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Xcel(XELB) - 2025 Q1 - Quarterly Report
XELBXcel(XELB)2025-06-04 21:15
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Financial Performance - Current quarter net revenue decreased by 0.85millionto0.85 million to 1.33 million from 2.18millionintheprioryearquarter,primarilyduetothedivestitureoftheLoriGoldsteinbrand[131].−NetlossattributabletoXcelBrands,Inc.stockholderswas2.18 million in the prior year quarter, primarily due to the divestiture of the Lori Goldstein brand [131]. - Net loss attributable to Xcel Brands, Inc. stockholders was 2.80 million for the current quarter, compared to a net loss of 6.29millionfortheprioryearquarter[141].−Non−GAAPnetlosswasapproximately6.29 million for the prior year quarter [141]. - Non-GAAP net loss was approximately 1.37 million, or 0.58perdilutedshare,forthecurrentquarter,comparedtoanon−GAAPnetlossof0.58 per diluted share, for the current quarter, compared to a non-GAAP net loss of 1.80 million, or 0.88perdilutedshare,fortheprioryearquarter[142].−AdjustedEBITDAforthecurrentquarterwasapproximately0.88 per diluted share, for the prior year quarter [142]. - Adjusted EBITDA for the current quarter was approximately (0.70) million, compared to approximately (1.57)millionfortheprioryearquarter[143].−AsofMarch31,2025,unrestrictedcashandcashequivalentswere(1.57) million for the prior year quarter [143]. - As of March 31, 2025, unrestricted cash and cash equivalents were 0.3 million, down from 1.3millionasofDecember31,2024[149].−Workingcapitaldeficitwasapproximately1.3 million as of December 31, 2024 [149]. - Working capital deficit was approximately 0.6 million as of March 31, 2025, compared to working capital of 0.8millionasofDecember31,2024[151].−AsofMarch31,2025,thecompanyincurredanetlossof0.8 million as of December 31, 2024 [151]. - As of March 31, 2025, the company incurred a net loss of (2.80) million, with net cash used in operating activities of approximately 1.43million,adecreasefrom1.43 million, a decrease from (2.61) million in the prior year quarter [157][158]. Cost Management - Direct operating costs and expenses decreased by approximately 1.68million,from1.68 million, from 3.96 million in the prior year quarter to 2.28millioninthecurrentquarter,duetorestructuringandcostreductionactions[132].−Thecompanyhasreduceditsdirectoperatingexpensestoanexpectedrunrateoflessthan2.28 million in the current quarter, due to restructuring and cost reduction actions [132]. - The company has reduced its direct operating expenses to an expected run rate of less than 10 million per annum as of the end of the first quarter of 2025 [132]. - The company has restructured its business operations, reducing direct operating costs from approximately 8millionperquarterin2022tolessthan8 million per quarter in 2022 to less than 2.5 million per quarter, resulting in over 22millioninannualizedcostsavings[173].CapitalandFinancing−Thecompanyisactivelypursuinganequityofferingtosecureadditionalcapital,withsubstantialdoubtaboutitsabilitytomeetfinancialobligationswithoutfurtherfunding[154][155].−OnApril21,2025,thecompanyamendeditsloanagreement,resultinginarepaymentof22 million in annualized cost savings [173]. Capital and Financing - The company is actively pursuing an equity offering to secure additional capital, with substantial doubt about its ability to meet financial obligations without further funding [154][155]. - On April 21, 2025, the company amended its loan agreement, resulting in a repayment of 1.5 million of the 3.95millionTermLoanAandanadditionalTermLoanBof3.95 million Term Loan A and an additional Term Loan B of 5.12 million [164]. - Net cash provided by financing activities in the current quarter was 2.05million,primarilyfromthedelayeddrawportionoftheDecember2024termloanagreement[162].−Thecompanyhasnooff−balancesheetarrangementsthatcouldmateriallyaffectitsfinancialconditionorliquidity[177].−Thecompanyiscurrentlyincompliancewithallapplicablefinancialcovenantsfollowingtherecentrefinancing[169].BusinessStrategyandGrowth−Thecompanyaimstobuildadiversifiedportfoliooflifestyleconsumerproductsbrandsthroughorganicgrowthandstrategicacquisitions[128].−Thecompanyplanstodiversifyitslicensedproductsanddistributionchannelstoreducedependenceonspecificretailersandmarkets,focusingonbrandslikeHalstonandCWonder[171].−Thecompanyhaslaunchednewbrands,includingTowerHillbyChristieBrinkleyandLB70byLloydBoston,andplanstointroducetwonewco−brandedcollaborationsinSpring2026[172].−Thecompanygeneratedover2.05 million, primarily from the delayed draw portion of the December 2024 term loan agreement [162]. - The company has no off-balance sheet arrangements that could materially affect its financial condition or liquidity [177]. - The company is currently in compliance with all applicable financial covenants following the recent refinancing [169]. Business Strategy and Growth - The company aims to build a diversified portfolio of lifestyle consumer products brands through organic growth and strategic acquisitions [128]. - The company plans to diversify its licensed products and distribution channels to reduce dependence on specific retailers and markets, focusing on brands like Halston and C Wonder [171]. - The company has launched new brands, including TowerHill by Christie Brinkley and LB70 by Lloyd Boston, and plans to introduce two new co-branded collaborations in Spring 2026 [172]. - The company generated over 5 billion in retail sales via live streaming and interactive television channels [127]. Market Conditions - The company continues to face headwinds from poor economic conditions, inflation, and rising consumer debt levels, which may negatively impact demand for its products [175].