NEW YORK--(BUSINESS WIRE)--April 20, 2004--Candie's, Inc. (NASDAQ:
CAND) (the "Company") today announced its results for the quarter
("Fourth Quarter") and fiscal year ending January 31, 2004 ("Fiscal
2004").
As previously announced in May 2003, the Company has licensed its
footwear operations. As of the end of Fiscal 2004, the Company has
completed the transition of its footwear business to the new licensing
model, discontinuing all activity in its operating wholesale and
retail footwear divisions, including the closing of all of its retail
stores. The Company continues to operate its BONGO jeans wear division
through its wholly-owned subsidiary Unzipped Apparel, LLC ("Unzipped")
and Bright Star Footwear, LLC, also a wholly-owned subsidiary, which
sells casual men's boots on a direct basis.
Licensing income, which is the core of the Company's business
under its new licensing model, was $1.75 million for the Fourth
Quarter, as compared to $934,000 in the prior year quarter, an
increase of 87.0%. For Fiscal 2004, licensing income was $6.6 million
as compared to $5.1 million in the prior fiscal year, an increase of
27.9%. Comparable licensing income for Fiscal 2004 increased $1.8
million, or 39.1% as the prior fiscal year 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.
The Company anticipates significant increases in licensing income for
Fiscal 2005, its first full year under the licensing model.
Selling, general and administrative expenses for the Fourth
Quarter in the footwear segment (presently transitioned to the new
licensing model) decreased by $2.4 million, or 32.4% to $4.9 million
from $7.3 million in the comparable prior year quarter. With the
operating footwear business now fully transitioned to the licensing
model, the Company anticipates that selling, general and
administrative expenses will continue to decrease significantly during
Fiscal 2005, when compared to Fiscal 2004.
As anticipated, this transition has adversely impacted the
operating results of the footwear segment for the Fourth Quarter and
Fiscal 2004.
The Company reported a consolidated net loss of $6.4 million, or
$.25 per share for the Fourth Quarter and a consolidated net loss of
$11.3 million, or $.45 per share for Fiscal 2004, compared to a
consolidated net loss of $7.5 million, or $.30 per diluted share and a
consolidated net loss of $3.9 million, or $.17 per diluted share for
the prior year quarter and fiscal year, respectively.
Consolidated net sales for the Fourth Quarter were $18.2 million,
as compared to $37.4 million in the prior year quarter. For Fiscal
2004, consolidated net sales were $124.6 million, as compared to
$151.6 million in the prior fiscal year.
Neil Cole, President and CEO commented, "With the transition of
the footwear operating business now complete, we are able to fully
focus on our future, licensing the CANDIE'S(R) and BONGO(R) brands to
their full potential. We are pleased with the increase in licensing
income reported in the Fourth Quarter and for the year, and we
anticipate this strong upward trend to continue in Fiscal 2005 and
beyond. At the same time, beginning in Fiscal 2005, the Company will
realize the full benefit of the substantial reductions in selling,
general and administrative expenses resulting from the new model. We
believe that with the licensing model, which brings in sustained
guaranteed income through royalties without the risk and uncertainty
of the operating footwear business, the Company is now positioned for
a profitable and stable future."
Shareholders are invited to listen to the conference call
scheduled for today at 10:00 AM Eastern Daylight Time. The call will
be webcast live via the Internet and can be accessed by logging on to
www.candiesinc.com and clicking on the "Live Webcast" link on the
"Investor's Overview" page. The call will be archived on the web and a
replay can also be accessed via telephone by dialing (888) 286-8010
and will be available through April 27, 2004.
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 "believe", "anticipate," "expect", "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
(000's omitted, except per share data)
Three Months Ended Twelve Months Ended
January 31, January 31,
--------------------- -------------------
2004 2003 2004 2003
---------- ---------- --------- ---------
Net sales $18,221 $37,443 $124,603 $151,643
Licensing income 1,747 934 6,574 5,140
---------- ---------- --------- ---------
Net revenue 19,968 38,377 131,177 156,783
Cost of goods sold 18,082 31,975 102,404 116,306
---------- ---------- --------- ---------
1,886 6,402 28,773 40,477
Selling, general and
administrative 6,640 9,546 32,308 37,872
Special charges 981 3,266 4,629 3,566
---------- ---------- --------- ---------
7,621 12,812 36,937 41,438
---------- ---------- --------- ---------
Operating loss (5,735) (6,410) (8,164) (961)
Other expenses:
Interest expense 656 1,123 3,118 3,373
Equity income
in joint venture - - - (250)
---------- ---------- --------- ---------
656 1,123 3,118 3,123
---------- ---------- --------- ---------
Loss before income taxes (6,391) (7,533) (11,282) (4,084)
Provision (benefit) for
income taxes 11 - 58 (139)
---------- ---------- --------- ---------
Net loss $(6,402) $(7,533) $(11,340) $(3,945)
========== ========== ========= =========
Loss per share:
- Basic $(0.25) $(0.30) $(0.45) $(0.17)
========== ========== ========= =========
- Diluted $(0.25) $(0.30) $(0.45) $(0.17)
========== ========== ========= =========
Weighted average #
of common shares:
- Basic 25,265 24,962 25,181 23,681
========== ========== ========= =========
- Diluted 25,265 24,962 25,181 23,681
========== ========== ========= =========
Selected Balance
Sheet Data: 1/31/2004 1/31/2003
--------------------------------------- ----------
Current Assets $ 26,923 $ 51,816
Total Assets $ 73,313 $103,417
Current Liabilities $ 29,990 $ 45,921
Long Term Liabilities $ 24,456 $ 28,505
Stockholders' Equity $ 18,868 $ 29,011
CONTACT: Candie's Inc.
Richard Danderline, 212-730-0030
SOURCE: Candie's, Inc.