Exhibit 99.1
Candie's, Inc. Reports First Quarter of Fiscal Year 2005 Results
NEW YORK--(BUSINESS WIRE)--June 10, 2004--Candie's, Inc. (NASDAQ: CAND) (the
"Company") today announced its results for the quarter ended April 30, 2004
("First Quarter") of its fiscal year ending January 31, 2005 ("Fiscal 2005").
As previously announced, as of the end of Fiscal 2004, the Company had completed
the transition of its footwear business to the new licensing model,
discontinuing all activity in its operating wholesale and retail footwear
divisions. The Company continues to operate its BONGO jeans wear division
through its wholly-owned subsidiary Unzipped Apparel, LLC ("Unzipped") and its
private label men's casual boot business through its wholly-owned subsidiary,
Bright Star Footwear, Inc.
Licensing income was $1.94 million for the First Quarter, as compared to $1.18
million in the prior year quarter, an increase of 64.3%. The Company anticipates
similar increases versus the prior year in licensing income for the remainder of
Fiscal 2005, its first full year under the licensing model.
The Company reported consolidated net income of $33,000, for the First Quarter,
or $.00 per diluted share, as compared to $726,000, or $.03 per diluted share
for the prior year quarter on 26.9 million and 25.1 million diluted shares,
respectively. Consolidated operating income was $729,000 for the First Quarter,
as compared to $1.6 million in the prior year quarter.
Selling, general and administrative expenses for the First Quarter in the
footwear segment (presently transitioned to the new licensing model) decreased
by $5.4 million, or 72.7% to $2.0 million from $7.4 million in the comparable
quarter from the prior year, primarily due to the discontinuance of the
operating footwear business and the transition to a licensing model. The Company
anticipates that selling, general and administrative expenses will continue to
decrease significantly for the remainder of Fiscal 2005,as compared to Fiscal
2004, now that the Company is fully transitioned out of the operating footwear
business to a licensing model.
As announced in a separate press release today, the Company has entered into an
agreement to sell Unzipped to TKO Apparel, Inc. ("TKO") on or before February 1,
2005 for a purchase price based on the tangible net worth of Unzipped at the
time of closing. In addition, the Company announced that it has licensed its
BONGO jeans wear to TKO Apparel, which will begin generating licensing income
upon its effective date of August 2, 2004.
Neil Cole, President and CEO commented, "Our first quarter as a brand management
company begins to hint at the potential of our new business model. With the
addition of the BONGO jeans wear license, and the continuing roll out of
CANDIE'S footwear, we expect royalty income to grow throughout Fiscal 2005 and
beyond. We are continuing to add new licenses in key categories for both BONGO
and CANDIE'S, and are pleased to see increasing customer acceptance of our
products and loyalty to our brands. We are confident that our new business model
is the basis for a profitable 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 June 17, 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. and Subsidiaries
Condensed Consolidated Income Statements
(Unaudited)
Three Months Ended
---------------------------------------
April 30, April 30,
2004 2003
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(000's omitted, except per share data)
Net sales $ 11,837 $ 40,863
Licensing income 1,936 1,178
Net revenue 13,773 42,041
Cost of goods sold 8,831 30,147
Gross profit 4,942 11,894
Selling, general and administrative
expenses 4,114 9,861
Special charges 99 434
Operating income 729 1,599
Other expenses:
Interest expense - net 696 873
Income before income tax provision 33 726
Income tax provision - -
Net income $ 33 $ 726
Earnings per share:
Basic $ 0.00 $ 0.03
Diluted $ 0.00 $ 0.03
Weighted average number of common shares outstanding:
Basic 26,022 25,015
Diluted 26,903 25,054
Selected Balance Sheet Data:
4/30/2004 1/31/2004
Current Assets 19,223 25,655
Total Assets 68,505 74,845
Current Liabilities 22,083 29,905
Stockholders' Equity 19,283 18,868
CONTACT: Candie's Inc.
Richard Danderline, 212-730-0030