost of sales, notably Disney Frozen and Frozen, where we are investing, along with the decline in the quarter for our higher margin MAGIC

[Deborah M. Thomas:]

Thank you, Brian and good morning, everyone. Our first quarter performance was in line with our expectations, and reinforces our full year outlook. As expected, 2017 began with a difficult comparison, yet we grew revenues 2%, and earnings per share 40%. Operating profit was negatively impacted by anticipated events in the quarter, including an extra week of expenses and a shift in product mix. Given the first quarter's smaller relative size to other quarters of the year, these changes are amplified and are expected to smooth out over the course of the year. Net earnings increased to $68.6 million, and earnings per share increased to $0.54. We experienced a $0.03 favorable foreign currency gain recorded in the other income line, as well as an $0.11 benefit from Hasbro's adoption of the new accounting standard governing stock-based compensation. This tax benefit was $0.03 higher than we forecasted in February due to the stock price appreciation over that time. Hasbro is in a very strong financial position, with positive consumer takeaway, strong earnings, and a healthy balance sheet. For the quarter, revenues in the U.S. and Canada segment increased 2%. Revenue growth in Hasbro Gaming and Emerging Brands offset lower Partner Brand revenues and a 1% decline in Franchise Brands, primarily due to the decline in MAGIC

[Brian D. Goldner:]

Thank you, Deb. Before we take your questions, I want to thank the global Hasbro team for all they do in setting the highest standards for a responsible business. Last week, Hasbro was ranked number one on Corporate Responsibility, CR Magazine's 2017, 100 Best Corporate Citizen List, which ranks the Russell 1000 companies across seven categories. This is a tremendous honor and the result of years of work from our teams around the world. Hasbro continues to be recognized by some of the world's most prestigious business rankings for our CSR commitments and advancements. It is a priority that our management and board have set, but it is the actions our teams take every day that sets the standard. In addition to topping the corporate citizen list, Hasbro was recently named a world's most ethical company for the sixth year and ranked number one in Newsweek's 2016 Green Rankings. Being a good corporate citizen is not just what we do, it's who we are. Deb and I are now happy to take your questions.

[Operator:]

Thank you. Our first question is from the line of Drew Crum with Stifel. Please proceed with your question.

[Drew Crum:]

Okay, thanks. Good morning, everyone.

[Brian D. Goldner:]

Morning, Drew.

[Drew Crum:]

Let me start with STAR WARS. Guys, I think you talked about having elevated inventory for that brand entering the year. Just give us an update as to where you are with that. And with Star Wars Celebration, I believe last week, how that impacted point of sales and the year-to-date figure you gave through Easter?

[Brian D. Goldner:]

Yeah, STAR WARS at this point, we are seeing that we have a number of opportunities and are selling through product. We took advantage of the fact that we have Rogue One home entertainment, which broke just in early April, and we are seeing great sales on the Black Series and role play are some of the key drivers, the Black Series figures. We've kicked into a marketing program around joining the rebellion and we are moving into the 40th anniversary of the STAR WARS business, and certainly celebrating that. In fact, we'll also have the Early Bird set from 1977 coming out of Celebration, which we've re-imagined and will be on sale. And then, again, we will have, over the summer, Forces of Destiny, which we're very excited about, the micro series of animation, plus product in our adventure figures and role play, And then that takes us to our September 1 which is Force Friday II and certainly very excited about that moving into the movie in December, mid-December. So overall, what we've seen is that STAR WARS year-on-year continues to perform and we've taken advantage, as Deb noted in our remarks, of marketing windows and entertainment windows to move through additional inventories in the first quarter.

[Drew Crum:]

Got it. Okay. And then moving over to BEYBLADE, I know it's really early. But any commentary on the launch and just general consumer interest in the line, relative to the last product cycle? And then on NERF NITRO, can you just give us a sense as to what the timing is of the launch of that product?

