Earnings Call Excerpt
Marvel Entertainment Q4 2005 Earnings Conference Call Transcript (MVL)
February 23, 2006
Executives
F. Peter Cuneo, Vice Chairman
Avi Arad, Chairman & CEO, Marvel Studios
Kenneth West, EVP and CFO
Analysts
Glen Reid, Bear Stearns
Robert Routh, Jefferies & Company
Mike Savner, Banc of America
Barton Crockett, JP Morgan Securities
Alan Gould, Natexis Bleichroder Inc.
Lowell Singer, SG Cowen Securities Corporation
Gordon Hodge, Thomas Weisel Partners
David Kestenbaum, Morgan Joseph
Tony Chicas, Piper Jaffrey
Presentation
F. Peter Cuneo Vice-Chairman.
Thank you very much operator and good morning everyone. With us today we have from California Avi Arad, our CEO of Marvel studios and of course a member of the Marvel board, with us in NY we have Ken West who is our Chief Financial Officer and John Turitzen who is EVP and our general counsel. We’re going to start today by reading our safe harbor statement. We’ll then have a couple of prepared comments from Ken West and then we’ll immediately go to Q&A.
Some of the statements that the company will make on this conference call, such as statements of the company’s plans, expectations and financial guidance are forward looking. Our forward looking statements reflect the company’s good faith beliefs, they are not guarantees of future performance and involve risks and uncertainties and the company’s actual results could differ materially from those discussed on this phone call. Some of these risks and uncertainties are discussed in today’s press announcement and the company’s filings with the SEC, including the company’s reports on form 8K, 10K and 10Q. Marvel assumes no obligation to publicly update or revise any forward-looking statements.
Thank you very much. Ken West has some comments.
Ken West, EVP and CFO.
Thank you Peter and good morning. I will first focus on brief remarks about our results for Q4 and full year 2005 then close with an update of our financial guidance for 2006.
Our independent auditors are in the process of completing their audit of the company’s 2005 consolidated annual financial statement and their evaluation of the design and effectiveness of the company’s internal controls pursuant to section 404 of the Sarbanes-Oxley act. The independent auditors report will be included in the company’s form 10K which we expect to file within the next 2 weeks.
Now for a review of our Q4 and full year 2005 operating income results, which are in line with the company’s internal budget and reflect the impact of a previously disclosed one time cash charge related to the early termination of our master toy license with ToyBiz worldwide. This one-time pretax charge, the estimated range of which was disclosed on January 9th, amounted to $12.5 million in the 4th quarter or the equivalent of $.07 per diluted share after tax. For the full year 2005, total net sales were $391 million, down from $514 million in 2004 and principally reflect the anticipated shift to more licensing related toy revenue in 2005 from the direct sales of Spider Man action figures and accessories.
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