iMedia Brands Inc (IMBI) 2022 Q3 法說會逐字稿

Hello, and welcome to iMedia Brands, Inc., Third Quarter 2022 Earnings Call. (Operator Instructions) As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Alex Wasserburger, Vice President, Deputy General Counsel. Please go ahead, Alex.

您好，歡迎來到 iMedia Brands, Inc. 2022 年第三季度財報電話會議。 （操作員說明）提醒一下，正在錄製此會議。現在我很高興將電話轉給副總裁兼副總法律顧問 Alex Wasserburger。請繼續，亞歷克斯。

Good morning, and thank you for joining us. We issued our Q3 earnings release earlier this morning. If you do not have a copy, it is available through the news section of our IR website at imediabrands.com. This release is also an exhibit to the Form 8-K we filed this morning. A webcast recording of this call will be available via the link provided in today's press release as well as on our IR section of our website.

早上好，感謝您加入我們。我們今天早上早些時候發布了第三季度收益報告。如果您沒有副本，可通過我們 IR 網站 imediabrands.com 的新聞部分獲取。此版本也是我們今天早上提交的 8-K 表格的展示。可通過今天的新聞稿中提供的鏈接以及我們網站的 IR 部分獲取此次通話的網絡廣播錄音。

Some of the statements made during this call are considered forward-looking and are subject to significant risks and uncertainties. These statements reflect our expectations about future operating and financial performance and speak only as of today's date. We undertake no obligation to update or revise these forward-looking statements. We believe the expectations reflected in our forward-looking statements are reasonable but give no assurance such expectations or any of our forward-looking statements will prove to be correct.

本次電話會議期間做出的一些聲明被認為是前瞻性的，並受到重大風險和不確定性的影響。這些聲明反映了我們對未來運營和財務業績的預期，並且僅代表今天的情況。我們不承擔更新或修改這些前瞻性陳述的義務。我們認為我們的前瞻性陳述中反映的預期是合理的，但不保證此類預期或我們的任何前瞻性陳述將被證明是正確的。

For additional information, please refer to the cautionary statement in today's earnings release and our SEC filings.

有關更多信息，請參閱今天的收益發布和我們向美國證券交易委員會提交的文件中的警示性聲明。

Finally, we will make references to non-GAAP measures on this call such as adjusted EBITDA. Please refer to our earnings release for further information about these measures, including reconciliations to the most comparable GAAP measures, where possible with reasonable efforts.

最後，我們將在本次電話會議上提及非 GAAP 指標，例如調整後的 EBITDA。請參閱我們的收益發布，了解有關這些措施的更多信息，包括在可能的情況下與最可比的 GAAP 措施的對賬。

Now I would like to turn the call over to the CEO of iMedia Brands, Tim Peterman. Tim?

現在我想把電話轉給 iMedia Brands 的首席執行官蒂姆彼得曼。蒂姆？

Thank you, Alex, and good morning, everyone. I'll start today with the obvious. It's a tough environment out there. Some challenges we expected like the struggling U.S. economy and some we did not like the extended Russian conflict. Although we intellectually understand all of these are short term in nature, it still significantly rises our risk radar, right? Risks in job security, risks in fundamental consumer-centric business models, risks in our investments, in our loans.

謝謝你，亞歷克斯，大家早上好。我將從今天開始。那裡的環境很艱苦。有些挑戰我們預料到了，比如陷入困境的美國經濟，有些我們不喜歡俄羅斯衝突的擴大。儘管我們從理智上理解所有這些本質上都是短期的，但它仍然顯著提高了我們的風險雷達，對吧？工作保障的風險，以消費者為中心的基本商業模式的風險，我們投資和貸款的風險。

Therefore, today, I'd like to start with 3 topics that I know our investors prioritize today -- debt, liquidity and working capital. In February, we explained our debt and liquidity management plan, and I'm excited to say that we are positioned to exceed all of our goals stated then.

因此，今天，我想從我知道我們的投資者今天優先考慮的 3 個主題開始——債務、流動性和營運資金。 2 月，我們解釋了我們的債務和流動性管理計劃，我很高興地說，我們有能力超越當時提出的所有目標。

From a working capital perspective, year-to-date this year, we have generated $5 million in positive working capital. Last year at this point, we had used $41 million in working capital, which means this year, we have improved our working capital management by roughly $46 million. From a debt reduction perspective, during our Capital Markets Day in February, we talked about a $25 million target for debt reduction by year-end.

從營運資金的角度來看，今年年初至今，我們已經產生了 500 萬美元的正營運資金。去年此時，我們使用了 4100 萬美元的營運資金，這意味著今年我們將營運資金管理改善了大約 4600 萬美元。從減債的角度來看，在 2 月份的資本市場日期間，我們談到了到年底減債 2500 萬美元的目標。

To date, we have reduced our debt by $7 million. On November 8, we executed an LOI with a real estate firm to sell 3 of iMedia's 4 buildings for $48 million in a sale leaseback transaction. Because of our roughly $380 million in NOLs, our gain on this transaction will seem tax-free. We remain confident we will close this transaction in Q4, and our goal is actually to close in December.

迄今為止，我們已經減少了 700 萬美元的債務。 11 月 8 日，我們與一家房地產公司簽署了一份意向書，以 4800 萬美元的價格出售 iMedia 4 棟建築中的 3 棟。由於我們大約有 3.8 億美元的 NOL，我們從這筆交易中獲得的收益似乎是免稅的。我們仍然有信心在第四季度完成這筆交易，我們的目標實際上是在 12 月完成。

In terms of our use of the $44 million in estimated net proceeds, we plan to retire the $28.5 million Green Lake term loan and used the remaining $16 million to reduce our ABL loan, which in short increases our working capital to fund our growth. This means combined, we are positioned to reduce our debt by roughly $50 million or 200% of our target.

就我們對 4400 萬美元估計淨收益的使用而言，我們計劃償還 2850 萬美元的 Green Lake 定期貸款，並使用剩餘的 1600 萬美元減少我們的 ABL 貸款，簡而言之，這增加了我們的營運資金，為我們的增長提供資金。這意味著我們可以將債務減少大約 5000 萬美元或我們目標的 200%。

Our interest savings alone next year will be over $4 million. With that important update complete, let's turn our discussion to our core, our television networks, ShopHQ, 1-2-3.tv, ShopBulldogTV and ShopHQHealth and how we are engaging our customers in this challenging environment that will likely be here for several quarters.

