iMedia Brands Reports Third Quarter 2021 Results, Increases 2021 Guidance

Rhea-AI Summary

iMedia Brands, Inc. (IMBI) reported robust Q3 2021 results, with net sales reaching $130.7 million, up 20% year-over-year, marking its highest quarterly growth in over a decade.

Year-to-date sales totaled $357.3 million (up 8%). Gross margin improved to 41.6%, while adjusted EBITDA increased 57% to $10.1 million.

Despite a net loss of $(9.5) million, driven by one-time costs from acquisitions, the company remains optimistic, projecting Q4 revenue between $175 million and $180 million.

Positive

• Net sales increased 20% year-over-year to $130.7 million, the highest quarterly growth in over ten years.
• Year-to-date net sales grew by 8% to $357.3 million, representing strong sales performance.
• Gross margin improved by 420 basis points to 41.6%, indicating enhanced profitability.
• Adjusted EBITDA rose 57% to $10.1 million, reflecting operational efficiency.

Negative

• Net loss attributable to stockholders increased to $(9.5) million, a $4.7 million year-over-year decline.

MINNEAPOLIS, Nov. 17, 2021 (GLOBE NEWSWIRE) -- iMedia Brands, Inc. (the “Company” or “IMBI”) (NASDAQ: IMBI) today announced results for the third quarter ended October 30, 2021.

“Our mission is to capitalize on the accelerating marketplace convergence of entertainment, ecommerce and advertising,” said Tim Peterman, CEO of IMBI. “Our strong third quarter performance and the successful closing of our 123tv acquisition are tangible examples that our progress continues.”

Third Quarter 2021 Summary & Recent Highlights

• Net sales were $130.7 million, an increase of 20% compared to the same prior-year period and the best year-over-year quarterly revenue growth in over ten years. During the quarter, the Company launched 25+ new brands across its television networks ShopHQ, ShopBulldogTV and ShopHQHealth.
  
  
• Year-to-date net sales were $357.3 million, which was 8% growth compared to the same prior year period and represent the strongest year-over-year net sales growth in the Company's first three fiscal quarters in eight years. This success was driven primarily by the 90+ new merchandise brand launches occurring year-to-date plus the accretive impact of the Christopher & Banks and iMDS net sales.
  
  
• Our 12-month rolling active customers grew by 20% compared to same prior-year period, driven by 65% growth in new customers which was the best new customer growth in over ten years.
  
  
• Gross margin was 41.6%, a 420-basis point improvement over the same prior-year period.   Year-to-date gross margin was 41.5%, a 430-basis point improvement over the same prior-year period.
  
  
• Net loss attributable to stockholders was $(9.5) million, a $4.7 million increase over the same prior-year period, largely driven by $4.5 million in one-time transaction and transition costs and $713,000 in interest costs relating to the bond offering in the third quarter.
  
  
• Adjusted EBITDA was $10.1 million, a $3.7 million improvement over the same prior-year period. Year-to-date adjusted EBITDA was $26.5 million, an $11.0 million increase, or 71% improvement, over the same prior-year period and the highest Q3 year-to date adjusted EBITDA in the Company's history.
  
  
• As previously announced, on November 5, 2021, the Company completed its acquisition of 123tv. On September 28, 2021, the Company closed on its offering of $80 million in 8.50% Senior Secured Notes due 2026 and used all the net proceeds to fund the closing cash payment for the acquisition of the 123tv.

