 Marvel has released their third quarter financial report this morning that included release dates for the THOR and CAPTAIN AMERICA video games based on the feature films.
Marvel Entertainment, Inc., a global character-based entertainment and licensing company celebrating the 70th anniversary of its founding, today reported operating results for its third quarter and nine months ended September 30, 2009.
Reflecting a lower level of feature film activity and related licensing compared to the year-ago period, Marvel reported Q3 2009 net sales of $105.7 million and net income of $20.4 million, or $0.26 per diluted share, compared to net sales of $182.5 million and net income of $50.6 million, or $0.64 per diluted share, in Q3 2008. The anticipated year-over-year decline in net sales and net income principally reflects approximately $65 million in lower film revenues in Q3 2009 compared to the prior year period, as well as lower licensing segment net sales related to last year's Iron Man and The Incredible Hulk feature films as well as the Spider-Man merchandising joint venture.
Marvel Entertainment, Inc.
Segment Net Sales and Operating Income (Unaudited)
(in millions)
Three Months Nine Months
Ended September 30, 2008 Ended September 30, 2009
Licensing: Net Sales $ 48.9 $ 58.1 $ 181.5 $ 237.5
Operating Income 37.5 42.5 130.5 205.4
Publishing: Net Sales 32.0 34.0 89.5 92.3
Operating Income 10.2 12.7 28.2 34.3
Film Production: Net Sales 24.8 90.2 147.9 119.1
Operating (Loss) Income (2.3 ) 40.4 25.0 40.6
All Other: Net Sales - 0.2 - 3.0
Operating (Loss) (8.8 ) (7.4 ) (20.9 ) (19.4 )
TOTAL NET SALES $ 105.7 $ 182.5 $ 418.9 $ 451.9
TOTAL OPERATING INCOME $ 36.6 $ 88.2 $ 162.8 $ 260.9
Marvel's Chairman, Morton Handel, commented, "Despite the absence of any Marvel Studios feature film releases in 2009, Marvel continued to deliver solid operating performance across all our operating segments. Anticipation for the high profile Iron Man 2 feature film continueto build, and we are focusing our efforts on the film's May 2010 release and the related licensing opportunities. At the same time, we are making solid progress on the development and pre-production of our Thor, The First Avenger: Captain America and The Avengers feature film projects.
"On August 31, 2009, The Walt Disney Company and Marvel agreed, subject to Marvel shareholder approval and other customary closing conditions, that Disney will acquire Marvel in a stock and cash transaction. Disney is the ideal home to nurture and further develop the distinctive Marvel brands because of its ability to extend the breadth, diversity and global reach of Marvel-branded entertainment and consumer products. We continue to expect this transaction will close by calendar year end."
Third Quarter Segment Review:
* As anticipated, Q3 2009 Licensing Segment net sales declined versus the year ago period, primarily due to the recognition in Q3 2008 of merchandise licensing revenue related to the Iron Man and The Incredible Hulk feature films, as well as a decrease in revenue from the Spider-Man merchandising joint venture. Q3 2009 licensing segment net sales reflect a total contribution of $6.3 million from Hasbro, ($3.8 million within domestic consumer products and $2.5 million within international consumer products) compared to a total contribution from Hasbro of $12.0 million in the year ago period ($7.2 million in domestic consumer products and $4.8 million in international consumer products). Licensing Segment operating income also declined in Q3 2009 to $37.5 million (an operating margin of 77%) principally reflecting the lower sales level.
Marvel Entertainment, Inc.
Licensing Sales by Division (Unaudited)
(in millions)
Three Months Ended Nine Months Ended
9/30/09 9/30/08 9/30/09 9/30/08
Domestic Consumer Products (1) $ 25.6 $ 24.8 $ 95.9 $ 97.8
International Consumer Products 15.8 22.0 61.8 67.0
Spider-Man L.P. (Domestic and International) 2.4 8.1 10.3 50.9
Studio Licensing 5.1 3.2 13.5 21.8
Total Licensing Segment $ 48.9 $ 58.1 $ 181.5 $ 237.5
(1) Domestic Consumer Products includes substantially all of Marvel 's global interactive licensing business.
