Xcel Brands, Inc

Thank you for standing by. This is a conference operator. Welcome to Excel Brand's second quarter earnings conference call. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then 1 on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and 0. 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 call is being recorded. I would now like to turn the conference call over to Andrew Berger of SM Berger & Co. Thank you. Andrew, you may now begin.

Good evening, everyone, and thank you for joining us. We appreciate your participation and interest and hope that all of you are safe and well. With us on the call today 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 second quarter ended June 30th, 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 August 16th. The release and the quarterly report will be available on the company's website at www.excelbrands.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 statements. 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 means 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 measures 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 in the company's earnings release or 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 exciting operating highlights and insights into 2021. After that, our CFO, Jim Herron, will discuss our financial results in more detail. The second quarter of 2021 was a quarter of growth and expansion for our business as we grew our top line revenues by over 100% from second quarter of 2020 and nearly 40% from the first quarter of 2021. This growth came from a combination of organic sources, including the continued rebound in our wholesale apparel sales, dramatic growth in our wholesale jewelry business, the opening of our Judith Ripka flagship jewelry store and the strong growth in our e-commerce businesses and inorganic sources, notably the April 1st, 2021 acquisition of the logo Lori Goldstein brand. I am pleased with the momentum we have built. And as we move towards the second half of 2021, we are eager to capitalize on that momentum and accelerate the expansion of our business. We expect continued strong growth in Q3 and Q4 of this year, and that our future quarterly revenues will eclipse pre-pandemic levels. That said, we are planning a slower recovery in our wholesale apparel business, which is driven by our conservative approach to inventory management, given the current global trends in increased product cost logistics and warehousing cost increases Delivery delays and the related margin decrease in certain apparel products. Now I'd like to turn to briefly discuss our business by channel of distribution. Our interactive television business led by our Isaac Mizrahi Live and Logo Lori Goldstein businesses is doing exceptionally well. Isaac Mizrahi Live is exceeding planned by 5% and is up almost 10% from the prior year. Our currently acquired, or I should say our recently acquired, Lori Goldstein business was reprogrammed to prime time shortly after our acquisition and has added significant growth to our interactive TV business. As a result, our interactive TV revenues are up 36% in Q2 compared with the prior year quarter. And we continue to grow certain of our 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 business for Xcel Brands, and we're excited to see our businesses in this channel continue to do incredibly well. Turning now to our direct-to-consumer e-commerce and live streaming businesses, Our Judith Ripka and Longaberger combined e-commerce sales are up almost 150% compared to the prior year quarter and are up over 220% year to date compared with the same period in the prior year. New memberships are up 33% in Longaberger and active stylists are up 167% for the first six months. In June, we conducted our first Judith Ripka live streaming event, which we were pleased with the results and we plan on conducting the second live streaming event in September for our Judith Ripka brand. Since our February premiere show, we have averaged one live streaming event per month for Longaberger, which has been a valuable resource contributing significantly to the sales and continued growth of the business. In fact, this past monday night we held our most successful show to date and achieved over 100 000 in sales or three thousand dollars per minute these are outstanding numbers given the current growth rate in our longer burger stylist community we believe that our shows can generate 1 million or 15 000 per minute by the end of 2022 in this new channel of distribution we are not waiting for the future to greet us we are in fact reaching out to greet it Now, turning to our wholesale businesses, our apparel wholesale business continues to improve since the outbreak of COVID last March, although we continue to take a cautious approach as it relates to our inventory management. For the near term, we are not going to take inventory positions without committed sales or clear demand forecasting for our dropship programs. Accordingly, we have reforecasted this business in line with our inventory risk tolerance for 2021. We will use this time to further our goal of making the best possible apparel products. Our Judith Ripka wholesale business is up dramatically at over 156% from last year. We opened over 47 new independent jewelry doors and are on plan to be at over 75 doors by year end. Our dropship programs with retailers such as Saks are doing well, and we plan to open more premium retail dropship accounts by year end, with those programs showing 500% growth for the first half of 2021. Finally, we are planning a live stream event with our Sea Wonder brand in connection with the launch of our new Spring 22 line at Walmart. We believe that live streaming will provide a significant, important boost to this business. We ended the first half of 2021 in Sea Wonder, up 33% in apparel, 47% in footwear, 19% in handbags, and 33% in luggage and belts, and believe we have now settled at retail price points that work for the Walmart customer. We continue to see improvements from the unprecedented impacts of the COVID-19 crisis, and I'm excited by the opportunities we are pursuing to create value in the coming quarters and years. We are encouraged by the growth in all of our channels of distribution, and we are very optimistic about our continued success. Now I would like to turn the call over to Jim to discuss our financial results for the quarter.