PURCHASE, N.Y.--(BUSINESS WIRE)--June 15, 1999--Candie's, Inc. (Nasdaq/NMS:CANDE - news; ``the Company'') today announced that a Special Committee of its Board of Directors has been appointed to investigate certain issues that have prevented completion of the audit of the Company's financial statements for the fiscal year ended January 31, 1999, and preparation of financial statements for subsequent periods.
The Special Committee has retained an independent accounting firm and law firm to assist in its investigation. The Company is diligently working to provide the Special Committee and its experts with the information they request as part of the Company's goal of having its fiscal year 1999 audit completed as soon as possible.
The Company also announced that the Company's Controller, Frank Marcinowski, has assumed the Chief Financial Officer's responsibilities on an interim basis until a successor to David Golden is appointed.
The Company also noted that its inability to complete its fiscal year 1999 audit has prevented it from filing its Form 10-K for fiscal 1999 and Form 10-Q for the quarter ended April 30, 1999, which is part of the maintenance requirement for continued listing of its common stock on the Nasdaq Stock Market. The Company intends to ask Nasdaq for a temporary exception to this maintenance requirement.
In addition, The Company announced that during the past several weeks, several class action complaints have been filed in the United States District Court for the Southern District of New York against the Company and certain of its current executive officers and directors and a former executive officer. The complaints, which the Company anticipates will be consolidated, allege, among other things, that the defendants misrepresented or omitted to state material facts concerning the Company's business and financial condition.
Commenting on these issues, Neil Cole, the Company's Chief Executive Officer, stated ``the Company has a strong balance sheet and sufficient capital to fund its operations for the foreseeable future. Our banks are very supportive and continue to provide our working capital requirements. We look forward to resolving the issues being investigated by the Special Committee as expeditiously as possible. Of course, the Company intends to defend vigorously all class action lawsuits.''
Neil Cole commented further, ``We are very excited about the fall season, in which we will launch CANDIE'S fragrance supported by a $20 million advertising campaign funded by our licensee, Liz Claiborne, Inc., and CANDIE'S jeanswear through our joint venture with Azteca Production International, Inc. We are also very enthusiastic about the growth of the BONGO brand, which we believe has been enhanced by our fall 1998 acquisition of Michael Caruso & Co., Inc., owner of BONGO branded jeanswear and apparel,'' Neil Cole concluded.
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 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, uncertainty regarding continued market acceptance of current products and the ability to successfully develop and market new products particularly in light of rapidly changing fashion trends, the impact of supply and manufacturing constraints or difficulties particularly in light of the Company's dependence on foreign manufacturers, uncertainties relating to customer plans and commitments, competition, uncertainty regarding the ability of the Company and critical third parties with which it conducts business to achieve year 2000 compliance, uncertainties relating to economic conditions in the markets in which Candie's operates, the ability to hire and retain key personnel, the ability to obtain additional capital if required, the risks of uncertainty of trademark protection and other risks detailed in Candie's Securities and Exchange Commission filings.
Allison Malkin, 914/694-8600