The acquisition of the Peanuts gang of characters by the Iconix Brand Group followed strong numbers in the first quarter. The move gives Iconix an 80% stake in the Peanuts brand and dramatically raises the companys 2010 guidance to $315 million, $45 million more than previously expected.
The deal was comprised of Iconix paying $175 million out of its $214 million cash balance.
In the quarter ended March 31, revenues climbed 42% to $71.7 million. Driving factors for the increase included organic growth from all of the companys major direct-to-retail brands such as OP, Starter and Danskin Now, as well as the addition of the Ecko portfolio of brands.
First quarter earnings rose 58%, totaling $24.8 million, or 33 cents a share, up from earnings of $15.6 million, or 26 cents a share, in the year-ago period.
On a non-GAAP basis, excluding non-cash interest related to the adoption of a new accounting method for convertible debt, net income increased 53% to approximately $27 million as compared to approximately $17.6 million in the prior year quarter.
EBITDA margins were 69%, while experiencing 42% revenue growth and over 50% earnings growth.
The companys initiatives are paying off as Iconix appears to be focusing on expansion to boost its brand prowess and elevate sales. According to Warren Clamen, Iconix Brand Groups executive vice president, Our top line performance last quarter was a result of the strength of our retail partners and our continued focus on two primary strategies of driving category growth and rack count expansion for each brand.
In other news, Iconix signed a long-term license with Macy’s for the Material Girl brand, resulting in the companys first direct-to-retail license with a major retailer.
