UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission file number 1-13638
TOY BIZ, INC.
-----------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-3711775
------------------------------ -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
333 East 38th Street, New York, NY 10016
- ----------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
212-682-4700
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if changed
since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
At November 1, 1996, the number of outstanding shares of the registrant's
common stock, par value $.01 per share, was 20,348,794 shares of Class A Common
Stock and 7,394,000 shares of Class B Common Stock, totaling 27,742,794 shares
of Common Stock.
<PAGE>
TOY BIZ, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
<TABLE>
<CAPTION>
September 30,
1996 December 31
(unaudited) 1995 *
-------------------- ---------------------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents............... $7,268 $22,484
Accounts receivable, net................ 108,008 74,748
Inventories, net........................ 29,627 17,195
Deferred income taxes................... 4,141 4,141
Prepaid expenses and other.............. 8,931 4,476
--------- --------
Total current assets................. 157,975 123,044
Molds, tools and equipment, net........... 17,671 12,102
Product and package design costs, net..... 10,520 6,971
Goodwill and other intangibles, net....... 10,048 10,101
--------- --------
Total assets......................... $196,214 $152,218
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable ....................... $12,667 $8,830
Accrued expenses and other.............. 41,915 29,040
--------- ----------
Total current liabilities............ 54,582 37,870
--------- ----------
Total liabilities.................... 54,582 37,870
--------- ----------
Redeemable preferred stock................ 1,657 3,016
--------- ----------
Stockholders' equity:
Common stock............................ 277 270
Additional paid-in capital.............. 70,611 61,158
Retained earnings....................... 69,087 49,904
--------- ----------
Total stockholders' equity........... 139,975 111,332
--------- ----------
Total liabilities and stockholders'
equity.............................. $196,214 $152,218
========= ==========
</TABLE>
* Derived from the audited Financial Statements for the year ended
December 31, 1995.
The accompanying Notes to Condensed Consolidated Financial Statements are an
integral part of these statements.
2
<PAGE>
TOY BIZ, INC .
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
--------------------- -------------------
1996 1995 1996 1995
-------- --------- -------- --------
<S> <C> <C> <C> <C>
Net sales ................................ $ 83,437 $ 58,687 $167,620 $117,010
Cost of sales ............................ 40,449 26,460 83,121 51,873
-------- -------- -------- --------
Gross profit ............................. 42,988 32,227 84,499 65,137
Operating expenses:
Selling, general and administrative .... 20,060 13,761 44,390 30,623
Depreciation and amortization .......... 4,044 2,677 8,630 6,666
-------- -------- -------- --------
Total operating expenses ............ 24,104 16,438 53,020 37,289
-------- -------- -------- --------
Operating income ......................... 18,884 15,789 31,479 27,848
Interest income, net ..................... 144 279 494 392
-------- -------- -------- --------
Income before provision for income taxes 19,028 16,068 31,973 28,240
Provision for income taxes ............. 7,611 6,588 12,790 11,578
-------- -------- -------- --------
Net income ............................... $ 11,417 $ 9,480 $ 19,183 $ 16,662
======== ======== ======== ========
Earnings per share ....................... $ 0.42 $ 0.35 $ 0.70 $ 0.62
======== ======== ======== ========
Weighted average number of common and
common equivalent shares outstanding,
(in thousands) ......................... 27,398 27,193 27,233 27,082
======== ======== ======== ========
</TABLE>
The accompanying Notes to Condensed Consolidated Financial Statements are an
integral part of these statements.
