NEW YORK, Feb. 16, 2011 /PRNewswire/ -- Iconix Brand Group,
Inc. (Nasdaq: ICON) ("Iconix" or the "Company"), today announced
financial results for the fourth quarter and year ended
December 31, 2010.
Full Year 2010 results for Iconix Brand Group, Inc:
Total revenue for the full year 2010 was approximately
$332.6 million, a 43% increase as
compared to approximately $232.1
million for the prior year. EBITDA attributable to Iconix
for 2010 increased 29% to approximately $209.6 million, and includes a one-time gain
related to the Company's Unzipped litigation described below. Free
cash flow for 2010 was approximately $166.6
million, a 24% increase as compared to the prior year
period. On a non-GAAP basis, which excludes non-cash interest
related to the Company's convertible debt, net income attributable
to Iconix for 2010 increased 29% to approximately $107.8 million as compared to the prior year and
non-GAAP diluted earnings per share increased to $1.44 versus $1.22
for the prior year. On a GAAP basis, net income attributable to
Iconix increased 32% to approximately $98.8
million as compared to the prior year period and GAAP
diluted earnings per share was $1.32
versus $1.10 for the prior year.
Q4 2010 results for Iconix Brand Group, Inc:
Total revenue for the fourth quarter of 2010 was approximately
$88.0 million, a 34% increase as
compared to approximately $65.8
million for the fourth quarter of 2009. EBITDA attributable
to Iconix for the fourth quarter increased 40% to approximately
$58.6 million, and includes a
one-time gain related to the Company's Unzipped litigation
described below. Free cash flow for the quarter was approximately
$45.4 million, a 37% increase as
compared to the prior year quarter. On a non-GAAP basis, as defined
above, net income attributable to Iconix increased 12% to
approximately $24.5 million and
diluted earnings per share, or EPS, for the fourth quarter of 2010
was $0.33 versus $0.30 for the prior year quarter. On a GAAP
basis, net income attributable to Iconix increased 12% to
approximately $22.1 million as
compared to the prior year quarter and GAAP diluted EPS for the
fourth quarter of 2010 was $0.30
versus $0.27 for the prior year
quarter.
The full year and fourth quarter ended December 31, 2010 include the following
non-recurring items.
- $16.0 million pre-tax income, net
of expenses, relating to the favorable judgment received in
December 2010 in the Unzipped
litigation.
- $13 million pre-tax write down of
the Company's auction rate security.
- Approximately $3 million pre-tax
non-recurring expenses related to the integration of Peanuts.
These one-time items, when taken on a net basis, are neutral to
net income and EPS.
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, "2010 was another record year
for our Company in which we continued to demonstrate the strength
of our portfolio and the profitability of our business model. Our
brands continue to gain market share as we build lifestyle
businesses and optimize distribution. We also expanded our platform
into new categories and geographies in 2010 through our Peanuts
acquisition. With 27 iconic brands that represent approximately
$12 billion in annual retail sales we
have made tremendous progress, and I believe through continued
growth with our current partners, international expansion, and new
acquisitions we can continue to build on our successes."
