The Lovesac Company Announces Second Quarter Fiscal 2020 Financial Results
September 11 2019 - 7:00AM
The Lovesac Company (Nasdaq:LOVE) today announced its financial
results for the second quarter of fiscal 2020, which ended on
August 4, 2019.
Shawn Nelson, Chief Executive Officer, stated,
“We reported a strong second quarter with revenue growth of close
to 45%, as the entire team is executing our strategies to expand
the Lovesac brand and deliver on our near and longer term goals. We
are further strengthening our multi-channel model with the addition
of productive new showrooms, the expansion of our pop up shop
business at Costco and the announcement of a brand new shop in shop
pilot with Macy’s that is expected to launch late in the third
quarter, as well as increasingly effective advertising and
marketing strategies.”
Mr. Nelson continued, “Given our first half
performance and our plans for the remainder of the year, we are
reiterating our full year outlook for 40% to 45% revenue growth
and positive Adjusted EBITDA. Importantly, this outlook
includes the net impact from all announced Lists 1 through 4
tariffs to date that our teams continue to successfully mitigate
through various means, with only minor price increases. We have
reduced our manufacturing in China from 75% of our total
manufacturing at the beginning of the year to 44% as of this month.
We believe this puts us on a path to being completely out of China,
if necessary, well before the end of next year. I would like to
thank all of our teams as well as our vendor partners for their
hard work and collaboration that have enabled this outcome.”
For the Thirteen Weeks Ended August 4,
2019
- Net sales increased 44.8% to $48.1
million in the second quarter of fiscal 2020 from $33.2 million in
the second quarter of fiscal 2019. This increase was driven by
strong showroom, Internet and pop up shop (which we previously
referred to as shop in shops) performance with both transaction and
ticket growth resulting from successful advertising and marketing
strategies which drew new customers to the brand while also driving
repeat purchase behavior. Comparable sales, which includes showroom
and Internet sales, increased 40.7% compared to a 41.0% increase in
the prior year period. Comparable showroom sales increased 31.8%
and Internet sales increased 71.5%.
- The Company opened two new
showrooms and closed no showrooms in the second quarter of fiscal
2020 and ended the quarter with 80 showrooms in 32 states. This
represents a unit increase of 11.1% over the same quarter in the
prior year.
- Gross profit increased $6.4
million, or 36.1%, to $24.3 million in the second quarter of fiscal
2020 from $17.8 million in the second quarter of fiscal 2019. Gross
margin decreased to 50.4% of net sales from 53.6% of net sales in
the prior year period. The decrease in gross margin rate was driven
primarily by the impact of the 10% China tariffs partially offset
by reduced costs of Sactionals and Sacs products. The decrease in
costs of Sactionals and Sacs products was primarily related to cost
savings from improved sourcing of Lovesoft and down blend fills in
addition to an ongoing shift of manufacturing from China to
Vietnam
- Selling, general and administrative
expenses increased $1.5 million, or 7.3%, to $22.0 million in the
second quarter of fiscal 2020 compared to $20.5 million in the
second quarter of fiscal 2019. The increase in selling, general and
administrative expenses was primarily related to an increase in
employment costs of $1.4 million, $0.8 million of increased rent
associated with our net addition of 2 showrooms, $3.6
million of expenses related to the increase in sales such as
$0.5 million of credit card fees, $2.3 million of showroom and web
related selling expenses, $0.2 million of web affiliate program and
web platform hosting commissions and $0.6 million of pop up shop
sales agent fees. Overhead expenses decreased $4.3 million
consisting of a decrease in IPO related expenses of $1.3 million,
management fees of $0.7 million, one-time professional fees of $0.3
million, net loss on disposal of property and equipment of $0.1
million and equity based compensation $1.9 million.
- As a percent of net sales, total
SG&A expense decreased to 45.6% from 61.5% in the prior year
period driven largely by decreases in equity based compensation and
IPO related expenses, partially offset by infrastructure
investments such as increased headcount, supply chain optimization
efforts and technology enhancements to support increased sales
growth.
- Advertising and marketing expenses
increased $2.5 million, or 68.8%, to $6.1 million in the second
quarter of fiscal 2020 compared to $3.6 million in the second
quarter of fiscal 2019. The increase in advertising and marketing
costs relates to increased media and direct to consumer programs,
which are expected to drive revenue beyond the period of the
expense.
