Xcel Brands, Inc. Announces Third Quarter 2024 Results

Core Insights - Xcel Brands, Inc. reported a net loss of $9.2 million for the third quarter of 2024, which includes a $6.3 million non-cash charge related to a contingent obligation, compared to a net loss of $5.1 million in the same quarter of the previous year [1][4] - The company experienced a 28% decrease in total revenue, amounting to $1.9 million, primarily due to a decline in net licensing revenue following the divestiture of the Lori Goldstein brand and sales delays caused by hurricanes [3][4] - Adjusted EBITDA improved to negative $1.0 million for the current quarter, a significant improvement from negative $1.4 million in the prior year quarter, attributed to business restructuring and new long-term licensing agreements [27][29] Financial Performance - For the nine months ended September 30, 2024, total revenue was $7.1 million, a decrease of 54% from the prior year, largely due to the discontinuation of wholesale businesses as part of the Project Fundamentals plan [5][6] - The net loss for the nine-month period was approximately $15.3 million, compared to a net loss of $14.3 million in the previous year, with significant one-off non-cash items impacting the results [6][8] - Non-GAAP net loss for the current nine-month period was approximately $3.4 million, showing a 60% improvement from the prior year [7][29] Operational Highlights - Direct operating costs and expenses for the third quarter were $2.8 million, reflecting a 50% improvement from the prior year quarter [1][4] - The company’s balance sheet as of September 30, 2024, showed stockholders' equity of approximately $35 million and unrestricted cash of approximately $0.2 million, indicating a working capital deficit of about $(0.4) million [9][30] - In November 2024, the company secured a new term loan agreement for $10 million, enhancing liquidity by approximately $5 million after repaying a previous loan, which increased working capital by about $6 million [28]