LUVU - Earnings call 4 2021 | Luvu Brands, Inc.

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Operator

Greetings, ladies and gentlemen, and welcome to Luvu Brands Inc.'s Fiscal Fourth Quarter and Full Year 2021 Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. It is now my pleasure to introduce Ron Scott, the Company's Chief Financial Officer. Mr. Scott, you may begin.

Ronald Scott

Thank you, Kate, and thank you to everyone who has joined us today for Luvu Brands' Fourth Quarter Fiscal 2021 Conference Call.

XXXX, Louis our Founder, XX-K Company's annual year June is afternoon, and for fourth today earnings ended filed an year we report XX, quarter me and Friedman, highlighted performance. President our CEO. Yesterday the release full Joining that issued the and on Form XX, morning, in items quarter financial Brands' results Brands' the fourth There of look as the to Luvu that are well a developments discussing for Company's including forward year XXXX, ended operational activities, near-term June and we Luvu the number with recent you this as future. for plans At session. will be the answering Q&A call, brief a conclusion of this questions we during

get statements our plans the materially forth our expectations, events we that and from and I'd will about you financial financial set statements. projections, regarding remind some information These performance. may our future Before future of results differ those future such include like include started, and to discussed forward-looking Actual prospects. in statements

discussion of SEC, which For the you press release. the yesterday's with these review uncertainties, a filings includes Company's risks and should

forward-looking and not obligation update this as on law. applicable on them, and based as call our of make All statements that no should You events. are predictions of on as beliefs required by assumptions we forward-looking statements undertake rely today, future we except to

provided in measure in measures been measure or be comparable GAAP in for addition directly considered Our non-GAAP discussion not to as reconciliation from today release. our EBITDA. a supplemental of press will such financial include results. non-GAAP The substitute financial should most adjusted These to measures, including our financial information EBITDA has non-GAAP the and as GAAP and isolation

a the from completed, to start few Brands' Friedman. and Louis? long I'd Founder that call paragraph with Louis CEO, words Now Luvu like with

Louis Friedman

and everyone, Good thank morning, joining morning. this and you, for us you, Ron, thank everyone,

year and pleased We quarter are fourth our results. very full with

million. for year the XX% For million, $XX.X a net of $X.X an the of $X.X fiscal record reported we profit prior increase record million a and year, over gross of with sales of income

high-speed over equipment, costs, our was we of a goals, freight more cutter competitive our a reduces large growing that believe which is with manufacturing our and channels us to we rollouts. We deliver the million production. bean and system, Included more daybeds. allows contour second foam bags, needed and [ to foam compression that and $X capacity contributes added During larger fabric new our actually stems us success gives new a to time, foam awareness Also doubling value many continued across is sustainability production cutter acquired new literally super ] processing the from for consumer. brands of XX% product our be

U.S.-based are container chain the integrated materials faced competition, fortunate shipping to has purchasing many This by We and vertically manufacturer. avoid supply other be of China to from and us allowed manufacturers. a shortages offshore

the to XXXX. over ahead. full I'll of back Financial to Luvu of fourth the Ron Now, Scott, Ron, Chief call year highlights financial summarize turn some the and fiscal go the please quarter Brands' Officer,

Ronald Scott

highlights last products, months $X.X net year But prior gowns; year's in and which masks material quarter sales XX% $X.X if we as The by which, from continue to contributed fourth had financial for the million the the sales ended the million year. Gross the fiscal of fiscal quarter. operating to PPE from profit in same any in year-ago expenses or the e-commerce primarily a Liberator products totaled website approximately of XX% $XXX,XXX products XXXX. Net from reduced in software million, slight $XXX,XXX fourth year, out, I prior costs decreased were relating XX% record from XX% in quarter increased quarter. fourth costs last the to million an of were prior fourth the of increase million last for back touch the out million were a Thanks, million in from $X.X business million year. in PPE gross gross sales XX% quarter. Operating $X.X profit XX% up $X.X after included product that QX in way the the that for increased approximately this compared $X.X Avana X% mainly Avana Fourth the $XXX,XXX fourth million did in $X.X increase loss year. point profit business. last Louis. medical should quarter of $XXX,XXX $X.X year to have $XXX,XXX quarter. business last in sales that expenses prior to prior $X,XXX,XXX decreased we this by year percentage to fourth $X.X the upgrade. of driven quarter on quarter June, year over from capitalized PPE the quarter. three a that of we briefly of year I'll compared profit, would totaled fourth of Sales Gross some of to year fourth Jaxx not our in

