- Licensing revenue $18.4 million versus $4.3 million in prior year
quarter
- EBITDA of $11.4 million versus $1.6 million in prior year quarter
- Fully diluted EPS of $0.19 versus $0.08 in prior year quarter
- Company broadens 2006 earnings per share guidance
NEW YORK, July 27 /PRNewswire-FirstCall/ -- Iconix Brand Group, Inc.
(Nasdaq: ICON) ("Iconix" or the "Company"), today announced financial results
for the second quarter of 2006. Licensing revenue increased to approximately
$18.4 million as compared to $4.3 million in the second quarter of the prior
year. The increase in licensing revenue was driven primarily by the continued
roll out and success of the Candie's brand at Kohl's Department Stores,
contributions from the Company's 2005 acquisitions of the Joe Boxer and
Rampage brands, and a greater-than-expected contribution from the Company's
recent acquisition of the Mudd brand in April 2006. The Company reported fully
diluted earnings per share of $0.19 versus $0.08 in the second quarter of the
prior year, which included a non-cash income tax benefit of $0.01 and $0.06,
respectively. Net income for the quarter was approximately $8.3 million versus
$2.5 million in the prior year quarter. EBITDA was approximately $11.4 million
versus $1.6 million in the prior year quarter and free cash flow was
approximately $9.4 million versus $1.2 million in the prior year quarter.
Six months ended June 30:
For the six months ended June 30, 2006 licensing revenue was approximately
$31.7 million compared to $8.6 million in the prior year six month period. Net
income was approximately $15.7 million versus $3.3 million in the prior year
six month period. Fully diluted earnings per share were $0.37 compared to
$0.11 in the prior year six month period. EBITDA for the six months ended June
30, 2006 was approximately $19.8 million compared to $3.4 million in the prior
year six month period and free cash flow was approximately $15.9 million
compared to $2.6 million in the prior year six month period.
Other Developments:
The Company has announced that due to delays associated with the
completion of the proxy statement/prospectus relating to the Mossimo
transaction, the merger is now expected to close in September. The delay in
closing Mossimo, which was originally planned for July, combined with the
treatment that approximately $2 million of the Company's deferred tax asset
has been recognized as equity, and not through the income statement, will
impact 2006 net income. However, the Company is currently experiencing
stronger than anticipated organic growth in several of its divisions and is
also evaluating several acquisition opportunities, one of which it anticipates
closing this year, and either or both of which could offset the impact of the
delayed Mossimo closing and tax treatment.
Neil Cole, Chairman and CEO of Iconix commented "Our year-over-year
results demonstrate the growth potential of our business model and our ability
to generate substantial profits and cash flow. Our strategy is on track with
our existing portfolio of brands growing nicely, our acquisition pipeline
deeper and more diverse than ever before and we hope to be announcing new
international agreements later this year. With our acquisition of Mossimo Inc.
later this year, the Company will have purchased four brands in a little over
twelve months and will have an annualized base of royalty revenue of
approximately $100 million. Looking ahead to 2007, I am confident that we can
continue this pace of growth and further build and diversify our portfolio of
brands and royalty revenue."
2006 Guidance:
Based upon the timing of the Mossimo closing, the treatment to recognize
approximately $2 million of the tax benefit as equity rather than through the
income statement, and also taking into consideration additional organic growth
and acquisition opportunities this year, the Company is expanding its current
2006 full year guidance from its previously stated range of $0.75 - $0.80 per
fully diluted share to a broader range of $0.70 - $0.80 per fully diluted
share.
2007:
While the Company has yet to issue detailed guidance for 2007, it is
currently comfortable with the First Call consensus estimate of $0.87 fully-
taxed and fully diluted EPS for 2007.
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) and MUDD (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. Iconix, through its in-house advertising agency, advertises and
markets its brands to continually drive greater consumer awareness and
loyalty.
For non-GAAP measures, see accompanying reconciliation schedules.
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: Warren Clamen
Chief Financial Officer
Iconix Brand Group
212.730.0030
Joseph Teklits
Integrated Corporate Relations
203.682.8200
Iconix Brand Group, Inc. and Subsidiaries
Condensed Consolidated Income Statements - (Unaudited)
(in thousands, except earnings per share data)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- -------------------
2006 2005 2006 2005
Licensing and commission
revenue $ 18,409 $ 4,287 $ 31,678 $ 8,587
Selling, general and
administrative expenses 6,817 2,734 11,501 5,308
Special charges 712 328 1,268 707
-------------------- -------------------
Operating income 10,880 1,225 18,909 2,572
Interest expense - net 2,882 504 4,826 1,054
-------------------- -------------------
Income before income taxes 7,998 721 14,083 1,518
Income taxes (benefits) (347) (1,790) (1,619) (1,780)
-------------------- -------------------
Net income $8,345 $2,511 $ 15,702 $3,298
==================== ===================
Earnings per share:
Basic $0.22 $0.09 $0.42 $0.12
==================== ===================
Diluted $0.19 $0.08 $0.37 $0.11
==================== ===================
Weighted average number of
common shares outstanding:
Basic 38,680 28,602 37,208 28,516
==================== ===================
Diluted 44,712 30,247 42,872 30,115
==================== ===================
Selected Balance Sheet Data: June 30, 2006 December 31, 2005
(in thousands) (audited)
Total Assets $335,141 $217,244
Total Liabilities $162,518 $116,348
Stockholders' Equity $172,623 $100,896
The following table details unaudited reconciliations from non-GAAP
amounts to U.S. GAAP and effects of these items:
(in thousands)
Three Months Ended Six Months Ended
------------------- -------------------
June 30, June 30, June 30, June 30,
2006 2005 2006 2005
------- ------- ------- -------
EBITDA (1) $11,447 $1,616 $19,826 $3,393
======= ======= ======= =======
Reconciliation of EBITDA:
Operating income 10,880 1,225 18,909 2,572
Add: Depreciation and
amortization 567 391 917 821
------- ------- ------- -------
EBITDA $11,447 $1,616 $19,826 $3,393
======= ======= ======= =======
(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 (2) $9,353 $1,236 $15,920 $2,568
======= ======= ======= =======
Reconciliation of Free
Cash Flow:
Net income $8,345 $2,511 $15,702 $3,298
Add: Depreciation,
amortization and
changes in
the reserve for
accounts receivable 1,355 515 1,837 1,050
Less: Non-cash income
tax benefit (347) (1,790) (1,619) (1,780)
------- ------- ------- -------
Free Cash Flow $9,353 $1,236 $15,920 $2,568
======= ======= ======= =======
(2) Free Cash Flow, a non-GAAP financial measure, represents net income
before depreciation, amortization, changes in the reserve for accounts
receivable and excludes non-cash income tax benefit. The Company
believes Free Cash Flow is useful for 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.
-0- 07/27/2006
/CONTACT: Warren Clamen, Chief Financial Officer of Iconix Brand Group,
+1-212-730-0030; or Joseph Teklits of Integrated Corporate Relations,
+1-203-682-8200 /
/Web site: http://iconixbrand.com /
(ICON)
CO: Iconix Brand Group, Inc.
ST: New York
IN: REA FAS HOU
SU: ERN ERP
KZ
-- NYTH099A --
1998 07/27/2006 08:00 EDT http://www.prnewswire.com