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LEGACY IMBDS, INC.
Date Filed : Nov 17, 2021
Exhibit 99.1
iMedia Brands Reports Third Quarter 2021 Results, Increases2021 Guidance
MINNEAPOLIS,MN – November 17, 2021 – iMedia Brands, Inc. (the “Company” or “IMBI”) (NASDAQ:IMBI) today announced results for the third quarter ended October 30, 2021.
“Ourmission is to capitalize on the accelerating marketplace convergence of entertainment, ecommerce and advertising,” said Tim Peterman,CEO of IMBI. “Our strong third quarter performance and the successful closing of our 123tv acquisition are tangible examples thatour progress continues.”
Third Quarter 2021 Summary & RecentHighlights
| · | Net sales were $130.7 million, an increase of 20% compared to the same prior-year period and the bestyear-over-year quarterly revenue growth in over ten years. During the quarter, the Company launched 25+ new brands across its televisionnetworks ShopHQ, ShopBulldogTV and ShopHQHealth. |
| · | Year-to-date net sales were $357.3 million, which was 8% growth compared to the same prior year periodand represent the strongest year-over-year net sales growth in the Company's first three fiscal quarters in eight years. This successwas driven primarily by the 90+ new merchandise brand launches occurring year-to-date plus the accretive impact of the Christopher &Banks and iMDS net sales. |
| · | Our 12-month rolling active customers grew by 20% compared to same prior-year period, driven by 65% growthin new customers which was the best new customer growth in over ten years. |
| · | Gross margin was 41.6%, a 420-basis point improvement over the same prior-year period. Year-to-date grossmargin was 41.5%, a 430-basis point improvement over the same prior-year period. |
| · | Net loss attributable to stockholders was $(9.5) million, a $4.7 million increase over the same prior-yearperiod, largely driven by $4.5 million in one-time transaction and transition costs and $713,000 in interest costs relating to the bondoffering in the third quarter. |
| · | Adjusted EBITDA was $10.1 million, a $3.7 million improvement over the same prior-year period. Year-to-dateadjusted EBITDA was $26.5 million, an $11.0 million increase, or 71% improvement, over the same prior-year period and the highest Q3 year-todate adjusted EBITDA in the Company's history. |
| · | As previously announced, on November 5, 2021, the Company completed its acquisition of 123tv. OnSeptember 28, 2021, the Company closed on its offering of $80 million in 8.50% Senior Secured Notes due 2026 and used all the netproceeds to fund the closing cash payment for the acquisition of the 123tv. |
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Third Quarter and Year-to-Date 2021 Results
SUMMARY RESULTS AND KEY OPERATING METRICS
($ Millions, except average selling price and EPS)
| Q3 10/30/2021 | Q3 10/31/2020 | Q3 Change | YTD 2021 10/30/2021 | YTD 2020 10/31/2020 | Change | |||||||||||||||||||
| Net Sales | $ | 130.7 | $ | 109.0 | 20 | % | $ | 357.3 | $ | 329.4 | 8 | % | ||||||||||||
| Gross Margin % | 41.6 | % | 37.4 | % | 420 | bps | 41.5 | % | 37.2 | % | 430 bps | |||||||||||||
| Net loss attributable to non-controlling interest | $ | - | $ | - | N/A | $ | (0.3 | ) | $ | - | N/A | |||||||||||||
| Net loss attributable to shareholders | $ | (9.5 | ) | $ | (4.7 | ) | 100 | % | $ | (17.0 | ) | $ | (10.5 | ) | (61 | )% | ||||||||
| EPS | $ | (0.44 | ) | $ | (0.39 | ) | (13 | )% | $ | (0.91 | ) | $ | (1.05 | ) | 14 | % | ||||||||
| Adjusted EBITDA | $ | 10.1 | $ | 6.4 | 57 | % | $ | 26.5 | $ | 15.5 | 71 | % | ||||||||||||
| Net Shipped Units (000s) | 1,919 | 1,664 | 15 | % | 5,411 | 4,775 | 13 | % | ||||||||||||||||
| Average Selling Price (ASP) | $ | 68 | $ | 58 | 17 | % | $ | 66 | $ | 61 | 8 | % | ||||||||||||
| Return Rate % | 15.8 | % | 14.4 | % | 140 | bps | 16.0 | % | 14.5 | % | 150 bps | |||||||||||||
| ShopHQ Digital Net Sales % | 46.5 | % | 49.1 | % | (260 | )bps | 48.5 | % | 50.7 | % | (220 | )bps | ||||||||||||
| Total Customers - 12 Month Rolling (000s) | 1,229 | 1,028 | 20 | % | N/A | N/A | N/A | |||||||||||||||||
| % of ShopHQ Net Merchandise Sales by Category | ||||||||||||||||||||||||
| Jewelry & Watches | 44 | % | 40 | % | 47 | % | 40 | % | ||||||||||||||||
| Home & Consumer Electronics | 17 | % | 16 | % | 16 | % | 14 | % | ||||||||||||||||
| Beauty & Health | 24 | % | 34 | % | 22 | % | 34 | % | ||||||||||||||||
| Fashion & Accessories | 15 | % | 10 | % | 15 | % | 12 | % | ||||||||||||||||
| Total | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||||||||||
Liquidity and Capital Resources
As of October 30, 2021, total unrestrictedcash was $51.4 million. The Company also had an additional $23.5 million of unused availability on its revolving credit facility.