- Depreciation and amortization
expenses increased $0.4 million or 58.9% in the second quarter of
fiscal 2020 to $1.2 million compared to $0.8 million in the second
quarter of fiscal 2019. The increase in depreciation and
amortization expense principally relates to capital investments for
new and remodeled showrooms.
- Operating loss was $4.9 million in
the second quarter of fiscal 2020 compared to an operating loss of
$7.0 million in the second quarter of fiscal 2019.
- Net loss and net loss attributable
to common shares was $4.8 million in the second quarter of fiscal
2020, compared to a net loss of $7.0 million, or net loss
attributable to common shares of $33.7 million including preferred
dividends and deemed dividends in the second quarter in fiscal
2019. Adjusted net loss, which excludes the impact of the IPO and
certain other non-recurring expenses in both periods, was $4.5
million in the second quarter of fiscal 2020 compared to $5.7
million in the second quarter of fiscal 2019 (see “GAAP and
Non-GAAP Measures”).
- Net loss per share, including
preferred dividends and deemed dividends, was ($0.33) in the second
quarter of fiscal 2020 compared to ($3.71) in the second quarter of
fiscal 2019. Adjusted net loss per common share, which is
calculated by dividing adjusted net loss by adjusted weighted
average common shares outstanding assuming the IPO related
issuances occurred at the beginning of each period presented, was
($0.31) in the second quarter of fiscal 2020 compared to ($0.63) in
the second quarter of fiscal 2019 (see “GAAP and Non-GAAP
Measures”).
- Adjusted earnings before interest,
taxes, depreciation and amortization (“EBITDA”), was ($3.3) million
in the second quarter of fiscal 2020 compared to ($2.0) million in
the second quarter of fiscal 2019 (see “GAAP and Non-GAAP
Measures”).
Please see “Non-GAAP Financial Measures” and
“Reconciliation of GAAP to Non-GAAP Financial Measures” below for
more
information. For
the Twenty-Six Weeks Ended August 4, 2019
- Net sales increased 48.5% to $89.1
million in the first half of fiscal 2020 from $60.0 million in the
first half of fiscal 2019 driven by strong showroom, Internet and
pop up shop performance with both transaction as well as ticket
growth resulting from successful advertising and marketing
strategies which drew new customers to the brand while also driving
repeat purchase behavior. Comparable sales, which includes showroom
and Internet sales, increased 41.3% compared to a 34.5% increase in
the prior year period. Comparable showroom sales increased 31.0%
and Internet sales increased 77.7%.
- The Company opened seven new showrooms and closed two showrooms
in the first half of fiscal 2020.
- Gross profit increased $12.8
million, or 39.4%, to $45.3 million in the first half of fiscal
2020 from $32.5 million in the corresponding prior year period.
Gross margin decreased to 50.8% of net sales in the first half of
fiscal 2020 from 54.1% of net sales in the corresponding prior year
period. The decrease in gross margin rate was driven primarily by
the impact of 10% China tariffs, partially offset by reduced costs
of Sactionals and Sacs products. The decrease in costs of
Sactionals and Sacs products was primarily related to cost savings
from improved sourcing of Lovesoft and down blend fills in addition
to an ongoing shift of manufacturing from China to Vietnam.
- Selling, general and administrative
expenses increased $10.2 million, or 28.5%, to $45.8 million in the
first half of fiscal 2020 compared to $35.6 million in the
corresponding prior year period. The increase in selling, general
and administrative expenses was primarily related to an increase in
employment costs of $3.5 million, $1.3 million of rent
associated with our net addition of 5 showrooms, equity based
compensation of $1.1 million and $7.3 million of expenses
related to the increase in sales such as $0.7 million of credit
card fees, $5.1 million of showroom and web related selling
expenses, $0.4 million of web affiliate program and web platform
hosting commissions , $1.1 million of pop up shop sales agent fees
. Overhead expenses decreased $3.0 million related to IPO fees
related to the public offering of $1.5 million, reduction in
one-time professional fees of $0.9 million and one time IPO bonuses
of $0.6 million. As a percent of net sales, total SG&A expense
decreased to 51.4% from 59.4% in the prior year period driven
largely by decreases in equity based compensation and IPO related
expenses, partially offset by infrastructure investments such as
increased headcount, supply chain optimization efforts and
technology enhancements to support increased sales growth.
