<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q


(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE 
ACT OF 1934 For the quarterly period ended August 31, 1996
                                           ---------------
                                       OR

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
EXCHANGE ACT OF 1934
For the transition period from_________________________to_______________________


Commission File Number:  0-15817
                         -------

                             THE TOPPS COMPANY, INC.
             (Exact name of registrant as specified in its charter)

               Delaware                                    11-2849283
      (State or other jurisdiction of                   (I.R.S. Employer
      incorporation or organization)                    Identification No.)

                    One Whitehall Street, New York, NY 10004
          (Address of principal executive offices, including zip code)

                                 (212) 376-0300
              (Registrant's telephone number, including area code)













Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes X No .



The  number of  outstanding  shares of Common  Stock as of  October  3, 1996 was
46,947,510.




<PAGE>

                             THE TOPPS COMPANY, INC.




--------------------------------------------------------------------------------
                         PART I - FINANCIAL INFORMATION
--------------------------------------------------------------------------------


ITEM 1.  FINANCIAL STATEMENTS


                           Index                                       Page
                           -----                                       ----
         Condensed Consolidated Balance Sheets as of
           August 31, 1996 and March 2, 1996                             3

         Condensed Consolidated Statements of Operations
           for the thirteen and twenty-six weeks ended
           August 31, 1996 and August 26, 1995                           4
           
         Condensed Consolidated Statements of Cash Flows
           for the twenty-six weeks ended August 31, 1996 and
           August 26, 1995                                               5

         Notes to Condensed Consolidated Financial Statements            6


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS                             8





--------------------------------------------------------------------------------
                           PART II - OTHER INFORMATION
--------------------------------------------------------------------------------



ITEM 1.  LEGAL PROCEEDINGS                                              10


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K                               10






The condensed  consolidated  financial statements for the twenty-six weeks ended
August 31,  1996  included  herein  have been  reviewed by Deloitte & Touche LLP
independent  public  accountants,  in accordance with  established  professional
standards for such a review.  The report of Deloitte & Touche LLP is included on
page 7.



                                        2

<PAGE>

                    THE TOPPS COMPANY, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>

                                                               (Unaudited)
                                                                  August        March
                                                                 31, 1996      2, 1996
                                                                 --------      -------
                                                                 (amounts in thousands)
<S>                                                              <C>          <C>
     ASSETS
     ---------
     CURRENT ASSETS:
         Cash                                                   $  35,120    $  24,154
         Accounts receivable - net                                 37,351       43,357
         Inventories                                               23,374       27,887
         Income tax receivable                                      1,961        3,008
         Deferred tax assets                                        3,206        2,598
         Prepaid expenses and other current assets                  7,803       11,267
                                                                ---------    ---------
             TOTAL CURRENT ASSETS                                 108,815      112,271
                                                                ---------    ---------

     PROPERTY, PLANT, & EQUIPMENT                                  53,718       53,232
         Less:  accumulated depreciation                           23,533       21,622
                                                                ---------    ---------
             NET PROPERTY, PLANT & EQUIPMENT                       30,185       31,610
                                                                ---------    ---------

     INTANGIBLE ASSETS, net of accumulated
         amortization of $32,948 and $30,532                       69,093       70,447
     OTHER ASSETS                                                   3,862        2,799
                                                                ---------    ---------
             TOTAL ASSETS                                       $ 211,955    $ 217,127
                                                                =========    =========

     LIABILITIES AND STOCKHOLDERS' EQUITY
     ------------------------------------
     CURRENT LIABILITIES:
         Accounts payable                                       $  23,602    $  28,848
         Accrued expenses and other liabilities                    43,542       39,879
         Current portion of long-term debt                          5,000        6,800
         Income taxes payable                                       2,470        5,466
                                                                ---------    ---------
             TOTAL CURRENT LIABILITIES                             74,614       80,993

     LONG-TERM DEBT, less current portion                          32,450       37,500
     DEFERRED INCOME TAXES                                         12,449       11,192
     OTHER LIABILITIES                                              5,923        5,592
                                                                ---------    ---------
             TOTAL LIABILITIES                                    125,436      135,277
                                                                ---------    ---------