3
<PAGE>
TOY BIZ, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(unaudited)
<TABLE>
<CAPTION>
Nine Months
Ended September 30,
-----------------------------
1996 1995
----------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net income............................................................ $19,183 $16,662
----------- ---------
Adjustments to reconcile net income to net cash (used in)
provided by operating activities:
Depreciation and amortization...................................... 8,630 6,666
Provision for deferred income taxes................................ - 154
Changes in assets and liabilities:
Increase in accounts receivable, net.............................. (33,260) (6,455)
Increase in inventories, net...................................... (12,432) (7,639)
Increase in prepaid expenses and other............................ (4,455) (2,360)
Increase (decrease) in accounts payable........................... 3,837 (3,736)
Increase in accrued expenses and other............................ 12,252 8,994
----------- ---------
Total adjustments..................................................... (25,428) (4,376)
----------- ---------
Net cash (used in) provided by operating activities.............. (6,245) 12,286
----------- ---------
Cash flows from investing activities:
Purchases of molds, tools and equipment............................. (11,246) (7,265)
Expenditures for product and package design costs................... (6,236) (3,975)
Acquisition of Spectra Star, net of cash & cash
equivalents acquired........................................... - (7,776)
Other investments................................................... (213) (33)
----------- ---------
Net cash used in investing activities............................ (17,695) (19,049)
----------- ---------
Cash flows from financing activities:
Redemption of preferred stock....................................... (1,440) -
Exercise of stock options........................................... 438 408
Proceeds from secondary offering.................................... 9,726 -
Proceeds from initial public offering............................... - 44,220
Net repayments under credit agreement............................... - (21,500)
Notes payable - stockholders........................................ - (15,119)
------------ ----------
Net cash provided by financing activities........................ 8,724 8,009
----------- ---------
Net (decrease) increase in cash....................................... (15,216) 1,246
Cash and cash equivalents at beginning of period...................... 22,484 4,142
----------- ---------
Cash and cash equivalents at end of period............................ $7,268 $5,388
=========== =========
Supplemental disclosures of cash flow information:
Interest paid during the period.................................... $83 $2,306
Income taxes paid during the period................................ $10,511 $9,845
Other non-cash transactions:
Accretion of preferred dividend..................................... $81 -
</TABLE>
The accompanying Notes to Condensed Consolidated Financial Statements are an
integral part of these statements.
4
<PAGE>
TOY BIZ, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
(unaudited)
1. BASIS OF FINANCIAL STATEMENT PRESENTATION
The accompanying unaudited condensed consolidated financial statements of
Toy Biz, Inc. and its subsidiary (collectively, the "Company") have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with the instruction to Form 10-Q and Article
10 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. For further information, refer to the consolidated financial
statements and footnotes thereto contained in the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1995, as filed with the
Securities and Exchange Commission.
2. COMMON STOCK OFFERINGS
On March 2, 1995, the Company completed an initial public offering ("IPO")
by issuing 2,750,000 new shares of its Class A Common Stock ("Class A Common
Stock" and collectively with the Class B Common Stock, the "Common Stock") at
$18 per share. The net proceeds to the Company of $44.1 million, after
deducting fees and expenses, were used to pay outstanding amounts due under
subordinated notes which totalled approximately $15.1 million in principal and
approximately $2.0 million in interest, with the balance used for working
capital and general corporate purposes.
On August 13, 1996, the Company completed an additional public offering by
issuing 700,000 new shares of Class A Common Stock at $15.00 per share. As part
of such offering, Marvel Entertainment Group, Inc. ("Marvel"), a principal
stockholder, also sold 2,500,000 shares of Class A Common Stock. The Company
intends to use the net proceeds from the sale of the new shares of Class A
Common Stock, of approximately $9.1 million, after deducting estimated fees and
expenses, to fund a portion of its capital commitment to Marvel Studios
("Marvel Studios"), an entity to be formed with Marvel to facilitate the
development of television programming, feature films and other media and
theatrical productions based on Marvel's characters. In light of the proposals
outlined in Section 6 (Subsequent Events), it is anticipated that the structure
of Marvel Studios may change. Pending such use, the net proceeds are being used
for working capital and general corporate purposes.
3. ACQUISITION
On September 11, 1995, pursuant to an Asset Purchase Agreement dated as of
August 17, 1995, as amended, between the Company and Spectra Star, Inc.