- Advertising and marketing expenses
increased $3.5 million, or 43.2%, to $11.5 million in the first
half of fiscal 2020 compared to $8.0 million in the corresponding
prior year period. The increase in advertising and marketing costs
relates to increased media and direct to consumer programs which
are expected to drive revenue beyond the period of the
expense.
- Depreciation and amortization
expenses increased $0.8 million or 59.0% in the first half of
fiscal 2020 to $2.3 million compared to $1.4 million in the
corresponding prior year period. The increase in depreciation and
amortization expense principally relates to capital investments for
new and remodeled showrooms.
- Operating loss was $14.3 million in the first half of fiscal
2020 compared to an operating loss of $12.6 million in the first
half of fiscal 2019.
- Net loss and net loss attributable
to common shares was $13.9 million in the first half of fiscal
2020. This compares to a net loss of $12.7 million in the first
half of fiscal 2019 and a net loss attributable to common shares of
$40.1 million including preferred dividends and deemed dividends in
the first half of fiscal 2019. Adjusted net loss, which excludes
the impact of the IPO and certain other non-recurring expenses, was
$13.4 million in the first half of fiscal 2020 compared to $11.1
million in the first half of fiscal 2019 (see “GAAP and Non-GAAP
Measures”).
- Net loss per share, including
preferred dividends and deemed dividends, was ($0.99) in the first
half of fiscal 2020 compared to ($5.29) in the first half of fiscal
2019. Adjusted net loss per common share, which is calculated by
dividing adjusted net loss by adjusted weighted average common
shares outstanding assuming the IPO related issuances occurred at
the beginning of each period presented, was ($0.96) in the first
half of fiscal 2020 compared to ($1.47) in the first half of fiscal
2019 (see “GAAP and Non-GAAP Measures”).
- Adjusted EBITDA was ($8.0) million
in the first half of fiscal 2020 compared to ($6.2) million in the
first half of fiscal 2019 (see “GAAP and Non-GAAP Measures”).
Please see “Non-GAAP Financial Measures” and
“Reconciliation of GAAP to Non-GAAP Financial Measures” below for
more information.
Conference Call Details
A conference call to discuss the second quarter
fiscal 2019 financial results is scheduled for today, September 11,
2019, 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 direct-to-consumer specialty furniture brand with
approximately 80 retail showrooms supporting its ecommerce delivery
model. Lovesac’s name comes from its original Durafoam filled
beanbags called Sacs. The Company derives a majority of its current
sales from its proprietary platform called Sactionals, a washable,
changeable, reconfigurable, and FedEx-shippable solution for large
upholstered seating. Founder and CEO, Shawn Nelson’s, “Designed for
Life” philosophy emphasizes sustainable products that are built to
last a lifetime and designed to evolve with the customer’s needs,
providing long-term utility and ultimately reducing the amount of
furniture discarded into landfills.
Non-GAAP Information
This press release includes the following
financial measures defined as non-GAAP financial measures by the
Securities and Exchange Commission (the “SEC”): adjusted net loss,
adjusted diluted loss per share and Adjusted EBITDA. Adjusted net
loss excludes the effect of one-time costs related to the Company’s
IPO in June 2018 and fees associated with fundraising and
reorganizing activities. Adjusted diluted loss per share is defined
as adjusted net loss divided by a pro forma share count which
assumes the IPO took place before the relevant time period. We
define Adjusted EBITDA as net income plus interest expense, income
tax expense, depreciation and amortization, sponsor fees, deferred
rent, equity-based compensation, write-off of property and
equipment, one-time IPO-related expenses, and fees associated with
fundraising and reorganizing activities. The Company has reconciled
these non-GAAP financial measures with the most directly comparable
GAAP financial measures under “GAAP and Non-GAAP Measures” in this
release. The Company believes 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 the Company’s business and facilitate a more
meaningful comparison of its diluted income per share and actual
results on a period-over-period basis. The Company has provided
this information as a means to evaluate the results of its ongoing
operations. Other companies in the Company’s industry may calculate
these items differently than the Company does. Each of these
measures is not a measure of performance under GAAP and should not
be considered as a substitute for the most directly comparable
financial measures prepared 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
Certain statements either contained in or
incorporated by reference into this communication, other than
purely historical information, including estimates, projections and
statements relating to Lovesac’s business plans, objectives and
expected operating results, and the assumptions upon which those
statements are based, are “forward-looking statements” within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended.
