UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15 (d)

of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 13, 2019

 

 

ICONIX BRAND GROUP, INC.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware

 

1-10593

 

11-2481903

(State or Other Jurisdiction

of Incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

 

1450 Broadway, 3rd Floor, New York, New York

 

10018

(Address of Principal Executive Offices)

 

(Zip Code)

Registrant’s telephone number, including area code (212) 730-0030

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

 

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol(s)

Name of Each Exchange on Which Registered

Common Stock, par value $0.001 per share

ICON

The NASDAQ Stock Market LLC

(NASDAQ Global Market)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  

 



 

 

 

Item 2.02Results of Operations and Financial Condition.

 

NOTE: On August 8, 2019, Iconix Brand Group, Inc. issued a press release announcing its second quarter and six-month results for the period ended June 30, 2019. Following the release, the Company discovered an error in the table titled: “Unaudited Consolidated Statement of Operations.” The Company incorrectly reported basic and diluted earnings per share for the three months ended June 30, 2019 of $0.04 and $0.04, respectively, when the correct basic and diluted earnings per share should have been $0.12 and $0.12, respectively. The Company incorrectly reported basic and diluted earnings per share for the six months ended June 30, 2019 of $2.13 and $0.10, respectively, when the correct basic and diluted earnings per share should have been $2.04 and $0.08, respectively.  Further, the Company also incorrectly reported basic and diluted loss per share for the three months ended June 30, 2018 of $12.55 and $12.55, respectively, when the correct basic and diluted loss per share should have been $12.04 and $12.04, respectively.  Further, the Company incorrectly reported basic and diluted loss per share for the six months ended June 30, 2018 of $9.06 and $9.06, respectively, when the correct basic and diluted loss per share should have been $8.26 and $8.26, respectively.  The Company had incorrectly calculated the amount of accretion of redeemable non-controlling interest that should have been included in the computation of earnings per share.  Please refer to the full text of the corrected press release furnished herewith as Exhibit 99.1 on this Form 8-K. The Company has posted the corrected press release on its website.

 

Item 9.01Financial Statements and Exhibits.

 

(d)

Exhibits.

 

99.1

  

Press Release of Iconix Brand Group, Inc., dated August 8, 2019.



 

 

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

ICONIX BRAND GROUP, INC.

(Registrant)

 

 

By:

 

/s/ John McClain

 

 

Name:

 

John McClain

 

 

Title:

 

Chief Financial Officer

Date: August 13, 2019

 

icon-ex991_6.htm

Exhibit 99.1

Iconix Reports Financial Results For The Second Quarter 2019

 

NEW YORK, August 8, 2019 /Globe Newswire/ -

 

Total revenue of $34.4 million compared with $50.2 million from the prior year quarter.

 

GAAP Operating Income improves to income of $18.6 million from a loss of $94.6 million in the prior year quarter.  Adjusted EBITDA margin improves to 59% from 49% in the prior year quarter.

 

Signed 111 license deals year to date, representing $79 million of aggregate guaranteed minimum royalties.

Iconix Brand Group, Inc. (Nasdaq: ICON) ("Iconix" or the "Company") today reported financial results for the second quarter ended June 30, 2019.

Bob Galvin, CEO commented, “Results for the second quarter of 2019 were as expected, as we continue to stabilize the business and our operational cost structure.  Our focus on the business and costs helped to improve our EBITDA margin to 59% from 49% in the prior year quarter.  We also continue to build the pipeline of our future business, as we have signed 111 deals year to date for aggregate guaranteed minimum royalties of approximately $79 million.”

Second Quarter 2019 Financial Results

GAAP Revenue by Segment

(000’s)

 

 

 

For the Three Months

Ended June 30,

 

 

For the Six Months

Ended June 30,

 

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

Licensing revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Women's

 

$

8,171

 

 

$

16,871

 

 

$

16,538

 

 

$

33,469

 

 

Men's

 

 

6,614

 

 

 

10,526

 

 

 

17,550

 

 

 

20,470

 

 

Home

 

 

4,285

 

 

 

6,961

 

 

 

7,775

 

 

 

13,473

 

 

International

 

 

15,324

 

 

 

15,854

 

 

 

28,473

 

 

 

31,349

 

 

 

 

$

34,394

 

 

$

50,212

 

 

$

70,336

 

 

$

98,761

 

 

 

For the second quarter of 2019, total revenue was $34.4 million, a 31% decline, compared to $50.2 million in the second quarter of 2018. Such decline was expected, principally as a result of the transition of our Danskin and Mossimo direct to retail licenses in our Women’s segment, as previously announced. Our revenue for the second quarter of 2019 was also impacted by the effect of the Sears bankruptcy on our Joe Boxer and Bongo brands in Women’s and the Cannon brand in Home. While we recently signed new agreements with the new Sears and Kmart for the Cannon and Joe Boxer brands, the overall revenue for the Cannon and Joe Boxer brands was down year over year. Our Men’s segment revenue decreased 37% in the second quarter of 2019, compared to the prior year quarter primarily from the Buffalo brand.  Our International segment declined 3% in the second quarter of 2019 primarily as a result of performance in China.

