Iconix Brand Group Reports Record Revenue and Earnings for the First Quarter 2011

NEW YORK, April 27, 2011 /PRNewswire/ -- Iconix Brand Group, Inc. (NASDAQ: ICON) ("Iconix" or the "Company"), today announced financial results for the first quarter ended March 31, 2011.

Q1 2011 results for Iconix Brand Group, Inc.:  

Total revenue for the first quarter of 2011 was approximately $92.4 million, a 29% increase as compared to approximately $71.7 million in the first quarter of 2010. EBITDA attributable to Iconix for the first quarter was approximately $58.8 million, a 19% increase as compared to approximately $49.4 million in the prior year quarter. Free cash flow for the quarter was $45.9 million a 15% increase as compared to approximately $40.1 million in the prior year quarter. On a non-GAAP basis, which excludes non-cash interest related to the Company's convertible debt, net income attributable to Iconix increased 25% to approximately $33.7 million, as compared to $27.0 million in the prior year quarter and non-GAAP diluted earnings per share for the first quarter of 2011 was $0.45 versus $0.36 in the prior year quarter. On a GAAP basis, net income attributable to Iconix increased 27% to approximately $31.4 million, as compared to approximately $24.8 million in the prior year quarter and GAAP diluted earnings per share for the first quarter of 2011 was $0.42 versus $0.33 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, "2011 is off to a strong start and I am pleased to announce that we achieved better than expected revenue and earnings in the first quarter.  Our outperformance was driven by strength across our portfolio of brands, most notably our direct-to-retail brands, which continue to gain shelf space. We are making progress internationally and are particularly excited about the opportunity in China as our partners open hundreds of stores for our brands. We also expect to continue to be acquisitive and today we announced that we are acquiring the worldwide rights for the Ed Hardy brand, which now puts us in complete control for the licensing and marketing of this brand. Looking ahead, we believe we are well positioned for continued growth as we expand our brands both in the U.S. and internationally, and acquire additional iconic brands."

2011 Guidance for Iconix Brand Group, Inc.:

To reflect the better than expected first quarter results and the Ed Hardy transaction, the Company is increasing its full year 2011 revenue guidance to a range of $355-$365 million from $340-$350 million. The Company is also raising its 2011 non-GAAP diluted EPS guidance to a range of $1.63-$1.68 from $1.53-$1.58 and raising its GAAP diluted EPS guidance to a range of $1.50-$1.55 from $1.40-$1.45. The Company now estimates that free cash flow for 2011 will be in a range of $167- $172 million. This guidance relates to the existing portfolio of brands only including the increased ownership of Ed Hardy, excludes any non-cash gains relating to this transaction and assumes no additional acquisitions.

Other Company News:

In a separate press release today, the Company announced it has acquired the worldwide master license for the Ed Hardy® brand from Nervous Tattoo. Through this transaction, the Company will gain control of the licensing and marketing functions, and increase its total ownership stake in the Ed Hardy brand to 85%.

Also, the Company announced today that  it has entered into an agreement settling a lawsuit filed by the Company in the Superior Court of California, Los Angeles County against Unzipped's former manager, supplier and distributor, Sweet, Azteca and ADS; and Hubert Guez, a principal of these entities and former member of the Company's board of directors (collectively referred to as the "Guez defendants"), pursuant to which the Guez Defendants and certain sureties paid the Company an aggregate of $27.7 million, including the $16.7 million previously paid in April and February 2011, in full satisfaction of their obligations to the Company.

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), LONDON FOG (R), MOSSIMO (R) OCEAN PACIFIC(R), DANSKIN (R) ROCA WEAR(R), CANNON (R), ROYAL VELVET (R), FIELDCREST (R), CHARISMA (R), STARTER (R) and WAVERLY (R). In addition, Iconix owns an interest in the ARTFUL DODGER (R), ED HARDY (R), ECKO (R), MARC ECKO (R), ZOO YORK (R), MATERIAL GIRL(TM) and PEANUTS (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.

The following three tables detail unaudited reconciliations from non-GAAP amounts to U.S. GAAP relating to the adoption of ASC Topic 470 as it relates to accounting for convertible debt, which became effective retroactively for the fiscal years beginning after December 15, 2008.

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

Contact Information:
   Jaime Sheinheit
   Investor Relations
   Iconix Brand Group
   212.730.0030

SOURCE Iconix Brand Group, Inc.