Good day, ladies and gentlemen, and welcome to the Iconix Brand Group Second Quarter 2016 Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. As a reminder, this conference is being recorded. I would like to introduce your host for today's conference, Jaime Sheinheit, VP, Investor Relations. Ma'am, you may begin.

Good afternoon and welcome to the Iconix Brand Group second quarter 2016 earnings conference call. On today's call, we have with us John Haugh, our President and CEO; Dave Jones, our Chief Financial Officer; and Peter Cuneo, our Executive Chairman. During today's call, we will be making some forward-looking statements within the meaning of the Federal securities laws. 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 to not 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 John. John N. Haugh - President & Chief Executive Officer: Thank you, Jamie, and good afternoon to everyone. I am pleased to announce today that for the second quarter our company has delivered solid results. Our primary goal is to position ourselves to achieve growth while at the same time improving the balance sheet, and we are making progress on both of those fronts. Since our last call, we have conducted a broad strategic review of our company, our brands and the overall market. As a result of this review, we have identified a number of opportunities that we believe will drive long-term growth, both in the U.S. and around the world; this will include creating new revenue opportunities as well as building on…

Thank you. And our first question comes from Dave King from ROTH Capital. Your line is open.

Thanks. Good afternoon, everyone. I guess, first off, on the Mens business and the growth in Ecko, to what extent did that contribute the new partnerships there? Did that contribute in the quarter? And I guess, more importantly, how different is that than I think the 30% sort of core growth you outlined for the year? And then, one more on the Mens business, when do you expect the upstairs business for Starter to begin to take hold? John N. Haugh - President & Chief Executive Officer: So, David, it's John. On Ecko, with Ecko, we had – we mentioned this last time, we had a brand summit a couple of months ago, we had 20 plus licensees in that covered apparel and covered watches and covered several different categories. And I think all licensees left feeling like the brand, while not nearly where it was some years ago, is on the right track back. And we have not only Prince Royce, we have some strong ambassadors in the boxing world and in the skateboard world. So I think everybody walked away feeling good. That's nice. But what really matters is what is the sell-in and the sell-out of our products. And we have had a lot of success this year with some of our key retailers, J. C. Penney, as an example, is a good retailer. We continued to strengthen our orders, strengthen our distribution and strengthen our position in Ecko. Again, it's going to take us a little while to get it all the way back, but net-net Ecko has been a shining light in the Mens business, which is we – as you well know has been troubled for a little while. So I'll pause there on Mens. With respect to Starter, Starter is an interesting business.…

Okay. That's good color. And then maybe switching gears a bit. In terms of the mid to high 40%s operating margins sort of in the back half, what are the drivers there? I guess it would seem to me with you anniversarying Peanuts that that wouldn't necessarily be the case. But also I know you've got the marketing investments, the digital stuff you're doing, the bonus accrual sort of issues with I think two different plants in place. So I guess what are the puts and takes to kind of have operating margins decline in the back half versus where they are, where they've been running for the first half? David K. Jones - Chief Financial Officer & Executive Vice President: Yeah. Dave, it's Dave Jones. Regarding the Peanuts business, that business will hold when you think about the whole year. So while the comps in Q3 and Q4, for Peanuts will be difficult, we kind of outperformed year-over-year in Q1 and Q2. So we're expecting a stability there. The marketing and advertising will kick up in Q3 and Q4, so that's kind of one of the biggest drivers, I think, of the decrease in margin compared to Q1 and Q2. And that's really – you're right, we've got a little bit in comp, but that's kind of been consistent through the year as the – like I said as the Peanuts business is stronger, we've got a little bit more in agent and talent fees, that'll drop off in Q3 and Q4. So those are really the drivers.

Okay. That's helpful. And then lastly for me and I'll step back. So with the change in free cash flow guidance, but then also the $35 million in cash that you're getting from or got from Complex, ongoing principal amortization, what have you – where do you see cash ending the year at this point versus the $245 million I think is where you're at as we sit today? David K. Jones - Chief Financial Officer & Executive Vice President: Well, I would tell you – I don't think there is any significant changes that we're expecting between now and the end of the year. The $245 million includes Complex. We'll have some natural growth in cash just from cash from operations, but I don't think we're calling out any big transactions at this point. So I would expect it to be somewhat consistent.