All statements, other than statements of historical facts, included
in or incorporated by reference into this press release regarding
strategy, future operations, future financial position, future
revenue, projected expenses, prospects, plans and objectives of
management are forward-looking statements. Lovesac may not actually
achieve the plans, carry out the intentions or meet the
expectations disclosed in the forward-looking statements and you
should not place undue reliance on these forward-looking
statements. Such statements are based on management’s current
expectations and involve risks and uncertainties. Actual results
and performance could differ materially from those projected in the
forward-looking statements as a result of many factors. Lovesac
disclaims 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
(Tables to Follow)
THE LOVESAC
COMPANY |
CONDENSED
CONSOLIDATED BALANCE SHEETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
As of August 4, 2019 |
|
As of February 3, 2019 |
Assets |
(unaudited) |
|
|
|
|
|
|
Current Assets |
|
|
|
Cash and cash equivalents |
$ |
44,202,352 |
|
|
$ |
49,070,952 |
|
Trade accounts receivable |
|
5,580,954 |
|
|
|
3,955,124 |
|
Merchandise inventories |
|
40,656,908 |
|
|
|
26,154,314 |
|
Prepaid expenses and other current assets |
|
7,032,106 |
|
|
|
5,933,872 |
|
Total Current Assets |
|
97,472,320 |
|
|
|
85,114,262 |
|
Property and Equipment, Net |
|
20,431,956 |
|
|
|
18,595,079 |
|
|
|
|
|
Other Assets |
|
|
|
Goodwill |
|
143,562 |
|
|
|
143,562 |
|
Intangible assets, net |
|
1,075,690 |
|
|
|
942,331 |
|
Deferred financing costs, net |
|
182,559 |
|
|
|
219,071 |
|
Total Other Assets |
|
1,401,811 |
|
|
|
1,304,964 |
|
Total Assets |
$ |
119,306,087 |
|
|
$ |
105,014,305 |
|
Liabilities and Stockholders' Equity |
|
|
|
Current Liabilities |
|
|
|
Accounts payable |
$ |
17,670,642 |
|
|
$ |
16,836,816 |
|
Accrued expenses |
|
4,950,806 |
|
|
|
3,701,090 |
|
Payroll payable |
|
2,233,444 |
|
|
|
2,269,834 |
|
Customer deposits |
|
1,553,085 |
|
|
|
1,059,957 |
|
Sales taxes payable |
|
645,918 |
|
|
|
750,922 |
|
Total Current Liabilities |
|
27,053,895 |
|
|
|
24,618,619 |
|
Deferred Rent |
|
1,682,953 |
|
|
|
1,594,179 |
|
Line
of credit |
|
- |
|
|
|
31,373 |
|
Total Liabilities |
|
28,736,848 |
|
|
|
26,244,171 |
|
|
|
|
|
Stockholders’ Equity |
|
|
|
Preferred Stock $0.00001 par value, 10,000,000 shares authorized,
no shares issued or outstanding as of August 4, 2019 and February
3, 2019. |
|
- |
|
|
|
- |
|
Common Stock $.00001 par value, 40,000,000 shares authorized,
14,538,586 shares issued and outstanding as of August 4, 2019 and
13,588,568 shares issued and oustanding as of February 3, 2019,
respectivily. |
|
145 |
|
|
|
136 |
|
Additional paid-in capital |
|
167,399,679 |
|
|
|
141,727,807 |
|
Accumulated deficit |
|
(76,830,585 |
) |
|
|
(62,957,809 |
) |
Stockholders' Equity |
|
90,569,239 |
|
|
|
78,770,134 |
|
Total Liabilities and Stockholders' Equity |
$ |
119,306,087 |
|
|
$ |
105,014,305 |
|
THE
LOVESAC COMPANY |
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
(unaudited) |
|
Thirteen weeks ended |
|
Twenty-six weeks ended |
|
August 4, |
|
August 5, |
|
August 4, |
|
August 5, |
2019 |
2018 |
2019 |
2018 |
|
|
|
|
|
|
|
|
Net sales |
$ |
48,146,415 |
|
|
$ |
33,249,012 |
|
|
$ |
89,104,778 |
|
|
$ |
60,017,810 |
|
Cost of
merchandise sold |
|
23,861,242 |
|
|
|
15,410,442 |
|
|
|
43,827,110 |
|
|
|
27,532,067 |
