Whoa Nelly, "Its getting hot in here" Marvel Raises 2002 Guidance and Initiates 2003 Guidance
Tuesday January 7, 7:46 pm ET
Strategic Focus On Licensing and Entertainment to Drive Growth in EBITDA and EPS in 2003
NEW YORK--(BUSINESS WIRE)--Jan. 7, 2003--Marvel Enterprises, Inc. (NYSE: MVL - News) today raised its financial guidance for its fourth quarter and full year ended December 31, 2002 and provided initial financial guidance for the first quarter and full year 2003.
Marvel's increased 2002 guidance reflects strong performances across all business segments, including better than expected Q4 performance from licensed toys and additional payments above certain guaranteed minimums related to Spider-Man: The Movie's licensing joint venture with Sony. Reflecting the strong performance of its key business segments, Marvel's cash balance at the end of 2002 exceeded $50 million.
Guidance for the 2003 periods reflects Marvel's successful transformation to a licensing-based entertainment company and the elimination of most in-house toy lines. This focus is expected to deliver strong contributions and exposures from all licensing categories as well as continued strength in Marvel's publishing operations.
Allen S. Lipson, Chief Executive Officer and President, commented: "We now expect 2002 revenues of at least $280 million, EBITDA of approximately $78 to $83 million, net income, before one-time items, of at least $28 million, and net income per share attributable to common stock, before one-time items, of at least $0.40 per share. Of particular importance, Marvel's free cash flow (EBITDA less capital expenditures, cash taxes, cash interest, plus/minus changes in working capital) for 2002 will approximate $58 to $62 million. Marvel expects to record a net loss applicable to common stockholders of over $50 million, or ($1.29) to ($1.36) per share, for 2002, reflecting previously announced one-time, non-cash charges principally related to the successful Preferred Stock exchange offer in November and the early retirement of our of bank loan. The benefits derived from these balance sheet-enhancing actions will be fully reflected in our fiscal 2003 results."
Marvel Enterprises, Inc. - FY 2002 Guidance Actual (3)
----------------------------------------------------------------------
(in millions -
except per New Previous New Previous Q4 FY
share data) Q4 2002 Q4 2002 FY 2002 FY 2002 2001 2001
----------------------------------------------------------------------
Total revenues $67 - $72 $63 - $68 $280-$285 $275 - $280 $49.6 $181.2
----------------------------------------------------------------------
EBITDA $17 - $22 $11 - $16 $78 - $83 $72 - $77 $10.5 $30.6
----------------------------------------------------------------------
Net income
(loss)
(1)(3)(4) $6 - $9 $1 - $5 $28 - $31 $21 - $24 $22.5 $5.3
----------------------------------------------------------------------
Net income
(loss)
attributable
to common
stock
(1)(2)(4) $5 - $8 ($3) - $1 $15 - $18 $5 - $8 $18.4 ($10.8)
----------------------------------------------------------------------
EPS (loss)
attributable to
common stock $0.11 - ($0.07) - $0.40 - $0.12 - $0.53 ($0.31)
(1)(2)(4) $0.18 ($0.01) $0.48 $0.20
----------------------------------------------------------------------
Weighted
average
diluted common
shares 47.3 40.4 38.5 40.4 34.8 34.3
----------------------------------------------------------------------
(1) Q4 and full-year 2002 net income excludes approximately $7.7
million and $11.8 million, respectively, in one-time, non-cash
charges resulting from the early retirement of the Company's HSBC
loan.
(2) Q4 and full-year 2002 net income attributable to common stock
excludes a $55.3 million non-cash charge related to the
completion of Marvel's exchange offer which exchanged 84.6% of
Marvel's outstanding 8% preferred stock for common stock,
eliminating $176 million in preferred stock obligations and $14.5
million in annual preferred stock dividends for all future
periods.
(3) Q4 2001 and full-year 2001 net income includes extraordinary
gains of $19.1 million and $32.7 million, respectively, relating
to the buyback of $99 million in Senior Notes.
(4) Full-year 2002 net income excludes the impact of the non-cash
SFAS 142 impairment charge of $4.4 million, recorded effective
January 1, 2002.
Fiscal 2003 Guidance
EBITDA and earnings per share in 2003 are also expected to increase to approximately $88 to $93 million and $0.57 to $0.62 per share, respectively, and Marvel projects free cash flow will increase to a range of approximately $69 to $74 million in 2003.