[Brian D. Goldner:]

Sure. BEYBLADE is only off to a start in a few markets but off to a very good start. And we've seen a very good start in Australia and very early days in the U.S. but a very good start here. And it will begin rolling out around the world. So, I would say staged and rolling out around the world as we have entertainment placed, but the play pattern is really compelling with BEYBLADE BURSTS. So, I'm very excited about that. And NERF NITRO will kick in late summer into fall sets and we're very excited. But NERF year-to-date has performed at a very high level. AccuStrike has gotten off to a very strong start. We continue to see great growth in NERF RIVAL and that brand is experiencing very robust growth and very robust sell-through, along with a lot of our product line.

[Drew Crum:]

Okay. I'll jump back into the queue. Thanks, guys.

[Brian D. Goldner:]

Thanks.

[Operator:]

Our next question is from the line of Felicia Hendrix with Barclays. Please proceed with your question.

[Felicia Hendrix:]

Hi, good morning.

[Brian D. Goldner:]

Morning.

[Deborah M. Thomas:]

Morning, Felicia.

[Felicia Hendrix:]

Hi. So, not to get caught up in semantics and hold you too much to this, but – so in the release and your prepared remarks you said that first quarter was in line with previously communicated expectations, but you did better on revenues, because you guys were guiding for the first quarter that revenues would be down a bit and they were up 2%. So, I'm assuming that when you talked about in line with expectations you were meaning overall. But given that you've kind of provided that guidance within six weeks to go in the quarter, I was just wondering what drove the better than expected revenues.

[Brian D. Goldner:]

Well, we're really seeing great acceleration in several categories. Our Gaming business up 43%, including great contributions from Backflip Studios, continued great growth in digital gaming. Our emerging brands are just accelerating. The BABY ALIVE team and FURREAL FRIENDS team have done a great job. So that business is up within our Emerging Brands. And, of course, our Franchise Brands, we've seen great acceleration in the TRANSFORMERS business. So, I think, as we were talking about guidance, clearly for us revenues growth is important, but as you know, earnings growth and profitability are important for us as well over time. And so we had noted that we would have this extra week, and the week does fall at the end of the year. So that's a week primarily of expenses with very little revenue between Christmas and New Year's with very little shipments. We had a mix shift that we spoke to within our Partner Brands where we're mixing more into Princess and Frozen where we continue to invest in that business for innovations and for the full year. So, that obviously had an impact. We talked about MAGIC

[Felicia Hendrix:]

Great. And then can you just give us some point of sales color for the quarter in the U.S. and then also, if you have it, for the top five Euro markets?

[Brian D. Goldner:]

Sure. Overall in the U.S., as Deb noted in her comments, U.S. is high single-digit growth in Toy and Game. And then we also have very strong growth in Emerging Brands, double digit growth in Emerging Brands and in Gaming. Our online POS was very strong and, again, continues to run ahead of our overall POS growth. We have really good data, particularly for our U.S. business and it was very strong growth. And we can talk more about that in a moment. Global POS was up mid-teens, but with certain regions up even higher, like Europe and Latin America. And we've seen even great sell through on global Partner Brands just because revenues were down, the sell through on Disney Princess and Frozen has been very, very robust. We continue to see great sell through in places like MARVEL, where our MARVEL LEGENDS business has continued to perform well. And as I said, global Games are up even more strongly than overall POS.

[Felicia Hendrix:]

Great. And then, Deb, I was just hoping you could just clarify something on for Other Income. You did break out that there was an FX gain of about $0.03. So, I calculated that's about $4 million. Other income was $17 million, which is kind of higher than it usually is. So, you had said that most of the benefit in that line was coming from FX, but that's only $4 million. I'm kind of wondering what else was in that. Like, if you could just call out for us what that Other, what else is in there.

