Hulk Hands Marvel A Winning Quarter

Saturday, August 2 2003

Posted on Variety.com Associated Press

The following was originally posted on Variety.com:

Hulk hands Marvel a winning quarter
Toys, vidgames help co. beat analysts

By JUSTIN OPPELAAR

NEW YORK -- Marvel Comics swooped in and saved the day on Wall Street Tuesday, announcing that earnings would beat expectations on the back of strong licensing revenue from such film properties as Hulk, Daredevil and the X-Men.
Investors pushed Marvel stock up almost 12% by the end of the day to $19.73, after the storied comic franchise said it expects second-quarter profits to come in between 25¢ and 30¢ a share on revenues of between $62 million and $67 million.

A big high point for the quarter was the Universal/Marvel-co-produced summer tentpole "Hulk," which took in $130 million in domestic box office to date and spawned a host of licensed products at retail from which Marvel draws substantial royalties.

The big winner this season, Marvel said, was Electronic Hulk Hands. The mammoth novelty hands are on track to outsell even last year's must-have, Spider-Man Web-Blasters, which moved more than 3.5 million units.

Marvel also drew strength from Hulk action figures and from a videogame based on the film, which was developed by Vivendi Universal Games and has maintained a top-five sales rank for all the major vidgame platforms.

Company, which plans to release second-quarter results on Aug. 12, has seen its stock price shoot up from less than $4.50 last fall to recent highs above $25, before settling again in the $20 range over the past few months.

And from the Associated Press:

Hulk Licensing Franchise off to Strong Start: Marvel's Hulk property, which last month was identified as the number one hot license for kids in a preview for the Licensing Show 2003, has firmly established itself as a powerful entertainment licensing franchise based on strong retail sales of Hulk-branded products, particularly in several key license categories such as toys, video games, domestics and children's apparel. The Hulk licensing program has roughly 300 licensees, encompassing over 1,000 products, with many of the licensees expected to report revenues in excess of the initial minimum guarantees.

Serving as the global catalyst and backdrop for the Hulk licensing program was the June 20th launch of Universal Picture's The Hulk feature film which has grossed in excess of $200 million in worldwide box office receipts in over 28 countries to date(3). The film remains in theaters in the U.S. and around the world, and premieres of The Hulk in international markets including Japan, Italy and a few others are still to come later this summer.

Alan Fine, CEO of Toy Biz, Marvel's in-house toy division, commented: "Sales of licensed Electronic Hulk Hands continue to exceed all of our expectations for this role-playing toy, both in units sold and retail dollars. With purchase orders surpassing the 3.5 million Spider-Man web-blaster units sold in 2002, Electronic Hulk Hands have already become the largest toy success in company history. Coming on the heels of last year's success with Spider-Man, we have demonstrated that we can translate our brands into powerful toy franchises, which have strengthened our relationships with key retail outlets."

Hulk action figures and accessories are created in-house by Marvel's Toy Biz division and manufactured and sold by Marvel's master toy licensee pursuant to a July 2001 license agreement. Royalties based on sales of The Hulk toys are recorded in Marvel's licensing division, and Marvel is reimbursed for its product development and marketing and sales efforts.

Russ Brown, Executive Vice President Consumer Products, Promotions & Retail Sales commented: "Sales of products based on The Hulk have been extremely strong in the toy, video game, domestics and children's apparel categories. These categories are some of the most influential, both in terms of sales dollars and brand support for other licensing categories. We consider the continued success of Hulk products in these categories to be proof of the Hulk's emergence as a major 'evergreen' licensed property."

Sales of Hulk video games, which are sold by Vivendi Universal Games, have exceeded Marvel's internal expectations for the product. The video game continues to sell well across all four video game platforms and is in the top five in sales of video games for the PC, PlayStation 2, X-Box, GameCube and Game Boy Advance platforms.

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