Good day, ladies and gentlemen, and welcome to Iconix Brand group’s first quarter 2009 Earnings Call. On the call today, we have Neil Cole, Chairman and Chief Executive of Iconix, and Warren Clamen, Chief Financial Officer. Before we begin, I would like to read the Safe Harbor. The statements that are not historical facts contained in this conference call are forward-looking statements that involve a number of 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. This may cause the actual results, performance, or achievements of the company to be materially different from the results, performance, or achievements expressed or implied by such forward-looking statements. The word believes, anticipates, expects, confident, and similar expressions identify forward-looking statements. Listeners 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 call over to Mr. Warren Clamen, Chief Financial Officer. Please proceed, sir.

Good morning, everyone, and welcome to the Iconix Brand Group first quarter 2009 earnings conference call. Following a tough holiday season, sales trends improved in February and March, and several of our brands ended up exceeding our expectations, which translated into better than expected earnings in the quarter. At the beginning of this year, we implemented an initiative to reduce our overhead cost structure. And as a result, our first quarter EBITDA margins increased to approximately 72%. We expect similar results for the entire year and are forecasting 2009 EBITDA margins to be similar to this quarter. Total net cost savings for the full-year compared to the full-year of 2008 should be approximately $14 million before taxes and approximately 60% of those savings will come from SG&A and the balance 40% will be related to interests. Reviewing our results for the first quarter ended March 31, 2009, revenue was approximately $50.5 million, a 9% decrease as compared to approximately $55.7 million in the prior-year quarter. As we stated on our last earnings call, this decline primarily relates to our Mudd brand, which has been, for the most part, taken out of the market for the first half of 2009 as we transition it into an exclusive direct-to-retail brand at Kohl’s. EBITDA in the first quarter was approximately $36.3 million, a 6% decrease as compared to $38.8 million in the prior-year quarter. Our EBITDA margin improvement of approximately 230 basis points to 72%, reflects a 16% quarter-over-quarter decline in overall SG&A expense, which is a direct result of our cost-cutting initiatives, and demonstrates our ability to leverage our existing infrastructure. On a non-GAAP basis, which excludes non-cash interest related to the adoption of the new accounting treatment for convertible debt, net income declined 4% to approximately $17.6 million as compared to…

Thank you, Warren. Good morning, everyone. I'm pleased with our performance this quarter, and believe our ability to deliver solid results speaks to the viability of our business model and the strength of our brands. Even in the current economic environment, many of our brands have gained market share, as we continue to provide great marketing support and partner with leading retailers and wholesale licensees that have the capacity to drive significant volume. Iconix is now recognized as the second largest licensing company in the world by Global License Magazine, as our brands generated over 6.5 billion in annual retail sales in 2008. We anticipate our sales at retail to increase to approximately $8 billion in 2009 as we rollout new programs at retailers such as Wal-Mart, Kohl’s, and Costco. We continue to be optimistic about our direct-to-retail partnerships. These win-win relationships provide the retailer with the ability to leverage national brands at great economics. And in return, our brands receive premium shelf space, signage and placement, and marketing materials. We recently signed our 15th direct-to-retail agreement with Costco for our Charisma brand, and will continue to look to partner our brands with the best-of-breed and retailers around the world. We are excited about the progress we are making with our three direct-to-retail brands at Wal-Mart, Danskin Now, Starter, and OP. Danskin Now was featured in the hotspot of the four in January for Fitness Month, prompting a dramatic increase in sales, and we are pleased to say the momentum has continued throughout April. The transition of the Men’s athletic pants at Starter began in February, and additional categories such as hosiery and shoes will be converted to Starter throughout the year. As the anchor athletic brands at Wal-Mart, which is crossing over 140 million customers a week, we expect…

(Operator Instructions) Your first question comes from the line of Todd Slater with Lazard Capital Markets. Please proceed.

I was wondering if you could just talk about the environment to finance larger transactions, because right now your cost of debt is under 4%, so how high can that go for a large deal to make financial sense?

Hi, Todd, it’s Warren. I think we’re seeing improvements in the markets. I mean, deals are getting done and improved pricing over the last 30, 60 days, even in the last two weeks. Deals are getting done at all levels from B to AAA and different areas of the markets are opening. So we think that we could get deals done. We’re looking at different ways. We’re looking at all different venues from the capital markets, but we do feel confident.

And also, I’m going to just add, the lower matrixes in purchase price we think will more than offset the higher interest rates, where it will definitely be higher than the three or four, but we believe that economics are still going to be pretty strong.

Okay. Well, that’s a good segue way to the Ed Hardy deal, which kind of breaks tradition a little bit in that you’re only buying half of it and the business is still quite robust, and typically you’ve bought brands sort of on the downturn. And it’s a lower multiple, obviously, than you’ve paid. Can you just talk a little bit more about how your acquisition strategy is evolving and why you only put one leg in the water here?

