Financial Data and Key Metrics Changes - The company reported a 28.7% increase in net sales to $61.9 million, driven by a 387% growth in e-commerce sales [9][35] - Adjusted EBITDA was positive at $2.2 million, compared to an adjusted EBITDA loss of $3.3 million in the same quarter last year [10][43] - The net loss was $1.1 million or a loss of $0.08 per share, an improvement from a net loss of $4.8 million or a loss of $0.33 per share in the prior year [43] Business Line Data and Key Metrics Changes - Sactionals sales increased by 39.7%, while Sacs sales decreased by 18.3% due to reduced Costco pop-up shops [38] - Other category sales, including decorative pillows and blankets, saw a significant increase of 188.5% [38] Market Data and Key Metrics Changes - The company experienced a 58.9% decrease in showroom sales due to COVID-19 related closures [36] - Comparable sales increased by 72.4% in the quarter, reflecting the impact of the pandemic on other sales channels [37] Company Strategy and Development Direction - The company is focusing on strategic investments in infrastructure to support growth and enhance customer experience [12][23] - Plans to open 7 to 10 new showrooms in the second half of the year, with a total of 15 to 18 new showrooms expected by year-end [15][28] - The company is leveraging its e-commerce platform and enhancing its omni-channel experience to capture market share [11][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to drive strong year-on-year growth despite ongoing uncertainties related to COVID-19 [15][45] - The company anticipates a challenging third quarter with adjusted EBITDA losses between $10 million and $11 million, but expects a return to profitability in the fourth quarter [46][47] Other Important Information - The company ended the quarter with a strong cash position of nearly $55 million [10][44] - The launch of a new e-commerce platform is expected to improve customer engagement and streamline operations [30] Q&A Session Summary Question: Inventory position and supply chain pressures - Management stated there are no inventory concerns and that they have managed through the COVID crisis effectively [50][51] Question: Online sales growth trajectory - E-commerce sales saw significant increases, especially in areas where showrooms were closed, and management noted a shift in customer shopping behavior [53] Question: Deferred expenses and their impact - The majority of the $5 million in deferred expenses will be accounted for in the third quarter, with some shifting to the fourth quarter [54] Question: Real estate strategy and showroom openings - The company is adopting a "touch point strategy" to optimize showroom openings and reduce capital expenditures [61] Question: Marketing strategy for Labor Day - Management reported high ROI from marketing efforts leading into Labor Day and expects to maintain consistent marketing spending [67]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended May 3, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-38555 THE LOVESAC COMPANY (Exact name of registrant as specified in its charter) | Delaware | 16-1685692 | | --- | --- | | (State or other ju ...

The Lovesac Company (NASDAQ:LOVE) Q1 2021 Earnings Conference Call June 9, 2020 8:30 AM ET Company Participants Rachel Schacter - Investor Relations, ICR Shawn Nelson - Chief Executive Officer Jack Krause - President and Chief Operating Officer Donna Dellomo - Executive Vice President and Chief Financial Officer, Treasurer and Secretary of the Company Conference Call Participants Thomas Forte - D.A. Davidson & Co. Brian Nagel - Oppenheimer & Co. Maria Ripps - Canaccord Genuity Matthew Koranda - ROTH Capital ...

