Press Release:
— Q3 revenue of $92.7 million, a 10% increase over prior year quarter excluding one-time item in Q3 2010
— Nine-month non-GAAP diluted earnings per share increased to $1.27 versus $1.12 for the prior year period
— Providing 2012 revenue guidance of $370 to $385 million and non-GAAP diluted EPS guidance of $1.77 to $1.84
— Acquiring Sharper Image Brand
— Announces $200 million stock repurchase program
NEW YORK, Oct. 27, 2011 /PRNewswire/ — Iconix Brand Group, Inc. (NASDAQ:ICON – News) (“Iconix” or the “Company”), today announced financial results for the third quarter ended September 30, 2011.
Q3 2011 results for Iconix Brand Group, Inc.:
Total revenue for the third quarter of 2011 was approximately $92.7 million compared to approximately $96.9 million in the third quarter of 2010. Third quarter 2010 revenue included approximately $12.5 million related to a contract the Company signed with ABC Network for the Peanuts holiday television specials.
EBITDA attributable to Iconix for the third quarter was approximately $55.3 million, a 6% increase over the prior year quarter. Free cash flow attributable to Iconix for the third quarter was approximately $44.9 million, a 9% increase over the prior year quarter. On a non-GAAP basis, which excludes non-cash interest related to the Company’s two convertible notes, net income attributable to Iconix was $30.1 million, a 1% increase over the prior year quarter.
Non-GAAP diluted EPS for the third quarter was $0.40 compared to $0.40 in the prior year quarter. GAAP net income attributable to Iconix for the third quarter was approximately $26.0 million compared to $27.4 million in the prior year quarter and GAAP diluted EPS was $0.34 compared to $0.37 in the prior year quarter.
Nine months ended September 30, 2011:
Total revenue for the nine months ended September 30, 2011 was approximately $274.3 million, a 12% increase as compared to approximately $244.6 million for the prior year period. EBITDA attributable to Iconix for the nine month period increased 14% from the prior year period to approximately $172.2 million. Free cash flow for the nine month period was approximately $134.3 million, a 14% increase over the prior year period.
On a non-GAAP basis, which excludes non-cash interest related to the Company’s two convertible notes and two non-recurring items recorded in the second quarter (see reconciliation tables below), net income attributable to Iconix for the nine month period increased 15% to approximately $96.2 million as compared to the prior year period and non-GAAP diluted earnings per share increased to $1.27 versus $1.12 for the prior year period.
On a GAAP basis, net income attributable to Iconix for the nine month period increased 29% to approximately $98.9 million as compared to the prior year period and GAAP diluted earnings per share was $1.31 versus $1.03 for the prior year period.
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, “We are pleased to report another strong quarter for our Company and believe our results further demonstrate the power of our business model and the strength of our brands. As we look to 2012, we are excited about the many opportunities ahead as we continue to grow our platform through new retail partners, new categories and new geographies. This week we announced two new exciting initiatives including our first DTR with JC Penney for our Royal Velvet brand and our first entry into the consumer electronics market with our acquisition of Sharper Image. With now 28 diverse consumer brands in our portfolio that represent approximately $12 billion in annual retail sales we have come a long way, and looking ahead we are very focused on delivering continued value to our shareholders.”
2011 Guidance for Iconix Brand Group, Inc.:
The Company is reaffirming its full year 2011 revenue guidance of $355-$365 million, its full year 2011 non-GAAP diluted EPS guidance of $1.63-$1.68, its full year 2011 GAAP diluted EPS guidance of $1.61-$1.66 and its full year 2011 free cash flow guidance of $167-$172 million. The Company expects Sharper Image to be earnings neutral in 2011 due to timing of the close and transaction costs.
2012 Guidance for Iconix Brand Group, Inc.:
The Company is providing 2012 revenue guidance of $370-$385 million, 2012 non-GAAP diluted EPS guidance of $1.77-$1.84, 2012 GAAP diluted EPS guidance of $1.62-$1.69 and 2012 free cash flow guidance of $187-$194 million. This guidance relates to the existing portfolio of brands including Sharper Image and does not include any additional acquisitions.
Other Company News:
The Company announced today that it signed a definitive agreement to acquire The Sharper Image brand. This acquisition will be the Company’s first entry into the consumer electronics sector. See separate press release for additional details.
The Company also announced today that its Board of Directors has authorized a program to repurchase up to $200 million of its common stock. See separate press release for additional details.
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), ZOO YORK (R) and WAVERLY (R). In addition, Iconix owns an interest in the ARTFUL DODGER (R), ED HARDY (R), ECKO (R), MARC ECKO (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.
