ICON - Earnings call transcript Q1 2019 | Iconix Brand Group, Inc.

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Operator

Good day, ladies and gentlemen, and welcome to the First Quarter 2019 Iconix Brand Group Earnings Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] As a reminder, today’s conference is being recorded. I’d now like to introduce your host for today's conference, Ms. Cristina Cosentino, Senior Director of Financial Reporting. ahead. go please Ma'am,

Cristina Cosentino

Officer; welcome conference Iconix we call. Galvin, Chief us, and Financial our quarter Officer. have Group's XXXX Bob Executive and President earnings On our John to morning McClain, Brand Chief the first with and Good today's call,

to other we making call facts historical today's involve of this statements conference meaning forward-looking some materially contained the factors, achievements performance be Listeners forward-looking forward-looking the achievements only confident by to or not impossible may call and anticipate, of within statements such cautioned the as number Company different which now place not many expressed call, or uncertainties like The implied similar to of forward-looking a results turn on During Federal of the or these made. words This would that Securities are difficult believe, was Galvin. forward-looking and statement. all Bob of are the are statements. statement expect, that to of the laws. will over to results, are as be which risks, I reliance performance or The Company. actual speak the identify undue cause statements in which control statements, date and predict from are beyond expressions the of

Bob Galvin

not of then. and around since since we weeks XXXX, only lot reported have six Cristina. the you, been everyone. for fourth morning, Thank quarter It's Good of results changed a things

our guidance. and We line quarter to are report and continue pleased that are with first plan results to on our in our deliver expectations

year. end year. or will pay at that provide detail expenses approximately We’ve we in the the last put start later more John million the of began XXXX to this call. savings dividends over quarter $XX Our the reduced by first of XX% in place cost at

for Mossimo, for impacted quarter Velvet. the Danskin to DTRs XXXX the negatively and was as by quarter residual of first XXXX of Royal compared revenue The first

quarter and of also revenues XXXX of during at Joe the included which Boxer Sears not Bongo, quarter first replaced for Cannon, first The were XXXX. core brands the

have deal with new As Himatsingka previously a for Velvet. reported, we Royal licensing signed

had have footwear the brand. recently for and in have success Danskin We in a outside deal Walmart signed of place

We with late Joe Boxer agreements stage of in are for new also Cannon. Sears discussions and for

of opportunity We have original basis. a also in global this brand non-medal to summer brand. promote Tokyo in will believe a signed the the for be the and the York founders market XXXX. support, Zoo sport We an excellent Skateboarding during games presents Olympic on

a in or total of $XX signed new license approximately total have renewed agreements XX We with GMRs fiscal million. XXXX of

flat when are roughly year-over-year our $X we excluding million last year Cup. the of in related international to business business World the We nearly saw

of Black other also with signing license for Starter the FILA and footwear division are announce is global Starter with license in new capable a footwear label regions. company pleased our to support a sourcing example basis footwear Korea. of a of on a This needs We in to Korea an

We other similar discussions are several partners with with potential holding opportunities.

we closing resolved requirement a per of $X minimum that bid the announce to NASDAQ share pleased are We listing price. maintaining

to requirement. continue listing market shares resolve publicly for We held staff minimum with to work value the NASDAQ's

during now a number the also turn for years. outstanding are we John. several pleased Iconix XXXX plagued will to the resolved that over that the We of quarter call have lawsuits have first of of I

John McClain

DTRs three and as was segment, segment months. EBITDA brands. quarter basis, a decreased the a first of Bob. company company our the as and Royal total revenue Velvet segment the result in Joe our announced adjusted transition Cannon the Danskin principally down our Mossimo Bongo of basis, XX% Total revenue Boxer, in women's impact in segment our expected, for quarter. Thanks, women's of XX% home the On Sears previously for was bankruptcy the XX% on and On down a

results transition was on Joe of and for the segment, include of strong World $X down was of the the In our approximately principally Lee result the Bob principally mentioned and the The was and Velvet our the which of international the DTR. for Buffalo, performance at we Sears Royal was the quarter, saw Danskin Starter, year-over-year, on segment strong for Boxer but bankruptcy XX% brand previously Cannon Mossimo the related revenue transition decline slightly Bongo. impact million was Umbro our quarter. up see revenue did our the impact DTRs Sears As to Cup. a men's segment performance of XX% this, home bankruptcy discussed, segment's the had We and XXXX of and the Including Rocawear. from the down Cooper.

