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Iconix Group reports Q3 loss, revenues decline 3 percent

By Prachi Singh

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Licensing revenue for the third quarter of 2015 at Iconix Brand Group was approximately 88.9 million dollars, a 3 percent decrease as compared to approximately 91.6 million dollars in the third quarter of 2014.

“I would like to reiterate that the underlying fundamentals of our business are strong,” said Peter Cuneo, Chairman and Interim Chief Executive Officer of Iconix, adding, “We have gone through a difficult transition period, but Iconix continues to have significant business strengths including its diversified portfolio of consumer brands, profitable business model and strong free cash flow generation.”

Negative impact of currency headwinds

The numbers were negatively affected by approximately 2.7 million dollars due to foreign currency exchange rates. Excluding the effect, licensing revenue was flat in the quarter. There was no ‘Other Revenue’ compared to about 18.7 million dollars related to a joint venture for Lee Cooper and Umbro brands in China recorded in the third quarter of 2014.

Adjusted EBITDA attributable to Iconix was approximately 30.5 million dollars, a 53 percent decrease against approximately 65.4 million dollars in the prior year quarter. On a non-GAAP basis, net income witnessed a decline of 89 percent. Non-GAAP diluted EPS was 0.09 dollar, an approximate decrease of 88 percent.

Nine months result highlights

Licensing revenue for the nine months ended September 30, 2015 was approximately 279 million dollars, a 7 percent decrease as compared to approximately 299.3 million dollars for the prior year period. Total licensing revenue was negatively affected by approximately 7.9 million dollars due to foreign currency exchange rates. In addition, licensing revenue in the comparable 2014 period included 17.1 million dollars of revenue related to the five-year renewal of the Peanuts specials with ABC. Excluding the effect of foreign currency exchange rates and the ABC renewal, licensing revenue increased 2 percent.

Adjusted EBITDA attributable to Iconix was about 135.7 million dollars, a 34 percent decrease as compared to approximately 206.8 million dollars in the prior year period. On a non-GAAP basis, net income was approximately 54.5 million dollars, a 50 percent decrease as compared to approximately $108.4 million in the prior year period, and non-GAAP diluted earnings per share was approximately 1.10 dollars, an approximate decrease of 46 percent. GAAP net income was approximately 72.1 million dollars, a 42 percent decrease as compared to 124.6 million dollars in the prior year period, and GAAP diluted EPS for the nine month period was 1.43 dollars, a 33 percent decrease.

Iconix Brand Group