UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported): November 24, 2020
 
iMedia Brands, Inc.
(Exact name of registrant as specified in its charter)
 
Minnesota	 	001-37495	 	41-1673770	
(State or other jurisdiction
of incorporation)	 	(Commission
File Number)	 	(IRS Employer
Identification No.)	
 
6740 Shady Oak Road,
Eden Prairie, Minnesota 55344-3433
(Address of principal executive offices)
 
(952) 943-6000
(Registrant’s telephone number, including area code)
 
Not applicable
(Former name or former address, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
 	¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	
 
 	¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	
 
 	¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	
 
 	¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	
 
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class	Trading Symbol(s)	Name of each exchange on which registered	
Common Stock, $0.01 par value	IMBI	Nasdaq Capital Market	
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 
  
	Item 2.02	Results of Operations and Financial Condition	
 
On November 24, 2020, iMedia Brands, Inc. (the “Company”) issued a press release disclosing its results of operations and financial condition for the Company’s third fiscal quarter ended October 31, 2020. The press release is furnished herewith as Exhibit 99.1.
  
In accordance with General Instruction B.2 of Form 8-K, the information in this Item 2.02, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, or the Securities Exchange Act of 1934, except as shall be expressly set forth by specific reference in that filing.
 
	Item 9.01	Financial Statements and Exhibits	
 
 	(d)	Exhibits	
 
The following exhibit is being furnished with this Current Report on Form 8-K:
 
 Exhibit No.	 	Description	
 	 	 	
99.1	 	Press Release dated November 24, 2020	
 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: November 24, 2020	iMedia Brands, Inc.	

 	
By:	 	/s/ Timothy A. Peterman	
 	 	 	Timothy A. Peterman
Chief Executive Officer	

 

Exhibit 99.1

 
iMedia Brands Reports Third Quarter 2020 Results
 
MINNEAPOLIS, MN – November 24, 2020 – iMedia Brands, Inc. (the “Company”) (NASDAQ: IMBI) today announced results for the third quarter ended October 31, 2020.
 
Third Quarter 2020 Summary & Recent Highlights
 
	·	Active customer file grew by 4% year-over-year, driven by a 31% growth in new customers.	
	·	Q3 net sales were $109.0 million, a decline of 5% compared to same prior-year period, which was the best year-over-year quarterly net sales performance in more than two years. This success was primarily driven by 49 exciting new brands launched so far this year that have generated approximately 21% of our year-to-date net sales, the highest percentage in any nine-month period in the Company’s 30-year history.	
	·	Q3 gross margin was 37.4%, a 130-basis point improvement over the same prior-year period. Year-to-date gross margin was 37.2%, a 370-basis point improvement over the same prior-year period.	
	·	Shaq kitchen products launched in over 2,000 Target and Sam’s Club stores in October 2020.	
	·	Completed an oversubscribed common equity raise in August 2020, increasing institutional ownership and strengthening the balance sheet as the Company positions for growth.	
	·	Q3 net loss was $4.7 million, a $2.0 million improvement over the same prior-year period. Year-to-date net loss was $10.5 million, a $27.4 million improvement over the same prior-year period.	
	·	Q3 adjusted EBITDA was $6.4 million, a $7.4 million improvement over the same prior-year period. Year-to-date adjusted EBITDA was $15.5 million, a $24.7 million improvement over the same prior-year period.	
	·	Float Left’s OTT SaaS proprietary platform, Flicast, generated a 100% year-over-year increase in demand[1] in Q3 as it continues to launch high quality OTT apps for clients on over 12 different internet-based video platforms.	
	·	Company’s newest consumer brand, J.W. Hulme, premiered on both ShopHQ and ShopBulldogTV during Q3 and exceeded internal sales forecasts by offering customers an engaging assortment of men’s and women’s accessories.	
 
CEO Commentary
 
“Q3 was another strong performance from our entrepreneurial-minded employees and vendors,” said Tim Peterman, CEO of iMedia Brands. “We are passionate about capturing our opportunities, and it shows.”

