TABLE OF CONTENTS
-----------------


                                                                      Page

Stockholders' Letter....................................................1


Financial Highlights....................................................6


Management's Discussion and Analysis
of Financial Condition and Results of Operations........................7


Consolidated Financial Statements......................................11


Notes to Consolidated Financial Statements.............................15


Report of Independent Public Accountants...............................30


Market & Dividend Information..........................................31


Selected Consolidated Financial Data...................................32


Directors, Officers, Subsidiaries
and Corporate Information...............................Inside Back Cover


<PAGE>


Dear Stockholders,

We are happy to report  outstanding  operating results for fiscal year 2000. The
twelve months saw net worth increase $51.9 million from a base of $77.2 million,
and the per share book  value of our stock by 64.5%.  Net sales  reached  $374.2
million from $229.4  million the previous year, and earnings were $59.2 million,
or $1.25 per fully diluted share,  compared to $15.6 million, or $0.33 per fully
diluted  share  in  fiscal  1999.  Other  financial  highlights  included:   the
elimination  of the Company's  long-term  debt, a significant  boost in our cash
position to $75.9 million at year-end as compared with $41.7 million a year ago,
and the  successful  repurchase of almost one million shares of its common stock
at an average price of $8.25. All in all, it was indeed a very good year.

Of course, extraordinary results emanated from Pokemon and the Company's ability
to make  the  most of it.  Also  worth  noting,  however,  is the  solid  growth
generated in our core collectible sports and confectionery businesses - the cake
under the icing, so to speak.


COLLECTIBLE SPORTS PRODUCTS
----------------------------

Overall,  we saw some  positive  results for our sports card  business in fiscal
2000,  although  product demand  weakened  during the course of the year and the
category remains  challenging.  As the months rolled on, Pokemon's  overwhelming
presence  undoubtedly  diverted a certain  amount of trade and consumer  support
away from sports products. In addition, we recognized a need for more innovation
and promotional spending, both of which will be accelerated in the new year.

On the  positive  side,  the  flagship  Topps brand  retained its mass appeal to
collectors.  Among the many awards The Topps Company  received  last year,  Card
Trade Magazine  awarded Topps "Best Base Brand" and Topps Baseball "Best Regular
Issue Set" (an award  granted to the best set of the year).  Also  noteworthy is
that Topps  Baseball will  celebrate its 50th  anniversary  later this year with
some special products and promotions for collectors of all ages.

Our performance was less successful, however, on super premium brands like Topps
Finest  and Gold  Label.  As a  result,  the  Company  is  planning  significant
investments  to boost these brands by including more elements that are currently
popular with collectors, such as autographs and memorabilia.

We made significant  progress last year in the development and implementation of
our Internet strategy.  We believe that the demographics of the Internet channel
of  distribution  represent  a natural  fit with  sports fans beyond the current
community of card  collectors.  As such, we are excited about the possibility of
expanding the card market,  which,  as you know, has contracted  during the last
five years.  We plan to announce the specifics of our Internet  plans before the
Baseball  All-Star break in July,  2000 and, if all goes well, to launch the new
program by year-end.

Internationally,  the markets for sports  collectibles  in the UK and Italy were
considerably  weaker than a year ago, and results suffered  accordingly.  We are
planning a battery of  research  so that we may  identify  appropriate  steps to
improve  performance  in the new  year.


CONFECTIONERY
-------------

By every measure,  the  confectionery  business  enjoyed a superb year,  setting
Company   records  for  sales  and   profits.   Our  core  (i.e.,   non-Pokemon)
confectionery  business grew 29% worldwide  over the previous  year,  reflecting
stellar performance by all of our major lollipop brands - Ring Pop, Push Pop and
Baby Bottle Pop. According to IRI scan data, these three brands combined to make
Topps one of the fastest growing lollipop businesses in America today.

Our strategy of creating appealing products,  increasing product availability by
improving  distribution,  and using  television  advertising  to build  sales is
working  and  will  be  continued.  We  made  good  progress  increasing  market
penetration during the year, and our products are now in more outlets, at better
counter position and with more breadth than ever before.

Moreover,  we have several product concepts in the pipeline.  Some of these will
initially  be  introduced  under our Pokemon  license,  affording  them  instant
visibility.  Down the road,  we will expand those lines by applying a variety of
new  themes.  We have  also  freshened  many of our  current  products  with new
flavors,  better  packaging  and other  innovations  - a  perpetual  enhancement
approach that keeps our line up-to-date and appealing.

<PAGE>

The candy  picture  is bright  as well.  Leading  the way this past year was the
further rollout of Baby Bottle Pop, which has enjoyed strong consumer acceptance
across a broad spectrum of markets.  Push Pop was introduced in Japan,  with the
help of a powerful  distribution partner, and enjoyed instant success. Flip Pop,
another new brand entry, successfully made its debut in the UK and several other
countries,  and  Pokemon  confectionery  items are  expected  to present a large
opportunity overseas, as the property is especially strong in Europe. Across the
world,  the same base  strategy  applies - quality  product,  widespread  retail
availability and well-placed television advertising.


ENTERTAINMENT PRODUCTS
-----------------------

There were two big stories in the  entertainment  segment of our  business  this
year - Pokemon  and Star  Wars.  Pokemon  is the most  successful  entertainment
program we have ever  undertaken,  and maximizing  this  opportunity has been no
small task.  Undoubtedly,  our efforts have been worthwhile as Pokemon continues
to be extraordinary. The Star Wars movie, "Episode I-The Phantom Menace" set box
office records in many markets. As one of Lucasfilm's trusted licensing partners
- a relationship  that spans some 20 years - Topps did well,  both  domestically
and overseas.  Our Star Wars product line,  comprising  trading  cards,  sticker
album  collections  and  magazines,  benefited  from  a  carefully  orchestrated
distribution strategy, which yielded very satisfying results.

This coming year should also be a good one for Topps entertainment  products. In
addition to Pokemon,  we will release our first card product under a license for
Marvel's  Universe of Superhero  characters,  featuring  the highly  anticipated
X-Men movie. We also plan to market a special card series of 'N SYNC, a hot rock
group that is experiencing immense popularity, especially in the United States.


OPERATIONS
-----------

The objective of the operations  group is to provide  product on a timely basis,
to reduce costs and to improve quality through better supply chain and inventory
management. Notable progress continues to be made in those areas.

We  significantly  improved our margin during fiscal 2000. The cost of purchased
goods was reduced through specific vendor  programs,  and  transportation  costs
were  diminished  due  to  better   warehouse   management  as  well  as  higher
confectionery  volumes.  Continued  emphasis on inventory  management  led to an
increase in  inventory  turns,  tying up less  capital and  resulting in fresher
products at retail.

Also during this past year, our  engineering  and quality  assurance staff began
implementation  of a major capital  project - building a second  production line
for Ring Pop in our Scranton,  Pennsylvania  plant. This line, which is expected
to be fully  operational by mid fiscal year, will enable us to produce a broader
array of products, and further reduce product costs.


THE FUTURE
-----------

This  past  year's  success  has put  Topps in an  excellent  position.  We will
continue to invest in our brand  franchises,  the heart and soul of the Company,
through advertising, research, quality improvements, and product extensions. Our
efforts  to  expand  distribution  will  continue  unabated.  We will  introduce
compelling  new products,  selectively  seek out new  licenses,  and explore new
business opportunities.  In short, we are not resting on last year's laurels ...
not for a moment.

In  closing,  we thank  the  Topps  family  of  employees  everywhere  for their
commitment to making good things  happen,  and  congratulate  them on a job well
done.  On behalf  of the  entire  organization,  we also  thank  our  customers,
licensors, stockholders and suppliers for their valued support.


<PAGE>

FINANCIAL HIGHLIGHTS
--------------------
<TABLE>
<CAPTION>

                                                  Year Ended
--------------------------------------------------------------------------------
                                     February       February       February
                                     26, 2000       27, 1999       28, 1998
--------------------------------------------------------------------------------
                                    (In thousands of dollars, except share data)
<S>                                     <C>            <C>            <C>
Net sales .........................  $    374,193   $    229,414   $    241,250
Income (loss) from operations .....        94,852         26,658         (2,020)
Net income (loss) .................        59,215         15,571         (4,572)
Cash provided (used) by operations         58,879         29,522            (62)
Working capital ...................        71,128         24,919         20,971
Total debt ........................          --           15,783         30,950
Stockholders' equity ..............       129,175         77,224         61,609
Net income (loss) per share
           - basic ................  $       1.28   $       0.34   $      (0.10)
           - diluted ..............  $       1.25   $       0.33   $      (0.10)
Weighted average shares outstanding
           - basic ................     46,398,000     46,415,000     46,421,000
           - diluted ..............     47,463,000     46,678,000     46,434,000
--------------------------------------------------------------------------------

Income (loss) from operations includes certain  non-recurring items in the years
1998 and 1999 presented above. See Note 2.
</TABLE>


<PAGE>
MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF  FINANCIAL  CONDITION  AND RESULTS OF
OPERATIONS

The  following  table sets forth,  for the periods  indicated,  net sales by key
business segment:
<TABLE>
<CAPTION>
                                               Year Ended
-------------------------------------------------------------------------
                                   February       February       February
                                   26, 2000       27, 1999       28, 1998
-------------------------------------------------------------------------
                                        (In thousands of dollars)
<S>                                <C>            <C>            <C>
Collectible sports products......  $133,803       $124,855       $141,324
Confectionery ..................    129,724         95,238         84,514
Entertainment products .........    110,666          9,321         15,412
     Total .....................   $374,193       $229,414       $241,250
-------------------------------------------------------------------------
</TABLE>

FISCAL 2000 VERSUS 1999*
------------------------
In fiscal 2000, the Company's net sales  increased 63% to $374.2  million.  This
was the result of higher sales in each of the three key business segments.

