Sequential Brands Group, the parent of Heelys, reported revenues increased to $10.6 million in the fourth quarter compared with $1.8 million in the prior year quarter. It earned $4 million, or 16 cents a share, in the quarter, against a loss of $7.3 milion, or $3.00, a year ago.

Highlights of the period include:

  •     Q4 Revenue of $10.6 million vs. $1.8 million in the prior year quarter
  •     Q4 Adjusted EBITDA of $7.1 million vs. $(0.7) million in the prior year quarter
  •     Q4 non-GAAP Net Income of $5.2 million vs. ($0.9) million in the prior year quarter
  •     Full Year Revenue of $22.7 million vs. $5.3 million in prior year
  •     Full Year Adjusted EBITDA of $12.3 million, representing a 54 percent Adjusted EBITDA margin
  •     Full Year non-GAAP Net Income of $6.6 million vs. ($0.6) million in the prior year

Fourth Quarter 2013 Results:

Total revenue for the fourth quarter ended December 31, 2013 increased to approximately $10.6 million, compared to approximately $1.8 million in the prior year quarter. Adjusted EBITDA for the fourth quarter was approximately $7.1 million, compared to approximately ($0.7) million in the prior year quarter. On a non-GAAP basis, net income for the quarter was approximately $5.2 million, or $0.20 per diluted share, compared to a net loss of approximately $0.9 million, or ($0.37) per share, in the prior year quarter. On a GAAP basis, net income for the quarter was approximately $4.1 million, or $0.15 per diluted share, compared to a net loss of approximately $7.3 million, or ($3.00) per share, in the prior year quarter. See tables below for a reconciliation of GAAP to non-GAAP measures.

Yehuda Shmidman, Sequential's Chief Executive Officer, commented, “2013 was another transformational year for Sequential Brands Group. Our portfolio grew from 3 brands and a small grouping of licensees to 8 brands with over 50 licensees that generate approximately $1 billion of retail sales. Our revenue and profitability metrics increased significantly, and most importantly, we invested in building a strong platform which we will be able to leverage in the years ahead to achieve our organic growth targets and our acquisition goals.”

Full Year 2013 Results:

Total revenue for the full year ended December 31, 2013 increased to approximately $22.7 million, compared to approximately $5.3 million for the prior year period. The company's adjusted EBITDA was approximately $12.3 million, compared to approximately $0.0 million for the full year ended December 31, 2012 and the company's non-GAAP net income was approximately $6.6 million, or $0.35 per diluted share, for the full year ended December 31, 2013, compared to ($0.6) million, or ($0.26) per share, in the prior year. Net loss on a GAAP basis was approximately $18.0 million for the year ended December 31, 2013, or ($1.01) per share, compared to a net loss of approximately $9.1 million, or ($3.78) per share, in the prior year, as the company incurred certain costs during 2013, both cash and non-cash, that were not representative of the company's ongoing business. See tables below for a reconciliation of GAAP to non-GAAP measures.

Financial Update:

The company projects revenue of $28-30 million for the existing portfolio of brands for the year ending December 31, 2014, operating at a 55 percent adjusted EBITDA margin. The company expects margin expansion to continue as the company acquires additional brands that are expected to operate individually at approximately 75 percent margins on a stand-alone basis.

Similar to the company's 2013 quarterly results, the company expects revenue for 2014 to be weighted to the fourth quarter due to seasonality in the businesses of many of the company's licensees.

Sequential Brands Group, Inc. (SQBG) owns, promotes, markets, and licenses a portfolio of consumer brands that presently include William Rast(R), People's Liberation(R), DVS(R), Heelys(R), Caribbean Joe(R), Ellen Tracy(R) and Revo(R), The Franklin Mint(R).