Iconix Reports Q2 Revenue Grow 9%, Raises FY09 Guidance

Iconix Brand Group, Inc. reported revenue for the second quarter of 2009 was $56.4 million, a 9% increase as compared to  $51.7 million in the second quarter of 2008. EBITDA for the second quarter was $41.8 million, a 19% increase as compared to $35.2 million in the prior year quarter.

Free cash flow for the quarter was $35.1 million a 34% increase as compared to approximately $26.3 million in the prior year quarter. On a non-GAAP basis, which excludes non-cash interest related to the adoption of the new accounting treatment for convertible debt, net income increased 29% to approximately $21.3 million, as compared to $16.5 million in the prior year quarter and diluted earnings per share for the second quarter of 2009 was $0.33 versus $0.27 in the prior year quarter. On a GAAP basis, net income increased 32% to approximately $19.3 million, as compared to $14.6 million in the prior year quarter and diluted earnings per share for the second quarter of 2009 was $0.30 versus $0.24 in the prior year quarter.

Six months ended June 30, 2009:

Revenue for the six months ended June 30, 2009 was $106.9 million as compared to approximately $107.4 million in the prior year six month period. EBITDA for the six month period increased 6% to approximately $78.2 million as compared to approximately $73.9 million in the comparable prior year period, and free cash flow increased 10% to approximately $64.9 million as compared to approximately $59.0 million in the comparable prior year period. Non-GAAP net income as defined above for the 2009 six month period increased 12% to approximately $38.9 million as compared to approximately $34.7 million in the comparable prior year period and non-GAAP diluted earnings per share increased to $0.62 versus $0.57 in the comparable prior year period. On a GAAP basis, net income increased 12% to approximately $34.9 million, as compared to $31.2 million in the comparable prior year period and diluted earnings per share for the six month period was $0.56 versus $0.51 in the comparable 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, “I am pleased to announce that we achieved record revenue and earnings this quarter. We continued to grow market share for many of our brands with a substantial increase driven by the successful roll-out of our OP, Starter and DanskinNow brands at Walmart. Our strong performance in this challenging economic environment continues to demonstrate the power of our business model. Further, with a strong balance sheet and over $200 million of cash on hand, we believe that we are well positioned to execute against our acquisition strategy.”

2009 Guidance:

The company is raising its full year 2009 revenue guidance to $223-$230 million from prior guidance of $218-$225 million, and maintaining both its full year 2009 non-GAAP diluted EPS guidance of $1.30 to $1.35 and 2009 GAAP diluted EPS guidance of $1.16 to $1.21 due to the impact of the common stock offering completed in the second quarter in which the company raised approximately $153 million. The company estimates that free cash flow for 2009 will be approximately $130 million. This guidance relates to the existing portfolio of brands only and assumes no 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.

Iconix's brands include Candie's, Bongo, Badgley Mischka, Joe Boxer, Rampage, Mudd, London Fog, Mossimo, Ocean Pacific, Danskin, Roca Wear, Cannon, Royal Velvet, Fieldcrest, Charisma, Starter And Waverly. In addition, Iconix owns an interest in The Artful Dodger and Ed Hardy brands.