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Iconix Brand Group, Inc. Reports Earnings for the Third Quarter 2008
By: PR Newswire
Nov. 3, 2008 08:01 AM
- Q3 revenue increased 29% to - Q3 diluted EPS of - Q3 free cash flow of - 2009 Guidance: Revenue growth of approximately 7% and EPS growth of approximately 8% Q3 2008 results: Revenue for the third quarter of 2008 increased 29% to approximately Nine months ended Revenue for the nine months ended 2008 Guidance: The Company expects to achieve its 2008 guidance for revenue of 2009 Guidance: The Company is issuing guidance for the full year 2009 of revenue in a range of Beginning in 2009, GAAP will require the Company to record incremental non-cash interest related to our convertible debt for 2009 and 2008 for comparability purposes. The Company expects the impact of this change in accounting policy to be Other News: In a separate press release, the Company announced that its Board of Directors has authorized a program to repurchase up to Iconix Brand Group Inc. (Nasdaq: ICON) owns, licenses and markets a growing portfolio of consumer brands including CANDIE'S(R), BONGO(R), BADGLEY MISCHKA(R), JOE BOXER(R) RAMPAGE(R), MUDD(R), LONDON FOG(R), MOSSIMO(R), OCEAN PACIFIC(R), DANSKIN(R), ROCAWEAR(R), CANNON (R), ROYAL VELVET(R), FIELDCREST(R), CHARISMA(R), STARTER(R), and WAVERLY(R). The Company licenses its brands to a network of leading retailers and manufacturers that touch every major segment of retail distribution from the luxury market to the mass market in both the U.S. and around the world. Iconix, through its in-house advertising, promotion and public relations agency, markets its brands to continually drive greater consumer awareness and equity. Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995. The statements that are not historical facts contained in this press release are forward looking statements that involve a number of known and unknown risks, uncertainties and other factors, all of which are difficult or impossible to predict and many of which are beyond the control of the Company, which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. Such factors include, but are not limited to, uncertainty regarding the results of the Company's acquisition of additional licenses, continued market acceptance of current products and the ability to successfully develop and market new products particularly in light of rapidly changing fashion trends, the impact of supply and manufacturing constraints or difficulties relating to the Company's licensees' dependence on foreign manufacturers and suppliers, uncertainties relating to customer plans and commitments, the ability of licensees to successfully market and sell branded products, competition, uncertainties relating to economic conditions in the markets in which the Company operates, the ability to hire and retain key personnel, the ability to obtain capital if required, the risks of litigation and regulatory proceedings, the risks of uncertainty of trademark protection, the uncertainty of marketing and licensing acquired trademarks and other risks detailed in the Company's SEC filings. The words "believe", "anticipate," "expect", "confident", "will", "project", "provide" "guidance" and similar expressions identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward looking statements, which speak only as of the date the statement was made.
Contact Information:
Jaime Sheinheit
Director of Strategic Development
Iconix Brand Group
212.730.0030
Joseph Teklits
Integrated Corporate Relations
203.682.8200
Iconix Brand Group, Inc. and Subsidiaries
Condensed Consolidated Income Statements - (Unaudited)
(in thousands, except earnings per share data)
Three Months Ended Sept. 30, Nine Months Ended Sept. 30,
--------------------------- ---------------------------
2008 2007 2008 2007
--------------------------- ---------------------------
Licensing and other
revenue $55,135 $42,681 $162,502 $112,593
Selling, general and
Administrative
expenses 18,558 13,400 55,589 30,130
Expenses related to
specific litigation 279 (39) 665 1,055
--------------------------- ---------------------------
Operating income 36,298 29,320 106,248 81,408
Other expenses -
net 8,007 4,719 24,178 14,254
--------------------------- ---------------------------
Income before income
taxes 28,291 24,601 82,070 67,154
--------------------------- ---------------------------
Provision for income
taxes 9,974 7,608 29,053 22,625
--------------------------- ---------------------------
Net income $18,317 $16,993 $53,017 $44,529
=========================== ===========================
Earnings per share:
Basic $0.32 $0.30 $0.92 $0.79
=========================== ===========================
Diluted $0.30 $0.28 $0.87 $0.73
=========================== ===========================
Weighted average number
of common shares
outstanding:
Basic 57,841 56,801 57,662 56,569
=========================== ===========================
Diluted 61,091 61,380 61,241 61,289
=========================== ===========================
Selected Balance Sheet Items: 9/30/2008 12/31/2007
(Unaudited) (Audited)
Total Assets $1,384,778 $1,336,130
Total Liabilities $787,336 $808,210
Stockholders' Equity $597,442 $527,920
The following tables detail unaudited reconciliations from non-GAAP amounts to U.S. GAAP and effects of these items:
(in thousands)
Three months ended Nine months ended
Sept. 30, Sept. 30, Sept. 30, Sept 30,
--------- --------- --------- --------
2008 2007 2008 2007
---- ---- ---- ----
EBITDA(1) $37,875 $30,840 $111,816 $85,394
==================== ==================
Reconciliation of EBITDA:
Net Income 18,317 16,993 53,017 44,529
Add: Provision for income
taxes 9,974 7,608 29,053 22,625
-------------------- ----------------
Net Income before taxes 28,291 24,601 82,070 67,154
Add: Net interest expense 7,579 4,719 23,750 14,254
Add: Depreciation and
amortization of certain
intangibles 2,005 1,520 5,996 3,986
-------------------- ----------------
EBITDA $37,875 $30,840 $111,816 $85,394
==================== ==================
(1) EBITDA, a non-GAAP financial measure, represents GAAP net income plus
income taxes, interest, depreciation and amortization expenses. The
Company believes EBITDA provides additional information for determining
its ability to meet future debt service requirements, investing and
capital expenditures.
