Iconix Secures New Credit Facility - Analyst Blog
November 25 2011 - 12:23PM
Zacks
In order to enhance liquidity and boost the capital structure,
Iconix Brand Group, Inc. (ICON) has agreed to a
$150 million secured revolving credit facility of two years.
Iconix h with
Barclays Capital, a unit of Barclays Plc (BCS),
Goldman Sachs Bank USA, a wing of The Goldman Sachs Group,
Inc. (GS), and GE Capital Markets, a part
of General
Electric (GE). The facility will thus offer capital at
a low cost.
Iconix’s board has recently authorized a program to repurchase
up to $200 million of its common stock over a four year period,
replacing the current share repurchase program expiring October 30,
2011.
On the same day, Iconix planned to acquire The Sharper Image
brand and intellectual property assets for approximately $65.6
million from Sharper Image Acquisition, LLC.
Iconix’s first steps in the consumer electronics sector will
benefit the company as Sharper Image operates under a licensing
business model. Further, the company expects the Sharper Image
brand to bring in approximately $12-13 million in annual royalty
revenue.
Iconix posted third quarter 2011 earnings in line with the Zacks Consensus
Estimate and the prior-year estimate of 40 cents per share, on the
back of steady organic strength across its portfolio of
brands.
Iconix has also reaffirmed
its fiscal 2011 reported earnings forecast at $1.61 - $1.66 per
share. On an adjusted basis, Iconix reaffirmed its earnings of
$1.63-$1.68.
For fiscal 2012, the company expects its reported earnings to
lie in the range of $1.62-$1.69 and expects its adjusted earnings
guidance to be $1.77-$1.84.
Further, the company expects Sharper Image to be earnings
neutral in 2011 due to the timing of the close and transaction
costs.
Iconix exited the year with free cash flow of $44.9 million, up
9% from the prior-year quarter. Capital expenditures for the
quarter were $280 million.
For fiscal 2011, the company reiterates its free cash flow in
the range of $167.0 million to $172.0 million, and provides a free
cash flow guidance of $187.0 million to $194.0 million in 2012.
Currently, we maintain a long-term Neutral recommendation on the
shares. Additionally, the quantitative Zacks Rank for Iconix is #3,
which implies a short-term Hold rating.
BARCLAY PLC-ADR (BCS): Free Stock Analysis Report
GENL ELECTRIC (GE): Free Stock Analysis Report
GOLDMAN SACHS (GS): Free Stock Analysis Report
ICONIX BRAND GP (ICON): Free Stock Analysis Report
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