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

                                    FORM 10-K
(Mark One)
                    [X] ANNUAL REPORT PURSUANT TO SECTION 13
         OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
                   For the fiscal year ended February 28, 1998

                                       OR

                   [ ] TRANSITION REPORT PURSUANT TO SECTION
      13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
                  For the transition period from       to
 
                         Commission file number 0-15817

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

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

   One Whitehall Street, New York, NY                    10004
  (Address of principal executive offices)              (Zip Code)
                                 (212) 376-0300
              (Registrant's telephone number, including area code)

           Securities registered pursuant to Section 12(b) of the Act:
                                 Not Applicable

           Securities registered pursuant to Section 12(g) of the Act:
                           Common Stock par value $.01
                                (Title of class)

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

   Indicate by check mark if disclosure of  delinquent  filers  pursuant to Item
405 of regulation S-K is not contained herein, and will not be contained, to the
best  of  the  registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. [ X ]

   
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The  aggregate  market  value  of  Common  Stock  held by  non-affiliates  as of
May 21,1998 was approximately $133,000,000.

   The  number  of  outstanding  shares of Common  Stock as of May  14,1998  was
46,400,010.

          Documents incorporated by reference                           Part

Annual Report to Stockholders for the Year Ended February 28, 1998      I,II,IV
Proxy Statement for the 1998 Annual Meeting of Stockholders               III

<PAGE>

                                     PART I

ITEM 1.  BUSINESS

General Development

     The Topps Company,  Inc. was incorporated in Delaware on February 24, 1987.
The Company is the successor to Topps Chewing Gum, Inc.,  which was  established
as a  partnership  in 1938 and was  incorporated  under  the laws of New York in
1947.  All  references  in this  Annual  Report on Form 10-K to  "Topps"  or the
"Company" are to The Topps Company, Inc. and its subsidiaries.

     Topps is a leading  marketer  of  collectible  picture  products  featuring
primarily  professional  athletes  and, from time to time,  popular  television,
movie and comic book  characters.  The Company also  distributes  Bazooka  brand
bubble gum as well as branded lollipops,  such as Ring Pop and Push Pop, novelty
candy products,  collectible toys, comic books,  magazines and sticker and album
collections.

     The  sports  card  category  in which the  Company  competes  continued  to
contract in  calendar  1997.  This  extended  industry  decline is the result of
several factors,  including:  product and brand  proliferation which have led to
consumer  confusion and oversupply;  a competitive rise in other  sports-related
merchandise  choices;  a reduction  in retailer  support and labor strife in the
sports industry.

     In 1995, the Company acquired Merlin Publishing  International  Limited,  a
U.K.-based  publisher and marketer of licensed  collectibles,  primarily sticker
and album  collections  and, to a lesser extent,  trading cards and  stationery.
While  continuing  to  market  products  under the  Merlin  brand  name,  Merlin
Publishing International Limited changed its corporate name to Topps Europe Ltd.
("Topps  Europe") in March 1997.  As a result of  contraction  in the market for
entertainment sticker and album collections, in fiscal 1998, Topps Europe closed
offices in France, Spain and the Netherlands.  It continues to have an office in
Italy and to service other markets from its office in the U.K.

     Over the  last  several  years,  the  Company  expanded  its  international
operations establishing new subsidiaries in Canada and Mexico in fiscal 1996 and
Brazil and  Argentina  in fiscal 1997.  The Company  currently  distributes  its
products in over fifty countries, has employees in eight countries and licensees
in two international markets.

________________________________________________________________________________
Trademarks of The Topps Company, Inc. and Subsidiaries appearing in this report:
Baby Bottle Pop, Bazooka,  Bazooka Blasts,  Bazooka Joe, Bowman,  Bowman Chrome,
Bowman's  Best,  Candy Zone,  Collect  'Ems,  Garage Pail Kids,  Juice Bar, Mars
Attacks, Merlin, Precious Piggies,  Precious Puppies, Push Pop, Ring Pop, Roller
Pop, Topps, Topps Baby Wild Animals,  Topps Chrome, Topps Finest, Topps Gallery,
Topps Stadium Club, Topps Stars, Triple Blasts and Wacky Packages.


Unless otherwise indicated, all date references refer to calendar years.

                                       2
<PAGE>

Products

     Sports Picture  Products.  The Company is a leading marketer of collectible
picture  products  featuring  players of Major  League  Baseball,  the  National
Basketball  Association,  the National Football League and various  professional
soccer leagues.  In the U.S. and Canada,  picture  products are generally in the
form of cards,  while in the rest of the world picture products are typically in
the form of sticker  and album  collections,  which are the  popular  medium for
licensed collectibles in these countries.

     Card  products   feature   photographs  of  athletes  and  contain  summary
statistics and biographical material.  Over the years, sports picture cards have
been  marketed in  packages  with and without  bubble gum.  The Company  markets
sports  picture cards in various size  packages,  as well as complete  sets, for
distribution through a variety of trade channels.

     The Company  distributes sports cards under brand names including,  but not
limited to, Topps,  Topps Stadium Club,  Topps Finest,  Topps  Gallery,  Bowman,
Bowman  Chrome,  Bowman's Best and Topps Chrome.  Each brand of sports cards has
its own unique  positioning  in the  marketplace  and is designed to appeal to a
specific  group of  consumers.  All brands of sports cards are of a high quality
and feature laminated paperboard and state-of-the-art  reproduction  techniques.
Certain brands feature  borderless cards and also contain foil stamping.  Prices
generally  range from a  suggested  retail  price of $0.99 per pack to $5.00 per
pack.  The Company is  continuously  updating the technology and features of its
cards.

     Sticker  and album  collections,  which are sold under the Merlin and Topps
brand names,  are marketed  throughout  Europe and other selected  international
markets.  Stickers display photos of popular local athletes and sports teams and
are  typically  sold in packages of six.  Stickers are designed for insertion in
designated places in an associated  album,  which usually contains more detailed
information  and  statistics  regarding  the players  and teams.  The Company is
expanding  its sports  licenses  beyond the Premier  League in the U.K.  and has
recently  obtained  sticker  and album  rights for  soccer in Italy,  Norway and
Denmark. The Company  also sells  sticker  products  in Canada  under  the Topps
brand name.

