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Iconix Brand Group Reports Record Revenue and Earnings for the First Quarter 2010
- Q1 total revenue of $71.7 million, a 42% increase over the prior year quarter - Q1 non-GAAP Iconix net income of $27.0 million, a 53% increase over the prior year - Q1 Iconix EBITDA of $49.4 million and Q1 free cash flow of $40.1 million - Q1 diluted non-GAAP Iconix EPS of $0.36 compared to $0.29 in the prior year quarter - Increasing guidance for strong Q1 and Peanuts acquisition

NEW YORK, April 27, 2010 /PRNewswire via COMTEX/ --Iconix Brand Group, Inc. (Nasdaq: ICON) ("Iconix" or the "Company"), today announced financial results for the first quarter ended March 31, 2010.

Q1 2010 results for Iconix Brand Group, Inc:

Total revenue for the first quarter of 2010 was approximately $71.7 million, a 42% increase as compared to approximately $50.5 million in the first quarter of 2009. EBITDA attributable to Iconix for the first quarter was approximately $49.4 million, a 36% increase as compared to approximately $36.3 million in the prior year quarter. Free cash flow for the quarter was $40.1 million a 34% increase as compared to approximately $29.8 million in the prior year quarter. On a non-GAAP basis, which excludes non-cash interest related to the Company's convertible debt, net income attributable to Iconix increased 53% to approximately $27.0 million, as compared to $17.6 million in the prior year quarter and diluted earnings per share for the first quarter of 2010 was $0.36 versus $0.29 in the prior year quarter. On a GAAP basis, net income attributable to Iconix increased 58% to approximately $24.8 million, as compared to approximately $15.6 million in the prior year quarter and diluted earnings per share for the first quarter of 2010 was $0.33 versus $0.26 in the prior year quarter. EBITDA, free cash flow, non-GAAP net income and non-GAAP 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, "We are pleased to report another record quarter for our Company as we continue to deliver strong organic growth and profitability for our existing portfolio of brands. We are having continued success with our direct-to-retail strategy, where almost across the board we saw double digit sales increases. Over the past five years we have built a strong brand management platform with a powerful portfolio of 24 brands across fashion and home. Today, we are excited to announce our acquisition of the Peanuts brand which further diversifies our Company into new categories, channels, and territories and provides a large global platform from which we hope to leverage our existing and future brands."

2010 Guidance for Iconix Brand Group, Inc:

The Company is increasing its full year 2010 revenue guidance to a range of $305-$315 million from $260-$270 million. This assumes an organic growth rate of approximately 7% and includes approximately $35-40 million related to the Peanuts acquisition. The Company is also raising its 2010 non-GAAP diluted EPS guidance to a range of $1.35-$1.40 from $1.25-$1.30 and raising its GAAP diluted EPS guidance to a range of $1.23-1.28 from $1.13-$1.18. The Company now estimates that free cash flow for 2010 will be in a range of $150- $155 million. This guidance relates to the existing portfolio of brands and also includes contributions related to our acquisition of the Peanuts brand which we expect to close in the next 30 to 60 days, 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), ECKO (R), MARC ECKO (R), ZOO YORK (R) and MATERIAL GIRL(TM) 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. 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
                                                              March 31,
                                                        -------------------
                                                          2010        2009
                                                          ----        ----



    Licensing and other revenue                        $71,704     $50,501

    Selling, general and administrative expenses        22,318      16,270
    Expenses related to specific litigation                  6          54
                                                           ---         ---

    Operating income                                    49,380      34,177

      Interest expense and other, net                    9,975       9,835

      Equity (gain) loss on joint venture, net          (1,113)        (37)
                                                        ------         ---

      Other expenses - net                               8,862       9,798

    Income before income taxes                          40,518      24,379

    Provision for income taxes                          14,064       8,730
                                                        ------       -----

    Net income                                         $26,454     $15,649
                                                       =======     =======

    Net income attributable to non-controlling
     interest,                                           1,680           -
    net of tax

    Net income attributable to Iconix Brand Group,
     Inc.                                              $24,774     $15,649
                                                       =======     =======

    Earnings per share:
                Basic                                    $0.35       $0.27
                                                         =====       =====

                Diluted                                  $0.33       $0.26
                                                         =====       =====


    Weighted average number of common shares
     outstanding:
                Basic                                   71,537      58,044
                                                        ======      ======

                Diluted                                 74,426      60,892
                                                        ======      ======





    Selected Balance Sheet
     Items:                      (Unaudited)
    (in thousands)               -----------   12/31/2009
                                   3/31/2010   ----------
                                   ---------

    Total Assets                  $1,812,915   $1,802,613
    Total Liabilities               $808,842     $832,841
    Total Stockholders' Equity    $1,004,073     $969,772



The following three tables detail unaudited reconciliations from non-GAAP amounts to U.S. GAAP relating to the adoption of ASC Topic 470 as it relates to accounting for convertible debt, which became effective retroactively for the fiscal years beginning after December 15, 2008.

