XELB - Earnings call transcript Q1 2024

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Operator

Welcome to Xcel Brands First Quarter 2024 Earnings Conference Call. Please be advised that reproduction of this call in whole or in part, is not permitted without prior written authorization of Xcel Brands. And as a reminder, this conference call is being recorded.

I would now like to turn the call over to Paul Kuntz from RedChip. Paul, you may begin.

Paul Kuntz

thank joining and everyone, evening, you us. for Good First XXXX Earnings to the of Brands Xcel Welcome Call. Quarter greatly We appreciate your interest. participation and With President of are today Development and Robert Officer, the Burroughs. Chief Business Haran; on Seth Jim Vice Officer, Financial D'Loren; Chairman Executive and Treasury, Executive Chief us and call

filing have and access in the on Report Form the on call XX, replay the out Commission at XX-Q the evening. And Report earnings a today. The which now, available This XXXX, will company's company's for the and release Investor By went www.xcelbrands.com. Securities had is Quarterly and be everyone on release being the Relations with webcast, be company its Quarterly website. is addition, should available will Exchange March to the quarter ended this website

time. filed with obligation any publicly we result will this call could risk certain subject could explained macroeconomic that detail current any what statements, materially to the said please not contain statements in the factors in that keep risks differ Annual forward-looking does cause is and revise Before any otherwise. a in future change are or mind recent today. on These of forward-looking that discussed here call nature Xcel whether as most information, uncertainties events of the undertake results to forward-looking new materially update All or this to dynamic SEC. The Report are begin, actual expectations environment company's statements. from at means

non-GAAP measures, non-GAAP will management adjusted refer EBITDA. including note certain please Finally, call, and today's non-GAAP income, net EPS on financial diluted that to

relating performance a measures these in to non-GAAP the performance of period-to-period results trends to metrics consistent on management from operating operations. identify assist of business and uses company's Our as to basis comparing

of our believes because also company's evaluating representative supplemental core the adjust to provide in and costs results, unless financial these that management events management are believes measurements operating performance are results. these they other Our useful measures information financial investors not certain for assist business

measures should accordance share measures or or in GAAP. isolation calculated presented in alternatives income, non-GAAP other These considered of to not financial earnings and net with be performance per any as

may to or release attachment to company's You a X, the for the X of of of XX-Q the refer non-GAAP Form earnings Item Part reconciliation measures.

now Chief Executive Bob, please I'm D'Loren, and ahead. And go to introduce pleased Chairman Robert Officer.

Robert D'Loren

like quarter outlook Thank year. call Paul. I'd on everyone, and financial Haran, you for discuss us our you, our our with brief thank detail. our CFO, more evening, results in and remainder to then for the of today's will first Jim the Good for joining a that, update the start today. performance After

licensing wholesale I capital previously all core have mentioned, us, are behind with business. of operations the light who working returns have As we discontinuance

made toward performance have We operating results. significant and financial improving our headway

total revenues product quarter the first quarter in year-over-year several for activities. X this declined our with from Our wholesale first was sales given years that

non-GAAP Goldstein basis royalties improvement. were up which flat. And a bottom line to brands, across for our be licensing showed brand, Lori revenues LOGO our Our caused on except our significant

XX% prior Our adjusted the by year EBITDA improved for almost the quarter from quarter.

is multiple fall. performing of footwear, the beauty categories, strong of brand this categories Siriano additional received across The this handbags, improve. We Christie to licensing Brinkley and potential new the As well. grow results HSN products launch our we quarters, month, starting To HSN partners of to bottom and Christian continue including licensing our our by we have skin revenues from by care. C. continue to traction TWRHLL by in we brand, outside interest followed and for accelerate expect gain Wonder to date, line to future on plan later launch brand

up That's last retailers. million to retail a other XXXX, expect see year's $XX and sales sales goal HSN of up retail volume $XX in We in to including over XXXX. million million from about XXX% to annually with $XX

core categories handbags spring additional and launch will in in We footwear new the of XXXX.

