iMedia Brands Reports First Quarter 2021 Results, Updates 2021 Guidance
May 25 2021 - 6:00AM
iMedia Brands, Inc. (the “Company”) (NASDAQ: IMBI) today announced
results for the first quarter ended May 1, 2021.
First Quarter 2021 Summary & Recent
Highlights
- Q1 net sales were $113.2 million,
an increase of 18% compared to same prior-year period and the best
year-over-year quarterly revenue growth in eight years. During the
quarter, the Company launched 34 new brands across its television
networks ShopHQ, ShopBulldogTV and ShopHQHealth.
- Q1 gross margin was 40.6%, a
350-basis point improvement over the same prior-year period.
- Q1 total active customers grew by
14% compared to the same prior-year period.
- Q1 net loss attributable to
stockholders improved to $3.2 million, a 53% improvement over the
same prior-year period.
- Q1 adjusted EBITDA was $8.1
million, a $9.8 million improvement over the same prior-year
period.
- On May 20, 2021, the Company
announced ShopHQ is set to launch in 20+ million high-definition
homes in top U.S. markets, including New York City, Los Angeles,
San Francisco, Dallas, Washington, D.C and Boston via its new
affiliation agreement with RNN, the largest independent broadcast
group in the U.S.
- On March 1, 2021, the Company
entered a licensing partnership with ReStore Capital, a Hilco
Global company, where iMedia will operate and grow the Christopher
& Banks business throughout all sales channels, including
digital, television, catalog, and brick-and-mortar retail.
- On February 22, 2021, the Company
successfully closed on its common stock equity raise of $21.2
million, net of discounts, commissions, and other offering
costs.
- On February 5, 2021, the Company
contributed approximately $3.5 million in inventory to acquire a
controlling interest in an online marketplace called
TheCloseOut.com. The site offers consumers exclusive and name-brand
products at deep discounts.
CEO Commentary
“Q1 was another strong performance for us,” said
Tim Peterman, CEO of iMedia Brands, “and when we combine our strong
operating fundamentals with the recently announced growth catalysts
like Christopher & Banks and ShopHQ’s launch in 20+ million
high-definition homes in June, iMedia is positioned well for a
strong 2021.”
First Quarter 2021 Results
SUMMARY
RESULTS AND KEY OPERATING METRICS |
($ Millions,
except average selling price and EPS) |
|
|
|
|
|
|
|
|
|
|
|
Q1 5/1/2021 |
|
Q1 5/2/2020 |
|
Q1 Change |
|
|
|
|
|
|
|
|
Net Sales |
|
$ |
113.2 |
|
|
$ |
95.8 |
|
|
18 |
% |
|
|
|
|
|
|
|
|
Gross Margin % |
|
|
40.6 |
% |
|
|
37.1 |
% |
|
350
bps |
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
$ |
8.1 |
|
|
$ |
(1.6 |
) |
|
N/A |
|
|
|
|
|
|
|
|
|
Net loss attributable to non-controlling interest |
$ |
(0.2 |
) |
|
$ |
- |
|
|
N/A |
|
|
|
|
|
|
|
|
|
Net loss attributable to shareholders |
|
$ |
(3.2 |
) |
|
$ |
(6.8 |
) |
|
53 |
% |
|
|
|
|
|
|
|
|
EPS |
|
$ |
(0.21 |
) |
|
$ |
(0.82 |
) |
|
75 |
% |
|
|
|
|
|
|
|
|
Net Shipped Units (000s) |
|
|
1,513 |
|
|
|
1,348 |
|
|
12 |
% |
Average Selling Price (ASP) |
|
$ |
66 |
|
|
$ |
64 |
|
|
3 |
% |
Return Rate % |
|
|
16.8 |
% |
|
|
17.8 |
% |
|
(100
bps) |
|
ShopHQ Digital Net Sales % |
|
|
51.5 |
% |
|
|
53.1 |
% |
|
(160
bps) |
|
Total Customers - 12 Month Rolling (000s) |
|
|
1,071 |
|
|
|
991 |
|
|
8 |
% |
|
|
|
|
|
|
|
|
% of ShopHQ Net Merchandise Sales by Category |
|
|
|
|
|
Jewelry
& Watches |
|
|
48 |
% |
|
|
46 |
% |
|
|
|
Home &
Consumer Electronics |
|
|
15 |
% |
|
|
16 |
% |
|
|
|
Beauty &
Health |
|
|
22 |
% |
|
|
24 |
% |
|
|
|
Fashion
& Accessories |
|
|
15 |
% |
|
|
14 |
% |
|
|
|
Total |
|
|
100 |
% |
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
Liquidity and Capital Resources
As of May 1, 2021, total unrestricted cash was
$14.9 million. Net debt at the end of Q1 was $37.8 million, a
$0.1 million reduction from prior-year end. The Company also had an
additional $9.3 million of unused availability on its revolving
credit facility.
