Thank you for standing by. This is the conference operator. Welcome to the Xcel Brands First Quarter Fiscal Year 2020 Financial Results Conference Call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. [Operator Instructions]. I would now like to turn the conference over to Stan Berger. Please go ahead.

Thank you, operator. Good evening, everyone, and thank you for joining us. We appreciate your participation and interest and hope that all of you are safe in these difficult and uncertain times. With us on the call today are Chairman and Chief Executive Officer, Robert D'Loren; Chief Financial Officer, Jim Haran; and Executive Vice President, Business Development and Treasury, Seth Burroughs. By now, everyone should have received access to the earnings release for the first quarter ended March 31, 2020, which went out earlier this morning. And in addition, the company plans to file with the Securities and Exchange Commission its quarterly report on Form 10-Q by May 20, 2020. The release and the annual 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 risk factors are explained in detail in the company's most recent annual report filed with the SEC. 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. In addition, at this time, the company's -- COVID-19 pandemic is having a significant impact on the company's business financial condition, cash flow and results of operations. There is significant uncertainty about the duration and extent of the impact of the virus. The dynamic nature of these circumstances mean what is said on this call could change materially at any time. 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 earnings per share 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 relating to the company's results of operations. Our management team 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 assist investors in evaluating the company's financial results. These non-GAAP measures should not be considered in isolation or as alternatives to net income, earnings per share or any other measures of financial performance calculated and presented in accordance with GAAP. You may refer to the attachment to the company's earnings release or Part 1, Item 2 of the Form 10-Q for a reconsolidation of non-GAAP measures. Now, I am pleased to introduce Robert D'Loren, Chairman and Chief Executive Officer. Bob, please go ahead.

Thank you, Stan. Good evening, everyone, and thank you for joining us. As Stan stated, I hope all of you and your families are staying safe and healthy. I will give an overview of our first quarter financial performance and then provide some operating highlights. After that our CFO, Jim Haran, will discuss our financial results in more detail. Before I discuss our financial results, I want to give an update about the impact from the events of the COVID-19 pandemic. As I stated on our prior call, this is an unprecedented event that comes with a great deal of uncertainty. Now, the most challenging part of all of this is assessing how will the customer or the consumer emerge from this when it is over? It is nearly impossible for any of us to forecast this. Our business was affected by COVID-19 in Q1 and will more severely be impacted in Q2 and Q3 of 2020, primarily in our wholesale business. We expect that Q4 will be impacted but it’s too early to fully assess the impact at this time. As previously reported, we have experienced canceled orders and in certain cases, goods are not being received by our retail accounts, because they closed their distribution centers. We are managing through this by moving certain core products forward to summer and early fall. And if we have any unsold inventory, we will explore selling it into off-price and other similar channels, or perhaps even packing up some goods for spring 2021. We are very fortunate in that part of our design strategy and brand DNA across our brands is to platform year-round fabrics that are season agnostic. At this time, we do not anticipate that we will have significant inventory to liquidate separately. We continue to monitor the financial…

Thanks, Bob. And good evening, everyone. I will briefly discuss financial results for the quarter ended March 31, 2020. And please take note that our financial results are described more fully in our quarterly report on Form 10-Q which will be filed with the SEC by May 20th. Total revenue for the first quarter of 2020 was $9.5 million, a net decrease of approximately $0.8 million or 8% in the prior quarter, primarily driven by lower licensing revenues, partially offset by growth in our wholesale apparel business. The decline in licensing revenues was primarily related to lower guaranteed minimum royalties compared with last year. Our strategy continues to be to transition certain licensing programs to a wholesale model. And Q1 wholesalers were negatively impacted by COVID-19 contributing to the decrease in our total revenue for the first quarter. Current quarter gross profit margins decreased from 82% in the prior year quarter to 75% in the current quarter, reflecting the transition of portions of our business from a licensing model to a wholesale model. However, gross profit margins from product sales increased from 25% in the prior year quarter to 38% in the current quarter as a result of achieving greater efficiencies and economies of scale as our wholesale business continues to grow. Our operating expenses were $8.2 million up from $7.8 million in the prior year quarter. The current quarter now reflects higher depreciation and amortization expense, primarily resulting from the accounting change for our Judith Ripka trademarks from an indefinite life asset to a finite life asset effective January 1st. This non-cash increase in expense was largely offset by decreases in both cash and stock-based compensation costs as compared with the prior year quarter. Further contributing to an increase in Q1 operating expenses was a $200,000 bad debt expense…

Thank you, Jim. This concludes our prepared remarks. Operator?

We will now begin the question-and-answer session. [Operator Instructions]. There are no questions in queue. This concludes the question-and-answer session. I would like to turn the conference back over to Bob D'Loren for any closing remarks.

Thank you, operator, and ladies and gentlemen, thank you all for your time this evening. We greatly appreciate your continued interest and support in Xcel Brands. The impact of the COVID-19 pandemic on the retail industry has been devastating. We believe the challenges will continue for the next several years as perhaps retail and wholesale consolidation and store closures continue and/or accelerate. Notwithstanding these challenges, we continue to believe that Xcel’s infrastructure and omni-channel distribution makes us an industry-leading platform both from an operational as well as a technological standpoint. And that we are uniquely positioned to capture significant market share during this period of enormous disruption. As always, stay fit, eat well and be healthy.

This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.