Financial Performance - Current quarter net revenue decreased by $0.85 million to $1.33 million from $2.18 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 $6.29 million for the prior year quarter [141]. - Non-GAAP net loss was approximately $1.37 million, or $0.58 per diluted share, for the current quarter, compared to a non-GAAP net loss of $1.80 million, or $0.88 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) million for the prior year quarter [143]. - As of March 31, 2025, unrestricted cash and cash equivalents were $0.3 million, down from $1.3 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 $0.8 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 $1.43 million, a decrease from $(2.61) million in the prior year quarter [157][158]. Cost Management - Direct operating costs and expenses decreased by approximately $1.68 million, from $3.96 million in the prior year quarter to $2.28 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 $8 million per quarter in 2022 to less than $2.5 million per quarter, resulting in over $22 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 $3.95 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 $2.05 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].
Xcel(XELB) - 2025 Q1 - Quarterly Report