 
1 Demand defined as total value of new contracts during the period.

 	1	 	

 
Third Quarter 2020 Results

SUMMARY RESULTS AND KEY OPERATING METRICS
($ Millions, except average selling price and EPS)

 	 	Q3 2020
10/31/2020	 	Q3 2019
11/2/2019	 	Change	 	YTD 2020
10/31/2020	 	YTD 2019
11/2/2019	 	Change	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net Sales	 	$	109.0	 	$	115.2	 	 	(5.3%)	 	$	329.4	 	$	378.2	 	 	(12.9%)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross Margin %	 	 	37.4%	 	 	36.1%	 	 	130 bps	 	 	37.2%	 	 	33.5%	 	 	370 bps	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjusted EBITDA	 	$	6.4	 	$	(1.0)	 	 	N/A	 	$	15.5	 	$	(9.2)	 	 	N/A	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss	 	$	(4.7)	 	$	(6.7)	 	 	30%	 	$	(10.5)	 	$	(37.9)	 	 	72%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
EPS	 	$	(0.39)	 	$	(0.89)	 	 	56%	 	$	(1.05)	 	$	(5.20)	 	 	80%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net Shipped Units (000s)	 	 	1,664	 	 	1,578	 	 	5%	 	 	4,775	 	 	5,227	 	 	(9%)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Average Selling Price (ASP)	 	$	58	 	$	66	 	 	(12%)	 	$	61	 	$	65	 	 	(6%)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Return Rate %	 	 	14.4%	 	 	19.0%	 	 	(460 bps)	 	 	14.5%	 	 	19.7%	 	 	(520 bps)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
ShopHQ Digital Net Sales %	 	 	49.1%	 	 	51.5%	 	 	(240 bps)	 	 	50.7%	 	 	52.3%	 	 	(160 bps)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total Customers - 12 Month Rolling (000s)	 	 	1,028	 	 	1,115	 	 	(8%)	 	 	N/A	 	 	N/A	 	 	N/A	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
% of ShopHQ Net Merchandise Sales by Category	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Jewelry & Watches	 	 	40%	 	 	45%	 	 	 	 	 	40%	 	 	45%	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Home & Consumer Electronics	 	 	16%	 	 	23%	 	 	 	 	 	14%	 	 	21%	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Beauty & Health	 	 	34%	 	 	18%	 	 	 	 	 	34%	 	 	19%	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Fashion & Accessories	 	 	10%	 	 	14%	 	 	 	 	 	12%	 	 	15%	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 	 	100%	 	 	100%	 	 	 	 	 	100%	 	 	100%	 	 	 	
  
Liquidity and Capital Resources
 
As of October 31, 2020, total unrestricted cash was $19.0 million, an increase of $8.7 million from prior-year end. Net debt at the end of Q3 was $33.6 million, a $25.1 million reduction from prior-year end. The Company also had an additional $11.3 million of unused availability on its revolving credit facility.
 
Outlook
 
In Q4, iMedia Brands anticipates posting adjusted EBITDA in the mid-to-high single-digit millions. The Company also continues to believe that the pandemic’s effect will be reduced because it has a direct-to-consumer revenue model that serves customers who seek to buy goods from the comfort of their own homes, and it is not dependent on the traditional advertising dollars from national advertisers who are impacted by the continued disruption of the brick and mortar shopping experience.   
 
Conference Call
 
The Company will hold a conference call today at 8:30 a.m. Eastern time to discuss its third quarter 2020 results.

 	2	 	

 
Date: Tuesday, November 24, 2020
Toll-free dial-in number: (877) 407-9039
International dial-in number: (201) 689-8470
Conference ID: 13712618
 
Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Gateway Investor Relations at (949) 574-3860.
 
The conference call will be broadcast live and available for replay here and via the Investors section of the iMedia Brands website at www.imediabrands.com.
 
A replay of the conference call will be available after 11:30 a.m. Eastern time on the same day through December 8, 2020.
 
Toll-free replay number: (844) 512-2921
International replay number: (412) 317-6671
Replay ID: 13712618
 
About iMedia Brands, Inc.
 
iMedia Brands, Inc. (Nasdaq: IMBI) is a leading interactive media company that owns a growing portfolio of lifestyle television networks, consumer brands and media commerce services. Its brand portfolio spans multiple business models and product categories. Its television brands are ShopHQ, ShopBulldogTV, ShopHQHealth and LaVenta. Its media commerce services brands are Float Left Interactive and i3PL. Its consumer brands include J.W. Hulme, Live Fit and Indigo Thread. Please visit www.imediabrands.com for more investor information.
 