[Deborah M. Thomas:]

Sure. Well, everything else was kind of relatively consistent with the prior year, with the exception of we did have higher interest income this year, as we see rates going up a bit and with our cash balance, we do have higher interest income in that line. But the one thing that was different and we really don't forecast – it just is kind of what it is – is the FX gain and it was just a little bit higher than that. But your math is not that far off. So, we wanted to point that out. The other thing was the excess tax benefit, because the increase in our stock price, we had said at Toy Fair, we thought it would be about $0.08 in the first quarter and it was about $0.11. So, we wanted to make sure we highlighted that. And that was just the benefit that our employees got from when all of the vesting took place in the beginning of the – or during the first quarter.

[Felicia Hendrix:]

And that falls in the Other Income line?

[Deborah M. Thomas:]

No, that falls into the tax line. But, our underlying -

[Felicia Hendrix:]

Okay, okay.

[Deborah M. Thomas:]

I guess I'm still thinking about your question on our expectations versus not. We really tried to highlight and that was something that was different than our expectations that we laid out at Toy Fair and that is in the tax line.

[Felicia Hendrix:]

Okay. I guess I'm asking just because a lot of investors this morning were just trying to figure out what your – kind of the normalized earnings are for the quarter. And so I think everybody understands the $0.08 from the accounting change. But looking at the $17 million in Other Income, I think some folks are inclined to kind of not give you credit for any of it. And I'm just trying to figure out what's, kind of, a normalized run rate for that line, versus some extra things you had in the quarter.

[Deborah M. Thomas:]

Yeah, we would say the only unusual thing that you really can't put your finger on is the FX gain. I mean, that's still dependent on where the rates are going. So-

[Felicia Hendrix:]

Okay. All righty. Thank you.

[Brian D. Goldner:]

Thanks.

[Operator:]

Our next question is from the line of Tim Conder with Wells Fargo. Please go ahead with your question.

[Timothy Andrew Conder:]

Thank you. Just a couple of clarifications here. Brian, you said global when you were responding to Felicia's question. So you meant global collectively, not just international on that?

[Brian D. Goldner:]

Yeah, global was up mid-teens. As I said, North America was up high – very high single digits. Europe was up double digits. Latin America up double digits above our global POS gain. Asia Pac was more in line with our global POS gain. So, in Europe and Latin America was particularly strong.

[Timothy Andrew Conder:]

Okay. Okay. And then, Deb, you'd called out how you had some very favorable FX hedges in 2016. Where are those comps more difficult on the FX side with the favorable hedges? And I apologize if you hit this before, but I just wanted to double check. How do you see the FX now versus that $50 million to $60 million you outlined at Toy Fair?

[Deborah M. Thomas:]

We hedged about 75% of our product purchases last year. And we're hedged a little bit less than that this year. The hedges are a bit less favorable than they were in the past, as rates have kind of leveled out this year. So, overall, we'll have a bit of a negative impact that impacts gross margin, but – and we'll take pricing to compensate for some of that as we go through the year. We still see our numbers kind of in line with what we set out for the full year, just as a bit of – because it's such a small quarter, little things can have such a big impact on our different percentages of revenue in the first quarter. But overall, for the full year, we still see our numbers in line with what we set out at Toy Fair.

[Timothy Andrew Conder:]

And the quarter that would have the most difficult comparison, versus the more favorable hedges last year?

[Deborah M. Thomas:]

It's really hard to say. I mean, it's probably – most of our purchases come through in the third and fourth quarter, along with our sales. So, I would think that that would be it. But you probably just won't see it as much because they are such big quarters.

[Timothy Andrew Conder:]

Okay, okay, okay. And then any areas, Brian, where you believe you're short on inventory?

[Brian D. Goldner:]

Well, I think overall, we do have some product lines that are selling quite well. If you look at the acceleration in our Games business and some of the new launches that we've come out with, they're selling quite well. And the Games category is up and POS is up very strongly. I would say overall, clearly, you see that retail inventories in the U.S. are down and our overall inventories are down a bit. I think you'll see in Qs 2 and 3 as we get into our storytelling and our Partner Brand storytelling you may see a bit of an increase in inventories, but only in line with sales. So, again, we'll try to put more inventory around the entertainment initiatives and more adjusted time inventory as we continue to manage that.

