Xcel Brands Q3 2024 Earnings Report

Xcel Brands EPS Results

• Actual EPS: -$0.60
• Consensus EPS: -$1.20
• Beat/Miss: Beat by +$0.60
• One Year Ago EPS: N/A

Xcel Brands Revenue Results

• Actual Revenue: N/A
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Xcel Brands Announcement Details

• Quarter: Q3 2024
• Date: 12/20/2024
• Time: After Market Closes
• Conference Call Date: Monday, December 23, 2024
• Conference Call Time: 5:00PM ET

Xcel Brands (NASDAQ:XELB). is a brand-management and media company that develops, acquires, markets and licenses consumer brands. The company focuses on lifestyle categories including fashion, accessories, jewelry, home goods and beauty products, using a combination of licensing, direct-to-consumer commerce, retail distribution and media-driven marketing.

Xcel’s portfolio has included brands associated with designers and personalities such as Isaac Mizrahi and Judith Ripka. The company works with retail and manufacturing partners to design, produce and distribute branded merchandise, while also supporting product launches through television, digital content, social media and livestream shopping. Its business model is intended to extend brands across multiple product categories and sales channels.

Founded in 2011, Xcel Brands serves consumers primarily through North American retail and e-commerce channels, with licensing arrangements that can provide international distribution. Robert W. D’Loren is the company’s chairman and chief executive officer. Brand ownership, licensing arrangements and product offerings may change as Xcel develops its portfolio and pursues new commercial opportunities.

Xcel Brands Q3 2024 Earnings Call Transcript

Key Takeaways

• Q1 total revenues dropped to $2.2 M from $6.1 M a year ago, driven by the complete exit from wholesale product sales and a soft Lori Goldstein brand.
• Adjusted EBITDA improved nearly 50% year-over-year, narrowing the non-GAAP net loss to $1.8 M (-$0.09/share) from $3.6 M (-$0.18/share) in Q1 2023.
• The company forecasts positive EBITDA later in 2024 and aims to return to profitability, backed by a streamlined, working-capital-light licensing model.
• Key upcoming brand launches—Tower Hill by Christie Brinkley, Halston by G-III in fall, C Wonder expansion to $20–$25 M in 2024 (targeting $50 M in 2025), plus another celebrity brand on HSN—are expected to drive licensing revenue growth.
• The Lori Goldstein brand generated roughly $5 M in royalties but faces scheduling conflicts with on-air talent, prompting potential renegotiation or repurchase options to stabilize future cash flow.

Presentation

[Operator]

Without prior written authorization of Xcel Brands, and as a reminder, this conference call is being recorded. I'd now like to turn the call over to Paul Kuntz from RedChip. Paul, you may begin.

[Paul Kuntz, Head of Investor Relations at Xcel Brands]

Good evening, everyone, and thank you for joining us. Welcome to the Xcel Brands first quarter of 2024 earnings call. We greatly appreciate your participation and interest. With us on the call today are Chairman and Chief Executive Officer Robert D'Loren, Chief Financial Officer Jim Haran, and Executive Vice President of Business Development and Treasury, Seth Burroughs. By now, everyone should have had access to the earnings release for the quarter ended March 31st, 2024, which went out this evening. In addition, the company is filing with the Securities and Exchange Commission its quarterly report on Form 10-Q today. The release and the quarterly report will be available on the company's website at www.xcelbrands.com. This call is being webcast, and a replay will be available on the company's investor relations website. Before we begin, please keep in mind that this call will contain forward-looking statements.

[Paul Kuntz, Head of Investor Relations at Xcel Brands]

All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from certain expectations discussed here today. These risk factors are explained in detail in the company's most recent annual report, filed with the SEC. Xcel does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. The dynamic nature of the current macroeconomic environment means that what is said on this call could change materially at any time. Finally, please note that on today's call, management will refer to certain non-GAAP financial measures, including non-GAAP net income, non-GAAP diluted EPS, and adjusted EBITDA. Our management uses these non-GAAP metrics 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 the company's results of operations.

