ICONIX BRAND GROUP, INC. - FORM 8-K - EX-99.1 - August 15, 2017

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8-K - FORM 8-K - ICONIX BRAND GROUP, INC.d443509d8k.htm

Exhibit 99.1

(Unaudited, subject to change, for analytical purposes only)

Iconix Brand Group, Inc. and Subsidiaries

Consolidated Income Statements Adjusted to Reflect Entertainment Segment as a Discontinued Operation

 

(in thousands, except earnings per share data)   2016 GAAP as Adjusted  
    Q1     Q2     Q3     Q4     FY  

Licensing revenue

     67,676       68,209       60,457       58,801       255,143  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Selling, general and administrative expenses

     32,600       29,506       29,869       36,784       128,759  (a) 

Depreciation and amortization

     965       895       233       699       2,793  

Equity earnings on joint ventures

     (1,193 )      (1,363 )      (574 )      (448 )      (3,578 ) 

Gains on sales of trademarks

     (10,969 )      1,125       (147 )      (28,113 )      (38,104 ) 

Goodwill impairment

           18,331       18,331  (b) 

Trademark impairment

           419,762       419,762  (b) 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Operating income

     46,273       38,046       31,076       (388,214 )      (272,818 ) 

Other (income) expenses

          

Interest expense

     19,526       21,890       18,334       17,174       76,925  (c) 

Interest income

     (355 )      (193 )      (140 )      (218 )      (904 ) 

Other income, net

     (7 )      (9 )      (10,164 )      (7,328 )      (17,508 ) (d) 

Loss (gain) on extinguishment of debt

     —         (4,288 )      (4,186 )      14,376       5,903  (e) 

Foreign currency translation loss (gain)

     617       (734 )      732       (1,903 )      (1,287 ) (f) 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Other expenses (income) - net

     19,781       16,666       4,578       22,101       63,129  

Income from continuing operations before income taxes

     26,492       21,380       26,498       (410,315 )      (335,948 ) 

Provision for income taxes

     8,836       6,888       9,433       (103,074 )      (77,917 ) (h) 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net income (loss) from continuing operations

     17,656       14,492       17,065       (307,241 )      (258,031 ) 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Less: Net income (loss) attributable to non-controlling interest from continuing operations

     3,027       3,890       2,885       (13,129 )      (3,327 ) (g) 

Net income (loss) from continuing operations attributable to Iconix Brand Group, Inc.

     14,629       10,602       14,179       (294,112 )      (254,704 ) 

Income from discontinued operations, net of income taxes

     3,987       980       1,036       (3,436 )      2,570  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net income (loss) attributable to Iconix Brand Group, Inc.

     18,616       11,582       15,215       (297,548 )      (252,134 ) 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Earnings per share - basic:

          

Continuing operations

     0.30       0.22       0.26       (5.24 )      (4.87 ) 

Discontinued operations

     0.08       0.02       0.02       (0.06 )      0.05  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Earnings per share - basic

     0.38       0.24       0.27       (5.30 )      (4.82 ) 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Earnings per share - diluted:

          

Continuing operations

     0.29       0.21       0.25       (5.24 )      (4.87 ) 

Discontinued operations

     0.08       0.02       0.02       (0.06 )      0.05  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Earnings per share - diluted

     0.37       0.23       0.27       (5.30 )      (4.82 ) 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Weighted average number of common shares outstanding:

          

Basic

     48,509       49,035       55,584       56,147       52,338  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Diluted

     50,327       50,675       57,355       56,147       52,338  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
         2016 Non-GAAP Adjustments  
         Q1     Q2     Q3     Q4     FY  
   Net income (loss) from continuing operations          
   attributable to Iconix Brand Group, Inc.     14,629       10,602       14,179       (294,112 )      (254,704 ) 
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
   Add:          

(a)

   

special charges

     5,470       1,860       3,118       3,866       14,314  

(b)

   

write-down of certain intangible assets

           438,093       438,093  

(c)

   

non-cash interest related to ASC 470

     7,280       6,812       4,246       4,059       22,397  

(d)

   

gain on Complex and settlement w/ former CEO

         (10,164 )      (7,263 )      (17,427 ) 

(e)

   

loss on extinguishment of deb

       (4,288 )      (4,186 )      14,376       5,903  

(f)

   

foreign currency translation gain

     617       (734 )      732       (1,903 )      (1,287 ) 

(g)

   

portion of non-controlling interest of (b) and (f)

     10       139       (40 )      (17,390 )      (17,282 ) 

(h)

    Deduct: Income taxes related to above     (4,533 )      (1,537 )      2,422       (117,781 )      (121,428 ) 
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
  

Net

     8,843       2,252       (3,871 )      316,057       323,283  
   Non-Gaap Net Income     23,472       12,854       10,308       21,945       68,579  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
   Non-Gaap Share count - Diluted     50,327       50,675       57,355       58,060       54,142  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
   Non-Gaap Earnings Per Share - Diluted     0.47       0.25       0.18       0.38       1.27  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

 

 

Footnotes:

(a) Special charges related to professional fees associated with the continuing correspondence with the Staff of the SEC, the SEC investigation, the previously disclosed class action and derivative litigations, and costs related to the transition of Iconix management
(b) Write-down of certain intangible assets
(c) Non-cash interest related to the Company’s convertible notes, ASC 470
(d) $10 million gain related to the sale of the Company’s minority interest in Complex Media, and $7 million gain related to the recoupment and final settlement of unearned incentive compensation from the Company’s former CEO.
(e) Gains related to the repurchase of a portion of the Company’s 2018 convertible notes at a discount and a loss related to the early extinguishment of debt
(f) Non-cash foreign currency translation loss (gain)
(g) Portion of write-down related to minority interest
(h) Income taxes related to adjustments (a) through (f)

 

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ICONIX BRAND GROUP, INC. Reports