EXHIBIT 99.1
The Middleton Doll Company Reports Second Quarter Results
PEWAUKEE, Wis.--(BUSINESS WIRE)--Aug. 8, 2003--The Middleton Doll
Company (Nasdaq: DOLL) today reported a loss of $502,748 or $0.13 per
diluted share for the second quarter ended June 30, 2003, compared to
a profit of $914,450 or $0.25 per diluted share for the same period in
2002. The financial services subsidiary reported earnings of $352,504
and the consumer products subsidiary reported a loss of $855,252 for
the second quarter ended June 30, 2003.
For the first six months of 2003, the company reported a loss of
$21,503 or $0.01 per diluted share, compared to a profit of $1,315,516
or $0.35 per diluted share for the same period in the prior year. The
financial services subsidiary reported earnings of $1,321,453 and the
consumer products subsidiary reported a loss of $1,342,956 for the six
months ended June 30, 2003.
"The second quarter of 2003 continued to be a challenging period
for our consumer products segment," said George R. Schonath, president
and chief executive officer of The Middleton Doll Company.
"On the positive side, License Products, a subsidiary of Lee
Middleton Original Dolls, continued to increase sales with Kohl's,
Bed, Bath & Beyond and Harley-Davidson," said Schonath. License
Products imports leading-edge design timepieces and home decor
merchandise on a private-label basis for America's foremost retailers.
"Results for our Lee Middleton Original Dolls subsidiary and the
collectible doll industry were impacted by the continued soft economy.
The company is also experiencing intense pricing pressure from
collectible dolls produced in China," said Schonath.
In June 2003, Lee Middleton lowered prices on its line of Artist
Studio Collection(TM) dolls to stimulate sales in the sluggish
economic environment and to offset the price competition of dolls
produced in China.
"We are continuing our legal actions to prevent the sale of
certain dolls manufactured in China that we believe infringe our
copyrights and other intellectual property," said Schonath. "We are
also thoroughly evaluating all of our operations to identify
additional ways to reduce operating expenses and increase efficiency."
"This is a transition period for Lee Middleton, as we refocus our
efforts on preventing infringements on our copyrights, further
reducing our cost of business and marketing our new products. We
continue to believe these strategies will provide opportunities to
improve the profitability of Lee Middleton over the long term," said
Schonath.
The Middleton Doll Company operates in two segments, consumer
products and financial services. The company's consumer products
segment is comprised of Lee Middleton Original Dolls, Inc., a
designer, manufacturer and marketer of lifelike collectible and play
dolls, and License Products, Inc., a designer and marketer of clocks
and home decor products that are sold to major national retailers. The
company's financial services subsidiary is a real estate investment
trust (REIT).
This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995 with
respect to the financial condition, results of operations, plans,
objectives, future performance and business of the Company.
Forward-looking statements, which may be based upon beliefs,
expectations and assumptions of the Company's management and on
information currently available to management, are generally
identifiable by the use of words such as "believe," "expect,"
"anticipate," "plan," "intend," "estimate," "may," "will," "would,"
"could," "should," or other similar expressions. Additionally, all
statements in this document, including forward-looking statements,
speak only as of the date they are made, and the Company undertakes no
obligation to update any statement in light of new information or
future events. A number of factors, many of which are beyond the
ability of the Company to control or predict, could cause actual
results to differ materially from those in its forward-looking
statements. Significant risks and uncertainties include (i) the
continuing effect of adverse economic conditions and (ii) the effect
of increasing competition in the collectible doll market. Additional
information concerning the Company and its business, including factors
that could materially affect the Company's financial results, is
included in the Company's filings with the Securities and Exchange
Commission.
The Middleton Doll Company news releases are available on-line 24
hours a day at: http://www.middletondollcompany.com
The Middleton Doll Company
(NASDAQ/NMS:DOLL)
(Unaudited)
Three months ended Six months ended
------------------ ----------------
June 30, June 30,
-------- --------
2003 2002 2003 2002
---- ---- ---- ----
STATEMENTS OF OPERATIONS BY SEGMENT
- -----------------------------------
Consumer Products:
Net sales $3,306,943 $4,932,191 $7,218,811 $10,516,297
Cost of sales 2,333,407 2,946,227 4,540,806 6,088,222
---------- ---------- ---------- -----------
Gross profit 973,536 1,985,964 2,678,005 4,428,075
Other expenses (income):
Operating
expenses 1,986,921 2,028,087 4,176,317 4,543,288
Interest/rental expense
to parent 220,105 118,978 437,766 301,091
Management fees to
parent 97,401 113,985 217,401 217,843
Other expense
(income) (5,569) 25,895 (10,782) 61,254
Income tax expense
(benefit) (461,485) (81,774) (786,284) (200,038)
Minority interest in
earnings of
subsidiary (8,585) 63,022 (13,457) 74,932
---------- ---------- ---------- -----------
Total other expenses
(income) 1,828,788 2,268,193 4,020,961 4,998,370
Net income (loss) $(855,252) $(282,229) $(1,342,956) $(570,295)
========== ========== ========== ===========
Financial Services:
Net rental/interest income:
Interest on loans $880,596 $1,290,213 $1,807,968 $2,659,396
Rental income 849,440 962,144 1,660,894 1,938,320
Interest/rental income
from subsidiary 220,105 118,978 437,766 301,091
Interest expense (772,841) (967,928) (1,570,798) (2,003,649)
---------- ---------- ---------- -----------
Total net
rental/interest
income 1,177,300 1,403,407 2,335,830 2,895,158
Other income:
Other income
(expense) 77,285 22,411 90,258 157,761
Management fees from
subsidiary 97,401 113,985 217,401 217,843
Gain on sale of swap
contract - - 484,304 -
Gain on sale of
property - 1,035,355 303,570 1,036,248
---------- ---------- ---------- -----------
Total other
income 174,686 1,171,751 1,095,533 1,411,852
Other expenses:
Depreciation expense on
leased properties 197,887 211,758 387,004 427,951
Other operating
expenses 442,167 442,517 896,551 909,616
Income tax expense - 364,776 107,499 364,776
---------- ---------- ---------- -----------
Total other
expenses 640,054 1,019,051 1,391,054 1,702,343
Preferred stock
dividends expense 359,428 359,428 718,856 718,856
---------- ---------- ---------- -----------
Net income $352,504 $1,196,679 $1,321,453 $1,885,811
========== ========== ========== ===========
STATEMENTS OF OPERATIONS - COMBINED
Net income:
Consumer
Products $(855,252) $(282,229) $(1,342,956) $(570,295)
Financial
Services 352,504 1,196,679 1,321,453 1,885,811
---------- ---------- ---------- -----------
Net income available
to common
shareholders $(502,748) $914,450 $(21,503) $1,315,516
Earnings Per Share
- Basic $ (0.13) $ 0.25 $ (0.01) $ 0.35
Earnings Per Share
- Diluted $ (0.13) $ 0.25 $ (0.01) $ 0.35
Average shares
outstanding -
Basic 3,727,589 3,727,589 3,727,589 3,727,589
Average shares
outstanding -
Diluted 3,730,637 3,727,589 3,730,929 3,727,589
CONTACT: The Middleton Doll Company
George R. Schonath, 262-523-4300