Iconix Brand Group Inc (NASDAQ:ICON) Issues Update On Intangible Asset Impairment

Iconix Brand Group Inc (NASDAQ:ICON) issued preliminary financial report for the third quarter closed September 30, 2017. The firm anticipates to close its impairment testing and submit its Form 10-Q for the quarter closed September 30, 2017 in the imminent period. The financial data for the reported quarter is preliminary and contingent to finalization by the firm and has not been reviewed by company’s independent registered public accountants.

The details

For Q3 2017, Iconix anticipates licensing revenue to be around $53.2 million versus $60.5 million in the previous year quarter. Revenue in the comparable quarter comprised licensing revenue of around $2.3 million from the Sharper Image brand. However, this was sold in Q4 2016. Licensing revenue for Q3 2016 also included revenue of around $1.3 million from its Southeast Asia deal which was deconsolidated in Q2 2017. Hence, there existed no comparable revenue for the two items in Q3 2017. Excluding Southeast Asia and Sharper Image, revenue dropped approximately 7% in Q3 2017.

Iconix Brand continued to manage S,G&A expenses and anticipates the same to be around $21.5 million in Q3 2017, a 28% drop over the third quarter of 2016. As previously stated, the firm supported the timing of its yearly impairment testing of intangible assets and goodwill that is usually performed in link with the preparation of year-end financial report and is in the course of concluding such testing pertaining to the preparation of its financial report for the quarter closed September 30, 2017.

Iconix has not yet confirmed its impairment analysis. However, as an outcome of such testing which will be closed prior to the submission of the firm’s Form 10-Q for the period closed September 30, 2017, the firm anticipates to record a non-cash intangible asset impairment expense of around $500 million to $750 million mainly linked to the women’s division.

Culver Stinson

Culver Stinson

Stinson is US Markets Daily’s Senior Producer for News & Public Affairs.