Exhibit 99.1
The Middleton Doll Company Reports Second Quarter Results
PEWAUKEE, Wis.--(BUSINESS WIRE)--Aug. 5, 2005--The Middleton Doll
Company (OTCBB:DOLL) today reported a consolidated net loss of
$1,167,281 or $0.31 per diluted share for the second quarter of 2005,
compared to a consolidated net loss of $852,439 or $0.23 per diluted
share for the second quarter of the prior year. The company's consumer
products segment reported a net loss of $1,253,923 for the second
quarter of 2005 and the financial services segment reported a profit
of $86,642.
For the first six months of 2005, the company reported a
consolidated net loss of $1,520,236 or $0.41 per diluted share,
compared to a consolidated net loss of $1,573,375 or $0.42 per diluted
share for the first half of 2004. The consumer products segment
reported a loss of $2,254,102 and the financial services segment
reported a profit of $733,866 for the first six months of 2005.
"The results for the second quarter of 2005 include non-recurring
expenses of approximately $340,000 in our consumer products segment.
These expenses primarily relate to remaining lease payments on our
former warehouse in Columbus, Ohio, following the consolidation of
these operations into our existing facility in Belpre, Ohio. Excluding
the one-time expenses, we achieved increased profit margins on
relatively flat sales in the second quarter. The improvement is due to
increased efficiencies resulting from the transfer of our collectible
doll production to China," said George R. Schonath, president and
chief executive officer of The Middleton Doll Company.
"We are continuing to expand our Newborn Nursery(R) boutiques
within selected Saks Department Store locations, and plan to add 14
new boutiques by the end of the year. Currently, there are 15 Newborn
Nursery boutiques at Saks Department Store locations and five at Belk,
Inc. stores. The new boutiques will increase our number of Newborn
Nursery locations to 34," said Schonath.
"In July 2005, we introduced our new Breathing Too(TM) babies. In
addition to their huggable bodies and lifelike skin and hair, these
babies also have a breathing mechanism that creates gentle movements
of the chest and arms. These most real of all our Breath of Life(TM)
baby dolls have been extremely well received by consumers and by
dealers at recent gift shows," said Schonath.
"We continue to believe our future growth will come from increased
sales at our Lee Middleton Original Dolls Newborn Nursery boutiques
and from new products such as Breathing Too. We have put a new
management team in place at Lee Middleton to facilitate this growth,"
added Schonath.
The company continues to carry out its plan to convert loans and
leased properties in the financial services segment into cash to
reduce outstanding debt so that it can redeem its $16.9 million of
preferred stock before July 2008.
On August 2, 2005, George Schonath, age 64, announced to the Board
of Directors that he plans to retire from the company effective
December 31, 2005. Schonath had previously alluded to his probable
retirement at the company's annual meeting in May. The Board will
appoint a successor to Schonath prior to his retirement.
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 Six months ended
------------------ ----------------
June 30, June 30,
-------- --------
2005 2004 2005 2004
---- ---- ---- ----
STATEMENTS OF
OPERATIONS BY
SEGMENT
- --------------
Consumer Products:
Net sales $ 2,581,213 $ 2,610,545 $ 5,349,550 $ 5,283,891
Cost of sales 1,607,753 2,015,666 3,216,197 3,672,921
----------- ----------- ----------- -----------
Gross profit 973,460 594,879 2,133,353 1,610,970
Other expenses
(income):
Operating
expenses 2,045,312 1,580,226 4,029,981 3,385,285
Interest/rental
expense to
parent 245,546 196,162 459,727 382,110
Management fees
to parent - - - 114,000
Forgiveness of
management fees
to parent - (114,000) - (114,000)
Other expense
(income) (63,475) (6,927) (102,253) (89,660)
Minority
interest in
earnings of
subsidiary - (10,444) - (20,452)
------------ ----------- ------------ -----------
Total other
expenses 2,227,383 1,645,017 4,387,455 3,657,283
Net loss $(1,253,923) $(1,050,138) $(2,254,102) $(2,046,313)
=========== =========== =========== ===========
Financial Services:
Net rental/interest
income:
Interest on
loans $ 417,850 $ 567,549 $ 877,085 $ 1,230,771
Rental income 496,239 813,563 1,031,088 1,529,022
Interest/rental
income from
subsidiary 245,546 196,162 459,727 382,110
Interest expense (428,170) (479,784) (883,054) (1,080,492)
----------- ----------- ----------- -----------
Total net
rental/
interest
income 731,465 1,097,490 1,484,846 2,061,411
Other income:
Other income 8,660 11,790 21,088 24,335
Management fees
from subsidiary - - - 114,000
Forgiveness of
management fees
from subsidiary - (114,000) - (114,000)
Gain on sale of
property - - 769,424 -
------------ ------------ ----------- ------------
Total other
income 8,660 (102,210) 790,512 24,335
Other expenses:
Depreciation
expense on
leased
properties 93,916 181,134 195,674 355,587
Other operating
expenses 333,291 390,171 687,064 804,670
Income tax
expense - - 206,203 -
------------ ------------ ----------- ------------
Total other
expenses 427,207 571,305 1,088,941 1,160,257
Preferred stock
dividends expense 226,276 226,276 452,551 452,551
----------- ----------- ----------- -----------
Net income $ 86,642 $ 197,699 $ 733,866 $ 472,938
=========== =========== =========== ===========
STATEMENTS OF
OPERATIONS -
COMBINED
- ------------------
Net (loss) income:
Consumer
Products $(1,253,923) $(1,050,138) $(2,254,102) $(2,046,313)
Financial
Services 86,642 197,699 733,866 472,938
----------- ----------- ----------- -----------
Net (loss) income
available to
common
shareholders $(1,167,281) $ (852,439) $(1,520,236) $(1,573,375)
(Loss) Earnings
Per Share - Basic $ (0.31) $ (0.23) $ (0.41) $ (0.42)
(Loss) Earnings
Per Share -
Diluted $ (0.31) $ (0.23) $ (0.41) $ (0.42)
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 3,727,589 3,727,589
CONTACT: The Middleton Doll Company
George R. Schonath, 262-523-4300