Icon Energy Corp. (ICON) Q4 2014 Earnings Report, Transcript and Summary

Good day, ladies and gentlemen, and welcome to the Iconix Brand Group Fourth Quarter and Full Year 2014 Earnings Conference Call. With us on the call today are Neil Cole, Chief Executive Officer; Seth Horowitz, Chief Operating Officer; and Jeff Lupinacci, Chief Financial Officer. [Operator Instructions] Please note, today's conference is being recorded. Before we begin, I will read the following Safe Harbor statement under the Private Securities Litigation Reform Act of 1995. 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 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 words believe, anticipate, expect, 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 is made. I will now turn the conference over to Mr. Cole. Please go ahead, sir.

Good morning, everyone, and welcome to the Iconix Brand Group Fourth Quarter and Full Year 2014 Earnings Conference Call. We are pleased with our performance in 2014 and enthusiastic about our growing global platform which, today, includes a diversified portfolio of over 35 brands that represent more than $13 billion in global retail sales. Over the past few years, we strategically pursued the expansion of our global footprint, which included the formation or extension of joint ventures around the world. We see these joint venture formations as integral to our international growth strategy, as we get to partner with locally strong, best-in-class companies who can bring our brands to market more quickly and efficiently than we could achieve if we did it on our own. Before going into our financial results, I'd like to highlight that in connection with our evolving business model, we evaluated how we present the results of the company. In this morning's press release and upcoming 2014 10-K, our financial reporting includes a more detailed breakdown of revenue and a new presentation of free cash flow. I would now like to turn the call over to Jeff Lupinacci, our CFO, who will take you through our financial results.

Thank you, Neil, and good morning, everyone. Reviewing results for the fourth quarter ended December 31, 2014. Total revenue in the fourth quarter was approximately $112.4 million, a 7% increase as compared to approximately $105.3 million in the fourth quarter of 2013. Our strong top line reflects growth in licensing revenue of 16% to $102.2 million from $88.3 million in the prior year quarter and other revenue of $10.3 million compared to $17 million in the prior year quarter. Other revenue in the quarter resulted from a revenue gain related to the formation of a new joint venture with Global Branch Group to grow our international footprint in the Middle East. Non-GAAP net income was approximately $28.3 million, a decline of 6% compared to $30.2 million in the prior year quarter. Diluted non-GAAP earnings per share in the fourth quarter increased 4% to $0.56 compared to $0.54 in the prior year quarter. EBITDA in the fourth quarter was approximately $50.4 million compared to $60.1 million in the prior year quarter. And our EBITDA margin in the fourth quarter of 2014 was approximately 45% as compared to 57% in the prior year quarter. The company anticipated lower margins, reflecting the strong growth in our Peanuts brand, which operates at a lower average margin, as well as investments in our international business and increased marketing investments for certain brands, including Royal Velvet, Buffalo and Umbro. Historically, our reported free cash flow did not account for the timing of payments. It reflected both cash from operations plus any notes we received in the respective time period from business initiatives such as the formation of joint ventures. While we view these initiatives as core to our overall operating strategy of maximizing the value of our brands, the increased number of joint venture transactions in 2014 led to an increase in the notes receivable component of our previous free cash flow calculation. Accordingly, we have established a new free cash flow definition to include only cash received in the period. Under the new calculation, we generated $46.3 million of free cash flow in the fourth quarter of 2014 as compared to $57.4 million in the prior year quarter. Reviewing results for the full year ended December 31, 2014. Our revenue increased 7% to approximately $461.2 million as compared to $432.6 million in the prior year period. Licensing revenue increased 2% to $406.9 million as compared to $398 million. And other revenue, which includes the formation of international joint ventures and the strategic sale of intellectual property, increased 57% to $54.3 million as compared to $34.6 million in 2013. Our non-GAAP net income was approximately $145.5 million, a 2% increase as compared to $142.2 million in the prior year period. And our diluted non-GAAP earnings per share increased 16% to $2.78 compared to $2.39 in the prior year period. GAAP net income for 2014 was approximately $152.7 million, a 19% increase as compared to $128 million in the prior year. And GAAP diluted earnings per share for 2014 increased 26% to $2.66 as compared to $2.11 in the prior year. Our EBITDA was approximately $263.8 million as compared to $262.9 million in the prior year period. Based on our new free cash flow definition, we generated free cash flow of approximately $174.3 million in 2014 compared to $235.5 million in 2013. The primary difference between our 2014 free cash flow and our previously projected free cash flow for 2014 is that our new calculation does not include notes receivable, which have grown meaningfully in 2014. With the goal of maximizing the value of our brands, we have recently entered into a number of joint ventures and other arrangements in which our partners paid a portion of the purchase price at closing, with the majority of the remaining payments to be received over a 3-year period. In 2014, we generated $174.3 million of free cash flow and generated approximately $51.2 million of notes receivable. At the end of 2014, inclusive of all prior strategic transactions, the company had approximately $85.6 million of notes receivable from strong credits that the company believes can be readily converted into cash. This includes $66.4 million of notes receivable related to the establishment and expansion of international joint ventures and the sale of certain trademarks as well as $19.2 million to be received from our long-term license for the Peanuts brand with ABC/Disney. While we believe these payment obligations are backed by high-quality credits, we will not recognize them as free cash flow until the payments are received. The company expects to receive $29.2 million of these receivables in 2015. EBITDA, free cash flow, non-GAAP net income and non-GAAP diluted earnings per share are all non-GAAP metrics. And reconciliation tables for each can be found in the press release sent earlier this morning and on our website, iconixbrand.com. Moving on to our balance sheet. We continue to be at a very strong position. We ended the year with $188 million of cash. In this month, we took down $100 million from our existing revolver to finance our acquisition of Strawberry Shortcake. Between our existing cash, additional capacity on our securitization facility and our strong free cash flow, we believe we have access to significant capital for future acquisitions and share repurchases. In 2014, we bought back a total of 5 million shares at an average price of $38.73. Since initiating our share repurchase program in October 2011, we have repurchased approximately 29.1 million shares or approximately 40% of our shares outstanding as of the beginning of the program at an average share price of $26.57. We plan to continue to opportunistically evaluate share repurchases and balance them with our acquisition strategy. With that, I will turn the call over to Seth Horowitz, our Chief Operating Officer.