("Spectra Star"), the Company acquired certain assets and assumed certain
liabilities of Spectra Star (the "Acquisition"). The purchase price, including
fees related to the Acquisition, totaled approximately $13.6 million,
consisting of approximately $10.6 million of cash and assumed liabilities and
the issuance of a maximum of 130,303 shares of Series A Preferred Stock (the
"Preferred Stock") with a maximum redemption value of $4.3 million. The
Preferred Stock is convertible at any time after March 10, 1996 at the option
of the holders into 130,303 shares of Class A Common Stock or cash at the then
present value of the Preferred Stock. Through September 30, 1996, 53,030 shares
of the Preferred Stock were redeemed for cash at an aggregate present value of
approximately $1.4 million. The present value of the remaining Preferred Stock
was approximately $1.7 million as of September 30, 1996. The Company utilized
available cash to finance the Acquisition and to redeem the Preferred Stock.
5
<PAGE>
TOY BIZ, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
(unaudited)
3. ACQUISITION (continued)
The Acquisition was accounted for using the purchase method of accounting.
Based on a preliminary allocation of purchase price, the fair value of the
assets acquired is summarized below.
Current assets.................................. $3,470
Noncurrent assets............................... 521
Intangibles..................................... 9,566
-------
$13,557
=======
The following unaudited pro forma consolidated financial information gives
effect to the Acquisition as if it occurred at the beginning of the period
presented. These pro forma results include certain adjustments, such as
increased amortization, decreased interest expense and the elimination of a
discontinued product line, and are not necessarily indicative of what results
would have been had the Acquisition occurred at the beginning of the period.
Nine Months Ended
September 30, 1995
------------------
Net sales........................................... $131,377
Net income.......................................... $15,993
Earnings per share.................................. $0.59
4. DETAIL OF CERTAIN BALANCE SHEET ACCOUNTS
September 30, December 31,
1996 1995
----------- -----------
Accounts receivable, net:
Accounts receivable................. $119,542 $86,019
Less allowances..................... (11,534) (11,271)
----------- ----------
Total........................... $108,008 $74,748
=========== ==========
Inventories, net:
Finished goods, net................. $24,943 $13,504
Component parts, raw materials and
work-in-process.................. 4,684 3,691
----------- ----------
Total........................... $29,627 $17,195
=========== ==========
6
<PAGE>
TOY BIZ, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
(unaudited)
4. DETAIL OF CERTAIN BALANCE SHEET ACCOUNTS (continued)
September 30, December 31,
1996 1995
----------------- -----------------
Goodwill and other intangibles, net:
Goodwill. .......................... $9,815 $9,815
Patents and other intangibles....... 622 409
Less accumulated amortization....... (389) (123)
-------- --------
Total........................... $10,048 $10,101
======== ========
Accrued expenses and other:
Accrued advertising costs........... $7,738 $9,459
Accrued royalties................... 4,655 3,956
Income taxes payable................ 9,677 7,374
Accrued inventory purchases......... 15,738 4,694
Other accrued expenses.............. 4,107 3,557
-------- --------
Total........................... $41,915 $29,040
======== ========
5. EARNINGS PER SHARE
Earnings per share have been computed based on the weighted average number
of common and common equivalent shares assuming 27 million shares of Common
Stock were outstanding during the period prior to the IPO in March, 1995.
