- Q2 revenue of $56.4 million, a 9% increase over $51.7 million
last year - Q2 EBITDA of $41.8 million and 74% EBITDA margin - Q2
Free cash flow of $35.1 million, a 34% increase over $26.3 million
last year - Q2 non-GAAP net income of $21.3 million, a 29% increase
over $16.5 million last year - Q2 non-GAAP diluted EPS of $0.33,
$0.06 above $0.27 last year - Raising 2009 revenue guidance to
$223-$230 million NEW YORK, Aug. 4 /PRNewswire-FirstCall/ -- Iconix
Brand Group, Inc. (NASDAQ:ICON) ("Iconix" or the "Company"), today
announced financial results for the second quarter ended June 30,
2009. Q2 2009 results: Revenue for the second quarter of 2009 was
approximately $56.4 million, a 9% increase as compared to
approximately $51.7 million in the second quarter of 2008. EBITDA
for the second quarter was approximately $41.8 million, a 19%
increase as compared to approximately $35.2 million in the prior
year quarter. Free cash flow for the quarter was $35.1 million a
34% increase as compared to approximately $26.3 million in the
prior year quarter. On a non-GAAP basis, which excludes non-cash
interest related to the adoption of the new accounting treatment
for convertible debt, net income increased 29% to approximately
$21.3 million, as compared to $16.5 million in the prior year
quarter and diluted earnings per share for the second quarter of
2009 was $0.33 versus $0.27 in the prior year quarter. On a GAAP
basis, net income increased 32% to approximately $19.3 million, as
compared to $14.6 million in the prior year quarter and diluted
earnings per share for the second quarter of 2009 was $0.30 versus
$0.24 in the prior year quarter. Six months ended June 30, 2009:
Revenue for the six months ended June 30, 2009 was $106.9 million
as compared to approximately $107.4 million in the prior year six
month period. EBITDA for the six month period increased 6% to
approximately $78.2 million as compared to approximately $73.9
million in the comparable prior year period, and free cash flow
increased 10% to approximately $64.9 million as compared to
approximately $59.0 million in the comparable prior year period.
Non-GAAP net income as defined above for the 2009 six month period
increased 12% to approximately $38.9 million as compared to
approximately $34.7 million in the comparable prior year period and
non-GAAP diluted earnings per share increased to $0.62 versus $0.57
in the comparable prior year period. On a GAAP basis, net income
increased 12% to approximately $34.9 million, as compared to $31.2
million in the comparable prior year period and diluted earnings
per share for the six month period was $0.56 versus $0.51 in the
comparable prior year period. 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, "I am
pleased to announce that we achieved record revenue and earnings
this quarter. We continued to grow market share for many of our
brands with a substantial increase driven by the successful
roll-out of our OP, Starter and DanskinNow brands at Walmart. Our
strong performance in this challenging economic environment
continues to demonstrate the power of our business model. Further,
with a strong balance sheet and over $200 million of cash on hand,
we believe that we are well positioned to execute against our
acquisition strategy." 2009 Guidance: The Company is raising its
full year 2009 revenue guidance to $223-$230 million from prior
guidance of $218-$225 million, and maintaining both its full year
2009 non-GAAP diluted EPS guidance of $1.30 to $1.35 and 2009 GAAP
diluted EPS guidance of $1.16 to $1.21 due to the impact of the
common stock offering completed in the second quarter in which the
Company raised approximately $153 million. The Company estimates
that free cash flow for 2009 will be approximately $130 million.
This guidance relates to the existing portfolio of brands only and
assumes no 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) and ED
HARDY (R) 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,
including the prospectus supplement relating to the offering. 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 Iconix Brand Group, Inc. and Subsidiaries Unaudited
Condensed Consolidated Income Statement (in thousands, except
earnings per share data) (Unaudited) (Unaudited) -----------
----------- Three Months Ended Six Months Ended June 30, June 30,
-------------------- ------------------- 2009 2008* 2009 2008*
-------------------- ------------------- Licensing and other
revenue $56,408 $51,700 $106,909 $107,367 Selling, general and
Administrative expenses 17,368 18,320 33,638 37,031 Expenses
related to specific litigation 83 195 137 386 --------------------
------------------- Operating income 38,957 33,185 73,134 69,950
Other expenses - net 8,769 10,441 18,567 21,821
-------------------- ------------------- Income before income taxes
30,188 22,744 54,567 48,129 ------------------- -------------------
Provision for income taxes 10,897 8,111 19,627 16,975
------------------- ------------------- Net income $19,291 $14,633
$34,940 $31,154 ==================== =================== Earnings
per share: Basic $0.31 $0.25 $0.58 $0.54 ====================
=================== Diluted $0.30 $0.24 $0.56 $0.51
==================== =================== Weighted average number of
common shares outstanding: Basic 62,467 57,719 60,044 57,572