Increased Outlook
Regarding our Outlook for Q4, we anticipate reportingapproximately $13 to $15 million of adjusted EBITDA, which is a 55% to 79% increase over the same prior year period, despite continuedexpectations for unusually high logistics costs due to COVID-19. We anticipate reporting Q4 net sales of approximately $175 to $180 million,which is roughly 40% to 44% growth compared to the same prior year period.
For the full year 2022, we anticipate reportingrevenue of approximately $675 to $725 million and adjusted EBITDA of approximately $50 to $60 million and reporting positive quarterlyEPS beginning in the back half of 2022.
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Conference Call
The Company will hold a conference call todayat 8:30 a.m. Eastern time to discuss its third quarter 2021 results.
Date: Wednesday, November 17, 2021
Toll-free dial-in number: (877) 407-9039
International dial-in number: (201) 689-8470
Conference ID: 13724909
Please call the conference telephone number 5-10minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with theconference call, please contact Gateway Investor Relations at (949) 574-3860.
Theconference call will be broadcast live and available for replay here and via the investor relations section of the iMediaBrands website at www.imediabrands.com.
A replay of the conference call will be availableafter 11:30 a.m. Eastern time on the same day through December 1, 2021.
Toll-free replay number: (844) 512-2921
International replay number: (412) 317-6671
Replay ID: 13724909
About iMedia Brands, Inc.
iMedia Brands, Inc. (Nasdaq: IMBI) is a leadinginteractive media company capitalizing on the convergence of entertainment, ecommerce, and advertising. The Company owns a growing, globalportfolio of Entertainment, Consumer Brands and Media Commerce Services businesses that cross promote and exchange data with each otherto optimize the engagement experiences it creates for advertisers and consumers.
Contacts:
Investors:
Gateway Investor Relations
Cody Slach
IMBI@gatewayir.com
(949) 574-3860
Media:
press@imediabrands.com
(800) 938-9707
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iMEDIA BRANDS INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands except share and per share data)
| October 30, | January 30, | |||||||
| 2021 | 2021 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | 51,352 | $ | 15,485 | ||||
| Restricted Cash | 2,168 | - | ||||||
| Accounts receivable, net | 66,948 | 61,951 | ||||||
| Inventories | 92,001 | 68,715 | ||||||
| Current portion of television broadcast rights, net | 21,349 | 19,725 | ||||||
| Prepaid expenses and other | 15,922 | 7,853 | ||||||
| Total current assets | 249,740 | 173,729 | ||||||
| Property and equipment, net | 44,932 | 41,988 | ||||||
| Television broadcast rights, net | 41,865 | 7,028 | ||||||
| Intangible assets, net | 35,769 | 2,359 | ||||||
| Other assets | 13,161 | 1,533 | ||||||
| Total Assets | $ | 385,467 | $ | 226,637 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 62,234 | $ | 77,995 | ||||
| Accrued liabilities | 39,592 | 29,509 | ||||||
| Current portion of television broadcast rights obligation | 25,937 | 29,173 | ||||||
| Current portion of long term credit facility | - | 2,714 | ||||||
| Current portion of operating lease liabilities | 1,046 | 462 | ||||||
| Deferred revenue | 541 | 213 | ||||||
| Total current liabilities | 129,350 | 140,066 | ||||||
| Long term broadcast rights liability | 45,742 | 7,358 | ||||||
| Other long term liabilities | 13,403 | 1,497 | ||||||
| Long term credit facilities | 46,650 | 50,666 | ||||||
| 8.50% Senior Secured Notes | 73,768 | - | ||||||
| Total liabilities | 308,914 | 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 October 30, 2021 and January 30, 2021; 21,560,514 and 13,019,061 shares issued and outstanding as of October 30, 2021 and January 30, 2021 | 213 | 130 | ||||||
| Additional paid-in capital | 537,987 | 474,375 | ||||||
| Accumulated deficit | (464,424 | ) | (447,455 | ) | ||||
| Accumulated other comprehensive loss | (371 | ) | - | |||||
| Total shareholders' equity | 73,405 | 27,050 | ||||||
| Equity of the Non-Controlling Interest | 3,148 | $ | - | |||||
| Total Equity | $ | 76,553 | $ | 27,050 | ||||
| Total Liabilities and Shareholders' Equity | $ | 385,467 | $ | 226,637 | ||||
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iMEDIABRANDS, INC.
