More good news IMO..............................I was looking for 80-90%, so I am happy. The ship has turned for this company. Many good days ahead.......all aboard! clear seas ahead............
Press Release Source: Marvel Enterprises
85% Of Marvel's Convertible Preferred Shares Were Tendered in Exchange Offer
Tuesday November 19, 9:20 am ET
NEW YORK--(BUSINESS WIRE)--Nov. 19, 2002--
Accretive to EPS Absent One-Time Charge
Eliminates $14.5 Million in Annual Preferred Dividends
Eliminates $176 Million in Convertible Preferred Obligations
Increases Trading Liquidity of Common Stock
Necessitates One-Time, Non-Cash Charge of $55.3 Million in Q4
2002
Marvel Enterprises, Inc. (NYSE: MVL - News), announced today that 84.6%, or 17.6 million shares, of its 8% Cumulative Convertible Exchangeable Preferred Stock ($10.00 par value; OTC BB: MVLEP) were validly tendered as of yesterday's expiration of the Company's exchange offer.
Under the exchange offer, Marvel will issue 1.39 shares of its common stock for each share of preferred stock tendered in the exchange. Accordingly, Marvel will issue a total of 24.5 million shares of common stock in exchange for the preferred shares that were tendered. Marvel expects that the common stock will be distributed on or about Thursday, November 21, 2002, at which point Marvel will have 60.8 million common shares outstanding as compared to 36.3 million shares at September 30, 2002.
Reflecting the issuance of 6.2 million shares in excess of the conversion terms of the preferred stock (1.039 shares of common stock per preferred share), Marvel will record a fourth quarter non-cash charge of $55.3 million as a preferred dividend. The charge was calculated as follows: (1.39 - 1.039 = 0.351) x $8.95 (Marvel's closing price on November 18, 2002) x 17.6 million preferred shares tendered for exchange.
As anticipated, Morgan Stanley, Whippoorwill Associates and Isaac Perlmutter tendered 100% of the preferred stock they own (collectively 11.3 million shares). Mr. Perlmutter is Marvel's Vice Chairman, and Shelley Greenhaus, President of Whippoorwill, is a Marvel Director.
Giving effect to the exchange offer, preferred stock as reflected on Marvel's balance sheet will be reduced to $32.1 million (3.2 million shares) from $208.1 million (20.8 million shares) at September 30, 2002. The remaining outstanding preferred shares are convertible into Marvel common stock at a rate of 1.039 common shares for each preferred share held.
Excluding the one-time, non-cash charge, the exchange offer will be immediately accretive to earnings per common share as it has substantially reduced the burden of required payment-in-kind (PIK) dividends on the preferred stock from approximately $16.3 million on an annual basis to $2.7 million.
Pro Forma Comparison
The following pro forma information presents the effects of the exchange offer as if the exchange had occurred on January 1, 2002 for the statement of operations data, and as if the exchange occurred as of September 30, 2002 for the balance sheet data. The pro forma results do not include costs of the exchange offer or the preferred dividend charge of $55.3 million incurred as a result of the exchange offer.
Statement of Operations Data:
(in thousands, except per
share amounts)
Nine Months Ended
September 30, 2002
Pro Forma Actual
Revenues $ 212,539 $ 212,539
Operating income 57,384 57,384
Net income - (1) 15,391 15,391
Preferred dividends 1,966 12,216
Net income attributable to
common stockholders $ 13,425 $ 3,175
Income per share - basic $ 0.22 $ 0.09
Income per share - diluted $ 0.21 $ 0.08
(1) The nine months ended September 30, 2002 include a one-time
non-cash, after-tax charge of $4.4 million, net of an income tax
benefit of $2.8 million, related to the implementation of FAS 142,
"Goodwill and Other Intangible Assets".
Balance Sheet & Other Data:
(in thousands except per
share amounts)
September 30, 2002
Pro Forma Actual
Stockholder's equity $ 237,896 $ 61,937
Book value per common share $ 3.92 $ 1.71
About Marvel Enterprises
With a library of over 4,700 proprietary characters, Marvel Enterprises, Inc. is one of the world's most prominent character-based entertainment companies. Marvel's operations are focused in three areas: entertainment (Marvel Studios) and licensing, comic book publishing and toys (Toy Biz). Marvel facilitates the creation of entertainment projects, including feature films, DVD/home video, video games and television based on its characters and also licenses its characters for use in a wide range of consumer products and services including apparel, collectibles, snack foods and promotions. Marvel's characters and plot lines are created by its comic book division which continues to expand its leadership position in the U.S. and worldwide while also serving as an invaluable source of intellectual property. For additional information visit the newly revised Marvel Web site at marvel.com.
Except for historical information contained herein, the statements in this news release regarding the Company's plans are forward-looking statements that are dependent upon certain risks and uncertainties, including the Company's potential inability to successfully implement its business strategy, a decrease in the level of media exposure or popularity of the Company's characters resulting in declining revenues from products based on those characters, the timing of releases and the decisions to proceed with feature films and TV series based on the Company's characters, the lack of commercial success of entertainment projects based on the Company's characters, the lack of commercial success of properties owned by major entertainment companies that have granted the Company toy licenses, the lack of consumer acceptance of new product introductions, the imposition of quotas or tariffs on toys manufactured in China as a result of a deterioration in trade relations between the U.S. and China, changing consumer preferences, production delays or shortfalls, continued pressure by certain of the Company's major retail customers to significantly reduce their toy inventory levels, the impact of competition and changes to the competitive environment on the Company's products and services, the ability of the Company's licensees to successfully market and sell the licensed products, changes in technology and changes in governmental regulation and the continued financial stability of major licensees of the Company. Those and other risks and uncertainties are described in the Company's filings with the Securities and Exchange Commission, including the Company's Annual Report 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. |
