iMedia Brands Inc (NASDAQ:IMBI) stock plunges 11.96% (As on April 13, 11:38:38 AM UTC-4, Source: Google Finance) after the company posted lower than expected results for the fourth quarter of FY 22. The company’s adjusted EBITDA of $2.5 million decreased 84% year over year from $15.1 million. The unexpected liquidity challenge and proactive content distribution disruptions were the primary drivers of the $13 million decrease. As of Jan. 28, 2023, total unrestricted cash was $7.2 million, compared to $11.3 million as of the year-ago period. On Apr. 10, 2023, the company completed its debt reduction event, which reduced its debt by $53 million to approximately $123 million. Q4 Net Loss was $24 million compared to a $5 million net loss for the same prior year period. Management notes the $19 million increase in net loss was driven primarily by the impact from the Company’s unexpected liquidity challenge; an estimated $4 million increase in interest expense; and the negative net income impact from ShopHQ Networks’ content distribution disruptions. Overall, Fiscal 2022 Net Loss was $70 million compared to a $22 million net loss for the same prior year period. The $48 million increase was driven primarily by a one-time $13 million charge for Shaq licensing termination, an estimated $13 million increase in interest expense, the negative impact from the Company’s Q4 liquidity challenge, and the negative impact from the ShopHQ Networks’ proactive content distribution disruptions.

IMBI in the fourth quarter of FY 22 has reported the adjusted loss per share of 82 cents, missing the analysts’ estimates for the adjusted loss per share of 13 cents. The company had reported 31.1 percent decline in the adjusted revenue to $133.5 million in the fourth quarter of FY 22, missing the analysts’ estimates for revenue of $171 million. The company attributed the revenue decline to an unexpected liquidity challenge. In addition, an estimated $10 million negative net sales impact was driven by ShopHQ Networks’ proactive content distribution disruptions. The gross margin fell 150 basis points Y/Y to 36.8%. The company recorded an operating loss of $(15.3) million for the quarter, wider than the operating loss of $(0.3) million in the year-ago period.

The company anticipates Q1 net sales at $105 million, a 31% year-over-year decline, dragged by the Q4 liquidity challenge. The company anticipates Q1 net income to be driven primarily by several one-time gains related to the debt reduction event. The company expects Q1 Adjusted EBITDA to be approximately $1 million. The company is in the process of engaging a national investment bank to lead an RFP process to replace its senior lenders as quickly as practical.