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Iconix Brand Group, Inc. Reports Record Revenue and Earnings for the Full Year and Fourth Quarter 2009
- 2009 non-GAAP net income of $83.3 million, a 19% increase over the prior year - 2009 revenue of $232.1 million, a 7% increase over the prior year - 2009 and Q4 non-GAAP diluted EPS of $1.22 and $0.30, respectively - 2009 and Q4 free cash flow of $134.8 million and $33.2 million, respectively - Q4 revenue up 21% and Q4 non-GAAP net income up 28% over the prior year quarter
NEW YORK, Feb 23, 2010 /PRNewswire via COMTEX/ -- Iconix Brand Group, Inc. (Nasdaq: ICON) ("Iconix" or the "Company"), today announced financial results for the fourth quarter and year ended December 31, 2009.

Full Year 2009 results for Iconix Brand Group, Inc.:

Revenue for the full year 2009 was approximately $232.1 million, a 7% increase as compared to approximately $216.8 million in the prior year period. As previously disclosed 2009 and 2008 include gains from the formation of international ventures and 2009 includes the gain from the sale of a trademark in Canada. Excluding these gains, revenue for 2009 increased 6% to $221.3 million from $208.4 million in 2008. EBITDA for 2009 increased 9% to approximately $163.1 million as compared to approximately $149.6 million in the comparable prior year period, and free cash flow increased 10% to approximately $134.8 million as compared to approximately $122.1 million in the comparable prior year period. Non-GAAP net income for 2009, which excludes non-cash interest related to the Company's convertible debt, increased 19% to approximately $83.3 million as compared to approximately $70.2 million in the comparable prior year period and non-GAAP diluted earnings per share increased to $1.22 versus $1.15 in the comparable prior year period. On a GAAP basis, net income increased 19% to approximately $75.1 million, as compared to $62.9 million in the comparable prior year period and diluted earnings per share for 2009 was $1.10 versus $1.03 in the comparable prior year period.

Q4 2009 results for Iconix Brand Group, Inc:

Revenue for the fourth quarter of 2009 was approximately $65.8 million, a 21% increase as compared to approximately $54.3 million in the fourth quarter of 2008. As previously disclosed both the fourth quarter of 2009 and the fourth quarter of 2008 include gains from the formation of international ventures. Excluding these gains, revenue for the fourth quarter of 2009 increased 21% to $58.8 million from $48.5 million in the fourth quarter of 2008. EBITDA for the fourth quarter was approximately $41.9 million, an 11% increase as compared to approximately $37.8 million in the prior year quarter. Free cash flow for the quarter was $33.2 million a 6% increase as compared to approximately $31.5 million in the prior year quarter. On a non-GAAP basis, as defined above, net income increased 28% to approximately $21.9 million, as compared to $17.1 million in the prior year quarter and diluted earnings per share for the fourth quarter of 2009 was $0.30 versus $0.28 in the prior year quarter. On a GAAP basis, net income increased 29% to approximately $19.7 million, as compared to $15.3 million in the prior year quarter and diluted earnings per share for the fourth quarter of 2009 was $0.27 versus $0.25 in the prior year quarter. EBITDA, free cash flow, non-GAAP net income and non-GAAP diluted EPS are all non-GAAP metrics and reconciliation tables for each are attached to this press release.

Neil Cole, Chairman and CEO of Iconix Brand Group, Inc. commented, "I am pleased to report that 2009 was another record year for our Company. Our ability to drive organic growth through the expansion of our direct to retail programs in one of the most challenging retail environments in history demonstrates the strength of our business model. In 2009, we successfully launched five new direct-to-retail partnerships in the U.S., renewed four direct-to-retail contracts, formed our third international joint venture for Europe and acquired stakes in Ecko and Ed Hardy, two of the leading brands in today's youth market. We have strengthened our balance sheet and today have approximately $230 million of cash available to be opportunistic in the pursuit of acquisitions. As we begin 2010, we believe our Company is well positioned to deliver continued growth and we look forward to the exciting opportunities ahead of us."

2010 Guidance for Iconix Brand Group, Inc:

The Company is reaffirming its full year 2010 revenue guidance of $260-$270 million. The Company is reaffirming its 2010 non-GAAP diluted EPS guidance of between $1.25 and $1.30 and GAAP diluted EPS guidance of between $1.13 and $1.18. The Company estimates that free cash flow for 2010 will be in a range of $140- $145 million. This guidance relates to the existing portfolio of brands only and assumes no additional acquisitions.

See reconciliation tables below for non-GAAP metrics. These non-GAAP metrics may be inconsistent with similar measures presented by other companies and should only be used in conjunction with our results reported according to U.S. GAAP. Any financial measure other than those prepared in accordance with U.S. GAAP should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with U.S. GAAP.

