Iconix Brand Group Inc. said Tuesday that first-quarter earnings rose 58.3 percent because of a surge in licensing revenues from its stable of brands, which will soon include the “Peanuts” comic strip franchise.
In the three months ended March 31, the New York-based brand management firm’s net income reached $24.8 million, or 33 cents a diluted share, compared with $15.6 million, or 26 cents, in the year-ago quarter. Adjusted earnings per share were 36 cents, 5 cents above the consensus estimate of analysts polled by Yahoo Finance.
Iconix’s licensing and other revenues in the quarter climbed 42 percent to $71.7 million from $50.5 million a year earlier.
The company said Tuesday it would use $175 million in cash to purchase the “Peanuts” properties from United Features Syndicate Inc. and The E.W. Scripps Co. Iconix plans to acquire the brand through a new subsidiary created with the heirs of the strip’s creator, Charles Schulz. The brand management firm will own 80 percent of the new venture, and the Schulz family will hold a 20 percent stake.
The company estimated that the properties, which include iconic characters such as Charlie Brown and Snoopy, will generate $75 million in annual royalty revenue on a pro-forma basis and eventually add between 12 cents and 15 cents to its annual EPS.
Iconix said the “Peanuts” brand has 1,200 licensing agreements across 40 countries and generates $2 billion in retail sales annually. Chairman and chief executive officer Neil Cole said with the addition of “Peanuts,” fashion’s share of Iconix’s overall revenues would be reduced to two-thirds.
Estimating the deal will add $35 million to $40 million in revenues for the rest of the year, Iconix updated its fiscal 2010 outlook. It now expects its full-year top line to range between $305 million and $315 million and to deliver adjusted EPS of between $1.35 and $1.40.
Shares rose 20 cents, or 1.1 percent, to $18.59 in Nasdaq trading Tuesday.
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