iconix roadshow
Post on 10-Apr-2015
31 Views
Preview:
TRANSCRIPT
SAFE HARBOR STATEMENTThis presentation contains forward‐looking statements under the Private Securities Litigation ReformAct of 1995. The statements that are not historical facts contained in this presentation are forwardlooking statements that involve a number of known and unknown risks, uncertainties and otherfactors, all of which are difficult or impossible to predict and many of which are beyond the control ofIconix Brand Group, Inc. (“Iconix” or the “Company), which may cause the actual results, performanceor achievements of the Company to be materially different from any future results, performance or
SAFE HARBOR STATEMENT
achievements expressed or implied by such forward looking statements. These forward‐lookingstatements reflect only current expectations of the Company and should not be read as a guarantee offuture performance or results, and will not necessarily be accurate indications of the times at, or bywhich, such performance or results will be achieved. Forward‐looking statements include statementsconcerning the Company’s plans, objectives, goals, strategies, future events, future results, competitivestrengths, industry trends, and the benefits of recent acquisitions. The words "believe", "anticipate,""expect," "confident," and similar expressions also identify forward‐looking statements. Readers arecautioned not to place undue reliance on these forward looking statements, which speak only as of thedate the statement was made. The Company can give no assurance that any of the events anticipatedby forward‐looking statements will occur or, if any of them do, what impact they will have on theCompany’s results of operations and financial condition. In light of the risks and uncertaintiesdescribed in the “Risk Factors” section of the Company's Annual Report on Form 10‐K for the fiscal yearended December 31, 2009, and Form 10‐Q for the quarter ended March 31, 2010 the matters referredto in the forward‐looking statements contained in this presentation may not in fact occur.
Forward‐looking statements speak only as of the date the statements are made. The Companyg p y p yassumes no obligation to update forward‐looking statements to reflect actual results, changes inassumptions or changes in other factors affecting forward‐looking information except to the extentrequired by applicable securities laws. If the Company does update one or more forward‐lookingstatements, no inference should be drawn that the Company will make additional updates with respectthereto or with respect to other forward‐looking statements.
This presentation contains certain non‐GAAP financial measures. The Company believes the use ofnon‐GAAP measures in addition to GAAP measures is an additional useful method of evaluating itsnon GAAP measures in addition to GAAP measures is an additional useful method of evaluating itsresults of operations. The non‐GAAP financial measures disclosed should not be considered asubstitute for, or superior to, financial measures calculated in accordance with GAAP, and the expectedresults calculated in accordance with GAAP and reconciliations to those expected results should becarefully evaluated. The non‐GAAP financial measures used by the Company may be calculateddifferently from, and therefore may not be comparable to, similarly titled measures used by othercompanies. A presentation of the most directly comparable GAAP financial measures and areconciliation of the differences between the non‐GAAP financial measure presented and the mostdirectly comparable financial measures calculated and presented in accordance with GAAP is provideddirectly comparable financial measures calculated and presented in accordance with GAAP is providedin tables appearing at the end of this presentation.
ICONIX OVERVIEW
WHO WE AREOwner of 27 Iconic Brands
