iMedia Brands, Inc. (NASDAQ: IMBI) today announced results for the
fourth quarter ended February 1, 2020 and full fiscal year
2019.
Fourth Quarter 2019 Summary & Recent
Highlights
- Q4 net sales of $124 million
declined 22% compared to prior year. Half of this decline was
expected and attributable to the company’s recent customer file
decline. Three one-time events drove the additional decline: (i)
scheduling conflicts in December with top two beauty brands; (ii)
reduction in consumer electronic (CE) products due to the largest
CE vendors requiring “cash in advance” payment terms; and (iii)
reduction in watch revenues resulting from management’s strategy to
reverse its five-plus year customer file decline by reducing the
average selling price to capture more new customers.
- Successfully flattened a five-plus
year continuous viewership decline on ShopHQ in November.
- Successfully launched Bulldog
Shopping Network in November, the first of its kind focused on
men.
- Learning to Cook with Shaq
premiered in March 2020 and posted highest weekday viewership in
ten months.
- Reestablished compliance with
Nasdaq listing requirements.
- Completed acquisition of Float Left
Interactive, a leading technology provider delivering Over-The-Top
(OTT) content and TV-everywhere solutions to media companies
seeking to reach audiences through the OTT and smart TV
distribution models.
- Completed acquisition of J.W.
Hulme, an iconic, 114-year-old American brand offering
artisan-crafted accessories and apparel via e-commerce, catalogs
and one flagship retail store in St. Paul, Minnesota.
- Consolidated net loss of $18.4
million compared to $10.0 million last year driven primarily by a
$4.1 million increase in transaction, settlement and integration,
restructuring and rebranding costs for ShopHQ, and a $2.0 million
increased loss in the company’s emerging business segment.
- ShopHQ Adjusted EBITDA of ($7.0
million) compared to ($5.2 million) for same period last year.
Emerging Business Adjusted EBITDA of ($2.2 million) compared to
($0.2 million) for same period last year.
- $4 million private investment led
by Eyal Lalo, Invicta’s CEO and iMedia Vice Chairman, entered into
on April 14, further strengthening the company’s working
capital.
CEO Commentary “First and
foremost, in terms of the COVID-19 situation and these uncertain
and stressful times, iMedia continues to be focused on taking every
necessary step to keep its employees, vendors, customers, guests,
and their families safe,” said Tim Peterman, CEO of iMedia Brands.
“We are also focused on continuing to provide our customers with
the products and services they love, and we feel very fortunate our
company remains operational and relevant so we can continue to
build value for our shareholders.”
Peterman continued, “In terms of Q4 performance,
from a ShopHQ revenue perspective, it was a mixed report card. We
achieved significant viewership, customer file, and product
assortment successes, but we also absorbed revenue pressure from
three unplanned events. With that being said, I’m proud of how our
teams reacted to reduce the probability of reoccurrence.
“Financially, our turnaround continues. In our
first nine months since May 2019 when I rejoined as CEO, we
materially reduced the company’s adjusted EBTIDA loss compared to
the prior nine months.
“Strategically, Q4 is when we really began to
demonstrate our plan to grow our portfolio of engaging niche
television networks, niche national advertisers and complementary
media services. We launched Bulldog and our membership service,
ShopHQ VIP. We acquired two important new businesses that will
further accelerate our evolution into a profitable, growing
interactive media company.”