For the six months ended June 30, 2019, total revenue was $70.3 million, a 29% decline, compared to $98.8 million in the six months ended June 30, 2018.

SG&A Expenses:

Total SG&A expenses in the second quarter of 2019 were $16.4 million, a 43% decline compared to $28.6 million in the second quarter of 2018. Most of the decline for the quarter was a decrease in compensation, advertising, bad debt expense and professional expenses. The decrease in compensation was part of the Company’s continued efforts to reduce costs as well as the prior year included severance costs related to the former CEO. Additionally, expenses for the second quarter of 2018 included $2.9 million in costs associated with a debt refinancing. Total SG&A expenses in the six months ended June 30, 2019 were $34.5 million, a 45% decline compared to $62.2 million in the six months ended June 30, 2018.


Exhibit 99.1

Operating Income and Adjusted EBITDA (1):

Adjusted EBITDA is a non-GAAP metric, and a reconciliation table is included below.  

Operating income for the second quarter of 2019 was $18.6 million, as compared to operating loss of $94.6 million in the second quarter of 2018.  Adjusted EBITDA in the second quarter of 2019 was $20.3 million which represents operating income of $18.6 million excluding net charges of $1.7 million.  Adjusted EBITDA in the second quarter of 2018 was $24.6 million which represents operating loss of $94.6 million excluding net charges of $119.2 million, which was primarily related to impairment charges of $111.1 million.  The change period over period in Adjusted EBITDA is primarily as a result of the change in revenue as outlined above, which was somewhat offset by the cost reduction initiative. Refer to footnote 1 below for a full detailed reconciliation of operating income to Adjusted EBITDA.      

Operating income for the six months ended June 30, 2019 was $37.0 million, as compared to operating loss of $79.1 million in the six months ended June 30, 2018.  Adjusted EBITDA for the six months ended June 30, 2019 was $38.8 which represents operating income of $37.0 million excluding net charges of $1.8 million.  Adjusted EBITDA for the six months ended June 30, 2018 was $47.1 million which represents operating loss of $79.1 million excluding net charges of $126.0 million. The change period over period in Adjusted EBITDA is primarily as a result of the change in revenue as outlined above.  Refer to footnote 1 below for a full detailed reconciliation of operating income to Adjusted EBITDA.      

 

Adjusted EBITDA by Segment (1)

For the Three Months Ended June 30,

 

 

 

For the Six Months Ended June 30,

 

 

(000's)

2019

 

2018

 

% Change

 

 

 

2019

 

2018

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Women's

$

8,622

 

$

15,481

 

 

-44

%

 

 

$

16,249

 

$

30,020

 

 

-46

%

 

Men's

 

3,478

 

 

3,259

 

 

7

%

 

 

 

7,544

 

 

6,684

 

 

13

%

 

Home

 

3,783

 

 

6,596

 

 

-43

%

 

 

 

6,790

 

 

12,347

 

 

-45

%

 

International

 

9,306

 

 

6,806

 

 

37

%

 

 

 

17,300

 

 

12,707

 

 

36

%

 

Corporate

 

(4,860

)

 

(7,516

)

 

35

%

 

 

 

(9,109

)

 

(14,663

)

 

38

%

 

Adjusted EBITDA

$

20,329

 

$

24,626

 

 

-17

%

 

 

$

38,774

 

$

47,095

 

 

-18

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA Margin (2)

 

59

%

 

49

%

 

 

 

 

 

 

55

%

 

48

%

 

 

 

 

 

Adjusted EBITDA margin in the second quarter of 2019 was 59% as compared to adjusted EBITDA margin in the second quarter of 2018 of 49%.  The change period over period in adjusted EBITDA margin is primarily as a result of the Company’s decrease in expenses which outpaced the decrease in revenues.  

