Icon Energy Corp (ICON) 2006 Q3 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Iconix Brand Group third-quarter 2006 conference call. My name is Tonya and I'll be your coordinator for today. At this time all participants are in listen-only mode. We will be facilitating a question-and-answer session towards the end of today's conference. (OPERATOR INSTRUCTIONS).

Safe Harbor statement under the Private Securities Litigation Reform Act of 1995. The statements that are not historical facts contained in this press release are forward-looking statements that involve a number of known and unknown risks, certainties and other factors, all of which are difficult or impossible to predict, and many of which are beyond the control of the Company which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

Such factors include, but are not limited to, uncertainty regarding the results of the Company's acquisition of additional licenses, continued market acceptance of current products, and the liability to successfully develop and market new products, particularly in light of rapidly changing fashion trends, the impact of supply and manufacturing constraints or difficulties relating to the Company's licensees, dependence on foreign manufacturers and suppliers. Uncertainties relating to customers' plans and commitments, the ability of licensees to successfully market and sell branded products, competition, uncertainty relating to economic conditions in the market in which the Company operates; the ability to hire and retain key personnel, the ability to obtain capital if required, the risk of litigation and regulatory proceedings, the risk of uncertainty of trademark protection, the uncertainty of marketing and licensing acquired trademarks, and other risk detailed in the Company's SEC filings.

The words believe, anticipate, expect, confident, project, provide, guidance, and similar expressions identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made.

I would now like to turn the presentation over to your host for today's conference, Mr. Warren Clamen, Executive Vice President of the Iconix Brand Group. Please proceed, sir.

Good morning, everyone, and welcome to the Iconix Brand Group third-quarter 2006 conference call. For the third quarter ended September 30, 2006, royalty revenue increased to approximately $22.1 million compared to approximately $9.2 million in the prior-year quarter. SG&A before special charges was approximately $6.1 million compared to approximately $3.9 million in the prior-year quarter.

Operating margins for the quarter increased to approximately 70% compared to approximately 55% in the prior-year quarter. Net income for the third-quarter 2006 was approximately $7.9 million compared to approximately $5.2 million in the prior-year quarter.

It is important to note that Q3 was the Company's first fully taxed quarter as a brand management company, and that the $5.2 million in net income from a year ago included a non-cash tax benefit of $1.4 million.

In looking at the Company's results on a pre-tax basis, Iconix earned approximately $12.2 million in pre-tax income in Q3 compared to approximately $3.8 million in the prior-year quarter. Pretax margins increased to 55% from 41% a year ago. Fully diluted earnings per share for the third-quarter 2006 were $0.18 compared to $0.14 in the prior-year quarter. However, if we were to look at both quarters on a fully taxed basis at our current effective tax rate of 35%, the result would be the $0.18 this year compared to an adjusted $0.07 fully taxed last year.

EBITDA, a non-GAAP financial measure, in the quarter increased to $16 million compared to $5.3 million in the prior-year quarter, and EBITDA margins grew to 72% from 58% in the prior-year quarter. Free cash flow, another non-GAAP financial measure, for the quarter was $13.3 million compared to $4.1 million a year ago. We refer you to our earnings release for the quarter for unaudited reconciliation of these non-GAAP amounts to the most comparable U.S. GAAP amounts.

Last night Iconix announced that it entered into a definitive agreement to buy the brand Ocean Pacific from Ocean Pacific Apparel Corp., a subsidiary of Warnaco Group, Inc. And this morning we announced that we have closed on our acquisition of Mossimo, Inc. Merrill Lynch is financing the Mossimo acquisition through a short-term loan of $90 million. Merrill Lynch has also committed to finance the OP acquisition should we require such financing.

The delay in closing Mossimo will impact our 2006 results. However, it is important to note that due to the delay we acquired on closing approximately $22 million in cash as compared to the $17 million we originally anticipated. Another unintended benefit of the delay is that the additional shares of common stock that Iconix potentially will have to issue to guarantee Mossimo stockholders total consideration of $8.50 per share in the merger is only approximately 41,000 shares, which is significantly lower than the amount of additional shares we anticipated at the time of signing the merger agreement.

I would like now to introduce David Conn, Executive Vice President of Iconix Brands Group, and turn the call over to him.

Good morning, everybody. I will now give an update on each of the six brands Iconix operated during the third quarter of 2006. Our Candie's brand had a strong back to school season at Kohl's and by the end of this year will be represented in over 30 different product categories. We are currently working with Kohl's to implement an in-store fixturing program for candies in all of their stores and excited about the potential for this to drive increased sales.