Net sales of collectible sports products, which consist of both sports cards and
sports sticker/album products, increased 7% to $133.8 million. This increase was
the result of several factors including the shipment of basketball card products
which  normally  would have occurred in the fourth  quarter of fiscal 1999,  but
were delayed  into fiscal 2000 due to the NBA lockout.  Higher sales of baseball
card products early in the year, which resulted from the  McGwire/Sosa  home-run
hitting  race the prior year and a full year's  participation  in the NHL hockey
market  also  contributed  to  the  increase.   Sales  of  international  soccer
sticker/album  products were significantly less this year than last. Collectible
sports  products  accounted for 36% of the Company's  consolidated  net sales in
2000, compared with 54% in 1999.

Net sales of confectionery products,  which include, among other things, Bazooka
brand bubble gum and Ring Pop, Push Pop, Baby Bottle Pop and Pokemon  lollipops,
increased 36% in 2000 to $129.7  million.  Excluding  sales of Pokemon  lollipop
products which totaled $6.4 million,  confectionery  sales grew 29%. This growth
was the result of the  continued  strength  of Baby Bottle Pop around the world,
strong domestic growth of Ring Pop and Push Pop, and the successful introduction
of Push Pop in Japan. Confectionery sales declined year over year in Brazil as a
result  of  the  January  1999  currency  devaluation.   Confectionery  products
accounted for 34% of the Company's net sales in 2000, compared with 42% in 1999.

Net sales of entertainment products, which consist of entertainment cards, comic
books,  magazines and the Merlin line of entertainment  sticker/album  products,
increased  to  $110.7  million  from  $9.3  million  in 1999.  Sales of  Pokemon
products,  primarily  trading  cards in the U.S. and Canada,  represented  $87.4
million,  while sales of Star Wars products around the world,  accounted for the
majority  of  the  remainder.  Entertainment  products  represented  30%  of the
Company's consolidated net sales in 2000, compared with 4% in 1999.

Consolidated  gross  profit as a percentage  of net sales  increased to 47.8% in
2000 from 41.3% in 1999.  This margin  improvement was largely the result of the
favorable mix of high margin entertainment card products.  Higher sales overall,
which resulted in greater  leverage of fixed costs, and both  manufacturing  and
vendor cost  reductions  also  contributed  to the  improvement  in gross profit
margins.

--------------------------------------------------------------------------------
*Unless otherwise indicated, all date references to 2000, 1999 and 1998 refer to
 the fiscal years ended  February  26,  2000, February 27, 1999 and February 28,
 1998, respectively.


<PAGE>


Selling, general & administrative expenses ("SG&A") decreased as a percentage of
net  sales to  22.6% in 2000  from  31.5% a year ago as a result  of the  higher
sales. SG&A dollar spending increased to $84.7 million from $72.3 million due to
greater  expenditures  for advertising  and marketing,  higher freight costs and
broker  commissions  as a result of the  increase  in sales,  and the  Company's
investment in its Internet initiative.

Income from  operations  in 1999 included  non-recurring  income of $3.5 million
from  gains  on the  sale  of the  Irish  plant  as  well  as on  the  sales  of
manufacturing-related equipment in Ireland and the U.S.

Net interest  income in 2000 was $1.7 million versus an expense of $454,000 last
year due to an increase in cash on hand and the  reduction  and ultimate pay off
of the Company's term loan balance.

The effective tax rate in 2000 of 38.7% reflects  provisions for federal,  state
and local  income  taxes in  accordance  with  statutory  income tax rates.  The
improvement  versus  the 1999 rate of 40.6% is a function  of a lower  effective
rate on international earnings.

Net income was $59.2 million,  or $1.25 per diluted share in 2000,  versus $15.6
million,  or $0.33 per diluted share in 1999.  Excluding  non-recurring items in
1999, net income would have been $13.3 million, or $0.28 per diluted share.


FISCAL 1999 VERSUS 1998
-----------------------
In 1999,  the Company's net sales  decreased  4.9% to $229.4 million from $241.3
million.  This was the  result of lower  sales of both  collectible  sports  and
entertainment  products which were only partially  offset by increased  sales of
confectionery products.

Net sales of collectible  sports products decreased 11.7% from $141.3 million in
1998 to $124.9  million in 1999.  This  decrease was the result of the prolonged
NBA lockout and, to a lesser extent, a decline in sales of soccer  sticker/album
products.  Partially  offsetting  these declines were increases in sales of U.S.
baseball  and football  cards and the  Company's  re-introduction  of NHL hockey
cards in the second half of fiscal 1999.  Collectible  sports products accounted
for 54% of consolidated net sales of the Company in 1999, versus 59% in 1998.

Net sales of  confectionery  products  increased  12.7% in 1999 to $95.2 million
from $84.5  million in 1998.  This growth was the result of the roll out of Baby
Bottle Pop and Flip Pop, the expansion of Push Pop in Brazil and stronger  sales
of our core  lollipop  brands--Ring  Pop and Push Pop in the U.S. The  Company's
confectionery  business accounted for 42% of total 1999 net sales, compared with
35% in 1998.

Net sales of entertainment  products  decreased 39.5% from $15.4 million in 1998
to $9.3 million in 1999. This was primarily the result of the Company's decision
to reduce its emphasis on entertainment  sticker/album products and comics. U.S.
sales of entertainment  cards increased however, as a result of the introduction
of WCW wrestling  cards.  Sales of  entertainment  products  accounted for 4% of
consolidated net sales of the Company in 1999, compared with 6% in 1998.

Consolidated  gross  profit as a percentage  of net sales  increased to 41.3% in
1999 from 33.0% in 1998. This margin improvement  resulted,  in part, from lower
royalty  payments due to an increase in the  percentage of  non-royalty  bearing
confectionery  sales as well as the  absence  of  minimum  guarantee  shortfalls
experienced in 1998 on U.S.  basketball and Brazilian  sticker  products.  Gross
profit margins also benefited from reduced  material,  product  development  and
obsolescence costs in the U.S.

     Selling,  general and administrative expenses decreased to $72.3 million or
31.5% of sales in 1999 from $78.4  million or 32.5% in 1998.  This  decrease was
largely the result of the  headcount and cost  reductions  put into place at the
end of 1998. A reduction in U.S. marketing expenses  previously  required by one
of the  Company's  sport  licenses  as well as lower  advertising  agency  fees,
combined with reduced  marketing  costs in Europe (due to the de-emphasis of the
entertainment business), also resulted in lower SG&A.


<PAGE>


Results for 1999 include  non-recurring income of $3.5 million from gains on the
sale  of the  Irish  plant  as  well as on the  sales  of  manufacturing-related
equipment  in Ireland and the U.S.  1998  results  reflect a  non-recurring  net
expense of $3.7  million.  This consists of severance and other costs related to
both the 1998 headcount reductions and the closure of the Irish plant, offset by
income from the reversal of a plant closure reserve set up in 1997.

Net interest income  decreased to an expense of $454,000 in 1999 from an expense
of $1.6 million in 1998 due to a reduction  in the  Company's  outstanding  loan
balance and an increase in cash balances.

The effective tax rate of 40.6% in 1999 reflects  provisions for federal,  state
and local income taxes in accordance with statutory  income tax rates.  The 1998
effective  tax rate of (26.8)%  was a function  of the  Company's  inability  to
recognize tax benefits on certain foreign losses.

Net income was $15.6 million,  or $0.33 per diluted share in 1999,  versus a net
loss of  $(4.6)  million,  or  $(0.10)  per  diluted  share in  1998.  Excluding
non-recurring items in both years, net income from operations in 1999 would have
been $13.3  million,  or $0.28 per  diluted  share,  versus a net loss of $(2.3)
million, or $(0.05) per diluted share in the prior year.


QUARTERLY COMPARISONS
---------------------

Management believes that  quarter-to-quarter  comparisons of sales and operating
results are affected by a number of fluctuating factors, including the timing of
product   introductions  and  variations  in  shipping  and  factory  scheduling
requirements. Thus, quarterly results vary. See Note 16 of Notes to Consolidated
Financial Statements.


INFLATION
----------

The Company has been subject to price  increases for certain  materials,  labor,
utilities and services,  which have been partially offset by effective buying of
materials  and by  adjustment  in the  contents of finished  products  and their
prices, as competition has permitted.


LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

In July 1995,  the Company  entered into a $65 million  credit  agreement with a
syndicate of eight banks in order to finance the  acquisition  of Topps  Europe,
Ltd.,  formerly  known as Merlin  Publishing,  Ltd.,  and to provide for working
capital and letter of credit needs.  In May 1998,  the Company  refinanced  this
facility with Chase  Manhattan  Bank. The new credit  agreement  included a term
loan in the aggregate amount of $25.0 million (which was used to repay the prior
loan) and a $9.5 million  facility to cover letter of credit and revolver needs.
The letter of credit and  revolver  facility was  increased to $12.5  million in
February  1999.  The term loan was paid in full in October  1999. As of February
26, 2000, the Company had outstanding $4.3 million in letters of credit.

The letter of credit and revolver  facility  expire on July 6, 2000. This credit
agreement is secured by a pledge of the Company's domestic trademarks and 65% of
the stock of Topps  Europe.  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 and prohibits the payment of dividends.

In October 1999, the Board of Directors of the Company authorized the Company to
repurchase  up to 5 million  shares of its stock.  As of February 26, 2000,  the
Company had repurchased 940,000 shares at an average price of $8.25.

As of February 26, 2000, the Company had $75.9 million in cash.

During 2000, the Company's net increase in cash and cash  equivalents  was $34.1
million  versus $19.6 million in 1999.  Cash flow from  operating  activities in
2000 was $58.9 million versus $29.5 million last year,  primarily as a result of
the higher net income, partially offset by the absence of income tax refunds and
an increase in confectionery  inventories.  Cash flow from investing  activities
reflects  $2.8  million  in  capital  expenditures  this year as  compared  with
$579,000 in net capital expenditures and $5.8 million in proceeds from the sales
of a plant and  manufacturing  equipment  last  year.  Cash flow from  financing
activities reflects debt payments of $15.8 million,  treasury stock purchases of
$7.8  million  and cash from the  exercise  of  employee  stock  options of $1.7
million this year versus debt payments of $15.2 million last year.

