The quarter ended the first full year of the combined Marvel and Toy Biz operations -- a year that included putting new senior management in place, the implementation of a new business strategy and divesting non-strategic assets.

Marvel closed up $0.25 to $6.25 per share and had climbed as high as $7 in earlier trading. The company reported sales of $92.9 million for the fourth quarter, up from $75.7 million for the year-ago period. EBITDA (earnings before interest, taxes, depreciation and amortization) rose to $4.7 million, compared with a loss of $715,000 in 1998.

But management was quick to run through the figures on the call in order to talk more in depth of what it sees for this year. The release of Marvel's X-Men movie this summer is the launching pad for many of the company's other businesses, including licensing, toys, and publishing.

There are four other films that are slated for the next three years, but the shares have yet to really reflect management's new growth story. In 1999, the company's revenues were primarily due to its Toy Biz division. However, CEO Peter Cuneo says Marvel's image will be more as an entertainment company than a toy company as this year rolls on.

The X-Men movie is expected to help keep the Toy Biz division pumping. Cuneo expects the World Championship Wrestling toy line to "turn down somewhat" in 2000 after a hot year. However, based on the interest he saw at Toy Fair recently for X-Men, he estimates the X-Men line can do between $50-$75 million in revenue this year.

"That range of sales didn't exist in 1999, so that's more than enough to offset the declines in WCW," says Cuneo. What's more, since X-Men is a proprietary brand, the product line will be more profitable than WCW because Marvel doesn't have to pay a royalty.

The licensing division also looks ready to go. Marvel already has licensing deals for X-Men trading cards, an X-Men television show, a video release, and a video game. Marvel typically receives a minimum payment upfront with these deals as well as overages, or payment over a set percentage of the manufacturer's business. The cash from overages goes straight to the bottom line.

The company also revealed that in the next three to four months, Marvel plans to announce a licensing joint venture with Sony Pictures for the Spider-man movie, which Sony is expected to bring to theaters in late 2001.

Marvel already received a $10 million royalty payment from Sony for the Spider-man film in the first quarter of last year. And despite the threat of tough licensing revenue comparisons, Cuneo is confident that its new licensing deals for the Spider-man film will help keep that division growing in 2000. The company is also venturing onto the international licensing front for the first time.

Other movies in development for 2002 include The Hulk, The Fantastic Four, and Blade 2. Over the next four to six weeks, management also says it plans to announce three to four new movie deals. Licensing strategies for each film can then be developed.

Marvel is also evaluating partnerships with leading Internet companies to help develop its own e-commerce initiative to help sell movie-related products. The company has plenty of cash to work with to help build its brand; at year-end, Marvel had approximately $64.8 million in cash and working capital of $91.9 million.

As the market starts to fully understand Marvel's new growth story this year and more deals are announced, its shares should continue to rise.

[Updated 2/28/2000]