Third Quarter Net Sales Increased 70.9% to $41.7
million Comparable Sales, Including Showroom and Internet
Sales, Increased 51.0% EBITDA of ($1.6) million vs. EBITDA of
($1.2) million in Prior Year Period Adjusted EBITDA of ($0.4)
million vs. ($0.8) million in Prior Year Period
The Lovesac Company (Nasdaq:LOVE) today announced its financial
results for the third quarter of fiscal 2019, which ended on
November 4, 2018.
Shawn Nelson, Chief Executive Officer, stated, “We had an
exceptional third quarter and are very pleased with our financial
results. We believe that our highly differentiated product and
disruptive direct-to-consumer business model are resonating with
both new and existing customers alike as we continue to lean into
our marketing strategy. We made good progress on our strategic
priorities in the third quarter including expanding marketing,
investing in infrastructure and capabilities, increasing and
improving showroom presence, extending brand reach with
shop-in-shops and driving higher levels of social media
engagement.”
Mr. Nelson continued, “We continue to see significant growth
opportunity for our innovative brand given the $31 billion total
addressable market. Looking ahead, we plan to continue to execute
on our key strategic priorities including a strong focus on
marketing and investing in infrastructure to grow brand awareness,
gain meaningful market share and establish a solid foundation for
long term growth.”
For the Thirteen Weeks Ended November 4,
2018
- Net sales increased 70.9% to $41.7 million in the third quarter
of fiscal 2019 from $24.4 million in the third quarter of fiscal
2018. The increase was driven by strong showroom, Internet and
shop-in-shop performance as a result of an increase in new
customers combined with an increase in the total number of units
sold and continued accelerated investments in marketing to increase
brand awareness. Comparable sales, which includes showroom and
Internet sales, increased 51.0%. Comparable showroom sales
increased 40.5% and Internet sales increased 93.9%.
- The Company opened five new showrooms and remodeled one
showroom in the third quarter of fiscal 2019 and ended the quarter
with 77 showrooms in 30 states. This represents a unit increase of
20% over the same quarter in the prior
year.
- Gross profit dollars increased 67.5% to $22.9 million in the
third quarter of fiscal 2019 from $13.7 million in the third
quarter of fiscal 2018. Gross margin decreased by 110 basis points
to 54.9% in the third quarter of fiscal 2019 from 56.0% in the
third quarter of fiscal 2018 due primarily to a channel mix shift
toward shop-in-shop locations and growth in Sactional products,
both of which carry a lower margin.
- Selling, general and administrative expenses increased $7.2
million, or 59.8%, to $19.3 million in the thirteen weeks ended
November 4, 2018 compared to $12.1 million in the thirteen weeks
ended October 29, 2017. The increase in selling, general and
administrative expenses was primarily related to an increase in
employment costs of $0.7 million, $1.1 million of increased rent
associated with our net addition of 11 showrooms, $3.7 million of
expenses related to the increase in sales such as credit card
fees, utility and repairs expenses, web affiliate program and web
platform hosting commissions and shop in shop sales agent fees,
$0.7 million increase in overhead expense to support overhead
initiatives and public company expenses, $0.5 million of stock
based compensation and $0.2 million of expenses related to capital
raises. As a percent to sales, total SG&A expense decreased by
320 basis points.