Looking ahead, we see continued growth at Kohl's through both comp increases and door expansion as Kohl's opens 100 new doors a year to reach their goal of 1200 doors by 2010. We're also beginning to work on licensing Candie's internationally and longer-term we see this as a significant avenue for potential growth.

It's been a challenging year for our Bongo brand, but as we wind down 2006 we believe we have stabilized the business. The core Bongo denim category has been successfully transitioned to our new licensee, the Mamiye Group, who had a good market last month in Los Angeles and is beginning to recapture previously lost marketshare. The Bongo kid's apparel business is stronger than ever and our licensee expects to do close to $50 million in product sales this year.

We're in the process of renewing the Bongo footwear license with our licensee Kenneth Cole for another four years and their business is growing nicely. We're also optimistic about several new Bongo licensees including the first-ever Bongo fragrance launch which is scheduled for next year.

Our luxury brand, Badgley Mischka is expanding and the bridge priced dress collection launched this spring continues to sell very well and is on track to exceed $10 million in product sales in its first year. Our fragrance launch with Elizabeth Arden is in stores and as of this month is now expanding to over 300 doors and we believe the product is selling exceptionally well.

Last month in New York we had a major bridal launch previewing a new collection of both bridal and bridesmaid dresses with retailers that were very well received. And we've also recently signed licenses for intimate apparel and footwear and are working on several others that we expect to sign soon.

We're excited about our Joe Boxer renewal with Sears Holdings and working with their merchants and marketers on the launch of Joe Boxer at Sears next year. We've accepted a reduced minimum guaranteed for this renewal; however, we've solidified the brand through 2010 and nearly doubled its points of distribution. Our belief is that in the long-term we will exceed the $20 million in annual licensing revenue we previously received from this brand.

Our international expansion of Joe Boxer is continuing and we recently announced new license agreements in the year UK, Eastern Europe and Turkey and we are in the middle of several interesting discussions with perspective licensees in Europe, Asia, Australia and South America. The Rampage business continues to be extremely strong, especially at the brand's largest customer, Macy's.

We've officially terminated our license agreement with Charlotte Russe, received the termination fee and the brand has been consolidated at the better department store channel. We're also excited about our new Rampage kid's apparel licensee whose product is being very well received by the brand's core department store account and we're seeing particular strength in the Rampage footwear and hand bag business.

Our Mudd brand is on plan and showing exceptional strength in its accessories business with our footwear licensee projecting to generate close to $100 million in product sales this year. In addition to footwear, the handbag and intimate apparel business are also both very strong. I would now like to introduce Neil Cole, Chairman and CEO of Iconix Brands Group and turn the call over to him.

Thank you, David. Good morning, everybody. Despite the delay in closing Mossimo I am very excited about our third-quarter results. Our business shows continued strength and growth in our existing portfolio of brands and this combined with the addition of new revenue streams from London Fog and Mossimo and the anticipated revenue stream resulting from our proposed acquisition of Ocean Pacific, OP, provides a strong foundation of growth as we head into 2007.

Our results also provide visibility into the leverage and incremental profitability of our business model as our margins continue to increase nicely year-over-year. David discussed the six brands we operated for the full quarter -- for the full third quarter of 2006 and I would like to now touch briefly on the three new acquisitions -- London Fog, Mossimo and OP.

London Fog is an iconic brand with global recognition with 80 years of heritage and we are excited about owning this classic brand. We anticipate the first phase of the London Fog licensing program to be in place by the end of this year. We are also very pleased with the three licenses we've signed to date including the retail direct license with Hudson Bay Corporation which will be putting London Fog in 98 of its better department stores and also a diffusion brand in 283 seller stores.

Additional categories we anticipate signing as part of Phase I include luggage, travel products, umbrellas, cold weather accessories and footwear. We believe that in the first full year London Fog will generate approximately $7 million in royalty revenue.

This morning we announced we had completed our acquisition of Mossimo Inc. I'm thrilled to have Mossimo as part of the Iconix portfolio of brands. Our U.S. licensee, the Target Corporation, has done an outstanding job in building Mossimo as one of the largest, most dominant lifestyle brands in the United States. The business at Target today is growing nicely and we are looking forward to working with them.

