Release Date: May 20, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Adjusted EBITDA for the quarter improved by almost 50% from the prior-year quarter.
- Licensing revenues were up across most brands, except for Lori Goldstein.
- The launch of Tower Hill by Christie Brinkley on HSN is expected to generate strong interest and potential licensing partnerships.
- C. Wonder by Christian Siriano brand is performing well, with expected retail sales volume up 100% from last year.
- The company expects to return to profitability in 2024, driven by organic growth and strategic initiatives.
Negative Points
- Total revenues for the first quarter declined year over year due to the discontinuance of wholesale operations.
- The Lori Goldstein brand experienced softer performance due to scheduling conflicts with talent.
- Net loss for the current quarter was approximately $6.3 million, compared to a net loss of $5.6 million in the prior year quarter.
- The company's cash and cash equivalents were approximately $2.3 million, with $0.7 million being restricted.
- The exit from wholesale and e-commerce activities in 2023 led to a significant decrease in direct operating costs and expenses.
Q & A Highlights
Q: Can you talk a little bit about Lori Goldstein and how that brand accounts for your total licensing revenue? Also, what do you mean by options for a satisfactory disposition of the brand?
A: The Lori Goldstein brand generates about $5 million in top-line royalties. However, due to an earn-out with a contingent obligation of about $5 million, it doesn't contribute significantly to cash flow. We are exploring options, including potentially selling the brand back to Lori under satisfactory terms. (Robert D'Loren, CEO)
Q: Regarding the launch of Halston, was there a delay in the timing of the product shipping?
A: Initially, we anticipated a spring launch, but G-III pushed it to fall to ensure a simultaneous launch of apparel, footwear, and handbags. They may have already begun shipping some goods, but we haven't received shipping reports yet. (Robert D'Loren, CEO)
Q: Can you provide details on the Christie Brinkley brand launch, such as the number of SKUs and product categories?
A: The Christie Brinkley launch will feature a full apparel collection, including tops, bottoms, and sweaters. We are also working on expanding into multiple categories like bags, shoes, accessories, skincare, beauty, and possibly fragrance. (Robert D'Loren, CEO)
Q: Could you give an update on the number of vendors for the Omi app and when you might move towards a full-scale launch?
A: Omi is onboarding three to five vendors per week. We recently onboarded Anne Klein, the first WHP brand. We expect other major brands to join in the next 30 days. (Robert D'Loren, CEO)
Q: How did the scheduling conflicts with Lori Goldstein impact your top line, and what are your expectations for resolving this?
A: The scheduling conflicts have been challenging, but we are close to a resolution that should be beneficial for both parties. The impact on cash flow is not significant, and we are optimistic about our ongoing negotiations. (Robert D'Loren, CEO)
Q: Do you expect to achieve positive EBITDA later this year, and if so, will it be for a specific quarter or the full year?
A: We expect to achieve positive EBITDA later this year, particularly in Q3 and Q4, as the G-III license ramps up. The full year should also be positive. (Robert D'Loren, CEO)
Q: Will the onboarding pace for Omi vendors accelerate as the year progresses?
A: Yes, we expect the onboarding pace to accelerate. Omi is hiring more staff, and we are assisting with bringing in bigger brands. (Robert D'Loren, CEO)
Q: Do you foresee any additional capital raises given the current state of the business?
A: We believe we are adequately funded for now. We don't foresee another equity deal unless there's a need for capital to effect a transaction. (Robert D'Loren, CEO)
Q: Can you provide more details on the new brand you plan to launch on HSN?
A: The new brand is an apparel line with a celebrity designer. It will likely launch during the holiday season and contribute more significantly in 2025. (Robert D'Loren, CEO)
Q: How many companies have signed up for Omi, and can you name some of them?
A: Omi has nine brands onboarded and another nine in the pipeline. The most notable recent addition is Anne Klein. (Robert D'Loren, CEO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
