Sequential Brands Group reported a profit against a year-ago loss in the third quarter as sales declined slightly.
The company’s active brands include AND1, Avia, Gaiam, and SPRI. Other brands owned by Sequential Brands include Joe’s, Ellen Tracy, Jessica Simpson, William Rast, Heely’s, Caribbean Joe, DVS, and The Franklin Mint.
Total revenue from continuing operations for the third quarter ended September 30, 2020, was $24.0 million, compared to $25.4 million in the prior-year quarter. On a GAAP basis, income from continuing operations for the third quarter 2020 was $4.5 million or $2.71 per diluted share, compared to a loss from continuing operations for the third quarter 2019 of $18.4 million, or $11.31. Included in income from continuing operations for the third quarter 2020 was a $3.7 million gain on the sale of two non-core brands completed in July 2020.
Non-GAAP net income from continuing operations for the third quarter 2020 was $2.1 million, or $1.30 per diluted share, compared to a non-GAAP net loss of $900,000, or 53 cents, in the prior-year quarter.
Adjusted EBITDA from continuing operations for the third quarter of 2020 was $18.9 million, compared to $13.2 million in the prior-year quarter.
Year-To-Date 2020 Results From Continuing Operations
Total revenue from continuing operations for the nine months ended September 30, 2020 was $66.8 million, compared to $77.3 million in the prior-year period. On a GAAP basis, loss from continuing operations for the nine months ended September 30, 2020 was $(83.8) million or $(50.96) per diluted share, compared to $(26.4) million or $(16.36) per diluted share for the nine months ended September 30, 2019. Included in the loss from continuing operations for the nine months ended September 30, 2020 were non-cash impairment charges of $85.6 million for indefinite-lived intangible assets related to the trademarks for Jessica Simpson, Gaiam, Joe’s, and Ellen Tracy brands reflecting the financial impacts of COVID-19. Non-GAAP net loss from continuing operations for the nine months ended September 30, 2020 was $(10.0) million, or $(6.08) per diluted share, compared to $(7.7) million, or $(4.74) per diluted share, in the prior-year period. Adjusted EBITDA from continuing operations for the nine months ended September 30, 2020 was $43.7 million, compared to $37.7 million in the prior-year period.
COVID-19 Update
The impact of COVID-19 and the pace at which there are new developments that have created uncertainty in the current economic environment. The impacts of COVID-19 have adversely affected its near-term and long-term revenues, earnings, liquidity, and cash flow as certain licensees have requested temporary relief or deferred making scheduled payments. However, the situation is dynamic, and the company is not currently able to predict the full impact of COVID-19 on its results of operations and cash flows.
Liquidity and Financing Update
Sequential ended the third quarter with $22.2 million in cash, including restricted cash.
Photo courtesy Sequential Brands
