NEW YORK, July 27 /PRNewswire-FirstCall/ -- Iconix Brand
Group, Inc. (Nasdaq: ICON) ("Iconix" or the "Company"), today
announced financial results for the second quarter ended
June 30, 2010.
Q2 2010 results for Iconix Brand Group, Inc:
Total revenue for the second quarter of 2010 was approximately
$76.0 million, a 35% increase as
compared to approximately $56.4
million in the second quarter of 2009. EBITDA attributable
to Iconix for the second quarter was approximately $49.4 million, an 18% increase as compared to
approximately $41.8 million in the
prior year quarter. Free cash flow for the quarter was $44.3 million, a 26% increase as compared to
approximately $35.1 million in the
prior year quarter. On a non-GAAP basis, which excludes non-cash
interest related to the Company's convertible debt, net income
attributable to Iconix increased 25% to approximately $26.7 million, as compared to $21.3 million in the prior year quarter and
diluted earnings per share, or EPS, for the second quarter of 2010
was $0.36 versus $0.33 in the prior year quarter. On a GAAP basis,
net income attributable to Iconix increased 27% to approximately
$24.5 million, as compared to
approximately $19.3 million in the
prior year quarter and GAAP diluted earnings per share for the
second quarter of 2010 was $0.33
versus $0.30 in the prior year
quarter.
Six months ended June 30, 2010
Total revenue for the six months ended June 30, 2010 was approximately $147.7 million, a 38% increase as compared to
approximately $106.9 million in the
prior year period. EBITDA attributable to Iconix for the six month
period was approximately $98.9
million, a 26% increase as compared to approximately
$78.2 million in the prior year
period, and free cash flow was approximately $84.4 million, a 30% increase as compared to
approximately $64.9 million in the
prior year period. On a non-GAAP basis, as defined above, net
income attributable to Iconix for the six month period increased
38% to approximately $53.7 million,
as compared to $38.9 million in the
prior year and non-GAAP diluted earnings per share increased to
$0.72 versus $0.62 in the prior year. On a GAAP basis, net
income attributable to Iconix increased 41% to approximately
$49.3 million, as compared to
approximately $34.9 million in the
prior year period and GAAP diluted earnings per share was
$0.66 versus $0.56 in the 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, "As we deliver a record second
quarter for our Company, we believe the advantages of our business
model and strength of our brands are evident. Our direct-to-retail
model has proven to be very powerful and was a key driver of our
organic growth this quarter with the majority of DTR brands posting
double digit retail sales gains. We are excited about our new
Peanuts platform and the worldwide access it gives us in over 40
countries. As we leverage our global platform, expand into new
categories, launch new programs with major retailers, and continue
to add iconic global lifestyle brands to our portfolio we believe
our Company is well positioned to continue to deliver strong
profitable growth."
2010 Guidance for Iconix Brand Group, Inc:
The Company is reiterating its full year 2010 revenue guidance
of $305-$315 million, its 2010
non-GAAP diluted EPS guidance of $1.35-$1.40, and its GAAP diluted EPS guidance of
$1.23-$1.28. The Company expects to
continue to generate strong free cash flow for 2010 of
approximately $150- $155 million.
This guidance relates to the existing portfolio of brands only and
does not include any additional 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.
About Iconix Brand Group, Inc: Iconix Brand Group, Inc. (Nasdaq:
ICON) owns, licenses and markets a growing portfolio of consumer
brands including CANDIE'S®, BONGO®, BADGLEY MISCHKA®, JOE BOXER®,
RAMPAGE®, MUDD®, LONDON FOG®, MOSSIMO®, OCEAN PACIFIC®, DANSKIN®,
ROCAWEAR®, CANNON®, ROYAL VELVET®, FIELDCREST®, CHARISMA®, STARTER®
and WAVERLY®. In addition, Iconix owns an interest in the ARTFUL
DODGER®, ED HARDY®, ECKO®, MARC ECKO®, ZOO YORK®, MATERIAL
GIRL™, and PEANUTS® 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.
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.
