NexCen Brands Files First Quarter 2009 and Full Year 2008 Financial Reports with the SEC

http://www.businesswire.com/news/home/20091006006515/en

2008 Audited Financial Statements Contain No Material Changes to Previously
Announced Results

Operating Income of $1.8 Million in First Quarter 2009 vs. Operating Loss of
$2.6 Million in First Quarter 2008

Positive Cash Generated from Continuing Operations in Q109, First Time in 12
Quarters

NEW YORK--(Business Wire)--
NexCen Brands, Inc. (PINK SHEETS: NEXC.PK) today announced that it has filed its
2008 Annual Report on Form 10-K and Quarterly Report on Form 10-Q for the
periods ending December 31, 2008 and March 31, 2009, respectively, with the
Securities and Exchange Commission (SEC). The financial statements for these
periods contain no material changes from the selected results previously
announced on September 22, 2009.

Kenneth J. Hall, Chief Executive Officer of NexCen Brands, Inc., stated, "Our
team continues to work diligently to regain compliance with the SEC`s financial
reporting requirements. At the same time, we remain focused on executing our
strategic plan. From the first quarter of 2008 to the first quarter of 2009, we
have expanded our international presence, reduced our debt and improved
financial results. We look forward to continuing to strengthen our operations
and expand our global franchised brands."

First Quarter 2009 Financial Highlights

The operating results for the first quarter ended, March 31, 2009 are as
follows:

* Total revenues remain as previously reported at $11.9 million compared to
$10.2 million in the first quarter of 2008.
* Total operating expenses remain as previously reported at $10.1 million
compared to $12.8 million in the first quarter of 2008.
* Operating income was $1.8 million in first quarter 2009, compared to an
operating loss of $2.6 million in the first quarter of 2008.
* The Company`s loss from continuing operations in the first quarter of 2009 was
$0.7 million, or $0.02 per fully diluted share, improving from a loss in the
first quarter of 2008 of $6.4 million, or $0.11 per fully diluted share.
Operating results exclude businesses that were discontinued during 2008 (Bill
Blass, Waverly and UCC Capital).
* Cash generated from operations remain as previously reported at $0.4 million
in first quarter of 2009 compared to cash used in operations of $4.2 million in
first quarter 2008. The first quarter of 2009 was the first quarter in three
years in which the Company generated cash from its operations.
* The Company had total cash as previously reported of approximately $8.3
million as of March 31, 2009, compared to total cash of $20.7 million at March
31, 2008 and total cash of $8.3 million at December 31, 2008.
* The outstanding debt balance as previously reported was $142.5 million at
March 31, 2009 compared to $178.7 million at March 31, 2008 and $142.3 million
at December 31, 2008.

Full Year 2008 Financial Highlights

The audited operating results for the full year ended December 31, 2008 are as
follows:

* Total revenues in 2008 remain as previously reported at $47.0 million compared
to $19.6 million in 2007.
* Operating expenses were $194.2 million in 2008 compared to $26.7 million in
2007. Operating expenses in 2008 encompassed many significant expenses that are
specific to the events of 2008, including impairment charges related to
intangible assets of $137.9 million, $3.9 million in professional fees related
to special investigations, and $1.1 million in restructuring charges.
* Operating loss in 2008 was $147.2 million compared to $7.1 million in 2007.
* Pre-tax loss from continuing operations was $159.6 million versus $8.0 million
in 2007. Excluding significant special items, pre-tax loss on an adjusted
non-GAAP basis was $10.5 million in 2008. A table displaying the adjustments to
pre-tax loss from continued operations is provided below.
* Loss from continuing operations in 2008 was $153.6 million, or $2.71 per fully
diluted share, compared to $8.9 million, or $0.17 per fully diluted share, in
2007.
* Net loss from discontinued operations in 2008 was $102.2 million, which
includes impairment charges of $104.4 million and a net loss of approximately
$10.6 million on the sale of the Waverly and Bill Blass brands.
* Net loss in 2008 was $255.8 million, or $4.52 per fully diluted share,
compared to $4.9 million, or $0.09 per fully diluted share, in 2007.
* Cash used in operations in 2008 was $10.4 million compared to cash used in
operations in 2007 of $3.4 million.