per or fourth basically So that to year in-house net with the $X.XX of we per staff that $XXX,XXX, in-house incurred quarter. our income in website the prior quarter the to cost share, or fourth was was income share, for upgrade. Net $X.XX create the $XXX,XXX, compared

Sales the now XX% for sales net purchased compared results. which shipping products increased a at and sales XX% primarily $X.X and and year increased to revenue, million work branded for to Product contract $X.X record $X.X to was to XXXX. Fiscal $X.X million. handling XX% fiscal $X.X XXXX. $X.X $XX.X charges, million. Total XX% gross year $XX.X sales XXXX increased And million. to sales XX% to of up fiscal profit product $X.X the resale million some increased million. full Liberator in is product Jaxx million, decreased other million in increased Looking million, to XX% from Avana

to cost and to consistent those from decreased net raw percentage of labor gross mainly XX% increases. cost sales in material year primarily fiscal of prior XX% However, increases profit production and the a due as

Mexico, $X,XXX,XXX, over in of equivalents adjusted options going our to we And a it's XX% year, prior last the year, is think at $X now has and cash million $X.X The fiscal And to X% the forgiveness at the running or income million and year to increase in for the due year was no XX was to XXXX, cost to opinion, XX% XX, during which year on fiscal financing compared I fiscal in for the continued million primarily the at the of report I'm of included in advertising XXXX, $XXX,XXX in products. of the for compared $X.X expenses June $X.XX the year. Cash prior to or in promotion a door $X.XX to costs. Other the $XXX,XXX, million reduction we a for last a were XXXX. And EBITDA from a and owned quantity year longer totaled which XX%. Net income operating expenses concern a PPP all opens personnel-related prior that audit Company higher expenses million the at compared June was interest $X.X of XXXX. Company. pleased about and from During to million and in occupancy income compared prior the some lower share, to at $X.XXX $XXX,XXX higher $X of expense reduced net were $X.X products increase or contractor XX%. Operating year is to share, by loan. was gain XXXX fiscal and the million, about $X,XXX,XXX year,

to like the I'd Louis? to for turn regarding Now comments some Louis call additional current developments. back

Louis Friedman

pleased I'm year fourth with Ron. Again, the and full results. you, Thank quarter

products to With product see Our diverse of new we continued and I expect many offering continues across attract e-commerce strong the approach lifestyle season. demand retail to repeat introductions, and consumer holiday customers. new as channels

across Our brands. new product introductions X are all

composed collection, highlights the a of foam we which Some trim. It's novel include excess primarily call headboard Panelist.

also children's seating, new of announced. to collection Liberator Avana and and We an soon expanded some be exciting modular products have play

a moving our We sofas outdoor channel collection and presence, Sunbrella lounges. style of into expanded hospitality with new have also beanbag

pandemic, beginning we see are As the continues market. ongoing to recover sales from to into growth hospitality market that the

capacity foam And on be Sustainability executing focused to chain within Our from the to strategies for shareholders. And we long-term more us. through our closing continue drive -- shareholders Liberator and recent support domestic products Operator, the quarter supply appreciate for execute quarter. That progress manufacturing produce Q&A, on sell, free -- you to developments challenging we'll as we're key we more comments. remain some first received our to open available principle environment. we've challenging and to driving for now us a execute continues our forward call a updated the presentation. look with and up provide Q&A. wraps foam-based after allows becomes that the formal for to second filling. We products finish trend keep the to and our and and against strong Avana We bags bean growth into a repurpose value