     Bazooka  Brand Bubble Gum.  The Company has been  marketing  Bazooka  brand
bubble gum since  1947.  Traditional  chunk  Bazooka  bubble gum is  produced in
individually-wrapped  rectangular  pieces in a variety  of  flavors  and sold at
retail  for five and ten cents a piece.  In the United  States and many  foreign
countries, individual pieces of Bazooka brand bubble gum include a comic printed
in the appropriate language usually featuring Bazooka Joe, a copyrighted cartoon
character created by the Company in 1953.

     The Company sells multiple piece packs of Bazooka which over the years have
included a  six-piece  pack of soft  sugarless  bubble  gum, a  ten-piece  pack,
forty-five and seventy-five count bags of traditional chunk Bazooka,  as well as
various box, bucket and canister configurations. These packages are designed for
distribution in  supermarkets,  convenience  stores,  drug store chains and mass
merchandisers.

                                       3
<PAGE>

     During 1997, the Company completed phase one of the relaunch of the Bazooka
bubble gum line.  This included the  development  of all new packaging  graphics
with a  contemporary  logo and a more focused  product line. In 1998,  phase two
which includes the  introduction of a 75 comic series  featuring new and updated
characters,  consumer  promotion  programs and targeted TV advertising,  will be
completed.

     The Company also sells Bazooka  Blasts,  a bubble gum product  manufactured
with super  flavor  crystals  designed to enhance  flavor  impact and extend its
duration. This product is being sold in four flavors in 1998.


     Lollipops.  The Company markets several  lollipop  products  throughout the
United States and many foreign countries.  Products include Ring Pop (a lollipop
made of candy  molded  into  the  form of an  exaggerated  precious  gem  stone,
anchored to a plastic ring) and Push Pop (a cylinder-shaped lollipop packaged in
a plastic  container with a removable cap, designed to enable consumers to eat a
portion of the pop and save the rest).  In 1998,  the Company  plans to continue
its advertising and promotional support as well as merchandising  efforts behind
both  Ring Pop and Push  Pop.  The  Company  also  plans  on  advertising  these
lollipops in the Canadian marketplace in 1998.
 
     In 1998, the Company introduced a new line of confectionery items under the
trademark  Candy Zone.  One of the  products,  Baby Bottle Pop, is a baby bottle
with a delicious  lollipop top whose bottle is filled with a tangy candy powder.
Another, Flip Pop, is a pop within a fun plastic container, which can be flipped
out, licked and replaced back in the case for consumption  later. The Company is
currently  developing  other  Candy  Zone  items and  intends to build upon this
premium-priced  line.  Introductions  of other  lollipop  products over the last
several years include Roller Pop, Triple Blasts and Tongue Sucker.


     Other  Collectibles.  The Company has introduced four series of collectible
plastic  animals  under the Collect'Ems brand name.  These  include Puppy In My
Pocket,  Topps Baby Wild Animals,  Precious Puppies and Precious  Piggies.  Each
series  consists of 24 different  animals which are packaged  individually  with
candy and a collector card.

     Entertainment and Other Picture Products.  The Company's activities in this
area began in the 1950's.  Since then,  the Company has  marketed  many  picture
products featuring the dominant entertainment  properties of the time, including
The Beatles,  Elvis Presley,  Star Wars,  Michael Jackson,  E.T., Indiana Jones,
Batman, Teenage Mutant Ninja Turtles, Jurassic Park, Goosebumps and The X-Files.
Occasionally, the Company has also created products detailing events of national
interest,  such as Desert Storm, or parodying popular brands and properties such
as Wacky Packages and Garbage Pail Kids. Over the years, products of this nature
have experienced peaks and valleys in terms of consumer interest.

     In fiscal 1998, the Company reduced the number of products sold and focused
its  entertainment  card efforts on a few of the most prominent  licenses in the
entertainment  field.  The  Company  produced  cards  based on The  Lost  World:
Jurassic Park, Star Wars, The X-Files and Xena: Warrior Princess.

                                       4
<PAGE>
 
     The Merlin  sticker and album  product  line has also  featured a number of
entertainment-based  properties.  In fiscal 1998, the Company  marketed over ten
different properties throughout Europe, some in multiple languages,  formats and
series.   Due   to   the   European   market    contraction,    Topps   Europe's
entertainment-oriented  sticker  products  will  be  limited  to a  few  product
offerings in fiscal 1998.

     Magazine Publishing. The Company is currently publishing two periodicals as
well as single  issues of  souvenir  and poster  magazines  based on subjects of
interest in the  entertainment  field.  The quarterly Star Wars Galaxy  Magazine
features,  among  other  things,  interviews  with  popular  Star Wars  artists,
excerpts  of new works of Star Wars  fiction,  original  comics  adventures  and
information  regarding  the next  trilogy of Star Wars films.  A quarterly  Xena
magazine  features  articles,  interviews,  artwork and  posters  based upon the
popular   television   series.   The  Company  has  on  occasion, also  produced
commemorative and poster magazines.


     Comic  Books.  The  Company  creates  and  markets a limited  selection  of
high-quality  color comic books for  distribution  primarily in specialty shops.
During fiscal 1997, more than 16 different comic books featuring  titles such as
The X-Files and Mars Attacks were published.  Due to the market contraction,  in
fiscal 1998 the Company  published  fewer  titles and focused  attention  on its
strongest  properties.  The Company  plans to continue  this  approach in fiscal
1999.


     For a  schedule  of net sales by major  product  group  for the past  three
fiscal years, see "Management's  Discussion and Analysis of Financial  Condition
and  Results  of  Operations"  on  page  6 of the  Company's  Annual  Report  to
Stockholders for the year ended February 28, 1998 (the "Annual  Report"),  which
is hereby incorporated by reference.



Distribution and Marketing

     Sales and  Distribution.  The Company's  products are sold  throughout  the
United  States,  Canada  and  Europe,  as well as in Latin  American  and  Asian
markets.

     In March 1997, the Company  reorganized  its U.S. sales force. As a result,
U.S.  card sales and national  accounts are handled by the  Company's  own sales
force,  while  U.S.  confectionery  sales to all  classes  of  trade  (excluding
national accounts) are handled through broker organizations. Together, the sales
force and brokers sell to more than 3,000  wholesale  tobacco and  confectionery
jobbers, hobby distributors,  wholesale clubs,  newsdealers,  mass merchandisers
and direct-buying grocery,  convenience,  drug, variety,  discount and toy store
chains.  Sales to more than 3,000  collectible  products dealers and hobby shops
are made by direct mail solicitation. During fiscal 1997, the Company introduced
an innovative  retailer  alliance  program  entitled Home Team  Advantage.  This
program  is   designed  to  promote   hobby   retailer   loyalty  and   in-store
merchandising.