|
Gross profit |
|
24,285,173 |
|
|
|
17,838,570 |
|
|
|
45,277,668 |
|
|
|
32,485,743 |
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
Selling,
general and administrative expenses |
|
21,956,376 |
|
|
|
20,454,183 |
|
|
|
45,817,988 |
|
|
|
35,648,687 |
|
Advertising
and marketing |
|
6,069,903 |
|
|
|
3,594,868 |
|
|
|
11,459,233 |
|
|
|
8,002,655 |
|
Depreciation
and amortization |
|
1,205,796 |
|
|
|
758,684 |
|
|
|
2,271,413 |
|
|
|
1,428,829 |
|
Total operating expenses |
|
29,232,075 |
|
|
|
24,807,735 |
|
|
|
59,548,634 |
|
|
|
45,080,171 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
(4,946,902 |
) |
|
|
(6,969,165 |
) |
|
|
(14,270,966 |
) |
|
|
(12,594,428 |
) |
Interest income (expense), net |
|
169,327 |
|
|
|
(435 |
) |
|
|
403,890 |
|
|
|
(58,420 |
) |
Net
loss before income taxes |
|
(4,777,575 |
) |
|
|
(6,969,600 |
) |
|
|
(13,867,076 |
) |
|
|
(12,652,848 |
) |
Benefit (provision) for income taxes |
|
6,576 |
|
|
|
- |
|
|
|
(5,700 |
) |
|
|
- |
|
Net
loss |
$ |
(4,770,999 |
) |
|
$ |
(6,969,600 |
) |
|
$ |
(13,872,776 |
) |
|
$ |
(12,652,848 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss per common share: |
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
$ |
(0.33 |
) |
|
$ |
(3.71 |
) |
|
$ |
(0.99 |
) |
|
$ |
(5.29 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares
outstanding: |
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
14,331,185 |
|
|
|
9,077,549 |
|
|
|
14,000,565 |
|
|
|
7,571,377 |
|
THE LOVESAC
COMPANY |
|
CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOW |
|
(unaudited) |
|
|
Twenty-six weeks ended |
|
August 4, |
|
|
August 5, |
2019 |
2018 |
|
|
|
|
|
Cash
Flows from Operating Activities |
|
|
|
|
Net loss |
$ |
(13,872,776) |
|
|
$ |
(12,652,848) |
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
Depreciation and amortization of property and equipment |
|
2,147,743 |
|
|
|
1,350,493 |
Amortization of intangible assets |
|
123,670 |
|
|
|
78,336 |
Amortization of deferred financing fees |
|
36,512 |
|
|
|
84,661 |
Net (gain) loss on disposal of property and equipment |
|
(166,865) |
|
|
|
6,139 |
Equity based compensation |
|
3,393,099 |
|
|
|
2,334,104 |
Deferred rent |
|
88,774 |
|
|
|
251,643 |
Changes in
operating assets and liabilities: |
|
|
|
|
|
|
Accounts receivable |
|
(1,625,830) |
|
|
|
(1,229,087) |
Merchandise inventories |
|
(14,502,594) |
|
|
|
(8,598,437) |
Prepaid expenses and other current assets |
|
(1,098,234) |
|
|
|
268,482 |
Accounts payable and accrued expenses |
|
1,942,148 |
|
|
|
3,521,298 |
Customer deposits |
|
493,128 |
|
|
|
1,290,383 |
Net
Cash Used in Operating Activities |
|
(23,041,225) |
|
|
|
(13,294,833) |
|
|
|
|
|
|
|
Cash
Flows from Investing Activities |
|
|
|
|
|
|
Purchase of
property and equipment |
|
(4,117,755) |
|
|
|
(6,033,856) |
Payments for
patents and trademarks |
|
(257,029) |
|
|
|
(243,249) |
Proceeds
from disposal of property and equipment |
|
300,000 |
|
|
|
- |
Net
Cash Used in Investing Activities |
|
(4,074,784) |
|
|
|
(6,277,105) |
|
|
|
|
|
|
|
Cash
Flows from Financing Activities |
|
|
|
|
|
|
Proceeds
from issuance of common shares, net |
|
25,610,000 |
|
|
|
58,908,552 |
Taxes paid
for net share settlement of equity awards |
|
(3,343,218) |
|
|
|
(7,902) |
Proceeds
from exercise of warrants |
|
12,000 |
|
|
|
- |
Principal
paydowns on the line of credit, net |
|
(31,373) |
|
|
|
(405) |
Payments of
deferred financing costs |
