iMedia Brands, Inc. (“iMedia”) (NASDAQ: IMBI, IMBIL) today announced results for the first quarter ended April 30, 2022.

“We are off to good start this year,” said Tim Peterman, CEO of iMedia. “Our top three fiscal 2022 priorities continue to be to deliver positive earnings per share in the fourth quarter, strengthen our balance sheet, and capitalize on the convergence of entertainment, advertising and ecommerce.”

First Quarter 2022 Consolidated Highlights:

  • Net sales were $155 million, a 37% increase over the prior year period.
  • Gross margin was 39.7%, a 96 basis-point decline from the prior year period.
  • Net loss was $11.9 million or $(0.55) per common share, compared to $3.2 million or $(0.21) per common share in the prior year period. The Q1 2022 net loss included $2.5 million of transaction, settlement, and integration costs, compared to $.7 million of similar costs in the prior year period.
  • Adjusted EBITDA was $9.2 million, a 13% increase over the prior-year period.
  • Total 12-month rolling active customer count, as of April 30, 2022, grew by 48% compared to the prior-year period, driven by the continued strong customer growth from Christopher & Banks and from the addition of the 1-2-3.tv customer file.

Consolidated First Quarter 2022 Results (dollars in millions except EPS):

             
    For the Three-Month Period Ended
    April 30,2022   May 1,2021   Change
             
Net Sales   $ 154.5     $ 113.2     37 %
             
Gross Margin %     39.7 %     40.6 %   (96 bps)
             
Net loss attributable to non-controlling interest   $ (0.3 )   $ (0.2 )   (113 %)
             
Net loss attributable to shareholders   $ (11.9 )   $ (3.2 )   (269 %)
             
EPS   $ (0.55 )   $ (0.21 )   (162 %)
             
Adjusted EBITDA   $ 9.2     $ 8.1     13 %
             

Segment First Quarter 2022 Highlights (dollars in millions): 

                                     
      For the Three-Month Period Ended   For the Three-Month Period Ended  
      April 30, 2022   May 1, 2021  
                                     
              Media               Media      
          Consumer   Commerce           Consumer   Commerce      
      Entertainment   Brands   Services   Consolidated   Entertainment   Brands   Services   Consolidated  
                                     
Net Sales   $ 130.6     12.7   11.2   $ 154.5     $ 106.5     5.1     1.6   $ 113.2    
                                     
Gross Profit   $ 52.2     5.8   3.3   $ 61.3     $ 43.0     2.3     0.7   $ 46.0    
                                     
Operating Income (Loss) $ (9.2 )   1.8   0.8   $ (6.5 )   $ (1.5 )   (0.7 )   0.1   $ (2.1 )  
                                     
Adjusted EBITDA   $ 4.8     2.5   1.9   $ 9.2     $ 7.6     0.3     0.2   $ 8.1    
                                     

Entertainment & Consumer Brands Segments’ First Quarter 2022 Key Operating Metrics:

Entertainment + Consumer Brands
    For the Three-Month Period Ended
    April 30,   May 1,      
Description   2022 (a)    2021    Change
               
 Net Units (000s)     3,481       1,540     126 %  
               
 Average Selling Price (ASP)   $ 37     $ 65     (43 %)  
               
 Return Rate %     17.3 %     16.8 %   47 bps  
               
Total Customers - 12 Month Rolling (000s)     1,584       1,072     48 %  
               
               
Entertainment + Consumer Brands
    For the Three-Month Period Ended
    April 30,   May 1,      
% of Net Merchandise Sales by Category 2022 (a)    2021    Change
               
Jewelry & Watches     38 %     43 %   (545 bps)  
               
Home & Consumer Electronics     18 %     14 %   450 bps  
               
Beauty & Health     20 %     25 %   (519 bps)  
               
Fashion & Accessories     24 %     18 %   614 bps  
               
Total     100 %     100 %      
               

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

Liquidity and Capital Resources:

As of April 30, 2022, total unrestricted cash was $12.0 million. iMedia also had an additional $6.2 million of borrowing capacity available under its revolving credit facility.