Thank you, Jeff, and good morning, everyone. 2014 was another strong year for our company. Our growth was driven by the ongoing success of our direct-to-retail business with market leading retailers around the world, increasing momentum for our Peanuts brand, global market share expansion for our portfolio and the formation and extension of our international joint venture platform. To provide additional information about the performance of our brands by division, we have included a summary table of revenue attributed to women's, men's, home and entertainment, each of which achieved positive year-over-year growth in the fourth quarter. The entertainment sector is an exciting area of growth for our company, with a 32% increase in revenues in the fourth quarter and a 38% gain for the full year. The Peanuts brand has already begun to experience the positive effects of the upcoming movie release later this year. In 2014, in addition to renewing its agreements with 2 key licensees, MetLife and ABC, we have signed hundreds of new licenses around the world. And Peanuts products have already started taking incremental market share across a multitude of product categories and within key retailers such as Macy's, Target, the Bay and Liverpool. In addition, global specialty chains such as Forever 21, UNIQLO and H&M continue to support and expand their Peanuts presence. The highly anticipated movie is expected to be released in 40 languages and more than 75 countries. The U.S. premiere is scheduled for November 2015, with release dates around the world throughout the fourth quarter of 2015 and the first quarter of 2016. Revenues for our women's brands, which are centered upon solid long-term direct-to-retail licenses were up 13% in the fourth quarter and 7% for the full year. Danskin Now continues to be a strong business with Walmart as we work together to capitalize on the increasing consumer demand for athletic and leisure products. In the past year, we've renewed some of our largest direct-to-retail licenses, including Mudd with Kohl's, Material Girl with Macy's, Danskin Now with Walmart and [Audio Gap] with Target, once again displaying the power of our business model and brands with our best-in-class retail partners. Our home business grew 15% in the fourth quarter and 7% in the full year. Royal Velvet is a leading brand in JCPenney's home section, which has been a key area of growth for JCPenney while Charisma continues to have a strong presence at Costco. In 2014, we signed a new direct-to-retail license with Walmart for Waverly Inspirations. The line will be launching this spring in all Walmart doors with a unique and compelling fabric and craft collection. Our men's business showed strong improvement in the fourth quarter versus a year earlier. The Lee Cooper brand continues to perform extremely well around the world while Rocawear, Ecko Unltd. and Ed Hardy are all experiencing new levels of success with licensees in diversified distribution channels. On an annual basis, revenues for our men's brands, which also include Umbro, Starter, Zoo York, Op and Nick Graham, were down 22%. However, in the fourth quarter by the same measurement, our men's brands were up 8%, and we expect continued improvement in the current year. With that, I will turn the call over to Neil Cole, our Chief Executive Officer.