6. SUBSEQUENT EVENT
On October 17, 1996, Andrews Group Incorporated ("Andrews Group"), an
indirect parent of Marvel, announced that it had reached agreement with each of
Isaac Perlmutter and Avi Arad to purchase approximately 67% of the outstanding
Class A Common Stock for debt of Andrews Group and cash. It is also anticipated
that Andrews Group (or an affiliate) will be making a proposal to the Company's
board of directors to acquire all remaining shares of Class A Common Stock and,
as part of such transaction, the Company will become a wholly owned subsidiary
of Marvel. In anticipation of receiving a proposal, the Company's board of
directors formed a special committee of directors not affiliated with Andrews
Group or with Marvel on behalf of the minority stockholders. The Andrews Group
agreements with each of Messrs. Perlmutter and Arad are, and the foregoing
contemplated proposals to the Company are expected to be, subject to a number of
significant conditions, including the consummation of the Andrews Group
investment in Marvel, as described below. On November 12, 1996, Andrews Group
made a proposal to Marvel to acquire shares of Marvel common stock, which is
subject to a number of significant conditions. There can be no assurance that
agreement will be reached on the terms of the proposed purchase of the Company
or that any of the foregoing transactions will be consummated.
7
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
General
The Company designs, markets and distributes in the United States and
internationally new and traditional toys in the boys', girls', preschool,
activity and electronic toy categories featuring major entertainment and
consumer brand name properties. The Company also designs, markets and
distributes its own line of proprietary toys.
Results of Operations
Three months ended September 30, 1996 compared with the three months ended
September 30, 1995 The Company's net sales increased 42% to approximately $83.4
million for the three months ended September 30, 1996 from approximately $58.7
million in the 1995 period. Domestic net sales increased 31% to approximately
$63.1 million in the third quarter of 1996 from the 1995 period due to expanded
product lines in all toy categories. International sales of boys' products
accounted for most of the $10.9 million increase in international sales during
the third quarter of 1996 as compared to the third quarter of 1995.
Gross profit increased 33% to approximately $43.0 million for the third
quarter of 1996 from approximately $32.2 million in the third quarter of 1995.
Gross profit as a percentage of net sales decreased to approximately 52% in the
third quarter of 1996 from approximately 55% in the third quarter of 1995 due
to changes in the Company's product mix and the effect of a higher percentage
of international sales, which typically has a lower gross margin than domestic
sales, in the 1996 period.
Selling, general and administrative expenses increased 46% to
approximately $20.1 million (approximately 24% of net sales) in the third
quarter of 1996 from approximately $13.8 million (approximately 23% of net
sales) in the third quarter of 1995. The increase was due to increased
royalties and advertising expense as a result of sales growth, and additional
salaries and other administrative expenses attributable to the Company's
expanded product lines.
Depreciation and amortization expense increased to approximately $4.0
million in the third quarter of 1996 from approximately $2.7 million in the
third quarter of 1995. The increase of $1.3 million was primarily attributable
to increased amortization expense resulting from an increased investment in
product tooling to support the Company's expanded product line.
Nine months ended September 30, 1996 compared with the nine months ended
September 30, 1995
The Company's net sales increased 43% to approximately $167.6 million for
the first nine months of 1996 from approximately $117.0 million in the first
nine months of 1995. Domestic net sales increased 22% to approximately $124.2
million in the nine months ended September 30, 1996 from the 1995 period due to
expanded product lines in all toy categories and the inclusion of Spectra Star
in the 1996 period. International sales of boys' toys accounted for most of the
$27.7 million increase in international sales for the first nine months of 1996
as compared to the first nine months of 1995.
8
<PAGE>
Gross profit increased 30% to approximately $84.5 million for the first
nine months of 1996 from approximately $65.1 million in the year ago period.
Gross profit as a percentage of net sales decreased to approximately 50% in the
first nine months of 1996 from approximately 56% in the year ago period due to
changes in the Company's product mix and the effect of a higher percentage of
international sales, which typically has a lower gross margin than domestic
sales, in the 1996 period.
Selling, general and administrative expenses increased 45% to
approximately $44.4 million (approximately 26% of net sales) in the first nine
months of 1996 from approximately $30.6 million (approximately 26% of net
sales) in the first nine months of 1995. The increase was due to increased
royalties, advertising and other selling expenses as a result of sales growth,
and additional salaries and administrative expenses attributable to the
Company's expanded product lines.