- Operating loss was $2.7 million in the third quarter of fiscal
2019 compared to an operating loss of $2.1 million in the third
quarter of fiscal 2018. Excluding non-recurring items of $0.4
million in the third quarter of fiscal 2019 and $0.2 million in the
third quarter of fiscal 2018, operating loss was $2.3 million in
the third quarter of fiscal 2019 and $1.9 million for the third
quarter of fiscal 2018
- Net loss and net loss attributable to common shares was $2.5
million and $2.9 million, respectively. There was
approximately $400K of preferred dividends and deemed dividends in
the third quarter of fiscal 2019. This is compared to a net loss of
$2.2 million, or net loss attributable to common shares of $2.6
million including preferred dividends and deemed dividends in the
third quarter in fiscal 2018. Adjusted net loss, which excludes the
impact of non-recurring expenses, was ($2.0) million in both the
third quarter of fiscal 2019 and the third quarter of fiscal 2018
(see “GAAP and Non-GAAP Measures”). Net loss per share, including
preferred dividends and deemed dividends, was ($0.22) in the third
quarter of fiscal 2019 compared to a loss of ($0.43) in the third
quarter of fiscal 2018. 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
($0.15) in both the third quarter of fiscal 2019 and the third
quarter of fiscal 2018 (see “GAAP and Non-GAAP Measures”).
- Earnings before interest, taxes, depreciation and amortization
(“EBITDA”) was ($1.6) million in the third quarter of fiscal 2019
compared to ($1.2) million in the third quarter of fiscal 2018.
Adjusted EBITDA was ($0.4) million compared to ($0.8) million in
the third quarter of fiscal 2018 (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 Thirty-Nine Weeks Ended November
4, 2018
- Net sales increased 62.0% to $101.7 million in the fiscal 2019
year-to-date period from $62.8 million in the same period of fiscal
2018. This increase was driven by strong showroom, Internet and
shop-in-shop performance as a result of an increase in new
customers combined with an increase in the total number of units
sold and continued accelerated investments in marketing to increase
brand awareness. Comparable sales, which includes showroom and
Internet sales, increased 40.9%. Comparable showroom sales
increased 33.2% and Internet sales increased 73.6%.
- The Company opened 13 new showrooms and closed two showrooms in
the fiscal 2019 year-to-date period.
- Gross profit dollars increased 61.5% to $55.4 million in the
fiscal 2019 year-to-date period. Gross margin decreased by 20 basis
points to 54.4% in the fiscal 2019 year-to-date period from 54.6%
in the same period of fiscal 2018. The decrease in gross margin was
primarily due to a channel mix shift toward shop-in-shop locations
which carry a lower margin.
- Selling, general and administrative expenses increased $20.4
million, or 59.0%, to $55.0 million in the thirty-nine weeks ended
November 4, 2018 compared to $34.6 million in the thirty-nine weeks
ended October 29, 2017. The increase in selling, general and
administrative expenses was primarily related to an increase in
employment costs of $2.7 million, $3.0 million of increased rent
associated with our net addition of 11 showrooms, and $8.3 million
of expenses related to the increase in sales such as credit card
fees, web affiliate program and web hosting program commissions,
shop in shop sales agent fees and utility and repairs expense,
$1.0 million increase in overhead expense to support overhead
initiatives and public company expenses, stock based compensation
of $2.3 million, sponsor fees of $1.3 million, and equity raise
expense of $1.2 million. As a percent to sales, total SG&A
expense decreased by 102 basis points.
- Marketing expense increased by $7.4 million or 128% to $13.2
million in the fiscal 2019 year-to-date period from $5.8 million in
the same period of fiscal 2018. The increase in
marketing costs relates to increased media, to include national
media and direct to consumer programs which drive revenue beyond
the period of the expense.
- Operating loss was $15.3 million in the fiscal 2019
year-to-date period compared to an operating loss of $7.6 million
in the same period of fiscal 2018. Excluding non-recurring items of
$4.0 million in fiscal year-to-date 2019 and $0.7 million in fiscal
year-to-date 2018, operating loss was $11.3 million and $6.9
million in the respective periods.
- Net loss was $15.1 million, and net loss attributable to common
shares was $43.0 million, including preferred dividends and deemed
dividends in the fiscal 2019 year-to-date period. This compares to
a net loss of $7.9 million in the prior year period and a net loss
attributable to common shares of $8.6 million including preferred
dividends and deemed dividends in the prior year period. Adjusted
net loss, which excludes IPO related sponsor fees and equity-based
compensation and certain other non-recurring expenses, was ($11.1)
million in the fiscal 2019 year-to-date period compared to ($7.2)
million in the prior year period (see “GAAP and Non-GAAP
Measures”). Net loss per share, including preferred dividends and
deemed dividends, was ($4.51) in the fiscal 2019 year-to-date
period compared to ($1.43) in the prior year period. 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 ($0.83) in the fiscal 2019 year-to-date
period compared to ($0.54) in the prior year period (see “GAAP and
Non-GAAP Measures”).
