IMBI - Earnings call transcript Q1 2020

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Operator

Greetings and welcome to iMedia Brands First Quarter 2020 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded. I would now turn the conference over to your host, Tim Peterman, CEO.

begin. may You

Tim Peterman

and Peterman, everyone for This joining. Good Brands, thank CEO. Tim iMedia is morning you

Before into issued cover a release I like this few would go earlier housekeeping my prepared items. We morning. our earnings I QX remarks, to

this I these, be remind exhibit replay Eastern starting A be for will not as today the it on IR at filed to provided of webcast also well IR Form XXXX, call copy June XX, release, section everyone the link section This imediabrands.com. available morning. may through will today’s the website XX:XX access time. X-Ks available If of press you at a as would release you in our A.M. to do via our replay have that website. also through like News is this an

this statements or Some speak be We We statements uncertainties. are call considered of of or forward-looking give update reason. our and for undertake and no reflect any performance made reasonable, in the expectations such operating statements expectations statements forward-looking are risks today’s These date. to as future of financial the significant during no correct. reflected subject assurance expectations and only about statements to revise our forward-looking but to these our forward-looking obligation will believe prove are any and

Safe in earnings today’s our statement filings. to Harbor additional information, please the refer For release and SEC

are these on including included measures, references release. measures required adjusted to this make most be The Finally, non-GAAP the earnings our comparable reconciliations to measures, such will about call information we within EBITDA. to disclosed GAAP as

With these begin. complete housekeeping items let’s

focused this vendors, begin their everyone taking I by every it employees, call, morning and these families to and to iMedia reiterate can customers, step last our that on to guests, stressful be acknowledging its safe. continues this Brands times with keep like on uncertain would to for call, As and

a quarter in one things XX start to million occurred going the my be to kind story time observed cash just really impact many flow. results, never past In in this improvement our turn experience, one is of we operating can and thing to QX impact As in to with and let's attributed attention dramatic activities build. never any three the the months. just composed takes of that well It the attributed of

are a things. of four are study case here and those We perfect examples

like Home Talk Up and QX, well strategy. constantly on foremost, to and completely are attracting calendar Shaq First as Savannah, our have on static time improving launched customers viewership we we to with by the year. In opportunity calendar Style Learning and these Cook room Thursdays. Sweet restaged double in Paula Wake on our of Deen Collectors static programs with successfully our new audiences introducing Tuesdays, new Fashion static Most Mondays last same and slots growth Invicta compared programs Thursdays, digit in as

start said this because the an to is in for and they buy. awhile for industry I is as viewership watch opportunities tune but revenue, As revenue future viewership indicator same customers before, before early in not

Second, our we restaged model. have completely margin gross

fancy the the was of either. rate by execution calendar, said I adjacencies, Better on result QX and our hosts better of viewership is nothing and accomplishment, band things. This better and of our margin static around gross but calendar the line highest XX.X%. like since new easy Our was margin assortment not which before, XX.X% planning because discipline producers, price many trends XXXX QX

assortment strategy merchandising and best better, good, pricing appear our all customers. categories a introduced our in be resonating have that to we Third, with

gemstones. Jewelry, example, our in is For biggest category

be better and three our months Treasures good. best. over would be our brands provides Vogue would be to our position Gem hard six to worked our customers would better have Insiders choices. differently We This our customers. core these past Gems our Gem en

Another Lagerfeld example Fourth, in reduce recent and our what pricing of World would good our perspective, we television DKNY our is we from be a be Brands, be Fashion. to & One our would would brands, with Elon by launches successfully and brand Mallory call Kate within our brands. distribution continued best Karl have examples distribution more collaborating partners. Designer of our costs better

do June as today together. grow great way, partners celebrating XXth to year. to ShopHQ for in anniversary is of this have abilities time, to structures technologies in to so like ways DISH to video we pricing upside Our provide in linear means XX/X and designed today. long We expect platforms That we Charter as about DIRECTV, in year we it well emerging future. distribution are platforms produce Think as us video both for the in continue its been believe companies their ComCast, the and a their this and opportunities parties

