Exhibit 99.1
Press Release of Candie's, Inc.
dated April 20, 2004
Candie's, Inc. Reports Fourth Quarter and Fiscal Year 2004 Results
April 20, 2004 08:39:00 AM ET
Candie's, Inc. 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 Information: Candie's Inc. Richard Danderline, 212-730-0030