Candie's Inc. Reports Second Quarter Net Income of $518,000 Versus Loss of $3.8 Million in Prior Year.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): --EPS $0.02 versus loss of $0.15 in prior year quarter --Licensing SG&A expenses reduced from $6.4 million to $1.9 million. Candie's Inc. (NASDAQ: CAND) (the "Company") today announced its results for the second quarter and six months ended July 31, 2004 of its fiscal year ending January 31, 2005. The Company reported consolidated net income of $518,000 for the quarter or $0.02 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, as compared to a loss of $3.8 million or $0.15 per diluted share for the prior year quarter. Licensing income for the quarter increased to $2.1 million from $1.8 million in the prior year quarter and SG&A expenses in the licensing segment decreased by 70.8 % from $6.4 million to $1.9 million. As previously announced, as of the end of Fiscal 2004, the Company completed the transition of its wholesale and retail 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). business to the new licensing model. The Company is in the process of transitioning its jeanswear operations to TKO Apparel Licensing, Inc, which is the new licensee licensee n. a person given a license by government or under private agreement. (See: license, licensor) LICENSEE. One to whom a license has been given. 1 M. Q. & S. 699 n. for BONGO(R) jeans and which will also purchase the Company's wholly-owned jeanswear subsidiary, Unzipped Apparel, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control ("Unzipped") for a purchase price to be based on the tangible net worth Tangible Net Worth Total assets less intangible assets and total liabilities. Notes: In terms of a consumer, tangible net worth is the sum of all your tangible assets (cash, home, cars, etc). of Unzipped at the time of closing. The jeanswear license will begin generating licensing income as of the third quarter of this fiscal year. 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 "We are definitely moving in the right direction. Looking ahead, the conversion of BONGO jeanswear to a license, along with the CANDIE'S(R) footwear license, will generate additional royalties and profits and eliminate jeanswear SG&A expenses. We are pleased with the continuing popularity of our powerful BONGO and CANDIE'S brands and look forward to increased income and profitability as we move into next year." For the six months ended July 31, 2004 the Company reported consolidated net income of $551,000 versus a loss of $3.0 million in the prior year six month period. Licensing income increased over 30% to $4.0 million from $3.0 million in the comparable prior year period and SG&A expenses in the licensing segment decreased by 71.7% from $13.8 million to $3.9 million. The six month results reflect an increase of $5.5 million in sales and cost of sales in the first quarter ended April 30, 2004 from the Company's Bright Star subsidiary to recognize, as gross sales Gross Sales A measure of overall sales that isn't adjusted for customer discounts or returns, calculated simply by adding all sales invoices, and not including operating expenses, cost of goods sold, payment of taxes, or any other charge. , certain revenues previously recorded as net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight . This change will be reported in an amended 10Q filing for the quarter ended April 30, 2004. This reclassification Reclassification The process of changing the class of mutual funds once certain requirements have been met. These requirements are generally placed on load mutual funds. Reclassification is not considered to be a taxable event. does not affect the previously reported gross profit, operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. , net income or earnings per share. Shareholders are invited to listen to the conference call scheduled for today at 10:00 AM Eastern Daylight Time. The call will be webcast live via the Internet and can be accessed by logging on to www.candiesinc.com and clicking on the "Live Webcast" 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 will be available through September 17, 2004. About Candie's, Inc. Candie's, Inc. is in the business of licensing the CANDIE'S and BONGO trademarks on a variety of young women's footwear, apparel and fashion products, and is a leading designer, distributor and marketer of jeanswear under the BONGO brand 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. , Unzipped Apparel, LLC. 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 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 Statements of Operations
(Unaudited)
Three Months Ended Six Months Ended
July 31, July 31,
---------------------- ------------------
2004 2003 2004 2003
(000's omitted, except per share data)
Net sales $26,590 $40,214 $43,879 $81,077
Licensing income 2,084 1,841 4,020 3,019
--------- --------- --------- --------
Net revenues 28,674 42,055 47,899 84,096
Cost of goods sold 22,780 32,986 37,063 63,133
--------- --------- --------- --------
Gross profit 5,894 9,069 10,836 20,963
Operating expenses:
Selling, general and
administrative expenses 4,636 9,556 8,750 19,417
Special charges - 2,450 99 2,884
--------- --------- --------- --------
4,636 12,006 8,849 22,307
--------- --------- --------- --------
Operating income (loss) 1,258 (2,937) 1,987 (1,338)
Other expenses:
Interest expense 740 843 1,436 1,716
Equity income in joint venture - - - -
--------- --------- --------- --------
740 843 1,436 1,716
--------- --------- --------- --------
Income (loss) before
income taxes 518 (3,780) 551 (3,054)
Income tax benefit - - - -
--------- --------- --------- ---------
Net income (loss) $ 518 $(3,780) $ 551 $ (3,054)
========= ========= ========= =========
Earnings (loss) per
common share:
Basic $ 0.02 $ (0.15) $ 0.02 $ (0.12)
========= ========= ========= =========
Diluted $ 0.02 $ (0.15) $ 0.02 $ (0.12)
========= ========= ========= =========
Weighted average number of
common shares outstanding:
Basic 26,602 25,068 26,315 25,042
========= ========= ========= =========
Diluted 27,735 25,068 27,322 25,042
========= ========= ========= =========
Selected Balance Sheet Data:
07/31/2004 01/31/2004
Current Assets 25,489 25,655
Total Assets 74,414 74,845
Current Liabilities 26,243 29,905
Shareholders' Equity 22,231 18,868
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