Greetings and welcome to the iMedia Brands Third Quarter 2021 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Monty Wageman, Chief Financial Officer for iMedia Brands. Please go ahead, sir.

Good morning, everyone and thank you for joining. This is Monty Wageman, iMedia Brands' Chief Financial Officer. We issued our Q3 earnings release earlier this morning. If you do not have a copy, you may access it through the News section of our IR website at imediabrands.com. This release is also an exhibit to the Form 8-K filed this morning. I would also like to remind everyone this call will be available for replay through December 1, 2021, starting today at 11:30 a.m. Eastern Time. A webcast replay will also be available via the link provided in today's press release as well as on the IR section of our website. Some of the statements made 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 or revise these forward-looking statements. 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. For additional information, please refer to the safe harbor statement in today's earnings release and our SEC filings. Finally, we will make references to non-GAAP measures on this call such as adjusted EBITDA. Please refer to our earnings release for further information about these measures, including reconciliations to the most comparable GAAP measures. Now, I would like to turn the call over to the CEO of iMedia Brands, Tim Peterman. Tim?

Thank you, Monty. Good morning, everyone. Thank you for joining. We had another strong quarter of financial performance and execution of our growth strategy. As you know, we are moving fast to become the leading interactive media company capitalizing on the convergence of entertainment, e-commerce and advertising. Our successes are accelerating fast and I want to make sure all of our stakeholders remain current with the moves we make, why we make them and where we are going. To help with this, beginning with this fourth quarter, iMedia will enhance it's financial reporting for each of it's three core growth strategies: entertainment, consumer brand and media commerce services. In addition, I am pleased to formally invite you to save the date of February 8, 2022. On that day, we will host our first Capital Markets Day at our corporate offices here in Minneapolis. This will be a jampacked half-day event where stakeholders can engage with me, my management team and our key vendors about iMedia's 2022 plan to organically generate $675 million to $725 million in net sales, while achieving positive quarterly EPS beginning in the back half of 2022. As most stakeholders know, the strong position iMedia created for itself today didn't happen overnight. In the middle of 2019, we set out to fix the business model, establish an entrepreneurial culture and pursue a new interactive media strategy and we did. In 2020, we set out to successfully launch 50-plus merchandising brands and grow our customer file and we did. In 2021, we said we would significantly grow net sales and adjusted EBITDA and we are. It's because of these successes and the employees and vendors who produce them that our 2022 plan is so compelling. For example, during our Capital Markets Day, we will further explain how the entertainment strategy's three owned and operated catalysts, ShopHQ, 123tv and emerging networks will drive growth over the next three years. And how their success, in turn, will accelerate the cross promotion that we believe will drive the outsized growth for our consumer brands. We will provide additional insight into how the consumer brand strategies three owned and operated catalysts, Christopher & Bank, J.W. Hulme and 123auctions.com will drive growth over the next three years. We will explain how the media commerce services strategies, three owned and operated catalysts, digital advertising services or iMDS, ValuePay financing and what to buy services will utilize our entertainment and consumer brands first-party shopping data to successfully scale in the converging information layer of e-commerce and advertising. We will also demonstrate why all of our businesses are focused on the same core customer demographics. And why the 34% growth over the last 10 years of U.S. consumers who are at least 65 years old, is creating unmatched spending power. And as iMedia scales becomes the single-source partner to brands and advertisers seeking to use interactive video to drive growth, iMedia believes it's entertainment networks promotional power will provide key advantages against it's competitors like Roku, Shopify, Taboola and IEC. We believe hosting an intensive Capital Markets Day and providing more financial reporting around our key growth strategies will help give our stakeholders even more insight into our fast-moving corporate story. Now, let's take a closer look at the Q3 performances of our top three growth catalysts today. First, it's ShopHQ, our flagship national entertainment network reported a 7% growth in gross margin dollars for the third quarter by implementing a new merchandising strategy that yielded a 520 basis point improvement in gross margin rate and a 7% net sales decline on a year-over-year basis. And although we did face logistic cost increases and delivery challenges related to COVID-19 in the third quarter, the procedural changes we established in Q2 minimized the impact of the inventory delays. Our success in Q3 was driven by two factors. First, the quality of ShopHQ's distribution footprint continues to improve, driven by the new 20 million HD