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EX-99 2 a4835971ex99.txt EXHIBIT 99 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
The following information was filed by Middleton Doll Co (FTDL) on Friday, March 4, 2005 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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