僅我們明年的利息節省就將超過 400 萬美元。隨著這一重要更新的完成，讓我們將討論轉向我們的核心、我們的電視網絡、ShopHQ、1-2-3.tv、ShopBulldogTV 和 ShopHQHealth，以及我們如何在這個可能會持續幾個季度的充滿挑戰的環境中吸引我們的客戶.

From an overall company perspective, before we move into each network, our customer report card is great. For the 7th successive quarter, iMedia posted year-over-year customer file growth in Q3 this quarter by 15%. And as we discussed in our last earnings call, our strategy to increase the upcoming Q3 promotional activity turned out to be very successful.

從整個公司的角度來看，在我們進入每個網絡之前，我們的客戶報告卡都很棒。連續第 7 個季度，iMedia 在本季度第三季度的客戶檔案同比增長 15%。正如我們在上次財報電話會議上討論的那樣，我們增加即將到來的第三季度促銷活動的策略結果非常成功。

Today, unlike many of our previous earnings calls, I'd like to start our conversation talking about 1-2-3.tv, our vibrant and growing television network in Germany in spite of the Russian conflict's ongoing negative impact on the German economy and its energy resources.

今天，與我們之前的許多財報電話會議不同，我想開始我們的談話，談論 1-2-3.tv，儘管俄羅斯衝突對德國經濟和經濟造成持續的負面影響，但我們在德國充滿活力且不斷發展的電視網絡它的能源資源。

Under the new leadership of Michael Hoinka, President; and Eberhard Kuom, CFO and COO, I'm pleased to share their progress today as they continue to successfully optimize merchandise margins, increase price points, drive viewership engagement and improve profitability. A couple of KPIs that will demonstrate their success.

在總裁 Michael Hoinka 的新領導下；和首席財務官兼首席運營官 Eberhard Kuom，我很高興今天能分享他們的進展，因為他們繼續成功優化商品利潤率、提高價格點、推動收視率參與和提高盈利能力。將證明其成功的幾個 KPI。

Q3's net revenue per customer was EUR 132, which was a 4% increase over Q2. Q3's average selling price was EUR 21.4, a 14% over Q2 and one of the foundational elements of what the company is doing today to improve its profitability. Q3's ending inventory was 23% lower than Q2's ending inventory, which means not only are they doing it with margin and with balance, they're doing it in a very fast-turning inventory environment.

第三季度每位客戶的淨收入為 132 歐元，比第二季度增長 4%。第三季度的平均售價為 21.4 歐元，比第二季度高出 14%，這也是公司目前為提高盈利能力所做工作的基本要素之一。第三季度的期末庫存比第二季度的期末庫存低 23%，這意味著他們不僅在保證金和平衡的情況下這樣做，而且他們是在一個非常快速周轉的庫存環境中這樣做的。

In addition, Q3 staffing costs were 15% lower than Q2 staffing costs. So hats off to Michael and Eberhard who are doing a great job. In addition to growing the core business, Michael and Eberhard are also working with their technology team headed by Manuel. I'm going to make this an attempt, (inaudible) who is their technology lead, and they are doing an amazing job bringing their shopping auction widget to ShopHQ for a soft launch in December or early January. We're very excited about this opportunity, and we can talk more about that during the Q&A session.

此外，第三季度的人員成本比第二季度的人員成本低 15%。因此，向工作出色的邁克爾和埃伯哈德致敬。除了發展核心業務，Michael 和 Eberhard 還與 Manuel 領導的技術團隊合作。我打算嘗試一下，（聽不清）誰是他們的技術負責人，他們做得非常出色，將他們的購物拍賣小部件帶到 ShopHQ，以便在 12 月或 1 月初進行軟啟動。我們對這個機會感到非常興奮，我們可以在問答環節中更多地討論這個問題。

Let's now turn our attention to ShopHQ as the team there is well prepared for the holiday season with a great level of inventory, an unbelievable schedule of great shows and a number of new brands and returning brands for our customers. As a matter of fact, we continue to attract former brands who are returning to us, including Joyce Giraud; Gems en Vogue; Naturally, Danny Seo; and Elizabeth Grant International.

現在讓我們把注意力轉向 ShopHQ，因為那裡的團隊為假期做好了充分的準備，擁有大量庫存、令人難以置信的精彩表演時間表以及許多新品牌和為我們的客戶回歸的品牌。事實上，我們不斷吸引前品牌回歸，包括 Joyce Giraud；時尚寶石；當然，Danny Seo；和伊麗莎白格蘭特國際。

In the past, these brands in aggregate generated over $50 million in annual revenues for ShopHQ and we feel great about their return. Our strategy to drive consumer engagement in Q4 will be based on the same type of promotional activity that we did in Q3. It won't dominate our selling efforts like it has done with other retailers, but it will be an important component.

過去，這些品牌總共為 ShopHQ 創造了超過 5000 萬美元的年收入，我們對他們的回報感到非常高興。我們在第四季度推動消費者參與的戰略將基於我們在第三季度開展的相同類型的促銷活動。它不會像其他零售商那樣主導我們的銷售工作，但它將成為一個重要的組成部分。

Also related to ShopHQ, as we did in Q2 with some of our smaller online marketplace businesses that we decided to either sell or shut down, we completed a very disciplined capital allocation process with the ShopHQ teams in Q3, and as a result, we made the decision to end our relationship with Shaquille O'Neal.

同樣與 ShopHQ 相關，正如我們在第二季度對我們決定出售或關閉的一些較小的在線市場業務所做的那樣，我們在第三季度與 ShopHQ 團隊完成了非常嚴格的資本分配流程，因此，我們取得了決定結束我們與沙奎爾奧尼爾的關係。

Sometimes in this business, you are surprised, and this is really one of those times. Back in early 2020, we felt Shaq's products would be a perfect fit for our audience. However, rather than force a fit that was just not there, we felt an amicable-parting was best for both sides. I have nothing but absolutely great things to say about Shaq and the ABG team, and we wish them the best.