Adjusted EBITDA margin in the six months ended June 30, 2019 was 55% as compared to adjusted EBITDA margin in the six months ended June 30, 2018 of 48%.  The change period over period in adjusted EBITDA margin is primarily as a result of the Company’s decrease in expenses which outpaced the decrease in revenues.  

Interest Expense and Other Income:

Interest expense in the second quarter of 2019 was $14.5 million as compared to $14.8 million in the second quarter of 2018.  In the second quarter of 2019, the Company recognized a $0.3 million gain as compared to a $32.1 million gain in the second quarter of 2018.  These gains result from the Company's accounting for the 5.75% Convertible Notes, which requires recording the fair value of this debt at the end of each period with any change from the prior period accounted for as other income or loss in the respective period's income statement.

Interest expense in the six months ended June 30, 2019 was $29.0 million as compared to $29.4 million in the six months ended June 30, 2018.


Exhibit 99.1

Provision for Income Taxes:

The effective income tax rate for the second quarter of 2019 is approximately -4%, which resulted in a $0.1 million income tax benefit, as compared to an effective income tax rate of 4% in the second quarter of 2018, which resulted in a $2.8 million income tax benefit.  The change in the effective tax rate was due to trademark impairment recorded in the Prior Year Quarter, for which the Company recognized a tax benefit against a pretax loss.

The effective income tax rate for the six months ended June 30, 2019 is approximately 7%, which resulted in a $1.8 million income tax provision, as compared to an effective income tax rate of 3% in the six months ended June 30, 2018, which resulted in a $1.2 million income tax benefit.  The increase in tax expense is due to trademark impairment recorded in the Prior Year Six Months, for which the Company recognized a tax benefit.

GAAP Net Income and GAAP Diluted EPS:

GAAP net income attributable to Iconix for the second quarter of 2019 reflects income of $1.3 million, compared to loss of $79.4 million for the second quarter of 2018. GAAP diluted EPS for the second quarter of 2019 reflects income of $0.12, compared to loss of $12.04 for the second quarter of 2018.

GAAP net income attributable to Iconix for the six months ended June 30, 2019 reflects income of $19.2 million, compared to a loss of $51.7 million for the six months ended June 30, 2018.  GAAP diluted EPS for the six months ended June 30, 2019 reflects income of $0.08 compared to a loss of $8.26 for the six months ended June 30, 2018.

Adjusted EBITDA (1):

Adjusted EBITDA for the second quarter of 2019 was $20.3 million, compared to $24.6 million for the second quarter of 2018.  Adjusted EBITDA for the six months ended June 30, 2019 was $38.8 million, compared to $47.1 million for the six months ended June 30, 2018.

 

Adjusted EBITDA: (1)

 

 

 

 

(000's)

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended June 30,

 

 

2019

2018

% Change

 

 

 

 

 

 

GAAP Operating Income (Loss)

$18,572

$(94,586)

120%

 

 

 

 

 

 

Add:

 

 

 

 

stock-based compensation expense

258

499

 

 

depreciation and amortization

482

632

 

 

costs associated with debt financings

-

2,905

 

 

loss on termination of licenses

-

5,650

 

 

impairment charges

-

111,147

 

 

special charges

3,198

2,677

 

 

non-controlling interest

(2,174)

(4,291)

 

 

non-controlling interest related to D&A

(7)

(7)

 

 

 

1,757

119,212

 

 

 

 

 

 

 

Adjusted EBITDA

$20,329

$24,626

-17%

 

Adjusted EBITDA Margin (2)

59%

49%

 

 

 

 

 

 

 

 


Exhibit 99.1

 

Adjusted EBITDA: (1)

 

 

 

 

(000's)

 

 

 

 

 

 

 

 

 

 

For the Six Months Ended June 30,

 

 

2019

2018

% Change

 

 

 

 

 

 

GAAP Operating Income (Loss)

$36,971

$(79,050)

147%

 

 

 

 

 

 

Add:

 

 

 

 

stock-based compensation expense

399

1,518

 

 

depreciation and amortization

974

1,286

 

 

costs associated with debt financings

-

8,344

 

 

loss on termination of licenses

-

5,650

 

 

impairment charges

-

111,147

 

 

special charges

5,978

5,382

 

 

non-controlling interest

(5,535)

(7,148)

 

 

non-controlling interest related to D&A

(13)

(34)

 

 

 

1,803

126,145

 

 

 

 

 

 

 

Adjusted EBITDA

$38,774

$47,095

-18%

 

Adjusted EBITDA Margin (2)

