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 )
                         

  1. 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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