Sequential Brands Group Inc., the parent of Avia, And1 and Gaiam, reported a steep loss in the first quarter due to an impairment charge related to the sale of the Martha Stewart and Emeril Lagasse brands. The company also noted that first quarter results came in below expectations.
“While first quarter results came in below expectations, we are excited to now focus on our active and fashion brands, which we believe have significant growth opportunities in the health, wellness and beauty space. Last month, we announced a definitive agreement to sell the Martha Stewart and Emeril Lagasse brands, which is on track to close in the second quarter. After the close, we expect to have an improved net leverage profile and additional cash on our balance sheet,” said Karen Murray, CEO of Sequential Brands Group.First Quarter 2019 Results:

Total revenue for the first quarter ended March 31, 2019 was $36.9 million, compared to $38.1 million in the prior year quarter. On a GAAP basis, net loss for the first quarter 2019 was $125.3 million or $1.95 per diluted share compared to a net loss for the first quarter 2018 of $2.3 million or 4 cents per diluted share. Included in the net loss for the first quarter 2019 was a $161.2 million impairment related to the sale of the Martha Stewart and Emeril Lagasse brands. Non-GAAP net loss for the first quarter 2019 was $800,000, or 1 cent per diluted share, compared to non-GAAP net income of $3.6 million, or 6 cents per diluted share, in the prior year period. Adjusted EBITDA for the first quarter of 2019 was $16.8 million, compared to $21.2 million in the prior year quarter.

The company’s brands include Martha Stewart, And1, Avia, Gaiam, Heelys, DVS, Jessica Simpson, Joe’s, William Rast and Ellen Tracy.