NEW YORK--(BUSINESS WIRE)--Dec. 15, 2003--Candie's, Inc. (NASDAQ:
CAND) (the "Company") today announced its results for the quarter
ending October 31, 2003 of its fiscal year ending January 31, 2004
("Third Quarter").
As announced in May 2003, the Company licensed its footwear
operations and is in the process of transitioning itself to a new
licensing business model. As the Company previously anticipated the
transition has and will continue to materially adversely affect the
operating results of its footwear segment for the remainder of Fiscal
2004. The Company continues to operate its BONGO jeans wear subsidiary
("Unzipped") and Bright Star Footwear, LLC, also a wholly-owned
subsidiary, which sells casual men's boots on a direct basis.
The Company reported a consolidated operating loss (before special
charges of $764,000, primarily relating to the discontinuance of
footwear operations) of $327,000 or $.01 per share, and consolidated
operating income (before special charges of $3.6 million) of $1.2
million or $.05 per share for the nine months ended October 31, 2003.
After the special charges noted above, the Company reported a
consolidated net loss of $1.9 million, or $.07 per share for the Third
Quarter and a consolidated net loss of $4.9 million, or $.20 per share
for the nine months ended October 31, 2003, compared to a consolidated
net loss of $788,000, or $.03 per diluted share and consolidated net
income of $3.6 million, or $.14 per diluted share for the prior year
three and nine month periods, respectively.
Primarily as a result of the Company's transition from the
operating footwear business, consolidated net revenues for the Third
Quarter were $27.1 million, as compared to $43.2 million in the prior
year quarter, a decrease of $16.1 million. For the nine months ended
October 31,2003, net revenues were $111.2 million, versus $118.4
million in the comparable prior year period, a decrease of $7.2
million. Also as a result of the transition, consolidated selling,
general & administrative expenses ("S,G&A"), before special charges,
were $6.3 million for the Third Quarter as compared to $10.7 million
in the prior year quarter, a decrease of $4.4 million or 41.6%. The
Company anticipates further significant reductions in comparable S,G&A
expenses in the fourth quarter as the transition is completed.
In connection with the ongoing licensing business, the Company
reported an increase of $374,000 in licensing income for the Third
Quarter to $1.8 million from $1.4 million in the comparable prior year
period. The nine month results also reflected net revenue gains in
licensing of $621,000 to $4.8 million from $4.2 million in the
comparable period for the prior year. Comparable licensing income
increased $1.0 million, as the prior year nine month period included
$414,000 of royalties the Company received from Unzipped prior to its
acquisition. The increase was due primarily to revenue generated by
new licenses.
Neil Cole, President and CEO stated, "Our transition out of the
operating footwear business will be complete by the end of this fiscal
year. Our new business model leverages our valuable CANDIE'S(R) and
BONGO(R) brands and we look forward to a stable and profitable company
in the next fiscal year and beyond."
About Candie's, Inc.
Candie's, Inc. is in the business of licensing the CANDIE'S and
BONGO trademarks on a variety of young women's footwear, apparel and
fashion products, and is a leading designer, distributor and marketer
of jeans wear under the BONGO brand through its wholly owned
subsidiary, Unzipped Apparel, LLC. Through its wholly owned subsidiary
Brightstar Footwear, Inc., the Company also arranges for the
manufacture of footwear products for mass market and discount
retailers under the private label brand of the retailer. For investor
information please visit the corporate web site at
http://www.candiesinc.com.
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995. The statements that 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, uncertainty regarding
the results of the Company's decision to license its footwear
business, 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 relating to the Company's
dependence on foreign manufacturers and suppliers, uncertainties
relating to customer plans and commitments, the ability of licensees
to successfully market and sell branded products, competition,
uncertainties relating to economic conditions in the markets in which
the Company operates, the ability to hire and retain key personnel,
the ability to obtain capital if required, the risks of litigation and
regulatory proceedings, the risks of uncertainty of trademark
protection, the uncertainty of marketing and licensing acquired
trademarks and other risks detailed in the Company's SEC filings. The
words "confident", and similar expressions identify forward-looking
statements. Readers are cautioned not to place undue reliance on these
forward looking statements, which speak only as of the date the
statement was made.
Candie's, Inc.
Condensed Consolidated Statements of Operations (Unaudited)
(000's omitted, except per share data)
Three Months Ended Nine Months Ended
October 31, October 31,
------------------------- -------------------------
2003 2002 2003 2002
------------ ------------ ------------ ------------
Net sales $25,305 $41,792 $106,382 $114,200
Licensing income 1,808 1,434 4,827 4,206
------------ ------------ ------------ ------------
Net revenue 27,113 43,226 111,209 118,406
Cost of goods sold 21,189 31,839 84,322 84,331
------------ ------------ ------------ ------------
5,924 11,387 26,887 34,075
Selling, general
and administrative 6,251 10,703 25,668 28,326
Special charges 764 207 3,648 300
------------ ------------ ------------ ------------
7,015 10,910 29,316 28,626
------------ ------------ ------------ ------------
Operating (loss)
income (1,091) 477 (2,429) 5,449
Other expenses:
Interest expense 746 1,265 2,462 2,250
Equity income
in joint venture - - - (250)
------------ ------------ ------------ ------------
746 1,265 2,462 2,000
------------ ------------ ------------ ------------
(Loss) income
before income
taxes (1,837) (788) (4,891) 3,449
Income tax expense
(benefit) 47 - 47 (139)
------------ ------------ ------------ ------------
Net (loss) income $(1,884) $(788) $(4,938) $3,588
============ ============ ============ ============
(Loss) earnings per
share:
- Basic $(0.07) $(0.03) $(0.20) $0.15
============ ============ ============ ============
- Diluted $(0.07) $(0.03) $(0.20) $0.14
============ ============ ============ ============
Weighted average number
of common shares:
- Basic 25,372 24,845 25,153 23,249
============ ============ ============ ============
- Diluted 25,372 24,845 25,153 25,591
============ ============ ============ ============
Selected Balance
Sheet Data: 10/31/2003 1/31/2003
------------------------------- -------------
Current Assets $28,852 $51,816
Current Liabilities $25,241 $45,921
Stockholders' Equity $25,051 $29,011
Working Capital $3,611 $5,895
Current Ratio 1.14:1 1.13:1
CONTACT: Candie's Inc.
Richard Danderline, 212-730-0030
SOURCE: Candie's, Inc.