Iconix Brand Group Inc. (Nasdaq: ICON) owns, licenses and markets a growing portfolio of consumer brands including CANDIE'S(R), BONGO(R), BADGLEY MISCHKA(R), JOE BOXER(R) RAMPAGE(R) MUDD(R), LONDON FOG(R), MOSSIMO(R) OCEAN PACIFIC(R), DANSKIN(R) ROCA WEAR(R), CANNON(R), ROYAL VELVET(R), FIELDCREST(R), CHARISMA(R), STARTER(R) and WAVERLY(R). In addition, Iconix owns an interest in the ARTFUL DODGER(R), ED HARDY(R) and ECKO(R) brands. The Company licenses its brands to a network of leading retailers and manufacturers that touch every major segment of retail distribution from the luxury market to the mass market in both the U.S. and around the world. Iconix, through its in-house advertising, promotion and public relations agency, markets its brands to continually drive greater consumer awareness and equity.

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 acquisition of additional licenses, 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 licensees' 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, including the prospectus supplement relating to the offering. The words "believe", "anticipate," "expect", "confident", "will", "project", "provide" "guidance" 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. All forward-looking statements are qualified by these cautionary statements and apply only as of the date they are made. The Company undertakes no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise.



    Contact Information:
    Jaime Sheinheit
    Investor Relations
    Iconix Brand Group
    212.730.0030



    Condensed Consolidated Income Statements
    (in thousands, except earnings per share data)

                               (Unaudited)
                       --------------------------
                       Three Months Ended Dec. 31,     Year Ended Dec 31,
                       --------------------------  --------------------------
                               2009        2008        2009            2008
                       --------------------------  --------------------------
    Licensing and other
     revenue                  $65,782     $54,259    $232,058        $216,761

    Selling, general
     and administrative
     expenses                  24,695      18,227      79,356          73,816
    Expenses related to
     specific
     litigation                     -         228         137             893
                       --------------------------  --------------------------

    Operating income           41,087      35,804     152,565         142,052

      Interest expense
       (income), net           10,338      12,108      38,733          44,439

      Equity (gain) loss
       on joint venture,
       net                       (860)        100      (3,424)            528
                       --------------------------  --------------------------

      Other expenses -
       net                      9,478      12,208      35,309          44,967

    Income before
     income taxes              31,609      23,596     117,256          97,085
                       --------------------------  --------------------------

    Provision for
     income taxes              10,787       8,263      41,551          34,177
                       --------------------------  --------------------------

    Net income                $20,822     $15,333     $75,705         $62,908
                       ==========================  ==========================

    Net income
     attributable to
     non-controlling
     interest,
     net of tax                 1,106           -         594               -

    Net income
     attributable to
     Iconix Brand
     Group, Inc.              $19,716     $15,333     $75,111         $62,908
                       ==========================  ==========================

    Earnings per share:
                Basic           $0.28       $0.26       $1.14           $1.09
                       ==========================  ==========================


                Diluted         $0.27       $0.25       $1.10           $1.03
                       ==========================  ==========================

    Weighted average
     number of common
     shares
     outstanding:
                Basic          71,431      58,174      65,763          57,810
                       ==========================  ==========================

                Diluted        73,683      61,332      68,325          61,248
                       ==========================  ==========================



    Selected Balance Sheet Items:
    (in thousands)
                                   12/31/2009    12/31/2008
                                   ----------    ----------

    Total Assets                   $1,825,894    $1,420,259
    Total Liabilities                $856,122      $776,170
    Total Stockholders' Equity       $969,772      $644,089



    Note: All items in the following reconciliation tables are attributable to
    Iconix Brand Group, Inc. and exclude results related to non-controlling
    interests.

    The following tables detail unaudited reconciliations from non-GAAP
    amounts to U.S. GAAP relating to the adoption of FASB Staff Position No.
    APB 14-1 "Accounting for Convertible Debt Instruments That May Be Settled
    In Cash Upon Conversion (Including Partial Cash Settlements)" (ASC Topic
    470) ("FSP APB 14-1"), which became effective retroactively for the fiscal
    years beginning after December 15, 2008.



    (in thousands, except per share data)

                                     (Unaudited)              (Unaudited)
                                     ----------               ----------
                                  Three months ended           Year ended
                                  Dec 31,     Dec 31,        Dec 31,   Dec 31,
                                  ------      ------         ------    ------
    Net income reconciliation      2009        2008           2009      2008
    -------------------------     ------      ------         ------    ------
    Non-GAAP Net Income (1)      $21,875     $17,136        $83,344   $70,153
                                ====================     ====================
    GAAP Net income               19,716     $15,333        $75,111   $62,908

    Add: Non cash interest
     related to FSP APB 14-1       3,347       3,095         12,808    11,841
    Deduct: Income taxes related
     to non cash interest         (1,188)     (1,292)        (4,575)   (4,596)
                                --------------------     --------------------
        Net                        2,159       1,803          8,233     7,245

    Non-GAAP Net Income          $21,875     $17,136        $83,344   $70,153
                                ====================     ====================




                                    (Unaudited)               (Unaudited)
                                     ----------                ----------
                                 Three months ended            Year ended
    Diluted EPS
     reconciliation              Dec 31,     Dec 31,         Dec 31,  Dec 31,
    ---------------              ------      ------          ------   ------
                                  2009        2008            2009      2008
                                 ------      ------          ------   ------
    Non-GAAP Diluted EPS (1)      $0.30       $0.28           $1.22    $1.15
                               ====================     ====================
    GAAP Diluted EPS              $0.27       $0.25           $1.10    $1.03

