Nelvana has acquired the worldwide development, production, distribution and merchandise licensing rights to Puff the Magic Dragon. Under the agreement, Nelvana will produce a feature film, tv series and tv special and will license all Puff merchandise.

Puff the Magic Dragon is currently in development for production in late 1999 or 2000. The company will soon begin international and North American broadcast and video sales.

In other Nelvana news, the company’s third quarter net earnings increased to $2.4 million ($0.33 per share) from $0.6 million ($0.10 per share). The year-to-date earnings were up to $4.4 million ($0.62 per share) from $1.8 million ($0.31 per share).

During this quarter, Nelvana completed the Kids Can Press acquisition and delivered 43 proprietary animated episodes, including seven of its primetime series Bob and Margaret.