Candie's, Inc. Reports First Quarter Results.Business Editors NEW YORK--(BUSINESS WIRE)--June 5, 2002 Candie's, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :CAND): -- Company Reports 1Q EPS of $0.05 vs. Guidance of $0.02 -- -- Raises EPS Guidance to $0.47 to $0.50 for Fiscal 2003 -- Candie's, Inc. (NASDAQ: CAND) today announced operating results for the first quarter ended April 30, 2002. Net revenues for the quarterly period increased 7.4% to $25.6 million versus $23.9 million in the year-ago quarter. Sales through the Company's 14 retail stores increased 31.1% to $2.1 million, and licensing revenues for the period were $1.4 million. Gross profit margin Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. for the first quarter was 31.3%, versus the prior year's level of 32.1%, due to a higher level of clearance activity in the period vs. the year-ago quarter. The Company's SG&A expenses, as a percentage of net revenues, decreased 130 basis points to 27.6% versus 28.9% in the year-ago quarter. SG&A expenses increased only 2.6% year-over-year, primarily from the opening of new retail stores. The company recorded first quarter operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. of $953,000 versus $718,000 last year. Net income during the quarter nearly tripled, to $1.1 million versus $393,000 in the year-ago period. The company reported fully diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of for the first quarter of $0.05 versus $0.02 in the first quarter of the prior year. Neil Cole Neil Cole (born 1 March 1972) is an English television presenter, comedian, radio broadcaster and actor. Early life Cole was born in Bristol in 1972, and attended King Edward Grammar School in Chelmsford. He studied English & French Literature at Bristol University. , Candies, Inc.'s Chief Executive Officer, said, "We are pleased to be off to a strong start this year. All of the trends we watch, both within our business, as well as in the wider market, seem to be moving in the right direction. Further, the level of acceptance of the Candies and Bongo product lines, as evidenced by strong sell-through sell-through Adjective of the sale of prerecorded video cassettes, without their first being for hire only data, is clearly very high. While the first quarter does not include results from our recent acquisition of Unzipped Apparel, that business performed very well during the quarter and has good momentum. We are extremely excited about the back half of the year as well as in our long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. prospects." Candies, Inc. also today updated financial guidance for the fiscal year ended January January: see month. 31, 2003. The company believes that it is likely to report net revenues, including 9 months of contribution from Unzipped Apparel, in the range of $160 million to $170 million and earnings per fully-diluted share of between $0.47 and $0.50. For the second quarter, ending July 31, 2002, the company is reiterating its guidance and expects to report sales in the range of $50 to $52 million and earnings in the range of $0.18 to $0.22. The company continues to believe that long-term goals Long-term goals Financial goals expected to be accomplished in five years or longer. for sales and earnings growth of approximately 20% are appropriate and achievable targets. About Candie's, Inc. Candie's Inc. is a leading designer and marketer of young women's footwear Footwear consists of garments worn on the feet. It is worn for a variety of reasons, including protection against the environment, hygiene and adornment. Usually, socks and other hosiery are worn between the feet and the footwear, except for sandals and flip flops (thongs). , apparel and accessories. The Company distributes its products, under the Candies and Bongo brand names, through better department and specialty stores Noun 1. specialty store - a store that sells only one kind of merchandise shop, store - a mercantile establishment for the retail sale of goods or services; "he bought it at a shop on Cape Cod" nationwide, as well as through 14 company-owned stores and specialty stores internationally. Candie's also arranges for the manufacture of footwear products for mass market and discount retailers under the private label brand of the retailer or other trademarks owned or licensed by Candie's. Additionally, the Candie's brand is licensed for the manufacture, sale and distribution of apparel, fragrances and cosmetics cosmetics, preparations externally applied to change or enhance the beauty of skin, hair, nails, lips, and eyes. The use of body paint for ornamental and religious purposes has been common among primitive peoples from prehistoric times (see body-marking). , handbags, sunglasses sunglasses A tinted pair of glasses used to ↓ light arriving at the eye, which are labeled according to the amount of UV light blocked; nonprescription glasses are classified according to use and amount of UV radiation blocked Sunglasses , watches and cell phone accessories. Candie's Inc. operates its website at www.candies.com. For investor information please visit the corporate web site at www.candiesinc.com. SAFE HARBOR Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and OF 1995. The statements which 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 the risks detailed in the Company's Securities and Exchange Commission filings, and uncertainty associated with the impact on the Company in relation to recent events discussed in the Company's Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for Fiscal 2002. The words "believe", "expect", "anticipate", "seek" and similar expressions identify forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . Readers are cautioned not to place undue reliance on these forward looking statements.
Candie's, Inc.
Condensed Consolidated Statements of Operations (Unaudited)
(000's omitted, except per share data)
Three Months Ended
April 30,
2002 2001
--------------------------------
Net sales $ 24,190 $ 22,652
Licensing income 1,427 1,202
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Net revenue 25,617 23,854
Cost of goods sold 17,587 16,187
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8,030 7,667
Selling, general and
administrative 7,062 6,884
Special charges 15 65
--------------------------------
7,077 6,949
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Operating income 953 718
Other expenses:
Interest expense - net 277 325
Equity (income) in joint venture (250) -
--------------------------------
27 325
--------------------------------
Income before income taxes 926 393
(Benefit) for income taxes (139) -
--------------------------------
Net income $ 1,065 $ 393
Earnings per share:
- Basic $ 0.05 $ 0.02
- Diluted $ 0.05 $ 0.02
Weighted average number
of common shares:
- Basic 20,647 19,135
- Diluted 23,109 22,392
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