Fourth Quarter and Full Year 2019
Results
|
SUMMARY RESULTS AND KEY OPERATING METRICS |
($ Millions, except average selling price and
EPS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q4 20192/1/2020 |
|
Q4 20182/2/2019 |
|
Change |
|
F'192/1/2020 |
|
F'182/2/2019 |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales |
|
$ |
123.6 |
|
|
$ |
157.6 |
|
|
(21.6 |
%) |
|
$ |
501.8 |
|
|
$ |
596.6 |
|
|
(15.9 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Margin % |
|
|
30.0 |
% |
|
|
29.5 |
% |
|
50 bps |
|
|
|
32.6 |
% |
|
|
34.7 |
% |
|
(210 bps |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
$ |
(9.1 |
) |
|
$ |
(5.4 |
) |
|
(70 |
%) |
|
$ |
(18.4 |
) |
|
$ |
(2.4 |
) |
|
(660 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) |
|
$ |
(18.4 |
) |
|
$ |
(10.0 |
) |
|
(84 |
%) |
|
$ |
(56.3 |
) |
|
$ |
(22.2 |
) |
|
(154 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
EPS |
|
$ |
(2.30 |
) |
|
$ |
(1.50 |
) |
|
(53 |
%) |
|
$ |
(7.54 |
) |
|
$ |
(3.35 |
) |
|
(125 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Shipped Units (000s) |
|
|
1,645 |
|
|
|
2,408 |
|
|
(32 |
%) |
|
|
6,872 |
|
|
|
9,235 |
|
|
(26 |
%) |
Average Selling Price (ASP) |
|
$ |
67 |
|
|
$ |
60 |
|
|
12 |
% |
|
$ |
65 |
|
|
$ |
58 |
|
|
12 |
% |
Return Rate % |
|
|
18.4 |
% |
|
|
18.4 |
% |
|
0 bps |
|
|
|
19.4 |
% |
|
|
19.0 |
% |
|
40 bps |
|
Digital Net Sales % |
|
|
53.9 |
% |
|
|
54.9 |
% |
|
(100 bps |
) |
|
|
52.8 |
% |
|
|
53.1 |
% |
|
(30 bps |
) |
Total Customers - 12 Month Rolling (000s) |
|
|
1,041 |
|
|
|
1,205 |
|
|
(14 |
%) |
|
|
N/A |
|
|
|
N/A |
|
|
N/A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of ShopHQ Net Merchandise Sales by Category |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jewelry & Watches |
|
|
41 |
% |
|
|
35 |
% |
|
|
|
|
44 |
% |
|
|
38 |
% |
|
|
Home & Consumer Electronics |
|
|
32 |
% |
|
|
33 |
% |
|
|
|
|
23 |
% |
|
|
25 |
% |
|
|
Beauty & Wellness |
|
|
15 |
% |
|
|
17 |
% |
|
|
|
|
18 |
% |
|
|
19 |
% |
|
|
Fashion & Accessories |
|
|
12 |
% |
|
|
15 |
% |
|
|
|
|
15 |
% |
|
|
18 |
% |
|
|
Total |
|
|
100 |
% |
|
|
100 |
% |
|
|
|
|
100 |
% |
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liquidity and Capital Resources
As of February 1, 2020, total unrestricted cash
was $10.3 million compared to $16.6 million at the end of the third
quarter of fiscal 2019. The Company also had an additional
$5.6 million of unused availability on its revolving credit
facility.
Also, as announced in a press release today,
iMedia entered into a financing agreement to sell $4 million of
common stock priced at market to investors that include, among
others, Invicta Media Investments, an affiliate of Eyal Lalo, the
Company’s Vice Chair, as well as current director Michael Friedman.
Proceeds will be used for general working capital purposes.
In light of the macro economic conditions and
COVID-19, the Company is closely monitoring any impact to its
operations, supply chain, liquidity or financial results.
Outlook
In terms of our outlook, because of COVID-19, we
are not providing guidance currently. We believe that television
retailing will be less impacted than other businesses because we
serve our customers without them ever leaving their homes.
Conference Call
The company will hold a conference call today at
8:30 a.m. Eastern time to discuss its fourth quarter 2019
results.
Date: Wednesday, April 15, 2020Toll-free dial-in
number: (877) 407-9039International dial-in number: (201)
689-8470Conference ID: 13700243
Please call the conference telephone number 5-10
minutes prior to the start time. An operator will register your
name and organization. If you have any difficulty connecting with
the conference call, please contact Gateway Investor Relations at
(949) 574-3860.
The conference call will be broadcast live and
available for replay here and via the investor relations section of
the iMedia Brands website at www.imediabrands.com.
A replay of the conference call will be
available after 11:30 a.m. Eastern time on the same day through
April 29, 2020.
Toll-free replay number: (844)
512-2921International replay number: (412) 317-6671Replay ID:
13700243
About iMedia Brands, Inc.
iMedia Brands, Inc. (Nasdaq: IMBI) is a leading
interactive media company that manages a growing portfolio of niche
lifestyle television networks, niche advertisers and complementary
media services in North America. Its brand portfolio spans multiple
business models and product categories and includes ShopHQ, Bulldog
Shopping Network, Float Left Interactive, J.W. Hulme and iMedia 3PL
Services. Please visit www.imediabrands.com for more investor
information.
