孩之寶 (HAS) 2012 Q1 法說會逐字稿

Good morning and welcome to the Hasbro first-quarter 2012 earnings conference call.

At this time all parties will be in a listen-only mode.

(Operator Instructions)

Today's conference is being recorded.

If you have any objections, you may disconnect at this time.

At this time I would like to turn the call over to Ms.

Debbie Hancock, Vice President of Investor Relations.

Please go ahead.

Thank you and good morning, everyone.

Our first-quarter earnings release was issued earlier this morning and is available on our website.

Additionally, available on our website are presentation slides containing information covered in today's earnings release and call.

The press release and presentation include information regarding non-GAAP financial measures included in today's call.

Please note that during today's call whenever we discuss earnings per share or EPS we are referring to earnings per diluted share.

This morning Brian Goldner, Hasbro's President and Chief Executive Officer, and Deb Thomas, Hasbro's CFO, will review our first-quarter financial results and discuss important factors impacting our performance.

Following their statements, David Hargreaves, Hasbro's Chief Operating Officer, will join Bryan and Deb to field your questions.

Before we begin, please note 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.

These forward-looking statements may include comments concerning our product and entertainment plans; anticipated product performance; business opportunities, plans and strategies; costs, financial goals, targets, and expectations for our future financial performance, including expectations for revenues and earnings per share in 2012, as well as achieving our objectives.

There are many factors that could cause actual results and experience 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, in today's press release, and in our other public disclosures.

You should review such factors together with any forward-looking statements made on today's call.

We undertake no obligation to update any forward-looking statements made today to reflect events or circumstances occurring after the date of this call.

Now I would like to introduce Brian Goldner.

Brian?

Thank you, Debbie.

Good morning, everyone, and thank you for joining us today.

At our investor day in November 2011, as well as our toy fair meeting following Q4 earnings in February, we communicated our plan for 2012 which called for a greater percentage of our business to come later in the year as we better aligned our shipments with the timing of consumer demand on a global basis.

Our first-quarter results are consistent with the execution of this plan and we continue to believe that we are on track to deliver revenues and earnings per share growth, absent the impact of foreign exchange, for the full year 2012.

We experienced point-of-sale growth versus the first quarter 2011 in both the US and major international markets, and according to NPD through the first 2012 we gained share in the US and Europe.

Let me share some of the highlights of the first quarter.

The momentum in our international business has continued and we posted growth in every major geographic region during the quarter.

We grew shipments in the Boy's and Games product categories, and we are experiencing positive point-of-sale trends in the major markets where we receive data.

In the US and Canada, we are making progress toward our plan to return the business to historical operating profit margin levels versus 2011 results.

We reduced our headcount and right-sized the business during the first quarter.

We are also working with our retailers to better align the timing of our shipments with the timing of consumer demand that comes later in the year.

Finally, we are aggressively increasing our media spend this year versus 2011 as we shift more dollars towards selling innovative Hasbro product lines to consumers.

So far we are seeing good results.

Point-of-sale was up in the quarter 6% and our retail inventories are down 20%.

From a product category standpoint, company-wide our Boy's and Preschool category shipments grew in the quarter.

In the Boy's category, demand was driven by entertainment properties from Marvel and Star Wars as well as KRE-O, which we did not have revenue for last year.

An encouraging sign is that Beyblade has continued to be strong in many markets with strong point-of-sale growth in several countries, including the US, Canada, and Germany, and net revenues in terms of shipments flat with last year.

As 2012 is a non-movie year, it's not surprising that Transformers was down in the Boy's category.

However, although early in the year, the brand is flat with last year on an overall brand revenue standpoint with new initiatives, including Transformers Rescue Bots and Bot Shots, contributing to be Preschool and Games categories.

Additionally, licensing revenue for Transformers grew year over year.

Point-of-sale trends for Transformers were up in many categories countries, including the US, Canada, UK, France, Germany, and Mexico.

We are also seeing good early success with Transformers Prime as television is now airing in more than 160 countries.

The Boy's category will benefit from the launch of four major motion pictures in the coming months to global audiences.

In partnership with Universal, Battleship is off to a great early start.

The film recently launched in more than 50 international territories, and while we are still awaiting final numbers, we are very pleased that in just 12 days the film has grossed more than $100 million in international box office revenue.

Marvel has two tremendous films this year -- The Avengers from Marvel opens May 4 and The Amazing Spiderman from Marvel and Sony opens July 3.

Both brands are being supported with television animation and we have strong lines for both properties.

Finally, in partnership with Paramount, we are excited for the return of G.I.

Joe to the big screen in G.I.

Joe Retaliation coming to theaters on June 29.

In Preschool, Sesame Street contributed to the year-over-year gains, as did Playskool Heroes, with Transformers Rescue Bots leading Playskool Heroes' growth.

While the Girl's and Games categories were down in the quarter, My Little Pony posted positive shipments for Hasbro and positive point-of-sale growth in several countries, including the US, UK, France, and Spain.

My Little Pony television programming is currently airing in these countries, as well as in more than 160 countries worldwide.

We also launched Dizzy Dancers, which is part of our FurReal Friends line, in the first quarter and this is off to a good start in early markets like the US and Australia.

We have many innovative new initiatives coming for Girl's this fall, including Baby Butterscotch in FurReal Friends and Baby Wanna Walk from Baby Alive, as well as great new look for Littlest Pet Shop inspired by television programming in the USA and Canada this fall and rolling out to additional markets beginning spring of 2013.

We are also very excited about the return of Furby to our lineup this fall.

We are not yet sharing specific details of the new Furby, but we are pleased with the reception Furby has received thus far by our retail partners and we look forward to unveiling Furby to consumers.

In the Games category, we continue to view 2012 as a year for stabilizing games with the intent of growing the category in 2013 and beyond.

At the end of the first quarter our retail inventories in Games are down significantly in the US from last year as we restaged the business and reinvent our Games initiatives beginning in the second half of 2012.

Despite this trend, several games brands grew in the quarter, including continued strong performance from Magic The Gathering and growth in Dual Masters and Battleship.

As we outlined at Toy Fair, we have developed new initiatives which focus on the gamification of play and these are off to a good start, including Star Wars Fighter Pods and Transformers Bot Shots.

Later this year we have innovative new games being introduced, including a completely reimagined Lazer Tag, a new way to play Twister with Twister Dance, and an all-new Monopoly, Monopoly Millionaires.

This year we also have an entirely new game brands, Kaijudo, from Wizards of the Coast.

Kaijudo is supported by all-new television programming, which begins airing on The Hub in May, as well as an online battle game in May and a trading card game which launches in limited edition release in June.

We are also very excited to have established a multiyear partnership with Zynga under which Hasbro will develop and distribute wide-ranging product lines based on Zynga's games brands in a number of toy and game categories.