niche in primarily provider acquisition as completed journey is our Shopping over-the-top, celebrating focused broader company, delivering men's niche our launched networks, reminder, Left services. interactive of we OTT, and to consumer become growing we and brands. we it, the to call Float companies everywhere advertisers television products and here Interactive, QX, QX, In media complimentary on our retailing TV media Also content the solutions a technology and leading of As services. television a first a portfolio Bulldog Network, leading media network

offering QX, J.W. addition, we multichannel acquisition In in and Hulme American brand an the crafted handbags XXX-year-old artisan iconic of completed accessories.

for future. So, media from near in more interactive the stay tuned successes us

I enough reported QX, last we million earnings cannot and signed by call, As Lalo, led $X Lalo behind in how, financing categories transaction agreement definitive find say growth. Vice CEO for driving Bulldog and vendors about to merchants equity has ShopHQ our for Invicta Invicta Eyal creative new Eyal previously on iMedia's the to in from spur our our force finance actually different helping growth iMedia's being to helping Chairman. company helped

about our sheet. talk let's Finally, balance

quarter would end important year-end. million at our cash was like times to uncertain $X I continually from especially sheet. million, in agree think balance the a $XX all that iMedia's this improve stakeholders improvement is

at end first reduced our the at of debt net the $XX end $XX at we of million quarter. moving net In million, QX million by debt the debt net $XX to from of of year-end addition,

credit facility $XX and have in a also credit line XXXX. term supported as base, which of July by a provides of we to matures Our million our loan up borrowing revolving

end balance the of first at to the $XX inventory at fourth Our quarter was of the end million the million quarter compared XXXX. $XX

infrastructure. to to reflecting the offset we tax and projects, Regarding quarter, in during capital have a future website investments perspective, available that expenditures approximately income. taxable From capital federal XXX spent million us to on X.X we approximately upgrades and are our million primarily NOLs

but recent year. our when expect a between revenues grow In X% revenues This also expectations to May revenue terms obviously performance we the quarter the revenue is of X%, financial our to outlook and to positive temper for to want more May compared performance, remainder and year. I report, of very our last this

ongoing remain As uncertain not given the COVID-XX guidance time. times providing be economic situation mentioned we previously, therefore I these will and at this

May continue as momentum. call will as to Thank their these I the would that revenue to measurable to will time businesses turn growth, retailing In morning. you than iMedia, your back we continue Operator. However, here television believe at operator over the we are growth I say times create this like be closing, for leaving serve without important other homes. for Q&A. impacted our that evidenced them because less to our can ever by customers we

Operator

with Thomas question proceed. Please Instructions] is [Operator from first Davidson. Our Forte D.A.

Thomas Forte

Sure.

So I'll queue. back two get in quick questions and the

historical. So, Are historical? on terms suggesting My the you're distribution. renegotiate is than that is to basis first impression on question shorter you potentially able a

your MSOs are with bad to free purchase agreements How second the should on term think something three any nature. extent distribution exposure? Your in longer to installment basis. or we years products an about offering that the payment you're installment efforts, term And on consumers potential debt then in interest opportunity

Tim Peterman

Hey, Tom, for you morning. Good this thank question.

of changed question, Regarding to your been range our haven't X we or distribution, first time. distribution years methodology from of They X that's the really since term the arrangements. no, beginning and the

meant work pricing to escalate for contracts we've do about often So be would those structure What up we renewal, I completed. able That ways are as come would a changes those on they that I you're when think as key are And that was that together. to the we're correct grew. talking been new that.

that's talking ways, additional different very help thing from us positive a promotion. us that those channel everything for about that, remarks. There's lower it cross rate. of HD, a was will variety and So ways like my neighborhoods, in as ways, that's things distribution channels, in a I new variety of think we with neighborhoods, whether partners prepared about partner that I are that the just our And isn't