                                       5
<PAGE>

     The Company  develops card products for exclusive  distribution in the U.S.
hobby channel of trade.  Recent examples include the Topps Gallery products that
feature  unique,  top-quality  sports star  photographs  and artwork by renowned
artist  Peter  Max and  Topps  Stars,  a product  designed  exclusively  for the
Company's Home Team Advantage hobby retailers.

     In the past,  the Company has also  operated a direct  response  membership
club  through  which it marketed  special sets of Topps  Stadium Club  baseball,
football  and  basketball  cards as well as other  products.  This  business was
terminated in February 1998.

     In Canada, sales of collectible products and confectionery are handled by a
small direct sales force and brokers.

     In the U.K.,  sales of both  confectionery  products and  collectibles  are
handled  by  a  dedicated  sales  force  as  well  as  wholesalers   selling  to
independents.  Together,  the sales force and  wholesalers  reach  approximately
30,000 retail news and  confectionery  outlets.  Elsewhere in Europe,  sales are
primarily through candy and snack food distributors as well as through newstrade
agents or distributors.  Topps continues to expand its distribution capabilities
and now has a presence in over thirty European markets.

     In  Latin  America,  Topps  sales  of both  confectionery  and  collectible
products are handled by national distributors under the supervision of the local
Topps general  manager.  In Asia,  Topps products are sold via  distributors and
direct sales.


     Advertising  and Promotion.  The Company  utilizes a variety of promotional
activities,   including  television,  radio  and  print  advertising  campaigns,
designed to create consumer awareness and increase retail sales of its products,
particularly  Topps and Topps  Stadium  Club brand sports cards and Ring Pop and
Push Pop lollipops.  Worldwide  advertising  and  promotional  expenditures as a
percentage  of net sales for the fiscal  years  ended  1996,  1997 and 1998 were
7.8%, 7.0% and 8.6%, respectively.

     Traditionally,  the Company has relied on the  popularity of its sports and
other licensed products and the consumer recognition of its brand names in order
to promote its products.  In addition, as described above, the Company has often
become a licensee for  characters and  personalities  with  well-publicized  and
well-advertised  names.  The  Company  also uses  print  advertising  on its own
product wrappers and promotional  insert cards to increase consumer awareness of
its products and promotions.

     Approximately  65% of the Company's  sales are made on a returnable  basis.
Industry practices require that the Company provide the right to return on sales
of sports card products excluding those to hobby dealers, on comic book products
sold to mass  merchandisers  and on  sales  of most  of the  sticker  and  album
products in Europe.  Returns  significantly  in excess of the Company's  returns
provisions  could have a material  adverse  effect on the Company.  Consolidated
return  provisions  as a  percentage  of gross sales for the fiscal  years ended
1996, 1997 and 1998 were 16.5%, 14.2% and 12.4%, respectively.

                                       6
<PAGE>

Production

     In  December  1996,  the  Company  discontinued  operations  at its Duryea,
Pennsylvania  manufacturing  facility  and took a  related  one-time  charge  of
$30,000,000.   As  a  result  of  the  Duryea  plant  closure,  Bazooka  gum  is
manufactured by a single contractor in the U.S. (Hershey Foods Corporation). The
cutting,  collating and packaging of card products  previously  performed at the
Duryea facility have been outsourced to several manufacturers in the U.S.

     In April 1998, the Company ceased  manufacturing  operations at its factory
in the Republic of Ireland.  This facility  produced gum on a limited basis. The
Company has sufficient  inventory for its current needs and is presently seeking
alternate sources of production for the longer term.


     Collectible  Picture  Products.  In the U.S.,  photographs  of athletes are
generally  taken  by  photographers  under  contract  with  the  Company  or  by
free-lance photographers on special assignment. In addition, certain photography
is provided by the organization representing the leagues and their member teams.
Pictures of  entertainment  subjects are generally  furnished by the licensor or
created by artists  retained by the Company.  Computerized  graphic  artwork and
design  development  for all of the Company's  products is done by staff artists
and through  independent  design  agencies  under the Company's  direction.  The
Company's   Graphic   Services   Department   also   utilizes   state-of-the-art
computerized  technology to enhance and  color-correct  photography and computer
imaging to create interesting and unusual backgrounds and visual effects.

     High-quality  paperboard  is  sent  directly  to  outside  printers  by the
Company's suppliers.  Pictures are printed utilizing a variety of techniques and
processes,  including waterless printing, which allows for a tighter line screen
resulting  in sharper and more  intense  photo  reproduction.  Sheets of printed
cards are then often sent to  additional  suppliers who foil stamp and UV (ultra
violet) coat the sheets  before they are delivered to contract  packagers  where
they are then cut into  individual  cards,  collated and wrapped in a variety of
package configurations.

     Certain elements of Merlin brand sticker products are sourced from a single
supplier in Italy.  The  Company  believes  that there  would be other  suitable
sources  available to meet its  requirements,  if the current  supplier  were to
become unable to meet Merlin's supply needs.


     Confectionery.  As a result of the Company's  decision to close its Duryea,
Pennsylvania plant, the Company now purchases all of its U.S. Bazooka bubble gum
requirements from Hershey Foods  Corporation  pursuant to an agreement which was
extended in 1998. The agreement expires in December 2002. The agreement requires
the  Company to source all of its current  U.S.  Bazooka  production  needs from
Hershey,  provided  it can  fulfill  the  orders  on a timely  basis.  Given the
shortage of  alternative  manufacturers  for Bazooka gum,  failure by Hershey to
supply the  Company on a timely  basis could have a material  adverse  effect on
product  availability  and,  therefore,  on sales of Bazooka.  Bazooka and other

                                       7
<PAGE>

bubble gum products for  international  sales were manufactured by the Company's
factory in the  Republic  of Ireland  through the end of fiscal  1998.  In April
1998,  production  of  Bazooka  was  discontinued  in  Ireland.  The Company has
sufficient  inventory for its current needs and is presently  seeking  alternate
sources of production for the longer term.

     Push Pop  lollipops  are  manufactured  by a single  supplier in  factories
located in Taiwan,  Thailand and China. The loss of production at one or more of
these  facilities  due to civil  unrest or for any  other  reason  could  have a
significant  negative  impact on sales of Push Pop until an  alternative  source
could be arranged.

