Reports Record Q1 Sales of $4.1 million; up 10% from prior year
Atlanta, Georgia, November 22, 2016 – Luvu Brands, Inc., (OTCQB: LUVU), a manufacturer and marketer of premium consumer brands in the wellness, lifestyle and fashion seating categories, announced their financial results for the first quarter ended September 30, 2016.
First Quarter Highlights
- Net sales during the three months ended September 30, 2016 (“Q1”) increased approximately 10% to $4.1 million from $3.7 million recorded in the same period last year.
- For the quarter ended September 30, 2016, sales to wholesale customers increased 10% to $2.7 million from the same quarter last year, due primarily to higher sales of branded Liberator, Jaxx and Avana products.
- Direct to consumer sales increased 13% to $1.3 million during Q1, due primarily to higher sales of branded Liberator products.
- Sales of Jaxx and Avana products (combined) during Q1 increased 60% to $884,000 from $551,000 in the same quarter of the prior year.
- Net loss for Q1 was $177,000, or $(0.00) per share, compared to a net loss of $222,000, or $(0.00) per share, during the same quarter of the prior year.
- Adjusted EBITDA* for the three months ended September 30, 2016 and 2015 was income of $33,000 and a loss of $(52,000), respectively.
Louis Friedman, the Company’s Founder and Chief Executive Officer, commented, “We were pleased with the revenue growth during Q1 despite deteriorating sales and margins from the wholesale products we purchase for resale. During the quarter, we made several strategic investments that are expected to improve our future operating performance. These initiatives include expansion of our conveyor-based sewing line and the purchase of the roll pack compression machine. The roll pack machine is still on track to be delivered before the end of calendar 2016 and the increased sewing capacity for our Jaxx and Avana products came on-line during the current second quarter. Both of these improvements are expected to reduce our production costs and increase throughput, which should result in improved future financial results.”
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.
Adjusted EBITDA is defined as net loss before interest, income taxes, depreciation and amortization expenses, excluding, when applicable, stock-based compensation expense and common stock issued for services.
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.
About Luvu Brands
Luvu Brands, Inc. designs, manufactures, licenses, and markets a portfolio of premium consumer lifestyle brands including sexual wellness, fashion seating and furniture, and home essentials.
The Company is headquartered in Atlanta, Georgia in a 140,000 square foot vertically-integrated manufacturing facility that employs over 150 people. Bringing manufacturing back to the USA, sustainable manufacturing practices, and decreasing the overall impact on the environment are core to the Company’s operating principles.
Luvu Brands promotes its products in a variety of consumer categories to retailers, wholesalers, and distributors in the United States and globally. 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.
Chief Financial Officer