homes that have generated increased net sales of about 15% within the respective markets since their launch at the end of July. This is a better growth rate than we expected this early. Second, our Q3 merchandising strategy returned to a focus of offering merchandise that she knows and loves ShopHQ4 and one that continue to maintain higher gross margin discipline. This assortment was driven by an increased mix of jewelry and fashion and a decreased mix of health and consumer electronics. While ShopHQ continues to offer products that are designed for everyday health and wellness, for example, the Medic Therapeutics vibrating fitness platform, we did shift away from the demand that existed last year for pandemic-related products. We believe this merchandising strategy is a more balanced approach to meeting her demand. For example, two great new beauty brands we launched in Q3 were Oliveda which is a revolutionary beauty brand that takes an internal and external approach with the use of Olive tree leaves. Unlike other skincare brands, their holistic approach means each formula is based on 70% to 100% active ingredient instead of 70% water which allows for more powerful and regenerative results. My facelift which is a clinically developed resistance training device so you can strengthen and tone your neck, chin and facial muscles, reducing the visible signs of skin aging by reducing the look of the sagging jaw lines and drooping cheeks. Our second growth catalyst Christopher & Banks or CBK, is our flagship consumer brand that reported a 50% sequential increase in net sales from Q2 to Q3 and maintains the highest gross margin in the company. This revenue growth was driven by our omnichannel sales strategy that includes television, e-commerce, catalog and bricks-and-mortar retail. Regarding television, it's official. CBK is a hit on ShopHQ. In the third quarter, CBK's on-air productivity, what we call DPM, or dollars per minute, grew by over 50% from Q2 to Q3. CBK's net sales on television grew approximately 250% from Q2 to Q3 and new customers grew 6x higher over that same time frame. Quite frankly, we have never seen a brand so well received so quickly on ShopHQ. Regarding brick-and-mortar retail, our first two CBK stores, one located in Coon Rapids, Minnesota and the other located in Branson, Missouri, continue to exceed our expectations. Our Branson store has already exceeded $1 million in net sales since opening in May and we are opening three more CBK stores in the fourth quarter. A first for CBK is a direct-to-consumer catalog which we introduced this fall. To date, we have created and mailed three CBK catalogs and each have been well received by new and existing customers. Our third growth catalyst, iMedia Digital Services or iMDS, formerly Synacor's portal advertising business segment that we acquired in July, is a leading video advertising platform that monetizes over 200 million monthly users for it's online publishers, MVPDs and ISPs by utilizing it's proprietary technologies and interactive websites to drive engagement, traffic and conversion for it's publishers. I will say, this third quarter was a successful and busy time for our seasoned iMDS management team. Wins during the quarter included: number one, iMDS merged Float Left, our OTT app SaaS platform, into it's organization. This capitalizes on iMDS' more seasoned product and engineering team's abilities to accelerate Float Left product innovation and sales growth. Number two, iMDS grew Q3 net sales by 27% over the same period last year which was driven by a 26% growth in monthly publishers and a double-digit increase in average revenue per publisher compared to the same prior year period. This revenue growth was complemented by a 200 basis point improvement in gross margin in the third quarter compared to the same period last year, a great first quarter within iMedia. I'd like to thank the team there, Ron, Matt, Gabor and Bill. They're doing a great job as we move this business forward. Now, I'd like to provide some additional color on our most recent acquisition 123tv. Today, 123tv is the leading interactive media company, disrupting Germany's TV retailing marketplace with it's expertise in proprietary live and automated auctions that emotionally engage customers with 123tv's balanced merchandising mix of compelling products shipped directly to their homes. Our growth strategy focuses on 123 continuing it's disruption of TV retailing in Western Europe, while exploring how 123's gamification really, it's gamification expertise and it's automated auction technology can disrupt online digital shopping marketplaces here in the United States, particularly in the online shopping for travel and event ticketing. We plan to use our television networks to drive customers to these new 123tv online businesses here in the U.S. which we believe will also generate significant first-party shopping data to further differentiate iMDS' video advertising platform. I was just in Germany last week. I can't say enough about the quality of the management team; it's run by Jorg Simon. He's got a great team; Rita, Christian, Bjorn, Michael, Manuel, Eberhard, I can't say enough good things. We've got a lot to do and I'm glad that we're partnering with that group. As always, I just want to say that I appreciate your trust on our journey together we're still in the very early innings. Now, I will turn the call back over to Monty to discuss our consolidated financial and operating results and our outlook for Q4 and 2022. Monty?