So in that's there. answer distribution, of the terms

we've the always we of In terms the still balances, base, value do same same with based. done as value checks and the

provide create would same volume there for having no to credit thresholds way because we where additional just that we're So, pressure do still the is customers. additional

as really an sales. where But providing feel good increase in as we So, grown advantage don't marketplace, be result. that to a hasn't credit we percent see in and about we our risk of believe opportunity a It customers. distinguishing are we competitive a the continues to it

Operator

with Capital. is Our question next proceed. Lake from Mark Street Argento Please

Mark Argento

Yes, Tim.

pretty can give, that bit Just wanted the to maybe us? quarter, bit mostly little impressive for you on a that gross in margin I on the driven? little is improvement, drill midst down Or a mean,

Tim Peterman

we the what of we talked know, components the driven. around discipline one -- really the we not minutes. as offered and the way Sure. critical Yes, we way our call plan the -- shows mixed I was it's we restaging What about business, and

that gross maintained band show. price that in engage idea categories, a require the us allows ASP a sure that, our more together has an it That these being begins pricing sense margin really the price have is in to balanced of make planning is So, of hour customer of reestablished to more doesn't price as about we're here of that and of high way we maintained that our point, -- balance engaging model. of products to that like in mid each conversion a disciplined to our That points point, a each allows team markdown. low better be offer the lot shows, not price be ASP an that making the allows

the eliminated do the the We the notion bottom not only is that price. a willing we're that reduce race to That have to the to engage is anymore. customer way something and to

making you sure margin is step not that discount. So, engaging assortment that about first an is customer have just the that's about the is maintaining the

they rather well. how around really third we're really improved as why The our our line second is honor way another is to of their hosts, the with product engage way producers customer than just And of unique piece the improved and the buying that engaged element The element then is has way the the really work propositions the on telling the discount, execution. we've selling margin inventory.

As earlier, business. believe about right we the cost way years, be buying as moved run to the receipts the new has couple that's really in entire the of just to goods talked their and Company seasons, last don't of we

So, the inventory sprinkles, to removes we better the call that an those using at inventory. existing actually described, your better having pressure in of or we're first it use turn overload sale means And also can a that into and built just and existing new receipts. our a improve as we I through inventory two to things of we buy of inventory move discount inventory way. to a We complement new

the you take you and are allow offer three a point band that the on you buying, So, over and you that your your if things margin maintain margins. that improve balance execution to price improve away those the

Mark Argento

the maybe until is states. most recently of you home touch just obviously places environment lot shopping in one shop can the really a of on, only only up at And the

And of some growth on outlook strong, some is? you this in do of trends? May or terms said, thinking look year-over-year, think but your sustainable you or -- kind these how I single-digit So, what's of had know double-digit of sustainability

Tim Peterman

migration in Yes, the TV where Shrimp use with have hosts. hurricane of of I'd like we customer access a that question. home. We're would that COVID think by XX going industry just general the in not effect Gump the so the not velocity the really amount it's ad do X the, situation engagement online uniquely the boat analogy retailing actually retail. to to factor because I think We're the kind certain But permanent positioned to supported, next I a interesting in on trust shopping. of of months. what There's today after their in Bubba we're a the but the we're call the is have affected to I of terms is of our

that teens in about I accelerate think situation accelerate, about the it's still in migration. think I you of e-commerce. and you think, it retail retail terms will experience when do any So, the the online e-commerce, will think And

benefit will that think acceleration. I retailing from also television

will it term to our a and provide -- term, will short the do believe benefit as buying also of that long benefit although the industry. So, consumer. a be from certainly lot also changing result retailing of I e-commerce TV habits

Operator

question Please Group. is from next proceed. Alex Our with Capital Fuhrman Craig-Hallum

