Exhibit 99.1- Press Release of Candie's, Inc.
dated December 15, 2003.
Candie's, Inc. Reports Third Quarter Fiscal 2004 Results
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