marvel comics turnaround - Turnaround Management Association

Marvel Comics Turnaround Team 2
outsourced to the lowest bidder to reduce operating expenses and to allow for flexibility
during seasonal toy cycles. However, the company did not go this far.
• The company in 2000 was still making overall net losses. The small positive operating
income that the company saw in 1999 all but disappeared in 2000 because the small
positive operating profit in 1999 was due in large part to the one-time cash advance from
Sony to Marvel for the Spiderman license. When there was no similar chunk of cash
received, operating profits went negative again. This indicated to us that the company,
though operating at a much better financial condition than before, was still not positioned
right for long term value. The year 2000 was in a way a wake-up call to this fact.
From the table below, it is clear that Marvel still looked ugly. Cash decreased considerably
from 1999 to 2000- and given the terrible Z-scores and net income numbers, one could easily
argue that Marvel should have retained some of its focus on improving the company’s financial
position instead of funding growth projects.
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