Exhibit 99
The Middleton Doll Company Reports Fourth Quarter Results;
Announces Election of Two New Directors
HARTLAND, Wis.--(BUSINESS WIRE)--March 23, 2007--The Middleton
Doll Company (OTCBB:DOLL) today reported results for the fourth
quarter and full year 2006 and announced the election of two new Board
members.
Fourth Quarter Highlights
-- The company reported net income for the fourth quarter of 2006
of $2,008,759 or $0.54 per diluted share, compared to net
income of $203,586 or $0.05 per diluted share for the fourth
quarter of 2005.
-- The consumer products segment reported a net loss of
$1,035,310 for the fourth quarter of 2006.
-- The financial services segment reported net income of $991,000
for the fourth quarter of 2006.
-- The company additionally reported a net gain on the redemption
of certain preferred stock shares of $2,268,103 and paid
$215,034 in preferred stock dividends in the fourth quarter.
Full Year 2006 Highlights
-- The company reported a consolidated net loss of $376,088 or
$0.10 per diluted share for 2006, compared to a loss of
$1,554,602 or $0.42 per diluted share in 2005.
-- The consumer products segment reported a net loss of
$3,411,361 for 2006.
-- The financial services segment reported net income of
$1,661,030 for 2006.
-- The company additionally reported a net gain on the redemption
of certain preferred stock shares of $2,268,103 and paid
preferred stock dividends of $893,860 in 2006.
Election of New Board Members
The company announced the election of Jeffrey B. Rusinow, 52, and
Douglas M. Schosser, 36, to the company's Board of Directors.
Rusinow has 22 years of experience in retail management, holding
senior executive positions at Macy's, Gimbel's, the Hudson Bay Company
and most recently, Kohl's Department Stores, where he served as an
executive vice president. Rusinow founded Milwaukee's first angel
network, Silicon Pastures, and is currently an active member of the
venture-capital community.
Schosser is the chief financial officer of the northeast region of
Cleveland-based KeyBank. He has held CFO and financial oversight
positions with Key Corp and its divisions for the past 11 years,
including executive and management positions with McDonald Financial
Group, Victory Capital Management and Key PrivateBank.
"We are very pleased to welcome Jeff and Doug to our Board. Their
experience in the consumer retail, financial and operational areas
will be an asset to the Board and our management team as we continue
to execute our strategies to increase revenues and improve
performance," said Salvatore L. Bando, president and chief executive
officer of The Middleton Doll Company.
Operations Review
"In 2006, we responded to the continuing decline in sales of
collectible dolls by focusing on two areas: developing new products
and marketing strategies that appeal to today's consumers and
continuing to reduce operating expenses and control inventory levels.
We made good progress on both fronts in 2006. With these critical
pieces now in place, our focus in 2007 will be on increasing sales,"
said Bando.
"In August 2006, we introduced our new line of play dolls, named
the 'PlayBabies' collection. This new product category features a
series of 13 play dolls that provide a playmate for each stage of a
young girl's early development. The dolls, which range from newborn
babies to toddlers, have contemporary looks and outfits, as well as
accessories including furniture, bedding and attractive room decor
items," said Ken Werner, president of consumer products for The
Middleton Doll Company.
"We have also added a number of talented new artists who are
successful in designing and sculpting realistic dolls that we believe
reflect the lifestyles of today's young girls. With the PlayBabies
line of dolls for girls up to age 12 and our well established Artist
Studio Collection(TM) of artist-designed collectible dolls, we believe
we are the only doll manufacturer who can to can take a young woman
from cradle to collector," said Werner.
Also in 2006, the company continued to move forward with the
liquidation of the financial services segment. "During the year, we
sold 11 of our 12 leased properties for a gain of $2.24 million. Only
one leased property with a carrying cost of $1.41 million remains, and
it is listed with a commercial realtor. We also continued to reduce
our loan portfolio. At year-end 2006, our loan portfolio consisted of
six loans totaling $463,575. Two of these loans, which total $227,963,
are presently in foreclosure proceedings. We have established a loan
loss reserve of $250,000 against these loans," said Craig Bald, chief
financial officer of The Middleton Doll Company.