It was the opportunity that was presented to us. We’re working with the original founder, Don Ed Hardy, the owner of the mark who licensed it to the Christian Audigier Company. Ed was looking to diversify and he had numerous partners that wanted to sell half the business. Looked at the business; obviously, we would have loved to own 100%, but we also think keeping Ed around will help us possibly with other branding opportunities and helping to exploit the brand further. So, while it was only half – 50%, we just thought it was a great mix and a great brand to add to the portfolio.

Okay. You said you see Danskin and Starter exceeding $1 billion. Was that this year, number one? And does that assume that it extends into the other Wal-Mart countries?

Yes.

How have the other properties performed at Wal-Mart relative to plan?

We said basically over the next couple of years, not this year. What’s a little unique about both Danskin and Starter, today, they’re both one gender, where Danskin now handles the female side and Starter handles the male side. So we see that taking a couple of years and in a lot of countries. And we’re starting to expand. We’re in discussions with pretty much most of the countries worldwide with Wal-Mart about expanding all three brands. Op is definitely ahead internationally than Starter and Danskin Now. But some of the other exciting things that have happened with Wal-Mart is we’re getting a lot of category expansion. For instance, Starter is going to be going into inflatable balls and Op has got beach bikes and beach chairs and towels. Danskin Now has a wide range of fitness equipment. So we’re starting to leverage the brand across different areas of the store, so we’re pretty excited. Also, last week, Op rolled out the hot spot when you walk into a Wal-Mart and it’s really incredible. So I encourage everyone to go check it out. But we’re really excited about how Wal-Mart has executed all three brands. Great value and the way they’ve displays, it’s pretty exciting.

Have the three been hitting or beating plan?

Yes, all three have been exceeding our expectations.

Your next question comes from the line of Omar Saad with Credit Suisse. Please proceed.

Hi everyone. This is Spencer Hill at Credit Suisse on Omar Saad’s team. Good morning.

Good morning.

We were hoping to discuss any plans or opportunities to expand this Ed Hardy distribution, both domestically and internationally and any potential new licenses on the category side?

Two new. We have to definitely talk to Christian and his team and look at all the different opportunities with Ed. And I think it’s going to take us a couple of months to get up to speed on the brand and before we could evaluate the future.

Great, thanks. And then with regards to just ad spend, the 1 billion free impressions on the Candie’s campaign is great. Could you talk just about the dollar ad spend and how that trended during the quarter?

Pretty much to last year, we’re pretty much – I think the quarters will come in pretty even with the ad spend that we did last year. But what’s wonderful also about – when you get a star like Britney Spears, those 1 billion impressions were on all the blogs and the Internet. And there’s this whole new way of marketing where you can make your dollars go really far by getting great celebrities and this viral marketing. And that’s something I think you’ll see that we do with all our brands. Also we great partnerships with the stores, Kohl’s, the cover of the Kohl’s catalog gets hundreds of millions of impressions also as it hits every newspaper across this country. So, by working with the stores and by doing viral marketing, we’re leveraging our ad campaign, which is, I think we estimate around $25 million.

Your next question comes from the line of Jeff Klinefelter with Piper Jaffray. Please proceed.

Hi, just a couple of quick questions guys. First on Ed Hardy. Interesting investment or acquisition, I was just curious what the licensing revenues were last year? Like what is forecast to be performance wise ‘09 versus ‘08. And then also just, Neil, in terms of future growth opportunities, the value that you guys are bringing, is it additional channels of distribution for the product? Is it a different way of marketing it? How do you see the partnership working?

The brand grew pretty strong last year I think it's somewhere around between 10 and 20% and we are hoping that growth continues. The first quarter was about 25% from last year. And once again, a little too early, need to get involved and understand the brands and look at what Ed Hardy himself and Christian and the plans going forward before I can opine on future direction.

Okay. And then one other question on your expenses. What are the thoughts in terms of the sort of sustainable run rate now of the expense reductions that you put in place, I mean, how much of this is temporary or volume based? How much of it’s going to ramp back up again as the retail environment improves?

Hey, it’s Warren Clamen. No, I think that it’s pretty sustainable. We're projecting our EBITDA margins to sustain. I don’t think anything in the expense categories are going to ramp up. I think you can take Q1 as our barometer for the rest of the year.

So in terms of advertising, can you remind us again what percent of your SG&A is advertising costs, this year in Q1 versus last year and Q1 and I think you started ramping that up last year starting the second quarter. And how are we going to annualize those increases?

Advertising is about a third of our SG&A. Usually Q2 and Q3 are slightly higher than Q1, but overall, it’s about 50/50 first half, second half.

Your next question comes from the line of Eric Beder with Brean Murray. Please proceed.

Could you talk a little bit about how Rocawear is doing?