I am pleased that the founder, Mossimo Giannulli, has joined Iconix and we look forward to working with him to grow our existing license businesses in Australia, South America, Mexico and Japan as well as further licensing the brand around the world to continue to make Mossimo an international lifestyle brand.

Last night we announced that we have entered into a definitive agreement to purchase what will be our ninth brand, Ocean Pacific, or also the other brand, OP. I'm excited about this acquisition. The action sports lifestyle category is a very attractive segment that resonates with today's youth. And OP is the original action sports brand with over 30 years of heritage and authenticity. OP has 15 direct licenses outside of the United States including Mitsubishi in Japan, represents over $30 million in sales at retail.

Our projection for OP is that the royalty revenue for '07 will be approximately $10 million, and this does not include several open categories that we intend to license. I'm also very excited that Warnaco is going to continue on as our junior swim licensee and confident that their expertise and leadership position in swimwear will enable that category to continue to expand and grow.

Our pipeline of potential acquisitions remains strong and we are currently looking very seriously and closely at several different exciting opportunities. When we close on OP we'll have acquired six brands in the last six quarters and we look forward to next year. I am confident we will continue to grow and diversify our portfolio with more iconic consumer brands.

We are working hard on licensing our brands around the world and gaining more traction every day. I'm excited about the two retail direct licenses we recently completed -- one for Mossimo with Falabella, a leading chain of department stores in South America and our London Fog deal with the Hudson Bay Corp. in Canada. At the moment we have a number of interesting opportunities we are working on all over the world and anticipate closing more deals shortly.

Addressing guidance for this year and next, the delay in closing the Mossimo transaction will have an impact on our '06 results and therefore we are updating our '06 full year earnings per share guidance to a range of $0.70 to $0.73 from the previous $0.70 to $0.80. In looking ahead to '07 we are issuing full year earnings per share guidance in the range of $0.87 to $0.92.

Comparing results year-to-year it is important to reiterate that our earnings next year will be fully taxed at an effective tax rate of approximately 35% compared to a projected blended rate this year of approximately 18% due to the fact that in the first two quarters of this year we were realizing the deferred tax benefit.

As we wind down 2006 I'm extremely proud of the business we've built today. As we look ahead to '07 we are anticipating revenue growth on three different fronts. Our existing portfolio of brands are poised for growth through new domestic license agreements, store expansions and comp store increases with licensees like Kohl's department store and Target and with new international license agreements.

In addition, full year contributions in '07 from London Fog, Mossimo, Ocean Pacific and Mudd are projected to add between 30 and $40 million of incremental revenue year-over-year from '06 to '07. Lastly, as we move into '07 we believe we will have the pieces in place to further diversify our portfolio of brands. Looking for a moment beyond '07, our goal will be to consistently grow our earnings per share at least 15 to 20% year-over-year and we are committed to achieving this goal.

Our growth over the last two years is very exciting; however, I can assure you that senior management and our team at Iconix and myself truly believe we have only scratched the surface of the potential of our 21st century business model. Every day we are forging relationships with more and more of the largest retailers and wholesalers in the world who understand the value Iconix can add and the greater efficiency of our model of specialization. Our leadership position and successful execution have, in my opinion, made us the acquirer of choice for owners of intellectual property looking to monetize their assets.

We have recently strengthened and diversified our Board of Directors with two very talented and experienced new individuals in Peter Cuneo and Mark Friedman and we are continuing to invest in our platform and ensure that we have the infrastructure and talent in place to nurture and develop our growing portfolio of brands. I truly believe in our mission statement to become the world's leading owner of a diversified portfolio of consumer brands and I promise all of you we will be working even harder than ever to fulfill this vision. Thank you all for your continued support and I'd like to open up the call to questions and answers.

(OPERATOR INSTRUCTIONS). Todd Slater, Lazard Capital.

Good morning, everyone. Just a quick question on the fourth-quarter guidance. Can you just talk about what has changed and what that guidance includes? What may be dragging that number a little bit if anything other than the Mossimo slippage? Thanks.

Todd, when we originally revised the guidance last time and lengthened it to $0.70 the large part was due to the tax benefit of over $2 million which we realized we did not get the benefit of. And then continued along with the Mossimo delay and our visibility for the next couple years we felt that it was a prudent estimate to do $0.70 to $0.73 for the fourth quarter.

Are there any other costs related to the transaction that may be filtering through there at some point -- related to debt or anything else?

