NEW YORK, Apr 24, 2002 (BUSINESS WIRE) --Announces Accretive Acquisition of Bongo Jeans Business
Increases EPS Guidance to $0.44-$0.47 from $0.40 for Fiscal 2003
Candie's, Inc. (NASDAQ: CAND) ( the "Company") today announced operating results
for the fourth quarter and full fiscal year ended January 31, 2002.
Additionally, the Company announced this morning in a separate release, that it
entered into an agreement to purchase Unzipped Apparel, LLC, the Company's
jeanswear licensee for the Bongo trademark.
Net revenues for the quarterly period increased 6.4% to $18.9 million versus
$17.8 million in the year-ago quarter. Sales through the Company's 13 retail
stores increased 30.4% to $2.3 million, driven by four new stores and a
comparable store sales increase of 3.6%. Licensing revenues for the period were
$1.1 million as compared to $0.9 million in the prior year quarter.
Gross profit margin for the fourth quarter increased 480 basis points to 24.2%,
versus the prior year's level of 19.4%. The Company's SG&A margin improved 750
basis points to 38.6% of net revenues, versus 46.1% in the year-ago quarter.
This improvement reflects the Company's on-going efforts to reduce its fixed
cost structure. Non-recurring items in the quarter totaled $1.4 million. The
Company's operating loss before non-recurring items, was $2.7 million versus a
year-ago loss of $4.7 million.
The Company reported a loss per fully diluted share for the fourth quarter of
$0.19 versus a per-share loss of $0.38 in the fourth quarter of the prior year.
For the full year ended January 31, 2002, the Company recorded net revenues of
$101.4 million, as compared to $95.2 million in the comparable period of the
prior year. Increases in sales of Candie's women's footwear, Company-owned
retail stores, and private label products were offset by sales decreases in
other divisions. The Company's retail store sales during the year increased
63.9% to $8.2 million from $5.0 million in fiscal 2001. Comparable store sales
increased 21.0% for the full year. Licensing income during the year was $5.1
million as compared to $4.5 million in the prior year. The Company reported
full-year operating income, before non-recurring items, of $0.2 million versus a
loss of $4.5 in the prior year. The loss per fully diluted share for the year
was $0.12 versus a loss of $0.43 in the prior year.
Neil Cole, the Company's Chief Executive Officer, said, "We are very excited
about the future of our business which, in the past year, has seen improvements
in all aspects. We focused on product, improved our operational efficiency,
tightened financial controls, and initiated a great retail development strategy
with Designs, Inc. Our Candie's and Bongo brands account for over $500 million
of sales at the retail level, which gives us great opportunities to deliver
superior financial returns to our shareholders."
Mr. Cole continued "To execute on our strategy, we have signed an agreement to
purchase the Bongo jeans business from our joint venture partner, Sweet
Sportswear. While we had an obligation to purchase this business in January of
2003, both companies believe that the timing is right to integrate now. We
believe that Bongo will contribute an additional $50 million in revenues and
$0.04 to $0.07 of earnings during the remainder of the year. Further, we have an
excellent opportunity to generate efficiencies between our companies as well as
grow the business. As a result, we believe that accretion in year two will
accelerate significantly."
The Company is adjusting prior financial guidance for the fiscal year ended
January 31, 2003 to reflect the impact of the acquisition. The Company now
believes that it is likely to report net revenues in the range of $160 million
to $170 million and earnings per fully-diluted share of between $0.44 and $0.47.
For the first quarter, ending April 30, 2002, the Company expects to report net
revenues of approximately $24 million and earnings of approximately $0.02. For
the second quarter, the Company believes revenues are likely to range from
$50-$52 million and earnings between $0.18 and $0.22. Additionally, the Company
believes that long-term goals for net revenues and earnings growth of
approximately 20% are appropriate and achievable targets.
About Candie's, Inc.
Candie's Inc. is a leading designer and marketer of young women's footwear,
apparel and accessories. The Company distributes its products under the Candie's
and Bongo brands through department and specialty stores nationwide, as well as
through 13 Company-owned stores, a web store and specialty stores
internationally. Candie's also arranges for the manufacture of footwear products
for mass market and discount retailers under the private label brand of the
retailer or other trademarks owned or licensed by Candie's. Additionally, the
Candie's brand is licensed for the manufacture, sale and distribution of
apparel, fragrances and cosmetics, handbags, sunglasses, watches and cell phone
accessories, and the Bongo brand for accessories and kid's clothing. Candie's
Inc. operates its websites at www.candies.com and www.bongo.com. For investor
information please visit the corporate web site at www.candiesinc.com.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995. The statements which are not historical facts contained in this press
release are forward looking statements that involve a number of known and
unknown risks, uncertainties and other factors all of which are difficult or
impossible to predict and many of which are beyond the control of the Company,
which may cause the actual results, performance or achievements of the Company
to be materially different from any future results, performance or achievements
expressed or implied by such forward looking statements. Such factors include,
but are not limited to the risks detailed in the Company's Securities and
Exchange Commission filings, and uncertainty associated with the impact on the
Company in relation to recent events discussed in the Company's Form 10-K for
Fiscal 2001. The words "believe", "expect", "anticipate", "seek" and similar
expressions identify forward-looking statements. Readers are cautioned not to
place undue reliance on these forward looking statements.
Candie's, Inc.
Condensed Consolidated Statements of Operations
(000's omitted, except per share data)
Three Months Ended Twelve Months Ended
January 31, January 31,
-------------------- ----------------------
2002 2001 2002 2001
--------- ---------- ----------- ----------
Net sales $ 17,779 $ 16,912 $ 96,327 $ 90,667
Licensing income 1,147 878 5,075 4,527
--------- ---------- ----------- ----------
Net revenue 18,926 17,790 101,402 95,194
Cost of goods sold 14,355 14,332 72,642 71,186
--------- ---------- ----------- ----------
Gross Profit 4,571 3,458 28,760 24,008
Selling, general and
administrative 7,300 8,202 28,514 28,508
Special charges 1,428 2,297 1,791 2,674
--------- ---------- ----------- ----------
8,728 10,499 30,305 31,182
--------- ---------- ----------- ----------
Operating income (loss) (4,157) (7,041) (1,545) (7,174)
Other expenses:
Interest expense - net 226 343 1,175 1,661
Equity (income) loss
in joint venture (500) (17) (500) (701)
--------- ---------- ----------- ----------
(274) 326 675 960
--------- ---------- ----------- ----------
Income (loss) before
income taxes (3,883) (7,367) (2,220) (8,134)
Provision for
income taxes 62 5 62 66
--------- ---------- ----------- ----------
Net income (loss) $ (3,945) $ (7,372) $ (2,282) $ (8,200)
========= ========== =========== ==========
Earnings (loss)
per share:
- Basic $ (0.19) $ (0.38) $ (0.12) $ (0.43)
========= ========== =========== ==========
- Diluted $ (0.19) $ (0.38) $ (0.12) $ (0.43)
========= ========== =========== ==========
Weighted average #
of common shares:
- Basic 20,265 19,229 19,647 19,231
========= ========== =========== ==========
- Diluted 20,265 19,229 19,647 19,231
========= ========== =========== ==========
CONTACT:
Candie's, Inc.
Neil Cole, 212/730-0030
or Richard Danderline, 914/769-8600
or
(Investor Relations)
Integrated Corporate Relations, Inc.
James Palczynski, 203/222-9013
Copyright (C) 2002 Business Wire. All rights reserved.