- Q3 revenue increased 29% to $55.1m and EBITDA increased 23% to $37.9m

- Q3 diluted EPS of $0.30 versus $0.28 in the prior year

- Q3 free cash flow of $31.5m and $91.0m for year to date 2008

- 2009 Guidance: Revenue growth of approximately 7% and EPS growth of approximately 8%

NEW YORK, Nov. 3 /PRNewswire-FirstCall/ -- Iconix Brand Group, Inc. (Nasdaq: ICON) ("Iconix" or the "Company"), today announced financial results for the third quarter ended September 30, 2008.

Q3 2008 results:

Revenue for the third quarter of 2008 increased 29% to approximately $55.1 million, as compared to approximately $42.7 million in the third quarter of 2007. EBITDA for the third quarter increased 23% to approximately $37.9 million as compared to approximately $30.8 million in the prior year quarter, and free cash flow for the quarter increased 13% to approximately $31.5 million as compared to approximately $27.9 million in the prior year quarter. Net income for the third quarter increased 8% to approximately $18.3 million, as compared to $17.0 million in the prior year quarter and GAAP diluted earnings per share increased to $0.30 versus $0.28 in the prior year quarter. EBITDA and free cash flow are non-GAAP metrics and reconciliation tables for both are attached to this press release.

Nine months ended September 30, 2008 results:

Revenue for the nine months ended September 30, 2008 increased 44% to approximately $162.5 million as compared to approximately $112.6 million in the prior year nine month period. EBITDA for the nine month period increased 31% to approximately $111.8 million as compared to approximately $85.4 million in the prior year period, and free cash flow increased 22% to approximately $91.0 million as compared to approximately $74.8 million in the prior year period. Net income for the nine month period increased 19% to approximately $53.0 million as compared to approximately $44.5 million in the prior year period and GAAP diluted earnings per share increased to $0.87 versus $0.73 in the prior year period.

Neil Cole, Chairman and CEO of Iconix Brand Group, Inc. commented, "Our strong performance in the third quarter demonstrates, more than ever, that our business model is extremely well suited to thrive in the current economic environment. Having a diversified portfolio of 17 iconic brands and partnerships with best in class retailers enables us to continue to deliver great results. In issuing 2009 guidance today, we are confident in our ability to grow sales and earnings next year and we are energized about our organic growth plans."

2008 Guidance:

The Company expects to achieve its 2008 guidance for revenue of $215-220 million and diluted earnings per share of $1.15-$1.20, but is now guiding towards the low-end of the ranges. Free cash flow is projected to be in excess of $120 million.

2009 Guidance:

The Company is issuing guidance for the full year 2009 of revenue in a range of $225-$235 million. The Company estimates non-GAAP diluted earnings per share to be in a range of $1.20-$1.30, excluding any non-cash interest related to the convertible debt. Free cash flow is estimated to be in a range of $114-$118 million. This guidance relates to the existing portfolio of brands only and includes no revenue assumption from acquisitions.

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 $0.14 for 2009 and $0.13 for 2008. See reconciliation tables below for non-GAAP metrics.

Other News:

In a separate press release, the Company announced that its Board of Directors has authorized a program to repurchase up to $75 million of its common stock.

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.