iMedia Brands, Inc. (the “Company”) (NASDAQ: IMBI) today announced
results for the third quarter ended October 31, 2020.
Third Quarter
2020 Summary & Recent
Highlights
- Active customer file grew by 4%
year-over-year, driven by a 31% growth in new customers.
- Q3 net sales were $109.0 million, a
decline of 5% compared to same prior-year period, which was the
best year-over-year quarterly net sales performance in more than
two years. This success was primarily driven by 49 exciting new
brands launched so far this year that have generated approximately
21% of our year-to-date net sales, the highest percentage in any
nine-month period in the Company’s 30-year history.
- Q3 gross margin was 37.4%, a
130-basis point improvement over the same prior-year period.
Year-to-date gross margin was 37.2%, a 370-basis point improvement
over the same prior-year period.
- Shaq kitchen products launched in over 2,000 Target and Sam’s
Club stores in October 2020.
- Completed an oversubscribed common equity raise in August 2020,
increasing institutional ownership and strengthening the balance
sheet as the Company positions for growth.
- Q3 net loss was $4.7 million, a
$2.0 million improvement over the same prior-year period.
Year-to-date net loss was $10.5 million, a $27.4 million
improvement over the same prior-year period.
- Q3 adjusted EBITDA was $6.4
million, a $7.4 million improvement over the same prior-year
period. Year-to-date adjusted EBITDA was $15.5 million, a $24.7
million improvement over the same prior-year period.
- Float Left’s OTT SaaS proprietary platform, Flicast, generated
a 100% year-over-year increase in demand¹ in Q3 as it
continues to launch high quality OTT apps for clients on over 12
different internet-based video platforms.
- Company’s newest consumer brand, J.W. Hulme, premiered on both
ShopHQ and ShopBulldogTV during Q3 and exceeded internal sales
forecasts by offering customers an engaging assortment of men’s and
women’s accessories.
CEO
Commentary
“Q3 was another strong performance from our
entrepreneurial-minded employees and vendors,” said Tim Peterman,
CEO of iMedia Brands. “We are passionate about capturing our
opportunities, and it shows.”
Third Quarter
2020 Results
SUMMARY RESULTS AND KEY OPERATING METRICS |
($ Millions, except average selling price and
EPS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3 202010/31/2020 |
|
Q3 201911/2/2019 |
|
Change |
|
YTD 202010/31/2020 |
|
YTD 201911/2/2019 |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales |
|
$ |
109.0 |
|
|
$ |
115.2 |
|
|
(5.3 |
%) |
|
$ |
329.4 |
|
|
$ |
378.2 |
|
|
(12.9 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Margin % |
|
|
37.4 |
% |
|
|
36.1 |
% |
|
130 bps |
|
|
37.2 |
% |
|
|
33.5 |
% |
|
370 bps |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
$ |
6.4 |
|
|
$ |
(1.0 |
) |
|
N/A |
|
$ |
15.5 |
|
|
$ |
(9.2 |
) |
|
N/A |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(4.7 |
) |
|
$ |
(6.7 |
) |
|
30 |
% |
|
$ |
(10.5 |
) |
|
$ |
(37.9 |
) |
|
72 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
EPS |
|
$ |
(0.39 |
) |
|
$ |
(0.89 |
) |
|
56 |
% |
|
$ |
(1.05 |
) |
|
$ |
(5.20 |
) |
|
80 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Shipped Units (000s) |
|
|
1,664 |
|
|
|
1,578 |
|
|
5 |
% |
|
|
4,775 |
|
|
|
5,227 |
|
|
(9 |
%) |
Average Selling Price (ASP) |
|
$ |
58 |
|
|
$ |
66 |
|
|
(12 |
%) |
|
$ |
61 |
|
|
$ |
65 |
|
|
(6 |
%) |
Return Rate % |
|
|
14.4 |
% |
|
|
19.0 |
% |
|
(460 bps) |
|
|
14.5 |
% |
|
|
19.7 |
% |
|
