Exhibit 99.1
Press Release
Candie's Inc. Reports First Quarter Net Income of $787,000
Licensing and Commission Revenue $4.3 Million versus $2.4 Million in Prior Year
Quarter Thursday April 28, 8:53 am ET
NEW YORK--(BUSINESS WIRE)--April 28, 2005--Candie's Inc. (NASDAQ: CAND - News;
the "Company") today announced its results for the first quarter and three
months ended March 31, 2005. The Company reported consolidated net income of
$787,000 or $0.03 per diluted share for the quarter, as compared to net income
of $33,000 or $0.00 per share for the comparable quarter in the prior year.
Licensing and commission revenue for the quarter increased 78% to $4.3 million,
up from $2.4 million in the comparable quarter for the prior year.
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Selling, general and administrative expenses for the first quarter decreased by
$1.4 million or 35% to $2.7 million, down from $4.1 million in the comparable
quarter in the prior year primarily as a result of the transition to a licensing
business. The Company's interest expense totaled $445,000 in the current
quarter, down $251,000 or 36% from $696,000 in the comparable quarter for the
prior year.
The first quarter results reflect the Company's transition from a footwear and
jeans wear operating company to a multi-brand licensing and management business.
The Company licensed its CANDIE'S(R) and BONGO(R) footwear operations in May
2003, and effective last August, licensed BONGO jeans wear, which began
generating licensing income as of the fourth quarter of last year. As previously
announced, in December 2004, the Company licensed CANDIE'S to Kohl's Department
Stores, where it will launch in all of Kohl's approximately 640 stores in 18
different categories for Fall 2005. Beginning in January of 2007, all CANDIE'S
branded products except optical frames will be exclusive to Kohl's in the United
States. In October 2004, the Company acquired the luxury designer brand BADGLEY
MISCHKA(R). The Company changed its fiscal year in the fourth quarter of last
year from one ending on January 31 to a calendar year ending December 31.
Chairman and CEO Neil Cole said "Our first quarter results begin to reflect the
profitability of our new licensing and brand management business model. Our
portfolio of intellectual property is becoming more diversified with brands that
serve different segments of the retail marketplace and reflect both wholesale
and retail licensing models. Our partnership with Kohl's will transform Candie's
from a footwear brand to a total lifestyle concept. BONGO, is now licensed in 15
categories in the United States, including in the key jeans wear category, plus
we have a new international license for Central and South America. Since
acquiring the BADGLEY MISCHKA brand six months ago, we have secured licenses in
six categories, including in the cornerstone couture category and are in the
process of evaluating many additional retail and wholesale licensing
opportunities. We see continued growth in licensing income for all three of our
brands and believe that the strength of our intellectual property and our
strategic business model will provide the foundation for an increasingly
profitable future for our shareholders. "
Shareholders are invited to listen to the conference call scheduled for today at
10:00 AM Eastern 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 pass code 40643118. The replay will be available for seven days
following the call.
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 Income Statements
(Unaudited)
Three Months Ended
------------------------
March 31, April 30,
2005 2004
-------- --------
(000's omitted, except per share data)
Net sales $ - $ 11,360
Licensing and commission revenue 4,300 2,413
-------- --------
Net revenue 4,300 13,773
Cost of goods sold (net of recovery
pursuant to an agreement of $988 in
2004) - 8,831
-------- --------
Gross profit 4,300 4,942
Selling, general and administrative
expenses (net of recovery pursuant to
an agreement of $296 in 2005) 2,679 4,114
Special charges 379 99
-------- --------
Operating income 1,242 729
Other expenses:
Interest expense - net 445 696
-------- --------
Income before income tax provision 797 33
Income tax provision 10 -
-------- --------
Net income $ 787 $ 33
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Earnings per share:
Basic $ 0.03 $ 0.00
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Diluted $ 0.03 $ 0.00
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Weighted average number of common shares outstanding:
Basic 28,429 26,022
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Diluted 29,982 26,903
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Selected Balance Sheet Data:
3/31/2005 12/31/2004
Total Assets $ 56,452 $ 60,160
Total Liabilities 31,085 35,902
Shareholders' Equity 25,367 24,258
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Contact:
Candie's, Inc.
Warren Clamen, 212-730-0030
wclamen@candiesinc.com