Exhibit 99.1

 

 

 

iMedia Brands Reports Second Quarter 2022 Results

 

Q2 Net Sales were $133 Million, a 17% Increase Over Same Prior Year Period

 

MINNEAPOLIS, MN – August 24, 2022 – iMedia Brands, Inc. (the “Company” or “iMedia”) (NASDAQ: IMBI, IMBIL) today announced results for the second quarter ended July 30, 2022.

 

Second Quarter and Year-To-Date 2022 Summary & Recent Highlights:

 

·Q2 Net sales were $133 million, a 17% increase over the same prior year period. Year-to-date net sales were $288 million, a 27% increase over the same prior period.

 

·Q2 Gross margin was 36.3%, a 597 basis-point decline over the same prior year period. Year-to-date gross margin was 38.1%, a 334 basis-point decline over the same prior year period.

 

·Q2 Net loss was $11.1 million or $(0.42) per common share, compared to the same prior-year period net loss of $4.2 million or $(0.23) per common share. Year-to-date net loss was $22.6 million or $(0.95) per common share, compared to the same prior-year period net loss of $7.5 million or $(0.45) per common share.

 

·Q2 Adjusted EBITDA was $5.1 million, a 39% decrease over the same prior year-period. Year-to-date adjusted EBITDA was $14.3 million, a $2.1 million decrease, compared to the same prior-year period.

 

·Total 12-month rolling active customer count, as of July 30, 2022, grew by 38% compared to the prior period, driven by Christopher & Banks and the addition of 1-2-3.tv

 

·The Company strengthened its balance sheet during Q2 with $20.8 million net proceeds from the May common stock direct placement offering.

 

Consolidated Second Quarter and Year-to- Date 2022 Results:

 

   For the Three-Month Period Ended   For the Six-Month Period Ended 
   July 30,
2022
   July 31,
2021
   Change   July 30,
2022
   July 31,
2021
   Change 
Net Sales  $133.2   $113.4    17%  $287.8   $226.6    27%
                               
Gross Margin %   36.3%   42.3%   (597)bps   38.1%   41.5%   (334)bps
                               
Net loss attributable to non-controlling interest  $(0.1)  $(0.1)   27%  $(0.4)  $(0.3)   (47)%
                               
Net loss attributable to shareholders  $(11.1)  $(4.2)   (161)%  $(23.0)  $(7.5)   (208)%
                               
EPS  $(0.42)  $(0.23)   (162)%  $(0.95)  $(0.45)   (162)%
                               
Adjusted EBITDA  $5.1   $8.3    (39)%  $14.3   $16.4    (13)%

 

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Segment Second Quarter and Year-to-Date 2022 Highlights:

 

   For the Three-Month Period Ended   For the Three-Month Period Ended 
   July 30, 2022   July 31, 2021 
           Media               Media     
       Consumer   Commerce           Consumer   Commerce     
   Entertainment   Brands   Services   Consolidated   Entertainment   Brands   Services   Consolidated 
Net Sales  $109.9    10.4    12.9   $133.2   $101.6    10.4    1.5   $113.4 
                                         
Gross Profit  $40.2    4.9    3.3   $48.4   $41.7    5.8    0.5   $48.0 
                                         
Operating Income (Loss)  $(13.9)   2.6    1.5   $(9.8)  $(3.3)   1.2    (0.3)  $(2.4)
                                         
Adjusted EBITDA  $0.2    2.7    2.2   $5.1   $6.0    2.5    (0.2)  $8.3 

 

   For the Six-Month Period Ended   For the Six-Month Period Ended 
   July 30, 2022   July 31, 2021 
           Media               Media     
       Consumer   Commerce           Consumer   Commerce     
   Entertainment   Brands   Services   Consolidated   Entertainment   Brands   Services   Consolidated 
Net Sales  $240.5    23.1    24.2   $287.8   $208.0    15.5    3.1   $226.6 
                                         
Gross Profit  $92.4    10.8    6.6   $109.8   $84.6    8.1    1.3   $94.0 
                                         
Operating Income (Loss)  $(23.1)   4.4    2.3   $(16.3)  $(4.8)   0.5    (0.1)  $(4.4)
                                         
Adjusted EBITDA  $5.0    5.2    4.1   $14.3   $13.6    2.9    (0.0)  $16.4 

 

