MARVEL ENTERTAINMENT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
(In thousands, except per share data)
(unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
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2006 2005 2006 2005
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Net sales $85,216 $117,095 $351,798 $390,507
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Costs and expenses:
Costs of revenue (excluding
depreciation expense) 27,147 12,972 103,584 50,517
Selling, general and
administrative 26,888 58,859 123,130 166,456
Depreciation and
amortization 5,089 1,159 14,322 4,534
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Total costs and expenses 59,124 72,990 241,036 221,507
Other income, net 274 674 1,798 2,167
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Operating income 26,366 44,779 112,560 171,167
Interest expense 3,631 3,037 15,225 3,982
Interest income and other
expense, net 232 745 1,465 3,863
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Income before income taxes and
minority interest 22,967 42,487 98,800 171,048
Income tax expense (11,116) (15,699) (39,071) (62,820)
Minority interest in
consolidated Joint Venture. (153) (869) (1,025) (5,409)
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Net income $11,698 $25,919 $58,704 $102,819
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Basic earnings per share
attributable to common stock $0.14 $0.27 $0.71 $1.03
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Weighted average number of
basic shares outstanding 81,496 94,612 82,161 99,594
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Diluted earnings per share
attributable to common stock $0.14 $0.26 $0.67 $0.97
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Weighted average number of
diluted shares outstanding 85,120 100,534 87,230 106,058
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MARVEL ENTERTAINMENT, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share data) (unaudited) December 31, --------------------- 2006 2005 ---------- ---------- (in thousands, except share data)ASSETSCurrent assets: Cash and cash equivalents $ 31,945 $ 24,227 Restricted cash 8,527 8,383 Short-term investments - 15,139 Accounts receivable, net 59,392 59,108 Inventories, net 10,224 9,177 Income tax receivable 45,569 - Deferred income taxes, net 22,564 19,553 Prepaid expenses and other current assets 7,231 4,785 ---------- ---------- Total current assets 185,452 140,372Molds, tools and equipment, net 4,444 5,659Product and package design costs, net 1,497 1,023Film production costs 15,055 -Goodwill 341,708 341,708Accounts receivable, non-current portion 12,879 20,290Deferred income taxes, net 36,406 36,460Deferred financing costs 15,771 20,751Advances to joint venture partner 8,535 3,489Other assets 2,118 3,794 ---------- ---------- Total assets $ 623,865 $ 573,546 ========== ==========LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilities: Accounts payable $ 5,112 $ 3,724 Accrued royalties 68,467 65,891 Accrued expenses and other current liabilities 38,895 57,360 Income taxes payable - 12,295 Deferred revenue 140,072 10,865 ---------- ---------- Total current liabilities 252,546 150,135Accrued royalties, non-current portion 12,860 5,908Deferred revenue, non-current portion 35,667 24,787Credit facility 17,000 -Film slate facility obligation 33,200 25,800Income tax payable, non-current portion 10,999 -Other liabilities 6,702 6,316 ---------- ---------- Total liabilities 368,974 212,946 ---------- ----------Commitments and Contingencies (Note 12)Stockholders' equity:Preferred stock, $.01 par value, 100,000,000 shares authorized, none issued - -Common stock, $.01 par value, 250,000,000 shares authorized, 128,420,848 issued and 81,326,627 outstanding in 2006 and 121,742,534 issued and 90,205,853 outstanding in 2005 1,284 1,217Deferred stock compensation - (6,242)Additional paid-in capital 710,460 594,873Retained earnings 228,466 169,762Accumulated other comprehensive loss (2,433) (3,474) ---------- ---------- Total stockholders' equity before treasury stock 937,777 756,136Treasury stock, at cost, 47,094,221 shares in 2006 and 31,536,681 shares in 2005 (682,886) (395,536) ---------- ---------- Total stockholders' equity 254,891 360,600 ---------- ---------- Total liabilities and stockholders' equity $ 623,865 $ 573,546 ========== ========== MARVEL ENTERTAINMENT, INC. CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (In thousands) (unaudited) Years Ended December 31, ------------------------ 2006 2005 ----------- -----------Net income $ 58,704 $ 102,819Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 14,322 4,534 Amortization of deferred financing charges 4,980 1,660 Unrealized (gain) loss on interest rate cap 1,504 (347) Non-cash charge for stock based compensation 11,040 4,832 Excess tax benefit from stock-based compensation (64,802) 7,382 Gain from sales of equipment (133) - Impairment of fixed assets 962 - Deferred income taxes (2,957) (13,573) Minority interest of joint venture (net of distributions of $6,071 in 2006 and $17,326 in 2005) (5,046) (11,917) Changes in operating assets and liabilities: Accounts receivable 7,127 31,896 Inventories (1,047) (2,590) Prepaid expenses and other current assets (2,446) (2,051) Film production costs (15,055) - Other assets 172 (56) Deferred revenue 140,087 (6,093) Income taxes payable 17,937 2,166 Accounts payable, accrued expenses and other current liabilities (7,174) 19,075 ----------- -----------Net cash provided by operating activities 158,175 137,737 ----------- -----------Cash flow provided by investing activities: Payment of administrative claims and unsecured claims, net - (50) Purchases of molds, tools and equipment (10,034) (3,193) Expenditures for product and package design costs (6,252) (1,096) Proceeds from sales of fixed assets 1,876 - Sales of short-term investments 80,671 442,394 Purchases of short-term investments (65,532) (302,814) Change in restricted cash (144) 22,514 ----------- -----------Net cash provided by investing activities 585 157,755 ----------- -----------Cash flow used in financing activities: Proceeds from film slate facility 7,400 25,800 Borrowings from credit facility 169,200 - Repayments of credit facility (152,200) - Deferred financing costs - (24,526) Purchase of treasury stock (287,350 (297,128) Exercise of stock options 46,882 5,532 Excess tax benefit from stock-based compensation 64,802 - ----------- -----------Net cash used in financing activities (151,266) (290,322) ----------- -----------Effect of exchange rate changes on cash 224 (117) ----------- ----------- Net increase (decrease in cash and cash equivalents) 7,718 5,053 Cash and cash equivalents, at beginning of year 24,227 19,174 ----------- ----------- Cash and cash equivalents, at end of year $ 31,945 $ 24,227 =========== ===========
Contact:
Marvel Entertainment, Inc.SVP Corporate DevelopmentMatt Finick, 212-576-4035
[email protected]orJaffoni & CollinsDavid Collins or Richard Land, 212-835-8500
[email protected]</SPAN>Source: Marvel Entertainment, Inc.