ANDSUBSIDIARIES
CONSOLIDATEDSTATEMENTS OF OPERATIONS
(Unaudited)
(Inthousands, except share and per share data)
| For the Three-Month Periods Ended | For the Nine-Month Periods Ended | |||||||||||||||
| October 30, | October 31, | October 30, | October 31, | |||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Net sales | $ | 130,681 | $ | 109,025 | $ | 357,325 | $ | 329,374 | ||||||||
| Cost of sales | $ | 76,260 | 68,211 | 208,911 | 206,711 | |||||||||||
| Gross profit | $ | 54,421 | $ | 40,814 | 148,414 | 122,663 | ||||||||||
| Margin % | 41.6 | % | 37.4 | % | 41.5 | % | 37.2 | % | ||||||||
| Operating expense: | ||||||||||||||||
| Distribution and selling | $ | 39,302 | 31,490 | 108,907 | 97,100 | |||||||||||
| General and administrative | $ | 10,747 | 4,687 | 24,569 | 15,158 | |||||||||||
| Depreciation and amortization | $ | 9,740 | 7,977 | 24,727 | 16,700 | |||||||||||
| Restructuring costs | $ | 634 | 55 | 634 | 264 | |||||||||||
| Total operating expense | $ | 60,423 | $ | 44,209 | 158,837 | 129,222 | ||||||||||
| Operating income (loss) | $ | (6,002 | ) | $ | (3,395 | ) | (10,423 | ) | (6,559 | ) | ||||||
| Other income (expense): | ||||||||||||||||
| Interest income | $ | 85 | 1 | 124 | 2 | |||||||||||
| Debt Extinguishment | $ | (9 | ) | - | (663 | ) | - | |||||||||
| Interest expense | $ | (3,551 | ) | (1,339 | ) | (6,245 | ) | (3,920 | ) | |||||||
| Total other expense | $ | (3,475 | ) | $ | (1,338 | ) | (6,784 | ) | (3,918 | ) | ||||||
| Income (Loss) before income taxes | $ | (9,477 | ) | $ | (4,733 | ) | $ | (17,207 | ) | (10,477 | ) | |||||
| Income tax provision | $ | (15 | ) | (15 | ) | (45 | ) | (45 | ) | |||||||
| Net income (loss) | $ | (9,492 | ) | $ | (4,748 | ) | $ | (17,252 | ) | $ | (10,522 | ) | ||||
| Less: Net loss attributable to non-controlling interest | $ | - | - | (282 | ) | - | ||||||||||
| Net income (loss) attributable to shareholders | $ | (9,492 | ) | $ | (4,748 | ) | $ | (16,970 | ) | $ | (10,522 | ) | ||||
| Net income (loss) per common share | $ | (0.44 | ) | $ | (0.39 | ) | $ | (0.91 | ) | $ | (1.05 | ) | ||||
| Net income (loss) per common share | ||||||||||||||||
| ---assuming dilution | $ | (0.44 | ) | $ | (0.39 | ) | $ | (0.91 | ) | $ | (1.05 | ) | ||||
| Weighted average number of | ||||||||||||||||
| common shares outstanding: | ||||||||||||||||
| Basic | 21,503,340 | 12,177,990 | 18,710,658 | 10,000,383 | ||||||||||||
| Diluted | 21,503,340 | 12,177,990 | 18,710,658 | 10,000,383 | ||||||||||||
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iMEDIA BRANDS, INC.