     STOCKHOLDERS' EQUITY:
         Preferred stock, par value $.01 per share authorized
             10,000,000 shares, none issued
         Common stock, par value $.01 per share, authorized
             100,000,000 shares; issued 47,502,510 shares,
              less 555,000 shares in Treasury                         475          475
     Stock
       Additional paid-in capital                                  16,812       16,812
       Treasury stock, at cost                                     (6,622)      (6,120)
       Retained earnings                                           74,686       69,719
       Minimum pension liability adjustment                          (110)        (110)
       Cumulative foreign currency adjustment                       1,278        1,074
                                                                ---------    ---------
         TOTAL STOCKHOLDERS' EQUITY                                86,519       81,850
                                                                ---------    ---------
         TOTAL LIABILITIES AND STOCKHOLDERS'
           EQUITY                                               $ 211,955    $ 217,127
                                                                =========    =========
</TABLE>

     See Notes to Condensed  Consolidated  Financial Statements and Accountants'
     Review Report. 
                                       3

<PAGE>


                    THE TOPPS COMPANY, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS




<TABLE>
<CAPTION>

                                                                  (Unaudited)
                                                 Thirteen weeks ended    Twenty-six weeks ended
                                                 August       August       August       August
                                                31, 1996     26, 1995     31, 1996     26, 1995
                                                --------     --------     --------     --------
                                                   (amounts in thousands, except share data)
<S>                                           <C>          <C>          <C>          <C>

Net sales                                      $  55,025    $  60,661    $ 134,286    $ 128,093

Cost of sales                                     34,697       42,209       87,784       86,540
                                               ---------    ---------    ---------    ---------

      Gross profit on sales                       20,328       18,452       46,502       41,553

Royalties and other income                           656          374        1,239          941
                                               ---------    ---------    ---------    ---------

                                                  20,984       18,826       47,741       42,494

Selling, general and administrative expenses      18,216       16,052       37,610       31,717
                                               ---------    ---------    ---------    ---------

      Income from operations                       2,768        2,774       10,131       10,777

Interest income (expense), net                      (537)        (364)      (1,100)        (226)
                                               ---------    ---------    ---------    ---------

Income before provision for income taxes           2,231        2,410        9,031       10,551

Provision for income taxes                         1,004        1,405        4,064        4,906
                                               ---------    ---------    ---------    ---------

      Net income                               $   1,227    $   1,005    $   4,967    $   5,645
                                               =========    =========    =========    =========



Net income per share                                $.03         $.02         $.11         $.12
Dividends paid per share                               -            -            -         $.21




Weighted average shares outstanding            47,011,191   47,047,510   47,029,351   47,046,982
</TABLE>










See Notes to Condensed  Consolidated  Financial Statements and Accountants'
Review Report.


                                        4


<PAGE>


                      TOPPS COMPANY, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>

                                                                                (Unaudited)
                                                                            Twenty-six weeks ended
                                                                              August      August
                                                                             31, 1996    26, 1995
                                                                             --------    -------- 
                                                                            (amounts in thousands)
<S>                                                                           <C>         <C>
  Cash provided by (used for) operations:
    Net income                                                               $  4,967    $  5,645
    Add(subtract) non-cash items included in net income:
         Depreciation and amortization                                          3,236       2,403
         Deferred income taxes                                                    648       1,199

         Change in assets and  liabilities net of effects from purchase of
              subsidiary:
              Receivables                                                       6,006      (3,875)
              Inventories                                                       4,513         421
              Income tax receivable                                             1,048      (  799)
              Prepaid expenses and other current assets                         3,464      (2,929)
              Payables and other current liabilities                           (4,579)        438
              Other                                                            (  658)     (  160)
                                                                             --------    --------

                 Cash provided by operations                                   18,645       2,343
                                                                             --------    --------

Cash used for investing activities:
    Additions to property, plant and equipment                                   (327)     (1,284)
    Purchase of subsidiary, net of cash acquired                                 --       (39,998)
                                                                             --------    --------

                 Cash used for investing activities                              (327)    (41,282)
                                                                             --------    --------

Cash provided by (used for) financing activities:
     Proceeds from long-term debt                                                          50,000
     Payments of long-term debt                                                (6,850)    ( 1,900)
     Exercise of employee stock options                                                        20
     Purchase of treasury stock                                                (  502)          -
                                                                             --------    --------

                 Cash provided by (used for) financing activities              (7,352)     48,120
                                                                             --------    --------

Net increase (decrease) in cash                                                10,966       9,181
Cash at beginning of year                                                      24,154      17,785
                                                                             --------    --------
Cash at end of quarter                                                       $ 35,120    $ 26,966
                                                                             ========    ========



Supplemental information:
     Interest paid                                                           $  1,125    $     91
     Income taxes paid                                                       $  4,981    $  7,041
</TABLE>




See Notes to Condensed  Consolidated  Financial Statements and Accountants'
Review Report.