     Ring Pop lollipops  for domestic  sales are  manufactured  at the Company's
Scranton,  Pennsylvania  factory.  Ring Pop lollipops for sale in  international
markets are  manufactured by a single supplier in factories  located in Thailand
and China.

     The Company's other candy products are also manufactured,  to the Company's
specifications,  by outside  suppliers  abroad and  delivered  to the Company as
finished product.

     All Products.  Sweeteners,  flavors, paperboard,  packaging materials, foil
stamping and UV coating are required to manufacture  the Company's total line of
collectible  picture and confectionery  products and are generally  available to
the  Company.  The Company  does rely on single  producers  for several of these
ingredients or processes.  While alternative  suppliers are generally available,
some  adjustment  in product  specification  might be required  if these  single
sources were no longer available to the Company.



Trademarks and License Agreements

     The  Company  considers  its  trademarks  and license  agreements  to be of
material  importance to its business.  The Company's  principal  trademarks have
been  registered  in the United  States  and many  foreign  countries  where its
products are sold.  The sports picture  products  marketed by the Company in the
U.S. are all based on rights under license  agreements with individual  athletes
or  their  players'  associations,  as  well  as  the  licensing  bodies  of the
professional sports leagues.  These agreements cover the following sports: Major
League  Baseball,  NBA  Basketball  and NFL  Football.  The  Company  also has a
contract  with the Premier  Soccer League in the U.K. and with players and teams
with  regard to soccer  in  Norway  and  Denmark.  The  Company's  inability  to
renegotiate successfully its Major League Baseball, NBA Basketball, NFL Football
or Premier League Soccer agreements upon expiration, or the loss of any of these
license  agreements,  could have a material  adverse effect on the Company.  The
Company  chose not to renew its NHL Hockey  license upon its  expiration in June
1996.  However,  the Company has recently  negotiated a new trading card license
with the National  Hockey League  Players'  Association  which is subject to the
execution of a definitive  agreement.  This  agreement  is  contingent  upon the
Company  obtaining a license from  National  Hockey League  Enterprises  for the
rights to use the team names and logos.

     The Company has an individual  license agreement with virtually every major
league baseball player.  Each baseball  player's license  agreement is initially

                                       8
<PAGE>

for four major  league  baseball  seasons  and may be  extended  for  additional
seasons as rights are used,  if the player  and the  Company  agree.  Typically,
these  agreements are extended  annually.  Among the rights the Company receives
are rights to use a player's name, picture, facsimile signature and biographical
description  in the form of two or three  dimensional  pictures,  trading cards,
postcards, stickers, stamps, transfers, decals, medallions or coins, each within
certain size  limitations,  provided  such  products are marketed  alone or with
chewing gum or candy. The licenses granted to the Company by athletes permit the
athlete to grant  others  rights to the use of his name,  picture and  facsimile
signature on other products,  including  collectible picture cards sold alone or
with products other than gum and (with certain  exceptions)  candy.  The Company
has a related  agreement  with the Major League  Baseball  Players  Association,
which governs certain terms of the individual player contracts. The Company also
has an agreement with Major League Baseball  Properties,  Inc., which covers the
use of the names and  insignias of the baseball  teams and leagues in connection
with its  baseball  picture  products  and which  expires at the end of the year
2000. The Company conducts a related active licensing  program with minor league
baseball players and continuously  seeks to supplement its relationship with the
baseball  community  through personal visits and corporate  identification.  The
Company considers such relationships to be good and to be of great importance to
it.  However,  should an  appreciable  number of Major League  Baseball  players
refuse to sign the Company's license agreement, it could have a material adverse
effect on the Company.

     The  Company  also  enters  into  license   agreements  with  entertainment
companies to produce certain products.  The terms of these contracts depend on a
variety  of  factors.  Total  royalty  expense  under the  Company's  sports and
entertainment licensing contracts for the fiscal years ended 1996, 1997 and 1998
were  $34,614,000,  $37,960,000 and  $33,662,000,  respectively.  See Note 16 of
Notes to  Consolidated  Financial  Statements  in the  Annual  Report,  which is
incorporated  herein  by  reference,  for a  description  of  minimum  guarantee
payments required under the Company's existing sports contracts.

                                       9
<PAGE>

International Licensing Operations

     The Company,  which licenses its technology and  trademarks,  currently has
license  agreements with  manufacturers in two foreign  countries to manufacture
and distribute the Company's  products.  These  licensees have the right to sell
licensed  products in countries  of their  location  and, in certain  instances,
other countries as well. The Company receives royalties from its licensees based
on sales of licensed products and, in certain instances,  the licensee's sale of
non-Company brands.  Prior to fiscal 1996, the licensee in Canada, which had the
rights with  respect to both  collectible  picture and  confectionery  products,
accounted for the largest  percentage of the Company's royalty income. In fiscal
1996, the Canadian license was restricted to confectionery  products only and in
fiscal 1997, it was terminated completely.  As a result, the Company now markets
and  distributes  all products  directly in Canada  through Topps Canada Inc., a
wholly-owned  subsidiary.  In addition,  in April 1996, the Company's  licensing
agreement with Productos Stani for the sale of Bazooka in Argentina expired, and
Productos Stani became the owner of the Bazooka trademark in Argentina.

     Royalties  are  generally  based on sales volume in local  currency and are
payable in U.S. dollars.  The Company's royalties from international  operations
are  subject to foreign  currency  fluctuations.  Although  the Company has from
time-to-time  experienced  delays in the receipt of payment for  royalties  from
various licensees because of foreign exchange control regulations, to date, such
regulations have not materially affected the Company's results.



Competition

     The  Company  competes  for sales as well as counter  and shelf  space with
large  corporations in the food,  candy,  publishing,  toy and other industries.
Many of  these  corporations  have  substantially  greater  resources  than  the
Company.  More narrowly,  the Company competes with other  companies,  large and
small,  which  market gum and candy,  and with a number of  collectible  picture
product companies for the spending money of children and adult  collectors.  The
Company   believes  that  the   industries  in  which  it  operates  are  highly
competitive.



