-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SWFBIeD9mp+XnAoNSe3r25nqFV7Vnx62dYbSqW/8h/eGYggu7GREmFrl8XlXUkEL temDzEfexjKYgOJeR3dfOA== 0000857737-03-000038.txt : 20030613 0000857737-03-000038.hdr.sgml : 20030613 20030613135603 ACCESSION NUMBER: 0000857737-03-000038 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030430 ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20030613 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CANDIES INC CENTRAL INDEX KEY: 0000857737 STANDARD INDUSTRIAL CLASSIFICATION: FOOTWEAR, (NO RUBBER) [3140] IRS NUMBER: 112481903 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10593 FILM NUMBER: 03743442 BUSINESS ADDRESS: STREET 1: 400 COLUMBUS AVE. CITY: VALHALLA STATE: NY ZIP: 10595 BUSINESS PHONE: 9147698600 MAIL ADDRESS: STREET 1: 400 COLUMBUS AVE. CITY: VALHALLA STATE: NY ZIP: 10595 FORMER COMPANY: FORMER CONFORMED NAME: MILLFELD TRADING CO INC DATE OF NAME CHANGE: 19920703 8-K 1 cand_8kpr061203.txt CURRENT REPORT - PRESS RELEASE SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): June 12, 2003 CANDIE'S, INC. ------------------------------------------------------------------------------- (Exact name of Registrant as specified in its charter) DELAWARE 001-10593 11-2481903 ----------- --------- ---------- (State or other jurisdiction (Commission (I.R.S. Employer of incorporation) File Number) Identification No.) 400 Columbus Avenue, Valhalla, New York 10595 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (914) 769-8600 -------------- - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report) Item 9. Regulation FD Disclosure The following information is furnished in satisfaction of Item 12 "Disclosure of Results of Operations and Financial Condition" of Form 8-K and is being presented under Item 9 "Regulation FD Disclosure" pursuant to the interim guidance of the Securities and Exchange Commission contained in its Release no. 33-8216 and 34-47583. On June 12, 2003 Candie's, Inc. (the "Company") issued a press release announcing its results of operations for the fiscal quarter ended April 30, 2003. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. The press release includes certain non-GAAP financial measures for the periods presented with respect to comparable licensing income and a qualitative reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measures. Management of the Company has chosen to provide the non-GAAP information in the press release because it believes that it provides a meaningful comparison of the Company's licensing income for the periods presented. The non-GAAP financial measures should not be considered in isolation or as a substitution for measures of financial performance prepared in accordance with GAAP. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CANDIE'S, INC. (Registrant) By:/s/Richard Danderline ------------------------------------- Richard Danderline Executive Vice President, Finance and Operations Date: June 12, 2003 Exhibit 99.1- Press Release of Candie's, Inc. dated June 12, 2003. EX-99.1 3 cand_8kprex991.txt PRESS RELEASE OF CANDIES INC Exhibit 99.1- Press Release of Candie's, Inc. dated June 12, 2003. Candie's, Inc. Reports First Quarter Fiscal 2004 Earnings Thursday June 12, 8:34 am ET Operating Income Increases 68% to $1.6 million VALHALLA, N.Y.--(BUSINESS WIRE)--June 12, 2003--Candie's, Inc. (NASDAQ: CAND - News; the "Company") today announced that consolidated net revenues for the first quarter ended April 30, 2003 of its fiscal year ending January 31, 2004 ("Fiscal 2004") increased by 64.1% to $42.0 million from $25.6 million in the same period last year. Operating income increased to $1.6 million in the first quarter of the current fiscal year compared to $953,000 in the prior year period. Special charges, primarily related to the settlement of the Company's SEC investigation were $434,000 in the first quarter of the current fiscal year as compared to $15,000 in the prior year's quarter. Net income was $726,000 or $.03 per fully diluted share in the first quarter of Fiscal 2004 compared to $1.1 million, or $.05 per fully diluted share in the first quarter last year. Included in the prior year's first quarter net income were $250,000 of income resulting from a reduction of the remaining liability in connection with the Company's acquisition of the remaining equity interest in Unzipped Apparel, LLC ("Unzipped") on April 23, 2002 and $139,000 of income tax benefit resulting from the utilization of net operating losses to recover previously recorded minimum statutory taxes. Comparable licensing income increased $165,000 in the first quarter, or 16.3%, as the licensing income for the prior year period included $414,000 of royalties the Company received from Unzipped prior to the Company's acquisition of the remaining equity interest in Unzipped. Licensing income for the first quarter was $1.2 million compared to $1.4 million in the same period last year. Consolidated gross profit was 28.3% of net revenues in the first fiscal quarter compared to 33.9% of net revenues in the comparable period last year, a decrease of 560 basis points. The decrease was primarily due to a shift in product mix that resulted from the inclusion of the financial results of Unzipped, which operates at lower gross profit margins. Selling, general, and administrative expenses were 23.5% of net revenues in the first quarter of Fiscal 2004 compared to 30.2% of net revenues in the comparable period last