Operator

question [Operator Instructions] Our [ Colombo Olivier from coming is today ]. first

Unknown Analyst

you a morning. have questions I few for this

what have installation that machines with you maximum one the the is of now X have you first the is The that added, today? now capacity available

Louis Friedman

pretty a good that's question. Well,

actually foam For in literally or dollars? double foam contouring foam bonds machines in that it ] our you the contouring, and want to capacity. But relate [ well, processing X

so conveniently foam-based of So, products, probably have we whatever in one which labor. on doing without revenue any shift, is additional most incurring revenue, we're our actually doubled

Unknown Analyst

regarding was couple have shortage, how that labor last of you one faced you the And The months? reacted? other yes, if over

Louis Friedman

living if we labor I shortages. we'd a in be think that vacuum have Well, didn't

machine operators, that's clerks kind opportunities who of to categories shortages and sew they kind And of so interesting other It's different by affected we are at do. like really labor we our and forklift And are Selling want Amazon not work because a others. because do. operators have within they want Other areas what labor have to niche. plant. of to people se, shipping per

or or right of probably guess we kind so we so that we're that's growing. people, So, have employ and pivoting. XX and in XXX now, another Mexico, But people I

we Mexico able we to demand And pivoting new ongoing the we Mexico, fact we have give of and for in that utilize but keep grow them as products an there. don't simpler to to and to handle, stream products, so products certainly, make, as was we're -- that able introduce the Mexico to ones

of Mexico think to good I -- with in problems kind a our plant. have avoiding So, we those system

Ronald Scott

in shortage. had seen certainly more some we as -- well. we've years, There's have general we some wage have turnover prior escalation turnover, than the But and labor

are going up up, have but been as going wages So, well. prices

continue we we and -- So raise can. prices to where

Unknown Analyst

is increase guess correct? continuing consumer. And you passing when to over manufacture, material if you're I -- you the those the so raw just that not can you consumer buy. the Is to yes, So, on prices, raise they on answer costs price the reacting? how say waters that of products question, I that are What to the will increases? if probably customer not happy, tested it's easy you here? not the I the have because, to mean, But is reaction mean

Louis Friedman

in our terms we reduce is not costs. raising Well, of prices. that try strategy to simple Ideally,

size especially that we products cost the And reduce and reduce some are have are equipment, sold wherever we value, brand. on of we of corrugated. good price the to side to foam costs were on and possible. design of primarily of other and our And continue fence, outgoing packages able motivated sold one to are products reduce compression, to the On certain

sales the increased XX%. prices -- I they Liberator, the have on with up we've to guess, were Liberator, had So, grown that

also manner that the of bean is a part, been product trim. any category mostly in which that from of only comes most free manufacturer the line, So line in has for form. The foam bags, category. Jaxx not We're growing affected

-- free, pretty comes of But does is to bags check comes most bean foam see free what good of might comes our fill our remarkable. portion trend. it of it You Lovesac in off

raise more the the be we foam edge prices that novel, tend and give some yet to out designed might would to be like us some we -- say there a us new more to designs, free other So, novel have have. And which in price designs, more where sensitive to competitive designs that increases, Avana, continue introduced, products products would area. and novel Liberator enable what's say you sell, to yes, we to I

and bit. doing So, proven possible to prices Avana work And best to can we on sales. our a we're Jaxx without raise wherever have little guess, need do I affecting that Liberator And that.