Part I [Business](index=5&type=section&id=Item%201.%20Business) The Lovesac Company is an omni-channel furniture retailer specializing in modular couches and premium foam beanbag chairs, with Sactionals comprising the majority of sales - Product Sales Mix (Fiscal Year 2020 vs. 2019) | Product Line | FY 2020 Sales % | FY 2019 Sales % | | :--- | :--- | :--- | | Sactionals | 80.7% | 72.5% | | Sacs | 17.0% | 24.8% | - Sales Channel Mix (Fiscal Year 2020 vs. 2019) | Channel | FY 2020 Sales % | FY 2019 Sales % | | :--- | :--- | :--- | | Ecommerce | 23.9% | 19.9% | | Other (Pop-ups/Shop-in-shops) | 12.7% | 11.9% | - The company operates **91 showrooms** in 35 states, designed to be small-footprint and technology-driven for customer education[23](index=23&type=chunk) - In response to the COVID-19 pandemic in March/April 2020, the company closed all showrooms, reduced its workforce by approximately **445 part-time employees** (57% of total headcount), and temporarily reduced executive cash compensation by **20%**[26](index=26&type=chunk) - Customer Acquisition Metrics (Fiscal Year 2020 vs. 2019) | Metric | Fiscal 2020 | Fiscal 2019 | | :--- | :--- | :--- | | Customer Acquisition Cost (CAC) | $319.71 | $309.46 | | Customer Lifetime Value (CLV) / CAC Ratio | 4.68 | 4.98 | - The company holds significant intellectual property, including **18 issued U.S. utility patents**, **21 issued foreign utility patents**, and numerous trademarks such as Lovesac®, Sactionals®, and Designed For Life®[48](index=48&type=chunk)[50](index=50&type=chunk) [Risk Factors](index=13&type=section&id=Item%201A.%20Risk%20Factors) The company faces multiple risks including the COVID-19 pandemic, operating losses, supply chain reliance, and substantial lease obligations - The COVID-19 outbreak is a primary risk, leading to the closure of all showroom locations since March 2020, which could materially adversely affect business, sales, and financial condition[55](index=55&type=chunk) - The company has a history of operating losses and may not achieve or sustain profitability, with growth dependent on increasing traffic, conversion rates, and opening new showrooms[58](index=58&type=chunk) - A substantial portion of products are sourced from a small number of suppliers, with Sacs manufactured by a single supplier in Texas and Sactionals manufactured in the USA, China, Taiwan, India, Malaysia, and Vietnam, creating supply chain risk[81](index=81&type=chunk) - Goods imported from China are subject to significant tariffs (**10% ad valorem duty**, with a proposed increase to **25%**), which could materially increase the cost of goods sold and negatively impact financial performance[87](index=87&type=chunk)[88](index=88&type=chunk) - The company has substantial, long-term, non-cancelable lease obligations for its showrooms, which account for a significant portion of SG&A expenses and expose it to risks even if a location becomes unprofitable[102](index=102&type=chunk)[105](index=105&type=chunk)[107](index=107&type=chunk) - The equity sponsor, Mistral, controls approximately **19% of the common stock**, enabling it to influence matters requiring stockholder approval, which may create interests that conflict with other stockholders[138](index=138&type=chunk) [Unresolved Staff Comments](index=40&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports that there are no unresolved staff comments - None[158](index=158&type=chunk) [Properties](index=40&type=section&id=Item%202.%20Properties) The company's principal executive offices are in Stamford, CT, and it leases retail space for 91 showrooms across the United States - The primary corporate office is located at Two Landmark Square, Suite 300, Stamford, CT 06901[159](index=159&type=chunk) - The company leases retail space for **91 showroom locations** throughout the majority of U.S. states[159](index=159&type=chunk) [Legal Proceedings](index=40&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in ordinary course legal proceedings, not expected to materially affect its financial condition - The company is involved in ordinary course legal proceedings but does not expect them to have a material adverse effect on its business[161](index=161&type=chunk) [Mine Safety Disclosures](index=41&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[162](index=162&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=42&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on Nasdaq under "LOVE", and it has no plans to pay cash dividends - Common stock is traded on Nasdaq under the symbol **"LOVE"**[165](index=165&type=chunk) - The company has never paid cash dividends and does not intend to in the foreseeable future[166](index=166&type=chunk) [Selected Financial Data](index=42&type=section&id=Item%206.%20Selected%20Financial%20Data) This section provides summary consolidated financial data for fiscal years 2020 and 2019, including key metrics and non-GAAP measures - Consolidated Statement of Operations Data (in thousands) | Metric | Fiscal Year 2020 | Fiscal Year 2019 | | :--- | :--- | :--- | | Total net sales | $233,377 | $165,881 | | Gross profit | $116,690 | $90,881 | | Operating loss | $(15,809) | $(7,043) | | Net Loss | $(15,205) | $(6,704) | | Net loss per common share | $(1.07) | $(3.28) | - Consolidated Balance Sheet Data (in thousands) | Metric | As of Feb 2, 2020 | As of Feb 3, 2019 | | :--- | :--- | :--- | | Cash and cash equivalents | $48,539 | $49,071 | | Total assets | $125,664 | $105,014 | | Total liabilities | $35,509 | $26,244 | | Total stockholders' equity | $90,155 | $78,770 | - Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Metric | Fiscal Year 2020 | Fiscal Year 2019 | | :--- | :--- | :--- | | Net loss | $(15,205) | $(6,704) | | EBITDA | $(10,651) | $(3,909) | | Adjusted EBITDA | $(3,721) | $3,385 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=47&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In fiscal 2020, net sales grew 40.7% to $233.4 million, but gross margin declined due to China tariffs, leading to a higher operating loss - Fiscal 2020 vs. 2019 Performance Comparison (in millions) | Metric | Fiscal 2020 | Fiscal 2019 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $233.4 | $165.9 | 40.7% | | Gross Profit | $116.7 | $90.9 | 28.4% | | SG&A Expenses | $98.1 | $76.4 | 28.4% | | Advertising & Marketing | $29.2 | $18.4 | 59.0% | | Operating Loss | $(15.8) | $(7.0) | 125.1% | - The **4.8 percentage point decrease** in gross margin (from **54.8% to 50.0%**) was primarily driven by the impact of **25% China tariffs**, partially offset by sourcing-related cost savings for Sactionals products[211](index=211&type=chunk) - Internet sales grew **68.9% to $55.8 million**, while showroom sales increased **30.9% to $148.0 million**, with comparable showroom point-of-sale transactions increasing by **34.4%**[210](index=210&type=chunk) - Net cash used in operating activities was **$11.2 million** in fiscal 2020, primarily due to a net loss of **$15.2 million** and a **$10.2 million increase in inventory**[226](index=226&type=chunk)[228](index=228&type=chunk) - The company has a **$25.0 million revolving credit facility** with Wells Fargo, with **$12.5 million of borrowing availability** and no outstanding balance as of February 2, 2020[233](index=233&type=chunk) - Contractual Obligations as of Feb 2, 2020 (in thousands) | Obligation Type | Total | Less than 1 year | 1 - 3 years | 3 - 5 Years | More than 5 years | | :--- | :--- | :--- | :--- | :--- | :--- | | Employment agreements | $3,671 | $3,671 | $ - | $ - | $ - | | Operating leases | $68,637 | $11,169 | $19,851 | $17,684 | $19,933 | | **Total** | **$72,307** | **$14,840** | **$19,851** | **$17,684** | **$19,933** | [Quantitative and Qualitative Disclosures About Market Risk](index=64&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a "smaller reporting company," the company is not required to provide this information - The company is not required to provide this information as it qualifies as a "smaller reporting company"[256](index=256&type=chunk) [Financial Statements and Supplementary Data](index=64&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section contains the company's audited consolidated financial statements for fiscal years 2020 and 2019, including balance sheets, statements of operations, and cash flows [Consolidated Balance Sheets](index=73&type=section&id=Consolidated%20Balance%20Sheets) The balance sheet as of February 2, 2020, shows total assets of $125.7 million, driven by inventory and property growth, with increased liabilities and equity - Key Balance Sheet Items (in thousands) | Account | Feb 2, 2020 | Feb 3, 2019 | | :--- | :--- | :--- | | Cash and cash equivalents | $48,539 | $49,071 | | Merchandise inventories | $36,400 | $26,154 | | **Total Assets** | **$125,664** | **$105,014** | | Total Current Liabilities | $32,401 | $24,619 | | **Total Liabilities** | **$35,509** | **$26,244** | | **Total Stockholders' Equity** | **$90,155** | **$78,770** | [Consolidated Statements of Operations](index=75&type=section&id=Consolidated%20Statements%20of%20Operations) For fiscal 2020, the company reported a net loss of $15.2 million on $233.4 million in sales, primarily due to lower gross margin and increased operating expenses - Statement of Operations Highlights (in thousands) | Account | Fiscal 2020 | Fiscal 2019 | | :--- | :--- | :--- | | Net sales | $233,377 | $165,881 | | Gross profit | $116,690 | $90,881 | | Operating loss | $(15,809) | $(7,043) | | **Net loss** | **$(15,205)** | **$(6,704)** | [Consolidated Statements of Cash Flows](index=77&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities increased to $11.2 million in fiscal 2020, primarily due to higher net loss and inventory growth, while financing activities provided $21.3 million - Summary of Cash Flows (in thousands) | Activity | Fiscal 2020 | Fiscal 2019 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | $(11,194) | $(7,008) | | Net Cash Used in Investing Activities | $(10,650) | $(11,362) | | Net Cash Provided by Financing Activities | $21,312 | $58,265 | | **Net Change in Cash** | **$(532)** | **$39,895** | [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=65&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[259](index=259&type=chunk) [Controls and Procedures](index=65&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and internal control over financial reporting were effective as of February 2, 2020 - Management concluded that the company's disclosure controls and procedures were effective as of February 2, 2020[260](index=260&type=chunk) - Based on an assessment using the COSO framework, management concluded that the company's internal control over financial reporting was effective as of February 2, 2020[263](index=263&type=chunk) [Other Information](index=65&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - None[265](index=265&type=chunk) Part III [Directors, Executive Officers, Corporate Governance, Compensation, and Security Ownership](index=66&type=section&id=Items%2010-14) Information for Items 10 through 14 is incorporated by reference from the company's definitive proxy statement - Information for Items 10, 11, 12, 13, and 14 is incorporated by reference from the company's definitive proxy statement[268](index=268&type=chunk)[269](index=269&type=chunk)[270](index=270&type=chunk)[271](index=271&type=chunk)[272](index=272&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=67&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists the exhibits filed with or incorporated by reference into the Form 10-K, with financial statement schedules omitted - This section contains a list of all exhibits filed with the Form 10-K, including governance documents, material contracts, and certifications[277](index=277&type=chunk)[278](index=278&type=chunk) [Form 10-K Summary](index=68&type=section&id=Item%2016.%20Form%2010-K%20Summary) This optional disclosure was not included in the Annual Report - Optional disclosure not included in this Annual Report on Form 10-K[279](index=279&type=chunk)