Increased Outlook
For Q2 2021, the Company anticipates reporting
at least $8 million of adjusted EBITDA and approximately $121
million in revenue, which is roughly a 3% decline in revenue
compared to the same prior year period due to the prior year
period’s unusually high revenue performance.
For the full year 2021, the Company anticipates
reporting full year adjusted EBITDA between $35 and $37 million,
which is an approximate $7 million increase from the Company’s
previous guidance. In addition, the Company anticipates reporting
full year revenue of at least $490 million, which is an 8% increase
compared to 2020. This is primarily driven by ShopHQ’s new 20+
million HD homes launching in late June and the growth of
Christopher & Banks.
Conference Call
The Company will hold a conference call today at
8:30 a.m. Eastern time to discuss its first quarter 2021
results.
Date: Tuesday, May 25, 2021Toll-free dial-in
number: (877) 407-9039International dial-in number: (201)
689-8470Conference ID: 13719509
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
June 8, 2021.
Toll-free replay number: (844)
512-2921International replay number: (412) 317-6671Replay ID:
13719509
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 shophq.com,
ShopBulldogTV shopbulldogtv.com, ShopHQHealth shophqhealth.com and
LaVenta. Its media commerce services brands are Float Left
Interactive floatleft.tv and i3PL Services. Its consumer brands
include J.W. Hulme jwhulmeco.com, Christopher & Banks
christopherandbanks.com, ourgalleria.com and thecloseout.com.
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) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
May 1, |
|
January 30, |
|
|
|
|
|
|
2021 |
|
2021 |
|
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
ASSETS |
Current assets: |
|
|
|
|
|
|
Cash |
|
|
$ |
14,946 |
|
|
$ |
15,485 |
|
|
Accounts receivable, net |
|
|
|
56,601 |
|
|
|
61,951 |
|
|
Inventories |
|
|
|
74,522 |
|
|
|
68,715 |
|
|
Current portion of television distribution rights, net |
|
17,364 |
|
|
|
19,725 |
|
|
Prepaid expenses and other |
|
|
|
11,722 |
|
|
|
7,853 |
|
|
|
Total current assets |
|
|
|
175,155 |
|
|
|
173,729 |
|
Property and equipment, net |
|
|
|
43,441 |
|
|
|
41,988 |
|
Television distribution rights, net |
|
|
|
4,230 |
|
|
|
7,028 |
|
Other assets |
|
|
|
8,975 |
|
|
|
3,892 |
|
|
|
|
Total Assets |
|
|
$ |
231,801 |
|
|
$ |
226,637 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable |
|
|
$ |
54,941 |
|
|
$ |
77,995 |
|
|
Accrued liabilities |
|
|
|
41,840 |
|
|
|
29,509 |
|
|
Current portion of television distribution rights obligation |
|
26,141 |
|
|
|
29,173 |
|
|
Current portion of long term credit facility |
|
|
2,714 |
|
|
|
2,714 |
|
|
Current portion of operating lease liabilities |
|
|
262 |
|
|
|
462 |
|
|
Deferred revenue |
|
|
|
361 |
|
|
|
213 |
|
|
|
Total current liabilities |
|
|
|
126,259 |
|
|
|
