Iconix Revenues Beat, Earnings Miss In Q4

Iconix Brand Group Inc. posted a mixed finish to a challenging year after the market close today.

The brand management firm — which delayed its filings due to its need to restate several historical transactions following a probe by the U.S. Securities and Exchange Commission — posted a net loss of $263 million in the fourth quarter, or $5.44 per diluted share, a decline from the comparable period’s net income of $17.5 million, or 32 cents per diluted share.

On a non-GAAP basis, net income was $12.3 million, or 25 cents per diluted share, a 46 percent decrease compared to the prior year’s income of $22.7 million, or 45 cents per diluted share. It was a miss on market watchers’ predictions for diluted earnings per share of 27 cents.

The company posted licensing revenue of $94.7 million, a 1 percent decline from the comparable period and a beat on Wall Street’s estimates for revenues of $93.3 million.

Iconix chairman and CEO Peter Cuneo said the firm has resolved several major challenges and will continue to forge ahead after a tough year.

Despite a challenging year in 2015, I believe our ability to continue to generate significant free cash flow speaks to the overall resilience of our business model and the ongoing strength of a diversified portfolio of global brands,” Cuneo said in a release. “When I took over as interim CEO about eight months ago, there were three key areas of concern. These were the need to refinance the $300 million convertible notes due in June, the continuing dialogue with the Staff of the SEC regarding certain historical accounting, and finally to bring a new CEO into the company with the right experience and leadership qualities to take us into the future. I am pleased to say we have met each of these challenges.”

Iconix named former Luxottica S.p.A., Build-A-Bear Workshop Inc. and Mars Inc. executive John Haugh its new CEO in February, effective April 1, and also announced this month that it secured a $300 million term loan to pay off convertible notes due in June.

For the full year, Iconix posted a net loss of $189.3 million, or $3.92 per diluted share, compared to net income of $103.7 million, or $1.81 per diluted share in the prior year. On a non-GAAP basis net income was $66.4 million, or $1.33 per diluted share, a 36 percent decline compared to net income of $103.6 million, or $1.98 per diluted share, in the prior year. Licensing revenue for the full year was $379.2 million, a 3 percent decline compared to $391.5 million in 2014.

The company also updated its 2016 guidance to expect licensing revenue of $370 million to $390 million (same), non-GAAP diluted EPS in the range of $1.15 to $1.30 (from $1.35 to $1.50) and GAAP diluted EPS in the range of 75 cents to 90 cents (from $1.08-$1.23).

Looking forward, 2016 will be a year of restaging the business,” Cuneo said, “but I believe with the right investments in our brands and our organization, as well as increased support to our licensing partners, we can strengthen our revenue and continue to generate strong free cash flow in the future, driving long-term value for our company and our shareholders.”

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