Legacy IMBDS, Inc.: restructuring charge — iMedia Brands pre-announces Q4 net sales $133.5M, $38.5M goodwill impairment; going concern doubt

The Company anticipates that its statement of operations for the three-month period ended January 28, 2023, will reflect (1) a decrease in net sales to approximately $133.5 million, compared with net sales of $193.8 million for the comparable prior year period, (2) a significant increase in the pre-tax net loss to approximately $62.7 million, compared with a pre-tax net loss of $5 million for the comparable prior year period, and (3) a significant increase in operating expenses to approximately $102.9 million, compared with operating expenses of $74.5 million for the comparable prior year period.

The Company anticipates that its statement of operations for the fiscal year ended January 28, 2023, will reflect (1) a decrease in net sales to approximately $544.5 million, compared to net sales of $551.1 for the prior fiscal year, (2) a significant increase in the pre-tax net loss to approximately $108.6 million, compared to a $22 million pre-tax net loss for the prior fiscal year, and (3) a significant increase in operating expenses to approximately $295.8 million, compared to operating expenses of $295.7 million for the prior fiscal year.

On April 28, 2023, the Company concluded that because of the lower financial performance than expected in the current fiscal year, decline in the market capitalization of the Company, and the lower projected results over the next three years, a material impairment to the Company’s goodwill would need to be recorded. As a result, the Company expects to record an impairment charge of $38.5 million related to the Company’s goodwill during the three and twelve month periods ended January 28, 2023.