有時在這項業務中，您會感到驚訝，而這確實是其中之一。早在 2020 年初，我們就認為 Shaq 的產品非常適合我們的觀眾。然而，我們認為友好分手對雙方來說都是最好的，而不是強迫不存在的合適。關於 Shaq 和 ABG 團隊，我只能說非常棒的事情，我們希望他們一切順利。

In conjunction with this contract termination, we incurred a onetime noncash charge of $10 million in Q3. Finally, as I'm sure you read in our recent release, ShopHQ relaunched on DISH yesterday, on the very same 2 channels we occupied before, channels 134 and 244. I can't say enough good things about the DISH team, and we are excited to be engaging again with some of our best customers on the DISH platform.

在終止合同的同時，我們在第三季度產生了 1000 萬美元的一次性非現金費用。最後，正如我確定您在我們最近發布的新聞中看到的那樣，ShopHQ 昨天在 DISH 上重新啟動，在我們之前佔用的兩個頻道上，頻道 134 和 244。關於 DISH 團隊，我不能說太多好話，我們很高興再次與 DISH 平台上的一些最佳客戶互動。

Now I'd like to give you my perspective on our overall financial performance in the third quarter. Revenue was a little softer than we anticipated, and our adjusted EBITDA was a little bit better. From an operating expense perspective, our general and administrative costs were up about $10 million driven by the Shaq write-off. In terms of our selling and distribution costs, the $4 million reduction this year is related primarily to the content distribution cost from DISH and Charter carriage of Bulldog and Health last year that were not present this year.

現在我想談談我對第三季度整體財務表現的看法。收入比我們預期的要軟一些，我們調整後的 EBITDA 也要好一些。從運營費用的角度來看，由於 Shaq 的註銷，我們的一般和行政成本增加了約 1000 萬美元。就我們的銷售和分銷成本而言，今年 400 萬美元的減少主要與去年 Bulldog 和 Health 的 DISH 和包機運輸的內容分發成本有關，而今年沒有這些成本。

Our third quarter net loss was $21.3 million or $0.72 per common share. This again included the $10 million Shaq charge. Regarding liquidity and capital resources, as of the end of Q3, total unrestricted cash was $9.1 million. As I previously mentioned, we expect to complete the $48 million sale-leaseback transaction in Q4. We plan to use our NOLs to offset the tax gain, and our planned use of proceeds is to reduce debt and increase working capital.

我們第三季度的淨虧損為 2130 萬美元或每股普通股 0.72 美元。這又包括了 1000 萬美元的 Shaq 費用。關於流動性和資本資源，截至第三季度末，不受限制的現金總額為 910 萬美元。正如我之前提到的，我們預計將在第四季度完成 4800 萬美元的售後回租交易。我們計劃使用我們的 NOL 來抵消稅收收益，我們計劃將收益用於減少債務和增加營運資金。

Regarding our outlook for the fourth quarter 2022, we expect the holiday season to be challenging and promotional. Accordingly, we anticipate reporting net sales of approximately $177 million, which is a 9% decline over the same prior year period. We anticipate reporting adjusted EBITDA of approximately $16 million, which is a 6% increase over the same prior year period. We continue to expect to post positive quarterly earnings per share in Q4 2022.

關於我們對 2022 年第四季度的展望，我們預計假期將充滿挑戰和促銷。因此，我們預計報告的淨銷售額約為 1.77 億美元，比去年同期下降 9%。我們預計報告調整後的 EBITDA 約為 1600 萬美元，比去年同期增長 6%。我們繼續預計 2022 年第四季度每股收益為正。

For the full year, we anticipate reporting revenue of approximately $588 million, which is a 7% increase compared to full year 2021. We expect to report full year 2022 adjusted EBITDA of $39 million, a 7% decline compared to prior year. As a final reminder, from a tax perspective, we have approximately $380 million in federal NOLs that should be available to us to offset future taxable income. Thank you for your time this morning.

對於全年，我們預計報告收入約為 5.88 億美元，與 2021 年全年相比增長 7%。我們預計 2022 年全年調整後 EBITDA 為 3900 萬美元，與上一年相比下降 7%。最後提醒一下，從稅收的角度來看，我們應該可以使用大約 3.8 億美元的聯邦 NOL 來抵消未來的應稅收入。謝謝你今天早上的時間。

Tom and I are now pleased to take any questions.

湯姆和我現在很樂意回答任何問題。

(Operator Instructions) Our first question today is coming from Thomas Forte from D.A. Davidson.

（操作員說明）我們今天的第一個問題來自 D.A. 的 Thomas Forte。戴維森。

Great. One question, one follow-up. So -- as a long-term follower of the video retailing category, historically, there's been more resilience. The customers held up better than, call it, the target Walmart customer. Can you compare how this environment is affecting your core customer versus other periods that were challenging such as the Great Recession in 2008, 2010 or any other periods of macroeconomic business that you think are applicable?

偉大的。一問一跟。所以——作為視頻零售類別的長期追隨者，從歷史上看，它具有更大的彈性。客戶比目標沃爾瑪客戶更好。您能否將這種環境如何影響您的核心客戶與其他具有挑戰性的時期（例如 2008 年、2010 年的大衰退或您認為適用的任何其他宏觀經濟業務時期）進行比較？

Sure, Tom. It's a great question. The -- if you take a step back and say, what are we doing here, which is we're really building television networks today that have 3 supporting revenue streams -- advertising, t-commerce and e-commerce. That by itself is very different than in 2008 and 2009, at least for this company and t-commerce in general.

當然，湯姆。這是一個很好的問題。如果你退後一步說，我們在這裡做什麼，我們今天真的在建立電視網絡，它有 3 個支持收入來源——廣告、t-commerce 和電子商務。這本身就與 2008 年和 2009 年有很大不同，至少對於這家公司和整個電子商務來說是這樣。

Because as we think about our performance this year, our advertising arm, IMBI continues to outperform expectations. And really, although they would -- we believe even more outperformed, they've certainly done better than previous year and are growing well. So that has not been affected and that helps our television networks as a balance and also as a catalyst offering advertisers that come on as well as brands, this opportunity for digital advertising and on-air television.

