Iconix Brand Group Reports Record Revenue and Earnings for the First Quarter 2013

NEW YORK, April 24, 2013 /PRNewswire/ --

  • Record Q1 revenue of $105.1 million, a 19% increase over prior year quarter
  • Record Q1 non-GAAP diluted EPS of $0.54, a 26% increase over prior year quarter
  • Record Q1 free cash flow of $51.8 million and EBITDA of $64.6 million
  • Raising 2013 non-GAAP diluted EPS guidance to $2.10-$2.20

Iconix Brand Group, Inc. (NASDAQ: ICON) ("Iconix" or the "Company"), today announced financial results for the first quarter ended March 31, 2013.

Q1 2013 Results for Iconix Brand Group, Inc.: 

Total revenue for the first quarter of 2013 was approximately $105.1 million, a 19% increase as compared to approximately $88.5 million in the first quarter of 2012. EBITDA attributable to Iconix for the first quarter was approximately $64.6 million, a 14% increase as compared to $56.8 million in the prior year quarter. Free cash flow attributable to Iconix for the first quarter was approximately $51.8 million, a 9% increase as compared to the prior year quarter of approximately $47.4 million. On a non-GAAP basis, as described in the tables below, net income attributable to Iconix was $36.2 million, a 13% increase as compared to the prior year quarter of approximately $31.9 million. Non-GAAP diluted EPS for the first quarter of 2013 increased 26% to $0.54 compared to $0.43 in the prior year quarter. GAAP net income attributable to Iconix for the first quarter of 2013 was approximately $34.2 million, a 24% increase as compared to $27.6 million in the prior year quarter and GAAP diluted EPS for the first quarter of 2013 increased 38% to $0.51 compared to $0.37 in the prior year quarter.

EBITDA, free cash flow, non-GAAP net income and non-GAAP diluted EPS are all non-GAAP metrics and reconciliation tables for each are attached to this press release.

Neil Cole, Chairman and CEO of Iconix Brand Group, Inc. commented, "With record results in the first quarter, 2013 is off to a strong start and we are on track to deliver over 20% revenue and EPS growth for the full year. We successfully completed three acquisitions in the past five months and with our current pipeline we believe there are additional opportunities, which would continue to enhance our portfolio.  As we look ahead, we are also focused on continuing to build our portfolio of brands organically through our global platform, and we believe that with our free cash flow and strong balance sheet we will continue to create increased shareholder value."

2013 Guidance for Iconix Brand Group, Inc.:

  • The Company is maintaining its 2013 revenue guidance of $425-$435 million
  • The Company is raising its 2013 non-GAAP diluted EPS guidance to $2.10-$2.20 from $2.05-$2.15
  • The Company is raising its 2013 GAAP diluted EPS guidance to $2.00-$2.10 from $1.95-$2.05
  • The Company is maintaining its free cash flow guidance of $203-$210 million

This guidance relates to the Company's existing portfolio of brands and does not include any additional acquisitions.

See reconciliation tables below for non-GAAP metrics. These non-GAAP metrics may be inconsistent with similar measures presented by other companies and should only be used in conjunction with our results reported according to U.S. GAAP.  Any financial measure other than those prepared in accordance with U.S. GAAP should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with U.S. GAAP.

About Iconix Brand Group, Inc.

Iconix Brand Group, Inc. 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), MOSSIMO (R), LONDON FOG (R), OCEAN PACIFIC (R), DANSKIN (R), ROCAWEAR (R), CANNON (R), ROYAL VELVET (R), FIELDCREST (R), CHARISMA (R), STARTER (R), WAVERLY (R), ZOO YORK (R), ED HARDY (R), SHARPER IMAGE (R), UMBRO (R) and LEE COOPER (R). In addition, Iconix owns interests in the ARTFUL DODGER (R), ECKO (R), MARC ECKO (R), MATERIAL GIRL (R), PEANUTS (R), TRUTH OR DARE (R), BILLIONAIRE BOYS CLUB (R), ICE CREAM (R), MODERN AMUSEMENT (R), and BUFFALO (R) brands. 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 worldwide. Through its in-house business development, merchandising, advertising and public relations departments Iconix manages its brands to 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", "estimate", "expect", "confident", "continue", "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. All forward-looking statements are qualified by these cautionary statements and apply only as of the date they are made. The Company undertakes no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise.

Contact Information:
    Jaime Sheinheit
    Investor Relations
    Iconix Brand Group
    212.730.0030

 




Unaudited Condensed Consolidated Income Statements

(in thousands, except earnings per share data)



Three Months Ended Mar. 31,









2013

2012








Licensing and other revenue

$ 105,062

$ 88,451








Selling, general and administrative expenses

38,826

30,899








Operating income

66,236

57,552








Interest and other expense, net

13,867

13,128








Equity earnings on joint ventures

(1,936)

(1,298)







Other expenses – net

11,931

11,830







Income before income taxes

54,305

45,722








Provision for income taxes

15,031

14,843








Net income

$ 39,274

$ 30,879








Less: Net income attributable to non-controlling interest

5,085

3,280








Net income attributable to Iconix Brand Group, Inc.

