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iMedia Brands Reports Fourth Quarter and Full Year 2020 Results, Provides 2021 Guidance

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Q4 2020 – Returned to Revenue Growth and Achieved 20% Gross Profit Growth
Full Year 2020 – Positive Operating Cash Flow and Free Cash Flow

MINNEAPOLIS, March 23, 2021 (GLOBE NEWSWIRE) -- iMedia Brands, Inc. (the “Company”) (NASDAQ: IMBI) today announced results for the fourth quarter and full year ended January 30, 2021.

Fourth Quarter and Full Year 2020 Summary & Recent Highlights

  • Q4 net sales were $124.8 million, an increase of 1% compared to same prior-year period, which was the first time since 20151 that the Company achieved Q4 revenue growth.

  • Full year 2020 cash flow from operations improved to $6.2 million compared to $(6.2) million cash used for operations for the same prior-year period. Full year 2020 free cash flow improved to $1.3 million compared to $(13.3) million for the same prior-year period.

  • Q4 gross margin was 35.6%, a 560-basis point improvement over the same prior-year period. Full year 2020 gross margin was 36.8%, a 420-basis point improvement over the same prior-year period.

  • Q4 gross profit was $44.4 million, a 20% increase compared to the same prior-year period.

  • Q4 new customers grew by 12% compared to the same prior-year period, reversing a six-year negative growth rate trend.

  • Q4 net loss improved to $2.7 million or $(0.21) per share, compared to the same prior-year period net loss of $18.4 million or $(2.30) per share. Full year 2020 net loss improved to $13.2 million or $(1.23) per share, compared to a net loss of $56.3 million or $(7.54) per share for the same prior-year period.

  • Q4 adjusted EBITDA was $8.4 million, which is a $17.5 million improvement from the same prior-year period. Full year 2020 adjusted EBITDA was $23.9 million, compared to an $18.4 million adjusted EBITDA loss for the same prior-year period.

  • On February 5, 2021, the Company contributed approximately $3.5 million in inventory to acquire a controlling interest in an online marketplace called TheCloseOut.com. The site offers consumers exclusive and name-brand products at deep discounts.

  • On February 22, 2021, the Company successfully closed on its common stock equity raise of $21.2 million, net of discounts, commissions and other offering costs.

  • On March 1, 2021, the Company entered into a licensing partnership with ReStore Capital, a Hilco Global company, where iMedia will operate and grow the Christopher & Banks business throughout all sales channels, including digital, television, catalog, and brick and mortar retail.

CEO Commentary

“Q4 was another strong quarter for us,” said Tim Peterman, CEO of iMedia Brands, “which we believe creates an even stronger foundation for profitable revenue growth in 2021.”

Fourth Quarter 2020 Results

SUMMARY RESULTS AND KEY OPERATING METRICS

($ Millions, except average selling price and EPS)

Q4 2020
1/30/2021

Q4 2019
2/1/2020

Change

YTD 2020
1/30/2021

YTD 2019
2/1/2020

Change

Net Sales

$

124.8

$

123.6

1%

$

454.2

$

501.8

(9%)

Gross Margin %

35.6%

30.0%

560 bps

36.8%

32.6%

420 bps

Adjusted EBITDA

$

8.4

$

(9.1)

N/A

$

23.9

$

(18.4)

N/A

Net loss

$

(2.7)

$

(18.4)

85%

$

(13.2)

$

(56.3)

76%

EPS

$

(0.21)

$

(2.30)

91%

$

(1.23)

$

(7.54)

84%

Net Shipped Units (000s)

1,722

1,645

5%

6,497

6,872

(5%)

Average Selling Price (ASP)

$64

$67

(4%)

$61

$65

(6%)

Return Rate %

15.5%

18.4%

(290 bps)

14.8%

19.4%

(460 bps)

ShopHQ Digital Net Sales %

51.1%

53.8%

(270 bps)

50.8%

52.7%

(190 bps)

Total Customers - 12 Month Rolling (000s)

1,020

1,041

(2%)

N/A

N/A

N/A

% of ShopHQ Net Merchandise Sales by Category

Jewelry & Watches

44%

41%

41%

44%

Home & Consumer Electronics

21%

32%

16%

23%

Beauty & Health

24%

15%

32%

18%

Fashion & Accessories

11%

12%

11%

15%

Total

100%

100%

100%

100%

Liquidity and Capital Resources

As of January 30, 2021, total unrestricted cash was $15.5 million, an increase of $5.2 million from prior-year end. Net debt at the end of Q4 was $37.9 million, a $20.8 million reduction from prior-year end. The Company also had an additional $12.5 million of unused availability on its revolving credit facility.

