NEW YORK, Aug. 09, 2019 (GLOBE NEWSWIRE) Sequential Brands Group, Inc. (“Sequential” or the “Company”) (Nasdaq:SQBG) today announced financial results for the second quarter ended June 30, 2019.

“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 $(0.05) 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. See Non-GAAP Financial Measure Reconciliation tables below for a reconciliation of GAAP to non-GAAP measures.  Adjusted EBITDA from continuing operations (defined under “Non-GAAP Financial Measures” below) 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.

Non-GAAP Financial Measures:

This press release contains historical and projected measures of Adjusted EBITDA from continuing operations, non-GAAP net (loss) income from continuing operations and non-GAAP earnings per diluted share from continuing operations. The Company defines Adjusted EBITDA from continuing operations as net income from continuing operations attributable to Sequential Brands Group, Inc. and Subsidiaries, excluding provision for (benefit from) income taxes, interest income or expense, non-cash compensation, depreciation and amortization, deal advisory costs, debt refinancing costs, non-cash mark-to-market adjustments to equity securities, loss on sale of assets, non-cash mark-to-market adjustments on interest rate swaps, other non-cash items and severance. Non-GAAP net income and non-GAAP earnings per share from continuing operations are non-GAAP financial measures which represent net income (loss) from continuing operations attributable to Sequential Brands Group, Inc. and Subsidiaries, excluding deal advisory costs, non-cash mark-to-market adjustments to stock-based compensation provided to non-employees, debt refinancing costs, non-cash mark-to-market adjustments to equity securities, loss on sale of assets, non-cash mark-to-market adjustments on interest rate swaps, other non-cash items and adjustments to taxes. These non-GAAP metrics are an alternative to the information calculated under U.S. generally accepted accounting principles (“GAAP”), as provided in the reports the Company files with the Securities and Exchange Commission, may be inconsistent with similar measures presented by other companies and should only be used in conjunction with the Company’s results reported according to GAAP. Any financial measure other than those prepared in accordance with GAAP should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. We consider these measures to be useful measures of our ongoing financial performance because they adjust for certain costs and other events that the Company believes are not representative of its core licensing business. See below for a reconciliation of these non-GAAP metrics to the most directly comparable GAAP measure.

About Sequential Brands Group, Inc.

Sequential Brands Group, Inc. (Nasdaq:SQBG) owns, promotes, markets, and licenses a portfolio of consumer brands in the active and fashion categories. Sequential seeks to ensure that its brands continue to thrive and grow by employing strong brand management, design and marketing teams. Sequential has licensed and intends to license its brands in a variety of consumer categories to retailers, wholesalers and distributors in the United States and around the world. For more information, please visit Sequential’s website at: www.sequentialbrandsgroup.com. To inquire about licensing opportunities, please email: newbusiness@sbg-ny.com.