The company said today that the net proceeds from the sale of its entertainment segment for $345 million in cash — completed today but subject to working capital adjustments — combined with additional cash on the company’s balance sheet were used to pay down approximately $362 million in debt principal.
According to Iconix, this payment includes the full extinguishment of the $210 million outstanding balance of the company’s senior secured-term loan and a mandatory payment of $152 million of the firm’s senior secured notes issued under its securitization facility.
Following these transactions, the company said its total debt is $828 million in principal, which includes approximately $433 million in senior secured notes, a $100 million variable-funding note and about $295 million in 2018 convertible notes.
“Improving the balance sheet has been a key objective of our company, and with the entertainment sale complete, we have made significant progress on this objective,” CEO John Haugh said in a statement. “In a little more than one year, we have reduced our debt by over $650 million and improved our leverage by approximately two turns.”
The entertainment segment’s historical results will be reported in Iconix’s consolidated financial statements as a discontinued operation, and in subsequent periods, Iconix’ consolidated financial statements will no longer reflect the assets, liabilities, results of operations or cash flows attributable to that segment.
Iconix — which has been mulling ways to reduce its debt load for more than a year — announced in May the sale of ins entertainment division to DHX Media Ltd. The sale included the firm’s 80 percent interest in the Peanuts brand and 100 percent interest in the Strawberry Shortcake brand.
Apparel, footwear and accessories brands in Iconix’s portfolio include Candie’s, London Fog, Mossimo and Mudd.