Possibly and we're not allowed to comment on the specifics of the proposed transaction. But there could be some costs that flow through there based on that transaction.

Okay, so your guidance would assume some amount that you can't talk about then potentially?

Potentially.

Okay.

Any other questions or am I done?

Eric Beder, Brian Murray.

Good morning. Can we talk a little bit -- Warnaco has basically took the business and took it away from a licensing model in the U.S. for some of the apparel pieces. What are you going to do with the direct business they have and where does that transition in terms of for you guys?

Warnaco interestingly two years ago when they purchased it did the reverse of what Iconix likes to do and they took a licensing business and tried to transform it into an operating business. OP ironically was one of the original licensed brands over 30 years ago and has today close to 30 licenses in place including 15 international. So our major job with a strong international business is to remonetize the U.S. and our first deal with Warnaco is a great start -- a really phenomenal swimwear company that's going to be our licensee and we're going to build off that. We think it's a wonderful trademark and something that is perfect to join the Iconix portfolio.

How many people are you taking from the brand? You're taking the head of the company -- the head of the division?

We're working with Dick on the transition and Andrew and they really have a phenomenal team out there and we're in the process -- we're going to decide over the next 90 days in working on a transition plan with Warnaco to do what's right for the future. So those details haven't been finished yet.

Okay. What's the share count going to be now after the OP transaction -- well actually not after the OP transaction -- after the Mossimo transaction, what's the share count going to be at year-end?

The share count at the end of the quarter, the actual count at the end of Q3 the weighted average was 44.9 and we issued 3.6 million shares for the Mossimo transaction.

And we obviously can't comment on the year-end share count, but we can only comment on where we are today.

Okay, thank you.

Jeremy Hellman, Thompson Davis.

Just wanted to go back to David's comment about Joe Boxer. Was that correct -- I was trying to keep up with you taking notes -- that over the long-term you expect to be getting over $20 million in royalty payments from Joe Boxer each year?

Jeremy, it's David. We think it's going to take some time. Obviously it's not going to happen next year. But we're excited about Sears. We're having a lot of active conversations with them around the launch next year and we also have a lot of great things going on internationally with Joe Boxer. So we do believe long-term it will get back to where it was.

Okay, good. A couple of my other questions were answered. In terms of the Merrill Lynch financing for Mossimo, can you disclose the terms of that $90 million?

Absolutely. It's actually -- the interest rate is a variable-rate and today it's at 10.5% and it's repayable over 25 months. It's essentially a two-year loan, but it's a (technical difficulty). We have the right to prepay early.

LIBOR prime plus, basically?

Exactly, exactly. And there's no prepayment penalty.

Okay. And then just going to London Fog and OP in general terms, the 7 and $10 million respectively. Am I right to think about those are real baseline numbers and as you get out there and hopefully get traction with new licensing deals that there would be some upside to those numbers potentially?

Yes, very much so. Those are just how we see the minimum going and we've known from experience that often retailers give 50% of what they can do as their minimum. So we see a lot of upside, we're excited about working with the Hudson Bay Corporation. London Fog is an incredibly powerful brand up in Canada which really never has had the peaks and valleys that has happened in the U.S. And we think we're going to be signing over 10 deals with London Fog over the next couple months and the potentials are far above the minimum.

Great. A lot to be excited about. Thanks, guys.

Kevin Foley, Constitution Research.

Just a few things. I just want to clarify -- the OP, that is in next year's guidance that you've given today?

Yes.

And in terms of that '07 guidance, what is the share count assumption for that?

We can't comment on share count for obvious reasons.

Okay. And then just to clarify on what you just said on London Fog and OP. The 7 and the $10 million, those are just contractual minimum guarantees?

Pretty much. Once again, we have to go out -- some of those we have to solidify over the next couple of months, but those are the base asking price or minimums in each of the agreements.

Okay. And then the final question is on the 15 to 20% growth you talked about in EPS committing to, is that just looking at the stable of brands today and saying this is what you can do organically or does that factor in acquiring these brands over time?

It's a combination of both. Looking out past -- obviously we've been growing a lot quicker over the next year or two and it's my belief that we can hopefully keep up this pace because there are so many great opportunities we have. But to conservatively look out into '08 and beyond, especially as our share -- as our revenue base continues to get higher, we put that number out there as a future estimate in '08 and beyond.

Okay, so '08 and beyond. Okay. Great, thank you.

Todd Fernandez, Glass Lewis.

