Candie's, Inc. Reports Third Quarter Fiscal 2000 Results.PURCHASE, N.Y.--(BUSINESS WIRE)--Dec. 16, 1999-- Candie's, Inc. (Nasdaq NMS See NetWare Management System. symbol: CAND) ("the Company") today announced financial results for the third quarter fiscal 2000 ended October October: see month. 31, 1999. These results are included in the Company's form 10-Q Form 10-Q See 10-Q. that has been filed with the Securities and Exchange Commission. THIRD QUARTER OPERATING RESULTS: (unaudited) For the third quarter fiscal 2000 ended October 31, 1999, net revenues declined by $6.7 million or 23.3% to $22.2 million from $28.9 million in the prior year third quarter results. The decline in net revenues stemmed stemmed adj. 1. Having the stems removed. 2. Provided with a stem or a specific type of stem. Often used in combination: stemmed goblets; long-stemmed roses. from lower wholesale sales of 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). and a decline in private label sales. Gross profit before licensing income was $3.3 million and gross margin of 14.8% compared to a gross profit of $5.6 million and gross margin of 19.3% in the prior year third quarter results. The decline in gross profit was primarily related to decreased wholesale sales of women's footwear and an increase in markdowns taken to reduce excess inventory. Licensing income reached $1.2 million compared to licensing income of $100,000 in the results in the prior year third quarter. Selling, general and administrative expenses rose to $8.3 million in the third quarter fiscal 2000 from $6.2 million in the results of the prior year third quarter. As a percent of net revenues, selling, general and administrative expenses increased to 37.3% from 21.5% for the comparable period of the prior year. The increase in selling, general and administrative expenses, as a percentage of net revenues, was due to the decline in net revenues, as well as costs associated with implementation of the Company's strategic plan to strengthen its management team and infrastructure, the expansion outside of its core footwear products to include, acquiring the Bongo brand and starting an apparel joint venture involving Azteca Azteca may refer to:
relating to relate prep → bezüglich +gen, mit Bezug auf +acc professional fees and payments to financial institutions in connection with the restatement Restatement A revision in a company's earlier financial statements. Notes: The need for restating financial figures can result from fraud, misrepresentation, or a simple clerical error. of its financial statements, evaluating various potential borrowing arrangements, the investigation by the Special Committee, the class action lawsuit class action lawsuit A lawsuit in which one party or a limited number of parties sue on behalf of a larger group to which the parties belong. For example, investors may bring a class action lawsuit against a brokerage firm that has actively promoted a tax and the Securities and Exchange Commission ("SEC") investigation". Operating losses operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. after special charges was $5.0 million compared to operating losses of $519,000 in the results of the prior year third quarter. Loss before income taxes after special charges was $5.4 million compared to loss before income taxes of $808,000 in the results of the prior year third quarter. Excluding special charges, the loss before income taxes was $4.3 million in the third quarter fiscal 2000. The net loss after special charges was $5.7 million or $0.32 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share on 17,896,000 shares compared to a net loss of $502,000, or $0.03 per diluted share on 15,841,000 shares, in the prior year third quarter. NINE MONTHS OPERATING RESULTS: (unaudited) For the nine months ended October 31, 1999, net revenues declined approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 15.6% to $76.5 million from $90.6 million in the comparable restated period of the prior year. The decline in net revenues stemmed from decreased wholesale sales of women's footwear and a reduction in private label sales. The gross profit before licensing income was $15.0 million and gross margin of 19.6% from a gross profit of $21.6 million and gross margin of 23.8% in the comparable period of the prior year. The decline in gross profit was primarily related to decreased wholesale sales of women's footwear and an increase in markdowns taken to clear excess inventory. Licensing income reached $2.0 million in the first nine months of fiscal 2000 compared to licensing income of $100,000 in the first nine months of the results of fiscal 1999. Selling, general and administrative expenses were $24.4 million and represented 31.8% of net revenues compared to 20.7% of net revenues in the comparable prior year. The percentage increase in selling, general and administrative expenses was due to lower net revenues and an increase in spending for new initiatives, as well as increased advertising expenditures and intangible amortization relating to the Company's fiscal 1999 acquisitions. The Company incurred $2.3 million in special charges in the first nine months of fiscal 2000, relating to professional fees and payments to financial institutions in connection with the restatement of its financial statements, evaluating various potential borrowing arrangements, the investigation by the Special Committee, the class action lawsuit and the SEC investigation. Operating losses after special charges was $9.7 million compared to 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 $3.0 million in the results of the prior year. Loss before income taxes after special charges was $11.1 million compared to income before income taxes of $2.2 million in the prior year. Loss before income taxes excluding special charges was $8.8 million in the first nine months