[Paul Kuntz, Head of Investor Relations at Xcel Brands]

Our management believes these financial performance measurements 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 they provide supplemental information to assist investors in evaluating the company's financial results. These non-GAAP measures should not be considered in isolation or as alternatives to net income, earnings per share, or any other measures of financial performance calculated and presented in accordance with GAAP. You may refer to the attachments of the company's earnings release or to Part 1, Item 2 of the Form 10-Q for reconciliation of non-GAAP measures. And now, I'm pleased to introduce Robert D'Loren, Chairman and Chief Executive Officer. Bob, please go ahead.

[Robert D'Loren, Chairman and CEO at Xcel Brands]

Thank you, Paul. Good evening, everyone, and thank you for joining us today. I'd like to start today's call with a brief update on our performance for the first quarter and then our outlook for the remainder of the year. After that, our CFO, Jim Haran, will discuss our financial results in more detail. As I have previously mentioned, with the discontinuance of all wholesale operations behind us, we have returned to a working capital-light core licensing business. We have made significant headway toward improving our financial performance and operating results. Our total revenues for the first quarter declined year over year, given that this was our first quarter in several years with zero product sales from wholesale activities. Our licensing revenues were up across our brands, except for our LOGO, Lori Goldstein brand, which caused royalties to be flat.

[Robert D'Loren, Chairman and CEO at Xcel Brands]

And our bottom line on a non-GAAP basis showed significant improvement. Our adjusted EBITDA for the quarter improved by almost 50% from the prior year quarter. As we continue to gain traction and accelerate in future quarters, we expect our licensing revenues to grow and our bottom line results to continue to improve. We plan to launch our new brand, Tower Hill by Christie Brinkley, on HSN later this month, followed by the launch of additional categories of products outside of HSN starting this fall. To date, we have received strong interest from potential licensing partners for the brand across multiple categories, including footwear, handbags, beauty, and skincare. The C. Wonder by Christian Siriano brand is performing well. We expect to see retail sales volume up to about 20-25 million annually in 2024.

[Robert D'Loren, Chairman and CEO at Xcel Brands]

That's up 100% from last year's retail sales, with a goal of over $50 million in 2025, including HSN and other retailers. We will launch additional new core categories in footwear and handbags in spring of 2025. We also expect to announce the launch of another celebrity designer brand on HSN before the end of this year. We are working with JTV to offer greater product assortments, including our Judith Ripka couture jewelry products, both on air and on JTV.com. This has the potential to add over 50 million visitors to the Judith Ripka e-commerce business and allows for email marketing campaigns to an additional 2.1 million customers. We look forward to seeing strong sales momentum carry forward through 2024 and 2025. As previously discussed, G-III is on schedule to launch Halston this fall. We expect them to begin shipping shortly after the second quarter.

[Robert D'Loren, Chairman and CEO at Xcel Brands]

We expect revenues from this license to begin to pick up later this year and grow strongly in 2025 and beyond. Orme soft launched its video and social commerce marketplace approximately three weeks ago. The Orme team is doing a great job building awareness for the app and onboarding premier brands. They are pleased with the results to date. As I previously mentioned, this is a joint venture with a technology company in which Xcel owns a 30% interest in this new video and social commerce marketplace. We believe this marketplace has the potential to transform the video and social commerce markets in the US, and its growth potential potentially is virtually unlimited.

[Robert D'Loren, Chairman and CEO at Xcel Brands]

Based on all of the progress with Project Fundamentals, our strategic plan to get Xcel back to what made us successful over the years and the organic growth in our brands, we expect to return to profitability in 2024. I should note that our LOGO, Lori Goldstein business, was softer than expected in Q1 of 2024, caused by continued scheduling conflicts with talent. We continue to work with QVC and our on-air talent to reach a resolution for this. This includes identifying additional on-air guests to support the business or a satisfactory position of the brand. Also, we are working on launching a robust pipeline of new brands on QVC and HSN and other potential business opportunities as we seek to ensure continued growth in our core live stream interactive TV business. And now, I'd like to turn the call over to Jim to discuss our financial outlook. Jim.

[Jim Haran, CFO at Xcel Brands]

Thanks, Bob, and good evening, everyone. I will now briefly discuss our financial results for the quarter ended March 31st, 2024. Total revenue for the first quarter of 2024 was $2.2 million, representing a decrease of approximately $3.9 million from the first quarter of 2023. This decline was almost entirely driven by the decrease in net product sales to zero, resulting from our exit from all wholesale operating businesses as part of our Project Fundamentals planned in 2023 and 2024. Licensing revenue was approximately $2.2 million in both the current quarter and the prior year quarter. Licensing revenue was up across our brands, except for the Lori Goldstein brand, which caused royalties to be flat. Our direct operating costs and expenses were $4 million for the current quarter, down by $3 million, or 43% from $7 million in the prior year quarter.

