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Sequential Brands Group Announces Fourth Quarter And Full Year 2012 Results

Gary Klein, Sequential's CFO, added, "Our 2012 financial results reflect a company in transition with the associated costs of exiting a former business model in favor of a new business model. As we continue to execute our new strategy, we expect our financial metrics to improve as we focus on growing our existing brands, adding accretive new brand acquisitions to our portfolio and leveraging our base, which we view as a highly scalable platform."  

See reconciliation tables below for non-GAAP metrics. These non-GAAP metrics may be inconsistent with similar measures presented by other companies and should only be used in conjunction with our results reported according to U.S. GAAP. Any financial measure other than those prepared in accordance with U.S. GAAP should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with U.S. GAAP.

About Sequential Brands Group, Inc.

Sequential Brands Group, Inc. (OTC:SQBG) owns, promotes, markets, and licenses a portfolio of consumer brands that presently include William Rast®, People's Liberation®, DVS® Action Sports and Heelys®. Sequential seeks to ensure that its brands continue to thrive and grow by employing strong brand management, design and marketing teams. Sequential has licensed and intends to license its brands in a variety of consumer categories to retailers, wholesalers and distributors in the United States and in certain international territories. For more information, please visit Sequential's corporate web site at:  www.sequentialbrandsgroup.com .

The Sequential Brands Group logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=17554

Forward-Looking Statements

Certain statements in this press release and oral statements made from time to time by representatives of the Company are forward-looking statements ("forward-looking statements") that involve risks and uncertainties. For this purpose, any statements contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. When used in this press release and in documents referenced herein, forward-looking statements include, without limitation, statements regarding our expectations, beliefs or intentions that are signified by terminology such as "subject to," "believes," "anticipates," "plans," "expects," "intends," "estimates," "may," "will," "should," "can," the negatives thereof, variations thereon and similar expressions. Such forward-looking statements reflect the Company's current views with respect to future events, based on what the Company believes are reasonable assumptions; however, such statements are subject to certain risks, uncertainties and other factors. Our actual results may differ materially from those anticipated in any forward-looking statements due to known and unknown risks, uncertainties and other factors. The section entitled "Risk Factors" set forth in Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, 2011, in Item 1A of Part II of our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 3012 and in similar discussions in our other Securities and Exchange Commission filings, discuss some of the important risks, uncertainties and other factors that may affect our business, results of operations and financial condition. The Company's stockholders are urged to consider such risks, uncertainties and factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. Forward-looking statements are not, and should not be relied upon as, a guarantee of future performance or results, nor will they necessarily prove to be accurate indications of the times at or by which any such performance or results will be achieved. As a result, actual outcomes and results may differ materially from those expressed in forward-looking statements. The Company is under no obligation to, and expressly disclaims any such obligation to, update or alter its forward-looking statements, whether as a result of new information, future events or otherwise.

Condensed Consolidated Income Statements:
(in thousands, except earnings per share data)
         
  (Unaudited) (Unaudited)
  Three Months Ended Dec. 31, Year Ended Dec. 31,
  2012 2011 2012 2011
         
Licensing and other revenue  $ 1,834  $ 442  $ 5,274  $ 547
Operating expenses  7,947  36  11,812  172
(Loss) income from operations  (6,113)  406  (6,538)  375
Interest expense, net  269  33  829  137
(Loss) income before income taxes  (6,382)  373  (7,367)  238
Provision for (benefit from) income taxes   13  (2)  27  (1)
(Loss) income from continuing operations  (6,395)  375  (7,394)  239
Loss from discontinued operations  (965)  (3,772)  (1,780)  (6,219)
Net Loss  (7,360)  (3,397)  (9,174)  (5,980)
Noncontrolling interest  14  --   49  3,643
Net loss attributable to common stockholders  $ (7,346)  $ (3,397)  $ (9,125)  $ (2,337)
         
Basic (loss) income per share:        
Continuing operations  $ (2.60)  $ 0.16  $ (3.04)  $ 0.11
Discontinued operations  (0.40)  (1.57)  (0.74)  (1.08)
Attributable to common shareholders  $ (3.00)  $ (1.41)  $ (3.78)  $ (0.97)
Basic weighted average common shares outstanding  2,452  2,400  2,413  2,400
         
Diluted loss per share:        
Continuing operations  $ (2.60)  $ 0.16  $ (3.04)  $ 0.11
Discontinued operations  (0.40)  (1.57)  (0.74)  (1.08)
Attributable to common shareholders  $ (3.00)  $ (1.41)  $ (3.78)  $ (0.97)
Diluted weighted average common shares outstanding  2,452  2,400  2,413  2,400
 
 
Select Balance Sheet Items:
(in thousands)
     
  Dec. 31, 2012 Dec. 31, 2011
     
Total Assets  $ 8,976  $ 2,188
Total Liabilities  $ 9,024  $ 7,604
Total Stockholders' Deficiency  $ (48)  $ (5,416)
 
(Loss)/Income and EPS Reconciliations:
(in thousands, except earnings per share)
         
  (Unaudited) (Unaudited)
  Three Months Ended Dec. 31, Year Ended Dec. 31,
  2012 2011 2012 2011
         
Non-GAAP net (loss) income (1)  $ (918)  $ 375  $ (619)  $ 261
         
GAAP net loss  $ (7,346)  $ (3,397)  $ (9,125)  $ (2,337)
         
Adjustments:        
Loss from discontinued operations  965  3,772  1,780  2,598
Restructuring charges  2,854  --   2,854  -- 
Deal costs  1,748  --   2,669  -- 
Executive compensation related to RSUs vesting upon employment commencement  669  --   669  -- 
Non-cash interest related to beneficial conversion feature  192  --   534  -- 
Total non-GAAP adjustments  6,428  3,772  8,506  2,598
         
Non-GAAP net (loss) income (1)  $ (918)  $ 375  $ (619)  $ 261
         
         
         
  (Unaudited) (Unaudited)
  Three Months Ended Dec. 31, Year Ended Dec. 31,
  2012 2011 2012 2011
         
Non-GAAP net (loss) income per share (1)  $ (0.37)  $ 0.16  $ (0.26)  $ 0.11
         
GAAP net loss per share  $ (3.00)  $ (1.41)  $ (3.78)  $ (0.97)
         
Adjustments:        
Loss from discontinued operations  0.39  1.57  0.74  1.08
Restructuring charges  1.16  --   1.18  -- 
Deal costs  0.71  --   1.11  -- 
Executive compensation related to RSUs vesting upon employment commencement  0.27  --   0.28  -- 
Non-cash interest related to beneficial conversion feature  0.08  --   0.22  -- 
Total non-GAAP adjustments  2.62  1.57  3.52  1.08
         
Non-GAAP net (loss) income per share (1)  $ (0.37)  $ 0.16  $ (0.26)  $ 0.11
         
         
(1) Non-GAAP net (loss) income and non-GAAP net (loss) income per share are non-GAAP financial measures which represent net loss excluding discontinued operations, restructuring charges, deal costs, and non-cash and/or certain items. The Company believes non-GAAP financial measures are useful in evaluating its financial condition and results of operations.
CONTACT: Sequential Brands Group, Inc.
         Gary Klein, Chief Financial Officer
         646-564-2577
         gklein@sequentialbrandsgroup.com

         ICR
         Rachel Schacter/John Rouleau
         203-682-8300
         Rachel.schacter@icrinc.com

Sequential Brands Group Logo

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