Condensed Consolidated Income
Statements
(in thousands, except earnings
per share data)
|
|
|
|
|
(Unaudited)
|
(Unaudited)
|
|
|
Three Months Ended June
30,
|
Six Months Ended June
30,
|
|
|
2010
|
2009
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Licensing and other
revenue
|
$ 76,013
|
$56,408
|
|
$ 147,717
|
|
$ 106,909
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
26,369
|
17,368
|
|
48,687
|
|
33,638
|
|
Expenses related to specific
litigation
|
201
|
83
|
|
207
|
|
137
|
|
|
|
|
|
|
|
|
|
Operating income
|
49,443
|
38,957
|
|
98,823
|
|
73,134
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
9,948
|
9,539
|
|
19,923
|
|
19,374
|
|
|
|
|
|
|
|
|
|
Equity earnings on joint
ventures
|
(1,104)
|
(770)
|
|
(2,217)
|
|
(807)
|
|
|
|
|
|
|
|
|
|
Other expenses – net
|
8,844
|
8,769
|
|
17,706
|
|
18,567
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
40,599
|
30,188
|
|
81,117
|
|
54,567
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
14,480
|
10,897
|
|
28,544
|
|
19,627
|
|
|
|
|
|
|
|
|
|
Net income
|
$ 26,119
|
$ 19,291
|
|
$ 52,573
|
|
$ 34,940
|
|
|
|
|
|
|
|
|
|
Net income attributable to
non-controlling interest
|
1,578
|
-
|
|
3,258
|
|
-
|
|
|
|
|
|
|
|
|
|
Net income attributable to
Iconix Brand Group, Inc.
|
$24,541
|
$ 19,291
|
|
$ 49,315
|
|
$ 34,940
|
|
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
Basic
|
$ 0.34
|
$ 0.31
|
|
$ 0.69
|
|
$ 0.58
|
|
|
|
|
|
|
|
|
|
Diluted
|
$ 0.33
|
$ 0.30
|
|
$ 0.66
|
|
$ 0.56
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of
common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
72,169
|
62,467
|
|
71,855
|
|
60,044
|
|
|
|
|
|
|
|
|
|
Diluted
|
74,749
|
65,060
|
|
74,589
|
|
62,765
|
|
|
|
|
|
|
|
|
Selected Balance Sheet
Items:
(in thousands)
|
(Unaudited)
6/30/2010
|
12/31/2009
|
|
|
|
|
|
Total Assets
|
$1,882,810
|
$1,802,613
|
|
Total Liabilities
|
$811,819
|
$832,841
|
|
Stockholders' Equity
|
$1,070,991
|
$969,772
|
|
|
|
|
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)" (ASC Topic 470) ("FSP APB 14-1"), which
became effective retroactively for the fiscal years beginning after
December 15, 2008.
Note: All items in the following reconciliation tables are
attributable to Iconix Brand Group, Inc. and exclude results
related to non-controlling interests.
(in thousands, except per share
data)
|
|
|
|
|
|
(Unaudited)
Three months
ended
|
|
(Unaudited)
Six months ended
|
|
|
|
|
Net income
reconciliation
|
June 30,
2010
|
June 30,
2009
|
|
June 30,
2010
|
June 30,
2009
|
|
Non-GAAP Net Income
(1)
|
$26,692
|
$21,280
|
|
$
53,657
|
$
38,868
|
|
|
|
|
|
|
|
|
GAAP Net income
|
$
24,541
|
$
19,291
|
|
$
49,315
|
$
34,940
|
|
|
|
|
|
|
|
|
Add: Non-cash interest related
to FSP APB 14-1
|
3,347
|
3,099
|
|
6,700
|
6,116
|
|
Deduct: Income taxes related to
non-cash interest
|
(1,196)
|
(1,110)
|
|
(2,358)
|
(2,188)
|
|
Net
|
2,151
|
1,989
|
|
4,342
|
3,928
|
|
|
|
|
|
|
|
|
Non-GAAP Net Income
|
$26,692
|
$21,280
|
|
$
53,657
|
$
38,868
|
|
|
|
|
|
|
|
|
|
(Unaudited)
Three months
ended
|
|
(Unaudited)
Six months ended
|
|
Diluted EPS
reconciliation
|
June 30,
2010
|
June 30,
2009
|
|
June 30,
2010
|
June 30,
2009
|
|
Non-GAAP Diluted EPS
(1)
|
$
0.36
|
$
0.33
|
|
$
0.72
|
$
0.62
|
|
|
|
|
|
|
|
|
GAAP Diluted EPS
|
$
0.33
|
$
0.30
|
|
$
0.66
|
$
0.56
|
|
|
|
|
|
|
|
|
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
|
$
0.36
|
$
0.33
|
|
$
0.72
|
$
0.62
|
|
|
|
|
|
|
|
Forecasted Diluted
EPS
|
Year Ending
12/31/2010
|
|
|
Year Ended
12/31/2009
|
|
|
High
|
Low
|
|
|
Actual
|
|
|
|
|
|
|
|
|
Non-GAAP Diluted EPS
(1)
|
$1.40
|
$1.35
|
|
|
$1.22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Diluted EPS
|
$1.28
|
$1.23
|
|
|
$1.10
|
|
|
|
|
|
|
|
|
Add: Non-cash interest related
to FSP APB 14-1, net of tax
|
$0.12
|
$0.12
|
|
|
$0.12
|
|
Non-GAAP Diluted EPS
|
$1.40
|
$1.35
|
|
|
$1.22
|
|
|
|
|
|
|
|
|
(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 they
are representative of only actual cash interest paid on
outstanding debt.
