NEW YORK — After swallowing Mossimo and Ocean Pacific, Neil Cole and his team at the Iconix Brand Group are still hungry for acquisitions.
The company plans additional licensing deals for the nine brands under the Iconix umbrella. But its appetite for more remains and the firm will need to boost its portfolio to help propel earnings per share toward the lofty growth goal of 15 to 20 percent.
"Looking beyond 2007, [our goal is to grow] earnings per share at least 15 to 20 percent year-over-year, and we are committed to achieving this goal,'' Cole, chairman and chief executive officer, said during a third-quarter conference call on Wednesday. "Our growth over the last two years is very exciting....We have only scratched the surface of the potential of our 21st-century business model."
"The pipeline of potential acquisitions remains strong," Cole said. He noted that the company is looking at several opportunities and expressed confidence that the brand management firm can "continue to grow the portfolio with more iconic consumer brands."
Cole told WWD that he was pleased with the purchase, announced Tuesday, of Ocean Pacific from the Warnaco Group for $54 million. "It's a great iconic brand with a 30-year heritage," he said. "It will bring more diversity to Iconix and is a different lifestyle brand than some of our other brands that are more fashion-oriented."
Cole said Op, a leading global action sports lifestyle company, has expansion opportunity, particularly on the sportswear side of the business for young men's and juniors. "In our research, the brand is still underpenetrated in every area," he said.
The Op deal came a day before Iconix reported quarterly results. Net income for the three months ended Sept. 30 rose 54 percent to $7.9 million, or 18 cents a diluted share, from $5.2 million, or 14 cents, in the same quarter a year ago. The company beat Wall Street's consensus by 2 cents. Licensing and commission income more than doubled to $22.1 million from $9.2 million. The quarter was the company's first fully taxed quarter as a brand management firm.
For the nine months, net income increased to $23.6 million, or 54 cents a diluted share, from $8.5 million, or 26 cents, in the year-ago period. Licensing and commission revenue was $53.8 million, up from $17.8 million.
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