Contacts:
Investors:Gateway Investor RelationsCody
SlachIMBI@gatewayir.com(949) 574-3860
Media:press@imediabrands.com(800) 938-9707
|
BRANDS, INC. |
AND SUBSIDIARIES |
CONSOLIDATED BALANCE SHEETS |
(In thousands except share and per share data) |
|
|
|
|
|
|
|
February 1, |
|
February 2, |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
ASSETS |
Current assets: |
|
|
|
|
Cash |
|
$ |
10,287 |
|
|
$ |
20,485 |
|
Restricted cash equivalents |
|
|
- |
|
|
|
450 |
|
Accounts receivable, net |
|
|
63,594 |
|
|
|
81,763 |
|
Inventories |
|
|
78,863 |
|
|
|
65,272 |
|
Prepaid expenses and other |
|
|
8,196 |
|
|
|
9,053 |
|
Total current assets |
|
|
160,940 |
|
|
|
177,023 |
|
Property and equipment, net |
|
|
47,616 |
|
|
|
51,118 |
|
Other assets |
|
|
4,187 |
|
|
|
1,846 |
|
Total Assets |
|
$ |
212,743 |
|
|
$ |
229,987 |
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
|
$ |
83,659 |
|
|
$ |
56,157 |
|
Accrued liabilities |
|
|
40,250 |
|
|
|
37,374 |
|
Current portion of long term credit facility |
|
|
2,714 |
|
|
|
2,488 |
|
Current portion of operating lease liabilities |
|
|
704 |
|
|
|
- |
|
Deferred revenue |
|
|
141 |
|
|
|
35 |
|
Total current liabilities |
|
|
127,468 |
|
|
|
96,054 |
|
|
|
|
|
|
|
|
|
|
|
Other long term liabilities |
|
|
335 |
|
|
|
50 |
|
Long term credit facilities |
|
|
66,246 |
|
|
|
68,932 |
|
Total liabilities |
|
|
194,049 |
|
|
|
165,036 |
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
Shareholders' equity: |
|
|
|
|
Preferred stock, $.01 par value, 40,000 shares authorized; |
|
|
|
|
zero shares issued and outstanding |
|
|
- |
|
|
|
- |
|
Common stock, $.01 par value, 14,960,000 and 9,960,000 shares
authorized; |
|
|
|
|
|
|
8,208,227 and 6,791,934 shares issued and outstanding |
|
|
82 |
|
|
|
68 |
|
Additional paid-in capital |
|
|
452,833 |
|
|
|
442,808 |
|
Accumulated deficit |
|
|
(434,221 |
) |
|
|
(377,925 |
) |
Total shareholders' equity |
|
|
18,694 |
|
|
|
64,951 |
|
Total Liabilities and Shareholders' Equity |
|
$ |
212,743 |
|
|
$ |
229,987 |
|
iMEDIA BRANDS, INC. |
AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF OPERATIONS |
(Unaudited) |
(In thousands, except share and per share data) |
|
|
|
|
|
|
|
|
|
|
|
For the Three-Month Periods Ended |
|
For the Twelve-Month Periods Ended |
|
|
|
|
|
|
|
|
|
|
|
February 1, |
|
February 2, |
|
February 1, |
|
February 2, |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
Net sales |
|
$ |
123,639 |
|
|
$ |
157,619 |
|
|
$ |
501,822 |
|
|
$ |
596,637 |
|
Cost of sales |
|
|
86,607 |
|
|
|
111,052 |
|
|
|
338,185 |
|
|
|
389,790 |
|
Gross profit |
|
|
37,032 |
|
|
|
46,567 |
|
|
|
163,637 |
|
|
|
206,847 |
|
Margin % |
|
|
30.0 |
% |
|
|
29.5 |
% |
|
|
32.6 |
% |
|
|
34.7 |
% |
Operating expense: |
|
|
|
|
|
|
|
|
Distribution and selling |
|
|
41,870 |
|
|
|
47,744 |
|
|
|
170,587 |
|
|
|
191,917 |
|
General and administrative |
|
|
7,795 |
|
|
|
6,429 |
|
|
|
25,611 |
|
|
|
25,883 |
|
Depreciation and amortization |
|
|
1,823 |
|
|
|
1,562 |
|
|
|
8,057 |
|
|
|