year or a decrease of 670 basis points, also primarily due to the inclusion of the financial results of Unzipped, which operates with lower selling, general, and administrative expenses. Operating income increased to $1.6 million in the first quarter of the current fiscal year compared to $953,000 in the comparable period last year. Since May 1, 2002, the operating results of Unzipped, which conducts the Company's Bongo(R) jeanswear business, have been consolidated with the Company's financial results. Unzipped contributed $17.2 million of net revenues in the first quarter of Fiscal 2004. During the first quarter of Fiscal 2004 gross profit of the Unzipped business was 19.2% and selling, general, and administrative expenses were 14.3% of net revenues generated by Unzipped. Unzipped contributed $849,000 of operating profit during the first quarter of Fiscal 2004. For the 12 months since the May, 2002 acquisition, Unzipped has generated $73.1 million in net revenues from the sale of Bongo jeanswear. Net revenues, including licensing income, in the Candie's(R) footwear business decreased by 3.2% to $24.8 million in the first quarter of Fiscal 2004 compared to $25.6 million in the comparable period last year. Licensing income for the first quarter was $1.2 million compared to $1.4 million in the comparable period last year. Comparable licensing income increased $165,000 in the first quarter, or 16.3%, as the licensing income for the prior year period included $414,000 of royalties the Company received from Unzipped prior to the Company's acquisition of the remaining equity interest in Unzipped. Gross profit of the footwear business was 34.6% of its net revenues compared to 33.9% of net revenues in the comparable period last year, an increase of 70 basis points. Selling, general, and administrative expenses generated by the footwear business were 29.8% of net revenues generated by the footwear business in the quarter compared to 30.2% of net revenues in the comparable quarter last year, a decrease of 40 basis points. Operating income from the footwear business in the first quarter was $750,000 compared to $953,000 in the comparable period last year. Neil Cole, President and CEO stated, "We are very excited about focusing our attention on the licensing of the Candie's and Bongo brands. We have two powerful lifestyle brands that we believe will continue to gain recognition in the marketplace as we move forward into new and expanded product categories. Under the new licensing structure, we will be able to eliminate the risks of inventory and substantially reduce our overhead, thereby reducing our capital needs, while at the same time leveraging our core competencies of marketing and brand development. We are confident that our strategic decision to license our footwear operations will position us for increased profitability." With respect to its retail operations, the Company is in the process of implementing its plan to close its 11 concept stores, but will continue to operate 10 outlet stores at least through the end of the fiscal year. 7 of the 10 outlets are operated through a contractual arrangement with Casual Male Retail Group ("CMRG") pursuant to which the Company has the option to return the operations of the stores to CMRG with no additional obligation in February 2004. The Company will also continue to design and manufacture jeans wear under the Bongo brand through its wholly owned subsidiary, Unzipped, which is managed by third party Sweet Sportswear, LLC, and to operate Bright Star footwear, which sells casual men's boots on a letter of credit basis. About Candie's, Inc. Candie's, Inc. is in the business of licensing the Candie's and Bongo name on a variety of young women's footwear, apparel and fashion products, and is a leading designer, distributor and marketer of jeans wear under the Bongo brand through its wholly owned subsidiary, Unzipped Apparel, LLC. Candie's also arranges for the manufacture of footwear products for mass market and discount retailers under the private label brand of the retailer. The Company operates 21 Candie's retail stores across the United States. 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 "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 ------------------ April April 30, 30, 2003 2002 ------------------ (000's omitted, except per share data) Net sales $40,863 $24,190 Licensing income 1,178 1,427 ------------------ Net revenue 42,041 25,617 Cost of goods sold 30,147 16,924 ------------------ Gross profit 11,894 8,693 Selling, general and administrative expenses 9,861 7,725 Special charges 434 15 ------------------ Operating income 1,599 953 Other expenses: Interest expense - net 873 277 Equity (income) in joint venture - (250) ------------------ 873 27 ------------------ Income before income tax benefit 726 926 Income tax benefit - (139) ------------------ Net income $ 726 $ 1,065 ================== Earnings per share: Basic $ 0.03 $ 0.05 ================== Diluted $ 0.03 $ 0.05 ================== Weighted average number of common shares outstanding: Basic 25,015 20,642 ================== Diluted 25,054 23,104 ================== Selected Balance Sheet Data: 4/30/2003 1/31/2003 Current Assets $52,733 $51,816 Current Liabilities $46,054 $45,921 Stockholders' Equity $29,767 $29,011 Working Capital $ 6,679 $ 5,895 Current Ratio 1.15:1 1.13:1 Contact: Candie's, Inc. Richard Danderline, 914/769-8600 -----END PRIVACY-ENHANCED MESSAGE-----