Attached files
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| 8-K - ICONIX BRAND GROUP, INC. | v212017_8k.htm |
Exhibit
99.1
ICONIX
BRAND GROUP REPORTS RECORD REVENUE AND EARNINGS FOR THE FULL YEAR AND FOURTH
QUARTER 2010
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|
·
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2010 revenue of $332.6
million, a 43% increase over the prior
year
|
|
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·
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Q4 revenue of $88.0 million, a
34% increase over the prior year
quarter
|
|
|
·
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2010 non-GAAP Iconix net
income of $107.8 million, a 29% increase over the prior
year
|
|
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·
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2010 and Q4 diluted non-GAAP
Iconix EPS of $1.44 and $0.33,
respectively
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NEW YORK,
New York—February 16, 2011 – Iconix Brand Group, Inc. (NASDAQ: ICON) (“Iconix”
or the “Company”), today announced financial results for the fourth quarter and
year ended December 31, 2010.
Full Year
2010 results for Iconix Brand Group, Inc:
Total
revenue for the full year 2010 was approximately $332.6 million, a 43% increase
as compared to approximately $232.1 million for the prior year. EBITDA
attributable to Iconix for 2010 increased 29% to approximately $209.6 million,
and includes a one-time gain related to the Company’s Unzipped litigation
described below. Free cash flow for 2010 was approximately $166.6 million, a 24%
increase as compared to the prior year period. On a non-GAAP basis, which
excludes non-cash interest related to the Company’s convertible debt, net income
attributable to Iconix for 2010 increased 29% to approximately $107.8 million as
compared to the prior year and non-GAAP diluted earnings per share increased to
$1.44 versus $1.22 for the prior year. On a GAAP basis, net income attributable
to Iconix increased 32% to approximately $98.8 million as compared to the prior
year period and GAAP diluted earnings per share was $1.32 versus $1.10 for the
prior year.
Q4 2010
results for Iconix Brand Group, Inc:
Total
revenue for the fourth quarter of 2010 was approximately $88.0 million, a 34%
increase as compared to approximately $65.8 million for the fourth quarter of
2009. EBITDA attributable to Iconix for the fourth quarter increased 40% to
approximately $58.6 million, and includes a one-time gain related to the
Company’s Unzipped litigation described below. Free cash flow for the quarter
was approximately $45.4 million, a 37% increase as compared to the prior year
quarter. On a non-GAAP basis, as defined above, net income attributable to
Iconix increased 12% to approximately $24.5 million and diluted earnings per
share, or EPS, for the fourth quarter of 2010 was $0.33 versus $0.30 for the
prior year quarter. On a GAAP basis, net income attributable to Iconix increased
12% to approximately $22.1 million as compared to the prior year quarter and
GAAP diluted EPS for the fourth quarter of 2010 was $0.30 versus $0.27 for the
prior year quarter.
The full
year and fourth quarter ended December 31, 2010 include the following
non-recurring items.
|
|
·
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$16.0
million pre-tax income, net of expenses, relating to the favorable
judgment received in December 2010 in the Unzipped
litigation.
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|
|
·
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$13
million pre-tax write down of the Company’s auction rate
security.
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·
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Approximately
$3 million pre-tax non-recurring expenses related to the integration of
Peanuts.
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These
one-time items, when taken on a net basis, are neutral to net income and
EPS.
EBITDA,
free cash flow, non-GAAP net income and non-GAAP 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, “2010 was another
record year for our Company in which we continued to demonstrate the strength of
our portfolio and the profitability of our business model. Our brands continue
to gain market share as we build lifestyle businesses and optimize distribution.
We also expanded our platform into new categories and geographies in 2010
through our Peanuts acquisition. With 27 iconic brands that represent
approximately $12 billion in annual retail sales we have made tremendous
progress, and I believe through continued growth with our current partners,
international expansion, and new acquisitions we can continue to build on our
successes.”
2011
Guidance for Iconix Brand Group, Inc:
-1-
The
Company is reaffirming its full year 2011 revenue guidance of $340-350 million,
2011 non-GAAP diluted EPS guidance of $1.53-$1.58 and GAAP diluted EPS guidance
of $1.40-$1.45. The Company estimates that free cash flow for 2011 will be
approximately $160-165 million. This guidance relates to the existing portfolio
of brands only and does not include any 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), 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.
