##### 



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
 (Mark
One)
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended February 25, 2006
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from            to
 Commission file number 0-15817
 THE TOPPS COMPANY, INC.
  Delaware
    
    11-2849283(State or other jurisdiction of
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)
 One Whitehall Street, New York, NY
    
    10004(Address of principal executive offices)
    
    (Zip Code)
 (212) 376-0300
 Securities registered pursuant to Section 12(b) of the Act:
 Securities registered pursuant to Section 12(g) of the Act:
 o þ
 o þ
 þ o
 o
  o þ o
 o þ
   Documents incorporated by reference
    
    PartAnnual Report to Stockholders for the Year Ended February 25, 2006
    
    I,II,IVProxy Statement for the 2006 Annual Meeting of Stockholders
    
    III




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##### 



PART I
 ITEM 1. BUSINESS
 General Development
     Products
 Confectionery
  
   2




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##### 



Entertainment
     3




---



##### 



4




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##### 



Distribution and Marketing
 Sales and Distribution
    Advertising and Promotion
   5




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##### 



Production


Confectionery


Entertainment
    6




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##### 



Trademarks and License Agreements
     7




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##### 



Competition
  Seasonality
   8




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##### 



Dependence on Certain Customers
  Environment
  Employees
   Financial Information About Industry Segments, Foreign and Domestic
Operations and Export Sales
  Availability of this Report
 www.topps.com www.sec.gov
 9




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##### 



ITEM 1A. RISK FACTORS
 Cautionary Statements
        10




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##### 



11




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##### 



ITEM 1B. UNRESOLVED STAFF COMMENTS
  ITEM 2. PROPERTIES
  Owned or Leased;Area/Facility
    
    If Leased,Location
    
    Type of Facility
    
    Square Footage
    
    Expiration YearDuryea, Pennsylvania***
    
    Office and warehouse
    
    
    70,000
    
    
    Leased; 2009Scranton, Pennsylvania*
    
    Manufacturing plant
    
    
    41,000
    
    
    OwnedSeattle, Washington**
    
    Office
    
    
    19,000
    
    
    Leased; 2006Cork, Ireland*
    
    Office
    
    
    8,000
    
    
    Leased; 2019New York, New York***
    
    Executive offices
    
    
    60,000
    
    
    Leased; 2009Cincinnati, Ohio**
    
    Warehouse
    
    
    14,000
    
    
    Leased; 2006Milton Keynes, United
Kingdom***
    
    Office and warehouse
    
    
    12,000
    
    
    Leased; 2014Milan, Italy***
    
    Office
    
    
    7,000
    
    
    Leased; 2008
  
 *
    
    Serves confectionery segment.**
    
    Serves entertainment segment.***
    
    Serves both business segments. 12




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##### 



ITEM 3. LEGAL PROCEEDINGS
     13




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##### 



ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  14




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##### 



PART II
 ITEM 5.
    
    MARKET FOR COMPANYS COMMON STOCK AND RELATED STOCKHOLDER MATTERS
   Maximum Number ofTotal
    
    
    
    
    
    
    Total Number of
    
    
    Shares that May YetNumber of
    
    
    Average
    
    
    Shares Purchased
    
    
    Be Purchased UnderShares
    
    
    Price Paid
    
    
    as Part of Publicly
    
    
    the Plans orPeroid
    
    Purchased
    
    
    per Share
    
    
    Announced Plans
    
    
    ProgramsNovember 27, 2005
to December 24,
2005
    
    
    166,660
    
    
    $
    7.45
    
    
    
    166,660
    
    
    
    4,403,754December 25, 2005
to January 28, 2006
    
    
    228,326
    
    
    $
    7.45
    
    
    
    228,326
    
    
    
    4,175,428January 29, 2006 to
February 25, 2006
    
    
    203,327
    
    
    $
    7.76
    
    
    
    203,327
    
    
    
    3,972,101Total
    
    
    598,313
    
    
    $
    7.56
    
    
    
    598,313
    
    
    
    3,972,101
 ITEM 6.
    
    SELECTED CONSOLIDATED FINANCIAL DATA
  ITEM 7.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
  15




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##### 



ITEM 7A.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  ITEM 8.
    
    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
  ITEM 9.
    
    CHANGES IN ACCOUNTANTS AND DISAGREEMENTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
  ITEM 9A.
    
    CONTROLS AND PROCEDURES
    16




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##### 



ITEM 9B. OTHER INFORMATION
  17




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##### 



PART III
 ITEM 10.
    
    DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
  Position with the Company and business experienceName
    
    during the past five yearsJohn S. Budd
    
    Vice President  Confectionery Marketing of the Company
since October 2005. Prior to that Mr. Budd was Group
Marketing Director  Confectionery since 2003 and
Marketing Director  Candy Brands since 2001. Mr. Budd
joined the Company in December 1994. Mr. Budd is 46
years of age.John C. Buscaglia
    
    Vice President  Entertainment Sales of the Company
since October 2005. Prior to that Mr. Buscaglia was
National Sales Manager  Retail Entertainment since
1998. Mr. Buscaglia joined the Company in September
1989. Mr. Buscaglia is 46 years of age.Michael P. Clancy
    
    Vice President  International of the Company since
December 1998 and Vice President since February 1995.
Mr. Clancy has been Managing Director, Topps
International Ltd. (formerly Topps Ireland) since July
1990 and was Joint Managing Director, Topps Europe Ltd.
from January 1997 to December 1998. Mr. Clancy joined
the Company in 1979. Mr. Clancy is 51 years of age.Ira Friedman
    
    Vice President  Publishing and New Product Development
of the Company since September 1991. Mr. Friedman
joined the Company in October 1988. Mr. Friedman is 52
years of age.Warren Friss
    
    Vice President  General Manager Entertainment of the
Company since February 2005. Prior to that Mr. Friss was
Vice President and Internet Business General Manager
since June 2001, and General Counsel of the Company
since February 2000. Mr. Friss joined the Company as
Deputy General Counsel in May 1995. Mr. Friss is 42
years of age.
 18




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##### 



Position with the Company and business experienceName
    
    during the past five yearsCatherine K. Jessup
    
    Vice President  Chief Financial Officer and
Treasurer. Ms. Jessup was Treasurer of the Company
since July 2004 and Chief Financial Officer of the
Company since July 1995. Prior to joining the
Company, Ms. Jessup held a number of positions with
PepsiCo (a food products company) from 1981 to July
1995. Ms. Jessup is 50 years of age.Michael K. Murray
    
    Vice President  Confectionery Sales of the Company
since October 2004. Prior to joining the Company, Mr.
Murray was Vice President  Regional Director of
Sales North America for Reckitt Benckiser PLC. Mr.
Murray is 48 years of age.William G. OConnor
    
    Vice President  Administration of the Company since
September 1991. Mr. OConnor was an Assistant
Secretary of the Company from June 1982 until June
1994. Mr. OConnor is 57 years of age.Christopher Rodman
    
    Vice President  Topps Europe of the Company since
October 2004. Previously, Mr. Rodman was Managing
Director, Topps Europe since November 1997. Mr. Rodman
joined the Company in July 1995 with the acquisition
of Merlin Publishing. Mr. Rodman is 49 years of age.Scott Silverstein
    
    President of the Company and Chief Operating Officer
since August 2004. Previously, Mr. Silverstein was
Executive Vice President of the Company since February
2000, with responsibilities including, among other
things, oversight of the U.S Entertainment business.
Prior thereto, Mr. Silverstein ran the Pokémon
business for Topps since 1999 and was Vice President
 Business Affairs and General Counsel of the Company
since February 1995. Mr. Silverstein held the
position of General Counsel from July 1993 until
February 2000. Mr. Silverstein is the son-in-law of
Mr. Shorin, the Companys Chairman of the Board and
Chief Executive Officer. Mr. Silverstein is 44 years
of age.
 19




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##### 



ITEM 11.
    
    EXECUTIVE COMPENSATION
  ITEM 12.
    
    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
  ITEM 13.
    
    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
  ITEM 14.
    
    PRINCIPAL ACCOUNTANT FEES AND SERVICES
  20




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##### 



PART IV
 ITEM 15.
    
    EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
 (a) (1&2) Financial Statements and Financial Statement Schedules
 Index to Financial Statements:
       Index to Independent Registered Public Accounting
Firms Report and Financial Statement Schedule:
 Report of Registered Public Accounting Firm
    
    
    S-1Schedule I  Valuation and Qualifying AccountsFor Fiscal Years Ended February 28, 2004, February 26, 2005 and February 25, 2006
    
    
    S-2
  21




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##### 



(3) Listing of Exhibits
 2.1
    
    
    -
    
    Agreement and Plan of Merger of Wizkids, LLC dated
as of June
23, 2003 (Incorporated by reference to the Companys Report on Form
8-K dated July 24, 2003).3.1
    