The first products under this agreement will be available fall 2012.

Finally, our television initiatives are trending positively.

The Hub ratings are up 32% in the first quarter versus last year in total day kids two to 11.

As we look at the overall schedule on The Hub, Hasbro-branded television shows accounted for six of the top 10 series in the quarter with Transformers Rescue Bots and My Little Pony Friendship is Magic ranking number one and number two for kids two to 11.

Outside the US, our shows are now airing in more than 160 countries worldwide and are performing quite well.

2012 is the first year in which we have programming and merchandise globally, and early sales trends support our long-stated premise that television programming drives merchandise sales.

Through a multiyear agreement with Netflix that we signed this month, we have dramatically expanded our audience by 24 million homes.

Netflix will be airing 10 Hasbro Studios shows in the US and Puerto Rico, including Transformers Prime and My Little Pony.

These shows are part of the Just for Kids section of Netflix, which is performing well.

Our approach to television programming has been an all-screen strategy from the start and this agreement dramatically expands the visibility and distribution of our shows.

In closing, the first quarter is in line with our expectation and what we outlined for you on a number of occasions.

We are on track for delivering our full-year plan, which is centered around the execution of our global brand blueprint through a focus on innovation, new inventions, immersive experiences, and our international business -- all while planning a return in the US business to historical levels of operating profit margin versus 2011 results.

Now I would like to turn the call over to Deb.

Deb?

Thank you and good morning.

As Brian said, beginning in November of last year we outlined for you our plan that called for 2012 to develop later in the year, more closely aligned with the timing of consumer demand in the US and Canada and more reflective of the trends historically evident in our International segment.

As you may recall, our plan outlines approximately 2% to 4% more of our full-year revenues to occur in the second half 2012 than we historically have reported.

This shift impacted both our revenues in the first quarter and our profits.

Consistent with this plan, first-quarter worldwide net revenues were $648.9 million, down 3% versus $672 million last year.

Foreign exchange had a negative $8.5 million impact on net revenues for the quarter.

Operating profit for the quarter was $15.7 million versus $48.9 million in 2011.

This reflected not only the lower revenues in the quarter, but also $11.1 million in severance costs.

We also had an extra week of certain fixed expenses as the first quarter 2012 was a 14-week period versus a 13-week period in 2011.

The extra week of the expense equated to approximately $6 million.

As a result, we reported a net loss of $2.6 million, or $0.02 per share, in the quarter.

Excluding the severance costs, net earnings were $5.1 million, or $0.04 per share.

Looking at our first-quarter 2012 results by segment, the US and Canada segment net revenues were $329 million, down 16% versus $391.2 million last year.

We are executing our plan to return the segment to historical operating profit margin levels and better align our shipment timing with the timing of consumer demand.

We have taken steps to right-size the organization and implement a higher level of spending in consumer-facing marketing and advertising.

As a result, in the first quarter we incurred severance costs in this segment and increased our advertising spend.

We are also working with our retailers to ensure the right level of product is available later in the year, more closely aligned with consumer demand.

As we expected, these actions resulted in lower revenues and lower profit for our USA and Canada segment.

However, we also saw positive results at retail with a 20% reduction in retail inventory at our top four accounts, as well as a 6% increase in point-of-sale in the quarter.

Consistent with the shift in revenue timing, net revenue's growth in the Preschool category was offset by declines in the Boy's, Girl's, and Games product categories.

The US and Canada segment reported an operating profit of $14.4 million, or 4.4% of revenues, for the first quarter 2012 versus an operating profit of $41 million, or 10.5% of revenues, in 2011.

The decline in operating profit margin is primarily the result of lower revenues in the quarter, as well as steps the US and Canada team is taking to position the segment for profitable growth.

These steps include not only severance costs but advertising spend 0.75% higher as a percentage of net revenues than a year ago at this time, as well as the mix of product sales versus the first quarter 2011.

In addition, we had an extra week of certain expenses during the quarter.

However, our underlying expenses are down in the quarter as the team positions the business to return to historical operating profit levels.

First quarter 2012 International segment net revenues increased 14% to $289.7 million compared to $254.3 million last year.

Absent a negative foreign exchange impact of $8.2 million, net revenues in the International segment grew 17%.

The results in this segment reflect continued growth in all major geographic regions, as well as growth in the Boy's and Games product categories, which more than offset flat revenues in the Preschool category and a decline in the Girl's category.

The International segment reported an operating loss of $5.1 million compared to an operating loss of $1.7 million last year.

This segment's results reflect continued investments in emerging markets, including the expansion of our sales and marketing office in Russia, which we shared with you in November.

Additionally, the segment was impacted by severance costs as our first-quarter restructuring actions were not limited to the US and Canada segments.

Excluding severance and one-time items, the International segment's operating loss as a percentage of revenues was slightly less than last year.

The Entertainment and Licensing segment first-quarter revenues increased 19% to $29.3 million from $24.6 million last year.

Revenue growth in the Entertainment and Licensing segment reflects the sale of television programming globally, as well as movie and licensing revenue from Transformers.

The Entertainment and Licensing segment reported an operating profit of $7.7 million compared to $5.4 million in 2011.

Higher revenues and better expense leverage drove the 42% increase in operating profit in the quarter.

For the Company overall, cost of sales for the quarter was $257 million, or 39.6% of revenues, compared to $267.2 million, or 39.8% of revenues, last year.

This included $2.8 million of severance costs in the first quarter of 2012.

Our full-year target for cost of sales remains in the 42% of revenues range.

From an expense standpoint, royalties were 8.1% of revenues compared to 6.4% of revenues in 2011 and reflect strong sales of entertainment properties, including Beyblade, Marvel, Star Wars, and Transformers.

For the full-year 2012, we continue to anticipate royalties to be in the 7% to 8% of revenues range.

SD&A increased as a percentage of revenues to 30.8% in 2012 versus 27.7% in 2011 due to the lower revenue level in the quarter as well as $5.9 million of severance costs.

We continue to target SD&A to be below 20% of revenues for the full-year 2012.

Our advertising to revenue ratio in the first quarter was up versus 2011.

For the full year, we are planning for ad spending to be up and the target for the Company's overall advertising and revenue ratio remains in the 10% to 11% range.

Moving below operating profit, interest expense totaled $23.1 million versus $21.4 million in 2011.

The $1.7 million increase is primarily due to higher short-term borrowings, as well as the impact of the extra week.

Other income was $2.5 million in the first quarter of 2012 versus an expense of $4.7 million in 2011.

The year-over-year improvement was primarily the result of higher interest income and investment gains, as well as foreign currency gains in 2012 versus losses in the first quarter of 2011.

Our 50% share of The Hub is included on this line in the P&L.