Management  believes  that the Company has adequate  means to meet its liquidity
and capital resource needs over the foreseeable future.


<PAGE>

EURO CONVERSION
---------------
On January 1, 1999,  the exchange  rates of Germany,  France,  the  Netherlands,
Austria, Italy, Spain, Finland,  Ireland,  Belgium, Portugal and Luxembourg were
fixed among one another and to a new currency,  the euro. The euro currency will
be  introduced  into  circulation  on  January  1, 2002 and later  that year the
currencies  of these  countries  will be retired.  The  Company  does not expect
future balance sheets and statements of earnings and cash flows to be materially
impacted by conversion to the euro.


YEAR 2000
---------
The  Company  has  completed  its Year 2000  readiness  initiatives  and did not
experience any significant  problems as a result of the date change. The Company
does not anticipate any negative impact related to this issue going forward.

Year 2000 compliance costs did not materially affect the financial  condition or
results of operations of the Company.


ACCOUNTING  CHANGES
-------------------

During 1998, the Financial  Accounting Standards Board ("FASB") issued Statement
of  Financial  Accounting  Standards  No.  133  ("SFAS  133"),  "Accounting  for
Derivative  Instruments and Hedging  Activities".  In June 1999, the FASB issued
Statement of Financial  Accounting Standards No. 137, "Accounting for Derivative
Instruments  and Hedging  Activities",  which delayed the effective date of SFAS
133 which is now effective for fiscal years  beginning after June 15, 2000. SFAS
133 provides  guidance for the  recognition  and  measurement of derivatives and
hedging  activities.  It  requires  an  entity to  record,  at fair  value,  all
derivatives  as either  assets  or  liabilities  in the  balance  sheet,  and it
establishes  specific  accounting rules for certain types of hedges.  Management
has  determined  that had SFAS No. 133 been adopted in the current year it would
not have had a material effect on the current  financial  condition,  results of
operations or cash flows of the Company.



<PAGE>

CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------

The Topps Company, Inc. and Subsidiaries
(In thousands of dollars, except share data)
<TABLE>
<CAPTION>
                                                     Year Ended
------------------------------------------------------------------------------
                                      February        February       February
                                      26, 2000        27, 1999       28, 1998
------------------------------------------------------------------------------
<S>                                   <C>          <C>           <C>
Net sales ........................... $    374,193 $    229,414  $    241,250
Cost of sales .......................      195,358      134,623       161,541
     Gross profit on sales ..........      178,835       94,791        79,709
Other income ........................          755          676           390
Selling, general and administrative
expenses ............................       84,738       72,288        78,437
Non-recurring income (expense) ......         --          3,479        (3,682)
     Income (loss) from operations ..       94,852       26,658        (2,020)
Interest income (expense), net ......        1,712         (454)       (1,585)
     Income (loss) before provision
     for income taxes ...............       96,564       26,204        (3,605)
Provision for income taxes ..........       37,349       10,633           967
     Net income (loss) .............. $     59,215 $     15,571  $     (4,572)
------------------------------------------------------------------------------
Net income (loss) per share
                    - basic ......... $       1.28 $       0.34  $      (0.10)
                    - diluted ....... $       1.25 $       0.33  $      (0.10)
------------------------------------------------------------------------------
Number of shares - basic ............   46,398,000   46,415,000    46,421,000
                 - diluted ..........   47,463,000   46,678,000    46,434,000
------------------------------------------------------------------------------

See Notes to Consolidated Financial Statements.
</TABLE>


<PAGE>
CONSOLIDATED BALANCE SHEETS
---------------------------

The Topps Company, Inc. and Subsidiaries
(In thousands of dollars, except share data)
<TABLE>
<CAPTION>

                                                           February   February
                                                           26, 2000   27, 1999
--------------------------------------------------------------------------------
<S>                                                         <C>       <C>
                                     ASSETS
Current assets:
Cash and cash equivalents ................................ $  75,853  $  41,728
Accounts receivable, less allowance for
doubtful accounts of $1,415 (2000) and
$1,137 (1999) ............................................    49,351     29,118
Inventories ..............................................    20,738     16,221
Income tax receivable ....................................       253        269
Deferred tax assets ......................................     5,737      1,342
Prepaid expenses and other current assets ................     5,357      4,860
     Total current assets ................................   157,289     93,538

Property, plant and equipment, net .......................     9,181      7,429
Intangible assets ........................................    57,588     60,207
Other assets .............................................     2,876      2,908
Total assets ............................................. $ 226,934  $ 164,082

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
     Accounts payable .................................... $  18,958  $  15,022
     Accrued expenses and other liabilities ..............    60,562     38,051
     Income taxes payable ................................     6,641      4,921
     Current portion of long-term debt ...................      --       10,625
          Total current liabilities ......................    86,161     68,619

Long-term debt, less current portion .....................      --        5,158
Deferred income taxes ....................................     2,630      5,143
Other liabilities ........................................     8,968      7,938
          Total liabilities ..............................    97,759     86,858

Commitments (See Note 17) ................................      --         --

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
     47,835,758 in 2000 and 47,515,760 in 1999 ...........       478        475
     Additional paid-in capital ..........................    18,498     16,841
     Treasury stock, 2,042,500 shares in 2000
     and 1,102,500 shares in 1999 ........................   (16,677)    (8,881)
     Retained earnings ...................................   128,990     69,775
     Accumulated other comprehensive loss ................    (2,114)      (986)
          Total stockholders' equity .....................   129,175     77,224

Total liabilities and stockholders' equity ............... $ 226,934  $ 164,082
--------------------------------------------------------------------------------
See Notes to Consolidated Financial Statements.
</TABLE>


<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------

The Topps Company, Inc. and Subsidiaries
(In thousands of dollars)
<TABLE>
<CAPTION>
                                                              Year Ended
-----------------------------------------------------------------------------------
                                                     February   February   February
                                                     26, 2000   27, 1999   28, 1998
-----------------------------------------------------------------------------------
<S>                                                  <C>       <C>       <C>
Cash flows from operating activities:
   Net income (loss) ............................... $ 59,215  $ 15,571  $ (4,572)
   Add (subtract) non-cash items included in income:
   Gain on sale of property, plant and equipment ...     --      (3,209)   (1,317)
   Depreciation and amortization ...................    4,019     4,871     4,374
   Deferred taxes on income ........................   (6,907)     (271)    7,182

   Net effect of changes in:
   Receivables .....................................  (20,233)   20,609    10,049
   Inventories .....................................   (4,517)      392     2,568
   Income tax receivable ...........................       16     6,560    (3,928)
   Prepaid expenses and other current assets .......     (497)   (1,039)    5,188
   Payables and other current liabilities ..........   28,165   (14,637)  (19,710)
   Other ...........................................     (382)      675       104
          Cash provided by (used in) operating
          activities ...............................   58,879    29,522       (62)

 Cash flows from investing activities:
   Proceeds from disposition of property,
   plant and equipment .............................     --       5,770     4,315
   Net additions to property, plant and
   equipment .......................................   (2,835)     (579)   (1,776)
          Cash (used in) provided by investing
          activities ...............................   (2,835)    5,191     2,539

Cash flows from financing activities:
   Proceeds from borrowing .........................     --        --       6,000
   Reduction of debt ...............................  (15,783)  (15,167)  (10,000)
   Exercise of employee stock options...............    1,660        29      --
   Purchase of treasury stock ......................   (7,796)     --        (523)
          Cash (used in) financing activities ......  (21,919)  (15,138)   (4,523)

Net increase (decrease) in cash and
cash equivalents ...................................   34,125    19,575    (2,046)
Cash and cash equivalents at beginning of year .....   41,728    22,153    24,199
Cash and cash equivalents at end of year ........... $ 75,853  $ 41,728  $ 22,153
----------------------------------------------------------------------------------

Supplemental disclosure of cash flow information:
Interest paid ...................................... $    842  $  2,237  $  3,260
Income taxes paid .................................. $ 39,407  $  7,423  $  3,354
----------------------------------------------------------------------------------

See Notes to Consolidated Financial Statements.
</TABLE>


<PAGE>

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME
------------------------------------------------------------------------

The Topps Company, Inc. and Subsidiaries
(In thousands of dollars)

<TABLE>
<CAPTION>
                                                          Additional                          Other
                                                 Common    Paid-in   Treasury   Retained   Comprehensive
                                       Total     Stock     Capital    Stock     Earnings   Income (Loss)
                                       -----     -----     -------   --------   --------   -------------
<S>                                    <C>       <C>       <C>       <C>        <C>        <C>

Balance at March 1, 1997 ............ $  68,052  $     475 $  16,812 $  (8,358) $  58,776  $     347
--------------------------------------------------------------------------------------------------------

Comprehensive income (loss):
Net loss ............................    (4,572)      --        --        --       (4,572)      --
Translation adjustment ..............    (1,348)      --        --        --         --       (1,348)
    Total comprehensive income (loss)    (5,920)      --        --        --       (4,572)    (1,348)
Purchase of treasury stock ..........      (523)      --        --        (523)      --         --
Balance at February 28, 1998 ........    61,609        475    16,812    (8,881)    54,204     (1,001)
--------------------------------------------------------------------------------------------------------

Comprehensive income:
Net income ..........................    15,571       --        --        --       15,571       --
Translation adjustment ..............        15       --        --        --         --           15
    Total comprehensive income ......    15,586       --        --        --       15,571         15
Exercise of employee stock options ..        29       --          29      --         --         --
Balance at February 27, 1999 ........    77,224        475    16,841    (8,881)    69,775       (986)
--------------------------------------------------------------------------------------------------------

Comprehensive income (loss):
Net income ..........................    59,215       --        --        --       59,215       --
Translation adjustment ..............      (304)      --        --        --         --         (304)
Minimum pension liability ...........      (824)      --        --        --         --         (824)
    Total comprehensive income (loss)    58,087       --        --        --       59,215     (1,128)


Purchase of treasury stock ..........    (7,796)      --        --      (7,796)      --         --
Exercise of employee stock options ..     1,660          3     1,657      --         --         --
Balance at February 26, 2000 ........ $ 129,175  $     478 $  18,498 $ (16,677) $ 128,990  $  (2,114)
--------------------------------------------------------------------------------------------------------

See Notes to Consolidated Financial Statements.
</TABLE>


<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation:
----------------------------
The consolidated  financial  statements  include the accounts of the Company and
its subsidiaries.  All intercompany  items and transactions have been eliminated
in consolidation.