Rocawear is doing really, really well. Number one brand at Macy's by far double digits sales increase to both planned and last year. Somewhat miraculously, [Jay] and his team have really hit it right on the product. And they're definitely leading the path by far in that street wear business.

Okay. You've given kind of the thoughts about changing the revenue numbers. What are the drivers this year in terms of you raising your guidance for revenue this year?

It's really the three Wal-Mart brands are a key part. Also Candie’s. Candie’s organically we thought was going to be planned down and what happen when Britney came around, Kohl’s got really energize and quite honestly, before Britney we’re trading to be up already this year, had a really good last four to six weeks and our plan to be very strong in the fall. So it’s a combination of Wal-Mart and Candie’s and the three Macy's brands are all ahead of plan, Rocawear, Rampage, and London Fog.

The next question comes from the line of [John Connery] with Barclays Capital. Please proceed.

Hey, just a couple of quick questions. Trying to reconcile the EPS and the net income, what share count are you guys using for the full-year?

About 62 million for the full year weighted average.

62 for the full year? Okay.

Yes.

And the other question was do you have an updated door count for the three Wal-Mart brands, any general numbers been drawn on that?

It’s all doors, all three brands in USA and now we have with Op all doors in both Mexico and Canada. And we're starting to move into Argentina and there's Starter product in Canada so far.

Actually the last one was, do you have any plans at Costco, are there any plans for expansion into any new categories?

Yes, well, Charisma, we're pretty excited about that deal to be doing business with Costco. I think, just big opportunity and they're pretty much doing it throughout the home business. So there's a big potential there. But it’s great to finally be doing it direct-to-retail with one of the strong players in the club business.

Your next question comes from the line of Mimi Bartow with Telsey Advisory Group. Please proceed.

Hey, guys, thanks. Great quarter. A couple of questions, I know you talked about the upside on the revenues. Are you still modeling kind of five to 10% down across even the majority of the other brands and does that include Rocawear at down 10% still?

No. We’ve adjusted with what happened in the first quarter and trends that are happening throughout April. Where, as I mentioned Candie’s is now – we're planning to be up for the year based on what’s happening there with Kohl's and the same thing with a lot of the Macy’s brands that are sold in that channel. So we readjusted the guidance and to readjust to the new guidance that we put out this morning.

Okay. And then so the other brands, excluding those that would fall under that umbrella, does that assume that kind of similar decline then?

Sure. I mean, when we looked at what was happening in the market, studied the brands and studied trends and how they trend each quarters and that’s how we did our new guidance.

Okay. And then in terms of SG&A, the 14 million that I think Warren mentioned, is that – I'm recalling from the fourth quarter that it was 16 million, I'm just wondering what that 2 million delta is because I'm assuming the 4 million in interest expense is the same?

I am not sure. It might have additional cost cutting, Warren?

Yes, it was the cost cutting. I mean, we had implemented right at the beginning of the year, and we ended up coming in at a lower SG&A than we had anticipated. That’s why the margins are 72%, Mimi.

Your next question comes from the line of Jim Chartier with Monness, Crespi, and Hardt. Please proceed.

Hi. It sounds like you guys are going to a lot of categories at Wal-Mart, are you seeing more categories than you originally expected for your Wal-Mart brands when you initially signed the deals?

Yes, we are. What's happened is we started [coring to] the apparel business, and we just gotten a great reaction throughout the store, in various meeting with some of the other merchants, which is led by the Wal-Mart Apparel Group as far as expanding the brands. So all these new categories are really a plus and they're happening a little quicker than we even thought they would.

Will most of the new categories be happening for fall of this year or are they more of a 2010 rollout?

Some for this fall and some for 2010.

Okay. And then anything going on internationally, excluding the joint ventures in Wal-Mart?

Internationally as far as –

New license agreements and --

Yes, we are doing deals across the world, but nothing – a couple of million here and there, just in the normal course of business. But we’re really excited about what’s happening in China. We think that’s going to be an incredible long-term opportunity and start monetizing in – probably about two years from now, we'll start getting hopefully, some big chunks of profit coming from China with our strategy. And also it's happening in South America. And the rest of the world, we have a really nice business in the Middle East, starting to rollout chain – Rocawear has got a chain of stores there and Rampage has a chain of stores, but no large chunks of revenue that is significant.

Okay. And then, can you give us an idea of what the retail sales of the Ed Hardy brand are today?

I don’t think we're going to give that number out, yet.

Okay, great. Thanks a lot.

All right, thanks, Jim.

With no further questions in the queue, I’d like to turn the call back over to Mr. Neil Cole for any closing remarks. Sir?

Okay. We’ll thank you everybody for your interest. And I'd also like to thank all my employees and everyone here that’s working very hard to make all these good things happen and also to the shareholders. We’ll talk to you next quarter. Thank you.