NexCen faced a number of challenges in 2008, both internal and external.
Starting in May 2008, the Company sought to address the immediate financial and
operational challenges that it faced. By December 31, 2008, the Company had
reduced non-essential staff and recurring expenses; restructured its credit
facility; sold its Waverly and Bill Blass businesses; made significant changes
in management, its management structure and corporate governance; and improved
its corporate infrastructure and internal control environment. The events of
2008 and the Company`s responsive actions had a significant impact on its 2008
financial results, which are not expected to recur, primarily due to impairment
expenses related to its intangible assets, restructuring charges, and increased
professional fees related to the internal and external investigations in second
and third quarter of 2008. First quarter 2009 results reflect the Company`s
restructured business and cost reduction efforts.

The following table details the Company`s adjusted operating results for each
2008 quarter and the first quarter of 2009.

Non-GAAP Adjustments to Loss from
Pre-Tax Continuing Operations for the Rolling Five-Quarter
2008 2009
Q1 Q2 Q3 Q4 Total Q1
Pre-tax loss from continuing operations (GAAP) $ (5,105 ) $ (116,841 ) $ (32,215 ) $ (5,405 ) $ (159,566 ) $ (658 )
Addback:
Impairment of intangible assets1 - (109,733 ) (28,148 ) (137,881 )
Special investigations2 - (1,932 ) (1,640 ) (325 ) (3,897 ) (33 )
Financing charges3 (37 ) (889 ) (791 ) (97 ) (1,814 ) (33 )
Restructuring and other charges4 (732 ) (1,500 ) (725 ) (444 ) (3,401 ) (444 )
Stock compensation5 - - - (2,100 ) (2,100 ) -
Total special items (769 ) (114,054 ) (31,304 ) (2,966 ) (149,093 ) (510 )
Pre-tax loss from continuing operations (Pro-forma) $ (4,336 ) $ (2,787 ) $ (911 ) $ (2,439 ) $ (10,473 ) $ (148 )

1 Impairment of intangible assets - During 2008, the
Company determined that it was necessary to evaluate goodwill
and trademarks for impairment between annual tests due to a
decline in the Company’s stock price and deterioration of the
economy.
2 Special investigations - The Company incurred outside
legal fees related to special investigations, namely,
investigations conducted at the direction of the Audit Committee
of the Board of Directors, the Company and the SEC,
respectively, regarding the Company’s public disclosures of
previously undisclosed terms of a January 2008 amendment of our
credit facility as in effect as of such date.
3 Financing charges - Consist of legal fees related to the
August 2008 restructuring of, and subsequent amendments to, our
credit facility with BTMU Capital Corporation.
4 Restructuring and other charges - Restructuring and other
charges includes severance expenses for employees terminated and
accelerated depreciation of corporate assets, both due to the
changes in the Company’s business.
5 Stock compensation - Stock compensation expense of $2.1
million in the fourth quarter 2008 resulted from the
acceleration of certain employee stock options that were
voluntarily cancelled pursuant to the Company’s stock option
cancellation program. Total stock compensation expense for the
year ended December 31, 2008 was $5.3 million.

1 Impairment of intangible assets - During 2008, the
Company determined that it was necessary to evaluate goodwill
and trademarks for impairment between annual tests due to a
decline in the Company’s stock price and deterioration of the
economy.
2 Special investigations - The Company incurred outside
legal fees related to special investigations, namely,
investigations conducted at the direction of the Audit Committee
of the Board of Directors, the Company and the SEC,
respectively, regarding the Company’s public disclosures of
previously undisclosed terms of a January 2008 amendment of our
credit facility as in effect as of such date.
3 Financing charges - Consist of legal fees related to the
August 2008 restructuring of, and subsequent amendments to, our
credit facility with BTMU Capital Corporation.
4 Restructuring and other charges - Restructuring and other
charges includes severance expenses for employees terminated and
accelerated depreciation of corporate assets, both due to the
changes in the Company’s business.
5 Stock compensation - Stock compensation expense of $2.1
million in the fourth quarter 2008 resulted from the
acceleration of certain employee stock options that were
voluntarily cancelled pursuant to the Company’s stock option
cancellation program. Total stock compensation expense for the
year ended December 31, 2008 was $5.3 million.

