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.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- 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) (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 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 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. 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 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 jeans wear operating company operating company A business that engages in transactions with outsiders. 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 This is a list of department stores. In the case of department store groups the location of the flagship store is given. This list does not include large specialist stores, which sometimes resemble 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 United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . In October 2004, the Company acquired the luxury designer brand BADGLEY MISCHKA Badgley Mischka is an American fashion label designed by Mark Badgley and James Mischka. Badgley & Mischka met at Parsons and found a common vision. The two launched the label Badgley Mischka in 1988, though their bridal business launched in 1993. (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 (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. 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. 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 diversified (di·verˑ·s 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 South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. . Since acquiring the BADGLEY MISCHKA brand six months ago, we have secured licenses in six categories, including in the cornerstone cornerstone Ceremonial building block, dated or otherwise inscribed, usually placed in an outer wall of a building to commemorate its dedication. Often the stone is hollowed out to contain newspapers, photographs, or other documents reflecting current customs, with a view to 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 Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. 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 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 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 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 relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc 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 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. 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 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. 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
======== ========
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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