The  Company and its  subsidiaries  operate  and report  financial  results on a
fiscal  year of 52 or 53 weeks which end on the  Saturday  closest to the end of
February. Fiscal 1999 and 2000 were comprised of 52 weeks. Financial results for
the fiscal  year ended  February  28,  1998  reflect a change in Topps  Europe's
fiscal  year end to  coincide  with that of the  parent  Company's  and  include
thirteen months of Topps Europe's operations.

Foreign Currency Translation:
-----------------------------
The financial statements of subsidiaries outside the United States, except those
subsidiaries  located in highly inflationary  economies,  are generally measured
using the local currency as the functional  currency.  Assets and liabilities of
these  subsidiaries  are  translated  at the rates of exchange as of the balance
sheet date. The resultant  translation  adjustments  are included in accumulated
other  comprehensive  income.  Income and expense  items are  translated  at the
average  exchange  rate for the month.  Gains and losses from  foreign  currency
transactions  of these  subsidiaries  are  included  in net income  (loss).  For
subsidiaries   operating  in  highly  inflationary   economies,   the  financial
statements are measured using the U.S. dollar as the functional currency.  Gains
and losses from balance sheet  translation  adjustments are also included in net
income (loss).

Derivative Financial Instruments:
---------------------------------
Derivative financial instruments are used for hedging purposes by the Company in
the management of its foreign currency  exposures.  The Company does not hold or
issue derivative financial instruments for trading purposes.


Accounting Changes:
-------------------

During 1998, the Financial  Accounting Standards Board ("FASB") issued Statement
of  Financial  Accounting  Standards  No.  133  ("SFAS  133"),  "Accounting  for
Derivative  Instruments and Hedging  Activities".  In June 1999, the FASB issued
Statement of Financial  Accounting Standards No. 137, "Accounting for Derivative
Instruments  and Hedging  Activities"  which delayed the effective  date of SFAS
133, which is now effective for fiscal years beginning after June 15, 2000. SFAS
133 provides  guidance for the  recognition  and  measurement of derivatives and
hedging  activities.  It  requires  an  entity to  record,  at fair  value,  all
derivatives  as either  assets  or  liabilities  in the  balance  sheet,  and it
establishes  specific  accounting rules for certain types of hedges.  Management
has  determined  that had SFAS No.133 been  adopted in the current year it would
not have had a material effect on the current  financial  condition,  results of
operations or cash flows of the Company.

Cash Equivalents:
-----------------
The Company  considers  investments  in highly  liquid debt  instruments  with a
maturity of three months or less to be cash equivalents.

Inventories:
------------
Inventories  are stated at lower of cost or market.  Cost is  determined  on the
first-in, first-out basis.

Property, Plant and Equipment ("PP&E"):
---------------------------------------
PP&E is stated at cost. Depreciation is computed using the straight-line method.
Estimated useful lives used in computing  depreciation are twenty-five years for
buildings,  five to twelve years for  machinery  and equipment and the remaining
lease period for leasehold  improvements.  In accordance  with SFAS No. 121, the
Company periodically  evaluates the carrying value of its PP&E for circumstances
which may indicate impairment.

Intangible Assets:
------------------
Intangible  assets include  trademarks,  the value of sports,  entertainment and
proprietary  product  rights and goodwill (the excess of the purchase price over
the estimated fair value of identifiable net assets  acquired).  Amortization is
by  the  straight-line  method  over  estimated  lives  of  up to  forty  years.
Management   evaluates  the   recoverability  of  intangible  assets  under  the
provisions of SFAS No. 121,  based on  undiscounted  projections  of future cash
flows attributable to the individual assets.

<PAGE>


Net Sales:
----------
Sales are recorded upon shipment of products.  Sales made on a returnable  basis
are recorded net of a provision  for  estimated  returns.  These  estimates  are
revised, as necessary, to reflect actual experience and market conditions.

Estimates:
----------
The preparation of financial  statements in conformity  with generally  accepted
accounting  principles  requires  management to make  estimates and  assumptions
which  affect the  reporting  of assets and  liabilities  as of the dates of the
financial  statements  and revenues and expenses  during the  reporting  period.
These estimates  primarily relate to the provision for sales returns,  allowance
for doubtful accounts,  inventory  obsolescence,  restructuring  costs and asset
valuations. Actual results could differ from these estimates.

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


NOTE 2 - NON-RECURRING ITEMS

During the third  quarter of fiscal 1997,  the Company  announced  that it would
discontinue  operations  at  its  Duryea,  Pennsylvania  factory  following  the
expiration of a labor agreement in December 1996. This resulted in the severance
of both union and non-union  employees  and the  outsourcing  of all  production
activities  previously  performed at that location.  As a result of the closing,
the  Company  recorded  a charge of $30  million  before  applicable  income tax
effects in fiscal 1997.

Due to headcount  reductions  in the United States and Europe and closure of the
Cork,  Ireland  manufacturing  facility,  fiscal  1998  results  include  a  net
non-recurring charge of $3.7 million.

Fiscal 1999's  non-recurring  income of $3.5 million represents the gains on the
sales of the Company's  manufacturing facility in Cork, Ireland and of equipment
in Cork, Ireland and Duryea, Pennsylvania.

Excluding these items in all years, net income (loss) from operations would have
been $13.3 million or $0.28 per diluted share in fiscal 1999 and $(2.3)  million
or $(0.05) per diluted share in fiscal 1998.


NOTE 3 - EARNINGS PER SHARE

Earnings  per share is computed in  accordance  with SFAS No. 128.  Basic EPS is
computed  using  weighted  average  shares  outstanding,  while  diluted  EPS is
computed using  weighted  average shares  outstanding  plus shares  representing
stock  distributable  under  stock-based plans computed using the treasury stock
method.  Both  basic and  diluted  EPS for  fiscal  1998 were  calculated  using
weighted  average shares  outstanding  because fiscal 1998 reflected a loss, and
therefore,  the inclusion of stock options or other securities  convertible into
common stock was anti-dilutive.

The following  table  represents  the  computation  of weighted  average  shares
outstanding - diluted:

<TABLE>
<CAPTION>
                                                     Year ended
------------------------------------------------------------------------------
                                        February       February     February
                                        26, 2000       27, 1999     28, 1998
------------------------------------------------------------------------------
<S>                                     <C>           <C>           <C>
Weighted average shares outstanding:
Basic ..............................    46,398,000    46,415,000    46,421,000
Effect of dilutive stock options ...     1,065,000       263,000        13,000
Diluted ............................    47,463,000    46,678,000    46,434,000
------------------------------------    ----------    ----------    ----------
</TABLE>


<PAGE>
<TABLE>
<CAPTION>
NOTE 4 INVENTORIES
                                                       February       February
                                                       26, 2000       27, 1999
                                                       --------       --------

                                                      (In thousands of dollars)
<S>                                                    <C>            <C>
Raw materials ......................................    $ 3,171        $ 2,097
Work in process ....................................        529          1,020
Finished products ..................................     17,038         13,104
     Total .........................................    $20,738        $16,221
                                                        -------        -------
</TABLE>
<TABLE>
<CAPTION>
NOTE 5 - PROPERTY, PLANT AND EQUIPMENT, NET
                                                       February       February
                                                       26, 2000       27, 1999
                                                       --------       --------
                                                      (In thousands of dollars)
<S>                                                    <C>            <C>
Land .............................................     $     42      $     42
Buildings and improvements ........................       2,022         2,030
Machinery and equipment ..........................       13,704        10,973
     Total PP&E ..................................       15,768        13,045
Accumulated depreciation and amortization ........       (6,587)       (5,616)
     Net .........................................     $  9,181      $  7,429

</TABLE>

<TABLE>
<CAPTION>
NOTE 6 - INTANGIBLE ASSETS
                                                       February       February
                                                       26, 2000       27, 1999
                                                       --------       --------
                                                      (In thousands of dollars)
<S>                                                    <C>            <C>
Value of sports, entertainment and
   proprietary products ............................   $ 36,635       $ 36,635
Goodwill ...........................................     64,265         64,265
Accumulated amortization ...........................    (43,312)       (40,693)
     Net ...........................................   $ 57,588       $ 60,207
</TABLE>

<TABLE>
<CAPTION>
NOTE 7-ACCRUED EXPENSES AND OTHER LIABILITIES
                                                       February       February
                                                       26, 2000       27, 1999
                                                       --------       --------
                                                      (In thousands of dollars)
<S>                                                    <C>            <C>
Provision for estimated losses on sales returns ....   $23,621        $12,629
Royalties ..........................................    12,760          3,852
Employee compensation ..............................     6,533          4,613
Payments received in advance .......................     4,665          5,741
Plant closure, severance and other non-recurring
items ..............................................       898            762
Other ..............................................    12,085         10,454
     Total .........................................   $60,562        $38,051
</TABLE>


<PAGE>

<TABLE>
<CAPTION>
NOTE 8 - DEPRECIATION AND AMORTIZATION
                                                      Year Ended
                                        February       February       February
                                        26, 2000       27, 1999       28, 1998
                                        --------       --------       --------
                                              (In thousands of dollars)
<S>                                     <C>            <C>            <C>
Depreciation expense ...............    $ 1,151        $ 1,464        $ 1,099
Amortization of intangible assets ..      2,618          2,618          2,618
Amortization - other ...............        250            789            657
     Total .........................    $ 4,019        $ 4,871        $ 4,374
                                        -------        -------        -------
</TABLE>

<TABLE>
<CAPTION>
NOTE 9 - LONG-TERM DEBT
                                                             Year Ended
                                                       February       February
                                                       26, 2000       27, 1999
                                                       --------       --------
                                                      (In thousands of dollars)
<S>                                                    <C>            <C>
Term loan                                              $ -            $ 15,783
Less: current portion                                    -             (10,625)
     Total                                             $ -            $  5,158
     -----                                             ---            --------
</TABLE>

In May 1998, the Company  entered into a credit  agreement with Chase  Manhattan
Bank.  The credit  agreement  provided for a $25.0  million term loan payable in
monthly  installments  and a $9.5 million facility to cover letter of credit and
working  capital needs.  The letter of credit and working  capital  facility has
since been  increased to $12.5  million.  The facility  expires on July 6, 2000.
Amounts  outstanding  under the credit  agreement are secured by a pledge of the
Company's  domestic  trademarks  and 65% of the stock of Topps Europe.  Interest
rates on the term loan and  outstanding  revolving  credit  balance are based on
LIBOR  plus an  applicable  margin of  1.75%,  or prime.  The  credit  agreement
contains  certain  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  and  prohibits  the  payment  of
dividends. The term loan was repaid in October 1999.


