Good day, ladies and gentlemen, and welcome to the Iconix Third Quarter 2015 Conference Call. At this time, all participant lines are in a listen-only mode to reduce background noise. But later we will be conducting a question-and-answer session. Instructions will follow at that time. As a reminder, today's call is being recorded. This conference call will contain forward-looking statements 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 may be 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 upon which the statement was made. I would now like to turn the call over to Peter Cuneo, Chairman of the Board and Interim Chief Executive Officer. You may begin, sir.

Thank you very much, and good morning, everyone. Welcome to the Iconix Brand Group third quarter 2015 earnings conference call. On today's call, I have with me Dave Jones, our Chief Financial Officer; David Blumberg, our Head of Strategic Development; Jaime Sheinheit, our VP of Investor Relations; and Jason Schaefer who is Executive Vice President and General Counsel. I know that we have given you a lot of information to digest over the past few days. We would have preferred to have had this call and last week's announcement at the same time. However, due to regulatory requirements, we will be required to file the 8-K no later than last Thursday. Given the resources we needed to devote to make the 8-K filing deadline, we simply weren't prepared to talk further at that time and, thus, did not push up this scheduled earnings call which was previously set. Our board and the current Iconix management team share your disappointment in the restatement of some of our historical results and in the reduction of our guidance for 2015. After 90 days on the job, this is not what I had hoped to be talking to you about today. Three months ago, when I stepped into the role of Interim CEO, the board, our new CFO, and I decided it was very important to conduct a broad, in-depth review of the company's operations. This included our existing license agreements, our relationships with business partners, and the company's overall processes and systems. These efforts were prompted by the announcement of an SEC review and by changes in management, including changes in our CEO, our CFO, and our COO. In addition, a Special Committee of the board was already undertaking an accounting assessment with the assistance of independent forensic auditors and legal advisors. This…

Thank you, Dave. Before we turn the call over to Q&A, I would like to talk to you about why I continue to be confident in the company despite the recent negative news. First, over the past three months, I've been meeting with our key licensing partners and I'm encouraged by their continued commitment and desire to work collaboratively to grow our brands. What I am learning is that we can support them better. Stepping into this role, my expectation were the growth in the U.S. was limited. Now, I believe with the right investments in our brands and proper support to our licensees and partners, there are significant opportunities to grow organically in the future in the U.S. As Dave mentioned, we are looking at 2016 as a reset year. Our 2016 budget includes a 15% increase in advertising spending. But more importantly, we plan to spend these dollars differently than in the past, with a much greater focus on digital promotion. The budget also includes a 15% increase in head count with important additions to the financial function to international operations and to the marketing organization to better support our DTRs. We are also considering investments in entertainment content, which we were not willing to affect previously. All of us continue to be excited about the company's opportunities on a global basis. Please let me emphasize that despite our recent challenges, Iconix has significant business strengths, again including its diversified portfolio of consumer brands, profitable business model, and a strong free cash flow generation. All of us at the company are focused on capitalizing on the strengths and addressing the issues that have impacted more recent performance. This to all improve our results and enhance value for shareholders. With that, I'd like to thank you for listening this morning. We'll now open the floor to Q&A. Operator?

Our first question comes from the line of Eric Beder from Wunderlich. Your line is open.

Good morning. Could you give me a little – or give us a little bit of update on how the Peanuts flow is going to happen in terms of what was moved into – from Q – from 2015 into 2016? And how should we think about longer term what the growth rate can be here given that the movie is kind of a – I'm not going to say it's a one-time thing, but it's an event as opposed to kind of steady state growth going forward.

Sure, Eric. This is Peter. I'll try to (29:57) respond to that. Very briefly, the way that we earn revenue from the film is by participating in all of the revenue streams that Fox has that result from the film. So these, of course, include worldwide box office, but also include DVD sales, pay-per-view, a sale to someone like HBO or Showtime, international syndication, there's quite a long list. And these revenues as you know have different timing, box office being upfront, and it can take as much as a year for the film actually be released in these other media forms. So, there is a tail on these revenues and basically that's what's going on. It is sometimes difficult, particularly for an organization that's not in the motion picture business to estimate the timing on all of these revenues. I will say that regardless of whether the revenues fall in 2015 or 2016, we are very pleased with the results from the film and very optimistic about the exposure for Peanuts worldwide. You asked about how we follow up with a film, and we do that by participating in lots of other media forms such as television and online exposures as well. And we try to build a bridge, a media bridge, between that film and the possibility of future sequels. David K. Jones - Chief Financial Officer & Executive Vice President: Eric, it's Dave Jones. Just to add to that and to give you a little bit more color, I think as most of you know, the Peanuts franchise in 2015 will generate about $100 million in revenue for us. We expect to be able to maintain that going into 2016. With all the different revenue streams that Peter talked about, we're not expecting a drop-off in the business by any means.