For the first quarter 2012 our share of the earnings in The Hub was a loss of $1.8 million compared to a loss of $2 million in 2011.

Our underlying tax rate for the first quarter 2012 was 26% compared to an underlying tax rate of 28% in the first quarter 2011.

We expect our full-year tax rate to be in line with the first quarter's 26% rate.

For the quarter, average diluted shares were 129.6 million compared to 141 million last year.

It should be noted that due to the fact we reported a loss in the first quarter, basic and diluted shares are the same.

If we have reported net earnings for the quarter, our averaged diluted shares would have been 131.6 million.

Now let's turn to the balance sheet.

At quarter-end cash totaled $883.8 million compared to $927.4 million a year ago and $641.7 million at year-end 2011.

Operating cash flow for the trailing 12 months was $404.3 million and includes $78.3 million in television programming costs over the period.

Almost all of our quarter-end cash balance is held outside of the US.

During the first quarter, we repurchased approximately 140,000 shares of common stock at a total cost of $5 million and at an average price of $35.80 per share.

At quarter-end $222.3 million remained available under our current share repurchase authorization.

We will continue to repurchase shares opportunistically in the open market using the current authorization as appropriate.

However, as we stated in February, we do not currently anticipate repurchasing shares at the same level as we did in 2011 and 2010.

We paid $38.6 million in cash dividends to shareholders during the quarter.

Our next dividend payment is on May 15 and reflects the 20% increase in the quarterly dividend announced in February.

We currently anticipate full-year 2012 dividend payments to be approximately $178 million compared to $154 million for the full year 2011.

The quality of our receivables portfolio remains good and receivables at quarter-end were $456.6 million versus $559 million last year and $1 billion at year-end.

DSOs were 63 days, down 12 days versus last year.

This improvement was primarily the result of a greater level of shipments occurring early in the quarter, which were collected by quarter-end, and the extra week in the quarter compared to a year ago allowing a greater level of collections to be made.

We continue to reduce our inventory levels and at quarter-end inventories where $397 million compared to $401.3 million a year ago and $334 million at year-end.

Depreciation and capital expenditures for the quarter were $19.3 million and $23 million, respectively.

We have begun 2012 as we expected, and as we outlined for you, our significant investments over the past few years are now in place and we have restructured both our US and Canada segment and our Games team.

Coupled with the strong product initiatives we have for the year, we continue to believe, absent the impact of foreign exchange, we will again grow revenues and earnings per share for the year.

Brian, David, and I are now happy to take your questions.

(Operator Instructions) Felicia Hendrix, Barclays Capital.

Good morning, guys.

You guys did provide us with a lot of detail and in the prepared remarks you did say that retail inventories in the Games business was down year over year.

Last quarter as well you provided some useful color.

Wondering if you could just give us some more detail around the inventories, perhaps around some of your other business lines.

Yes, I think Felicia we are feeling very good about our inventories both at Hasbro and at our retailers.

If you looked at the retailers, we are down nearly 40%, 39.9% or something, in terms of gains and overall we are down 20%.

We are down -- in addition to Games, we are down in Nerf where we have been a little bit long at the end of the year, but we are up in a lot of the new lines, like Beyblade.

We were in short supply at the beginning of last year.

We are up in Beyblade.

We are up in My Little Pony, which is a brand that is doing very well for us at the moment.

The brands that have been experiencing some decline, like Littlest Pet Shop; we are down in Littlest Pet Shop for example.

So, overall, as you look at our inventories, we are feeling good, we are longer wear, we have got momentum, and the product is selling well and it's driving up POS.

The brands that are moving a little bit less well at the moment we are significantly down in those brands.

Thank you, that is helpful.

Did you see -- do you think you saw any impact from Easter on either point-of-sales levels or inventory levels or overall?

Our point of sale in first quarter was up in the US, as we said, by 6% and, if you look Easter versus Easter, we were up as well in single digits.

Okay, thanks.

On the Games and Puzzles are you continuing to see a bifurcation in performance?

In other words, how did the mega brands do compared to the rest of the business?

I know you highlighted some aspects that were strong, but just in general.

Again, I think where you have the major innovations we are seeing those brands doing very well.

Obviously, Battleship is up year over year.

Magic The Gathering is performing exceedingly well, probably nearly 40% in the quarter.

We are seeing things like Monopoly with the electronic banking perform very well.

So again a range of -- where there are innovations, a range of games that are performing well.

In fact, as we look at it, a few categories of games, like children's games and preschool games, were actually up in terms of POS in the quarter.

So I think what we are seeing is as we are applying more innovation, as we are beginning the process of reinventing and re-imagining that business and we have a number of new initiatives that are first launching now, like the Fighter Pods as well as Bot Shots now, and then in the second half of the year, whether it's Lazer Tag or a number of other new initiatives that are coming, we feel very good about our plan for Games and our guidance that we had provided.

Again, stabilizing the business in 2012, growing it for 2013.

You did mention the zAPPed Game of Life; how is that doing?

It has been off to a good start.

Again, spring is always about creating the marketing and impression around the brand.

We start to see the volumes going.

But you are going to see a number of brands that marry iPads or iPhones or that hybridization of games where you have both digital and analog together, and they are off to a very good start.

And, Deb, the gross margins, just wondering what drove the year-over-year improvement on a year-over-year decline in revenues?

The improvement in gross margin really related to the product mix.

In addition to that, we had some factory under absorption last year that we didn't have this year.

And that was just -- really it was about product mix and the pricing that we took early in the year.

Okay, thanks.

Then final question also for you, Deb.

The share repurchase it just was -- we haven't seen a level this low since the fourth quarter of 2010.

Just wondering how we should think about that going forward; is that mainly due to cash being mostly offshore or other issues?

That is correct, Felicia.

Most of the cash is offshore and we have been trying to highlight it.

As a matter of fact, the predominant amount of our cash at the end of this quarter, again, remains offshore.

We continue to expect to opportunistically repurchase in the market under our open authorization; however, at lower levels than 2011 and 2010.

Okay, great.

Thanks a lot.

Rob Carroll, UBS.

Just a quick question.

If you were to talk about some of the entertainment properties, is there any color in terms of what shifted domestically during Q1, outside of Star Wars obviously?

In fact, Rob, if you look across the entertainment brand, Star Wars was up significantly in the quarter, as you indicate, but so was Marvel, and we are seeing great early success from Avengers.

We feel very good about the Marvel brand overall.

It was up significantly in the quarter.

G.I.

Joe was up in the quarter.

Beyblade was flat in the quarter.

Transformers, as a brand, was flat in the quarter.

Battleship was up significantly in the quarter.

Then kind of an entertainment brand of a different sort, Sesame Street, was up in the quarter but so was My Little Pony up in the quarter behind television.