[Jim Haran, CFO at Xcel Brands]

This decrease was mainly attributable to the discontinuance of all wholesale and e-commerce activities in 2023, which included reductions in staffing levels as well as related reductions in other overhead costs. With the Project Fundamentals initiative substantially completed last year, going forward, we expect our average direct operating costs to be less than $4 million per quarter. Overall, we had a net loss, excluding non-controlling interest, for the current quarter of approximately $6.3 million, or -$0.31 per share, compared with a net loss of $5.6 million, or -$0.29 per share in the prior year quarter. The current quarter's net loss includes a non-cash operating cost of $2.3 million due to asset impairment charges relating to our successful exit and subleasing of our prior office space as part of Project Fundamentals.

[Jim Haran, CFO at Xcel Brands]

On a non-GAAP basis, we had a net loss for the quarter of $1.8 million, or minus $0.09 per share, which represents a roughly 50% improvement from the non-GAAP net loss of $3.6 million, or minus $0.18 per share in the first quarter of 2023. Now that we have right-sized our cost structure, our non-GAAP net income should continue to improve in future periods as licensing revenues are projected to grow. Finally, adjusted EBITDA was negative $1.6 million for the current quarter, representing a year-over-year improvement of $1.6 million, or approximately 50% from the negative $3.2 million EBITDA in the prior year quarter. With our new cost structure in place and projected revenue growth, management anticipates achieving positive EBITDA later this year.

[Jim Haran, CFO at Xcel Brands]

Once again, I would like to take this opportunity to remind everyone that non-GAAP net income, non-GAAP diluted EPS, and adjusted EBITDA are non-GAAP unaudited terms. Our earnings press release and Form 10-Q present a reconciliation of these items with the most directly comparable GAAP measures. Now, turning to our balance sheet and liquidity. As of March 31st, 2024, the company had total cash and cash equivalents of approximately $2.3 million, of which $0.7 million was restricted. Our net working capital, excluding the current portion of lease obligations and deferred revenue, was approximately $2.1 million, which we believe is adequate and appropriate under our current licensing plus working capital-light business model.

[Jim Haran, CFO at Xcel Brands]

Since executing our Project Fundamentals plan, our cash usage has decreased significantly and is projected to continue to improve with the launch of Halston by G-III this fall, the launch of Tower Hill by Christie Brinkley later this month, and continued growth in our C. Wonder and Judith Ripka licensing businesses. In March 2024, we did a small common stock offering for net proceeds of approximately $2 million. This recent capital raise, combined with our current working capital position, lower operating costs, and balance sheet borrowing capacity, provides us with adequate liquidity to meet our obligations as they become due while growing our business. And with that, I would like to turn the call back over to Bob. Bob?

[Robert D'Loren, Chairman and CEO at Xcel Brands]

Thank you, Jim. Ladies and gentlemen, this concludes our prepared remarks. Operator.

[Operator]

We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. If you are called upon to ask your question and are listening by a loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. Again, press star one to join the queue. And your first question comes from the line of Michael Kupinski with Noble Capital Markets.

[Michael Kupinski, Analyst at Noble Capital Markets]

Taking my questions, and good afternoon. First of all, can you talk a little bit about Lori Goldstein and how much does that brand account for your total licensing revenue, maybe in the latest quarter and for the full year 2023? And then finally, can you talk a little bit about what you mean by options for a satisfactory disposition of the brand as a prospect there? What do you mean by that?

[Robert D'Loren, Chairman and CEO at Xcel Brands]

Okay. So the Lori Goldstein brand, Michael, generates about $5 million in top-line royalties. And because there's an earnout there with a contingent obligation that's booked on the balance sheet of about $5 million, the way the deal works is there's a sweep. It doesn't contribute a lot of cash flow to us. And we've been concerned about trends in the business and some of the complications of logistics for Lori herself now, having moved to Palm Springs and being able to get to West Chester, Pennsylvania, to give us the time that we need to really drive the sales. We've been challenged by that. Everyone is working through it. We are all doing whatever is necessary under the circumstances to keep the flow in the business as good as we can because no one wants to create any issues for QVC with the business.

