8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 1, 2004

The First Years Inc.

(Exact name of registrant as specified in its charter)

Massachusetts	0-7024	04-2149581
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

One Kiddie Drive

Avon, Massachusetts 02322-1171

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (508) 588-1220

TABLE OF CONTENTS

PRESS RELEASE DATED MARCH 1, 2004

Item 7. Financial Statements and Exhibits.

(c) The following exhibits are furnished with this report:

Exhibit Number	Description
99.1	Press Release dated March 1, 2004.

Item 12. Disclosure of Results of Operations and Financial Condition.

On March 1, 2004, the Registrant issued a press release to report its financial results for the quarter ended December 31, 2003. A copy of the press release is attached to this current report on Form 8-K as Exhibit 99.1.

This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.

SIGNATURES

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

	The First Years Inc. (Registrant)
Date: March 2, 2004	By	/s/ John R. Beals John R. Beals, Treasurer and Senior Vice-President- Finance (Chief Financial Officer and Chief Accounting Officer)

EX-99.1

The First Years Inc.
Corporate Headquarters
One Kiddie Drive
Avon, MA 02322-1711
Tel: 508-588-1220
Fax: 508-580-6849
www.thefirstyears.com

Contact: John Beals
Senior Vice President, Finance and Treasurer
(508) 588-1220

THE FIRST YEARS REPORTS FOURTH QUARTER SALES AND YEAR END RESULTS
— Record Sales and Earnings in 2003 —

AVON, Massachusetts, March 1, 2004 – The First Years Inc. (Nasdaq:KIDD), a leading marketer of parenting products for infants and toddlers, today reported sales and net income for the fourth quarter and year ended December 31, 2003.

Net sales for the quarter increased 9% to $35,256,777 versus $32,359,320 for the fourth quarter of 2002. Net income for the quarter increased 79% to $2,492,984 or $0.29 per diluted share compared with $1,389,048 or $0.17 per diluted share in the prior year based on diluted weighted average shares outstanding of 8,571,600 and 8,279,324 respectively.

Net sales for the full year 2003 increased 1% to $135,614,017 versus $134,391,487 for the full year 2002. Net income for the full year increased 23% to $9,781,823 or $1.16 per diluted share compared with $7,937,715 or $0.95 per diluted share in the prior year period based on diluted weighted average shares outstanding of 8,462,178 and 8,368,882, respectively. Annual results for 2003 include a tax benefit of $465,100 or $.06 per diluted share related to the favorable resolution of a state tax matter. Excluding the effect of this non-recurring tax benefit, net income for the full year increased by 17% to $9,316,723 or $1.10 per diluted share.

“Increased sales growth in the fourth quarter was due to the success of new product lines and international sales,” said Ronald J. Sidman, President and Chief Executive Officer of The First Years. “Earnings for the quarter were further enhanced by operational efficiencies and product cost reductions. Overall, we achieved record sales and earnings for the year.”

About The First Years

The First Years Inc. is a leading international marketer of feeding, soothing, play and care products for infants and toddlers. The Company’s distinctive brands include: “The First Years,” licenses from the Walt Disney Company and “Sesame Street®,” licensed from the Sesame Workshop.

Included in this release are certain “forward-looking” statements, involving risks and uncertainties, which are covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements regarding the Company’s financial performance. Such statements are based on management’s current expectations and are subject to certain factors, risks and uncertainties that may cause actual results, events and performance to differ materially from those referred to or implied by such statements. In addition, actual future results may differ materially from those anticipated, depending on a variety of factors, which include, but are not limited to, sales of The First Years® brand, trends in sales of The First Years brand and licensed products, continued success of new Disney character refreshed graphics, continued maintenance of favorable license arrangements, success of market research identifying new product opportunities, successful introduction of new products, continued product innovation, the success of new enhancements to the Company’s brand image, growth in domestic and international sales, ability to attract and retain key personnel, sales and earnings results, and general economic conditions affecting consumer spending, including uncertainties relating to global political conditions, such as terrorism and the conflict with Iraq. Information with respect to important factors that should be considered is contained in the Company’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company does not intend to update any of the forward-looking statements after the date of this release to conform these statements to actual results or to changes in its expectations, except as may be required by law.

The First Years Inc.
Condensed Consolidated Balance Sheets

	December 31,		December 31,
	2003		2002
ASSETS
Current assets:
Cash and cash equivalents	$	24,730,265	$	21,989,782
Accounts receivable, net		25,891,057		21,995,564
Inventories		20,298,164		16,171,842
Prepaid expenses and other assets		801,566		1,631,942
Deferred tax assets		2,157,200		2,196,400
Total current assets		73,878,252		63,985,530
Property, plant, and equipment, net		10,786,503		11,766,370
Total Assets	$	84,664,755	$	75,751,900
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	14,788,716	$	15,259,792
Accrued royalty expenses		1,431,051		1,361,836
Accrued selling expenses		3,107,430		3,251,482
Total current liabilities		19,327,197		19,873,110
Deferred tax liability		1,391,900		1,262,200
Stockholders’ equity		63,945,658		54,616,590
Total Liabilities and Stockholders’ Equity	$	84,664,755	$	75,751,900

The First Years Inc.
Condensed Consolidated Statements of Income

	Three Months Ended				Year Ended
	December 31,				December 31,
	2003		2002		2003			2002
Net Sales	$	35,256,777	$	32,359,320	$	135,614,017		$	134,391,487
Cost of Products Sold		22,070,631		22,008,041		85,448,357			88,281,741
Gross Profit		13,186,146		10,351,279		50,165,660			46,109,746
Selling, General, and Administrative Expenses		9,197,687		8,056,998		35,223,252			32,790,120
Operating Income		3,988,459		2,294,281		14,942,408			13,319,626
Interest Income		65,125		59,967		206,715			134,089
Income before Income Taxes		4,053,584		2,354,248		15,149,123			13,453,715
Provision for Income Taxes		1,560,600		965,200		5,367,300	1		5,516,000
Net Income	$	2,492,984	$	1,389,048	$	9,781,823	1	$	7,937,715
Basic Earnings Per Share	$	0.30	$	0.17	$	1.18	1	$	0.97
Basic Weighted Average Number of Shares Outstanding		8,308,187		8,216,028		8,264,554			8,200,624
Diluted Earnings Per Share	$	0.29	$	0.17	$	1.16	1	$	0.95
Diluted Weighted Average Number of Shares Outstanding		8,571,600		8,279,324		8,462,178			8,368,882

1 – Amounts include a tax benefit of $465,100 related to the favorable resolution of a state tax matter. Excluding the effect of this non-recurring tax benefit, net income for the year ended December 31, 2003 was $9,316,723 or $1.10 per diluted share.