We also, if you go underneath Transformers into Prime, Transformers Prime, the TV-related product line where we have TV shows airing around the world in 160 plus countries, that too was off to a very strong start.

So the premise around -- our premise around both television-supported initiatives as well as movies initiatives are working, albeit early days.

And I would just remind you in terms of as you think about quarter-on-quarter revenues, remember that next quarter, the second quarter, you are going to see that motion picture revenue versus year ago and things like Transformers be much stronger.

So, again, it's that mix of Transformers over time that will change what we are seeing.

Underneath Transformers, a little more color, is that we are beating the trend on the year after for movie-related or boy's action-related product lines.

Then Transformers Prime, Bot Shots, and some of our other initiatives, like KRE-O, the new brand KRE-O, are making up that difference and that is how we get back to virtually flat.

Okay.

And then on Beyblade specifically, I mean during Q1 2011 were you guys still supply constrained on manufacturing?

We were.

We were particularly as we were chasing product in the US.

In the US, we are seeing very strong point-of-sale, albeit not as strong shipments versus year ago, only in that we have been working through some early inventories.

But the point-of-sale is very, very strong and similarly catching up on year-ago inventory in international markets.

Got you.

All right, thanks, guys.

James Hardiman, Longbow Research.

Good morning.

Thanks for taking my call here.

Couple of questions; first on the retail.

You talked about a 20% decline in inventories at retail overall.

How much of that was a function of the shifted timing of your shipments later into the year, and how much of that was retail proactively scaling back on their inventories?

As we work our way through the year, do you get any of that back?

In fact, if you look back to what we had outlined for you, in fact what we are seeing is that 2% to 4% of our annualized revenues one could expect to see in the back half of the year versus the first half of the year versus historical trends.

So, in fact, we do expect that we will get that back more in line with consumer demand.

It has been a partnership between us and the retailers to ensure we are dropping retail inventories at the right places.

Meanwhile, we are bringing in a lot of new initiatives.

So whether it's Dizzy Dancers or Transformers Bot Shots or Fighter Pods in Star Wars, so you are seeing a lot of new initiatives get up and underway, as well as rolling out KRE-O around the world and Transformers and Battleship KRE-O in 10 markets.

So it's really that combination.

I would say that it is all about the inventory management as the reason why the inventories are down.

Obviously, our POS has been up so we are also selling through inventories.

And so as I think about that inventory over the remainder of the year it sounds like maybe you get some of that back, but how should I think about -- when we exit from 2012 where do you think, based on the cadence that you are hearing from retailers, where do you think you finish the year on that front?

I think we have admitted over at the end of 2011 and at the end of 2010 that in the US our retailer inventories were too high.

So I think within our guidance this year we expect to grow our revenues.

We actually are expecting a bit in the US our POS grows by more than our shipments into the trade, and we actually will finish the year with less retailer inventory than we have had in either of the last two years.

Great.

And then shifting gears here to the games business.

I have got to ask, this Draw Something game basically seems like an IOS version of your Pictionary game and this is ultimately the second time this has kind of happened to you guys.

I guess first question, can you talk about patent protection in some of your Games business?

Creating a digital version of your game, does that basically get around any patents or exclusivity you have there?

And I guess just secondly, talk a bit about your ability to win on digital platforms versus competitors that take what seems to be some of your intellectual property and just puts it on those digital platforms.

If you look at our licensing revenues in digital year over year, they are running about year ago -- a little bit down versus year ago, but that is just as we transition from console gaming to some of the online and mobile gaming.

But, again, very strong revenues overall continue in our digital gaming.

Obviously, we have some protections around trademarks, but there is play patterns and copyrights that you can't protect.

And so one of the strategies we have had proactively over the last couple of years, since 2007 as we signed the deal with EA and then more recently with Activision, has been to ensure that our games are out there.

And so we have, I think, over the period over 75 games, brands EA has launched and titles that they have launched for Hasbro in the digital arena.

And with good operating profit margins for us as a partner in all of that.

As we go forward, clearly we have reached out to some of these partners.

Our long-term deal now with Zynga enables us to take advantage of some of their development.

Certainly anything that Zynga has would be something that we will develop and we are going to develop it in a way that really is additive, not just exploitive, of the online property.

So you will see this fall our new launches, which we haven't outlined yet, but the new launches for this fall, literally, add to the play in a way that you haven't been able to play before online.

Then in doing so in our analog game it enhances the online play and then the online play in turn would enhance the analog play.

So you will see that we are going to marry up our brands in a number of ways.

You will have fully digital versions, hybridized versions, versions on the iPad and versions on mobile, but also brand-new ways to think about what we might call, broadly speaking, broad gaming and off-the-board gaming as we go forward.

Excellent.

Then just one last clarification here; help me understand the extra week.

You talked about it being $6 million in fixed expenses.

Was there any impact on the top line and, ultimately, what was the bottom-line impact of that extra week?

Well, the extra week really, because of the time of the year when it comes, we talked about it being in the early part of the year, so it really didn't add anything significant in terms of revenue.

However, by having an extra week of fixed expenses in the Company it impacted us by about $6 million in the quarter.

And that is ultimately the net impact, $6 million, to the bottom line as well?

That is right.

Great.

Thanks, guys.

Margaret Whitfield, Sterne, Agee.

Good morning.

I was curious, since I saw some Avengers products on shelves early, how much that line contributed to the quarter.

Also, with Beyblade starting out relatively good in terms of consumer demand, what is your current thought on where you might end the year for Beyblade?

Will it still be down significantly?

Well, thus far, Margaret, Beyblade is basically flat.

Obviously, we have guided everyone to not expect that as we go forward, but it's very heartening to see the kind of POS gains we are seeing in the US and several countries around the world.

We had mentioned to you we were going to try to buck historical trends by adding new innovations to Beyblade, which we are adding.

It will both be expressed in toys as well as expressed in the animation series itself, which is new for the brand versus the last time it was launched.

Let's see, on Avengers, it did contribute to the quarter.

I don't think we give like quarterly numbers, but it did contribute to the quarter.

We began shipping Avengers but overall we feel very strongly that Avengers is going to perform very well in the marketplace.

What is heartening about the Marvel business for us is not only is it growing in the US, but it's growing more quickly internationally as we work with Marvel globally to really build this business.

And so we are seeing great uptake on Avengers and anticipation and excitement around Spiderman that follows.

We also have a lot of classic product, and the Marvel business will also be supported by a number of animated shows, both here in the US and outside the US around the world.

So, again, the Marvel business for us we had always seen as a significant contributor, plus side contributor, and it's bearing out.

And Sesame Street did not increase overseas, but it did in the US, of course.

It wasn't in the line a year ago.

What is going on with the Street in terms of your international markets?

It takes a bit longer.

A lot of preschool products are language dependent, so you have to take the time in order to translate those products into multiple different languages so that takes a few more quarters.

