Sequential Brands Group, the parent of Gaiam, And1 and Avia, reported a net loss of $2.3 million, or 4 cents, in the first quarter.
On a non-GAAP basis, net income for the first quarter was $3.6 million, or $0.06 per diluted share. Revenue was $38.1 million in the period.
Effective January 1, 2018, the company adopted a new revenue recognition standard, ASC 606, which impacted the company’s reported revenue. The new methodology resulted in a positive adjustment to retained earnings of $1.1 million on the adoption date and first quarter 2018 revenue that is $1.3 million lower than revenue recognized under the previous standard. The accounting change does not impact the underlying business momentum and has no impact on free cash flow.
Sequential Brands did not provide year-ago comparisons under the news standard.
Under the old revenue recognition standard:
- Revenue for the first quarter of 2018 would have been $39.4 million, flat compared to 2017.
- Net loss for the first quarter of 2018 would have been $1.3 million, or 2 cents per share, compared to net loss in the prior year’s first quarter of $1.2 million, or 2 cents.
- Non-GAAP net income for the first quarter would have been $4.9 million, or $0.08 per diluted share, compared to $5.9 million, or $0.09 per diluted share, in the prior year period.
- Adjusted EBITDA for the first quarter of 2018 would have been $22.5 million, compared to $23.0 million in the prior year quarter.
“We are encouraged by our solid start to 2018 and the momentum underway across our portfolio of strong, diversified brands,” said Karen Murray, CEO of Sequential Brands Group. “We remain focused on executing against our strategic plan to grow revenue, manage costs and improve our balance sheet.”
Sequential Brand’s other brands include Jessica Simpson, William Rast, Heelys, Joe’s Jeans, Martha Stewart, Chef Emeril, Revo, DVS and Ellen Tracy.