#
#
Contact
Information:
Jaime
Sheinheit
Investor
Relations
Iconix
Brand Group
212.730.0030
-2-
Condensed
Consolidated Income Statements
(in
thousands, except earnings per share data)
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(Unaudited)
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||||||||||||||||
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Three Months Ended Dec. 31,
|
Year Ended Dec. 31,
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|||||||||||||||
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2010
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2009
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2010
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2009
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|||||||||||||
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Licensing
and other revenue
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$ | 87,955 | $ | 65,782 | $ | 332,559 | $ | 232,058 | ||||||||
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Selling,
general and administrative expenses
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47,813 | 24,695 | 138,532 | 79,356 | ||||||||||||
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(Income)/expenses
related to specific litigation
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(15,928 | ) | (15,688 | ) | 137 | |||||||||||
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Operating
income
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56,070 | 41,087 | 209,715 | 152,565 | ||||||||||||
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Interest
expense, net
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9,632 | 10,338 | 39,318 | 38,733 | ||||||||||||
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Equity
earnings on joint ventures
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(3,250 | ) | (860 | ) | (5,492 | ) | (3,424 | ) | ||||||||
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Write-off
of marketable securities
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13,000 | - | 13,000 | - | ||||||||||||
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Other
expenses – net
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19,382 | 9,478 | 46,826 | 35,309 | ||||||||||||
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Income
before income taxes
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36,688 | 31,609 | 162,889 | 117,256 | ||||||||||||
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Provision
for income taxes
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12,367 | 10,214 | 52,409 | 41,225 | ||||||||||||
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Net
income
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$ | 24,321 | $ | 21,395 | $ | 110,480 | $ | 76,031 | ||||||||
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Less:
Net income attributable to non-controlling interest
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2,198 | 1,679 | 11,633 | 920 | ||||||||||||
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Net
income attributable to Iconix Brand Group, Inc.
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$ | 22,123 | $ | 19,716 | $ | 98,847 | $ | 75,111 | ||||||||
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Earnings
per share:
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||||||||||||||||
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Basic
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$ | 0.30 | $ | 0.28 | $ | 1.37 | $ | 1.14 | ||||||||
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Diluted
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$ | 0.30 | $ | 0.27 | $ | 1.32 | $ | 1.10 | ||||||||
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Weighted
average number of common shares outstanding:
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||||||||||||||||
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Basic
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72,560 | 71,431 | 72,151 | 65,763 | ||||||||||||
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Diluted
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74,743 | 73,683 | 74,713 | 68,325 | ||||||||||||
| Selected Balance Sheet Items: |
(Unaudited)
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|||||||
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(in
thousands)
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12/31/2010
|
12/31/2009
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||||||
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Total
Assets
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$ | 1,948,470 | $ | 1,802,613 | ||||
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Total
Liabilities
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$ | 812,339 | $ | 832,841 | ||||
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Stockholders'
Equity
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$ | 1,136,131 | $ | 969,772 | ||||
The
following tables detail unaudited reconciliations from non-GAAP amounts to U.S.
GAAP relating to the adoption of FASB Staff Position No. APB 14-1 “Accounting
for Convertible Debt Instruments That May Be Settled In Cash Upon Conversion
(Including Partial Cash Settlements)” (ASC Topic 470) (“FSP APB 14-1”), which
became effective retroactively for the fiscal years beginning after December 15,
2008.
-3-
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)
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(Unaudited)
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|||||||||||||||
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Three months ended
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Year ended
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|||||||||||||||
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Net income reconciliation
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Dec 31,
2010
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Dec 31,
2009
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Dec 31,
2010
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Dec 31,
2009
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||||||||||||
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Non-GAAP
net income (1)
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$ | 24,491 | $ | 21,875 | $ | 107,819 | $ | 83,344 | ||||||||
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GAAP
net income
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$ | 22,123 | $ | 19,716 | $ | 98,847 | $ | 75,111 | ||||||||
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Add:
Non-cash interest related to FSP APB 14-1
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3,679 | 3,347 | 13,729 | 12,808 | ||||||||||||
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Deduct:
Income taxes related to non-cash interest
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(1,311 | ) | (1,188 | ) | (4,757 | ) | (4,575 | ) | ||||||||
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Net
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2,368 | 2,159 | 8,972 | 8,233 | ||||||||||||
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Non-GAAP
net income
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$ | 24,491 | $ | 21,875 | $ | 107,819 | $ | 83,344 | ||||||||
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(Unaudited)
Three months ended
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(Unaudited)
Year ended
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Diluted EPS reconciliation
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Dec 31,
2010
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Dec 31,
2009
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Dec 31,
2010
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Dec 31,
2009
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Non-GAAP diluted EPS (1)
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$ | 0.33 | $ | 0.30 | $ | 1.44 | $ | 1.22 | ||||||||
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GAAP
diluted EPS
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$ | 0.30 | $ | 0.27 | $ | 1.32 | $ | 1.10 | ||||||||
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Add:
Non-cash interest related to FSP APB 14-1, net of tax
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$ | 0.03 | $ | 0.03 | $ | 0.12 | $ | 0.12 | ||||||||
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Non-GAAP diluted
EPS
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$ | 0.33 | $ | 0.30 | $ | 1.44 | $ | 1.22 | ||||||||
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Forecasted Diluted EPS
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Year
Ending
12/31/11
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High
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Low
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Non-GAAP diluted
EPS (1)
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$ | 1.58 | $ | 1.53 | ||||
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GAAP
diluted EPS
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$ | 1.45 | $ | 1.40 | ||||
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Add:
Non-cash interest related to FSP APB 14-1, net of tax
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$ | 0.13 | $ | 0.13 | ||||
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Non-GAAP Diluted
EPS
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$ | 1.58 | $ | 1.53 | ||||
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(1)
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Non-GAAP
net income and non-GAAP EPS, are non-GAAP financial measures, which
represent net income excluding any non-cash interest, net of tax, relating
to the adoption of FSP APB 14-1. The Company believes these are
useful financial measures in evaluating its financial condition because
they are representative of only actual cash interest paid on outstanding
debt.
