The Lovesac Company (Nasdaq: LOVE) (“Lovesac” or the “Company”),
sustainable home furnishing brand best known for its Sactionals,
The World's Most Adaptable Couch, today announced financial results
for the second quarter of fiscal 2024, which ended July 30,
2023.
Shawn Nelson, Chief Executive Officer, stated,
“We are very pleased with our second quarter performance, which
affirms the resilience of our brand and disruptive business model
that has consistently delivered category outperformance and
extraordinary customer love and loyalty. The quarterly highlights
include 4% total net sales growth, impressively lapping 45.0% net
sales growth in the year ago period. Operational highlights
included the launch of our new Angled Side product – a strategic
expansion of our Sactionals portfolio that has been very well
received – and successful growth of our physical and e-commerce
footprint to deliver a seamless, omnichannel customer
experience.”
Mr. Nelson continued, “Looking ahead, we expect
consumer spending in our category to remain challenged. To that
end, we will prudently control expenses with a focus on efficiency
balanced against proactive investments in new products to drive
consumer demand and further expand our market leadership. Coupled
with our healthy balance sheet, we are positioned well to optimize
the opportunity ahead of us.”
Key Measures for the Second Quarter and
First Half of Fiscal 2024 Ending July 30,
2023:(Dollars in millions, except per share
amounts. Dollar and percentage changes may not
recalculate due to rounding.)
|
Thirteen weeks ended |
Twenty-six weeks ended |
July 30, 2023 |
|
July 31, 2022 |
|
% Inc (Dec) |
|
July 30, 2023 |
|
July 31, 2022 |
|
% Inc (Dec) |
|
Net sales |
$154.5 |
|
$148.5 |
|
4.0% |
|
$295.7 |
|
$277.9 |
|
6.4% |
|
Gross profit |
$92.4 |
|
$79.1 |
|
16.8% |
|
$163.0 |
|
$145.1 |
|
12.3% |
|
Gross margin |
59.8% |
|
53.3% |
|
650 bps |
|
55.1% |
|
52.2% |
|
290 bps |
|
Total operating expenses |
$93.4 |
|
$71.0 |
|
31.6% |
|
$169.7 |
|
$134.5 |
|
26.2% |
|
SG&A |
$63.8 |
|
$48.8 |
|
30.8% |
|
$120.4 |
|
$93.7 |
|
28.4% |
|
SG&A as a % of Net Sales |
41.3% |
|
32.9% |
|
840 bps |
|
40.7% |
|
33.7% |
|
700 bps |
|
Advertising and marketing |
$26.5 |
|
$19.1 |
|
39.0% |
|
$43.4 |
|
$35.0 |
|
24.2% |
|
Advertising & marketing as a % of NetSales |
17.2% |
|
12.9% |
|
430 bps |
|
14.7% |
|
12.6% |
|
210 bps |
|
Basic net (loss) income per common share |
$(0.04) |
|
$0.38 |
|
(110.5%) |
|
$(0.31) |
|
$0.50 |
|
(162.0%) |
|
Diluted net (loss) income per common share |
$(0.04) |
|
$0.37 |
|
(110.8%) |
|
$(0.31) |
|
$0.48 |
|
(164.6%) |
|
Net (loss) income |
$(0.6) |
|
$5.8 |
|
(110.9%) |
|
$(4.8) |
|
$7.6 |
|
(162.2%) |
|
Adjusted EBITDA 1 |
$5.3 |
|
$12.3 |
|
(57.1%) |
|
$3.2 |
|
$18.5 |
|
(82.7%) |
|
Net cash provided by (used in) operating activities |
$21.1 |
|
$(39.6) |
|
153.2% |
|
$27.3 |
|
$(62.9) |
|
143.5% |
|
1 Adjusted EBITDA is a non-GAAP measure. See
“Non-GAAP Information” and “Reconciliation of Non-GAAP Financial
Measures” included in this press release.
