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8-K
ICONIX BRAND GROUP, INC. filed this Form 8-K on 11/09/2018
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Interest Expense, Other Income and Loss on extinguishment of debt:

 

Interest expense in the third quarter of 2018 was $14.9 million, as compared to interest expense of $16.9 million in the third quarter of 2017.

 

In the third quarter of 2018, the Company recognized a $17.2 million gain resulting from the Company's accounting for the 5.75% Convertible Notes which requires recording the fair value of this debt at the end of each period with any change from the prior period accounted for as other income or loss in the current period's income statement.  Additionally, in the third quarter of 2018, the Company acquired an additional 5% interest of its Iconix Australia joint venture and as a result, recognized a $8.4 million pre-tax non-cash gain on the remeasurement of the Company's initial investment.  In the third quarter of 2017, the Company recognized a $2.7 million gain related to a payment received from the sale of its minority interest in Complex Media in 2016 and recognized a $1.5 million expense related to the repurchase of a portion of the Company's 1.50% convertible notes, of which there was no comparable amount for the third quarter of 2018.  The Company has excluded these amounts from its non-GAAP results. 

 

Provision for Income Taxes:

 

The effective income tax rate for the third quarter of 2018 is approximately 4.5% which resulted in a $1.0 million income tax provision, as compared to an effective income tax rate of 4.9% in the prior year quarter which resulted in a $29.6 million income tax benefit.  Excluding any mark-to-market adjustments from the Company's 5.75% Convertible Notes, we expect the full year 2018 tax rate to be approximately (4)% and approximately 50% on a GAAP basis and non-GAAP basis, respectively.

 

GAAP Net Income and GAAP Diluted EPS:

 

GAAP net loss from continuing operations attributable to Iconix for the third quarter of 2018 reflects income of $20.2 million as compared to a loss of $550.6 million for the third quarter of 2017. GAAP diluted EPS from continuing operations for the third quarter of 2018 reflects a loss of $0.01 as compared to a loss of $9.64 for the third quarter of 2017.

 

GAAP net loss from continuing operations attributable to Iconix for the nine months ended September 30, 2018 reflects a loss of $31.4 million as compared to a loss of $559.7 million for the nine months ended September 30, 2017.  GAAP diluted EPS from continuing operations for the nine months ended September 30, 2018 reflects a loss of $0.81 as compared to a loss of $9.83 for the nine months ended September 30, 2017.

 

Non-GAAP Net Income and Non-GAAP Diluted EPS:

 

Non-GAAP net income from continuing operations for the third quarter of 2018 was $1.2 million as compared to $13.9 million for the third quarter of 2017. Non-GAAP diluted EPS from continuing operations for the third quarter of 2018 was $0.02 as compared to $0.24 for the third quarter of 2017.

 

Non-GAAP net income from continuing operations for the nine months ended September 30, 2018 was $15.0 million as compared to $41.7 million for the nine months ended September 30, 2017.  Non-GAAP diluted EPS from continuing operations for the nine months ended September 30, 2018 was $0.23 as compared to $0.73 for the nine months ended September 30, 2017.

 

 

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