EXHIBIT 99.1
The Middleton Doll Company Reports Second Quarter Results
PEWAUKEE, Wis.--(BUSINESS WIRE)--Aug. 16, 2004--The Middleton Doll
Company (OTCBB:DOLL) today reported a consolidated net loss of
$852,439 or $0.23 per diluted share for the second quarter of 2004,
compared to a consolidated net loss of $502,748 or $0.13 per diluted
share for the second quarter of 2003. The consolidated results for the
second quarter of 2004 reflect earnings of $197,699 in the company's
financial services segment and a loss of $1,050,138 in the consumer
products segment.
For the first six months of 2004, the company reported a
consolidated net loss of $1,573,375 or $0.42 per diluted share,
compared to a consolidated net loss of $21,503 or $0.01 per diluted
share for the same period in 2003. The consolidated results for the
first half of 2004 reflect earnings of $472,938 in the financial
services segment and a loss of $2,046,313 in the consumer products
segment.
George R. Schonath, president and chief executive officer of The
Middleton Doll Company, said sales in the company's consumer products
segment, which includes its Lee Middleton Original Dolls subsidiary,
decreased as a result of the reduced consumer demand for collectible
dolls.
Schonath noted that the collectible dolls sold in the first half
of 2004 were produced at the company's higher-cost manufacturing
facility in Belpre, Ohio. "We anticipate that we will begin to realize
the benefits of our manufacturing alliance in China during the second
half of 2004," said Schonath.
"In July, we released our first series of Artist Studio
Collection(R) dolls produced in China. The quality of these dolls is
consistent with the high standards that are the foundation of our
company's name and reputation. The feedback we have received from
dealers is very positive," said Schonath.
Schonath said that the company's three Newborn Nursery Adoption
Centers, developed by Lee Middleton Original Dolls, Inc. for
department stores owned by the Saks Department Store Group, are now
open. The centers are located at a Parisian store in Birmingham, Ala.,
a Proffitt's store in Chattanooga, Tenn., and a Younkers store in Des
Moines, Iowa. The Newborn Nursery Adoption Centers are located in
proximity to the children's departments and provide an opportunity for
little girls to experience the "adoption" of their very own lifelike
baby doll in a simulated hospital nursery.
As previously announced, the company's Lee Middleton Original
Dolls subsidiary won a copyright infringement verdict against Seymour
Mann, Inc., a New York-based importer of dolls and other products. The
jury determined that certain dolls sold by Seymour Mann contained
unauthorized copies of copyrighted face, hand and foot sculptures
created exclusively for Lee Middleton Original Dolls, Inc. by renowned
doll artist Reva Schick. "We are pleased with the verdict on the
copyright claim. We will continue to pursue each infringement of our
copyrights to the full extent allowed by law," said Schonath.
"We are optimistic that sales to our Newborn Nursery Adoption
Centers will increase and that our operating results will improve,"
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
(OTCBB:DOLL)
(Unaudited)
STATEMENTS OF OPERATIONS BY SEGMENT
- -----------------------------------
Three months ended Six months ended
June 30, June 30,
2004 2003 2004 2003
---- ---- ---- ----
STATEMENTS OF OPERATIONS BY SEGMENT
- -----------------------------------
Consumer Products:
Net sales $2,733,153 $3,306,943 $5,557,201 $7,218,811
Cost of sales 2,241,051 2,333,407 4,156,294 4,540,806
---------- ---------- ---------- ----------
Gross profit 492,102 973,536 1,400,907 2,678,005
Other expenses (income):
Operating
expenses 1,477,449 1,986,921 3,175,222 4,176,317
Interest/rental
expense to
parent 196,162 220,105 382,110 437,766
Management fees
to parent (114,000) 97,401 - 217,401
Other expense
(income) (6,927) (5,569) (89,660) (10,782)
Income tax expense
(benefit) - (461,485) - (786,284)
Minority interest in
earnings of
subsidiary (10,444) (8,585) (20,452) (13,457)
--------- ---------- ---------- -----------
Total other
expenses 1,542,240 1,828,788 3,447,220 4,020,961
Net loss $(1,050,138) $(855,252) $(2,046,313) $(1,342,956)
=========== =========== =========== ===========
Financial Services:
Net rental/interest income:
Interest on
loans $567,549 $880,596 $1,230,771 $1,807,968
Rental income 813,563 849,440 1,529,022 1,660,894
Interest/rental
income from
subsidiary 196,162 220,105 382,110 437,766
Interest
expense (479,784) (772,841) (1,080,492) (1,570,798)
---------- ---------- ---------- ----------
Total net rental/
interest
income 1,097,490 1,177,300 2,061,411 2,335,830
Other income:
Other income 11,790 77,285 24,335 90,258
Management fees
from
subsidiary (114,000) 97,401 - 217,401
Gain on sale of
swap contract - - - 484,304
Gain on sale of
property - - - 303,570
----------- ---------- ---------- -----------
Total other
income (102,210) 174,686 24,335 1,095,533
Other expenses:
Depreciation expense
on leased
properties 181,134 197,887 355,587 387,004
Other operating
expenses 390,171 442,167 804,670 896,551
Income tax expense
(benefit) - - - 107,499
------------ ---------- ----------- -----------
Total other
expenses 571,305 640,054 1,160,257 1,391,054
Preferred stock
dividends expense 226,276 359,428 452,551 718,856
------------- ---------- ----------- -----------
Net income $197,699 $352,504 $472,938 $1,321,453
============= ========== =========== ===========
STATEMENTS OF OPERATIONS - COMBINED
Net (loss) income:
Consumer
Products $(1,050,138) $(855,252) $(2,046,313) $(1,342,956)
Financial
Services 197,699 352,504 472,938 1,321,453
---------- ---------- ----------- -----------
Net loss applicable to
common
shareholders $(852,439) $(502,748) $(1,573,375) $(21,503)
Basic Loss Per
Share $ (0.23) $ (0.13) $ (0.42) $ (0.01)
Diluted Loss Per
Share $ (0.23) $ (0.13) $ (0.42) $ (0.01)
Basic average
shares
outstanding 3,727,589 3,727,589 3,727,589 3,727,589
Diluted average
shares
outstanding 3,727,589 3,730,637 3,727,589 3,730,929
CONTACT: The Middleton Doll Company
George R. Schonath, 262-523-4300