Xcel Brands, Inc. (NASDAQ: XELB) (“Xcel” or the “Company”), a media
and consumer products company with significant expertise in
livestream shopping and social commerce, today announced its
financial results for the quarter ended September 30, 2023.
Robert W. D'Loren, Chairman and Chief Executive
Officer of Xcel commented, “Throughout 2023, we have focused on
restructuring our business, reducing operating costs, and
strengthening our balance sheet, and I am encouraged by the
progress we are making. The November 2023 licensing agreements for
our Longaberger business completes our restructuring efforts, which
has transformed Xcel Brands into a working capital light and highly
profitable company that is focused on high-touch licensing,
livestream shopping, and social commerce growth strategies.”
Mr. D’Loren continued, “Our third quarter
adjusted EBITDA was lower than expected as a result of soft sales
in our Interactive TV business primarily driven by talent
scheduling conflicts as QVC transitions post-COVID from remote
shows to 100% in-studio shows. However, we expect overall licensing
revenue to grow sequentially in the fourth quarter and beyond as
recently signed agreements with G-III for our Halston Brand, and
JTV for our Judith Ripka Brand start to contribute to our
results.”
“We also remain on track to launch our
livestream and social commerce platform during the 2023 fourth
quarter. This powerful platform is an exciting opportunity with
strong growth potential for the Company, and we are looking forward
to being able to share more details about the launch in the coming
weeks. While the overall retail environment remains extremely
fluid, I am pleased with the progress we are making and the
opportunities we are pursuing to drive long-term shareholder
value,” concluded Mr. D’Loren.
Third Quarter 2023 Financial
Results
Net revenue for the third quarter of 2023 was
$2.6 million, representing a decrease of approximately $1.9 million
(-41%) from the third quarter of 2022. The year-over-year revenue
decline in the third quarter of 2023 was driven by a $2.1 million
decrease in net sales, attributable to the exit from the wholesale
apparel and fine jewelry sales operations earlier this year as part
of our restructuring plan.
Net loss attributable to Xcel Brands for the
quarter was approximately $5.1 million, or ($0.26) per share,
compared with a net loss of $4.0 million, or ($0.21) per diluted
share, for the prior year quarter. The operating loss for the
current quarter was approximately $5.4 million, compared with $6.0
million, loss for the prior year quarter.
After adjusting for certain cash and non-cash
items, results on a non-GAAP basis were a net loss of approximately
$3.0 million, or ($0.15) per share for the quarter ended September
30, 2023, and a net loss of approximately $3.3 million, or ($0.17)
per share, for the prior year quarter.
Adjusted EBITDA improved significantly on a
year-over-year basis to negative $1.4 million for the current
quarter as compared with negative $2.9 million for the prior year
quarter, primarily as a result of the restructuring of our business
and entry into the new long-term license agreements for our
Halston, Judith Ripka, and C Wonder brands.
Nine Month 2023 Financial
Results
Net revenue for the current nine-month period
was $15.5 million, representing a decrease of approximately $6.2
(29%) million from the prior year comparable period. The
year-over-year revenue decline from the prior nine-month period was
driven by a $6.3 million decrease in licensing revenue, primarily
attributable to the sale of a majority interest in the Isaac
Mizrahi brand in May 2022.
Net loss attributable to Xcel Brands for the
current nine-month period was approximately $14.3 million, or
($0.72) per share, compared with net income of $2.0 million, or
$0.10 per diluted share, for the prior year nine months, which
included a $20.6 million gain on the sale of a majority interest in
the Isaac Mizrahi brand.
After adjusting for certain cash and non-cash
items, results on a non-GAAP basis were a net loss of approximately
$8.7 million, or $(0.44) per share for the nine months ended
September 30, 2023, compared with a net loss of approximately $8.8
million, or $(0.45) per share, for the nine months ended September
30, 2022.
Adjusted EBITDA was negative $4.6 million for
the current year nine months, as compared with negative $6.6
million for the prior year comparable period, an improvement of
$2.0 million or approximately 31%.
