Michael Porter - Vice President of Finance and Investor Relations Bob Rosenblatt - Chief Executive Officer, Director Tim Peterman - Chief Financial Officer, Chief Operating Officer, Executive Vice President

Eric Wold - B. Riley & Co. Mark Argento - Lake Street Capital Markets Alex Fuhrman - Craig-Hallum Capital Group Keith Rosenbloom - Cruiser Capital

Greetings and welcome to the EVINE Live second quarter 2017 earnings call. At this time, all participants are in a listen-only-mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions]. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host Mr. Michael Porter, Vice President of Finance and Investor Relations. Thank you, Mr. Porter. You may begin.

Good morning and thank you for joining us today. Joining me on today's call is our CEO, Bob Rosenblatt and our COO and CFO, Tim Peterman. Bob will provide his thoughts on our business and Tim will follow with the highlights of our financial and operational performance. We issued our earnings release earlier this morning. If you do not have a copy of our earnings release, you may obtain a copy through the News section of our Investor Relations website at evine.com. Some of the statements that we make during this call are considered forward-looking and are subject to significant risks and uncertainties. These statements reflect our expectations about future operating and financial performance and speak only as of today's date. We undertake no obligation to update publicly or revise these forward-looking statements for any reason. We believe the expectations reflected in our forward-looking statements are reasonable, but give no assurance such expectations or any of our forward-looking statements will prove to be correct. Please refer to the Safe Harbor section in our earnings release today and our SEC filings for additional information. Finally, certain of the financial information disclosed on this call includes non-GAAP measures such as adjusted EBITDA. The information required to be disclosed about these measures including reconciliations to the most comparable GAAP measures are included in the earnings release. The earnings release is also in exhibit to our Form 8-K that can be accessed through the SEC filings section of our Investor Relations website. Now I would like to turn the call over to Bob.

