8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15 (d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 27, 2006

ICONIX BRAND GROUP, INC.

(Exact name of registrant as specified in its charter)

Delaware	0-10593	11-2481093
(State or Other	(Commission	(IRS Employer
Jurisdiction of Incorporation)	File Number)	Identification No.)

1450 Broadway, New York, NY	10018
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code(212) 730-0030

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01   Entry into a Definitive Material Agreement

On October 27, 2006, Iconix Brand Group, Inc. (the “Company”) entered into an amendment to its employment agreement dated as of February 14, 2005, with its Chief Financial Officer, Warren Clamen (the “Original Agreement”), which extends the date of the term of his employment with the Company until October 27, 2008. The amendment also provides for him to receive an annual base salary of $275,000 for the period from October 27, 2006 through October 26, 2007 and $300,000 for the balance of the extended term. Pursuant to the amendment and a related restricted stock agreement, the Company also awarded to Mr. Clamen 10,971 shares of its restricted common stock which vest as to one-half (1/2) of such shares on October 27, 2007 and the remaining one-half (1/2) of such shares on October 27, 2008, subject to acceleration or forfeiture under certain conditions. The amendment also provides that Mr. Clamen will receive additional compensation in the event that, within twelve months of a “change of control” (as defined in the amendment), Mr. Clamen’s employment is terminated by the Company without cause. All other material terms of the Original Agreement remained unchanged.

The description of the amendment to the Original Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of such document, which is filed an exhibit to this report and incorporated herein by reference.

Item 2.02   Results of Operations and Financial Condition

On November 1, 2006 the Company issued a press release announcing its financial results for the three and nine months ended September 30, 2006. A copy of the Company’s press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Item 9.01   Financial Statements and Exhibits

(d) Exhibits.

Exhibit 10.1*	Amendment dated October 27, 2006 to the Employment Agreement dated as of February 14, 2005 between the Iconix Brand Group, Inc. and Warren Clamen.
Exhibit 99.1+	Press release of Iconix Brand Group, Inc. dated November 1, 2006.

_______

*Denotes management compensatory plan or arrangement.

+This exhibit is furnished pursuant to Item 2.02, is not to be considered "filed" under the Securities Exchange Act of 1934, as amended ("Exchange Act"), and shall not be incorporated by reference into any of the Company's previous or future filings under the Securities Act of 1933, as amended, or the Exchange Act.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

ICONIX BRAND GROUP, INC.
(Registrant)
By	/s/ Neil Cole
	Neil Cole
	Chief Executive Officer

Date: November 2, 2006

-2-

EXHIBIT INDEX

Exhibit No.	Description of Exhibit
Exhibit 10.1	Amendment dated October 27, 2006 to the Employment Agreement dated as of February 14, 2005 between the Iconix Brand Group, Inc. and Warren Clamen.
Exhibit 99.1	Press release of Iconix Brand Group, Inc. dated November 1, 2006.

EX-10.1

EXHIBIT 10.1

AMENDMENT TO EMPLOYMENT AGREEMENT

AMENDMENT dated as of October 27, 2006 (the “Amendment”) to the Employment Agreement dated as of February 14, 2005 (the “Original Agreement”) between Iconix Brand Group, Inc. (the “Company” or “Employer”) and Warren Clamen (the “Employee”).

WHEREAS, the Company and the Employee wish, among other things, to continue the Employee’s employment with the Company beyond the term currently provided by the Original Agreement pursuant to the terms as provided herein;

NOW, THEREFORE, in consideration with the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Employer and Employee hereby agree that the following sections of the Original Agreement are hereby amended as follows:

1.      The Term, as defined in Section 3, shall be two years from the date hereof and end on the October 27, 2008.

2.      The compensation provisions of Section 4 shall be modified to read that the “Company shall pay to the Employee an annual salary of $275,000 for the first year of the Term and of $300,000 for the second year of the Term paid in accordance with the Company’s payroll practices and procedures in effect.”

3.      The compensation provisions of Section 4 shall be further modified to add the following sentence at the end:

“The Company shall issue to the Employee that number of shares of restricted stock under the Company’s 2006 Equity Incentive Plan equal to $200,000, calculated using the closing price of the stock on October 27, 2006, subject to restrictions on the full enjoyment of such shares as set forth a separate restricted stock agreement, such restrictions to lapse with respect to one-half (½) of such shares on October 27, 2007, and with respect to one-half (½) of such shares on October 27, 2008, in accordance with the terms and conditions of the Restricted Stock Agreement.”