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


    (in thousands, except per share data)


                                                       (Unaudited)
                                                   Three months ended
    Net income reconciliation                  March 31,       March 31,
    -------------------------                  ---------       ---------
                                                      2010            2009
                                                      ----            ----
    Non-GAAP Net Income (1)                        $26,959         $17,588
                                                   =======         =======

    GAAP Net income                                 24,774          15,649

    Add: Non-cash interest related to ASC
     Topic 470                                       3,347           3,017
    Deduct: Income taxes related to non-
     cash interest                                   1,162           1,078
                                                     -----           -----
        Net                                          2,185           1,939


    Non-GAAP Net Income                            $26,959         $17,588
                                                   =======         =======





                                                       (Unaudited)
                                                   Three months ended
    Diluted EPS reconciliation                 March 31,       March 31,
    --------------------------                 ---------       ---------
                                                      2010            2009
                                                      ----            ----
    Non-GAAP  Diluted EPS (1)                        $0.36           $0.29
                                                     =====           =====

    GAAP Diluted EPS                                 $0.33           $0.26

    Add: Non-cash interest related to ASC
     Topic 470, net of tax                           $0.03           $0.03
                                                     -----           -----

    Non-GAAP  Diluted EPS                            $0.36           $0.29
                                                     =====           =====





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

    Non-GAAP  Diluted EPS (1)             $1.40   $1.35      $1.22
                                          =====   =====      =====


    GAAP Diluted EPS                      $1.28   $1.23      $1.10

    Add: Non-cash interest related to ASC
     Topic 470, net of tax                $0.12   $0.12      $0.12
                                          -----   -----      -----
    Non-GAAP  Diluted EPS                 $1.40   $1.35      $1.22
                                          =====   =====      =====



    (1)  Non-GAAP Net Income and EPS, are non-GAAP financial measures,
    which represent net income excluding any non-cash interest, net of
    tax, relating to the adoption of ASC Topic 470.  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.


    (in thousands)
                                                   (Unaudited)
                                               Three months ended
                                             March 31,  March 31,
                                                  2010       2009
                                                  ----       ----
    EBITDA  (1)                                $49,447    $36,337
                                               =======    =======

    Reconciliation of EBITDA:
    Net Income                                  24,774     15,649

    Add: Income taxes                           13,159      8,730

    Add: Net interest expense                    9,245      9,835

      Add: Depreciation and amortization of
       certain intangibles                       2,269      2,123
                                                 -----      -----
    EBITDA                                     $49,447    $36,337
                                               =======    =======



    (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.


                                              (Unaudited)
                                           Three months ended
                                           ------------------

                                        March 31,    March 31,
                                           2010         2009
                                       ----------   ----------
    Free Cash Flow (2)                     $40,060      $29,846
                                           =======      =======

    Reconciliation of Free Cash Flow:
      Net Income                            24,774       15,649
      Add: Non-cash income taxes,
       non-cash interest related ASC
       Topic 470, depreciation,
       amortization of certain
       intangible assets and finance
       fees, non-cash compensation
       expense, bad debt expense and
       net non cash equity earnings
       from certain joint ventures          15,310       14,208
      Less: Capital expenditures               (24)         (11)
                                               ---          ---

    Free Cash Flow                         $40,060      $29,846
                                           =======      =======






    (in thousands)                                 Year Ending
                                                   Dec 31, 2010
                                                   High        Low
                                                   ----        ---
    Forecasted Free Cash Flow (2)              $155,000   $150,000
                                               ========   ========

    Reconciliation of Free Cash Flow:
      Net Income                                $95,000    $90,000
    Add: Non-cash income taxes, non-cash
     interest                                    63,000     63,000
    related to ASC Topic 470, depreciation,
     amortization
    of certain intangible assets and  finance
     fees, non-cash
    compensation expense, bad debt expense
     and net
    equity earnings from certain joint
     ventures
      Less: Capital expenditures                 (3,000)    (3,000)
                                                 ------     ------

    Forecasted Free Cash Flow                  $155,000   $150,000
                                               ========   ========



    (2)  Free Cash Flow, a non-GAAP financial measure, represents net
    income before depreciation, amortization, non-cash compensation
    expense, bad debt expense, net non cash equity earnings from joint
    ventures, non-cash income taxes, non-cash interest related to ASC
    Topic 470, 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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