Thank you, Seth and Jeff. In 2015, we are projecting to achieve another year of strong top and bottom line growth, driven by a steady expansion in our domestic licensing business, our rapid growth in our international business, both inside our joint ventures and across the territories that we control, the excitement surrounding our upcoming Peanuts movie and the benefits of our recently announced Strawberry Shortcake and PONY acquisitions. We continue to see our international business as a key driver of growth for the company as we leverage our worldwide licensing and marketing platform, including our 8 joint ventures; to expand the revenue base of our global brands, Peanuts, Umbro and Lee Cooper; to secure new licenses in new territories and across additional categories in our fall brand portfolio; and to tap the underlying potential of the reacquired territories within Latin America. To recap our international joint venture strategy, our primary purpose is to bring our brands to market more efficiently, generating greater short- and long-term value than if we were to build out our own wholly-owned operations ourselves across a multitude of international offices. As our businesses in each territories' structure of management include marketing, licensing, acquisitions and finance, we may consider, where possible, acquiring full control ownership of our joint ventures, as was the case in Latin America in 2014. We believe that our approach to international joint ventures has enabled our brands to effectively increase licensing revenue, market share and profitability. For example, in Latin America, royalty revenue for our brands in the JV increased from $2 million in 2009 to approximately $12 million in 2014. When the Latin America JV was formed in December 2008, we had 16 licenses and 1 direct-to-retail agreement. Today, we have 53 licensees and 6 DTRs with the most successful big box retailers, including Falabella, Suburbia and Walmart. Since 2008, we have completed 11 transactions with local partners to establish and expand our international business. Going forward, we expect to form additional joint ventures, with the goal of developing markets that have not grown as quickly as we would have hoped. Moving on to acquisitions. We are excited to be expanding both our entertainment and sports platforms with 2 new acquisitions. In the entertainment space, we recently announced that we have signed a definitive agreement with American Greetings to acquire the Strawberry Shortcake brand, a great complement to our existing entertainment business. Through our Peanuts brand, we have a powerful worldwide platform that we believe we can leverage. With the acquisition of Strawberry Shortcake, we will be expanding this platform as we gain new partnerships with top entertainment companies around the world, including Netflix, Discovery Family, Budge Studios and The Bridge. Strawberry Shortcake has an impressive network of over 350 licensees and is highly recognizable around the world, with revenue outside of the United States representing approximately 50% of total sales. We currently estimate that Strawberry Shortcake will generate approximately $18 million to $20 million of annual royalty revenue. Our sports brands have been some of the fastest-growing in our portfolio, and they have proven to be truly global assets. To accelerate our growth in this area, we recently acquired the North American rights to the athletic brand, PONY, in partnership with a footwear company called AL&F, a leader in that industry. By leveraging our existing sports platform, including Danskin, Starter and Umbro, we believe we can grow PONY throughout North America, creating a profitable, multitier distribution strategy similar to our other successful sports brands. There's a high demand for authentic athletic lifestyle brands. And given PONY's strong brand recognition across both male and female consumers, we believe that PONY will generate approximately $7 million to $9 million of annual royalty revenue. Moving on to guidance. Based on our recent acquisition and anticipation of plans for incremental expenses to support our growing global platform, we are raising our 2005 (sic) [ 2015 ] guidance as follows. We are raising our revenue guidance to $490 million to $510 million. We are raising our non-GAAP diluted EPS guidance to a range of $3 to $3.15. And based on our new free cash flow calculation, we are establishing free cash flow guidance of $208 million to $218 million. With the Peanuts movie launching in the fourth quarter and other strategic alternative -- initiatives anticipated later in the year, we expect revenue and earnings to be more back-half weighted, with approximately 45% in the first half and 55% in the back half of the year. In closing, as we approach our 10th year anniversary in June, our company is stronger than ever, with a diversified portfolio of over 35 brands and a growing global platform that includes over 50 direct-to-retail partnerships and over 1,100 licensees worldwide. We expect to continue to deliver growth through the expansion of our global footprint, our growing entertainment platform, continued execution on our acquisition strategy and opportunistic share repurchases. It has been an exciting 10 years, and we look forward to continuing to deliver value to our shareholders. I'd like to thank you all for listening this morning and for your continued support. And I will now turn it over to questions and answers.