[Timothy Andrew Conder:]

Okay. And then lastly, and I know you've had and we've had questions related to the concerns about cannibalization on TRANSFORMERS and Spider-Man and you've answered that, as those address different audiences. How, I guess, are the approach of yourselves and Disney, as it comes to the five to six months between The Last Jedi and then the spinoff coming then in May of 2018?

[Brian D. Goldner:]

Yeah, I would say that 2017 has certainly lined up to be a very strong year. You have a number of initiatives, but you do have different audiences, demographics, fan bases for each of those and some good separation in the calendar as well. One of the things we're also seeing is this very good strength in the electronic sell through windows, the home entertainment windows. So you're getting both the theatrical as well as the electronic sell through windows, like Moana had performed so well around the home entertainment window. As we get into 2018, we go from strength to strength. We have a number of new theatrical pieces of entertainment. We'll have our own TRANSFORMERS movie in Bumblebee next year and then you have a number of MARVEL movies. And then, you're right, summer we'll also have the Han Solo movie. But, again, there's very big differences between the fan bases and the – both demographics and psychographics, the play patterns. And we have dedicated teams of individuals. We don't have the same teams working on Lucasfilm that we have working on MARVEL. They're different teams, they have different innovations. We're bringing new innovations to the market first around those brands, as well as around our brand. So, because of that, we're able to look at the marketplace and take global consumer insights and apply them differently so that we're able to tease out and offer different play patterns and role play and action figures that really help to keep all of our fans, children, and families enthusiastic around those brands. So we really don't see it – and by the way, we've experienced years with Spider-Man and TRANSFORMERS movies before, and both of those brands performed at a very high level. I'm very excited about the Spider-Man movie. I think the materials look fantastic.

[Timothy Andrew Conder:]

Okay. Okay. Thank you.

[Operator:]

Our next question comes from the line of Arpiné Kocharyan with UBS. Please proceed with your question.

[Arpiné H. Kocharyan:]

Hi, thank you. So, thanks for the expense color on extra week. And I understand revenue was not up commensurate with expense, but in terms of year over year terms, what did the extra week add in terms of revenue year over year? And does incremental expense and MAGIC

[Deborah M. Thomas:]

Arpiné, let me address your first question. So, the extra week comes at the beginning of our fiscal year, which is the end of the calendar year. So it's essentially that week between Christmas and New Year. And really, a lot of retailers don't take a lot at shipments in that timeframe. Many of our offices are closed down. So, from a revenue standpoint, it truly is negligible, if we have any at all, but the expenses are fixed. Typically, we have to pay salaries. We pay things like that, rents. So our expenses are pretty much fixed. And that's why you get that extra week. It only happens once every several years. So, we don't talk about that much. But it's a 14-week period versus a 13-week period, and that's really why we highlighted that.

[Brian D. Goldner:]

Yeah. And then on operating margin, we do expect operating profit margin expansion, versus our reported 15.7% last year. And, as I noted in February, we would expect over time to continue to expand operating profit margins towards that 16.4% level over the medium term. But as you know, we're also investing in our business, creating new content and innovation, and ensuring that we have the horsepower to deliver great results in both top and bottom line over multiple years and that requires investing back in our business, and you'll also see that. So, again, I want to reiterate that we do see operating profit margin expansion versus the 15.7%.

[Arpiné H. Kocharyan:]

Thank you. And then I have a quick follow-up on Backflip. Was there anything outsized for the quarter that you don't expect reoccurring in Q2, Q3, Q4 this year under Backflip?