Balance Sheet
The Company's balance sheet at September 30,
2023, reflected stockholders' equity of approximately $55 million,
cash and cash equivalents of approximately $2.2 million, and
working capital, exclusive of the current portion of lease
obligations, of approximately $2.9 million.
The Company did not have any short-term or
long-term debt as of September 30, 2023.
Conference Call and Webcast
The Company will host a conference call with
members of the executive management team to discuss these results
with additional comments and details at 5:00 p.m. Eastern Time on
November 20, 2023. A webcast of the conference call will be
available live on the Investor Relations section of Xcel's website
at www.xcelbrands.com. Interested parties unable to access the
conference call via the webcast may dial 800-715-9871 or
646-307-1963 and use the conference ID 8167522. A replay of the
webcast will be available on Xcel’s website.
About Xcel Brands
Xcel Brands, Inc. (NASDAQ: XELB) is a media and
consumer products company engaged in the design, production,
marketing, live streaming, and social commerce sales of branded
apparel, footwear, accessories, fine jewelry, home goods and other
consumer products, and the acquisition of dynamic consumer
lifestyle brands. Xcel was founded in 2011 with a vision to
reimagine shopping, entertainment, and social media as one thing.
Xcel owns the Judith Ripka, Halston, LOGO by Lori Goldstein, and C.
Wonder brands and a minority stake in the Isaac Mizrahi brand. It
also owns and manages the Longaberger brand through its controlling
interest in Longaberger Licensing LLC. Xcel is pioneering a true
modern consumer products sales strategy which includes the
promotion and sale of products under its brands through interactive
television, digital live-stream shopping, social commerce,
brick-and-mortar retail, and e-commerce channels to be everywhere
its customers shop. The company’s brands have generated in excess
of $4 billion in retail sales via livestreaming in interactive
television and digital channels alone, and over 20,000 hours of
live-stream and social commerce. Headquartered in New York City,
Xcel Brands is led by an executive team with significant live
streaming, production, merchandising, design, marketing, retailing,
and licensing experience, and a proven track record of success in
elevating branded consumer products companies.
www.xcelbrands.com
Forward Looking Statements
This press release contains forward-looking
statements. All statements other than statements of historical fact
contained in this press release, including statements regarding
future events, our future financial performance, business strategy
and plans and objectives of management for future operations, are
forward-looking statements. We have attempted to identify
forward-looking statements by terminology including "anticipates,"
"believes," "can," "continue," "ongoing," "could," "estimates,"
"expects," "intends," "may," "appears," "suggests," "future,"
"likely," "goal," "plans," "potential," "projects," "predicts,"
"seeks," "should," "would," "guidance," "confident" or "will" or
the negative of these terms or other comparable terminology. These
forward-looking statements include, but are not limited to,
statements regarding our anticipated revenue, expenses,
profitability, strategic plans and capital needs. These statements
are based on information available to us on the date hereof and our
current expectations, estimates and projections and are not
guarantees of future performance. Forward-looking statements
involve known and unknown risks, uncertainties, assumptions and
other factors, including, without limitation, the risks discussed
in the "Risk Factors" section and elsewhere in the Company's Annual
Report on form 10-K for the year ended December 31, 2021 and its
other filings with the SEC, which may cause our or our industry's
actual results, levels of activity, performance or achievements to
differ materially from those expressed or implied by these
forward-looking statements. Moreover, we operate in a very
competitive and rapidly changing environment. New risks emerge from
time to time, and it is not possible for us to predict all risk
factors, nor can we address the impact of all factors on our
business or the extent to which any factor, or combination of
factors, may cause our actual results to differ materially from
those contained in any forward-looking statements. You should not
place undue reliance on any forward-looking statements. Except as
expressly required by the federal securities laws, we undertake no
obligation to update any forward-looking statements, whether as a
result of new information, future events, changed circumstances or
any other reason.
For further information please contact:
Andrew BergerSM Berger & Company, Inc.