Outlook:

For the second quarter of our fiscal year ending January 29, 2023 (“Fiscal 2022”), we anticipate reporting net sales of approximately $158 million, which is approximately 40% growth over the same prior year period. We anticipate reporting adjusted EBITDA of approximately $10 million, which is approximately a 11% increase over the same prior year period.

For Fiscal 2022, we reiterate our previously provided guidance. We anticipate reporting revenue of approximately $675 to $725 million, adjusted EBITDA of approximately $50 to $60 million and we anticipate reporting positive quarterly earnings per share beginning in the back half of Fiscal 2022, specifically in the fourth quarter.

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.

Conference Call:

Q1 2022 Earnings Conference Call: Our Q1 earnings conference call and webcast is scheduled for Tuesday, May 24, at 8:30 a.m. Eastern time to discuss our financial results for the first quarter ended April 30, 2022.

  • Date: Tuesday, May 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: 1372 9848
  • Webcast link: iMedia Brands 1Q 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 June 7, 2022.

  • Toll-free replay number: 1-844-512-2921
  • International replay number: 1-412-317-6671
  • Replay ID: 1372 9848

About iMedia Brands, Inc.

iMedia Brands, Inc. 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. iMedia’s common stock is traded on the NASDAQ Global Market stock exchange under the ticker IMBI. iMedia’s 8.5% bonds are also publicly traded on the NASDAQ Global Market under the ticker IMBIL and pay holders 8.5% interest quarterly in arrears on March 31, June 30, September 30, and December 31.

Investors:Ken Cooperkcooper@imediabrands.com(952) 943-6119

Media:press@imediabrands.com(952) 943-6125 

 

iMEDIA BRANDS INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands except share and per share data)
             
    April 30,   January 29,
    2022   2022
    (Unaudited)      
ASSETS            
Current assets:            
Cash   $ 12,049     $ 11,295  
Restricted Cash     1,893       1,893  
Accounts receivable, net     76,166       78,947  
Inventories     115,300       116,256  
Current portion of television broadcast rights, net     24,723       27,521  
Prepaid expenses and other     21,484       18,340  
Total current assets     251,615       254,252  
Property and equipment, net     47,405       48,225  
Television broadcast rights, net     69,698       74,821  
Goodwill     93,158       99,050  
Intangible assets, net     28,725       27,940  
Other assets     17,457       18,359  
TOTAL ASSETS   $ 508,058     $ 522,647  
LIABILITIES AND SHAREHOLDERS’ EQUITY            
Current liabilities:            
Accounts payable   $ 85,666     $ 89,046  
Accrued liabilities     43,577       44,388  
Current portion of television broadcast rights obligations     31,868       31,921  
Current portion of long-term debt     14,400       14,031  
Current portion of operating lease liabilities     1,764       2,331  
Deferred revenue     633       427  
Total current liabilities     177,908       182,144  
Long term broadcast rights liability     77,114       81,268  
Long-term debt, net     185,241       176,432  
Long-term operating lease liabilities     4,877       5,169  
Deferred tax liability     5,484       5,285  
Other long term liabilities     3,787       2,986  
Total liabilities     454,411       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, 29,600,000 shares authorized as of April 30, 2022 and January 29, 2022; 21,804,017 and 21,571,387 shares issued and outstanding as of April 30, 2022 and January 29, 2022     218       216  
Additional paid-in capital     539,398       538,627  
Accumulated Other Comprehensive Income/(loss)     (6,703 )     (2,428 )
Accumulated deficit     (481,359 )     (469,463 )
Total shareholders’ equity     51,554       66,951  
Equity of the non-controlling interest     2,093       2,412  
Total equity     53,647       69,363  
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $ 508,058     $ 522,647  
             

iMEDIA BRANDS, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except share and per share data)
                 
