Q2 2020 Sequential Brands Group Inc Earnings Call
Thank you and good morning.
Before we begin I'd like to bring your attention that statements that are not historical fact contained in this conference call are forward looking statements that involve a number of risks uncertainties and other factors all of which are difficult or impossible to predict.
Many of which are beyond the control the company.
Mccloskey actual results performance or achievements of the company to materially different from the results performance or achievements expressed or implied by such forward looking statements.
We refer you to public filings as a press release issued this morning for a summary of such factors.
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Hi, I'm confident or similar expressions identify forward looking statements.
Listeners are cautioned not place undue reliance on these forward looking statements fish me speak only as of the date Stapling with me.
Other than as required by law, we undertake no obligation to update or revise these forward looking statement.
As a result of information future events or otherwise.
Additionally, it's EPS adjusted EBITDA, a non-GAAP net income are all non-GAAP metrics and recall instillation people. It's for each can be found in the press release distributed to date in the Investor Relations portion of our website www sequential grants dot.
Dot com.
Today's call our sequential brands group's CEO David Todd.
Interim CFO, Dan average well now turn the conference call over to Mr., calling you may begin when lately.
Thank you for joining our second quarter 2020 earnings call.
Since we last spoken May we've had a few more months to understand how the cobot 19 pandemic has impacted our business.
The impact on our industry has been significant and we have not been immune.
However, we have also experienced some bright spots in our business, particularly with our active brands where sales have been resilient.
We continue to stay highly connected with our licensees and have seen many cases, where the pandemic has strengthened our existing partnerships.
Since March we have adapted brought expenditure control measures across our businesses, which are additive to the SGN a reductions that we had already planned for 2020.
I'll now provide some specific updates on our progress.
First the management team remains focused on implementing growth strategies for our core brands, which includes renewals of existing licensees.
As mentioned previously we entered into a long term renewal with our anchor partner for CGI haven't spry fit for life.
Fit for life is a great company and a partner that we believe can guide guy and sprite to their full this potential.
We're pleased to have solidified this long term alliance.
In addition to the fits to like renewal. We also renewed the license for the and one brands premium footwear business covering specialty sporting goods and athletic footwear stores.
In our Jessica Simpson business, we recently signed two new endorsement deals as well as new licensees in the active kids and home categories.
For Joe's we finalized a three year renewal for kids denim.
In addition to these we're actively working on a pipeline of new deals for the balance of the year with an emphasis on the beauty wellness and active wear categories.
Second the pandemic has reinforced the power of our core brands.
Our active brands and one of the Gaiam and sprite, which are sold at mass retailers, including Walmart and target as well as grocery and drug stores nationwide have seen strong retail sales during the pandemic.
These brands are aligned with the weight consumers are behaving and living their lives today, they practice at home health and wellness category, such as underwear socks shorts sweats fitness equipment and work out here have been in demand.
Third our team continues to closely manage costs and take steps to maximize our liquidity.
Specifically, we implemented significant compensation reduction there remain in place today.
We're scrutinizing all material non essential expenses and eliminating costs, where appropriate and we are fully drawn on our revolving credit facility.
We also recently divested three of our non core brands, namely Nevados Linens N things and the Franklin Mint.
We frequently review our portfolio and consider divesting certain smaller brands when the right opportunity arises.
While these divestitures were not material transactions, they reinforced our cash position and our consistent with our strategy to focus management's efforts on our core growth brands.
As we look ahead to the second half of the year, we remain cautiously optimistic as we continue to navigate macro economic uncertainties.
Well the pandemic as presented challenges for our business. It is also demonstrated its durability.
The demand for our core brands, particularly our active grants the power of the mass channels, such as Walmart and the strength of our relationships with our licensees.
I'm proud of the work our team has done to navigate through the early stages of the pandemic and the work we continue to do to position ourselves for long term success.
I look forward to keeping you updated on our progress with that let me turn the call over to Dan to take you through the financials, but the second quarter.
Thank you David.
For taking the through a quarterly financial results I wanted to know that on July 27, 2020, our previously announced one chair for 40 shares reverse stock split of our outstanding common stock our value one cents per share became effective.
As a result of the reverse stock split we are now in compliance with NASDAQ listing requirements.
All share and per share amounts in today's earnings release and in my remarks have been adjusted to reflect the reverse stock split.
Total revenue from continuing operations for the second quarter ended June Thirtyth, 2020 was 22.6 million compared to 26.4 million in the prior year quarter.
On a GAAP basis loss from continuing operations for the second quarter, 2020 was 2.9 million or $1.78 cents per diluted share.
Compared to loss from continuing operations for the second quarter 2018 up three point threemillion or $2.03 per diluted share.
Non-GAAP net loss from continuing operations for the second quarter 2020 was 1.8 million or one dollar in 10 cents per diluted share compared to 2.6 million or $1.57 cents per diluted share in the prior year quarter.
Adjusted EBITDA from continuing operations for the second quarter of 2020 was 15.1 million compared to 13.3 million in the prior year quarter.
Total revenue from continuing operations for the six months ended June Thirtyth 2020 was 42.8 billion compared to 51.9 million in the prior year period.
On a GAAP basis net loss from continuing operations for the six month ended June Thirtyth, 2020 was 88.2 million or $53.80 per diluted share count.
Compared to net loss from continuing operations for the six months ended June Thirtyth, 2019 of 8.1 million or $5 per diluted share.
Included in the net loss from continuing operations, where non cash impairment charges.
85.6 million for indefinite life intangible assets related to the trademarks for the Jessica Simpson Guy.
Goes then Ellen Tracy brands, reflecting the financial impact of Covidien 18.
Which we recognized in the first quarter 2020.
Non-GAAP net loss from continuing operations for the six months ended June Thirtyth, 2020 was 12.2 million or $7 in 40 cents per diluted share compared to 6.9 million or $4.21 per diluted share in the prior year period.
Adjusted EBITDA from continuing operations for the six month ended June Thirtyth 2020 was 24.9 million compared to 24.6 million in the prior year period, which reflects the company's implementation of significant expense reductions.
We closed the second quarter 2020, with 16.8 million of cash, including restricted cash and 461.8 million of debt net of cash.
Looking ahead as David mentioned, we believe the Kobin 18 pandemic will continue to impact our operating results cash flows and financial condition.
We continue to monitor it closely and are actively managing relationships and expenses to best position ourselves for the short and long term as the economy recovers.
Thank you for joining us for our call today I will now turn the call back over to the operator.
Thank you.
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Ladies and gentlemen.
This concludes our recall pretty big.
Thank you for your participation and interest you may now disconnect your lines and have a wonderful day.
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