216-464-6400andrew@smberger.com
Xcel Brands,
Inc. and Subsidiaries |
Unaudited
Condensed Consolidated Statements of Operations |
(in
thousands, except share and per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the
Three Months Ended |
|
For the Nine
Months Ended |
|
|
September
30, |
|
June
30, |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
Net licensing revenue |
|
$ |
2,381 |
|
|
$ |
2,166 |
|
|
$ |
7,031 |
|
|
$ |
13,302 |
|
Net sales |
|
|
256 |
|
|
|
2,335 |
|
|
|
8,437 |
|
|
|
8,413 |
|
Net revenue |
|
|
2,637 |
|
|
|
4,501 |
|
|
|
15,468 |
|
|
|
21,715 |
|
Cost of goods sold |
|
|
225 |
|
|
|
1,465 |
|
|
|
6,718 |
|
|
|
5,715 |
|
Gross profit |
|
|
2,412 |
|
|
|
3,036 |
|
|
|
8,750 |
|
|
|
16,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Salaries, benefits and employment taxes |
|
|
2,141 |
|
|
|
3,301 |
|
|
|
7,847 |
|
|
|
13,390 |
|
Other selling, general and administrative expenses |
|
|
3,482 |
|
|
|
3,618 |
|
|
|
9,918 |
|
|
|
11,330 |
|
Total operating costs and expenses |
|
|
5,623 |
|
|
|
6,919 |
|
|
|
17,765 |
|
|
|
24,720 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss before other expenses, including non-cash
expenses |
|
|
(3,211 |
) |
|
|
(3,883 |
) |
|
|
(9,015 |
) |
|
|
(8,720 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expense, including non-cash expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
1,677 |
|
|
|
1,815 |
|
|
|
5,260 |
|
|
|
5,447 |
|
Gain on sale of assets |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(20,608 |
) |
Loss from equity method investment |
|
|
515 |
|
|
|
277 |
|
|
|
1,545 |
|
|
|
277 |
|
Gain on sale of limited partner ownership |
|
|
- |
|
|
|
- |
|
|
|
(351 |
) |
|
|
- |
|
Gain on Lease Liability |
|
|
- |
|
|
|
- |
|
|
|
(445 |
) |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
(loss) income |
|
|
(5,403 |
) |
|
|
(5,975 |
) |
|
|
(15,024 |
) |
|
|
6,164 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and finance expense |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense - term loan debt |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,187 |
|
Other interest and finance charges (income), net |
|
|
- |
|
|
|
(6 |
) |
|
|
18 |
|
|
|
(6.00 |
) |
Loss on early extinguishment of debt |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
2,324 |
|
Total interest and finance expense |
|
|
- |
|
|
|
(6 |
) |
|
|
18 |
|
|
|
3,505 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income before income taxes |
|
|
(5,403 |
) |
|
|
(5,969 |
) |
|
|
(15,042 |
) |
|
|
2,659 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
(benefit) provision |
|
|
- |
|
|
|
(1,539 |
) |
|
|
- |
|
|
|
1,639 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
(loss) income |
|
|
(5,403 |
) |
|
|
(4,430 |
) |
|
|
(15,042 |
) |
|
|
1,020 |
|
Less: Net loss attributable to noncontrolling interest |
|
|
(259 |
) |
|
|
(388 |
) |
|
|
(787 |
) |
|
|
(941 |
) |
Net
(loss) income attributable to Xcel Brands, Inc.