Thanks, Tim. On a consolidated basis, our Q3 12-month rolling active customer file grew by 20% compared to the same prior year period, driven by 65% growth in new customers. This was the best new customer growth in over 10 years and the highest overall customer file growth in seven years. Q3 net sales were $130.7 million, an increase of about 20% compared to the same prior year period and about $3.7 million higher than we guided for the quarter. We also improved our Q3 gross margin to 41.6% which was a 420 basis point improvement over the same prior year period. Adjusted EBITDA was $10.1 million, a 57% improvement over the same prior year period which is the best performance since the company began reporting adjusted EBITDA in 2005. Our year-to-date performances through Q3 are equally as strong. Net sales were $357.3 million which was an 8.5% growth compared to the same prior year period and the strongest year-over-year net sales growth in the company's first three fiscal quarters in eight years. Our operating expenses in Q3 were $60.4 million, an increase of 36.7% or $16.2 million. This increase was comprised primarily of approximately $5 million of onetime transaction costs, $5 million of additional administrative and selling costs associated with our new businesses and $2 million of additional variable costs associated with our new businesses. Regarding our Q3 balance sheet, total unrestricted cash was $51.4 million compared to $15.5 million at prior year-end. As noted previously, on September 28, 2021, we closed on our offering of $80 million and 8.5% senior secured notes due 2026. After deducting underwriting discounts and offering expenses, we received $74.2 million in net proceeds and we used the net proceeds from the offering to fund the closing cash payment to acquire 123tv. Regarding capital expenditures during the quarter, we spent approximately $2 million on capital projects, primarily reflecting investments and upgrades to our website, infrastructure and facilities. Regarding our outlook for Q4, we anticipate reporting approximately $13 million to $15 million of adjusted EBITDA which is a 55% to 79% increase over the same prior year period despite continued expectations for unusually high logistics costs due to COVID-19. We anticipate reporting Q4 net sales of approximately $175 million to $180 million which is roughly 40% to 44% growth compared to the same prior year period. For the full year 2022, we anticipate reporting net sales of approximately $675 million to $725 million and we anticipate reporting adjusted EBITDA of approximately $50 million to $60 million and reporting positive quarterly EPS beginning in the back half of 2022. As a reminder, from a tax perspective, we have approximately $397 million in federal NOLs that are available to us to offset future taxable income. Thank you for your time this morning. I will now turn the call back over to the operator for Q&A.

[Operator Instructions] Our first question comes from the line of Thomas Forte with D.A. Davidson. Please proceed with your question.

Great. Tim and Monty, congrats on the quarter. So, one question and one follow-up. So Tim, you've put together a very nice set of assets here. When you think about your current strategy and you think about potential M&A, how do you feel about the assets you have? And are there still pieces that would be attractive to advance your initiatives here?

Tom, thanks for the question. So when we think about the -- our model and how the entertainment strategies work with the consumer brands and the media commerce services, we -- there really aren't any missing pieces for that model to work together for the cross promotion from the entertainment networks to drive the growth of consumer brands, to use the services from media commerce services to engage and really create a data lake of information around customers that we can better -- give them a better engaging experience because of the information that we have. All of those pieces work now with the assets we have. So when we talk about our guidance for 2022, that's what we mean by organic. We have the businesses in place now to scale very nicely and move the strategy quickly into a scale position.