Thanks Michael. Good morning everyone. I am pleased to report we had another productive quarter as we continue to execute on our turnaround plan. Some key successes from the second quarter were revenue and EPS results were in line with our expectations and we are firmly positioned now to grow both our topline and our bottomline in the second half of fiscal 2017. We completed the year-long rebalancing of our merchandise mix that began in April of last year. This rebalancing did reduce our topline revenue for the last four quarters but increased our profitability and was an important step to position our merchandising offering for a long term profitable growth. The efforts to rebuild our home category are showing signs of success which resulted in a 9% revenue growth during the second quarter. Year-over-year that can be attributed to the strength of several of our recent brand launches, including MacKenzie Childs, Royal Albert, Frankie Avalon and the Deen Brothers. Our new content distribution deals ramped up significantly near the end of this quarter. We recently agreed to launch over 10 million HD Homes over the next six months whit our providers, including Comcast and Cox among others. We expect these new channels located in the productive HD neighborhoods will provide access to new affluent customers and help drive solid revenue growth in the back half of the year and going forward. Purchase frequency increased 5%, demonstrating that our customers are enjoying our improved merchandising offerings. From our proprietary apparel brands like Kate & Mallory and Indigo Thread Co., which grew 12% and 93%, respectively during the second quarter to our destination programming like The Sizzle and Wake Up in Style that continue to bring in strong viewership and sales productivity. Our technology investments in our mobile offerings and in our fulfillment center are beginning to pay dividends by offering customer experiences and operational efficiencies. Our mobile sales have once again increased as a percentage of digital sales to 49.4% for the second quarter, a year-over-year increase of 420 basis points. Additionally, our fulfillment cost per unit improved year-over-year by 12% while our fulfillment speed from order to shipment improved by 31%. Although pleased with all of this progress, we are sobered about the continued challenges we face in this choppy macro retail environment. Our first strategic priority remains to be focused on our customer. We want to exceed the expectations of our existing customers while attracting and capturing new customers, particularly in categories with higher customer lifetime values. Although our total company 12-month customer file decreased 5% compared to last year, this was primarily attributable to our previously mentioned rebalancing and reduction in the offering of consumer electronic products. Although consumer electronic products tend to bring in a disproportionate volume of customers, those customers usually by once and provide less contribution margin. Therefore they tend not be as valuable from a lifetime value perspective as our other customers. Our 12-month customer file for our non-CE categories was relatively flat compared to last year but we believe that our new HD distribution combined with our fall merchandising lineup and digital and social marketing efforts will help ignite our customer file growth. I would now like to spend a few minutes talking about a few of our fall plans to further illustrate why we are so excited about the next six months and beyond. This fall, we plan to launch House of Greatness, a new lifestyle brand brought to EVINE by Randi Shinder, who has a remarkable track record of building strong consumer product lines including Dessert Beauty featuring Jessica Simpson, Fusion Beauty and CLEAN Perfume. House of Greatness will launch with an assortment of fragrances, pillows, throws and candles with I Smell Great and Great in Bed themes and will expand to more categories throughout the fall season and into 2018. Love Bites by Carnie featuring pop singer Carnie Wilson of Wilson Phillips with her own line of bite-sized desserts. EVINE will be the exclusive TV retailer for Love Bites. Akos The Solutionist Jankura will launch a collection of practical and problem-solving products. Akos is one of the world's top inventors and problem-solving experts with a long career in the industry. His products have generated nearly $1 billion in sales in his career. And the Jerry Garcia art collection, which is an assortment of exclusive and limited-edition pieces from the mind of artistic and musical legend Jerry Garcia of the Grateful Dead. These are just a few the new brands we plan to launch this fall and we expect each of them to be compelling and to resonate with our customers. Our customers will also be happy to see new offerings, products and events from many of our established brands. We have brought back our All Star Gala event. Historically, this was an iconic experience for both our brand partnerships and customers and we are proud to bring it back for the first time in over eight years. We just concluded the successful event on Monday night after a four-day experience celebrating our top brands and partnerships with over 200 never before seen products and limited time offers. I am proud to announce that the fabulous Beekman 1802 group is expanding into new categories including an exclusive launch of a cleaning line featuring goat milk laundry soap and on-brand line extension into their home category. Invicta's anniversary visit will feature the launch of a Marvel Universe collection with characters from the Avengers, a live appearance by Jason Taylor to celebrate his induction into the Pro football Hall of Fame and an offering of 160 new styles never seen before. We will be celebrating the 25th