Represent $12 Billion in Annual Retail SalesRepresent $12 Billion in Annual Retail Sales
Marketing, Brand Management & Merchandising Experts
2005: Transitioned to a pure play licensing company
EVOLUTION OF ICONIX
2005: Transitioned to a pure play licensing company
Today: 21st century model of specialization
TRADITIONAL OPERATING COMPANY
Marketing/Advertising/PR Marketing/Advertising/PR
ADVANTAGES OF ICONIX MODEL
Predictable Revenue Streamg gLicensingTrend Direction
g gLicensingTrend Direction
Guaranteed Minimum Royalties
No Inventory Risk
Low Overhead
SalesRetailDesignSourcing
RESPONSIBILITY OF LICENSEES
High EBITDA Margins
Minimal Working Capital
Minimal Capital Expenditures
ManufacturingDistributionWarehousingInventory Ownership & Mgmt
OF LICENSEES
GROWING BRAND MANAGEMENT PLATFORM
CATEGORIES FASHIONFASHION
HOME
FASHION
HOME
CHARACTER
FASHION
HOME
FASHION
HOME
GEOGRAPHIES
U.S.CANADA
CHINALATIN AMERICA
U.S.CANADA
U.S.CANADACHINA
LATIN AMERICA
U.S.CANADACHINA
LATIN AMERICAEUROPE
U.S.CANADA
U.S.CANADACHINA
LATIN AMERICALATIN AMERICA LATIN AMERICA
KOHL’S TARGET
JAPAN40+ COUNTRIES
KOHL’S
LATIN AMERICAEUROPE
DIRECT RETAIL
KOHL’S TARGETKMARTSEARS
KOHL’S TARGETKMARTSEARS
HUDSON’S BAY
KMARTSEARS
HUDSON’S BAYFALABELLAWALMART
BED BATH &
KOHL’S TARGETKMARTSEARS
TARGETKMARTSEARS
HUDSON’S BAYFALABELLAWALMARTPARTNERSHIPS SEARS
HUDSON’S BAYFALABELLA
FALABELLAWALMART
BED BATH & BEYONDLOWE’S
BED BATH & BEYONDLOWE’S
HSNCOSTCO
SUBURBIA
SEARSHUDSON’S BAY
FALABELLAWALMART
WALMARTBED BATH &
BEYONDLOWE’S
HSNCOSTCO
2006 2008
MACY’S
20102007
SUBURBIA
2009
UNIQUE DIRECT TO RETAIL MODEL
21 DTR PARTNERSHIPS
Winning formula providing retailers with an exclusive national brand at private label economics
Iconix receives premium support from DTR partners with marketingpartners with marketing campaigns and prominent circular & in-store placement
Note: Royal Velvet is not a DTR but is exclusive to Bed Bath & Beyond in certain categories under Li & Fung license
p
DIVERSIFIED ACROSS CATEGORIES AND RETAILERS
FASHIONHOME
CHARACTER21%
67%HOME12%
COMPETITIVE ADVANTAGE
MARKETINGMERCHANDISINGLICENSING NETWORKRETAIL RELATIONSHIPS
MARKETING MISSION: To keep all of our brands fresh and relevant to the consumer
MARKETING
MARKETING MISSION: To keep all of our brands fresh and relevant to the consumer
ICONIX BRAND VIDEO
h // i i b d /i i idhttp://www.iconixbrand.com/iconix_video.asp
MERCHANDISING
MERCHANDISING MISSION:To build lifestyle programs for each brand while maintaining its heritage
STRONG LICENSING NETWORK & RETAIL RELATIONSHIPS
Network of over 1,400 LicensesRelationships with Top RetailersPartners in International Markets
ORGANIC GROWTH
CORE EXTENSIONS
ORGANIC GROWTH: CATEGORY EXPANSION
WOMENS MENSWOMENS
LOUNGEWEAR
COREGIRLS BOYS
BABY/TODDLER
EXTENSIONS
CORE EXTENSIONS
ORGANIC GROWTH: CATEGORY EXPANSION
WOMENS SKATEBOARDSMENS FOOTWEAR/BAGS/SUNGLASSES
POOL ACCESSORIES
CORE EXTENSIONS
“ C
ORGANIC GROWTH: CATEGORY EXPANSION/DOOR GROWTH
2008- 2010
1067 STORES
“In one year, Candie’s has become our largest brand in the teen space.”
Kevin Mansell, President of Kohl’sThe Wall Street Journal, June 2006
2006817 STORES
2007
Decorative BathBedding Collections
929 STORES Beauty & CosmeticBody
ToddlersHair AccessoriesDecorative Bath
Bedding CollectionsF
Juniors OuterwearJuniors Activewear
Juniors SwimHats
SunglassesKids Activewear
Kid S i
FragranceJuniors OuterwearJuniors Activewear
Juniors SwimHats
SunglassesKids Activewear
Kid S i
FragranceJuniors OuterwearJuniors Activewear
Juniors SwimHats
SunglassesKids Activewear
Kid S iKids SwimKids Sleepwear
Kids IntimatesKids Sunglasses
Cold Weather AccessoriesBeach AccessoriesJuniors Sportswear
Denim
Kids SwimKids Sleepwear
Kids IntimatesKids Sunglasses
Cold Weather Accessories Beach AccessoriesJuniors Sportswear
Denim
Kids SwimKids Sleepwear
Kids IntimatesKids Sunglasses
Cold Weather AccessoriesBeach AccessoriesJuniors Sportswear