I was just wondering if the Rampage payment -- did that come in this quarter or was that being slated for the next quarter?

Yes, we got the benefit in Q3 of that payment.

So about -- I mean, my estimate is that's about 1Q and kind of the nonrecurring element. So what's the impact there?

Probably after taxes close to $0.02.

Okay. so you got a $0.02 benefit that's nonrecurring which won't come in later quarters. And are you providing a breakdown of the different license revenues for the quarter?

No.

All right, thanks.

Ronald Bookbinder, Sterne Agee.

Did you get any benefit from a reversal on the Bongo Q2 charge or could we possibly see that coming in the fourth quarter?

Hopefully. We're continuing to take a reserve and hopefully we will get the benefit of that. But it did not come in this quarter, the reversal.

Did you take an additional reserve in Q3?

We did. We took a reserve on what we recorded as the receivable in Q3. But we're still confident that the entire amount is collectible. And when and if we do collect it there will be a benefit there, correct.

On the '07 guidance, do you have any -- in the past you've put acquisitions into your out year guidance. Are there any acquisitions in your '07 guidance?

We looked at the pace that we've been doing and when you look at -- we've been that when you do acquisitions especially in year a lot of the benefit comes in the following year. For instance, we're going to get roughly 30 to $40 million of acquisitions that we did in '06 are going to benefit us going into '07. So on top of the 30 to 40 that -- on top of the organic growth we are also projecting somewhere between 20 and $30 million going into '07.

20 to $30 million from unnamed acquisitions or just from the annualization of acquisitions that you've done in the past year?

Ron, it's David. Neil mentioned before we see 30 to 40 flowing into next year from brands that we've acquired in '06. And he's saying that we see an additional 20 to 30 from brands that we will acquire in '07 that will be in our '07 revenue.

Okay. Okay, great. And on the OP acquisition, OP had been working on a line of collegiate cobranded sportswear and swimwear and also an NBA cobranded. The Collegiate line was expected to be really strong. What is happening with those lines? And in the press release it didn't mention a licensee for sportswear at all. Who is going to end up with that or are you looking for someone?

Yes, we're -- in our due diligence we identified numerous candidates and whether it be possibly a direct to retail deal or some wholesalers that are very interested. So we're evaluating different opportunities and as far as the team sports, the NBA deal and the collegiate deal, that's also part of what we're going to be working with Dick and Andrew and trying to determine the future of what works in the Iconix portfolio.

Will that be coming from Warnaco or will Dick be starting up his own line with the collegiate?

Well, we have the option whether we wanted to step into Warnaco's shoes on those deals and we're going to be evaluating that over the next 60 to 90 days whether we want it to go forward within the Iconix portfolio.

Okay. And just -- the secondary. Can you talk at all about the fact that it looks like it's going to be accretive as long as the price is over $15 a share?

No, we can't talk about it. The only thing I can assure everybody is we will continue to evaluate whether it's a good deal for our shareholders and we'll only go forward if it is.

Can you make a comment as to whether or not you would do a deal that's dilutive?

As I said, we're not going to do a deal that's not good for our shareholders.

Okay. Well, it looks like the share count -- the dilution would be far outweighed by the savings on interest. Okay, anyway thank you very much.

(OPERATOR INSTRUCTIONS). Virginia Genereux, Merrill Lynch.

Neil, maybe you can comment on sort of how your acquisition pipeline compares maybe today versus kind of a year ago and maybe a quarter or two ago. And should we still look for you guys to expand beyond the sort of core fashion kind of expertise?

Our acquisition pipeline is -- the word we used I think in the script was robust. We have so many great opportunities and some of them are a lot bigger than what we traditionally have been able to pull the trigger on. So we're pretty excited and I think that we now have -- we really have our choice in some great opportunities and definitely great iconic brands.

As far as continuing to diversify the portfolio, it's definitely something that we plan on doing in '07 and doing a couple of deals outside of the "core fashion categories". And one of the reasons we like OP is because it does have a component in it that's not necessarily fashion being all the skateboards and the surfboard, etc., in sporting goods. But we're definitely going to continue -- we think that this business model works outside of fashion and we're going to go slowly and continue to acquire great iconic brands.

that's great. And Neil, may I ask you, is the pipeline sort of a mix of larger size transactions of kind of -- you've had a couple deals in the $20 million range, OP you're saying is 10, London Fog sort of coming out of the gate zero, but will be $7 million I think you said in the 17, 18 months time range -- a $7 million run rate. Can you characterize the mix of the backlog in terms of maybe large, medium, small targets?