140,066 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other long term liabilities |
|
|
|
6,814 |
|
|
|
8,855 |
|
Long term credit facilities |
|
|
|
49,995 |
|
|
|
50,666 |
|
|
|
Total liabilities |
|
|
|
183,068 |
|
|
|
199,587 |
|
|
|
|
|
|
|
|
|
|
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 shares authorized as
of |
|
|
|
|
|
May 1, 2021 and January 30, 2021; 16,384,402 and 13,019,061
shares |
|
|
|
|
issued and outstanding as of May 1, 2021 and January 30, 2021 |
|
164 |
|
|
|
130 |
|
|
Additional paid-in capital |
|
|
|
495,972 |
|
|
|
474,375 |
|
|
Accumulated deficit |
|
|
|
(450,683 |
) |
|
|
(447,455 |
) |
|
|
Total shareholders' equity |
|
|
|
45,453 |
|
|
|
27,050 |
|
|
|
Equity of the Non-Controlling Interest |
|
$ |
3,280 |
|
|
$ |
- |
|
|
|
Total Equity |
|
|
$ |
48,733 |
|
|
$ |
27,050 |
|
|
|
|
Total Liabilities and Shareholders' Equity |
|
$ |
231,801 |
|
|
$ |
226,637 |
|
|
|
|
|
|
|
|
|
|
iMEDIA
BRANDS, INC. |
AND
SUBSIDIARIES |
CONSOLIDATED
STATEMENTS OF OPERATIONS |
(Unaudited) |
(In thousands,
except share and per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three-Month Periods Ended |
|
|
|
|
|
|
|
|
|
|
|
May 1, |
|
May 2, |
|
|
|
|
2021 |
|
2020 |
Net sales |
$ |
113,203 |
|
|
$ |
95,834 |
|
Cost of sales |
$ |
67,196 |
|
|
|
60,277 |
|
|
|
|
Gross
profit |
$ |
46,007 |
|
|
|
35,557 |
|
|
|
|
Margin
% |
|
40.6 |
% |
|
|
37.1 |
% |
Operating expense: |
|
|
|
|
Distribution and selling |
$ |
34,247 |
|
|
|
33,735 |
|
|
General and administrative |
$ |
6,435 |
|
|
|
5,367 |
|
|
Depreciation and amortization |
$ |
7,375 |
|
|
|
1,881 |
|
|
Restructuring costs |
$ |
- |
|
|
|
209 |
|
|
|
Total operating expense |
$ |
48,057 |
|
|
|
41,192 |
|
Operating loss |
$ |
(2,050 |
) |
|
|
(5,635 |
) |
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
Interest income |
$ |
1 |
|
|
|
1 |
|
|
Interest expense |
$ |
(1,313 |
) |
|
|
(1,179 |
) |
|
|
Total other expense |
$ |
(1,312 |
) |
|
|
(1,178 |
) |
|
|
|
|
|
|
|
Loss before income taxes |
$ |
(3,362 |
) |
|
|
(6,813 |
) |
|
|
|
|
|
|
|
Income tax provision |
$ |
(15 |
) |
|
|
(15 |
) |
|
|
|
|
|
|
|
Net loss |
$ |
(3,377 |
) |
|
$ |
(6,828 |
) |
|
|
|
|
|
|
|
Less: Net loss attributable to non-controlling interest |
$ |
(150 |
) |
|
|
- |
|
|
|
|
|
|
|
|
Net loss attributable to shareholders |
$ |
(3,227 |
) |
|
$ |
(6,828 |
) |
|
|
|
|
|
|
|
Net loss per common share |
$ |
(0.21 |
) |
|
$ |
(0.82 |
) |
|
|
|
|
|
|
|
Net loss per common share |
|
|
|
|
|
---assuming dilution |
$ |
(0.21 |
) |
|
$ |
(0.82 |
) |
|
|
|
|
|
|
|
Weighted average number of |
|
|
|
common shares outstanding: |
|
|
|
|
|
|
Basic |
|
15,620,995 |
|
|
|
8,290,790 |
|
|
|
|
Diluted |
|
15,620,995 |
|
|
|
8,290,790 |
|
|
|
|
|
|
|
|
iMEDIA
BRANDS, INC. |
|
AND
SUBSIDIARIES |
|
PERFORMANCE
MEASURES BY SEGMENT |
|
($ in
Millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three-Month Period Ended |
|
For the Three-Month Period Ended |
|
|
|
|
May 1, 2021 |