- Earnings before interest, taxes, depreciation and amortization
(“EBITDA”), was ($12.5) million in the year-to-date period of
fiscal 2019 compared to ($6.1) million in prior year period in
fiscal 2018. Adjusted EBITDA was ($6.3) million compared to ($4.8)
million in the prior year period (see “GAAP and Non-GAAP
Measures”).
Please see Non-GAAP financial 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 third quarter
fiscal 2019 financial results is scheduled for today, December 18,
2018, 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 77
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 |
|
|
|
|
|
November 4, 2018 |
|
February 4, 2018 |
|
(unaudited) |
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
Current
Assets |
|
|
|
Cash and
cash equivalents |
$ |
44,683,851 |
|
|
$ |
9,175,951 |
|
Trade
accounts receivable |
|
2,913,322 |
|
|
|
2,805,186 |
|
Merchandise inventories |
|
24,618,738 |
|
|
|
11,641,482 |
|
Prepaid
expenses and other current assets |
|
6,253,866 |
|
|
|
6,062,946 |
|
|
|
|
|
|
|
|
|
Total Current
Assets |
|
78,469,777 |
|
|
|
29,685,565 |
|
|
|
|
|
|
|
|
|
Property and
Equipment, Net |
|
17,092,936 |
|
|
|
11,037,289 |
|
|
|
|
|
|
|
|
|
Other
Assets |
|
|
|
|
|
|
|
Goodwill |
|
143,562 |
|
|
|
143,562 |
|
Intangible assets, net |
|
828,289 |
|
|
|
526,370 |
|
Deferred
financing costs, net |
|
237,327 |
|
|
|
48,149 |
|
|
|
|
|
|
|
|
|
Total Other
Assets |
|
1,209,178 |
|
|
|
718,081 |
|
|
|
|
|
|
|
|
|
Total
Assets |
$ |
96,771,891 |
|
|
$ |
41,440,935 |
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
Liabilities |
|
|
|
|
|
|
|
Accounts
payable |
$ |
16,869,229 |
|
|
$ |
12,695,954 |
|
Accrued
expenses |
|
2,864,069 |
|
|
|
784,340 |
|
Payroll
payable |
|
2,151,332 |
|
|
|
1,454,193 |
|
Customer
deposits |
|
2,525,034 |
|
|
|
909,236 |
|
Sales
taxes payable |
|
663,021 |
|
|
|
894,882 |
|
Line of
credit |
|
- |
|
|
|
405 |
|
|
|
|
|
Total Current
Liabilities |
|
25,072,685 |
|
|
|
16,739,010 |
|
|
|
|
|
Deferred
Rent |
|
1,445,825 |
|
|
|
1,063,472 |
|
|
|
|
|
Total
Liabilities |
|
26,518,510 |
|
|
|
17,802,482 |
|
|
|
|
|
Stockholders’ Equity |
|
|
|
|
|
|
|
Preferred
Stock $.00001 par value, 10,000,000 shares authorized, no shares
issued as of November 4, 2018 and 1,018,600 shares issued as of
February 4, 2018. |
|
- |
|
|
|
26 |
|
Common
Stock $.00001 par value, 40,000,000 shares authorized and
13,535,268 shares issued as of November 4, 2018, and 6,064,500
shares issued as of February 4, 2018, respectively. |
|
135 |
|
|
|
61 |
|
|
|
|
|
Additional paid-in capital |
|
141,650,165 |
|
|
|
79,891,819 |
|
|
|
|
|
Accumulated deficit |
|
(71,396,919 |
) |
|
|
(56,253,453 |
) |
|
|
|
|
Stockholders'
Equity |
|
70,253,381 |
|
|
|
23,638,453 |
|
|
|
|
|
Total
Liabilities and Stockholders' Equity |
$ |
96,771,891 |
|