stockholders |
|
$ |
(5,144 |
) |
|
$ |
(4,042 |
) |
|
$ |
(14,255 |
) |
|
$ |
1,961 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) earnings per share attributed to Xcel Brands, Inc. common
stockholders: |
|
|
|
|
|
|
|
|
|
|
Basic net
(loss) income per share |
|
$ |
(0.26 |
) |
|
$ |
(0.21 |
) |
|
$ |
(0.72 |
) |
|
$ |
0.10 |
|
Diluted net
(loss) income per share |
|
$ |
(0.26 |
) |
|
$ |
(0.21 |
) |
|
$ |
(0.72 |
) |
|
$ |
0.10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
weighted average common shares outstanding |
|
|
19,749,317 |
|
|
|
19,624,860 |
|
|
|
19,683,525 |
|
|
|
19,624,604 |
|
Diluted
weighted average common shares outstanding |
|
|
19,749,317 |
|
|
|
19,624,860 |
|
|
|
19,683,525 |
|
|
|
19,752,339 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Xcel Brands,
Inc. and Subsidiaries |
|
Unaudited
Condensed Consolidated Balance Sheets |
|
(in
thousands, except share and per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2023 |
|
|
December 31, 2022 |
|
|
|
(Unaudited) |
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
Current Assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
2,189 |
|
|
|
$ |
4,608 |
|
|
Accounts receivable, net |
|
|
4,749 |
|
|
|
|
5,110 |
|
|
Inventory |
|
|
997 |
|
|
|
|
2,845 |
|
|
Prepaid expenses and other current assets |
|
|
447 |
|
|
|
|
1,457 |
|
|
Total current assets |
|
|
8,382 |
|
|
|
|
14,020 |
|
|
|
|
|
|
|
|
|
|
|
Non-Current Assets: |
|
|
|
|
|
|
|
|
Property and equipment, net |
|
|
779 |
|
|
|
|
1,418 |
|
|
Operating lease right-of-use assets |
|
|
4,702 |
|
|
|
|
5,420 |
|
|
Trademarks and other intangibles, net |
|
|
43,055 |
|
|
|
|
47,665 |
|
|
Equity method investment |
|
|
17,650 |
|
|
|
|
19,195 |
|
|
Deferred tax assets, net |
|
|
1,107 |
|
|
|
|
1,107 |
|
|
Other assets |
|
|
75 |
|
|
|
|
110 |
|
|
Total non-current assets |
|
|
67,368 |
|
|
|
|
74,915 |
|
|
Total Assets |
|
$ |
75,750 |
|
|
|
$ |
88,935 |
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Equity |
|
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
|
|
Accounts payable, accrued expenses and other current
liabilities |
|
$ |
3,621 |
|
|
|
$ |
4,438 |
|
|
Deferred revenue |
|
|
889 |
|
|
|
|
88 |
|
|
Accrued payroll |
|
|
80 |
|
|
|
|
416 |
|
|
Current portion of operating lease obligations |
|
|
1,219 |
|
|
|
|
1,376 |
|
|
Current portion of contingent obligations |
|
|
847 |
|
|
|
|
243 |
|
|
Total current liabilities |
|
|
6,656 |
|
|
|
|
6,561 |
|
|
Long-Term Liabilities: |
|
|
|
|
|
|
|
|
Long-term portion of operating lease obligations |
|
|
4,362 |
|
|
|
|
5,839 |
|
|
Long-term Deferred revenue |
|
|
3,875 |
|
|
|
|
- |
|
|
Contingent obligations |
|
|
5,548 |
|
|
|
|
6,396 |
|
|
Total long-term liabilities |
|
|
13,785 |
|
|
|
|
12,235 |
|
|
Total
Liabilities |
|
|
20,441 |
|
|
|
|
18,796 |
|
|
|
|
|
|
|
|
|
|
|
Commitments and Contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity: |
|
|
|
|
|
|
|
|
Preferred stock, $.001 par value, 1,000,000 shares authorized, none
issued and outstanding |
|
|
- |
|
|
|
|
- |
|
|
Common stock, $.001 par value, 50,000,000 shares authorized, and
19,800,053 and 19,624,860 shares issued and outstanding at
September 30, 2023 and December 31, 2022. |
|
|
20 |
|
|
|
|
20 |
|
|
Paid-in capital |
|
|
103,804 |
|
|
|
|
103,592 |
|
|
Accumulated deficit |
|
|
(47,052 |
) |
|
|
|
(32,797 |
) |
|
Total Xcel Brands, Inc. stockholders' equity |
|
|
56,772 |
|
|
|
|
70,815 |
|
|
Noncontrolling interest |
|
|
(1,463 |
) |
|
|
|
(676 |
) |
|
Total Equity |
|
|
55,309 |
|
|
|
|
70,139 |
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Equity |
|
$ |
75,750 |
|
|
|
$ |
88,935 |
|
|
|
|
|
|
|
|
|
|
|
Xcel Brands,
Inc. and Subsidiaries |
Unaudited
Condensed Consolidated Statements of Cash Flows |
(in
thousands) |
|
|
|
|
|
|
|
|
|
|
For the Nine
Months Ended |