<PAGE>
NOTE 10 - INCOME TAXES

U.S. and foreign  operations  contributed to income (loss) before  provision for
income taxes as follows:
<TABLE>
<CAPTION>
                                                      Year Ended
                                        February       February       February
                                        26, 2000       27, 1999       28, 1998
                                        --------       --------       --------
                                             (In thousands of dollars)
<S>                                     <C>            <C>            <C>
United States ......................     $ 86,654     $ 21,984      $  4,083
Europe .............................        7,240        2,424        (5,368)
Canada .............................        1,395        1,868           737
Latin America ......................        1,275          (72)       (3,057)
Total income (loss) before provision
     for income taxes ..............     $ 96,564     $ 26,204      $ (3,605)
     -------------------------------     --------     --------      ---------
</TABLE>

<TABLE>
<CAPTION>
Provision for income taxes consists of:
                                                      Year Ended
                                        February       February       February
                                        26, 2000       27, 1999       28, 1998
                                        --------       --------       --------
                                             (In thousands of dollars)
<S>                                     <C>            <C>            <C>
--------------------------------------------------------------------------------
Current income taxes (benefit):
Federal ...........................     $ 32,024      $  6,655      $ (4,657)
Foreign ...........................        3,368         2,250          (679)
State and local ...................        8,362         2,032          (293)
   Total current ..................       43,754        10,937        (5,629)
Deferred income taxes (benefit):
Federal ...........................       (4,889)          (79)        5,890
Foreign ...........................       (1,316)         --            --
State and local ...................         (200)         (225)          706
   Total deferred .................       (6,405)         (304)        6,596
   Total provision for income taxes     $ 37,349      $ 10,633      $    967
--------------------------------------------------------------------------------
</TABLE>


<PAGE>

The reasons for the  difference  between the  provision for income taxes and the
amount  computed by applying  the  statutory  federal  income tax rate to income
(loss) before provision for income taxes are as follows:

<TABLE>
<CAPTION>
                                                      Year Ended
                                        February       February      February
                                        26, 2000       27, 1999      28, 1998
                                        --------       --------      --------
                                             (In thousands of dollars)
<S>                                     <C>            <C>            <C>
--------------------------------------------------------------------------------
Computed expected tax provision
 (benefit) ..........................     $ 33,797      $  9,171      $ (1,262)
Increase in taxes resulting from:
   State and local taxes, net of
   federal tax benefit ..............        5,220         1,175           586
   Foreign and U.S. tax effects
   attributable to foreign operations       (1,525)         (578)        1,113
    Goodwill ........................          549           549           549
    Other permanent differences .....         (692)          316           (19)
    Provision for income taxes ......     $ 37,349      $ 10,633      $    967
--------------------------------------------------------------------------------
</TABLE>

Deferred U.S. income taxes have not been provided on  undistributed  earnings of
foreign  subsidiaries  as the Company  considers such earnings to be permanently
reinvested  in the  businesses  as of February  26,  2000.  These  undistributed
foreign earnings could become subject to U.S. income tax if remitted,  or deemed
remitted, as a dividend. Determination of the deferred U.S. income tax liability
on these unremitted earnings is not practical,  since such liability, if any, is
dependent  on  circumstances  existing  at  the  time  of  the  remittance.  The
cumulative amount of unremitted  earnings from the foreign  subsidiaries that is
expected to be permanently reinvested was approximately $9.2 million on February
26, 2000.


The components of deferred income tax assets and liabilities are as follows:
<TABLE>
<CAPTION>
                                                      Year Ended
                                        February       February       February
                                        26, 2000       27, 1999       28, 1998
                                        --------       --------       --------
                                             (In thousands of dollars)
--------------------------------------------------------------------------------
<S>                                     <C>            <C>            <C>
Deferred income tax assets:
    Provision for estimated losses
    on sales returns ...............    $ 3,241      $   110     $ 2,792
    Provision for inventory
    obsolescence ...................      2,496        1,232        --
    Total deferred income tax assets    $ 5,737      $ 1,342     $ 2,792

Deferred income tax liabilities:
    Amortization ...................    $ 3,659      $ 4,233     $ 4,756
    Depreciation ...................        242          224         627
    Non-recurring items ............       (366)          29         315

    Undistributed earnings -
     foreign subsidiaries ..........        --           --        1,422
    Other .........................        (905)         657        (256)
    Total deferred income tax
    liabilities ...................     $ 2,630      $ 5,143     $ 6,864
--------------------------------------------------------------------------------
</TABLE>



<PAGE>

NOTE 11 - EMPLOYEE BENEFIT PLANS

The FASB issued SFAS No. 132,  "Employers'  Disclosures about Pensions and Other
Postretirement  Benefits," in February  1998.  This new standard does not change
the  measurement or  recognition  of costs for pensions or other  postretirement
plans.  It  standardizes  disclosures  and  eliminates  those that are no longer
useful.  The  information  provided  below  for  fiscal  2000  and 1999 has been
presented under the requirements of the new standard.

The  Company  maintains  noncontributory  qualified  and  non-qualified  defined
benefit  pensions as well as a  postretirement  healthcare plan for all eligible
non-bargaining unit personnel.

The  Company is also a  participant  in a  multi-employer  defined  contribution
pension plan covering domestic bargaining unit employees.

In addition,  the Company sponsors a defined  contribution plan, which qualifies
under  Sections  401(a) and 401(k) of the  Internal  Revenue  Code (the  "401(k)
Plan").  While all non-bargaining  unit employees are eligible to participate in
the 401(k) Plan,  participation is optional.  The Company does not contribute to
the 401(k) Plan.

Pension expense for all plans was $1,334,000 (2000) and $883,000 (1999).


The  following  tables   summarize   benefit  costs,  as  well  as  the  benefit
obligations, plan assets and funded status associated with the Company's pension
and postretirement healthcare benefit plans.

<TABLE>
<CAPTION>
                                                                Postretirement
                                        Pension Benefits     Healthcare Benefits
--------------------------------------------------------------------------------
                                       February  February     February  February
                                       26, 2000  27, 1999     26, 2000  27, 1999
--------------------------------------------------------------------------------
                                              (in thousands of dollars)
<S>                                    <C>       <C>         <C>       <C>
Reconciliation of change in benefit obligation

Benefit obligation at beginning
of year ............................   $ 21,712  $ 20,839    $  6,581  $  6,239
Service cost .......................        693       692         228       216
Interest cost ......................      1,537     1,513         465       443
Benefits paid ......................     (1,063)   (1,847)       (376)     (317)
Actuarial (gains) losses ...........     (2,124)      515        (604)      --
Benefit obligation at end of year ..   $ 20,755  $ 21,712    $  6,294  $  6,581
--------------------------------------------------------------------------------

Reconciliation of change in the fair value of plan assets

Fair value of plan assets
at beginning of year ...............   $ 15,011  $ 14,738    $    --    $   --
Actual return on plan assets .......       (845)    2,053         --        --
Employer contributions .............         67        67         376       317
Benefits paid ......................     (1,063)   (1,847)       (376)     (317)
Fair value of plan assets
at end of year .....................   $ 13,170  $ 15,011     $   --    $    --
--------------------------------------------------------------------------------
</TABLE>


<PAGE>
<TABLE>
<CAPTION>
                                                               Postretirement
                                         Pension Benefits    Healthcare Benefits
--------------------------------------------------------------------------------
                                       February   February    February  February
                                       26, 2000   27, 1999    26, 2000  27, 1999
--------------------------------------------------------------------------------
                                               (In thousands of dollars)
<S>                                    <C>        <C>         <C>       <C>
Funded status

Funded status .......................  $(7,583)   $(6,701)    $(6,294)  $(6,581)
Unrecognized actuarial(gains)losses .    3,447      3,600      (1,367)     (771)
Unrecognized prior service cost .....     (128)      (143)        --         --
Unrecognized initial transition
obligation ..........................      416        612       3,216     3,437
Net amount recognized in the
consolidated balance sheets .........  $(3,848)   $(2,632)    $(4,445)  $(3,915)
--------------------------------------------------------------------------------

Components of amounts recognized
in the consolidated balance sheets

Prepaid benefit cost ................   $   269   $   908     $   --    $   --
Accrued benefit liability ...........    (4,941)   (3,557)     (4,445)   (3,915)
Intangible asset ....................       --        17          --        --
Accumulated other comprehensive
expense .............................       824       --          --        --
Accumulated other comprehensive
consolidated balance sheets .........   $(3,848)  $(2,632)    $(4,445)  $(3,915)
--------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
                                                                            Postretirement
                                              Pension Benefits             Healthcare Benefits
--------------------------------------------------------------------------------------------------
                                        February  February  February  February  February  February
                                        26, 2000  27, 1999  28, 1998  26, 2000  27, 1999  28, 1998
--------------------------------------------------------------------------------------------------
                                                            (In thousands of dollars)
<S>                                     <C>       <C>       <C>       <C>       <C>       <C>
Components of net periodic benefit cost