Great. And then, for my follow-up question. There were a lot of highlights in the highlights. But the thing that struck me the most is, sequentially, it seems like you are managing the supply chain issues much, much better. How are you able to do that? And what gives you confidence you can continue to manage them better in the fourth quarter?

Great question. We like to think of ourselves as responsive to a punch in the face. So when we got punched in the face in Q2, we reacted quickly with really changing our internal procedures. So the -- we can't avoid or negate what the logistic cost increases might be, right? There are surprises. We certainly have a range now of what we expect in spikes and we incorporate that into our guidance and our models. In terms of things we can control is around the inventory receipts and around what we do with our programming calendar, what we promised to our customer for her or his viewing habit. And those are the things that made the biggest impact for us so when we went forth in Q3 with our merchandising strategy and our programming calendars, we made sure that we had enough buffer to make sure that we weren't surprising them with delays or advanced orders and those sorts of things that lower productivity and really increase returns. So we focus on what we can control and we feel that's a pretty good recipe as we move through because I do think there'll be spikes and supply chain challenges for at least another year.

Great. I think I'm going to get back in the queue for my next questions. But I'll let someone else ask. Thanks.

Thanks, Tom.

Thank you. Our next question comes from the line of Eric Wold with B. Riley. Please proceed with your question.

Hey, good morning, Tim and Monty. Thanks for taking my questions. I guess two questions, kind of both somewhat follow-ups to the last one. I guess I'll take it in reverse order, I guess. So the -- on the ShopHQ side, obviously, you've navigated these headwinds that popped up last quarter. You did a great job, drove better gross margins and then follow it up again this past quarter with, again, impressive gross margins. I guess, how much of that is reactionary to changing the mix to what you can control during this environment versus how much of this is kind of permanent shift in where you think margins can be for that segment? Can you be at this level going forward? Or is there -- as you bring additional categories back into the mix, it's not actually going to migrate back down towards where it was before?

Great question, Eric. The -- think of it this way. When we started our journey back in '19, we talked about really lowering Home and what an inside of Home is CE. And so what we've been doing is that and really focusing on our strength of our reason for being which are these wearable categories, fashion, beauty, jewelry, watches, what you see with the evolution over the years as we've moved our gross margin up from the 32%, 33% to 37%, 38%, 39%, 40%. The margins we're at today are certainly sustainable and we think we can even do better than them, not materially better. That's not a focal point. But when you looked at our Q-over-Q performance, what you did see was there were a lot of health products and other products really related to the pandemic. And those were not naturally what we think is the right balance. So you saw us move back to this wearable strategy which is what we've always been. So it's a combination of last quarter was a little bit out of character and it was certainly more normal than Q2 last year but Q3 was still a little bit of the pandemic in there and it was pretty much gone in Q4. So the -- when we're ever given a choice between margin and revenue growth, we'll always choose margin. I think we talked about it before with the bigger rear-barrel approach to revenue is we just need more scale, we need more profitable scale. So that's how you see that balance working with us pretty consistently every single quarter.

Got it, helpful. And then, the other follow-up question. If you think about the acquisitions you made recently, Synacor, 123tv, when should we start to see all of these businesses in the iMDS truly start working together and how will those benefits be first visible? I guess another way to ask this is, if I look at the '22 guidance, how much of those kind of revenue synergies, so to speak, are baked in that guidance versus what those companies would have done on their own just kind of combined together?

