Xcel Brands, Inc

Hello and welcome to the Excel Brands Q4 2025 earnings call. All ends 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, just press star followed by the number 1 on your telephone keypad. And if you would like to withdraw your question, press star 1 again. Thank you. Now I would like to turn the call over to Seth Burrows. Seth, you may begin.

Good afternoon, everyone, and thank you for joining us. Welcome to the Accel Brands' fourth quarter of 2025 earnings call. We greatly appreciate your participation and interest. With us today on the call are Chairman and Chief Executive Officer, Robert DeLaurin, and Chief Financial Officer, Jim Herron. By now, everyone should have added access to the earnings release for the quarter and fiscal year ended December 31st, 2025. In addition, we plan to file our annual report on Form 10-K with the Securities and Exchange Commission later this week. The release and the annual 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 the result is new information, future events, or otherwise. The dynamic nature of the current macroeconomic environment means that what is said on this call could change superiorly 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 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 companies' 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 the 10-K 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 recent developments from Q4 2025. and the full calendar year of 2025, and our outlook moving forward. After that, our CFO, Jim Herring, will discuss our financial results in more detail. In 2025, we worked hard with all our production partners and licensees to drive our business for a 2026 ramp-up of the business. Also, we worked – with UTG on a new business development strategy, identifying prospective business licensing partners, and continue to explore acquisition opportunities with them. 2025 was a year of getting back to basics and laying the foundations of growth for the future. After enduring three years of setbacks caused by COVID and the bankruptcy, of Lord & Taylor, which alone cost us over $3 million in related losses. To start with building for the future, in 2025, we announced our new influencer-led brands with Cesar Millan, Jenna Stadford, Jenny Martinez, Coco Rocha, and Shannon Dougherty. This grew the social media following in our brand portfolios from $5 million to $46 million. We identified key category license opportunities for all these new influencer-led brands. Now, all of these influencer-led brands will be launching throughout 2026 on interactive television and at bricks and e-commerce retailers. Interest in these brands has exceeded our expectations. We are on track with wholesale shipments by our licensees beginning in the first quarter of 2026 and on-air programing on QDC and HSN commencing in the second quarter, followed by distribution in other channels later this year. We believe that these new influencer-led and our legacy brands each have the potential of reaching our goal of achieving annual royalty income on average of $6 million per year by 2029. We believe this would imply Assuming royalty exit multiples remain at the current market average of 7X gross royalty income, a potential portfolio gross value for all of our existing influencer-led and legacy brands of $375 million. As I mentioned, our social media reach across our portfolio is now $46 million, and based on our pipeline of new influencer-led brand opportunities, We are well on our way to achieving our goal of 100 million social media followers across our brand portfolio. I should add that our TV and streaming content distribution is well over 100 million households. We believe the social media and broadcast and streaming reach of our brand portfolio is driving demand for our brands and products across all categories. Sea Wonder and Christie Brinkley remain some of the fastest-growing brands on HSN, and we have a new licensee that is designing and selling outstanding apparel products for these brands. Judith Ripka continues to operate on plan on JTV. Revenues from JTV were up 23% from the prior year, and we expect 2026 growth in product sales and related royalties to exceed 2025's actual sales. We expect that our Longaberger brand will launch in spring of 2027 with new products co-created by Shannon Dougherty. Shannon has 3 million social media followers and is perfect for the Longaberger brand. We generated an adjusted EBITDA loss of approximately $600,000 in Q4 and a $2.3 million loss for the full year 2025. which is 187,000 improvement over the prior year quarter and a $1.2 million improvement over the full year of 2024. Although our results improved year over year, it was less than our expectations. This was primarily attributable to a combination of a transition to a new apparel supplier for our Sea Wonder in Tower Hill by Christie Brinkley Brands and our Holston business not materializing as expected for the full year. That said, Holston had a strong second half of 2025, and we are optimistic about Holston's potential in 2026. Although we are pleased with the progress of our legacy and new influencer-led brands, and we believe the worst is now behind us, we remain cautious about for the near term given the macroeconomic outlook for 2026, which has been shaped by lingering inflation, the full impact of trade tariffs, the war in Iran, and to some extent, the bifurcation consumer spending. With that, I would like to turn the call over to our CFO, Jim Herron, to cover our financial results for the fourth quarter and full calendar year 2025. Jim?