|
$ |
41,440,935 |
|
|
|
|
|
|
|
|
|
|
THE LOVESAC COMPANY |
|
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
|
(unaudited) |
|
Thirteen weeks ended |
|
|
Thirty-nine weeks ended |
|
November 4, 2018 |
|
October 29, 2017 |
|
|
November 4, 2018 |
|
October 29, 2017 |
|
|
|
|
|
|
|
|
|
Net
sales |
$ |
41,685,929 |
|
|
$ |
24,391,450 |
|
|
|
$ |
101,703,739 |
|
|
$ |
62,769,038 |
|
|
|
|
|
|
|
|
|
|
Cost of
merchandise sold |
|
18,799,108 |
|
|
|
10,724,293 |
|
|
|
|
46,331,175 |
|
|
|
28,481,985 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit |
|
22,886,821 |
|
|
|
13,667,157 |
|
|
|
|
55,372,564 |
|
|
|
34,287,053 |
|
|
|
|
|
|
|
|
|
|
Operating
expenses |
|
|
|
|
|
|
|
|
Selling, general and administrative expenses |
|
19,329,422 |
|
|
|
12,095,035 |
|
|
|
|
54,978,109 |
|
|
|
34,574,771 |
|
Marketing |
|
5,164,699 |
|
|
|
2,798,467 |
|
|
|
|
13,167,354 |
|
|
|
5,775,512 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
1,084,180 |
|
|
|
835,819 |
|
|
|
|
2,513,009 |
|
|
|
1,521,461 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses |
|
25,578,301 |
|
|
|
15,729,321 |
|
|
|
|
70,658,472 |
|
|
|
41,871,744 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
loss |
|
(2,691,480 |
) |
|
|
(2,062,164 |
) |
|
|
|
(15,285,908 |
) |
|
|
(7,584,691 |
) |
|
|
|
|
|
|
|
|
|
Interest income
(expense), net |
|
200,862 |
|
|
|
(114,667 |
) |
|
|
|
142,442 |
|
|
|
(343,755 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss before
taxes |
|
(2,490,618 |
) |
|
|
(2,176,831 |
) |
|
|
|
(15,143,466 |
) |
|
|
(7,928,446 |
) |
|
|
|
|
|
|
|
|
|
Provision for
income taxes |
|
- |
|
|
|
- |
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss |
$ |
(2,490,618 |
) |
|
$ |
(2,176,831 |
) |
|
|
$ |
(15,143,466 |
) |
|
$ |
(7,928,446 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per
common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
$ |
(0.22 |
) |
|
$ |
(0.43 |
) |
|
|
$ |
(4.51 |
) |
|
$ |
(1.43 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
13,465,882 |
|
|
|
6,000,000 |
|
|
|
|
9,536,164 |
|
|
|
6,000,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the thirteen weeks ended |
|
|
|
|
|
|
November 4, 2018 |
|
October 29,2017 |
|
|
|
|
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
|
Net loss - Basic and
diluted |
$ |
(2,490,618 |
) |
|
$ |
(2,176,831 |
) |
|
|
|
|
|
Preferred dividends and
deemed dividends |
|
(408,919 |
) |
|
|
(382,573 |
) |
|
|
|
|
|
Net loss attributable
to common shares |
|
(2,899,537 |
) |
|
|
(2,559,404 |
) |
|
|
|
|
|
Denominator: |
|
|
|
|
|
|
|
|
Weighted average number
of common shares for basic and diluted net loss per share |
|
13,465,882 |
|
|
|
6,000,000 |
|
|
|
|
|
|
Basic and diluted net
loss per share |
$ |
(0.22 |
) |
|
$ |
(0.43 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the thirty-nine weeks ended |
