Luvu Brands Announces Fiscal 2018 First Quarter Results
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E-mailATLANTA, GA -- (Marketwired) -- 11/14/17 -- Luvu Brands, Inc., (OTCQB: LUVU), a manufacturer and marketer of premium consumer brands in the categories of sexual wellness, comfort top-of-bed accessories and lifestyle fashion furniture, today reported financial results for the three months ended September 30, 2017.
Operating highlights for the quarter ended September 30, 2017:
- Net sales decreased 12% to $3.6 million for the first quarter of fiscal 2018, as compared to $4.1 million for the comparable prior-year period. Excluding the $743,000 decrease in the sales of Tenga products, the net sales would have increased 8% year-over-year.
- Total gross profit was unchanged at $1.0 million, as compared to $1.0 million for the comparable prior-year period.
- Gross profit as a percentage of net sales increased to 27% from 24% in the prior year first quarter.
- Operating expenses remained unchanged at $1 million during the three months ended September 30, 2017 as compared to the prior year first quarter.
- The net loss increased slightly to $193,000 during the current year first quarter compared to a net loss of $177,000 in the prior year.
Louis Friedman, Chairman and Chief Executive Officer, commented, "During the first quarter, we were able to recover much of the discontinued Tenga revenue through higher sales of our own branded products at a higher gross profit margin. Despite the $482,000 net decline in sales revenue, our net gross profit was unchanged at $1 million and, as a percentage of revenue, increased by over 300 basis points. Mr. Friedman added, "During the first quarter, sales of our Jaxx products increased by 27% and sales of our Avana products increased by over 74%. We expect to see continued strong growth for both of these brands through the holiday season and during the remainder of fiscal 2018."
About Luvu Brands
Luvu Brands, Inc. is an Atlanta, Georgia based designer, manufacturer and brand based marketer of consumer products that offers a growing number of product categories including: Liberator® sexual positioning furniture, Avana" top-of-bed comfort pillows and Jaxx® casual fashion furniture, child, teen and adult beanbags, outdoor loungers, loveseats and daybeds. These products are sold through the Company's websites, concept factory store, online mass merchants and retail stores worldwide. Many of our products are offered flat-packed and vacuum compressed to save on shipping and reduce our carbon footprint.
The Company is headquartered in a 140,000 square foot vertically-integrated manufacturing facility that employs over 160 people. Bringing sewn products manufacturing back to the USA and creating innovative vacuum-compressed consumer products are core to the Company's operating principles. As the majority of the Company's products are constructed of polyurethane foam, sustainable manufacturing practices are used including re-purposing of foam trim into beanbag fill to reduce our overall carbon footprint.
Luvu Brands promotes its products globally in a variety of distribution channels including mass market web retailers, catalogers and specialty retail stores. The Company's brand sites include: liberator.com, jaxxliving.com, avanacomfort.com plus other global e-commerce sites. For more information about Luvu Brands, please visit luvubrands.com.