also brand before HSN launch year. expect end of this to another of on the We celebrity announce designer the

with including allows our offer assortments Judith to e-commerce X.X potential Judith on million products, the greater to an This marketing to visitors over on jewelry We e-mail campaigns business are jtv.com. Ripka additional customers. and working million add product XX has JTV both couture to Ripka air and the for

and XXXX look strong momentum We forward seeing forward carry to sales XXXX. through

schedule As fall. to previously this on launch Halston discussed, G-III is

shortly expect to second the We quarter. them shipping after begin

in year We expect and this revenues from grow beyond. pick strongly XXXX later up and license this to to begin

social Orme brands. its is premier They app doing building the with weeks team awareness to great pleased job a approximately commerce ago. the X marketplace onboarding are and and results video soft date. launched The Orme for

to markets As commerce video technology and a I has video U.S., is and is social joint a venture mentioned, interest owns growth this its potentially in new and with company social transform marketplace. Xcel in in the potential unlimited. this previously a potential, XX% We marketplace believe which the the this virtually commerce

strategic project and Xcel of growth in to organic return on the we fundamentals, progress the profitability Based the back plan successful to expect years get all to over what to in XXXX. our with made our us brands,

in Lori caused LOGO talent. with softer I XXXX, continued should was note conflicts of business by expected that QX Goldstein scheduling our than

core interactive brands in on and launching live new robust continued on seek HSN business. opportunities talent we support of working and potential We identifying continue brand. QVC includes Also, for to with are or other our and of the business pipeline on-air business TV This growth position to the we satisfactory resolution ensure a stream a as this. guests reach QVC a on-air additional work our to to

highlights. call to Jim? discuss And Jim over turn like now to I'd financial our to the

James Haran

exit entirely operating wholesale for part the in first XXXX businesses and Thanks, approximately almost million XXXX. from plan by resulting of to driven our decline for decrease from in was was from quarter everyone. of discuss Bob, all sales XXXX product as briefly project now good This I $X.X XXXX. representing Total evening, a fundamentals March million ended revenue XX, the will of of quarter quarter financial XXXX. net the $X.X decrease the first our and our X, results

Licensing brand, prior the approximately revenue year the the was caused across except revenue for which Goldstein flat. up current Lori both quarter. Licensing in million quarter royalties $X.X brands, was our be and to

attributable were overhead quarter. activities Our or in year for costs. the million direct and staffing reductions well in decrease $X operating discontinuance to from in costs the was current $X levels as the million all and expenses $X down as which in of wholesale million other quarter, prior XXXX, included by reductions e-commerce This mainly related XX%

non-GAAP year substantially excluding last going we expect had year, our than approximately interest share Fundamental the or minus completed million prior current in to or Project per a of net the the first from quarter's minus loss, loss less costs million million includes forward, $X.XX or improvement million $X.XX of of the $X.X per million direct of average The of which XX% a non-GAAP quarter space net net to $X.XX our costs million a as loss for noncontrolling we share the minus impairment With of quarter quarter in compared $X.X we successful $X had quarter. Overall, $X.X of operating initiatives per prior minus XXXX. be operating $X.XX On per loss a represents per due of net Fundamentals. current subleasing a with loss $X.X roughly asset part exit a quarter. net basis, our noncash charges the $X.X Project or to and share, for office relating share

to net income our we non-GAAP have structure, as our grow. periods future in should are cost projected rightsized that revenues Now improve to continue licensing

opportunity adjusted year EBITDA would $X.X quarter. projected later XX% the Finally, year. Once take negative achieving in income, revenue to that for and With structure to growth, are million adjusted net negative unaudited $X.X a non-GAAP the place positive anticipates non-GAAP million the EBITDA management diluted EBITDA remind $X.X and of or our everyone approximately I this terms. new prior year-over-year current like again, EPS non-GAAP quarter, was representing improvement this EBITDA in million cost from

with most Form reconciliation comparable Our earnings measures. present these a directly GAAP items the XX-Q release press of and