Depreciation and amortization expense increased to approximately $8.6
million in the nine months ended September 30, 1996 from approximately $6.7
million in the same period of 1995. The increase of $1.9 million was primarily
attributable to increased amortization expense resulting from an increased
investment in product tooling to support the Company's expanded product line.
Liquidity and Capital Resources
Net cash used in operating activities was approximately $6.2 million in
the first nine months of 1996, while net cash provided by operating activities
was approximately $12.3 million in the first nine months of 1995. The net
decrease results primarily from increased sales during the first nine months of
1996, the receivables of which, due to industry dating practices , were not due
as of September 30, 1996.
Net cash used in investing activities increased to approximately $17.7
million in the first nine months of 1996 from approximately $11.3 million in
the same period of 1995, not including net cash used for the acquisition of
Spectra Star in the 1995 period. The increase of $6.4 million was primarily
attributable to increased investment in product tooling and product design to
support the Company's expanded product line.
On March 2, 1995, the Company completed an IPO by issuing 2,750,000 new
shares of its Class A Common Stock at $18 per share. The net proceeds to the
Company of $44.1 million, after deducting fees and expenses, were used to pay
outstanding amounts due under subordinated notes which totalled approximately
$15.1 million in principal and approximately $2.0 million in interest, with the
balance used for working capital and general corporate purposes.
In March, 1996, the Company acquired, pursuant to a put right, 53,030
shares of Series A Preferred Stock for approximately $1.4 million. The present
value of the remaining Preferred Stock was approximately $1.7 million as of
September 30, 1996. The Company utilized available cash to redeem the Preferred
Stock.
On August 13, 1996, the Company completed an additional public offering by
issuing 700,000 new shares of Class A Common Stock at $15.00 per share. As part
of such offering, Marvel, a principal stockholder, also sold 2,500,000 shares
of Class A Common Stock. The Company intends to use the net proceeds from the
sale of the new shares of Class A Common Stock, of approximately $9.1 million,
after deducting estimated fees and expenses, to fund a portion of its capital
commitment to Marvel Studios, an entity to be formed with Marvel to facilitate
the development of television programming, feature films and other media and
theatrical productions based on Marvel's characters. In light of the proposals
outlined below, it is anticipated that the structure of Marvel Studios may
change. Pending such use, the net proceeds are being used for working capital
and general corporate purposes.
9
<PAGE>
In March, 1995, the Company entered into a three year $30 million
revolving line of credit with a syndicate of banks for which The Chase
Manhattan Bank (formerly named Chemical Bank) serves as administrative agent.
Substantially all of the assets of the Company were pledged to secure
borrowings under this credit facility. Borrowings under the credit facility
bear interest at either The Chase Manhattan Bank's alternate base rate or at
the Eurodollar rate plus the applicable margin. The applicable margin is 3/4 of
1% to 1% to be determined based on the Company's financial performance. The
credit facility requires the Company to pay a commitment fee of 3/8 of 1% per
annum on the average daily unused portion of the credit facility. The Company
had no outstanding indebtedness under the line of credit as of November 1,
1996.
The credit facility contains various financial covenants, as well as
restrictions, on new indebtedness, prepaying or amending subordinated debt,
acquisitions and similar investments, the sale or transfer of assets, capital
expenditures, limitations on restricted payments, dividends, issuing guarantees
and creating liens. The credit facility also requires an annual reduction,
commencing January 1, 1996, of outstanding borrowings to zero for a period of
45 consecutive days, commencing during the first six months of each calendar
year. In addition, the credit facility also requires that (a) Marvel continue
to control the Company and (b) the toy license agreement between the Company
|and Marvel remain in effect. The credit facility is not guaranteed by Marvel.
Certain indebtedness of Marvel and Marvel's direct and indirect parent
companies impose restrictions that |limit the ability of Marvel and its
subsidiaries, including the Company, to incur debt, make restricted payments,
enter into transactions with affiliates and sell or transfer assets.