4.      Section 9 shall be deleted and replaced with the following:

“If the Company terminates your employment without cause within 12 months after a Change in Control (as defined in herein), then the Company shall pay to you in complete satisfaction of its obligations under this Agreement, as severance pay and as liquidated damages (because actual damages are difficult to ascertain), in a lump sum, in cash, within 15 days after the date of your termination, an amount equal to $100 less than three times your “annualized includable compensation for the base period” (as defined in Section 280G of the Internal Revenue Code of 1986); provided, however, that if such lump sum severance payment, either alone or together with other payments or benefits, either cash or non-cash, that you have the right to receive from the Company, including, but not limited to, accelerated vesting or payment of any deferred compensation, options,

EXHIBIT 10.1

stock appreciation rights or any benefits payable to you under any plan for the benefit of employees, which would constitute an “excess parachute payment” (as defined in Section 280G of the Internal Revenue Code of 1986), then such lump sum severance payment or other benefit shall be reduced to the largest amount that will not result in receipt by you of a parachute payment. A “Change in Control” shall mean any of the following:

(1)      any consolidation or merger of the Company in which the Company is not the continuing or surviving corporation or pursuant to which shares of the Company’s common stock would be converted into cash, securities or other property, other than a merger of the Company in which the holders of the Company common stock immediately prior to the merger have the same proportionate ownership of common stock of the surviving corporation immediately after the merger;

(2)      any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company;

(3)      any approval by the stockholders of the Company of any plan or proposal for the liquidation or dissolution of the Company.”

Other than as specifically amended hereby, the Original Agreement shall remain in full force and effect unamended by this Amendment.

IN WITNESS WHEREOF, the Company and Employee have executed this agreement as of the date above written.

ICONIX BRAND GROUP, INC.
By:	/s/ Neil Cole	/s/ Warren Clamen
		WARREN CLAMEN

EX-99.1

EXHIBIT 99.1

FOR IMMEDIATE RELEASE:

ICONIX BRAND GROUP REPORTS RECORD EARNINGS FOR THIRD QUARTER 2006

·      Licensing revenue $22.1 million versus $9.2 million in prior year quarter

·      Fully diluted EPS of $0.18 versus $0.14 in prior year quarter

·      Company gives 2007 guidance of $0.87 - $0.92 per fully diluted share

·      Company updates 2006 earnings per share guidance

NEW YORK, November 1, 2006 - Iconix Brand Group, Inc. (NASDAQ: ICON) (“Iconix” or the “Company”), today announced financial results for the third quarter and nine months ended September 30, 2006.

Third Quarter ended September 30,2006

Licensing revenue for the quarter increased to approximately $22.1 million, as compared to $9.2 million in the third quarter of last year. The Company reported fully diluted earnings per share of $0.18 for the quarter versus $0.14 for the prior year quarter. The current quarter was the Company’s first fully taxed quarter as a brand management business, as compared to its third quarter earnings per share of $0.14 in the third quarter of last year which was inclusive of a net non-cash tax benefit of approximately $0.04 per share. Pre-tax income for the 2006 quarter was approximately $12.2 million versus approximately $3.8 million in the prior year quarter. Fully-taxed net income for the 2006 quarter was approximately $7.9 million versus $5.2 million in the third quarter of last year which included a $1.4 million net non cash tax benefit. EBITDA for the 2006 quarter was approximately $16.0 million versus approximately $5.3 million last year and free cash flow for the 2006 quarter was approximately $13.3 million versus approximately $4.1 million last year.

Nine months ended September 30, 2006:

For the nine months ended September 30, 2006 licensing revenue was approximately $53.8 million compared to approximately $17.8 million in the prior year nine month period. Fully diluted earnings per share were $0.54 for the 2006 period versus $0.26 in the prior year nine month period and net income was approximately $23.6 million versus approximately $8.5 million in the prior year nine month period. EBITDA for the nine months ended September 30, 2006 was approximately $35.8 million compared to approximately $8.4 million in the prior year nine month period, and free cash flow was approximately $28.7 million compared to approximately $6.6 million in the prior year nine month period.

Other Developments:

In a separate press release last night the Company announced that it has entered into a definitive agreement with Warnaco Group Inc. and Ocean Pacific Apparel Corp. to purchase the brand Ocean Pacific, (“OP”). In a separate release today the Company announced that it has completed its merger with Mossimo Inc.

Neil Cole, Chairman and CEO of Iconix commented, “I am pleased with our third quarter financial results, especially with the strength of our core brands and their continued growth. Despite being impacted by the delay in closing the Mossimo merger and it being our first fully taxed quarter, we delivered substantial year-over-year increases, reinforcing the scalability and leverage of our business model. I am excited about adding the Mossimo and OP brands to our growing portfolio. With these two additions Iconix will own nine powerful brands all with strong potential for organic growth both in the U.S. and around the world. Our pipeline of potential future acquisitions is stronger than ever as I believe our unique business model and successful execution has positioned us as the acquirer of choice.”