"The proceeds from the sale of the financial services assets were
used to pay off all of our existing debt, fund the operations of the
consumer products segment and redeem 259,574 shares of our preferred
stock," said Bald. The preferred stock was redeemed at a price of
$16.25 per share through a tender offer. The redeemed shares
represented 38.5% of the total outstanding preferred shares at the
time of the offer.
The Middleton Doll Company currently 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 segment is comprised primarily of the
lending and real estate leasing business of its former subsidiary,
Bando McGlocklin Small Business Lending Corporation, now owned by Lee
Middleton Original Dolls. Beginning on January 4, 2006, the financial
services segment began selling substantially all of its loans, loan
participations and leased real estate properties. The company does not
intend to continue in the financial services segment after the
financial services segment's assets are sold.
This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
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. These factors include: the proceeds to be generated upon
the sale of real properties of the financial services segment, which
depends upon a variety of factors, such as competition, real estate
conditions, interest rates and availability of tenants; and the
declining demand for collectible dolls in the consumer products
segment.
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,
------------------------ -------------------------
2006 2005 2006 2005
------------ ----------- ------------ ------------
STATEMENTS OF
OPERATIONS BY
SEGMENT
- -------------------
Consumer Products:
Net sales $4,712,848 $5,008,782 $12,044,872 $14,328,082
Cost of sales 3,625,366 3,586,201 8,917,258 9,233,667
------------ ----------- ------------ ------------
Gross profit 1,087,482 1,422,581 3,127,614 5,094,415
------------ ----------- ------------ ------------
Other expenses
(income):
Impairment of
goodwill 506,145 - 506,145 -
Litigation
settlements - - - (225,000)
Other operating
expenses 1,656,200 1,461,412 6,192,993 7,484,449
Interest expense
to financial
services - 314,515 - 1,051,272
Other (income) (39,553) (101,730) (160,163) (246,321)
Income tax
expense - - - -
------------ ----------- ------------ ------------
Total other
expenses 2,122,792 1,674,197 6,538,975 8,064,400
------------ ----------- ------------ ------------
Net loss $(1,035,310) $(251,616) $(3,411,361) $(2,969,985)
============ =========== ============ ============
Financial Services:
Net rental/interest
income:
Interest on loans $15,399 $435,339 $323,992 $1,717,316
Rental income 99,390 316,583 770,530 1,796,937
Interest income
from consumer
products - 314,515 - 1,051,272
Interest expense - (441,425) (321,388) (1,769,736)
------------ ----------- ------------ ------------
Total net
rental/inter-
est income 114,789 625,012 773,134 2,795,789
------------ ----------- ------------ ------------
Other income:
Other income 80,677 10,444 117,001 38,826
Gain on sale of
leased
properties 821,351 745,472 2,235,207 1,779,964
------------ ----------- ------------ ------------
Total other
income 902,028 755,916 2,352,208 1,818,790
------------ ----------- ------------ ------------
Other expenses:
Loss on early
extinguishment
of indebtedness - - 289,034 -
Provision for
impairment of
leased property - - 98,812 -
Provision for
losses on loans - - 250,000 -
Depreciation
expense 18,438 73,851 138,714 353,613
Management fee
expense - 13,869 45,139 198,522
Other operating
expenses 7,379 364,062 642,613 1,195,043
Income tax
expense - 247,669 - 546,917
------------ ----------- ------------ ------------
Total other
expenses 25,817 699,451 1,464,312 2,294,095
------------ ----------- ------------ ------------
Net income $991,000 $681,477 $1,661,030 $2,320,484
============ =========== ============ ============
Total company net
income (loss) $(44,310) $429,861 $(1,750,331) $(649,501)
Gain on redemption
of preferred
stock, net 2,268,103 - 2,268,103 -
Preferred stock
dividends (215,034) (226,275) (893,860) (905,101)
------------ ----------- ------------ ------------
Net income (loss)
available to
common
shareholders $2,008,759 $203,586 $(376,088) $(1,554,602)
============ =========== ============ ============
Income (Loss)
Earnings Per Share
- Basic and
Diluted $0.54 $0.05 $(0.10) $(0.42)
Average shares
outstanding -
Basic and Diluted 3,727,589 3,727,589 3,727,589 3,727,589
CONTACT: The Middleton Doll Company
Craig Bald, (262) 369-8163