NEW YORK, May 1, 2013 (GLOBE NEWSWIRE) -- Sequential Brands Group, Inc. (OTC:SQBG) ("Sequential" or the "Company") today announced financial results for the first quarter ended March 31, 2013.
First Quarter 2013 Results (See attached table for reconciliation of GAAP to non-GAAP measures):
Total revenue from continuing operations for the three months ended March 31, 2013 increased 54% to approximately $1.6 million, as compared to approximately $1.1 million, in the prior year quarter.The Company incurred certain costs in the quarter that are either not representative of the Company's ongoing business or are unusual in nature, including: (i) a loss from discontinued operations related to the wind down of the Heelys legacy operating business totaling $3.9 million; (ii) deal related costs incurred in connection with the Heelys, Ellen Tracy and Caribbean Joe acquisitions that closed in the quarter totaling $2.4 million; (iii) non-cash tax expense of $2.3 million; and (iv) non-cash interest expense of $11.6 million related to the conversion of the Tengram Convertible Notes to equity. Therefore, on an adjusted non-GAAP basis, without giving effect to the unusual loses, taxes, costs and expenses noted above, the Company's net loss was approximately $1.4 million, or approximately $0.20 per share, for the three months ended March 31, 2013, as compared to net loss of approximately $0.1 million, or approximately $0.03 per share, in the prior year quarter. The Company's wind down costs of $3.9 million, which are included in discontinued operations, relate to the Heelys legacy operating business, and were an anticipated cost of acquisition. The cost of the wind down will be offset by the cash the Company is expected to generate from the liquidation of the net assets that were acquired in connection with the acquisition. The non-cash tax expense of $2.3 million is related to the deferred tax expense created by the amortization of certain trademarks for tax, but not book purposes. Although the Company will continue to recognize deferred tax expense in the normal course of business, it is unusual for a company to have a material non-cash tax expense in a quarter that it is reporting a loss.