                                        5

<PAGE>

                    THE TOPPS COMPANY, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                     TWENTY-SIX WEEKS ENDED AUGUST 31, 1996


1.       Basis of Presentation

         The accompanying  unaudited  condensed interim  consolidated  financial
         statements   have  been  prepared  by  The  Topps  Company,   Inc.  and
         subsidiaries  (the "Company")  pursuant to the rules and regulations of
         the  Securities and Exchange  Commission  and reflect all  adjustments,
         which are, in the opinion of  management,  considered  necessary  for a
         fair  presentation.  These  statements  do not include all  information
         required by generally accepted accounting  principles to be included in
         a  full  set  of  financial  statements.   Operating  results  for  the
         twenty-six  weeks  ended  August 31,  1996 and August 26,  1995 are not
         necessarily indicative of the results that may be expected for the year
         ending March 1, 1997. For further information refer to the consolidated
         financial  statements and notes thereto in the Company's  annual report
         for the year ended March 2, 1996.

         Certain  items in the  prior  year's  financial  statements  have  been
         reclassified to conform with the current year's presentation.

2.       Acquisition

         On July 6,  1995,  the  Company  acquired  100% of the shares of Merlin
         Publishing  International  Limited  ("Merlin"),  a privately-held  U.K.
         publisher   and  marketer  of  sticker  and  album   collections   (the
         "Acquisition"). The purchase price for the Acquisition was $46,244,700.
         The Company financed the Acquisition using a $50 million term loan with
         a five-year amortization schedule provided by a syndicate of banks.

         The  Acquisition  has been  accounted for using the purchase  method of
         accounting.  The cost of the Acquisition has been allocated to tangible
         and  intangible  assets  acquired and  liabilities  assumed  based upon
         management's   estimate  of  their   respective   fair  values  at  the
         acquisition date as adjusted to reflect additional reserves for product
         returns.  Management  is  presently  finalizing  its  estimate of these
         respective fair values and may make further refinement if required. The
         excess of purchase price over the fair value of the net assets acquired
         (goodwill)  is  being  amortized  on  a  straight-line   basis  over  a
         forty-year period.

3.       Quarterly Comparison

         Management  believes that  quarter-to-quarter  comparisons of sales and
         operating  results are affected by a number of factors,  including  the
         timing of product  introductions and variations in shipping and factory
         scheduling  requirements.  Thus,  annual sales and earnings amounts are
         unlikely to consist of equal quarterly portions.

4.       Inventories
<TABLE>
<CAPTION>
                                              (Unaudited)
                                           August     March
                                          31, 1996   2, 1996
                                          --------   -------
                                         (amounts in thousands)
<S>                                        <C>       <C>
Raw materials                              $ 5,347   $ 8,581
Work in process                              2,502     3,221
Finished products                           15,525    16,085
                                           -------   -------
Total                                      $23,374   $27,887
                                           =======   =======
</TABLE>


                                        6
<PAGE>





INDEPENDENT ACCOUNTANTS' REPORT
-------------------------------


Board of Directors and Stockholders
The Topps Company, Inc.


We have made a review of the accompanying  condensed  consolidated balance sheet
of The Topps Company, Inc. and subsidiaries,  (the "Company"),  as of August 31,
1996, and the related condensed  consolidated  statements of operations and cash
flows for the twenty-six week periods ended August 31, 1996 and August 26, 1995,
in  accordance  with the  standards  established  by the  American  Institute of
Certified Public Accountants.

A review of interim financial  information  consists principally of obtaining an
understanding   of  the  system  for  the   preparation  of  interim   financial
information,  applying  analytical  procedures  to  financial  data  and  making
inquiries of persons  responsible  for financial and accounting  matters.  It is
substantially less in scope than an audit conducted in accordance with generally
accepted  auditing  standards,  the  objective of which is the  expression of an
opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material  modifications that should
be made to the accompanying condensed consolidated financial statements for them
to be in conformity with generally accepted accounting principles.