[Robert D'Loren, Chairman and CEO at Xcel Brands]

And part of the negotiations are perhaps we would sell the brand back to Lori under satisfactory terms and conditions. And we're exploring all of that now in good faith on both sides.

[Michael Kupinski, Analyst at Noble Capital Markets]

Thank you. And then in terms of the launch of a Halston, obviously a big event for the company and a key factor to your swing toward profitability, you indicated that the shipping of the product would be after the second quarter. Was there a little slippage in that timing of that?

[Robert D'Loren, Chairman and CEO at Xcel Brands]

No, I don't think so. We anticipated initially when we signed the license with G-III that they would be launching in spring, but they pushed it out to fall because they're simultaneously launching apparel, footwear, and handbags, and they just couldn't get it all together for the spring launch. They may have already begun shipping some goods. We haven't received any shipping reports from them yet.

[Michael Kupinski, Analyst at Noble Capital Markets]

Gotcha. And then can you talk a little bit about Christie Brinkley, the brand there, in terms of the number of SKUs that you'd be launching initially, that sort of thing?

[Robert D'Loren, Chairman and CEO at Xcel Brands]

So the Christie launch is a full apparel collection, and that launches next week. We have a big press event that will hit simultaneously with the launch of the show. Christie was fantastic in the photo shoot for it. And it will be tops, bottoms, sweaters, full collection in apparel. And we are working now across multiple categories for bags, shoes, accessories, skincare, beauty, and possibly fragrance.

[Michael Kupinski, Analyst at Noble Capital Markets]

Gotcha. Final question. I'm sorry for so many. Can you give us an update on the number of vendors for Orme at this point and any particular update on when you might move towards a full-scale launch?

[Robert D'Loren, Chairman and CEO at Xcel Brands]

As far as we know from Orme, the pipeline of vendors now is between three to five per week coming on. We just onboarded Anne Klein. That will be the first of the WHP brand. And we're working with them to analyze which of their brands really works, given their model as a licensing company. They don't operate most of the e-comm sites. And then we expect other major brands to come on as well over the next 30 days.

[Michael Kupinski, Analyst at Noble Capital Markets]

Perfect. That's all I have for now. Thank you.

[Robert D'Loren, Chairman and CEO at Xcel Brands]

Thank you, Michael.

[Operator]

Your next question comes from the line of Anthony Lebiedzinski with Sidoti.

[Anthony Lebiedzinski, Analyst at Sidoti & Company]

Good afternoon, and thank you for taking the questions. So first, I just wanted to follow up on Lori Goldstein. So Bob, I know you talked about the continued scheduling conflicts. It sounds like it was meaningful for the quarter as the other brands were up. So any way you could quantify, take a stab at trying to share how much you think this was, how much this impacted your top line?

[Robert D'Loren, Chairman and CEO at Xcel Brands]

So we won't know for this year until and unless we reach a settlement agreement with Lori. We are close. I think it's in good shape. Everyone's been acting in good faith. Obviously, we'll have the first half of the year just because of timing to get anything done with Lori. But I think based on where we are in the discussions, it'll be good for us and the shareholders and good for Lori. That's where we are.

[Anthony Lebiedzinski, Analyst at Sidoti & Company]

Gotcha. Okay. All right. And it sounds like from a cash flow perspective, it's not overly meaningful, so it doesn't really take away from your goals to.

[Robert D'Loren, Chairman and CEO at Xcel Brands]

No, it's not, and with all the things that we have coming on, with the business doubling and C. Wonder and Halston getting launched, Christie getting launched, other things we have in the pipeline, because this wasn't a big cash flow contributor, we're happy with where we are in the negotiations with Lori.

[Anthony Lebiedzinski, Analyst at Sidoti & Company]

Gotcha. Okay. And then in terms of profitability for this year, I think you said that you expect to be positive EBITDA later this year. So do you mean for one of the quarters later this year, or do you think you'll be positive EBITDA for the full year? Just wanted to get a little bit more clarification in terms of that.