Seasonality

     The Company's  sports picture  products are sold throughout the year in the
U.S.,  spanning  the three major sports  seasons in which the Company  currently
participates,  i.e., baseball,  football and basketball.  Sales of entertainment
card products  tend to be driven by the property on which they are based,  often
peaking  with the release of a movie or the rise in  popularity  of a television
program.  Sales of confectionery  products are relatively  stable throughout the
year, although they are impacted by the introduction of new products and the use
of consumer  advertising that can occur at any point in the year. Topps Europe's
sales are driven largely by the shipment of products  relating to Premier League
Soccer, with much of the sales activity occurring in January and February.

                                       10
<PAGE>

Environment

     The Company believes that it is in compliance in all material respects with
existing federal,  state and local regulations relating to the protection of the
environment.  Such  environmental  regulations have not had a material impact on
the Company's capital expenditures, earnings or competitive position.



Employees

     In December 1996, the Company discontinued  manufacturing operations at its
Duryea, Pennsylvania facility. Many of the employees at the Duryea facility were
represented  by Teamster's  Union Local 229 which filed an unfair labor practice
charge  relating  to the  closure.  This  claim was  settled  and the charge was
dismissed  in  December  1997.  See  "Item  3 - Legal  Proceedings."  All of the
production  employees at the  Company's  factory in Scranton,  Pennsylvania  are
represented by a union.

     The Company employed approximately 500 people in fiscal 1998. In the fourth
quarter of fiscal 1998, the Company  eliminated  approximately  fifty management
and administrative positions worldwide.  Subsequent to the Company's fiscal 1998
year end,  the  Company's  factory in the  Republic  of  Ireland  was shut down.
Twenty-six employees were affected by this shutdown.

         The Company considers relations with its employees to be good.



Cautionary Statements

     In connection with the "safe harbor"  provisions of the Private  Securities
Litigation  Reform Act of 1995 (the "Reform Act"),  the Company is hereby filing
cautionary  statements  identifying  important  factors  that could cause actual
results  to  differ  materially  from  those  projected  in any  forward-looking
statements  of the Company made by or on behalf of the Company,  whether oral or
written.  The Company wishes to ensure that any  forward-looking  statements are
accompanied  by  meaningful  cautionary  statements  in order to maximize to the
fullest extent  possible the  protections of the safe harbor  established in the
Reform Act. Accordingly,  any such statements are qualified in their entirety by
reference to, and are accompanied  by, the following  important  factors,  among
others,  that could cause the Company's actual results to differ materially from
those projected in forward-looking  statements of the Company:

     1. Dependence on Licenses. The Company's trading card and sticker and album
businesses are highly dependent upon licensing  arrangements with third parties.
These  licenses,  which have varying  expiration  dates,  are obtained  from the
various  professional  sports  leagues,  players  associations  and,  in certain
instances,  the  players  themselves  as well as  entertainment  companies.  The

                                       11
<PAGE>

Company's  inability to renew or retain these licenses,  or the lack of vitality
of these  licenses,  could  materially  affect its future plans and results.

     2.  Contraction  in Sports  Card  Industry  and  Competition.  The  Company
believes that the sports card  industry  continued to contract  during  calendar
1997. That  contraction,  caused in part by product and brand  proliferation and
previous labor strife between players and team owners in the various sports, has
resulted in an increasingly competitive environment in the sports card industry.
In addition,  the NBA's collective  bargaining  agreement between the owners and
the  union  has been  reopened  for  negotiation,  and an NBA work  stoppage  is
possible,  prior to and/or  during the next NBA season.  Further  prolonged  and
material contraction in the sports card industry, whether caused by labor strife
or otherwise,  could materially affect the Company's future plans and results.

     3.  Returns.  Approximately  65% of  the  Company's  sales  are  made  on a
returnable basis. Although the Company maintains provisions for returns, returns
considerably in excess of the Company's  provisions could materially  affect its
future plans and results.

     4. Leverage. In July 1995, the Company entered into a 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.  As of February 28,  1998,  the Company had
outstanding  $24,950,000  on the term loan,  $6,000,000 of revolving  credit and
$700,000  in standby  letters of credit,  and the Company was in default of it's
financial covenants.

     In May 1998, the total facility was refinanced  with Chase  Manhattan Bank.
The new credit agreement provides for a $24,950,000 term loan payable in monthly
installments  and a  $9,450,000  facility to cover  letter of credit and working
capital needs. The facility expires on July 6, 2000.  Amounts  outstanding under
this  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 2.75%, 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 and the  acquisition of
treasury stock. A future default under the new credit facility could  materially
adversely affect the Company's future plans and results.

     5. Legal Proceedings.  In August 1996, the Company was named a defendant in
a class action in the United States  District Court for the Eastern  District of

                                       12
<PAGE>

New York (the "Court") entitled Sullivan,  et.al. v. The Topps Company, Inc. No.
CV-96-3779 (EDNY) (the "Action").  The Action alleged,  among other things, that
the Company violated the federal Racketeer Influenced and Corrupt  Organizations
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,  as well as
several of its principal  licensors,  was separately  sued in its home state 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.  On August 21,
1997, the Court entered a judgment  granting the Company's motion to dismiss the
complaint with prejudice. The plaintiffs have filed a Motion to Alter, Amend and
Vacate Judgment and for Leave to File Amended Complaint. The Company opposed the
motion and, by  Memorandum  and Order dated  April 28,  1998,  the Court  denied
plaintiffs'  motion in all respects.  However,  if the decision is appealed,  an
adverse outcome could materially affect the Company's future plans and results.

                                       13
<PAGE>

Financial  Information About Industry Segments,  Foreign and Domestic Operations
and Export Sales

     The Company  operates in one business  segment  which is the  marketing and
distribution of collectible  picture and confectionery  products,  including the
licensing  of  its  technology  and  trademarks.   Geographic  area  information
contained in Note 13 of the Notes to Consolidated  Financial Statements included
in the Annual Report is hereby incorporated by reference.


Executive Officers of the Company

     The information  required by this item with respect to the directors of the
Company and as to those executive  officers who are also directors  appearing in
the Proxy Statement for the annual meeting of stockholders  scheduled to be held
on June 30, 1998 ("1998 Proxy  Statement") is hereby  incorporated  by reference
thereto. Set forth below is information required by this item covering the other
executive officers of the Company.


      Name                     Position with the Company and business
                               experience during the past five years

Ronald L. Boyum                Vice  President  - Marketing  and Sales of the 
                               Company  since March 1995,  Vice  President-
                               Marketing of the Company  since April 1994 
                               and Vice  President-Sales  since  April  1990.
                               Mr. Boyum is 46 years of age.