I think there's a little of each. Because of our visibility and what's happened we are being courted in so many deals right now and we're trying to make sure they all fit our formula, that they are iconic brands. And there are a couple of deals that are two or three times the size of what we've ever done and there are also a lot of deals in our 10 to $20 million range. So it's a combination of all and, once again, we're going to be very careful and not do anything that is not -- doesn't fit our expertise and what we feel comfortable with.

Great. And it sounds like it's your expectation that you can bring in another 20 to 30 I think you said in acquired growth is a fairly conservative one?

Yes, very conservative.

Okay, thank you. Congratulations.

Thanks, Virginia.

Jim Chartier, Monness Crespi.

Good morning. Just curious on the timing of the secondary. You guys have consistently said that you thought your stock was undervalued. So I'm wondering why you chose that to be the secondary if there's any influence from the selling shareholders in terms of the timing?

We're unable to comment on anything related to the secondary.

Okay. And then, any thoughts on refinancing debt for Mossimo at a lower interest rate? It seems like that should be -- that license agreement should get you the lowest interest rate possible. So do have any plans in the future to potentially issue debt using that licensing agreement?

As I said, we can't comment on any specifics related around the secondary or anything to do with our capital structure at the moment.

Okay. And then does your guidance for this year include any contribution from Ocean Pacific?

It does include -- in '06?

In '06.

Minimal. Nothing that would move the needle either way.

And then your guidance for next year in terms of earnings looks a little conservative if you expect to add another 20 to $30 million of acquisitions next year. Do you guys have any expenses to build out infrastructure that maybe we're not looking at?

We've been analyzing as our portfolio continues to grow one of the things that people don't realize is all the value that Iconix in working with its licensees do. For instance, we're working with Kohl's on a major fixture program. We're doing a lot of other benefits that we think are going to grow our business long-term. So we did analyze and we are going to be beefing up the infrastructure in various different ways.

But as I believe have mentioned before, we believe that even though we will be investing in the capital structure -- in the infrastructure of the Company in all different areas especially business development around the world internationally, we do see our EBITDA margins continuing to grow because we do have such a scalable, leverageable business model.

And can you give us any idea of where you think those margins would peak out?

Not really at this time because we get so many great opportunities and depending on the size of the deals and I'd rather not comment on that. But we just continue to see improvement as we've been showing.

Okay, thank you.

Thank you, Jim.

Eric Jacobson, Bear Stearns.

My question was what does the balance sheet look like after the Mossimo transaction, cash and debt?

The debt as of September 30th, before the Mossimo transaction, is about $171 million. And giving effect to the Mossimo transaction it becomes about $261 million. In terms of the cash that's acquired, there are some post closing costs that are going to bring down that cash considerably including the Cherokee payment, etc. So we closed yesterday, so I don't have exactly that cash number. But our cash as of September 30th is about $22 million.

Thanks, Warren.

Todd Slater, Lazard Capital.

With respect to the -- back to the third quarter for a second -- you had $22 million in revenue. I'm just wondering if there's any way you can give us a little more color on the performance there? What drove that $4 million sequential increment relative to 2Q? What were some of the key drivers?

I think there was general strength in Rampage and Mudd. I think those are two of the newer brands that started to kick in. And Candie's continued to do well along with Boxer in our minimum. So it's a combination I think mostly looking at that Mudd was a new deal for the Company of size and Rampage last year we did not have in our Q3, we closed that deal in September.

Got it. So Rampage and Mudd were primarily -- whatever numbers we might have had, if there was upside those could have been two possible areas.

Correct.

Thanks very much.

At this time, gentlemen, you have no further questions.

Okay. Once again, I'd just like to thank everyone for their interest. We at Iconix are obviously very excited and proud of what we've begun to build. We think we have this incredible opportunity with this business model that we think, as I mentioned before, we've kind of scratched the surface.

Today -- or I shouldn't say today, hopefully in the next week we will own nine iconic consumer brands, we'll have over 110 licensees worldwide including licensees such as Target and Kohl's Department Store and Sear's Holding and the Hudson Bay Corporation. And once again, we're excited about what we've accomplished, but we think it's beginning. Thank you all for your interest in listening and we'll talk to you soon.

Thank you for your participation in today's conference. This now concludes the presentation. You may disconnect. Have a great day.