NEW YORK, Dec 8, 2004 (BUSINESS WIRE) -- Candie's Inc. (NASDAQ:
CAND) (the "Company") today announced its results for the third
quarter and nine months ended October 31, 2004 of its fiscal year
ending January 31, 2005. The Company reported consolidated net income
of $603,000 or $0.02 per diluted share for the quarter, as compared to
a loss of $1.9 million or $0.07 loss per share for the prior year
quarter. Licensing income for the quarter increased by 50.7% to $2.7
million from $1.8 million in the prior year quarter and operating
expenses decreased by 31.2% from $7.0 million to $4.8 million.
The Company is completing the process of transforming from a
footwear and jeanswear operating company to a multi-brand licensing
and management business. The Company licensed its CANDIE'S(R) and
BONGO(R) footwear operations in May 2004, and effective last August,
it licensed BONGO jeanswear, which will begin generating licensing
income as of the fourth quarter of this year and be fully transitioned
by January 31, 2005. As previously announced in November 2004, the
Company acquired the designer trademark BADGLEY MISCHKA(R), and as
more recently announced, the Company has licensed CANDIE'S to Kohl's
Department Stores, with plans to launch CANDIE'S as a lifestyle brand
in Fall 2005, with exclusivity in all categories except optical by the
end of 2006.
Chairman and CEO Neil Cole said "Our third quarter numbers begin
to reflect the potential profitability of the licensing business under
our new brand management model. We are very excited about the recently
announced retail direct license with Kohl's for CANDIE'S, and have
completed the transition of BONGO jeans wear to our new licensee.
These two significant licenses, when added to the potential that we
see for BADGLEY MISCHKA, provide a solid platform for sustained growth
in the future."
For the nine months ended October 31, 2004, the Company reported
consolidated net income of $1.2 million versus a loss of $4.9 million
in the prior year period. Licensing income increased nearly 40% to
$6.7 million from $4.8 million in the prior year and operating
expenses decreased from $29.3 million to $13.7 million.
The Company also announced that beginning January 1, 2005, it will
change its fiscal year to a calendar year beginning on January 1st and
ending on December 31st. The change is designed to align the Company's
financial reporting with that of its licensees. As a result, the
current fiscal year will be reported as an eleven month period ending
on December 31, 2004.
Shareholders are invited to listen to the conference call
scheduled for today at 10:00 AM Eastern Daylight Time. The call will
be web cast live via the Internet and can be accessed by logging on to
www.candiesinc.com and clicking on the "Live Web cast" 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 entering the passcode 48299476. The replay will be available
through December 22, 2004.
About Candie's, Inc.
Candie's, Inc. is in the business of licensing the CANDIE'S, BONGO
and BADGLEY MISCHKA trademarks on a variety of women's apparel,
footwear and accessories. 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. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
Three Months Ended Nine Months Ended
October 31, October 31,
--------------------------------------------
2004 2003 2004 2003
(000's omitted, except per share data)
Net sales $ 10,679 $ 25,305 $ 54,558 $106,382
Licensing income 2,725 1,808 6,745 4,827
-------- -------- -------- --------
Net revenues 13,404 27,113 61,303 111,209
Cost of goods sold 7,320 21,189 44,383 84,322
-------- -------- -------- --------
Gross profit 6,084 5,924 16,920 26,887
Operating expenses:
Selling, general and
administrative expenses 4,824 6,251 13,574 25,668
Special charges - 764 99 3,648
-------- -------- -------- --------
4,824 7,015 13,673 29,316
-------- -------- -------- --------
Operating income (loss) 1,260 (1,091) 3,247 (2,429)
Interest expense 657 746 2,093 2,462
-------- -------- -------- --------
Income (loss) before
income taxes 603 (1,837) 1,154 (4,891)
Income tax expense - 47 - 47
-------- -------- -------- --------
Net income (loss) $ 603 $ (1,884) $ 1,154 $ (4,938)
======== ======== ======== ========
Earnings (loss)
per common share:
Basic $ 0.02 $ (0.07) $ 0.04 $ (0.20)
======== ======== ======== ========
Diluted $ 0.02 $ (0.07) $ 0.04 $ (0.20)
======== ======== ======== ========
Weighted average
number of common
shares outstanding:
Basic 27,264 25,372 26,633 25,153
======== ======== ======== ========
Diluted 29,462 25,372 28,037 25,153
======== ======== ======== ========
Selected Balance Sheet Data:
10/31/2004 01/31/2004
Current Assets 10,675 25,655
Total Assets 60,689 74,845
Current Liabilities 14,673 29,905
Shareholders' Equity 24,016 18,868
SOURCE: Candie's, Inc.
Candie's, Inc.
Richard Danderline, 212-819-2069
rdanderline@candiesinc.com