Outlook

For Q1 2021, the Company anticipates reporting revenue growth between 3% and 5% and adjusted EBITDA of at least $6 million. For the full year 2021, the Company anticipates adjusted EBITDA between $28 million and $32 million.

_____________________________
1 The Company reported Q4 revenue growth in 2017, but it was on a 53-week fiscal year.

Conference Call

The Company will hold a conference call today at 8:30 a.m. Eastern time to discuss its fourth quarter and full year 2020 results.

Date: Tuesday, March 23, 2021
Toll-free dial-in number: (877) 407-9039
International dial-in number: (201) 689-8470
Conference ID: 13717498

Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Gateway Investor Relations at (949) 574-3860.

The conference call will be broadcast live and available for replay here and via the Investors section of the iMedia Brands website at www.imediabrands.com.

A replay of the conference call will be available after 11:30 a.m. Eastern time on the same day through April 6, 2021.

Toll-free replay number: (844) 512-2921
International replay number: (412) 317-6671
Replay ID: 13717498

About iMedia Brands, Inc.

iMedia Brands, Inc. (Nasdaq: IMBI) is a leading interactive media company that owns a growing portfolio of lifestyle television networks, consumer brands and media commerce services. Its brand portfolio spans multiple business models and product categories. Its television brands are ShopHQ, ShopBulldogTV, ShopHQHealth and LaVenta. Its media commerce services brands are Float Left Interactive and i3PL Services. Its consumer brands include J.W. Hulme jwhulmeco.com, Christopher & Banks christopherandbanks.com, OurGalleria.com and TheCloseOut.com. Please visit www.imediabrands.com for more investor information.

Contacts:

Investors:
Gateway Investor Relations
Cody Slach
IMBI@gatewayir.com
(949) 574-3860

Media:
press@imediabrands.com
(800) 938-9707

iMEDIA BRANDS INC.

AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands except share and per share data)

January 30,

February 1,

2021

2020

(Unaudited)

ASSETS

Current assets:

Cash

$

15,485

$

10,287

Accounts receivable, net

61,951

63,594

Inventories

68,715

78,863

Current portion of television distribution rights, net

19,725

-

Prepaid expenses and other

7,853

8,196

Total current assets

173,729

160,940

Property and equipment, net

41,988

47,616

Television distribution rights, net

7,028

-

Other assets

3,892

4,187

Total Assets

$

226,637

$

212,743

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Accounts payable

$

77,995

$

83,659

Accrued liabilities

29,509

40,250

Current portion of television distribution rights obligation

29,173

-

Current portion of long term credit facility

2,714

2,714

Current portion of operating lease liabilities

462

704

Deferred revenue

213

141

Total current liabilities

140,066

127,468

Other long term liabilities

8,855

335

Long term credit facilities

50,666

66,246

Total liabilities

199,587

194,049

Commitments and contingencies

Shareholders' equity:

Preferred stock, $.01 par value, 400,000 shares authorized;

zero shares issued and outstanding

-

-

Common stock, $.01 par value, 29,600,000 and 14,600,000 shares authorized

as of January 30, 2021 and February 1, 2020; 13,019,061 and 8,208,227

shares issued and outstanding as of January 30, 2021 and February 1, 2020

130

82

Additional paid-in capital

474,375

452,833

Accumulated deficit

(447,455

)

(434,221

)

Total shareholders' equity

27,050

18,694

Total Liabilities and Shareholders' Equity

$

226,637

$

212,743


iMEDIA BRANDS, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except share and per share data)