Contacts:
 
Investors:
Gateway Investor Relations
Cody Slach
IMBI@gatewayir.com
(949) 574-3860
 
Media:
press@imediabrands.com
(800) 938-9707

 	3	 	

 

iMEDIA BRANDS, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands except share and per share data) 

 
 	 	October 31,	 	 	February 1,	 	
 	 	2020	 	 	2020	 	
 	 	(Unaudited)	 	 	 	 	
 	 	 	 	 	 	 	
ASSETS	 	 	 	 	 	 	 	 	
Current assets:	 	 	 	 	 	 	 	 	
Cash	 	$	18,962	 	 	$	10,287	 	
Accounts receivable, net	 	 	53,539	 	 	 	63,594	 	
Inventories	 	 	71,666	 	 	 	78,863	 	
Current portion of television distribution rights, net	 	 	15,420	 	 	 	-	 	
Prepaid expenses and other	 	 	7,364	 	 	 	8,196	 	
Total current assets	 	 	166,951	 	 	 	160,940	 	
Property and equipment, net	 	 	43,560	 	 	 	47,616	 	
Television distribution rights, net	 	 	3,875	 	 	 	-	 	
Other assets	 	 	4,413	 	 	 	4,187	 	
Total Assets	 	$	218,799	 	 	$	212,743	 	
 	 	 	 	 	 	 	 	 	
LIABILITIES AND SHAREHOLDERS' EQUITY	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Current liabilities:	 	 	 	 	 	 	 	 	
Accounts payable	 	$	81,168	 	 	$	83,659	 	
Accrued liabilities	 	 	28,102	 	 	 	40,250	 	
Current portion of television distribution rights obligation	 	 	21,478	 	 	 	-	 	
Current portion of long term credit facility	 	 	2,714	 	 	 	2,714	 	
Current portion of operating lease liabilities	 	 	643	 	 	 	704	 	
Deferred revenue	 	 	205	 	 	 	141	 	
Total current liabilities	 	 	134,310	 	 	 	127,468	 	

Other long term liabilities	 	 	5,619	 	 	 	335	 	
Long term credit facilities	 	 	49,836	 	 	 	66,246	 	
Total liabilities	 	 	189,765	 	 	 	194,049	 	
 	 	 	 	 	 	 	 	 	
Commitments and contingencies	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Shareholders' equity:	 	 	 	 	 	 	 	 	
Preferred stock, $.01 par value, 400,000 shares authorized; zero shares issued and outstanding	 	 	-	 	 	 	-	 	
Common stock, $.01 par value, 29,600,000 and 14,600,000 shares authorized; as of October 31, 2020 and February 1, 2020; 13,016,660 and 8,208,227 shares issued and outstanding as of October 31, 2020 and February 1, 2020	 	 	130	 	 	 	82	 	
Additional paid-in capital	 	 	473,647	 	 	 	452,833	 	
Accumulated deficit	 	 	(444,743	)	 	 	(434,221	)	
Total shareholders' equity	 	 	29,034	 	 	 	18,694	 	
Total Liabilities and Shareholders' Equity	 	$	218,799	 	 	$	212,743	 	

 	4	 	

 
iMEDIA BRANDS, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except share and per share data)  
 
 	 	For the Three-Month Periods Ended	 	 	For the Nine-Month Periods Ended	 	
 	 	October 31,	 	 	November 2,	 	 	October 31,	 	 	November 2,	 	
 	 	2020	 	 	2019	 	 	2020	 	 	2019	 	
Net sales	 	$	109,025	 	 	$	115,159	 	 	$	329,374	 	 	$	378,183	 	
Cost of sales	 	 	68,211	 	 	 	73,573	 	 	 	206,711	 	 	 	251,578	 	
Gross profit	 	 	40,814	 	 	 	41,586	 	 	 	122,663	 	 	 	126,605	 	
Margin %	 	 	37.4	%	 	 	36.1	%	 	 	37.2	%	 	 	33.5	%	
Operating expense:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Distribution and selling	 	 	31,490	 	 	 	38,332	 	 	 	97,100	 	 	 	128,717	 	
General and administrative	 	 	4,687	 	 	 	5,415	 	 	 	15,158	 	 	 	17,816	 	
Depreciation and amortization	 	 	7,977	 	 	 	2,053	 	 	 	16,700	 	 	 	6,234	 	
Restructuring costs	 	 	55	 	 	 	1,516	 	 	 	264	 	 	 	6,681	 	
Executive and management transition costs	 	 	-	 	 	 	87	 	 	 	-	 	 	 	2,428	 	
Total operating expense	 	 	44,209	 	 	 	47,403	 	 	 	129,222	 	 	 	161,876	 	
Operating loss	 	 	(3,395	)	 	 	(5,817	)	 	 	(6,559	)	 	 	(35,271	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Other income (expense):	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest income	 	 	1	 	 	 	4	 	 	 	2	 	 	 	15	 	
Interest expense	 	 	(1,339	)	 	 	(914	)	 	 	(3,920	)	 	 	(2,608	)	
Total other expense	 	 	(1,338	)	 	 	(910	)	 	 	(3,918	)	 	 	(2,593	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss before income taxes	 	 	(4,733	)	 	 	(6,727	)	 	 	(10,477	)	 	 	(37,864	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income tax provision	 	 	(15	)	 	 	(14	)	 	 	(45	)	 	 	(44	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss	 	$	(4,748	)	 	$	(6,741	)	 	$	(10,522	)	 	$	(37,908	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss per common share	 	$	(0.39	)	 	$	(0.89	)	 	$	(1.05	)	 	$	(5.20	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss per common share	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
---assuming dilution	 	$	(0.39	)	 	$	(0.89	)	 	$	(1.05	)	 	$	(5.20	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Weighted average number of	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
common shares outstanding:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic	 	 	12,177,990	 	 	 	7,577,028	 	 	 	10,000,383	 	 	 	7,286,380	 	
Diluted	 	 	12,177,990	 	 	 	7,577,028	 	 	 	10,000,383	 	 	 	7,286,380	 	

