Investor Deck March 2020 OTCQB Venture Market LUVU Luvu Brands Inc OTCQB Venture LU VU 2 SAFE HARBOR FORWARD LOOKING STATEMENT This investor presentation contains forward looking information ID: 823885
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Luvu Brands, Inc.Investor DeckMarch 20
Luvu Brands, Inc.Investor DeckMarch 2020OTCQB Venture Market: LUVULuvuBrands,Inc.OTCQBVenture:LUVU2SAFEHARBOR/FORWARDLOOKINGSTATEMENTThisinvestorpresentationcontainsforward-lookinginformationandotherforward-lookingstatementswithinthemeaningofapplicableU.S.securitieslaws.Forward-lookingstatementsinvolvesignifi
cantknownandunknownrisks,uncertaint
cantknownandunknownrisks,uncertaintiesandotherfactorsthatmaycausetheactualresults,performanceorachievementsofLuvuBrands,Inc.,tobemateriallydifferentfromanyfutureplans,goals,targets,objectives,results,performanceorachievementsexpressedorimpliedbysuchforward-lookingstatements.Asaresult,suchforward-lookings
tatementsshouldnotbereadasguarante
tatementsshouldnotbereadasguaranteesoffutureperformanceorresults,shouldnotbeundulyreliedupon,andwillnotnecessarilybeaccurateindicationsofwhetherornotsuchresultswillbeachieved.Suchmattersinvolverisksanduncertaintiesthatmaycauseactualresultstodiffermaterially,includingthefollowing:changesineconomicconditio
ns;generalcompetitivefactors;accep
ns;generalcompetitivefactors;acceptanceoftheCompany'sproductsinthemarket;theCompany'ssuccessinobtainingnewcustomers;theCompany'ssuccessinproductdevelopment;theCompany'sabilitytoexecuteitsbusinessmodelandstrategicplans;theCompany'ssuccessinintegratingacquiredentitiesandassets,andalltherisksandrelatedinfo
rmationdescribedfromtimetotimeint
rmationdescribedfromtimetotimeintheCompany'sfilingswiththeSecuritiesandExchangeCommission("SEC"),includingthefinancialstatementsandrelatedinformationcontainedintheCompany'sAnnualReportonForm10-KandinterimQuarterlyReportsonForm10-Q.NON-GAAPFINANCIALMEASUREAdjustedEBITDArepresentsnetincome(loss)beforeinte
restincome,interestexpense,incometa
restincome,interestexpense,incometaxes,depreciation,amortization,lossondisposaloffixedassets,andstock-basedcompensationexpense.Wehaveexcludedthenon-cashexpense,stock-basedcompensation,asitdoesnotreflectthecash-basedoperationsoftheCompany.AdjustedEBITDAisanon-GAAPfinancialmeasurewhichisnotrequiredbyo
rdefinedunderGAAP(GenerallyAccepted
rdefinedunderGAAP(GenerallyAcceptedAccountingPrinciples).ThepresentationofthisfinancialmeasureisnotintendedtobeconsideredinisolationorasasubstituteforthefinancialmeasurespreparedandpresentedinaccordancewithGAAP,includingthenetincomeoftheCompanyornetcashusedinoperatingactivities.Managementrecognizesthatno
n-GAAPfinancialmeasureshavelimitat
n-GAAPfinancialmeasureshavelimitationsinthattheydonotreflectalloftheitemsassociatedwiththeCompanyâsnetincomeornetlossasdeterminedinaccordancewithGAAP,andarenotasubstitutefororameasureoftheCompanyâsprofitabilityornetearnings.AdjustedEBITDAispresentedbecausewebelieveitisusefultoinvestorsasameasu
reofcomparativeoperatingperformance
reofcomparativeoperatingperformanceandliquidity,andbecauseitislesssusceptibletovariancesinactualperformanceresultingfromdepreciationandamortizationandnon-cashchargesforamortizationofdebtissuancecostsandstock-basedcompensationexpense.LuvuBrands,Inc.OTCQBVenture:LUVU3LUVU Brands At a Glanceâ¢Vertically integ
rated US manufacturerâ¢Diverse consum
rated US manufacturerâ¢Diverse consumer brands with international distributionâ¢Fiscal 2019 revenue of $17Mâ¢Operating metrics are improvingâ¢Attractive valuation relative to peersâ¢Inflection point âentering growth phase and gaining scaleâ¢Shifting production of high-volume products to Mexican contractor to improve marginsExchange
: OTCQB VentureTicker: LUVUFloat: 2