55%

48%

 

 

 

 

 

 

 

 



Exhibit 99.1

Balance Sheet and Liquidity:

 

(000's)

June 30, 2019

 

December 31, 2018

 

Cash Summary:

 

 

 

 

Unrestricted Domestic Cash (wholly owned)

$33,944

 

$45,936

 

Unrestricted Domestic Cash (in consolidated JV's)

8,896

 

8,460

 

Unrestricted International Cash

9,585

 

12,213

 

Restricted Cash

14,633

 

16,026

 

 

 

 

 

 

Total Cash

$67,058

 

$82,635

 

 

 

 

 

 

Debt Summary:

 

 

 

 

Senior Secured Notes due January 2043*

$353,163

 

$365,481

 

5.75% Convertible Notes due August 2023

94,580

 

109,715

 

Variable Funding Note due January 2043

100,000

 

100,000

 

2017 Senior Secured Term Loan due August 2022

187,492

 

189,421

 

 

 

 

 

 

Total Debt (Face Value)

$735,235

 

$764,617

 

 

 

 

 

 

*- The Company’s Senior Secured Notes include a test that measures the amount of principal and interest required to be paid on the debt to the approximate cash flow available to pay such principal and interest; the test is referred to as the debt service coverage ratio (“DSCR”).  As a result of a decline in royalty collections during the twelve months ended March 31, 2019, the DSCR fell below 1.10x as of March 31, 2019. Beginning April 1, 2019, the Senior Secured Notes are in a Rapid Amortization Event pursuant to the Securitization Notes Indenture.  In rapid amortization, the residual will immediately be used to pay down the principal.  Iconix will continue to receive its management fee from the Securitization Notes and the Company does not believe the loss of our residual, if any, will have a significant impact on our operations.

 

 

 

 

 

 

 

The Company currently projects compliance with its financial covenants under its senior secured term loan and the interest only DSCR under the Securitization indenture for 2019.

Conference Call

The Company will host a conference call today at 5:00 PM ET. The call can be accessed on the Company's website at www.iconixbrand.com or by telephone at 844-286-1555 or 270-823-1180 (conference ID: 8539908). A written transcript will be posted online as soon as available.

About Iconix Brand Group, Inc.

Iconix Brand Group, Inc. owns, licenses and markets a portfolio of consumer brands including: CANDIE'S ®, BONGO ®, JOE BOXER ®, RAMPAGE ®, MUDD ®, MOSSIMO ®, LONDON FOG ®, OCEAN PACIFIC ®, DANSKIN ®, ROCAWEAR ®, CANNON ®, ROYAL VELVET ®, FIELDCREST ®, CHARISMA ®, STARTER ®, WAVERLY ®, ZOO YORK ®, UMBRO ®, LEE COOPER ®, ECKO UNLTD. ®, MARC ECKO ®, ARTFUL DODGER ®, and HYDRAULIC®. In addition, Iconix owns interests in the MATERIAL GIRL ®, ED HARDY ®, TRUTH OR DARE ®, MODERN AMUSEMENT ®, BUFFALO ® and PONY ® brands. The Company licenses its brands to a network of retailers and manufacturers. Through its in-house business development, merchandising, advertising and public relations departments, Iconix manages its brands to drive greater consumer awareness and brand loyalty.


Exhibit 99.1

Forward-Looking Statements

In addition to historical information, this press release contains forward-looking statements within the meaning of the federal securities laws. Such forward-looking statements include projections regarding the Company's beliefs and expectations about future performance and, in some cases, may be identified by words like "anticipate," "assume," "believe," "continue," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "future," "will," "seek" and similar terms or phrases. These statements are based on the Company's beliefs and assumptions, which in turn are based on information available as of the date of this press release. Forward-looking statements involve known and unknown risks and uncertainties, which could cause actual results to differ materially from those contained in any forward-looking statement and could harm the Company's business, prospects, results of operations, liquidity and financial condition and cause its stock price to decline significantly. Many of these factors are beyond the Company's ability to control or predict. Important factors that could cause the Company's actual results to differ materially from those indicated in the forward-looking statements include, among others: the ability of the Company's licensees to maintain their license agreements or to produce and market products bearing the Company's brand names, the Company's ability to retain and negotiate favorable licenses, the Company's ability to meet its outstanding debt obligations and the events and risks referenced in the sections titled "Risk Factors" in the Company's Annual Report on Form 10‑K for the year ended December 31, 2018 and subsequent Quarterly Reports on Form 10‑Q and in other documents filed or furnished with the Securities and Exchange Commission. Our forward-looking statements do not reflect the potential impact of any acquisitions, mergers, dispositions, business development transactions, joint ventures or investments we may enter into or make in the future. Given these uncertainties, you should not place undue reliance on these forward-looking statements. These forward-looking statements are made only as of the date hereof and the Company undertakes no obligation to update or revise publicly any forward-looking statements, except as required by law.

