Xcel Brands, Inc

Ladies and gentlemen, thank you for patiently waiting. Welcome to the Axel Brands Q4 2024 and Q1 2025 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 followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I will now turn the call over to Seth Burrows, AVP. Seth, you may begin.

Good afternoon, everyone, and thank you for joining us. Welcome to Excel Brands combined fourth quarter of 2024 and first quarter of 2025 earnings call. We greatly appreciate your participation and interest. With us on the call today are Chairman and Chief Executive Officer Robert DeLoren and Chief Financial Officer Jim Herron. By now, everyone should have access to the earnings releases for the quarter and fiscal year ended December 31st, 2024, and the quarter ended March 31st, 2025. which went out last Wednesday and yesterday, respectively. In addition, the company filed with the Securities and Exchange Commission with its annual report on Form 10-K last Wednesday and will file a quarterly report on Form 10-Q for the quarter ended March 31, 2025, tomorrow. The releases, the annual report, 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 can 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 reports 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 related to our company's results of operations. Our management believes these financial performance measurements are also useful because these measurements adjust for certain costs and other events that management believes are not representative of our core business 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 attached to the company's earnings leases for the Form 10-K and 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, Seth. Good afternoon, everyone, and thank you for joining us today. I would like to start today's call with a brief update on our performance over the two most recent quarters and our outlook for 2025 and beyond. After that, our CFO, Jim Herron, will discuss our financial results in more detail. But first, I'm happy to report that we have closed a strategic transaction with United Trademark Group in April. This transaction brings together two industry leaders in brand management, supply chain management, licensing, and video and social commerce to create a global powerhouse. The UTG alliance significantly enhances Excel's goal of achieving global distribution of our existing and new creator-driven brands and our ability to deliver great products with a high quality-to-value ratio across multiple product categories and through UTG's supply chain capabilities. The initial transaction provided the company with $3 million of liquidity and saves us over $1 million per year in interest and principal payments through March of 2027. Also, UTG puts us in a great position to more aggressively pursue acquisitions, some of which may be transformative to the company. We have been working hard and fast with UTG to present the strength of the combined platforms to retailers across multiple channels of distribution and conducting due diligence for potential acquisitions. Also, we believe that this partnership will accelerate our formation of additional creator influencer brands on our platform. We continue to work hard with all of our production partners to drive our business. We announced our new creator influencer brands with Cesar Millan, Gemma Stafford, and Jenny Martinez in Q2 of 2025. We have identified key category license opportunities for all of these new creator influencer brands. Our social media reach across our brand portfolio has grown from 5 million followers in January of 2025 to 45 million to date. We believe this is an extremely important and valuable media currency going forward, given the recent dramatic growth in video commerce and creator-led brands. Sea Wonder and Christie Brinkley remain the two fastest-growing brands on HSM. We have a strong pipeline of additional new creator-influencer brands that we hope to announce in the near future. All that said... We are approaching Q3 and Q4 of this year with caution given the impacts of the tariffs on QVC and HSN's business and our licensees including G3 for our Halston brand and the coming consolidation of HSN's operations into QVC's headquarters in Pennsylvania. Judith Ripka continues to operate on plan at JTV. In fact, our most recent on-air rotation was most was our most successful to date. Our Longaberger brand launches on QVC this fall. The Army team has onboarded 25 premium beauty brands as it focuses its efforts on the beauty category. User downloads have reached 50,000, and the influencer base now reaches over 10 million followers. As previously mentioned, this is a joint venture with a technology company in which Excel owns a 19% interest in this new marketplace. We believe that our goal of building a portfolio of creator-influencer brands that reaches 100 million followers has the potential to accelerate the growth of Ormi. We generated an adjusted EBITDA loss of $792,000 in Q4. That is a $361,000 improvement over Q4 23. I should note The 2024 loss is approximately 150,000 more than we expected, which was caused by the impacts of the Florida hurricanes in Q4 of 2024. While we forecast a range of one to two and a half million of adjusted EBITDA for 2025, much of it was weighted on the results of the back half of this year. We are assessing the impact of the tariffs and the HSN Tampa studio closure on our businesses, and working on potential solutions, including short-term domestic production for some of our brands. Jim will more fully cover Q4 2024 and the full year of 24 results and Q1 25 results. Jim?