Edward P. Camp                 Vice  President of the Company since April
                               1997 and President of the Hobby Division
                               since  October 1995. Mr. Camp held a number
                               of sales related  positions within the Company
                               prior thereto. Mr. Camp is 51 years of age.

Michael P. Clancy              Vice President of the Company since 
                               February 1995. Mr. Clancy has been
                               Managing  Director - Topps Ireland  since July
                               1990 and Joint Managing  Director - Topps 
                               Europe Ltd. since January 1997. Mr. Clancy
                               is 43 years of age.

Michael J. Drewniak            Vice  President - Manufacturing  of the
                               Company  since March 1991. Mr. Drewniak
                               held the position of General Manager -
                               Manufacturing Operations prior thereto.
                               Mr.Drewniak is 61 years of age.

                                       14
<PAGE>

      Name                     Position with the Company and business
                               experience during the past five years

Ira Friedman                   Vice  President - Publishing and New
                               Product Development of the Company since
                               September 1991. Mr. Friedman joined the
                               Company in October 1988 as Director of New
                               Product Development. Mr. Friedman is 44
                               years of age.

Catherine K. Jessup            Vice President - 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 including
                               Director  of  Planning and C.F.O.  PepsiCo
                               Wines and Spirits. Ms. Jessup is 42 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 49 years of age.

John Perillo                   Vice President - Operations of the Company
                               since April 1995 and Vice President-Controller
                               and Chief Financial Officer of the Company
                               from April 1990 to July 1995.  Mr. Perillo is 41
                               years of age.

Scott Silverstein              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 1995. Prior to joining the
                               Company,  Mr.  Silverstein  was an attorney with
                               the law firm of  Hutton  Ingram  Yuzek  Gainen
                               Carroll & Bertolotti from April 1990 until July 
                               1993. Prior thereto, he was an attorney with
                               the  law  firm  of Shea & Gould. Mr. Silverstein
                               is the son-in-law of Mr. Shorin, the Company's
                               Chairman of the Board, Chief Executive Officer
                               and President. Mr. Silverstein is 36 years of
                               age.

                                       15
<PAGE>





ITEM 2.  PROPERTIES

     The location and general  description of the principal  properties owned or
leased by the Company are as follows:
<TABLE>
<CAPTION>

                                                                                          Owned or Leased;
                                                                 Area/Facility                If Leased,
      Location                   Type of Facility                Square Footage           Expiration Year

<S>                                                                 <C>
Duryea, Pennsylvania           office and warehouse                  60,000                 Leased; 2000

Scranton, Pennsylvania          manufacturing plant                  41,000                    Owned

Cork, Ireland                   manufacturing plant                 101,000                    Owned*
                                    and office

New York, New York               executive offices                   60,000                 Leased; 2010

Milton Keynes, United            warehouse/office                    10,000                 Leased; 2014
Kingdom
</TABLE>

     The Company also leases offices in Canada,  Brazil,  Argentina,  Mexico and
Italy.  The Company  believes that its active  facilities are in good repair and
are suitable for its needs for the foreseeable future.

     * In April 1998, the Company entered into a contract to sell this property.
The Company  intends to lease back a small  portion of this  facility for office
space.


ITEM 3.  LEGAL PROCEEDINGS

     In August 1996,  the Company was named a defendant in a class action in the
United States District Court for the Eastern  District of New York (the "Court")
entitled Sullivan,  et.al. v. The Topps Company, Inc. No. CV-96-3779 (EDNY) (the
"Action"). The Action alleged, among other things, that the Company violated the
federal  Racketeer  Influenced and Corrupt  Organizations 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,  as well as  several  of its  principal  licensors,  was
separately sued in its home state 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.  On  August  21,  1997 the Court  entered a  judgment
granting  the  Company's   motion  to  dismiss  the  complaint  with  prejudice.
Thereafter,  the plaintiffs  filed a Motion to Alter,  Amend and Vacate Judgment
and for Leave to File Amended Complaint.  The Company opposed the motion and, by
Memorandum and Order dated April 28, 1998, the Court denied  plaintiffs'  motion
in all respects.

                                       16
<PAGE>



     In November 1996,  Teamsters  Local 229 (the "Union") filed an unfair labor
practice charge with the National Labor Relations Board (the "NLRB") relating to
the Duryea plant closing. In April 1997, the NLRB issued a complaint against the
Company  based upon the Union's  charge,  alleging  that the Company  refused to
bargain  over its decision to close the Duryea  plant.  On November 25, 1997 the
parties entered into a Settlement  Agreement and Release,  settling this matter.
Under the Settlement  Agreement and Release,  all individuals who worked for the
Company in 1996 and were  affected  by the  closure of Duryea were paid $450 for
each full year of service to the Company,  provided such individuals  executed a
release.  Individuals  who did not work during 1996,  but who  retained  certain
recall rights,  received a lump sum payment of $1,500,  provided they executed a
release. Based on the Settlement Agreement and Release, on December 10,1997, the
NLRB signed an order  approving  withdrawal of the unfair labor practice  charge
and dismissing the complaint. As of February 28, 1998, all amounts due under the
Settlement Agreement have been paid.


     The Company is a defendant in several other civil actions which are routine
and incidental to its business. In management's opinion, after consultation with
legal counsel, these actions are not likely to have a material adverse effect on
the Company's consolidated financial condition or results of operations.

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

         None

                                       17
<PAGE>

                                     PART II


ITEM 5.  MARKET FOR COMPANY'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS

     Reference  is made to the data  appearing  on page 30 of the Annual  Report
under the heading "Market and Dividend Information" which is hereby incorporated
by reference.



ITEM 6.  SELECTED CONSOLIDATED FINANCIAL DATA

     Reference  is made to the data  appearing  on page 31 of the Annual  Report
under  the  heading  "Selected  Consolidated  Financial  Data"  which is  hereby
incorporated by reference.



ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS

     Reference is made to the data  appearing on pages 6 through 9 of the Annual
Report  under the heading  "Management's  Discussion  and  Analysis of Financial
Condition and Results of Operations" which is hereby incorporated by reference.



ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     Reference  is made to the data  appearing on pages 10 through 28 and to the
Report of  Independent  Public  Accountants  appearing  on page 29 of the Annual
Report which are hereby incorporated by reference.



