NEW YORK, N. Y., January 27, 1997 -- Marvel Entertainment Group, Inc. (NYSE: MRV) intends to file today information related to its preliminary results for the fourth quarter and year ended December 31, 1996 as part of its Chapter 11 reorganization in the U.S. Bankruptcy Court for the District of Delaware in Wilmington. Based on unaudited data, Marvel expects to report a net loss of approximately $405-$440 million or ($4.00-$4.35) per share for the quarter and approximately $435-$470 million or ($4.25-$4.60) per share for the year. As the Company indicated in its November 12, 1996 news release for the third quarter and 10-Q filed on November 14, 1996, the net loss for the fourth quarter and 1996 fiscal year includes significant special, principally non-cash charges estimated at $350-$385 million prior to completion of its year end audit. Such special charges primarily relate to trading card operations, including a reduction of goodwill, the write-off of deferred tax assets, and charges related to restructuring.
Preliminary results for the fourth quarter and fiscal 1996 before special charges were lower than originally anticipated due to lower results from operations, and compared to year ago periods were affected by the Company's inability to recognize potential tax benefits, lower results from operations, and reorganization expenses related to the Company's Chapter 11 filing.
These preliminary results will cause the Company to have negative stockholders' equity of $225-$260 million on its books. Under Marvel's Chapter 11 proposed plan of reorganization submitted to the Court, Andrews Group Incorporated, which is controlled by Ronald O. Perelman, will invest $365 million in new equity in Marvel which will be used to make Toy Biz, Inc. a wholly-owned subsidiary. In turn, Marvel's lender group has agreed to provide a total of $160 million to finance Marvel's new strategic investment program and working capital requirements.
Upon completion of its audit of the year ended December 31, 1996, Marvel will report actual financial results for the fourth quarter and year. In 1995, Marvel reported a net loss of $58.5 million or ($0.58) per share for the fourth quarter and a net loss of $48.4 million or ($0.48) per share for the full year. Marvel's results for 1995 included $95 million in special and restructuring charges in the fourth quarter and $135 million of such charges for the full year.
In light of the urgent need of Marvel to speedily implement its Chapter 11 plan of reorganization, Marvel's Chapter 11 attorneys have invited the Unsecured Creditors' Committee in separate holding companies' Chapter 11 cases, and the successor Indenture Trustee for certain bond issues of the holding companies, to develop a program so that they may conduct their own review of the financial situation.
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