Marvel Entertainment has revealed its financials for the first quarter ending March 31st 2008 - and, while the figure reflects the effect that Spider-man 3 had last year, it is still an impressive start for the company.
Reflecting contributions in the year-ago first quarter related to the coming release of Spider-man 3, Marvel reported Q1 2008 net sales of $112.6 million and net income of $45.2 million, or $0.58 per diluted share, compared to net sales of $151.4 million and net income of $46.8 million, or $0.54 per diluted share, in Q1 2007.
Marvel's chairman, Morton Handel, commented: "Adjusting for the strong year-ago contribution from the Spider-Man JV, Marvel's Q1 2008 operating results continued to demonstrate strong global demand for consumer products based on the company's portfolio of characters.
"Marvel's self-produced feature film slate launched this past weekend with a performance that firmly establishes Iron Man as a major new film franchise, and the company eagerly awaits the June premiere of The Incredible Hulk, Marvel's second self-produced film.
"In addition, Marvel has been investing in other important areas of growth such as the internet where, to lead the company's newly formed Global Digital Media Group, Marvel recently announced the hiring of Ira Rubenstein. Marvel has a strong foundation to build from, and the company is adding infrastructure to maximise these opportunities."
Speaking of Iron Man, the film debuted this weekend, generating an estimated domestic box office of $100.75 million for the three days. This performance represents the tenth best opening weekend ever and the second best non-sequel feature film debut ever - second only to Spider-man.
On a worldwide basis, Iron Man has generated an estimated $201 million in global box office to date.
Meanwhile, Marvel is now reporting the net sales and operating contribution from its licence agreement with Hasbro within the licensing segment. Net sales in the licensing segment decreased in Q1 2008 principally reflecting a decline in net sales from the Spider-man merchandising joint venture (JV) with Sony and a decrease in income from Hasbro to $8.3 million, compared to income from Hasbro of $20.8 million in Q1 2007.
Net sales for the Spider-man JV declined to $29.7 million in Q1 2008, versus $56.9 million in Q1 2007. The year-over-year decline in JV net sales was anticipated, as the high level of net sales in Q1 2007 was triggered by 'on shelf dates' related to the May 2007 release of Spider-man 3.
This decline was offset in part by increases in domestic and international consumer products licensing, as well as from a higher level of licence revenue from Marvel Studios related to the Spider-man, X-Men and Fantastic Four movie properties.
Marvel's Q1 2008 licensing segment operating income results also reflect settlement payments from two licensees in connection with the termination of their respective interactive licence agreements. The settlements totaled $19 million and were recorded as other income. Operating margin in the licensing segment was 101 per cent in Q1 2008, reflecting the benefit of these settlement payments included in operating income but not included in net sales.