For the Three-Month Periods Ended

For the Twelve-Month Periods Ended

January 30,

February 1,

January 30,

February 1,

2021

2020

2021

2020

Net sales

$

124,797

$

123,639

$

454,171

$

501,822

Cost of sales

80,407

86,607

287,118

338,185

Gross profit

44,390

37,032

167,053

163,637

Margin %

35.6

%

30.0

%

36.8

%

32.6

%

Operating expense:

Distribution and selling

32,820

41,870

129,920

170,587

General and administrative

5,178

7,795

20,336

25,611

Depreciation and amortization

7,322

1,823

24,022

8,057

Restructuring costs

451

2,485

715

9,166

Executive and management transition costs

-

313

-

2,741

Total operating expense

45,771

54,286

174,993

216,162

Operating loss

(1,381

)

(17,254

)

(7,940

)

(52,525

)

Other income (expense):

Interest income

1

2

3

17

Interest expense

(1,317

)

(1,169

)

(5,237

)

(3,777

)

Total other expense

(1,316

)

(1,167

)

(5,234

)

(3,760

)

Loss before income taxes

(2,697

)

(18,421

)

(13,174

)

(56,285

)

Income tax (provision) benefit

(15

)

33

(60

)

(11

)

Net loss

$

(2,712

)

$

(18,388

)

$

(13,234

)

$

(56,296

)

Net loss per common share

$

(0.21

)

$

(2.30

)

$

(1.23

)

$

(7.54

)

Net loss per common share

---assuming dilution

$

(0.21

)

$

(2.30

)

$

(1.23

)

$

(7.54

)

Weighted average number of

common shares outstanding:

Basic

12,982,514

7,990,381

10,745,916

7,462,380

Diluted

12,982,514

7,990,381

10,745,916

7,462,380


iMEDIA BRANDS, INC.

AND SUBSIDIARIES

PERFORMANCE MEASURES BY SEGMENT

($ in Millions)

For the Three-Month Period Ended

For the Three-Month Period Ended

January 30, 2021

February 1, 2020

ShopHQ

Emerging

Consolidated

ShopHQ

Emerging

Consolidated

Net Sales

$

118.4

$

6.4

$

124.8

$

120.5

$

3.1

$

123.6

Gross Profit

41.7

$

2.7

44.4

36.5

$

0.5

37.0

Operating Loss

(1.1

)

$

(0.3

)

(1.4

)

(14.6

)

(2.6

)

(17.3

)

Adjusted EBITDA

8.5

(0.1

)

8.4

(7.0

)

(2.2

)

(9.1

)

For the Twelve-Month Period Ended

For the Twelve-Month Period Ended

January 30, 2021

February 1, 2020

ShopHQ

Emerging

Consolidated

ShopHQ

Emerging

Consolidated

Net Sales

$

437.2

$

17.0

$

454.2

$

496.1

$

5.7

$

501.8

Gross Profit

160.2

$

6.9

167.1

162.8

$

0.8

163.6

Operating Loss

(3.6

)

$

(4.3

)

(7.9

)

(47.0

)

(5.6

)

(52.5

)

Adjusted EBITDA

27.5

(3.6

)

23.9

(14.9

)

(3.5

)

(18.4

)


iMEDIA BRANDS, INC.

AND SUBSIDIARIES

Reconciliation of Net Loss to Adjusted EBITDA:

(Unaudited)

(in thousands)

For the Three-Month Period Ended

For the Three-Month Period Ended

January 30, 2021

February 1, 2020

ShopHQ

Emerging

Consolidated

ShopHQ

Emerging

Consolidated

Net loss

$

(2,712

)

$

(18,388

)

Adjustments:

Depreciation and amortization

8,281

2,822

Interest income

(1

)

(2

)

Interest expense

1,317

1,169

Income taxes

15

(33

)

EBITDA (as defined)

$

6,970

$

(70

)

$

6,900

$

(11,932

)

$

(2,500

)

$

(14,432

)

A reconciliation of EBITDA to Adjusted EBITDA is as follows:

EBITDA (as defined)