因為當我們考慮今年的表現時，我們的廣告部門 IMBI 的表現繼續超出預期。實際上，儘管他們會——我們相信他們的表現會更好，但他們肯定比前一年做得更好，而且增長良好。所以這並沒有受到影響，這有助於我們的電視網絡作為一種平衡，也作為一種催化劑，為廣告商和品牌提供數字廣告和直播電視的機會。

So number one, the revenue streams are more balanced. That gives us the opportunity to withstand some of the -- some of these things that are very centric to TV retailing, very centric to retail. When you take another step back and say, okay, well, how is it that we, for example, were able to maintain our margin in this environment, right? That was a very challenging environment we just went through in Q3. We had margins year-over-year that are the same.

因此，第一，收入來源更加平衡。這讓我們有機會承受一些——其中一些對電視零售非常重要，對零售非常重要的事情。當你退後一步說，好吧，好吧，例如，我們如何能夠在這種環境下保持利潤率，對嗎？這是我們剛剛在第三季度經歷的一個非常具有挑戰性的環境。我們的利潤率同比是相同的。

I've already talked about how ShopHQ was more promotional in Q3. And therefore, it's gross margin was going down, but that was balanced by an improvement in margin from our Germany TV network 1-2-3.tv by Christopher & Banks and certainly by iMDS.

我已經談到了 ShopHQ 在第三季度的促銷活動。因此，它的毛利率在下降，但這與我們德國電視網絡 1-2-3.tv 的利潤率提高相平衡，克里斯托弗和班克斯當然還有 iMDS。

So the durability of our business model to withstand surprises like a DISH disruption in carriage or even macroeconomic pressures like we have in the U.S. or in Germany is pretty solid. And the results speak to that. A 6% decline in revenue and flat margin, while just giving a surprise disruption from DISH and phasing down these promotional environment, we feel very good about it. So that's the reason that we have spent the last 3 years constructing this framework to have 4 television networks, each supported by 3 revenue streams.

因此，我們的商業模式能夠承受諸如 DISH 運輸中斷或什至像我們在美國或德國遇到的宏觀經濟壓力這樣的意外事件的持久性非常穩固。結果說明了這一點。收入下降 6%，利潤率持平，而 DISH 的意外中斷和逐步減少這些促銷環境，我們對此感覺非常好。這就是我們在過去 3 年中構建這個框架以擁有 4 個電視網絡的原因，每個電視網絡由 3 個收入流支持。

And then as a follow-up, now that you're back on DISH, how do you think about your carriage again for ShopHQ? And how do you think about your opportunities in the future to potentially improve the cost of carriage?

然後作為後續行動，既然你回到了 DISH，你如何看待你再次為 ShopHQ 準備的馬車？您如何看待未來可能降低運輸成本的機會？

As we've talked about, Tom, the entire secret of ShopHQ's profitability growth is around reducing our percent of really our content distribution cost as a percent of net sales. This -- our DISH renewal was an important step forward for us in the future, each of our renewals is centered to reducing the cost in the future, but also in increasing the productivity.

正如我們所說，湯姆，ShopHQ 盈利能力增長的全部秘訣在於降低我們的內容分發成本占淨銷售額的百分比。這——我們的 DISH 更新是我們未來向前邁出的重要一步，我們的每一次更新都以降低未來成本為中心，同時也以提高生產力為中心。

So we work with our distributors to make sure that we're being promoted to make sure we're in the HD neighborhood. It isn't just always about cost, it's about both cost and about driving the core productivity of ShopHQ.

因此，我們與我們的分銷商合作，確保我們得到提升，以確保我們在 HD 社區。這並不總是與成本有關，它既與成本有關，也與推動 ShopHQ 的核心生產力有關。

In addition, it's about our smaller networks, ShopHQHealth, ShopBulldogTV. All of those contribute to drive down the content distribution costs as a percent of net sales. It is a journey that we began, as you know, 2 years ago and each year, we're making progress in bringing it down because all 3 of those strategies are smaller networks. Cost as a percent -- cost from the distributor as well as revenue productivity in our flagship, ShopHQ, is critical.

此外，它還涉及我們的小型網絡 ShopHQHealth、ShopBulldogTV。所有這些都有助於降低內容分發成本占淨銷售額的百分比。如您所知，這是我們 2 年前開始的旅程，每年我們都在降低它方面取得進展，因為所有這 3 個策略都是較小的網絡。成本百分比——來自分銷商的成本以及我們旗艦店 ShopHQ 的收入生產力至關重要。

For example, 1-2-3.tv already has a content distribution costs as a percent of their net sales in the mid- to low-single digits. So they're already in the place that ShopHQ will be, we believe, in the next 12 to 18 months.

例如，1-2-3.tv 的內容分發成本佔其淨銷售額的百分比已經處於中低個位數。因此，我們相信，在未來 12 到 18 個月內，他們已經處於 ShopHQ 的位置。

Next question today is coming from Mark Argento from Lake Street Capital.

今天的下一個問題來自 Lake Street Capital 的 Mark Argento。

Tim, just a couple of quick ones. I was hoping you could peel the onion a little bit. It looks like units were up pretty nicely on a year-over-year basis. ASPs were down, customers up. Maybe just talk a little bit about what you're actually seeing with the customers right now as you move into the holidays?

蒂姆，只是幾個快速的。我希望你能把洋蔥剝一點。看起來單位同比增長相當不錯。平均售價下降，客戶增加。也許只是談談您在進入假期時與客戶實際看到的內容？

Sure thing, Mark, the numbers you're seeing are aggregated between 1-2-3.tv and ShopHQ. So there is -- that's the first point we need to make is that 1-2-3.tv's units, their average, when we talk about ASP or AOV, the ASP average selling price is not even half of what ShopHQ is, and that was one of the core things that was important for us to fix at the 1-2-3.tv business and their customer profile was we need to make sure that the ASP is growing in a way in categories that they do well in so that when we do promotional events or we do free shipping or we engage the customer, and we had to pick pack and ship it, we're not doing 10 units to get to $100. We're doing 5 units or 4 units. And that critical business model shift is what you see every single quarter from us.