|
-4-
(in
thousands)
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(Unaudited)
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(Unaudited)
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|||||||||||||||
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Three months ended
|
Year ended
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|||||||||||||||
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Dec 31, 2010
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Dec 31,
2009
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Dec 31,
2010
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Dec 31,
2009
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EBITDA (2)
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$ | 58,647 | $ | 41,869 | $ | 209,567 | $ | 163,081 | ||||||||
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Reconciliation
of EBITDA:
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||||||||||||||||
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Net
Income
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22,123 | 19,716 | 98,847 | 75,111 | ||||||||||||
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Add:
Income taxes
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12,367 | 10,169 | 52,409 | 41,222 | ||||||||||||
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Add:
Net interest expense and other
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21,964 | 10,338 | 49,552 | 38,733 | ||||||||||||
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Add:
Depreciation and amortization of certain intangibles
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2,193 | 1,646 | 8,759 | 8,015 | ||||||||||||
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EBITDA
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$ | 58,647 | $ | 41,869 | $ | 209,567 | $ | 163,081 | ||||||||
(2)
EBITDA, a non-GAAP financial measure, represents income from operations before
income taxes, interest, write-off of marketable securities, 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
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(Unaudited)
Year ended
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||||||||||||||
| (in thousands) |
Dec 31, 2010
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Dec 31, 2009
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Dec 31, 2010
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Dec 31, 2009
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||||||||||||
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Free
Cash Flow (3)
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$ | 45,443 | $ | 33,194 | $ | 166,571 | $ | 134,843 | ||||||||
|
Reconciliation
of Free Cash Flow:
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||||||||||||||||
|
Net
Income
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22,123 | 19,716 | 98,847 | 75,111 | ||||||||||||
|
Add:
Non-cash income taxes, non-cash interest related to convertible debt,
depreciation, amortization of trademarks and finance fees, non-cash
compensation expense, bad debt expense, net equity earnings from certain
joint ventures, non-cash gain/loss from sale of trademarks and non-cash
write-off of marketable securities
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25,819 | 15,562 | 70,914 | 63,605 | ||||||||||||
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Less:
Capital expenditures
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(2,499 | ) | (2,084 | ) | (3,190 | ) | (3,873 | ) | ||||||||
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Free
Cash Flow
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$ | 45,443 | $ | 33,194 | $ | 166,571 | $ | 134,843 | ||||||||
-5-
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(in
thousands)
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Year
Ending
Dec
31, 2011
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|||||||
|
High
|
Low
|
|||||||
|
Forecasted
Free Cash Flow (3)
|
$ | 165,000 | $ | 160,000 | ||||
|
Reconciliation
of Free Cash Flow:
|
||||||||
|
Net
Income
|
$ | 109,000 | $ | 105,000 | ||||
|
Add:
Non-cash income taxes, non-cash interest related to convertible debt,
depreciation, amortization of trademarks and finance
fees, non-cash compensation expense, bad debt expense, net equity earnings
from certain joint ventures and non-cash gain/loss from sale of
trademarks
|
60,000 | 60,000 | ||||||
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Less:
Capital expenditures
|
(4,000 | ) | (5,000 | ) | ||||
|
Forecasted
Free Cash Flow
|
$ | 165,000 | $ | 160,000 | ||||
(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 gains/loss from sale of
trademarks, non-cash write-off of marketable securities, and 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.
-6-