Marvel's Profits Way Up

[wktf]

Licensing and publishing driving a lot of the growth. Some great and exciting info in here about progress on upcoming Marvel movies, animated TV, toys and other Marvel related projects as well:

MARVEL ANNOUNCES Q2 2007 NUMBERS

Marvel Entertainment today released its Second Quarter 2007 numbers, reporting that net income rose 78% from one year ago, due to growth in all three divisions: licensing, comics and toys. Q2 2007 net income for the company was $29.1 million vs. Q2 2006 of $16.3 million.

From Marvel’s report:

Marvel's Chairman, Morton Handel, commented, "Marvel continued to achieve strong operating results across its businesses in Q2 2007, with improved operating profit contributions in all divisions. Through the first half of 2007, our Licensing segment has benefited from strong contributions related to Spider-Man 3 consumer merchandise licensing. The Publishing segment continues to benefit from strong sales related to the Civil War series, which is driving unit sales per title above historical levels while also helping Marvel to achieve higher operating margins in the division.

"In 2008, Marvel will release our first two self-produced films. Producing our own films positions Marvel to benefit from each film's profits as well as the related fees from merchandising. Principal photography was completed during the quarter for the first film, Iron Man, and it commenced on July 9th for the second film, The Incredible Hulk. Both films are slated for summer 2008 release with significant promotional and licensing support."

Licensing Segment net sales grew 45% in Q2 2007 to $49.3 million, primarily due to strength in Marvel's Spider-Man merchandising joint venture (JV) with Sony and in domestic licensing. The Spider-Man JV had revenues of $18.2 million in Q2 2007 associated with the release of the Spider-Man 3 film in May 2007. Revenues from Marvel Studios decreased by $3.4 million due to large fees in Q2 2006 from licensed films.

Marvel's Publishing Segment net sales increased $7.8 million or 31% to $32.9 million in Q2 2007 principally due to continued strength in Civil War and the Dark Tower publications in the Direct and Mass Market channels. Operating income in the publishing segment rose to $14.7 million with an operating margin of 45% in Q2 2007, compared to operating income of $10.4 million with an operating margin of 41% in the prior-year period. The improvement in operating margin principally reflects the benefit of operating leverage resulting from sales of high margin trade books.

Marvel reported Toy Segment revenues of $19.3 million in Q2 2007, a decrease from revenues of $25.4 million in Q2 2006. The decrease was primarily due to the transition from toys produced by Marvel in 2006 to toys principally produced by Hasbro, Marvel's master toy licensee, in 2007. Margins improved sharply in the Toy Segment in Q2 2007 to 55% from 13%, reflecting the higher-margin nature of license income recorded in 2007. This compares to Q2 2006 revenues, which were largely comprised of wholesale sales, subject to a corresponding cost-of-revenues expense.

Marvel reported Film Production segment operating costs of ($0.3 million) for Q2 2007, which reflect costs and overhead for personnel devoted to the Company's self-produced feature films. These costs were partially offset by a $1.0 million increase in the fair value of an interest rate cap associated with the Company's film finance facility, and a $0.7 million increase in the fair value of forward contracts for the Canadian dollar entered into in connection with future spending on The Incredible Hulk production being filmed in Canada. For Q2 2006, Film Production operating costs reflect SG&A expenses offset by a $1.0 million increase in the fair value of the film finance facility's interest rate cap.

Marvel’s report also included current status on a number of film and television projects, reporting some previously reported news, including that both the Wolverine and Punisher 2 both have directors attached, and Punisher 2 has a lead actor engaged.

Reiterating from earlier in the report, Iron Man’s release date is listed as May 2nd, 2008, with The Incredible Hulk scheduled for a June 13th, 2008 release. Other film projects:

Ant-Man: Writer and director engaged
Captain America: Writer engaged
Nick Fury: Writer engaged
Thor: Writer engaged
The Avengers: Writer engaged

Animated television shows: Spider-Man, Wolverine and the X-Men, Iton Man. Direct to DVD animated films: Teen Avengers (July 2008), and Hulk Smash (October 2008). Spider-Man: The Musical is listed as in development with an opening date to be determined. Upcoming videogame releases include Iron Man and The Incredible Hulk, both being developed by Sega, and targeted for 2008 release.