anniversary of EVINE 's longest running brand and on-air guest, Gem Treasures from Chuck Clemency with a live remote broadcast from New York. As we announced earlier, we will be broadcasting live from the Minnesota State Fair this week featuring special guests Paula Deen, John O'Hurley as well as Akos The Solutionist Jankura. The Minnesota State Fair is one of the biggest and best fairs in the United States and we couldn't be more excited to be the first retailer of our kind to broadcast live from such an event. Equally important, we continue to expand our efforts on digital, mobile and social platforms. For example, we expanded our interactive screening initiatives by adding more key brands such as Invicta and Skinn Cosmetics to our social selling shows that stream live on YouTube. This complemented our existing regularly scheduled Warehouse Sale and Beyond Backstage shows. With this expansion, we more than doubled our social sales from the first quarter and garnered over 225,000 minutes of viewed content, predominantly through Facebook Live and YouTube. These efforts in the second quarter helped to grow digital sales to be 48.1% of our total sales in the second quarter, a 20% basis point increase over last year. And as mentioned earlier they also helped to boost our mobile sales penetration by 420 basis points. Finally, the rollout of our new HD neighborhood distribution in over 10 million homes over the next six months will be complemented by our transition to a Full HD signal starting in September. We think this will further drive viewership not only in the traditional TV households but equally important in the over-the-top platforms like Roku, Apple TV and Samsung Smart TVs where we continue to see growth in these nascent but important sales channels. This is an exciting time for our company and you will hear us talk more and more about EVINE as a digital commerce company. As previously discussed, our strategy is far beyond merely closing the gap on the home shopping networks. Strategically, we believe interactive video commerce is at the beginning of a meaningful growth curve because retailers are looking for better and more differentiated ways to connect to consumers and to bolster their digital initiatives. To that end, we have been honing our internal capabilities around building proprietary brands selected by our skilled team of merchants and offering customers seamless digital services across all screens. We think these capabilities complement our existing expertise in creating socially enabled video experiences. When we combine all of these elements, we believe we can sell products and services in ways traditional bricks and mortar and e-commerce sales channels don't have the infrastructure or ability to provide. When I look out two to three years from now, there will be two types of retailers, those whose models are based on price selling commoditized products available on multiple platforms and those who are based on product exclusivity and the customer experience. Our goal is to be the leader in the latter category. Interactive video is the cornerstone of our digital commerce company that is driving business opportunities in all digital platforms and business models, from mobile to social, from laptop to television and from merchandising business models to web service business models. We will do this while engaging with all types of customers, from millennial to baby boomers, for both men and women. A significant portion of the population will continue to want to purchase products from a curated assortment that facilitates the opportunity of discovery. We believe interactive video commerce at scale and expertise we have continued to refine over many years gives us an unfair advantage in delivering that experience. Before I turn it over to Tim, I would like to highlight a few of our successes and challenges from our topline performance in Q2. Our topline revenue in the second quarter was down 5.2%, which was in line with what we expected. The home category performed better than expected and our wearables were a little softer than expected. The lion's share of that occurred in the watches category which, as mentioned last quarter, is being adjusted for the third quarter. I am not overly concerned about our wearables performance since we did push a few brand launches to the fall time frame in an effort to better position ourselves for momentum as we head into that critical holiday period. I am however, very excited about the traction we picked up with our home category this quarter. We have talked of prior calls about it being a priority because of the opportunities it provides to engage with a wide range of customers and the category is really starting to show the potential with second quarter in a row strong of new brand launches. I was also happy with our progress on sales in our subscription services products in the quarter. This has been an important focus of the team, particularly in the beauty and health businesses as our business model is ideal to maximize this revenue stream. We were able to grow subscription sales in the quarter, driven by fueling the front end offers which we expect will provide benefits in the back half of the year as the back end subscriptions are fulfilled without needing to use valuable additional airtime. With our rebalancing of the mix complete, the second half of the year is where we expect to see our strategy show its revenue growth potential. It is in the third and fourth quarter where we expect to modestly grow our topline while continuing to strengthen our balance sheet and improve profitability. I feel the past four quarters have positioned us well to accomplish this. I will now hand the call over to Tim to walk through our financial, operational and content distribution results in more detail.