SG&A all advertising. of in Our a expense XXXX The of with yielded quarter and the personnel-related XXXX. first in has quarter the the fees most million, in $XX.X plan was with savings in decrease we major that compared significant professional expense in began reductions quarter first the fourth XX% XX.X categories, reduction costs, expense

statement the trademark included gain a on and related few of a onetime the extinguishment sale filed today has for details a to earnings such including the we debt. a Our XXXX income release of items, quarter items. gain The on

the of which and end unrestricted. subsidiaries million in $XX.X sheet. balance on million the was hand of We of owned wholly quarter, $XX.X the to at Turning cash had

$XXX from million Our XXXX. X.XX% otherwise outstanding, compared convertible mature Of million million of at face-value convertible, of August notes, declined at quarter. in $XXX represent year-end. end end debt approximately notes unless this balances balance at of million approximately the the as the $XXX the with XXXX, These million $XX $XXX $XXX the million

an interest term has quarter and XXXX plus a rate August repayment a date has is million, anticipated average million loan, approximately matures and of senior-secured in XXXX. at facility, January securitization to X.X% date approximately X% interest end. which $XXX LIBOR This maturity of which Our bears balance the The weighted of at our legal $XXX of facility relates XXXX.

by until XXXX the refinanced interest and goes if not current our is The the rate is payable As isn't not on the year-end XXXX, interest, of discussed we compounded. up. top interest, additional then which during debt is call,

We in total leverage under ratio facility. ratio asset well financial securitization our are coverage compliance service the under currently as our our interest-only as coverage ratio agreement credit debt covenants with and

three-year Additionally, be shows projection to rapid status. through we ratio our in within facility, are securitization compliance debt current coverage to our amortization service XXXX. in now in Due the decrease

management amortization in towards go fee, and debt reminder, status, continue certain receive directly excess As all expenses other a our and to management will its of and service. will in collections fees Iconix rapid fees

principal. a certain on from brands fee, collections collections this received reminder a pay brands. secured interest the and remainder management loss our of into on these the licensing if guidance finally, remain operations. EBITDA anticipating now securitization, to As million facility by With turn we Generally, $XXX facility. revenue full is we These the will are adjusted $XXX of the by to then and followed on is back not of have go there's between and principal. tightened to to that, Under be million. million residual, and management normal to plan. ranges from Iconix our back impact to $XX million a to continue pay it Bob. call I and significant over any Iconix. be be fee the do we're And our XXXX, for operations, comes securitization, will our and the in used When rapid down slightly to amortization if receive residual, would any, the we immediately residual the We believe status, as look its between $XX year

Bob Galvin

John. Thank you,

this we making, with continue are line up remainder and of that or will progress the we'll plan are the hard work operator, pleased question we We now With for our year. a that, at executing throughout the two. open to

Operator

with Eric the line Our Research. comes first SCC question from of Beder

open. now is line Your

Eric Beder

Good morning.

Bob Galvin

Eric. morning, Good

Eric Beder

been an the handling How the side? trying done strategically, there the of what You’ve And left job have incredible to of to done on do side there? expenses expense is be much business. you

Bob Galvin

nice think, year Eric, second it. I revenues we have would move non-value-added the but we're continue future in focusing opportunities relationship as to can to Again, this business to as that up pick we forward. are of be into rationalize today, we half expenses move in always are still the and There we when the to consider what warrants will them on expenses we

still is rationalize for it upside relationship but us, going the more to to we're there revenues. in some So

John McClain

see that Eric, remember year-end million that of the out to And million and $XX – expenses. run $XX year-over-year, at about of expected rate said ongoing we call, kind we right, was

we special feel still So stuff now. that where million we was year, the and kind are $XX that's last from of onetime

Eric Beder

level? move When you of what in that Danskin, is on OP of their DTR look people it response seeing Right. the the and DTRs, been terms take things and key traditional from the the like to from you've to at desire some

Bob Galvin

just to and able with channels different retail footwear up picking been license. a we've addition in first, Danskin Danskin of number to a retailers place

what Danskin, about just West been We've been DTR on Walmart the period think of to in we're we've brand. of momentum I time. a interest So of helping that had traditional outside because founder's during OP, had With Coast. outside it talking getting was of lot good the son a the

OP. So there come. and has accessories More apparel in been real in to good footwear and interest for both

Eric Beder

of look should saying, They're be here, you looking more about there's most not When of okay, not thinking of be here going question. a going I'm that impact business kind a at impact we the this last agreements assuming noise to should the And these kind in year. we at of piece to and of between? are When lot numbers apples-to-apples XXXX. agreements, where

Bob Galvin

going comparative. bankruptcy. for affect noise we will there's year. Hopefully, better Sears still to have us that becomes move XXXX so we're That We a XXXX – less residuals be still there'll XXXX, the still through in Again, the during DTRs. as

Eric Beder

Okay.

thank Okay, you.

Bob Galvin

Great.

Operator

question-and-answer today's to Galvin turn will session. remarks. for that call like back Mr. closing And I'd to conclude the

Bob Galvin

your to improvement We we goes keep do We'll year and thank on. you. look progress, Thank updated we forward the for continued as make everybody as you support. continued

Operator

concludes thank gentlemen, program, disconnect. the participation your Everyone This you you day. great conference. in a now and may and for have Ladies today's

Iconix Brand (ICON) 14 May 192019 Q1 Earnings call transcript