Luvu Brands Reports Fiscal 2022 Second Quarter and First Half Results
Luvu Brands, Inc. (OTCQB:LUVU) reported record net sales of $13.4 million for the first half of fiscal 2022, up 21% year-over-year. The second quarter saw a 26% increase in net sales to $7.2 million. However, net income fell significantly to $167,000, or $0.00 per share, compared to $1.465 million, or $0.02 per share, last year. Operating expenses rose 20% to $1.326 million. Gross profit margins declined, with gross profit as a percentage of net sales at 22% versus 27% in the prior year. The company plans to enhance operations through automation and expanded supplier relationships.
- Record first half net sales of $13.4 million, up 21% year-over-year.
- Second quarter net sales reached $7.2 million, a 26% increase compared to the previous year.
- Sales of Liberator and Jaxx products grew 33% and 37%, respectively.
- Net income dropped to $167,000 from $1.465 million in the prior year.
- Gross profit margin decreased to 22% from 27% in the same quarter last year.
- Operating expenses increased by 20% to $1.326 million.
Reports Record First Half Net Sales of
ATLANTA, GA / ACCESSWIRE / February 18, 2022 / Luvu Brands, Inc. (OTCQB:LUVU), a designer, manufacturer and marketer of a portfolio of consumer lifestyle brands, today reported fiscal 2022 second quarter and first half results.
Fiscal Second Quarter 2022 Highlights
Three months ended December 31, 2021 as compared to the three months ended December 31, 2020
- Net sales increased
26% to a record$7.2 million from$5.7 million . - Total gross profit of
$1.6 million , up slightly from the prior year. - Gross profit as a percentage of net sales was
22% versus27% in 2020. - Operating expenses increased
20% to$1,326,000 from$1,109,000. - Income from operations was
$251,000 , down45% from$457,000 in 2020. - Net income of
$167,000 , or$0.00 per share, compared to a net income of$1,465,000 , or$0.02 per share, in the prior year.
First Half Fiscal 2022 Highlights
Six months ended December 31, 2021 as compared to the six months ended December 31, 2020
- Net sales increased
21% to a record$13.4 million from$11.1 million . - Total gross profit of
$3.1 million , up1% from$3.1 million in the prior year. - Gross profit as a percentage of net sales was
23% versus28% in 2020. - Operating expenses were
$2.5 million , up16% from the prior year. - Income from operations was
$574,000 , versus$893,000 in 2020. - Net income of
$394,000 , or$0.01 per share, compared to a net income of$1,794,000 , or$0.02 per share, in the prior year. - Adjusted EBITDA was
$733,000 for the first half compared to$2,100,000 in the prior year first half.
Louis Friedman, Chairman and Chief Executive Officer, commented, "The company has a multi-faceted plan to increase sales, profitability and improve delivery times including 1) adding additional sewing and cutting automation, 2) increasing our orders from a sewing subcontractor in Mexico, and 3) re-sourcing and lowering costs of certain raw materials. The Company recently purchased a new unit production system from Eton Systems which will increase our sewing conveyor system capacity by
Fiscal Second Quarter 2022 Results
Net sales increased
Gross profit for the second quarter totaled
Operating expenses were approximately
Income from operations was
Net income for the quarter was
Secured and unsecured debt decreased from
Forward-Looking Statements
Certain matters discussed in this press release may be forward-looking statements. Such forward-looking statements can be identified by the use of words such as ''should,'' ''may,'' ''intends,'' ''anticipates,'' ''believes,'' ''estimates,'' ''projects,'' ''forecasts,'' ''expects,'' ''plans,'' and ''proposes.'' 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 difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. You are urged to carefully review and consider any cautionary statements and other disclosures in our Annual Report on Form 10-K for the fiscal year ended June 30, 2021 as filed with the Securities and Exchange Commission (the "SEC") on September 28, 2021 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 in the forward-looking statements, many of which are generally outside the control of Luvu Brands, Inc. and are difficult to predict. Luvu Brands, Inc. does not undertake any duty to update any forward-looking statements except as may be required by law. The information which appears on our websites and our social media platforms is not part of this press release.
Use of Non-GAAP Financial Measures
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. As used herein, Adjusted EBITDA represents net income before interest income, interest expense, income taxes, depreciation, amortization, and stock-based compensation expense. Management believes that this non-GAAP measure provides useful information about the Company's operating results. Adjusted EBITDA has not been prepared in accordance with GAAP. This non-GAAP financial measure should not be considered as alternative to, or more meaningful than, net income as indicators of the Company's operating performance. Further, this non-GAAP financial measure, as presented by the Company, may not be comparable to similarly titled measures reported by other companies. The Company has attached to this press release a reconciliation of this non-GAAP financial measure to its most directly comparable GAAP financial measure.
About Luvu Brands
Luvu Brands, Inc. designs, manufactures and markets a portfolio of consumer lifestyle brands through the Company's websites, online mass / drug merchants and specialty retail stores worldwide. Brands include: Liberator®, a brand category of iconic products for enhancing sensuality and intimacy; Avana®, inclined bed therapy products, assistive in relieving medical conditions associated with acid reflux, surgery recovery and chronic pain; and Jaxx®, a diverse range of casual fashion daybeds, sofas and beanbags made from virgin and our re-purposed polyurethane foam trim. Headquartered in Atlanta, Georgia, the Company occupies a 140,000 square foot vertically-integrated manufacturing facility and employs over 200 people. The Company's brand sites include: www.liberator.com, www.jaxxliving.com, www.avanacomfort.com plus other global e-commerce sites. For more information about Luvu Brands, please visit www.luvubrands.com.