Now and our liquidity. to turning balance sheet

March was $X.X $X.X of company of As equivalents and which approximately cash of million cash XXXX, the had XX, restricted. total million,

this the excluding lease million, which month in significantly deferred our with business believe and and executing has Judith model. Since usage was we of is late appropriate Project growth $X.X to working decreased by Heritage our adequate and Ripka working and is launch to launch our businesses. TWRHLL obligations of approximately continued Our under capital, projected plan, revenue Fundamentals Wonder of net portion fall, cash Brinkley licensing Christie the current and capital-light C. our current the licensing this continue improve Halston plus

This become recent working as lower our adequate Bob. provides us raise, and a back for our capacity did borrowing they In balance turn net of offering with to proceeds approximately costs million. I common Bob? small that, capital March due stock $X obligations liquidity while we current combined meet with growing position, call business. And like operating sheet to XXXX, the to would capital over with our

Robert D'Loren

this Jim. remarks. prepared our you, Thank gentlemen, Ladies concludes and Operator?

Operator

your from Markets. Kupinski Capital with [Operator question line NOBLE Instructions] comes first And the Michael of

Michael Kupinski

prospect and the your total talk satisfactory options what in you can the revenue a full do What Lori there? about And little licensing quarter and bit a all, you account of year by bit how Finally, does First for that XXXX? a about Goldstein little then disposition the latest can that? for you by brand a as of talk you maybe brand much mean mean for

Robert D'Loren

Okay.

there's lot on brand, in of working Everyone works for flow Springs the the So now in really being Pennsylvania generates million, the Palm able challenged a royalties million because $X drive that's sweep. of concerned and Westchester, to there trends and a balance earnout to us the through the the there's obligation contribute Lori get by and give deal of it. Goldstein some that the we that. complications to contingent way about top with cash of having about need us, the Lori sheet doesn't been we've to been to time is put logistics moved It is to sales. We've $X Michael, business and herself about line an

Lori We to any with we're perhaps under business. no conditions, are terms now And whatever brand to can satisfactory issues the flow all for and back create keep the and would one on negotiations all QVC exploring of to circumstances as both business the faith under in are good part that we doing wants sides. because the necessary of the the is sell we as good in

Michael Kupinski

and of And towards factor Halston, company obviously, terms big event then for the key a to on the a your profitability. launch swing of

after that? of in timing of Was there a product the that You the slippage second quarter. be indicated that shipping would the little

Robert D'Loren

they but pushed may so. that think out apparel Because have they we don't launching anticipated be when it launch. handbags to some in begun just goods. We fall. I it G-III simultaneously and the initially spring get together with already footwear license shipping and would all spring, They they're they the couldn't launching towards signed

We haven't shipping from received yet. any them reports

Michael Kupinski

a of SKUs the number Got in talk you. can about thing? that And sort initially, you'd little Christie then terms that brand of there you the launching Brinkley, of bit be

Robert D'Loren

Christie next launch launch week. the collection, a is that is So full apparel and

with big tops, and have for We care, full that in accessories, it the across Christie shoes, bags, now was working shoot we be categories And bottoms, and multiple simultaneously of will beauty possibly the launch the photo apparel a fragrance. event in skin fantastic for press are it. show. sweaters will collection hit

Michael Kupinski

an many. so at update move Final when for you. for And Got update sorry launch? Can on any on us particular the point? vendors you Orme towards number might you I'm full-scale this give of question,

Robert D'Loren

licensing next their a to to of e-com they of of We as the on. pipeline per the we're XX and operate most come company, brand, the far don't we works on them from now brands Klein, expect know major X be side. well And analyze week just vendors other Orme, over days. between given working their that first which as of really we model to will the with coming X onboarded is the brands Anne WHP So then as as

Operator

comes Anthony Lebiedzinski next Your line of from with the question Sidoti.

