iMedia Brands Reports Third Quarter Results

MINNEAPOLIS, Nov. 20, 2019 (GLOBE NEWSWIRE) — iMedia Brands, Inc. (NASDAQ: IMBI) today announced results for the third quarter ended November 2, 2019. 
Third Quarter 2019 Summary & Recent Operational HighlightsEPS improved 36% to $(0.09) compared to $(0.14) last year.Net loss improved 26% to $6.7 million compared to $9.2 million last year.Adjusted EBITDA improved 77% to $(986) thousand compared to $(4.2) million last year. Previous six month period Adjusted EBITDA loss of $14 million reduced to $775 thousand for the most recent six month period.Net sales of $115 million compares to $132 million last year, a 12.6% decline. Previous six month period revenue decline of 17.2% reduced to 12.7% for the most recent six months. Rebranded flagship network to ShopHQ.Secured exclusive relationships with seven new home and fashion brands: John O’Hurley, Heather Dubrow, Romero Britto, Danny Seo, Heather Hall, Bear Creek Cattle Steaks and Leota Fashions.Launched innovative new loyalty program, ShopHQ VIP.Entered into exclusive partnership with Shaquille O’Neal on November 18^th.Bulldog Shopping Network to launch on November 22^nd.CEO Commentary“Before I go into our successes achieved this past quarter,” said Tim Peterman, CEO of iMedia Brands, “I want to explain the significance of our Shaquille O’Neal partnership announced yesterday. Specifically, why we worked so hard to make this happen and why we believe the size of this opportunity is significant.“First and foremost, Shaquille O’Neal is more than a celebrity to iMedia. We know him. We know his work ethic, what kind of partner he will be and how good of an entertainer and entrepreneur he is. That is the ‘why.’ He’s that rare, authentic personality who has grown beyond his achievements to become a pop culture icon. “iMedia estimates the size of the financial opportunity here to be meaningful. Shaq’s iconic status combined with iMedia’s television and ecommerce retailing expertise create a unique opportunity for iMedia to build a profitable, omni-channel business that iMedia believes could exceed $200 million in annual revenues.“Regarding our operating results, prior to my arrival in May, the revenue decline for the previous six months was 17.2%. During these past six months, we successfully reduced that decline to 12.7%. We accomplished this by launching multiple exciting brands, making important staffing changes, simplifying the promotional framework and introducing an innovative loyalty program. Although the revenue decline did slow, it did not slow as fast as we wanted.  The reason was the merchandising effort in the company was more troubled prior to my arrival than previously expected, particularly in our two long-lead businesses of Home and Fashion.”Third Quarter 2019 ResultsNet sales decline driven by assortment pressure in the long lead time businesses of Home and Fashion & Accessories, which required an over-reliance on the Jewelry & Watches category.Subscription sales increased 10%, reflecting strong loyalty within the Beauty & Wellness category.Gross margin in the third quarter increased 30 basis points to 36.1% compared to 35.8% in the year-ago quarter. The improvement was driven by a strong discipline to increase rates, which helped to offset slight product mix pressure. The return rate for the quarter was 19.0%, a 90-basis point year-over-year improvement driven by return rate reductions within the Watches, Fashion & Accessories and Consumer Electronics categories.Average selling price increased 5% to $66 driven by increases in the Jewelry and Home & Consumer Electronics categories, combined with a mix shift into Jewelry & Watches.Operating expenses decreased 15%, or $8.1 million, year-over-year to $47.4 million, reflecting decreases of $9.0 million in distribution and selling expenses and $0.8 million in general and administration expenses, partially offset by a $1.5 million increase related to restructuring costs.Liquidity and Capital Resources
As of November 2, 2019, total unrestricted cash was $16.6 million compared to $21.6 million at the end of the second quarter of fiscal 2019. The Company also had an additional $6.3 million of unused availability on its revolving credit facility.OutlookThe company expects a year-over-year revenue decline in the upcoming fourth quarter, but at a lower rate than the second and third quarters of 2019.  The company also expects to report positive adjusted EBITDA in the fourth quarter.⁽¹⁾   Conference CallThe company will hold a conference call today at 8:30 a.m. Eastern time to discuss its third quarter 2019 results.Date: Wednesday, November 20, 2019
Toll-free dial-in number: (877) 407-9039
International dial-in number: (201) 689-8470
Conference ID: 13696572Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Gateway Investor Relations at (949) 574-3860.The conference call will be broadcast live and available for replay here and via the investor relations section of the iMedia Brands website at www.imediabrands.com.
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