[Brian D. Goldner:]

No, the Backflip business, we made the transition and now own 100% of that business. The business revenues have been accelerating as we brought on board some new leadership, and also we see our brands like TRANSFORMERS

[Arpiné H. Kocharyan:]

Great. Great. And then one quick follow-up, Brian. One of your large customers, I guess, in the prior week talked about a tough retail environment, whether in terms of inventories, as well as sell through and trade spend. Could you just take a few minutes to kind of give investors an update on the overall health of the category as you stand here at the beginning of the year, in terms of Toys? Thanks.

[Brian D. Goldner:]

Sure. You saw that our overall sales grew, despite the fact that we had the flip in Easter and, as I said noted, our overall POS grew both without and including Easter, and grew very robustly. Our allowances overall are in line with prior periods. So, as we said in the fourth quarter, back in February, it's very consistent with the first quarter, where allowances really are very much the same as they have been in the past. We have a lot of products that are selling quite well. As Deb noted, we did take advantage of some of the marketing windows and entertainment windows in EST and our own windows around MY LITTLE PONY launching its new TV series mid-April to clean up some inventories and that goes out through closeouts. But for the full year, we do not expect closeouts to differ materially from any prior year. Just, again, taking advantage of what we're seeing in the marketplace, which is this great much more robust uptake around the home entertainment windows for major entertainment and also the continued drive that television has on businesses. So, I would say, overall, we're partnering with that retailer and all our retailers, both in store and Omni channel online, and we are seeing a great convergence of content, commerce, and innovation happening at retail and also particularly in the online space. And we're seeing a lot of our retailers performing quite well across both of those dimensions.

[Arpiné H. Kocharyan:]

Thank you.

[Operator:]

Our next question is from the line of Greg Badishkanian with Citi. Please proceed with your question.

[Gregory Robert Badishkanian:]

Great. Thanks. Could you talk a little bit about the response to Beauty and the Beast? Did it meet your expectations and what type of benefit will you receive from the box office versus the home entertainment? How do you think that's going to differ for this movie?

[Brian D. Goldner:]

Yeah. Overall, the sell through for our Disney Princess, Beauty and the Beast, and Frozen has been extremely positive around the world. And what we saw for Moana I believe we will also see for Beauty and the Beast. We saw great sell through during the time of the movie, but this EST or electronic sell through window has become a more marketable window for those OTT platforms. Lot of OTT platforms are now marketing around the availability of new movies and content and that's really helping to engender a lot more interest and driving a lot more merchandise sales. So, we saw it for Moana around EST and home entertainment. It's been a major driver, and I would expect it to be the case for Beauty and the Beast. Clearly, we see the Beauty and the Beast as a major contributor and we are very excited about the kind of sales we are seeing. In fact, if you look at the 11 Princesses that we have available in the market, right now, Belle is our number one seller. So, I think that's a good indication of just how well Beauty and the Beast is performing. But then, as you go out through the year, we have a number of new initiatives coming in the area of content. There's a new lineup for a new Tangled TV series. I mentioned the Beauty and the Beast home entertainment window. We also have innovations like Dance Code Belle coming from the product line that we're very happy about and other innovations and fashion dolls. You have the summer Descendants 2 movie coming that will be in television. And then, of course, around holiday, you have new entertainment for holiday coming for Frozen – the Olaf's Frozen Adventure and a whole new line of product coming for us to celebrate that. So, again, overall, sell through has been up significantly across the business and Disney Princess globally.

[Gregory Robert Badishkanian:]

All right, good. And then in terms of M&A opportunities and maybe the potential to combine with some other large manufacturers like Mattel, do you see opportunities or would that just be a distraction given the strong POS and momentum that you're seeing?

[Brian D. Goldner:]

We're very focused on building our brands and building our capabilities around the Blueprint. And we've said that we remain open to looking at new capabilities and on boarding new capabilities. We've also looked at a lot of our vault brands and over time have acquired a few brands here and there, like Micronauts that have been great comic book brands that we're developing. But, as you see, we're sort of shifting into the next gear as a company, and beginning to identify those new brands we want to put in the marketplace, like Hanazuki and you'll see a TV series coming this fall from us as an exclusive on Netflix which is Stretch Armstrong coming out of our vault. So, we feel like we have the right brands, the right team, and the right blueprint to drive our business.

