- First quarter 2025 net loss of $2.8 million, representing a 56% improvement from the prior year quarter net loss of $6.3 million.
- Net loss on a non-GAAP basis was $1.4 million for the first quarter 2025, representing a 24% improvement from the first quarter of 2024 non-GAAP net loss of $1.8 million.
- Adjusted EBITDA for the first quarter 2025 was negative $0.7 million, compared with Adjusted EBITDA of negative $1.6 million for the first quarter 2024, representing a 56% improvement.
NEW YORK, June 04, 2025 (GLOBE NEWSWIRE) -- Xcel Brands, Inc. (NASDAQ: XELB) ("Xcel" or the "Company"), a media and consumer products company with significant expertise in livestream shopping and social commerce, today announced its financial results for the quarter ended March 31, 2025.
Robert W. D'Loren, Chairman and Chief Executive Officer of Xcel, commented, "Despite headwinds in the industry from tariffs and other external forces, I am extremely pleased with where we are headed given continued improvement in our operational cost and our recent new brand launches. The social media following of our brand portfolio has grown from 5 million to 45 million followers over the past five months. We believe this positions us well to drive new business growth and is a significant step toward our goal of reaching 100 million followers across our brands."
First Quarter 2025 Financial Results
Total revenue for the first quarter of 2025 was $1.3 million, representing a decrease of approximately $0.9 million (-39%) from the first quarter of 2024. This decrease was driven by a decline in net licensing revenue as a result of the June 30, 2024 divestiture of the Lori Goldstein brand, the impact of which was partially offset by increased licensing revenues generated by the Company's other brands.
Direct operating costs and expenses decreased approximately $1.7 million (-42%) from the prior year quarter to $2.3 million in the current quarter. As of the end of the first quarter of 2025, the Company has reduced its direct operating expenses to an expected run rate of less than $10 million per annum.
Net loss attributable to Xcel Brands stockholders for the quarter was approximately $2.8 million, or $(1.18) per share, compared with a net loss of $6.3 million, or $(3.09) per share, for the prior year quarter.
After adjusting for certain cash and non-cash items, results on a non-GAAP basis were a net loss of approximately $1.4 million, or $(0.58) per share for the current quarter and a net loss of approximately $1.8 million, or $(0.88) per share, for the prior year quarter.
Adjusted EBITDA also improved on a year-over-year basis, from negative $1.6 million in the prior year quarter to negative $0.7 million for the current quarter, representing 56% improvement.
Balance Sheet
The Company's balance sheet at March 31, 2025 reflected stockholders' equity of approximately $25.7 million, unrestricted cash and cash equivalents of approximately $0.3 million, and a working capital (exclusive of the current portion of lease obligations, deferred revenue, and contingent obligations payable in shares or via other non-cash means) deficit of approximately $0.6 million. The Company's balance sheet at March 31, 2025, also reflected $8.5 million of long-term debt.
In April 2025, the Company refinanced its term loan debt, resulting in a net increase of approximately $3.0 million in the Company's liquidity.
Conference Call and Webcast
The Company will host a conference call with members of the executive management team to discuss these results and together with the fourth quarter and fiscal year 2024 results. Details of the date and time of this call will be released shortly.