Then if we want to coordinate that with the television episodes that are airing around the world, so I think you will just see that happen.

Again, it's a matter of timing.

Can I conclude from the inventory at retail that your carryover inventory is virtually gone at this point?

I mean the retailers are heading into a second quarter and clearly they have got inventory to sell.

I think areas where we were long we have certainly worked that down and it's an adequate level.

And they have got a lot of inventory, not a lot but sufficient inventory, of the new initiatives, like The Avengers and Battleship, which are coming very shortly in supply in terms of Beyblade now, whereas they were short a year ago.

So I think we feel good about the overall quality of the inventory.

And for Deb, could you comment on the outlook for program production cost amortization for the year?

Because you were flat year over year in Q1.

Yes, we were and for the full year I think we are looking at about $70 million in program production amortization (multiple speakers).

Yes, it would be about $60 million to $70 million, Margaret.

Right.

Thank you.

Greg Badishkanian, Citigroup.

Wondering how do you think that the inventory reduction overall at retail for the industry will impact the manufacturers, both from a sales perspective or maybe needing to have more inventory on hand as we get into the holiday.

I think what is interesting is that in fact what we have done the US as part of employing this strategy has been to up the advertising and to work through good products in the springtime, driving POS of product lines that were good, albeit not shipped necessarily in the quarter, driving down that inventory and beginning to ship a lot of new initiatives in a lot of these brands.

And you will see more of that as we get into the second half across the brand portfolio, whether it's Nerf or Pet Shop or Pony, or in our Games business a raft of new initiatives that are widely supported by retailers, not only here in the US but globally.

So I think it has been part of our express strategy.

It's something we outlined for you last fall and again in February, and I would say we are absolutely executing the plan we intended to execute in 2012.

David, I don't know if you want to add anything?

No, I think, as we all know, most toys sell 50% in the last quarter of the year.

In international markets, in markets around the world, we tend to shift close to 40% in the last quarter of the year.

In the US, working with the retailers, we try to a level [out] that a bit and we have been shipping a lot more during the early part of the year and only maybe 24% during the fourth quarter of the year.

I think as we and retailers work d together we say for go-forward we need to -- shipping patterns need to look more like the international level where the issue is associated with shipping too much early in the year.

And to be honest, if you are going to give retailers floor allowances or warehouse allowances, then you are spending money against the retailer which you would be better spending against the consumer in your advertising.

So I think with working with the retailers in the US we are saying, no, but we will be shipping it later in the year, more in line with consumer demand.

It also allows us to be more responsive.

As we start to see product lines accelerate, we are able to ship more of those inventories.

And we are already seeing that in the first quarter where we are able to really look at new product lines that have begun quite strongly in certain regions or territories -- Star Wars Fighter Pods and Avengers, Transformers Bot Shots -- where we are able to fill that inventory because we haven't already put inventory into place.

Good, thanks.

Just in terms of sales of your movie-related products; last year was obviously a tough comparison year.

Do you have any change in terms of your view on how some of those products are selling at retail at this point?

As I was looking at the numbers, what we are really seeing, as we said, is Transformers overall as a brand is relatively flat year on year and that has to do with new games initiatives and our Preschool initiative with our Rescue Bot line.

Overall, if you look at the Boy's business, it's tracking better than one would expect on a year-over-year decline in following a movie year.

So typically we would see about a 50% decline and we are tracking more strongly than that in the first quarter.

Recognize that we had the benefit of the DVD out in the fourth quarter, lots of excitement around the Transformers brand as people see that, and still shipping Transformers-related movie product and selling it through in the first quarter.

So right now we are down around 30% versus a historical level of 50%.

Good.

Just finally, on Games, how much do you think of the decline and softness that you have been seeing the last year or so?

Is it due to just the category being a little bit softer, which we have seen, or is it just a function of your getting your new product as well as marketing and improving that to capitalize on it?

Really it's a shift in thought process and a shift in strategy.

There was a day many years ago, actually now as we think about it not that many years ago, that you could sell a new game, quote-unquote, game brand, and you would have a game SKU and a TV commercial and you would be off to the races.

What we have really recognized now is you need a raft of innovations, you really need to think about that brand across multiple platforms, and you need to focus on fewer brands and much more intensely.

And so in doing so, like Magic The Gathering is a perfect example and very emblematic of what we have done, which is to develop the Magic The Gathering online game, a digital game that marries up with the analog game, to go back out to lapsed users.

The team has done a very effective job of getting lapsed users as well as new users into the analog, meaning paper-based trading card game, around the world but also marrying that with any number of iterations of digital game play.

To me that is a great example of what you are going to see from us in developing that ecosystem, both in our own brands as well as our partnered brands, alongside of Zynga, alongside of EA, alongside of Activision.

Great, thank you.

Eric Handler, MKM Partners.

Thanks for taking my question.

So first on Battleship, correct me if I am wrong, but I believe the gross revenue participations from the film are not included in your guidance.

Now that we are seeing a strong start to the film internationally, wondered if you might be able to give some color on what those contributions could be in 2012.

Then, secondly, with regard to your buybacks, given your positive tone toward the back half of the year and given the prices where you bought stock back before, why not be a little bit aggressive down here in the low 30s?

So on the first point, thanks for the question.

Battleship now, we have gotten some final numbers in early this morning from the weekend, so after just 12 days we have done nearly $130 million, $129.6 million, at the global box office.

Very strong starts around the world; number one in a number of markets around the world -- in Asia, in Europe, in Russia.

So, again, really bearing out our strategy.

In terms of our participation, as we get participation, which we are a first dollar gross participant on this film, that would appear as revenue in the Entertainment and Licensing segment of the business, although I am not going to guide you as to what that could be.

But, again, it's an improvement versus our prior deals that we had made as we get more established in --

And we certainly planned for that in our plans.

In the guidance we gave we certainly assumed that we would be getting some revenues from Battleship participation.

Right.

So thank you for that.

In terms of the buybacks, I think it's a matter of us looking at our cash throughout the year, utilization of cash versus short- and long-term debt.

Making good decisions about how to return excess cash to shareholders, recognizing that a lot of our cash is now held offshore.

So, again, we have guided around -- remembering last year that we were buying back shares more aggressively based on our (inaudible).

Okay, thanks.

Sean McGowan, Needham & Co.

A couple questions here.

Could you be more specific about where you are seeing the bulk of the weakness in Girl's toys?

You mentioned a couple of lines that were up, but get us to the 18% decline somehow.

I think the biggest element there has been as the US business is down in the first quarter clearly that has impacted the Girl's business in particular in a couple of brands.

Pet Shop has been down.

It's down more in the US than internationally.

And FurReal Friends year over year in the first quarter is certainly down as we transition out of some product lines and into the early days of Dizzy Dancers.

