Sequential Brands Group, the parent of DVS Action Sports and Heelys, reported total revenue from continuing operations for the fourth quarter ended Dec. 31, was approximately $1.8 million, as compared to
approximately $0.4 million, in the prior year quarter.
The company also owns and licenses William Rast and People’s Liberation.
In the quarter and full year, the company incurred certain extraordinary costs that are not representative of a normalized licensing business including a loss from the company’s discontinued operations, restructuring charges primarily related to the severance of the former CEO and the transition of the company’s licensing operations from Los Angeles to New York, deal costs related to acquisitions that have or are expected to close the following year, compensation related to the restricted stock that was granted to the new management team which vested upon commencement of their employment with the Company and non-cash interest related to the Tengram Convertible notes.
Therefore, on an adjusted Non-GAAP basis, net loss was approximately $0.9 million, or approximately 37 cents per share, for the three months ended December 31, 2012, as compared to net income of approximately $0.4 million, or approximately 16 cents per share, in the prior year quarter.
Net loss on a GAAP basis was approximately $7.3 million for the three months ended December 31, 2012, or $3.00 per share, as compared to approximately $3.4 million, or approximately $1.41 per share, in the prior year quarter.
Full Year 2012 Results
Net revenue from continuing operations for the full year ended December 31, 2012 was approximately $5.3 million, as compared to approximately $0.5 million in the prior year.
On an adjusted Non-GAAP basis, net loss was approximately $0.6 million, or approximately $0.26 per share, during 2012, as compared to net income of approximately $0.3 million, or approximately $0.11 per share, in the prior year.
Net loss on a GAAP basis was approximately $9.1 million, or approximately $3.78 per share, as compared to approximately $2.3 million, or approximately $0.97 per share, in the prior year.
Yehuda Shmidman, Sequential’s CEO, commented, “2012 was a transformational year for the Company as we closed down our wholesale and retail operations and re-launched our Company under a new name, Sequential Brands Group, with a new business model, being a focused brand management company. Over the past year, we were pleased to have announced the beginning steps of our new business model, including two brand acquisitions and a $22.4 million private placement of equity which strengthened our balance sheet in support of our growth plan.”
Gary Klein, Sequential’s CFO, added, “Our 2012 financial results reflect a company in transition with the associated costs of exiting a former business model in favor of a new business model. As we continue to execute our new strategy, we expect our financial metrics to improve as we focus on growing our existing brands, adding accretive new brand acquisitions to our portfolio and leveraging our base, which we view as a highly scalable platform.”
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.