$34,189

$27,599








Earnings per share:





Basic        

$  0.53

$  0.38








Diluted

$  0.51

$  0.37













Weighted average number of common shares outstanding:





Basic

64,208

72,302








Diluted

66,692

74,605









 

Selected Balance Sheet Items:                    

(in thousands)

 

(Unaudited)

3/31/2013


 

12/31/2012





Total Assets

$2,827,905


$2,481,738

Total Liabilities

$1,532,959


$1,181,898

Total Stockholders' Equity

$1,294,946


$1,299,840





The following tables detail unaudited reconciliations from non-GAAP amounts to U.S. GAAP and include reconciliations related to ASC Topic 470, accounting for convertible debt.

Note: All items in the following reconciliation tables are attributable to Iconix Brand Group, Inc. and exclude results related to non-controlling interests.


(in thousands, except per share data)


(Unaudited)






Three months ended


Net income reconciliation

Mar. 31,

2013

Mar. 31,

2012


Non-GAAP net income (1)

$36,219

$31,938






GAAP net income

$34,189

$27,599






Adjustments:




    Non-cash interest related to ASC Topic 470               

3,172

6,672


    Taxes related to above item

(1,142)

(2,333)


    Net adjustments

2,030

4,339






Non-GAAP net income

$36,219

$31,938









 


(Unaudited)



Three months ended


Diluted EPS reconciliation

Mar. 31,

2013

Mar. 31,

2012


Non-GAAP  diluted EPS (1)

$0.54

$0.43






GAAP diluted EPS

$0.51

$0.37






Adjustments for non-cash interest related to ASC          

470, net of tax

$0.03

$0.06






Non-GAAP  diluted EPS

$0.54

$0.43



 

Forecasted Diluted EPS

Year Ending
Dec. 31 2013











High

Low






















Forecasted Non-GAAP  diluted EPS (1)

$2.20

$2.10






















Forecasted GAAP diluted EPS

$2.10

$2.00






















Adjustments for non-cash interest related to ASC 470 and

non-cash non-recurring gains and charges, net of tax

$0.10

$0.10










Forecasted Non-GAAP  Diluted EPS

$2.20

$2.10











(1)  Non-GAAP net income and non-GAAP diluted EPS are non-GAAP financial measures which represent

      net income excluding any non-cash interest related to ASC Topic 470 and non-cash non-recurring gains

      and charges, net of tax. The Company believes these are useful financial measures in evaluating its

      financial condition because they are representative of only actual cash results.


                                                                                          




(in thousands)



(Unaudited)





Three months ended





Mar. 31,

2013

Mar. 31,

 2012


EBITDA  (2)

$64,598

$56,772






Reconciliation of EBITDA:






Net Income

$34,189

$27,599






Add: Income taxes

15,031

14,843






Add: Net interest expense

13,293

12,595







Add: Depreciation and amortization of certain                 

intangibles

2,085

1,735


 

EBITDA

$64,598

$56,772






(2) EBITDA, a non-GAAP financial measure, represents net income before income taxes,

interest, other non-operating gains and losses, 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.

 


 




(Unaudited)


Three months ended

(in thousands)

Mar. 31, 2013

Mar. 31, 2012




Free Cash Flow (3)

$51,820

$47,447




Reconciliation of Free Cash Flow:

 



  Net Income

$34,189

$27,599


Add: Non-cash income taxes, non-cash

interest related to convertible debt,

depreciation, amortization of certain

intangibles and finance fees, non-cash

compensation expense, bad debt expense and

net equity earnings from certain joint

ventures.

17,748

20,085

 

  Less: Capital expenditures

(117)

(237)





Free Cash Flow

$51,820

$47,447

















 





Year Ending










(in thousands)



Dec. 31, 2013






High


Low


























Forecasted Free Cash Flow (3)



$210,000


$203,000


















Reconciliation of Forecasted Free































Cash Flow:
















Net Income



$137,000


$130,000



























Add: Non-cash income taxes,

non-cash interest  related to

convertible debt, depreciation,

amortization of certain

intangibles and finance fees,

non-cash compensation

expense, bad debt expense, net

equity earnings from certain

joint ventures and non-cash

non-recurring gains and

charges



76,000


76,000



























Less: Capital expenditures



(3,000)


(3,000)


















Forecasted Free Cash Flow



$210,000


$203,000












(3) Free Cash Flow, a non-GAAP financial measure, represents net income before depreciation, amortization,

non-cash compensation expense, bad debt expense, net equity earnings from certain joint ventures, non-cash

income taxes, non-cash interest related to convertible debt, non-cash non-recurring gains and charges, less

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.











 

SOURCE Iconix Brand Group, Inc.



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