Thanks Bob and good morning everyone. Let me start by providing additional information on the content distribution deals that Bob referenced. We recently entered into agreements to launch in more than 10 million HD Homes over the next six months, with several of our distribution partners, including Comcast, Cox and others. The first tranche of these HD Homes was already added at the end of the second quarter and we expect the systematic rollout to continue over the next six months. We have experienced strong sales growth from prior launches in this productive HD channel neighborhood and we are excited about this opportunity to reach more customers. To be clear, these are not new homes that we will be entering but these are additional channels and home where we are already in, but within this section of the cable channel lineup that exclusively offers HD programming. I will now walk through highlights of our financial performance during the quarter where we had many sequential and year-over-year improvements. Consolidated net sales for the second quarter were $148.9 million which was a 5.2% decrease year-over-year. Bob mentioned earlier, this was in line with our expectations for the quarter. Our return rate was 19.1% in the quarter, which was an improvement of 70 basis points year-over-year. This improvement was driven by our strong product assortment and our more robust product descriptions available online, on-air and on the phone which resulted in decreased return rates across all categories. Our average selling price in the second quarter was $55, a 4% decrease year-over-year. This was primarily attributable to mix pressure coming from our home and watch categories along with an ASP decline in our beauty category as our customers told us they prefer single items rather than kits and we have adjusted our assortment accordingly. Our gross margin percentage declined 20 basis points during the quarter to 37.9%. As expected, the decrease was driven by rate pressure in our watches category. This modest decrease coupled with our revenue decline resulted in a corresponding decrease of our gross profit dollars of $3.3 million in the second quarter. Our second quarter operating expenses totaled $57 million which was a $3.1 million or a 5% decrease over the prior year. This was attributable primarily to lower content distribution costs and overall expense discipline across the organization. Also included in operating expenses are costs related to our primary operational functions, our customer solutions group, our fulfillment and logistics center and our credit and payments group. We continue to perform well in all three areas. In the customer solutions group, our most important KPIs are live agent contact rates, which measures the post sales support calls compared to units sold. We again improved this metric during the quarter, this time by 210 basis points. This improvement reflects continued overall operational precision as well as strong first contact resolution in our customer solutions center. Looking forward to the second half of the year, I am excited about an initiative we call voice of the customer that will further improve our customer intelligence and responsiveness to their needs. We recently launched this program with the purpose of creating customer centric models that institute data driven decision making that is grounded by the voice of the customer. This program will accelerate our consumption of quantifiable data and enable us to identify trends and insights and turn those into actions to create an improved customer experience. The first phase of this program includes the reintroduction of our net promoter score survey that will augment the data we already gather through our solution center. In our fulfillment and logistics center, we are really starting to click on all cylinders after our second full quarter using our new warehouse management system. We continue to experience the best productivity that we have seen in recent years and we expect to continue to improve throughout the year. Our productivity improvement helped to drive down our cost per unit by 12%. Additionally, it had a positive impact on a level of customer service by improving our fulfillment speed by 31%, which is a time from order to shipment. This was primarily driven by 35% improvement in our building wide throughput measured by units per hour process through the fulfillment center. In our payments and credit group, we increased our private-label credit card penetration during the quarter by 140 basis points compared to the same period last year. Our private-label credit card remained an important loyalty tool while also helping to reduce our credit card interchange and other processing fees. Variable cost for the quarter were down 3% compared to last year, which is a result of lower credit card fees and lower bad debt expense coupled with improved efficiencies at our fulfillment center. While variable costs were down, total variable expense as a percent of sales was approximately 9.8% for the second quarter, up 20 basis points from the prior year, primarily due to the decline in the ASP. Our primary content distribution platform, that being television, remained robust for EVINE. We are distributed in more than 87 million homes as of the end of the second quarter. Our paid cable and satellite homes have remained stable while we still have been able to reduce our costs. Meanwhile we have continued to grow our over-the-air broadcast footprint across the country to take advantage of the fact that antenna sales in the U.S. are projected to rise 7% in 2017 to nearly eight million units according to the Consumer Technology Association. We are reaching approximate 3.5 million more over-the-air homes this year than last year. Combined, we have reduced our content distribution costs by $3.3 million compared to last year, driven primarily by favorable contract negotiations. In addition to launching in more HD channels over the next six months, we are continuing to develop ways to further penetrate the over-the-top platforms such as Roku, Amazon Fire and Apple TV. Additionally, our YouTube targeted programs, while not material yet continue to grow in both sales and audience. We generated adjusted EBITDA of approximately $3.5 million in the quarter, which was a 9% decrease to the second quarter of 2016. As for the balance sheet, we ended the quarter with cash and restricted cash of approximately $23 million which was down slightly from the first quarter of $26 million which is primarily related to the pay down of debt as we continue to improve our balance sheet. We also had an additional $11 million of unused availability on our revolving credit facility with PNC Bank for a total liquidity of approximately $34 million at the end of the quarter. On a year-to-date basis, we have reduced our total outstanding debt by approximately $9.4 million which is another strong example of our successful turnaround efforts. Our inventory at quarter end was $63.7 million which was down sequentially from the first quarter balance of $75.6 million and 8% higher than our 2016 second quarter balance of $58.8 million. In terms of an outlook for the third quarter for 2017, we project revenue to grow in the low single digits. From a bottomline perspective, we expect a slight improvement in net income and EPS as compared to our third quarter of 2016. For full year 2017, we continue to expect adjusted EBITDA to be the $18 million to $22 million range which would be growth of 11% to 36% year-over-year. Our fiscal year expectations include a 5third week in fiscal 2017. For full year 2017, we also expect to invest approximately $8 million in capital expenditures, of which $6 million we spent in the first half of the year related primarily to our transition to HD. Like Bob, I am very pleased with our first half performance. However our entire organization knows, the second half of the year is where we deliver the profitable revenue growth that we have all been working so hard to organize for this past year. I firmly believe we are ready. And with that, Bob and I are happy to take your questions.

