16 Aug Sequential Brands Sees Q2 Revenues Slide
Sequential Brands Group reported a loss in the second quarter as sales declined 20.2 percent.
“Our second quarter results reflect a transformation currently underway at Sequential. The first phase of that transition included the completion of the divestiture of the Martha Stewart and Emeril Lagasse brands which occurred during the quarter. The second phase, which is currently underway, is right sizing our operational cost structure to ensure it is aligned with the current business. We are confident that we are on the right path to best position our business for 2020,” said Karen Murray, CEO of Sequential.
Second Quarter 2019 Results from Continuing Operations:
Total revenue from continuing operations for the second quarter ended June 30, 2019 was $26.4 million, compared to $33.1 million in the prior year quarter. On a GAAP basis, net loss from continuing operations for the second quarter 2019 was $3.3 million or 5 cents per diluted share compared to net income from continuing operations for the second quarter 2018 of $2.2 million or $0.03 per diluted share. Non-GAAP net loss from continuing operations for the second quarter 2019 was $2.6 million, or $(0.04) per diluted share, compared to non-GAAP net income from continuing operations of $4.5 million, or $0.07 per diluted share, in the second quarter 2018.
Adjusted EBITDA from continuing operations for the second quarter of 2019 was $13.3 million, compared to $21.2 million in the prior year quarter.
Year-to-Date 2019 Results from Continuing Operations:
Total revenue from continuing operations for the six months ended June 30, 2019 was $51.9 million, compared to $62.6 million in the prior year period. On a GAAP basis, net loss from continuing operations for the six months ended June 30, 2019 was $(8.1) million or $(0.13) per diluted share compared to a net loss from continuing operations for the six months ended June 30, 2018 of $(1.4) million or $(0.02) per diluted share. Non-GAAP net loss from continuing operations for the six months ended June 30, 2019 was $(6.9) million, or $(0.11) per diluted share, compared to non-GAAP net income from continuing operations of $5.8 million, or $0.08 per diluted share, in the prior year period. Adjusted EBITDA from continuing operations for the six months ended June 30, 2019 was $24.6 million, compared to $39.0 million in the prior year period.
Discontinued Operations:
On June 10, 2019, Sequential completed its previously announced sale of 100% of the issued and outstanding equity interests of Martha Stewart Living Omnimedia, Inc. (“MSLO”), a Delaware corporation and a wholly-owned subsidiary of Sequential, for approximately $166 million in cash consideration at closing, plus additional amounts in respect of pre-closing accounts receivable that are received after the closing, subject to certain adjustments, to Marquee Brands LLC. The sale was made pursuant to the equity purchase agreement (“Purchase Agreement”) entered into on April 16, 2019. In addition, the Purchase Agreement provides for an earnout of up to $40 million if certain performance targets are achieved during each of the three calendar years ending December 31, 2020, December 31, 2021 and December 31, 2022.
Sequential’s after-tax net loss from discontinued operations was $(1.3) million and $(121.9) million for the three and six months ended June 30, 2019, respectively.
The company’s brands include Martha Stewart, And1, Avia, Gaiam, Heelys, DVS, Jessica Simpson, Joe’s, William Rast and Ellen Tracy.