[Gregory Robert Badishkanian:]

Okay. Thank you.

[Operator:]

Our next question is from the line of Michael Ng with Goldman Sachs. Please proceed with your question.

[Michael Ng:]

Thanks very much. I have a question for Deb and one for Brian and then a content question for whomever wants to take it. First, Deb, just a question on the ASU 2016-09 benefit of $0.015 each quarter. What stock price are you assuming? And then, for Brian, Gaming was particularly strong in the quarter and this is despite MAGIC being down year on year. Can you provide any additional color on what drove the strength? And maybe are you able to provide any color around gaming POS? I'm just trying to better understand the underlying consumer demand versus the benefit from initial shipments. And then I have a follow-up.

[Brian D. Goldner:]

Sure.

[Deborah M. Thomas:]

So, Michael, I'll just grab the stock price one, quickly. We're just assuming a stock price similar to what we had around the end of our first quarter.

[Brian D. Goldner:]

And then in Gaming, we've had a number of new initiatives and continuing initiatives that have been strong contributors to shipments and to sell through. In fact, our sell through is very strong as well, up double digits, as I noted. And we're seeing that globally around gaming. So, in the area of games, we have a few new games. I never thought I'd actually get to talk about this on an earnings call but, TOILET TROUBLE is off to a very good start and as everybody here sort of laughs, it's a fun game for preschoolers. FANTASTIC GYMNASTICS has been off to a great start. We continue to see great results around Speak Out Kids vs Parents, which is a new line extension for that brand. PIE-FACE has continued to perform at a very high level. We saw growth in MONOPOLY in the quarter, as you know. I also am very happy to see very strong growth for brands like DUNGEONS & DRAGONS and Duel Masters. So, the team at (46

[Michael Ng:]

Great, thank you very much. That was helpful. And the content question is, I believe that MY LITTLE PONY

[Brian D. Goldner:]

Yeah, so let me take the first part of that question and then Deb can talk about the geography on the P&L. The first part is we are working in partnership with Lionsgate. They've have done a great job in helping to get us global distribution. And all the territories are very excited now as we line up the global box office date for MY LITTLE PONY. Again, remember, for those of you less familiar with how we produce animation, we are taking advantage of new technology and capability so that we're able to produce this animated feature film with animated quality, animated feature film quality with a very notable cast, very all-star cast, and all-star music, but yet at a price point that's lower than other feature film studios out there, and I think that's important to note. And we're using a great modality as we roll the product line out around the world. And, yes, we will participate in box office for the movie. I don't know, Deb, if you want to -

[Deborah M. Thomas:]

Right. So we've had some moderate box office before. Our share of TRANSFORMERS, again, very modest share of box office, but that was booked in our Entertainment and Licensing segment and the box office related to this movie will be booked there as well.

[Michael Ng:]

Great. Thank you very much.

[Operator:]

Thank you. At this time, I will turn the floor back to Debbie Hancock for closing remarks.

[Debbie Hancock:]

Thank you, Rob, and thank you everyone for joining the call today. The replay will be available on our website in approximately two hours. Additionally management's prepared remarks will be posted on our website following this call. Hasbro will be participating in several upcoming conferences. On May 22nd, we will be at the J.P. Morgan TMT Conference in Boston. On June 1, we will participate in the Bernstein Strategic Decisions Conference in New York. On June 15, we'll be at the NASDAQ Investor Conference, hosted in conjunction with Jefferies at London. We're also planning an Investor Day to be held on Thursday, October 3 in our West Coast offices in Burbank, California. – August. What did I say? August 3, I apologize. Thursday, August 3 and finally Hasbro's second quarter earnings release is tentatively scheduled for Monday, July 24. Thank you.

[Operator:]

Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.