UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): March 10, 2014
XCEL BRANDS, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
| 000-31553 | 76-0307819 | |
| (Commission File Number) | (IRS Employer Identification No.) | |
| 475 10th Avenue, 4th Floor, New York, NY | 10018 | |
| (Address of Principal Executive Offices) | (Zip Code) |
(347) 727-2474
(Registrant’s Telephone Number, Including Area Code)
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 7.01 Regulation FD Disclosure.s
On March 10, 2014, Xcel Brands, Inc. (the “Company”) is making an investor presentation at the 26th Annual Roth Conference. A copy of the investor presentation is furnished herewith as Exhibit 99.1.
The information furnished pursuant to Item 7.01, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933 or the Exchange Act.
The furnishing of the information under Item 7.01 in this Current Report on Form 8-K is not intended to, and does not, constitute a determination or admission by the Company (i) that the furnishing of the information in this Item 7.01 is required by Regulation FD, (ii) that the information under Item 7.01 in this Current Report on Form 8-K is material or complete, or (iii) that investors should consider this information before making an investment decision with respect to any security of the Company.
This Form 8-K contains “forward-looking statements” within the meaning of the safe harbor provisions of the federal securities laws. It should be read in conjunction with the ‘Safe Harbor” statement contained in the presentation material and the risk factors included in the Company’s periodic reports filed with the Securities and Exchange Commission that discuss important factors that could cause the Company’s results to differ materially from those anticipated in such forward-looking statements.
Item 9.01 Financial Statement and Exhibits.
| (d) | Exhibits. | |
| 99.1 | Xcel Brands, Inc. Investor Presentation | |
| 99.2 | Reconciliation of Non-GAAP financial measures included in the Xcel Brands, Inc. Investor Presentation. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned thereunto duly authorized.
| XCEL BRANDS, INC. | |||
| (Registrant) | |||
| By: | /s/ James F. Haran | ||
| Name: | James F. Haran | ||
| Title: | Chief Financial Officer | ||
Date: March 10, 2014
March 10, 2014 Investor Update Roth Capital Conference
2 (3/10/14) Safe Harbor
3 (3/10/14) To Design and Produce the Best Products For Our Followers and Partners Differentiate by Design Our Mission :
4 (3/10/14) Our Business Model is Built for Today’s New Social Era We Are A Total OmniChannel Company
5 (3/10/14) Our Brands
6 (3/10/14) 59 Licenses 150 Product Categories 1000 Better Department Store Doors USA, Mexico, Canada, Middle East, Philippines x x x x
7 (3/10/14) x x x x 1 DTR 30 Product Categories 1 Direct Response TV Network USA, U.K. 2 DTR’s 30 Product Categories 2 Direct Response TV Networks USA, Canada, U.K. x x x x
8 (3/10/14) Modern Traditional B e t t e r R e t a i l e r s B r i d g e R e t a i l e r s MICHAEL Michael Kors Lauren by Ralph Lauren Tommy Hilfiger Elie Tahari Vince Tory Burch DVF Marc by Marc Jacobs Lilly Pulitzer Rachel Zoe Kate Spade Vineyard Vines J.Crew Juicy Couture BCBGMAXAZRIA Eileen Fisher Anne Klein Nicole Miller T Tahari Lucky Brand Jeans Jessica Simpson Ivanka Trump FCUK Ralph Lauren Blue Burberry Lafayette 148 Theory DKNY Joie Jones New York CK Jeans DKNY Jeans Lauren Denim Co. Vince Camuto Calvin Klein Our Better Retail Brand Positioning Calvin Klein
9 (3/10/14) Traditional Every Day Designer Our Interactive TV Brand Positioning Contemporary Luxe Rachel Zoe Bob Mackie Susan Graver Joan Rivers George Simonton Women in Control Quacker Factory Denim & Co. Attitudes by Rene Logo by Lori Goldstein K - Dash by Kardashian Dennis Basso American Glamour Badgley Mischka DKNY Jeans IMAN Jeffrey Banks Jessica Simpson DKNYC Betsey Johnson Judith Ripka Dooney & Bourke Nicole Richie Heidi Klum
10 (3/10/14) Our Growth Opportunities
11 (3/10/14) Continue to Increase S ales in our Interactive TV Business : Continue to Increase Productivity New Categories Geographies On - Air H ours, and Online S ales Continue to Launch New Categories : Wholesale Better Retail Business Other B ricks & Mortar Distribution Increase Door C ounts Continue to Grow International Business Increase O perating Margins as Revenues G row Increase Brand Awareness Continue to open new stores x x x x x x x x x x x x x x . Grow Existing Business
12 (3/10/14) Retail Sales Score Card . Grow Existing Business $80MM $20MM $60MM $90MM $155MM $120MM $205MM 2011 ( proforma )* 2012 2013 ( est ) 2014 ( est ) ▪ Interactive Gross Retail Sales (Combined IML & LCNY) $80MM $120MM $155MM $205MM ▪ Bricks - and - Mortar/E - Commerce Sales (IMNY) ▪ Xcel Brands Revenue ▪ EBITDA * Acquired brands 9/29/11 $20MM $13.1MM $4.5MM $60MM $13.4MM (G) $4.0MM (G) $90MM Note: Xcel’s revenues are generally based on a royalty paid on sales, net of discounts and returns. Based on minimums and royalty rates, growth in sales is not necessarily indicative of growth rates for revenues to the Company. 2013 figures are preliminary estimates, and 2014 figures are projected.
