Iconix Brand Group reported earnings slid 5.3 percent in the third quarter to $26.0 million, or 34 cents a share, from $27.4 million, or 37 cents, a year ago. Revenues, largely royalties from licensed agreements, fell 4.3 percent to $92.7 million.

Third quarter 2010 revenue included approximately $12.5 million related
to a contract the company signed with ABC Network for the Peanuts
holiday television specials. Iconix noted that Q3 revenue represented a 10 percent increase over prior year quarter, excluding the one-time item.

EBITDA attributable to Iconix for the third quarter was approximately
$55.3 million, a 6 percent increase over the prior year quarter. Free
cash flow attributable to Iconix for the third quarter was approximately
$44.9 million, a 9 percent increase over the prior year quarter.

On a
non-GAAP basis, which excludes non-cash interest related to the
company's two convertible notes, net income attributable to Iconix was
$30.1 million, a 1 percent increase over the prior year quarter. Non-GAAP diluted EPS for the third quarter was 40 cents a share compared
to 40 cents a share in the prior year quarter.

Nine months ended September 30, 2011:

Total revenue for the nine months ended September 30, 2011 was approximately $274.3 million, a 12 percent increase as compared to approximately $244.6 million for the prior year period. EBITDA attributable to Iconix for the nine month period increased 14 percent from the prior year period to approximately $172.2 million. Free cash flow for the nine month period was approximately $134.3 million, a 14 percent increase over the prior year period. On a non-GAAP basis, which excludes non-cash interest related to the company's two convertible notes and two non-recurring items recorded in the second quarter (see reconciliation tables below), net income attributable to Iconix for the nine month period increased 15 percent to approximately $96.2 million as compared to the prior year period and non-GAAP diluted earnings per share increased to $1.27 versus $1.12 for the prior year period. On a GAAP basis, net income attributable to Iconix for the nine month period increased 29 percent to approximately $98.9 million as compared to the prior year period and GAAP diluted earnings per share was $1.31 versus $1.03 for 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, “We are pleased to report another strong quarter for our company and believe our results further demonstrate the power of our business model and the strength of our brands. As we look to 2012, we are excited about the many opportunities ahead as we continue to grow our platform through new retail partners, new categories and new geographies. This week we announced two new exciting initiatives including our first DTR with JC Penney for our Royal Velvet brand and our first entry into the consumer electronics market with our acquisition of Sharper Image. With now 28 diverse consumer brands in our portfolio that represent approximately $12 billion in annual retail sales we have come a long way, and looking ahead we are very focused on delivering continued value to our shareholders.”

2011 Guidance for Iconix Brand Group, Inc.:

The company is reaffirming its full year 2011 revenue guidance of $355-$365 million, its full year 2011 non-GAAP diluted EPS guidance of $1.63-$1.68, its full year 2011 GAAP diluted EPS guidance of $1.61-$1.66 and its full year 2011 free cash flow guidance of $167-$172 million. The company expects Sharper Image to be earnings neutral in 2011 due to timing of the close and transaction costs.

2012 Guidance for Iconix Brand Group, Inc.:

The company is providing 2012 revenue guidance of $370-$385 million, 2012 non-GAAP diluted EPS guidance of $1.77-$1.84, 2012 GAAP diluted EPS guidance of $1.62-$1.69 and 2012 free cash flow guidance of $187-$194 million. This guidance relates to the existing portfolio of brands including Sharper Image and does not include any additional acquisitions.

Other company News:

The company announced today that it signed a definitive agreement to acquire The Sharper Image brand. This acquisition will be the company's first entry into the consumer electronics sector.

The company also announced that its Board of Directors has authorized a program to repurchase up to $200 million of its common stock. See separate press release for additional details.

Iconix Brand Group's brand portfolio includes: Candie's, Bongo, Badgley Mischka, Joe Boxer, Rampage, Mudd, London Fog, Mossimo, Ocean Pacific, Danskin  Roca Wear, Cannon, Royal Velvet, Fieldcrest, Charisma, Starter, Zoo York  and Waverly. In addition, Iconix owns an interest in the Artful Dodger, Ed Hardy, Ecko, Marc Ecko, Material Girl and Peanuts .


(Unaudited)


(Unaudited)



Three Months Ended Sept. 30,


Nine Months Ended Sept. 30,



2011

2010


2011


2010










Licensing and other revenue

$ 92,683

$96,887


$ 274,332


$ 244,604










Selling, general and administrative expenses

33,729

42,032


97,396


90,719


Expenses related to specific litigation

33


92


240










Operating income

58,954

54,822


176,844


153,645










Interest and other expense, net

12,816

9,763


13,768


29,686










Equity earnings on joint ventures

(98)

(25)


(3,236)


(2,242)










Other expenses – net

12,718

9,738


10,532


27,444










Income before income taxes

46,236

45,084


166,312


126,201










Provision for income taxes

15,209

13,252


55,313


40,042










Net income

About The Author

Thomas J. Ryan

Thomas J. Ryan Senior Business Editor | SGB Media tryan@sgbonline.com | 917.375.4699

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