* Q3 2009 Publishing Segment net sales declined 6%, or $2 million, compared to Q3 2008 and were in line with Q2 2009 net sales. The year-over-year decline principally reflects $3.2 million in lower custom publishing and advertising revenue compared to the prior year period, partially offset by a year-over-year increase of $1.6 million in revenue from the book market. Operating income declined by $2.5 million, or 19.7%, on a year-over-year basis, to $10.2 million and operating margin decreased to 32% in Q3 2009 versus 37% in Q3 2008,
principally due to an increase in talent costs and the decrease in custom publishing which carries a higher margin.
* Film Production Segment net sales declined to $24.8 million in Q3 2009 from $90.2 million in Q3 2008. Net sales in Q3 2009 primarily reflect the recognition of revenues associated with the international pay TV window for Iron Man and the domestic pay TV window for The Incredible Hulk as well as contributions from DVD sales for both Iron Man and The Incredible Hulk. Against these revenues Marvel amortized capitalized film production costs of $20.5 million. Year-ago Q3 film production segment results reflected theatrical box office revenues from Iron Man and The Incredible Hulk and the opening of the home video window in certain international pre-sold territories for Iron Man.
* In the All Other category, Marvel recorded Q3 2009 and Q3 2008 operating losses of $8.8 million and $7.4 million, respectively, reflecting respective corporate overhead expense of $9.5 million and $7.6 million. Q3 2009 corporate overhead includes a provision of $2.9 million for transaction costs (principally legal fees) associated with Disney's proposed acquisition of Marvel.
Balance Sheet and Cash Use Update:
As of September 30, 2009, Marvel had cash and cash equivalents of $109.6 million, restricted cash of $79.0 million and no outstanding borrowings under its $100 million line of credit. Marvel's outstanding film-facility borrowings increased to $21.5 million at September 30, 2009 compared to no outstanding film borrowings at June 30, 2009. The quarterly sequential increase in film-facility borrowings reflects ongoing production funding for the Iron Man 2 feature film.
Marvel Studios Entertainment Pipeline
(scheduled release dates are subject to change)
Feature Films Scheduled release date
Iron Man 2 May 7, 2010
Thor May 20, 2011
The First Avenger: Captain America July 22, 2011
The Avengers May 4, 2012
Animated TV Series Status
The Super Hero Squad 52, 30-minute episodes airing on Cartoon Network in the U.S. and launching on International broadcast channels in Q4 2009
The Avengers: Earth's Mightiest Heroes 52, 30-minute episodes in production; timing and network TBD
Marvel Licensed Entertainment Pipeline
(scheduled release dates are subject to change)
Feature Films Scheduled Release Date
Spider-Man 4 May 6, 2011
Animated TV Series Status
Black Panther 6, 30-minute episodes in production for BET; timing TBD
Fantastic Four: World's Greatest Heroes 26, 30-minute episodes airing on Nicktoons in the U.S., various networks internationally and on Marvel.com and Marvelkids.com
Iron Man: Armored Adventures 52, 30-minute episodes. Episodes 1-26 are airing on Nicktoons in the U.S. and are on air internationally. Episodes 27-52 are currently in development
Spectacular Spider-Man 26, 30-minute episodes airing on Disney XD in the U.S. and on various networks internationally
Wolverine and the X-Men 52, 30-minute episodes. Episodes 1-26 are airing on Nicktoons in the U.S. and are on air internationally. Episodes 27-52 are currently in development
Marvel Anime: Iron Man 12, 30-minute episodes in production. Scheduled to launch on Animax in Japan in Q2 2010. Scheduled to launch in the U.S. in 2011
Marvel Anime: Wolverine 12, 30-minute episodes in production. Scheduled to launch on Animax in Japan in Q3 2010. Scheduled to launch in the U.S. in 2011
Licensed Broadway Musical Status
Spider-Man, Turn off the Dark, Julie Taymor director; music & lyrics by U2's Bono and The Edge Opening Night TBD
Animated Direct-to-DVD Projects Status
Planet Hulk Production complete. Scheduled for February 2010 release
Thor: Tales of Asgard Production complete. Release date TBD
Marvel Licensed Video Game Pipeline
(scheduled release dates are subject to change)
Game / Publisher Status
The Punisher: No Mercy / Zen Released July 2, 2009
Marvel vs. Capcom 2 / Capcom Released July 29, 2009 for X-Box console and August 13, 2009 for PS3 console
Marvel Ultimate Alliance 2 / Activision Released September 15, 2009
Marvel Super Hero Squad / THQ Released October 20, 2009
Iron Man 2 / Sega Scheduled for April 2010 release
Thor / Sega Scheduled for May 2011 release
Captain America / Sega Scheduled for July 2011 release
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