Alex Fuhrman

Thanks little would few obviously, I you very my in QX. drill results pretty question. in returning much to be a taking strong could to growth on a the turnaround what from wanted May, for if seen here further, there bit down stunning last we've quarters, including the

month sorry have have you to board coming more, to been together of new the been categories? you May? have the May, you that bit been little you could be or that who we'd in been if the general So, really customers kind you the am customers it been sell? that new demand they of offerings new across see more your customers more May? that in -- mostly related have coming And came a having, buying there buying love and Or would how existing customers on home extent provide like have buying they then I in kitchen things color pandemic buying in to that expect Is

Tim Peterman

not Thanks question was for multi-pronged. even that the

was ahead XX-pronged, go that think we're I that going and shot. but to get

month, terms talked to finishing May that is with we strong -- It the X% last of if performance performance. So, X% And is start in growth we'll we're sure, the as up think, year to for we about. solid. a

really year on right -- opportunity As idea we not would that not something about, forecasting the we're doing. talked of a be now, we're

bear thesis as asked, and is, So, of May they we talked habits what's we the really more. to prepared And with The to groundwork each establish isn't come levels with isn't together And higher being me, I as once. hot is time about revenue, go doing when fall allowed last just introduced remarks, establish all but It that really it to really little revenue. viewing calendar customers is well it is, my home. calendar. and about static as back viewing And steps. the started at it's viewership things question of at the for and lay habits, they static you the why really the through that best lot we come the which related a talked as begins more it

That's March stopping to have the of flat back trend. revenue. our increases So you month, time five month now QX forever first upside year. in full static But negative a that where measuring -- weeks. for be Nielsen may for we the saw in the was of years. just May because certain in it was the it started viewership entire was and XXXX. on ratings, Actually, reversals, basically March for That was viewership viewership March we the plus in last calendar. benefit the was

So, fashion. build that in does it

that by working specifically in the you and things doing vibrant some stream even the or we million asked But QX. and took That categories $XX Beauty Health investing receipts in has been talked we well. about more talk the is has well. already very -- well in do, our that by next Then file. millions. quarter We expense that capital had operating as months you've we We fortunate QX, the about for performing cash now a and QX, work about So, as Homecare, as were customer and the hard file. one I vibrant one, to we customer several been I Health flow improve would over and that in flat in that's going move say Health last did is but that Health, of of turning a also that's our Health. planning file customer into were because reduced called think be Watches characterize certainly around. in would I will that year. QX And, $XX you

haven't Health just Health, also by So results, been that although results dominated been our but driven has growing. has the

our from They got, You've have all we performances provided talked the balance has been you have Waterford Watches, hard Home everything have answer. price -- also core well. I about band from terms in Mackenzie that record the brand of as to working mentioned to earlier the earlier

really through, it's the you've static driving So, culmination a got of viewership. coming calendar it's

creating that's You all categories. stronger engagement have viewership planning a concept in

in still improvement Health. period fashion a that in making will better, those those. and growth think on we're those and it's customer perform Watches businesses QX, such restaging even is were for but of combinations file on have And and around progress focused And robust that around then, really us. in we is You and make Jewelry May that the all

that's if that believe when going last the the efforts and TV to our of right about drive have through own -- and months employment, that's if So elements execution you over idea asked, the will We trend the we of now and going of think move to more COVID drive stay, that's on all retrenchment the nature results. of the continue of the about performance a will six watching the enough all of our our the year. culmination folks concern to nervousness continue the terms own our to in plate that we rest to advertising, those

or So, answers that the that to think situation, question. not your to we if something going beholden we're completely captured it's be COVID

Alex Fuhrman

accomplishment here. could those if is are turnaround follow viewership Tim. driving been up bringing quite viewership May? it April and effect Are really seems reversing, shop we a the that of revenue the the an in then been those halo viewership? trend specifically been and Thanks, in That's customers Are your programs have does. the That downward Or programs the really finally yes, And, here just site? with helpful. like more I as get across they that into capturing of that

Tim Peterman

Alex. is -- question, a It really combination, Great it's right.