6,243 |
|
Restructuring costs |
|
|
2,485 |
|
|
|
- |
|
|
|
9,166 |
|
|
|
- |
|
Executive and management transition costs |
|
|
313 |
|
|
|
661 |
|
|
|
2,741 |
|
|
|
2,093 |
|
Gain on sale of television station |
|
|
- |
|
|
|
(665 |
) |
|
|
- |
|
|
|
(665 |
) |
Total operating expense |
|
|
54,286 |
|
|
|
55,731 |
|
|
|
216,162 |
|
|
|
225,471 |
|
Operating loss |
|
|
(17,254 |
) |
|
|
(9,164 |
) |
|
|
(52,525 |
) |
|
|
(18,624 |
) |
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
Interest income |
|
|
2 |
|
|
|
6 |
|
|
|
17 |
|
|
|
34 |
|
Interest expense |
|
|
(1,169 |
) |
|
|
(811 |
) |
|
|
(3,777 |
) |
|
|
(3,502 |
) |
Total other expense |
|
|
(1,167 |
) |
|
|
(805 |
) |
|
|
(3,760 |
) |
|
|
(3,468 |
) |
|
|
|
|
|
|
|
|
|
Loss before income taxes |
|
|
(18,421 |
) |
|
|
(9,969 |
) |
|
|
(56,285 |
) |
|
|
(22,092 |
) |
|
|
|
|
|
|
|
|
|
Income tax benefit (provision) |
|
|
33 |
|
|
|
(5 |
) |
|
|
(11 |
) |
|
|
(65 |
) |
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(18,388 |
) |
|
$ |
(9,974 |
) |
|
$ |
(56,296 |
) |
|
$ |
(22,157 |
) |
|
|
|
|
|
|
|
|
|
Net loss per common share |
|
$ |
(2.30 |
) |
|
$ |
(1.50 |
) |
|
$ |
(7.54 |
) |
|
$ |
(3.35 |
) |
|
|
|
|
|
|
|
|
|
Net loss per common share |
|
|
|
|
|
|
|
|
---assuming dilution |
|
$ |
(2.30 |
) |
|
$ |
(1.50 |
) |
|
$ |
(7.54 |
) |
|
$ |
(3.35 |
) |
|
|
|
|
|
|
|
|
|
Weighted average number of |
|
|
|
|
|
|
|
|
common shares outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
|
7,990,381 |
|
|
|
6,657,092 |
|
|
|
7,462,380 |
|
|
|
6,607,321 |
|
Diluted |
|
|
7,990,381 |
|
|
|
6,657,092 |
|
|
|
7,462,380 |
|
|
|
6,607,321 |
|
iMEDIA BRANDS, INC. |
AND SUBSIDIARIES |
PERFORMANCE MEASURES BY SEGMENT |
(Unaudited) |
($ in Millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three-Month Period Ended |
|
For the Three-Month Period Ended |
|
|
February 1, 2020 |
|
February 2, 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ShopHQ |
|
Emerging |
|
Consolidated |
|
ShopHQ |
|
Emerging |
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales |
|
$ |
120.5 |
|
|
$ |
3.1 |
|
|
$ |
123.6 |
|
|
$ |
156.2 |
|
|
$ |
1.5 |
|
|
$ |
157.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Loss |
|
|
(14.6 |
) |
|
|
(2.6 |
) |
|
|
(17.3 |
) |
|
|
(8.5 |
) |
|
|
(0.6 |
) |
|
|
(9.2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss |
|
|
(15.8 |
) |
|
|
(2.6 |
) |
|
|
(18.4 |
) |
|
|
(9.4 |
) |
|
|
(0.6 |
) |
|
|
(10.0 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
|
(7.0 |
) |
|
|
(2.2 |
) |
|
|
(9.1 |
) |
|
|
(5.2 |
) |
|
|
(0.2 |
) |
|
|
(5.4 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Twelve-Month Period Ended |
|
For the Twelve-Month Period Ended |
|
|
February 1, 2020 |
|
February 2, 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ShopHQ |
|
Emerging |
|
Consolidated |
|
ShopHQ |
|
Emerging |
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales |
|
$ |
496.1 |
|
|
$ |
5.7 |
|
|
$ |
501.8 |
|
|
$ |
590.2 |
|
|
$ |
6.4 |
|
|
$ |
596.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Loss |