|
May 2, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ShopHQ |
|
Emerging |
|
Consolidated |
|
ShopHQ |
|
Emerging |
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales |
|
$ |
100.3 |
|
|
$ |
12.9 |
|
|
$ |
113.2 |
|
|
$ |
93.8 |
|
|
$ |
2.0 |
|
|
$ |
95.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit |
|
$ |
40.4 |
|
|
$ |
5.6 |
|
|
|
46.0 |
|
|
|
35.0 |
|
|
|
0.6 |
|
|
|
35.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Loss |
|
$ |
(1.9 |
) |
|
$ |
(0.2 |
) |
|
|
(2.1 |
) |
|
|
(3.8 |
) |
|
|
(1.8 |
) |
|
|
(5.6 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
$ |
7.1 |
|
|
$ |
1.0 |
|
|
|
8.1 |
|
|
|
0.0 |
|
|
|
(1.7 |
) |
|
|
(1.6 |
) |
|
iMEDIA
BRANDS, INC. |
AND
SUBSIDIARIES |
Reconciliation of Net Loss Attributable to Shareholders to
Adjusted EBITDA: |
(Unaudited) |
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three-Month Period Ended |
|
For the Three-Month Period Ended |
|
|
May 1, 2021 |
|
May 2, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ShopHQ |
|
Emerging |
|
Consolidated |
ShopHQ |
|
Emerging |
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss attributable to shareholders |
|
|
|
|
|
$ |
(3,227 |
) |
|
|
|
|
|
$ |
(6,828 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
|
|
|
|
8,317 |
|
|
|
|
|
|
|
2,905 |
|
Interest income |
|
|
|
|
|
|
(1 |
) |
|
|
|
|
|
|
(1 |
) |
Interest expense |
|
|
|
|
|
|
1,313 |
|
|
|
|
|
|
|
1,179 |
|
Income taxes |
|
|
|
|
|
|
15 |
|
|
|
|
|
|
|
15 |
|
EBITDA (as
defined) |
|
$ |
5,956 |
|
$ |
461 |
|
$ |
6,417 |
|
|
$ |
(1,063 |
) |
|
$ |
(1,667 |
) |
|
$ |
(2,730 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
A reconciliation of EBITDA to Adjusted EBITDA is as follows: |
|
|
|
|
|
|
|
|
|
|
EBITDA (as
defined) |
|
$ |
5,956 |
|
$ |
461 |
|
$ |
6,417 |
|
|
$ |
(1,063 |
) |
|
$ |
(1,667 |
) |
|
$ |
(2,730 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring costs |
|
|
- |
|
|
- |
|
|
- |
|
|
|
209 |
|
|
|
- |
|
|
|
209 |
|
One-time customer concessions |
|
|
341 |
|
|
- |
|
|
341 |
|
|
|
|
|
|
|
Transaction, settlement and
integration costs, net (a) |
|
124 |
|
|
576 |
|
|
700 |
|
|
|
259 |
|
|
|
- |
|
|
|
259 |
|
Non-cash share-based compensation
expense |
|
|
678 |
|
|
- |
|
|
678 |
|
|
|
615 |
|
|
|
- |
|
|
|
615 |
|
Adjusted EBITDA |
|
$ |
7,099 |
|
$ |
1,037 |
|
$ |
8,136 |
|
|
$ |
20 |
|
|
$ |
(1,667 |
) |
|
$ |
(1,647 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
- Transaction, settlement and integration costs for the
three-month period ended May 1, 2021 includes professional fees and
other transaction fees related to the TheCloseOut.com and
Christopher & Banks transactions. Transaction, settlement and
integration costs for three-month period ended May 2, 2020 includes
contract settlement costs, business acquisition and
integration-related costs.
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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