Entertainment & Consumer Brands Segments’ Second Quarter and Year-to-Date 2022 Key Operating Metrics:

 

Entertainment + Consumer Brands
   For the Three-Month Period Ended   For the Six-Month Period Ended 
   July 30,   July 31,       July 30,   July 31,     
Description  2022   2021   Change   2022   2021   Change 
 Net Units (000s)   2,910    1,735    68%   6,391    3,275    95%
                               
 Average Selling Price (ASP)  $37   $58    (36)%  $37   $61    (39)%
                               
 Return Rate %   18.4%   15.4%   296bps   17.8%   16.1%   168bps
                               
Total Customers - 12 Month Rolling (000s)   1,534    1,109    38%               

 

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Entertainment + Consumer Brands
   For the Three-Month Period Ended   For the Six-Month Period Ended 
   July 30,   July 31,       July 30,   July 31,     
% of Net Merchandise Sales by Category  2022   2021   Change   2022   2021   Change 
Jewelry & Watches   38%   41%   (246)bps   38%   42%   (439)bps
                               
Home & Consumer Electronics   18%   14%   406bps   18%   15%   348bps
                               
Beauty & Health   19%   24%   (503)bps   19%   24%   (455)bps
                               
Fashion & Accessories   25%   21%   343bps   25%   19%   546bps
                               
Total   100%   100%        100%   100%     

 

(a)For the three-month periods ended July 30, 2022 and July 31, 2021 and year-to-date period ended July 30, 2022 and July 31, 2021, period-over-period comparison of the key operating metrics above are impacted by the addition of 1-2-3.tv in the three-month period ended July 30, 2022 and year-to-date period ended July 31, 2021, particularly the ASP metric because 1-2-3.tv’s ASP is below $25.

 

Liquidity and Capital Resources:

 

As of July 30, 2022, total unrestricted cash was $20.0 million.

 

Outlook:

 

For the third quarter 2022, we anticipate reporting net sales of approximately $138 million, which is approximately 6% growth over the same prior year period. We anticipate reporting adjusted EBITDA of approximately $8 million, which is approximately a 20% decrease over the same prior year period.

 

For the full-year 2022, we anticipate reporting revenue of approximately $615 million, adjusted EBITDA of approximately $41 million and positive quarterly earnings per share in Q4 2022.

 

A reconciliation of adjusted EBITDA is not available on a forward-looking basis without unreasonable efforts because we are unable to predict with reasonable certainty the ultimate outcome and timing of certain significant items, including mergers and acquisitions, other transactions, settlements, integration activities, customer concessions, restructuring activities, and certain tax related events. These items are uncertain, depend on various factors and could have a material impact on earnings and cash flow measures determined in accordance with U.S. generally accepted accounting principles (“GAAP”) for the applicable future period.

 

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Conference Call:

 

Q2 2022 Earnings Conference Call: Our Q2 earnings conference call and webcast is scheduled for Wednesday, August 24, at 8:30 a.m. Eastern time to discuss its financial results for the Second quarter ended July 30, 2022.

 

·Date: Wednesday, August 24, 2022

 

·Time: 8:30 a.m. Eastern time (7:30 a.m. Central time)

 

·U.S. dial-in number: 1-877-407-9039

 

·International dial-in number: 1-201-689-8470

 

·Conference ID: 1373 2127

 

·Webcast link: iMedia Brands 2Q earnings webcast

 

The conference call and webcast will be broadcast live and available for replay 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, 2022.

 

·Toll-free replay number: 1-844-512-2921

 

·International replay number: 1-412-317-6671

 

·Replay ID: 1373 2127

 

About iMedia Brands, Inc.

 

iMedia Brands, Inc. (NASDAQ: IMBI, IMBIL) is a leading interactive media company capitalizing on the convergence of entertainment, ecommerce, and advertising. The company owns a growing, global portfolio of entertainment, consumer brands and media commerce services businesses that cross promote and exchange data with each other to optimize their consumer engagement experiences and to position the company as the leading single-source partner to television advertisers and consumer brands seeking to entertain and transact with customers.

