ICON Icon Energy Corporation

- Q3 revenue increased 29% to $55.1m and EBITDA increased 23% to $37.9m NEW YORK, Nov. 3 /PRNewswire-FirstCall/ -- Iconix Brand Group, Inc. (NASDAQ:ICON) ("Iconix" or the "Company"), today announced financial results for the third quarter ended September 30, 2008. Q3 2008 results: Revenue for the third quarter of 2008 increased 29% to approximately $55.1 million, as compared to approximately $42.7 million in the third quarter of 2007. EBITDA for the third quarter increased 23% to approximately $37.9 million as compared to approximately $30.8 million in the prior year quarter, and free cash flow for the quarter increased 13% to approximately $31.5 million as compared to approximately $27.9 million in the prior year quarter. Net income for the third quarter increased 8% to approximately $18.3 million, as compared to $17.0 million in the prior year quarter and GAAP diluted earnings per share increased to $0.30 versus $0.28 in the prior year quarter. EBITDA and free cash flow are non-GAAP metrics and reconciliation tables for both are attached to this press release. Nine months ended September 30, 2008 results: Revenue for the nine months ended September 30, 2008 increased 44% to approximately $162.5 million as compared to approximately $112.6 million in the prior year nine month period. EBITDA for the nine month period increased 31% to approximately $111.8 million as compared to approximately $85.4 million in the prior year period, and free cash flow increased 22% to approximately $91.0 million as compared to approximately $74.8 million in the prior year period. Net income for the nine month period increased 19% to approximately $53.0 million as compared to approximately $44.5 million in the prior year period and GAAP diluted earnings per share increased to $0.87 versus $0.73 in the prior year period. Neil Cole, Chairman and CEO of Iconix Brand Group, Inc. commented, "Our strong performance in the third quarter demonstrates, more than ever, that our business model is extremely well suited to thrive in the current economic environment. Having a diversified portfolio of 17 iconic brands and partnerships with best in class retailers enables us to continue to deliver great results. In issuing 2009 guidance today, we are confident in our ability to grow sales and earnings next year and we are energized about our organic growth plans." 2008 Guidance: The Company expects to achieve its 2008 guidance for revenue of $215-220 million and diluted earnings per share of $1.15-$1.20, but is now guiding towards the low-end of the ranges. Free cash flow is projected to be in excess of $120 million. 2009 Guidance: The Company is issuing guidance for the full year 2009 of revenue in a range of $225-$235 million. The Company estimates non-GAAP diluted earnings per share to be in a range of $1.20-$1.30, excluding any non-cash interest related to the convertible debt. Free cash flow is estimated to be in a range of $114-$118 million. This guidance relates to the existing portfolio of brands only and includes no revenue assumption from acquisitions. Beginning in 2009, GAAP will require the Company to record incremental non-cash interest related to our convertible debt for 2009 and 2008 for comparability purposes. The Company expects the impact of this change in accounting policy to be $0.14 for 2009 and $0.13 for 2008. See reconciliation tables below for non-GAAP metrics. Other News: In a separate press release, the Company announced that its Board of Directors has authorized a program to repurchase up to $75 million of its common stock. 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), ROCAWEAR(R), CANNON (R), ROYAL VELVET(R), FIELDCREST(R), CHARISMA(R), STARTER(R), and WAVERLY(R). 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. Contact Information: Jaime Sheinheit Director of Strategic Development 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 Sept. 30, Nine Months Ended Sept. 30, --------------------------- --------------------------- 2008 2007 2008 2007 --------------------------- --------------------------- Licensing and other revenue $55,135 $42,681 $162,502 $112,593 Selling, general and Administrative expenses 18,558 13,400 55,589 30,130 Expenses related to specific litigation 279 (39) 665 1,055 --------------------------- --------------------------- Operating income 36,298 29,320 106,248 81,408 Other expenses - net 8,007 4,719 24,178 14,254 --------------------------- --------------------------- Income before income taxes 28,291 24,601 82,070 67,154 --------------------------- --------------------------- Provision for