|
|
|
|
|
November 4, 2018 |
|
October 29,2017 |
|
|
|
|
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
|
Net loss - Basic and
diluted |
$ |
(15,143,466 |
) |
|
$ |
(7,928,446 |
) |
|
|
|
|
|
Preferred dividends and
deemed dividends |
|
(27,832,998 |
) |
|
|
(669,605 |
) |
|
|
|
|
|
Net loss attributable
to common shares |
|
(42,976,464 |
) |
|
|
(8,598,051 |
) |
|
|
|
|
|
Denominator: |
|
|
|
|
|
|
|
|
Weighted average number
of common shares for basic and diluted net loss per share |
|
9,536,164 |
|
|
|
6,000,000 |
|
|
|
|
|
|
Basic and diluted net
loss per share |
$ |
(4.51 |
) |
|
$ |
(1.43 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THE LOVESAC COMPANY |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
(unaudited) |
|
Thirty-nine weeks ended |
|
November 4, 2018 |
|
October 29, 2017 |
|
|
|
|
Cash Flows from
Operating Activities |
|
|
|
Net
loss |
$ |
(15,143,466 |
) |
|
$ |
(7,928,446 |
) |
Adjustments to reconcile net loss to net cash |
|
|
|
|
|
|
|
used in
operating activities: |
|
|
|
|
|
|
|
Depreciation and amortization of property and equipment |
|
2,374,743 |
|
|
|
1,343,519 |
|
Amortization of other intangible assets |
|
138,266 |
|
|
|
177,942 |
|
Amortization of deferred financing fees |
|
102,917 |
|
|
|
108,660 |
|
Loss on
disposal of property and equipment |
|
6,139 |
|
|
|
-- |
|
Equity
based compensation |
|
2,849,842 |
|
|
|
15,209 |
|
Deferred
rent |
|
382,353 |
|
|
|
241,928 |
|
Changes
in operating assets and liabilities: |
|
|
|
|
|
|
|
Accounts
receivable |
|
(108,136 |
) |
|
|
(1,048,799 |
) |
Merchandise inventories |
|
(12,977,256 |
) |
|
|
(2,048,493 |
) |
Prepaid
expenses and other current assets |
|
(190,920 |
) |
|
|
(2,166,290 |
) |
Accounts
payable and accrued expenses |
|
6,726,184 |
|
|
|
1,463,510 |
|
Customer
deposits |
|
1,615,798 |
|
|
|
343,253 |
|
|
|
|
|
|
|
|
|
Net Cash Used
in Operating Activities |
|
(14,223,536 |
) |
|
|
(9,498,007 |
) |
|
|
|
|
|
|
|
|
Cash Flows from
Investing Activities |
|
|
|
|
|
|
|
Purchase
of property and equipment |
|
(8,436,529 |
) |
|
|
(5,340,484 |
) |
Payments
for patents and trademarks |
|
(440,185 |
) |
|
|
(70,852 |
) |
|
|
|
|
|
|
|
|
Net Cash Used
in Investing Activities |
|
(8,876,714 |
) |
|
|
(5,411,336 |
) |
|
|
|
|
|
|
|
|
Cash Flows from
Financing Activities |
|
|
|
|
|
|
|
Proceeds
from initial public offering, net |
|
59,168,596 |
|
|
|
- |
|
Payments
of initial public offering issuance costs |
|
(260,044 |
) |
|
|
- |
|
Taxes
paid for net share settlement of equity awards |
|
(7,902 |
) |
|
|
- |
|
Proceeds
from sale of preferred stock and warrants, net of issuance
costs |
|
- |
|
|
|
18,919,419 |
|
Principal
payments on note payable |
|
- |
|
|
|
(194,530 |
) |
Principal
(paydowns of) proceeds from the line of credit, net |
