Buoyed by increased licensing revenues, Marvel Enterprises, Inc. announced that, '...based on preliminary figures, the company will exceed the high end of financial guidance for revenue, EBITDA, Net Income, EPS and Free Cash Flow for Q2 2003.' Marvel's statement singled out the strong performance of licensed products based on its Incredible Hulk character.  Marvel's cash balance grew from approximately $85 million in cash on hand as of March 31, 2003, to $144 million on hand as of June 30, 2003.  With a long-term debt of $151 million, Marvel's net debt has been reduced to $7 million as of June 30 versus $66.3 million on March 31, 2003.

While Ang Lee's Hulk movie had a strong opening weekend, the film faded fast and has to be considered something of a disappointment, though with overseas box office and DVD revenue the film will eventually make money.  The Hulk's performance in key licensing categories including toys, video games, and apparel appears to be altogether much stronger than on the big screen.  Sales of Electronic Hulk Hands have surpassed expectations -- the product has already sold more units than the Spider-Man Web Blaster (3.5 million shipped) and has become the biggest toy success in company history.

Overall Marvel has more than 300 Hulk licensees, who are producing more than 1,000 licensed products -- and many of the licensees are expected to report revenues in excess of the initial minimum guarantees, which should translate into more licensing revenue for Marvel.

Marvel designs the Hulk action figures and accessories in-house using its Toy Biz division, but the actual toys are manufactured and sold by Marvel's master toy licensee working under the terms of a July 2001 licensing agreement.  Royalties based on the sales of Hulk figures go to Marvel's licensing division, and Marvel is reimbursed for its product development and marketing and sales efforts.

Russ Brown, Marvel's Executive VP of Consumer Products characterized sales of Hulk licensed items as 'extremely strong in the toy, video game, domestics and children's apparel categories.'  The Hulk video game from Vivendi Universal Games is in the top five in terms of sales of video games for the PC, Playstation 2, X-Box, Nintendo GameCube, and Game Boy Advanced.