Financial Data and Key Metrics Changes - The company reported a 43.6% increase in net sales to $92.2 million for Q4 2020, driven by strong performance across all channels [50] - E-commerce sales surged by 73.9% to $26.5 million, while showroom sales increased by 31.9% to $57.3 million [52] - Adjusted net income was $5.4 million or $0.37 per share, compared to $8.5 million or $0.63 per share in Q4 2019 [58] Business Line Data and Key Metrics Changes - Sactional sales increased by 73%, while Sac sales decreased by 16.4% due to a focus on Sactionals [52] - Other category sales, including decorative pillows and blankets, decreased by 5.1% [52] - The company opened 16 net new showrooms in FY 2020, a 21% year-over-year growth [25] Market Data and Key Metrics Changes - E-commerce point of sales transaction dollars were up over 400% from March 17 to April 12, 2020, compared to the same period last year [10] - The company experienced a 3.6% increase in total POS dollars during the same period [10] - The average customer lifetime value (CLV) reached a record of $1,835 in FY 2020, up from $1,540 in FY 2019 [42] Company Strategy and Development Direction - The company aims to diversify sales channels, including a new pilot with Best Buy and expanding partnerships with Costco and Macy's [16][45] - The focus is on maintaining a flexible marketing budget and adapting to online sales strategies due to showroom closures [13][14] - The company plans to continue its omni-channel strategy while evaluating the need for physical showrooms in the future [88] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the COVID-19 crisis, emphasizing cash preservation and financial resilience [9][30] - The company anticipates a gradual recovery in gross margins over approximately eight quarters [23] - Management is cautiously optimistic about sustaining online sales growth despite potential economic headwinds [105] Other Important Information - The company has a strong balance sheet with over $40 million in cash and $10 million available under a line of credit [11] - Inventory levels increased by 39% year-over-year, driven by higher sales and increased warehousing costs [59] - The company has diversified its supply chain across multiple countries to mitigate risks associated with tariffs and disruptions [21][23] Q&A Session Summary Question: Recent sales trajectory and online sales offsetting closed stores - Management noted a significant increase in online sales, with showroom associates effectively driving online business through remote interactions [72][74] Question: Cash flow dynamics and inventory needs - Management highlighted strong vendor relationships allowing flexibility in inventory purchases, which are committed only 90 days out [78][80] Question: Flexibility on showroom real estate - Management indicated opportunities to reassess showroom locations and leases post-pandemic, focusing on productivity and customer acquisition costs [86][88] Question: Liquidity position and government assistance - Management is exploring all available options for government assistance but noted limitations due to employee cap restrictions [90] Question: Long-term showroom expansion plans - Management remains optimistic about expanding to 200-400 touchpoints but will evaluate the format and strategy based on recent learnings [95][96] Question: Impact of consumer behavior on higher ticket items - Management expressed cautious optimism, noting that their customer base appears to be more resilient during economic downturns [105]

