NexCen Brands, Inc. reported that total revenues for the second quarter sequentially increased to $8.9 million, compared to $3.9 million in the first quarter of 2007. Income from continuing operations was $650,000 or a penny per share, compared to a loss from continuing operations of $645,000 or a penny per share for the first quarter of 2007. Income from continuing operations for the second quarter included stock-based compensation expense of $731,000 and transition costs of approximately $450,000 relating to the integration of the company's franchising operations in it's Atlanta location, which reduced operating income by approximately 2 cents per share. The company reported a net loss of ($245,000) or a penny per diluted share for the quarter, compared to a net loss of ($198,000) or ($0.00) per share for Q1 2007.
Commenting on the quarter, Robert D'Loren, President and CEO of NexCen Brands, Inc., noted, “I am extremely gratified by the extent of our accomplishments and our ability to quickly become operationally profitable. During the quarter, we directed a considerable amount of effort toward building NexCen's operating infrastructure and improving the depth of our management team, including the addition of new presidents in our QSR and home businesses. It is important for shareholders to understand that our goal is to make accretive and synergistic acquisitions, and to support and grow each of our operating verticals. I believe that we made great strides in advancing these goals during the quarter.”
Mr. D'Loren further stated, “I am pleased about the recent acquisition of Pretzel Time and Pretzelmaker, as these brands and their related products mark the beginning of the Company's revenue growth strategy for its ice cream QSR concepts.”
As of June 30, 2007, NexCen had cash and cash equivalents of $27 million, total assets of $273 million, long-term debt of $54 million and deferred revenues of $5.7 million.
Mr. D'Loren concluded, “One of the most exciting events during the second quarter took place at our TAF Global Franchise Convention in Las Vegas in June, where we introduced our vision for the future of The Athlete's Foot (“TAF”) to approximately 70 TAF franchisees, representing over 600 stores throughout the world. We presented an innovative, modular merchandising system that will allow each store location to more closely align its product offering with local demographics and buying tastes. In addition, we introduced our new line of high margin, TAF branded apparel. Both of these introductions were received enthusiastically by the franchisees in attendance. Adding to our excitement about TAF was the recent signing of an agreement with an existing TAF area developer, to open a minimum of 100 new domestic stores over the next 14 years.”
The results for the second quarter of 2007 included: (a) The Athlete's Foot, Bill Blass and MaggieMoo's and Marble Slab for the entire quarter and (b) Waverly for approximately two months. The Company did not own any of these brands during the first half of 2006.
For the six months ended June 30, 2007, NexCen reported total revenues of $12.7 million and a net loss of ($443,000) or ($0.01) per share.
The results for the first six months of 2007 included: (a) The Athlete's Foot for the entire six months, (b) Bill Blass from February 15 (date of acquisition), (c) MaggieMoo's and Marble Slab from February 28 (date of acquisition) and (d) Waverly for approximately two months.
NEXCEN BRANDS, INC
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE DATA)
(UNAUDITED)Three Months Six Months Ended
Ended June 30, Ended June 30,
2007 2006 2007 2006
Revenues:
Royalty revenues $3,515 $- $5,689 $-
Licensing revenues 4,179 – 5,786 –
Franchise fee revenues 1,158 – 1,261 –
Total Revenues 8,852 – 12,736 –Operating Expenses:
Selling, general and
administrative expenses:
Corporate 2,241 1,015 4,139 1,744
Brands 3,510 – 5,341 –
Professional fees 627 376 1,230 425
Depreciation and amortization 316 25 505 49
Stock based compensation 731 625 1,371 696
Restructuring charges – 789 – 789
Total Operating Expenses 7,425 2,830 12,586 3,703Operating Income (loss) 1,427 (2,830) 150 (3,703)
Non-Operating income (expense):
Interest income 399 638 1,161 898
Interest expense (1,028) – (1,187) –
Other income, net 158 32 240 93
Minority interest (89) – (142) –
Total non-operating income
(expense) (560) 670 72 991Income (loss) from continuing
operations before income taxes 867 (2,160) 222 (2,712)
Provision for income taxes (217) – (217) –Income (loss) from continuing
operations 650 (2,160) 5 (2,712)Income (loss) from
discontinued operations,
net of taxes (895) 640 (448) 1,059Net Loss $(245) $(1,520) $(443) $(1,653)
Income (loss) per share
(basic and diluted) from
continuing operations $0.01 $(0.05) $0.00 $(0.06)
Income per share
(basic and diluted)
from discontinuing operations (0.02) 0.01 (0.01) 0.02
Net loss per share –
basic and diluted $(0.01) $(0.04) $(0.01) $(0.04)Weighted average shares
outstanding – basic 50,824 44,721 49,996 45,460
Weighted average shares
outstanding – diluted 54,465 44,903 53,313 45,012