About Xcel Brands
Xcel Brands, Inc. (NASDAQ: XELB) is a media and consumer products company engaged in the design, licensing, marketing, live streaming, and social commerce sales of branded apparel, footwear, accessories, fine jewelry, home goods and other consumer products, and the acquisition of dynamic consumer lifestyle brands. Xcel was founded in 2011 with a vision to reimagine shopping, entertainment, and social media as social commerce. Xcel owns the Halston, Judith Ripka, and C. Wonder brands, as well as the co-branded collaboration brands TowerHill by Christie Brinkley, LB70 by Lloyd Boston, Trust. Respect. Love. by Cesar Millan, and GemmaMade by Gemma Stafford, and also holds noncontrolling interests or long-term license agreements in the Isaac Mizrahi brand, Orme Live and Jenny Martinez Live brands. Xcel also owns and manages the Longaberger brand through its controlling interest in Longaberger Licensing, LLC. Xcel is pioneering a true modern consumer products sales strategy which includes the promotion and sale of products under its brands through interactive television, digital live-stream shopping, social commerce, brick-and-mortar retailers, and e-commerce channels to be everywhere its customers shop. The company's brands have generated in excess of $5 billion in retail sales via livestreaming in interactive television and digital channels alone and consisting of over 20,000 hours of content production time in live-stream and social commerce. The brand portfolio reaches in excess of 40 million social media followers with broadcast reach into 200 million households. Headquartered in New York City, Xcel Brands is led by an executive team with significant live streaming, production, merchandising, design, marketing, retailing, and licensing experience, and a proven track record of success in elevating branded consumer products companies. For more information, visit www.xcelbrands.com.
Forward Looking Statements
This press release contains forward-looking statements. All statements other than statements of historical fact contained in this press release, including statements regarding future events, our future financial performance, business strategy and plans and objectives of management for future operations, are forward-looking statements. We have attempted to identify forward-looking statements by terminology including "anticipates," "believes," "can," "continue," "ongoing," "could," "estimates," "expects," "intends," "may," "appears," "suggests," "future," "likely," "goal," "plans," "potential," "projects," "predicts," "seeks," "should," "would," "guidance," "confident" or "will" or the negative of these terms or other comparable terminology. These forward-looking statements include, but are not limited to, statements regarding our anticipated revenue, expenses, profitability, strategic plans and capital needs. These statements are based on information available to us on the date hereof and our current expectations, estimates and projections and are not guarantees of future performance. Forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors, including, without limitation, the risks discussed in the "Risk Factors" section and elsewhere in the Company's Annual Report on form 10-K for the year ended December 31, 2024 and its other filings with the SEC, which may cause our or our industry's actual results, levels of activity, performance or achievements to differ materially from those expressed or implied by these forward-looking statements. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time, and it is not possible for us to predict all risk factors, nor can we address the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause our actual results to differ materially from those contained in any forward-looking statements. You should not place undue reliance on any forward-looking statements. Except as expressly required by the federal securities laws, we undertake no obligation to update any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason.
For further information please contact:
Seth Burroughs
Xcel Brands
sburroughs@xcelbrands.com
Non-GAAP net income and non-GAAP diluted EPS are non-GAAP unaudited terms. We define non-GAAP net income as net income (loss) attributable to Xcel Brands, Inc. stockholders, exclusive of asset impairment charges, amortization of trademarks, income (loss) from equity method investments, reduction in equity ownership and carrying value of IM Topco, LLC, stock-based compensation and cost of licensee warrants, loss on extinguishment of debt, gains on sales of assets and investments, gain on lease termination, and income taxes. Non-GAAP net income and non-GAAP diluted EPS measures do not include the tax effect of the aforementioned adjusting items, due to the nature of these items and the Company's tax strategy.
Adjusted EBITDA is a non-GAAP unaudited measure, which we define as net (loss) income attributable to Xcel Brands, Inc. stockholders before interest and finance expenses (including loss on extinguishment of debt, if any), accretion of lease liability for exited leases, income taxes, other state and local franchise taxes, depreciation and amortization, income (loss) from equity method investments, reduction in equity ownership and carrying value of IM Topco, LLC, asset impairment charges, stock-based compensation and cost of licensee warrants, gains on sales of assets and investments, gain on lease termination, and costs associated with restructuring of operations. Costs associated with restructuring of operations include operating losses generated by certain of our businesses that have been restructured or discontinued (i.e., wholesale apparel and fine jewelry), as well as non-cash charges associated with the restructuring of certain contractual arrangements.
