Iconix Brand Group Inc. (ICON, Financial) filed Quarterly Report for the period ended 2010-09-30.
Iconix Brand Group Inc. has a market cap of $1.23 billion; its shares were traded at around $17.17 with a P/E ratio of 12.8 and P/S ratio of 5.3. ICON is in the portfolios of Ron Baron of Baron Funds, Murray Stahl of Horizon Asset Management, George Soros of Soros Fund Management LLC.
Other Expenses - Net β Other expenses - net increased $2.4 million from approximately $25.0 million in the Prior Year Nine Months to approximately $27.4 million in the Current Nine Months. An increase of approximately $2.0 million in interest expense was primarily attributed to interest expense of approximately $4.9 million related to the Ecko Note, which was entered into as part of our acquisition of the Ecko assets and for which there was no comparable interest expense in the Prior Year Nine months, offset primarily by a decrease in $2.0 million in interest expense from our variable rate debt due to a lower debt balance as a result of our principal payment in March 2010 as well as a decrease of $1.4 million from our Asset-Backed Notes due to a lower average balance during the Current Quarter as compared to the Prior Year Quarter. Additionally, the increase in other expenses β net can be partially attributed to an aggregate decrease in our equity earnings on joint ventures of approximately $1.1 million primarily due to expenses from our MG Icon joint venture (created in February 2010) related to the launch of the Material Girl brand in Macy s stores in August 2010 for which there was no comparable expenses in the Prior Year Nine Months, offset by our Hardy Way joint venture (created in May 2009), for which there was only one quarter of comparable earnings in the Prior Year Nine Months. The aggregate increase in other expenses β net can be partially offset by an increase of approximately $0.8 million in interest income from $1.9 million in the Prior Year Nine Months to $2.7 million in the Current Nine Months primarily due to dividends received from our investment in Roc Apparel, our licensee for the Rocawear brand.
Net cash provided by operating activities increased approximately $48.1 million, from $80.6 million in the Prior Year Nine Months to $128.7 million in the Current Nine Months. This increase in net cash provided by operating activities of $48.1 million is primarily due to an increase in net income of approximately $30.8 million from $55.4 million in the Prior Year Nine Months to $86.2 million in the Current Nine Months for the reasons discussed above, as well as an aggregate increase in net cash provided by changes in operating assets and liabilities (net of acquisitions) of $15.8 million from approximately $10.7 million of net cash used in operating activities in the Prior Year Nine Months to approximately $5.1 million of net cash provided by operating activities in the Current Nine Months.
Net cash used in investing activities in the Current Nine Months increased $156.4 million, from $19.5 million in the Prior Year Nine Months to $175.9 million in the Current Nine Months. This increase is primarily due to our purchase of Peanuts Worldwide for $172.1 million, as well as $4.0 million paid in connection with our acquisition of a 50% interest in MG Icon. In the Prior Year Nine Months we paid cash earn-outs totaling $9.4 million, as compared to $0.8 million in cash earn-outs in the Current Nine Months, both of which were related to acquisitions prior to 2009 and were recorded as increases to goodwill. Further, in the Prior Year Nine Months we paid $9.0 million in connection with our acquisition of a 50% interest in Hardy Way.
Net cash used in financing activities increased $151.1 million, from $98.6 million of net cash provided by financing activities in the Prior Year Nine Months to net cash used in financing activities of $52.5 million in the Current Nine Months. The main driver of this net increase of cash used in financing activities of $151.1 million was an increase of $152.8 million cash received in the Prior Year Nine Months related to our public offering of our common stock in June 2009, with no comparable transaction in the Current Nine Months, and an increase of $17.5 million in principal payments on our long-term debt during the Current Nine Months as compared to the Prior Year Nine Months. Specifically, our payment in March 2010 of 50% of the excess cash flow from the subsidiaries subject to the term loan facility for the year ended December 31, 2009 was $47.2 million, as compared to our payment in March 2009 of 50% of the excess cash flow from the subsidiaries subject to the term loan facility for the year ended December 31, 2008 was $38.7 million. This was offset by a contribution of $16.5 million from Beagle in connection with the purchase of Peanuts Worldwide through our joint venture Peanuts Holdings, as compared to a contribution of $2.1 million in the Prior Year Nine Months related to our investment in our joint venture Scion. See Note 2 of Notes to Unaudited Condensed Consolidated Financial Statements for further information on these joint ventures.
As of September 30, 2010, our unaudited condensed consolidated balance sheet reflects debt of approximately $601.2 million, including secured debt of $330.3 million ($170.9 million under our Term Loan Facility, $76.9 million under Asset-Backed Notes issued by our subsidiary, IP Holdings, and $82.5 million under the Promissory Note issued by IPH Unltd), primarily all of which was incurred in connection with our acquisition activities. In accordance with ASC 820, our Convertible Notes are included in our $601.2 million of consolidated debt at a net debt carrying value of $258.8 million; however, the principal amount owed to the holders of our Convertible Notes is $287.5 million. We may also assume or incur additional debt, including secured debt, in the future in connection with, or to fund, future acquisitions. Our debt obligations:
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Iconix Brand Group Inc. has a market cap of $1.23 billion; its shares were traded at around $17.17 with a P/E ratio of 12.8 and P/S ratio of 5.3. ICON is in the portfolios of Ron Baron of Baron Funds, Murray Stahl of Horizon Asset Management, George Soros of Soros Fund Management LLC.