Service cost .......................... $   693   $   692   $   654    $   228  $   216   $   362
Interest cost .........................   1,537     1,513     1,480        465      443       579
Expected return on plan assets ........  (1,320)   (1,430)   (1,355)        --       --        --
Amortization of initial transition
obligation ............................     196       196        56        221      221       221
Prior service cost ....................     (15)      (15)      (15)        --       --        --
Actuarial (gains) losses ..............     193       132       (10)        (8)     (11)       18
Net periodic benefit cost ............. $ 1,284   $ 1,088   $   810    $   906  $   869   $ 1,180
--------------------------------------------------------------------------------------------------
</TABLE>


<PAGE>

As of February 26, 2000, both the qualified and non-qualified pension plans have
accumulated  benefit  obligations  in excess of plan assets.  As of February 27,
1999, only the non-qualified pension plan had accumulated benefit obligations in
excess of plan assets. Information is as follows:

                                                    Pension Benefits
-------------------------------------------------------------------------
                                             February            February
                                             26, 2000            27, 1999
-------------------------------------------------------------------------
                                               (In thousands of dollars)
Projected benefit obligation                 $ 20,753            $ 4,462
Accumulated benefit obligation                 17,308              3,557
Fair value of plan assets                    $ 13,170            $    --
-------------------------------------------------------------------------


The  weighted-average  actuarial  assumptions used for both pension plans
are as follows:
-------------------------------------------------------------------------
                                             February            February
                                             26, 2000            27, 1999
-------------------------------------------------------------------------
                                               (In thousands of dollars)
Discount rate                                  7.75%                7.0%
Expected return on plan assets                  9.0%                9.0%
Rate of compensation increase                   5.0%                5.0%
-------------------------------------------------------------------------


Assumptions for healthcare  cost increases are as follows:  8.5% in fiscal 1999;
8.0% in fiscal 2000; trending down to a 5.5% increase in fiscal 2005.  Increases
in  healthcare  costs could  significantly  affect the  reported  postretirement
benefits cost and benefit obligations.  A one percentage point change in assumed
healthcare benefit cost trends would have the following effect:

-------------------------------------------------------------------------
                                                    1-Percentage Point
                                                  Increase       Decrease
-------------------------------------------------------------------------
On total service and interest cost component       $ 116         $  (98)
On postretirement benefit obligation (APBO)        $ 793         $ (705)
-------------------------------------------------------------------------


<PAGE>
NOTE 12 - STOCK OPTION PLANS

The  Company  has  Stock   Options  Plans  that  provide  for  the  granting  of
non-qualified  stock  options,  incentive  stock options and stock  appreciation
rights (SARs) to employees,  non-employee  directors and consultants  within the
meaning of Section 422A of the Internal Revenue Code.  Options granted generally
vest over two or three years and expire ten years after the grant date.

The following table summarizes information about the Plans.
<TABLE>
<CAPTION>
                                            February 26, 2000           February 27, 1999          February 28, 1998
---------------------------------------------------------------------------------------------------------------------------
                                                   Weighted-Average             Weighted-Average           Weighted-Average
                                                       Exercise                     Exercise                   Exercise
Stock Options                             Shares        Price       Shares           Price       Shares         Price
---------------------------------------------------------------------------------------------------------------------------
<S>                                     <C>       <C>   <C>         <C>        <C>   <C>       <C>        <C>   <C>
Outstanding at beginning of year ....   4,036,000       $ 5.75      3,777,500        $ 6.23     3,352,250       $ 7.90
Granted .............................   1,032,500       $ 5.39        527,500        $ 3.03     1,427,250       $ 2.47
Exercised ...........................    (318,448)      $ 3.75        (13,250)       $ 2.22           --           --
Forfeited ...........................     (66,000)      $ 5.41       (255,750)       $ 7.39    (1,002,000)      $ 6.49
  Outstanding at end of year ........   4,684,052       $ 5.81      4,036,000        $ 5.75     3,777,500       $ 6.23
Options exercisable at end of year...   3,468,129       $ 6.11      2,663,865        $ 6.99     1,984,741       $ 8.90
Weighted-average fair value of
 options granted during the year ....             $2.97                       $1.72                       $1.33
---------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
Summarized information about stock options outstanding and exercisable at February 26, 2000 is as follows:

                                 Options Outstanding                    Options Exercisable
--------------------------------------------------------------------------------------------
                                      Weighted-       Weighted-                    Weighted-
                    Outstanding        Average         Average      Exercisable     Average
Exercise Price      as of             Remaining        Exercise         as of       Exercise
Ranges              2/26/00        Contractual Life     Price          2/26/00       Price
--------------------------------------------------------------------------------------------
<S>                 <C>                 <C>            <C>            <C>            <C>

$ 1.76 - $ 3.53     1,694,135           7.6            $ 2.63         1,412,379      $ 2.53
$ 3.54 - $ 5.29       913,167           7.9            $ 4.55           313,000      $ 4.63
$ 5.30 - $ 7.05       588,000           4.4            $ 6.00           470,000      $ 5.76
$ 7.06 - $ 8.81       823,000           4.7            $ 7.97           612,000      $ 8.17
$ 8.82 - $10.57       126,000           3.4            $ 9.31           121,000      $ 9.29
$10.58 - $12.34       208,250           1.5            $10.92           208,250      $10.92
$12.35 - $14.10        37,500           0.1            $13.33            37,500      $13.33
$14.11 - $15.86       231,000           1.5            $14.95           231,000      $14.95
$15.87 - $17.63        63,000           2.3            $17.63            63,000      $17.63
--------------------------------------------------------------------------------------------
                    4,684,052           5.9            $ 5.81         3,468,129      $ 6.11
---------------------------------------------------------------------------------------------
</TABLE>


<PAGE>

The Company follows the provisions of SFAS No. 123,  "Accounting for Stock-Based
Compensation."  As  permitted  by this  statement,  the  Company  has  chosen to
continue to account  for  stock-based  compensation  using the  intrinsic  value
method.  Accordingly,  no  compensation  expense  has  been  recognized  in  the
Company's Consolidated Statements of Operations for its stock-based compensation
plans.  Had  compensation  costs been determined  based on the fair value of the
2000,  1999 and 1998 stock option grants  consistent with the method of SFAS No.
123, the Company's net income and net income per common share assuming  dilution
would have been reduced to the pro forma amounts indicated below.

<TABLE>
<CAPTION>
                                        2000                          1999                          1998
------------------------------------------------------------------------------------------------------------------
                                                  (In thousands of dollars, except share data)
                              As reported    Pro forma      As reported    Pro forma      As reported    Pro forma
------------------------------------------------------------------------------------------------------------------
<S>                           <C>            <C>            <C>            <C>            <C>            <C>
Net income (loss) .......     $ 59,215       $ 58,471       $15,571        $15,169        $(4,572)       $(4,881)
Earnings (loss) per share     $   1.25       $   1.23       $  0.33        $  0.32        $ (0.10)       $ (0.11)
------------------------------------------------------------------------------------------------------------------
</TABLE>

In determining the preceding pro forma amounts under SFAS 123, the fair value of
each option  grant is  estimated  on the date of grant  using the  Black-Scholes
option-pricing  model with the following  assumptions for fiscal 2000: risk free
interest rate of 6.5%; expected life of ten years;  estimated volatility of 56%;
no dividend yield.


NOTE 13 - CAPITAL STOCK

The  Company  has a  Shareholder  Rights Plan which  entitles  stockholders,  in
certain circumstances, to purchase one one-hundredth of a share of the Company's
Series A Junior  Participating  Preferred  Stock at an exercise price of $62 for
each share of Common Stock  owned.  The  Shareholder  Rights Plan is intended to
protect the interests of the Company's  stockholders in the event the Company is
confronted with coercive or unfair takeover tactics.

In October 1999, the Board of Directors of the Company authorized the Company to
repurchase  up to 5 million  shares of its stock.  As of February 26, 2000,  the
Company had repurchased 940,000 shares at an average price of $8.25.


NOTE 14 - SEGMENT AND GEOGRAPHIC INFORMATION

Following is the breakdown of industry segments as required by SFAS No. 131. The
Company has three reportable  business  segments:  Collectible  Sports Products,
Entertainment Products and Confectionery.

The Collectible  Sports  Products  segment  primarily  consists of trading cards
featuring   players  from  Major  League  Baseball,   the  National   Basketball
Association, the National Football League and the National Hockey League as well
as  sticker/album  products  featuring  players  from  certain  European  soccer
leagues.

The Confectionery  segment consists of a variety of lollipop products  including
Ring Pop,  Push Pop,  Baby Bottle Pop and Flip Pop, the Bazooka  bubble gum line
and other novelty confectionery products.

The  Entertainment  Products  segment  consists of trading cards,  sticker/album
products, comics and magazines featuring licenses from popular films, television
shows and other entertainment properties, including Pokemon.


<PAGE>

The Company's  management  evaluates the  performance of each segment based upon
its  contributed  margin,   which  is  profit  after  cost  of  goods,   product
development,  advertising and  promotional  costs and  obsolescence,  but before
allocation   of  general   and   administrative   expenses,   depreciation   and
amortization,  other  income/expense,  non-recurring items,  interest and income
taxes.

