Wednesday, December 6, 2017

Iconix Reports Preliminary Third Quarter 2017 Results and Provides Update on Intangible Asset Impairment

Licensing Revenue: The Company expects licensing revenue for the third quarter of 2017 to be approximately $53.2 million, a 12% decline as compared to $60.5 million in the prior year quarter. Revenue in the prior year’s third quarter included approximately $2.3 million of licensing revenue from the Sharper Image brand which was sold in the fourth quarter of 2016 and approximately $1.3 million of revenue from its Southeast Asia joint venture which was deconsolidated in the second quarter of 2017. As a result, there was no comparable revenue for these items in the third quarter of 2017. Excluding Sharper Image and Southeast Asia, revenue declined approximately 7% in the third quarter of 2017.

SG&A Expenses: The Company continued to manage expenses and expects SG&A expenses to be approximately $21.5 million in the third quarter of 2017, a 28% decrease as compared to approximately $29.9 million in the third quarter of 2016.

Asset Impairment: As previously disclosed, the Company accelerated the timing of its annual impairment testing of goodwill and intangible assets that is customarily performed in connection with the preparation of year-end financial statements and is in the process of completing such testing in connection with the preparation of its financial statements for the quarter ended September 30, 2017. The Company has not yet finalized its impairment analysis, however, as a result of such testing which will be completed prior to the filing of the Company’s Form 10-Q for the period ended September 30, 2017, the Company expects to recognize a non-cash intangible asset impairment charge of approximately $500 million to $750 million primarily related to the women’s segment. The Company also expects to have a non-cash tax charge of approximately $15 million related to the write off of certain deferred tax assets.

GAAP Diluted EPS from Continuing Operations: The Company expects GAAP diluted EPS from continuing operations for the third quarter of 2017, excluding the impairment charge, to be a loss of approximately $0.10, as compared to earnings of $0.25 in the third quarter of 2016. The earnings of $0.25 in the third quarter of 2016 includes approximately $0.18 per share related to a gain on the sale of our equity interest in Complex Media. The loss of $0.10 in the third quarter of 2017 includes the non-cash tax charge of approximately $15 million or $0.26 per share.

Non-GAAP Diluted EPS from Continuing Operations: The Company expects non-GAAP diluted EPS from continuing operations for the third quarter of 2017 to be approximately $0.24, as compared to $0.18 in the third quarter of 2016. A reconciliation table for non-GAAP diluted EPS is included at the end of this press release.

1 comment:

Anonymous said...

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