2006 Guidance:

Based primarily on the delay in closing the Mossimo acquisition the Company is updating its range of EPS guidance for 2006 to $0.70 - $0.73 per fully diluted share. Previous guidance was for EPS in a range of $0.70 to $0.80 cents per share.

2007 Guidance:

The Company is issuing guidance for the full year 2007 of fully diluted and fully taxed earnings per share in a range of $0.87 - $0.92.

Iconix Brand Group Inc. (Nasdaq: ICON - News) owns, licenses and markets a growing portfolio of consumer brands including CANDIE'S ®, BONGO ®, BADGLEY MISCHKA ®, JOE BOXER ® RAMPAGE ® MUDD ®, LONDON FOG ® and MOSSIMO ®. The Company has also entered into a definitive agreement to purchase the brand OCEAN PACIFIC ®. The Company licenses its brands to a network of leading retailers and manufacturers that touch every major segment of retail distribution from the luxury market to the mass market in both the U.S. and around the world. Iconix, through its in-house advertising, promotion and public relations agency, markets its brands to continually drive greater consumer awareness and equity.

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, uncertainties 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 ability 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 customer plans and commitments, the ability of licensees to successfully market and sell branded products, competition, uncertainties relating to economic conditions in the markets in which the Company operates, the ability to hire and retain key personnel, the ability to obtain capital if required, the risks of litigation and regulatory proceedings, the risks of uncertainty of trademark protection, the uncertainty of marketing and licensing acquired trademarks and other risks 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.

Contact:	David Conn
	Executive Vice President
	Iconix Brand Group
	212.730.0030
	Joseph Teklits
	Integrated Corporate Relations
	203.682.8200

Iconix Brand Group, Inc. and Subsidiaries

Condensed Consolidated Income Statements - (Unaudited)

(in thousands, except earnings per share data)

		Three Months Ended Sept 30,					Nine Months Ended Sept 30,
		2006		2005			2006		2005
Licensing and commission revenue	$	22,113	$	9,205		$	53,791	$	17,792
Selling, general and administrative expenses		6,072		3,868			17,572		9,385
Special charges		632		289			1,900		996
Operating income		15,409		5,048			34,319		7,411
Other expenses:
Interest expense - net		3,164		1,289			7,991		2,134
Income before income taxes		12,245		3,759			26,328		5,277
Income taxes (benefits)		4,299		(1,400	)		2,680		(3,180	)
Net income	$	7,946	$	5,159		$	23,648	$	8,457
Earnings per share:
Basic	$	0.20	$	0.16		$	0.62	$	0.28
Diluted	$	0.18	$	0.14		$	0.54	$	0.26
Weighted average number of common shares outstanding:
Basic		39,782		32,501			38,075		29,859
Diluted		44,818		36,654			43,469		33,071

Selected Balance Sheet Items:		9/30/2006		12/31/2005
		(Unaudited)		(Audited)
Total Assets	$	383,564	$	217,244
Total Liabilities	$	192,549	$	116,348
Stockholders' Equity	$	191,015	$	100,896

The following table details unaudited reconciliations from non-GAAP amounts to U.S. GAAP and effects of these items:

(in thousands)

		Three Months Ended				Nine Months Ended
		Sept 30,		Sept 30		Sept 30,		Sept 30
		2006		2005		2006		2005
EBITDA (1)	$	16,014	$	5,297	$	35,841	$	8,422
Reconciliation of EBITDA:
Operating income		15,409		5,048		34,319		7,411
Add: Depreciation and amortization of certain intangibles		605		249		1,522		1,011
EBITDA	$	16,014	$	5,297	$	35,841	$	8,422

(1) EBITDA, a non-GAAP financial measure, represents income from operations before interest, income taxes, depreciation and amortization expenses. The Company believes EBITDA provides additional information for determining its ability to meet future debt service requirements, investing and capital expenditures.

Free Cash Flow (2)	$	13,297	$	4,095		$	28,658	$	6,631
Reconciliation of Free Cash Flow:
Net income	$	7,946	$	5,159		$	23,648	$	8,457
Add: Depreciation, amortization of intangibles and           deferred financing costs and the change in
the reserve for accounts receivable		1,056		362			2,892		1,380
Add: Non-cash income taxes (benefits)		4,299		(1,400	)		2,680		(3,180	)
Less: Capital expenditures		4		26			562		26
Free Cash Flow	$	13,297	$	4,095		$	28,658	$	6,631

(2) Free Cash Flow, a non-GAAP financial measure, represents net income before depreciation, amortization, the change in the reserve for accounts receivable and excluding non-cash income taxes (benefits) and capital expenditures. The Company believes Free Cash Flow is useful for evaluating our financial condition because it represents the amount of cash generated from the operations that is available for repaying debt and investing.