[Operator Instructions]. Our first question comes from the line of Eric Wold with B. Riley & Co. Please proceed with your question.

Hi. Good morning Bob and Tim.

Hi.

A few questions around the HD roll. I guess one, how many houses you are currently or were at the end of our Q2?

Hi Eric. This is Tim. We haven't really released how many HD, but this is a significant increase from what we previously had.

I know you were at around 25 million in May.

Right.

I wasn't sure how much --

So when we think about this, we are marking this at about 50% increase as this thing rolls out.

Okay. And you remarked that 10 million households, as you mentioned, include some homes from Comcast, Cox and others. They clearly have more than 10 million HD homes they get into from those two and I am assuming the others as well on a combined basis. Are you cherry picking individual regions? Is this kind of the initial rollout? You will go into the remaining HD homes later? Or just something possibly keeping out of going into all of those initially?

Well, it was both sides of the sentence. So its' the 10 million within the next six months. These things take time to rollout and we just wanted to be conservative on what we think we can accomplish in the next six months.

Okay. And then lastly, are you still seeing roughly 30% lift when you get into the HD neighborhood? And how long does it take to get that lift? And how is the launch, once you get in there, communicated to those households or consumers?

Yes. Absolutely, we are still seeing that lift. That's why we are so excited about launching this at the same time that launched our HD signal, same time we are going to be introducing our new merchandising lineup and the assortment that we have. So the HD neighborhood has absolutely, it increased to 30% productivity based on what we have seen when we have done this in the past. So we are optimistic.

And how is that communicated to consumers once you are launched?

Yes. There is a whole program we go about whenever there is a channel lineup change. So we work with our partners to notify the customers and to promote our change.

Got it. Thanks guys.

Thanks Eric.

Thanks Eric.

Thank you. Our next question comes from the line of Mark Argento with Lake Street Capital Markets. Please proceed with your question.

Hi. Good morning guys.

Good morning.

I just wanted to drill down a little bit more in terms of content or distribution cost. It looks like you guys continue to see some improvement there. You mentioned a number, I think it was $3.3 million. Was that the cost to distribute? Or what was that number?

So those are the fees that we pay our distributors, the 87 million homes that we are in. So there is any combination of deals, whether they are fixed fees, percent of revenue. But that reduction is a direct reduction in the fees that we pay to f them for carriage.

And that was on a quarter or year-over-year basis, quarterly? Or what was that?

That's correct. That was a $3.3 million decrease from this time last year. And we had a very similar, that was just one quarter, we had a similar a metric for Q1 in terms of the performance of savings.

Got it. All right. That's helpful. And then understanding, Bob maybe one for you here, in terms of the watch category, I know this is still a pretty sizeable category for you guys. Rebalancing and inventories and new brands, can you talk about what you think things should like for Q3 and Q4 in terms of that category?