Thanks for the question, Eric. The best way to do -- to demonstrate our strategy is just talk about examples, right? So the first and best example would be CBK. Remember, our wheel, the turns, the reason we have these three strategies in place is to they each feed each other and create these synergies. So for example is CBK. We acquired that brand for -- in partnership with Hilco. They were very big retail tipped over for all the obvious reasons but a great loyal reason for being the proprietary fabrics, focused on the same customers. And Hilco really came [indiscernible] you guys have all the assets to really grow this quickly. And so when you look at the KPIs we reported this quarter, you can see that television is driving the bus on the increased awareness on the new customer acquisition and it's filling the void of what brick-and-mortar used to be for that brand. That's why quarter-over-quarter, the CBK customer, who is used to shopping at retail engaged on ShopHQ and ShopHQ customers engaged with CBK. And that created that lift that also drove e-commerce and then also gave us the opportunity because of this -- what I call the data mining we're doing, we were able to focus where we should ship our first direct-to-consumer catalog. And that's really never been done by CBK. We've done our third now and they've been very successful because of the data we know about the customers what we're learning about them today, what historically they've done. So we've opened up three sales channels really that didn't -- weren't real drivers of the business before with television, e-com and direct-to-consumer catalog. And that is complementing, we believe, the existing brick-and-mortar retail that will slowly roll out as a thoughtful add-on to the primary three rather than making brick-and-mortar the traditional model driving the bus. That's -- so I think it's already an evidence for CBK. And when you see Q4, we hope to talk to you about tangible examples of how iMDS is driving value within our ecosystem, again, capitalizing on the entertainment assets we have as well as the consumer brands. In terms of 123, very early, we've owned them 43 hours and I can tell you I'm very excited about it. And as I talked about before, it's really -- every single time we make an acquisition, it is about the business model, it is about the strategic fit. It's also about the culture of the team in place. And the team at 123tv not only can execute what they're doing today in Western Europe. We think the gamification secret soft that they have is something that we will work well here in the U.S. and you'll see more of that and we have not built those kind of opportunities into the guidance that we've provided. We wanted to provide a very sturdy guidance that we know we can, as I like to say it, beat and raise. We want to make sure that we overdeliver on the promises.

Perfect. Thanks, Tim.

Yes. Thanks, Eric.

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

Hey Tim and Monty. Just a quick one on 123tv. Tim, in your prepared remarks, you had mentioned you saw the travel and entertainment vertical as a potential fit for that platform. Maybe talk a little bit more about that and how quickly we could see that come over to the U.S. potentially?

Thanks, Mark. It is -- when we think of the engaging experience consumers enjoy, they do enjoy the gamification of how they can compete and win for the best prices, for the most scarce quantity. And that's something that we do here at ShopHQ but the format and the technology and what they do at 123 is a level above and something that we think as you move here to the U.S. and look at online only digital shopping marketplaces and you look at the, what I call, product that is in the information layer, airline tickets, hotels, all those types of things, we are very focused on that. Because our -- again, our core demographic, all the businesses that we talk about and I really want to emphasize this, is focused on that consumer who is 50 and older. And the -- we talked about the baby boomer coming into that age group of 65 and older back in 2011 and driving very big growth over these last 10 years with spending power that like I talked about is unmatched. Again, those are also the areas where our consumers are spending -- our customers are spending money. And so, as we know when we take traditional scaled media like ShopHQ national networks and you cross-promote to online marketplaces, not only you send new customers there but you also capture the attention of customers that are even customers of ShopHQ because you're on national television. This is back in my early days, I was at IEC, I ran the USA Network and Sci-Fi channel. Those were big national networks. That, again, were at the same time that IEC was acquiring hotels.com and Ticketmaster and driving promotion to those emerging marketplaces at that time. It's something that we are excited about and we think is a very big opportunity for us.

Great. And then, just one quick follow-up regarding Synacor. Have you guys started that cross-sell at this point? I know kind of the little idea was to create that one-stop solution for leveraging the different assets on a -- for a brand or for a customer. Have you guys started that process in terms of cross-sell? And kind of what have you seen as a result of that?