Percent increase except showroom count |
|
Thirteen weeks ended |
Twenty-six weeks ended |
July 30, 2023 |
July 31, 2022 |
July 30, 2023 |
July 31, 2022 |
Total Comparable Sales 2 |
7.2% |
|
31.1% |
|
10.9% |
|
36.0% |
|
Comparable Showroom Sales 3 |
2.7% |
|
36.8% |
|
5.3% |
|
43.9% |
|
Internet Sales |
16.6% |
|
20.5% |
|
22.3% |
|
22.2% |
|
Ending Showroom Count |
223 |
|
174 |
|
223 |
|
174 |
|
2 Total comparable sales include showroom
transactions through the point of sale and internet net sales.3
Comparable showroom sales reflect transactions through the point of
sale and not necessarily product that has shipped to the customer.
Product that has shipped to the customer is included in Net
Sales.
Highlights for the Quarter Ended
July 30, 2023:
- Net sales increased 4.0% in the
second quarter primarily driven by growth within our Showroom and
Internet channels. Showroom net sales, which include kiosks and
mobile concierges, increased 6.3%. Internet net sales increased
16.6%, and our “Other” channel which principally includes
pop-up-shops and shop-in-shops decreased 27.7%. The increase in
showroom net sales was driven by an increase of 2.7% in comparable
showroom sales related to higher point of sale transactions with
higher promotional discounting, the addition of 54 new showrooms
and 5 less kiosks compared to the prior year period, and marketing
campaigns. The internet net sales increase was driven by the same
strong promotion campaigns. The Company also opened three
additional Best Buy shop-in-shop locations compared to the prior
year period.
- Gross profit increased
$13.3 million, or 16.8%, to $92.4 million in the second
quarter of fiscal 2024 from $79.1 million in the second
quarter of fiscal 2023. Gross margin increased 650 basis points to
59.8% of net sales in the second quarter of fiscal 2024 from 53.3%
of net sales in the prior year period primarily driven by a
decrease of approximately 720 basis points in total distribution
and related tariff expense, partially offset by a decrease of 70
basis points in product margin driven by higher promotional
discounting. The decrease in total distribution and related tariff
expenses over prior year is principally related to the positive
impact of the 880 basis points decrease in inbound transportation
costs partially offset by 160 basis points in higher outbound
transportation and warehousing costs.
- SG&A expense as a percent of
net sales increased by 840 basis points due to investments in
payroll, selling related expenses, infrastructure, and professional
fees.
- Advertising and
marketing expense increased 39% due to continued investments in
marketing spend to support our net sales growth including our 25th
anniversary brand campaign. As a percent of net sales, advertising
and marketing increased by 430 basis points.
- Operating loss was
$1.0 million in the second quarter of fiscal 2024 compared to
operating income of $8.1 million in the second quarter of
fiscal 2023. Operating margin was (0.6)% of net sales in the second
quarter of fiscal 2024 compared to 5.5% of net sales in the second
quarter of fiscal 2023.
- Net loss was $0.6 million in
the second quarter of fiscal 2024 or $(0.04) net loss per diluted
share compared to net income of $5.8 million or $0.37 net
income per diluted share in the second quarter of fiscal 2023.
During the second quarter of fiscal 2024, the Company recorded an
income tax benefit of less than $0.1 million, compared to
income tax expense of $2.3 million for the second quarter of fiscal
2023. The change in provision is primarily driven by the Company
generating net loss before taxes of $0.6 million and net income
before taxes of $8.1 million in the second quarter of fiscal 2024
and fiscal 2023, respectively.
Highlights for the First Half Ended
July 30, 2023:
- Net sales increased 6.4% primarily
driven by growth within our Showroom and Internet channels.
Showroom net sales, which include kiosks and mobile concierges,
increased 4.7%. Internet net sales increased 22.3%, and our “Other”
channel which principally includes pop-up-shops and shop-in-shops,
decreased 13.8%. The increase in showroom net sales was driven by
an increase of 5.3% in comparable showroom sales related to higher
point of sale transactions with higher promotional discounting, the
addition of 54 new showrooms and 5 less kiosk compared to the prior
year period, and strong marketing campaigns. The internet net sales
increase was driven by the same strong promotion campaigns. The
Company also opened three additional Best Buy shop-in-shop
locations compared to the prior year period.