Sure. So yes, thanks. As we referenced last call that we had a weakness in watches because one of the strategies that we tried was to do a lower price point to be able to engage more customers. So essentially bring them in as a try me and hoping that they would join the group of people who collect watches and that did not work as well as we wanted to in the first quarter. What you are seeing in the second quarter is really moving out of the rest of the inventory that we have there that was frankly not the core audience was not interested in. Starting in the third and fourth quarter and we have already started with it, as I think I mentioned in the press release, we realized that the average price point for the people that like to collect these watches and we did a deep dive analytically into all the people that buy this, we recognized the fact that these collectors actually care less about the price point as much as they do about the special nature of the product and how it's promoted. So between having about the Marvel Universe superhero collection that we are introducing at a high price point which is very similar to what we did with the Peanuts group with Charlie Brown and the Popeye group that we did, we realize that that's a much bigger opportunity for us. So what you will see in the third and fourth quarter is a much different mix of merchandise and we have also focused our social energies as well as our e-commerce energies on revamping sites specifically for our watch customer, since they do have a slightly different demographic and psychographic than our current EVINE customer. And in addition, last year we did the Invicta Cruise where we actually took out a carnival ship and introduced all the people did live from the carnival cruise for three days and had a significant lift in sales, both on the boat, believe it or not, as well as to the Bahamas, as well as on-air. We had a significant lift and we are doing that again in February and we have already sold about two or three times as many cabins as we did last year. So we feel very strongly about the fact that we are back on the right track with that and there is no reason we shouldn't get to a very significant higher run rate in the third and fourth quarter.

Okay. That's helpful. Just shifting gears maybe looking a little bit more at the industry. I know in the press release you talked about different types of retailers going forward. Obviously big news in your space Q and HSN merging. What does that mean for you guys in particular? Is that opportunity? From a competitive perspective, how do you think things might change?

Yes. We have been pretty consistent now, I guess, for the last year-and-a-half when we speak about Q and H. As I said early on here, I was a President of HSN during probably it's most significant growth phase and they are both great businesses and they are a very different business than ours in the sense that we do not -- they are a big ship and they have billions and billions of revenue based on how they do things and we have purposely ever since I got here decided that we did not want to be the third and I guess now, if you wanted to count it, the second largest video commerce network. I think Q and H are great. I think they seem to be pivoting in a different direction than we are. I think the consolidation frankly will either be neutral or additive to us ultimately, because what we are doing and our strategy has been and it started before we even knew about the merger, our strategy was all about being able to be on every screen for every customer being the discoverer of new merchandise and using our merchandise team who are really good at curating great merchandise out there that's hard to find and putting it on every screen possible and demonstrating it in every possible way to be able look at it. So I think Q and H are on a different trajectory than us. The good news is, our fixed expenses, at least as a percent of sales, are very similar to the Q and H piece of it and we feel, as I said earlier in the year, that once we righted our expense base and righted our merchandise mix, we should have already been a profitable company and now that we righted it, we see that we should be incremental and be cash flow positive, probably for the first time for this company on a continual basis and in the 27 years that we have been here starting next year, which is incredibly exciting and we will be able to reinvest into being the group that can look at every screen and change things appropriately. So I don't know what the future holds for Q and H other than they are very large and it looks like they are selling a lot of products that are also on other e-commerce and bricks and mortar platforms and we hope to continue to move away from that model to really be a disruption retail business of selling merchandise in a different way and really being the arbiters of merchandise that's not available everywhere else as opposed to doing it based on price.

Got it. Last one for me. I know back when there was the reverse auction of the spectrum auction going on, obviously you guys weren't able to monetize your property, but there was still talk of potential some channel sharing opportunities. Anything new there? Is that something that we should still think is there is still some potential going forward?

Hi Mark. So yes, that's still a very live ongoing process. All the stations that participated or a lot of the stations that participated in the auction are now looking for new homes in the channel share arrangements that you talked about. So yes, we are still having ongoing dialogue but nothing to report.

Last question for Bob. Are you going to be out at the State Fair with Paula tomorrow?

I am absolutely going to be at the State Fair with Paula tomorrow. I will be out there with John O'Hurley. The make-believe J. Peterman from Seinfeld and I am going to eat lots of stuff on a stick. So for me there. I am happy to meet and greet and to whatever I need to do and give out discount coupons for new customers at EVINE.

