0001193125-16-679230.txt : 20161206 0001193125-16-679230.hdr.sgml : 20161206 20160811150956 ACCESSION NUMBER: 0001193125-16-679230 CONFORMED SUBMISSION TYPE: CORRESP PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20160811 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ICONIX BRAND GROUP, INC. CENTRAL INDEX KEY: 0000857737 STANDARD INDUSTRIAL CLASSIFICATION: FOOTWEAR, (NO RUBBER) [3140] IRS NUMBER: 112481903 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: CORRESP BUSINESS ADDRESS: STREET 1: 1450 BROADWAY, 4TH FL CITY: NEW YORK STATE: NY ZIP: 10018 BUSINESS PHONE: 212-730-0030 MAIL ADDRESS: STREET 1: 1450 BROADWAY, 4TH FL CITY: NEW YORK STATE: NY ZIP: 10018 FORMER COMPANY: FORMER CONFORMED NAME: CANDIES INC DATE OF NAME CHANGE: 19930604 FORMER COMPANY: FORMER CONFORMED NAME: MILLFELD TRADING CO INC DATE OF NAME CHANGE: 19920703 CORRESP 1 filename1.htm CORRESP

August 11, 2016

Via EDGAR

Mr. Craig Arakawa

Accounting Branch Chief

Office of Beverages, Apparel, and Mining

United States Securities and Exchange Commission

Division of Corporate Finance

Washington, D.C. 20549-7010

 

  Re: Iconix Brand Group, Inc. (the “Company,” “Iconix,” “we,” “us” or “our”)

Form 10-K for the Year Ended December 31, 2015

Amendment No. 1 to Form 10-K for the Year Ended December 31, 2015

File No. 001-10593

Dear Mr. Arakawa:

This letter is in response to the Staff’s oral request, made during a call on July 14, 2016, for additional information relating to the Company’s recent correspondence to the Staff dated June 29, 2016. The aforementioned additional information has been included as an Appendix to this letter.

*****

 

Sincerely,

/s/ David K. Jones

David K. Jones
Chief Financial Officer

 

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cc: Myra Moosariparambil

Brian Snyderman

BDO USA, LLP; attn: Natalie Kotlyar

BDO USA, LLP National Office

 

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APPENDIX

Put Option Summary for Joint Ventures

(dollar amounts in thousands)

 

                                      Accretion ($)  
                                      2013     2014     2015  

Joint Ventures

   Formation
Date		   Put Option
Value at
Inception (1)		     Projected Royalty
(2)		     FMV Put
Option (3)		     Variance (Total
Accretion) (4)		     Duration
(5)		     Q4     FY     Q1     Q2     Q3     Q4     FY     Q1     Q2     Q3     Q4     FY  
        ($)     ($)     ($)     ($)     (yrs)                                                                          

SE Asia (original) (b)

   Oct-2013     10,000        5,628        15,477        5,477        4.99        256        256        271        274        277        277        1,098        271        274        277        277        1,098   

SE Asia II - Korea (b)

   Jun-2014       2,441        6,712        6,712                             

SE Asia II - Europe (b)

   Jun-2014       4,870        13,393        13,393                             
   

 

 

    

 

 

    

 

 

    

 

 

                            

SE Asia II - Total (b)

   Jun-2014     10,554        7,311        20,105        9,551        4.26        —          —          —          6        565        565        1,137        553        559        565        565        2,243   

SEA III - China (b)

   Sep-2014     21,500        7,474        20,553        (947 )      5.00        —          —          —          —          (7 )      (48 )      (55 )      (47 )      (47 )      (48 )      (48 )      (189 ) 

MENA

   Dec-2014     15,208        7,296        20,064        4,856        4.99        —          —          —          —          —          21        21        240        243        245        245        973   

LC Partners (a)

  Mar-2014     4,000        20,000        10,000        6,000        5.77        —          —          11        259        262        262        795        257        259        262        262        1,040   

Iconix Europe

   Jan-2014     13,508        6,214        17,088        3,580        5.00            179        179        179        179        716        179        179        179        179        716   

 

(a) Projections listed are projected wholesale sales, which are used to determine the put value.
(b) SE Asia was formed in October 2013. Subsequent to formation, in June 2014, SE Asia purchased certain Korean and European trademarks from the Company. In September 2014, SE Asia purchased certain Chinese trademarks from the Company. The put options enumerated above are all part of the SE Asia joint venture and therefore all accretion is considered aggregated.

 

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(1) The fair value of the put option at the time of additional investment and grant date of the put option. As the put option is for the entire minority interest, the fair value of the put option equals the value of the minority interest at the time of the joint venture formation or the grant date of the put option.
(2) Projected royalties for the joint venture (as of the most recent fiscal quarter); used as an input in the calculation of the fair value of the put option, in accordance with the joint venture shareholder/operating agreement.
(3) Fair market value (“FMV”) of the put option; calculated using the formula provided by the joint venture shareholder/operating agreement, as disclosed in our form 10-K for the year ended December 31, 2015. The inputs used, including the ‘Projected Royalties’ and multiple stipulated in the shareholder/operating agreement, are reassessed for reasonableness every quarterly period. As an example, Iconix Europe is calculated as follows: ‘Agreed Value-Five-Year Put/Call: (i) (x) percentage of Iconix Europe owned by GBG, multiplied by (y) 5.5, multiplied by (z) the greater of aggregate royalty generated by Iconix Europe for the year ended December 31, 2013 and the year ended December 31, 2018; plus (ii) percentage of Iconix Europe owned by GBG multiplied by the aggregate amount of cash in Iconix Europe which is available for distribution to the members.’ -

 

Projected Royalty

      6,214   

Multiple

      5.5   
  

 

 

  
     34,176   

GBG Ownership Interest

      50 % 
  

 

 

  

FMV of Put Option

      17,088   
  

 

 

  

Note that we excluded the amount of cash in Iconix Europe as an input as it is assumed that distributions would have been made prior to exercising the put.

 

(4) The difference between the projected ‘FMV Put Option’ and the ‘Put Option Value at Inception’.
(5) The number of years between the formation of the joint venture and when the put option becomes exercisable.

 

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