- Gross profit increased $17.9
million, or 12.3%, to $163.0 million in the first half of
fiscal 2024 from $145.1 million in the first half of fiscal
2023. Gross margin increased 290 basis points to 55.1% of net sales
in the first half of fiscal 2024 from 52.2% of net sales in the
prior year period driven primarily by a decrease of approximately
380 basis points in total distribution and related tariff expenses
partially offset by a decrease of 90 basis points in product margin
driven by higher promotional discounting. The decrease in total
distribution and related tariff expenses over the prior year is
principally related to the positive impact of the 540 basis points
decrease in inbound transportation costs partially offset by 160
basis points in higher outbound transportation and warehousing
costs.
- SG&A expense as a percent of
net sales increased by 700 basis points due to investments in
payroll, selling related expenses, infrastructure, and professional
fees.
- Advertising and marketing expense
increased 24.2% due to continued investments in marketing spend to
support our net sales growth. As a percent of net sales,
advertising and marketing increased by 210 basis points.
- Operating loss was
$6.7 million in the first half of fiscal 2024 compared to
operating income of $10.6 million in the first half of fiscal
2023. Operating margin was (2.3)% of net sales in the first half of
fiscal 2024 compared to 3.8% of net sales in the first half of
fiscal 2023.
- Net loss was $4.8 million in
the first half of fiscal 2024 or $(0.31) net loss per diluted share
compared to a net income of $7.6 million or $0.48 net income
per diluted share in the first half of fiscal 2023. During the
first half of fiscal 2024, the Company recorded an income tax
benefit of $1.3 million, compared to income tax expense of
$2.9 million for the first half of fiscal 2023. The change in
provision is primarily driven by the Company generating net loss
before taxes of $6.0 million and net income before taxes of
$10.6 million in the first half of fiscal 2024 and fiscal
2023, respectively.
Other Financial Highlights as of
July 30, 2023:
- The cash and cash equivalents
balance as of July 30, 2023 was $54.7 million as compared to
$17.7 million as of July 31, 2022. There was no balance on the
Company’s line of credit as of July 30, 2023 and July 31,
2022. The Company’s availability under the line of credit was $36.0
million as of July 30, 2023 and July 31, 2022. As
previously announced, on March 24, 2023, we amended our existing
credit agreement with Wells Fargo Bank, N.A. to extend the maturity
date to September 30, 2024. All other terms of the credit agreement
remain unchanged.
- Total merchandise inventory was
$105.0 million as of July 30, 2023 as compared to $145.7
million as of July 31, 2022 principally related to a planned
stock inventory decrease of $2.0 million coupled with a
decrease in freight capitalization of $39.3 million related to
the decrease in inbound freight expense.
Outlook:
The Company provides guidance of select
information related to the Company’s financial and operating
performance, and such measures may differ from year to year. The
projections are as of this date and the Company assumes no
obligation to update or supplement this information.
The Company expects the following for the full
year of fiscal 2024:
- Net sales in the range of $710.0
million to $730.0 million.
- Adjusted EBITDA4 in the range of
$51.0 million to $63.0 million.
- Net income in the range of $20.0
million to $29.0 million.
- Diluted income per common share in
the range of $1.21 to $1.75 on approximately 16.5 million estimated
diluted weighted average shares outstanding.
- Fiscal 2024 will contain an
additional “53rd week” in the fourth quarter versus 52 weeks in
fiscal 2023.
The Company currently expects the following for
the third quarter of fiscal 2024:
- Net sales of approximately $154.0
million.
- Adjusted EBITDA4 in the range of a
loss of $1.5 million to a gain of $0.5 million.
- Net loss in the range of $5.2
million to $3.2 million.
