Exhibit 99
The Middleton Doll Company Reports Fourth Quarter and 2004 Results
PEWAUKEE, Wis.--(BUSINESS WIRE)--March 4, 2005--The Middleton Doll
Company (OTCBB:DOLL) today reported income before income tax expense
and preferred stock dividends of $633,138 or $0.17 per diluted share
for the fourth quarter of 2004, compared to a loss before income tax
expense and preferred stock dividends of $543,222 or $0.15 per diluted
share for the same period in 2003. In the fourth quarter of 2004, the
company took a non-cash charge of $2.69 million or $0.72 per diluted
share to income tax expense to write-off deferred income tax assets in
the consumer products segment. After the charge, the company reported
a net loss of $2,369,720 or $0.64 per diluted share for the fourth
quarter of 2004, compared to a net loss of $561,616 or $0.15 per
diluted share for the fourth quarter of 2003. For the fourth quarter
of 2004, the company's consumer products segment reported a net loss
of $2,508,656 and the financial services segment reported net income
of $138,936.
For the full year, the company reported a loss before income tax
expense and preferred stock dividends of $41,780 or $0.01 per diluted
share in 2004, compared to a loss before income tax expense and
preferred stock dividends of $675,338 or $0.18 per diluted share in
2003. After the non-cash charge taken in the fourth quarter, the net
loss for 2004 was $3,760,476 or $1.01 per diluted share, compared to a
net loss of $661,742 or $0.18 per diluted share in 2003. The consumer
products segment reported a net loss of $4,463,641 and the financial
services segment reported net income of $703,165 in 2004.
"At the end of 2004, we wrote-off the deferred income tax benefit
related to net operating loss carryforwards that were recognized for
financial reporting purposes in years prior to 2004 in our consumer
products segment due to uncertainties regarding the realization of
such assets in the near term. If this segment becomes profitable, the
existing net operating loss carryforwards will be available to be
utilized against future taxable income over the next 12 to 20 years.
The consumer products segment had income before income tax expense of
$176,568 for the fourth quarter of 2004, compared to a loss before
income tax expense of $513,859 for the fourth quarter of 2003," said
George R. Schonath, president and chief executive officer of The
Middleton Doll Company.
"The performance of our consumer products segment has steadily
improved over the past year. We believe this business has good
long-term growth potential and are focusing on expanding our Newborn
Nursery(R) boutiques, introducing distinctive new dolls and further
reducing operating expenses," said Schonath.
"We introduced 23 new dolls in January 2005 at the Atlanta Gift
Show and the International Doll Expo. In addition, we introduced six
new Breath of Life Babies(TM) at the American International Toy Fair
in February, and in April, we plan to introduce three new distinctive
doll faces created by artist Reva Schick to further expand our line of
Artist Studio Collection(TM) dolls," said Schonath. "We also look
forward to the continued expansion of our Newborn Nursery boutiques
within Saks Department Store Group locations, with 15 boutiques in
development for spring 2005."
Schonath said net income for the financial services segment
decreased as loans outstanding and leased properties declined as part
of the plan announced in June 2004 to liquidate and convert assets to
cash and reduce outstanding debt to enable the company to redeem its
preferred stock at maturity on July 1, 2008.
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, but are not
limited to, (i) the continuing effect of adverse economic conditions,
(ii) the effect of increasing competition in the collectible doll
market and (iii) the effect of not reaching the Company's goal to
expand to 100 boutiques over a three-year period. 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)
Three months ended Year ended
December 31, December 31,
2004 2003 2004 2003
-------------------------------------------------
STATEMENTS OF
OPERATIONS BY SEGMENT
- ----------------------
Consumer
Products:
Net sales $ 5,151,300 $ 6,016,512 $ 16,002,777 $ 17,604,836
Cost of goods
sold 3,141,014 3,716,870 10,573,295 11,449,356
Gross profit 2,010,286 2,299,642 5,429,482 6,155,480
Other expenses
(income):
Operating
expenses 1,643,322 2,623,387 6,556,919 8,646,985
Interest/rental
expense to
parent 195,411 88,364 769,319 747,524
Management fees
to parent - 107,267 - 449,267
Other expense
(income) 4,241 (2,479) (89,553) (12,566)
Minority
interest in
earnings of
subsidiary (9,256) (3,038) (28,786) (22,857)
Total other
expenses 1,833,718 2,813,501 7,207,899 9,808,353
Income (loss)
before income
tax expense
(benefit) 176,568 (513,859) (1,778,417) (3,652,873)
Income tax
expense
(benefit) 2,685,224 (207,881) 2,685,224 (1,368,698)
Net income
(loss) $ (2,508,656) $ (305,978)$ (4,463,641) $ (2,284,175)
Financial
Services:
Net rental/
interest income:
Interest on
loans $ 516,674 $ 679,247 $ 2,244,411 $ 3,258,164
Rental income 718,395 573,246 3,004,701 3,074,479
Interest/rental
income from
subsidiary 195,411 88,364 769,319 747,524
Interest expense (548,902) (631,018) (2,113,731) (2,869,363)
Total net
rental/interest
income 881,578 709,839 3,904,700 4,210,804
Other income:
Other income 7,546 53,086 70,608 178,950
Management fees
from subsidiary - 107,267 - 449,267
Gain on sale of
swap contract - - - 484,304
Gain on sale of
property 228,428 - 309,718 518,967
Total other
income 235,974 160,353 380,326 1,631,488
Other expenses:
Depreciation
expense on
leased
properties 137,682 188,477 649,693 771,451
Other operating
expenses 523,300 711,078 1,898,696 2,093,306
Total other
expenses 660,982 899,555 2,548,389 2,864,757
Income (loss)
before income
tax expense and
preferred stock
dividends 456,570 (29,363) 1,736,637 2,977,535
Income tax
expense 91,359 - 128,371 183,695
Preferred stock
dividends 226,275 226,275 905,101 1,171,407
Net income
(loss) $ 138,936 $ (255,638)$ 703,165 $ 1,622,433
STATEMENTS OF
OPERATIONS - COMBINED
- ----------------------
Net income
(loss):
Consumer
Products $ (2,508,656) $ (305,978)$ (4,463,641) $ (2,284,175)
Financial
Services 138,936 (255,638) 703,165 1,622,433
Net income (loss)
available to
common
shareholders $ (2,369,720) $ (561,616)$ (3,760,476) $ (661,742)
Income (Loss)
Per Share -
Basic $ (0.64) $ (0.15)$ (1.01) $ (0.18)
Income (Loss)
Per Share -
Diluted $ (0.64) $ (0.15)$ (1.01) $ (0.18)
Average shares
outstanding -
Basic 3,727,589 3,727,589 3,727,589 3,727,589
Average shares
outstanding -
Diluted 3,727,589 3,731,484 3,727,589 3,731,484
CONTACT: The Middleton Doll Company
George R. Schonath, 262-523-4300