|
|
(47.0 |
) |
|
|
(5.6 |
) |
|
|
(52.5 |
) |
|
|
(17.2 |
) |
|
|
(1.5 |
) |
|
|
(18.6 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss |
|
|
(50.7 |
) |
|
|
(5.6 |
) |
|
|
(56.3 |
) |
|
|
(20.7 |
) |
|
|
(1.5 |
) |
|
|
(22.2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
|
(14.9 |
) |
|
|
(3.5 |
) |
|
|
(18.4 |
) |
|
|
(1.5 |
) |
|
|
(0.9 |
) |
|
|
(2.4 |
) |
iMEDIA BRANDS, INC. |
AND SUBSIDIARIES |
Reconciliation of Net Loss to Adjusted
EBITDA: |
(Unaudited) |
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three-Month Period Ended |
|
For the Three-Month Period Ended |
|
|
February 1, 2020 |
|
February 2, 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ShopHQ |
|
Emerging |
|
Consolidated |
ShopHQ |
|
Emerging |
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(15,764 |
) |
$ |
(2,624 |
) |
|
$ |
(18,388 |
) |
|
$ |
(9,353 |
) |
|
$ |
(621 |
) |
|
$ |
(9,974 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
2,698 |
|
|
|
124 |
|
|
|
2,822 |
|
|
|
2,473 |
|
|
|
24 |
|
|
|
2,497 |
|
Interest income |
|
|
(2 |
) |
|
|
- |
|
|
|
(2 |
) |
|
|
(6 |
) |
|
|
- |
|
|
|
(6 |
) |
Interest expense |
|
|
1,169 |
|
|
|
- |
|
|
|
1,169 |
|
|
|
811 |
|
|
|
- |
|
|
|
811 |
|
Income taxes |
|
|
(33 |
) |
|
|
- |
|
|
|
(33 |
) |
|
|
5 |
|
|
|
- |
|
|
|
5 |
|
EBITDA (as defined) |
|
$ |
(11,932 |
) |
$ |
(2,500 |
) |
|
$ |
(14,432 |
) |
|
$ |
(6,070 |
) |
|
$ |
(597 |
) |
|
$ |
(6,667 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
A reconciliation of EBITDA to Adjusted EBITDA is as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA (as defined) |
|
$ |
(11,932 |
) |
$ |
(2,500 |
) |
|
$ |
(14,432 |
) |
|
$ |
(6,070 |
) |
|
$ |
(597 |
) |
|
$ |
(6,667 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring costs |
|
|
2,389 |
|
|
|
96 |
|
|
|
2,485 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Executive and management transition costs |
|
|
313 |
|
|
|
- |
|
|
|
313 |
|
|
|
661 |
|
|
|
- |
|
|
|
661 |
|
Rebranding costs |
|
|
473 |
|
|
|
- |
|
|
|
473 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Transaction, settlement and integration costs, net (a) |
|
|
1,282 |
|
|
|
216 |
|
|
|
1,498 |
|
|
|
63 |
|
|
|
338 |
|
|
|
401 |
|
Gain on sale of television station |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(665 |
) |
|
|
- |
|
|
|
(665 |
) |
Non-cash share-based compensation expense |
|
|
521 |
|
|
|
- |
|
|
|
521 |
|
|
|
858 |
|
|
|
26 |
|
|
|
884 |
|
Adjusted EBITDA |
|
$ |
(6,954 |
) |
|
$ |
(2,188 |
) |
|
$ |
(9,142 |
) |
|
$ |
(5,153 |
) |
|
$ |
(233 |
) |
|
$ |
(5,386 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Twelve-Month Period Ended |
|
For the Twelve-Month Period Ended |
|
|
February 1, 2020 |
|
February 2, 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ShopHQ |
|
Emerging |
|
Consolidated |
ShopHQ |
|
Emerging |
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(50,727 |
) |
$ |
(5,569 |
) |
|
$ |
(56,296 |
) |
|
$ |
(20,706 |
) |
$ |
(1,451 |
) |
|
$ |
(22,157 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