So the -- so when Synacor, what -- we'll treat Synacor as the name more like Baltimore, right, that shall not be named. It's a -- so now we call it iMDS, so it's iMedia's digital services. And the arm that digital services really plays around the programmatic advertising opportunity and really helping us join together the consumer profiles that we have in place, all the data that we have and organizing that in a way that can be mined very efficiently to improve the experience for the customer, that is underway and moving quickly. The team -- Matt's team there is doing a great job and we're getting to actionable items quickly. When you mentioned, though, Mark, the idea of us being a one-stop shop, as I frequently talk about it when we become the single source partner, that's really a step above that. That's where we're saying we will use our entertainment assets, our consumer brand, technology, whether that's the pick, pack and ship or the e-com platform or the customer service and the media commerce services. Remember, media commerce services is comprised primarily today of iMedia digital services, the advertising -- video advertising platform. We also do pick, pack and ship for G3. We also do some loyalty services that we want to, again, scale. So think of it that way that our single-source partnership is at the entertainment, media commerce services and consumer brand level. And the example, again, of that transaction or that strategy working is CBK, really in partnership with Hilco. The reason Hilco came to us and said, you have the assets in place to grow this more than we could grow it and more efficiently and more profitable is because of that level of single-source partnership. And very similar, quite frankly, with Shaq. We haven't talked about Shaq yet. He's a big guy, big name, big brand for us. We did, I think, over $4 million in sales on Shaq alone in the last couple of months, outstanding response to his Smokeless Grill and we're excited about that. But that's also -- if you think about it, a single-source partnership with ABG which is a great partner of ours with Shaq. And we're very excited about the -- using our television platforms to again drive a scaled retail opportunity for Shaq. This has obviously slowed down a little bit with Shaq because of the -- just the logistics of getting the products at retail, the pandemic very, very difficult on small kitchen appliances and other types of electronics. But it's a very big opportunity for us. And that's another example of that strategy in place working today. And as I talked about before, in Q4, we'll have tangible examples of iMDS' ability to data mine into improving customer engagement which ultimately produces higher conversion.

Great. Thanks, Tim. Good luck for the rest of the way [ph].

Thanks, Mark.

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

Hi guys, thanks for taking my question. And congratulations on another really nice quarter here. As we think about the early 2022 outlook, what are going to be the biggest drivers of EBITDA you see next year between ShopHQ and 123tv and some of your emerging assets.

Alex, thanks for the question. I would really revolve the conversation around what I call our catalysts, right? So think about the -- we talked about three on the call today. And obviously, 123 which closed in Q4 technically, will be added to that. So you have ShopHQ. Then we talked about CBK. Then we talked about iMDS. And we'll be quickly talking about 123tv. So with context to us producing the $675 million to $725 million in revenue next year, those who are going to revolve around those four catalysts, there are smaller ones that we'll talk about more on our Capital Markets Day but those are drivers. And if you think about each of them, the big profitability is around ShopHQ is to capture the upside that we're creating with the new 20 million HD homes. It took us 2.5 years to get in the position to have our programming and merchandising at the level to take advantage of the more expensive HD carriage and we love what we're seeing, as we talked about 15% growth is much higher than we expected the maturity of the upside of HD to happen in these 8 of the top 10 markets. So you'll see that HD carriage as a driver for ShopHQ. On CBK, you'll see we've introduced all sorts of virtual engagement with the CBK customers, not just on television but on the online as well in mobile. So you'll see the digital driving the growth around CBK complemented again by thoughtful accent in brick-and-mortar. As I mentioned, we're opening three brick-and-mortar stores in Q4, this Q4. One is in Canton, Ohio. One is in Fort Wayne, Indiana. And the third is in Greensberg, Pennsylvania, just outside of Pittsburgh. These are all locations that we have through an extensive research of their historical performance, opened back up as they've been there before and we expect them to be well received in those locations very quickly in Q4. So that growth will also mature. We didn't talk about J.W. Hulme as much. That's a smaller brand but we expect big things from that, similar to what we're doing with CBK. Alex, the last part would be -- and I just want to emphasize that what's in our models today from a guidance perspective is really just what I call the sausage-making and that's actually works with Bavaria because I used that analogy before Bavaria in Germany. But the sausage making of what 123tv does every day, in Germany, in Austria as it moves through into maybe other territories in Western Europe, is what we look at for our guidance for the revenue we talked about next year. The upside to that is how successful we are in the opportunities we talked for the digital shopping marketplaces online digital shopping marketplace here in the U.S. Very exciting, not baked into any of our upside because we always want to make sure that our guidance is at the bottom of our expectations.