(520 bps) |
ShopHQ Digital Net Sales % |
|
|
49.1 |
% |
|
|
51.5 |
% |
|
(240 bps) |
|
|
50.7 |
% |
|
|
52.3 |
% |
|
(160 bps) |
Total Customers - 12 Month Rolling (000s) |
|
1,028 |
|
|
|
1,115 |
|
|
(8 |
%) |
|
N/A |
|
N/A |
|
N/A |
|
|
|
|
|
|
|
|
|
|
|
|
|
% of ShopHQ Net Merchandise Sales by Category |
|
|
|
|
|
|
|
|
|
|
Jewelry & Watches |
|
|
40 |
% |
|
|
45 |
% |
|
|
|
|
40 |
% |
|
|
45 |
% |
|
|
Home & Consumer Electronics |
|
|
16 |
% |
|
|
23 |
% |
|
|
|
|
14 |
% |
|
|
21 |
% |
|
|
Beauty & Health |
|
|
34 |
% |
|
|
18 |
% |
|
|
|
|
34 |
% |
|
|
19 |
% |
|
|
Fashion & Accessories |
|
|
10 |
% |
|
|
14 |
% |
|
|
|
|
12 |
% |
|
|
15 |
% |
|
|
Total |
|
|
100 |
% |
|
|
100 |
% |
|
|
|
|
100 |
% |
|
|
100 |
% |
|
|
Liquidity and Capital
Resources
As of October 31, 2020, total unrestricted cash
was $19.0 million, an increase of $8.7 million from prior-year
end. Net debt at the end of Q3 was $33.6 million, a $25.1
million reduction from prior-year end. The Company also had an
additional $11.3 million of unused availability on its revolving
credit facility.
Outlook
In Q4, iMedia Brands anticipates posting
adjusted EBITDA in the mid-to-high single-digit millions. The
Company also continues to believe that the pandemic’s effect will
be reduced because it has a direct-to-consumer revenue model that
serves customers who seek to buy goods from the comfort of their
own homes, and it is not dependent on the traditional advertising
dollars from national advertisers who are impacted by the continued
disruption of the brick and mortar shopping experience.
_____________________________
¹ Demand defined as total value of new contracts
during the period.
Conference Call
The Company will hold a conference call today at
8:30 a.m. Eastern time to discuss its third quarter 2020
results.
Date: Tuesday, November 24, 2020Toll-free
dial-in number: (877) 407-9039International dial-in number: (201)
689-8470Conference ID: 13712618
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 Investors 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
December 8, 2020.
Toll-free replay number: (844)
512-2921International replay number: (412) 317-6671Replay ID:
13712618
About iMedia Brands, Inc.
iMedia Brands, Inc. (Nasdaq: IMBI) is a leading
interactive media company that owns a growing portfolio of
lifestyle television networks, consumer brands and media commerce
services. Its brand portfolio spans multiple business models and
product categories. Its television brands are ShopHQ,
ShopBulldogTV, ShopHQHealth and LaVenta. Its media commerce
services brands are Float Left Interactive and i3PL. Its consumer
brands include J.W. Hulme, Live Fit and Indigo Thread. 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
iMEDIA BRANDS, INC. |
AND SUBSIDIARIES |
CONSOLIDATED BALANCE SHEETS |
(In thousands except share and per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
October 31, |
|
February 1, |
|
|
|
|
|
|
|
2020 |
|
|
|
2020 |
|
|
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
ASSETS |
Current assets: |
|
|
|
|
|
|
Cash |
|
|
$ |
18,962 |
|
|
$ |
10,287 |
|
|
Accounts receivable, net |
|
|
|
53,539 |
|
|
|
63,594 |
|
|
Inventories |
|
|
|
71,666 |
|
|
|
78,863 |
|
|
Current portion of television distribution rights, net |
|
15,420 |
|
|
|
- |
|
|
Prepaid expenses and other |
|
|
|
7,364 |
|
|
|
8,196 |
|
|
|
Total current assets |
|
|
|
166,951 |
|
|
|
160,940 |
|
Property and equipment, net |
|
|
|
43,560 |
|
|
|
47,616 |
|
Television distribution rights, net |
|
|
|
