Announcement of record first quarter net sales of $8.1 million
ATLANTA, GA /ACCESSWIRE/ November 15, 2022 / Luvu Brands, Inc. (OTCQB:LUVU), a designer, manufacturer and marketer of a portfolio of consumer lifestyle brands, yesterday reported financial results for its first fiscal quarter, which ended September 30 2022.
Third Quarter Fiscal 2023 Highlights
Quarter ended September 30, 2022 compared to the quarter ended September 30, 2021
- Net sales increased 29.5% to a record $8.1 million.
- Total gross profit of $2.0 million, an increase from $1.5 million the previous year.
- Gross profit as a percentage of net sales of 24.5% compared to 24.1% the previous year.
- Operating expenses were $1.4 million, compared to $1.2 million in fiscal 2022.
- Net income was $0.5 million, or $0.01 per share, compared to net income of $0.2 million, or $0.00 per share, in 2022.
- Adjusted EBITDA of $675,000 compared to $398,000 during the first three months of the previous fiscal year.
Louis Friedman, President and Chief Executive Officer, said, “Coming into the end of September, we are encouraged by the continued business performance as we continue to have strong revenue and gross margin growth. We remain positioned to innovate and manufacture great new products with sustainable materials, while reducing our carbon footprint. Our growth initiatives include a multi-channel marketing approach now adding partnerships that allow us to further expand our brand territory with retailers in sexual wellness, Amazon and mass market e-tailers. Our product placement on Netflix “How to Build a Sex Room” resulted in an 86% increase in sales of Liberator products over the previous year” .
Results for the third quarter of fiscal 2023
Net sales increased 29.5% to $8.1 million from $6.2 million in the same quarter a year ago. Sales of the company’s flagship Liberator brand increased 86% year over year to $5.1 million. Jaxx product sales were down 5% from a year ago to $1.8 million, and Avana sales were down 25% to $0.6 million. Net sales of products purchased for resale decreased 26% from the prior year to $0.3 million and other income decreased 30% to $0.3 million of dollars.
Total gross profit for the first quarter was $2.0 million, an increase of 31.6% from $1.5 million in the first quarter of the prior year. Gross margin as a percentage of net sales increased to 24.5% from 24.1% in the prior year.
Operating expenses represented approximately 17% of net sales, or approximately $1,397,000, compared to 19% of net sales, or approximately $1,176,000, for the same period last year.
Net earnings for the quarter were $492,000, or $0.01 per share, compared to net earnings of $227,000, or $0.00 per share in the first quarter of the prior year.
Adjusted EBITDA for the three months ended September 30, 2022 was $675,000 compared to $398,000 in the prior year.
Cash and cash equivalents as of September 30, 2022 totaled $1.3 million compared to $0.9 million as of June 30, 2022.
Management will host a conference call at 11:00 a.m. EST (10:00 a.m. CST; 8:00 a.m. PST) on Friday, November 18, 2022. To listen to and participate in the call, please register at this web link: https://www.webcaster4.com/Webcast/Page/2527/47147
A question and answer session will be held following the official presentation, which shareholders and other interested parties may participate in via the aforementioned web link or by calling 888-506-0062 (international: 973-528-0011) using the code participant access number 895731.
Certain matters discussed in this press release may be forward-looking statements. These forward-looking statements can be identified by the use of words such as ‘should’, ‘may’, ”’projects”’ offers”. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, and other factors, some of which are beyond our control and are difficult to predict and could cause actual results to differ materially from those expressed or anticipated in the forward-looking statements. You are urged to carefully review and consider all cautionary and other information contained in our Annual Report on Form 10-K for the fiscal year ended June 30, 2022, as filed with the Securities and Exchange Commission ( the “SEC”) on October 12, 2022 and our other filings with the SEC. All forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements, many of which are generally beyond the control of Luvu Brands, Inc. and are difficult to predict. Luvu Brands, Inc. assumes no obligation to update forward-looking statements except as required by law. Information that appears on our websites and social media platforms is not part of this press release.
Use of Non-GAAP Financial Measures
Luvu Brands management evaluates and makes operational decisions using various financial measures. In addition to the company’s GAAP results, management also considers the non-GAAP measure of Adjusted EBITDA and non-GAAP operating margin. As used herein, Adjusted EBITDA represents net earnings before interest income, interest expense, income taxes, depreciation, amortization and stock-based compensation expense, and non-compliant operating margin. GAAP means adjusted EBITDA divided by net sales. Management believes that these non-GAAP measures provide useful information about the Company’s results of operations. Neither adjusted EBITDA nor non-GAAP operating margin has been prepared in accordance with GAAP. These non-GAAP financial measures should not be considered alternatives to or more meaningful than gross profit and net profit as indicators of the Company’s operating performance. Additionally, these non-GAAP financial measures as presented by the Company may not be comparable to similarly titled measures presented by other companies. The Company has attached to this press release a reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures.
About Luvu Brands
Luvu Brands, Inc. designs, manufactures and markets a portfolio of consumer lifestyle brands through company websites, online mass merchants and specialty retail stores worldwide. Brands include: Liberator®, a brand category of iconic sexual enhancement products; Avana®, incline bed therapy products, helping to relieve medical conditions associated with acid reflux and surgical recovery; and Jaxx®, a diverse range of daybeds, sofas and ottomans in casual fashion made from polyurethane foam and recycled polyurethane foam fillings. Based in Atlanta, Georgia, the company occupies a 140,000 square foot vertically integrated manufacturing facility and employs more than 200 people. The Company’s branded sites include: www.liberator.com, www.jaxxbeanbags.com, www.avanacomfort.com and other global e-commerce sites. For more information about Luvu brands, please visit www.luvubrands.com.
Luvu Brands, Inc.
Alexander A. Sannikov
Annual results for the first quarter of 2023
ADDITIONAL FINANCIAL INFORMATION
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
THE SOURCE: Luvu Brands, Inc.