Q1 2026 iFabric Corp Earnings Call Transcript
Key Points
- Record Q1 revenue of $27.5 million, significantly exceeding guidance of $20-25 million and prior year's $7.1 million.
- Both divisions achieved record revenues, with Intelligent Fabrics at $23.6 million and Intimate Apparel at $3.9 million.
- Gross margin improved to 33% from 26% in the prior quarter, trending toward the 35% target.
- Adjusted EBITDA reached $5.7 million, demonstrating strong operating leverage above the $35 million revenue threshold.
- Healthy current ratio of 2:1, with low credit risk due to reliable collections from major retailers like Walmart and Costco.
- Inventory buildup positions the company to mitigate potential polyester price increases from oil price spikes.
- New product launches, including Nudish brand and Walmart US intimates program, are driving growth.
- Inventory levels are high at $16.9 million, with management acknowledging potential overstocking on new programs.
- Accounts receivable increased to $25.5 million, with a collection cycle of around 75 days, tying up cash.
- Gross margin was negatively impacted by a higher proportion of lower-margin Intelligent Fabric sales.
- One-time costs, including tariffs and markdowns from the Maidenform transition, reduced EBITDA by approximately $200,000.
- Selling and administrative costs rose by $1.5 million due to variable costs like royalties and commissions.
- The company is in a regulatory quiet period due to a proposed offering, limiting forward-looking guidance and transparency.
- Operating debt stood at $9.3 million, though expected to be paid down with cash flow.
All right. Good morning, good afternoon, depending on where you're dialing in from. Thanks for joining us today. We have an update with iFabric, who just reported their Q1 numbers earlier this week.
So, with me today, I have Hylton Karon, CEO; Hilton Price, CFO; and Giancarlo Beevis, COO. I don't think we're going to work off a presentation, but as always, this session will contain forward-looking statements. If you'd like to know more about those, you can find them on the presentation on the company's website. There will be a Q&A section. So feel free to enter any questions you have in the Q&A box.
And I'm just going to read a quick little disclaimer. So as announced in the press release yesterday, the company is undertaking a short-form prospectus offering due to Canadian securities laws and a regulatory quiet period, management is strictly prohibited from discussing the proposed financing, the offering terms, or the specific use of proceeds. Therefore, the remarks today will focus entirely on the recently released financial
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