SEQUENTIAL BRANDS GROUP, INC.

CIK:0000791770|SEC Filings

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Net revenue	$ 22,981	$ 10,000	$ 56,833	$ 23,265
Operating expenses	9,960	11,015	30,561	21,200
Income (loss) from operations	13,021	(1,015)	26,272	2,065
Other income	0	4	700	5
Interest expense	6,210	3,859	17,162	6,361
Income (loss) before income taxes	6,811	(4,870)	9,810	(4,291)
Provision for (benefit from) income taxes	2,460	(7,603)	3,348	(7,357)
Consolidated net income	4,351	2,733	6,462	3,066
Net income attributable to noncontrolling interest	(1,623)	(88)	(3,617)	(285)
Net income attributable to Sequential Brands Group, Inc. and Subsidiaries	$ 2,728	$ 2,645	$ 2,845	$ 2,781
Earnings per share attributable to Sequential Brands Group, Inc. and Subsidiaries:
Basic (in dollar per share)	$ 0.07	$ 0.08	$ 0.07	$ 0.10
Diluted (in dollar per share)	$ 0.06	$ 0.08	$ 0.07	$ 0.10
Weighted-average common shares outstanding:
Basic (in shares)	39,781,868	31,742,991	39,384,090	27,213,730
Diluted (in shares)	42,106,056	34,424,323	41,639,135	29,284,602

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Consolidated net income	$ 6,462	$ 3,066
Adjustments to reconcile consolidated net income to net cash provided by (used in) operating activities:
Provision for bad debts	126	75
Depreciation and amortization	1,255	750
Stock-based compensation	5,647	1,620
Amortization of debt discount and deferred financing costs	3,169	2,117
Gain on sale of trademark	(700)	0
Disposal of assets not placed into use	0	900
Deferred income taxes	2,712	(7,356)
Changes in operating assets and liabilities:
Receivables	(6,155)	(3,053)
Prepaid expenses and other assets	2,528	292
Accounts payable and accrued expenses	(1,833)	(2,073)
Deferred license revenue	76	(1,229)
Other liabilities	37	(458)
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES FROM CONTINUING OPERATIONS	13,324	(5,349)
CASH USED IN OPERATING ACTIVITIES FROM DISCONTINUED OPERATIONS	(211)	(899)
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	13,113	(6,248)
CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid for acquisitions, net of cash acquired	(190,417)	(107,079)
Acquisition of intangible assets	(350)	(436)
Acquisition of property and equipment	(878)	(989)
Acquisition of available-for-sale securities	(12,048)	0
Proceeds from sale of trademark	140	0
CASH USED IN INVESTING ACTIVITIES	(203,553)	(108,504)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from term loan and revolver	205,679	180,000
Proceeds from the sale of common stock	10,000	0
Proceeds from options exercised	710	417
Proceeds from warrants exercised	223	0
Stock registration costs	(1,330)	0
Repayment of term loan and revolver	(11,679)	(59,000)
Deferred financing costs	(4,927)	(4,738)
Repurchase of common stock	(837)	0
Noncontrolling interest distribution	(1,633)	0
CASH PROVIDED BY FINANCING ACTIVITIES	196,206	116,679
NET INCREASE IN CASH	5,766	1,927
CASH - Beginning of period	22,521	25,125
CASH - End of period	28,287	27,052
Cash paid during the periods for:
Interest	13,584	4,144
Taxes	994	335
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Common stock issued in connection with acquisitions	1,295	183,975
Noncontrolling interest recorded in connection with acquisition	65,094	0
Receivable for sale of trademark	560	0
Guaranteed contractual payments recorded on acquisitions	3,648	0
Debt discount recorded on sale of common stock to debtholders	$ 1,496	$ 0

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Current Assets:
Cash	$ 28,287	$ 22,521
Accounts receivable, net	21,489	15,720
Available-for-sale securities	11,107	0
Prepaid expenses and other current assets	3,302	5,681
Current assets held for disposition from discontinued operations of wholesale business	123	162
Total current assets	64,308	44,084
Property and equipment, net	2,710	2,255
Intangible assets, net	558,552	303,039
Goodwill	174,246	169,786
Other assets	9,650	7,199
Total assets	809,466	526,363
Current Liabilities:
Accounts payable and accrued expenses	7,097	6,691
Deferred license revenue	470	394
Long-term debt, current portion	16,000	13,253
Current liabilities held for disposition from discontinued operations of wholesale business	0	236
Total current liabilities	23,567	20,574
Long-Term Liabilities:
Long-term debt	352,026	162,247
Deferred tax liability	79,768	77,056
Other long-term liabilities	2,411	886
Long-term liabilities held for disposition from discontinued operations of wholesale business	686	700
Total long-term liabilities	434,891	240,889
Total liabilities	$ 458,458	$ 261,463
Commitments and Contingencies
Equity:
Preferred stock Series A, $0.001 par value, 19,400 shares authorized; none issued and outstanding at September 30, 2015 and December 31, 2014	$ 0	$ 0
Common stock, $0.001 par value, 150,000,000 shares authorized; 41,324,112 and 39,694,117 shares issued at September 30, 2015 and December 31, 2014, respectively, 40,768,676 and 39,300,580 shares outstanding at September 30, 2015 and December 31, 2014, respectively	41	39
Additional paid-in capital	313,758	295,719
Accumulated other comprehensive loss	(1,055)	(36)
Accumulated deficit	(33,114)	(35,959)
Treasury stock, at cost; 278,809 and 197,784 shares at September 30, 2015 and December 31, 2014, respectively	(2,480)	(1,643)
Total Sequential Brands Group, Inc. and Subsidiaries stockholders’ equity	277,150	258,120
Noncontrolling interest	73,858	6,780
Total equity	351,008	264,900
Total liabilities and equity	$ 809,466	$ 526,363