EXHIBIT 99
The Middleton Doll Company Reports Third Quarter Profit
PEWAUKEE, Wis.--(BUSINESS WIRE)--Nov. 11, 2004--The Middleton Doll
Company (OTCBB:DOLL) today reported net income of $182,619 or $0.05
per diluted share for the third quarter of 2004, compared to a net
loss of $78,623 or $0.02 per diluted share for the third quarter of
2003. For the quarter, the consumer products segment earned $91,328
and the financial services segment earned $91,291.
For the nine months ending September 30, 2004, the company
reported a net loss of $1,390,756 or $0.37 per diluted share, compared
to a net loss of $100,126 or $0.03 per diluted share for the same
period in 2003. For the nine months ending September 30, 2004, the
consumer products segment lost $1,954,985 and the financial services
segment earned $564,229.
Net income for the financial services segment decreased as loans
outstanding and leased properties declined from $90,513,142 at
September 30, 2003 to $63,716,982 at September 30, 2004. The planned
liquidation of the company's financial services subsidiary is expected
to be completed in June 2008 to enable the company to redeem its
preferred stock at maturity.
Commenting on the third quarter results for the consumer products
segment, George R. Schonath, president and chief executive officer of
The Middleton Doll Company, said, "In the future, we expect gross
profit margins to increase as we complete the transition of our
production to China. Operating expenses are expected to decrease as we
continue to reduce costs related to our restructuring and eliminate
the legal fees associated with winning a recent copyright infringement
lawsuit. More importantly, we believe that we are in the initial
stages of reducing our dependence on the sale of collectible dolls and
increasing sales of play dolls through our Newborn Nursery(R) Adoption
Centers."
Two Newborn Nursery Adoption Centers opened at Saks Department
Store Group locations in the third quarter of 2004 and an additional
three centers opened in October 2004. The new openings increase the
total number of Newborn Nursery centers in Saks stores to eight.
The Newborn Nursery Adoption Centers enable young girls to
experience the "adoption" of their very own lifelike baby doll in a
simulated hospital nursery setting and help parents to teach their
children moral values and parenting responsibilities of a parent-child
relationship. Newborn Nursery Adoption Centers are located in Parisian
stores in Birmingham, Ala., Rochester Hills, Mich. and Alpharetta,
Ga., a Proffitt's store in Chattanooga, Tenn., a Younkers store in Des
Moines, Iowa, a McRae's store in Sanford, Fla., a Carson Pirie Scott
store in Lombard, Ill., and a Boston Store in Milwaukee, Wis.
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
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 Nine months ended
September 30, September 30,
2004 2003 2004 2003
----------- ----------- ------------ ------------
STATEMENTS OF
OPERATIONS BY SEGMENT
- ----------------------
Consumer Products:
Net sales $5,294,276 $4,369,513 $10,851,477 $11,588,324
Cost of sales 3,275,987 3,191,680 7,432,281 7,732,486
----------- ----------- ------------ ------------
Gross profit 2,018,289 1,177,833 3,419,196 3,855,838
Other expenses
(income):
Operating expenses 1,738,375 1,847,281 4,913,597 6,023,598
Interest/rental
expense to parent 191,798 221,394 573,908 659,160
Management fees to
parent - 124,599 - 342,000
Other expense
(income) (4,134) 695 (93,794) (10,087)
Income tax expense
(benefit) - (374,533) - (1,160,817)
Minority interest
in earnings of
subsidiary 922 (6,362) (19,530) (19,819)
----------- ----------- ------------ ------------
Total other
expenses 1,926,961 1,813,074 5,374,181 5,834,035
Net income (loss) $91,328 $(635,241) $(1,954,985) $(1,978,197)
=========== =========== ============ ============
Financial Services:
Net rental/interest
income:
Interest on loans $496,966 $770,949 $1,727,737 $2,578,917
Rental income 757,284 840,339 2,286,306 2,501,233
Interest/rental
income from
subsidiary 191,798 221,394 573,908 659,160
Interest expense (484,337) (667,547) (1,564,829) (2,238,345)
----------- ----------- ------------ ------------
Total net
rental/interest
income 961,711 1,165,135 3,023,122 3,500,965
Other income:
Other income 38,727 35,606 63,062 125,864
Management fees
from subsidiary - 124,599 - 342,000
Gain on sale of
swap contract - - - 484,304
Gain on sale of
property 81,290 215,397 81,290 518,967
----------- ----------- ------------ ------------
Total other
income 120,017 375,602 144,352 1,471,135
Other expenses:
Depreciation
expense on leased
properties 156,424 195,970 512,011 582,974
Other operating
expenses 570,726 485,677 1,375,396 1,382,228
Income tax expense 37,012 76,196 37,012 183,695
----------- ----------- ------------ ------------
Total other
expenses 764,162 757,843 1,924,419 2,148,897
Preferred stock
dividends expense 226,275 226,276 678,826 945,132
----------- ----------- ------------ ------------
Net income $91,291 $556,618 $564,229 $1,878,071
=========== =========== ============ ============
STATEMENTS OF OPERATIONS -
COMBINED
- --------------------------
Net income (loss):
Consumer Products $91,328 $(635,241) $(1,954,985) $(1,978,197)
Financial Services 91,291 556,618 564,229 1,878,071
----------- ----------- ------------ ------------
Net income (loss)
available to common
shareholders $182,619 $(78,623) $(1,390,756) $(100,126)
Earnings (Loss) Per
Share - Basic $0.05 $(0.02) $(0.37) $(0.03)
Earnings (Loss) Per
Share - Diluted $0.05 $(0.02) $(0.37) $(0.03)
Basic average shares
outstanding 3,727,589 3,727,589 3,727,589 3,727,589
Diluted average
shares outstanding 3,727,589 3,743,389 3,727,589 3,734,733
CONTACT: The Middleton Doll Company
George R. Schonath, 262-523-4300