|
|
|
|
|
|
|
|
(in thousands)
|
|
|
|
(Unaudited)
Three months
ended
|
|
(Unaudited)
Six months ended
|
|
|
|
|
|
|
|
June 30,
2010
|
June 30,
2009
|
|
June 30,
2010
|
June 30,
2009
|
|
EBITDA (2)
|
$49,403
|
$41,839
|
|
$98,850
|
$78,176
|
|
|
|
|
|
|
|
|
|
Reconciliation of
EBITDA:
|
|
|
|
|
|
|
Net Income
|
24,541
|
19,291
|
|
49,315
|
34,940
|
|
|
|
|
|
|
|
|
Add: Income taxes attributable
to Iconix Brand Group, Inc.
|
13,631
|
10,897
|
|
26,790
|
19,627
|
|
|
|
|
|
|
|
|
Add: Net interest
expense
|
9,231
|
9,539
|
|
18,476
|
19,374
|
|
|
|
|
|
|
|
|
|
Add: Depreciation and
amortization of certain intangibles
|
2,000
|
2,112
|
|
4,269
|
4,235
|
|
EBITDA
|
$49,403
|
$41,839
|
|
$98,850
|
$78,176
|
|
|
|
|
|
|
|
|
|
(2) 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.
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
Three months
ended
|
(Unaudited)
Six months ended
|
|
(in thousands)
|
June 30, 2010
|
June 30, 2009
|
|
June 30, 2010
|
June 30, 2009
|
|
|
|
|
|
|
|
|
Free Cash Flow (3)
|
$44,321
|
$35,071
|
|
$84,381
|
$64,937
|
|
|
|
|
|
|
|
|
|
Reconciliation of Free Cash
Flow:
|
|
|
|
|
|
|
Net Income
|
24,541
|
19,291
|
|
49,315
|
34,940
|
|
|
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,
net equity earnings from certain
joint ventures and
non-cash gain/loss from sale of
trademarks
|
20,405
|
15,789
|
|
35,715
|
30,017
|
|
Less: Capital
expenditures
|
(625)
|
(9)
|
|
(649)
|
(20)
|
|
|
|
|
|
|
|
|
|
Free Cash Flow
|
$44,321
|
$35,071
|
|
$84,381
|
$64,937
|
|
|
|
|
|
|
|
|
(in thousands)
|
Year Ending
Dec 31, 2010
|
|
|
High
|
Low
|
|
Forecasted Free Cash Flow
(3)
|
$155,000
|
$150,000
|
|
|
|
|
|
Reconciliation of Free Cash
Flow:
|
|
|
|
Net
Income
|
$95,000
|
$90,000
|
|
Add: Non-cash income taxes,
non-cash interest
|
63,000
|
63,000
|
|
related to convertible debt,
depreciation, amortization
|
|
of trademarks and finance fees,
non-cash
|
|
compensation expense, bad debt
expense, net
|
|
equity earnings from certain
joint ventures and non-cash gain/loss from sale of
trademarks
|
|
Less: Capital
expenditures
|
(3,000)
|
(3,000)
|
|
|
|
|
|
Forecasted Free Cash
Flow
|
$155,000
|
$150,000
|
|
|
|
|
|
(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
certain
joint ventures, non-cash income
taxes, non-cash interest related to convertible debt,
non-cash
gains/loss from
sale of trademarks, 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.
|
|
|
|
|
SOURCE Iconix Brand Group, Inc.