Iconix Brand Group Reports Record Earnings for the First Quarter 2007
May 01 2007 - 9:00AM
PR Newswire (US)
-- Q1 Licensing Revenue of $30.8 million compared to $13.3 million
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
Executive Vice President 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 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 DATASOURCE: Iconix Brand Group, Inc. CONTACT: David
Conn, Executive Vice President of Iconix Brand Group,
+1-212-730-0030; or Joseph Teklits of Integrated Corporate
Relations, +1-203-682-8200 Web site: http://iconixbrand.com/
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