Third Quarter and Year-to-Date 2021 Results

SUMMARY RESULTS AND KEY OPERATING METRICS
($ Millions, except average selling price and EPS)
		Q3 10/30/2021				Q3 10/31/2020				Q3 Change			YTD 2021 10/30/2021				YTD 2020 10/31/2020				Change
Net Sales		$	130.7			$	109.0			20%			$	357.3			$	329.4			8%
Gross Margin %			41.6%				37.4%			420 bps				41.5%				37.2%			430 bps
Net loss attributable to non-controlling interest		$	-			$	-			N/A			$	(0.3)			$	-			N/A
Net loss attributable to shareholders		$	(9.5)			$	(4.7)			100%			$	(17.0)			$	(10.5)			(61%)
EPS		$	(0.44)			$	(0.39)			(13%)			$	(0.91)			$	(1.05)			14%
Adjusted EBITDA		$	10.1			$	6.4			57%			$	26.5			$	15.5			71%
Net Shipped Units (000s)			1,919				1,664			15%				5,411				4,775			13%
Average Selling Price (ASP)		$	68			$	58			17%			$	66			$	61			8%
Return Rate %			15.8%				14.4%			140 bps				16.0%				14.5%			150 bps
ShopHQ Digital Net Sales %			46.5%				49.1%			(260 bps)				48.5%				50.7%			(220 bps)
Total Customers - 12 Month Rolling (000s)			1,229				1,028			20%				N/A				N/A			N/A
% of ShopHQ Net Merchandise Sales by Category
	Jewelry & Watches		44%				40%							47%				40%
	Home & Consumer Electronics		17%				16%							16%				14%
	Beauty & Health		24%				34%							22%				34%
	Fashion & Accessories		15%				10%							15%				12%
	Total		100%				100%							100%				100%

Liquidity and Capital Resources

As of October 30, 2021, total unrestricted cash was $51.4 million.  The Company also had an additional $23.5 million of unused availability on its revolving credit facility.

Increased Outlook

Regarding our Outlook for Q4, we anticipate reporting approximately $13 to $15 million of adjusted EBITDA, which is a 55% to 79% increase over the same prior year period, despite continued expectations for unusually high logistics costs due to COVID-19. We anticipate reporting Q4 net sales of approximately $175 to $180 million, which is roughly 40% to 44% growth compared to the same prior year period.

For the full year 2022, we anticipate reporting revenue of approximately $675 to $725 million and adjusted EBITDA of approximately $50 to $60 million and reporting positive quarterly EPS beginning in the back half of 2022.

Conference Call

The Company will hold a conference call today at 8:30 a.m. Eastern time to discuss its third quarter 2021 results.

Date: Wednesday, November 17, 2021
Toll-free dial-in number: (877) 407-9039
International dial-in number: (201) 689-8470
Conference ID: 13724909

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 investor relations 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 December 1, 2021.

Toll-free replay number: (844) 512-2921
International replay number: (412) 317-6671
Replay ID: 13724909

About iMedia Brands, Inc.

iMedia Brands, Inc. (Nasdaq: IMBI) is a leading interactive media company capitalizing on the convergence of entertainment, ecommerce, and advertising. The Company owns a growing, global portfolio of Entertainment, Consumer Brands and Media Commerce Services businesses that cross promote and exchange data with each other to optimize the engagement experiences it creates for advertisers and consumers.

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)
				October 30,				January 30,
					2021				2021
				(Unaudited)
ASSETS
Current assets:
	Cash			$	51,352			$	15,485
	Restricted Cash				2,168				-
	Accounts receivable, net				66,948				61,951
	Inventories				92,001				68,715
	Current portion of television broadcast rights, net				21,349				19,725
	Prepaid expenses and other				15,922				7,853
		Total current assets			249,740				173,729
Property and equipment, net					44,932				41,988
Television broadcast rights, net					41,865				7,028
Intangible assets, net					35,769				2,359
Other assets					13,161				1,533
			Total Assets	$	385,467			$	226,637
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
	Accounts payable			$	62,234			$	77,995
	Accrued liabilities				39,592				29,509
	Current portion of television broadcast rights obligation				25,937				29,173
	Current portion of long term credit facility				-				2,714
	Current portion of operating lease liabilities				1,046				462
	Deferred revenue				541				213
		Total current liabilities			129,350				140,066
Long term broadcast rights liability					45,742				7,358
Other long term liabilities					13,403				1,497
Long term credit facilities					46,650				50,666
8.50% Senior Secured Notes					73,768				-
		Total liabilities			308,914				199,587
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 shares authorized as of
		October 30, 2021 and January 30, 2021; 21,560,514 and 13,019,061 shares
		issued and outstanding as of October 30, 2021 and January 30, 2021			213				130
	Additional paid-in capital				537,987				474,375
	Accumulated deficit				(464,424	)			(447,455	)
	Accumulated other comprehensive loss				(371	)			-
		Total shareholders' equity			73,405				27,050
		Equity of the Non-Controlling Interest			3,148			$	-
		Total Equity		$	76,553			$	27,050
			Total Liabilities and Shareholders' Equity	$	385,467			$	226,637