 

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Investors: 

Ken Cooper 

kcooper@imediabrands.com 

(952) 943-6119

 

Media: 

press@imediabrands.com 

(952) 943-6125

 

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iMEDIA BRANDS INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands except share and per share data)
         
   July 30,   January 29, 
   2022   2022 
   (Unaudited)     
ASSETS          
Current assets:          
Cash  $19,902   $11,295 
Restricted Cash   1,575    1,893 
Accounts receivable, net   65,577    78,947 
Inventories   104,978    116,256 
Current portion of television broadcast rights, net   22,797    27,521 
Prepaid expenses and other   20,483    18,340 
Total current assets   235,312    254,252 
Property and equipment, net   47,074    48,225 
Television broadcast rights, net   66,852    74,821 
Goodwill   89,323    99,050 
Intangible assets, net   27,075    27,940 
Other assets   17,186    18,359 
TOTAL ASSETS  $482,822   $522,647 
LIABILITIES AND SHAREHOLDERS’ EQUITY          
Current liabilities:          
Accounts payable  $81,358   $89,046 
Accrued liabilities   36,278    44,388 
Current portion of television broadcast rights obligations   34,254    31,921 
Current portion of long-term debt   16,595    14,031 
Current portion of operating lease liabilities   1,773    2,331 
Deferred revenue   209    427 
Total current liabilities   170,467    182,144 
Long term broadcast rights liability   68,615    81,268 
Long-term debt, net   176,477    176,432 
Long-term operating lease liabilities   4,290    5,169 
Deferred tax liability   5,183    5,285 
Other long term liabilities   2,741    2,986 
Total liabilities   427,773    453,284 
Commitments and contingencies          
Shareholders' equity:          
Preferred stock, $0.01 per share par value, 400,000 shares authorized; zero shares issued and outstanding        
Common stock, $0.01 per share par value, 49,600,000 and 29,600,000 shares authorized as of July 30, 2022 and  January 29, 2022; 29,245,411 and 21,571,387 shares issued and outstanding as of July 30, 2022 and January 29, 2022   291    216 
Additional paid-in capital   557,319    538,627 
Accumulated deficit   (492,457)   (469,463)
Accumulated Other Comprehensive Income/(loss)   (10,104)   (2,429)
Total shareholders’ equity   55,049    66,951 
Equity of the non-controlling interest       2,412 
Total equity   55,049    69,363 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY  $482,822   $522,647 

 

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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 Six-Month Periods Ended 
   July 30,   July 31,   July 30,   July 31, 
   2022   2021   2022   2021 
Net sales  $133,233   $113,442   $287,778   $226,644 
Cost of sales   84,820    65,456    178,028    132,651 
Gross profit   48,413    47,986    109,750    93,993 
Margin %   36.3%   42.3%   38.1%   41.5%
                     
Operating expense:                    
Distribution and selling   36,740    35,357    79,889    69,605 
General and administrative   9,986    7,387    23,637    13,822 
Depreciation and amortization   7,749    7,611    18,643    14,986 
Restructuring costs   2,779    -    2,935    - 
Total operating expense   57,254    50,356    125,104    98,413 
Operating loss   (8,841)   (2,370)   (15,354)   (4,420)
                     
Other income (expense):                    
Interest income and other   76    39    151    39 
Interest expense   (4,073)   (1,381)   (9,835)   (2,694)
Change in fair value of warrant liability   3,529         3,529      
Loss on sale of investment   (985)        (985)     
Loss on debt extinguishment   (884)   (654)   (884)   (654)
Total other expense   (2,338)   (1,996)   (8,025)   (3,309)
                     
Loss before income taxes   (11,179)   (4,366)   (23,378)   (7,729)
                     
Income tax (provision) benefit   (16)   (15)   (32)   (30)
                     
Net loss   (11,195)   (4,381)   (23,410)   (7,759)
                     
Less: Net loss attributable to non-controlling interest   (96)   (132)   (415)   (282)
                     
Net loss attributable to shareholders  $(11,099)  $(4,249)  $(22,995)  $(7,476)
                     
Net loss per common share  $(0.42)  $(0.23)  $(0.95)  $(0.45)
                     
Net loss per common share---assuming dilution  $(0.42)  $(0.23)  $(0.95)  $(0.45)
                     
Weighted average number of common shares outstanding:                    
                     
Basic   26,662,037    19,101,652    24,181,920    17,314,317 
Diluted   26,662,037    19,101,652    24,181,920    17,314,317 

 

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IMEDIA BRANDS, INC.