Operator

]. [Operator Levine question coming [ today Instructions] next Michael Our is Dr. from

Unknown Analyst

have Olivier Mr. -- them. one Mr. asked Colombo I couple a questions. of of

inventories that $X.XX I'm believe So, year-over-year. going $X.XX XX% million follow-up. noticed I I versus to million. were is Why that? up it's

Ronald Scott

really Well, a the sort snapshot balance specific sheet is on just of a day.

more -- fabrics range color really There's day, reason. more of And on also products. outdoor do had We in-house. we inventory because stock, broader we paramount offering in So we're doing of that a no particular choices. had more fabrics, have specific we're

in And as in the product then related really Jaxx because so to that's And took products more of be that outdoor more fabric have growth inventories. that fourth the has to is pipeline sales the we sort in And Mexico, quarter. -- well. filled with another

Louis Friedman

true. It's

Ronald Scott

Mexico and sewn to then us. Fabric comes it to it's back and

Louis Friedman

we custom, we in be environment so some Yes. that made in Just-in-time to us. kind Well, vendors [indiscernible] some some that some what bring have fabrics difficult. we we have for -- to of and stoppages, supply in bring because order we to in up if buy have issues, make there's stock chain we this sure of others the think going is don't specifically then And are to they

Ronald Scott

we we'll try manage to it. minimize it as But, no, But best that's to Yes. -- as question. good can a yes

Unknown Analyst

you another order first have and an follow-up your companies can to that have fact business this? operation, from shipping orders off, can upon, concerns have China, going, you macroeconomic wait To an for you on you do North issue, and based I come guess, you see vertical we American increased integration, more, that the do coming don't

Louis Friedman

in training that you're new Board, is because matter business seems that's closed Yes, we're to this competency & all as Room little like Could work common, core private a operators, label Frontgate and of Ashley area. either of Ashley point, manufacturing? Ashley or we key. pretty and that a others. interest. stabilitating we and there to with particular on But and referring label And with with at take let's our an really yes, our to response fact, things. -- -- be very fair within do amount take private -- contract yes, just only some are and and be hospitality, we So, close to Yes, fairly say requires gaining is that work companies of

nicely. that call business, or contract we the our of CREATL, services and growing label is that's So side private which

Unknown Analyst

-- hit. potential never huge breakthrough could beat product item? be a Do your on a back any to items To use that or items that, on of guys follow-up because expected is you're there any you is new breakthrough to that what sometimes such almost in really you planning you to see

Louis Friedman

to off trim. It freight low very to of because the are diverse ship comes for selling product Panelist, and all, our the it, it at What's of took that fabrics know the on us And kind kind of really short it's don't in basically lightweight form a is, look for about so X, well And our if number of about And what's it's cost which on in has. of it's headboards, introduction you produce. a interesting rate easy colors. to I it has conventional because that a it but it is oversized. it's now interesting one, number second foam comparison

a And in wide looking that introduced and the of competitive truly fabrics children's a it's also real it's at haven't so works. configurations yet, but in that edge, and it product novel. gives We're that variety we us

product us you them. that. favorably with allows So, these a fur are equipment financial check $XX And beanbag, I think huge our with compete and I compression to products about what like beanbag knows? or also, I products, they has And statement, breakthrough. where large million could something in we've think new million doing, if who $X products. It compete that quarter very business, Lovesac, to Lovesac's of But added mean, more more big beanbag be

within But and new and at of different we of and Things whatever. a ideas. price, out other can products fraction the designing the variety some have new always produce wide in fit with are channels. them we're designs fur works, we And so coming things our that

Unknown Analyst

kind in like question you year final a for or I fiscal are -- fiscal you It like clip. is, seems guidance the guidance. current providing at guess, comfortable to My any referring year? guys Are growing XX% QX of

Ronald Scott

double-digit it's sales. guidance. tough. the February. in day us out then year, see how for too still to difficult to think Valentine Certainly, it's going growth shakes the and seeing We'll I But much to Christmas going we're have Mike, in in to be for be even the holiday give full