We have  previously  audited,  in accordance  with generally  accepted  auditing
standards,  the  consolidated  balance sheet of the Company as of March 2, 1996,
and the related consolidated statements of operations, stockholders' equity, and
cash  flows for the year then ended (not  presented  herein);  and in our report
dated March 27, 1996, we expressed an unqualified  opinion on those consolidated
financial  statements.  In  our  opinion,  the  information  set  forth  in  the
accompanying  condensed consolidated balance sheet as of March 2, 1996 is fairly
stated, in all material respects,  in relation to the consolidated balance sheet
from which it has been derived.





DELOITTE & TOUCHE LLP



September 20, 1996








                                        7


<PAGE>

ITEM 2.  Management's  Discussion  and Analysis of Financial  Condition and
         ------------------------------------------------------------------
         Results of Operations
         ---------------------

Three  Months Ended  August 31, 1996  Compared  with the Three Months Ended
---------------------------------------------------------------------------
August 26, 1995
---------------
Net  sales for the  second  quarter  of  fiscal  1997  decreased  9.3%,  to
$55,025,000  from  $60,661,000  for the same  period  last  year.  The  decrease
resulted  from lower sales of sports  cards,  which was in large part due to the
timing  of  certain  baseball  product  releases  and  lower  sales of  football
products,  as well as the decline of  lollipop  sales  overseas.  Sales from the
acquisition  of Merlin  Publishing  International  Ltd.,  which occurred in July
1995, helped to offset some of the decrease.

Gross profit as a percentage  of net sales for the second  quarter  increased to
36.9% from 30.4% for the same period last year. Improved margins were the result
of reduced product costs in Ireland and lower royalty  expenses,  as well as the
Company's  ongoing cost  reduction  efforts,  particularly  in the areas of card
design and inventory obsolescence.

Selling,  general  and  administrative  expenses  ("S,G&A")  for the second
quarter of fiscal 1997  increased  to  $18,216,000  or 33.1% of net sales,  from
$16,052,000  or 26.5% for the same period last year.  These  increases  occurred
primarily as a result of the addition of Merlin and its  relatively low level of
summer  sales.  Investment  in the  domestic  salesforce  and the startup  costs
associated with certain foreign markets also contributed to the higher S,G&A.

The  increase  in net  interest  expense  from  $364,000 to $537,000 in the
second  quarter of fiscal 1997 was  attributable  to debt incurred in connection
with the Merlin acquisition.

The  effective  tax rate for the second  quarter  of fiscal  1997 was 45.0%
compared  to an  effective  rate of 58.3% for the same  period a year  ago.  The
higher tax rate last year was the result of a one-time  adjustment  necessitated
by the Merlin acquisition.

Net income for the second  quarter of fiscal 1997 was  $1,227,000,  or $.03
per share,  as compared with  $1,005,000,  or $.02 per share for the same period
last year.


Six Months Ended August 31, 1996  Compared with the Six Months Ended August
---------------------------------------------------------------------------
26, 1995
--------
Net sales for the first half of fiscal 1997 increased 4.8%, to $134,286,000 from
$128,093,000  for the same  period last year.  The  increase  resulted  from the
addition  of Merlin and from  stronger  sales of  baseball  products,  partially
offset by lower sales of other sports cards, and to a lesser extent, lollipops.

Gross  profit as a  percentage  of net sales for the first  half of fiscal  1997
increased  to 34.6% as compared  with 32.4% for the same  period last year.  The
margin  improvement was the result of lower material and labor costs in both the
U.S. and Ireland as well as lower costs for card design.

Selling,  general and administrative  expenses ("S,G&A") for the first half
of fiscal 1997 increased to $37,610,00 or 28.0% of net sales,  from  $31,717,000
or 24.8% for the same period a year ago. This increase  occurred  primarily as a
result of the  acquisition  of Merlin.  The increase in S,G&A as a percentage of
net sales was due to higher depreciation and amortization charges as a result of
the  Merlin  acquisition,  selective  headcount  additions  of sales  and  other
personnel  and the costs  associated  with the startup of  operations in foreign
markets.

The increase in net interest  expense from  $226,000 to  $1,100,000  in the
first  half of fiscal  1997 was the result of debt  incurred  as a result of the
Merlin acquisition.


                                        8

<PAGE>

The effective tax rate for the first half of fiscal 1997 was 45.0% compared
to an  effective  rate of 46.5% for the same  period a year ago.  The lower rate
this year is attributable to a more favorable effective tax rate at Merlin.