Another thing we've mentioned, Eric, is that one of the goals of the film was to introduce or reintroduce the Peanuts characters to a younger generation, and I would define that as people around the world who are under 20 years old. We have very strong following, as you know, with older generations. But this was a very important goal for the film, and I think we're going to achieve it. And that's going to, of course, provide lots of growth opportunity for this brand.

Okay. And when you look at the future here for this company, after the debt is paid down, where do you think – where is the organic growth potential? Do DTRs have continued growth potential to them that hasn't really been cultivated because the resources weren't put as much as in as what you're doing right now next year with ramping the marketing of the pieces?

Well, as part of the review that we had over the past three months, we've really looked at how we support our DTR partners. I think historically, philosophy has been that when we do these deals, we largely leave the promotion of the brands to the DT partners themselves, to the retailers. And over a period of time, I think it's safe to say that some of our brands are getting stale. The retail partners certainly support these brands in store and with local advertising. So we think that we needed to (33:50), if you will, reinvigorate some of these brands with the more intensive advertising and also with advertising that reaches the younger generations. So, we're going to be doing a lot more in the digital word with regard to that.

Great. And congratulations. And good luck for the rest of the year, next year.

Thank you.

Thank you. Our next question comes from the line of Dave King from ROTH Capital Partners. Your line is open.

Thanks. Good morning, everyone. I guess following up on the Peanuts business, to be clear, it sounds like you're not expecting a drop-off by any means. I guess, as you think about your guidance, does that then assume any acceleration? Or is that just flat lined? And then in terms of that guidance, what are you assuming in terms of box office versus wholesale royalties?

Well, this is Peter again. I think we're basically flat in our revenue projection for Peanuts in 2016 versus 2015. Obviously, we're losing much of the box office revenue. But we feel that, if you will, the kick, the spurt that we're getting from the film globally is helping our overall licensing business, so that right now we're projecting that as flat, and I hope we'll do better than that. We think that's the appropriate forecast right now.

No; understood. That's probably prudent to be conservative. That helps. And then regarding your 2016 outlook in general, I guess can you walk us through the differences between the $1.35 to $1.50, I think you said in non-GAAP EPS, versus the free cash flow outlook of $170 million to $185 million? Or I guess better yet, could you help us understand how with maybe some decline in earnings free cash flow should still improve? Is that based on licensing renewals or advances on new deals? I guess, some color there would be helpful. David K. Jones - Chief Financial Officer & Executive Vice President: Not sure I understand the question, Dave. But obviously, the decline in earnings, we've got some one-time items or what we consider one-time items in 2015. When you think about the free cash flow, really it's different calculation from just our earnings.

Understood. I guess what I'm trying to say is maybe just walk us through some of the major differentiating pieces. Obviously, 2015 had some earnings that are some one-time stuff. Some of that has backed down in terms of the non-GAAP, I think. So just maybe, just some of the big pieces that might be helping you to get to that cash flow guidance versus the EPS guidance, just to give people comfort in terms of how do we think about the free cash flow and the visibility towards that? David K. Jones - Chief Financial Officer & Executive Vice President: Right. I would tell you, I think the assumptions in 2016 are pretty straightforward. We're focused on core licensing revenue and because of that we go through brand by brand. We look at the DTRs. We look at guaranteed minimums. As we mentioned, we've got some issues in the men's brands. And the assumptions in 2016, obviously, to the extent we've canceled licenses or taken back licenses, we've pulled out any revenue guidance related to those. So, the 2016, what I would tell you is a pretty straightforward year. We've got some investments, as Peter mentioned, in advertising, some investments in people. But, the guidance we've given on free cash flows is really just that, exactly what we expect the business to generate in terms of cash just from our normal licensing business. We've got no other income assumptions. We may have some transactions, but we're certainly not forecasting those or putting those into our guidance.