[Operator Instructions] Our first question comes from the line of Bob Drbul from Nomura.

Neil, I just want to say thanks for the additional disclosure. Find it very helpful.

Great. Thanks. Welcome.

I guess a couple of questions that I have on -- the first one is on the Peanuts, the rollout of Peanuts, is some of that momentum happening sooner than you expected? And as we think about sort of the build into the movie, can you just make sure we understand exactly how strong it can be going in into the fourth quarter especially?

I'm not so sure how much happened earlier. But in 2014, we had the benefit of Disney or ABC renewed the Peanuts specials for the next 5 years. And we also signed MetLife on for another long-term contract. So the combination of those definitely helped '14. And '15, we're -- we have incredible retail exposure around the world, and it's going to be -- each quarter is going to continue to get better and culminating in -- hopefully, a really strong fourth quarter because we got movie revenues starting there. One of the things to add though is we are opening -- it's going to be a pretty strong global push with -- in over 70 markets around the world, and I think half of them are in the first quarter of '16. So we try to play it both and then we also get the digital and the video-on-demand rights in '16 also. So I don't know if I answered the question, but did my best.

Okay. And I guess on the men's business. Definite -- it seems like there may have been an inflection point in the fourth quarter. Can you just talk about exactly what you've seen change there to demonstrate that growth that you saw after the declines for most of the year?

Seth, why don't you take that?

I think what we saw in the fourth quarter kind of reflect the transition that we've been going through for the past 12 to 18 months with new core licensees, new distribution strategies that have resulted in strong sell-throughs across the men's brand portfolio.

And our next question comes from the line of Steve Marotta from CL King & Associates. Steven Louis Marotta - CL King & Associates, Inc., Research Division: A couple of questions. First, the SG&A level in the fourth quarter was up materially year-over-year. What can we consider a normalized run rate for 2015?

Yes. Fourth quarter, we launched, I believe, 3 or 4 different major ad campaigns. And the ad number was pretty steady for the year. We just had pushed a lot of third quarter initiatives and even some back half second. And we came up with some great marketing between Sharper Image, London Fog, Buffalo and Royal Velvet all in the fourth quarter. Next year -- I'll let Jeff chime in if he disagrees. But we see the EBITDA level probably be in the mid-50s where, I think, for the year, we're going to come out are out $57 million, $58 million or -- and most of that is because of the increase of Peanuts revenue in the movies and our marketing. Our EBITDA is a lot lower on Peanuts than the rest of the portfolio. Did I answer that, Steve? Or do you want... Steven Louis Marotta - CL King & Associates, Inc., Research Division: Yes, that's pretty close. Jeff, do you have anything to add?

No, that was -- that's accurate. Steven Louis Marotta - CL King & Associates, Inc., Research Division: Okay. The tax rate in the fourth quarter was a little lower. What can our expectations be for 2015?

For 2015, it's going to be high 20s, low 30s. And it was lower in the fourth -- in Q4 and in '14 is our international revenue is a greater percentage of our total, and that's taxed at a lower rate. But I would use high 20s, low 30s for '15. Steven Louis Marotta - CL King & Associates, Inc., Research Division: Okay. And just to put the finest points possible on this, the only change in the free cash flow calculation is the recognition of those notes receivable on launching new JVs. Is that accurate?