11,395 |
|
|
|
619 |
|
|
|
12,014 |
|
|
|
10,065 |
|
|
|
99 |
|
|
|
10,164 |
|
Interest income |
|
|
(17 |
) |
|
|
- |
|
|
|
(17 |
) |
|
|
(34 |
) |
|
|
- |
|
|
|
(34 |
) |
Interest expense |
|
|
3,777 |
|
|
|
- |
|
|
|
3,777 |
|
|
|
3,502 |
|
|
|
- |
|
|
|
3,502 |
|
Income taxes |
|
|
11 |
|
|
|
- |
|
|
|
11 |
|
|
|
65 |
|
|
|
- |
|
|
|
65 |
|
EBITDA (as defined) |
|
$ |
(35,561 |
) |
$ |
(4,950 |
) |
|
$ |
(40,511 |
) |
|
$ |
(7,108 |
) |
|
$ |
(1,352 |
) |
|
$ |
(8,460 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
A reconciliation of EBITDA to Adjusted EBITDA is as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA (as defined) |
|
$ |
(35,561 |
) |
$ |
(4,950 |
) |
|
$ |
(40,511 |
) |
|
$ |
(7,108 |
) |
|
$ |
(1,352 |
) |
|
$ |
(8,460 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring costs |
|
|
8,228 |
|
|
|
938 |
|
|
|
9,166 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Executive and management transition costs |
|
|
2,741 |
|
|
|
- |
|
|
|
2,741 |
|
|
|
2,093 |
|
|
|
- |
|
|
|
2,093 |
|
Rebranding costs |
|
|
1,265 |
|
|
|
- |
|
|
|
1,265 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Inventory Impairment write-down |
|
|
6,050 |
|
|
|
- |
|
|
|
6,050 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Transaction, settlement and integration costs, net (b) |
|
|
266 |
|
|
|
428 |
|
|
|
694 |
|
|
|
1,142 |
|
|
|
407 |
|
|
|
1,549 |
|
Gain on sale of television station |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(665 |
) |
|
|
- |
|
|
|
(665 |
) |
Non-cash share-based compensation expense |
|
|
2,152 |
|
|
|
52 |
|
|
|
2,204 |
|
|
|
3,038 |
|
|
|
26 |
|
|
|
3,064 |
|
Adjusted EBITDA |
|
$ |
(14,859 |
) |
$ |
(3,532 |
) |
|
$ |
(18,391 |
) |
|
$ |
(1,500 |
) |
|
$ |
(919 |
) |
|
$ |
(2,419 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
- Transaction, settlement and
integration costs, net, for the quarter ended February 1, 2020
of $1.5 million includes contract settlement costs, costs incurred
to effect a reverse stock split and business acquisition and
integration-related costs. Transaction, settlement and integration
costs, net, for the quarter ended February 2, 2019 includes
business development and expansion costs of $401,000.
- Transaction, settlement and
integration costs, net, for year ended February 1, 2020 of
$0.7 million includes $2.2 million of costs for contract settlement
costs, business acquisition and integration-related costs to
acquire Float Left and J.W. Hulme; costs incurred related to the
implementation of our ShopHQ VIP customer program and our
third-party logistics service offerings and costs incurred to
effect a reverse stock split, partially offset by a $1.5 million
gain for the sale of our claim related to the Payment Card
Interchange Fee and Merchant Discount Antitrust Litigation class
action lawsuit. Transaction, settlement and integration costs, net,
for year ended February 2, 2019 includes business development
and expansion costs of $796,000 and contract termination costs of
$753,000.
