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| Iconix Brand Group Reports Record Earnings for the First Quarter 2007 |
-- Q1 Licensing Revenue of $30.8 million compared to $13.3 million in prior
year quarter
-- Pre-Tax Income of $19.7 million compared to $6.1 million in prior year
quarter
-- EBITDA of $23.3 million compared to $8.4 million in prior year quarter
-- Q1 fully diluted EPS of $0.21 versus $0.10 (tax-effected) in prior year
quarter
NEW YORK, May 1 /PRNewswire-FirstCall/ -- Iconix Brand Group, Inc. (Nasdaq: ICON) ("Iconix" or the "Company") today announced financial results for the first quarter ended March 31, 2007. Q1 2007 results: Licensing revenue for the first quarter of 2007 increased to approximately $30.8 million, as compared to approximately $13.3 million in the first quarter of 2006. EBITDA for the quarter increased to approximately $23.3 million as compared to approximately $8.4 million in the prior year quarter and free cash flow for the quarter increased to approximately $21.6 million as compared to approximately $6.1 million in the prior year quarter. Net income as reported on the Company's income statement was approximately $12.7 million versus approximately $7.4 million in 2006 and fully diluted earnings per share as reported was $0.21 versus $0.18. The Company recognized non-cash tax benefits in the prior year quarter and therefore comparing net income on a tax-effected basis the Company reported net income of $12.7 million versus approximately $3.9 million (tax-effected) in 2006 and fully diluted earnings per share was approximately $0.21 for 2007 versus $0.10 (tax-effected) in 2006. EBITDA, free cash flow and tax effected EPS are non-GAAP metrics and reconciliation tables for all three are attached to this press release. Neil Cole, Chairman and CEO of Iconix commented, "I am pleased with the continued momentum of our growth plan which is evident in our strong revenue, earnings, EBITDA and free cash flow. It was a good quarter for the growth of our existing portfolio of brands as well as with respect to acquisitions as we acquired two powerful new lifestyle brands, Roca Wear and Danskin, that on an annualized basis generate approximately $60 million in royalty revenue and significantly diversify our holdings. Iconix today owns eleven strong consumer brands that are expected to generate approximately $5 billion in annual retail sales this year through over 150 licensees around the world. We will continue to be focused on executing our long term growth strategy of expanding our existing portfolio and adding new iconic brands through acquisition." 2007 Guidance: The Company is re-affirming its previously stated 2007 guidance of revenue in a range of $150-$160 million and fully diluted earnings per share in a range of $0.96-$1.00. The current 2007 guidance assumes no additional acquisitions in 2007; however, the Company has said that it intends to remain acquisitive. The Company's $50 million verdict, with respect to which the Company believes judgment will be entered later this month, is subject to collection and possible appeal and therefore at this time the Company is not including it in its guidance. 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) and ROCA WEAR(R). The Company licenses it 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," "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.
Contact: David Conn
Iconix Brand Group, Inc. and Subsidiaries
Condensed Consolidated Income Statements - (Unaudited)
(in thousands, except earnings per share data)
Three Months Ended Mar 31,
--------------------------
2007 2006
--------------------------
Licensing revenue $30,841 $13,269
Selling, general and administrative expenses 7,719 4,667
Special charges 763 556
--------------------------
Operating income 22,359 8,046
Other expenses:
Interest expense - net 2,622 1,961
--------------------------
Income before income taxes 19,737 6,085
--------------------------
Income taxes (benefits) 6,990 (1,272)
--------------------------
Net income $12,747 $7,357
==========================
Earnings per share:
Basic $0.23 $0.21
==========================
Diluted $0.21 $0.18
==========================
Weighted average number of common shares
outstanding:
Basic 56,402 35,719
==========================
Diluted 61,243 41,169
==========================
Selected Balance Sheet Items: 3/31/2007 12/31/2006
(Unaudited)
Total Assets $937,849 $701,052
Total Liabilities $453,400 $235,595
Stockholders' Equity $484,449 $465,457
The following table details unaudited reconciliations from non-
GAAP amounts to U.S. GAAP and effects of these items:
(in thousands)
Three Months Ended
------------ ------------
Mar 31, Mar 31
2007 2006
------------ ------------
EBITDA (1) $23,301 $8,408
============ ============
Reconciliation of EBITDA:
Operating income 22,359 8,046
Add: Depreciation and
amortization of certain
intangibles 942 362
------------ ------------
EBITDA $23,301 $8,408
============ ============
(1) EBITDA, a non-GAAP financial measure, represents income from
operations before interest, income taxes, 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 (2) $21,633 $6,134
============ ============
Reconciliation of Free Cash
Flow:
Net income $12,747 $7,357
Add: Depreciation,
amortization of intangibles
and deferred financing costs,
the change in the
reserve for accounts
receivable and non-cash
compensation expense 1,936 525
Add: Non-cash income taxes
(benefits) 6,990 (1,272)
Less: Capital expenditures (40) (476)
------------ ------------
Free Cash Flow $21,633 $6,134
============ ============
(2) Free Cash Flow, a non-GAAP financial measure, represents net
income before depreciation, amortization, the change in the
reserve for accounts receivable and excludes non-cash income taxes
(benefits) and non-cash compensation expense and further deducts
the capital expenditures. The Company believes Free Cash Flow is
useful for evaluating its financial condition because it
represents the amount of cash generated from operations that is
available for repaying debt and investing.
Reconciliation for tax effected EPS:
Reconciliation to GAAP:
Three Months Ended
March 31, 2006
Net income, GAAP, as reported $7,357
Less: GAAP income tax benefit (1,272)
------------
Income before income taxes, as
reported 6,085
Less: approximately 35%
effective tax provision (2,155)
------------
Net income, as adjusted with
approximately 35% effective
tax rate $3,930
============
Number of dilutive shares 41,169
Dilutive EPS, as adjusted with
approximately 35% effective
tax rate $0.10
SOURCE Iconix Brand Group, Inc. |
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