Exhibit 99.1
The Middleton Doll Company Reports Fourth Quarter and 2003 Results
PEWAUKEE, Wis.--(BUSINESS WIRE)--Feb. 26, 2004--The Middleton Doll
Company (Nasdaq:DOLL) today reported a net loss of $561,616 or $0.15
per diluted share for the fourth quarter of 2003, compared to net
income of $1,131,139 or $0.30 per diluted share for the same period in
2002. The company's consumer products subsidiary reported a loss of
$305,978 for the fourth quarter of 2003 and the financial services
subsidiary reported a loss of $255,638 for the period.
For the full year, the company reported a loss of $661,742 or
$0.18 per diluted share, compared to net income of $3,203,016 or $0.86
per diluted share in 2002. The consumer products subsidiary reported a
loss of $2,284,175 and the financial services subsidiary reported
earnings of $1,622,433 for 2003.
George R. Schonath, president and chief executive officer of The
Middleton Doll Company, said that despite the losses in the financial
services subsidiary in the fourth quarter, the company's taxable
income for 2003 was sufficient to pay its quarterly cash dividend
payments to shareholders in 2003.
"In our consumer products subsidiary, Lee Middleton Original
Doll's unit sales increased 17% for the period from June through
December 2003, compared to the same period in 2002. The increase was
the result of price reductions on the company's line of Artist Studio
Collection(TM) dolls announced in June 2003," said Schonath.
"We are evaluating additional strategies to reduce costs and are
developing new products to improve Lee Middleton's competitive
position in the marketplace. We believe that by reducing costs and
developing new products, Lee Middleton should be positioned to
increase sales and improve its financial performance in the future,"
said Schonath.
"Although this is a very difficult period for the collectible doll
industry, we are encouraged by the increase in unit sales. The
lifelike designs and high quality of Lee Middleton dolls make them the
collectible dolls of choice in the market. We believe we have the
products and strategies in place to weather this storm in the industry
and profitably grow the company over the long term," said Schonath.
"In addition, we will continue to pursue legal action to prevent
the sale of certain dolls manufactured in China that we believe
infringe on Lee Middleton's copyrights and other intellectual
property. We are pleased to have settled our disputes with several
defendants," 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 Twelve months ended
------------------------- -------------------------
December 31, December 31,
------------ ------------
2003 2002 2003 2002
---- ---- ---- ----
STATEMENTS OF
OPERATIONS BY SEGMENT
- ---------------------
Consumer Products:
Net sales $ 6,016,512 $ 7,612,018 $17,604,836 $23,463,333
Cost of sales 3,716,870 4,571,710 11,449,356 13,910,220
------------ ------------ ------------ ------------
Gross profit 2,299,642 3,040,308 6,155,480 9,553,113
Other expenses
(income):
Operating expenses 2,623,387 2,852,862 8,646,985 9,756,737
Interest/rental
expense to parent 88,364 158,639 747,524 590,088
Management fees
to parent 107,267 114,149 449,267 438,909
Other expense
(income) (2,479) 29,394 (12,566) 127,835
Income tax expense
(benefit) (207,881) (683,225) (1,368,698) (1,164,478)
Minority interest
in earnings of
subsidiary (3,038) 11,800 (22,857) 84,129
------------ ------------ ------------ ------------
Total other
expenses 2,605,620 2,483,619 8,439,655 9,833,220
Net (loss) income $ (305,978) $ 556,689 $(2,284,175) $ (280,107)
============ ============ ============ ============
Financial Services:
Net rental/interest
income:
Interest on
loans $ 679,247 $ 1,046,299 $ 3,258,164 $ 4,849,362
Rental income 573,246 859,439 3,074,479 3,636,388
Interest/rental
income from
subsidiary 88,364 158,639 747,524 590,088
Interest expense (631,018) (775,134) (2,869,363) (3,699,308)
------------ ------------ ------------ ------------
Total net
rental/interest
income 709,839 1,289,243 4,210,804 5,376,530
Other income:
Other income 53,086 30,717 178,950 209,230
Management fees
from subsidiary 107,267 114,149 449,267 438,909
Gain on sale of
swap contract - - 484,304 747,000
Gain on sale of
property - 150,713 518,967 1,186,961
------------ ------------ ------------ ------------
Total other
income 160,353 295,579 1,631,488 2,582,100
Other expenses:
Depreciation
expense on leased
properties 188,477 197,965 771,451 825,244
Other operating
expenses 711,078 399,597 2,093,306 1,806,378
Income tax expense
(benefit) - 53,382 183,695 406,173
------------ ------------ ------------ ------------
Total other
expenses 899,555 650,944 3,048,452 3,037,795
Preferred stock
dividends expense 226,275 359,428 1,171,407 1,437,712
------------ ------------ ------------ ------------
Net (loss) income $ (255,638) $ 574,450 $ 1,622,433 $ 3,483,123
============ ============ ============ ============
STATEMENTS OF OPERATIONS - COMBINED
- -----------------------------------
Net (loss) income:
Consumer
Products $ (305,978) $ 556,689 $(2,284,175) $ (280,107)
Financial
Services (255,638) 574,450 1,622,433 3,483,123
------------ ------------ ------------ ------------
Net (loss) income
available to common
shareholders $ (561,616) $ 1,131,139 $ (661,742) $ 3,203,016
(Loss) Earnings Per
Share - Basic $ (0.15) $ 0.30 $ (0.18) $ 0.86
(Loss) Earnings Per
Share - Diluted $ (0.15) $ 0.30 $ (0.18) $ 0.86
Average shares
outstanding -
Basic 3,727,589 3,727,589 3,727,589 3,727,589
Average shares
outstanding -
Diluted 3,727,589 3,727,589 3,731,484 3,727,589
CONTACT: The Middleton Doll Company
George R. Schonath, 262-523-4300