Media contact:
John T. McClain  
Executive Vice President and Chief Financial Officer  
Iconix Brand Group, Inc.  
jmcclain@iconixbrand.com   
212-730-0030



Exhibit 99.1

Unaudited Consolidated Statement of Operations

(000’s, except earnings per share data)

 

 

 

For the Three Months Ended June 30,

 

 

For the Six Months Ended June 30,

 

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

Licensing revenue

 

$

34,394

 

 

$

50,212

 

 

$

70,336

 

 

$

98,761

 

 

Selling, general and administrative expenses

 

 

16,435

 

 

 

28,643

 

 

 

34,528

 

 

 

62,241

 

 

Loss on termination of licenses

 

 

 

 

 

5,650

 

 

 

 

 

 

5,650

 

 

Depreciation and amortization

 

 

482

 

 

 

632

 

 

 

974

 

 

 

1,286

 

 

Equity earnings on joint ventures

 

 

(1,095

)

 

 

(1,149

)

 

 

(2,137

)

 

 

(1,245

)

 

Gain on sale of trademarks

 

 

 

 

 

(125

)

 

 

 

 

 

(1,268

)

 

Goodwill impairment

 

 

 

 

 

37,812

 

 

 

 

 

 

37,812

 

 

Trademark impairment

 

 

 

 

 

73,335

 

 

 

 

 

 

73,335

 

 

Operating income (loss)

 

 

18,572

 

 

 

(94,586

)

 

 

36,971

 

 

 

(79,050

)

 

Other expenses (income):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

14,465

 

 

 

14,827

 

 

 

28,970

 

 

 

29,376

 

 

Interest income

 

 

(90

)

 

 

(92

)

 

 

(162

)

 

 

(214

)

 

Other income, net

 

 

1,140

 

 

 

(32,083

)

 

 

(18,795

)

 

 

(58,215

)

 

Gain on extinguishment of debt

 

 

 

 

 

 

 

 

 

 

 

(4,473

)

 

Foreign currency translation (gain) loss

 

 

(258

)

 

 

704

 

 

 

369

 

 

 

152

 

 

Other expenses (income) – net

 

 

15,257

 

 

 

(16,644

)

 

 

10,382

 

 

 

(33,374

)

 

Income (loss) before income taxes

 

 

3,315

 

 

 

(77,942

)

 

 

26,589

 

 

 

(45,676

)

 

(Benefit) provision for income taxes

 

 

(130

)

 

 

(2,804

)

 

 

1,838

 

 

 

(1,154

)

 

Net income (loss)

 

 

3,445

 

 

 

(75,138

)

 

 

24,751

 

 

 

(44,522

)

 

Less: Net income attributable to non-controlling interest

 

 

2,174

 

 

 

4,291

 

 

 

5,535

 

 

 

7,148

 

 

Net income (loss) attributable to Iconix Brand Group, Inc.

 

$

1,271

 

 

$

(79,429

)

 

$

19,216

 

 

$

(51,670

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.12

 

 

$

(12.04

)

 

$

2.04

 

 

$

(8.26

)

 

Diluted

 

$

0.12

 

 

$

(12.04

)

 

$

0.08

 

 

$

(8.26

)

 

Weighted average number of common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

10,377

 

 

 

6,598

 

 

 

9,426

 

 

 

6,257

 

 

Diluted

 

 

10,377

 

 

 

6,598

 

 

 

44,779

 

 

 

6,257

 

 

 



Exhibit 99.1

Footnotes

(1) Adjusted EBITDA is a non-GAAP financial measure which represents operating income excluding stock-based compensation (benefit) expense, depreciation and amortization, costs associated with recent financings, special charges related to professional fees incurred as a result of the correspondence with the Staff of the SEC, the SEC and related SDNY investigations, internal investigations, the previously disclosed class action and derivative litigations, costs related to the transition of Iconix management, but including gains on sales of trademarks and non-controlling interest. The Company believes Adjusted EBITDA is a useful financial measure in evaluating its financial condition because it is more reflective of the Company's business purpose, operations and cash expenses.  Uses of cash flows that are not reflected in Adjusted EBITDA include interest payments and debt principal repayments, which can be significant.  As a result, Adjusted EBITDA should not be considered as a measure of our liquidity.  Other companies that provide Adjusted EBITDA information may calculate EBITDA and Adjusted EBITDA differently than we do. The definition of Adjusted EBITDA may not be the same as the definitions used in any of our debt agreements.

