iMedia Brands Reports Second Quarter 2021 Results, Increases 2021 Guidance

MINNEAPOLIS, Aug. 24, 2021 (GLOBE NEWSWIRE) -- iMedia Brands, Inc. (the “Company” or “IMBI”) (NASDAQ: IMBI) today announced results for the second quarter ended July 31, 2021.

“Q2 represented a significant achievement for us,” said Tim Peterman, CEO of IMBI. “Despite short-term logistic challenges that caused inventory receipt delays, we continued to optimize our existing television networks and consumer brands while strengthening our balance sheet and completing the acquisition of a leading video advertising platform that we believe, when combined with our first party customer data and our OTT App platform, Float Left, will become online publishers’ most trusted video advertising platform. Strategically, our goal remains the same - to scale our television networks and consumer brands while improving our digital services offerings because we believe those successes will continue to accelerate our timeline to becoming the leading single-source partner to brands and advertisers seeking to entertain and transact with customers using interactive video.”

Second Quarter and Year-to-Date 2021 Summary & Recent Highlights

• Q2 12-month rolling active customers grew by 9% compared to same prior-year period, driven by 40% growth in new customers. July 2021 marked the 10^th consecutive month of year-over-year new customer growth and the best overall customer file growth rate since April 2010. 
• Q2 net sales were $113.4 million, a decrease of 9% compared to the same prior-year period, driven by the Company experiencing material delays in seasonal inventory receipts of its best-selling direct-import products resulting from the industry-wide container shortages and congestion delays at U.S. ports.
• Year-to-date net sales were $226.6 million, which was 3% growth compared to the same prior year period and represent the strongest year-over-year net sales growth in the Company’s first two fiscal quarters in seven years. This success was driven primarily by the 66 new merchandise brand launches occurring year-to-date, which was a 65% increase in new brand launches compared to the same prior year period.
• On June 28^th, 2021, ShopHQ launched in 20+ million high-definition homes in top U.S. markets, including New York City, Los Angeles, San Francisco, Philadelphia, Dallas, Washington DC, Houston, and Boston through an affiliation agreement with RNN.
• Q2 gross margin was 42.3%, a 510-basis point improvement over the same prior-year period. Year-to-date gross margin was 41.5%, a 430-basis point improvement over the same prior-year period.
• Q2 net loss attributable to shareholders was ($4.2) million, a $5.3 million decrease from the same prior-year period. Year-to-date net loss attributable to shareholders was ($7.5) million, a $1.7 million decrease from the same prior-year period.
• Q2 adjusted EBITDA was $8.3 million, a $2.4 million decrease from the same prior-year period. Year-to-date adjusted EBITDA was $16.4 million, a $7.3 million increase or 80% improvement, over the same prior-year period and the highest Q2 year-to-date adjusted EBITDA in the Company’s history.
• Strategic Acquisition of Leading Video Advertising Platform: On July 30, 2021, the Company closed on the acquisition of Synacor’s Portal and Advertising business segment. The Company has relaunched this business as iMedia Digital Services (“iMDS”) and will offer iMedia’s existing OTT App platform, Float Left (www.floatleft.tv), as one of its products. iMedia expects this transaction to be accretive and expects iMDS to generate at least $45 million in profitable revenue over the next twelve months.
• Strengthening Its Balance Sheet: On June 14, 2021, the Company closed on a common stock equity raise, generating proceeds of $40.3 million, net of discounts, commissions, and other offering costs. On July 30, 2021, the Company closed on a new, expanded $108.5 million debt financing facility to replace its previous facility.
  
  

Second Quarter and Year-to-Date 2021 Results

Liquidity and Capital Resources

As of July 31, 2021, total unrestricted cash was $20.9 million, an increase of $5.4 million from the prior year-end. The Company also had an additional $13.5 million of unused availability on its new revolving credit facility.

Increased Outlook

For Q3 2021, the Company anticipates reporting at least $9 million of adjusted EBITDA and approximately $127 million in net sales, which is approximately 17% growth in net sales compared to the same prior year period.

For the full year 2021, the Company anticipates reporting full year adjusted EBITDA between $37 and $40 million, which is an increase from its previous guidance range of between $35 and $37 million. In addition, the Company anticipates reporting full year net sales of approximately $502 million, which is a $12 million increase from management’s Q1 guidance.

Conference Call

The Company will hold a conference call today at 8:30 a.m. Eastern time to discuss its second quarter 2021 results.

Date: Tuesday, August 24, 2021
Toll-free dial-in number: (877) 407-9039
International dial-in number: (201) 689-8470
Conference ID: 13722262

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 September 7, 2021.

Toll-free replay number: (844) 512-2921
International replay number: (412) 317-6671
Replay ID: 13722262

About iMedia Brands, Inc.

iMedia Brands, Inc. (Nasdaq: IMBI) is a leading interactive media company that owns a growing portfolio of TV Networks, Consumer Brands and Digital Services that together position the Company as a leading single-source partner to television advertisers and consumer brands seeking to entertain and transact with customers using interactive video.

Contacts:

Investors:
Gateway Investor Relations
Cody Slach
IMBI@gatewayir.com
(949) 574-3860

Media:
press@imediabrands.com
(800) 938-9707

(a)   Transaction, settlement and integration costs for the three-month period ended July 31, 2021, includes transaction and integration costs related primarily to the Christopher & Banks transaction. Transaction, settlement and integration costs for three-month period ended August 1, 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.

Released August 24, 2021