Xcel Brands, Inc

Hello, and welcome to Excel Brands' first quarter earnings conference call. At this time, all participants are in listen-only mode. 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 call over to Andrew Berger of SM Berger & Company. 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 first quarter ended March 31st, 2022, which went out a short while ago. And in addition, the company will file with the Securities and Exchange Commission its quarterly report on Form 10-Q by May 23, 2022. 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 statements, whether as a result of new information, future events, or otherwise. The dynamic nature of the current macroeconomic and geopolitical environment 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 to 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 will start tonight's call with some opening remarks followed by some operating highlights for the quarter, after which our CFO, Jim Herron, will discuss our financial results for the first quarter of 2022 in more detail. We have worked very hard over the past 12 years to position XL Brands as a design, production, and media platform focused on driving growth in consumer brands through a livestream-driven strategy and are pleased both with the success we have been able to achieve under our brands on direct response television as well as our ability to materially increase the long-term value of our brands. There is no better example of this than our Isaac Mizrahi brand that generated 30 million of retail sales when we acquired it in 2011 and is now generating over 350 million in annual retail sales. We are working on multiple new projects within our existing businesses and based upon the pipeline of projects and opportunities that are currently either planned or being considered, we are positioning Accel as a leading platform for brands primarily driven by the rapidly growing live stream shopping experience now happening on all types of screens. Now, turning to a few highlights from our first quarter results. In the first quarter of 2022, we continued to show strong top line revenue growth year over year. We had 8.7 million of top line revenues, which is 12% or nearly 1 million higher than the first quarter of 2021. The company's net loss was 3.5 million compared with a 2.5 million loss from last year and our adjusted EBITDA was flat to last year at a loss of just under 1 million. We are working hard to reduce operating costs going forward while continuing to drive growth in new business. As mentioned on our last earnings call, the fourth quarter of 2021 was challenging for us given a warehouse fire at QVC, which materially impacted our business. Q1 2022 shows a strong recovery for the fourth quarter of last year with net revenues and gross profit up 8% and 36% respectively. Also, net loss and adjusted EBITDA improved $3.4 million and $1.6 million respectively on the same comparative basis. Our current brands remain strong with our Holston brand showing continued growth and strong sell through that retail and new partnerships under the brand, which we expect to announce soon. Lori Goldstein has been performing extremely well at QVC and we just finalized development on our new brand Gold by Lori Goldstein, which we will be showing to retailers in fall 2022. Our Judith Ripka brand is continuing to gain traction at independent jewelry retailers around the country with 14 new accounts opened in the first quarter and two new Las Vegas casino doors opening soon. And Longaberger continues to show strong momentum primarily driven by our digital live stream shows and micro and nano influencer driven strategy. We expect that our interactive TV businesses with both HSN and QVC will present a significant opportunity for us in 2022 and beyond with our existing brands as well as multiple new brand opportunities that we hope to also announce soon. Also, based upon our current business trends, we expect that the company will return to profitability this year. Our investments in people, technology, live streaming, design, product development, and supply chain management are now greatly benefiting the company. We believe our financial flexibility and significant untapped rich asset values positions us well to drive our current businesses and fund new opportunities. This is even more important as companies in our industry are dealing with margin pressure due to logistics and raw materials costs. As a result, we believe that the growth investments we are pursuing combined with our strong balance sheet asset values will position us well to grow our business despite any economic headwinds that may lurk ahead. In closing, the past two years have taught us to focus on who we are and what we stand for in the world and in our industry. Also, we know that in the face of continued uncertainty both globally and in our industry, We need to keep our focus and priorities crystal clear. That is, we exist to design and develop great products and to reimagine shopping, entertainment, and social media as one thing. Now I'd like to turn the call over to Jim to discuss our financial results for the quarter and the year.