 

Adjusted EBITDA Reconciliation For the Three Months Ended June 30, (1):

 

 

GAAP Operating Income

 

Impairment

Charges

 

Special Charges

 

Costs associated with debt financings

 

Loss on Termination

of Licenses

 

Depreciation & Amortization

 

Stock Compensation

 

Non-controlling Interest, net

 

Adjusted EBITDA

 

($, 000s)

2019

2018

 

2019

2018

 

2019

2018

 

2019

2018

 

2019

2018

 

2019

2018

 

2019

2018

 

2019

2018

 

2019

2018

 

Women's

8,622

(95,694)

 

-

111,147

 

-

-

 

-

-

 

-

-

 

-

-

 

-

28

 

-

-

 

8,622

15,481

 

Men's

4,952

664

 

-

-

 

-

-

 

-

-

 

-

5,650

 

13

13

 

-

-

 

(1,487)

(3,068)

 

3,478

3,259

 

Home

3,782

6,589

 

-

-

 

-

-

 

-

-

 

-

-

 

-

-

 

1

7

 

-

-

 

3,783

6,596

 

International

10,766

8,082

 

-

-

 

-

-

 

-

-

 

-

-

 

72

110

 

3

74

 

(1,535)

(1,460)

 

9,306

6,806

 

Corporate

(9,550)

(14,227)

 

-

-

 

3,198

2,677

 

-

2,905

 

-

-

 

397

509

 

254

390

 

841

230

 

(4,860)

(7,516)

 

Total Income

18,572

(94,586)

 

-

111,147

 

3,198

2,677

 

-

2,905

 

-

5,650

 

482

632

 

258

499

 

(2,181)

(4,298)

 

20,329

24,626

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA Reconciliation For the Six Months Ended June 30, (1):

 

 

GAAP Operating Income

 

Impairment Charges

 

Special Charges

 

Costs associated with debt financings

 

Loss on Termination

of Licenses

 

Depreciation & Amortization

 

Stock Compensation

 

Non-controlling Interest, net

 

Adjusted EBITDA

 

($, 000s)

2019

2018

 

2019

2018

 

2019

2018

 

2019

2018

 

2019

2018

 

2019

2018

 

2019

2018

 

2019

2018

 

2019

2018

 

Women's

16,249

(81,066)

 

-

111,147

 

-

-

 

-

-

 

-

-

 

-

-

 

-

56

 

-

(117)

 

16,249

30,020

 

Men's

12,498

6,538

 

-

-

 

-

-

 

-

-

 

-

5,650

 

25

65

 

-

-

 

(4,979)

(5,569)

 

7,544

6,684

 

Home

6,787

12,332

 

-

-

 

-

-

 

-

-

 

-

-

 

-

-

 

3

15

 

-

-

 

6,790

12,347

 

International

19,189

14,569

 

-

-

 

-

-

 

-

-

 

-

-

 

161

248

 

7

148

 

(2,057)

(2,258)

 

17,300

12,707

 

Corporate

(17,752)

(31,423)

 

-

-

 

5,978

5,382

 

-

8,344

 

-

-

 

788

973

 

389

1,299

 

1,488

762

 

(9,109)

(14,663)

 

Total Income

36,971

(79,050)

 

-

111,147

 

5,978

5,382

 

-

8,344

 

-

5,650

 

974

1,286

 

399

1,518

 

(5,548)

(7,182)

 

38,774

47,095

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2) Adjusted EBITDA margin is a non-GAAP financial measure which represents Adjusted EBITDA as a percentage of revenue.  The Company believes Adjusted EBITDA margin is a useful financial measure in evaluating its financial condition because it is more reflective of the Company's business purpose, operations and cash expenses.  Uses of cash flows that are not reflected in Adjusted EBITDA margin include interest payments and debt principal repayments, which can be significant.  As a result, Adjusted EBITDA margin should not be considered as a measure of our liquidity.  Other companies that provide Adjusted EBITDA margin information may calculate EBITDA margin and Adjusted EBITDA margin differently than we do. The definition of Adjusted EBITDA margin may not be the same as the definitions used in any of our debt agreements.