Adjusted EBITDA
EBITDA represents net income (loss) for the
respective periods excluding depreciation and amortization expense,
interest income (expense) and income taxes. The Company defines
Adjusted EBITDA as EBITDA excluding non-operating gains (losses);
executive and management transition costs; restructuring costs;
rebranding costs; non-cash impairment charges and write downs;
transaction, settlement, and integration costs, net; gain on sale
of television station and non-cash share-based compensation
expense. The Company has included the “Adjusted EBITDA” measure in
its EBITDA reconciliation in order to adequately assess the
operating performance of its television and online businesses and
in order to maintain comparability to its analyst's coverage and
financial guidance, when given. Management believes that the
Adjusted EBITDA measure allows investors to make a meaningful
comparison between its business operating results over different
periods of time with those of other similar companies. In addition,
management uses Adjusted EBITDA as a metric to evaluate operating
performance under the Company’s management and executive incentive
compensation programs. Adjusted EBITDA should not be construed as
an alternative to operating income (loss), net income (loss) or to
cash flows from operating activities as determined in accordance
with generally accepted accounting principles (“GAAP”) and should
not be construed as a measure of liquidity. Adjusted EBITDA may not
be comparable to similarly entitled measures reported by other
companies. The Company has included a reconciliation of the
comparable GAAP measure, net income (loss) to Adjusted EBITDA in
this release.
Safe Harbor Statement under the Private
Securities Litigation Reform Act of 1995
This document may contain certain
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. Any statements contained
herein that are not statements of historical fact, including
statements regarding rebranding, savings from cost reductions,
expected changes in the merchandise mix and its impact,
expectations arising from our partnership with Shaquille O’Neal,
plans for LaVenta, expected advantages to pursue restructuring and
operational changes, guidance, industry prospects, or future
results of operations or financial position are forward-looking.
The Company often use words such as anticipates, believes,
estimates, expects, intends, seeks, predicts, hopes, should, plans,
will and similar expressions to identify forward-looking
statements. These statements are based on management's current
expectations and accordingly are subject to uncertainty and changes
in circumstances. Actual results may vary materially from the
expectations contained herein due to various important factors,
including (but not limited to): variability in consumer
preferences, shopping behaviors, spending and debt levels; the
general economic and credit environment, including COVID-19;
interest rates; seasonal variations in consumer purchasing
activities; the ability to achieve the most effective product
category mixes to maximize sales and margin objectives; competitive
pressures on sales and sales promotions; pricing and gross sales
margins; the level of cable and satellite distribution for the
Company’s programming and the associated fees or estimated cost
savings from contract renegotiations; the Company’s ability to
establish and maintain acceptable commercial terms with third-party
vendors and other third parties with whom the Company has
contractual relationships, and to successfully manage key vendor
and shipping relationships and develop key partnerships and
proprietary and exclusive brands; the ability to manage operating
expenses successfully and the Company’s working capital levels; the
ability to remain compliant with the Company’s credit facilities
covenants; customer acceptance of the Company’s branding strategy
and its repositioning as a video commerce company; the ability to
respond to changes in consumer shopping patterns and preferences,
and changes in technology and consumer viewing patterns; changes to
the Company’s management and information systems infrastructure;
challenges to the Company’s data and information security; changes
in governmental or regulatory requirements; including without
limitation, regulations of the Federal Communications Commission
and Federal Trade Commission, and adverse outcomes from regulatory
proceedings; litigation or governmental proceedings affecting the
Company’s operations; significant events (including disasters,
weather events or events attracting significant television
coverage) that either cause an interruption of television coverage
or that divert viewership from its programming; disruptions in the
Company’s distribution of its network broadcast to customers; the
Company’s ability to protect its intellectual property rights; our
ability to obtain and retain key executives and employees; the
Company’s ability to attract new customers and retain existing
customers; changes in shipping costs; expenses related to the
actions of activist or hostile shareholders; the Company’s ability
to offer new or innovative products and customer acceptance of the
same; changes in customer viewing habits of television programming;
and the risks identified under Item 1A(Risk Factors) in the
Company’s most recently filed Form 10-K and any additional risk
factors identified in its periodic reports since the date of such
Form 10-K. More detailed information about those factors is set
forth in the Company’s filings with the Securities and Exchange
Commission, including its annual report on Form 10-K, quarterly
reports on Form 10-Q, and current reports on Form 8-K. Investors
are cautioned not to place undue reliance on forward-looking
statements, which speak only as of the date of this announcement.
the Company’s is under no obligation (and expressly disclaim any
such obligation) to update or alter its forward-looking statements
whether as a result of new information, future events or
otherwise.
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