- Diluted loss per common share in
the range of $0.20 to $0.33 on approximately 15.5 million estimated
weighted average shares outstanding.
4 Adjusted EBITDA is a non-GAAP measure. See
“Non-GAAP Information” and “Reconciliation of Non-GAAP Financial
Measures” included in this press release.
Conference Call
Information:
A conference call to discuss the financial
results for the second quarter ended July 30, 2023 is
scheduled for today, November 3, 2023, at 8:30 a.m. Eastern
Time. Investors and analysts interested in participating in the
call are invited to dial (877) 407-3982 (international callers
please dial (201) 493-6780 approximately 10 minutes prior to the
start of the call. A live audio webcast of the conference call will
be available online at investor.lovesac.com.
A recorded replay of the conference call will be
available within two hours of the conclusion of the call and can be
accessed online at investor.lovesac.com for 90 days.
About The Lovesac Company:
Based in Stamford, Connecticut, The Lovesac
Company is a technology driven company that designs, manufactures
and sells unique, high quality furniture derived through its
proprietary Designed for Life approach which results in products
that are built to last a lifetime and designed to evolve as our
customers’ lives do. Our current product offering is comprised of
modular couches called Sactionals, premium foam beanbag chairs
called Sacs, and their associated home decor accessories.
Innovation is at the center of our design philosophy with all of
our core products protected by a robust portfolio of utility
patents. We market and sell our products primarily online directly
at www.lovesac.com, supported by direct-to-consumer touch-feel
points in the form of our own showrooms as well as through
shop-in-shops and pop-up-shops with third party retailers. LOVESAC,
SACTIONALS, SAC, DESIGNED FOR LIFE, and THE WORLD'S MOST ADAPTABLE
COUCH are trademarks of The Lovesac Company and are Registered in
U.S. Patent and Trademark Office.
Non-GAAP Information:
Adjusted EBITDA is defined as a non-GAAP
financial measure by the Securities and Exchange Commission (the
“SEC”) that is a supplemental measure of financial performance not
required by, or presented in accordance with, GAAP. We define
“Adjusted EBITDA” as earnings before interest, taxes, depreciation
and amortization, adjusted for the impact of certain non-cash and
other items that we do not consider in our evaluation of ongoing
operating performance. These items include management fees,
equity-based compensation expense, write-offs of property and
equipment, deferred rent, financing expenses and certain other
charges and gains that we do not believe reflect our underlying
business performance. We have reconciled this non-GAAP financial
measure with the most directly comparable GAAP financial measure
within the schedules attached hereto. Statements regarding our
expectations as to fiscal 2024 Adjusted EBITDA do not include
certain charges and costs. We define “Adjusted EBITDA” as EBITDA
adjusted for the impact of certain non-cash and other items that we
do not consider in our evaluation of ongoing operating performance.
These items include equity-based compensation expense and certain
other charges and gains that we do not believe reflect our
underlying business performance. We are not able to provide a
reconciliation of our non-GAAP financial guidance to the
corresponding GAAP measures without unreasonable effort because of
the uncertainty and variability of the nature and amount of these
future charges and costs. This is due to the inherent difficulty of
forecasting the timing of certain events that have not yet occurred
and are out of the Company’s control.
We believe that these non-GAAP financial
measures not only provide its management with comparable financial
data for internal financial analysis but also provide meaningful
supplemental information to investors. Specifically, these non-GAAP
financial measures allow investors to better understand the
performance of our business, facilitate a more meaningful
comparison of our actual results on a period-over-period basis and
provide for a more complete understanding of factors and trends
affecting our business. We have provided this information as a
means to evaluate the results of our ongoing operations alongside
GAAP measures such as gross profit, operating income (loss) and net
income (loss). Other companies in our industry may calculate these
items differently than we do. These non-GAAP measures should not be
considered as a substitute for the most directly comparable
financial measures prepared in accordance with GAAP, such as net
income (loss) or net income (loss) per share as a measure of
financial performance, cash flows from operating activities as a
measure of liquidity, or any other performance measure derived in
accordance with GAAP. Non-GAAP financial measures have limitations
as analytical tools, and investors should not consider them in
isolation or as a substitute for analysis of the Company’s results
as reported under GAAP.
