Topps Sees Improved Sales, Income

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Topps Sees Improved Sales, Income

On the strength of its U.S. and European sports card business, The Topps Co. Inc. saw net sales in its fiscal 2007 first quarter of $81 million, compared to $78.6 million last year.

Weaker foreign currencies versus the prior year, however, reduced 2007 first quarter sales by $1 million. Income from operations was $1.6 million, compared to $507,000 in last year's first quarter. Net income in the fiscal 2007 first quarter was $1.6 million, versus $897,000 last year.

Net sales of the entertainment segment increased 10.8 percent to $38.3 million in the fiscal 2007 first quarter, up from $34.5 million in the prior-year period. Both U.S. sports cards and European sports product sales were up significantly in the quarter. Company-driven initiatives to reduce product proliferation and create a strong product line up contributed to a dramatic increase in first quarter sales of U.S. sports cards, the company said in a statement. World Cup-related sticker products along with other collections featuring Pokemon, WWE and Superman also contributed to entertainment sales in the quarter.

"The strategic importance of our new agreement with the Major League Baseball Players' Association and Major League Baseball Properties was evidenced by a 27-percent increase in first-quarter sales within the baseball category alone," said Arthur T. Shorin, chairman and CEO of Topps. "In addition to addressing the product proliferation issue, under the new agreement Topps has entered into a joint national advertising program aimed at bringing kids back into the market and is promoting its brand through 30 in-stadium baseball promotions."

As expected, WizKids' comparative results continued to be affected by industry-wide softness in the gaming category.

Confectionery net sales were $42.7 million in the fiscal 2007 first quarter, a 3-percent decline compared to $44.0 million in last year's first quarter. Net sales in the period benefited from a successful Baby Bottle Pop line extension called 2DMax, the seasonal impact of a later Easter and higher sales of Pokemon candy in Europe. Sales of Bazooka brand declined, however, as the company transitioned to its new supplier and began rolling out its revamped product line.

Shipments of Grand Slam prepacks, which pair confectionery items with baseball cards, were delayed to the second quarter, consistent with the new baseball agreement.

On June 1 Sherry Schultz joined Topps as vice president and general manager of the company's confectionery business. Shultz has more than 25 years of marketing-related experience as an executive in the confectionery industry, most recently as vice president, global business development at Adams.

Regarding the confectionery business, Shorin said, "We have implemented a more disciplined new product development process, re-launched Bazooka, introduced new merchandising vehicles to broaden in-store distribution and placed renewed emphasis on cost controls as can be seen through improved margins."

Company executives expect to achieve solid mid-single digit revenue growth in fiscal 2007 and significant margin improvement.