ITEM 9.  CHANGES IN ACCOUNTANTS AND DISAGREEMENTS ON
      ACCOUNTING AND FINANCIAL DISCLOSURE

         None.

                                       18
<PAGE>

                                    PART III


ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY

     Information  required by this item appears in Part I of this Report on Form
10-K under the heading "Executive Officers of the Company" and in the 1998 Proxy
Statement and is hereby incorporated by reference.



ITEM 11. EXECUTIVE COMPENSATION

     Information  required by this item appears in the 1998 Proxy  Statement and
is hereby incorporated by reference.



ITEM 12. SECURITY OWNERSHIP  OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     Information  required by this item appears in the 1998 Proxy  Statement and
is hereby incorporated by reference.




ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Information  required by this item appears in the 1998 Proxy  Statement and
is hereby incorporated by reference.

                                       19
<PAGE>

                                     PART IV



ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)(1&2) Financial Statements and Financial Statement Schedules

         See index on page 22.




(3)      Listing of Exhibits

         See index on pages 23-25.




(b)      Reports on Form 8-K
 
         None










                                       20
<PAGE>

                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Dated:  May 28, 1998                            THE TOPPS COMPANY, INC.
 
                                                       Registrant



                                                ___________________________
                                                      Arthur T. Shorin
                                                 Chairman of the Board,
                                           Chief Executive Officer and President


     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Report  has been  signed on the day of May,  1998 by the  following  persons  on
behalf of the Registrant and in the capacities indicated.


/s/       Arthur T. Shorin              /s/       Catherine K. Jessup
          Arthur T. Shorin                        Catherine K. Jessup
       Chairman of the Board,             Vice President-Chief Financial Officer
Chief Executive Officer and President            (Principal Financial and
    (Principal Executive Officer)                  Accounting Officer)


/s/       Seymour P. Berger             /s/         David M. Mauer
          Seymour P. Berger                         David M. Mauer
              Director                                 Director
 

/s/        Allan A. Feder               /s/         Jack H. Nusbaum
           Allan A. Feder                           Jack H. Nusbaum
              Director                                   Director

/s/     Stephen D. Greenberg            /s/         Stanley Tulchin
        Stephen D. Greenberg                        Stanley Tulchin
Director                                                Director

/s/       Wm. Brian Little
          Wm. Brian Little
              Director






                                       21
<PAGE>

                             THE TOPPS COMPANY, INC.
                      FORM 10-K ITEM 14(a)(1), (2) AND (3)
              LIST OF FINANCIAL STATEMENTS, SCHEDULES AND EXHIBITS


(a)(1) Index to Financial Statements:
 
     The  following  Consolidated  Financial  Statements  included in the Annual
     Report are hereby incorporated by reference to Item 8:
 
        Consolidated  Statements  of  Operations  -- Years  Ended March 2, 1996,
     March 1, 1997 and February 28, 1998.
 
        Consolidated Balance Sheets -- March 1, 1997 and February 28, 1998.
 
        Consolidated  Statements  of Cash  Flows -- Years  Ended  March 2, 1996,
     March 1, 1997 and February 28, 1998.
 
        Consolidated  Statements of Stockholders' Equity -- Years Ended March 2,
        1996, March 1, 1997 and February 28, 1998.

        Notes to Consolidated Financial Statements.

        Report of Independent Public Accountants.



(a)(2) Index to Independent Public Accountants'
         Report and Financial Statement Schedules                       Page No.

        Report of Independent Public Accountants......................... S-1

        Schedule  VIII -- Valuation and Qualifying Accounts - Years
        Ended March 2, 1996, March 1, 1997 and February 28, 1998......... S-2
 
        Schedules  other than those  listed  above are omitted  because they are
        either not required or not  applicable  or the required  information  is
        shown in the Consolidated Financial Statements or Notes thereto.




                                       22
<PAGE>

(a)(3)  Index to Exhibits

            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 3, 1991).

            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 3, 1991).

            4.1  -  Rights  Agreement,  dated  as  of  December  3,  1991,  with
                    Manufacturers   Hanover  Trust  Company,   as  rights  agent
                    (Incorporated  by reference to Exhibit 4.1 to the  Company's
                    Report on Form 8-K dated December 3, 1991).

            10.1 -  The Topps Company, Inc. Annual Bonus Plan.

            10.2 -  Retirement Plan and Trust as amended and restated  effective
                    February  28,  1993   (Incorporated   by  reference  to  the
                    Company's  Annual  Report on Form 10-K for the  fiscal  year
                    ended February 26, 1994).

            10.3 -  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)).

            10.4 -  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).

            10.5 -  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).

            10.6 -  Memorandum of Agreement with Major League  Baseball  Players
                    Association dated April 10, 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).

            10.7 -  Settlement  Agreement  with Major League  Baseball  Players
                    Association  (Incorporated  by  reference  to the  Company's
                    Annual  Report  on Form  10-K  for  the  fiscal  year  ended
                    February 26, 1994).

            10.8 -  Employment  Agreement with Arthur T. Shorin (Incorporated by
                    reference  to  Exhibit  10.2 to the  Company's  Registration
                    Statement on Form S-3 (No. 33-43567)).

            10.9 -  Amendment  to  Employment  Agreement  with Arthur T. Shorin
                    dated May 18, 1994  (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).

                                       23
<PAGE>

Index to Exhibits (continued)

            10.10 - 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).
 
            10.11 - Retail  License  Agreement with NBA  Properties,  Inc. dated
                    July 25, 1995  (Incorporated  by reference to the  Company's
                    Quarterly Report on Form 10-Q for the quarter ended November
                    25, 1995).

            10.12 - 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).

            10.13 - Amended and Restated 1994 Non-Employee Director Stock Option
                    Plan  (Incorporated by reference to the Company's 1998 Proxy
                    Statement filed on May 28,1998).

            10.14 - Agreement for the acquisition of the issued share capital of
                    Merlin  Publishing  International  plc  dated  May 17,  1995
                    (Incorporated by reference to the Company's Annual Report on
                    Form 10-K for the fiscal year ended February 25, 1995).

            10.15  -  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).

            10.16 - 1996 Stock  Option  Plan and form of  agreement  pursuant to
                    1996 Stock  Option Plan.  (Incorporated  by reference to the
                    Company's  Annual  Report on Form 10-K for the  fiscal  year
                    ended March 2, 1996).