That's really helpful. And then, if I could just ask another question on your guidance. It looks like you're looking for positive EPS beginning in the second half of the year next year. So there's presumably some sequential ramp up, we're going to see in profitability as the year moves on. Is that just because the second half of the year tends to have more revenue than the first half of the year given the holidays and everything? Or are there some other drivers that are going to be accelerating as the year progresses?

Alex, thank you for asking that question. So I didn't have to mention it again. The -- it is precedent that we established a track record of delivering what we promised and it is precedent that we're promising EPS growth in the back half of next year. That, to me, is a very significant shift and something that we're very proud to be able to do and it's taken us some time to get there. In terms of why the back half of the year is just the way we modeled in and the way we believe things are going to move, we want to make sure that we deliver on everything we say. So there's no magic to the back half of the year being -- or the first half of the year. I just want to make sure that we deliver on everything we say.

Great. That's really helpful, Tim. Thank you very much.

Thanks, Alex.

Thank you. Our next question is a follow-up from Thomas Forte with D.A. Davidson. Please proceed with your question.

Great. Thanks Tim and Monty. So four follow-up questions; two longer, two shorter. I will go one at a time. So Tim and Monty, the drivers of the customer file improvements, what are they? And what gives you confidence is sustainable?

So we're going to -- we'll deal it one at a time or you're going to list them all out. I've got 10 [ph] but I'll start with that one. The...

One at a time, yes.

All right. So the customer file growth; think about 20%. I would say that, that's only going to accelerate. So think back to Q1 before CBK and before these other businesses, we were growing at 8% organically. And that 8%, remember, because you've been with us, Tom, it took us a couple of years to fix the things that we did and move it from a mid-teen decline to a single-digit decline and we broke through in Q4 of last year with growth in Q1 accelerated from there. So that trend will continue just organically with the ShopHQ as we add and grow distribution for our emerging networks also in the entertainment strategy, those will pick up new customers 123tv, certainly now inorganic. But soon to be included in organic is going to make that even bigger. So it's -- you've got -- you're really just firing on all cylinders. And the 20% growth is really around the engagement and the popularity and the surprising growth of Christopher & Banks starting out as quickly as they are. Remember, that brand has been around a long time and reengaging those customers with fresh product and engaging marketing opportunity. We haven't talked enough about our technologies that we're using to engage our customers. We have a sales force shop here. So we have sales force marketing. We use sales force sales and service that we're actually upgrading this year to make sure that we have everything at our disposal to make sure the customer experience is strong. So the idea is that you grow the customers and keep them this time which is a novel thing that we want to make sure that we do better at. And so I would say that you're going to see our customer file growth accelerate; that would be my projection.

Great. And then, second follow-up of four [ph]. So there have been a lot of things you've done, Tim, since returning that are not currently reflected in the share price. But can you talk about it at a high level, the significant improvements you've made to your capital structure from when you first returned to where you are today?

Well, for capital structure, think of it -- we think of our growth strategy is around three principal areas, right? There's the enterprise thesis which is the interactive media strategy we've been talking about. There's obviously the financing and balance sheet that is very important how we make that as sturdy as possible and over time. And I think that's what you're referring to. And there's also our shareholder growth strategy which is as we grow, how do we attract and maintain the right type of shareholders who are going to grow with us. And the over -- the first step on any of these -- the three journeys we talked about, is we have to fix the business which we did in '19 and '20. And then we had the opportunity to gain trust and go out to the marketplace and raise equity several times at escalating prices with bringing in new investors that liked our track record and trusted the vision of where we are going. And that's been a game changer for us be able to then accelerate the road map that we have from an enterprise thesis perspective. So the balance sheet, as I say, you wage war with your balance sheet, our balance sheet has improved dramatically around the equity raises that we were able to do with bringing in great new investors to the story. Also, even on the bond side for the 123tv transaction, very important for us to make sure that we not only fix the business but also fix the balance sheet which I think we've done a really great job at. And then it's about the shareholder growth. As we move from a micro-cap to a small-cap and the attractive aspects of our business with EPS, that's really where the -- that's -- those are the three strategies working in harmony.