of fiscal 2000. Net loss after taxes was $10.0 million, or $0.56 per diluted share on 17,742,000 shares compared to net income after tax of $1.3 million, or $0.08 on 16,723,000 shares. In commenting on the results, 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. , Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. stated, "We continued to experience challenging results in the third quarter due to lower than anticipated sales in our Candie's women's footwear division. Also contributing to our losses in the period were higher expenses for new initiatives and special charges. Each of the key executives at Candie's has made improving the sales and profitability of women's footwear a top priority. By focusing our efforts on Candie's and streamlining our operations we are hopeful that we will return to profitability in the near future." "Our brand awareness continues to grow, which is illustrated by the strong performance of our new product launches. In fact, our fragrance launch with licensing partner, Liz Claiborne This article is about the corporation Liz Claiborne Inc. For the fashion designer who founded the company, see Liz Claiborne (fashion designer). Liz Claiborne Inc. , has been a success and has exceeded our expectations. We are also pleased to announce that on November November: see month. 4, 1999, the Company launched its web site www.candies.com. The site marks the beginning of an aggressive effort to create a destination site for millions of young women providing them with a forum for self-expression self-ex·pres·sion n. Expression of one's own personality, feelings, or ideas, as through speech or art: "Self-expression must pass into communication for its fulfillment" Pearl S. Buck. , a place to interact Interact can refer to:
Fall of Interact While the Game Boy device was first released, Interact acquired the rights to sell Datel's Action Replay with each other, and be informed and entertained en·ter·tain v. en·ter·tained, en·ter·tain·ing, en·ter·tains v.tr. 1. To hold the attention of with something amusing or diverting. See Synonyms at amuse. 2. . As we look forward to the millennium millennium [Lat.,=1,000 years], the period of 1,000 years in which, according to some schools of Christian eschatology, Christ will reign again gloriously on earth. Belief in the millennium, based on Rev. 20, has recurred in Christianity since the earliest times. , we believe that our efforts to bring about positive change within our organization will benefit our Company and shareholders greatly." "The Company has had settlement discussions with the plaintiffs in the pending class action lawsuit and hopes to reach a timely resolution." "The Company has adequate capital to fund its operations. I along with the management team at Candie's are ready to tackle the challenges that the Company faces with a goal of making Candie's a profitable growth company in the future," Neil Cole concluded. 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 Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. by such forward looking statements. Such factors include, but are not limited to, uncertainty regarding 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 CONSTRAINTS - A language for solving constraints using value inference. ["CONSTRAINTS: A Language for Expressing Almost-Hierarchical Descriptions", G.J. Sussman et al, Artif Intell 14(1):1-39 (Aug 1980)]. or difficulties relating to the Company's dependence on foreign manufacturers, uncertainties relating to customer plans and commitments, 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 An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. , the risks of uncertainty of trademark protection, Year 2000 compliance, the uncertainty of marketing and licensing the trademarks acquired during fiscal 1999 and other risks detailed and 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 1999. 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, which speak only as of the date the statement, was made.
Candie's, Inc.
Condensed Consolidated Statements of Operations (Unaudited)
(000's omitted, except per share data)
Three Months Ended Nine Months Ended
October 31, October 31,
------------------- -------------------
1999 1998 1999 1998
------ ------ ------ ------
Net revenues $ 22,175 $ 28,919 $ 76,483 $ 90,627
Cost of goods sold 18,877 23,330 61,516 69,042
-------- -------- -------- --------
Gross profit 3,298 5,589 14,967 21,585
Licensing income 1,151 100 2,009 100
-------- -------- -------- --------
4,449 5,689 16,976 21,685
Operating expenses:
Special charges 1,144 - 2,310 -
Selling, general and
administrative 8,281 6,208 24,359 18,728
-------- -------- -------- --------
9,425 6,208 26,669 18,728
Operating (loss) income (4,976) (519) (9,693) 2,957
Other expenses:
Interest expense - net 307 289 958 786
Equity loss in joint
venture 116 - 453 -
-------- -------- -------- --------
423 289 1,411 786
-------- -------- -------- --------
(Loss) income before
income taxes (5,399) (808) (11,104) 2,171
(Benefit) provision for
income taxes 346 (306) (1,090) 862
-------- -------- -------- --------
Net (loss) income $ (5,745) $ (502) $(10,014) $ 1,309
======== ======== ======== ========
(Loss) earnings per share:
- Basic $ (0.32) $ (0.03) $ (0.56) $ 0.09
======== ======== ======== ========
- Diluted $ (0.32) $ (0.03) $ (0.56) $ 0.08
======== ======== ======== ========
Weighted average # of
common shares:
- Basic 17,896 15,841 17,742 14,577
======== ======== ======== ========
- Diluted 17,896 15,841 17,742 16,723
======== ======== ======== ========
Selected Balance Sheet Data: 1/31/99 10/31/99
---------------------------- -------- --------
Current Assets $ 45,216 $ 33,427
Current Liabilities $ 22,330 $ 19,071
Stockholders' Equity $ 51,849 $ 42,075
Working Capital $ 22,886 $ 14,356
Current Ratio 2.02:1 1.75:1
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