Iconix Raises FY Profit Guidance on Strong Q3

Iconix Brand Group, the parent of Umbro, Starter and Danskin, reported a 44 percent gain in non-GAPP earnings in the third quarter ended Sept. 30 on a 24 percent increase in revenues. EBITDA attributable to Iconix for the quarter was approximately
$65.6 million, a 27 percent increase as compared to $51.8 million in the
prior year quarter.

Q3 2013 Results for Iconix Brand Group, Inc.:

Total revenue for the third quarter of 2013 was approximately $107.2 million, a 24 percent increase as compared to approximately $86.6 million in the third quarter of 2012. EBITDA attributable to Iconix for the third quarter was approximately $65.6 million, a 27 percent increase as compared to $51.8 million in the prior year quarter. Free cash flow attributable to Iconix for the third quarter was approximately $54.3 million, a 26 percent increase as compared to the prior year quarter of approximately $43.2 million. On a non-GAAP basis, as defined in the tables below, net income attributable to Iconix was $33.1 million, a 15 percent increase as compared to the prior year quarter of approximately $28.7 million. Non-GAAP diluted EPS for the third quarter of 2013 increased approximately 44 percent to $0.59 compared to $0.41 in the prior year quarter. GAAP net income attributable to Iconix for the third quarter of 2013 was approximately $29.0 million, a 7 percent increase as compared to $27.1 million in the prior year quarter and GAAP diluted EPS for the third quarter of 2013 increased 32 percent to $0.50 compared to $0.38 in the prior year quarter.

Nine months ended September 30, 2013:

Total revenue for the nine months ended September 30, 2013 was approximately $327.4 million, a 22 percent increase as compared to approximately $268.7 million for the prior year period. EBITDA attributable to Iconix for the nine month period was approximately $202.8 million, a 21 percent increase as compared to approximately $167.0 million in the prior year period. Free cash flow attributable to Iconix for the nine month period was approximately $167.0 million, a 17 percent increase over the prior year period of approximately $142.6 million. On a non-GAAP basis, as defined in the tables below, net income attributable to Iconix for the nine month period was approximately $112.0 million, a 20 percent increase as compared to approximately $93.1 million in the prior year period, and non-GAAP diluted earnings per share increased approximately 45 percent to $1.85 versus $1.28 for the prior year period. GAAP net income attributable to Iconix for the nine month period of 2013 was approximately $101.9 million, a 22 percent increase as compared to $83.3 million in the prior year period and GAAP diluted EPS for the nine month period of 2013 increased 45 percent to $1.67 compared to $1.15 in the prior year period. Included in the third quarter and year-to-date results, is the formation of a new joint venture in Australia, which contributed approximately $5 million to revenue.

EBITDA, free cash flow, non-GAAP net income and non-GAAP diluted shares and 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 believe the performance we have achieved year to date, with over 20 percent revenue growth and over 40 percent EPS growth, demonstrates the power of our business model and the strength of our portfolio. Looking ahead into 2014 and beyond, we expect to continue to deliver strong growth through both organic initiatives as well as acquisitions, as we continue to build our global footprint and further leverage our strong balance sheet. In addition, we plan to continue to balance acquisitions with share repurchases, as we have successfully done over the past two years, in which we bought back 32 percent of our shares outstanding.”

2013 Guidance for Iconix Brand Group, Inc.:

    The company is maintaining its 2013 revenue guidance of $425-$435 million
    The company is raising its 2013 non-GAAP diluted EPS guidance to $2.30-$2.40 from $2.20-$2.30
    The company is raising its 2013 GAAP diluted EPS guidance to $2.06-$2.16 from $1.97-$2.07
    The company is maintaining its free cash flow guidance of $203-$210 million

This guidance relates to the company's existing portfolio of brands and does not include any additional acquisitions. In addition, this guidance does not assume any dilution from our convertible notes.

2014 Guidance for Iconix Brand Group, Inc.:

The company is initiating the following guidance for 2014:

    2014 revenue guidance of $440-$455 million
    2014 non-GAAP diluted EPS guidance of $2.50-2.60
    2014 GAAP diluted EPS guidance of $2.19-$2.29
    2014 free cash flow guidance of $210-$217 million

Iconix Brand Group, Inc. owns, licenses and markets a growing portfolio of consumer brands including: Candie's, Bongo, Badgley Mischka, Joe Boxer, Rampage, Mudd, Mossimo, London Fog, Ocean Pacific, Danskin, Rocawear, Cannon, Royal Velvet, Fieldcrest, Charisma, Starter, Waverly, Zoo York, Sharper Image, Ecko, Marc Ecko, Umbro and Lee Cooper. In addition, Iconix owns interests in the Ed Hardy, Artful Dodger, Material Girl, Peanuts, Truth Or Dare, Billionaire Boys Club, Ice Cream, Modern Amusement, and Buffalo brands