3,875 |
|
|
|
- |
|
Other assets |
|
|
|
4,413 |
|
|
|
4,187 |
|
|
|
|
Total Assets |
|
|
$ |
218,799 |
|
|
$ |
212,743 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable |
|
|
$ |
81,168 |
|
|
$ |
83,659 |
|
|
Accrued liabilities |
|
|
|
28,102 |
|
|
|
40,250 |
|
|
Current portion of television distribution rights obligation |
|
21,478 |
|
|
|
- |
|
|
Current portion of long term credit facility |
|
|
2,714 |
|
|
|
2,714 |
|
|
Current portion of operating lease liabilities |
|
|
643 |
|
|
|
704 |
|
|
Deferred revenue |
|
|
|
205 |
|
|
|
141 |
|
|
|
Total current liabilities |
|
|
|
134,310 |
|
|
|
127,468 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other long term liabilities |
|
|
|
5,619 |
|
|
|
335 |
|
Long term credit facilities |
|
|
|
49,836 |
|
|
|
66,246 |
|
|
|
Total liabilities |
|
|
|
189,765 |
|
|
|
194,049 |
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity: |
|
|
|
|
|
|
Preferred stock, $.01 par value, 400,000 shares authorized; |
|
|
|
|
|
zero shares issued and outstanding |
|
|
- |
|
|
|
- |
|
|
Common stock, $.01 par value, 29,600,000 and 14,600,000 shares
authorized; |
|
|
|
|
as of October 31, 2020 and February 1, 2020; 13,016,660 and
8,208,227 |
|
|
|
|
shares issued and outstanding as of October 31, 2020 and February
1, 2020 |
|
|
|
130 |
|
|
|
82 |
|
|
Additional paid-in capital |
|
|
|
473,647 |
|
|
|
452,833 |
|
|
Accumulated deficit |
|
|
|
(444,743 |
) |
|
|
(434,221 |
) |
|
|
Total shareholders' equity |
|
|
|
29,034 |
|
|
|
18,694 |
|
|
|
|
Total Liabilities and Shareholders' Equity |
|
$ |
218,799 |
|
|
$ |
212,743 |
|
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 Nine-Month Periods Ended |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
October 31, |
|
November 2, |
|
October 31, |
|
November 2, |
|
|
|
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
Net sales |
$ |
109,025 |
|
|
$ |
115,159 |
|
|
$ |
329,374 |
|
|
$ |
378,183 |
|
Cost of sales |
|
68,211 |
|
|
|
73,573 |
|
|
|
206,711 |
|
|
|
251,578 |
|
|
|
|
Gross profit |
|
40,814 |
|
|
|
41,586 |
|
|
|
122,663 |
|
|
|
126,605 |
|
|
|
|
Margin % |
|
37.4 |
% |
|
|
36.1 |
% |
|
|
37.2 |
% |
|
|
33.5 |
% |
Operating expense: |
|
|
|
|
|
|
|
|
Distribution and selling |
|
31,490 |
|
|
|
38,332 |
|
|
|
97,100 |
|
|
|
128,717 |
|
|
General and administrative |
|
4,687 |
|
|
|
5,415 |
|
|
|
15,158 |
|
|
|
17,816 |
|
|
Depreciation and amortization |
|
7,977 |
|
|
|
2,053 |
|
|
|
16,700 |
|
|
|
6,234 |
|
|
Restructuring costs |
|
55 |
|
|
|
1,516 |
|
|
|
264 |
|
|
|
6,681 |
|
|
Executive and management transition costs |
|
- |
|
|
|
87 |
|
|
|
- |
|
|
|
2,428 |
|
|
|
Total operating expense |
|
44,209 |
|
|
|
47,403 |
|
|
|
129,222 |
|
|
|
161,876 |
|
Operating loss |
|
(3,395 |
) |
|
|
(5,817 |
) |
|
|
(6,559 |
) |
|
|
(35,271 |
) |
|
|
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
Interest income |
|
1 |
|
|
|
4 |
|
|
|
2 |
|
|
|
15 |
|
|
Interest expense |
|
(1,339 |
) |
|
|
(914 |
) |
|
|
(3,920 |
) |
|
|
(2,608 |
) |
|
|
Total other expense |
|
(1,338 |
) |
|
|
(910 |
) |
|
|
(3,918 |
) |
|
|
(2,593 |
) |
|
|
|
|
|
|
|
|
|
|
|
Loss before income taxes |
|
(4,733 |
) |
|
|
(6,727 |
) |
|
|
(10,477 |
) |
|
|
(37,864 |
) |
|
|
|
|
|
|
|
|
|
|
|
Income tax provision |
|
(15 |
) |
|
|
(14 |
) |
|
|
(45 |
) |
|
|
(44 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(4,748 |
) |
|
$ |
(6,741 |
) |
|
$ |
(10,522 |
) |
|
$ |
(37,908 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net loss per common share |
$ |
(0.39 |
) |