Free Cash Flow(2) $31,488 $27,948 $91,003 $74,837
==================== ==================
Reconciliation of Free Cash Flow:
Net Income 18,317 16,993 53,017 44,529
Add: Depreciation, 3,320 3,375 13,272 7,751
amortization
of trademarks and
finance fees, non cash
compensation expense, and
bad debt expense, net of gain on
sale of trademarks
Add: Non-cash income taxes 9,974 7,608 28,962 22,625
Less: Capital expenditures (123) (28) (4,248) (68)
-------------------- ----------------
Free Cash Flow $31,488 $27,948 $91,003 $74,837
==================== ==================
(in thousands) Year Ended Dec Year Ended Dec
31, 2009 31, 2008
High-end Low-end High-end Low-end
Forecasted Free Cash Flow(2) $118,000 $114,000 $125,000 $120,000
-------------------- --------------------
Reconciliation of Free Cash Flow:
Net Income(3) 79,000 73,000 74,000 71,000
Add: Depreciation, 21,000 21,000 20,000 18,000
amortization of trademarks
and finance fees, non cash
compensation expense, and
bad debt expense, net of
gain on sale of trademarks
Add: Non-cash income taxes 25,000 25,000 38,000 38,000
Less: Capital expenditures (7,000) (5,000) (7,000) (7,000)
-------------------- --------------------
Forecasted Free Cash Flow $118,000 $114,000 $125,000 $120,000
-------------------- --------------------
(2) Free Cash Flow, a non-GAAP financial measure, represents net income
before depreciation, amortization, non cash compensation expense, bad debt
expense, net of gain on sale of trademarks, and add back the non-cash
income taxes and deduct capital expenditures. The Free Cash Flow also
excludes any changes in Balance Sheet items. The Company believes Free
Cash Flow is useful in evaluating its financial condition because it is
representative of cash flow from operations that is available for repaying
debt, investing and capital expenditures.
(3) The following table details unaudited reconciliations from non-GAAP
amounts to U.S. GAAP based on the FASB Staff Position APB 14-1 "Accounting
for Convertible Debt Instruments That May Be Settled In Cash Upon
Conversion (Including Partial Cash Settlements)", which is effective for
the fiscal year beginning January 1, 2009.
Net Income:
Year Ended Dec 31, 2009 Year Ended Dec 31, 2008
High-end Low-end High-end Low-end
Non-GAAP Net Income 79,000 73,000 74,000 71,000
effective January 1, 2009
Less: Non Cash
interest (8,500) (8,500) (7,900) (7,900)
(net of tax)
U.S. GAAP Net Income
effective January 1, 2009 70,500 64,500 66,100 63,100
Earnings Per Share:
Year Ended Dec 31, 2009 Year Ended Dec 31, 2008
High-end Low-end High-end Low-end
Non-GAAP EPS -
effective January 1,
2009 $1.30 $1.20 $1.20 $1.15
Less: Non-cash interest ($0.14) ($0.14) ($0.13) ($0.13)
--------------------- ---------------------
U.S. GAAP EPS -
effective January 1,
2009 $1.16 $1.06 $1.07 $1.02
--------------------- ---------------------
SOURCE Iconix Brand Group, Inc.
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