Marvel's transitional 06 paves way for soaraway 07

Marvel Entertainment is confident that its future growth prospects are looking strong - with Spider-man 3, Ghost Rider and Fantastic Four: Rise of the Silver Surfer set to significantly boost its revenues in 2007.
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The character-based entertainment and licensing company released its operating results for the fourth quarter and full year ended December 31st 2006 this afternoon.

For Q4, Marvel reported net income of $11.7m, while for the 12 months ending December 31st, the firm recorded net income of $58.7m. These results are down on the previous periods - which saw net income of $25.9m and $102.8m for Q4 and full year 2005 respectively - mainly due to the fact that they did not include any share-based payment expense.

Net sales within the licensing sector declined 69 per cent from the year ago period to $25.5m, although sales in Marvel's publishing and toy segments both increased.

On the toy side, the transition from toys produced by a master toy licensee in 2005 to toy production by Marvel in 2006 contributed to the expected year-over-year increase in segment revenues. Sales in the quarter rose by 159 per cent. In addition, there was $5.2m in royalties and service fees related to initial shipments made by Hasbro, Marvel's new toy licensee.

"We are pleased with the strong cash flows generated by our operations during 2006, a transitional year for the company," said Marvel's chairman Morton Handel. "Reflecting the unique strengths of our IP assets and business model, in 2006 Marvel generated approximately $158m in operating cash flow, inclusive of $15m spent on pre-production for future feature film slate productions.

"We remain optimistic about the outlook for 2007 and beyond. 2007 has three feature films produced in conjunction with studio partners including Ghost Rider which has achieved total domestic box office receipts of over $76m since its February 16th release. Later this year, we should benefit from high profile sequels to our Spider-man and Fantastic 4 movie franchises. Operating results in 2007 should also benefit from strong contributions from Marvel-branded toys distributed by Hasbro."

Looking further ahead, Marvel is planning to release Iron Man and The Incredible Hulk in 2008.

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