Sequential Brands Group Inc., which expects to add Avia, AND1 and Nevados to its brand portfolio by year end, reported revenue of approximately $7.0 million for the second quarter ended June 30, compared to approximately $4.3 million in the prior year quarter.
The company, which already owns the Revo, Caribbean Joe, Heelys, DVS and People's Liberation brands, reported adjusted EBITDA for the second quarter was approximately $3.7 million, compared to approximately $2.5 million in the prior year quarter. On a non-GAAP basis, net income for the quarter was approximately $1.1 million, or $0.04 per share, compared to approximately $0.8 million, or $0.05 per share, in the prior year quarter. On a GAAP basis, net loss for the quarter was approximately ($0.6) million, or ($0.02) per share, compared to net income of approximately $0.7 million, or $0.04 per share, in the prior year quarter.
“We are pleased with our strong second quarter results that were driven by substantial increases in both revenue and Adjusted EBITDA versus last year,” said Yehuda Shmidman, Sequential's Chief Executive Officer. “We believe we are still in the very beginning stages of our evolution and are very excited about our position going forward. The pending acquisition of Galaxy Brands is expected to nearly double the scale of our brand portfolio and further diversifies our license and distribution platform. All told, we are well positioned to continue executing against our growth targets and achieving our three-year goal of $100 million in annual revenue and $70 million in annual adjusted EBITDA.”
Six month results
Sequential Brands revenues for the six months ended June 30, 2014 increased to approximately $13.3 million, compared to approximately $6.0 million in the prior year period. Adjusted EBITDA was approximately $6.8 million, compared to approximately $1.3 million in the prior year period. On a non-GAAP basis, net income for the six months was approximately $1.9 million, or $0.07 per share, compared to a net loss of approximately ($0.6) million, or ($0.05) per share, for the prior year period. On a GAAP basis, net income for the six months ended June 30, 2014 was approximately $0.1 million, or $0.01 per share, compared to net loss of approximately ($20.8) million, or ($1.76) per share, for the prior year period.
Sequential Brands owns, promotes, markets, and licenses eight consumer brands. On June 24, the company entered into a definitive agreement with Galaxy Brand Holdings, Inc. to acquire the Avia, AND1, Linens 'N Things and Nevados brands, pending the closing of the transaction later in the year. Sequential seeks to ensure that its brands continue to thrive and grow by employing strong brand management, design and marketing teams. Sequential has licensed and intends to license its brands in a variety of consumer categories to retailers, wholesalers and distributors in the United States and in certain international territories.
Including the Galaxy acquisition, the company projects forward 12-month revenues of $56-$60 million and Adjusted EBITDA of $36 – $40 million from the total brand portfolio of 12 brands on a combined basis post-closing.