: OTCQB VentureTicker: LUVUFloat: 27M sharesMarket Cap: $1.9MShare Price (2/27/20): $.0352-Week Range: $0.02 -$0.04Avg. Daily Volume: 11,000Headquarters: Atlanta, GAEmployees: 172Founded: 1999LuvuBrands,Inc.OTCQBVenture:LUVU4Our Brand PortfolioLiberator®, a brand category of iconic products for enhancing sensuality and
intimacyJaxx®, a diverse range of c
intimacyJaxx®, a diverse range of casual fashion daybeds, sofas and beanbags made from eco-friendly re-purposed polyurethane foamAvana®, inclined bed therapy products, assistive in relieving medical conditions associated with acid reflux, surgery recovery and chronic painLuvuBrands,Inc.OTCQBVenture:LUVU5Our Manufacturing Capabil
itiesLuvu BrandsUnique and Growing Bra
itiesLuvu BrandsUnique and Growing Brands LuvuBrands,Inc.OTCQBVenture:LUVU6LuvuBrands,Inc.OTCQBVenture:LUVU7Our Brand PortfolioLiberator Bedroom Adventure Gear®Five star Amazon reviewsBuy it no matter what!The BEST thing EVER for the bedroom!!Worth every cent!Amazing, Amazing and Amazing!LuvuBrands,Inc.OTCQBVentur
e:LUVU8Our Brand PortfolioAnnual S
e:LUVU8Our Brand PortfolioAnnual Sales History âFY â13 to FY â19$6.8$7.1$7.2$8.1$7.3 - 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 8,000,000 9,000,000FY '13FY '14FY '15FY '16FY '17FY '18FY '19LuvuBrands,Inc.OTCQBVenture:LUVU9Our Brand PortfolioQuarterly Sales History âv2 â18 to v2
â20 - 500,000 1,000,000 1,500,000
â20 - 500,000 1,000,000 1,500,000 2,000,000 2,500,000Q2 '18Q3 '18Q4 '18Q1 '19Q2 '19Q3 '19Q4 '19Q1 '20Q2 '20LuvuBrands,Inc.OTCQBVenture:LUVU10Our Brand PortfolioFive star Amazon reviewsBest bean bag chair ever!Absolutely in love with this bean bagItâs just amazing! My boys luv thisLove this! The whole family loves itLuv
uBrands,Inc.OTCQBVenture:LUVU11
uBrands,Inc.OTCQBVenture:LUVU11Our Brand PortfolioFive star Amazon reviews:Loved them so much I bought 2 moreWe have these on our patio and love them!Repeat customer: I'm on my 4th one!Worth every penny!LuvuBrands,Inc.OTCQBVenture:LUVU12Our Brand PortfolioFive star Amazon ReviewsWish I Had This Years Ago!Why did I wait so
long?I am IN LOVE with thisPerfect i
long?I am IN LOVE with thisPerfect in every way -LuvuBrands,Inc.OTCQBVenture:LUVU13AnnualSales History 5 year CAGR = 32%$1.7$2.3$3.1$4.5$6.0 - 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 8,000,000FY '14FY '15FY '16FY '17FY '18FY '19$7.4LuvuBrands,Inc.OTCQBVenture:LUVU14QuarterlySales
History - 500,000 1,000,000 1,500,
History - 500,000 1,000,000 1,500,000 2,000,000 2,500,000Q2 '18Q3 '18Q4 '18Q1 '19Q2 '19Q3 '19Q4 '19Q1 '20Q2 '20Luvu BrandsFinancials LuvuBrands,Inc.OTCQBVenture:LUVU15LuvuBrands,Inc.OTCQBVenture:LUVU16Sales History âFY 2014 to FY 2019 Excluding discontinued imported products4 year CAGR = 8%$11.5$12.4$13.6$14.9
$16.4 100,000 2,100,000 4,100,000 6
$16.4 100,000 2,100,000 4,100,000 6,100,000 8,100,000 10,100,000 12,100,000 14,100,000 16,100,000 18,100,000FY '14FY '15FY '16FY '17FY '18FY '19Total Sales (excluding Tenga) LuvuBrands,Inc.OTCQBVenture:LUVU17Quarterly Net Sales âFY 2017 to Q2 FY â20 (Includes discontinued imported products until v2 FY â17) - 1,000,000
2,000,000 3,000,000 4,000,000 5,000,0
2,000,000 3,000,000 4,000,000 5,000,000 6,000,000Q1Q2Q3Q42017201820192020LuvuBrands,Inc.OTCQBVenture:LUVU18Gross Profit History âFY 2015 to FY 2019 - 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000FY '15FY '16FY '17FY '18FY '19LuvuBrands,Inc.OTCQBVenture:LUVU19Gross Profit History âQuMrterly f
rom Q1 â17 - 200,000 400,000 600,
rom Q1 â17 - 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 1,800,000Q1Q2Q3Q42017201820192020LuvuBrands,Inc.OTCQBVenture:LUVU20EBITDA History âFY 2015 to FY 2019 - 200,000 400,000 600,000 800,000 1,000,000 1,200,000FY '15FY '16FY '17FY '18FY '19LuvuBrands,Inc.OTCQBVenture:LUVU
21Quarterly EBITDA History âQ2 â1
