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In its fourth consecutive quarter of improved performance, The Topps Co. recorded net sales in its fiscal 2007 fourth quarter of $83.4 million, compared to $67.5 million last year.
Income from operations was $2.1 million compared to a loss of $4.9 million in last year's fourth quarter. Net income for the fiscal fourth quarter was $2.3 million; last year's quarter saw a net loss of $833,000.
"As anticipated, we achieved profitable growth in the entertainment segment, reflective of our successful implementation of strategic initiatives designed to revitalize the U.S. sports card business," said Arthur T. Shorin, Topps' chairman and CEO. "Confectionery, however, remains more of a challenge, experiencing margin pressure and continued weakness in some of our core products."
Confectionery net sales were $33.2 million in the fourth quarter, an increase of $2.7 million or 8.7 percent versus the prior year period. The sales increase was largely attributed to a one-time sale of inventory to a new Canadian distributor and the initial sell-in of Vertigo in the United States.
Worldwide expansion of Juicy Drop Pops and increased sales of Mega Mouth Spray in Europe offset U.S. declines in other core products. For the full year, confectionery net sales were $147.2 million, an increase of 2.1 percent, compared to $144.3 million in fiscal 2006.
Confectionery earnings declined in the fourth quarter, driven by a 3.4 percentage point decrease in year-over-year operating margins after direct overhead. Profitability was impacted by higher costs on purchases from the company's Far East vendor and increased marketing and trade spending in support of sales.
Entertainment net sales totaled $50.2 million in the fiscal 2007 fourth quarter, a 35.9 percent increase from $36.9 million in the prior-year period. Full year entertainment sales grew 19.1 percent to $178.2 million.
The entertainment segment's performance was driven by sales increases of U.S. sports cards across all three major sports, gains in European sports products resulting from a successful Premier League
promotional event and solid sales of licensed WWE entertainment properties in the United States and Europe. WizKids declined in the period, but at a lesser
rate than earlier this year.