|
$ |
(0.89 |
) |
|
$ |
(1.05 |
) |
|
$ |
(5.20 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net loss per common share |
|
|
|
|
|
|
|
|
|
---assuming dilution |
$ |
(0.39 |
) |
|
$ |
(0.89 |
) |
|
$ |
(1.05 |
) |
|
$ |
(5.20 |
) |
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of |
|
|
|
|
|
|
|
common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
Basic |
|
12,177,990 |
|
|
|
7,577,028 |
|
|
|
10,000,383 |
|
|
|
7,286,380 |
|
|
|
|
Diluted |
|
12,177,990 |
|
|
|
7,577,028 |
|
|
|
10,000,383 |
|
|
|
7,286,380 |
|
iMEDIA BRANDS, INC. |
AND SUBSIDIARIES |
PERFORMANCE MEASURES BY SEGMENT |
($ in Millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three-Month Period Ended |
|
For the Three-Month Period Ended |
|
|
October 31, 2020 |
|
November 2, 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ShopHQ |
|
Emerging |
|
Consolidated |
|
ShopHQ |
|
Emerging |
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales |
|
$ |
104.3 |
|
|
$ |
4.7 |
|
|
$ |
109.0 |
|
|
$ |
114.0 |
|
|
$ |
1.1 |
|
|
$ |
115.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit |
|
|
38.8 |
|
|
$ |
2.0 |
|
|
|
40.8 |
|
|
|
41.5 |
|
|
$ |
0.1 |
|
|
|
41.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Loss |
|
|
(2.4 |
) |
|
$ |
(1.0 |
) |
|
|
(3.4 |
) |
|
|
(5.3 |
) |
|
$ |
(0.5 |
) |
|
|
(5.8 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
|
7.2 |
|
|
$ |
(0.8 |
) |
|
|
6.4 |
|
|
|
(0.9 |
) |
|
$ |
(0.1 |
) |
|
|
(1.0 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine-Month Period Ended |
|
For the Nine-Month Period Ended |
|
|
October 31, 2020 |
|
November 2, 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ShopHQ |
|
Emerging |
|
Consolidated |
|
ShopHQ |
|
Emerging |
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales |
|
$ |
318.8 |
|
|
$ |
10.6 |
|
|
$ |
329.4 |
|
|
$ |
375.6 |
|
|
$ |
2.6 |
|
|
$ |
378.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit |
|
|
118.5 |
|
|
$ |
4.2 |
|
|
|
122.7 |
|
|
|
126.3 |
|
|
$ |
0.3 |
|
|
|
126.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Loss |
|
|
(2.5 |
) |
|
$ |
(4.1 |
) |
|
|
(6.6 |
) |
|
|
(32.3 |
) |
|
$ |
(2.9 |
) |
|
|
(35.3 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
|
19.1 |
|
|
$ |
(3.5 |
) |
|
|
15.5 |
|
|
|
(7.9 |
) |
|
$ |
(1.3 |
) |
|
|
(9.2 |
) |
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 |
|
|
October 31, 2020 |
|
November 2, 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ShopHQ |
|
Emerging |
|
Consolidated |
|
ShopHQ |
|
Emerging |
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
|
|
|
$ |
(4,748 |
) |
|
|
|
|
|
$ |
(6,741 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
|
|
|
|
8,952 |
|
|
|
|
|
|
|
3,052 |
|
Interest income |
|
|
|
|
|
|
(1 |
) |
|
|
|
|
|
|
(4 |
) |
Interest expense |
|
|
|
|
|
|
1,339 |
|
|
|
|
|
|
|
914 |
|
Income taxes |
|
|
|
|
|
|
15 |
|
|
|
|
|
|
|
14 |
|
EBITDA (as defined) |
|
$ |
6,315 |
|
|
$ |
(758 |
) |
|
$ |
5,557 |
|
|
$ |
(2,419 |
) |
|
$ |
(346 |
) |
|
$ |
(2,765 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
A reconciliation of EBITDA to Adjusted EBITDA is as follows: |
|
|
|
|
|
|
|
|
|
|
EBITDA (as defined) |
|
$ |
6,315 |
|
|
$ |
(758 |
) |
|
$ |
5,557 |
|
|
$ |
(2,419 |
) |
|
$ |
(346 |
) |
|
$ |
(2,765 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Transaction, settlement and integration costs, net (a) |
|
312 |
|
|
|
- |
|
|
|
312 |
|
|
|
(1,016 |
) |
|
|
212 |
|
|
|
(804 |
) |
Restructuring costs |
|
|
55 |
|
|
|
- |
|
|
|
55 |
|
|
|
1,502 |
|
|
|
14 |
|
|
|