Excellent, all right. The last two should be faster. So on the performance of the HD, I feel like an argument to be made that there was pent-up demand your customer was saying, what took you so long to give us an HD offering. Do you think that's part of it? And then do you have an opportunity to go HD in more markets since it's doing so well?

Great question, Tom. We do have that opportunity. I do think there's pent-up demand. Remember, the -- we couldn't really afford from a balance sheet perspective because the payment terms are so much shorter for HD to do that. And that was one of the things we were talking about, they all work together. So the HD that we have with that 15% growth in 8 of the top 10 markets, it's just been outstanding. And it is a pleasure to see that all the hard work you put in on the merchandising, Kathy and her team around the merchandising have done just an amazing job of really producing the products, the new products, reinvigorating the existing products from Isomers to Invicta. We've got all sorts of opportunities with Consult. We've got great jewelry brands with Stefano. I could go on and on about why it's so exciting to get better distribution to showcase our reason for being. And our reason for being isn't about nationally available products that you can get anywhere. We're not selling Ninja air fryers. We are about the discovery of brands, the discovery of stories. We go on air and our reason for being is that we tell the story with the person that brought the product. We talk about the unique selling propositions of those products and customers love that opportunity to discover and to engage in that and then to participate in that discovery by buying our products. It's a very clear clean reason for being. And I think the more HD carriage we get which again works with our core customer, 50-plus who are lower in the dial and still are watching more hours of linear television than they're doing anything else as it relates to OTT. So it's an opportunity to reach our core customer. And the other thing that you want to think about here is our core customer is that already initiated into TV retailing being a customer of QVC or HSN, they're about $9 billion in annual revenue and we're $0.5 billion. So the opportunity to attract customers that haven't seen this before that are already initiated into the TV retailing experience is gigantic.

Last question, I promise. Can you talk about the repeatability of the Christopher & Banks strategy? It seems like you have a real winning strategy here which is defined a physical retailer that resonates with your core customer, thoughtfully add stores and execute offline online strategy?

Sure thing, Tom. And listen, I appreciate the questions. The -- we partner with -- so there's a couple of very important criteria about what brands that we would partner with to grow. And the answer is absolutely, yes. There are all sorts of opportunities. We turn down more opportunities today than we're saying yes to because the model really works. And we want to make sure that all of our criteria are in place. Number one, it has to be a brand that has done things and has reached an inflection point for one reason or another but the bones of the brand are strong. And that inflection point, meaning that technology innovation which you could call CBK a variety of things but a shift in buying retail, taking the hits that it has over the last decade, right? So the -- it has to have a brand that means something. It has to be focused on our core demographics of 50-plus men and women. We do both since our customer base is both. And those two things alone are the initial lens that we look at. And there are many like that. And so when you think about how they come across our plate, it really isn't just about us going out and finding them. It's really about the partners we already have. Hilco is an amazing partner. They are in the middle of the entire retail consumer experience and they have opportunities all the time and that's really been our best source and I think will continue to be our best source for partnerships in the future that will take advantage of this entertainment consumer brands and media commerce services, spinning the wheel to provide outsourced returns for our partners.

Great. Thanks for taking my questions.

Thank you, Tom.

Thank you. Ladies and gentlemen, this concludes our question-and-answer session. I'll turn the floor back to Mr. Peterman for any final comments.

Thanks, Melissa. I just want to say thank you, everybody, for your time this morning. We are very excited here at iMedia and we look forward to talking to everybody again coming February.

Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.