Fantastic. Thanks guys.

Thanks Mark.

Thank you. Our next question comes from the line of Alex Fuhrman with Craig-Hallum Capital Group. Please proceed with your question.

Great. Thank you for taking my question. I wanted to ask about some of the new brand launches during the quarter. It looks like you guys launched particularly large number of new brands in the quarter and we will be curious to the extent that you can share how perhaps some of your other proprietary brand launches have scaled up in their first few years? It sounds like some of your more established proprietary brands like Kate & Mallory are continuing to grow nicely. But when you have a big launch like this and it sounds like Q2 was perhaps impacted by an inordinate number of launches, all in one quarter, how does that scale up? Does it tend to take a few months, a few quarters, a few years to reach maturity? Or do some brands perhaps launch with a big honeymoon and then perhaps settle in over the next few months? I am just wondering how we should think about this big wave of brand launches perhaps factoring out over the next few quarters?

Sure. It's a really good question. As you can imagine with the number brands that we launch, there are some that do well right out of the gate and there are some that take building and nuancing because we have so many different things that we touch, depending on the hours that the show is on, based on how well that we think the host does, based on how well the merchandise does, based on how well the guest does. So there is so many different things that involve this. I will give you a -- but for the most part, I would say one of every three new brands have the opportunity and usually we see positive momentum, whether it be from new customer growth or whether it be from the attraction of how much we sell to bring them back an additional time. And I guess the best example that I can think of is Beekman 1802 which has been around for a few years now and started out really being nascent and not being on any other channel and over the last couple years, two, three years has really taken on a life of its own. And that's why I mentioned in the press release that we are actually doing brand extensions into other areas. So the truth is that if the customer likes it, the customer is out there. And to Tim's point about the fact that we are now going to be in different neighborhoods where the digital homes are and we will be in the same place where people who already appreciate shopping using the video commerce method are out there, where before people had to look for us on analog in a lot of homes, I think we are going to find that it's really going to be a multiple effect. So I would say probably one out of three do well and the trajectory is kind of crazy because once the customer likes it and depending on how well we do the marketing of it and how much of a following they have behind the scenes, it could become very substantial. I mean we are talking hockey stick growth over a three to five year period. At the same time, I want to mention Waterford, which we have had for very long time and frankly we were having trouble getting the kind of traction we wanted there and so we worked with the Waterford people and I think that's one of the things that sets us apart from a lot of other companies is that we have the opportunity of actually, because we are nimble and small, to actually sit with the management teams of these companies and say what do you guys want to do, how do you guys want to do it. And with Waterford, we started to do additional remotes from Ireland and go to the factories and go to where the merchandise was made. And although Waterford was a bit of a challenge for us initially and I think a bit of a challenge for Waterford to get some traction, this past year we increased the number of remotes from Ireland, we increased and analyzed the price points and reached out to more Waterford customers using social media significantly more as well as e-commerce and looking at our data and figuring out who would be more likely to be a Waterford customer and we are now, believe it or not, the number one vendor of Waterford in the highest end of Waterford merchandise that they sell. I am trying to remember the name of it, but there is a brand, there is a component of Waterford which is the highest end of it and believe it or not it, it used to be Macy's that was the number one brand that highest end, now we are actually the highest end distributor of that than anyone else. So that's a brand that's been around for a while and yet we have been able to reinvigorate it. And MacKenzie Childs is the most recent one I think I can mention that has very limited distribution. It's available, I think, at only a few of the higher-end department stores and they a few stores on their own and by us actually working together with them in terms of having a show and saying what is it that you guys want to message, we were able to do, so far we have done two Waterford shows, the first one, we did 400% more revenue than we thought we were going to do and essentially literally sold out every product we had plus anything they had lying around in the warehouse. When they came back the second time, we did a better job of planning for it. And based on the fact that we did better job of planning for it, we ended up once again we doubled our revenue versus our plan, which of course was a much higher revenue build. And we see that as being a huge opportunity for us where we can actually make sure that for brands that are great that are being the story is not being told appropriately and people are not walking into some of the higher-end retailers anymore or they not able to find the merchandise on e-commerce easily, we feel using our 88 million homes as a marketing platform for people to tell the story, we are able to elevate the brands for us and for them. And frankly, we know that some of the sales may end up going to the store itself or it may end up going to one of the other retailers, but that's fine with us because at the end of the day, it introduces everybody else to a new video commerce experience that seems to be taken by everybody.