Management uses non-GAAP net income, non-GAAP diluted EPS, and Adjusted EBITDA as measures of operating performance to assist in comparing performance from period to period on a consistent basis and to identify business trends relating to our results of operations. Management believes non-GAAP net income, non-GAAP diluted EPS, and Adjusted EBITDA are also useful because these measures adjust for certain costs and other events that management believes are not representative of our core business operating results, and thus these non-GAAP measures provide supplemental information to assist investors in evaluating our financial results.
Non-GAAP net income, non-GAAP diluted EPS, and Adjusted EBITDA should not be considered in isolation or as alternatives to net income, earnings per share, or any other measure of financial performance calculated and presented in accordance with GAAP. Given that non-GAAP net income, non-GAAP diluted EPS, and Adjusted EBITDA are financial measures not deemed to be in accordance with GAAP and are susceptible to varying calculations, our non-GAAP net income, non-GAAP diluted EPS, and Adjusted EBITDA may not be comparable to similarly titled measures of other companies, including companies in our industry, because other companies may calculate these measures in a different manner than we do. In evaluating non-GAAP net income, non-GAAP diluted EPS, and Adjusted EBITDA, you should be aware that in the future we may or may not incur expenses similar to some of the adjustments in this document. Our presentation of non-GAAP net income, non-GAAP diluted EPS, and Adjusted EBITDA does not imply that our future results will be unaffected by these expenses or any unusual or non-recurring items. When evaluating our performance, you should consider non-GAAP net income, non-GAAP diluted EPS, and Adjusted EBITDA alongside other financial performance measures, including our net income and other GAAP results, and not rely on any single financial measure.
| Xcel Brands, Inc. and Subsidiaries | |||||||
| Unaudited Consolidated Statements of Operations | |||||||
| (in thousands, except share and per share data) | |||||||
| For the Three Months Ended | |||||||
| March 31, | |||||||
| 2025 | 2024 | ||||||
| Revenues | |||||||
| Net licensing revenue | $ | 1,332 | $ | 2,184 | |||
| Operating costs and expenses | |||||||
| Salaries, benefits and employment taxes | 1,086 | 1,933 | |||||
| Other selling, general and administrative expenses | 1,197 | 2,029 | |||||
| Total direct operating costs and expenses | 2,283 | 3,962 | |||||
| Other expense, including non-cash expenses | |||||||
| Depreciation and amortization | 900 | 1,589 | |||||
| Asset impairment charges | - | 2,295 | |||||
| Loss from equity method investment | 576 | 533 | |||||
| Change in contingent reduction in equity ownership of IM Topco, LLC | (240 | ) | - | ||||
| Operating loss | (2,187 | ) | (6,195 | ) | |||
| Interest and finance expense | |||||||
| Interest expense | 473 | 146 | |||||
| Other interest and finance charges | 87 | 4 | |||||
| Total interest and finance expense | 560 | 150 | |||||
| Loss before income taxes | (2,747 | ) | (6,345 | ) | |||
| Income tax provision (benefit) | 50 | - | |||||
| Net loss | (2,797 | ) | (6,345 | ) | |||
| Less: Net loss attributable to noncontrolling interest | - | (51 | ) | ||||
| Net loss attributable to Xcel Brands, Inc. stockholders | $ | (2,797 | ) | $ | (6,294 | ) | |
| Loss per common share attributed to Xcel Brands, Inc. stockholders: | |||||||
| Basic and diluted net loss per share | $ | (1.18 | ) | $ | (3.09 | ) | |