21Quarterly EBITDA History âQ2 â18 to Q2 â20 (200,000) (100,000) - 100,000 200,000 300,000 400,000 500,000Q2 '18Q3 '18Q4 '18Q1 '19Q2 '19Q3 '19Q4 '19Q1 '20Q2 '20LuvuBrands,Inc.OTCQBVenture:LUVU22Amazon Sales History âFY â14 to FY â196 year CAGR = 20% - 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000
,000 7,000,000FY '14FY '15FY '16FY
,000 7,000,000FY '14FY '15FY '16FY '17FY '18FY '19LuvuBrands,Inc.OTCQBVenture:LUVU23Mass Market Sales History âFY â15 to FY â196 year CAGR = 19%(Excluding Amazon Sales) - 500,000 1,000,000 1,500,000 2,000,000 2,500,000FY '15FY '16FY '17FY '18FY '19Q2 FY â20 FinMnciMl Review(in thousands)Direct$1,303Wholesale3,398
Other78Total $4,779(in thous
Other78Total $4,779(in thousands)Liberator$1,970Jaxx1,182Avana1,037Products purchased for resale394Other196Total $4,779LuvuBrands,Inc.OTCQBVenture:LUVU2429%69%2%Q2 FY2020 Net Sales By ChannelDirectWholesaleOther41%25%22%8%4%Q2 FY2020 Net Sales By Product TypeLiberatorJaxxAvanaProducts purchased for
resaleOtherFinancial ReviewQ2 and YTD
resaleOtherFinancial ReviewQ2 and YTDLuvuBrands,Inc.OTCQBVenture:LUVU25Financial ReviewGross Profit and SG&A TrendsLuvuBrands,Inc.OTCQBVenture:LUVU26Luvu BrandsGrowth Strategy LuvuBrands,Inc.OTCQBVenture:LUVU27LuvuBrands,Inc.OTCQBVenture:LUVU28Growth Strategy -To continually grow as a brand category in Sexual
Wellness and Erotic Luxury:â¼Expan
Wellness and Erotic Luxury:â¼Expanded retail distribution, taking full advantage of our novel vacuum compressed Point-of-Purchase packaging (with a discrete flip door) that allows Liberator shapes and sex furniture to fit onto any retail shelf.â¼Our packaging is easily customizable for mass market, drug and international retailers, allowin
g for quick expansion into these market
g for quick expansion into these markets.â¼Continue to expand our collection with luxury furniture-like designs, offer lower cost products for mass market, and develop Liberator branded pleasure objects and consumables.LuvuBrands,Inc.OTCQBVenture:LUVU29Growth Strategy -â¼Jaxx NimbusâContinue to capitalize on the growing pop
ularity of our spandex beanbags. â¼
ularity of our spandex beanbags. â¼Jaxx BeanbagsâPromote the fMvorMble âprice to vMlueâ of our US made beanbag collection.â¼Jaxx KidsâContinue to promote our beanbags, loveseats, sofas, and game chairs in the mass market, retail and school market.â¼Zipline Sofas & Alon DaybedsâRecently launched the first of many designs
to come in compressed packaging with fl
to come in compressed packaging with flat-packed wood bases. Sofas and daybeds already exceed $1.3 million in trailing twelve month salesâ¼Jaxx Outdoors-Continue to build this product line through our growing relationship with Room and Board and others. Additional styles will be introduced in Spring 2020.LuvuBrands,Inc.OTCQBVenture
:LUVU30Growth Strategy -This colle
:LUVU30Growth Strategy -This collection of comfort and assistive products has been growing at a 67% CAGR for the last 3 years with trailing twelve month sales of $3.9 million.â¼The Kind Bed collection exceeds $1.5 million in annual revenue, soon to be launched in mass markets.â¼We are launching a mainstream advertising campaign to prom
ote the Kind Bed collection.â¼Our in
ote the Kind Bed collection.â¼Our inclined-bed therapy mattress elevator and top-of-bed wedges have grown 32% this past year and show no signs of slowing.LuvuBrands,Inc.OTCQBVenture:LUVU31Conclusionâ¼We are a manufacturing, marketing and invention company with diverse distribution across three unique brands.â¼Our ability to mo
netize new products with minimal invest
netize new products with minimal investment is extraordinary.â¼Large upside for continued growth without additional capital equipment.â¼At inflection point; gaining scale and entering a profitable growth phase.LuvuBrands,Inc.OTCQBVenture:LUVU32Luvu Brands, Inc.Ronald ScottChief Financial OfficerP: (770) 246-6426E: ir@luvubrands.