Good day, and welcome to the Xcel Brands Inc. Fiscal Second Quarter 2017 Investor Conference Call. Please be advised that reproduction of this call in whole or in part is not permitted without prior written authorization of Xcel Brands. And as a reminder, this conference is being recorded. I would now like to turn the call over to Andrew Berger of SM Berger & Company. Please go ahead.

Thank you, Melissa. Good evening, everyone, and thank you for joining us. We appreciate your participation and interest. With us on the call today are Chairman and Chief Executive Officer, Robert D’Loren; Chief Financial Officer, Jim Haran; and Executive Vice President of Business Development and Treasury, Seth Burroughs. By now, everyone should have access to our earnings release for the second quarter ended June 30, 2017, which went out earlier today and in addition, the company plans to file with the Securities and Exchange Commission, its quarterly report on Form 10-Q by the end of this week. Release and the quarterly report will be available on the company’s website at www.xcelbrands.com. This call is being webcast, and a replay will be available on the company’s Investor Relations website. Before we begin, please keep in mind that this call will contain forward-looking statements. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from certain expectations discussed here today. These risks factors are detailed in the company’s SEC filings. Xcel does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Finally, please note that on today’s call, management will refer to certain non-GAAP financial measures, such as non-GAAP net income, non-GAAP diluted EPS and adjusted EBITDA. Our management uses these non-GAAP metrics as measures of operating performance to assist in comparing performance from period-to-period on a consistent basis and to identify business trends related to the company’s results of operations. Our management believes these financial performance measurements are also useful, because these measures adjust for certain costs and other events that management believes are not representative of our core business operating results. And thus, they provide supplemental information to insist…

Thanks, Bob, and good evening, everybody. The following discussions relate to our financial results in the second quarter. In the second quarter, net revenues decreased by approximately 0.8% to $8.4 million compared with $9.1 million in the prior year quarter. This was primarily attributable to lower revenue from the C. Wonder brand and a discontinuance of the LCNY brand on QVC in 2016. These decreases were partially offset by the increases in revenues from our short lead production platform, which is expanding to more product categories and an increased the number of retail stores our brands are sold at. Our net income for the quarter was $213,000 or $0.01 per diluted share compared with a net loss of $90,000 or $0 per share in the prior year quarter. Net income for the current quarter was primarily driven by decreased operating costs and expenses, which in the prior year quarter were affected by nonrecurring facility exiting charges and lower expenses as we eliminated some start-up cost associated with launching and developing the short lead production platform. Net income further benefited from a decline in interest and financial expenses. Non-GAAP net income for the current quarter was $1.5 million or $0.08 per diluted share based on approximately 18.8 million weighted average shares outstanding, compared with non-GAAP net income of $1.1 million or $0.10 per diluted share, based on approximately 19.4 million weighted average shares outstanding in the prior year quarter. Adjusted EBITDA in the current quarter was approximately $2.3 million compared with the prior year quarter’s adjusted EBITDA of $2.7 million. Moving to our 6-month results. Net revenues for the 6 months ended June 30, 2017, decreased by approximately 4% to $16.8 million compared with $17.5 million in the same period in 2016. Similarly, to our quarterly results, the decrease in 2017…

Thank you. [Operator Instructions] We’ll take a question from Eric Beder from FBR Capital Markets.

Good morning. Good afternoon, excuse me. Robert D’Loren: Hi, Eric.

Hi. Could you talk – so you have the merger between QVC and HSN, how do you see that as a challenge plus opportunity for you guys? Robert D’Loren: All right. I don’t see it as a challenge, Eric, and it’s a little early to tell. I can say that over the last 1.5 years, 2 years, we’ve been in discussions with HSN to explore any new business that we could do with them, help them to create a virtual vertical platform, similar to the ones that we have in place with QVC. And they’ll raise the conflict. And doing business with HSN, so well, there were a lot of discussions. We just weren’t prepared to pull the trigger. That said, now they’re one company, so we look forward to that moment in time when QVC has fully integrated HSN and they’ve made a decisions that, that’s how they want to proceed going forward. And we’d hope that there would be an opportunity for us to continue the conversation, we were having with HSN without any fear of creating conflicts.