LUVU BRANDS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
September
30,
2017 June 30,
(unaudited) 2017
------------ ------------
(in thousands, except
Assets: share data)
Current assets:
Cash and cash equivalents $ 439 $ 742
Accounts receivable, net 537 631
Inventories, net 1,613 1,545
Prepaid expenses 62 80
----------- -----------
Total current assets 2,651 2,998
Equipment and leasehold improvements, net 875 869
Other assets 10 9
----------- -----------
Total assets $ 3,536 $ 3,876
=========== ===========
Liabilities and stockholders' deficit:
Current liabilities:
Accounts payable $ 2,231 $ 2,177
Current debt 1,975 2,115
Other accrued liabilities 411 535
----------- -----------
Total current liabilities 4,617 4,827
Noncurrent liabilities:
Long-term debt 1,161 1,094
Deferred rent payable 137 147
----------- -----------
Total noncurrent liabilities 1,298 1,241
----------- -----------
Total liabilities 5,915 6,068
Commitments and contingencies (See Note 15) -- --
Stockholders' deficit:
Preferred stock, 5,700,000 shares authorized,
$0.0001 par value none issued and outstanding -- --
Series A Convertible Preferred stock,
4,300,000 shares authorized $0.0001 par
value, 4,300,000 shares issued and
outstanding with a liquidation preference of
$1,000 at September 30, 2017 and June 30,
2017 -- --
Common stock, $0.01 par value, 175,000,000
shares authorized, 73,452,596 shares issued
and outstanding at September 30, 2017 and
June 30, 2017 735 735
Additional paid-in capital 6,085 6,079
Accumulated deficit (9,199) (9,006)
----------- -----------
Total stockholders' deficit (2,379) (2,192)
----------- -----------
Total liabilities and stockholders' deficit $ 3,536 $ 3,876
=========== ===========
LUVU BRANDS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(unaudited)
Three Months Ended
September 30,
--------------------------
2017 2016
------------ ------------
(in thousands, except
share data)
Net Sales $ 3,623 $ 4,105
Cost of goods sold 2,644 3,128
----------- -----------
Gross profit 979 977
Operating expenses:
Advertising and promotion 93 82
Other selling and marketing 285 285
General and administrative 609 584
Depreciation and amortization 52 51
----------- -----------
Total operating expenses 1,039 1,002
----------- -----------
Operating loss (60) (25)
Other income (expense):
Interest income -- --
Interest (expense) and financing costs (133) (152)
----------- -----------
Total other income (expense) (133) (152)
----------- -----------
Loss from operations before income taxes (193) (177)
Provision for income taxes -- --
----------- -----------
Net loss $ (193) $ (177)
----------- -----------
Net loss per share:
Basic and diluted loss per common shares $ (0.00) $ (0.00)
----------- -----------
Weighted-average common shares outstanding:
Basic and diluted weighted average common and
common equivalent shares outstanding 73,452,596 71,452,596
=========== ===========
Use of Non-GAAP Measure -- *Adjusted EBITDA
Luvu Brands management evaluates and makes operating decisions using various financial metrics. In addition to the Company's GAAP results, management also considers the non-GAAP measure of Adjusted EBITDA. While Adjusted EBITDA is not a measure of performance in accordance with GAAP, management believes that this non-GAAP measure provides useful information about the Company's operating results. The table below provides a reconciliation of this non-GAAP financial measure with the most directly comparable GAAP financial measure.
As used herein, Adjusted EBITDA income (loss) represents net loss before interest income, interest expense, income taxes, depreciation, amortization, and stock-based compensation expense.
Reconciliation of net loss to Adjusted EBITDA income (loss) for the three months ended September 30, 2017 and 2016:
Three months ended
(Dollars in thousands) September 30,
---------------------------
2017 2016
------------- -------------
Net loss $ (193)$ (177)
Less interest income
Plus interest expense, net 133 152
Plus depreciation and amortization expense 52 51
Plus stock-based compensation 7 7
------------ ------------
Adjusted EBITDA income (loss) $ (1)$ 33
------------ ------------
Forward-Looking Statements
Certain matters discussed in this press release may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such matters involve risks and uncertainties that may cause actual results to differ materially, including the following: changes in economic conditions; general competitive factors; acceptance of the Company's products in the market; the Company's success in obtaining new customers; the Company's success in product development; the Company's ability to execute its business model and strategic plans; the Company's success in integrating acquired entities and assets, and all the risks and related information described from time to time in the Company's filings with the Securities and Exchange Commission ("SEC"), including the financial statements and related information contained in the Company's Annual Report on Form 10-K and interim Quarterly Reports on Form 10-Q. Examples of forward-looking statements in this release include statements related to new products, anticipated revenue and profitability. The Company assumes no obligation to update the cautionary information in this release.
Company Contact: Luvu Brands, Inc. Ronald Scott Chief Financial Officer 770-246-6426 [email protected]
Source: Luvu Brands, Inc.
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