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Iconix Brand Group Announces its Conclusions Related to SEC Comment Letter Process and Reaffirms 2015 Guidance
|||Accounting for certain transactions to be restated|
|||No impact on free cash flow|
|||Refinancing plans on track|
|||Reaffirming 2015 guidance|
|||2016 operating performance on plan|
NEW YORK, New York February 18, 2016 Iconix Brand Group, Inc. (Nasdaq: ICON) (Iconix or the Company) today announced that it will restate historical financial statements based on the Companys conclusions related to the accounting treatment applied to certain transactions in connection with the previously disclosed comment letter process with the Staff of U.S. Securities and Exchange Commission (the Staff). The Company has responded to the Staff with a Confirming Letter on all of the questions the Staff has raised. The Company also reaffirmed its guidance for 2015 licensing revenue, non-GAAP diluted EPS and free cash flow.
Due to the restatements, the Company anticipates filing its Form 10-K for the year ended December 31, 2015, and reporting fourth quarter and full year 2015 financial results, by the extended filing date of March 15, 2016. Please refer to the Form 8-K filed today for additional details on the restatement, including tables detailing the estimated adjustments.
Peter Cuneo, Chairman and Interim CEO, commented As we have stated in the past, the comment letter process was related to highly technical accounting standards and while we are disappointed to have to restate our financial statements, as we expected, there will be no impact on free cash flow. Moving forward we are highly focused on positioning Iconix for long term success and are pleased to announce that our core operating business is on track to achieve our 2015 and 2016 projections. We also remain on track with our financing plans and expect to be in the position to refinance our convertible notes that mature in June 2016.
As previously disclosed, the Company has been engaged in a comment letter process with the Staff. The correspondence with the Staff was primarily related to the accounting treatment applied by the Company to the formation of joint ventures under U.S. Generally Accepted Accounting Principles, and whether the operating results of such joint ventures should have been consolidated with the operating results of the Company. After discussions with the Staff, the Company has concluded that with respect to its Iconix Canada, Iconix Israel, Iconix Southeast Asia, Iconix MENA and LC Partners US joint ventures, the Company will revise its historical accounting treatment to consolidate the financial statements of these entities with the Companys financial statements and will eliminate the previously reported gains on sale which were recorded at the time these transactions were consummated (including the subsequent June 2014 and September 2014 transactions with respect to Iconix Southeast Asia).
The following information was filed by Iconix Brand Group, Inc. (ICON) on Thursday, February 18, 2016 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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