Okay. That helps. Thanks for the color. And then lastly for me, I'll step back. In terms of the refinancing, based on your comments, it sounds like you're planning to address that through existing cash and free cash flow generation. I guess given the $58 million or so net balance domestically and $78 million internationally, I guess, do you have the ability to issue in debt overseas? And then, beyond that, do you anticipate any asset sales at all to meet that obligation? And then, if so, which of those would you be able to sell or which of those are you not currently using as collateral for your securitization? Any help there would be appreciated. Thanks. David K. Jones - Chief Financial Officer & Executive Vice President: Sure. And so, obviously, the cash that's international, no current plans to repatriate any of that. We consider that to be permanently reinvested. I think we always consider that cash that we have offshore as cash that's available for international acquisitions. We're obviously focused on the international business and so, therefore, I would say we look at the domestic cash as it relates to our refinancing opportunities. Again, we've retained Guggenheim Securities and we're working closely with them on refinancing opportunities and different options that we had in the U.S. I think any of the refinancing that we do will come from U.S. sources. Like I said, there's no plan to bring cash back. We can pledge about 65% of our luxco (39:42) stock to the extent we wanted to do it international financing. But we – in terms of the existing converts, we think that refinancing effort will be U.S. based.

Okay. And no asset sales necessarily to do it? David K. Jones - Chief Financial Officer & Executive Vice President: Say that again?

No asset sales needed in order to do it?

I think the answer (40:04) is we're looking at all the brands right now to see which are performing and which are strategic. There's none that we will sell right now just to do the financing because we feel comfortable that the cash flow, the assets we have that have not been pledged already, both domestically, as well, as Dave said, the luxco (40:35) stock will be sufficient due to the convert we finance. But in kind of the general concept of where we do divestitures, we're talking about two noncore brands, very small, that maybe divested, but it's part of its overall strategic review.

Okay. That's great color. Thanks, everyone, and good luck.

Thank you.

Thank you. Our next question comes from the line of Liz Pierce from Brean Capital. Your line is open.

Thanks. Good morning. So, Peter, I was wondering with regards to Peanuts and the shelf space, I mean is there a possibility if the movie continues to kind of perform well that there would be an opportunity to get that product out there. What's happening to that product? Or is it shifting into next year? You could just perhaps share some insight into that.

Sure. So, the answer is, we do expect to have an important holiday season for Peanuts. There is that possibility, but I think for those of you that are not in the motion picture business, we might talk briefly about what happens at retail. Big mass retailers only really can make two to four bets per year on tent-pole movies. And that bet requires them to dedicate a lot of shelf space to the licensed products associated with those films. And Disney is, of course, the big player in the room. Star Wars has had tremendous promotion. The retailers have been very successful with Star Wars in the past. They are typically with a first film in a franchise as is the case in Peanuts. They tend to be conservative. And if they have to make a choice between the new guy on the block, Peanuts and Star Wars, they're going to choose and they have chosen, Star Wars. So, our sense of how much licensing we could get done from retailers this year was a little too optimistic. But it doesn't dim our optimism for the future. To the extent that product sells through, and I think we'll have a very good sell through, the retailers will come back to support the brand in the future. But there's no question that timing on films, particularly tent-pole movies, when they're going to be released and so on can affect everybody's business at retailing.

Okay. That's...

I'd love to tell you we have the power of a Disney at this point. We don't and...

You said that it was released in 10 other countries. Do you have any – including China which I think was up for grabs after the second quarter. Can you give us any insight how it performed and what those 10 other countries were?

Well, the 10 other countries actually were very small with the exception of China. I mean, we're talking about very marginal places such as Italy and so on. I don't have any results that I can talk to at this point. So, I'm afraid I just can't tell you. Most of the international openings are a little bit further into this year.

Right. I thought they were in December, so...

I think that's generally correct, Liz.

Okay. And then, maybe just talking about the underperforming licenses that you mentioned in China with Peanuts, if you can help us understand exactly what that is and perhaps what the plans are in place to address that.

Sure. So, we've had a number of licensees, particularly – one in particular is involved in e-commerce that got a very late start on a lot of this. So, our expectation for the sales, as you know, in China, as opposed to the retailing situation I described here where you're fighting for shelf space with mass retailers, in China, it's very different. There are no basically national chains in China. China really consists of 12 different regions speaking 12 different languages. So, it is very hard to have the equivalent of what we have here in the U.S. You're dealing with local retailers, and you're also dealing with the fact that in many ways, China is ahead of the United States from the standpoint of digital commerce. Much of the business that's done is done digitally as well, particularly with regard to Entertainment. So, in this case, we just had a licensee, one particular licensee involved in e-commerce that didn't get their work done as quickly as we had hoped. But this does not suggest that Peanuts' future in China isn't bright. I think it's very bright and I think that the film really, again, is launching. We have so many young people in China that don't know Peanuts, have never had exposure to Peanuts, and this film is going to do that. So, we feel very good about Peanuts in China in the future.