| --- | --- | --- | --- | |-------|-------|-------|------------------------------------| | | | | | | | | | | | | | | | | | | | | | | | | LOVESAC | | | | | | | NÖTI | | | Designed for Life Furniture Co. | | | | | | | | | | Investor Presentation January 2020 | NOITION Safe Harbor Statement This presentation by The Lovesac Company (the "Company," "we," "us," and "our") may include "forward-looking statements" with the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended November 3, 2019 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-38555 THE LOVESAC COMPANY (Exact name of registrant as specified in its charter) | Delaware | 16-1685692 | | --- | --- | | (State or oth ...

The Lovesac Company (NASDAQ:LOVE) Q3 2020 Earnings Conference Call December 12, 2019 8:30 AM ET Company Participants Shawn Nelson - Chief Executive Officer Jack Krause - President, Chief Operating Officer Donna Dellomo - Executive Vice President, Chief Financial Officer Rachel Schacter - ICR Investor Relations Conference Call Participants Brian Nagel - Oppenheimer Thomas Forte - DA Davidson Maria Ripps - Canaccord Genuity Dave King - Roth Capital Alex Fuhrman - Craig Hallum Operator Greetings. Welcome to t ...

| --- | --- | --- | --- | |-------|-------|-------|--------------------------------------| | | | | | | | | | | | | | | | | | | | LOVESAC | | | | | Designed for Life Furniture Co. | | Nori | | | | | | | | | | | | | Investor Presentation September 2019 | NOITION Safe Harbor Statement The Lovesac Company (the "Company," "we," "us," and "our") has filed a registration statement (including a preliminary prospectus) with the Securities and Exchange Commission ("SEC") for the offering to which this presentation re ...

FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended August 4, 2019 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-38555 THE LOVESAC COMPANY (Exact name of registrant as specified in its charter) Not applicable (Former name, former address and former fi ...