2011 Guidance for Iconix Brand Group, Inc:
The Company is reaffirming its full year 2011 revenue guidance
of $340-350 million, 2011 non-GAAP
diluted EPS guidance of $1.53-$1.58
and GAAP diluted EPS guidance of $1.40-$1.45. The Company estimates that free cash
flow for 2011 will be approximately $160-165
million. This guidance relates to the existing portfolio of
brands only and does not include any 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. 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), ED HARDY (R), ECKO (R), MARC ECKO (R), ZOO YORK (R), MATERIAL GIRL(TM)
and PEANUTS (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 worldwide. Through its in-house
business development, merchandising, advertising and public
relations departments Iconix manages its brands to 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", "estimate", "expect",
"confident", "continue", "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
|
|
|
Condensed Consolidated
Income Statements
(in thousands, except
earnings per share data)
|
|
|
|
|
(Unaudited)
|
|
|
|
Three Months
Ended Dec. 31,
|
Year Ended
Dec. 31,
|
|
|
2010
|
2009
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
Licensing and other
revenue
|
$ 87,955
|
$65,782
|
|
$ 332,559
|
|
$ 232,058
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
47,813
|
24,695
|
|
138,532
|
|
79,356
|
|
(Income)/expenses related to
specific litigation
|
(15,928)
|
|
|
(15,688)
|
|
137
|
|
|
|
|
|
|
|
|
|
Operating income
|
56,070
|
41,087
|
|
209,715
|
|
152,565
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
9,632
|
10,338
|
|
39,318
|
|
38,733
|
|
|
|
|
|
|
|
|
|
Equity earnings on joint
ventures
|
(3,250)
|
(860)
|
|
(5,492)
|
|
(3,424)
|
|
|
|
|
|
|
|
|
|
Write-off of marketable
securities
|
13,000
|
-
|
|
13,000
|
|
-
|
|
|
|
|
|
|
|
|
|
Other expenses –
net
|
19,382
|
9,478
|
|
46,826
|
|
35,309
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
36,688
|
31,609
|
|
162,889
|
|
117,256
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
12,367
|
10,214
|
|
52,409
|
|
41,225
|
|
|
|
|
|
|
|
|
|
Net income
|
$ 24,321
|
$ 21,395
|
|
$ 110,480
|
|
$ 76,031
|
|
|
|
|
|
|
|
|
|
Less: Net income attributable to
non-controlling interest
|
2,198
|
1,679
|
|
11,633
|
|
920
|
|
|
|
|
|
|
|
|
|
Net income attributable to
Iconix Brand Group, Inc.
|
$22,123
|
$ 19,716
|
|
$ 98,847
|
|
$ 75,111
|
|
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
Basic
|
$ 0.30
|
$ 0.28
|
|
$ 1.37
|
|
$ 1.14
|
|
|
|
|
|
|
|
|
|
Diluted
|
$ 0.30
|
$ 0.27
|
|
$ 1.32
|
|
$ 1.10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of
common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
72,560
|
71,431
|
|
72,151
|
|
65,763
|
|
|
|
|
|
|
|
|
|
Diluted
|
74,743
|
73,683
|
|
74,713
|
|
68,325
|
|
|
|
|
|
|
|
|
|
|
Selected Balance Sheet
Items:
(in thousands)
|
12/31/2010
|
12/31/2009
|
|
|
|
|
|
Total Assets
|
$1,948,470
|
$1,802,613
|
|
Total Liabilities
|
$812,339
|
$832,841
|
|
Stockholders' Equity
|
$1,136,131
|
$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)
|
|
(Unaudited)
|
|
|
Three months
ended
|
|
Year
ended
|
|
Net income
reconciliation
|
Dec
31,
2010
|
Dec
31,
2009
|
|
Dec
31,
2010
|
Dec
31,
2009
|
|
Non-GAAP net income
(1)
|
$24,491
|
$21,875
|
|
$
107,819
|
$
83,344
|
|
|
|
|
|
|
|
|
GAAP net income
|
$
22,123
|
$
19,716
|
|
$
98,847
|
$
75,111
|
|
|
|
|
|
|
|
|