AND SUBSIDIARIES
PERFORMANCE MEASURES BY SEGMENT
($ in Millions)
| For the Three-Month Period Ended | For the Three-Month Period Ended | |||||||||||||||||||||||
| October 30, 2021 | October 31, 2020 | |||||||||||||||||||||||
| ShopHQ | Emerging | Consolidated | ShopHQ | Emerging | Consolidated | |||||||||||||||||||
| Net Sales | $ | 97.5 | $ | 33.2 | $ | 130.7 | $ | 104.3 | $ | 4.7 | $ | 109.0 | ||||||||||||
| Gross Profit | $ | 41.4 | $ | 13.0 | $ | 54.4 | 38.8 | $ | 2.0 | $ | 40.8 | |||||||||||||
| Operating Loss | $ | (6.8 | ) | $ | 0.8 | $ | (6.0 | ) | (2.4 | ) | $ | (1.0 | ) | $ | (3.4 | ) | ||||||||
| Adjusted EBITDA | $ | 7.2 | $ | 2.9 | $ | 10.1 | 7.2 | $ | (0.8 | ) | $ | 6.4 | ||||||||||||
| For the Nine-Month Period Ended | For the Nine-Month Period Ended | |||||||||||||||||||||||
| October 30, 2021 | October 31, 2020 | |||||||||||||||||||||||
| ShopHQ | Emerging | Consolidated | ShopHQ | Emerging | Consolidated | |||||||||||||||||||
| Net Sales | $ | 292.5 | $ | 64.8 | $ | 357.3 | $ | 318.8 | $ | 10.6 | $ | 329.4 | ||||||||||||
| Gross Profit | $ | 121.1 | $ | 27.3 | $ | 148.4 | 118.5 | $ | 4.2 | $ | 122.7 | |||||||||||||
| Operating Loss | $ | (11.5 | ) | $ | 1.0 | $ | (10.5 | ) | (2.5 | ) | $ | (4.1 | ) | $ | (6.6 | ) | ||||||||
| Adjusted EBITDA | $ | 20.7 | $ | 5.8 | $ | 26.5 | 19.1 | $ | (3.5 | ) | $ | 15.5 | ||||||||||||
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iMEDIA BRANDS, INC.
AND SUBSIDIARIES
Reconciliation of Net Income (Loss) Attributable to Shareholders to Adjusted EBITDA:
(Unaudited)
(in thousands)
| For the Three-Month Period Ended | For the Three-Month Period Ended | |||||||||||||||||||||||
| October 30, 2021 | October 31, 2020 | |||||||||||||||||||||||
| ShopHQ | Emerging | Consolidated | ShopHQ | Emerging | Consolidated | |||||||||||||||||||
| Net income (loss) attributable to shareholders | $ | (9,492 | ) | $ | (4,748 | ) | ||||||||||||||||||
| Adjustments: | ||||||||||||||||||||||||
| Depreciation and amortization | 10,677 | 8,952 | ||||||||||||||||||||||
| Interest income | (85 | ) | (1 | ) | ||||||||||||||||||||
| Interest expense | 3,551 | 1,339 | ||||||||||||||||||||||
| Income taxes | 15 | 15 | ||||||||||||||||||||||
| EBITDA (as defined) | $ | 3,435 | $ | 1,231 | $ | 4,666 | $ | 6,315 | $ | (758 | ) | $ | 5,557 | |||||||||||
| A reconciliation of EBITDA to Adjusted EBITDA is as follows: | ||||||||||||||||||||||||
| EBITDA (as defined) | $ | 3,435 | $ | 1,231 | $ | 4,666 | $ | 6,315 | $ | (758 | ) | $ | 5,557 | |||||||||||
| Adjustments: | ||||||||||||||||||||||||
| Transaction, settlement and integration costs, net (a) | 2,207 | 1,630 | 3,837 | 312 | - | 312 | ||||||||||||||||||
| Restructuring costs | 625 | 7 | 632 | 55 | - | 55 | ||||||||||||||||||
| Non-cashshare-based compensation expense | 949 | - | 949 | 504 | - | 504 | ||||||||||||||||||
| Loss on Debt Extinguishment | 9 | - | 9 | - | - | - | ||||||||||||||||||
| Adjusted EBITDA | $ | 7,225 | $ | 2,868 | $ | 10,093 | $ | 7,186 | $ | (758 | ) | $ | 6,428 | |||||||||||
| For the Nine-Month Period Ended | For the Nine-Month Period Ended | |||||||||||||||||||||||
| October 30, 2021 | October 31, 2020 | |||||||||||||||||||||||
| ShopHQ | Emerging | Consolidated | ShopHQ | Emerging | Consolidated | |||||||||||||||||||
| Net loss attributable to shareholders | $ | (16,970 | ) | $ | (10,522 | ) | ||||||||||||||||||
| Adjustments: | ||||||||||||||||||||||||
| Depreciation and amortization | 27,564 | 19,697 | ||||||||||||||||||||||
| Interest income | (124 | ) | (2 | ) | ||||||||||||||||||||
| Interest expense | 6,245 | 3,920 | ||||||||||||||||||||||
| Income taxes | 45 | 45 | ||||||||||||||||||||||
| EBITDA (as defined) | $ | 14,351 | $ | 2,410 | $ | 16,760 | $ | 16,679 | $ | (3,541 | ) | $ | 13,138 | |||||||||||
| A reconciliation of EBITDA to Adjusted EBITDA is as follows: | ||||||||||||||||||||||||
| EBITDA (as defined) | $ | 14,351 | $ | 2,410 | $ | 16,761 | $ | 16,679 | $ | (3,541 | ) | $ | 13,138 | |||||||||||
| Adjustments: | ||||||||||||||||||||||||
| Restructuring costs | 625 | 9 | 634 | 264 | - | 264 | ||||||||||||||||||
| One-time customer concessions | 341 | - | 341 | - | - | - | ||||||||||||||||||
| Transaction, settlement and integrationcosts, net | 2,370 | 3,387 | 5,757 | 886 | - | 886 | ||||||||||||||||||
| Non-cash share-based compensation expense | 2,385 | - | 2,385 | 1,227 | - | 1,227 | ||||||||||||||||||
| Loss on Debt Extinguishment | 663 | - | 663 | - | - | - | ||||||||||||||||||
| Adjusted EBITDA | $ | 20,735 | $ | 5,806 | $ | 26,541 | $ | 19,056 | $ | (3,541 | ) | $ | 15,515 | |||||||||||