income taxes 9,974 7,608 29,053 22,625 --------------------------- --------------------------- Net income $18,317 $16,993 $53,017 $44,529 =========================== =========================== Earnings per share: Basic $0.32 $0.30 $0.92 $0.79 =========================== =========================== Diluted $0.30 $0.28 $0.87 $0.73 =========================== =========================== Weighted average number of common shares outstanding: Basic 57,841 56,801 57,662 56,569 =========================== =========================== Diluted 61,091 61,380 61,241 61,289 =========================== =========================== Selected Balance Sheet Items: 9/30/2008 12/31/2007 (Unaudited) (Audited) Total Assets $1,384,778 $1,336,130 Total Liabilities $787,336 $808,210 Stockholders' Equity $597,442 $527,920 The following tables detail unaudited reconciliations from non-GAAP amounts to U.S. GAAP and effects of these items: (in thousands) Three months ended Nine months ended Sept. 30, Sept. 30, Sept. 30, Sept 30, --------- --------- --------- -------- 2008 2007 2008 2007 ---- ---- ---- ---- EBITDA(1) $37,875 $30,840 $111,816 $85,394 ==================== ================== Reconciliation of EBITDA: Net Income 18,317 16,993 53,017 44,529 Add: Provision for income taxes 9,974 7,608 29,053 22,625 -------------------- ---------------- Net Income before taxes 28,291 24,601 82,070 67,154 Add: Net interest expense 7,579 4,719 23,750 14,254 Add: Depreciation and amortization of certain intangibles 2,005 1,520 5,996 3,986 -------------------- ---------------- EBITDA $37,875 $30,840 $111,816 $85,394 ==================== ================== (1) EBITDA, a non-GAAP financial measure, represents GAAP net income plus 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) $31,488 $27,948 $91,003 $74,837 ==================== ================== Reconciliation of Free Cash Flow: Net Income 18,317 16,993 53,017 44,529 Add: Depreciation, 3,320 3,375 13,272 7,751 amortization of trademarks and finance fees, non cash compensation expense, and bad debt expense, net of gain on sale of trademarks Add: Non-cash income taxes 9,974 7,608 28,962 22,625 Less: Capital expenditures (123) (28) (4,248) (68) -------------------- ---------------- Free Cash Flow $31,488 $27,948 $91,003 $74,837 ==================== ================== (in thousands) Year Ended Dec Year Ended Dec 31, 2009 31, 2008 High-end Low-end High-end Low-end Forecasted Free Cash Flow(2) $118,000 $114,000 $125,000 $120,000 -------------------- -------------------- Reconciliation of Free Cash Flow: Net Income(3) 79,000 73,000 74,000 71,000 Add: Depreciation, 21,000 21,000 20,000 18,000 amortization of trademarks and finance fees, non cash compensation expense, and bad debt expense, net of gain on sale of trademarks Add: Non-cash income taxes 25,000 25,000 38,000 38,000 Less: Capital expenditures (7,000) (5,000) (7,000) (7,000) -------------------- -------------------- Forecasted Free Cash Flow $118,000 $114,000 $125,000 $120,000 -------------------- -------------------- (2) Free Cash Flow, a non-GAAP financial measure, represents net income before depreciation, amortization, non cash compensation expense, bad debt expense, net of gain on sale of trademarks, and add back the non-cash income taxes and deduct 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. (3) The following table details unaudited reconciliations from non-GAAP amounts to U.S. GAAP based on the FASB Staff Position APB 14-1 "Accounting for Convertible Debt Instruments That May Be Settled In Cash Upon Conversion (Including Partial Cash Settlements)", which is effective for the fiscal year beginning January 1, 2009. Net Income: Year Ended Dec 31, 2009 Year Ended Dec 31, 2008 High-end Low-end High-end Low-end Non-GAAP Net Income 79,000 73,000 74,000 71,000 effective January 1, 2009 Less: Non Cash interest (8,500) (8,500) (7,900) (7,900) (net of tax) U.S. GAAP Net Income effective January 1, 2009 70,500 64,500 66,100 63,100 Earnings Per Share: Year Ended Dec 31, 2009 Year Ended Dec 31, 2008 High-end Low-end High-end Low-end Non-GAAP EPS - effective January 1, 2009 $1.30 $1.20 $1.20 $1.15 Less: Non-cash interest ($0.14) ($0.14) ($0.13) ($0.13) --------------------- --------------------- U.S. GAAP EPS - effective January 1, 2009 $1.16 $1.06 $1.07 $1.02 --------------------- --------------------- DATASOURCE: Iconix Brand Group, Inc. CONTACT: Jaime Sheinheit, Director of Strategic Development, Iconix Brand Group, +1-212-730-0030, or Joseph Teklits, Integrated Corporate Relations, +1-203-682-8200 Web Site: http://iconixbrand.com/

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