13 (3/10/14) New Licenses under our B rands New International Licenses for Wholesale and ITV New Collaborations/Co - Branding Opportunities New Market Segments Increased Door Count As of December 31 st : 2011 2012 2013 2014 ( est ) ▪ IMNY Categories Signed: Signed Licenses IMNY Categories Launched Estimated Bricks & Mortar Retail Doors Market Segments 40 18 0 0 6 120 40 8 125 9 150 59 27 1000 12 170 65 40 1500 12 ▪ Collaborations/Co - Branding and DTRs 0 1 4 6 . Category Extensions Operating Metrics Score Card 40 1 150 4 120 x x x x x 170 150 6 Note: Categories, door counts, and market segments are estimated based on available information; all figures for 2013 are preliminary estimates, and 2014 figures are projected and subject to change.
14 (3/10/14) Retail S tores U nder the Isaac Mizrahi New York Brand ( 1 st Store Opened May 2013, 2 nd Store Opened February 2014 ), u p to 6 additional stores planned for 2014 Launch e - Commerce to Promote and Sell O ur Products Online – 2Q14 . Direct - To - Consumer (Retail) x x
15 (3/10/14) . Acquisitions - Gates Strategic Synergistic Accretive x x x
16 (3/10/14) Positioned For The Future We Believe: The Way People Shop will continue to Change The Acceleration of Change will continue to increase The Way We Need to Reach our Customers will continue to Change Our Focus On Design and OmniChannel Distribution in this New Social Era positions us well to benefit from the Changes that Are Coming We Know: One Thing Remains Constant – Sales and customer satisfaction are achieved through great products!
Non-GAAP Financial Information
Statements included in the presentation include non-GAAP measures and should be read along with the accompanying tables which provide a reconciliation of non-GAAP measures to GAAP measures. Adjusted EBITDA is a non-GAAP measure and excludes interest, income taxes, depreciation and amortization expenses, and other non-cash expense including stock-based compensation, gain on reduction of contingent obligations and gain loss on extinguishment of debt, from net income. Management believes that these non-GAAP measures provide additional useful information to allow readers to compare the financial results between periods. Non-GAAP measures should not be considered as an alternative to any measure of performance or financial condition as promulgated under GAAP, and investors should consider the company’s performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the company. Non-GAAP measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the company’s results or financial condition as reported under GAAP.
Reconciliation of Net Income to Adjusted EBITDA
| Years Ended December 31 | ||||||||
| 2013 | 2012 | |||||||
| Net Income | $ | 1,556,000 | $ | 4,284,000 | ||||
| Adjustments: | ||||||||
| Interest and other finance costs | 1,726,000 | 2,175,000 | ||||||
| Tax benefit | (1,376,000 | ) | (766,000 | ) | ||||
| Other state and local taxes | 144,000 | 47,000 | ||||||
| Depreciation | 365,000 | 327,000 | ||||||
| Amortization | 529,000 | 529,000 | ||||||
| Stock-based compensation | 4,810,000 | 4,623,000 | ||||||
| Other stock-based costs | 6,000 | 5,000 | ||||||
| Gain on reduction of contingent obligations) | (5,122,000 | ) | (6,300,000 | ) | ||||
| Gain loss on extinguishment of debt | 1,351,000 | (422,000 | ) | |||||
| Adjusted EBITDA | $ | 3,989,000 | $ | 4,502,000 | ||||