SECURITIES AND EXCHANGE COMMISSION FORM 10-Q Quarterly report pursuant to sections 13 or 15(d) Filing Date: 1998-08-19 | Period of Report: 1998-06-30 SEC Accession No. 0000950136-98-001530 (HTML Version on secdatabase.com) FILER MARVEL ENTERTAINMENT GROUP INC Mailing Address Business Address 387 PARK AVENUE SOUTH 387 PARK AVE S CIK:874808| IRS No.: 943024816 | State of Incorp.:DE | Fiscal Year End: 1231 NEW YORK NY 10016 NEW YORK NY 10016 Type: 10-Q | Act: 34 | File No.: 001-10779 | Film No.: 98694485 2126960808 SIC: 2721 Periodicals: publishing or publishing & printing Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1998 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission file number 1-10779 MARVEL ENTERTAINMENT GROUP, INC. ------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) DELAWARE 94-3024816 ------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 387 PARK AVENUE SOUTH, NEW YORK, NY 10016 ------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) 212-696-0808 ------------------------------------------------------------------------------- (Registrant's telephone number, including area code) ------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes X No ___ MARVEL ENTERTAINMENT GROUP, INC. INDEX TO CONTENTS OF THE SECOND QUARTER 1998 FORM 10-Q <TABLE> <CAPTION> Page ---- <S> <C> Condensed Consolidated Balance Sheets as of June 30, 1998 and December 31, 1997-----------------------------------3 Condensed Consolidated Statements of Operations for the six months and three months ended June 30, 1998 and 1997-------------------------------------------------------------------------------------4 Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 1998 and 1997-------------------5 Condensed Consolidated Statements of Comprehensive Loss for the six months ended June 30, 1998 and 1997 ----------6 Notes to Condensed Consolidated Financial Statements--------------------------------------------------------------7 Management's Discussion and Analysis of Financial Condition and Results of Operations----------------------------15 Other Information------------------------------------------------------------------------------------------------24 Signatures-------------------------------------------------------------------------------------------------------26 </TABLE> 2 Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document MARVEL ENTERTAINMENT GROUP, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA) (SEE NOTE 1 OF NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS) (UNAUDITED) <TABLE> <CAPTION> June 30, December 31, 1998 1997 ------------ ----------- <S> <C> <C> ASSETS Current assets: Cash........................................................... $ 23.3 $ 21.7 Accounts receivable, net....................................... 95.4 86.8 Inventories, net............................................... 30.6 43.9 Prepaid expenses and other..................................... 34.6 36.1 ------------ ----------- Total current assets......................................... 183.9 188.5 Property, plant and equipment, net................................ 47.4 55.5 Goodwill and other intangibles, net............................... 169.4 174.7 Investment in Toy Biz............................................. 33.0 33.0 Deferred charges and other........................................ 26.1 24.8 ------------ ----------- Total Assets................................................. $459.8 $476.5 ============ =========== LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities: Debtor-in-Possession Loan...................................... $ 81.4 $ 91.2 Accounts payable............................................... 82.3 78.3 Accrued expenses and other..................................... 153.7 127.3 Panini short term borrowings................................... 34.7 39.5 Panini debt.................................................... 115.3 121.9 ----------- ----------- Total current liabilities.................................... 467.4 458.2 Long-term debt.................................................... 7.4 8.5 Other long-term liabilities....................................... 24.5 19.6 Liabilities subject to settlement under reorganization............ 502.8 502.2 ------------ ----------- Total Liabilities............................................ 1,002.1 988.5 Stockholders' deficit: Common Stock................................................... 1.0 1.0 Additional paid-in capital..................................... 93.1 93.1 Accumulated deficit............................................ (636.5) (604.6) Comprehensive (loss)/gain ..................................... 0.1 (1.5) ------------ ----------- Total Stockholders' Deficit.................................. (542.3) (512.0) ------------ ----------- Total Liabilities and Stockholders' Deficit.................. $459.8 $476.5 ============ =========== </TABLE> The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements. 3 MARVEL ENTERTAINMENT GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA) (SEE NOTE 1 OF NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS) (UNAUDITED) <TABLE> <CAPTION> For the For the Three Months Ended Six Months Ended June 30, June 30, ---------------------- ---------------------- Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 1998 1997 1998 1997 ----------- ---------- ---------- ---------- <S> <C> <C> <C> <C> Net revenues......................................................... $ 106.1 $ 129.6 $ 203.2 $ 286.3 Cost of sales........................................................ 76.2 96.4 148.9 200.9 Selling, general & administrative expenses........................... 22.8 51.5 46.1 100.0 Depreciation and amortization........................................ 1.8 7.7 3.9 12.5 Amortization of goodwill, intangibles and deferred charges........... 2.6 4.1 5.2 8.4 Interest expense, net (contractual interest for the three months ended June 30, 1998 and 1997 was $19.4 and $19.6, respectively, and contractual interest for the six months ended June 30, 1998 and 1997 was $39.0 and $32.5, respectively.)........................ 6.4 13.2 13.3 28.8 Foreign exchange loss, (gain)........................................ 0.9 (0.8) 0.6 (1.5) Loss on sale of confectionery assets................................. 2.5 - 5.9 - Equity in net (loss) income of unconsolidated subsidiaries and other, net....................................................... 0.3 (5.3) 0.4 (5.2) ----------- ---------- ---------- ---------- Loss before reorganization items, provision for income taxes and minority interest................................................... (6.8) (47.8) (20.3) (68.0) Reorganization items................................................. 4.3 2.6 9.4 6.0 ----------- ---------- ---------- ---------- Loss before provision for income taxes and minority interest......... (11.1) (50.4) (29.7) (74.0) Provision (benefit) for income taxes................................. 1.7 (4.6) 2.2 (0.8) ----------- ---------- ---------- ---------- Loss before minority interest........................................ (12.8) (45.8) (31.9) (73.2) Minority interest in earnings of Toy Biz............................. - (3.9) - (3.5) ----------- ---------- ---------- ---------- Net loss............................................................. ($12.8) ($41.9) ($31.9) ($69.7) =========== ========== ========== ========== Loss per Common Share-Basic and Diluted.............................. ($ .13) ($ .41) ($ .31) ($ .68) =========== ========== ========== ========== Common shares outstanding - Basic and Diluted (in millions) 101.8 101.8 101.8 101.8 =========== ========== ========== ========== </TABLE> The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements. 4 MARVEL ENTERTAINMENT GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA) (SEE NOTE 1 OF NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS) (UNAUDITED) <TABLE> <CAPTION> For the Six Months Ended June 30, ---------------------------- 1998 1997 ------------ ------------ <S> <C> <C> Cash flows from operating activities: Net loss....................................................................