|
|
September
30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
Cash
flows from operating activities |
|
|
|
|
|
|
|
Net (loss) income |
|
$ |
(15,042 |
) |
|
|
$ |
1,020 |
|
Adjustments
to reconcile net (loss) income to net cash used in operating
activities: |
|
|
|
|
|
|
|
Depreciation
and amortization expense |
|
|
5,260 |
|
|
|
|
5,447 |
|
Asset
impairment charges |
|
|
100 |
|
|
|
|
- |
|
Amortization
of deferred finance costs |
|
|
- |
|
|
|
|
156 |
|
Stock-based
compensation and cost of licensee warrants |
|
|
184 |
|
|
|
|
568 |
|
Allowance
for doubtful accounts |
|
|
20 |
|
|
|
|
173 |
|
Restructuring of certain contractual arrangements |
|
|
756 |
|
|
|
|
- |
|
Proportional
share of trademark amortization of equity method investee |
|
|
1,545 |
|
|
|
|
277 |
|
Loss on
extinguishment of debt |
|
|
- |
|
|
|
|
2,324 |
|
Deferred
income tax benefit |
|
|
- |
|
|
|
|
363 |
|
Net gain on
sale of assets |
|
|
- |
|
|
|
|
(20,608 |
) |
Gain on sale
of limited partner ownership interest |
|
|
(351 |
) |
|
|
|
- |
|
Gain on
settlement of lease liability |
|
|
(445 |
) |
|
|
|
- |
|
|
|
|
|
|
|
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
Accounts
receivable |
|
|
(415 |
) |
|
|
|
747 |
|
Inventory |
|
|
1,848 |
|
|
|
|
(509 |
) |
Prepaid
expenses and other assets |
|
|
920 |
|
|
|
|
235 |
|
Deferred
revenue |
|
|
4,676 |
|
|
|
|
199 |
|
Accounts
payable, accrued expenses and other current liabilities |
|
|
(1,395 |
) |
|
|
|
(995 |
) |
Lease-related assets and liabilities |
|
|
(471 |
) |
|
|
|
(202 |
) |
Other
Liabilities |
|
|
- |
|
|
|
|
(224 |
) |
Net
cash used in by operating activities |
|
|
(2,810 |
) |
|
|
|
(11,029 |
) |
|
|
|
|
|
|
|
|
Cash
flows from investing activities |
|
|
|
|
|
|
|
Net proceeds
from sale of majority interest in Isaac Mizrahi brand |
|
|
- |
|
|
|
|
45,408 |
|
Net proceeds
from sale of assets |
|
|
451 |
|
|
|
|
- |
|
Purchase of
property and equipment |
|
|
(87 |
) |
|
|
|
(241 |
) |
Net
cash provided by investing activities |
|
|
364 |
|
|
|
|
45,167 |
|
|
|
|
|
|
|
|
|
Cash
flows from financing activities |
|
|
|
|
|
|
|
Proceeds
from exercise of stock |
|
|
27 |
|
|
|
|
|
Shares
repurchased including vested restricted stock in exchange for
withholding taxes |
|
|
- |
|
|
|
|
(442 |
) |
Payment of
long-term debt |
|
|
- |
|
|
|
|
(29,000 |
) |
Payment of
breakage fees associated with extinguishment of long-term debt |
|
|
- |
|
|
|
|
(1,511 |
) |
Net
cash provided by (used in) financing activities |
|
|
27 |
|
|
|
|
(30,953 |
) |
|
|
|
|
|
|
|
|
Net
(decrease) increase in cash and cash equivalents |
|
|
(2,419 |
) |
|
|
|
3,185 |
|
|
|
|
|
|
|
|
|
Cash and
cash equivalents at beginning of period |
|
|
4,608 |
|
|
|
|
5,222 |
|
|
|
|
|
|
|
|
|
Cash and
cash equivalents at end of period |
|
$ |
2,189 |
|
|
|
$ |
8,407 |
|
|
|
|
|
|
|
|
|
Liability
for equity-based bonuses and other equity-based payments |
|
$ |
- |
|
|
|
$ |
(283 |
) |
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow
information: |
|
|
|
|
|
|
|
Cash paid
during the period for interest |
|
$ |
- |
|
|
|
$ |
1,032 |
|
Cash paid
during the period for income taxes |
|
$ |
16 |
|
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
Non-GAAP net income and non-GAAP diluted EPS are
non-GAAP unaudited terms. We define non-GAAP net income as net
income (loss) attributable to Xcel Brands, Inc. stockholders,
exclusive of amortization of trademarks, proportional share of
trademark amortization of equity method investee, stock-based
compensation, loss on extinguishment of debt, gain on the sale of
assets, gain on lease termination, asset impairment and income
taxes. Non-GAAP net income and non-GAAP diluted EPS measures do not
include the tax effect of the aforementioned adjusting items, due
to the nature of these items and the Company’s tax strategy.