Marvel listed its “financial guidance drivers” for the second half of 2007 as:

Continued Spider-Man 3 movie merchandise licensing overages generated by the Spider-Man JV.

Marvel Studios revenues resulting from the box office performance and initial DVD/video sales for the Ghost Rider, Spider-Man 3 and Fantastic Four: Rise of the Silver Surfer feature films.

Toy license contributions related to Marvel's toy license agreement with Hasbro.

Strong growth in interactive revenues from license fees in excess of minimum guarantees.

Continued, top-line and bottom-line growth from the publishing division.

An estimated effective tax rate of 37-39% in 2007.

Marvel's guidance is based on a weighted average diluted share count of 84 million for 2007 and does not reflect any future share repurchase activity in 2007.

[Makkari1]

Now Joe Q. will never go away.

[bat_collector]

marvel profits on the rise

marvel quality on films and merchandise on the low, lol

[Krypton Knight]

Marvel is the biggest pimp out there. They don't care what you want to with their characters, just as long as you can pony up the cash for the license.

[RichBamf]

Originally Posted by bat_collector

marvel profits on the rise

marvel quality on films and merchandise on the low, lol

DC only have themselves to blame though.

Why have they not jumped on Marvel's lapse in quality.

Over the last two years Marvel have been in really bad shape IMO, poor films, poor merchandise in terms of their action figures, minimates, games etc, poor decline in some major titles (although resurgence in others)

If DC were sensible, they would have got more films out, getting them more in the public eye.

Instead they Ko'd Whedon's Wonder Woman project, and the Flash film.

Where is the GL film, now that the property has hit a new high?

It's hard being a DC fan!

[Makkari1]

Originally Posted by Krypton Knight

Marvel is the biggest pimp out there. They don't care what you want to with their characters, just as long as you can pony up the cash for the license.

So why won't they renew Randy Bowen's licence for phase 4? A good pimp will never turn down a guarantee trick.

[Jesse321]

Originally Posted by RichBamf

If DC were sensible, they would have got more films out, getting them more in the public eye.

Instead they Ko'd Whedon's Wonder Woman project, and the Flash film.

Where is the GL film, now that the property has hit a new high?

It's hard being a DC fan!

AMEN!

[biglebowski9999]

Originally Posted by RichBamf

DC only have themselves to blame though.

Why have they not jumped on Marvel's lapse in quality.

Over the last two years Marvel have been in really bad shape IMO, poor films, poor merchandise in terms of their action figures, minimates, games etc, poor decline in some major titles (although resurgence in others)

If DC were sensible, they would have got more films out, getting them more in the public eye.

Instead they Ko'd Whedon's Wonder Woman project, and the Flash film.

Where is the GL film, now that the property has hit a new high?

It's hard being a DC fan!

Finally, a sensible DC fan who sees the big picture rather than taking pot-shots at Marvel out of pure jealousy. Kudos.

[RichBamf]

Originally Posted by biglebowski9999

Finally, a sensible DC fan who sees the big picture rather than taking pot-shots at Marvel out of pure jealousy. Kudos.

Thank you!

I read both companies, but get equally frustrated by both!

[cma3]

Originally Posted by Makkari1

Now Joe Q. will never go away.

Love him or hate him, from a business perspective there is absolutely no reason for him to go, or to hate him for that matter.

We can hate his direction, his leadership, his vision all day long but there is one single fact that gives him legendary status among the shareholders:

before Joe Q: 1.66 a share
after Joe Q: 22+ a share

he is directly credited for bringing marvel back from the depths of bankruptcy and the resurgence of comic books. just ask your lcs. mine is making money.

no board or shareholder in existence would ever think twice of replacing him.