LONDON, UK / ACCESSWIRE / January 12, 2018 / Active-Investors.com has just released a free earnings report on Iconix Brand Group, Inc. (NASDAQ: ICON) ("Iconix"). If you want access to this report all you need to do is sign up now by clicking the following link www.active-investors.com/registration-sg/?symbol=ICON. The Company reported its third quarter fiscal 2017 operating results on December 22, 2017. The clothing brand licensing Company's earnings and revenue were in-line with market expectations. Register today and get access to over 1000 Free Research Reports by joining our site below:
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Earnings Highlights and Summary
For the third quarter of the fiscal year 2017, Iconix's licensing revenue was $53.2 million, reflecting a 12% decline compared to $60.5 million in Q3 2016. In the prior year's same quarter, the Company's revenue included approximately $2.3 million of licensing revenue from the Sharper Image brand which was sold in Q4 2016, and approximately $1.3 million of revenue from the Company's Southeast Asia joint venture which was deconsolidated in Q2 2017. Iconix's revenue numbers met market consensus estimates.
Iconix recorded a non-cash trademark impairment charge of approximately $521.8 million in Q3 2017, which is comprised of $227.6 million in the women's segment; $135.9 million in the men's segment; $69.5 million in the home segment; and $88.7 million in the international segment, to reduce various trademarks in those segments to fair value. The Company also recorded a non-cash goodwill impairment charge of $103.9 million due to impairment of goodwill in the women's segment, men's segment, and home segment of $73.9 million, $1.5 million, and $28.4 million, respectively.
Iconix's operating loss was approximately $595.9 million for Q3 2017 compared to an operating income of $31.1 million in Q3 2016. The Company's operating loss included a trademark and goodwill impairment of $625.5 million, a loss on termination of licenses of $2.8 million, and a gain on sale of trademarks of $0.9 million. Excluding these items, Iconix's adjusted operating income was approximately $31.6 million in the reported quarter. In Q3 2016, the Company's operating income included approximately $2.1 million of income related to the Sharper Image brand. Adjusting for these items, Iconix's operating income increased approximately 10% in Q3 2017.
Iconix reported a GAAP net loss from continuing operations of $550.6 million in Q3 2017 compared to earnings of $14.2 million in Q3 2016. The Company's GAAP diluted loss per share from continuing operations was negative $9.64 compared to diluted earnings per share (EPS) of approximately $0.25 in the year ago same period.
Iconix's non-GAAP net income from continuing operations surged 35% to $13.9 million on a y-o-y basis for Q3 2017 compared to $10.3 million in Q3 2016. The Company's non-GAAP diluted EPS from continuing operations was $0.24 for the reported quarter, up 35% versus $0.18 in the year earlier comparable quarter, and was in-line with market expectations.
Balance Sheet and Liquidity
Iconix ended Q3 2017 with approximately $28.9 million of unrestricted domestic cash; $12.4 million of unrestricted domestic cash in consolidated JV's; $9.7 million of unrestricted international cash; $280 million of restricted cash; and $1.0 billion of debt. Subsequent to the end of the reported quarter, the Company amended its senior secured term loan and reduced the size of the credit facility by $75 million to $225 million.
Iconix generated approximately $1.4 million of free cash flow in Q3 2017 compared to approximately $27.9 million in Q3 2016. The decline in free cash flow was partially related to a $7 million state and local income tax audit assessment that the Company paid in the reported quarter.
For the full fiscal year 2017, Iconix is forecasting revenue to be at the low end of its guidance range of $225 million to $235 million. The Company is adjusting its 2017 GAAP EPS guidance to a range of negative $9.89 to $9.79, in order to reflect the impairment charges. Iconix is projecting 2017 non-GAAP EPS to be slightly above its guidance range of $0.65 to $0.70, and expects free cash flow to be at the low end of its guidance range of $65 million to $82 million for FY17.
Stock Performance Snapshot
January 11, 2018 - At Thursday's closing bell, Iconix Brand Group's stock advanced 8.20%, ending the trading session at $1.32.
Volume traded for the day: 2.98 million shares, which was above the 3-month average volume of 2.63 million shares.
Stock performance for year-to-date – up 2.33%
After yesterday's close, Iconix Brand Group's market cap was at $77.66 million.
The stock is part of the Consumer Goods sector, categorized under the Textile - Apparel Footwear & Accessories industry. This sector was up 0.5% at the end of the session.
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