Adjusted EBITDA is a non-GAAP unaudited measure,
which we define as net income (loss) attributable to Xcel Brands,
Inc. stockholders, before depreciation and amortization, interest
and finance expenses (including loss on extinguishment of debt, if
any), proportional share of trademark amortization of equity method
investee, stock-based compensation, gain on the sale of assets,
gain on lease termination, asset impairment, losses from
discontinued businesses and income taxes income taxes, other state
and local franchise taxes.
Management uses non-GAAP net income, non-GAAP
diluted EPS, and Adjusted EBITDA 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 our results of operations. Management believes non-GAAP
net income, non-GAAP diluted EPS, and Adjusted EBITDA 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 these non-GAAP measures
provide supplemental information to assist investors in evaluating
our financial results. Adjusted EBITDA is the measure used to
calculate compliance with the EBITDA covenant under our term loan
agreement.
Non-GAAP net income, non-GAAP diluted EPS, and
Adjusted EBITDA 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. Given that non-GAAP net income, non-GAAP
diluted EPS, and Adjusted EBITDA are financial measures not deemed
to be in accordance with GAAP and are susceptible to varying
calculations, our non-GAAP net income, non-GAAP diluted EPS, and
Adjusted EBITDA may not be comparable to similarly titled measures
of other companies, including companies in our industry, because
other companies may calculate these measures in a different manner
than we do. In evaluating non-GAAP net income, non-GAAP diluted
EPS, and Adjusted EBITDA, you should be aware that in the future we
may or may not incur expenses similar to some of the adjustments in
this document. Our presentation of non-GAAP net income, non-GAAP
diluted EPS, and Adjusted EBITDA does not imply that our future
results will be unaffected by these expenses or any unusual or
non-recurring items. When evaluating our performance, you should
consider non-GAAP net income, non-GAAP diluted EPS, and Adjusted
EBITDA alongside other financial performance measures, including
our net income and other GAAP results, and not rely on any single
financial measure.
($
in thousands) |
Three Months
Ended |
|
Nine Months
Ended |
|
|
September
30, |
|
September
30, |
|
September
30, |
|
September
30, |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
Net (loss) income attributable to Xcel Brands, Inc.
