Xcel Brands, Inc

Good day and welcome to the Excel Brands First Quarter Earnings Conference Call. Please be advised that reproduction of this call in whole or in part is not permitted without prior written authorization of Excel Brands. And as a reminder, this conference is being recorded. I would now like to turn the call over to Andrew Berger of SM Berger & Company. Thank you. Andrew, you may begin.

Good evening, everyone, and thank you for joining us. We appreciate your participation and interest and hope that everyone is safe and well. With us on today's call are Chairman and Chief Executive Officer Robert DeLoren, Chief Financial Officer Jim Herron, and Executive Vice President of Business Development and Treasury Seth Burrows. By now, everyone should have had access to the earnings release for the first quarter ended March 31st, 2021, which went out a short while ago. And in addition, the company expects to file with the Securities and Exchange Commission its quarterly report on Form 10Q by May 17th. The release and quarterly report will be available on the company's website at www.xlbrands.com. This call is being webcast and a replay will be available on the company's investor relations website. Before we begin, please keep in mind that this call will contain forward-looking statements. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from certain expectations discussed here today. These risk factors are explained in detail in the company's most recent annual report filed with the SEC. Excel does not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. In addition, the ongoing COVID-19 pandemic continues to have a significant impact on the company's business, financial condition, cash flow, and results of operations. there remains significant uncertainty about the duration and extent of the impact of the pandemic. The dynamic nature of these circumstances mean what is said on today's call could change materially at any time. Finally, please note that on today's call, management will refer to certain non-GAAP financial measures, such as non-GAAP net income, non-GAAP diluted earnings per share, and adjusted EBITDA. Our management uses these non-GAAP metrics as measures of operating performance to assist in comparing performance from period to period on a consistent basis and to identify business trends relating to the company's results of operations. Our management believes these financial performance measurements are also useful because these measure adjust for certain costs and other events that management believes are not representative of our core business operating results. And thus, they provide supplemental information to assist investors in evaluating the company's financial results. These non-GAAP measures should not be considered in isolation or as alternatives to net income earnings per share, or any other measure of financial performance calculated and presented in accordance with GAAP. You may refer to the attachment on the company's earnings release or to Part 1, Item 2 of the Form 10-Q for reconciliation of non-GAAP measures. And now, I'm pleased to introduce Robert DeLoren, Chairman and Chief Executive Officer. Bob, please go ahead.

Thank you, Andrew. Good evening, everyone, and thank you for joining us. I hope all of you and your families are staying safe and healthy. I will start today's call with some brief opening remarks, followed by some operating highlights and insights into 2021. After that, our CFO, Jim Herron, will discuss our financial results in more detail. With the extraordinary events of 2020 now nearly behind us, our team has been hard at work during the first quarter of 2021. in not just rebuilding and recovering but also expanding and growing the business as i mentioned in our last earnings call we expected our q1 wholesale businesses to be soft with momentum picking up in q2 and a return to normalized growth in q3 and q4 this year as we entered As we enter Q2, we are beginning to see the green shoots of a recovery across all channels of distribution, including our wholesale business. In order to accelerate the growth of our business, we recently entered into two significant transactions, which we believe will expand our opportunities to create significant value in 2021 and beyond. First, we acquired the Lori Goldstein brand on April 1st. I am pleased to announce that in less than 60 days, we have successfully integrated the business into our existing licensing platform and the initial results from the brand's performance in April and early May have been strong. We expect Lori Goldstein will contribute to earnings in Q2 of this year and for the remainder of the year. We believe our interactive TV business has fully recovered from the COVID pandemic. Our Isaac Mizrahi Live business is doing exceptionally well and has exceeded plan every month this year with April sales at 122% of sales plan and up significantly over last year. Our recently acquired Lori Goldstein business was reprogrammed to prime time shortly after our acquisition and generated 110% of sales plan for April and is off to a great start. Our Judith Ripka Fine Jewelry business on QVC and HSN generated sales of 122% and 142% of sales planned for April on QVC and HSN respectively. As we continue to grow our Halston and Isaac Mizrahi brands on HSN and in international interactive TV channels, including the shopping channel in Canada and TVSN in Australia, which are included in our wholesale sales results. Interactive television continues to be a core capability of XL Brands, and we're excited to see our businesses in these channels continue to do incredibly well coming out of the COVID-19 pandemic. Also, we refinanced our debt facility on April 14, which provided us with additional liquidity of over $10 million and reduced loan amortization by $6 million over the term of the loan. In addition, This gives us an available acquisition line of credit of up to $75 million, subject to lender approval for any opportunistic transactions that may exist in the current retail environment. I believe that the worst of the impact of the COVID pandemic is behind us, and we are now getting the business back on track to drive growth in 2021 and beyond. Now, I'd like to briefly discuss our business by channels of distribution. As I stated, our interactive TV business is doing extremely well. We also believe that our experience in interactive television positions us with a significant advantage to grow live stream shopping across all channels of distribution. Turning now to our direct-to-consumer e-commerce and live streaming businesses, Our Judith Ripka e-commerce business was up 45% from Mother's Day holiday compared to the same period last year and is up 25% for the year. Our Longaberger e-commerce and live streaming business is demonstrating strong monthly growth of approximately 29% per month in its first year of operations with an anticipated run rate of sales exceeding 10 million by year end. This compared to a 2.5 million run rate at year end 2020. I am pleased to report that in June we will conduct our first Judith Ripka live streaming event simultaneously with the opening of our Westchester store and plans continue to grow our direct consumer businesses with the addition of live streaming across all brands. Now turning to our wholesale businesses while we have taken a cautious approach with the wholesale apparel business heading into 2021 The business continues to improve since the outbreak of COVID last March. April sales have been strong, and we expect that business to show significant growth in Q2 as compared to Q1, and with continued growth accelerating in Q3 and Q4. Our Judith Ripka wholesale business is up dramatically at over 300% from last year. We opened over 33 independent jewelry doors and are on plan to be at over 75 doors by year-end. Our dropship programs with retailers such as Sachs are doing well, and we plan to open more premium retail dropship accounts by year-end. As mentioned in our previous earnings call, our sales goal for our wholesale and direct-to-consumer segments is over $35 million for 2021. We are well positioned for growth as we emerge from the unprecedented impacts of the COVID-19 crisis. and I am excited by the opportunities we are pursuing to create value in the coming quarters and years. As you can see, April and May are showing the green shoots of a return to growth across all channels of distribution, and I look forward to reporting our progress throughout the year. Now, I'd like to turn the call over to Jim to discuss our financial results for the quarter. Jim?