Press Release:

 

-Q3 total revenue of $96.9 million, a 63% increase over the prior year quarter

 

– Q3 non-GAAP Iconix net income of $29.8 million, a 32% increase over the prior year

 

– Q3 diluted non-GAAP Iconix EPS of $0.40 versus $0.31 in the prior year quarter

 

– Q3 and year-to-date free cash flow of $36.7 million and $121.1 million, respectively

 

– 2011 diluted non-GAAP Iconix EPS guidance of $1.53-$1.58

 

NEW YORK, Oct. 28 /PRNewswire-FirstCall/ — Iconix Brand Group, Inc. (Nasdaq:ICON – News) (“Iconix” or the “Company”), today announced financial results for the third quarter ended September 30, 2010.

 

Q3 2010 results for Iconix Brand Group, Inc:

 

Total revenue for the third quarter of 2010 was approximately $96.9 million, a 63% increase as compared to approximately $59.4 million for the third quarter of 2009. EBITDA attributable to Iconix for the third quarter was approximately $52.1 million, a 21% increase as compared to the prior year quarter. Free cash flow for the quarter was approximately $36.7 million. On a non-GAAP basis, which excludes non-cash interest related to the Company’s convertible debt, net income attributable to Iconix increased 32% to approximately $29.8 million and diluted earnings per share, or EPS, for the third quarter of 2010 was $0.40 versus $0.31 for the prior year quarter.

 

On a GAAP basis, net income attributable to Iconix increased 34% to approximately $27.4 million as compared to the prior year quarter and GAAP diluted EPS for the third quarter of 2010 was $0.37 versus $0.28 for the prior year quarter. Third quarter 2010 financials include approximately $12.5 million of revenue or approximately $0.02 of diluted EPS related to the new contract the Company signed with ABC for the Peanuts specials.

 

Nine months ended September 30, 2010

 

Total revenue for the nine months ended September 30, 2010 was approximately $244.6 million, a 47% increase as compared to approximately $166.3 million for the prior year period. EBITDA attributable to Iconix for the nine month period was approximately $150.9 million, a 25% increase as compared to the prior year period, and free cash flow was approximately $121.1 million, a 19% increase as compared to the prior year period. On a non-GAAP basis, as defined above, net income attributable to Iconix for the nine month period increased 36% to approximately $83.3 million as compared to the prior year period and non-GAAP diluted earnings per share increased to $1.12 versus $0.93 for the prior year period. On a GAAP basis, net income attributable to Iconix increased 39% to approximately $76.7 million as compared to the prior year period and GAAP diluted earnings per share was $1.03 versus $0.83 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, “2010, thus far has been an exciting year for our Company as we delivered another record quarter in terms of both revenue and earnings to our shareholders. With 27 brands today that represent approximately $12 billion in annual global retail sales, we are the second largest consumer products licensing company in the world, and we remain committed to expanding and growing our portfolio of iconic brands through new categories, geographies and distributions. As we look ahead to 2011, we feel confident about the overall strength of our existing brand portfolio and our ability to acquire world class brands.”

 

2010 Guidance for Iconix Brand Group, Inc:

 

The Company is raising its full year 2010 revenue guidance to $323-$328 million from $305-$315 million, its 2010 non-GAAP diluted EPS guidance to $1.38-$1.42 from $1.35-$1.40, and its GAAP diluted EPS guidance to $1.26-$1.30 from $1.23-$1.28. The Company expects to continue to generate strong free cash flow for 2010 of approximately $150- $155 million. This guidance relates to the existing portfolio of brands only and does not include any additional acquisitions.

 

The 2010 revenue revision is primarily related to the ABC contract in addition to the Company’s positive performance in the third quarter. The 2010 earnings revision is primarily related to the Company’s strong third quarter results, as the EPS benefit this quarter from the ABC contract will be offset on a full year basis as a result of estimated Peanuts restructuring costs to be incurred in the fourth quarter of 2010.

 

2011 Guidance for Iconix Brand Group, Inc:

 

The Company is providing 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 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), 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.