[Robert D'Loren, Chairman and CEO at Xcel Brands]

I think it will depend quarter by quarter and quite frankly how fast we see the ramp-up in the G-III license. But we expect for the full year, we'll be positive. And coming into Q3 and Q4, that's when we're going to see that pickup because that's really when G-III starts to ramp.

[Anthony Lebiedzinski, Analyst at Sidoti & Company]

So G-III, will it start already in July, or are we talking about later in the quarter? What's the timing so we just have a better understanding as to how the business will flow as the quarter, as the year progresses? I'm sorry.

[Robert D'Loren, Chairman and CEO at Xcel Brands]

Yeah. They should be shipping now. So we're going to wait for them to send to us their shipping reports. But to get in for fall, shipping is starting now.

[Anthony Lebiedzinski, Analyst at Sidoti & Company]

Okay. Gotcha. So it sounds like as the year progresses each quarter should be better from both a top-line and bottom-line perspective. Is that fair to say?

[Robert D'Loren, Chairman and CEO at Xcel Brands]

That's how we see it. Unless there's an adjustment for Lori, top-line may change, but we believe bottom-line and cash flow will be better.

[Anthony Lebiedzinski, Analyst at Sidoti & Company]

Okay. That's very encouraging. And then in terms of Orme, you talked about onboarding three to five per week. Do you think that perhaps could maybe accelerate as the year progresses as well, or do you think that's the pace that you'll be happy with if you can continue with that?

[Robert D'Loren, Chairman and CEO at Xcel Brands]

No, I think it will accelerate. Orme's been hiring staff, busy people. We're helping them with the bigger brands, making contacts for them. But they're staffing up and beginning to really operate.

[Anthony Lebiedzinski, Analyst at Sidoti & Company]

Gotcha. Okay. And you did a, I guess my last question here. So you did a small capital raise during the quarter. Do you think, given the state of business, that you should be all set, or do you project any other capital raises?

[Robert D'Loren, Chairman and CEO at Xcel Brands]

I think we're good for now, given where we are, and unless there's some kind of transaction that we have a need for cash, I don't foresee us doing another equity deal unless there's a need for the capital to affect the transaction.

[Anthony Lebiedzinski, Analyst at Sidoti & Company]

Got it. Very good. All right. Well, thank you, gentlemen, and best of luck.

[Robert D'Loren, Chairman and CEO at Xcel Brands]

Okay. Thank you, Anthony.

[Operator]

Again, if you would like to ask a question, press star then the number one on your telephone keypad. And your next question comes from the line of Howard Brous with Wellington Shields.

[Howard Brous, Analyst at Wellington Shields]

So a couple of questions that I have been asked, but not in the depth I'd like them. ORME, how many companies have you signed up, and can you give us some sense of names that have signed up?

[Robert D'Loren, Chairman and CEO at Xcel Brands]

Howard, one, we don't have daily reports from Orme. Remember, we own 30% of that company. We've invested in it. Orme's a private company, and they share some information, but not all information with us. What I can see coming through is they're adding three to five brands per week now to their pipeline. And of course, as brands come on, then they email those customer databases and recruit users for the app. And at some point, Orme will do its own capital raise and then report accordingly so that we all have a little more visibility into the Orme business. But there are some things that they're just not reporting on.

[Howard Brous, Analyst at Wellington Shields]

Do you know how many brands have signed up already?

[Robert D'Loren, Chairman and CEO at Xcel Brands]

Nine are on, and there's about another nine in the pipeline. The biggest one that was just put on is Anne Klein.

[Howard Brous, Analyst at Wellington Shields]

Looking at G-III and the minimum they've basically guaranteed to you, I'm looking at, if you will, next year's numbers. Is it fair to say that the EBITDA number certainly and directionally is increasing significantly? And can you comment on what people are looking for in terms of EBITDA for next year? And the estimate out there is, call it $11 million.

[Robert D'Loren, Chairman and CEO at Xcel Brands]

The catalyst for top-line and EBITDA are Halston, C. Wonder, and Christie going into next year. C. Wonder's doing incredibly well. It did $12.9 million in 2023. It's planned at approximately 25 for this year. We believe it could hit 50 next year based on the trend that it's on and the release now of handbags and footwear and some other licensed categories. And Christie, we believe, just has tremendous potential. There is another transaction that we will be executing on with HSN this year. It'll come in the latter part of Q3, possibly the beginning of Q4 for holiday season. And those will be the catalyst for revenue. And of course, Judith Ripka continues to do well with JTV.

