Xcel(US:XELB)2019-05-14 15:54Financial Data and Key Metrics Changes - Revenue increased by 18% in Q1 2019 compared to Q1 2018, driven by improvements in apparel and jewelry wholesale businesses and jewelry e-commerce [10][22] - Adjusted EBITDA was nearly equal to the prior year quarter after add-backs from non-recurring charges of approximately $100,000 [11] - Net income for Q1 2019 was approximately $0.13 million or $0.01 per diluted share, down from $0.5 million or $0.03 per diluted share in the prior year quarter [26] Business Line Data and Key Metrics Changes - The interactive television business performed well, particularly in the Isaac Mizrahi brand, while the Judith Ripka brand showed strong growth in wholesale and e-commerce [13][16] - The wholesale apparel business saw promising early indications from retail accounts after recruiting experienced merchandising and operations executives [15] - Judith Ripka's e-commerce business was trending to be at 500% growth over last year, supported by new 3D design technology [37][39] Market Data and Key Metrics Changes - International markets, particularly in the U.K. and Italy, are experiencing nice growth [14] - The jewelry business on QVC faced macro headwinds due to reduced air time allocation for jewelry [41][42] Company Strategy and Development Direction - The company is transitioning from a licensing model to a vertical consumer products, media, and technology-based operating company, focusing on expanding brands across all distribution channels [12] - The company is considering strategic acquisition opportunities to drive growth, particularly targeting less technologically advanced companies [19] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about top-line revenue growth and the potential for acceleration in wholesale sales in Q3 and Q4 [36] - The company is actively monitoring manufacturing exposure in China and has pivoted production to Vietnam, with 60% of production now in Vietnam [43] Other Important Information - Total revenue for the quarter was $10.3 million, with net revenue decreasing slightly to $8.5 million [22] - Total operating expenses increased to $7.8 million, primarily due to the amortization of the Halston brand trademark [23][24] - As of March 31, 2019, the company had unrestricted cash of approximately $6.8 million, down from $8.8 million at the end of 2018 [28] Q&A Session Summary Question: How is the wholesale apparel business trending? - Management expects acceleration in Q3 and Q4, balancing inventories with retail partners in Q1 [36] Question: Is Judith Ripka still on track for significant e-commerce growth? - Yes, the brand is utilizing 3D design technology and consumer insight testing, with strong early indications for new collections [37][39] Question: What are the headwinds in the interactive TV segment? - The brand is performing well, but QVC is allocating less air time to jewelry, impacting the channel [41][42] Question: What is the company's exposure to manufacturers in China? - The company has pivoted to Vietnam for production and is actively monitoring the situation [43]