Louis Friedman

and a to old is had mass convince days, thing feeding to I to of variety and one wide have a content. buyer So, it's matter marketers, with would we that we a add really the have access back-end In websites, to websites XX% A-plus relationships there's of you our and their websites, about and Being a as Well, content these to what the feeding waiting to buy. to other no mean, convince, them to. we're own sales. it's all to e-commerce simply of today, buyers that for talk matter I

these working And with experience are because established growing XXX%, to so just regular one relationships sales up on very basis. we opening XXX%. individual new and business, he's -- have about doors I XX selling mean, years' on development, business And a market, mass new

new only opening investment the XX Easy new real existing new enhance to doors, us no pretty for And content. go he so Brookstone Wayfair channels of we're on with able or but to it's for not products easy and us add -- is with and products. add with new go minimal and on to product feed

And products, So, on we're visuals better marketing to really better our to what just sales day. every all built content our do of keep feeding so and this channels the of is grow increase channels diverse and videos we better ability going into that and have. and we with that's those and to

Operator

Thank you.

follow-up [ a Colombo is ]. question next Olivier Our from

Unknown Analyst

It's me. kicked I'm but again, was time. I first sorry, think me -- I excuse Yes, out

what don't but sense -- few a shorter I've visible going know, on bit media influencers your that is place to the a are what think social here, Facebook, you're about content feeding maybe I activity or more or and on the new and products in put I try get, comments videos seen might it more front? that? you on Instagram, to mean, your Louis' to you're be following don't initiatives make that videos like on have launching Just people

Louis Friedman

a question. great Well, Yes. that's

ad in-house agency. an have We

have We now. X people right

are videographer. and markets. editors do in to we X we multiple in video, and per to And of certainly more blast social. and XXX,XXX X week out do need and We process And web about have in full-time people. to in need the blasts content certainly hiring we customers e-mail We a more writers to

have agency And place. our goal more a need We a add for we in-house is for to goal. for -- this -- actually So, next really simply for in season, or now we it's the holiday staff. that's quarter --

Unknown Analyst

are could finally, planning And give over you yes, a question any you to names? us to conferences next And investor months? X few my if will, attend last XX the already

Ronald Scott

we're be yesterday. We're actually ] but one. that going be to attending And at conference the talking attending -- may we'll the going And then of conferences, some the maybe Fidelity We're -- looking LD sure following next conference. not about to I'm we other Micro, the spring. in one, ROTH the [ the smaller

we're So working on that. yes,

Unknown Analyst

just sorry, forward? biggest a appeared. And then going are I final had you're -- the facing one here What that challenges that

Louis Friedman

And show exponentially, challenges grow to facing we our forward? in place is to our and do manufacturing challenge fair or our whatever and main really biggest to say I but we quarter-over-quarter. we at-home start anyway, people is our have guess really I the home, home utilizing the Should things at that challenge. of a COVID, manufacturing, wanting out The there would for ugly the one. work people working And staying things the continue get and people only for the business head business going Well, that month-after-month that that amount and but home. of part-time -- we're increased mean that systems are in the that are again that's can I at growing no had way -- its control,

and big those are Everything COVID. that chain face but is and inflation we our supply challenges control, and everyone not. that certainly, faces else So within is the

continue least, And when out grow and challenges as figure themselves, themselves. so at to least work we per to those they have XX% to how present year, present around they at -- to have we to

Operator

Gentlemen, are it you appears have closing there Do further questions. no any comments?

Louis Friedman

want Yes, are on look everyone, operator. markets. fiscal we we to results. growing On Brands' our Luvu to time, Thank we're do. We solid us with to again further and XXXX you you, you building joining for today. again, we at Luvu future you, Yes. are updating developments pleased a Once Thank your behalf foundation the growth, entire www.luvubrands.com. management Brands well and for upon capitalize I on I believe positioned of for thank forward team,

Operator

concludes Thank this you. Ladies gentlemen, today's conference and call.

You at webcast may for disconnect Thank you from your time. the participation. this

Luvu Brands (LUVU) 29 Sep 212021 Q4 Earnings call transcript