[Robert D'Loren, Chairman and CEO at Xcel Brands]

They have decided to move all of the full-price product to JTV.com, which exposes that product to another 50 million unique visitors per year on Jewelry Television and gives us access to millions of customers for the Judith Ripka e-commerce business that they're running. So we're excited about what JTV is doing with Judith Ripka. And those will be the catalyst for growth. We do have other brands that we anticipate that we will be launching going into next year that could be immediate drivers of revenue. And we look forward to announcing those as we get closer to finalizing.

[Howard Brous, Analyst at Wellington Shields]

So is it fair to say the estimate for EBITDA for next year is how conservative? Let me ask it that way.

[Robert D'Loren, Chairman and CEO at Xcel Brands]

We're standing behind the estimates that are out there, Howard, based on what we see in the pipeline and the business.

[Howard Brous, Analyst at Wellington Shields]

So effectively, you're selling at one and a half times EBITDA for next year. Is that a fair comment?

[Robert D'Loren, Chairman and CEO at Xcel Brands]

It seems reasonable when you think about where that EBITDA can be. Yes.

[Howard Brous, Analyst at Wellington Shields]

That's all I have. Thank you. Good luck, Bob.

[Robert D'Loren, Chairman and CEO at Xcel Brands]

Thank you.

[Operator]

Your last question comes from the line of Michael Kupinski with Noble Capital Markets.

[Howard Brous, Analyst at Wellington Shields]

All right. Thanks. I'm sorry. Just one quick follow-up, Bob. In terms of the new brand you hope to launch, you said that I believe this might be featured on HSN. Will this be in a, can you give us any additional color on that, whether or not it's an apparel brand, or will it also be streaming? Can you just kind of give us a little additional color there?

[Robert D'Loren, Chairman and CEO at Xcel Brands]

Sure.

[Howard Brous, Analyst at Wellington Shields]

Maybe even some thoughts about how much revenue it might generate this year.

[Robert D'Loren, Chairman and CEO at Xcel Brands]

So it is an apparel brand, and it is with a celebrity designer. We don't think it'll contribute much this year, Michael, just because of when it's launching. But it will be a contributor coming into 2025. Just based on timing where we are now, it does look like holiday is when it will get out. But we're excited. It's a great opportunity, great designer, great product. We're not making that product. A licensee is doing it. And our goal is to do more of these at HSN, where each of these brands could be $30 million-$50 million in volume on HSN. That's the goal, so.

[Howard Brous, Analyst at Wellington Shields]

Perfect. Well, good luck with that. Thank you. That's all I have.

[Robert D'Loren, Chairman and CEO at Xcel Brands]

Thank you.

[Operator]

There are no further questions at this time. I will now turn the call back over to Mr. D'Loren for closing remarks.

[Jim Haran, CFO at Xcel Brands]

Bob, before you begin?

[Robert D'Loren, Chairman and CEO at Xcel Brands]

Yes.

[Jim Haran, CFO at Xcel Brands]

I just want to let everyone know that we had some technical difficulties getting our earnings release out. I was just informed that they fixed them, and the release should be going out momentarily. We did file our 10-Q earlier this afternoon, so apologies for having that release not issued prior to the call. So I just want to let everyone know we had technical issues with the release, and at least now it's fixed. So sorry about that.

[Robert D'Loren, Chairman and CEO at Xcel Brands]

Okay. So thank you, Jim. Ladies and gentlemen, thank you for your time this evening. We greatly appreciate your continued interest and support in Xcel Brands. As always, stay fit, eat well, and be healthy.

[Operator]

Ladies and gentlemen, that does conclude our conference call for today. You may all disconnect, and thank you for participating.

Participants

Executives

• Jim Haran, CFO
• Robert D'Loren, Chairman and CEO
• Paul Kuntz, Head of Investor Relations

Analysts

• Howard Brous, Analyst at Wellington Shields
• Michael Kupinski, Analyst at Noble Capital Markets
• Anthony Lebiedzinski, Analyst at Sidoti & Company