Anthony Lebiedzinski

up I wanted on first, Lori Goldstein. to So follow just

the I So Bob, as talked scheduling quarter continued brands about of up. sounds other for like were it was know conflicts. you the kind It meaningful the

line? how take any you how was could way think impacted like trying this stab this top you So your -- share to quantify at much much a

Robert D'Loren

with So Lori, until year we reach close. unless -- agreement a and until we won't know are this settlement for we we

we but been in are good on the in in are. we we'll just think I anything good I faith. Obviously, half That's good shareholders of will Lori. where based where think for of the us with timing and it it's Lori, good have shape. acting done be the first the to Everyone's get because and for year discussions,

Anthony Lebiedzinski

you. Got

Okay. All right.

it overly and a So flow cash -- from not sounds perspective, it's meaningful. like

from your it So take doesn't goals? away really

Robert D'Loren

we things with we pipeline all Lori. not. because with C. doubling It's where with contributor. on with cash Wonder And a launched, Christie No. in business getting the launched, other we Halston the the and have things negotiations happy have wasn't that this in in We're the big are getting coming flow

Anthony Lebiedzinski

Got you.

profitability Okay. then And think for this expect that to you terms in positive year. EBITDA year, you of this be said I later

the more So do wanted the this you be clarification later quarters full do little terms Or that. year? get you think I positive just in of of EBITDA year? mean for one a bit to you'll for

Robert D'Loren

year license. we expect full really that's be to going pick because positive starts to QX how frankly, G-III that I see will But and think in see coming and the QX, it we we're G-III quite when that's quarter-by-quarter when ramp. the ramp-up the and will for depend into up fast

Anthony Lebiedzinski

have G-III, better the business it the are we So timing? will Or what's -- quarter? as just the understanding So I'm a progresses, as the how the in later in quarter as sorry? flow start Like talking to we will year already about July?

Robert D'Loren

Yes. now. be should They shipping

going to is send report. get shipping to for to their them So we're us in But shipping starting propo, to now. wait

Anthony Lebiedzinski

Got Okay. you.

as perspective. should from each a fair it So better be say? top the that like sounds progresses, year and quarter bottom to line line Is both

Robert D'Loren

better. for may but line change, Lori, it. see be cash line bottom That's top adjustment how and we will believe there's an Unless flow we

Anthony Lebiedzinski

happy could Okay. Orme, the Do that's progresses the that you about accelerate week. talked terms That's maybe continue encouraging. Or year think And very then that? could in you you perhaps as X be if pace well? as to think X of per you'll onboarding that you with with do

Robert D'Loren

bigger it hiring for helping them they're contacts we're staffing will Orme them, beginning but [ with really has brands accelerate. I No, Bizz to D been the think and people, operate. staff, ] and up making

Anthony Lebiedzinski

Got you.

Okay.

and -- did guess mean you question I I here. So -- my last

did Do all capital raise should that state business other do So during you you project given Or small quarter. capital you raises? the set? of the be think you a any

Robert D'Loren

for transaction. foresee need doing good given are. cash. I kind there's think transaction I for capital unless of the And a effect equity unless we have another there's we're to for now, some where we don't the that us deal the need

Operator

And your the Instructions] from Howard next Wellington Shields. question line of [Operator with comes Brous

Howard Brous

companies depths So a couple of like How questions that I have been sense asked signed up? but give on not I'd many have in that names you And up? you some of signed the have can Orme. us

Robert D'Loren

then course, pipeline. some Orme to own the share I week in and we accordingly they're customer a do invested on. information And So, e-mail and it. raise private its are point, visibility databases to don't some as of that brands through is for Orme. business, they Remember, into all app. And there per reporting Orme not report as that X little XX% own that Orme we but their have not reports things of those capital just the at brands they're recruit come information, but Howard, daily see adding They now we users more so company. we'll coming on then on, company. We've some have What us. X a one, with all can

