Hasbro Balance Sheet Check Up

Hasbro (HAS) reported Q1 net revenues of $704.2 million, an increase of $78.9 million or 13% compared to $625.3 million a year ago, or an increase of 9%, net of the favourable foreign exchange impact of $25.4 million. The Company reported net earnings of $37.5 million or $0.25 per diluted share, compared to $32.9 million or $0.19 per diluted share in 2007.

During the quarter, the Board of Directors increased the May 2008 quarterly dividend by $0.04 per share, or 25%, to $0.20 per share. This is the fifth consecutive annual increase and the highest it has been in the history of the Company. Additionally, the Company spent a total of $156.0 million to repurchase 6.1 million shares of common stock at an average price of $25.63 per share.

Management commentary rested exclusively on income statement issues. So here are a few things to think about from the balance sheet.

Accounts receivable are up 19% which is faster than revenue growth. The current ratio has dropped from approximately 2.49x to 1.92x. The level of indebtedness has increased by 39% with a rather large increase in short term indebtedness. The company has been buying back its own stock and has just increased the dividend. The balance sheet has worsened and no new plans are being announced for investments for the future. Although product R&D hit $41.7 million for the quarter.

This stock could put you to sleep with its supposed lack of issues. Then you wake up one morning and wonder why you are in a cash flow bind.