Mr. Lipson continued: "Having successfully demonstrated the power of Marvel brands to our business partners and to consumers worldwide, and having completed our transformation into a licensing driven entertainment company in 2002, we look for stronger bottom-line results in 2003. Our existing licensing agreements and their related guarantees provide a significant amount of revenue and net income visibility as we look forward in 2003.
"This year Marvel will benefit from worldwide exposure caused by the release of three major feature films based on Marvel characters: Daredevil in Feb. `03; X-Men 2 in May `03; and The Hulk in June '03; growing TV exposure; the expanding reach of Marvel comics and trade paperbacks; a strong lineup of Marvel character video game releases; and a broad array of consumer products and promotions. Our recently amended agreement with Activision is an example of Marvel's growing leverage in key licensing categories, such that it can secure long-term relationships with triple-A partners on financial terms commensurate with the enormous popularity of our properties. The guarantees and up-front cash payments related to this license amendment are reflected in our Q1 2003 guidance."
Marvel's expected increase in EBITDA and net income for 2003 will result from its publishing and licensing operations. This will be partially offset by decreased toy division sales of Spider-Man: The Movie toys in 2003. Under a July 2001 license agreement, all Marvel character action figure and accessory toy lines (with the exception of Spider-Man: The Movie) are manufactured and sold under a licensing agreement with Toy Biz Worldwide. Marvel records Toy Biz Worldwide royalties within its licensing division results.
----------------------------------------------------------------------
Marvel Enterprises, Inc. - Initial Q1 and Full-Year 2003 Guidance
----------------------------------------------------------------------
(in millions Q1 FY 2002
except per Q1 2003 FY 2003 2002 Guidance
share data) Guidance Guidance Actual New
----------------------------------------------------------------------
Total revenues $67 - $72 $205 - $215 $57.2 $280 -$285
----------------------------------------------------------------------
EBITDA $22 - $27 $88- $93 $10.3 $78 - $83
----------------------------------------------------------------------
Net income (1) (4) $10 - $14 $42 - $45 $0.80 $28 - $31
----------------------------------------------------------------------
EPS attributable to
common
(1) (2) (3) (4) $0.15 - $0.19 $0.57 - $0.62 ($0.10) $0.40 - $0.48
----------------------------------------------------------------------
Weighted average
shares outstanding 73.1 69.7 34.4 38.5
----------------------------------------------------------------------
Free cash flow $16 - $20 $69 - $74 $2 $58 - $62
----------------------------------------------------------------------
Free cash flow per
share $0.22 - $0.29 $0.99 - $1.06 $0.06 $1.51 - $1.61
----------------------------------------------------------------------
(1) FY 2002 net income excludes approximately $11.8 million in
non-cash charges resulting from the early retirement of the
balance of the Company's HSBC loan. The pre-payment (the loan was
retired in one year instead of three) of the loan required the
accelerated amortization of all deferred loan costs.
(2) Full-year 2002 net income per share attributable to common stock
excludes a $55.3 million non-cash charge related to the
completion of Marvel's exchange offer (described above).
(3) Q1 2003 & FY 2003 net income attributable to common stock
includes approximately $0.7 million and $2.7 million in preferred
stock dividends, respectively. Q1 2002 & FY 2002 net income
attributable to common stock includes approximately $4.1 million
and $12.8 million in preferred stock dividends respectively.
(4) Q1 and FY 2002 net income excludes the impact of the non-cash
SFAS 142 impairment charge of $4.6 million and $4.4 million,
respectively.
Peter Cuneo, Marvel Director and former President and CEO, commented: "While my tenure as Marvel's Chief executive drew to a close at year-end 2002, I can state with great pride and confidence that Marvel is now poised for substantial growth in future years. Marvel's brands are re-energized; its business has been refocused on higher margin, lower risk opportunities; its pipeline of entertainment exposures is second-to-none; and its capital structure has been substantially improved with fixed payments for interest and preferred dividends reduced to approximately $21 million in 2003 from approximately $46 million three years ago. Its management team and strong staff, under the leadership of the new President and CEO, Allen Lipson, has the experience and expertise to extend the Company's success and create leaps in value for all shareholders. I look forward to participating through my continuing role as a member of the Board and as a shareholder."
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 are created by its comic book division which continues to expand its leadership position in the U.S. and worldwide marketplace 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.
--------------------------------------------------------------------------------
Contact: |