Cautionary Statement Concerning
Forward-Looking Statements
This press release contains forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995 and other legal authority. Forward-looking
statements can be identified by words such as “may,” “continue(s),”
“believe,” “anticipate,” “could,” “should,” “intend,” “plan,”
“will,” “aim(s),” “can,” “would,” “expect(s),” “expectation(s),”
“estimate(s),” “project(s),” “forecast(s)”, “positioned,”
“approximately,” “potential,” “goal,” “pro forma,” “strategy,”
“outlook” or the negative of these words or other similar terms or
expressions that concern our expectations, strategy, plans, or
intentions. All statements, other than statements of historical
facts, included in this press release under the heading “Outlook”
and all statements regarding strategy, future operations, the pace
and success of new products, future financial position or
projections, future revenue, projected expenses, sustainability
goals, prospects, plans and objectives of management are
forward-looking statements. These statements are based on
management’s current expectations, beliefs and assumptions
concerning the future of our business, anticipated events and
trends, the economy and other future conditions. We may not
actually achieve the plans, carry out the intentions or meet the
expectations disclosed in the forward-looking statements and you
should not rely on these forward-looking statements. Actual results
and performance could differ materially from those projected in the
forward-looking statements as a result of many factors. Among the
key factors that could cause actual results to differ materially
from those expressed or implied in the forward-looking statements
include: business disruptions or other consequences of economic
instability, political instability, civil unrest, armed
hostilities, natural and man-made disasters, pandemics or other
public health crises, or other catastrophic events; the impact of
changes or declines in consumer spending and increases in interest
rates and inflation on our business, sales, results of operations
and financial condition; our ability to manage and sustain our
growth and profitability effectively, including in our ecommerce
business, forecast our operating results, and manage inventory
levels; our ability to improve our products and develop new
products; our ability to successfully open and operate new
showrooms; our ability to advance, implement or achieve the goals
set forth in our ESG Report; our ability to realize the expected
benefits of investments in our supply chain and infrastructure;
disruption in our supply chain and dependence on foreign
manufacturing and imports for our products; our ability to acquire
new customers and engage existing customers; reputational risk
associated with increased use of social media; our ability to
attract, develop and retain highly skilled associates; system
interruption or failures in our technology infrastructure needed to
service our customers, process transactions and fulfill orders; any
inability to implement and maintain effective internal control over
financial reporting or inability to remediate any internal controls
deemed ineffective; unauthorized disclosure of sensitive or
confidential information through breach of our computer system;
unauthorized disclosure of sensitive or confidential information
through breach of our computer system; the ability of third-party
providers to continue uninterrupted service; the impact of tariffs,
and the countermeasures and tariff mitigation initiatives; the
regulatory environment in which we operate, our ability to
maintain, grow and enforce our brand and intellectual property
rights and avoid infringement or violation of the intellectual
property rights of others; and our ability to compete and succeed
in a highly competitive and evolving industry, as well as those
risks and uncertainties disclosed under the sections entitled “Risk
Factors” and “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” in our most recent Form 10-K
and in our Form 10-Qs filed with the Securities and Exchange
Commission, and similar disclosures in subsequent reports filed
with the SEC, which are available on our investor relations website
at investor.lovesac.com and on the SEC website at www.sec.gov. Any
forward-looking statement made by us in this press release speaks
only as of the date on which we make it. We disclaim any intent or
obligation to update these forward-looking statements to reflect
events or circumstances that exist after the date on which they
were made.