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 Nine-Month Periods Ended
				October 30,				October 31,				October 30,				October 31,
					2021				2020				2021				2020
Net sales				$	130,681			$	109,025			$	357,325			$	329,374
Cost of sales				$	76,260				68,211				208,911				206,711
			Gross profit	$	54,421			$	40,814				148,414				122,663
			Margin %		41.6%				37.4%				41.5%				37.2%
Operating expense:
	Distribution and selling			$	39,302				31,490				108,907				97,100
	General and administrative			$	10,747				4,687				24,569				15,158
	Depreciation and amortization			$	9,740				7,977				24,727				16,700
	Restructuring costs			$	634				55				634				264
		Total operating expense		$	60,423			$	44,209				158,837				129,222
Operating income (loss)				$	(6,002)			$	(3,395)				(10,423)				(6,559)
Other income (expense):
	Interest income			$	85				1				124				2
	Debt Extinguishment			$	(9)				-				(663)				-
	Interest expense			$	(3,551)				(1,339)				(6,245)				(3,920)
		Total other expense		$	(3,475)			$	(1,338)				(6,784)				(3,918)
Income (Loss) before income taxes				$	(9,477)			$	(4,733	)		$	(17,207	)			(10,477	)
Income tax provision				$	(15)				(15)				(45)				(45)
Net income (loss)				$	(9,492)			$	(4,748)			$	(17,252)			$	(10,522)
Less: Net loss attributable to non-controlling interest				$	-				-				(282)				-
Net income (loss) attributable to shareholders				$	(9,492)			$	(4,748)			$	(16,970)			$	(10,522)
Net income (loss) per common share				$	(0.44)			$	(0.39)			$	(0.91)			$	(1.05)
Net income (loss) per common share
		---assuming dilution		$	(0.44)			$	(0.39)			$	(0.91)			$	(1.05)
Weighted average number of
common shares outstanding:
			Basic		21,503,340				12,177,990				18,710,658				10,000,383
			Diluted		21,503,340				12,177,990				18,710,658				10,000,383

iMEDIA BRANDS, INC.
AND SUBSIDIARIES
PERFORMANCE MEASURES BY SEGMENT
($ in Millions)
		For the Three-Month Period Ended											For the Three-Month Period Ended
		October 30, 2021											October 31, 2020
		ShopHQ				Emerging			Consolidated				ShopHQ				Emerging				Consolidated
Net Sales		$	97.5			$	33.2		$	130.7			$	104.3			$	4.7			$	109.0
Gross Profit		$	41.4			$	13.0		$	54.4				38.8			$	2.0			$	40.8
Operating Loss		$	(6.8	)		$	0.8		$	(6.0	)			(2.4	)		$	(1.0	)		$	(3.4	)
Adjusted EBITDA		$	7.2			$	2.9		$	10.1				7.2			$	(0.8	)		$	6.4
		For the Nine-Month Period Ended											For the Nine-Month Period Ended
		October 30, 2021											October 31, 2020
		ShopHQ				Emerging			Consolidated				ShopHQ				Emerging				Consolidated
Net Sales		$	292.5			$	64.8		$	357.3			$	318.8			$	10.6			$	329.4
Gross Profit		$	121.1			$	27.3		$	148.4				118.5			$	4.2			$	122.7
Operating Loss		$	(11.5	)		$	1.0		$	(10.5	)			(2.5	)		$	(4.1	)		$	(6.6	)
Adjusted EBITDA		$	20.7			$	5.8		$	26.5				19.1			$	(3.5	)		$	15.5