|
(405 |
) |
|
|
1,015,708 |
|
Payments
of deferred financing costs |
|
(292,095 |
) |
|
|
(75,266 |
) |
Net Cash
Provided by Financing Activities |
|
58,608,150 |
|
|
|
19,665,331 |
|
|
|
|
|
|
|
|
|
Net Change in
Cash and Cash Equivalents |
|
35,507,900 |
|
|
|
4,755,988 |
|
|
|
|
|
|
|
|
|
Cash and Cash
Equivalents - Beginning |
|
9,175,951 |
|
|
|
878,696 |
|
|
|
|
|
|
|
|
|
Cash and Cash
Equivalents - End |
$ |
44,683,851 |
|
|
$ |
5,634,684 |
|
|
|
|
|
|
|
|
|
Supplemental
Cash Flow Disclosures |
|
|
|
|
|
|
|
Cash paid
for interest |
$ |
48,256 |
|
|
$ |
254,593 |
|
|
|
|
|
|
|
|
|
|
THE LOVESAC COMPANY |
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES |
|
(unaudited) |
|
|
|
|
|
|
|
Thirteen weeks ended |
Thirteen weeks ended |
|
Thirty-nine weeks ended |
Thirty-nine weeks ended |
(dollars in
thousands) |
November 4, 2018 |
October 29, 2017 |
|
November 4, 2018 |
October 29, 2017 |
Net loss |
$ |
(2,490 |
) |
$ |
(2,177 |
) |
|
$ |
(15,143 |
) |
$ |
(7,928 |
) |
Interest
(income) expense |
|
(201 |
) |
|
115 |
|
|
|
142 |
|
|
344 |
|
Taxes |
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
Depreciation and amortization |
|
1,084 |
|
|
836 |
|
|
|
2,513 |
|
|
1,521 |
|
EBITDA |
|
(1,607 |
) |
|
(1,226 |
) |
|
|
(12,488 |
) |
|
(6,063 |
) |
Sponsor
fees (a) |
|
125 |
|
|
125 |
|
|
|
992 |
|
|
359 |
|
Deferred
Rent (b) |
|
131 |
|
|
103 |
|
|
|
383 |
|
|
242 |
|
Equity-based compensation (c) |
|
516 |
|
|
15 |
|
|
|
2,850 |
|
|
15 |
|
Write-off
of property and equipment (d) |
|
- |
|
|
- |
|
|
|
6 |
|
|
- |
|
Other
non-recurring expenses (e)(f) |
|
444 |
|
|
205 |
|
|
|
1,982 |
|
|
693 |
|
Adjusted EBITDA |
$ |
(392 |
) |
$ |
(778 |
) |
|
$ |
(6,275 |
) |
$ |
(4,754 |
) |
|
|
|
|
|
|
(a) Represents management fees charged by our equity
sponsors.
(b) 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.
(c) Represents expenses associated with stock options,
restricted stock units granted to our management and equity
sponsors.
(d) Represents the net loss on the disposal of fixed
assets.
(e) Other expenses in the thirteen weeks ended November 4,
2018 are made up of: (1) $110 in fees and costs associated
with our fundraising and reorganizing activities including the
legal and professional services incurred in connection with such
activities; (2) $29 in fees paid for investor relations and
public relations relating to the IPO; (3) $44 in executive
recruitment fees to build executive management team; and (4) $261
in secondary offering legal fees. Other expenses in the
thirteen weeks ended October 29, 2017 are made up of: (1) $163 in
fees and costs associated with our fundraising and reorganizing
activities including the legal and professional services incurred
in connection with such activities; (2) $42 in other professional
fees.