| Weighted average number of common shares outstanding: | |||||||
| Basic and diluted weighted average common shares outstanding | 2,373,583 | 2,037,397 | |||||
| Xcel Brands, Inc. and Subsidiaries | ||||||||
| Unaudited Consolidated Balance Sheets | ||||||||
| (in thousands, except share and per share data) | ||||||||
| March 31, 2025 | December 31, 2024 | |||||||
| Assets | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 298 | $ | 1,254 | ||||
| Accounts receivable, net | 2,105 | 2,269 | ||||||
| Prepaid expenses and other current assets | 508 | 520 | ||||||
| Total current assets | 2,911 | 4,043 | ||||||
| Property and equipment, net | 180 | 182 | ||||||
| Operating lease right-of-use assets | 3,573 | 3,751 | ||||||
| Trademarks and other intangibles, net | 33,877 | 34,759 | ||||||
| Equity method investment | 9,534 | 10,110 | ||||||
| Other assets | 2411 | 911 | ||||||
| Total non-current assets | 49,575 | 49,713 | ||||||
| Total Assets | $ | 52,486 | $ | 53,756 | ||||
| Liabilities and Stockholders' Equity | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable, accrued expenses and other current liabilities | $ | 2,714 | $ | 2,734 | ||||
| Deferred revenue | 1,398 | 1,380 | ||||||
| Accrued income taxes payable | 546 | 554 | ||||||
| Current portion of operating lease obligation | 1,594 | 1,513 | ||||||
| Current portion of long-term debt | 250 | - | ||||||
| Current portion of contingent obligations | 3,973 | 4,213 | ||||||
| Total current liabilities | 10,475 | 10,394 | ||||||
| Long-Term Liabilities: | ||||||||
| Deferred revenue | 2,444 | 2,667 | ||||||
| Long-term portion of operating lease obligation | 4,956 | 5,297 | ||||||
| Long-term debt, net, less current portion | 8,470 | 6,569 | ||||||
| Other long-term liabilities | 431 | 431 | ||||||
| Total long-term liabilities | 16,301 | 14,964 | ||||||
| Total Liabilities | 26,776 | 25,358 | ||||||
| Commitments and Contingencies | ||||||||
| Stockholders' Equity: | ||||||||
| Preferred stock, $.001 par value, 1,000,000 shares authorized, none issued and outstanding | - | - | ||||||
| Common stock, $.001 par value, 50,000,000 shares authorized, and 2,386,325 and 2,368,072 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively | 2 | 2 | ||||||
| Paid-in capital | 106,775 | 106,666 | ||||||
| Accumulated deficit | (79,041 | ) | (76,244 | ) | ||||
| Total Xcel Brands, Inc. stockholders' equity | 27,736 | 30,424 | ||||||
| Noncontrolling interest | (2,026 | ) | (2,026 | ) | ||||
| Total Stockholders' Equity | 25,710 | 28,398 | ||||||
| Total Liabilities and Stockholders' Equity | $ | 52,486 | $ | 53,756 | ||||
| Xcel Brands, Inc. and Subsidiaries | ||||||||
| Unaudited Consolidated Statements of Cash Flows | ||||||||
| (in thousands) | ||||||||
| For the Three Months Ended | ||||||||
| March 31, | ||||||||
| 2025 | 2024 | |||||||
| Cash flows from operating activities | ||||||||
| Net loss | $ | (2,797 | ) | $ | (6,345 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization expense | 900 | 1,589 | ||||||
| Asset impairment charges | - | 2,295 | ||||||
| Amortization of deferred finance costs | 102 | 26 | ||||||
| Stock-based compensation and cost of licensee warrants | 109 | 144 | ||||||
| Contingent reduction in equity ownership of IM Topco, LLC | (240 | ) | - | |||||
| Loss from equity method investment | 576 | 533 | ||||||
| Accounts receivable | 164 | (149 | ) | |||||
| Inventory | - | 8 | ||||||
| Prepaid expenses and other assets | 12 | (156 | ) | |||||
| Deferred revenue | (205 | ) | (223 | ) | ||||
| Accounts payable, accrued expenses and other current liabilities | 27 | (560 | ) | |||||