==================== =================== Diluted 65,060 61,279
62,765 61,315 ==================== =================== Selected
Balance Sheet Items: (in thousands) 6/30/2009 12/31/2008*
(Unaudited) Total Assets $1,592,251 $1,420,259 Total Liabilities
$727,934 $776,170 Stockholders' Equity $864,317 $644,089 *Results
for the three months and six months ended June 30, 2008 and the
December 31, 2008 Balance Sheet have been adjusted for the
retrospective adoption of Financial Accounting Standards Board
Staff Position No. APB 14-1 (FSP APB 14-1), which became effective
for the fiscal years beginning after December 15, 2008. The
following tables detail unaudited reconciliations from non-GAAP
amounts to U.S. GAAP relating to the adoption of FASB Staff
Position No. APB 14-1 "Accounting for Convertible Debt Instruments
That May Be Settled In Cash Upon Conversion (Including Partial Cash
Settlements)", which became effective retroactively for the fiscal
years beginning after December 15, 2008. (in thousands, except per
share data) Three months ended Six months ended June 30, June 30,
June 30, June 30, -------- -------- -------- -------- Net income
reconciliation 2009 2008 2009 2008 ------------------------- ----
---- ---- ---- Non-GAAP Net Income (1) $21,280 $16,456 $38,868
$34,700 ==================== ==================== GAAP Net income
$19,291 $14,633 $34,940 $31,154 Add: Non cash interest related to
FSP APB 14-1 3,099 2,826 6,116 5,652 Deduct: Income taxes related
to non cash interest (1,110) (1,003) (2,188) (2,106)
-------------------- ------------------- Net 1,989 1,823 3,928
3,546 Non-GAAP Net Income $21,280 $16,456 $38,868 $34,700
==================== =================== Three months ended Six
months ended June 30, June 30, June 30, June 30, -------- --------
-------- -------- Diluted EPS reconciliation 2009 2008 2009 2008
-------------------------- ---- ---- ---- ---- Non-GAAP Diluted EPS
(1) $0.33 $0.27 $0.62 $0.57 ===================
==================== GAAP Diluted EPS $0.30 $0.24 $0.56 $0.51 Add:
Non-cash interest related to FSP APB 14-1, net of tax $0.03 $0.03
$0.06 $0.06 ------------------- -------------------- Non-GAAP
Diluted EPS $0.33 $0.27 $0.62 $0.57 ===================
==================== Forecasted Diluted EPS Year Ending Dec. 31,
Year Ended Dec. 31, ---------------------- 2009 2008 High-end
Low-end Actual Non-GAAP Diluted EPS (1) $1.35 $1.30 $1.15
=================== =================== GAAP Diluted EPS $1.21
$1.16 $1.02 Add: Non-cash interest related to FSP APB 14-1, net of
tax $0.14 $0.14 $0.13 ------------------- -------------------
Non-GAAP Diluted EPS $1.35 $1.30 $1.15 ===================
=================== (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 FSP APB
14-1. 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. The following
additional tables detail 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, -------- -------- -------- -------- 2009 2008 2009 2008 ----
---- ---- ---- EBITDA (2) $41,839 $35,188 $78,176 $73,941
================== =================== Reconciliation of EBITDA:
GAAP Net Income 19,291 14,633 34,940 31,154 Add: Provision for
income taxes 10,897 8,111 19,627 16,975 ------------------
------------------- Net Income before taxes 30,188 22,744 54,567
48,129 Add: Net interest expense 9,539 10,441 19,374 21,821 Add:
Depreciation and amortization of certain intangibles 2,112 2,003
4,235 3,991 ------------------ ------------------- EBITDA $41,839
$35,188 $78,176 $73,941 ================== =================== (2)
EBITDA, a non-GAAP financial measure, represents net income 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 (3) $35,071
$26,267 $64,937 $58,968 ================== ===================
Reconciliation of Free Cash Flow: GAAP Net Income 19,291 14,633
34,940 31,154 Add: Non-cash income taxes, non-cash interest related
to FSP APB 14-1, depreciation, amortization of trademarks and
finance fees, non-cash compensation expense, bad debt expense and
net equity earnings from joint ventures 15,789 15,321 30,017 31,939
Less: Capital expenditures (9) (3,687) (20) (4,125)
------------------- ------------------- Free Cash Flow $35,071
$26,267 $64,937 $58,968 =================== =================== (in
thousands) Year Ending Dec 31, 2009 High-end Low-end --------
------- Forecasted Free Cash Flow (3) $130,000 $127,700
======================== Reconciliation of Free Cash Flow: GAAP Net
Income 82,000 79,200 Add: Non-cash income taxes, non-cash interest
related to convertible debt, depreciation, amortization of
trademarks and finance fees, non-cash compensation expense, bad
debt expense and net equity earnings from joint ventures 51,000
51,000 Less: Capital expenditures (3,000) (2,500)
------------------------ Forecasted Free Cash Flow $130,000
$127,700 ======================== (3) Free Cash Flow, a non-GAAP
financial measure, represents net income before depreciation,
amortization, non-cash compensation expense, bad debt expense, net
equity earnings from joint ventures, non-cash income taxes,
non-cash interest related to FSP APB 14-1, 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. DATASOURCE: Iconix Brand Group,
Inc. CONTACT: Jaime Sheinheit, Investor Relations, Iconix Brand
Group, +1-212-730-0030 Web Site: http://iconixbrand.com/
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