The Company does not allocate  assets among its business  segments and therefore
does not include a  breakdown  of assets or  depreciation  and  amortization  by
segment.
<TABLE>
<CAPTION>
                                                      Year Ended
--------------------------------------------------------------------------------
                                        February       February       February
                                        26, 2000       27, 1999       28, 1998
--------------------------------------------------------------------------------
                                               (In thousands of dollars)
<S>                                     <C>            <C>            <C>
Net Sales
Collectible Sports Products ........    $ 133,803      $ 124,855      $ 141,324
Confectionery ......................      129,724         95,238         84,514
Entertainment Products .............      110,666          9,321         15,412
  Total ............................    $ 374,193      $ 229,414      $ 241,250
--------------------------------------------------------------------------------
Contributed Margin
Collectible Sports Products ........    $  47,408      $  48,414      $  40,326
Confectionery ......................       40,136         24,736         16,496
Entertainment Products .............       62,886          1,594         (1,668)
  Total ............................    $ 150,430      $  74,744      $  55,154
--------------------------------------------------------------------------------
Reconciliation of contributed margin
to income (loss) before provision
for income taxes

Total contributed margin ...........    $ 150,430      $  74,744      $  55,154
General & administrative expenses ..      (52,314)       (47,370)       (49,508)
Depreciation & amortization ........       (4,019)        (4,871)        (4,374)
Other income .......................          755            676            390
Non-recurring items ................         --            3,479         (3,682)
  Income (loss) from operations ....       94,852         26,658         (2,020)
Interest income (expense), net .....        1,712           (454)        (1,585)
  Income (loss) before provision
  for income taxes .................    $  96,564      $  26,204      $  (3,605)
--------------------------------------------------------------------------------
</TABLE>


<PAGE>

Net sales to  unaffiliated  customers  and income  (loss)  from  operations,  as
presented  below,  are based on the  location of the ultimate  customer.  Income
(loss)  from  operations  is defined as  contributed  margin  less  general  and
administrative expenses, depreciation and amortization, other income/expense and
non-recurring  items.  Identifiable assets, as presented below, are those assets
located in each geographic area.

<TABLE>
<CAPTION>
                                                 Year Ended
---------------------------------------------------------------------------
                                   February       February       February
                                   26, 2000       27, 1999       28, 1998
---------------------------------------------------------------------------
                                         (In thousands of dollars)
<S>                                <C>            <C>            <C>
Net Sales
United States ...............      $ 270,792      $ 156,913      $ 157,208
Europe ......................         64,534         45,537         64,599
Other .......................         38,867         26,964         19,443
    Total Net Sales .........      $ 374,193      $ 229,414      $ 241,250

Income (Loss) from Operations
United States ...............      $  84,289      $  22,536      $   5,566
Europe ......................          5,784          1,623         (6,215)
Other .......................          4,779          2,499         (1,371)
    Total Income (Loss) from
     operation ..............      $  94,852      $  26,658      $  (2,020)

Identifiable Assets
United States ...............      $ 170,021      $ 127,186      $ 126,498
Europe ......................         42,267         29,732         43,972
Other .......................         14,646          7,164          7,936
    Total Identifiable Assets      $ 226,934      $ 164,082      $ 178,406
---------------------------------------------------------------------------
</TABLE>


<PAGE>

NOTE 15 - FAIR VALUE OF FINANCIAL INSTRUMENTS

The following disclosure of the estimated fair value of financial instruments is
made in accordance with the  requirements  of SFAS No. 107, " Disclosures  About
Fair Value of Financial  Instruments."  These  estimates have been determined by
the  Company  using  available  market  information  and  appropriate  valuation
techniques  based on  information  as of  February  26,  2000.  As  considerable
judgment  is  inherent  in the  development  of  these  estimates,  they are not
necessarily  indicative  of the amounts  that the Company  would  realize in the
current market exchange.

The recorded amounts and fair values are as follows:

<TABLE>
<CAPTION>
                                       February 26, 2000    February 27, 1999
------------------------------------------------------------------------------
                                       Recorded   Fair      Recorded  Fair
                                       Amount     Value     Amount    Value
------------------------------------------------------------------------------
                                             (In thousands of dollars)
<S>                                     <C>       <C>       <C>       <C>
Assets:
Cash and equivalents .............   $ 75,853   $ 75,853   $ 41,728   $ 41,728
Prepaid expenses .................      5,357      5,357      4,860      4,860

Liabilities:
Current portion of long-term debt        --         --       10,625     10,625
Long-term debt ...................       --         --        5,158      5,158
Foreign currency forward contracts       --          685       --         (313)
Interest rate swap contracts .....   $   --     $   --     $   --     $    (29)
------------------------------------------------------------------------------
</TABLE>


<TABLE>
<CAPTION>
NOTE 16 - QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

                                        2000                                   1999
------------------------------------------------------------------------------------------------------
                         1st       2nd       3rd       4th       1st       2nd       3rd       4th
------------------------------------------------------------------------------------------------------
<S>                      <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>
Net sales ............   $84,941   $80,391   $110,777  $98,084   $53,327   $57,868   $67,647   $50,572
Gross profit on sales     37,747    37,286     58,555   45,247    21,679    25,305    26,545    21,262
Income from operations    15,578    16,525     36,551   26,198     5,094     8,668     7,197     5,699
Net income ...........     9,267     9,881     21,930   18,137     2,696     4,813     4,134     3,928

Net income per share
  - basic ............   $  0.20   $  0.21   $   0.47  $  0.39   $  0.06   $  0.10   $  0.09   $  0.08
  - diluted ..........   $  0.20   $  0.21   $   0.46  $  0.38   $  0.06   $  0.10   $  0.09   $  0.08
Net income per share
without non-recurring
  - basic ............   $  0.20   $  0.21   $   0.47  $  0.39   $  0.05   $  0.06   $  0.09   $  0.09
  - diluted ..........   $  0.20   $  0.21   $   0.46  $  0.38   $  0.05   $  0.06   $  0.09   $  0.09
------------------------------------------------------------------------------------------------------
</TABLE>


<PAGE>
NOTE 17 - COMMITMENTS AND OTHER MATTERS

Future minimum payments under  non-cancelable  leases which extend into the year
2010 are $1,650,000  (2001),  $1,608,000 (2002),  $1,474,000 (2003),  $1,428,000
(2004), $1,238,600 (2005) and $5,800,000 thereafter.

Future  minimum  payments  required  under the  Company's  existing  sports  and
entertainment  contracts,  with various expiration dates extending into the year
2003, are estimated to be  $12,313,750  (2001),  $3,393,750  (2002) and $250,000
(2003).

Total royalty  expense under the Company's  sports and  entertainment  licensing
contracts was $43,403,000 (2000), $24,373,000 (1999) and $33,662,000 (1998).

Advertising  and marketing  expenses  (which  encompass  media  spending,  trade
spending and consumer  promotions  including player autograph costs) included in
selling,  general and  administrative  expenses amounted to $25,219,000  (2000),
$18,974,000 (1999) and $20,813,000 (1998).

The Company  transacts  business in many  countries,  utilizing  many  different
currencies.  It is thus exposed to the effect of exchange rate  fluctuations  on
sales and purchase  transactions.  The Company enters into both foreign currency
forward  contracts  and options on currency  forward  contracts  to manage these
exposures and to minimize the effects of foreign  currency  transactions on cash
flow.  Such  contracts  are  entered  into  primarily  to hedge  against  future
commitments. The Company does not engage in foreign currency speculation.  Gains
and losses on these hedging  instruments  that are  designated  and effective as
hedges of firm  commitments  are deferred and  recognized  in income in the same
period as the hedge transaction.  The Company may be exposed to credit losses in
the event of non-performance by counterparties to these instruments.  Management
believes,  however,  that the risk of  incurring  such  losses  is remote as the
contracts are entered into with major financial institutions.

At February 26,  2000,  the Company had  outstanding  foreign  currency  forward
contracts with banks in the amounts of $26,485,000 as compared to $20,955,000 as
of February 27, 1999.

These  contracts  have various  maturity  dates ranging up to twelve months from
February 26, 2000,  with over 90% of the contracts  maturing  within six months.
The recognition of the net gain,  which amounted to $685,000 using spot rates as
of year  end,  is  deferred  until  the  hedged  transaction  is  recorded  into
operations.  In addition, the Company had options to purchase foreign currencies
outstanding in the amount of $4,607,000 as of February 26, 2000.


Legal proceedings:
------------------

In August  1996,  the Company was named as a defendant  in a class action in the
United States District Court for the Eastern District of New York (the "New York
Court") entitled  Sullivan,  et. al. v. The Topps Company,  Inc., No. CV 96 3779
(E.D.N.Y.) (the  "Action").  The Action  alleged,  among other things,  that the
Company  violated the federal  Racketeer  Influenced  and Corrupt  Organizations
("RICO")  Act by its  practice of selling  sports and  entertainment  cards with
randomly-inserted   "insert"   cards,   in   violation   of  state  and  federal
anti-gambling   statutes.  Each  of  the  Company's  principal  competitors  and
licensors  was  separately  sued in various  federal  courts for  employing,  or
participating  in,  the same or similar  practices.  The  Action  sought  treble
damages  and  attorneys'  fees on  behalf  of all  purchasers  of packs of cards
potentially including "insert" cards over a four-year period. The New York Court
granted the  Company's  motion to dismiss the Action  with  prejudice  in August
1997. The New York Court later denied  motions by plaintiffs to alter,  amend or
vacate the  judgment,  and for leave to file an amended  complaint.  Plaintiffs'
time to appeal  all of these  rulings  has  expired,  and the  judgment  for the
Company dismissing the Action is now final and nonappealable.

In September  1998,  the Company  filed an action in the New York Court  seeking
declaratory  and  injunctive  relief  against  a class of all  original  end-use
purchasers of trading cards  marketed  within the four years prior to the filing
of the complaint in packages that may contain randomly-inserted  "insert" cards,
entitled  The Topps  Company,  Inc. v.  Sullivan  et. al.,  No. CV 98 6023 (EHN)
(E.D.N.Y.) (the "Declaratory Judgment Action").  The Declaratory Judgment Action
seeks a declaratory judgment that the defendant class of card purchasers did not
suffer any injury  cognizable  under RICO by this  practice,  and an  injunction
enjoining the  defendant  class from filing or pursuing any further RICO actions
against the  Company  relating to the  purchase  of trading  cards.  Two similar
declaratory  judgment  actions  have  been  filed by  several  of the  Company's
principal  licensors in the New York Court against the same class of defendants.
On December 14, 1998,  defendants  in all of the  declaratory  judgment  actions
moved to dismiss the complaints.  The New York Court denied all of these motions
in an order entered on March 17, 2000.