Those two things have an impact in the quarter given that it's a low revenues quarter overall.

And then, as we have said, Littlest Pet Shop is now planned for the new animation as well as a whole new line in the fall.

FurReal Friends, in addition to Dizzy Dancers which is off to a strong start, has a number of new brands.

Then Baby Alive that had modest growth in the quarter has a lot of new initiatives in the second half of the year.

Thank you.

Could you comment on what you are seeing within Games at point-of-sale relative to some of the other categories?

I mean you mentioned that overall it was up 6%, but how is it trending in Games?

Games was down in POS 5.8% around in the first quarter, but recognize that is far above the decline in inventories and in sell-in.

So we are selling down and selling through those inventories; a number of Games' brands certainly performed well in the quarter.

We have strong sell-through in Transformers Bot Shots and Fighter Pods, as well as Monopoly and Battleship.

And there is a few other brands I probably haven't mentioned but certainly in that mix.

We are also selling through inventories of the Games.

Okay, thank you.

The program -- just to follow-up on Margaret's question of the program amortization costs being flat with last year.

Is this the kind of relationship of first quarter to full year and that we should be expecting from here on out because it just seems a little low relative to the full year?

Actually, more than a little low.

I think it's really just kind of the timing.

If you look at and think about when we talked before about looking at the trend of the amortization along the lines of our revenue in the quarter, that is probably why it's looking so low right now.

So the amortization timing tends to follow basically the revenue trend.

Right, I just thought that with all the program sales that happened late last year or in the second half anyway of last year that that line would be at least up.

Right.

And we do have a lot of those shows that are going to start to air a little bit later in the year.

Okay.

Then I guess a related question then, so how will Entertainment revenue then trend vis-a-vis program sales?

You book a deal, then I know you recognize the revenue over some time period.

So how is that going to trend the balance of this year?

Will we continue to see increases in that line?

You would see that entertainment line trend up as we get paid for our TV shows.

The TV shows have to be delivered and, therefore, they have to be translated into multiple languages and we have different windows of airing around the world for those shows.

But as we start to put those shows on the air we get paid for the episodes and that is what you are beginning to see.

But again it's early days, but the early indications, if you look at the impact from television, the early indications in the US, throughout Latin America, Korea, Hong Kong, Taiwan, Singapore, I mean every market really where Transformers Prime is now running we are seeing strong point-of-sale trends.

Okay, thank you.

Then two other quick questions.

So in terms of royalties or whatever you would get on the box office participation on Battleship has some of that already been booked at the time -- was some of that booked last year when production got to a certain level, or has any of that been booked?

We do book some when we start principal photography on the movie, so we did recognize that last year.

It may have even been And late in 2010.

However, the box office revenue when it begins to be reported to us will be recognized through Licensing.

As David mentioned, that was included -- there was an amount of that included in our plan when we gave our guidance for the year.

So that is the kind of thing at the end of the quarter they tell you what you earned and you find out what it is when you open the mail and look at the check, right?

Obviously, we can do some math and we can look at how the box office has performed and what our participation is.

So just a lag in timing.

Then, finally, could you clarify what your goal is when you say returning US and Canada to historical levels of margins?

What is your target timing on that?

Is it run rate by the end of this year, or is it for the full year, or is it full year 2013?

Operating profit margin is to get more normalized and I think I would look back to years like 2010 as a good guidepost.

We would like to get there or close to that by the end of this year.

So that would be for the full year 2012 the US and Canada segment operating profit margin would be similar to 2010's level, not 2011's.

As we say, versus 2011 we would be it therefore up and that to us is back to more historical levels and operating profit margin.

Then at go-forward we would drive off of that number.

Okay, great.

Thank you.

Gerrick Johnson, BMO Capital Markets.

Good morning.

A question on the balance sheet.

Other current assets were up 62%; this is a three-quarter trend of big growth.

What is in that line that is causing that to grow?

Well, year on year it's actually just VAT receivable so it's a timing issue on year over year.

I am sorry, is a what receivable?

Tax receivable internationally, it's value-added tax.

Oh, okay.

That is what is really causing it.

It's just a timing issue.

Okay.

Brian, I think you mentioned Bot Shots and Fighter Pods in Games.

Is that accurate or should it be in Boy's?

No, Fighter Pods and Bot Shots are not considered board games, but they are in the broader definition of games just as Bop It is in games or Lazer Tag is in games.

Okay.

Speaking of Games, how about just the board game performance on its own?

I was going to ask excluding trading card games, because you call those out as strong performers, but now I guess I will exclude trading card games and Bot Shots and Fighter Pods.

How about the core board game business?

Board games, the board game business was certainly down in the quarter, not down as much as inventories were down in the quarter.

As we said, inventories were down 40% in the quarter.

We are seeing some positive areas within board games.

As I mentioned, for example, Monopoly and some places where we have electronic banking in some of the early innovations that were out there, either from fall or in springtime.

We would expect to see more of that in the second half of the year and as well we will be launching the line of Zynga-based games and that will be happening in the second half of 2012 as well.

So that is where we are.

Okay, great.

One last one if I can.

Your marketing that you planned for this year, is there any shift in the way you are using those marketing dollars, for instance, traditional?

Yes, there is.

Actually, Gerrick, let me follow-up on one more point.

The biggest decline within the Games business is actually the Puzzle business and we have a plan for how to handle Puzzles.

So that -- as a percent that is really the biggest drag on Games in the first quarter.

Okay, thanks.

Okay.

And then -- sorry, what was the question?

I was asking about marketing, the increase in marketing spend this year.

Is there going to be any sort of shift in the way you use those marketing dollars this year away from how we traditionally TV advertise things?

I think you will see it's kind of an all-platform strategy.

The team has done a very good job in looking at how consumers make decisions about purchases, particularly in mature markets and certainly particularly in the US.

Recognizing the importance of digital platforms you are going to certainly see an array of new digital marketing elements.

Television is still important and you will see us focus on TV when we believe there is the highest propensity to drive consumer demand around Hasbro's strong brands and innovations.

So it's really kind of an all mediums approach to marketing.

Great, thank you very much, Brian.

Michael Kelter, Goldman Sachs.

I wanted to ask within Boy's about Nerf, a brand that was flat overall in 2011, including down in the US after a multiyear positive run.

What do the current trends look like for Nerf, and how confident are you that you can get that growing again versus being maybe a third drag in Boy's along with Transformers and Beyblade this year?

I think if you look at Nerf, the biggest decline in Nerf year over year is really in the US business, so that has to do, as David mentioned, with the fact that we did have too much inventory on the brand and we have been selling through.

The sell-through on that brand has been very good in this first quarter and we do have some new initiatives around the glow in the dark products in the springtime, as well as a lot of darts promotions and so we have seen sell-through.