So, is this particular licensee ready for single day, which is coming up at the end of this week, which is obviously one of the biggest selling days over there?

I don't think we have a report on that right now. We are assuming that they are not. Yes. If they are...

Okay. That is not in the forecast. Okay. That's helpful. And then finally, just one other question on China in terms of what's going on with Candie's and just the possibility of further – is that part of your thinking in terms of refinancing on selling any of that or maybe that – what Dave is referring into the assets?

When you talk about for Candie's, obviously what we're looking at with Hong Kong market, the Chinese market is they basically reselling as well, but we don't control the Candie's positions, so we can't affect the timing of the public offering. But then again, as we look at China, what we're really excited about is our ability to be positioned from a strategy that we thought was really successful five years ago of affecting joint ventures into one where we're now seeing some exciting licensing opportunities with some of our bigger brands like Umbro with long-term licenses and strategic partners in China.

Okay. All right. I'll step back. Thanks and best of luck, guys.

Thank you. Our next question comes from the line of Steve Marotta from C.L. King & Associates. Your line is open. Steven L. Marotta - C.L. King & Associates, Inc.: Good morning, everybody. When you think about EBITDA margins in fiscal 2016, can you talk a little bit about it given the increase in expected marketing spend, the increase in head count? I'm assuming the fact that Peanuts is expected to be flat year-over-year, there shouldn't be a big delta from a brand mix standpoint. But can you discuss EBITDA margins a little bit directionally for fiscal 2016? David K. Jones - Chief Financial Officer & Executive Vice President: Hey, Steve, it's Dave. Yeah. So, when you look at 2015 in terms of EBITDA margins, I think we're projecting around 43% with all of the items that we mentioned. Going forward into 2016, even with the additional investments, we're still projecting about 50% EBITDA margins. And I think we feel pretty comfortable with that. So we're still in that range that we said we wanted to be in of around 50%, low 50% margin. Steven L. Marotta - C.L. King & Associates, Inc.: Okay. Where would the extra be coming from, because with roughly flattish sales and increased expenses in one area, where would the balance come from? David K. Jones - Chief Financial Officer & Executive Vice President: Well, I think as the mix of sales changes a little bit, remember the Peanuts business is of a bit lower margin and so the margins on the mix of the business get a little bit better. And then we've got some savings in other SG&A areas, although we're investing in people and advertising. Steven L. Marotta - C.L. King & Associates, Inc.: Okay. One other question. What was the reticence on your part to include free cash flow assumptions and guidance in the Thursday evening pre-announcement? David K. Jones - Chief Financial Officer & Executive Vice President: Again, as Peter said, I think the announcement or the restatement in the 8-K obviously took up an enormous amount of effort here at the company. And we just honestly weren't ready with our free cash flow estimates. Steven L. Marotta - C.L. King & Associates, Inc.: Okay. One last question on a run rate basis. What's the balance between domestic/international just as a percent of sales? David K. Jones - Chief Financial Officer & Executive Vice President: I don't have that right in front of me. We'll get back to you on that, if that's okay. Steven L. Marotta - C.L. King & Associates, Inc.: No trouble. Thank you.

Thank you. Our next question comes from the line of John Kernan from Cowen & Company. Your line is open. David Buckley - Cowen & Co. LLC: Hi. This is David Buckley on for John. Thanks for taking our question this morning. Two quick questions. One, can you talk about the long-term sustainable operating margin, what your outlook is there? And then, second question, just the home business, what's the outlook for next year and long-term there as well? Thank you. David K. Jones - Chief Financial Officer & Executive Vice President: Hey, David, it's Dave. Sitting here today, I think long-term, we would expect our operating margins to be in that 50% to 55% range. Obviously, we've got a leverageable business. To the extent we can get acquisitions that are accretive to us. We would expect those to add a lot of leverage to the business. So that could go up over time, but right now I think our long-term plan is in the low to mid-50%s. David M. Blumberg - EVP & Head of Strategic Development, Iconix Brand Group, Inc.: And this is David Blumberg. On Home, we're excited about honestly Charisma doing very well at Costco. Waverly Inspirations, a new DTR with Walmart, which has just started, we see on a long-term basis is a wonderful way to grow, Royal Velvet as well. All the Home brands, deep relationships with retailers right now. And what's exciting about Sharper Image, as I think Peter talked about, some of these new retail distribution opportunities at Walgreens, Toys"R"Us, Target, and it's becoming a lifestyle. So we feel good about the long term, and when I say lifestyle for Sharper Image, it's more than just one-off toys. It's really becoming a category. So we're excited about it. We're excited for all of them, how we've been able to build these deeper retail relationships like the fashion apparel.

