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The Topps Company, Inc. Reports Fiscal 2004 Fourth Quarter and Full Year Results

The Topps Company, Inc. (Nasdaq:TOPP) today reported financial results for the fiscal 2004 fourth quarter and year ended February 28, 2004.

Net sales in the fiscal 2004 fourth quarter were $69.8 million compared to $65.7 million last year. Stronger foreign currencies versus the prior year increased 2004 fourth quarter sales by $3.1 million. Income from operations was $2.0 million compared to $3.0 million in the same period last year. Net income was $2.9 million, or $0.07 per diluted share, versus $2.0 million, or $0.05 per diluted share, in the prior year period. Results for the fiscal 2004 fourth quarter benefited by $0.04 per diluted share due to a difference in the tax rate for this year's fourth quarter versus the same quarter in the prior year.

For the twelve months ended February 28, 2004, net sales were $297.3 million compared to $290.1 million last year. Stronger foreign currencies versus the prior year added $9.7 million to full year fiscal 2004 sales results. Income from operations was $14.6 million compared to $20.8 million last year. Net income was $12.7 million, or $0.31 per diluted share, versus $16.9 million, or $0.40 per diluted share, in the prior year.

Confectionery sales declined 13.3% in the fourth quarter resulting in flat sales for the full fiscal year. Fourth quarter sales in the U.S. were impacted by several factors including continued softness in wholesale clubs, the effects of delayed new product introductions, and a reduction in certain promotional activity undertaken by major retailers last year. Domestic performance was partially offset by growth of international confectionery sales which benefited from the successful introduction of Juicy Drop Pop.

Entertainment sales increased 25.1% in the fourth quarter and 4.8% for the full year. The addition of WizKids and strong sales of European sports sticker and album products drove the fourth quarter and full year increase. Additionally, Yu-Gi-Oh! in Europe and Garbage Pail Kids in the U.S. performed well. WizKids contributed $4.2 million in revenue in the fourth quarter and generated a pre-tax loss of $1.0 million for the period, which was a smaller loss than previously anticipated. U.S. sports card sales declined in the quarter as expected.

Arthur T. Shorin, Chairman and CEO of Topps, commented, "In fiscal 2004, we undertook a number of strategic initiatives to drive long-term Company performance. In Confectionery, while financial results came in below expectations, we made significant inroads into branded, non-lollipop products marked by the introduction of Juicy Bugs, Juicy Drop Chews, and Big Mouth Candy Spray which occurred too late in the fiscal year to contribute meaningfully. Additionally, distribution of Juicy Drop Pops reached sufficient levels to justify a full television advertising schedule which began in late February. We also made significant headway in achieving targeted distribution gains in a number of European markets.

"Within Entertainment, we placed additional focus in Europe on football products and extended the successful mini-album format to new markets and licenses. In the U.S., we restructured the sports business, pared down our offerings, and reduced overhead. While we experienced a year-on-year decline during fiscal 2004, we fared considerably better than our expectations, fueled in part by stronger basketball sales. We also established a new avenue for growth with the acquisition of WizKids, which we continue to believe offers us long-term potential by applying its game design capabilities to the Company's overall line of products."

Mr. Shorin concluded, "We currently anticipate a return to operating earnings growth in fiscal 2005."

During the fourth quarter, the Company paid a cash dividend to shareholders of $0.04 per share. Additionally, the Company repurchased 63,200 shares of stock at an average price of $9.06 per share. At February 28, 2004, the Company had $93.8 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 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 and album collections, and collectible games. For additional information, visit

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.

                     (amounts in thousands, except share data)

                                 Quarter ended            Year ended
                              February 28,  March 1,  February 28,  March 1,
                                 2004        2003        2004        2003

  Net sales                   $ 69,775    $ 65,688    $297,338    $290,115
  Cost of sales                 47,293      43,533     193,417     188,375

     Gross profit on sales      22,482      22,155     103,921     101,740

  Other income (expense)           286         322         631         184

  Selling, general and
   administrative expenses      20,769      19,484      89,957      81,142
     Income from operations      1,999       2,993      14,595      20,782
  Interest income, net             497         643       2,426       2,516
  Income before provision
   for income taxes              2,496       3,636      17,021      23,298

   Provision for income taxes      (424)      1,643       4,326       6,362
      Net income               $  2,920    $  1,993    $ 12,695    $ 16,936

   Basic net income per share     0.07        0.05        0.31        0.41
   Diluted net income per share   0.07        0.05        0.31        0.40

  Weighted average shares
   outstanding - Basic      40,594,000  40,727,000  40,604,000  41,353,000
  Weighted average shares
   outstanding - Diluted    41,557,000  41,380,000  41,515,000  42,065,000

    (Amounts in Thousands)

                                               As of             As of
                                         February 28, 2004   March 1, 2003

    Cash and Equivalents                    $  93,837         $ 114,259
    Working Capital                           133,299           141,484
    Net Property, Plant and Equipment          13,786            14,606
    Total Assets                              275,463           262,756
    Shareholders' Equity                    $ 211,277         $ 196,768

                               SEGMENT INFORMATION
                              (Amounts in Thousands)

                                   Quarter Ended              Year Ended
                              February 28,  March 1,    February 28,  March 1,
                                  2004        2003         2004         2003
  Net Sales
  Confectionery             $  28,027   $  32,326    $ 147,254    $ 146,901
  Entertainment Products       41,748      33,362      150,084      143,214
  Total                     $  69,775   $  65,688    $ 297,338    $ 290,115

  Contributed Margin
  Confectionery             $   7,241   $  11,124    $  45,734    $  52,101
  Entertainment Products       14,084      10,616       42,467       39,313
  Total                     $  21,325   $  21,740    $  88,201    $  91,414

    Reconciliation of Contributed
     Margin to Income Before
     Provision for Taxes:

  Total Contributed Margin  $  21,325   $  21,740    $  88,201    $  91,414
  Unallocated General and
   Administrative Expenses
   and Manufacturing
   Overhead                   (17,817)    (17,712)     (67,644)     (65,778)
  Depreciation & Amortization  (1,795)     (1,357)      (6,593)      (5,038)
  Other Income (Expense)          286         322          631          184
  Income from Operations        1,999       2,993       14,595       20,782
  Interest Income, Net            497         643        2,426        2,516
  Income before Provision
   for Income Taxes         $   2,496   $   3,636    $  17,021    $  23,298

Source: The Topps Company, Inc.
Date: April 6, 2004

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