Net income for the first half of fiscal  1997 was  $4,967,000,  or $.11 per
share, as compared with  $5,645,000,  or $.12 per share for the same period last
year.

Liquidity and Capital Resources
-------------------------------
On June 30, 1995, the Company  entered into a $65 million credit  agreement (the
"Credit  Agreement")  with a syndicate of banks which consisted of a $50 million
term loan to finance  the  Merlin  acquisition,  a $2  million  letter of credit
facility  and a $13  million  revolving  credit  facility to be used for working
capital and general corporate  purposes.  Interest rates are variable on half of
the outstanding  principal and, as a result of swap  transactions,  fixed on the
remaining  balance for two years,  commencing  April 1996. The Credit  Agreement
contains  restrictions  and  prohibitions  of a nature  generally  found in loan
agreements of this type and requires the Company,  among other things, to comply
with  certain  financial  covenants,  limits  the  Company's  ability to sell or
acquire  assets or borrow  additional  money (other than  through the  revolving
facility,) and prohibits the payment of dividends.  The Credit Agreement is 
secured by a pledge of 65% of the stock of Merlin.

On June  27,  1996  the  Company  announced  that its  Board  of  Directors  had
authorized  the  repurchase of up to 2,000,000  shares of its common stock.  The
total number of shares to be repurchased and the price the Company will pay will
depend on a variety of factors,  including  prevailing market conditions.  As of
October  1,  1996,  the  Company  had  repurchased  100,000  shares  under  this
authorization at an average price of $5.02.

As of August 31, 1996, the Company had  $35,120,000 in cash, and  $37,450,000 in
debt as a result of the Merlin acquisition. Management believes, in light of the
Company's  borrowing  capacity and cash on hand as of August 31, 1996,  that the
Company has adequate  means to meet its working  capital,  capital  expenditure,
interest and principal repayment requirements for the foreseeable future.

Cautionary Statements
---------------------
In connection  with the "safe harbor"  provisions of the Private  Securities
Litigation  Reform  Act  of  1995,  the  Company  is  hereby  filing  cautionary
statements  identifying  important factors that could cause the Company's actual
results  to  differ  materially  from  those  projected  in any  forward-looking
statements made by, or on behalf of, the Company, whether oral or written. These
important  factors  include  quarterly  fluctuations  in results,  the Company's
dependence on licensing  arrangements with third parties,  the further prolonged
and material contraction in the trading card industry,  excessive returns of the
Company's  products  and the  effect of  restrictions  and  financial  covenants
imposed by the Credit  Agreement,  as well as other risks  detailed from time to
time in the  Company's  reports  and  registration  statements  filed  with  the
Securities and Exchange Commission.
























                                        9

<PAGE>

                             THE TOPPS COMPANY, INC.

                                     PART II

                                OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS

In August  1996,  the  Company was named a  defendant  in a class  action in the
United  States  District  Court for the Eastern  District  of New York  entitled
Sullivan,  et al.  v.  The  Topps  Company,  Inc.,  No CV  96-3779  (EDNY)  (the
"Action"). The Action alleges, among other things, that the Company has violated
the federal Racketeer  Influenced and Corrupt  Organizations Act by its practice
of  selling  sports and  entertainment  cards  with  randomly-inserted,  limited
edition   "insert"   cards,   allegedly   in  violation  of  state  and  federal
anti-gambling statutes. Each of the Company's principal competitors,  as well as
several of its principal  licensors,  has been separately sued in its home state
for employing,  or participating in, the same or similar  practices.  The Action
seeks treble  damages and attorneys fees on behalf of all purchasers of packs of
cards potentially  including "insert" cards over a four-year period. The Company
believes  it  has  meritorious   defenses  and  intends  to  defend  the  Action
vigorously.  Given the early stage of the  litigation,  however,  the Company is
unable to assess the likelihood of a materially  adverse  outcome or to estimate
the amount or range, if any, of any probable loss.



ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits as required by Item 601 of Regulation S-K

      10.27 - Amendment Number 1 to Credit Agreement


























                                       10

<PAGE>

                                    SIGNATURE





Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                                        THE TOPPS COMPANY, INC.
                                        -----------------------
                                              REGISTRANT



                                        /s/    Catherine Jessup
                                        ------------------------------
                                        Vice President-Chief Financial
                                                   Officer












October 15, 1996
























                                       11