Denim
2005
Juniors SportswearDenim
732 STORES
DenimSweatersKnit Tops
Juniors FootwearSleepwear
Intimate ApparelWatchesJewelry
DenimSweatersKnit Tops
Juniors FootwearSleepwear
Intimate ApparelWatchesJewelry
DenimSweatersKnit Tops
Juniors FootwearSleepwear
Intimate ApparelWatchesJewelry
DenimSweatersKnit Tops
Juniors FootwearSleepwear
Intimate ApparelWatchesJewelry Jewelry
HandbagsKids Sportswear
Kids DenimKids Footwear
Cold Weather AccessoriesOptical
JewelryHandbags
Kids SportswearKids Denim
Kids FootwearCold Weather Accessories
Optical
JewelryHandbags
Kids SportswearKids Denim
Kids FootwearCold Weather Accessories
Optical
JewelryHandbags
Kids SportswearKids Denim
Kids FootwearCold Weather Accessories
Optical
ORGANIC GROWTH:CONVERTING LARGE VOLUME BUSINESSES
ORGANIC GROWTH:NEW PARTNERSHIPS
JV with MADONNA
Madonna’s 1st ever consumer products
t hipartnership
Material Girl at Macy’s launched August 3rd
Madonna Dolce & Gabanna eyewear
Actively pursing partnerships worldwide
ORGANIC GROWTH: BUILDING INTERNATIONAL PLATFORM THROUGH JV PARTNERSHIPS
50/50 JV with Silas Chou
5 partnerships signed covering Rampage, London Fog, Rocawear, Badgley Mischka,
50/50 JV with Falic Group
Office in Panama City
Signed DTR with Suburbia
50/50 JV with TLC (The Licensing Company)
Formed December 2009Rocawear, Badgley Mischka, Candie’s
Office in Hong Kong
Projecting ~1,000 stores
Signed DTR with Suburbia for Mossimo
18 licensees
TLC has 50+ people in London, Munich & Paris
Projecting 1,000 stores in next 3 years
22
ORGANIC GROWTH: BUILDING INTERNATIONAL PLATFORMTHROUGH RETAIL PARTNERS AND ACQUISITIONS
OP launched in Canada, Mexico, Central America & Argentina
Over 4,000 Walmart stores outside the US
Licensed in over 40 countries
2/3rds of its revenue is generated in international markets
the US
Working to further expand our brands globally
LatinAmerica
OtherUS
E A i
WALMART MEXICO
America
JapanEurope
East Asia-[Excluding Japan]
2222
SUCCESSFULLY GROWINGINTERNATIONAL PLATFORM
2009 2010E 2010E- PRO FORMA*
6%11%
18%
TOTAL REVENUE: $232M
TOTAL REVENUE: $305-315M
TOTAL REVENUE: $345-355M
*Assumes a full year of Peanuts revenue
INTERNATIONAL REVENUE
FINANCIAL HIGHLIGHTS
STRONG RECORD OF GROWTH
$305M-$315M
REVENUE$1.35-$1.40
NON-GAAP NET INCOME
$100M
DILUTED NON-GAAP EPS(2)(2)
$217M
$232M
$1.04
$1.15
$1.22
$83M
$100M-$105M
$160M
$0.72
$1.04
$70M
$64M
$81M
$0 58
$33M
$0.58
(1) Shading represents 2006 YTD fully taxed diluted earnings per share of $0.58 assuming tax rate of 34%, CAGR based on fully taxed number.(2) See last page for a reconciliation to comparable GAAP numbers.
PROJECTED PROJECTED PROJECTED
STRONG 1H 2010
1H REVENUE1H NON-GAAP NET INCOME
1H DILUTED NON-GAAP EPS
+38% +38% +16%
(1) (1)
$107
$130
$150
$25
$30
$0.35
$0.40$147.7M
$53.7M $0.72
7
$90
$110
$20$0.25
$0.30$106.9M
$38.9M
$0.62
LIO
NS
LIO
NS
$50
$70
$10
$15
$0 10
$0.15
$0.20
IN M
ILL
IN M
ILL
$10
$10
$30
$0
$5
$0.00
$0.05
$0.10
2009 2010-$10 2009 2010 2009 2010 2009 2010
(1) See last page for a reconciliation to comparable GAAP numbers.
STRONG FREE CASH FLOW
$150-$155
NON-GAAP NET INCOME VS. FREE CASH FLOW(1)
$122
$135
$
($ in millions)Expect Free Cash Flow of over $150m in 2010
$99
$83
$100-$105
FCF is an important metric ~ $50m of cash is incremental to our Non-GAAP Net Income
$45
$64$70 Recurring annual cash benefit
Tax benefit: amortize intangible assets over 15 years for tax purposes with no related GAAP$33 purposes with no related GAAP amortization due to indefinite life
(1) See last page for a reconciliation to comparable GAAP numbers.
PROJECTED
SCALABLE PLATFORM
$305-315M 350
EBITDA(1)
$217M $232M 250
300
REVENUE
$150M
$163M
$185M-$191M
EBITDA(2)
$160M
$106-111M150
200
SG&A
$128M$30M
$81M
$13M$25M $32M
$67M $71M
50
100
SG&A$56M
$17M
$25M$32M
$67M $71M$102M-$104M
02005 2006 2007 2008 2009 2010-Projected (1)
Note: SG&A excludes depreciation and amortization.