$

6,970

$

(70

)

$

6,900

$

(11,932

)

$

(2,500

)

$

(14,432

)

Adjustments:

Transaction, settlement and integration costs, net (a)

314

-

314

1,282

216

1,498

Restructuring costs

451

-

451

2,389

96

2,485

Executive and management transition costs

-

-

-

313

-

313

Rebranding costs

-

-

-

473

-

473

Non-cash share-based compensation expense

733

-

733

521

-

521

Adjusted EBITDA

$

8,468

$

(70

)

$

8,398

$

(6,954

)

$

(2,188

)

$

(9,142

)

For the Twelve-Month Period Ended

For the Twelve-Month Period Ended

January 30, 2021

February 1, 2020

ShopHQ

Emerging

Consolidated

ShopHQ

Emerging

Consolidated

Net loss

$

(13,234

)

$

(56,296

)

Adjustments:

Depreciation and amortization

27,978

12,014

Interest income

(3

)

(17

)

Interest expense

5,237

3,777

Income taxes

60

11

EBITDA (as defined)

$

23,649

$

(3,611

)

$

20,038

$

(35,561

)

$

(4,950

)

$

(40,511

)

A reconciliation of EBITDA to Adjusted EBITDA is as follows:

EBITDA (as defined)

$

23,649

$

(3,611

)

$

20,038

$

(35,561

)

$

(4,950

)

$

(40,511

)

Adjustments:

Transaction, settlement and integration costs, net (a)

1,200

-

1,200

266

428

694

Restructuring costs

715

-

715

8,228

938

9,166

Executive and management transition costs

-

-

-

2,741

-

2,741

Rebranding costs

-

-

-

1,265

-

1,265

Inventory Impairment write-down

-

-

-

6,050

-

6,050

Non-cash share-based compensation expense

1,960

-

1,960

2,152

52

2,204

Adjusted EBITDA

$

27,524

$

(3,611

)

$

23,913

$

(14,859

)

$

(3,532

)

$

(18,391

)

(a) Transaction, settlement and integration costs for the three and twelve-month period ended January 30, 2021 includes consulting fees incurred to explore additional loan financings, settlement costs, professional fees related to the TheCloseOut.com transaction, and incremental COVID-19 related legal costs. Transaction, settlement and integration costs for three-month period ended February 1, 2020 includes contract settlement costs, costs incurred to affect a reverse stock split and business acquisition and integration-related costs to acquire Float Left and J.W. Hulme. Transaction, settlement and integration costs, net, for the twelve-month period ended February 1, 2020 includes $2.2 million of costs for contract settlement costs, business acquisition and integration-related; costs incurred related to the implementation of our ShopHQ VIP customer program and our third-party logistics service offerings and costs incurred to effect a reverse stock split, partially offset by a $1.5 million gain for the sale of our claim related to the Payment Card Interchange Fee and Merchant Discount Antitrust Litigation class action lawsuit.

Adjusted EBITDA

EBITDA represents net income (loss) for the respective periods excluding depreciation and amortization expense, interest income (expense) and income taxes. The Company defines Adjusted EBITDA as EBITDA excluding non-operating gains (losses); executive and management transition costs; restructuring costs; non-cash impairment charges and write downs; transaction, settlement, and integration costs, net; rebranding costs; and non-cash share-based compensation expense. The Company has included the “Adjusted EBITDA” measure in its EBITDA reconciliation in order to adequately assess the operating performance of its television and online businesses and in order to maintain comparability to its analyst's coverage and financial guidance, when given. Management believes that the Adjusted EBITDA measure allows investors to make a meaningful comparison between its business operating results over different periods of time with those of other similar companies. In addition, management uses Adjusted EBITDA as a metric to evaluate operating performance under the Company’s management and executive incentive compensation programs. EBITDA and Adjusted EBITDA are both non-GAAP measures and should not be construed as an alternative to operating income (loss), net income (loss) or to cash flows from operating activities as determined in accordance with generally accepted accounting principles (“GAAP”) and should not be construed as a measure of liquidity. Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies. The Company has included a reconciliation of the comparable GAAP measure, net income (loss) to Adjusted EBITDA in this release.

iMEDIA BRANDS, INC.