AND SUBSIDIARIES

Reconciliation of Net Loss to Adjusted EBITDA

(Unaudited)

  

   For the Three-Month Period Ended July 30, 2022   For the Three-Month Period Ended July 31, 2021 
           Media               Media     
       Consumer   Commerce           Consumer   Commerce     
   Entertainment   Brands   Services   Consolidated   Entertainment   Brands   Services   Consolidated 
Net Loss                 $(11,099)                 $(4,249)
Adjustments:                                        
Television Broadcast Rights Amortization                  5,150                   6,036 
Depreciation and Amortization, other                  3,550                   2,526 
Interest, net                  3,998                   1,342 
Tax                  16                   15 
                                         
EBITDA (as defined)  $(3,010)  $2,950   $1,675   $1,615   $4,511   $1,355   $(196)  $5,670 
                                         
A reconciliation of EBITDA to Adjusted EBITDA is as follows:                                        
EBITDA (as defined)  $(3,010)  $2,950   $1,675   $1,615   $4,511   $1,355   $(196)  $5,670 
Adjustments:                                      - 
Transaction, Settlement and Integration costs, net (a)   741    (256)   511    996    40    1,180    -    1,220 
Non-Cash Share-Based Compensation   1,124    -    -    1,124    768    -    -    768 
Loss on Debt Extinguishment   884    -    -    884    654    -    -    654 
Inventory Impairment write-down   228    -    -    228    -    -    -    - 
Loss on sale of investment   985    -    -    985    -    -    -    - 
Change in fair value of warrant liability   (3,529)   -    -    (3,529)   -    -    -    - 
Restructuring Costs   2,779    -    -    2,779    -    -    -    - 
Adjusted EBITDA  $202   $2,694   $2,186   $5,082   $5,973   $2,535   $(196)  $8,312 

 

   For the Six-Month Period Ended July 30, 2022   For the Six-Month Period Ended July 31, 2021 
                           Media     
       Consumer   Commerce           Consumer   Commerce     
   Entertainment   Brands   Services   Consolidated   Entertainment   Brands   Services   Consolidated 
Net Loss                 $(22,995)                 $(7,476)
Adjustments:                                        
Television Broadcast Rights Amortization                  13,072                   11,194 
Depreciation and Amortization, other                  7,359                   5,694 
Interest, net                  9,684                   2,655 
Tax                  32                   30 
                                         
EBITDA (as defined)  $(898)  $5,351   $2,699   $7,152   $10,978   $1,121   $(2)  $12,097 
                                         
A reconciliation of EBITDA to Adjusted EBITDA is as follows:                                        
EBITDA (as defined)  $(898)  $5,351   $2,699   $7,152   $10,978   $1,121   $(2)  $12,097 
Adjustments:                                      - 
Transaction, Settlement and Integration costs, net (a)   1,853    (156)   1,420    3,117    165    1,756    -    1,921 
Non-Cash Share-Based Compensation   2,108    -    -    2,108    1,435    -    -    1,435 
Loss on Debt Extinguishment   884    -    -    884    654    -    -    654 
Inventory Impairment write-down   618    -    -    618    -    -    -    - 
Loss on sale of investment   985    -    -    985    -    -    -    - 
Change in fair value of warrant liability   (3,529)   -    -    (3,529)   -    -    -    - 
Restructuring Costs   2,935    -    -    2,935    -    -    -    - 
One Time Customer Adjustments   -    -    -    -    341    -    -    341 
Adjusted EBITDA  $4,956   $5,195   $4,119   $14,270   $13,573   $2,877   $(2)  $16,448 

 

(a)Transaction, settlement, restructuring and integration costs for the three-month period ended July 30, 2022, includes transaction and integration costs related to Synacor and 1-2-3.tv transactions. For the three-month period ended July 31, 2021, includes transaction and integration costs related to the TheCloseOut.com and Christopher & Banks transactions.

 

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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; one-time customer concessions; 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 segments 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 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 high logistics costs and the impact of the Ukraine & Russia conflict are forward-looking. The Company often use words such as anticipates, believes, estimates, expects, intends, seeks, predicts, hopes, should, plans, will, or the negative of these terms and similar expressions to identify forward-looking statements, although not all forward looking-statements contain these words. 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; the Company’s 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; logistics costs including the price of gasoline and transportation; and the risks described from time to time in the Company’s reports filed with the SEC, including, but not limited to, the Company’s most recent 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 is under no obligation (and expressly disclaims 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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