13
$13M
ACQUISITIONS
OO O
ACQUISITIONS
MONETIZED PURCHASE PRICE
STRONG CORE PARTNERS
ICONIC LIFESTYLE BRAND
WHAT WE LOOK FOR
PURCHASE PRICE PARTNERSBRAND
Average age of our 5.0x average brands over 50 years old
Multi-category,
acquisition multiple
Try to have over 65% of purchase
lifestyle brands price in guaranteed minimums
Acquisition Purchase Revenue R
Rev Recoup
ACQUISITION TRACK RECORD
qDate
BadgleyMischka
Joe Boxer
Price
$1M
$88.2M
Recoup(thru 09)
$12M
$67M
1154%
76%
Recoup% of PP(thru 09)
Rampage
Mudd
London Fog
$46.3M
$92.9M
$37 6M
$40M
$63M
$18M
87%
68%
47%London Fog
Mossimo
Op
$37.6M
$135M
$54M
$18M
$70M
$43M
47%
52%
80%
Danskin
Rocawear
Pillowtex
$81.7M
$215M
$247M
$47M
$105M
$76M
57%
49%
31%
Starter
Waverly
Ed Hardy $17M
$60M
$26M
$4M
$37M
$7M
24%
61%
27%
31
Ed Hardy $17M
$109MEcko
$4M
$3M
24%
3%
~$1.2B ~$600M
MOST RECENT ACQUISITION: PEANUTS
Strong Global Platform
$75 million in annual royalty revenue
M th 1 200 li i tMore than 1,200 licensing agreements
7% ORGANIC REVENUE GROWTH
2010 OUTLOOK
~7% ORGANIC REVENUE GROWTH~34% TOTAL REVENUE GROWTH~24% NET INCOME GROWTH
REVENUE$305-315M $100-105M
NON-GAAP NET INCOME
$300 $100
(1)
$232M$83M
$200
$250$80
$150
$200
$40
$60
IN M
ILLI
ON
S
IN M
ILLI
ON
S
$50
$100
$20
32
$02009 2010- Projected
$02009 2010- Projected
(1) See last page for a reconciliation to comparable GAAP numbers.
LONG-TERM VISION
OUR MISSION:
2010
2015OUR MISSION:To be the world’s premier owner of a diversified portfolio of consumer brands
2005NEXT FIVE YEARS
2005
1993
Continued Organic GrowthGlobal Platform for Consumer Brands
Acquisitions of Iconic Brands
NON-GAAP RECONCILIATION TABLES
2006 2007 2008 2009 2010EGAAP Diluted EPS $0.72 $0.98 $1.02 $1.10 $1.23-$1.28Non-cash interest $0.00 $0.06 $0.13 $0.12 $0.12Non-GAAP Diluted EPS $0.72 $1.04 $1.15 $1.22 $1.35-$1.40
Non-GAAP Diluted EPS
Non GAAP Net Income
(1)
(1)2006 2007 2008 2009 2010E
GAAP Net Income $33 $60 $63 $75 $90-$95Tax Effected Non-cash interest $0 $4 $7 $8 $10Non-GAAP Net Income $33 $64 $70 $83 $100-$105
Non-GAAP Net Income
2006 2007 2008 2009 2010EFree Cash Flow(2)
GAAP Net Income $33 $60 $63 $75 $90-$95Add: Non-Cash Adjustments $12 $39 $65 $64 $63Less: Capital Expenditures $0.3 $0.1 $6 $4 $3
Free Cash Flow $44.7 $99 $122 $135 $150-$155
(1)
2009 2010GAAP Diluted EPS $0.56 $0.66Non-cash interest $0.06 $0.06Non-GAAP Diluted EPS $0.62 $0.72
1H Non-GAAP Diluted EPS
2009 20101H Non-GAAP Net Income
(1)
(1)
These non-GAAP metrics may be inconsistent with similar measures presented by other companies and should only be used in conjunction with our results reported according to U.S. GAAP. Any financial measure other than those prepared in accordance with U.S. GAAP should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with U.S. GAAP
2009 2010GAAP Net Income $34.9 $49.3Tax Effected Non-cash interest $4 $4.4Non-GAAP Net Income $38.9 $53.7
22
(1) Non-GAAP Net Income and EPS, are non-GAAP financial measures, which represent net income excluding any non-cash interest, net of tax, relating to the adoption of FSP APB 14-1. The Company believes these are useful financial measures in evaluating its financial condition because it is representative of only actual cash interest paid on outstanding debt.
(2) Free Cash Flow, a non-GAAP financial measure, represents net income before depreciation, amortization of trademark and financing fees, non-cash compensation expense, bad debt expense, net equity earnings from joint ventures, non-cash income taxes, non-cash interest related to FSP APB 14-1, non-cash net gain on sale of trademarks, non-cash gain related to Unzipped litigation, and less capital expenditures. The Free Cash Flow also excludes any changes in Balance Sheet items. The Company believes Free Cash Flow is useful in evaluating its financial condition because it is representative of cash flow from operations that is available for repaying debt, investing and capital expenditures. Operational Adjustment includes: Non-Cash Taxes, Non-Cash Interest,Depreciation, Amortization, Non-Cash Comp, Bad-Debt Expenses, Net Equity Earnings for JV’s.
top related