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Heroic Marvel gain

Comics major sees Q1 sales jump 40%

NEW YORK — With anticipation and toy sales for the upcoming “Spider-Man 2” running high, comic purveyor Marvel Enterprises on Tuesday announced first-quarter sales up a hefty 40% over last year as the company touted an ambitious, studio-backed release slate that it hopes will fuel future licensing fees and toy sales off its superhero collection.

Company also said a sequel is under way for current R-rated actioner “The Punisher,” produced with Lions Gate/Artisan.

Marvel Studios CEO Avi Arad told analysts on the Tuesday earnings call that lead Thomas Jane and writer-director Jonathan Hensleigh are already signed on for “Punisher 2,” to be released in fall 2005.

First pic, which has pulled in a modest $30 million at the domestic box office so far, is set to be released by Sony internationally starting in September. Its next Lions Gate project, “Black Widow,” is slated for a 2006 release.

Marvel finished its first fiscal quarter with $122.3 million in net sales, thanks mostly to big gains in its publishing and toys divisions. Unfortunately, its good fortune is taking a toll on the bottom line, where quarterly net profit fell to $31.2 million from $41.1 million a year earlier, due to a higher tax rate (from 16% last year to 41% in the first quarter).

Marvel prexy and CEO Allen Lipson said company continues to adhere to its principles of strict cost management and aversion to heavy capital investment as it moves deeper into production.

He added, however, that even with its new push into TV animation, live action and direct-to-video production, company would be careful not to deficit finance projects.

“The Punisher” marked Marvel’s first major independent release as an equity owner, whereby it contributes characters and creative support to lower-budget pics in exchange for a financial stake in the negative. (Marvel’s studio releases yield only a share of the gross plus related ancillary product sales).

Lipson asserted film will be “solidly profitable,” which he based on forecast of domestic and foreign box office plus ancillaries. Company said that thanks to outside investment, foreign tax shelters and international rights sold, “The Punisher” had covered its production even before its started filming.

Despite pic’s only so-so start, Arad insisted “The Punisher” would be a new franchise for Marvel. He maintained pic would have performed better if it hadn’t been for the “Kill Bill” brawl during its opening weekend.

As for “Spider-Man 2,” Sony is planning a 60-second promo for the film during Thursday night’s “Friends” finale on NBC. Arad also said sequel will benefit from a more aggressive marking push internationally than its predecessor.

Strong toy sales

Citing unusually strong toy sales in the run-up to Spidey’s release June 30, Marvel forecasts it will generate $175 million-$200 million from “Spidey 2” toy sales this year, compared with $105 million from the first movie.

As for other upcoming studio productions of Marvel characters, company said “Blade Trinity” (New Line) has been moved from August to a Dec. 10 bow, and has tested well in early screenings. Marvel also said Fox/New Regency has begun production on Jennifer Garner starrer “Elektra,” which is due to come out Presidents Day 2005.

Company also is looking toward big toy sales licensing returns from Fox’s July 2005 release of “Fantastic Four” (now in pre-production) as well as New Line’s “Iron Man” (November 2005). For 2006, Sony’s toy-driven “Ghost Rider” is tentatively slotted for a summer launch, as is Fox’s “X-Men 3.” Marvel said a “Hulk” sequel is also in the cards for 2006, though the story is still in development.

With some 61 comic titles per month in print, publishing division net sales rose to $19.6 million, up from $15.2 million in the same period a year ago. The toy division, which is shipping more Spider-Man action figures and accessories than expected, saw sales hit $44.7 million in Q1 2004 compared with a mere $8.4 million in Q1 2003. Company also benefited from continued strong sales of its “Lord of the Rings”-related products.

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