    
    -
    
    Restated Certificate of Incorporation of the Company
(Incorporated by reference to Exhibit 3.1 to the Companys Report on Form
8-K dated December 2, 1991 SEC File Number 000-15817).3.2
    
    
    -
    
    Restated By-laws of the Company (Incorporated by
reference to Exhibit 3.2 to the Companys Report on Form 8-K dated December
2, 1991 SEC File Number 000-15817).10.1
    
    
    -
    
    The Topps Company, Inc. Fiscal Year 2007 Executive
Officers Annual Bonus Plan (Incorporated by reference to Exhibit 99.1 to the
Companys Report on Form 8-K dated April 17, 2006).10.2
    
    
    -
    
    Supplemental Pension Agreement with Arthur T. Shorin
(Incorporated by reference to Exhibit 10.16 to the Companys Registration
Statement on Form S-1 No. 33-130821).10.3
    
    
    -
    
    Amendment to Supplemental Pension Agreement with Arthur T.
Shorin dated May 18, 1994 (Incorporated by reference to the Companys Annual
Report on Form 10-K for the fiscal year ended February 25, 1995 SEC File
Number 000-15817).10.4
    
    
    -
    
    License Agreement and Letter Amendment thereto with Major
League Baseball Promotion Corporation (Incorporated by reference to Exhibit
10.12 to the Companys Annual Report on Form 10-K for the fiscal year ended
March 2, 1991 SEC File Number 000-15817).10.5
    
    
    -
    
    Letter Amendment effective January 1, 2001 to the License
Agreement dated January 1, 1969 and Letter Amendments thereto between the
Company and Major League Baseball Properties, Inc. Confidential treatment has
been requested with respect to portions of this exhibit. Omitted portions
have been filed with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended. (Incorporated by
reference to Exhibit 10.1 to the Companys Quarterly Report for the quarter
ended November 29, 2003.)10.6
    
    
    -
    
    Stock Option Agreement with Arthur T. Shorin dated March
29, 1995 (Incorporated by reference to Exhibit 10.12 to the Companys Annual
Report on Form 10-K for the fiscal year ended February 25, 1995 SEC File
Number 000-15817).
 22




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##### 



Index to Exhibits (continued)
 10.7
    
    
    -
    
    Agreement of Lease with One Whitehall Company dated
February 24, 1994 (Incorporated by reference to the
Companys Annual Report on Form 10-K for the fiscal
year ended February 26, 1994 SEC File Number
000-15817).10.8
    
    
    -
    
    Amendment and Restatement of the 1994 Non-Employee
Director Stock Option Plan. (Incorporated by reference
to the Companys 1998 Proxy Statement filed on May 28,
1998 SEC File Number 000-15817).10.9
    
    
    -
    
    Corporate Guaranty in favor of the Bank of Scotland
(Incorporated by reference to the Companys Quarterly Report on Form 10-Q for
the quarter ended November 25, 1995 SEC File Number 000-15817).10.10
    
    
    -
    
    Amended and Restated Manufacturing Agreement with
Hershey Foods Corporation, dated March 13, 1998. (Incorporated by reference
to the Companys Quarterly Report on Form 10-Q for the quarter ended August
29, 1998).10.11
    
    
    -
    
    Letter Agreement with Hershey Foods Corporation, dated
April 26, 2006. (Incorporated by reference to Exhibit 10.1 to the Companys
Report on Form 8-K dated April 26, 2006).10.12
    
    
    -
    
    Credit Agreement, dated September 7, 2004, between The
Topps Company, Inc. and The JPMorganChase Bank. (Incorporated by reference to
the Companys Quarterly Report on Form 10-Q for the period year ended August
28, 2004).10.13
    
    
    -
    
    Memorandum of Agreement between the Company and Major
League Baseball Players Association dated January 6, 2003 (Incorporated by
reference to the Companys Annual Report on Form 10-K for the fiscal year
ended March 1, 2003).10.14
    
    
    -
    
    Letter Amendment, dated July 19, 2005, to the Memorandum
of Agreement, dated January 6, 2003, between the Company and Major League
Baseball Players Association. Confidential treatment has been requested with
respect to portions of this exhibit. Omitted portions have been filed with
the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended. (Incorporated by reference to
the Companys Quarterly Report on Form 10-Q for the period ended August 27,
2005).10.15
    
    
    -
    
    Amended and Restated Employment Agreement (the
Agreement), effective as of the 1st day of June, 2001, by and between The
Topps Company, Inc., a Delaware corporation (the Company), and Arthur T.
Shorin, a resident of New York (the Executive) (Incorporated by reference to
the Companys Annual Report on Form 10-K for the fiscal year ended March 1,
2003).
 23