stockholders |
$ |
(5,144 |
) |
|
|
(4,042 |
) |
|
$ |
(14,255 |
) |
|
|
1,961 |
|
|
Amortization of trademarks |
|
1,520 |
|
|
|
1,520 |
|
|
|
4,565 |
|
|
|
4,559 |
|
|
Proportional share
of trademark amortization of equity method investee |
515 |
|
|
|
742 |
|
|
|
1,545 |
|
|
|
742 |
|
|
Stock-based compensation and cost of licensee warrants |
|
62 |
|
|
|
51 |
|
|
|
184 |
|
|
|
568 |
|
|
Loss on
extinguishment of debt |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
2,324 |
|
|
Gain on
the sale of assets and investments |
|
- |
|
|
|
- |
|
|
|
(351 |
) |
|
|
(20,608 |
) |
|
Gain on
lease termination |
|
- |
|
|
|
- |
|
|
|
(445 |
) |
|
|
- |
|
|
Asset
impairment |
|
- |
|
|
|
- |
|
|
|
100 |
|
|
|
- |
|
|
Income tax
benefit |
|
- |
|
|
|
(1,539 |
) |
|
|
- |
|
|
|
1,639 |
|
|
Non-GAAP
net loss |
$ |
(3,047 |
) |
|
$ |
(3,268 |
) |
|
$ |
(8,657 |
) |
|
$ |
(8,815 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Nine Months
Ended |
|
|
September
30, |
|
September
30, |
|
September
30, |
|
September
30, |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
Diluted
(loss) earnings per share |
$ |
(0.26 |
) |
|
$ |
(0.21 |
) |
|
$ |
(0.72 |
) |
|
$ |
0.10 |
|
|
Amortization
of trademarks |
|
0.08 |
|
|
|
0.08 |
|
|
|
0.23 |
|
|
|
0.23 |
|
|
Proportional
share of trademark amortization of equity method investee |
|
0.03 |
|
|
|
0.04 |
|
|
|
0.08 |
|
|
|
0.04 |
|
|
Stock-based compensation and cost of licensee warrants |
|
0.00 |
|
|
|
0.00 |
|
|
|
0.01 |
|
|
|
0.03 |
|
|
Loss on
extinguishment of debt |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
0.12 |
|
|
Gain on
the sale of assets and investments |
|
- |
|
|
|
- |
|
|
|
(0.02 |
) |
|
|
(1.05 |
) |
|
Gain on
lease termination |
|
- |
|
|
|
- |
|
|
|
(0.02 |
) |
|
|
- |
|
|
Asset
Impairment |
|
- |
|
|
|
- |
|
|
|
0.00 |
|
|
|
- |
|
|
Income tax
benefit |
|
- |
|
|
|
(0.08 |
) |
|
|
- |
|
|
|
0.08 |
|
|
Non-GAAP
diluted EPS |
$ |
(0.15 |
) |
|
$ |
(0.17 |
) |
|
$ |
(0.44 |
) |
|
$ |
(0.45 |
) |
|
Non-GAAP
weighted average diluted shares |
|
19,749,317 |
|
|
|
19,624,860 |
|
|
|
19,683,525 |
|
|
|
19,624,604 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($
in thousands) |
Three Months
Ended |
|
Nine Months
Ended |
|
|
September
30, |
|
September
30, |
|
September
30, |
|
September
30, |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
Net loss
attributable to Xcel Brands, Inc. stockholders |
$ |
(5,144 |
) |
|
$ |
(4,042 |
) |
|
$ |
(14,255 |
) |
|
$ |
1,961 |
|
|
Depreciation
and amortization |
|
1,677 |
|
|
|
1,815 |
|
|
|
5,260 |
|
|
|
5,447 |
|
|
Proportional
share of trademark amortization of equity method investee |
|
515 |
|
|
|
742 |
|
|
|
1,545 |
|
|
|
742 |
|
|
Interest
and finance expense |
|
- |
|
|
|
(6 |
) |
|
|
18 |
|
|
|
3,505 |
|
|
Income tax
provision |
|
- |
|
|
|
(1,539 |
) |
|
|
- |
|
|
|
1,639 |
|
|
State and
local franchise taxes |
|
9 |
|
|
|
85 |
|
|
|
53 |
|
|
|
121 |
|
|
Stock-based compensation and cost of licensee warrants |
|
62 |
|
|
|
51 |
|
|
|
184 |
|
|
|
568 |
|
|
Gain on
the sale of assets and investments |
|
- |
|
|
|
- |
|
|
|
(351 |
) |
|
|
(20,608 |
) |
|
Gain on
lease termination |
|
- |
|
|
|
- |
|
|
|
(445 |
) |
|
|
- |
|
|
Asset
impairment |
|
- |
|
|
|
- |
|
|
|
100 |
|
|
|
- |
|
|
Costs
associated with restructuring of operations |
|
1,471 |
|
|
|
- |
|
|
|
3,319 |
|
|
|
- |
|
|
Adjusted
EBITDA |
$ |
(1,410 |
) |
|
$ |
(2,894 |
) |
|
$ |
(4,572 |
) |
|
$ |
(6,625 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Xcel Brands (NASDAQ:XELB)
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