27 Jul Sequential Brands Sees Q2 Revenues Climb 23 Percent
Sequential Brands Group Inc. reported total revenue for the quarter ended June 30, 2017 increased 23 percent to $42.1 million, compared to $34.2 million in the prior year quarter.
On a GAAP basis, net income for the second quarter 2017 was $2.5 million, or 4 cents per diluted share, compared to a net loss for the second quarter 2016 of $(0.1) million, or zero per diluted share. Included in the second quarter 2017 was a charge of $1.9 million related to the company’s realized loss on the sale of available-for-sale securities.
Non-GAAP net income for the second quarter 2017 was $7.8 million, or 12 cents per diluted share, compared to $3.6 million, or 6 cents per diluted share, in the prior year period. Adjusted EBITDA for the second quarter of 2017 was $24.7 million, compared to $17.3 million in the prior year quarter.
“Second quarter results were strong reflecting growth across key brands, and our continued focus on cost management,” said Karen Murray, CEO of Sequential Brands Group. “As we head into the second half of the year, we’re encouraged by the continued strength of our core brands and the exciting, new growth initiatives planned for the remainder of the year.”
Year-to-Date 2017 Results:
Total revenue for the six months ended June 30, 2017 increased 20 percent to $81.5 million, compared to $68.2 million in the prior year period.
On a GAAP basis, net income for the six months ended June 30, 2017 was $1.4 million or 2 cents per diluted share compared to a net loss for the six months ended June 30, 2016 of $1.1 million or 2 cents per diluted share. The results for the six months ended June 30, 2017 include charges of $1.9 million related to the company’s realized loss on the sale of available-for-sale securities and $6.7 million related to costs associated with the departure of our former CEO.
Non-GAAP net income for the six months ended June 30, 2017 was $13.6 million, or $0.21 per diluted share, compared to $6.2 million, or $0.10 per diluted share, in the prior year period. Adjusted EBITDA for the six months ended June 30, 2017 was $47.7 million, compared to $34.0 million in the prior year period.
Financial Update:
For the year ending December 31, 2017, the company is reiterating guidance of $170 million to $175 million in revenue and $98 million to $102 million of Adjusted EBITDA. The company’s GAAP net income is now expected to be $13.6 million to $16.2 million due to the company’s realized loss on the sale of available-for-sale securities during the quarter ended June 30, 2017. The company’s contractual guaranteed minimum royalties for 2017 are approximately $120 million. Consistent with the company’s historical quarterly results, the company expects revenue for 2017 to be weighted to the third and fourth quarters due to seasonality in the businesses of many of the company’s licensees.
Business Update:
This morning, the company is announcing that Gary Klein is stepping down as CFO at the end of August. Andrew Cooper, president, will assume the position of interim chief financial officer along with his current duties as we initiate a search to identify a permanent replacement.
The company also announced a multi-year strategic partnership with USA TODAY NETWORK, part of Gannett Co, Inc. (GCI), to license the Martha Stewart brand in connection with the USA TODAY NETWORK Food & Wine Experience event series.
The company’s brands include AND1, Avia, Heelys, Gaiam, Jessica Simpson, William Rast, Joe’s Jeans, Martha Stewart, Chef Emeril, Revo, DVS and Ellen Tracy.