                 
            For the Three-Month Periods Ended
          Apr 30,     May 1,
           2022       2021 
Net sales   $ 154,544       $ 113,203  
Cost of sales     93,207         67,196  
      Gross profit     61,337         46,007  
      Margin %     39.7 %       40.6 %
Operating expense:          
  Distribution and selling     43,149         34,247  
  General and administrative     13,650         6,436  
  Depreciation and amortization     10,893         7,375  
  Restructuring costs     157         -  
    Total operating expense     67,850         48,058  
Operating loss     (6,513 )       (2,051 )
                 
Other income (expense):          
  Interest income and other     168         1  
  Interest expense     (5,854 )       (1,313 )
    Total other expense     (5,686 )       (1,312 )
                 
Loss before income taxes     (12,199 )       (3,363 )
                 
Income tax (provision) benefit     (16 )       (15 )
                 
Net loss     (12,215 )       (3,378 )
                 
Less: Net loss attributable to non-controlling interest   (319 )       (150 )
                 
Net loss attributable to shareholders   $ (11,896 )     $ (3,228 )
                 
Net loss per common share   $ (0.55 )     $ (0.21 )
                 
Net loss per common share          
    ---assuming dilution   $ (0.55 )     $ (0.21 )
                 
Weighted average number of          
common shares outstanding:          
      Basic     21,742,286         15,620,995  
      Diluted     21,742,286         15,620,995  
                 

IMEDIA BRANDS, INC.
AND SUBSIDIARIES
Reconciliation of Net Loss to Adjusted EBITDA
(Unaudited)
 
  For the Three-Month Period Ended April 30, 2022
                           
                Media        
        Consumer   Commerce        
  Entertainment   Brands   Services   Consolidated  
                           
Net Loss                     $ (11,896 )
Adjustments:                          
Depreciation and Amortization                       11,731  
Interest, net                       4,369  
Interest, Broadcast Rights Liability                       1,317  
Tax                       16  
                           
EBITDA (as defined) $ 2,111   $ 2,402     $ 1,024   $ 5,537  
                           
                           
A reconciliation of EBITDA to Adjusted EBITDA is as follows:                          
EBITDA (as defined) $ 2,111   $ 2,402     $ 1,024   $ 5,537  
Adjustments:                          
Transaction, Settlement and Integration costs, net (a)   1,500     100       909     2,509  
Non-Cash Share-Based Compensation   985     -       -     985  
Restructuring Costs   157     -       -     157  
                           
Adjusted EBITDA $ 4,753   $ 2,502     $ 1,933   $ 9,188  
                           
                           
                           
  For the Three-Month Period Ended May 1, 2021
                           
                Media        
        Consumer   Commerce        
  Entertainment   Brands   Services   Consolidated
                           
Net Loss                     $ (3,228 )
Adjustments:                          
Depreciation and Amortization                       8,317  
Interest, net                       810  
Interest, Broadcast Rights Liability                       502  
Tax                       15  
                           
EBITDA (as defined) $ 6,456   $ (234 )   $ 194   $ 6,416  
                           
                           
A reconciliation of EBITDA to Adjusted EBITDA is as follows:                          
EBITDA (as defined) $ 6,456   $ (234 )   $ 194   $ 6,416  
Adjustments:                          
Transaction, Settlement and Integration costs, net (a)   701     -       -     701  
Non-Cash Share-Based Compensation   678     -       -     678  
One-time Customer Concessions   341     -       -     341  
                           
Adjusted EBITDA $ 8,176   $ (234 )   $ 194   $ 8,136  
                           
                           

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

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 “adjusted EBITDA” in order to adequately assess the operating performance of its segments and in order to maintain comparability to analyst coverage and financial guidance, when given. Management believes that adjusted EBITDA allows investors to make a meaningful comparison between its business operating results over different periods of time and 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 financial 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 U.S. generally accepted accounting principles (“GAAP”) and should not be construed as measures of liquidity. Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies. A reconciliation of the comparable GAAP measure, net income (loss) to adjusted EBITDA is included in this release. 

Cautionary Statement Concerning Forward-Looking Statements

This document may contain certain “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Any statements contained herein that are not statements of historical fact, including statements regarding future revenue and adjusted EBITDA are forward-looking. The Company often uses words such as anticipates, believes, estimates, expects, seeks, predicts, 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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