Iconix Brand Group, Inc. (ICON)

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Iconix Brand Group, Inc. (ICON)

Citi 2013 Global Consumer Conference Call

May 29, 2013, 01:20 pm ET


Neil Cole - Chairman, President & CEO

Warren Clamen - EVP & CFO



Unidentified Analyst

Thanks for joining us this afternoon. We’re very happy to be introducing Neil Cole, Chairman and CEO of Iconix and Warren Clamen, EVP and CFO of Iconix. The company is going to show quick video and open the presentation with some prepared comments and then we’re go to into a fireside chat format where we thought it would be helpful to walk through Iconix growth trajectory, future acquisition strategies, international opportunities and the overall financial health of the business. We will then leave plenty of time at the end for Q&A. So thank you for joining us today

Neil Cole

Thank you for having us. So just quickly, how many hands anyone here not know Iconix? Okay, so it makes a little easier. So I’ll now make it a lot quicker the introduction, we’re brand management business and over the last seven, eight years, we’ve put together a portfolio of 33 Iconix brands and the video is not supposed to be running so quickly.

And we’re kind of pretty excited about what’s happening today in the business; we’ve acquired three different brands over the last six months. So we’ve also acquired another piece of 49% of one of our joint ventures last week in Ecko and we’ve also been very excited about our ability to buyback our stock and we think at affordable prices and the combination of the two are pretty much we think making for an exciting outlook.

So I guess all of you are familiar with the company we’ll dive deeper with [Kate] on question and answers. This is a quick little video; it’s about three or four minutes kind of just showing the marketing of the company, because that’s how we have big added value; a lot of the people are somewhat mystified sometimes what we do for living. They know we buy great brands, but then they ask what do we do with them; Iconix is a brand management company that we do a lot of marketing and branding that we treat our brands very well.

So this is a little update of the company and then we will delve a little deeper into some Q&A when we are done with the video. So why don't we roll the tape.

[Commercial Video]

Unidentified Analyst

Okay, good. Thank you. I guess we will start with a very big picture question, with a very diverse portfolio and a lot going on, where do you see the majority of topline growth coming from over the next one to three years in terms of brands, countries, categories?

Neil Cole

Okay. I think it's going to come a lot of different places; as you said, the portfolio is pretty well diversified, we are pretty excited about international, we have build out these verticals, we have four strong powerful partners in Asia, South America, Europe and I am missing the fourth, and India with Reliance and we think there is a lot of growth in those businesses. Also, we are excited about a movie that we are making the first time Iconix’s Fox Studio is getting behind a movie for Peanuts the first ever of its kind which comes out in ‘15 which is going to be big growth vehicle for us.

And third just acquisitions, the company has purchased over three brands as I mentioned before over $80 million royalty revenue, announced last week a repurchase 49% of one of our JVs vehicle brands and we have a lot of capability to continue to utilize our balance sheet a lot more leverage and opportunity so. I think the combination of the three of those, we’re pretty comfortable this year, I think we’re plan to grow top line over 20% and we’re hoping we could do it over the next couple of years. We’re pretty excited about our growth capability.

Unidentified Analyst

One of the reasons for your success I think is aside from the very robust and good portfolio brand; the retailers desire to have exclusivity and differentiation. I wonder if you could talk at all what you’re seeing in the current environment from retailers where there demand seemed to be focusing, has there been any kind of shift in their attitude or their strategy?

Neil Cole

I think it’s been pretty steady, the digital world where you can get on your device, you can find out the price point of any article within two miles. Retailers want exclusive brands; they don’t want to go into a mall and have to worry about from people about what the price is going to be. So giving them exclusive brands which we do, giving them the ability to the like high margins because we often -- they often source our brands directly.

And so they make high margin have exclusive brands and often we converted programs that were unbranded or private label programs that we got big share. Over the last, I guess, five years we have over close to $7 billion of market share of this brand. We see it growing, a big growth vehicle on that s worldwide. We have been doing a lot of deals with companies like Falabella in Chile, department stores in Mexico. We are doing something with Kallstadt in Germany. So we think this whole direct to retail formula that we have kind of I think maybe pioneered. In America we see helping us throughout the world and been a big growth vehicle around the world and in America it's going to I think only continue to be stronger.

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