Great. C. Wonder. So you took it back. What is the opportunity with C. Wonder? Where do you want it to end up? Robert D’Loren: So we’ve been in discussions with retailers at multiple tiers of distribution, and we would hope that sometime this year, we’ll make an announcement about where we’ve landed with the brand and what we intend to do. The idea is to fully leverage the short lead production platform for bricks and mortar and online retailers with the brand.

I’ll just really add one thing on C. Wonder. The brand has been well perceived by QVC customers, and we are encouraged by the performance of C. Wonder all that time it was there. And we look forward to the next opportunities with the brand.

Great. Dillard’s. So what was the initial reaction to the Halston line? And I see you’re at Isaac Mizrahi. Where did you expect that Dillard’s can be as big an opportunity as HBC down the road? Robert D’Loren: We actually think Dillard’s is a bigger opportunity for us. Of course, they have more doors. And as you know, Halston is currently in 150 of the Dillard’s stores. We do see expansion potential there. Isaac this fall will be in a 100 doors. We expect it to go 150 doors in spring. And we see expansion potential there. We’ll also see an opportunity with Dillard’s to bring some of our additional brands there to them. So the progression that we anticipated is happening. First Halston than Isaacs, then we’ll work to try to develop the business there with Highline and perhaps, C. Wonder. And as we go forward with Dillard’s relationship, we’re identifying white space opportunities where we may be able to develop, either proprietary brands for them or seek an acquisition of other brands that would be suitable for our short lead platform.

Okay. So [indiscernible] you talked about some acquisition front, you’re still aggressively looking further brands there? Robert D’Loren: I would say that we’re well receptive and have done well in ’16, as you can imagine, implementing and building the short lead production capability, consumed us during ’16. While we had some theories out, we really want to aggressively looking for opportunities. But that said, in ’17, we’ve been able to come up for, Eric. And in this current environment, as you can imagine, there are opportunities. There are companies. They’re looking for solutions. Retailers looking for solutions. And we continue to look for the right opportunities, that kind of leverage our core expertise in women’s apparel and accessories.

Okay. And last question, you talked before – you talked in prior conference calls about being able to really start leveraging the quick-response model. Are we starting to see the fruits of that? And do you expect – where do you expect that to go going forward as you keep on rolling out these doors? Robert D’Loren: So if you think about where we are as an industry, we’re confident that this is the right model for the future. It delivers to the retailers, customers what they want, when they want it. We’re certainly delivering enhanced margins because of the virtual vertical set up that we have created. We really don’t see a limit to this. It’s now both. It’s a matter of execution, and establishing relationships with new retailers and building on the ones that we have established with HBC. And those – While these are very troubled times in the industry, there are also very exciting times, if you’re working on solutions. I’m really excited about what we are doing with data sciences. We started to develop trend analytics capabilities and we will now build into that predictive capabilities. And of course, get it through consumer survey for online, and perhaps, even on television. I really get a sense of what consumers want and what they like. And then, put all that into the data science basket, so that we can support our design teams with real-time direction on what customers are looking for.

So I would add to that, as you know, we launched the QTR model relatively recently. We launched in first quarter of spring in 2016. So it’s been going on for a little over a year now. The mall continues to evolve, so as Bob mentioned in the past, we’ve optimized a lot of the quality and we continue to optimize speed and decision-making. The data analytic platform will help continue to do that. We’re also reviewing new ways to bring media partnerships to retailers. And I think, at this point in the platform, again, it continues to evolve. But we do have hard data now, where it’s becoming easier for us to expand the platform. So if you look at our first year, when we were at HBC, we signed Dillard’s and announced it fourth quarter of last year, with the launch in spring, which as you know in the industry is a relatively fast launch, and we are now sending Dillard’s into an additional brand. I think you’ll see a continued momentum and speed as – we have to demonstrate actual results to other retailers and as well as our current partners. And expand these relationships in the platform.

Great. Thank you for the color. Good luck.

Thank you, Eric. Robert D’Loren: Thanks, Eric.

And that does conclude our question-and-answer session for today. I’ll turn it back over to our speakers for any additional or closing remarks. Robert D’Loren: Ladies and gentlemen, thank you for joining us tonight. We greatly appreciate your continued interest and support in Xcel Brands. As always, stay fit, eat well, and be healthy.

That does conclude our conference. Thank you, and it does conclude our conference for today. thank you for your participation.