1,516 |
|
Executive and management transition costs |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
87 |
|
|
|
- |
|
|
|
87 |
|
Rebranding costs |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
554 |
|
|
|
- |
|
|
|
554 |
|
Non-cash share-based compensation expense |
|
|
504 |
|
|
|
- |
|
|
|
504 |
|
|
|
426 |
|
|
|
- |
|
|
|
426 |
|
Adjusted EBITDA |
|
$ |
7,186 |
|
|
$ |
(758 |
) |
|
$ |
6,428 |
|
|
$ |
(866 |
) |
|
$ |
(120 |
) |
|
$ |
(986 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine-Month Period Ended |
|
For the Nine-Month Period Ended |
|
|
October 31, 2020 |
|
November 2, 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ShopHQ |
|
Emerging |
|
Consolidated |
|
ShopHQ |
|
Emerging |
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
|
|
|
$ |
(10,522 |
) |
|
|
|
|
|
$ |
(37,908 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
|
|
|
|
19,697 |
|
|
|
|
|
|
|
9,192 |
|
Interest income |
|
|
|
|
|
|
(2 |
) |
|
|
|
|
|
|
(15 |
) |
Interest expense |
|
|
|
|
|
|
3,920 |
|
|
|
|
|
|
|
2,608 |
|
Income taxes |
|
|
|
|
|
|
45 |
|
|
|
|
|
|
|
44 |
|
EBITDA (as defined) |
|
$ |
16,679 |
|
|
$ |
(3,541 |
) |
|
$ |
13,138 |
|
|
$ |
(23,629 |
) |
|
$ |
(2,450 |
) |
|
$ |
(26,079 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
A reconciliation of EBITDA to Adjusted EBITDA is as follows: |
|
|
|
|
|
|
|
|
|
|
EBITDA (as defined) |
|
$ |
16,679 |
|
|
$ |
(3,541 |
) |
|
$ |
13,138 |
|
|
$ |
(23,629 |
) |
|
$ |
(2,450 |
) |
|
$ |
(26,079 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Transaction, settlement and integration costs, net (a) |
|
886 |
|
|
|
- |
|
|
|
886 |
|
|
|
(1,016 |
) |
|
|
212 |
|
|
|
(804 |
) |
Restructuring costs |
|
|
264 |
|
|
|
- |
|
|
|
264 |
|
|
|
5,839 |
|
|
|
842 |
|
|
|
6,681 |
|
Executive and management transition costs |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
2,428 |
|
|
|
- |
|
|
|
2,428 |
|
Rebranding costs |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
792 |
|
|
|
- |
|
|
|
792 |
|
Inventory Impairment write-down |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
6,050 |
|
|
|
- |
|
|
|
6,050 |
|
Non-cash share-based compensation expense |
|
|
1,227 |
|
|
|
- |
|
|
|
1,227 |
|
|
|
1,631 |
|
|
|
52 |
|
|
|
1,683 |
|
Adjusted EBITDA |
|
$ |
19,056 |
|
|
$ |
(3,541 |
) |
|
$ |
15,515 |
|
|
$ |
(7,905 |
) |
|
$ |
(1,344 |
) |
|
$ |
(9,249 |
) |
(a) Transaction, settlement and integration
costs for the three and nine-month period ended October 31, 2020
includes consulting fees incurred to explore additional loan
financings, settlement costs, and incremental COVID-19 related
legal costs. Transaction, settlement and integration costs, net,
for the three and nine-month period ended November 2, 2019 includes
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, partially offset by costs incurred
related to the implementation of our ShopHQ VIP customer program
and our third-party logistics service offerings of $721,000.
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;
non-cash impairment charges and write downs; transaction,
settlement, and integration costs, net; rebranding costs; 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. EBITDA and Adjusted EBITDA are
both non-GAAP measures and 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 titled 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 the expected impact of COVID-19 on television
retailing 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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