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##### 



Index to Exhibits (continued)
 10.16
    
    
    -
    
    First Amendment, effective October 11, 2004 to the Amended and
Restated Employment Agreement, by and between The Topps Company, Inc. and
Arthur T. Shorin in which he consented to remove the title of President of the
Corporation. (Incorporated by reference to the Companys Form 10-Q filed
November 27, 2004).10.17
    
    
    -
    
    Employment Agreement, dated as of July 9, 2003 between
WizKids LLC and Jordan K. Weisman. (Incorporated by reference to Exhibit 10.1
to the Companys Form 10-Q filed November 29, 2003).10.18
    
    
    -
    
    First Amendment, effective August 1, 2003, to the
Employment Agreement, dated as of July 9, 2003 between WizKids LLC and Jordan
K. Weisman. (Incorporated by reference to Exhibit 10.1 to the Companys Form
10-Q filed November 29, 2003).10.19
    
    
    -
    
    Second Amendment, effective October 1, 2003, to the
Employment Agreement, dated as of July 9, 2003 between WizKids LLC and Jordan
K. Weisman. (Incorporated by reference to Exhibit 10.1 to the Companys Form
8-K filed July 24, 2003).10.20
    
    
    -
    
    License Agreement between The Topps Company, Inc. and
National Football League Players Association, effective March 1, 2004.
Confidential treatment has been requested with respect to portions of this
exhibit. Omitted portions have been filed with the Securities and Exchange
Commission Pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.*10.21
    
    
    -
    
    Service Agreement between The Topps Company, Inc. and
National Football League Players Incorporated, effective March 1, 2004.
Confidential treatment has been requested with respect to portions of this
exhibit. Omitted portions have been filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the securities Exchange Act of 1934, as
amended.*10.22
    
    
    -
    
    License Agreement between Topps Europe Ltd., a
wholly-owned subsidiary of The Topps Company, Inc., and The Football
Association Premier League Ltd. dated September 30, 2003. Confidential
treatment has been requested with respect to portions of this exhibit.
Omitted portions have been filed with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
(Incorporated by reference to the Companys Quarterly Report on Form 10-Q for
the period year ended August 28, 2004).
 24




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##### 



Index to Exhibits (continued)
 10.23
    
    
    -
    
    License Agreement between Topps Europe Ltd., a wholly-owned subsidiary
of The Topps Company, Inc., and The Football Association Premier League Ltd.
dated January 20, 2006. Confidential treatment has been requested with respect
to portions of this exhibit. Omitted portions have been filed with the
Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities
Exchange Act of 1934, as amended.*10.24
    
    
    -
    
    The Topps Company, Inc. Executive Severance Plan, Amended
and Restated as of June 30, 2005. (Incorporated by reference to Exhibit 10.3
to the Companys Form 8-K filed July 7, 2005).10.25
    
    
    -
    
    The Topps Company, Inc. 2001 Stock Incentive Plan, Amended
and Restated as of June 30, 2005. (Incorporated by reference to the Companys
Quarterly Report on Form 10-Q for the period ended August 27, 2005).10.26
    
    
    -
    
    The Topps Company, Inc. 1996 Stock Option Plan, Amended
and Restated as of June 30, 2005 (Incorporated by reference to Exhibit 10.2 to
the Companys Form 8-K filed July 7, 2005).13
    
    
    -
    
    Annual Report (except for those portions specifically
incorporated by reference, the 2006 Annual Report to Stockholders is furnished
for the information of the Commission and is not to be deemed filed as part
of this filing).*21
    
    
    
    
    Significant subsidiaries of the Company (Incorporated by
reference in the Annual Report to Stockholders).23
    
    
    -
    
    Deloitte & Touche LLP Consent.*31.1
    
    
    -
    
    Certification of Principal Executive Officer pursuant to
Rules 13(a)-14(a) and 15(d)-14(a) under the Securities Exchange Act of 1934.*31.2
    
    
    -
    
    Certification of Principal Financial Officer pursuant to
Rules 13(a)-14(a) and 15(d)-14(a) under the Securities Exchange Act of 1934.*32.1
    
    
    -
    
    Certification of Arthur T. Shorin, Chairman and Chief
Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.*32.2
    
    
    -
    
    Certification of Catherine K. Jessup, Vice-President and
Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
 
 *
    
    filed herewith 25




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##### 



SIGNATURES
  Dated: May 10, 2006
    
    THE TOPPS COMPANY, INC.Registrant/s/Arthur T. Shorin/Arthur T. ShorinChairman andChief Executive Officer
  /s/Arthur T. Shorin/
    