Investor Relations
Contact:Rachel Schacter, ICR(203)
682-8200InvestorRelations@lovesac.com
THE LOVESAC COMPANYCONDENSED BALANCE
SHEETS(unaudited) |
|
|
|
|
(amounts in thousands, except share and per share amounts) |
|
|
July 30,2023 |
|
January 29,2023 |
Assets |
|
|
|
|
|
Current
Assets |
|
|
|
|
|
Cash and cash equivalents |
|
$ |
54,716 |
|
$ |
43,533 |
Trade accounts receivable |
|
|
7,994 |
|
|
9,103 |
Merchandise inventories,
net |
|
|
104,970 |
|
|
119,627 |
Prepaid expenses and other
current assets |
|
|
15,947 |
|
|
15,452 |
Total Current
Assets |
|
|
183,627 |
|
|
187,715 |
Property and equipment,
net |
|
|
63,079 |
|
|
52,904 |
Operating lease right-of-use
assets |
|
|
149,285 |
|
|
135,411 |
Other
Assets |
|
|
|
Goodwill |
|
|
144 |
|
|
144 |
Intangible assets, net |
|
|
1,474 |
|
|
1,411 |
Deferred tax asset |
|
|
10,075 |
|
|
8,677 |
Other assets |
|
|
25,882 |
|
|
22,364 |
Total Other
Assets |
|
|
37,575 |
|
|
32,596 |
Total
Assets |
|
$ |
433,566 |
|
$ |
408,626 |
Liabilities and
Stockholders' Equity |
|
|
|
Current
Liabilities |
|
|
|
Accounts payable |
|
$ |
33,858 |
|
$ |
24,576 |
Accrued expenses |
|
|
24,984 |
|
|
25,417 |
Payroll payable |
|
|
6,239 |
|
|
6,783 |
Customer deposits |
|
|
12,279 |
|
|
6,760 |
Current operating lease
liabilities |
|
|
16,072 |
|
|
13,075 |
Sales taxes payable |
|
|
3,910 |
|
|
5,430 |
Total Current
Liabilities |
|
|
97,342 |
|
|
82,041 |
Operating Lease
Liability, long-term |
|
|
149,431 |
|
|
133,491 |
Line of
Credit |
|
|
— |
|
|
— |
Total
Liabilities |
|
|
246,773 |
|
|
215,532 |
Commitments and
Contingencies |
|
|
|
Stockholders’
Equity |
|
|
|
Preferred Stock $0.00001 par
value, 10,000,000 shares authorized, no shares issued or
outstanding as of July 30, 2023 and
January 29, 2023. |
|
|
— |
|
|
— |
Common Stock $.00001 par
value, 40,000,000 shares authorized, 15,481,925 shares issued
and outstanding as of July 30, 2023 and 15,195,698
shares issued and outstanding as of January 29, 2023. |
|
|
— |
|
|
— |
Additional paid-in
capital |
|
|
181,003 |
|
|
182,554 |
Accumulated earnings |
|
|
5,790 |
|
|
10,540 |
Stockholders'
Equity |
|
|
186,793 |
|
|
193,094 |
Total Liabilities and Stockholders' Equity |
|
$ |
433,566 |
|
$ |
408,626 |
|
|
|
|
|
|
|
THE LOVESAC COMPANYCONDENSED STATEMENTS OF
OPERATIONS(unaudited) |
|
|
|
Thirteen weeks ended |
|
Twenty-six weeks ended |
(amounts in thousands, except per share data and share
amounts) |
|
July 30,2023 |
|
July 31,2022 |
|
July 30,2023 |
|
July 31,2022 |
Net sales |
|
$ |
154,529 |
|
|
$ |
148,534 |
|
|
$ |
295,722 |
|
|
$ |
277,914 |
|
Cost of merchandise sold |
|
|
62,139 |
|
|
|
69,435 |
|
|
|
132,757 |
|
|
|
132,841 |
|
Gross profit |
|
|
92,390 |
|
|
|
79,099 |
|
|
|
162,965 |
|
|
|
145,073 |
|
Operating expenses |
|
|
|
|
|
|
|
|
Selling, general and administration expenses |
