Iconix Brand Group, Inc., for its second quarter reported total revenue of 22.3 million dollars, a 35 percent decline, compared to the second quarter of 2019. The company said in a statement that revenue across all segments was negatively impacted by the effects of the Covid-19 pandemic on the global economy, while the 46 percent decrease in revenue in the women’s segment was a result of a decrease in licensing revenue from Mudd and Candies brands. The company further said that GAAP net income attributable to Iconix reflected a loss of 17.4 million dollars, compared to net income of 1.3 million dollars and GAAP diluted EPS reflected a loss of 1.46 dollars per share, compared to income of 12 cents per share for the second quarter of 2019.
Commenting on the second quarter results, Bob Galvin, the company’s CEO said: “With the onset of Covid-19 during the first quarter, we quickly responded to remove costs and preserve liquidity. During the second quarter while we continued those efforts, we also continued to develop our pipeline of future business, as we have signed 92 deals during 2020 for aggregate guaranteed minimum royalties of approximately 69 million dollars.”
Decline in revenue impacts Iconix’s operating result
Revenue from the company’s men’s segment decreased 55 percent due to a decrease in licensing revenue from Buffalo and Umbro brands, while sales in Home segment declined 12 percent due to a decrease in licensing revenue from Cannon brand. The company added that international segment revenue declined 27 percent due to decreases in Latin America and Europe.
The company’s operating income for the second quarter was 3.5 million dollars compared to 18.6 million dollars for the second quarter of 2019, while adjusted EBITDA was 11.4 million dollars compared to 20.3 million dollars. Adjusted EBITDA margin was 51 percent compared to 59 percent last year.
The company said that its board of directors is exploring strategic alternatives available to the company including a potential sale of the company, merger or other business combination. This is in addition to the company’s previously announced agreements to sell the rights to the Umbro and Starter brands in China. In connection with such strategic review, the company has retained Ducera Partners LLC as a financial advisor, together with Dechert LLP, its existing legal counsel, to assist in this effort.