Xcel Brands, Inc

Thank you for standing by. I'd like to welcome everyone to the XELB's Q2 2024 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star and the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Paul Kuntz. Please go ahead.

Good afternoon, everyone, and thank you for joining us. Welcome to the Excel Brands second quarter of 2024 earnings call. We greatly appreciate your participation and interest. With us on the call today are Chairman and Chief Executive Officer Robert DeLoren, Chief Financial Officer Jim Aaron, and EVP of Business Development and Treasury, Seth Burrows. By now, everyone should have had access to the earnings release for the quarter ended June 30th, 2024, which went out last evening. And in addition, the company is filing with the Securities and Exchange Commission its quarterly report on Form 10Q today. 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. The dynamic nature of the current macroeconomic environment means that what is said on this call could change materially at any time. Finally, please note that on today's call, management will refer to certain non-GAAP financial measures, including non-GAAP net income, non-GAAP diluted EPS, 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 other measures of financial performance calculated and presented in accordance with GAAP. You may refer to the attachment to 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 am pleased to introduce Robert DeLorean, Chairman and Chief Executive Officer. Bob, please go ahead.

Thank you, Paul. Good morning, everyone, and thank you for joining us today. I'd like to start today's call with a brief update on our performance for the second quarter and our outlook for the remainder of the year. After that, our CFO, Jim Herron, will discuss our financial results in more detail. Before I cover the second quarter highlights, I would like to cover the sale and divestiture of the Lori Goldstein brand for a variety of reasons. it was determined that it would be in the best interest of the company to sell the brand back to its namesake and allow us to focus on our growing brands and potential new opportunities. In doing so, we recognized a net gain of $3.8 million and reduced liabilities by $6 million. Turning to the second quarter, we made continued progress on executing our project fundamentals plan to transition fully to a core working capital licensing business, growing our top line licensing revenues while also improving our bottom line results for the quarter and going forward. Our net licensing revenues grew 16% year over year and 29% for the first quarter. While looking at our bottom line, our non-GAAP earnings for the quarter improved by approximately 85% from last year and our adjusted EBITDA approach break even during the second quarter. As we continue to gain traction and accelerate growth in future quarters, we expect our licensing revenues to continue to grow and our bottom line operating results to continue to improve. Based on all of our progress with project fundamentals, our strategic plan to get back to what made us successful in our core business over the years and the organic growth in our brands. We expect to grow strongly going forward. The Sea Wonder brand is performing well on HSN with second quarter sales exceeding HSN's plan by 6%. The second half of 2024 is planned up from the first half with expectations of achieving an excess of a 60% year-over-year growth rate. We expect to see retail sales volumes continue to grow strongly beyond 2024 on HSN. and at other retailers. We are on track to launch additional new categories of footwear and handbags in spring of 2025. Our new brand, Tower Hill by Christie Brinkley, launched on HSN during the second quarter, exceeding plan by 40%. Additional airtime has been scheduled for the remainder of the year with significant growth planned for 2025. Separately, the brand will introduce additional categories of products outside of HSN starting in spring of 2025. In addition, we have received strong interest from potential licensing partners for the brand across multiple categories, including footwear, bags, beauty, and skincare. One last note on HSN, we expect to announce the launch of another celebrity designer brand on HSN before the end of this year. and another food and kitchen products brand in Q1 of 2025. Looking at our Judith Ripka business, second quarter royalties increased from first quarter by 45%. This is the result of greater product assortments. We look forward to seeing strong sales momentum carry forward throughout 2024 and 2025. As previously discussed, G3 launched Halston Apparel this fall. In addition, they expect to begin shipping footwear and bags later this year for spring 2025. We expect revenues from this license to begin to pick up later this year and grow strongly in 2025 and beyond. As previously mentioned, Ormi soft-launched its video and social commerce marketplace during the second quarter. For Excel, Ormi represents a natural extension of our expertise in video commerce over television. The Ormi team is doing a great job building awareness for the app and onboarding premier brands. They are pleased with the results to date. We believe this marketplace has the potential to transform video and social commerce in the US, and it will achieve its goal to democratize the influencer and creator economy. We are very excited about the potential of Ormi. And now, I'd like to turn the call over to Jim to discuss our financial results. Jim?