We'll entertain – thanks, David -- we'll entertain one more question.

Our next question comes from the line of Jim Chartier from Monness, Crespi and Hardt. Your line is open. Jim A. Chartier - Monness, Crespi, Hardt & Co., Inc.: Thanks for taking my questions. On the free cash flow, what's the contribution from cash received from earlier joint venture formations that were done in the last couple of years in both 2015 and 2016? David K. Jones - Chief Financial Officer & Executive Vice President: Jim, that's about $20 million in 2016. Jim A. Chartier - Monness, Crespi, Hardt & Co., Inc.: $20 million in 2016? David K. Jones - Chief Financial Officer & Executive Vice President: Correct. Jim A. Chartier - Monness, Crespi, Hardt & Co., Inc.: Okay. And then on the men's business, it's great to see that it's a such a small part of the business now. But it looks like it's about a third or so of what you initially projected for those three brands for 2015. So I'm just wondering how they could do so much less than what you're initially projecting given that most of the deals have guaranteed minimums. David K. Jones - Chief Financial Officer & Executive Vice President: Hey, Jim, it's Dave. I think part of the review that we did in the quarter -- we sat down with our key licensees there and really reviewed their business. And like I said, in some cases we've actually terminated licenses due to nonperformance or nonpayment, and we're searching for new licensees. We've signed a couple of new licensees. So there was a lot of change that went on there. Peter and myself sat with the management teams from quite a few of the licensees and talked about where their business was and where they were going in the future. David M. Blumberg - EVP & Head of Strategic Development, Iconix Brand Group, Inc.: Yeah, what I'd add to it is we brought in a new manager for the men's fashion division as part of that and as part of, as Dave just said, Dave and Peter's top-down. Rocawear now has a new licensee, a new core licensee. Ecko is doing well, but in much smaller base, in mid-tier revenue. Same kind of review on Ed Hardy. And so, I think this was the time for us to focus on who are the licensees, what's the opportunity and with the new management, the ability to really focus on what's become a very small part of our revenue, but hopefully can have good growth opportunities over the next few years. Jim A. Chartier - Monness, Crespi, Hardt & Co., Inc.: Can you just quantify or give us a sense of how much of the revenue reduction in this year's forecast is the result of you canceling license agreements or exiting those agreements?

I think we said it was about $4 million related to the men's brand, and then it was about $8 million related to the accounting adjustments and that was a combination of a few different items, but certainly where we've cancelled some license agreements. Jim A. Chartier - Monness, Crespi, Hardt & Co., Inc.: Okay. And then, Dave, earlier you sounded like adding some additional brands to the existing securitization facilities was probably the best option for you to help finance the maturity of the convert. Is that still the best option and could you just talk about how easy it is to add the unencumbered brands to that facility? David K. Jones - Chief Financial Officer & Executive Vice President: This is Dave. The securitization is clearly our lowest cost of capital and mechanically I don't think it's difficult to get back into the securitization. It's obviously market dependent and like we said, we're going to work closely now with Guggenheim on different financing options, and we'll decide with them what the best one is for us at the time. Jim A. Chartier - Monness, Crespi, Hardt & Co., Inc.: Is your ability to access the existing securitization of those brands impacted by the lower results you reported today? David K. Jones - Chief Financial Officer & Executive Vice President: In order to get back into the securitization, there is a leverage cap that we can't be above. And so, obviously as our EBITDA and projected EBITDA is lower than what we expected, that puts us at some risk for being able to access that cap, at least to the full amount. Jim A. Chartier - Monness, Crespi, Hardt & Co., Inc.: Okay. And then, Strawberry Shortcake and PONY, it looks like year-to-date it's doing something like $8 million…

Thank you very much. Appreciate everyone listening in and thank you for your participation, and hope to hear from you on our next call. Thank you.