THE TOPPS COMPANY, INC. REPORTS
FISCAL 2005 FIRST QUARTER RESULTS
New York, NY, June 24, 2004 - The Topps Company, Inc. (Nasdaq: TOPP) today
reported financial results for the fiscal 2005 first quarter ended May 29, 2004.
Net sales in the fiscal 2005 first quarter were $88.1 million compared to $76.0
million last year. Stronger foreign currencies versus the prior year increased
2005 first quarter sales by $2.8 million. Income from operations was $5.6
million compared to $4.4 million in last year's first quarter. Net income in the
fiscal 2005 first quarter was $4.1 million, or $0.10 per diluted share, versus
$3.5 million, or $0.08 per diluted share, last year. Fiscal 2005 first quarter
results include a one-time charge of $1.9 million, or approximately $0.05 per
diluted share, related to a previously disclosed European Commission fine.
Confectionery net sales were $44.2 million in the fiscal 2005 first quarter, a
2.9% decline from the prior-year period. In addition to the continuation of
certain trends affecting the U.S. confectionery industry in general, sales of
Baby Bottle Pop, which benefited last year from the introduction of Baby Bottle
Pop with Candy Juice, were below last year's levels. Partially offsetting these
factors was a favorable contribution from the further roll-out of two new chewy
candy brands--Juicy Bugs and Juicy Drop Chews--and growing sales of Juicy Drop
Pop.
Entertainment sales in the first quarter were $43.9 million, 44% above the first
quarter last year. This increase was attributable to strong sales of sticker
album collections featuring teams and players participating in the European Cup,
a tournament held every four years, as well as to higher sales of English
Premier League products. Entertainment sales for the period were also impacted
by the inclusion of results from WizKids, acquired last July, and strong demand
for NBA trading cards.
Arthur T. Shorin, Chairman and CEO of Topps, said, "We are very pleased with
overall first quarter results, particularly in light of challenging
confectionery industry trends including consumer concern over nutrition, retail
consolidation resulting in fewer outlets and continued discounting by large
chocolate manufacturers. Within Entertainment, a number of positive factors
contributed to first quarter performance. Overseas activities were strong, U.S.
sports card sales were above a year ago, Wacky Packages and Garbage Pail Kids
products performed well and WizKids was modestly accretive."
The Company paid its regular quarterly cash dividend to shareholders of $0.04
per share. Additionally, the Company repurchased 143,800 shares of stock at an
average price of $8.95 per share. At May 29, 2004, the Company had $96.4 million
in cash and no debt.
The Topps Company, Inc. will host a webcast of its earnings conference call
today at 10:00 a.m., Eastern Time. Investors, analysts, and the media are
invited to listen to the call live at www.topps.com. A replay of the webcast
will be available on the Company's website for the next 60 days.
Founded in 1938, Topps is a leading creator and marketer of distinctive
confectionery and entertainment products. The Company's confectionery brands
include "Ring Pop," "Push Pop," "Baby Bottle Pop" and "Juicy Drop Pop" lollipops
as well as "Bazooka" bubble gum. Topps entertainment products include trading
cards, sticker album collections, and collectible games. For additional
information, visit www.topps.com.
This release contains forward-looking statements pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. Although the
Company believes the expectations contained in such forward-looking statements
are reasonable, it can give no assurance that such expectations will prove to be
correct. This information may involve risks and uncertainties that could cause
actual results to differ materially from the forward-looking statements. Factors
that could cause or contribute to such differences include, but are not limited
to, factors detailed in the Company's Securities and Exchange Commission
filings.
(Tables Follow)
THE TOPPS COMPANY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(amounts in thousands, except share data)
(Unaudited)
Quarter ended
May May
29, 2004 31, 2003
-------- --------
Net sales $ 88,089 $ 75,992
Cost of sales 54,290 47,868
-------- --------
Gross profit on sales 33,799 28,124
Other income (expense) 433 602
Selling, general and administrative expenses 28,593 24,343
-------- --------
Income from operations 5,639 4,383
Interest income, net 484 1,034
-------- --------
Income before provision for income taxes 6,123 5,417
Provision for income taxes 2,021 1,896
-------- --------
Net income $ 4,102 $ 3,521
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Basic net income per share 0.10 0.09
Diluted net income per share 0.10 0.08
Weighted average shares outstanding -Basic 40,567,000 40,694,000
Weighted average shares outstanding -Diluted 41,372,000 41,480,000
THE TOPPS COMPANY, INC.
CONSOLIDATED BALANCE SHEET HIGHLIGHTS
(Amounts in Thousands)
As Of As of
May 29, 2004 February 28, 2004
------------ -----------------
Cash and Equivalents $ 96,373 $ 93,837
Working Capital 134,466 133,299
Net Property, Plant and Equipment 13,627 13,786
Total Assets 278,802 275,463
Shareholders' Equity $ 211,610 $ 211,277
SEGMENT INFORMATION
(Amounts in Thousands)
Quarter Ended
May 29, 2004 May 31, 2003
------------ ------------
Net Sales
---------
Confectionery $ 44,207 $ 45,530
Entertainment Products 43,882 30,462
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Total $ 88,089 $ 75,992
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Contributed Margin
------------------
Confectionery $ 13,002 $ 13,749
Entertainment products 13,428 7,143
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Total $ 26,430 $ 20,892
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Reconciliation of Contributed Margin
to Income Before Provision for Taxes:
------------------------------------
Total Contributed Margin $ 26,430 $ 20,892
Unallocated General and Administrative
Expenses and Manufacturing Overhead (19,632) (15,832)
Depreciation & Amortization ( 1,592) ( 1,279)
Other Income (Expense) 433 602
-------- --------
Income from Operations 5,639 4,383
Interest Income, Net 484 1,034
-------- --------
Income before Provision for Income Taxes $ 6,123 $ 5,417
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