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$LUVU Brands .059c Announces Fiscal 2017 Third Quarter Results

Gross profit increased 30% to $1.3 million; net income of $111,000 in 2017 versus net loss of $159,000 in 2016

ATLANTA, GA--(Marketwired - May 15, 2017) - Luvu Brands, Inc. (OTCQB: LUVU), a manufacturer and marketer of premium consumer brands in the categories of intimacy enhancement, top-of-bed relaxation and fashion beanbags, loungers and sofas, today reported financial results for the three and nine months ended March 31, 2017.

Operating highlights for the quarter ended March 31, 2017:

Net sales decreased 6% to $4.0 million for the third quarter of fiscal 2017, as compared to $4.3 million for the comparable prior-year period.

Gross margin increased to 33.5% for the three months ended March 31, 2017, significantly higher than the 24.1% gross margin reported for the three months ended March 31, 2016.

Total gross profit increased 30% to $1.3 million, as compared to $1.0 million for the comparable prior-year period.

Net income increased to $111,000 during the current year third quarter compared to a net loss of ($159,000) in the prior-year third quarter.

EBITDA, as adjusted, increased to $302,000 in the third quarter, as compared to $22,000 in the third quarter of fiscal 2016.
Operating highlights for the nine months ended March 31, 2017:

Net sales increased 2.8% to a record $13.3 million for the nine months ended March 31, 2017, as compared to $12.9 million for the comparable prior-year period.

Gross margin increased to 29.1% for the nine months ended March 31, 2017, an improvement from the 25.4% gross margin for the nine months ended March 31, 2016.

Total gross profit increased 18% to $3.9 million, as compared to $3.3 million for the comparable prior-year period.

Net income increased to $334,000 during the nine months ended March 31, 2017, as compared to a net loss of ($157,000) for the comparable prior-year period.

EBITDA, as adjusted, increased to $914,000 for the first nine months of fiscal 2017, as compared to $383,000 in the comparable period of fiscal 2016.
Louis Friedman, Chairman and Chief Executive Officer, commented, "We are pleased with the improved operating performance of the Company, despite the decrease in sales during the quarter. As we previously announced, we are focusing more on sales of our manufactured products and less on lower margin distributed products. As a result, our gross profit margin during the three months ended March, 31, 2017 increased to 33.5% from 24.1% in the same period last year. The production improvements that we made during calendar year 2016 and earlier in the third quarter are also yielding positive results."

Mr. Friedman added, "During the third quarter, net sales of our Jaxx and Avana products (combined) increased by 81%. Unit shipments of Avana products increased 83% during the third quarter to approximately 4,500 units. Unit shipments of Jaxx products increased approximately 40% during the third quarter over last year third quarter. We expect to see continued strong growth for both of these brands during the remainder of calendar 2017."

Luvu Brand's executive management will host a business update conference call for investors, analysts and other interested parties on Tuesday, May 16, 2017 at 12:00 p.m. Eastern Daylight Time. To listen to the call, please dial 412-902-6510 and ask to be joined into the Luvu Brands, Inc. call. The replay of the call will remain available on the Company's investor relations website, www.luvubrands.com, for approximately 60 days.

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