Excluding special items that were specific to 2008, pre-tax loss from continuing
operations was $10.5 million.

Mr. Hall concluded, "As we look to the reminder of the year and beyond, we will
continue to build on our accomplishments. Over the past 18 months, we have
launched our franchised brands into 13 new countries and introduced new brands
in 10 of our existing international markets. Most recently, we executed a
franchise agreement that allows for our six franchised brands to be represented
in countries throughout Africa, which we believe demonstrates the power and
transportability of our master franchise platform. We remain committed to
growing our core business and increasing the reach of our franchised brands."

2009 10-Q`s

With the filings of its 2008 Annual Report on Form 10-K and Quarterly Report on
Form 10-Q for the first quarter of 2009, the Company continues to make progress
towards becoming fully compliant with the SEC`s financial reporting
requirements. The Company expects to file as soon as possible its Quarterly
Report on Form 10-Q for the quarter ending June 30, 2009, after which the
Company intends to timely file its reports for subsequent periods as required by
SEC rules and regulations.

Conference Call Information

The Company will be holding a conference call today at 5:00 pm EDT to review its
full year results from the fiscal year ended December 31, 2008 and first quarter
results for the period ended March 31, 2009. The conference call may be accessed
by dialing 800-944-8766 or 317-713-0002, access code: 27689. A replay of the
call will be available through October 16, 2009, by dialing 1-866-281-6782,
access code: 154227. The broadcast will be available through the `Investor
Relations` link at http://www.nexcenbrands.com/ and will be archived online
shortly after the conference call until December 31, 2009.

The Company`s Annual Report on Form 10-K for the fiscal year ended December 31,
2008 and Quarterly Report on Form 10-Q for the quarter ended March 31, 2009 are
available on the Company`s website at http://www.nexcenbrands.com, under the
"Investor Relations" tab, or through the SEC`s website at http://www.sec.gov.

About NexCen Brands, Inc.

NexCen Brands, Inc. is a strategic brand management company with a focus on
franchising. It owns a portfolio of franchise brands that includes two retail
franchise concepts: TAF and Shoebox New York®, as well as five quick service
restaurant (QSR) franchise concepts: Great American Cookies®, MaggieMoo's®,
Marble Slab Creamery®, Pretzelmaker® and Pretzel Time®. The brands are managed
by NexCen Franchise Management, Inc., a subsidiary of NexCen Brands.

Forward-Looking Statement Disclosure

This press release contains "forward-looking statements," as such term is used
in the Securities Exchange Act of 1934, as amended.Such forward-looking
statements include those regarding the expected timing for filing additional SEC
reports, expectations for the future performance of the Company`s brands and
expectations regarding the impact of recent developments on its business.When
used herein, the words "anticipate," "believe," "estimate," "intend," "may,"
"will," "expect" and similar expressions as they relate to the Company or its
management are intended to identify such forward-looking
statements.Forward-looking statements are based on current expectations and
assumptions, which are subject to risks and uncertainties.They are not
guarantees of future performance or results.The Company's actual results,
performance or achievements could differ materially from the results expressed
in, or implied by, these forward-looking statements.Factors that could cause or
contribute to such differences include: (1) the Company`s efforts to focus on
the franchise business as its core business may not be successful and may not
improve the performance of the Company; (2) economic conditions may deteriorate
in international and domestic markets, which could negatively impact the
Company`s business and financial performance, (3) the Company`s inability to
file its financial reports within the prescribed timeframes and the failure to
hold an annual meeting of stockholders for the fiscal year ended December 31,
2007 may subject the Company to governmental investigations or third-party
claims, (4) continued delays in the Company`s compliance with the Securities and
Exchange Commission`s filing requirements may negatively impact the Company, (5)
increases in LIBOR, which affects the interest rate on approximately 61% of the
debt outstanding under the Company`s current bank credit facility, will increase
its interest expenses, (6) the substantial debt service obligations and
extensive covenants in the Company`s current bank credit facility may restrict
its ability to respond to changing market conditions, and (7) other factors
discussed in the Company`s filings with the Securities and Exchange Commission.
The Company undertakes no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.

FD
Leigh Parrish/Stephanie Rich, 212-850-5600

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