Exhibit 99.1
Press Release of Candie's, Inc.
Dated March 23, 2005
Candie's, Inc. Reports Fourth Quarter and Fiscal Year Ended December 31, 2004
Results Wednesday March 23, 8:56 am ET
NEW YORK--(BUSINESS WIRE)--March 23, 2005--Candie's, Inc. (NASDAQ: CAND - News;
the "Company") announced today its results for the quarter (the "two-month
Fourth Quarter") and 11-month current year ended December 31, 2004 (the
"11-month Current Year").
As previously announced, the Company changed its fiscal year end from January 31
to December 31. As a result, the Fourth Quarter has been reported as a two-month
period and the current fiscal year has been reported as an 11-month period ended
December 31, 2004.
The Company reported consolidated net income of $241,000 or $0.01 per diluted
share for the 11-month Current Year, as compared to a loss of $11.3 million or
$0.45 loss per diluted share for the prior year. Licensing revenue for the
11-month Current Year increased by 30.4% to $8.6 million from $6.6 million in
the prior year and selling, general and administrative expenses decreased by
45.2% from $32.3 million to $17.7 million.
For the two-month Fourth Quarter, the Company reported a consolidated operating
net loss of $314,000 before special charges of $196,000, as compared to a
consolidated operating net loss of $4.8 million before special charges of
$981,000 in the same quarter for the prior year. Special charges in the Fourth
Quarter consisted of $434,000 of legal fees incurred by the Company relating to
litigation involving Unzipped Apparel, LLC ("Unzipped"), its former jeans wear
operations that have now been fully transitioned to a license arrangement, which
was offset by $238,000 of special income resulting from the Company's
termination of certain long term debt payments. The Company reported a
consolidated net loss of $912,000 or $0.03 per diluted share for the Fourth
Quarter compared to a consolidated net loss of $6.4 million, or $0.25 per
diluted share for the prior year quarter.
Licensing revenue was $1.8 million for the two-month Fourth Quarter, as compared
to $1.7 million in the prior year quarter, an increase of 4.5%. Selling, general
and administrative expenses for the two-month Fourth Quarter decreased by $2.5
million, or 37.6% to $4.1 million from $6.6 million in the prior year quarter.
Included in the Company's consolidated operations are the results from the
former jeans wear operations of Unzipped. For the 11-month Current Year,
Unzipped had a net loss of $6.4 million prior to adjustments, compared to a net
loss of $266,000 for the prior year. The Company, however, is guaranteed a
certain profit pursuant to a third-party management agreement with Unzipped's
former manager, Sweet Sportswear, LLC ("Sweet"), consequently, the Company has
offset shortfall payments of $7.6 million and $1.6 million in the current and
prior year, respectively, against cost of goods sold and an $11 million note
payable to Sweet. For the two-month Fourth Quarter, Unzipped had a net loss of
$2.2 million prior to adjustments, compared to a net loss of $2.4 million for
the prior year quarter.
The Company has now completed the process of transforming from a footwear and
jeans wear operating company to a multi-brand licensing and management business.
In December 2004, the Company licensed CANDIE'S(R) to Kohl's Department Stores,
with plans to launch CANDIE'S as a lifestyle brand in Fall 2005 and become
exclusive in all categories except optical by the end of 2006. The BONGO(R)
brand is licensed in 15 categories for women's, kids and men's products,
including for jeans wear and footwear. As previously announced in October 2004,
the Company acquired the designer trademark BADGLEY MISCHKA(R) and has begun to
implement its strategy to license that brand as well with four new licenses and
additional categories planned.
Neil Cole, President and CEO commented, "Our transition to a licensing and
marketing company is finally complete. We are now fully focused on generating
the maximum revenue from our three valuable brands and believe that we have
positioned the Company to achieve sustained growth and profitability in 2005 and
beyond."
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
1-888-286-8010 and entering the passcode 42968486. The replay will be available
through March 30, 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 business, continued market acceptance of the Company's
branded products, 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 risks of litigation 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)
Two Three Eleven Twelve
months months months months
ended ended ended ended
December January December January
31, 31, 31, 31,
2004 2004 2004 2004
Net sales $ 5,851 $18,421 $60,409 $124,803
Licensing revenue 1,826 1,747 8,571 6,574
Net revenues 7,677 20,168 68,980 131,377
Cost of goods sold 3,846 18,282 48,229 102,604
Gross profit 3,831 1,886 20,751 28,773
Operating expenses:
Selling, general and
administrative expenses 4,145 6,640 17,720 32,308
Special charges 196 981 295 4,629
4,341 7,621 18,015 36,937
Operating income (loss) (510) (5,735) 2,736 (8,164)
Interest expense 402 656 2,495 3,118
Income (loss) before income taxes (912) (6,391) 241 (11,282)
Income tax provision - 11 - 58
Net income (loss) $ (912) $(6,402) $ 241 $(11,340)
Earnings (loss) per common share:
Basic $ (0.03) $ (0.25) $ 0.01 $ (0.45)
Diluted $ (0.03) $ (0.25) $ 0.01 $ (0.45)
Weighted average number of common shares outstanding:
Basic 27,829 25,265 26,851 25,181
Diluted 27,829 25,265 28,706 25,181
Selected Balance Sheet Data:
12/31/2004 01/31/2004
Total Assets 59,475 74,845
Total Liabilities 35,217 55,977
Shareholders' Equity 24,258 18,868
Contact:
Candie's, Inc.
Richard Danderline, 212-730-0030
rdanderline@candiesinc.com