AND SUBSIDIARIES

Reconciliation of Operating Cash Flow to Free Cash Flow:

(Unaudited)

(in millions)

For the Twelve-Month

For the Twelve-Month

Period Ended

Period Ended

January 30,
2021

February 1,
2020

Major GAAP Cash Flow Categories

Net cash provided by (used for) operating activities

$

6.2

$

(6.2

)

Net cash used for investing activities

$

(4.9

)

$

(7.8

)

Net cash provided by financing activities

$

3.9

$

3.3

Free Cash Flow (non-GAAP measure)

Net cash provided by (used for) operating activities

$

6.2

$

(6.2

)

Cash paid for property and equipment

$

(4.9

)

$

(7.1

)

Free cash flow

$

1.3

$

(13.3

)

Free Cash Flow

Free cash flow represents net cash provided by operating activities less cash paid for property and equipment. It should not be inferred that the entire free cash flow amount is available for discretionary expenditures. Management utilizes the free cash flow measure in order to assess the operating performance of its television and online businesses. Free cash flow is a non-GAAP measure and therefore should not be considered a substitute for income or cash flow data prepared in accordance with GAAP and may not be comparable to similarly titled measures reported by other companies. The Company has included a reconciliation of the comparable GAAP measure, net cash provided by operating activities in this release.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

This document may contain certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements contained herein that are not statements of historical fact, including statements regarding the expected impact of COVID-19 on television retailing are forward-looking. The Company often uses words such as anticipates, believes, estimates, expects, intends, seeks, predicts, hopes, should, plans, will and similar expressions to identify forward-looking statements. These statements are based on management's current expectations and accordingly are subject to uncertainty and changes in circumstances. Actual results may vary materially from the expectations contained herein due to various important factors, including (but not limited to): variability in consumer preferences, shopping behaviors, spending and debt levels; the general economic and credit environment, including COVID-19; interest rates; seasonal variations in consumer purchasing activities; the ability to achieve the most effective product category mixes to maximize sales and margin objectives; competitive pressures on sales and sales promotions; pricing and gross sales margins; the level of cable and satellite distribution for the Company’s programming and the associated fees or estimated cost savings from contract renegotiations; the Company’s ability to establish and maintain acceptable commercial terms with third-party vendors and other third parties with whom the Company has contractual relationships, and to successfully manage key vendor and shipping relationships and develop key partnerships and proprietary and exclusive brands; the ability to manage operating expenses successfully and the Company’s working capital levels; the ability to remain compliant with the Company’s credit facilities covenants; customer acceptance of the Company’s branding strategy and its repositioning as a video commerce Company; the ability to respond to changes in consumer shopping patterns and preferences, and changes in technology and consumer viewing patterns; changes to the Company’s management and information systems infrastructure; challenges to the Company’s data and information security; changes in governmental or regulatory requirements; including without limitation, regulations of the Federal Communications Commission and Federal Trade Commission, and adverse outcomes from regulatory proceedings; litigation or governmental proceedings affecting the Company’s operations; significant events (including disasters, weather events or events attracting significant television coverage) that either cause an interruption of television coverage or that divert viewership from its programming; disruptions in the Company’s distribution of its network broadcast to customers; the Company’s ability to protect its intellectual property rights; our ability to obtain and retain key executives and employees; the Company’s ability to attract new customers and retain existing customers; changes in shipping costs; expenses related to the actions of activist or hostile shareholders; the Company’s ability to offer new or innovative products and customer acceptance of the same; changes in customer viewing habits of television programming; and the risks identified under Item 1A(Risk Factors) in the Company’s most recently filed Form 10-K and any additional risk factors identified in its periodic reports since the date of such Form 10-K. More detailed information about those factors is set forth in the Company’s filings with the Securities and Exchange Commission, including its annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K. Investors are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this announcement. The Company is under no obligation (and expressly disclaims any such obligation) to update or alter its forward-looking statements whether as a result of new information, future events or otherwise.