Sunday, December 24, 2017

Iconix Brand Group Files 10-Q $ICON

  • In the Current Quarter, the Company recorded a total non-cash asset impairment charge of $521.7 million which is comprised of $135.9 million in the men's segment, $227.6 million in the women’s segment, $69.5 million in the home segment, and $88.8 million in the international segment to reduce various trademarks in those segments to fair value. Additionally, the Company recorded a total non-cash goodwill impairment charge of $103.9 million which is comprised of $73.9 million in the women's segment, $1.5 million in the men's segment and $28.4 million in the home segment.
  • Pursuant to the amendment,in order to receive the net proceeds of the Second Delayed Draw Term Loan on March 15, 2018, the Company will have to raise net cash proceeds of at least $100 million(and/or achieving a reduction in the outstanding principal amount of the 1.50% Convertible Notes) which would provide sufficient funds with the amounts drawn under the Second Delayed Draw Term Loan for the Company to retire the 1.50% Convertible Notes outstanding on their maturity date. If the Company cannot secure additional funds or otherwise satisfy the requirements for availability of the First Delayed Draw Term Loan, the Company will not have sufficient liquidity to repay its 1.50% Convertible Notes which will become due in March 2018, which default may result in a cross-default and acceleration of the Company’s other outstanding indebtedness, which could ultimately force the Company into bankruptcy or liquidation.These factors raise substantial doubt about the Company's ability to continue as a going concern within one year after the financial statements contained in this Quarterly Report on Form 10-Q are issued.
  • In order to continue its operations, the Company continues to actively evaluate various capital raising options to repay debt and add additional liquidity to the Company's balance sheet, as well as considering strategic alternatives, which could include the sale of certain assets or of the entire company, to sufficiently extend its cash and liquidity. There can be no assurance, however, that any of these alternatives will be successfully completed on terms acceptable to the Company to extend its cash and liquidity. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
  • In order to seek to satisfy these requirements, we continue to actively evaluate various capital raising options to repay debt and add additional liquidity to the company’s balance sheet as well as strategic alternatives, which could include the sale of certain assets or of the entire company. There can be no assurance, however, that any of these alternatives will be successfully completed on terms acceptable to us in order to extend our cash and liquidity. If we cannot secure additional funds and cannot repay the 1.50% Convertible Notes when they become due in March 2018, the resulting default may result in a cross-default and acceleration of our other outstanding indebtedness, whichcould ultimately force us into bankruptcy or liquidation. These factors raise substantial doubt about our ability to continue as a going concern over the next twelve months.

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