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Marvel Acquires Cover Concepts

Marvel Enterprises Inc. has acquired the business and certain assets of New York City-based Cover Concepts, a small company specializing in the distribution of free, sponsored materials to public schools across the U.S. Cover Concepts sells advertising space on those materials, which include book covers, bookmarks, locker posters, teaching guides, health & beauty samples, calendars, stickers, notepads, folders, coloring sheets, incentive programs and growth charts. Major advertising customers have included Gatorade, McDonalds and The Centers for Disease Control and Prevention. Cover Concepts anticipates advertising revenue of approximately $4 million and a modest operating profit in 2003. Marvel purchased Cover Concepts from Hearst Communications Inc.

Gui Karyo, president - publishing, commented, "Though small in size, this acquisition represents an exciting new growth initiative for the publishing division and is one of several steps Marvel is taking to expand its reach to children. Cover Concepts will provide the distribution to schools for various new products targeting the valuable tween demographic (ages 8 to 12) that could begin as early as fall 2004. These products could include lesson plans, periodicals and other areas of publishing that are traditionally targeted to this demographic. From a financial perspective, we believe this accretive acquisition should provide an exceptional return on investment and more importantly, provide us with a means for expanding the demographic reach of Marvel publishing as well as provide relationships with advertisers that were not previously Marvel Comics customers."

Cover Concepts (www.coverconcepts.com) distributes materials, free of charge, to a BPA International-audited network of more than 43,000 public schools, reaching more than 30 million children in grades K-12.

Marvel Enterprises, Inc. is a leading global character-based entertainment licensing company that has developed and owns a library of more than 4,700 characters. Marvel's operations are focused in entertainment and consumer product licensing and comic book publishing. For additional information, visit http://www.marvel.com.

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