Okay. Thanks for the color. Good luck with the rest of the year. John N. Haugh - President & Chief Executive Officer: Thank you. David K. Jones - Chief Financial Officer & Executive Vice President: Thank you.

And our next question comes from Eric Beder from Wunderlich Securities. Your line is open.

Good afternoon. John N. Haugh - President & Chief Executive Officer: Hi, Eric.

Hi. Well, congratulations on the – being able to settle the convertible debt and the buyback of the $105 million. What is your appetite to buy back more of that debt at those terms if some came (24:46) to you? What – how is your thought process on where do you want the convertible debt to be maybe at the end of this year or any other (24:52)? David K. Jones - Chief Financial Officer & Executive Vice President: Eric, I think we'll look at all alternatives for redeeming the debt opportunistically. After we did the last round, we had some interest from additional holders, but we were comfortable where we were with the last round. We continue to believe we can redeem the 40% to 50% of the original $400 million that we've talked about before by maturity. So I think there's a lot of levers to pull. We feel better now that we've gotten 25% of it taken care of. So I think at this point, we'll see how we progress during the year, but kind of everything's on the table.

And when you look at the $86 million or so at international, what is the thought process there? Would you undertake an acquisition on the international side? And if you would, what would you be looking at, what kind of context makes sense for you? John N. Haugh - President & Chief Executive Officer: So, Eric, John. I think it's a great question. We, as you know, have a pretty sizable amount of money over there and you can't (26:10) repatriate it – you can, but you would do it at a pretty significant tax rate. So we are looking to say, how do we grow our international business. In the meantime, our leadership over there continues to strengthen. Our overall leader of international is very, very talented. We now have a team on the ground in China. We now have more players on the ground in Europe. We now have more players on the ground in LatAm. So we feel we're positioned well to kind of maximize or leverage the players that we have throughout the world and we have some available capital. So our M&A team is taking a look at how best to deploy that money. Again, first thing we've talked about and we've had this conversation, is making sure that the core business is steady and make sure that we are rebuilding confidence with our investors, our shareholders. So we want to be thoughtful in everything we do. But we are acutely aware of the fact that we have money sitting not getting a great return on investments, and we have a talented team that could take our brands and use our models throughout the world. And so it's something that's on the horizon. No definitive plan right now, but it's something that we're actively working on.

Okay. And you know it's so exciting that you guys are bringing more money into marketing and advertising and I – just listening to the different people you have here as Creative Directors and such, I would assume that's part of the ramp. What is the goal eventually with this? Obviously, it's to drive better sales. But is it to become a better partner to your licensees? Is it to become a more important partner? How do you look upon your goal of all this marketing spend and this advertising spend going forward? John N. Haugh - President & Chief Executive Officer: Our goal is actually really simple, Eric; it is we want our partners to sell more of our brands. We don't gain unless they gain. We want Danskin to continue to grow as it's doing at Walmart. We want Mossimo to grow at Target. We want Material Girl to grow at Macy's, et cetera, et cetera. So our goal as brand owners and active brand managers is to work with our partners. In some cases it's very, very collaborative. In some cases they certainly steer more. But we want to make sure that our brands resonate with the core demo. We want to make sure that the consumer is seeing our brand, relating to our brand. This whole business has evolved from where we started years ago with probably a simpler celebrity and take some good photography and that was enough. We're much more active. Pia Mia is out there blogging, texting, Instagraming, and developing and working with Macy's; Prince Royce doing the same thing; DJ, the same thing. There's another announcement we will have soon. Eric, we feel very good. I'll be off a little bit on the number here, but we feel very good that in the last three months, four months we've had somewhere in the range of a dozen strong lead cover or other stories just in WWD talking about how we're much more actively managing the brand. We hadn't had good coverage like that in the industry in probably for a couple years. So I think our partners are taking note. I think the industry is taking note. And ultimately, we own these brands and the stronger the brand is, the more our partners benefit, and the more our shareholders benefit. So that's how we look at this.