Okay. That's really helpful, Bob. Thanks so much.

You are welcome.

Thank you. Our next question comes from the line of Keith Rosenbloom with Cruiser Capital. Please proceed with your question.

Thanks. Bob, I feel like I got to ask this question in before you enter food coma from the fair.

Thank you.

Just a couple of questions. One obvious, I am assuming that your EBITDA guidance for the year of $18 million to $22 million continues to stand, there is no change to that.

Hi Keith. This is Tim. Nice to hear from you. Yes, that's correct. It still stands as it standed --

As it stood.

As it stood for the last two quarters. Yes, we are still in the $18 million to $22 million range.

Terrific. A clarification on Eric's question earlier. You guys mentioned the 10 million homes, HD homes. It that all the homes that you are, all the additional HD Homes you are going to enter into? Or are there more homes once you get into those 10 million that you will be able to enter?

No. There is plenty more. We are just now moving into that growth phase. So starting in the 25 million, we are adding these 10 million over the nest six months, but we will be adding, we hope to be adding at a very steady clip similar to that all throughout 2018.

Where's QVC?

They are in the 70 million to 80 million. They are all in the 70 million, 80 million range.

So you think this could be a multiyear cadence where you are going to be increasing your HD presence?

Absolutely. I mean as you can see, we timed it with the introduction of the fall lineup with a lot more product. We timed it with the launch of the HD signal that will be coming on September. So all of those factors combined together, it's how we are igniting the revenue growth in the back half of the year.

Perfect. You guys may have taken a strategic investment earlier, I guess, about six months ago. You haven't really given any clarity on that, on what the benefits are from that strategic investor? Can you comment on when you would expect to see those benefits and what the nature of that investment is or that investor is?

Yes. Absolutely. We are already seeing, as we mentioned earlier for anybody who is listening that might not be following this, we took an infusion with a strategic investor lat quarter. The strategic investor, one that had asked us not to mention his name yet and I actually have to get in touch with him to see if it's okay if we mention his name or not, but I can tell you that he already has products, he is a producer of merchandise in the highest gross margin category that we have and that he has already begun to move people and energies over to here and based on a bunch of the things that we said earlier, we think that adding this person and his team and his company will end up increasing significantly our opportunity both on the revenue side as well on the margin side. They have already started in the second quarter and the more we work with them, we think that it will end up seeing a shift in penetration into that family of business. But I apologize, but I think we need another quarter. I just want to ask the group to make sure, the guy that it's okay to mention it before, because I know he is involved in several other things and I just want to respect his privacy for now.

Okay. Thanks a lot guys. Bob, Tim, you guys are doing a great job. Thanks.

Thanks so much.

See you soon.

Thank you. There are no further questions at this time. I would like to turn the call back over to Mr. Rosenblatt for closing remark.

Thanks so much. Our company has accomplished a tremendous amount over the past six quarters. We honestly believe this is the beginning of reigniting the growth that we have been working on very hard. We have our management team in place now. For the first time, I could say that we have 100% of the management team in place. We have had very little turnover in our minds. This is where the fun really begins for our customers, for our brands, for our merchants, for our investors and for everybody else that's part of this. We firmly believe that it will turn to -- the results will turn to having more happiness from a vendor, from a shareholder and a employee standpoint. And we look forward to seeing all of you on the conference circuit over the next few months and in November during our next update call. Until then, as our mantra is, bee good to yourself. Thanks so much

Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.