當然，馬克，你看到的數字是在 1-2-3.tv 和 ShopHQ 之間匯總的。所以 - 這是我們需要做的第一點是 1-2-3.tv 的單位，它們的平均值，當我們談論 ASP 或 AOV 時，ASP 平均售價甚至不到 ShopHQ 的一半，並且這是我們在 1-2-3.tv 業務和他們的客戶資料中解決的重要核心問題之一，我們需要確保 ASP 在他們擅長的類別中以某種方式增長當我們進行促銷活動或免費送貨或吸引客戶時，我們必須挑選包裝並運送，我們不會做 10 個單位才能達到 100 美元。我們正在做 5 個單元或 4 個單元。這種關鍵的商業模式轉變是您在我們每個季度看到的。

And you'll see that the units will start to calm down again and move -- the ASP will start to move up again. That's just simply fixing the challenges of 1-2-3.tv, which were exactly the same as they were at ShopHQ when I returned in the middle of 2019. These are fundamental things we know how to fix. That was one of the exciting things we saw in the opportunities of 1-2-3.tv beyond the strategy and the -- what I would call the catalyst of bringing their expertise for gamification into ShopHQ, which as I noted, we're doing a soft launch of their auction shopping widget. I'll give the way the secret sauce of today's top option instead of today's top value, but both will be featured on ShopHQ as we tweak that model and that consumer experience, and we head down the path for the spring of next year around doing the same thing in disrupting travel.

您會看到單位將再次開始平靜下來並開始移動——ASP 將再次開始上升。這只是簡單地解決了 1-2-3.tv 的挑戰，這些挑戰與我在 2019 年年中返回時在 ShopHQ 的挑戰完全相同。這些是我們知道如何解決的基本問題。這是我們在 1-2-3.tv 的機會中看到的令人興奮的事情之一，除了戰略和 - 我稱之為將他們的遊戲化專業知識帶入 ShopHQ 的催化劑，正如我指出的那樣，我們正在試運行他們的拍賣購物小部件。我會給出今天頂級選項的秘訣，而不是今天的最高價值，但隨著我們調整該模型和消費者體驗，兩者都將出現在 ShopHQ 上，我們將在明年春天沿著這條路走下去擾亂旅行也是如此。

Just a follow-up on the domestic business. From an inventory perspective, how are you feeling about your kind of mix of product relative to what you think consumers are gravitating towards here as you move into the holidays?

只是對國內業務的跟進。從庫存的角度來看，當您進入假期時，相對於您認為消費者傾向於這裡的產品，您如何看待您的產品組合？

Great question. I was wondering you have to read the room. I think that the most important thing we discovered in the last, call it, 4 years, was that, that idea of capturing what the customer wants and the imagination of the customer that's timely and that you can often bet wrong on is around consumer electronics and the big items like that and what you're taking in. And those customers, the reason it's so risky is that if you get it wrong, you're sitting on a lot of inventory and those customers only come around once.

很好的問題。我想知道你必須閱讀房間。我認為我們在過去 4 年裡發現的最重要的事情是，捕捉客戶想要的東西和客戶的想像力的想法是及時的，而且你經常會打錯賭的是消費電子產品以及像這樣的大件物品以及你要接收的東西。還有那些客戶，風險如此之大的原因是，如果你弄錯了，你就會坐擁大量庫存，而這些客戶只會來一次。

So you saw us really move out of consumer electronics for the holiday season in '19 and '20 and '21. And we really only focus on our core wearables strategy. The elements that we do have, some of the gaming stuff and some of the fun stuff we do have, is stuff that we sell a year round from the drones and the cars and these other things. And we do those internally so we can avoid the other mousetrap of consumer electronics, which is the low margin.

所以你看到我們真的在 19 年、20 年和 21 年的假期裡離開了消費電子產品。我們真的只專注於我們的核心可穿戴設備戰略。我們擁有的元素，一些遊戲和一些我們擁有的有趣的東西，是我們全年通過無人機、汽車和其他東西銷售的東西。我們在內部做這些，這樣我們就可以避免消費電子產品的另一個捕鼠器，即低利潤率。

So that's -- we feel like we have a great selection of product for ShopHQ and some of the brands on ShopHQ weren't better positioned as well. Christopher & Banks, for example, last holiday season, we had some late shipments still because of logistics. We were able to get all that in, in the first quarter, and it's just been waiting to be sold for 9 months, and that is -- so we feel like we're in great shape there in the holiday season for Christopher & Banks.

這就是 - 我們覺得我們為 ShopHQ 提供了很多產品選擇，而 ShopHQ 上的一些品牌也沒有更好的定位。例如，Christopher & Banks，在上個假日季節，由於物流原因，我們仍有一些延遲發貨。我們能夠在第一季度獲得所有這些，並且它已經等待出售 9 個月了，也就是說 - 所以我們覺得我們在克里斯托弗和班克斯的假期期間處於良好狀態.

Then last question for me. You've talked a little bit about capital allocation and prioritizing liquefying the balance sheet as much as possible. Is there anything that would prohibit you guys from potentially doing a buyback of any sort here with the equity at market cap of roughly $15 million, even a small amount of dollars would go a long way there. But is there anything that's prohibiting you guys at this point now, hopefully, once you get the deal closed on the sale leaseback from potentially buying back some stock?

然後是我的最後一個問題。你已經談到了一些關於資本配置和盡可能優先流動資產負債表的問題。有什麼會阻止你們在這里以大約 1500 萬美元的市值進行任何形式的回購，即使是少量的美元也會有很長的路要走。但是，現在有什麼事情會阻止你們，希望一旦你們在售後回租交易結束後可能回購一些股票？

Great question. It is one that we wrestle with all the time. Right now, we're focused on, obviously, the debt reduction and closing the transaction. In terms of the additional liquidity and what the IRR would be on that additional liquidity and how it's deployed, we talk about that all the time with our Board and our stakeholders, and we will make that call when it comes up. But certainly, there is an opportunity, a very large -- as I would call a large disconnect between the equity value, the enterprise value as it relates to the business what we're doing and what we've done.

很好的問題。這是我們一直在與之搏鬥的問題。現在，我們顯然專注於減少債務和完成交易。關於額外的流動性以及額外流動性的 IRR 是多少以及它的部署方式，我們一直在與董事會和利益相關者討論這個問題，我們會在它出現時做出決定。但當然，有一個機會，一個非常大的 - 正如我所說的股權價值，企業價值之間的巨大脫節，因為它與我們正在做的事情和我們已經做過的事情有關。

So we think that's going to work itself through and certainly, in certain circumstances, at onetime events, buybacks do have impact. I am a subscriber to that since the book, The Outsiders, where they -- I think where they talked about certain opportunities for stock buybacks.