|
|
63,834 |
|
|
|
48,815 |
|
|
|
120,380 |
|
|
|
93,733 |
|
Advertising and marketing |
|
|
26,535 |
|
|
|
19,088 |
|
|
|
43,448 |
|
|
|
34,989 |
|
Depreciation and amortization |
|
|
3,014 |
|
|
|
3,076 |
|
|
|
5,836 |
|
|
|
5,737 |
|
Total operating expenses |
|
|
93,383 |
|
|
|
70,979 |
|
|
|
169,664 |
|
|
|
134,459 |
|
|
|
|
|
|
|
|
|
|
Operating (loss) income |
|
|
(993 |
) |
|
|
8,120 |
|
|
|
(6,699 |
) |
|
|
10,614 |
|
Interest income (expense),
net |
|
|
351 |
|
|
|
3 |
|
|
|
692 |
|
|
|
(32 |
) |
Net (loss) income before
taxes |
|
|
(642 |
) |
|
|
8,123 |
|
|
|
(6,007 |
) |
|
|
10,582 |
|
Benefit from (provision for)
income taxes |
|
|
7 |
|
|
|
(2,274 |
) |
|
|
1,257 |
|
|
|
(2,947 |
) |
Net (loss) income |
|
$ |
(635 |
) |
|
$ |
5,849 |
|
|
$ |
(4,750 |
) |
|
$ |
7,635 |
|
|
|
|
|
|
|
|
|
|
Net (loss) income per common
share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.04 |
) |
|
$ |
0.38 |
|
|
$ |
(0.31 |
) |
|
$ |
0.50 |
|
Diluted |
|
$ |
(0.04 |
) |
|
$ |
0.37 |
|
|
$ |
(0.31 |
) |
|
$ |
0.48 |
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
|
15,422,640 |
|
|
|
15,195,116 |
|
|
|
15,326,702 |
|
|
|
15,175,247 |
|
Diluted |
|
|
15,422,640 |
|
|
|
16,004,061 |
|
|
|
15,326,702 |
|
|
|
16,032,731 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THE LOVESAC COMPANYCONDENSED STATEMENT OF
CASH FLOWS(unaudited) |
|
|
|
Twenty-six weeks ended |
(amounts in thousands) |
|
July 30,2023 |
|
July 31,2022 |
Cash Flows from
Operating Activities |
|
|
|
|
Net (loss) income |
|
$ |
(4,750 |
) |
|
$ |
7,635 |
|
Adjustments to reconcile net (loss) income to cash provided by
(used in) operating activities: |
|
|
|
|
Depreciation and amortization of property and equipment |
|
|
5,608 |
|
|
|
5,549 |
|
Amortization of other intangible assets |
|
|
228 |
|
|
|
188 |
|
Amortization of deferred financing fees |
|
|
81 |
|
|
|
71 |
|
Net loss on disposal of property and equipment |
|
|
145 |
|
|
|
— |
|
Equity based compensation |
|
|
2,037 |
|
|
|
2,197 |
|
Non-cash operating lease cost |
|
|
10,880 |
|
|
|
8,711 |
|
Deferred income taxes |
|
|
(1,398 |
) |
|
|
2,313 |
|
Change in operating assets and liabilities: |
|
|
|
|
Trade accounts receivable |
|
|
1,109 |
|
|
|
(423 |
) |
Merchandise inventories |
|
|
14,657 |
|
|
|
(37,199 |
) |
Prepaid expenses and other current assets |
|
|
(524 |
) |
|
|
(16,510 |
) |
Other assets |
|
|
(3,518 |
) |
|
|
(10 |
) |
Accounts payable and accrued expenses |
|
|
3,087 |
|
|
|
(18,520 |
) |
Operating lease liabilities |
|
|
(5,817 |
) |
|
|
(10,064 |
) |
Customer deposits |
|
|
5,519 |
|
|
|
(6,828 |
) |
Net cash provided by
(used in) operating activities |
|
|
27,344 |
|
|
|
(62,890 |
) |
Cash Flows from
Investing Activities |
|
|
|
|
Purchase of property and equipment |
|
|
(12,361 |
) |
|
|
(9,965 |
) |