 	5	 	

  

iMEDIA BRANDS, INC.
AND SUBSIDIARIES
PERFORMANCE MEASURES BY SEGMENT
($ in Millions) 
 
 	 	For the Three-Month Period Ended	 	 	For the Three-Month Period Ended	 	
 	 	October 31, 2020	 	 	November 2, 2019	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	ShopHQ	 	 	Emerging	 	 	Consolidated	 	 	ShopHQ	 	 	Emerging	 	 	Consolidated	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net Sales	 	$	104.3	 	 	$	4.7	 	 	$	109.0	 	 	$	114.0	 	 	$	1.1	 	 	$	115.2	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross Profit	 	 	38.8	 	 	$	2.0	 	 	 	40.8	 	 	 	41.5	 	 	$	0.1	 	 	 	41.6	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating Loss	 	 	(2.4	)	 	$	(1.0	)	 	 	(3.4	)	 	 	(5.3	)	 	$	(0.5	)	 	 	(5.8	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjusted EBITDA	 	 	7.2	 	 	$	(0.8	)	 	 	6.4	 	 	 	(0.9	)	 	$	(0.1	)	 	 	(1.0	)	
 
 	 	For the Nine-Month Period Ended	 	 	For the Nine-Month Period Ended	 	
 	 	October 31, 2020	 	 	November 2, 2019	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	ShopHQ	 	 	Emerging	 	 	Consolidated	 	 	ShopHQ	 	 	Emerging	 	 	Consolidated	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net Sales	 	$	318.8	 	 	$	10.6	 	 	$	329.4	 	 	$	375.6	 	 	$	2.6	 	 	$	378.2	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross Profit	 	 	118.5	 	 	$	4.2	 	 	 	122.7	 	 	 	126.3	 	 	$	0.3	 	 	 	126.6	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating Loss	 	 	(2.5	)	 	$	(4.1	)	 	 	(6.6	)	 	 	(32.3	)	 	$	(2.9	)	 	 	(35.3	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjusted EBITDA	 	 	19.1	 	 	$	(3.5	)	 	 	15.5	 	 	 	(7.9	)	 	$	(1.3	)	 	 	(9.2	)	

 	6	 	

 

iMEDIA BRANDS, INC.
AND SUBSIDIARIES
Reconciliation of Net Loss to Adjusted EBITDA:
(Unaudited)
(in thousands)
 