Lots of promotion around that brand, so again that has really been the biggest element there in terms of the drag on the business.

And I think in our international markets where sales tend to come later, as we said, Nerf is still very much a growing business.

Then the other thing, Michael, to know is we have a complete reinvention of the core dart business, which we did not have last fall.

If you remember last fall with Vortex we added a new form factor in the disc shooters.

But this fall we have new dart-related business, the Nerf Elite line, which is brand new to the business and will allow for there to be a number of SKUs in the fan favorite dart business that are brand new and much higher performers.

And then I also wanted to ask, from what I understand action figures as a category hasn't been doing all that great for a little while now.

I am curious to understand, since it's an important category for you, to the extent that you have visibility what do trends look like?

What do you think is going on there?

Are play patterns changing for children and this is something to keep an eye on, or do you think it's maybe just a fleeting kind of dynamic because the properties haven't been enough to stimulate people to purchase?

What do you think?

I think we have certainly, over the last year, expanded the number and types of play patterns and the different kinds of innovations.

Whether it's Preschool Transformers with our Rescue Bots and a new play pattern that is easier to transform for littler hands, in Bot Shots which is a brand-new play pattern in Transformers which is doing very well early this year as we launch it.

That is a new play pattern, although it's action figures and it's merchandise in the Boy's aisle.

Fighter Pods within Star Wars, which is a whole new play pattern.

So you are going to see from us a raft of new innovations.

In a short while, coming out, I believe, May 1 we will start with -- and we told you about Bonkazonks.

Bonkazonks is all around the Marvel brands in a fun, really a fun new way to play action figures.

So it's both the collectability of action figures as well as a fun new battling kind of a play pattern.

So when I talk about the gamification of play this is really what we are thinking about.

So many of our brands have the opportunity to provide these new, innovative ways to play and so we are out really doing that proactively.

We have been doing this for some time, hence, we are launching these new initiatives now.

The last area I would say is that as we see the growth of KRE-O around the world we are really reemphasizing the innovation strategy there.

There are things that we understand about that business being in the Boy's action business that we can really bring to KRE-O as we roll out, and that is why we are seeing such good early success.

And Preschool, which was up only 2% just by adding Sesame Street to the mix.

And Fisher Price wasn't doing that well of late either.

What do you think is going on from a consumer perspective in that category?

Why are sales not necessarily all that robust in Preschool right now?

If you look, our POS in Preschool was actually very strong in the quarter, so I think it's a matter of looking at Preschool again a bit differently.

Our PlayDoh business is part of our Preschool business, and while it's only up a bit in revenues, the POS as we start to ship new playsets and new innovations it was quite strong in the quarter.

If you look within Playskool Heroes that whole category is really performing well with Transformers Rescue Bots, the Star Wars Jedi Force, and the Marvel Superhero Squad, which is also on air on The Hub.

And those are all strong performers.

So I think it's different kinds of play patterns that are certainly working and certainly Sesame Street is a major new contributor for us.

So I just think it's early days, early in the year and certainly a lowest revenue quarter within the year and so, clearly, positive signs for us as a POS around our new initiatives.

Lastly, I just wanted to circle back on inventory because, yes, the number this quarter was roughly in line with last year, but if you recall, you guys weren't all that happy with the number last year and you spent all of 2011 trying to work it down.

You had and you did a great job with that.

Now that inventory number in dollars is back pretty much exactly where you started beginning of 2011, how should we think about that?

Remember that our business outside the US grew by 14%, or 17% ex-FX, so pools of inventory are following sales.

We have more territories, more new Hasbro marketing and sales teams and marketing and sales personnel selling Hasbro brands around the world than we ever have.

And so as we build our capabilities and build a brand blueprint, meaning TV on the air around our brands, motion pictures coming from our partners and from Hasbro, you are going to see a demand for more inventory because those markets need to feed consumer demand in those geographies.

So that is a major driver of that.

Then in the US, clearly, we have a lot of new initiatives.

What we wanted to do was clear out the retailer shelves and clear out retailer inventories so that we would make room for our new initiatives that could benefit from the additional advertising, and to guide you guys to say that, in fact, we are going to follow more of consumer demand.

And do that early enough so that you could be along there with us and on the same page as we go through this process.

Thank you very much.

Tim Conder, Wells Fargo.

Thank you and thank, Deb and everybody up for the additional disclosure with the slide deck.

I think that is helpful and the disclosure through the call here.

A couple of things; most questions have been answered here but, Brian, there has been a little confusion out in the market as far as the definition of Games being stable this year, your goal.

Can you clarify that?

Are you talking flat year-over-year revenues or are you talking stabilization in the rate of decline?

Okay, I guess the way I would view it -- and thank you for the question -- I would view stable meaning we would be very pleased if we improved the rate of decline is one way to look at it.

But I would just look at it in simple terms, Tim, to be plus or minus a few percentage points in terms of revenue for the full year.

Okay, okay, thank you.

Just a very simple way to look at it is if we were down a few percentage points in revenue this year and our rate of decline was better than prior years or be up a bit, if everything broke right for us, that would be -- to me that is the range we are talking about.

So it both has those two components; it's stabilizing the rate of decline and it's also looking at just overall revenues being plus or minus a few percent.

Great, great.

And on the Zynga relationship, you talk about and you have mentioned this since day one of announcing the relationship that in the back half of the year you are going to be shipping product off of Zynga properties.

I think also you had mentioned that there is the ability under the agreement for Zynga to do online games to be developed off of Hasbro's IP.

Any time table for where we could potentially see some of that being developed here?

We certainly will have a number of brands of Zynga's activated across a number of different iterations for this fall, so that is on track.

There will be a number of ways to play Zynga games in an analog space, as well as adding to the digital play in really unique ways.

I can't wait to tell you guys or for you guys to see what we are talking about there.

But certainly an added enhancement building on what I talked about is that ecosystem -- one enhances the other and the other feeds the next in a virtuous circle.

So that is certainly part of our plan.

If you look at our opportunities in digital gaming as we go forward, certainly we have great partnership with Electronic Arts that was signed in 2011.

That deal goes through the end of 2013 on a number of Games brands.

There is an opportunity to renew that under certain conditions for another four years and we have talked to you guys about that, but there are Games brands that are available to us right now to go after and to look at.

And there is new ways to think about Zynga's brands that would benefit the analog space.

We are doing both of those things right now.

Clearly, also Activision is working with us as we are also working in joint ventures with NetDragon and Jagex on some MMOGs, so there is an array of ways that we are bringing to life our Games business across a number of platforms.

Okay.

And then one related to the Girl's business, and I apologize if I missed this, but I don't think you commented on how Girl's POS specifically was trending in the quarter.

I am looking.

Girls POS was down in the quarter and it was down less than shipments.