Howard Brous

know many signed have You already? how brands up

Robert D'Loren

another one pipeline. The on Anne just there's and about the on, Klein. are is Nine was X put that biggest in

Howard Brous

comment what if for year's terms to in And looking certainly there year. fair EBITDA I'm that call and on minimum to is, can looking are Is numbers. you the you G-III is number looking at next you. next for the people it, increasing say of guaranteed will, estimate significantly? EBITDA million. directionally And the at, So basically it out $XX

Robert D'Loren

other of million on handbags be planned in and Christie, the We line top with another to JTV. could with us believe on is And C. do C. all is and gives year are the categories. now product will TV $XX.X in incredibly of decided going year. part trend possibly of for million catalyst holiday that has per they're million next the this did well. move continues tremendous catalyst 'XX. licensed the that come of Wonder the HSN and to to of have some latter e-commerce running. into transaction year. full and it's just They based to million year. potential. for QX those Ripka Jewelry millions revenue. And And on course, There believe and releasing QX, footwear to It Judith product will beginning exposes we It It's be will the next business XX visitors Well, well $XX and for EBITDA hit it season. customers access which Wonder on for $XX that Ripka price jtv.com, this we Halston, approximately unique year doing another at Christie, their executing Judith that for

doing about with have to immediate of be we be for closer those and Judith that we be finalizing. JTV look excited to year, the we're So catalyst forward is Ripka. get going that And revenue, we will announcing launching could what anticipate We do drivers those brands as into other that next we growth. will

Howard Brous

conservative. So the is fair estimate EBITDA say to next for is it for year how

it ask way. that me Let

Robert D'Loren

Well, behind the what on there, in that we're see standing estimates are the we and business. the pipeline based out Howard,

James Haran

year. a selling for effectively, you're fair that So next Is a X.Xx comment? EBITDA

Robert D'Loren

that seems you reasonable about Yes. when think -- It's EBITDA it where Yup. can be.

Operator

Michael Markets. line NOBLE with Capital from comes of question Kupinski last Your the

Michael Kupinski

I'm sorry.

Just quick follow-up, Bob. one

can on featured that, HSN. whether additional streaming? In believe additional maybe little Could a new give launch, Will about kind also might said apparel might of there? not to year? much this just this you us how brand you give brand, an color thoughts or it of be hope any or you on the -- be us be this generate you terms color even I some it's will it And revenue that

Robert D'Loren

Sure.

is brand when a contribute and it will much is just in But apparel it Michael, will because this of coming We 'XX. celebrity with it's think designer. So it contributor into it be don't a year, launching.

based look we're it design, are to million out. and a is do our will not goal. It's volume brands it HSN be licensees excited. opportunity, great great like now, That's where product, great that holiday is we're on in does of $XX But get million to timing doing Just goal we making $XX on at these HSN. product it. more of where could these Then each when the

Operator

There closing are for back further this questions to now at I call remarks. turn over no time. will D'Loren Mr. the

James Haran

Just, begin? before Bob, Just you

Robert D'Loren

Yes.

James Haran

I release the getting was this did that afternoon. should that out. earnings had they out informed our difficulties let release to earlier want just we everyone just our them know technical fixed momentarily, be some and we going XX-Q file I

issued So apologies that having the for prior release not call. to

release know let we our wanted So I just side on to issues technical ]. that had everyone [ with the

So sorry that. about

Robert D'Loren

Okay.

Jim. your Brands. for interest appreciate gentlemen, and thank in you, this Xcel and We support Ladies time you evening. thank greatly continued your So

fit, stay and well eat always, As be happy.

Operator

Ladies and conclude for gentlemen, call that conference does today. our

for all may You you and disconnect, participating. thank

Xcel Brands (XELB) 20 May 242024 Q1 Earnings call transcript