every converged we we in So virtually range range. that I viewership beginning would revenue to about call what the our introduced static -- from move programs And ones QX, that introduced QX the in think categories, have category. are in or to

from same same fashion in their So Sunday in Paula about, our we've morning, several more to program introduced home with of shop same we've her with to more Shaq, done category around elements to and your with because that's actually week-over-week host introduced well, fashion, these the viewing Eat gone We've habits. think the know because and the engage Obviously, different there's in called we the Learning on launched customers Shaq people done basis. are with Shaquille Deen we've Learning engaged Savannah. the with shows it's format Shaq, we've but all night a in interested different and Shop, television that a Cook has why

has one it's or things one just not category, with great So, Dr. guest. Consult. host one not done Terry Dubrow

status regular now where these all and So every health they're category customer appointments, engaging we with can Terry with a are a elements. from have show much the where I questions that basis. Serious think Stallone different single it's of Dr. ours having beauty brand the of weekly folks weekly introduced on where about benefiting Jennifer asking we've shows, another a Skincare. so great engaging ISOMERS

our And really business. I don't the certainly So, other, as of at one it least as is just see nothing this new. or I new a it it fundamental see

same introducing year how You that's spring fundamentals to you the show, fall a cable the the world, this we're network And That ratings. you And in build really know, day. network now. start to a of is and last build entertainment about if you world. with that think the thing, you

Operator

Please Tom follow-up question Forte with proceed. Davidson. have We a D.A. from

Thomas Forte

Great.

think So, I had I three.

time. So, we'll a at go one

today So, the the us as first for can is, OTT Tim, such what distribution one you significance tell you is for Roku?

Tim Peterman

a important start this ecosystem. environment QX think that new believe we Alright, Float do Left that could walled a ecosystem as we so I'll because got you create that Obviously, dominating for we a I've with acquired one garden where time in because OTT an where at though. Interactive of in have one We marketplace the you customers sure. pen,

for think marketplace. believe customers by of going we to So, relevant in personalities Shaq making type is from but engage customers a about that, you kind doing that bundles, be in How what consumer that if those Roku are those a more make we like what We We think different brands. We're TV important. the a it's the that would we be that important that engage of that more have of definitions shorter We provide entertainment does way Float world, the form OTT learning engage at to to for in differently. the network. and to to discoverable customer? participating there's content lot that of XX/X think in the long would skinny services OTT, OTT we're be Left and someone of we think like sale. relevant do programs that -- the Smart right learning we way in networks we don't to a We a that believe in system our and and today much future create it's television a have just but conversion would are -- mechanism the OTT

critical things of -- very for get today it's that to agenda. a that about, our interactive it's next talked media customer to wouldn't are effect viewership. results doesn't critically And we learn five very finish the on company, not we're line. economic from not it's to creating it as we our important say I that important the dramatic in that said trying an just because as And it's I the years we our it's way financial a important now. OTT the enterprise, like in year not and engage at do OTT is beginning, mean you an variety So, But economically create here what would impact

Thomas Forte

remind is a to you that And OTT? where distributing you Bulldog follow-up distribution? one. are as on Okay, Can in us then and

Tim Peterman

is and TV not and And it in on environments. everything Certainly, we we Yes, terms We talked relatively and Samsung ShopHQ planning OTT of we about that situation, the going OTT, COVID other to to distribution way last the from Roku, to to because small we're were we're opportunity significant to -- with release, sure increase now the of increase in on on think in QX still from niche several prevail yet that make are. Smart a them. have is QX back we that wiser Bulldog QX, the Bulldogs distributions. a the hedge is pushed to in business to engage

are that Bulldog, QX. in QX launch like that today being think how primary you better at talked be, and an in customer the about and believe in and category If along that much the things. we as with to environment they I about, beauty health we focused the we're like it's other isn't with and are it's fashion male category, to more the But engaging home and today, really the going

course. it's So model. its producing the social are still stay building distribution campaigns right content, still for and still Bulldogs the looking its online

a distribution our of beginning, about ShopIQ, be call the -- things distribution, still talked very distribution we a products male trying network again reach is networks distinct male celebrating linear not will different. not single be each as customers services. state to our all combination network we a to with with it's which male business as and category to from regional As broadest social Bulldog. not base going sports everybody, of And programming where distinct is be Bulldog XX/X is in on after and is soft it right. the will partial a categories have the combination how certain well as the The the blocks we of, Home is launched that it's today. XX/X strategy We're

running position presents under -- the to hit product today, perspective in perspective programming, opportunity good we're homes a and guest the in a ground itself from XX/X. think We again we're from assortment in call although So it a when a QX. finally

