Exhibit 99.1
The Middleton Doll Company Reports First Quarter Results
PEWAUKEE, Wis.--(BUSINESS WIRE)--May 13, 2004--The Middleton Doll
Company (Nasdaq:DOLL) today reported a net loss of $720,936 or $0.19
per diluted share for the first quarter of 2004, compared to net
income of $481,245 or $0.13 per diluted share for the same period in
2003. The company's consumer products subsidiary reported a loss of
$996,175 for the first quarter of 2004 and the financial services
subsidiary reported net income of $275,239 for the period.
"Our consumer products subsidiary continues to be affected by the
soft economy, with the greatest impact on Lee Middleton Original
Dolls. Sales in the entire collectible doll industry appear to be
lagging as a result of reduced consumer discretionary spending. In
addition, many of our dealers and customers are reducing their
inventory levels and purchasing new dolls in smaller quantities," said
George R. Schonath, president and chief executive officer of The
Middleton Doll Company.
Schonath said the company was continuing to develop new products
to improve Lee Middleton's competitive position in the marketplace.
"In January 2004, we introduced 27 new Artist Studio Collection(TM)
dolls and one new Classic Miniature doll. We also introduced a new
line of Breath of Life Babies(TM), a collection of preemie-sized
babies that feature "New Baby Skin(TM)," made of a new dewy and soft
vinyl, and "Baby Fine Hair(TM), which is rooted hair similar to the
wispy hair on real newborn babies. We have already pre-sold nearly
5,500 Breath of Life Babies, which will first be available in the
market in July," said Schonath. He added that many Lee Middleton dolls
are now featured in limited editions to create added excitement and
increase demand.
"In March 2004, we introduced our online Newborn Nursery, which
enables girls to 'adopt' their new baby doll through the company's
website: www.newbornnursery.com. This new feature was developed in
response to parents who wanted to purchase Newborn Nursery dolls, but
did not have a dealer in their area. We are pleased with the initial
response to the new website," Schonath said.
Schonath said the company is continuing to pursue legal action to
prevent sales of certain dolls manufactured in China that it believes
infringe on Lee Middleton's copyrights and other intellectual
property.
"We are also continuing our focus on reducing costs. While the
prolonged downturn in the collectible doll industry continues to
impact our business, we believe our strategies to reduce costs and
increase sales will benefit the company 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)
STATEMENTS OF OPERATIONS BY SEGMENT
- -----------------------------------
Three months ended
March 31, 2004 March 31, 2003
-------------- --------------
Consumer Products:
Net sales $ 2,824,048 $ 3,911,868
Cost of sales 1,915,243 2,207,399
-------------- --------------
Gross profit 908,805 1,704,469
Other expenses (income):
Operating expenses 1,697,773 2,189,396
Interest/rental expense to parent 185,948 217,661
Management fees to parent 114,000 120,000
Other expense (income) (82,733) (5,213)
Income tax expense (benefit) - (324,799)
Minority interest in earnings of
subsidiary (10,008) (4,872)
-------------- --------------
Total other expenses (income) 1,904,980 2,192,173
Net loss $ (996,175) $ (487,704)
============== ==============
Financial Services:
Net rental/interest income:
Interest on loans $ 663,222 $ 927,372
Rental income 715,459 811,454
Interest/rental income from subsidiary 185,948 217,661
Interest expense (600,708) (797,957)
-------------- --------------
Total net rental/interest income 963,921 1,158,530
Other income:
Other income 12,545 12,973
Management fees from subsidiary 114,000 120,000
Gain on sale of swap contract - 484,304
Gain on sale of property - 303,570
-------------- --------------
Total other income 126,545 920,847
Other expenses:
Depreciation expense on leased
properties 174,453 189,117
Other operating expenses 414,499 454,384
Income tax expense (benefit) - 107,499
-------------- --------------
Total other expenses 588,952 751,000
Preferred stock dividends expense 226,275 359,428
-------------- --------------
Net income $ 275,239 $ 968,949
============== ==============
STATEMENTS OF OPERATIONS - COMBINED
- -----------------------------------
Net (loss) income:
Consumer products $ (996,175) $ (487,704)
Financial services 275,239 968,949
-------------- --------------
Net (loss) income available to common
shareholders $ (720,936) $ 481,245
(Loss) Earnings Per Share - Basic $ (0.19) $ 0.13
(Loss) Earnings Per Share - Diluted $ (0.19) $ 0.13
Average shares outstanding - Basic 3,727,589 3,727,589
Average shares outstanding - Diluted 3,727,589 3,727,589
CONTACT: The Middleton Doll Company
George R. Schonath, 262-523-4300