    Add: Non-cash interest
     related to FSP APB 14-1,
     net of tax                   $0.03       $0.03           $0.12    $0.12
                               --------------------     --------------------
    Non-GAAP Diluted EPS          $0.30       $0.28           $1.22    $1.15
                               ====================     ====================




    Forecasted Diluted EPS                     Year Ending        Year Ended
    ----------------------                       12/31/10           12/31/09
                                               High     Low          Actual

    Non-GAAP  Diluted EPS (1)                 $1.30   $1.25           $1.22
                                              =============           =====


    GAAP Diluted EPS                          $1.18   $1.13           $1.10

    Add: Non-cash interest
     related to FSP APB 14-1,
     net of tax                               $0.12   $0.12           $0.12
                                              -------------           -----
    Non-GAAP  Diluted EPS                     $1.30   $1.25           $1.22
                                              =============           =====

     (1) Non-GAAP Net Income and non-GAAP diluted EPS, are non-GAAP financial
         measures, which represent net income excluding any non-cash interest,
         net of tax, relating to the adoption of FSP APB 14-1.  The Company
         believes these are useful financial measures in evaluating its
         financial condition because it is representative of only actual cash
         interest paid on outstanding debt.




    EBITDA Reconciliation Tables:
    -----------------------------
    (in thousands)

                                    (Unaudited)               (Unaudited)
                                Three months ended            Year ended
                                Dec. 31,   Dec. 31,        Dec. 31,  Dec. 31,
                                -------    -------         -------   -------
                                  2009       2008            2009      2008
                                  ----       ----            ----      ----
    EBITDA  (1)                 $41,869    $37,828         $163,074  $149,643
                                ==================         ==================
    Net Income                   19,716     15,333           75,111    62,908

    Add: Income taxes
     attributable to Iconix
     Brand Group, Inc.           10,169      8,263           41,222    34,177

    Add: Net interest expense    10,338     12,108           38,726    44,439

      Add: Depreciation and
       amortization of certain
        intangibles               1,646      2,124            8,015     8,119
                                ------------------         ------------------
    EBITDA                      $41,869    $37,828         $163,074  $149,643
                                ==================         ==================

    (1) EBITDA, a non-GAAP financial measure, represents income from
    operations before income taxes, interest, depreciation and amortization
    expenses. The Company believes EBITDA provides additional information for
    determining its ability to meet future debt service requirements,
    investing and capital expenditures.


    Free Cash Flow Reconciliation Tables:
    -------------------------------------

                            (Unaudited)                 (Unaudited)
                        Three months ended               Year ended
                        ------------------               ----------
                   Dec. 31, 2009 Dec. 31, 2008    Dec. 31, 2009 Dec. 31, 2008
                   ---------------------------    ---------------------------
    Free Cash Flow(2)  $33,194       $31,449          $134,843      $122,139
                   ===========================    ===========================
    Reconciliation
     of Free Cash
     Flow:
      Net Income        19,716        15,333            75,111        62,908
       Add: Non-cash
        income taxes,
        non-cash
        interest
        related to
        convertible
        debt, depreciation,
        amortization of
        trademarks and
        finance fees,
        non-cash
        compensation
        expense, bad debt
        expense and net
        equity earnings
        from certain
        joint ventures
        and sale
        of trademarks   15,562        18,152            63,605        65,512
      Less: Capital
       expenditures     (2,084)       (2,036)           (3,873)       (6,281)
                   ---------------------------    ---------------------------
    Free Cash Flow     $33,194       $31,449          $134,843      $122,139
                   ===========================    ===========================



    (in thousands)                                           Year Ending
                                                             Dec 31, 2010
                                                            High       Low
                                                            ----       ----
    Forecasted Free Cash Flow (2)                        $145,000   $140,000
                                                         ====================
    Reconciliation of Free Cash Flow:
      Net Income                                          $88,600    $84,700
    Add: Non-cash income taxes, non-cash interest
     related to convertible debt, depreciation,
     amortization of trademarks and  finance fees,
     non-cash compensation expense, bad debt expense
     and net equity earnings from certain joint ventures   59,900     57,800
      Less: Capital expenditures                           (3,500)    (2,500)
                                                         --------------------
    Forecasted Free Cash Flow                            $145,000   $140,000
                                                         ====================


    (2) Free Cash Flow, a non-GAAP financial measure, represents net
     income before depreciation, amortization, non-cash compensation
     expense, bad debt expense, net equity earnings from joint ventures,
     non-cash income taxes, non-cash interest related to FSP APB 14-1,
     and less capital expenditures. The Free Cash Flow also excludes any
     changes in Balance Sheet items. The Company believes Free Cash Flow
     is useful in evaluating its financial condition because it is
     representative of cash flow from operations that is available for
     repaying debt, investing and capital expenditures.



SOURCE Iconix Brand Group, Inc.



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