Thomas Forte

Great.

still time. So at last one two, a

Okay, talking $X of managing can you're incremental lot about Bowling the for in Amazon's fulfillment is a center quarter. that June an how logistics in you level. managing Amazon, efforts spend explain billion the -- your at COVID-XX And Green,

Tim Peterman

So costs spike not. question is no, inference I our to seeing center? is. situation related And your we of the in we fulfillment are Are at think the a the answer

all thoughtful certainly Although, employees and personnel for protective in. outside proactive measures we being the all from we our and very on are limited certainly coming

to You implemented to in by know, design. our provide COVID, Green talked providing we're we've And services those only which about, of GX company teams a our out a those their have had our and think as ShopHQ we're -- not you thoughtful without is well cases continue we XPL interruption. as and group, also the been services Bowling for we've we facility goods there, we and know, any a in have we major Bulldog, that as place shipping put and ABG, in operate is not direct-to-consumer and services

job dramatic done believe incurred have cost continue we in but result crew. day, not every as to So, a and great protecting we a our watch any we of situation obviously we've the kind increases

Thomas Forte

last so And question.

sort to is summarize. this So

suggest the sales So it's cash to reason it's are There's are May to while improved early the sustainable. sustainable. and trends future to suggest sales profitability it's that that easy improving. your the are And too the in also improvement of unclear believe just trends quarter trends reported that you the on while for flow,

that confident and at you're trends improving able guidance because both in COVID-XX, top least provide it's cases, to both saying to you're difficult of bottom line, So the while say that.

Tim Peterman

how in if operate what control team. control, discipline improvements to right. take I how around of static those fundamentals calendar drive only flow plan We you and a And viewership. to we would continue I how all as would will bottom think operating the, improvements, that. the line. benefits the million do cash even -- continue control we I in the the the We XX improved not and on Yes, we've by say, say We the control

say, ballgame us. at before right. and the right barrel would a to on that's believe we're of seeing finally, the don't whole money, Now, subscribe And the important not we money we which actually completely. very margin wheel improving fundamentals now. to cash doing probably investors is this this line, bigger it's again, gross We restaging But flow, operating We size the some we're top just need to why need for benefits, as us. make scale, the improving the be viewership, we -- making

do to revenue, are all make drops those those the important. you well that you to then if And bottom more elements All of line. when start

we believe the the trends we've on are They overnight. all control something to opportunity just worked is year that think because revenue that the things sustainable And do of we the side. for happen. is don't those make happen that So, we driving last

And don't just so, go away overnight. also they

feel good able with XXXX we through these push about So, to in trends. being improved

Thomas Forte

Okay.

ground in footing the So that line just if basically growth? COVID-XX set stores more while so quick is point the and clear. over physical What the efforts is then, the to I since from took bottom you at from long-term are top-line putting place business of could tack you benefit on fact and short-term improvement be top are the one saying getting line for and some you've a been closed reflection in it some to on improve bottom you're

Tim Peterman

better And that appreciate said. that. Yes, Yes, to communicate. what trying I'm shorter, I is

Operator

turn closing Mr. Peterman back our concludes call to question-and-answer the remarks. like would session. over I to for This

Tim Peterman

appreciate Thank to you. will we and time Listen, talk morning, you, everybody's this soon. everybody Thank Sherry. we

Operator

concludes you. conference. This today's Thank

lines and at thank disconnect You your participation. this may you time your for

Legacy IMBDS (IMBIQ) 27 May 202020 Q1 Earnings call transcript