Add: Non-cash interest related
to FSP APB 14-1
|
3,679
|
3,347
|
|
13,729
|
12,808
|
|
Deduct: Income taxes related to
non-cash interest
|
(1,311)
|
(1,188)
|
|
(4,757)
|
(4,575)
|
|
Net
|
2,368
|
2,159
|
|
8,972
|
8,233
|
|
|
|
|
|
|
|
|
Non-GAAP net income
|
$24,491
|
$21,875
|
|
$
107,819
|
$
83,344
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
Three months
ended
|
|
(Unaudited)
Year
ended
|
|
Diluted EPS
reconciliation
|
Dec
31,
2010
|
Dec
31,
2009
|
|
Dec
31,
2010
|
Dec
31,
2009
|
|
Non-GAAP diluted EPS
(1)
|
$
0.33
|
$
0.30
|
|
$
1.44
|
$
1.22
|
|
|
|
|
|
|
|
|
GAAP diluted EPS
|
$
0.30
|
$
0.27
|
|
$
1.32
|
$
1.10
|
|
|
|
|
|
|
|
|
Add: Non-cash interest related
to FSP APB 14-1, net of tax
|
$
0.03
|
$
0.03
|
|
$
0.12
|
$
0.12
|
|
|
|
|
|
|
|
|
Non-GAAP diluted
EPS
|
$
0.33
|
$
0.30
|
|
$
1.44
|
$
1.22
|
|
|
|
|
|
|
|
Forecasted Diluted
EPS
|
(Unaudited)
Year
Ending
Dec. 31,
2011
|
|
|
High
|
Low
|
|
|
|
|
|
Non-GAAP diluted EPS
(1)
|
$1.58
|
$1.53
|
|
|
|
|
|
GAAP diluted EPS
|
$1.45
|
$1.40
|
|
|
|
|
|
Add: Non-cash interest related
to FSP APB 14-1, net of tax
|
$0.13
|
$0.13
|
|
Non-GAAP Diluted
EPS
|
$1.58
|
$1.53
|
|
|
|
(1) Non-GAAP net income and
non-GAAP 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)
|
|
(Unaudited)
|
|
|
|
Three months
ended
|
|
Year
ended
|
|
|
|
Dec
31,
2010
|
Dec
31,
2009
|
|
Dec
31,
2010
|
Dec
31,
2009
|
|
EBITDA (2)
|
$58,647
|
$41,869
|
|
$209,567
|
$163,081
|
|
|
|
|
|
|
|
|
|
Reconciliation of
EBITDA:
|
|
|
|
|
|
|
Net Income
|
22,123
|
19,716
|
|
98,847
|
75,111
|
|
|
|
|
|
|
|
|
Add: Income taxes
|
12,367
|
10,169
|
|
52,409
|
41,222
|
|
|
|
|
|
|
|
|
Add: Net interest expense and
other
|
21,964
|
10,338
|
|
49,552
|
38,733
|
|
|
|
|
|
|
|
|
|
Add: Depreciation and
amortization of certain intangibles
|
2,193
|
1,646
|
|
8,759
|
8,015
|
|
EBITDA
|
$58,647
|
$41,869
|
|
$209,567
|
$163,081
|
|
|
|
|
|
|
|
|
(2) EBITDA, a non-GAAP
financial measure, represents income from operations before income
taxes, interest, write-off of marketable securities, 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.
|
|
|
|
|
|
|
|
|
(in thousands)
|
(Unaudited)
Three months
ended
|
|
(Unaudited)
Year
ended
|
|
|
Dec 31,
2010
|
Dec 31,
2009
|
|
Dec 31,
2010
|
Dec 31,
2009
|
|
Free Cash Flow (3)
|
$45,443
|
$33,194
|
|
$166,571
|
$134,843
|
|
|
|
|
|
|
|
|
|
Reconciliation of Free Cash
Flow:
|
|
|
|
|
|
|
Net Income
|
22,123
|
19,716
|
|
98,847
|
75,111
|
|
|
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, non-
cash gain/loss from sale of
trademarks
and non-cash write-off of
marketable securities
|
25,819
|
15,562
|
|
70,914
|
63,605
|
|
Less: Capital
expenditures
|
(2,499)
|
(2,084)
|
|
(3,190)
|
(3,873)
|
|
|
|
|
|
|
|
|
|
Free Cash Flow
|
$45,443
|
$33,194
|
|
$166,571
|
$134,843
|
|
|
|
|
|
|
|
|
|
|
Year
Ending
|
|
(in thousands)
|
|
Dec 31,
2011
|
|
|
|
High
|
Low
|
|
Forecasted Free Cash Flow
(3)
|
|
$165,000
|
$160,000
|
|
|
|
|
|
|
Reconciliation of Free Cash
Flow:
|
|
|
|
|
Net
Income
|
|
$109,000
|
$105,000
|
|
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
|
|
60,000
|
60,000
|
|
|
|
|
|
|
|
|
|
|
Less: Capital
expenditures
|
|
(4,000)
|
(5,000)
|
|
|
|
|
|
|
Forecasted Free Cash
Flow
|
|
$165,000
|
$160,000
|
|
|
|
|
|
|
(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, non-cash
write-off of marketable
securities, 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.