所以我們認為這會自行解決，當然，在某些情況下，在一次性事件中，回購確實會產生影響。自從《局外人》一書以來，我一直是這本書的訂閱者，我認為他們在那裡談論了某些股票回購的機會。

The next question is coming from Eric Wold from B. Riley Securities.

下一個問題來自 B. Riley Securities 的 Eric Wold。

A couple of questions, I guess. I guess, first off on the sale leaseback. Can you maybe kind of talk about how that played out versus what you may have expected when the board first approved going forward that if you wanted to go, anything come out better or worse you may have thought? And then is there a plan -- the press release alluded a fourth building that was not included in this. Any plans for that separately?

我想有幾個問題。我想，首先是售後回租。你能不能談談當董事會第一次批准繼續前進時你的預期是如何發揮作用的，如果你想離開，你可能認為的結果會更好或更糟？然後有一個計劃——新聞稿提到了第四座建築，但沒有包括在其中。有單獨的計劃嗎？

Yes. Great question. Let me talk about it. The -- taking a step back, again, when did we start? We started in, I would say, August, September, we were looking at the large disconnect in our market cap and some of the risks out there in the market. And obviously, there was a concern that at that time that we felt around our liquidity and debt and even though we preannounced that we were going to be moving forward to reduce our debt by $25 million, my belief was there's 2 ways to walk out of the woods when there's such a large disconnect in that continue to operate and then demonstrate that the balance sheet and the company's liquidity is much stronger than what the market is giving it credit for.

是的。很好的問題。讓我談談吧。再次退後一步，我們什麼時候開始的？我想說，我們從 8 月、9 月開始，我們正在研究我們市值的巨大脫節以及市場上存在的一些風險。顯然，當時有人擔心我們對流動性和債務感到擔憂，儘管我們預先宣布我們將繼續減少 2500 萬美元的債務，但我相信有兩種方法可以擺脫困境當存在如此大的脫節時，森林會繼續運營，然後證明資產負債表和公司的流動性比市場給予的信任要強得多。

So taking buildings that were a fair market value of $45 million, all 4 of them and turning that into cash and deploying that cash into a higher return was obviously the answer. And so we moved into that time frame of August, September. And as we had more and more inbound traffic and interest in our buildings, particularly in the Bowling Green area, where, as you know, those distribution centers there are very valuable. That's the one area of the country where you have all the distribution networks because that's the area of the country that reaches the highest percent of customers in the U.S. in 1 day.

因此，將公允市場價值為 4500 萬美元的建築物全部 4 處，然後將其轉化為現金並將這些現金用於更高的回報顯然是答案。所以我們進入了 8 月、9 月的時間框架。隨著越來越多的入站流量和對我們建築物的興趣，特別是在 Bowling Green 地區，如您所知，那裡的那些配送中心非常有價值。那是您擁有所有分銷網絡的國家/地區的一個區域，因為這是該國家/地區在 1 天內達到美國最高百分比客戶的區域。

So those are driving all sorts of velocity of offers. We partnered with B. Riley, who obviously, the real estate firm is -- has sold many of the buildings, believe it or not, right around us in even priority. So having them partner with us and then even expand the reach and make it more competitive was where we moved into in the October, really the September, October time frame. So we're very happy with the partner that we have, and that's also very important.

因此，這些正在推動各種報價的速度。我們與 B. Riley 合作，顯然，這家房地產公司已經賣掉了很多建築物，不管你信不信，就在我們周圍，甚至優先考慮。因此，讓他們與我們合作，然後甚至擴大影響範圍並使其更具競爭力是我們在 10 月，實際上是 9 月，10 月的時間框架內進入的地方。所以我們對我們擁有的合作夥伴感到非常滿意，這也非常重要。

We're with this partner for a good chunk of time. So you want to make sure that it's a partner that you know and that you have a good body of work that you can trust. So once we had that and we had a good price, and remember, when you look at a price, you have to look at the balance between the price of the sale leaseback and the lease payments that you're making. We've restructured our business in Q2. We always continue to maximize our cost structures to make sure that when we bring that lease in, it's not really lowering our margin level.

我們和這個合作夥伴在一起很長一段時間。因此，您要確保它是您認識的合作夥伴，並且您擁有可以信任的良好工作體系。因此，一旦我們有了它並且我們有了一個好的價格，請記住，當您查看價格時，您必須查看售後回租價格與您正在支付的租賃付款之間的平衡。我們在第二季度重組了我們的業務。我們總是繼續最大化我們的成本結構，以確保當我們引入租賃時，它並沒有真正降低我們的利潤水平。

But as we move into closing, you're right, we are doing a sale-leaseback transaction with 3 of the 4 buildings that we own. There's a second building here in Eden Prairie, Minnesota office that we really don't need, and we will be putting that up for market in Q1, and that has not been part of the sale-leaseback transaction because it doesn't need to be. We're just going to sell that building outright.

但是當我們接近關閉時，你是對的，我們正在與我們擁有的 4 座建築物中的 3 座進行售後回租交易。在明尼蘇達州 Eden Prairie 的辦公室還有第二棟我們真的不需要的建築，我們將在第一季度將其推向市場，這還不是售後回租交易的一部分，因為它不需要是。我們打算直接賣掉那棟樓。

Got it. Helpful. And then secondly, on inventory levels kind of obviously, it moved up in Q3, expectations for inventories in Q4. I guess more specifically, as you think about you reaffirming positive EPS in the fourth quarter and EBITDA in the $16 million-odd range. Can you kind of connect the dots between that EBITDA and what you think cash flow, operating cash flow could look like in the fourth quarter on the core business?

知道了。有幫助。其次，在庫存水平上，第三季度明顯上升，這是對第四季度庫存的預期。我想更具體地說，當您考慮重申第四季度的正每股收益和 1600 萬美元以上的 EBITDA 時。您能否將 EBITDA 與您認為第四季度核心業務的現金流量、運營現金流量之間的點聯繫起來？

Sure. The -- when you think about working capital, that's something we -- as we talked about earlier, the -- something we feel like we do well even in tumultuous times. So year-to-date, working capital increase of $5 million. We also think that we'll do the same type of working capital management in Q4, and that will really be driven by the inventory levels and the inventory levels will come down.