iMEDIA BRANDS, INC.
AND SUBSIDIARIES
Reconciliation of Net Income (Loss) Attributable to Shareholders to Adjusted EBITDA:
(Unaudited)
(in thousands)
		For the Three-Month Period Ended												For the Three-Month Period Ended
		October 30, 2021												October 31, 2020
		ShopHQ				Emerging				Consolidated				ShopHQ				Emerging				Consolidated
Net income (loss) attributable to shareholders										$	(9,492	)										$	(4,748	)
Adjustments:
Depreciation and amortization											10,677												8,952
Interest income											(85	)											(1	)
Interest expense											3,551												1,339
Income taxes											15												15
EBITDA (as defined)		$	3,435			$	1,231			$	4,666			$	6,315			$	(758	)		$	5,557
A reconciliation of EBITDA to Adjusted EBITDA is as follows:
EBITDA (as defined)		$	3,435			$	1,231			$	4,666			$	6,315			$	(758	)		$	5,557
Adjustments:
Transaction, settlement and integration costs, net (a)			2,207				1,630				3,837				312				-				312
Restructuring costs			625				7				632				55				-				55
Non-cash share-based compensation expense			949				-				949				504				-				504
Loss on Debt Extinguishment			9				-				9				-				-				-
Adjusted EBITDA		$	7,225			$	2,868			$	10,093			$	7,186			$	(758	)		$	6,428
		For the Nine-Month Period Ended												For the Nine-Month Period Ended
		October 30, 2021												October 31, 2020
		ShopHQ				Emerging				Consolidated				ShopHQ				Emerging				Consolidated
Net loss attributable to shareholders										$	(16,970	)										$	(10,522	)
Adjustments:
Depreciation and amortization											27,564												19,697
Interest income											(124	)											(2	)
Interest expense											6,245												3,920
Income taxes											45												45
EBITDA (as defined)		$	14,351			$	2,410			$	16,760			$	16,679			$	(3,541	)		$	13,138
A reconciliation of EBITDA to Adjusted EBITDA is as follows:
EBITDA (as defined)		$	14,351			$	2,410			$	16,761			$	16,679			$	(3,541	)		$	13,138
Adjustments:
Restructuring costs			625				9				634				264				-				264
One-time customer concessions			341				-				341				-				-				-
Transaction, settlement and integration costs, net			2,370				3,387				5,757				886				-				886
Non-cash share-based compensation expense			2,385				-				2,385				1,227				-				1,227
Loss on Debt Extinguishment			663				-				663				-				-				-
Adjusted EBITDA		$	20,735			$	5,806			$	26,541			$	19,056			$	(3,541	)		$	15,515

(a) Transaction, settlement and integration costs for the three-month period ended October 30, 2021, includes transaction and integration costs related primarily to the Synacor and 123tv transactions. Transaction, settlement and integration costs for three-month period ended October 31, 2020, includes contract settlement costs, business acquisition and integration-related costs.

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. 

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 use 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 disclaim any such obligation) to update or alter its forward-looking statements whether as a result of new information, future events or otherwise.

FAQ

What were the Q3 2021 results for iMedia Brands (IMBI)?

iMedia Brands reported Q3 2021 net sales of $130.7 million, an increase of 20% year-over-year, with a gross margin of 41.6%.

How much did iMedia Brands (IMBI) lose in Q3 2021?

iMedia Brands recorded a net loss of $(9.5) million in Q3 2021, an increase of $4.7 million compared to the prior year.

What is the adjusted EBITDA for iMedia Brands (IMBI) in Q3 2021?

The adjusted EBITDA for iMedia Brands in Q3 2021 was $10.1 million, a 57% increase compared to the same period last year.

What is iMedia Brands' (IMBI) revenue outlook for Q4 2021?

iMedia Brands anticipates Q4 2021 net sales between $175 million and $180 million, representing a growth of approximately 40% to 44% year-over-year.