Payments for patents and trademarks |
|
|
(160 |
) |
|
|
(160 |
) |
Net cash used in
investing activities |
|
|
(12,521 |
) |
|
|
(10,125 |
) |
Cash Flows from
Financing Activities |
|
|
|
|
Taxes paid for net share settlement of equity awards |
|
|
(3,588 |
) |
|
|
(1,449 |
) |
Payment of deferred financing costs |
|
|
(52 |
) |
|
|
(276 |
) |
Net cash used in
financing activities |
|
|
(3,640 |
) |
|
|
(1,725 |
) |
Net change in cash and
cash equivalents |
|
|
11,183 |
|
|
|
(74,740 |
) |
Cash and cash equivalents -
Beginning |
|
|
43,533 |
|
|
|
92,392 |
|
Cash and cash equivalents -
Ending |
|
$ |
54,716 |
|
|
$ |
17,652 |
|
Supplemental Cash Flow
Data: |
|
|
|
|
Cash paid for taxes |
|
$ |
1,232 |
|
|
$ |
9,393 |
|
Cash paid for interest |
|
$ |
66 |
|
|
$ |
34 |
|
Non-cash investing activities: |
|
|
|
|
Asset acquisitions not yet paid for at period end |
|
$ |
3,698 |
|
|
$ |
3,536 |
|
|
|
|
|
|
|
|
|
|
THE LOVESAC COMPANYRECONCILIATION OF
NON-GAAP FINANCIAL
MEASURES(unaudited) |
|
|
|
|
Thirteen weeks ended |
|
Twenty-six weeks ended |
(amounts in thousands) |
|
July 30, 2023 |
|
July 31, 2022 |
|
July 30, 2023 |
|
July 31, 2022 |
Net
(loss) income |
|
$ |
(635 |
) |
|
$ |
5,849 |
|
|
$ |
(4,750 |
) |
|
$ |
7,635 |
|
|
Interest (income) expense, net |
|
|
(351 |
) |
|
|
(3 |
) |
|
|
(692 |
) |
|
|
32 |
|
|
Income tax (benefit)
expense |
|
|
(7 |
) |
|
|
2,274 |
|
|
|
(1,257 |
) |
|
|
2,947 |
|
|
Depreciation and
amortization |
|
|
3,014 |
|
|
|
3,076 |
|
|
|
5,836 |
|
|
|
5,737 |
|
EBITDA |
|
|
2,021 |
|
|
|
11,196 |
|
|
|
(863 |
) |
|
|
16,351 |
|
|
Equity-based compensation
(a) |
|
|
1,467 |
|
|
|
1,123 |
|
|
|
2,272 |
|
|
|
2,295 |
|
|
Loss on disposal of assets
(b) |
|
|
145 |
|
|
|
— |
|
|
|
145 |
|
|
|
— |
|
|
Other non-recurring expenses
(c) |
|
|
1,650 |
|
|
|
— |
|
|
|
1,650 |
|
|
|
(105 |
) |
Adjusted
EBITDA |
|
$ |
5,283 |
|
|
$ |
12,319 |
|
|
$ |
3,204 |
|
|
$ |
18,541 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
Represents expenses,
such as compensation expense and employer taxes related to RSU
equity vesting and exercises associated with stock options and
restricted stock units granted to our associates and board of
directors. Employer taxes are included as part of selling, general
and administrative expenses on the Statements of Operations. |
(b) |
Represents loss on
disposal of property and equipment. |
(c) |
Other non-recurring
expenses in the thirteen and twenty-six weeks ended July 30,
2023 represents professional fees related to the restatement of
previously issued financial statements. Other non-recurring
expenses in the twenty-six weeks ended July 31, 2022
represents costs related to a legal settlement. There were no other
non-recurring expenses in the thirteen weeks ended July 31,
2022. |
|
|
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