當然。當你想到營運資金時，這就是我們 - 正如我們之前談到的那樣 - 我們覺得即使在動盪時期我們也做得很好。所以年初至今，營運資金增加了 500 萬美元。我們還認為我們將在第四季度進行相同類型的營運資金管理，這將真正受到庫存水平的推動，庫存水平將會下降。

If you note on our first 3 quarters of 2022, a lot of our working capital management was around the decrease in accounts receivable and that's been a 3-year effort of ours to reduce the amount of ValuePay and what our customers use ValuePay. So we're -- we've moved our percent of sales under ValuePay, which is our installment sales basis from as high as 60, 65 down into the 50 range. So that is producing more cash upfront, something that we're intentful about, and we don't believe is affecting sales either.

如果你注意到我們在 2022 年的前三個季度，我們的很多營運資金管理都是圍繞應收賬款的減少進行的，這是我們為減少 ValuePay 的數量和我們的客戶使用 ValuePay 所做的 3 年努力。所以我們 - 我們已經將我們的銷售額百分比轉移到 ValuePay 下，這是我們的分期付款銷售基礎，從高達 60、65 降至 50 範圍。因此，這會產生更多的預付現金，這是我們很關心的事情，我們認為這也不會影響銷售。

So when you think about Q4, our strategy there is really the reduction of the inventory that we're carrying and that is also going to -- that's going to be the driver for the working capital management in Q4, if that answers your question, Eric.

因此，當您考慮第四季度時，我們的戰略實際上是減少我們攜帶的庫存，這也將成為第四季度營運資本管理的驅動力，如果這回答了您的問題，埃里克。

Next question is coming from Alex Fuhrman from Craig-Hallum Capital Group.

下一個問題來自 Craig-Hallum Capital Group 的 Alex Fuhrman。

Tim, I wanted to ask about the return to DISH. Can you give us a sense of how that process unfolded? Is this -- how long you would have expected to be off of DISH 4? And now that you're back in your original channel placement, can you talk about how that customer has come back? Is it performing in line with how you were in those channels originally? Or I imagine it probably takes a little bit of time to bounce back to full productivity. But any color you can provide us with the return to DISH would be very helpful?

蒂姆，我想問一下回到 DISH 的事情。你能告訴我們這個過程是如何展開的嗎？這是——您預計離開 DISH 4 多長時間？既然你回到了原來的渠道佈局，你能談談那個客戶是如何回來的嗎？它的表現是否與您最初在這些渠道中的表現一致？或者我想可能需要一點時間才能恢復到全部生產力。但是你能提供給我們任何顏色的退貨給 DISH 都會很有幫助嗎？

Sure thing, Alex. We're good, we're not that good, right? We've only been live now for 24 hours. So I would say that it's too early to tell the velocity of migration back to the performance levels, but we're very encouraged by it. And when you think about where we are and how we are today with DISH, you got to go back a year from now, really. Jessica Gregory, who runs our content distribution has done a great job in terms of managing all the different elements of our distribution. And we knew the renewal coming up with DISH in June of this year was going to be a tough one because as we stated, we have to lower our content distribution cost.

當然可以，亞歷克斯。我們很好，我們沒那麼好，對吧？我們現在只直播了 24 小時。所以我想說現在將遷移速度返回到性能水平還為時過早，但我們對此感到非常鼓舞。當你想到我們現在所處的位置以及我們今天與 DISH 的關係時，你必須從現在開始回顧一年，真的。負責我們內容分發的 Jessica Gregory 在管理我們分發的所有不同元素方面做得很好。我們知道今年 6 月 DISH 的續約將是一個艱難的計劃，因為正如我們所說，我們必須降低內容分發成本。

It's a critical component of our strategy to lower the content distribution cost as a percent of sales. So we knew it might be a challenge. We did -- we spent a year making sure that we would be prepared for the worst-case scenario, which we didn't expect, which would be the nonrenewal.

降低內容分發成本佔銷售額的百分比是我們戰略的重要組成部分。所以我們知道這可能是一個挑戰。我們做到了——我們花了一年時間確保我們為最壞的情況做好準備，這是我們沒有預料到的，那就是不續約。

So when that happened, then we knew that we had to stick to our guns about the terms that we were seeking. And obviously, DISH felt like they needed to stick to their guns about the terms they were seeking. I've seen this before, traditionally, and that's why I guided to the end of the year.

所以當這種情況發生時，我們就知道我們必須堅持我們所尋求的條款。很明顯，DISH 覺得他們需要堅持他們所尋求的條款。傳統上，我以前見過這種情況，這就是我指導到年底的原因。

It traditionally takes time to not only then for both partners to realize that there is a place in the middle that we can get to but also, once that decision is made, it doesn't happen overnight. These are -- we're a small company, but DISH is a big company, and they have a much bigger network.

傳統上，不僅雙方都需要時間來意識到我們可以到達中間位置，而且一旦做出決定，它不會在一夜之間發生。這些是——我們是一家小公司，但 DISH 是一家大公司，他們擁有更大的網絡。

So what you have to face, and I've seen this before at my time at IAC with USANetwork and Syfy, where we had the biggest networks and we had the fastest treatment or even at Scripps with HGTV and Food, you get priority treatment when they're very big like that.

所以你必鬚麵對什麼，我之前在 IAC 與 USANetwork 和 Syfy 的時候已經看到了這一點，我們擁有最大的網絡，我們有最快的治療，甚至在 HGTV 和 Food 的斯克里普斯，你得到優先治療它們很大。

We're not as big as Disney and a lot of these other channel conflicts that DISH was going through. So we were able to sit down and really talk with DISH. Like we said, we've been partners with them for 20 years. Nobody wanted to go through what we were going through. So once we resolved it, then there was just a process of going through the sign up again and getting all the slots right and making sure we're on the same channel as we were before.