Yes. But the increase this time was or is based on these notes that were paid out over 3 years from -- mostly from Li & Fung. And there's been what's called GBG and also from the Disney, when they renewed, that gets paid over a period of 4 to 5 years. Steven Louis Marotta - CL King & Associates, Inc., Research Division: Okay. Last question is you mentioned that there are still some additional markets that you would prefer to have a joint venture with as opposed to going direct. Can you rattle a few of those off for us? What would be top of mind? And if you could wave a magic wand, change them today, what would they be?

We've been really working hard on Japan and we have a pretty big business there. And we think there's a couple of big opportunities there that we've been dealing with probably [ph]. It takes a while in Japan. And also places like South Africa [indiscernible] a few other [indiscernible] smaller markets. But we see few opportunities mostly in Japan and South Africa.

Next question comes from the line of John Kernan from Cowen and Company.

So can you help us out what's embedded in your revenue guidance for 2015 in terms of the other revenue line item? And any magnitude of sales to JV partners or remeasurements that you might be seeing this year? I know there's an assumption for a $0.53 noncash gain on a remeasurement of investments. I'm just trying to understand the licensing revenue and the other revenue that's embedded in your guidance.

Okay. In '15, we see that being a lower number than in '14, and we see that probably going down anywhere between 20% or 30% on the other line. And we see continued growth -- our international organic business is growing at a rate of 15%. Domestic, low single-digits. And then we have, obviously, the Peanuts movie is going to help on that -- grow that international number. Also in that number, or the growth number, you have about $20 million of additional Strawberry and PONY from the acquisitions. So we do see the other line going lower this year. And we do see growth organically, mostly coming internationally and a little bit domestic.

So that 10% organic growth rate that you hinted at in your prior guidance for 2015 is still on the table?

Yes. Mostly because of the international being, we think, over '15.

Okay. Then Jeff, can you just talk a little bit about the capitalization of the company at this point? I know there's some incremental debt associated with the Strawberry Shortcake and PONY acquisitions and you've got a $300 million of convert maturity next year. So how do you view your capacity to take on more debt to fund acquisitions at this point, to buy back stock? And ultimately, how do you view the capital structure and financing the company going forward now that you're going to see some of these converts come due in the coming years?

Yes. So just to start off on the balance sheet, we capped today, including the revolver that we drew down, it's $260 million. And we'll use $105 million of that for Strawberry Shortcake funding. The great thing is we have the ability to upsize our securitization facility by adding additional brands in. And so that will give us a lot of capacity and a lot of dry powder as we look to upsize that securitization. Our net debt to EBITDA is 4.2x. So from the leverage perspective, we feel comfortable. In terms of the converts, John, we're looking at that now and weighing all of our options. The first one hasn't come due until June '16 and the next one is March of '18. So they're not in the money now, but we're looking at that and we're figuring out what makes sense to evaluate the converts.

Okay, that's helpful. And just if I could sneak one more in. The $0.53 in noncash gain related to the remeasurement of an investment, can you help us understand where that's coming from?

Yes, a lot -- I believe that's going to be GAAP-ed out or non-GAAP-ed out. That's from a GAAP perspective. As we gain, a lot of our JVs have the option where we can get control of them, mostly in the back half, which will give us these gains that we will non-GAAP out.

And they'll be noncash, obviously, right?

Correct.

Our next question comes from line of Eric Beder from Wunderlich.

Could you talk a little bit about what you are seeing? Obviously, you are seeing some better deals now in the M&A market. How is the M&A market looking for you guys right now?