<PAGE>

In November  1998,  the Company  was named as a defendant  in a purported  class
action  commenced in the United States District Court for the Southern  District
of California (the "California Court") entitled Rodriquez,  et. al. v. The Topps
Company,  Inc., No. CV 2121-B (AJB) (S.D. Cal.) (the "Class Action").  The Class
Action  alleges  that the  Company  violated  RICO,  and the  California  Unfair
Business  Practices  Act, by its  practice of selling  sports and  entertainment
trading cards with  randomly-inserted  "insert" cards, allegedly in violation of
state and federal  anti-gambling laws. The Class Action seeks treble damages and
attorneys'  fees on behalf of all  individuals  who purchased  packs of cards at
least in part to obtain an "insert" card over a four-year period. On January 22,
1999,  plaintiffs  moved to  consolidate  the Class  Action with  similar  class
actions  pending  against  several of the Company's  principal  competitors  and
licensors in the  California  Court.  On January 25, 1999,  the Company moved to
dismiss the complaint,  or,  alternatively,  to transfer the Class Action to the
Eastern District of New York or stay the Class Action pending the outcome of the
Declaratory  Judgement  Action  pending in the Eastern  District of New York. By
orders dated May 14, 1999, the California Court denied the Company's  motions to
dismiss or transfer  the Class Action but granted the  Company's  motion to stay
the Class Action pending the outcome of the Declaratory  Judgement  Action.  The
California Court also denied  plaintiff's motion to consolidate the Class Action
with similar  purported Class Actions.  On April 18, 2000, the California  Court
entered  an order  requiring  plaintiffs  in the Class  Action as well as in the
other  purported  class actions to show cause why all such actions should not be
dismissed.  A hearing  on the issue is  scheduled  for early  June,  2000 in the
California  Court. An adverse outcome in this action could materially affect the
Company's future plans and results.


<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------

Board of Directors and Stockholders
The Topps Company, Inc.:

We have  audited  the  accompanying  consolidated  balance  sheets  of The Topps
Company,  Inc. and  Subsidiaries  as of February 26, 2000 and February 27, 1999,
and the related consolidated statements of operations,  stockholders' equity and
cash flows for each of the three years in the period  ended  February  26, 2000.
These financial  statements are the responsibility of the Company's  management.
Our responsibility is to express an opinion on these financial  statements based
on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our  opinion,  such  financial  statements  present  fairly,  in all material
respects,  the financial position of The Topps Company, Inc. and Subsidiaries as
of February 26, 2000 and  February 27, 1999 and the results of their  operations
and cash flows for each of the three years in the period ended February 26, 2000
in  conformity  with  generally  accepted  accounting  principles  in the United
States.


DELOITTE & TOUCHE LLP

New York, New York
March 30, 2000


<PAGE>

MARKET AND DIVIDEND INFORMATION
-------------------------------

The  Company's  Common Stock is traded on the Nasdaq  National  Market under the
symbol TOPP. The following table sets forth, for the periods indicated, the high
and low sales  price for the Common  Stock  during the last two fiscal  years as
reported  on the  Nasdaq  National  Market.  As of April 14,  2000,  there  were
approximately 4,783 holders of record.

<TABLE>
<CAPTION>
                                   Fiscal year ended        Fiscal year ended
                                   February 26, 2000        February 27, 1999
--------------------------------------------------------------------------------
                                 High Price  Low Price    High Price  Low Price
--------------------------------------------------------------------------------
<S>                                <C>       <C>            <C>       <C>
First quarter ...............      $ 7.375   $ 4.188        $3.500    $ 2.375
Second quarter ..............       12.063     5.750         3.500      2.125
Third quarter ...............       12.188     6.813         5.500      2.125
Fourth quarter ..............      $13.375   $ 6.938        $5.563    $ 4.125
--------------------------------------------------------------------------------
</TABLE>
The  Company's  credit  agreement  prohibits  the  payment  of  dividends.   See
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations  -  Liquidity  and  Capital  Resources"  and  "Notes to  Consolidated
Financial Statements - Note 9."



<PAGE>

SELECTED CONSOLIDATED FINANCIAL DATA
------------------------------------
<TABLE>
<CAPTION>
                                             2000           1999           1998           1997           1996
---------------------------------------------------------------------------------------------------------------
                                                     (In thousands of dollars, except share data)
<S>                                     <C>            <C>            <C>            <C>            <C>
OPERATING DATA:
Net sales ............................  $    374,193  $    229,414   $    241,250   $    268,975   $    265,495
Gross profit on sales ................       178,835        94,791         79,709         90,121         82,005
Selling, general and
administrative expenses ..............        84,738        72,288         78,437         75,974         68,563
Income (loss) from operations ........        94,852        26,658         (2,020)       (14,475)        16,571
Interest income (expense), net .......         1,712          (454)        (1,585)        (1,942)        (1,447)
Net income (loss) ....................        59,215        15,571         (4,572)       (10,943)         8,394
Income (loss) from operations
per share - basic ....................  $       2.04  $       0.57   $      (0.04)  $      (0.31)  $       0.35
          - diluted ..................  $       2.00  $       0.57   $      (0.04)  $      (0.31)  $       0.35
Net income (loss) - basic ............  $       1.28  $       0.34   $      (0.10)  $      (0.23)  $       0.18
                 - diluted ...........  $       1.25  $       0.33   $      (0.10)  $      (0.23)  $       0.18
Cash dividends .......................  $       --    $       --     $       --     $       --     $       --
Wtd. avg. shares outstanding
     - basic .........................    46,398,000    46,415,000     46,421,000     46,928,000     47,047,000
     - diluted .......................    47,463,000    46,678,000     46,434,000     46,928,000     47,047,000
---------------------------------------------------------------------------------------------------------------

BALANCE SHEET DATA:
Cash and equivalents .................  $     75,853  $     41,728   $     22,153   $     24,199   $     24,154
Working capital ......................        71,128        24,919         20,971         18,716         31,278
Net property, plant and equipment ....         9,181         7,429         10,148         12,900         31,610
Long-term debt, less current portion .          --           5,158         22,617         27,450         37,500
Total assets .........................       226,934       164,082        178,406        201,178        217,127
Stockholders' equity .................  $    129,175  $     77,224   $     61,609   $     68,052   $     81,850
---------------------------------------------------------------------------------------------------------------
</TABLE>

Amounts in 1996 include the impact of Topps Europe from the date of  acquisition
on July 6, 1995.

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

Income (loss) from operations  includes  various  non-recurring  items in fiscal
1999, 1998 and 1997. See Note 2.



<PAGE>
<TABLE>
<CAPTION>
<S>                                <C>                                <C>                      <C>
BOARD OF DIRECTORS                 OFFICERS                           SUBSIDIARIES             CORPORATE INFORMATION

Arthur T. Shorin*                  Arthur T. Shorin                   Topps Argentina S.A.     Annual Meeting
Chairman, Chief Executive          Chairmain, Chief Executive         Managing Director        Thursday, June 29, 2000. 10:30 A.M.
Officer and President              Officer and President              Juan P. Georgalos        Chase Manhattan Bank
                                                                                               55 Water Street
Allan A. Feder                     Ronald L. Boyum                    Topps Brasil, Ltda.      New York, New York 10041-0199
Independent Business               Vice President - Marketing and     Managing Director
Consultant                         Sales and General Manager          Jeroen Servaes           Corporate Counsel
                                   Confectionery                                               Willkie Farr & Gallagher
Stephen D. Greenberg                                                  Topps Canada, Inc.       787 Seventh Avenue
Chairman                           Edward P. Camp                     Managing Director        New York, New York 10019
Fusient Media Ventures, Inc.       Vice President and President       Kevin J. Crux
                                   Hobby Division                                              Independent Auditors
Ann Kirschner                                                         Topps Europe Limited     Deloitte & Touche
Chief Executive Officer            Michael P. Clancy                  Managing Director        Two World Financial Center
and President                      Vice President - International     Christopher Rodman       New York, New York 10281
FATHOM                             and Managing Director
                                   Topps Ireland Limited              Topps Ireland Limited    Registrar and Transfer Agent
Wm. Brian Little*                                                     Managing Director        ChaseMellon Shareholder Service, LLC
Private Investor                   Michael J. Drewniak                Michael P. Clancy        85 Challenger Road
                                   Vice President - Manufacturing                              Ridgefield Park, NJ  07660
David Mauer                                                           Topps Italia SRL         (800) 851-9677
President and Chief Executive      Ira Friedman                       Managing Director
Officer                            Vice President - Publishing and    Furio Cicogna
Ridell Sports, Inc.                New Product Development
                                                                      Topps UK Limited
Jack H. Nusbaum                    Leon J. Gutmann                    Managing Director
Senior Partner and Chairman        Assistant Treasurer and            Jeremy Charter
Willkie Farr & Gallagher           Assistant Secretary

Richard Tarlow                     Catherine K. Jessup
President                          Vice President - Chief Financial
Tarlow Advertising (a division     Officer
of Revlon, Inc.) and
Chairman                           William G. O'Connor
Carlson & Partners Advertising     Vice President - Administration

Stanley Tulchin*                   John Perillo
Chairman                           Vice President - Operations
Stanley Tulchin Associates, Inc.
                                   Scott Silverstein
                                   Executive Vice President


</TABLE>

*Nominated to stand for re-election
to the Company's  Board of Directors
at the 2000 Annual Meeting of
Stockholders.


--------------------------------------------------------------------------------
Additionl copies of this 2000 Annual Report and Form 10-K are available  without
charge  by making a written  request  to  Investor  Relations  at the  Company's
corporate officers or by calling (212) 376-0300.