    /s/Catherine K. Jessup/Arthur T. Shorin
    
    Catherine K. JessupChairman and Chief Executive
    
    Vice President  Chief Financial OfficerOfficer
    
    and Treasurer(Principal Executive Officer)
    
    (Principal Financial Accounting Officer)/s/Allan A. Feder/
    
    /s/David Mauer/Allan A. Feder
    
    David MauerDirector
    
    Director/s/Stephen D. Greenberg/
    
    /s/Jack H. Nusbaum/Stephen D. Greenberg
    
    Jack H. NusbaumDirector
    
    Director/s/Ann Kirschner/
    
    /s/Richard Tarlow/Ann Kirschner
    
    Richard TarlowDirector
    
    Director/s/Edward Miller/Edward MillerDirector
 26




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##### 



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 To the Board of Directors and Stockholders of The Topps Company, Inc.
    
 
 S-1




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##### 



Valuation and Qualifying Accounts
 THE TOPPS COMPANY, INC. AND SUBSIDIARIES
 
 SCHEDULE I. VALUATION AND QUALIFYING ACCOUNTS
  Balance
    
    Charged to
    
    Charged
    
    
    
    
    
    Balanceat Beginning
    
    Costs and
    
    Against
    
    Additions/
    
    At EndDescription
    
    of Period
    
    Expenses
    
    Sales
    
    (Deductions)
    
    of PeriodYear Ended February 28, 2004Reserve for Estimated Returns
    
    $
    16,443
    
    
    $
    
    
    
    $
    17,404
    
    
    $
    (14,331
    )(a)
    
    $
    19,516Reserve for Doubtful Accounts
    
    $
    1,602
    
    
    $
    (143
    )
    
    $
    
    
    
    $
    (810
    )(b)
    
    $
    649Reserve for Cash Discounts
    
    $
    965
    
    
    $
    
    
    
    $
    3,882
    
    
    $
    (3,410
    )(c)
    
    $
    1,437Reserve for Customer Deductions
    
    $
    528
    
    
    $
    
    
    
    $
    1,132
    
    
    $
    (528
    )(d)
    
    $
    1,132Reserve for Obsolete Inventory
    
    $
    3,527
    
    
    $
    7,462
    
    
    $
    
    
    
    
    .$(3,874
    )(e)
    
    $
    7,115Year Ended February 26, 2005Reserve for Estimated Returns
    
    $
    19,516
    
    
    $
    
    
    
    $
    22,020
    
    
    $
    (20,712
    )(a)
    
    $
    20,824Reserve for Doubtful Accounts
    
    $
    649
    
    
    $
    (110
    )
    
    $
    
    
    
    $
    (276
    )(b)
    
    $
    263Reserve for Cash Discounts
    
    $
    1,437
    
    
    $
    
    
    
    $
    4,692
    
    
    $
    (4,685
    )(c)
    
    $
    1,444Reserve for Customer Deductions
    
    $
    1,132
    
    
    $
    
    
    
    $
    883
    
    
    $
    (1,132
    )(d)
    
    $
    883Reserve for Obsolete Inventory
    
    $
    7,115
    
    
    $
    4,917
    
    
    $
    
    
    
    $
    (7,741
    )(e)
    
    $
    4,291Year Ended February 25, 2006Reserve for Estimated Returns
    
    $
    20,824
    
    
    $
    
    
    
    $
    29,840
    
    
    $
    (29,483
    )(a)
    
    $
    21,181Reserve for Doubtful Accounts
    
    $
    263
    
    
    $
    468
    
    
    $
    
    
    
    $
    (576
    )(b)
    
    $
    155Reserve for Cash Discounts
    
    $
    1,444
    
    
    $
    
    
    
    $
    2,900
    
    
    $
    (2,805
    )(c)
    
    $
    1,539Reserve for Customer Deductions
    
    $
    883
    
    
    $
    
    
    
    $
    1,189
    
    
    $
    (883
    )(d)
    
    $
    1,189Reserve for Obsolete Inventory
    
    $
    4,291
    
    
    $
    5,360
    
    
    $
    
    
    
    $
    (4,655
    )(e)
    
    $
    4,996
 
 a)
    
    Returns charged against provision, net of recoveriesb)
    
    Bad debt write-offsc)
    
    Early payment discounts taken by customersd)
    
    Pricing allowance and slotting credits issued to customerse)
    
    Disposals, net of recoveries S-2