Highlight of Business Operations:
Other Expenses - Net β Other expenses - net increased to $9.7 million in the Current Quarter as compared to $6.5 million in the Prior Year Quarter. An increase of approximately $0.9 million in interest expense was primarily attributed to interest expense of $1.6 million related to the Ecko Note, which was entered into as part of our acquisition of the Ecko assets and for which there was no comparable interest expense in the Prior Year Quarter. This increase of $1.6 million is offset by a decrease in $0.2 million in interest expense from our variable rate debt due to a lower debt balance as a result of our principal payment in March 2010, as well as a decrease of $0.5 million from our Asset-Backed Notes due to a lower average balance during the Current Quarter as compared to the Prior Year Quarter. Additionally, an aggregate decrease in our equity earnings on joint ventures of approximately $2.5 million, from approximately $2.6 million in the Prior Year Quarter to less than $0.1 million in the Current Quarter was primarily due to expenses from our MG Icon joint venture (created in February 2010) related to the launch of the Material Girl brand in Macy s stores in August 2010 for which there was no comparable results in the Prior Year Quarter.Other Expenses - Net β Other expenses - net increased $2.4 million from approximately $25.0 million in the Prior Year Nine Months to approximately $27.4 million in the Current Nine Months. An increase of approximately $2.0 million in interest expense was primarily attributed to interest expense of approximately $4.9 million related to the Ecko Note, which was entered into as part of our acquisition of the Ecko assets and for which there was no comparable interest expense in the Prior Year Nine months, offset primarily by a decrease in $2.0 million in interest expense from our variable rate debt due to a lower debt balance as a result of our principal payment in March 2010 as well as a decrease of $1.4 million from our Asset-Backed Notes due to a lower average balance during the Current Quarter as compared to the Prior Year Quarter. Additionally, the increase in other expenses β net can be partially attributed to an aggregate decrease in our equity earnings on joint ventures of approximately $1.1 million primarily due to expenses from our MG Icon joint venture (created in February 2010) related to the launch of the Material Girl brand in Macy s stores in August 2010 for which there was no comparable expenses in the Prior Year Nine Months, offset by our Hardy Way joint venture (created in May 2009), for which there was only one quarter of comparable earnings in the Prior Year Nine Months. The aggregate increase in other expenses β net can be partially offset by an increase of approximately $0.8 million in interest income from $1.9 million in the Prior Year Nine Months to $2.7 million in the Current Nine Months primarily due to dividends received from our investment in Roc Apparel, our licensee for the Rocawear brand.
Net cash provided by operating activities increased approximately $48.1 million, from $80.6 million in the Prior Year Nine Months to $128.7 million in the Current Nine Months. This increase in net cash provided by operating activities of $48.1 million is primarily due to an increase in net income of approximately $30.8 million from $55.4 million in the Prior Year Nine Months to $86.2 million in the Current Nine Months for the reasons discussed above, as well as an aggregate increase in net cash provided by changes in operating assets and liabilities (net of acquisitions) of $15.8 million from approximately $10.7 million of net cash used in operating activities in the Prior Year Nine Months to approximately $5.1 million of net cash provided by operating activities in the Current Nine Months.
Net cash used in investing activities in the Current Nine Months increased $156.4 million, from $19.5 million in the Prior Year Nine Months to $175.9 million in the Current Nine Months. This increase is primarily due to our purchase of Peanuts Worldwide for $172.1 million, as well as $4.0 million paid in connection with our acquisition of a 50% interest in MG Icon. In the Prior Year Nine Months we paid cash earn-outs totaling $9.4 million, as compared to $0.8 million in cash earn-outs in the Current Nine Months, both of which were related to acquisitions prior to 2009 and were recorded as increases to goodwill. Further, in the Prior Year Nine Months we paid $9.0 million in connection with our acquisition of a 50% interest in Hardy Way.
Net cash used in financing activities increased $151.1 million, from $98.6 million of net cash provided by financing activities in the Prior Year Nine Months to net cash used in financing activities of $52.5 million in the Current Nine Months. The main driver of this net increase of cash used in financing activities of $151.1 million was an increase of $152.8 million cash received in the Prior Year Nine Months related to our public offering of our common stock in June 2009, with no comparable transaction in the Current Nine Months, and an increase of $17.5 million in principal payments on our long-term debt during the Current Nine Months as compared to the Prior Year Nine Months. Specifically, our payment in March 2010 of 50% of the excess cash flow from the subsidiaries subject to the term loan facility for the year ended December 31, 2009 was $47.2 million, as compared to our payment in March 2009 of 50% of the excess cash flow from the subsidiaries subject to the term loan facility for the year ended December 31, 2008 was $38.7 million. This was offset by a contribution of $16.5 million from Beagle in connection with the purchase of Peanuts Worldwide through our joint venture Peanuts Holdings, as compared to a contribution of $2.1 million in the Prior Year Nine Months related to our investment in our joint venture Scion. See Note 2 of Notes to Unaudited Condensed Consolidated Financial Statements for further information on these joint ventures.
As of September 30, 2010, our unaudited condensed consolidated balance sheet reflects debt of approximately $601.2 million, including secured debt of $330.3 million ($170.9 million under our Term Loan Facility, $76.9 million under Asset-Backed Notes issued by our subsidiary, IP Holdings, and $82.5 million under the Promissory Note issued by IPH Unltd), primarily all of which was incurred in connection with our acquisition activities. In accordance with ASC 820, our Convertible Notes are included in our $601.2 million of consolidated debt at a net debt carrying value of $258.8 million; however, the principal amount owed to the holders of our Convertible Notes is $287.5 million. We may also assume or incur additional debt, including secured debt, in the future in connection with, or to fund, future acquisitions. Our debt obligations:
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