Okay, great.

Thank you.

John Taylor, Arcadia Investment Advisors.

Good morning.

So I got a couple of questions.

First on The Hub, I wonder if you could give us any sense quantify for us what kind of lift you are seeing in the markets?

I think you mentioned Pony for instance.

So is there any way to do a before and after and kind of give us a sense for that?

That is the first question on Hub.

The second one is, given all the timing issues related to amortization and stuff that folks were asking about before, I wonder what the first-quarter episodes broadcast versus episodes broadcast last year might have been like and kind of maybe what your outlook for the full year is versus full year of 2011.

So two questions on Hub and then I got another question.

So, John, as you look around the world, in fact, My Little Pony is on the air in more than 160 countries, as is Transformers Prime, so we are actually seeing strong lifts in POS in early shipments around the world.

Our POS on My Little Pony, for example, even in the US was up over 50% in the quarter.

Transformers was up very strongly behind Prime in the quarter in the US.

As we go around the world, we are seeing that My Little Pony in Latin America is up well more than 50%, whether it's Peru, Chile, Brazil, Mexico, Ecuador.

So again great point-of-sale gains.

It's really our long-stated premise but not a -- it's not lost on everyone that television, particularly television outside the US, has historically driven merchandise sales and that is what we are seeing.

On Transformers, the programming continues to drive and help us to drive our retail POS.

Whether it's Korea, Singapore, Hong Kong, Europe, the UK has seen significant growth in Transformers Prime in POS year-to-date.

Recognizing again it's still early days, but certainly a strong performance.

As you look at The Hub, our growth on The Hub in the first quarter was up 32% in kid's total day -- our ratings in kid's total day against kid's two to 11.

It also grew with kids six to 11 and it also grew with 18 to 49-year-olds.

This is the second-best quarter we have had since our start, and so again it bodes well to the trends that Margaret and her team are putting together.

Lots of new excitement as we bring on new series and we get to our second and third seasons on some of our shows, as well as adding new shows like Kaijudo.

So overall very positive trend within television.

I was wondering on the episode side, though, as you take the Hasbro programming global kind of what your episode comparison looked like maybe first quarter and your outlook for the year.

Well, I am trying to figure out how to answer that the best --

I mean, 160 countries that is a good headliner, but you just kind of wonder how many episodes are under each one of those.

Okay.

So what we have sold thus far is really -- we have sold in season one or season one and two depending on brands.

Overall, we have greenlit, which doesn't mean they all have been produced, but we have greenlit over 750 half hours of programming around all of our brand shows.

Our brand shows are six of the top 10 rated shows on The Hub and are performing -- working with great partners around the world.

Whether it's Disney or Nickelodeon or Cartoon Network or [Carousel] in Russia, our shows are performing very well.

As we are trying to give you some early indication of POS, certainly contributing to our POS as well as contributing to revenues, because both Pony was up in the quarter versus year ago and that wasn't just in US, but actually vast growth outside the US.

Transformers being flat, certainly Transformers Prime has contributed to helping us get back that gap -- this is what we have talked about a lot -- that we didn't have been 2010 because we were waiting on the launch of The Hub.

We didn't have an animated series throughout 2010.

We do have that animated series in 2012 so we would expect the decline in Transformers to be less than a traditional 50% drop-off in a non-movie year.

So I am not sure how else to answer that, but I am trying to give you some color around it.

I was just kind of getting at the broadcast episodes around the world, kind of how many half-hour segments have actually been shown, that kind of comparison as a unit revenue driver and cost driver kind of thing.

So most of the series began airing roughly in the fourth quarter of 2011, so it has just been early days, so I would say your into season one primarily.

I would doubt that anywhere around the world has seen season two, although it has been produced.

We are also translating episodes as we speak.

So I would say primarily you are talking about season one shows and that is the first season of Transformers Prime, which was 26 episodes; the first season of My Little Pony, which I remember as being 26 episodes; Pound Puppies; Chuck and Friends in Preschool; and then some of our game show formats being translated and aired in countries around the world.

Okay, great.

Then, Deb, on the DSO coming down so much and the shift in timing of shipments and so on, do you think that was related to the price increase?

As I recall, you had one, what, on February 1 or something?

Did people buy early?

It may have been some of it, but it was really the January and February compared to the March timing.

So it really was a shift in the quarter but it was February as much as March -- as much as January, rather.

And that extra week helped as well, particularly internationally where you get the very last day of March being a big collection day.

Okay, great.

Then on the whole first half versus second half shift to 2% to 4%, so Brian can we assume that huge -- sorry, I am having something in my throat -- huge piece of that is related to the game shift closer to the fourth quarter?

Or is there a shift towards more seasonal, the sort of higher price point holiday stuff, shipping later?

I mean is there any way to talk about that in baskets?

Yes, I think the way to think about it is in the first and second quarters it has been about, particularly in the first quarter, been a reduction of historical inventories.

Also, as David outlined, typically the US might do 25% of its revenue in the first quarter, whereas the total company might do 15% to 17% of its revenue in the first quarter.

We are going to follow more of that pattern over the first and second quarter just in terms of matching consumer demand and consumer take away so as to allow us to get visibility to those lines that are really performing.

Given that we have made so many strong strides and improvement in our supply chain, we are able to do that, more just-in-time inventory, and, therefore, able to follow really the consumer takeaway patterns.

So it's kind of an across-the-board approach.

It's advertising when the consumer has a high propensity to buy.

There is certainly mitigating factors within that, especially in 2012 as we have strong entertainment properties coming out in second quarter, but recognize we have strong comps to go up against n versus year ago in Transformers in particular.

So I think that, as we view the year, we look at it as being -- the best way to view it is that if you take 2% to 4% of historical level annualized s inventory and were to shift that that is what we sort of describe to you guys back in November and again in February.

I think some of you have understood that more than others.

Okay, thank you.

There are no further questions at this time.

I would like to turn the floor back to Debbie Hancock for closing comments.

Thank you, everyone, for joining the call today.

The replay will see available on our website in approximately two hours.

Additionally, managements prepared remarks will be posted on our website following this call.

Finally, before we end today's call, we wanted to take this opportunity to update you on some of our Investor Relations activities for this year to facilitate your planning.

First, our second-quarter earnings release is tentatively scheduled for Monday, July 23, 2012, and our third-quarter release is tentatively slated for Monday, October 22.

Second, we are not planning to hold our fall investor day this year and plan to use this time as an opportunity to get out on the road and meet with investors.

Additionally, on June 4 we will be presenting at the Goldman Sachs Lodging, Gaming, Restaurant, and Leisure Conference.

We look forward to speaking with you in the coming months.

Thank you.

This concludes today's teleconference.

You may disconnect your lines at this time.

Thank you for your participation.