|
- |
|
|
|
(292,095) |
Net
Cash Provided by Financing Activities |
|
22,247,409 |
|
|
|
58,608,150 |
Net
Change in Cash and Cash Equivalents |
|
(4,868,600) |
|
|
|
39,036,212 |
Cash
and Cash Equivalents - Beginning |
|
49,070,952 |
|
|
|
9,175,951 |
Cash
and Cash Equivalents - End |
$ |
44,202,352 |
|
|
$ |
48,212,163 |
Supplemental Cash Flow Disclosures |
|
|
|
|
|
|
Cash paid
for interest |
$ |
24,045 |
|
|
$ |
38,803 |
|
THE LOVESAC COMPANY |
|
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES |
|
|
|
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
Thirteen weeks ended |
|
Twenty-six weeks ended |
|
|
(dollars in thousands) |
|
August 4, |
|
August 5, |
|
August 4, |
|
August 5, |
|
|
|
2019 |
|
|
2018 |
|
|
|
2019 |
|
|
2018 |
|
|
Net loss |
|
$ |
(4,771 |
) |
|
$ |
(6,970 |
) |
|
$ |
(13,873 |
) |
|
$ |
(12,653 |
) |
|
|
Interest (income) expense |
|
|
(169 |
) |
|
|
- |
|
|
|
(404 |
) |
|
|
58 |
|
|
|
Taxes |
|
|
(7 |
) |
|
|
- |
|
|
|
6 |
|
|
|
- |
|
|
|
Depreciation and amortization |
|
|
1,206 |
|
|
|
759 |
|
|
|
2,271 |
|
|
|
1,429 |
|
|
|
EBITDA |
|
|
(3,741 |
) |
|
|
(6,211 |
) |
|
|
(12,000 |
) |
|
|
(11,166 |
) |
|
|
Management fees (a)(b) |
|
|
133 |
|
|
|
742 |
|
|
|
297 |
|
|
|
867 |
|
|
|
Deferred Rent (c) |
|
|
77 |
|
|
|
128 |
|
|
|
89 |
|
|
|
252 |
|
|
|
Equity-based compensation (d) |
|
|
171 |
|
|
|
2,039 |
|
|
|
3,394 |
|
|
|
2,334 |
|
|
|
Net (gain) loss on disposal of property and equipment
(e) |
|
|
(214 |
) |
|
|
- |
|
|
|
(167 |
) |
|
|
6 |
|
|
|
Other non-recurring expenses (f)(g) |
|
|
275 |
|
|
|
1,292 |
|
|
|
425 |
|
|
|
1,508 |
|
|
|
Adjusted EBITDA |
|
$ |
(3,299 |
) |
|
$ |
(2,010 |
) |
|
$ |
(7,962 |
) |
|
$ |
(6,199 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
Management fees in the thirteen weeks ended August 4, 2019 reflect
monitoring fees of $133k and for the thirteen weeks ended August 5,
2018, reflect monitoring fess of $117k and one-time IPO bonus
payments of $625k, respectively. |
|
(b) |
Management fees in the twenty-six weeks ended August 4, 2019
monitoring fees of $297k and in the twenty-six weeks ended August
5, 2018 monitoring fees of $242k and one-time IPO bonus payments of
$625k. |
|
(c) |
Represents the difference between rent expense recorded and the
amount paid by the Company. In accordance with GAAP, the Company
records monthly rent expense equal to the total of the payments due
over the lease term, divided by the number of months of the lease
terms. |
|
(d) |
Represents expenses associated restricted stock units granted to
our management. |
|
(e) |
Represents the net (gain) loss on the disposal of property and
equipment. |
|
(f) |
Other expenses in the thirteen weeks ended August 4, 2019 are made
up of: (1) $83 in financing fees associated with our
secondary offering and (2) $192 in legal
and professional fees. Other expenses in the thirteen
weeks ended August 5, 2018 are made up of: (1)
$176 in fees and costs associated with our fundraising and
reorganizing activities including the legal and professional
services incurred in connections with such activities; (2) $73 in
travel and logistical costs associated with the offering; (3) $88
in accounting fees related to the offering; (4) $450
in IPO bonuses paid to executives; (5) $446 in fees paid for
investor relations and public relations relating to the IPO
and (6) $59 in executive recruitment fees to build executive
management team. |
|
(g) |