| Lease-related assets and liabilities | (82 | ) | (237 | ) | ||||
| Other Liabilities | - | 466 | ||||||
| Net cash used in operating activities | (1,434 | ) | (2,609 | ) | ||||
| Cash flows from investing activities | ||||||||
| Purchase of property and equipment | (14 | ) | - | |||||
| Net cash used in investing activities | (14 | ) | - | |||||
| Cash flows from financing activities | ||||||||
| Proceeds from public offering and private placement transactions, net of transaction costs | - | 1,902 | ||||||
| Proceeds from long-term debt | 2,050 | - | ||||||
| Shares repurchased including vested restricted stock in exchange for withholding taxes | (58 | ) | - | |||||
| Net cash provided by (used in) financing activities | 1,992 | 1,902 | ||||||
| Net increase (decrease) in cash and cash equivalents | 544 | (707 | ) | |||||
| Cash and cash equivalents at beginning of period | 1,993 | 2,998 | ||||||
| Cash and cash equivalents at end of period | $ | 2,537 | $ | 2,291 | ||||
| Reconciliation to amounts on consolidated balance sheets: | ||||||||
| Cash and cash equivalents | 298 | 1,552 | ||||||
| Restricted cash (reported in other non-current assets) | 2,239 | 739 | ||||||
| Total cash, cash equivalents, and restricted cash | $ | 2,537 | $ | 2,291 | ||||
| For the Three Months Ended | ||||||||
| ($ in thousands) | March 31, | March 31, | ||||||
| 2025 | 2024 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Net loss attributable to Xcel Brands, Inc. stockholders | $ | (2,797 | ) | $ | (6,294 | ) | ||
| Asset impairment | - | 2,295 | ||||||
| Amortization of trademarks | 875 | 1,519 | ||||||
| Loss from equity method investments | 576 | 533 | ||||||
| Contingent reduction in equity ownership of IM Topco, LLC | (240 | ) | - | |||||
| Stock-based compensation and cost of licensee warrants | 166 | 144 | ||||||
| Income tax provision (benefit) | 50 | - | ||||||
| Non-GAAP net (loss) | $ | (1,370 | ) | $ | (1,803 | ) | ||
| For the Three Months Ended | ||||||||
| March 31, | March 31, | |||||||
| 2025 | 2024 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Diluted loss per share attributable to Xcel Brand Inc. stockholders | $ | (1.18 | ) | $ | (3.09 | ) | ||
| Asset impairment | - | 1.13 | ||||||
| Amortization of trademarks | 0.37 | 0.75 | ||||||
| Loss from equity method investments | 0.24 | 0.26 | ||||||
| Contingent reduction in equity ownership of IM Topco, LLC | (0.10 | ) | - | |||||
| Stock-based compensation and cost of licensee warrants | 0.07 | 0.07 | ||||||
| Income tax provision (benefit) | 0.02 | - | ||||||
| Non-GAAP diluted EPS | $ | (0.58 | ) | $ | (0.88 | ) | ||
| Non-GAAP weighted average diluted shares | 2,373,583 | 2,037,397 | ||||||
| For the Three Months Ended | ||||||||
| ($ in thousands) | March 31, | March 31, | ||||||
| 2025 | 2024 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Net loss attributable to Xcel Brands, Inc. stockholders | $ | (2,797 | ) | $ | (6,294 | ) | ||
| Asset impairment | - | 2,295 | ||||||
| Depreciation and amortization | 900 | 1,589 | ||||||
| Loss from equity method investments | 576 | 533 | ||||||
| Contingent reduction in equity ownership of IM Topco, LLC | (240 | ) | - | |||||
| Interest and finance expense | 560 | 150 | ||||||
| Income tax benefit | 50 | - | ||||||
| State and local franchise taxes | 8 | 12 | ||||||
| Stock-based compensation and cost of licensee warrants | 166 | 144 | ||||||
| Accretion of lease liability for exited lease | 61 | - | ||||||
| Costs associated with restructuring of operations | 17 | - | ||||||
| Adjusted EBITDA | $ | (699 | ) | $ | (1,571 | ) | ||
