NexCen Breaks Even in Q3 on 28% Sales Increase

NexCen Brands, Inc. total revenues increased 28% from Q2 2007 to $11.3 million. Operating income increased 85% from Q2 2007 to $2.6 million. Adjusted EBITDA increased 49% from Q2 2007 to $3.9 million. Net Income of $117,000 or $0.00 per share compares to a net loss of ($245,000) or ($0.01) per share in Q2 2007. Comparable store sales for the Franchise segment increased 4.8% versus the same period of the prior year.

Non-GAAP net income for Q3 2007 of $2.5 million or $0.05 per diluted share compares to $1.8 million or $0.03 per diluted share in Q2 2007 . Brand operations achieved Adjusted EBITDA margin of 55% (excluding corporate expenses). Deferred franchise fee revenue of $5.0 million is equivalent to seven cents to eight cents per share which will be recognized in future periods as stores open.

Q3 OPERATIONAL HIGHLIGHTS

    -- Acquired assets of Pretzel Time and Pretzelmaker for combined price of

       $30.3 million

    -- The Athlete's Foot (TAF) entered into definitive agreement with a

       franchisee to open twenty stores in Mississippi

    -- TAF entered into agreement with Li & Fung USA to manufacture and

       distribute the TAF branded apparel line "Taftec(TM)"

    -- Bill Blass entered into exclusive licensing agreement with The Global

       Fur Group to manufacture and distribute luxury fur products under the

       Bill Blass label

POST Q3 HIGHLIGHTS

    -- Bill Blass entered into exclusive licensing agreement with Mondani to

       manufacture and distribute handbags, small leather goods and cosmetic

       toiletry cases

    -- TAF entered into a 10 store area development agreement in Sweden

Commenting on the quarter, Robert D'Loren, President and CEO of NexCen Brands, Inc., noted, “I am extremely pleased with the favorable advancements of our company during the third quarter. The investments we have made in our brands, people and infrastructure are now beginning to show results. I remain confident that we have developed an extremely robust and scaleable operating platform from which to grow our business.”

“During the quarter, we experienced positive momentum within each of our operating segments,” continued Mr. D'Loren. In retail franchising, our rebranding efforts at The Athlete's Foot (TAF) have been met with strong acceptance as evidenced by the signing of three separate area development agreements to open a minimum of 130 stores in the United States and Sweden. In addition, we are delighted to have aligned ourselves with Li & Fung, a global supply chain manager to retailers, to serve as our manufacturing and distribution partner for Taftec(TM), the new TAF branded apparel line.

The results for the third quarter of 2007 included: The Athlete's Foot, Bill Blass, MaggieMoo's, Marble Slab and Waverly for the entire quarter, and Pretzel Time and Pretzelmaker since August 7 (the date of acquisition), or less than 60 days.

For the nine months ended September 30, 2007, NexCen reported total revenues of $24.1 million, Adjusted EBITDA of $6.2 million, net loss of ($326,000) or ($0.01) per diluted share, Non-GAAP Net Income of $4.5 million, or $0.08 per diluted share.

As of September 30, 2007, NexCen had cash and cash equivalents of $29.4 million, total assets of $337.7 million, debt of $91.3 million and stockholders' equity of $194.0 million. Debt was 32% of total capital (22% based on current market capitalization). On November 7, 2007, NexCen borrowed an additional $19.0 million under its existing credit facility. The additional borrowing is secured by the assets of MaggieMoo's and Marble Slab and increased cash and debt to approximately $50 million and $110 million, respectively.

Guidance

The company expects full year Non-GAAP net income to be in the range of 11 cents to 13 cents per diluted share for 2007 and 19 cents to 21  cents per diluted share for 2008, assuming no additional acquisitions.