Atlanta, Georgia, February 14, 2017 – 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 and six months ended December 31, 2016.
Operating highlights for the quarter ended December 31, 2016:
- Net sales increased 5% to a record $5.1 million for the second quarter of fiscal 2017, as compared to $4.9 million for the comparable prior-year period.
- Total gross profit increased 16.3% to $1.5 million, as compared to $1.3 million for the comparable prior-year period.
- Net income increased 78% to $399,000 during the current year second quarter compared to net income of $224,000 in the prior-year.
- EBITDA, as adjusted, for the second quarter improved by 40.2% to $579,000, as compared to $413,000 in fiscal 2016.
Operating highlights for the six months ended December 31, 2016:
- Net sales increased 7.4% to a record $9.2 million for the six-month ended December 31, 2016, as compared to $8.6 million for the comparable prior-year period.
- Total gross profit increased 12.5% to $2.5 million, as compared to $2.2 million for the comparable prior-year period.
- Net income increased to $222,000 during the six months ended December 31, 2016, as compared to $2,000 for the comparable prior-year period.
- EBITDA, as adjusted, for the first half of fiscal 2017 improved by 69.5% to $612,000, as compared to $361,000 in the comparable period of fiscal 2016.
Louis Friedman, Chairman and Chief Executive Officer, commented, “We are pleased with the growth in net sales and gross profit during the three and six months ended December 31, 2016. The production improvements that we made during calendar year 2016 are yielding positive results and the roll pack machine that was delivered in January of this year should allow us to continue that trend”.
Mr. Friedman added, “During the second quarter, sales of our Jaxx and Avana products (combined) increased by 27%. Unit shipments of Avana products increased 80% during the second quarter to approximately 4,500 units. And, excluding a one-time order from a retailer last year for 5,000 Jaxx products, unit shipments of Jaxx products increased approximately 19% during the second quarter over last year second quarter. We expect to see continued strong growth for both of these brands during the remainder of calendar 2017.”
Luvu Brand’s executive management will host a business update conference call for investors, analysts and other interested parties on Wednesday, February 15, 2017, at 11:15 a.m. Eastern Standard Time. To listen to the call, please dial 412-902-6510 and ask to be joined into the Luvu Brands, Inc. call. The replay of the call will remain available on the Company’s investor relations website, www.luvubrands.com, for approximately 60 days.
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 nonGAAP 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 represents net income before interest income, interest expense, income taxes, depreciation, amortization, and stock-based compensation expense.
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 products for intimacy enhancement, fashion seating and furniture, and top-of-bed comfort products. The Company is headquartered in Atlanta, Georgia in a 140,000 square foot vertically-integrated manufacturing facility that employs over 160 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.