            10.17 - Amendment  to  Employment  Agreement  with Arthur T. Shorin
                    dated  May  22,  1996.  (Incorporated  by  reference  to the
                    Company's  Annual  Report on Form 10-K for the  fiscal  year
                    ended March 2, 1996).

            10.18 -  Amendment  to  Employment  Agreement  with Arthur T. Shorin
                     dated  May  21, 1997  (Incorporated  by  reference  to  the
                     Company's Annual  Report on Form 10-K for the  fiscal  year
                     ended March 1,1997).

            10.19 - License  Agreement and Letter Amendment  thereto between the
                    Football  Association  Premier  League  Limited  and  Merlin
                    Publishing  International  PLC dated August 3, 1994 and July
                    2, 1996,  respectively  (Incorporated  by  reference  to the
                    Company's  Annual  Report on Form 10-K for the  fiscal  year
                    ended March 1, 1997).

                                       24
<PAGE>

Index to Exhibits (continued)

            10.20 - Retail  Product  License  Agreement  with the  Major  League
                    Baseball   Properties,   Inc.   dated   September  28,  1995
                    (Incorporated by reference to Exhibit 10.31 to the Company's
                    Quarterly  Report on Form 10-Q for the quarter  ended August
                    30, 1997.)

            10.21 - Credit  Agreement, dated  May 11,  1998,  between The  Topps
                    Company, Inc and The Chase Manhattan Bank.*

            10.22 - Consulting  Agreement  between The Topps  Company,  Inc and 
                    Seymour Berger dated December 31, 1997.*

            10.23 - Amended and  Restated  Manufacturing  Agreement  between The
                    Topps Company, Inc and Hershey Foods Corporation, a Delaware
                    corporation, dated March 13, 1998.*

            10.24 - Ammendment to  Employment  Agreement with  Arthur T.  Shorin
                    dated May 27, 1998.*

            13  -   Annual  Report (Except  for  those   portions   specifically
                    incorporated  by  reference,   the  1998  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.*

            23  -   Consent of Independent Public Accountants.*

            27  -   Financial Data Schedule.*






            * Filed herewith.


                                       25
<PAGE>

                          INDEPENDENT AUDITORS' REPORT
                  ON CONSOLIDATED FINANCIAL STATEMENT SCHEDULE







The Topps Company, Inc.:

We have audited the consolidated  balance sheets of The Topps Company,  Inc. and
Subsidiaries  as of  February  28,  1998  and  March  1,  1997  and the  related
consolidated  statements of operations,  stockholders' equity and cash flows for
each of the three years in the period ended  February 28, 1998,  and have issued
our report  thereon  dated  April 3, 1998 and May 11,  1998;  such  consolidated
financial  statements  and report are  included  in your 1998  Annual  Report to
Stockholders and are incorporated herein by reference.  Our audits also included
the consolidated  financial  statement  schedule of The Topps Company,  Inc. and
Subsidiaries  listed in Item 14. This consolidated  financial statement schedule
is the  responsibility  of the Company's  management.  Our  responsibility is to
express  an opinion  based on our  audits.  In our  opinion,  such  consolidated
financial statement schedule, when considered in relation to the basic financial
statements  taken  as a whole,  present  fairly  in all  material  respects  the
information set forth therein.





Deloitte & Touche LLP
New York, New York
April 3, 1998
May 11, 1998
















                                       S-1

<PAGE>
                    THE TOPPS COMPANY, INC. AND SUBSIDIARIES
                SCHEDULE VIII. VALUATION AND QUALIFYING ACCOUNTS
                             (Amounts in thousands)

<TABLE>
<CAPTION>
<S>                                       <C>                <C>                <C>              <C>                     <C>        
             Column A                     Column B                  Column C                      Column D             Column E     
-----------------------------------    ----------------    ---------------------------------    ---------------     ----------------
                                           Balance           Charged to         Charged                                 Balance
                                        at Beginning         Costs and          Against            Additions             At End
           Description                    of Period           Expenses           Sales           (Deductions)          of Period
                                       ----------------    ---------------   ---------------    ----------------     ---------------
Year Ended March 2, 1996:
   Amortization of Sports,
      Entertainment and
      Proprietary Products                     $23,333             $1,610                                                   $24,943
  Amortization of Other
      Intangible Assets                          7,199                702                                                    $7,901
                                       ----------------    ---------------                                           ---------------
                                               $30,532             $2,312                                                   $32,844
                                       ================    ===============                                           ===============

  Allowance for Estimated Losses
     on Sales Returns                          $12,920                              $53,256           $(44,053) (a)         $22,123
                                       ================                      ===============    ================     ===============

  Inventory Valuation
     Adjustment                                $29,425             $7,082                             $(13,092) (b)         $23,415
                                       ================    ===============                      ================     ===============

====================================================================================================================================

Year Ended March 1, 1997:
   Amortization of Sports,
      Entertainment and
      Proprietary Products                     $24,943             $1,932                                                   $26,875
  Amortization of Other
      Intangible Assets                          7,901                717                                 $(36)              $8,582
                                       ----------------    ---------------                      ----------------     ---------------
                                               $32,844             $2,649                                 $(36)             $35,457
                                       ================    ===============                      ================     ===============
  Allowance for Estimated Losses
     on Sales Returns                          $22,123                              $46,096           $(44,980) (a)         $23,239
                                       ================                      ===============    ================     ===============

  Inventory Valuation
     Adjustment                                $23,415             $6,418                             $(11,381) (b)         $18,452
                                       ================    ===============                      ================     ===============

====================================================================================================================================

Year Ended February 28, 1998:
   Amortization of Sports,
      Entertainment and
      Proprietary Products                     $26,875             $1,898                                                   $28,773
  Amortization of Other
      Intangible Assets                          8,582                720                                                    $9,302
                                       ----------------    ---------------                                           ---------------
                                               $35,457             $2,618                                                   $38,075
                                       ================    ===============                                           ===============

  Allowance for Estimated Losses
     on Sales Returns                          $23,239                              $35,468           $(39,449) (a)         $19,258
                                       ================                      ===============    ================     ===============

  Inventory Valuation
     Adjustment                                $18,452             $5,340                             $(15,842) (b)          $7,950
                                       ================    ===============                      ================     ===============

====================================================================================================================================
</TABLE>
(a) Returns charged against provision, net of recoveries.
(b) Disposals, net of recoveries
                                                                  S-2