我們不像迪士尼那麼大，也沒有 DISH 經歷過的許多其他渠道沖突。所以我們能夠坐下來和 DISH 真正交談。正如我們所說，我們已經與他們合作了 20 年。沒有人想經歷我們正在經歷的事情。因此，一旦我們解決了它，就會有一個過程再次進行註冊並正確設置所有插槽並確保我們與之前在同一個頻道上。

So I have to say that it happened faster than I expected, even though it was a painfully long time, 6 months, but that was something that we were expecting and that we wanted to guide to. I can't say enough again about the customers that are there and the team at DISH, we were all working towards the same strategy of finding a place that we both felt good about, and that's what we're able to do.

所以我不得不說它發生的速度比我預期的要快，儘管那是一段痛苦的漫長時間，6 個月，但這是我們所期待的，我們想要引導的。關於那裡的客戶和 DISH 的團隊，我不能再多說了，我們都在努力尋找一個我們都感覺良好的地方，這就是我們能夠做到的。

Great. That's really helpful, Tim. And then I know it's early to talk about numbers for '23, but just as it relates to the sale leaseback, what is that going to do to the numbers in aggregate as you consider the lease payments and presumably a reduction in debt-related interest expense?

偉大的。這真的很有幫助，蒂姆。然後我知道現在談論 23 年的數字還為時過早，但正如它與售後回租相關，當您考慮租賃付款以及可能減少與債務相關的利息時，這會對總體數字產生什麼影響費用？

Yes. Alex, when you think about our business and our performance, this is like we're at the tipping point, if you will, when 1.5 years ago, I talked about being EPS positive in Q4, and that is an important thing for 2023 as well. We first tried to fix the revenue, first tried to fix the expense structure, then the customer file, then the revenue and then we put our pieces together and now we're off to the races.

是的。亞歷克斯，當你考慮我們的業務和我們的表現時，這就像我們正處於轉折點，如果你願意的話，1.5 年前，我談到了在第四季度實現每股收益積極，這對 2023 年來說是一件重要的事情，因為出色地。我們首先嘗試確定收入，首先嘗試確定費用結構，然後是客戶檔案，然後是收入，然後我們將各個部分放在一起，現在我們開始比賽了。

But the -- if you think about our year-to-date performance, you need to say, "Well, I hear all that good news, but year-to-date, we've lost what's the net income in the $40 million range year-to-date." And but if you break those pieces down, and you think about the core business and then the below-the-line costs or the integration costs, it's a very compelling picture. And it works something like this. Call us an year-to-date net income loss of $40 million. What's not going to be there next year.

但是 - 如果你考慮我們今年迄今的表現，你需要說，“嗯，我聽到了所有這些好消息，但今年迄今，我們已經失去了 4000 萬美元的淨收入範圍年初至今。”但是，如果你將這些部分分解，然後考慮核心業務，然後考慮線下成本或整合成本，這是一幅非常引人注目的圖景。它的工作原理是這樣的。稱我們今年迄今的淨收入損失為 4000 萬美元。明年不會有什麼。

Well, we have about, of that $40 million net income loss, about $22 million of it is related to onetime costs related to either the integration of the four acquisitions we made in 2021 or really half of it is the Shaq write-off that I mentioned earlier. So that does not happen again next year.

好吧，在這 4000 萬美元的淨收入損失中，大約有 2200 萬美元與一次性成本有關，這些成本與我們在 2021 年進行的四次收購的整合有關，或者實際上有一半是我對 Shaq 的註銷之前提到。所以明年不會再發生這種情況。

The other chunk that -- the other biggest chunk would really be the $14 million, $15 million in noncash depreciation and stock comp, again, noncash, not an issue. But as you mentioned earlier, the $16 million in interest that we paid year-to-date, it's too high. And that's why we talked about it in February, and that's why we're doubling the target that we established at the beginning of the year '25 and coming in at [50].

另一塊——另一塊最大的塊實際上是 1400 萬美元，1500 萬美元的非現金折舊和股票補償，同樣，非現金，不是問題。但正如您之前提到的，我們今年迄今支付的 1600 萬美元利息太高了。這就是我們在 2 月份討論它的原因，這就是為什麼我們將我們在 25 年初制定的目標翻倍並達到 [50] 的原因。

We expect to see our interest alone drop in the $4 million to $6 million range depending on the complexities of how we use the additional sale proceeds from the sale leaseback. So all of those elements, along with the core business, if you peel the onion that way, you look at the elements I just mentioned, the core business is profitable today, and we're fixing these other onetime events so the multiplier effect of that next year is pretty significant.

我們預計僅我們的利息就會下降 400 萬至 600 萬美元，具體取決於我們如何使用售後回租額外銷售收益的複雜性。所以所有這些要素，連同核心業務，如果你這樣剝洋蔥，你看看我剛才提到的要素，核心業務今天是盈利的，我們正在解決這些其他一次性事件，所以乘數效應明年非常重要。

And that's why we're as excited as we are as fixing the balance sheet also fixes the profitability and the capital structure from an interest perspective. That it also means that, as I've talked about before, the players are on the field here in terms of assets and our strategy.

這就是為什麼我們和我們一樣興奮，因為從利益的角度來看，修復資產負債表也修復了盈利能力和資本結構。這也意味著，正如我之前所說，就資產和我們的戰略而言，球員們都在場上。

We're not seeking any more acquisitions. That was what was important about 2021, to get the durability of having 3 revenue streams together for our 4 television networks. That's what we've done. It's messy. We are through that phase, and that's why we're excited about 2023.

我們不再尋求任何收購。這就是 2021 年的重要之處，即為我們的 4 個電視網絡獲得 3 個收入來源的持久性。這就是我們所做的。很亂。我們已經度過了那個階段，這就是我們對 2023 年感到興奮的原因。

Thank you. We reach the end of our question-and-answer session. I'd like to turn the floor back over to Tim for any further or closing comments.

謝謝。我們的問答環節結束了。我想將發言權轉回給 Tim，以徵求任何進一步意見或結束意見。

I just want to thank everybody for their time again today, and have a happy holiday, and we'll talk soon.

我只是想再次感謝大家今天的時間，祝大家假期愉快，我們很快就會談。

Thank you. That concludes today's teleconference and webcast. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation today.

謝謝。今天的電話會議和網絡廣播到此結束。您可以在此時斷開您的線路，並度過美好的一天。感謝您今天的參與。