Iconix recorded a $24.7 million profit in Q4 ended Dec. 31, compared to a $293.9 million loss a year earlier as it received a $66.8 million benefit from the new federal tax law. Q4 revenue declined 2% to $52.2 million, due partly to the absence of $4 million contributed by the Sharper Image brand in the year-earlier period, when it was sold to the ThreeSixty Group.

The improved earnings also came despite Iconix taking a $4.1 million non-cash impairment charge for the end of its Royal Velvet DTR with J.C. Penney (Inside Licensing Dec. 29). The company also recorded a $16.8 million charge tied to its investment in the MG Icon joint venture for the Material Girl brand. Macy’s is ending a Material Girl DTR that expires in 2020, Iconix said.

Meanwhile, men’s brands posted a $957,000 operating loss in Q4 against a $7.7 million profit a year earlier as revenue fell 30% to $8.2 million. The decline was partly offset by a 10% operating profit rise in women’s brands to $16.6 million as revenue jumped 7% to $20 million. Operating income for the home business dropped 5% to $5.3 million as revenue slipped 6% to $6.1 million. International operating income grew 21% to $9.7 million on a 10% revenue increase to $17.9 million.

For the year ended Dec. 31, Iconix’s trademark, goodwill and investment impairment loss totaled $646.5 million, with trademarks accounting for $525.7 million, due largely the loss of DTRs at Walmart (Ocean Pacific, Starter and Danskin Now) and Target (Mossimo), Iconix said in a 10K filed with the SEC. DTRs at Walmart, Target, J.C. Penney, Kohl’s and Sears Holdings accounted for 42% of the company’s $225.8 million. Walmart accounted for 19% of total revenue, followed by followed by Target and Kohl’s (9% each) and Sears Holdings and Global Brands Group (8% each).

Iconix will partly offset the loss of the Starter DTR at Walmart with a new Starter deal with Amazon that is expected to produce 300 styles of men’s, women’s and children’s activewear and accessories that ship later this year, Iconix said. It also struck a new multi-year Umbro licensing deal with Target.

The company says it had more than 50 DTRs and 400 total licenses as of Dec. 31, with $530 million in aggregate minimum guaranteed royalty revenue due over the terms of existing contracts.

Iconix says it expects to be in compliance with all debt requirements for the next 12 months after earlier this year converting 1.5% notes to 5.75% notes. That transaction that produced $100 million in proceeds, which it used to repay the 1.5% notes that matured on March 15.

Contact:

Iconix Brand Group, David Jones, CFO, 212- 730-0030, djones@iconixbrand.com