 	 	For the Three-Month Period Ended	 	 	For the Three-Month Period Ended	 	
 	 	October 31, 2020	 	 	November 2, 2019	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	ShopHQ	 	 	Emerging	 	 	Consolidated	 	 	ShopHQ	 	 	Emerging	 	 	Consolidated	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss	 	 	 	 	 	 	 	 	 	$	(4,748	)	 	 	 	 	 	 	 	 	 	$	(6,741	)	
Adjustments:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Depreciation and amortization	 	 	 	 	 	 	 	 	 	 	8,952	 	 	 	 	 	 	 	 	 	 	 	3,052	 	
Interest income	 	 	 	 	 	 	 	 	 	 	(1	)	 	 	 	 	 	 	 	 	 	 	(4	)	
Interest expense	 	 	 	 	 	 	 	 	 	 	1,339	 	 	 	 	 	 	 	 	 	 	 	914	 	
Income taxes	 	 	 	 	 	 	 	 	 	 	15	 	 	 	 	 	 	 	 	 	 	 	14	 	
EBITDA (as defined)	 	$	6,315	 	 	$	(758	)	 	$	5,557	 	 	$	(2,419	)	 	$	(346	)	 	$	(2,765	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
A reconciliation of EBITDA to Adjusted EBITDA is as follows:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
EBITDA (as defined)	 	$	6,315	 	 	$	(758	)	 	$	5,557	 	 	$	(2,419	)	 	$	(346	)	 	$	(2,765	)	
Adjustments:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Transaction, settlement and integration costs, net (a)	 	 	312	 	 	 	-	 	 	 	312	 	 	 	(1,016	)	 	 	212	 	 	 	(804	)	
Restructuring costs	 	 	55	 	 	 	-	 	 	 	55	 	 	 	1,502	 	 	 	14	 	 	 	1,516	 	
Executive and management transition costs	 	 	-	 	 	 	-	 	 	 	-	 	 	 	87	 	 	 	-	 	 	 	87	 	
Rebranding costs	 	 	-	 	 	 	-	 	 	 	-	 	 	 	554	 	 	 	-	 	 	 	554	 	
Non-cash share-based compensation expense	 	 	504	 	 	 	-	 	 	 	504	 	 	 	426	 	 	 	-	 	 	 	426	 	
Adjusted EBITDA	 	$	7,186	 	 	$	(758	)	 	$	6,428	 	 	$	(866	)	 	$	(120	)	 	$	(986	)	

 	 	For the Nine-Month Period Ended	 	 	For the Nine-Month Period Ended	 	
 	 	October 31, 2020	 	 	November 2, 2019	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	ShopHQ	 	 	Emerging	 	 	Consolidated	 	 	ShopHQ	 	 	Emerging	 	 	Consolidated	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss	 	 	 	 	 	 	 	 	 	$	(10,522	)	 	 	 	 	 	 	 	 	 	$	(37,908	)	
Adjustments:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Depreciation and amortization	 	 	 	 	 	 	 	 	 	 	19,697	 	 	 	 	 	 	 	 	 	 	 	9,192	 	
Interest income	 	 	 	 	 	 	 	 	 	 	(2	)	 	 	 	 	 	 	 	 	 	 	(15	)	
Interest expense	 	 	 	 	 	 	 	 	 	 	3,920	 	 	 	 	 	 	 	 	 	 	 	2,608	 	
Income taxes	 	 	 	 	 	 	 	 	 	 	45	 	 	 	 	 	 	 	 	 	 	 	44	 	
EBITDA (as defined)	 	$	16,679	 	 	$	(3,541	)	 	$	13,138	 	 	$	(23,629	)	 	$	(2,450	)	 	$	(26,079	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
A reconciliation of EBITDA to Adjusted EBITDA is as follows:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
EBITDA (as defined)	 	$	16,679	 	 	$	(3,541	)	 	$	13,138	 	 	$	(23,629	)	 	$	(2,450	)	 	$	(26,079	)	
Adjustments:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Transaction, settlement and integration costs, net (a)	 	 	886	 	 	 	-	 	 	 	886	 	 	 	(1,016	)	 	 	212	 	 	 	(804	)	
Restructuring costs	 	 	264	 	 	 	-	 	 	 	264	 	 	 	5,839	 	 	 	842	 	 	 	6,681	 	
Executive and management transition costs	 	 	-	 	 	 	-	 	 	 	-	 	 	 	2,428	 	 	 	-	 	 	 	2,428	 	
Rebranding costs	 	 	-	 	 	 	-	 	 	 	-	 	 	 	792	 	 	 	-	 	 	 	792	 	
Inventory Impairment write-down	 	 	-	 	 	 	-	 	 	 	-	 	 	 	6,050	 	 	 	-	 	 	 	6,050	 	
Non-cash share-based compensation expense	 	 	1,227	 	 	 	-	 	 	 	1,227	 	 	 	1,631	 	 	 	52	 	 	 	1,683	 	
Adjusted EBITDA	 	$	19,056	 	 	$	(3,541	)	 	$	15,515	 	 	$	(7,905	)	 	$	(1,344	)	 	$	(9,249	)	

	(a)	Transaction, settlement and integration costs for the three and nine-month period ended October 31, 2020 includes consulting fees incurred to explore additional loan financings, settlement costs, and incremental COVID-19 related legal costs. Transaction, settlement and integration costs, net, for the three and nine-month period ended November 2, 2019 includes a $1.5 million gain for the sale of our claim related to the Payment Card Interchange Fee and Merchant Discount Antitrust Litigation class action lawsuit, partially offset by costs incurred related to the implementation of our ShopHQ VIP customer program and our third-party logistics service offerings of $721,000.	