On October 17, 1996, Andrews Group, an indirect parent of Marvel,
announced that it had reached agreement with each of Isaac Perlmutter and Avi
Arad to purchase approximately 67% of the outstanding Class A Common Stock for
debt of Andrews Group and cash. It is also anticipated that Andrews Group (or an
affiliate) will be making a proposal to the Company's board of directors to
acquire all remaining shares of Class A Common Stock and, as part of such
transaction, the Company will become a wholly owned subsidiary of Marvel. In
anticipation of receiving a proposal, the Company's board of directors formed a
special committee of directors not affiliated with Andrews Group or with Marvel
on behalf of the minority stockholders. The Andrews Group agreements with each
of Messrs. Perlmutter and Arad are, and the foregoing contemplated proposals to
the Company are expected to be, subject to a number of significant conditions,
including the consummation of the Andrews Group investment in Marvel, as
described below. On November 12, 1996, Andrews Group made a proposal to Marvel
to acquire shares of Marvel common stock, which is subject to a number of
significant conditions. There can be no assurance that agreement will be reached
on the terms of the proposed purchase of the Company or that any of the
foregoing transactions will be consummated.
The Company believes that it has sufficient funds available from operating
activities, borrowings under the credit facility and proceeds from the stock
offering to meet peak working capital needs and capital expenditure
requirements for the forseeable future.
10
<PAGE>
CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995
The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for certain forward-looking statements. The factors discussed under
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" could cause actual results to differ materially from those
contained in forward-looking statements made in this Form 10-Q Quarterly Report
and in oral statements made by authorized officers of the Company. When used in
this Form 10-Q, the words "intend," "estimated", "believe," "expect" and
similar expressions are intended to identify forward-looking statements. In
addition, the following factors, among others, could cause the Company's
financial performance to differ materially from that expressed in any
forward-looking statements made by, or on behalf of, the Company: (i) a
decrease in the level of media exposure or popularity of Marvel characters
resulting in declining revenues of toys based on such characters; (ii) the lack
of continued commercial success of properties owned by major licensors which
have granted the Company toy licenses; (iii) consumer acceptance of new toy
product introductions; and (iv) the imposition of quotas or tariffs on toys
manufactured in China as a result of a deterioration in trade relations between
the U.S. and China.
PART II. Other Information.
Item 1. Legal Proceedings.
None
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
None
(b) Reports on Form 8-K
The Registrant filed a Current Report on Form 8-K,
dated as of July 24, 1996, under Item 5 "Other
Events" reporting the Company's issuance of a press
release announcing its financial results for the
second quarter ended June 30, 1996.
11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereto duly authorized.
TOY BIZ, INC.
(Registrant)
Dated: November 13, 1996 By: /s/David J. Fremed
----------------------------------
David J. Fremed
Chief Financial Officer
12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Toy Biz,
Inc. Condensed Consolidated Balance Sheets and Statements of Income and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000933730
<NAME> TOY BIZ, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 7,268
<SECURITIES> 0
<RECEIVABLES> 119,542
<ALLOWANCES> 485
<INVENTORY> 29,627
<CURRENT-ASSETS> 157,975
<PP&E> 33,766
<DEPRECIATION> 16,095
<TOTAL-ASSETS> 196,214
<CURRENT-LIABILITIES> 54,582
<BONDS> 0
1,657
0
<COMMON> 277
<OTHER-SE> 139,698
<TOTAL-LIABILITY-AND-EQUITY> 196,214
<SALES> 167,620
<TOTAL-REVENUES> 167,620
<CGS> 83,121
<TOTAL-COSTS> 83,121
<OTHER-EXPENSES> 53,020
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 73
<INCOME-PRETAX> 31,973
<INCOME-TAX> 12,790
<INCOME-CONTINUING> 19,183
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 19,183
<EPS-PRIMARY> $0.70
<EPS-DILUTED> 0
</TABLE>
