As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

11/13/06  Marvel Entertainment, Inc.        8-K:2,9    11/06/06    3:353K                                   Paul Hastings LLP/FA

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         November 6, 2006                                    HTML     18K 
 2: EX-99       Ex. 99.1: Press Release                             HTML    137K 
 3: EX-99       Ex. 99.2: Conference Call Transcript                HTML     51K 

Exhibit 99.1

 

Marvel will host a webcast today for all investors at 9:00 a.m. EST available at: www.Marvel.com/webcasts or www.fulldisclosure.com

 

MARVEL REPORTS Q3 2006 EPS OF $0.16 AND

INITIATES 2007 EPS GUIDANCE RANGE OF $1.35 - $1.55

 

- Raises 2006 EPS Guidance Range to $0.61 - $0.64 -

 

New York, New York – November 6, 2006 -- Marvel Entertainment, Inc. (NYSE: MVL), a global character-based entertainment and licensing company, today initiated financial guidance for 2007 and revised its financial guidance for 2006. The financial guidance was provided in conjunction with the reporting of operating results for the third quarter and nine-month periods ended September 30, 2006.

 

For Q3 2006, Marvel reported net income of $13.2 million, or $0.16 per diluted share, net of a $0.7 million charge for FAS 123R share-based payments. This compares to net income of $23.4 million, or $0.23 per diluted share, in the year-ago third quarter period, which did not include any stock option expense.

 

(1) The nine-month period in 2005 includes the impact of a $10 million, one-time charge related to the settlement of litigation with Stan Lee.

 

Marvel’s Chairman, Morton Handel, commented, “The framework for Marvel’s strategic transformation into a global entertainment company is largely complete, and we are excited about the outlook for our business in the coming years. We have refined the 2006 guidance as a result of better than expected operating results for the remainder of 2006. We have also initiated financial guidance for 2007 that demonstrates the strong line-up of entertainment and marketing exposure that should drive consumer awareness and sales of our licensed products. 2007 should be a pivotal year for Marvel, marked by three licensed feature film releases as well as the first full year of our toy license agreement with Hasbro.

 

“Of particular note in 2007, our Marvel Studios subsidiary expects to commence principal photography on our first Marvel-produced feature film, Iron Man, in the first quarter of 2007, and we anticipate filming on The Hulk to begin later in the year for its newly announced June 27, 2008 release date. In addition, Marvel Studios will continue development on several films targeted for 2009 and beyond.”

 

Financial Guidance:

As reflected in the table below, Marvel today revised its financial guidance for 2006 and initiated financial guidance for 2007. A few key drivers behind Marvel’s 2007 guidance are highlighted below.

 

---

EX-99	2nd “Page” of 7	TOC	1st	Previous	Next	↓Bottom	Just 2nd

 

 

 

(1) FY 2005 net income and diluted EPS include a one-time charge of approximately $12.5 million associated with the early termination of Marvel’s toy licensee, Toy Biz Worldwide Ltd.

(2) Previous 2006 guidance ranges were provided on August 2, 2006.

(3) 2006 net income and diluted EPS reflect $5.9 million (pre-tax) of non-cash expenses related to the implementation of FAS 123R.

 

Primary 2007 Financial Guidance Drivers:

 

Marvel cautions investors that variations in the timing of licenses and entertainment events, the timing of their revenue recognition, and their level of success result in variations and uncertainty in forecasting the Company’s financial results. These factors could have a material impact on year-over-year and sequential quarterly results comparisons as well as Marvel’s ability to achieve the financial performance included in its financial guidance.

 

Third Quarter Segment Review:

 

 

 

 

---

EX-99	3rd “Page” of 7	TOC	1st	Previous	Next	↓Bottom	Just 3rd

 

 

 

Operating margins in the licensing division were 47% in Q3 2006, below margins of 60% in the prior-year period, resulting from higher compensation and related expenses, coupled with lower revenues in the Q3 2006 period.

 

 

 

 

 

Balance Sheet Update:

As of September 30, 2006, Marvel had cash and equivalents of $34.9 million and $79.7 million in borrowings under its $125 million credit facility with HSBC Bank. During the third quarter of 2006 Marvel did not repurchase any additional shares under the repurchase program. As of September 30, 2006, the Company had $50.0 million remaining under its $100 million share repurchase authorization announced June 5, 2006.

 

---

EX-99	4th “Page” of 7	TOC	1st	Previous	Next	↓Bottom	Just 4th

 

 

 

 

 

---

EX-99	5th “Page” of 7	TOC	1st	Previous	Next	↓Bottom	Just 5th

 

 

 

About Marvel Entertainment, Inc.

With a library of over 5,000 characters, Marvel Entertainment, Inc. is one of the world's most prominent character-based entertainment companies. Marvel's operations are focused on utilizing its character franchises in licensing, entertainment, publishing and toys. Areas of emphasis include feature films, DVD/home video, consumer products, video games, action figures and role-playing toys, television and promotions. Rooted in the creative success of over sixty years of comic book publishing, Marvel's strategy is to leverage its character franchises in a growing array of opportunities around the world. For more information visit www.marvel.com.

 

Except for any historical information that they contain, the statements in this news release regarding Marvel's plans are forward-looking statements that are subject to certain risks and uncertainties, including a decrease in the level of media exposure or popularity of Marvel's characters, financial difficulties of Marvel's licensees, changing consumer preferences, delays and cancellations of movies and television productions based on Marvel characters, transition difficulties between licensees, toy-production delays or shortfalls, continued concentration of toy retailers, toy inventory risk, significant appreciation of Chinese currency against other currencies and the imposition of quotas or tariffs on products manufactured in China.

 

In addition, in connection with Marvel’s studio operations, including those related to the slate of feature films Marvel plans to produce on its own with proceeds from its $525 million film slate facility (the “Film Facility”), the following factors, among others, could cause Marvel’s or Marvel Studios’ financial performance to differ materially from that expressed in any forward-looking statements: (i) Marvel Studios’ potential inability to attract and retain creative talent, (ii) the potential lack of popularity of Marvel’s films, (iii) the expense associated with producing films, (iv) union activity which could interrupt film production, (v) that Marvel Studios has not, in the past, produced film projects on its own, (vi) changes or disruptions in the way films are distributed, including a decline in the profitability of the DVD market, (vii) piracy of films and related products, (viii) Marvel Studios’ dependence on a single distributor, (ix) that Marvel will depend on its distributor for the implementation of internal controls related to the accounting of film-production activities, (x) Marvel’s potential inability to meet the conditions necessary for an initial funding of a film under the Film Facility, (xi) Marvel’s potential inability to obtain financing to make more than four films if certain tests related to the economic performance of the film slate are not satisfied (specifically, an interim asset test and a foreign pre-sales test) and (xii) fluctuations in reported income or loss related to the accounting of film-production activities.

 

These and other risks and uncertainties are described in Marvel's filings with the Securities and Exchange Commission, including Marvel's Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Marvel assumes no obligation to publicly update or revise any forward-looking statements.

 

For further information contact:

 

 

 

---

EX-99	6th “Page” of 7	TOC	1st	Previous	Next	↓Bottom	Just 6th

 

 

 

 

MARVEL ENTERTAINMENT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

AND COMPREHENSIVE INCOME

(In thousands, except per share data)

 

(unaudited)

 

 

 

 

---

EX-99	Last “Page” of 7	TOC	1st	Previous	Next	↓Bottom	Just 7th

 

 

MARVEL ENTERTAINMENT, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

(unaudited)

 

 

# # #