| (a) | Transaction, settlement and integration costs for the three-month period ended October 30, 2021,includes transaction and integration costs related primarily to the Synacor and 123tv transactions. Transaction, settlement and integrationcosts for three-month period ended October 31, 2020, includes contract settlement costs, business acquisition and integration-relatedcosts. |
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Adjusted EBITDA
EBITDA represents net income (loss) for the respectiveperiods excluding depreciation and amortization expense, interest income (expense) and income taxes. The Company defines Adjusted EBITDAas EBITDA excluding non-operating gains (losses); executive and management transition costs; restructuring costs; non-cash impairmentcharges and write downs; transaction, settlement, and integration costs, net; rebranding costs; and non-cash share-based compensationexpense. The Company has included the “Adjusted EBITDA” measure in its EBITDA reconciliation in order to adequately assessthe operating performance of its television and online businesses and in order to maintain comparability to its analyst's coverage andfinancial guidance, when given. Management believes that the Adjusted EBITDA measure allows investors to make a meaningful comparisonbetween its business operating results over different periods of time with those of other similar companies. In addition, management usesAdjusted EBITDA as a metric to evaluate operating performance under the Company’s management and executive incentive compensationprograms. 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 titledmeasures reported by other companies. The Company has included a reconciliation of the comparable GAAP measure, net income (loss) to AdjustedEBITDA in this release.
Safe Harbor Statement under the Private SecuritiesLitigation Reform Act of 1995
This document may contain certain “forward-lookingstatements” within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements contained herein that arenot 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 andsimilar expressions to identify forward-looking statements. These statements are based on management's current expectations and accordinglyare subject to uncertainty and changes in circumstances. Actual results may vary materially from the expectations contained herein dueto various important factors, including (but not limited to): variability in consumer preferences, shopping behaviors, spending and debtlevels; 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 salesand sales promotions; pricing and gross sales margins; the level of cable and satellite distribution for the Company’s programmingand the associated fees or estimated cost savings from contract renegotiations; the Company’s ability to establish and maintainacceptable commercial terms with third-party vendors and other third parties with whom the Company has contractual relationships, andto successfully manage key vendor and shipping relationships and develop key partnerships and proprietary and exclusive brands; the abilityto manage operating expenses successfully and the Company’s working capital levels; the ability to remain compliant with the Company’scredit 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 informationsecurity; changes in governmental or regulatory requirements; including without limitation, regulations of the Federal CommunicationsCommission and Federal Trade Commission, and adverse outcomes from regulatory proceedings; litigation or governmental proceedings affectingthe 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’sdistribution of its network broadcast to customers; the Company’s ability to protect its intellectual property rights; our abilityto 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 newor innovative products and customer acceptance of the same; changes in customer viewing habits of television programming; and the risksidentified under Item 1A(Risk Factors) in the Company’s most recently filed Form 10-K and any additional risk factors identifiedin its periodic reports since the date of such Form 10-K. More detailed information about those factors is set forth in the Company’sfilings 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 onlyas of the date of this announcement. The Company is under no obligation (and expressly disclaim any such obligation) to updateor alter its forward-looking statements whether as a result of new information, future events or otherwise.
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