(f) Other expenses in the thirty-nine weeks ended November
4, 2018 are made up of: Other expenses in the thirty-nine
weeks ended November 4, 2018 are made up of: (1) $341 in fees and
costs associated with our fundraising and reorganizing activities
including the legal and professional services incurred in
connection with such activities; (2) $508 in fees paid for investor
relations and public relations relating to the IPO; (3) $140 in
executive recruitment fees to build executive management team; (4)
$261 in secondary offering legal fees; (5) $84 in travel and
logistical costs associated with the offering; (6) $198 in
accounting fees related to the offering; and (7) $450 in IPO
bonuses paid to executives. Other expenses in the
thirty-nine weeks ended October 29, 2017 are made up of: (1) $567
in fees and costs associated with our fundraising and reorganizing
activities including the legal and professional services incurred
in connection with such activities; (2) $25 in travel and
logistical costs associated with the offering; and (3) $59 in
accounting fees related to the offering; (4) $42 in other
professional fees.
|
|
|
THE LOVESAC COMPANY |
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES |
|
(unaudited) |
|
|
|
|
|
|
|
Thirteen weeks ended |
Thirteen weeks ended |
|
Thirty-nine weeks ended |
Thirty-nine weeks ended |
(dollars in
thousands) |
November 4, 2018 |
October 29, 2017 |
|
November 4, 2018 |
October 29, 2017 |
Net loss as
reported |
$ |
(2,490 |
) |
$ |
(2,177 |
) |
|
$ |
(15,143 |
) |
$ |
(7,928 |
) |
Adjustments: |
|
|
|
|
|
Adjustments to selling, general and administrative expense: |
|
|
|
|
|
Sponsor
fees relating to the IPO (a) |
|
- |
|
|
- |
|
|
|
625 |
|
|
- |
|
Equity
based compensation related to the IPO (b) |
|
- |
|
|
- |
|
|
|
1,442 |
|
|
- |
|
Other
non-recurring expenses (c)(d) |
|
444 |
|
|
205 |
|
|
|
1,982 |
|
|
693 |
|
Adjusted net loss |
$ |
(2,047 |
) |
$ |
(1,972 |
) |
|
$ |
(11,094 |
) |
$ |
(7,235 |
) |
|
|
|
|
|
|
Adjusted basic and
diluted weighted average shares outstanding- adjusted for IPO
related issuance (e) |
|
13,445,147 |
|
|
13,359,671 |
|
|
|
13,445,147 |
|
|
13,359,671 |
|
Adjusted net loss per
common share |
$ |
(0.15 |
) |
$ |
(0.15 |
) |
|
$ |
(0.83 |
) |
$ |
(0.54 |
) |
|
|
|
|
|
|
(a) $625
paid in sponsor monitoring fees paid as a result of the
IPO |
(b) $700
in executive restricted stock awards vested as a result of the IPO
and $742 IPO bonus payable to Satori in common stock |
(c) Other
expenses in the thirteen weeks ended November 4, 2018 are made up
of: (1) $110 in fees and costs associated with our fundraising and
reorganizing activities including the legal and professional
services incurred in connection with such activities; (2) $261 in
legal fees related to the secondary offering , (3) $29 in fees paid
for investor relations and public relations relating to the IPO and
(6) $44 in executive recruitment fees to build executive management
team. Other expenses in the thirteen weeks ended October 29,
2017 are made up of: (1) $163 in fees and costs associated with our
fundraising and reorganizing activities including the legal and
professional services incurred in connection with such activities;
(2) $42 in executive recruitement fees to build executive menagment
team. |
(d) Other
expenses in the thirty-nine weeks ended November 4, 2018 are made
up of: (1) $341 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) $508 in fees paid for investor relations
and public relations relating to the IPO and (6) $140 in executive
recruitment fees to build executive management team, (7) $261 in
legal fees relating to the secondary offering. Other expenses
in the thirteen weeks ended October 29, 2017 are made up of: (1)
$567 in fees and costs associated with our fundraising and
reorganizing activities including the legal and professional
services incurred in connection with such activities; (2) $59 in
accounting fees related to the offering, (3) $25 in travel and
logistical costs associated with the offering, (4) $42 in executive
recruitement fees to build the executive management
team. |
|
|
|
|
|
|
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