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Adjusted EBITDA
 
EBITDA represents net income (loss) for the respective periods excluding depreciation and amortization expense, interest income (expense) and income taxes. The Company defines Adjusted EBITDA as EBITDA excluding non-operating gains (losses); executive and management transition costs; restructuring costs; non-cash impairment charges and write downs; transaction, settlement, and integration costs, net; rebranding costs; and non-cash share-based compensation expense. The Company has included the “Adjusted EBITDA” measure in its EBITDA reconciliation in order to adequately assess the operating performance of its television and online businesses and in order to maintain comparability to its analyst's coverage and financial guidance, when given. Management believes that the Adjusted EBITDA measure allows investors to make a meaningful comparison between its business operating results over different periods of time with those of other similar companies. In addition, management uses Adjusted EBITDA as a metric to evaluate operating performance under the Company’s management and executive incentive compensation programs. EBITDA and Adjusted EBITDA are both non-GAAP measures and should not be construed as an alternative to operating income (loss), net income (loss) or to cash flows from operating activities as determined in accordance with generally accepted accounting principles (“GAAP”) and should not be construed as a measure of liquidity. Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies. The Company has included a reconciliation of the comparable GAAP measure, net income (loss) to Adjusted EBITDA in this release. 
 
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
 
This document may contain certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements contained herein that are not statements of historical fact, including statements regarding the expected impact of COVID-19 on television retailing are forward-looking. The Company often use words such as anticipates, believes, estimates, expects, intends, seeks, predicts, hopes, should, plans, will and similar expressions to identify forward-looking statements. These statements are based on management's current expectations and accordingly are subject to uncertainty and changes in circumstances. Actual results may vary materially from the expectations contained herein due to various important factors, including (but not limited to): variability in consumer preferences, shopping behaviors, spending and debt levels; the general economic and credit environment, including COVID-19; interest rates; seasonal variations in consumer purchasing activities; the ability to achieve the most effective product category mixes to maximize sales and margin objectives; competitive pressures on sales and sales promotions; pricing and gross sales margins; the level of cable and satellite distribution for the Company’s programming and the associated fees or estimated cost savings from contract renegotiations; the Company’s ability to establish and maintain acceptable commercial terms with third-party vendors and other third parties with whom the Company has contractual relationships, and to successfully manage key vendor and shipping relationships and develop key partnerships and proprietary and exclusive brands; the ability to manage operating expenses successfully and the Company’s working capital levels; the ability to remain compliant with the Company’s credit facilities covenants; customer acceptance of the Company’s branding strategy and its repositioning as a video commerce Company; the ability to respond to changes in consumer shopping patterns and preferences, and changes in technology and consumer viewing patterns; changes to the Company’s management and information systems infrastructure; challenges to the Company’s data and information security; changes in governmental or regulatory requirements; including without limitation, regulations of the Federal Communications Commission and Federal Trade Commission, and adverse outcomes from regulatory proceedings; litigation or governmental proceedings affecting the Company’s operations; significant events (including disasters, weather events or events attracting significant television coverage) that either cause an interruption of television coverage or that divert viewership from its programming; disruptions in the Company’s distribution of its network broadcast to customers; the Company’s ability to protect its intellectual property rights; our ability to obtain and retain key executives and employees; the Company’s ability to attract new customers and retain existing customers; changes in shipping costs; expenses related to the actions of activist or hostile shareholders; the Company’s ability to offer new or innovative products and customer acceptance of the same; changes in customer viewing habits of television programming; and the risks identified under Item 1A(Risk Factors) in the Company’s most recently filed Form 10-K and any additional risk factors identified in its periodic reports since the date of such Form 10-K. More detailed information about those factors is set forth in the Company’s filings with the Securities and Exchange Commission, including its annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K. Investors are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this announcement. the Company’s is under no obligation (and expressly disclaim any such obligation) to update or alter its forward-looking statements whether as a result of new information, future events or otherwise.

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