Yes, it's always a tough question. We're working on a lot of exciting transactions, but we've also done that before and they didn't close. So they're not -- we have a lot of deals we're working on. I guess you can call it a pipeline, a robust pipeline. But until you close deals, it doesn't mean anything. And I think there's a lot of good opportunities. And especially what we're doing is -- there's a big opportunity globally. So we are working hard in a lot of our international markets to buy brands, whether it be in sports. And what we're excited about sports and entertainment, which are last 2 acquisitions, we think both of those areas give us global a lot more than domestic. So a lot of it is internationally focused sports and entertainment. But it's -- I would still not be conservative by just -- there's still -- there's a lot of money out there on the PE side. So the sellers are asking for a little more prices -- a little higher prices than we're used to paying. So that's what's been preventing a lot of wonderful deals that we would have liked closing, because we're doing our best to stay disciplined.

How do you handle the FX risk with your licensees?

I'm sorry, what risk?

Foreign exchange.

Very little. Most of our deals are all done in dollars. The only thing we got a little hurt last year, in our Peanuts business, which is a very large business in Japan, we lost a couple million dollars on the yen when it went from like 80 to 100 [indiscernible]. But generally, even a lot of the European deals, we get paid in dollars. And so we haven't had much really foreign exchange risk.

And finally, when we look at Peanuts and the movie, are these deals that you're signing for the movie just tied based to the movie? Or are these multiyear deals that we're going to see the impact, obviously, a little more in 2016? But how should we think about after this movie comes out, what is the potential of Peanuts?

That's a great question. And we talk about it every day. We've gotten all this wonderful -- we're going to get all this share and market the movie. We're going to do our best to keep it. We're working on other initiatives, both digitally and incredible social. Jeff has the largest Facebook page, higher than most Disney properties. I think all -- maybe all probably not Frozen anymore. But we're working really hard to connect to the next generation both digitally and then, God willing, we're working on a television show for preschool, which we're hoping to get done in 2016. But Hollywood is a tricky place and you can't predict timing. But very important that we try to keep our share. And I think a lot of our partners that are giving us this big share, it's kind of a let's see what happens. They're not promising it more than the back half of this year. But if we have great sell-throughs, Peanuts is such an iconic property over the last 65 years. Our specials seems better -- has done better in the last couple of years than ever. So it's -- we have this wonderful -- yes, the mom loves us. Now we've got to get down and get the kid. And hopefully, the movie is going to help do that.

Our next question comes from the line of Liz Pierce from Brean Capital.

Just I wanted to circle back, if I could, on a couple of questions that had been asked. First on the SG&A. I guess maybe more specifically when we look at that number and granted I understand that the marketing, but almost of what, a $16 million shift from Q4 last year. Is the normal run rate -- I think you mentioned like a 50% rate, but I didn't know if that was EBITDA or was that the SG&A?

That's the EBITDA. The shift is a combination of a few things. It's a combination of -- a lot of it's marketing. There's also -- with the growth of Peanuts, where we make a lower margin and we pay agencies and the family a rev share, that comes out of that number, which was substantial. And we've also begin -- we started to staff up around the world. And so it's a combination of 3 factors: marketing, which a number of, for instance, we are now sponsoring a Premier League team, and we have many other teams; Peanuts, lower share; and as I mentioned, the campaigns before and just growing human capital around the world to help make sure we -- our brands are maximized. So we think it kind of levels out. Because as I mentioned, a lot of that marketing was weighted from third quarter into fourth quarter. But on the year, we see EBITDA kind of similar, maybe a few ticks lower, because of Peanuts in '15 different than '14.

Okay, all right. That's helpful. And then in terms of Peanuts, I think again relating to another question, are you actually -- if -- has product shipped sooner than expected or is it just the other factors that are contributing that you mentioned, like ABC and MetLife, for the increase?

Yes -- no, I think it's -- you're going to start seeing great programs, great marketing starting in May in a lot of the big boxes and retailers across the world. So it's not that much earlier, but besides to the benefits as we talked about with MetLife and with ABC.

Good. Because essentially -- because I think you said last quarter, kind of Q2 would be the time frame when we would see product.

Yes. I'd say, the back half of Q2, you'll start seeing it roll out, and that some of those is really spectacular.

Okay. And then when you talk about these TV programs for preschool, is that different than, I think, in the past you referred to shorts, as in programs, movie shorts for TV?