Great. Good luck on the back half. John N. Haugh - President & Chief Executive Officer: Thanks.

And our next question comes from Steven Marotta from C.L. King & Associates. Your line is open. Steven L. Marotta - C.L. King & Associates, Inc.: Good evening, everybody. David, as it pertains to the number of shares outstanding that is used in the guidance, could you tell us what that number is currently? And if that has changed since the settlement of the $105 million of March 2018 converts? David K. Jones - Chief Financial Officer & Executive Vice President: The number that we are using currently for guidance is about $54 million and that includes the weighted average share count as a result of issuing the additional 7 million shares on the repurchase of the converts. Steven L. Marotta - C.L. King & Associates, Inc.: So the third quarter and the fourth quarter would be closer to $57 million, is that accurate? David K. Jones - Chief Financial Officer & Executive Vice President: Yeah. That's correct. Steven L. Marotta - C.L. King & Associates, Inc.: Okay. Without a change... David K. Jones - Chief Financial Officer & Executive Vice President: I would – $56 million and change, I would say it... Steven L. Marotta - C.L. King & Associates, Inc.: Okay. Without a change in the non-GAAP EPS for the year, that must mean that you expect more net income than you would have previously? Is that accurate? John N. Haugh - President & Chief Executive Officer: Well, the things that we adjusted the GAAP EPS change (31:12) don't affect the non-GAAP. Steven L. Marotta - C.L. King & Associates, Inc.: Right. But the settlement of the convert would though, no? John N. Haugh - President & Chief Executive Officer: Yes. Yes. I mean of course. We've got less interest as a result of the convert. Steven L.…

And our next question comes from Patrick Marshall from Cowen & Co. Your line is open. Patrick Marshall - Cowen & Co. LLC: Hi. Good evening. So I just wanted to drill down on the cash a little bit. So you said, I think, as of today, you now have $245 million of cash. How much of that is unrestricted domestic? David K. Jones - Chief Financial Officer & Executive Vice President: Let me get my cash sheet. So unrestricted domestic is about $72.7 million; and Patrick, in that there's about $40.6 million from wholly-owned subs and about $32 million from consolidated joint ventures. Patrick Marshall - Cowen & Co. LLC: Sorry. What was that second number? David K. Jones - Chief Financial Officer & Executive Vice President: $32.2 million from consolidated joint ventures. Patrick Marshall - Cowen & Co. LLC: Understood. And then the proceeds of Badgley Mischka, BBC Ice Cream (33:58) and Ed Hardy China, are the proceeds from those sales available to repay the convert? David K. Jones - Chief Financial Officer & Executive Vice President: No, the proceeds from those are in what's called an excluded asset account under our new term loan. And they're available for acquisitions, but not for the repayment of debt. Patrick Marshall - Cowen & Co. LLC: Right. Okay. And then so any potential sales of JVs in China; those would also fall under those accounts, right? David K. Jones - Chief Financial Officer & Executive Vice President: Yes. That's correct. Patrick Marshall - Cowen & Co. LLC: So are there any assets within the Iconix portfolio which would be unencumbered? I mean, available to be – the proceeds of which could be applied towards paying down the converts? David K. Jones - Chief Financial Officer & Executive Vice President: Oh, I see. No. I think generally for the terms of our new term loan – so if assets are sold within the securitization, there's repayment requirement within the securitization. Patrick Marshall - Cowen & Co. LLC: Sure. David K. Jones - Chief Financial Officer & Executive Vice President: If they're outside of the securitization generally the money has to go to repay the new term loan. Patrick Marshall - Cowen & Co. LLC: The term loan. Understood. Thank you.

And at this time I am showing no further questions. I would like to turn the call back to Mr. John Haugh, CEO. John N. Haugh - President & Chief Executive Officer: Perfect. Thank you. So thank you to everyone again for this afternoon. More importantly, thank you for your ongoing support. We appreciate it. We appreciate you challenging us and asking us good questions, and we look forward to seeing everybody at our fall investor day. Thanks. Enjoy your evening.