Other expenses in the twenty-six weeks ended August 4, 2019
are made up of: (1) $150 in recruitment fees to build executive
management team and Board of Directors; (2) $83 in
fees associated with our secondary offering finance expense
and (3) $192 in legal and professional fees. Other expenses in
the twenty-six weeks ended August 5, 2018 are made up of: (1)
$201 in fees and costs associated with our fundraising and
reorganizing activities including the legal and professional
services incurred in connection with such activities; (2) $84 in
travel and logistical costs associated with the offering; (3)
$198 in accounting fees related to the offering; (4) $450
in IPO bonuses paid to executives; (5) $479 in fees paid for
investor relations and public relations relating to the IPO and (6)
$96 in executive recruitment fees to build executive management
team. |
|
THE LOVESAC
COMPANY |
|
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES |
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen weeks ended |
|
Twenty-six weeks ended |
|
(dollars in thousands) |
August 4, 2019 |
|
August 5, 2018 |
|
August 4, 2019 |
|
August 5, 2018 |
|
Net loss as reported |
$
(4,771) |
|
$
(6,970) |
|
$
(13,873) |
|
$
(12,653) |
|
Adjustments: |
|
|
|
|
|
|
|
|
Adjustments to selling,
general and administrative expense: |
|
|
|
|
|
|
|
|
Other expenses (a)(b) |
275 |
|
1,292 |
|
425 |
|
1,508 |
|
Adjusted net loss |
$ (4,496) |
|
$ (5,678) |
|
$ (13,448) |
|
$ (11,145) |
|
Adjusted basic and diluted weighted average shares outstanding-
adjusted for IPO related issuance |
14,331,185 |
|
9,077,549 |
|
14,000,565 |
|
7,571,377 |
|
Adjusted net loss per common share |
$ (0.31) |
|
$ (0.63) |
|
$ (0.96) |
|
$ (1.47) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
Other expenses in the thirteen weeks ended August 4, 2019 are made
up of: (1) $83 in financing fees associated with our
secondary offering and (2) $192 in legal
and professional fees. Other expenses in the thirteen
weeks ended August 5, 2018 are made up of: (1)
$176 in fees and costs associated with our fundraising and
reorganizing activities including the legal and professional
services incurred in connections with such activities; (2) $73 in
travel and logistical costs associated with the offering; (3) $88
in accounting fees related to the offering; (4) $450
in IPO bonuses paid to executives; (5) $446 in fees paid for
investor relations and public relations relating to the IPO
and (6) $59 in executive recruitment fees to build executive
management team. |
|
(b) |
Other expenses in the twenty-six weeks ended August 4, 2019
are made up of: (1) $150 in recruitment fees to build executive
management team and Board of Directors; (2) $83 in
fees associated with our secondary offering finance expense
and (3) $192 in legal and professional fees. Other expenses in
the twenty-six weeks ended August 5, 2018 are made up of: (1)
$201 in fees and costs associated with our fundraising and
reorganizing activities including the legal and professional
services incurred in connection with such activities; (2) $84 in
travel and logistical costs associated with the offering; (3)
$198 in accounting fees related to the offering; (4) $450
in IPO bonuses paid to executives; (5) $479 in fees paid for
investor relations and public relations relating to the IPO and (6)
$96 in executive recruitment fees to build executive management
team. |
|
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