Yes. The short program is now actually on the air, globally in Europe, in other places that we're hoping to get America soon. But yes, the preschool series that is in development, and we have an amazing writer who's doing it. It's different than the short stuff that's currently starting around the world now.

Okay. So that is incremental?

Yes.

Okay. And then any update on Umbro in China? And what's kind of happened in the quarter since you guys had to -- took that over?

No -- yes, we're working with Li & Fung, GBG. And there's some incredible opportunities and we're setting the groundwork, hopefully, to have a really big exciting business and a lot of interesting alternatives that we hope to be able to announce soon.

Okay. And then my final question. On the men's business. So it does seem again that there was a little bit of an inflection. Have these -- do think these brands had been particularly kind of Ecko and Rocawear kind of repositioned enough that they had kind of broader appeal?

I think the repositioning has made the brands more accessible, and we think that's an important factor in reestablishing these brands.

Our next question comes from line of Jim Chartier from Monness, Crespi, Hardt. James Andrew Chartier - Monness, Crespi, Hardt & Co., Inc., Research Division: The first question I have for you guys, can you just bridge your revenue and EPS guidance versus your prior guidance? Given the Strawberry Shortcake and PONY acquisitions, I would have thought that you could have raised it a little bit more.

Yes, it was a thought process. This was an opportunity, as we learned in fourth quarter, to invest a little more in our infrastructure. Our partners around the world are really saying that the brands are not -- some of our brands are not as well known in those territories as in America and that we have to invest, so whether it be in new media or old media. So a lot more global marketing when we enter a territory with our brands and human capital. And so we try to -- it was not just as an opportunity to take some of that and invest in infrastructure around the world. James Andrew Chartier - Monness, Crespi, Hardt & Co., Inc., Research Division: All right. But in terms of the revenues, it looked like Strawberry and then PONY could have added somewhere in the neighborhood of $20 million to revenues this year?

Yes, that's what we're projecting. James Andrew Chartier - Monness, Crespi, Hardt & Co., Inc., Research Division: And then so you guys only, I think, raised your total revenue by like $5 million to $10 million?

Yes. And we just believe that's the right thing to do base on what's happening around the world. James Andrew Chartier - Monness, Crespi, Hardt & Co., Inc., Research Division: So was that more -- that's the expectation for lower organic revenues? This is more conservatism on your part? Is there an FX impact there?

Maybe a combination of both. James Andrew Chartier - Monness, Crespi, Hardt & Co., Inc., Research Division: Okay. And then you guys mentioned a renewal from MetLife. Was there any upfront revenues similar to what you guys get with the ABC license in fourth quarter?

Yes. James Andrew Chartier - Monness, Crespi, Hardt & Co., Inc., Research Division: Excuse me?

Yes. No, no, no. We had a small marketing fee, but over a couple million with no upfront money, just it gets paid over a period of years. And by the way, just to be clear, ABC/Disney, that also gets paid over a couple of years. But because it is -- it's written 65 years ago by Charles Schulz and we don't change it, there's accounting way you have you take the revenue upfront. James Andrew Chartier - Monness, Crespi, Hardt & Co., Inc., Research Division: Right. And then what's your share count? What's embedded in the guidance for 2015?

I would use for share count for '15, 50 million shares. James Andrew Chartier - Monness, Crespi, Hardt & Co., Inc., Research Division: Okay. And were there any deal costs in fourth quarter of '14 or anything that's going to be in first quarter '15 related to the recent acquisitions?

Maybe a little. But most of it will be in first quarter. James Andrew Chartier - Monness, Crespi, Hardt & Co., Inc., Research Division: And then under the men's business on the Ed Hardy, can you talk about what the door plan is for Ed Hardy at Walmart and Kmart in 2015 and where you ended 2014 in terms of the number of doors?

I don't think we specifically called number of doors by retailer. But we're comfortable saying that the door count for Ed Hardy will continue to grow at the mass level of distribution in 2015.

And that concludes our question-and-answer session for today. I would like to turn the conference back over to Neil Cole for any closing comments.

Okay. Well, thank you for joining us today and for your interest in Iconix. As always, our team will be available for further questions throughout the day. Have a good one. Thank you.