Sequential Brands Group Announces 2014 Fourth Quarter and Full Year 2014 Financial Results
- Q4 Adjusted EBITDA increased 56% to $11.1 million vs. $7.1 million in the prior year quarter
- Full Year Revenue increased 85% to $41.8 million vs. $22.7 million in the prior year
- Full Year Adjusted EBITDA increased 96% to $24.0 million vs. $12.3 million in the prior year
NEW YORK, Feb. 25, 2015 -- Sequential Brands Group, Inc. ("Sequential" or the "Company") (Nasdaq:SQBG) today announced financial results for the fourth quarter and full year ended December 31, 2014.
Fourth Quarter 2014 Results:
Total revenue for the fourth quarter ended December 31, 2014 increased to $18.6 million, compared to $10.6 million in the prior year quarter. Adjusted EBITDA for the fourth quarter was $11.1 million, compared to $7.1 million in the prior year quarter. On a non-GAAP basis, net income for the quarter was $4.5 million, or $0.11 per diluted share, compared to $5.2 million, or $0.20 per diluted share, in the prior year quarter. On a GAAP basis, net loss for the quarter was $3.8 million, or ($0.10) per diluted share, compared to net income of $4.1 million, or $0.15 per diluted share, in the prior year quarter. See tables below for a reconciliation of GAAP to non-GAAP measures.
Yehuda Shmidman, Sequential's Chief Executive Officer, commented, "2014 was another transformational year for Sequential. Our platform grew substantially, and the Company delivered strong financial results. Looking ahead, we remain focused on executing the chapters of our playbook inclusive of both organic and acquisition growth, as we look to achieve our three-year plan of $3.5 billion in annual global retail sales, $100 million in revenue and $70 million of adjusted EBITDA."
Full Year 2014 Results:
Total revenue for the year ended December 31, 2014 increased to $41.8 million, compared to $22.7 million in the prior year. Adjusted EBITDA for the year ended December 31, 2014 was $24.0 million, compared to $12.3 million in the prior year, and the Company's non-GAAP net income was $8.6 million, or $0.27 per diluted share, for the year ended December 31, 2014, compared to $6.6 million, or $0.35 per diluted share, in the prior year. On a GAAP basis, net loss was $1.1 million for the year ended December 31, 2014, or ($0.04) per diluted share, compared to $18.0 million, or ($1.01) per diluted share, in the prior year, as the Company incurred certain costs in each year, both cash and non-cash, that were not representative of the Company's ongoing business. See tables below for a reconciliation of GAAP to non-GAAP measures.
2014 GAAP and Non-GAAP Taxes:
For GAAP purposes, in the fourth quarter of 2014 the Company recorded $10.3 million of taxes on $6.4 million of pre-tax income and for the full year 2014 the Company recorded $2.9 million of taxes (of which approximately $2.5 million were non-cash taxes) on $1.9 million of pre-tax income. The Company believes this is an anomaly and in future years the Company's statutory tax rate will be 35%. Therefore, the non-GAAP tables below demonstrate the 2014 financials inclusive of this statutory tax rate of 35%.
For the year ending December 31, 2015, the Company is reiterating revenue guidance of $61 - $64 million with adjusted EBITDA of $38 - $40 million. The Company's contractual guaranteed minimum royalties for 2015 are approximately $45 million.
Consistent with the Company's historical quarterly results, the Company expects revenue for 2015 to be weighted to the third and fourth quarters due to seasonality in the businesses of many of the Company's licensees. Therefore, revenue for the first half of the year will be close to minimum revenue, with overages being recognized in the second half of the year. As a result of this seasonality, the Company expects its adjusted EBITDA margins to be lower in the first half of the year, and higher in the second half of the year.
Investor Call and Webcast:
Management will provide further commentary today, February 25, 2015, on the Company's financial results via a conference call and webcast beginning at approximately 10:00am ET. To join the conference call, please dial (760) 666-3775 or visit the investor relations page on the Company's website www.sequentialbrandsgroup.com.
Non GAAP Financial Measures:
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. (Nasdaq:SQBG) owns, promotes, markets, and licenses a portfolio of consumer brands that presently includes Avia®, AND1®, Ellen Tracy®, William Rast®, Revo®, Caribbean Joe®, Heelys®, DVS®, The Franklin Mint®, Nevados®, People's Liberation® and Linens 'N Things®. 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 website at: www.sequentialbrandsgroup.com.
To inquire about licensing opportunities, please email: firstname.lastname@example.org.
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") within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are made as of the date hereof and are based on current expectations, estimates, forecasts and projections as well as the beliefs and assumptions of management. The Company's actual results could differ materially from those stated or implied in forward-looking statements. Forward-looking statements include statements concerning guidance, plans, objectives, goals, strategies, expectations, intentions, projections, developments, future events, performance or products, underlying assumptions and other statements that are not historical in nature, including those that include the words "subject to," "believes," "anticipates," "plans," "expects," "intends," "estimates," "forecasts," "projects," "aims," "targets," "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. Whether actual results will conform to expectations and predictions is subject to known and unknown risks and uncertainties, including: (i) risks and uncertainties discussed in the reports that the Company has filed with the Securities and Exchange Commission (the "SEC"); (ii) general economic, market, or business conditions; (iii) changes in the Company's competitive position or competitive actions by other companies; (iv) the Company's ability to maintain strong relationships with its licensees and retail partners; (v) the Company's ability to retain key personnel; (vi) the Company's ability to achieve and/or manage growth and to meet target metrics associated with such growth; (vii) the Company's ability to successfully attract new brands; (viii) the Company's ability to identify suitable targets for acquisitions; (ix) the Company's ability to obtain financing for the acquisitions on commercially reasonable terms; (x) the Company's substantial level of indebtedness, including the possibility that such indebtedness and related restrictive covenants may adversely affect the Company's future cash flows, results of operations and financial condition and decrease its operating flexibility; (xi) the Company's ability to integrate successfully the new acquisitions into its ongoing business; (xii) the Company's ability to achieve the anticipated results of these and other potential acquisitions; (xiii) the Company's largest stockholders control a significant percentage of the Company's common stock and appointed two members to the Company's board of directors, which may enable them to exert influence over corporate transactions and matters affecting the rights of the Company's stockholders; (xiv) the Company's ability to comply with government regulations; (xv) changes in laws or regulations or policies of federal and state regulators and agencies; and (xvi) other circumstances beyond the Company's control. Refer to section entitled "Risk Factors" set forth in the Company's Annual Reports on Form 10-K and the Company's Quarterly Reports on Form 10-Q for a discussion of 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.
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