Company Contact:
Luvu Brands, Inc.
Ronald Scott
Chief Financial Officer
770-246-6426
ron@LuvuBrands.com
Fiscal 2022 Second Quarter and First Half Results
LUVU BRANDS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(unaudited)
Three Months Ended December 31, | Six Months Ended December 31, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
(in thousands, except share data) | ||||||||||||||||
Net Sales | $ | 7,186 | $ | 5,714 | $ | 13,411 | $ | 11,081 | ||||||||
Cost of goods sold | 5,609 | 4,148 | 10,335 | 8,027 | ||||||||||||
Gross profit | 1,577 | 1,566 | 3,076 | 3,054 | ||||||||||||
Operating expenses | ||||||||||||||||
Advertising and promotion | 155 | 120 | 287 | 189 | ||||||||||||
Other selling and marketing | 321 | 270 | 581 | 537 | ||||||||||||
General and administrative | 772 | 668 | 1,485 | 1,332 | ||||||||||||
Depreciation and amortization | 78 | 51 | 149 | 103 | ||||||||||||
Total operating expenses | 1,326 | 1,109 | 2,502 | 2,161 | ||||||||||||
Income from operations | 251 | 457 | 574 | 893 | ||||||||||||
Other Income (Expense): | ||||||||||||||||
Gain on forgiveness of SBA loan | - | 1,096 | - | 1,096 | ||||||||||||
Interest expense and financing costs | (84 | ) | (88 | ) | (180 | ) | (195 | ) | ||||||||
Total Other Income (Expense) | (84 | ) | 1,008 | (180 | ) | 901 | ||||||||||
Income before income taxes | 167 | 1,465 | 394 | 1,794 | ||||||||||||
Provision for income taxes | - | - | - | - | ||||||||||||
Net income | $ | 167 | $ | 1,465 | $ | 394 | $ | 1,794 | ||||||||
Net income per share: | ||||||||||||||||
Basic | $ | .00 | $ | .02 | $ | .01 | $ | .02 | ||||||||
Diluted | $ | .00 | $ | .02 | $ | .01 | $ | .02 | ||||||||
Shares used in computing net income per share: | ||||||||||||||||
Basic | 75,139,516 | 73,682,551 | 75,088,425 | 73,567,574 | ||||||||||||
Diluted | 76,613,472 | 74,050,847 | 76,594,991 | 74,550,249 | ||||||||||||
LUVU BRANDS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
December 31, | ||||||||
2021 | June 30, | |||||||
(unaudited) | 2021 | |||||||
Assets: | (in thousands, except share data) | |||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 1,081 | $ | 977 | ||||
Accounts receivable, net | 920 | 1,134 | ||||||
Inventories, net | 3,456 | 3,391 | ||||||
Prepaid expenses | 168 | 145 | ||||||
Total current assets | 5,625 | 5,647 | ||||||
Equipment, property and leasehold improvements, net | 1,863 | 1,934 | ||||||
Finance lease assets | 23 | 27 | ||||||
Operating lease assets | 2,409 | 2,554 | ||||||
Other assets | 100 | 84 | ||||||
Total assets | $ | 10,020 | $ | 10,246 | ||||
Liabilities and stockholders' equity: | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 2,597 | $ | 2,669 | ||||
Current debt | 1,361 | 1,599 | ||||||
Other accrued liabilities | 528 | 694 | ||||||
Operating lease liability | 290 | 250 | ||||||
Total current liabilities | 4,776 | 5,212 | ||||||
Noncurrent liabilities: | ||||||||
Long-term debt | 1,258 | 1,288 | ||||||
Long-term operating lease liability | 2,256 | 2,423 | ||||||
Total noncurrent liabilities | 3,514 | 3,711 | ||||||
Total liabilities | 8,290 | 8,923 | ||||||
Commitments and contingencies (See Note 15) | - | - | ||||||
Stockholders' equity: | ||||||||
Preferred stock, 5,700,000 shares authorized, | - | - | ||||||
Series A Convertible Preferred stock, 4,300,000 shares authorized | - | - | ||||||
Common stock, | 752 | 750 | ||||||
Additional paid-in capital | 6,177 | 6,166 | ||||||
Accumulated deficit | (5,199 | ) | (5,593 | ) | ||||
Total stockholders' equity | 1,730 | 1,323 | ||||||
Total liabilities and stockholders' equity | $ | 10,020 | $ | 10,246 | ||||
SUPPLEMENTAL FINANCIAL INFORMATION
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Reconciliation of net income to Adjusted EBITDA for the six months ended December 31, 2021 and 2020:
(Dollars in thousands) | Six months ended December 31, | |||||||
2021 | 2020 | |||||||
Net income | $ | 394 | $ | 1,794 | ||||
Plus interest expense, net | 180 | 195 | ||||||
Plus depreciation and amortization expense | 149 | 103 | ||||||
Plus stock-based compensation | 10 | 8 | ||||||
Adjusted EBITDA | $ | 733 | $ | 2,100 | ||||
SOURCE: Luvu Brands, Inc.
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