Third Quarter 2025 Earnings Presentation 2 Forward-Looking Statements Any "forward-looking" statements, within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, contained herein, including those relating to TriMas' business, financial condition or future results, involve risks and uncertainties with respect to, including, but not limited to: general economic and currency conditions; competitive factors; market demand; our ability to realize our ...

Financial Data and Key Metrics Changes - Total net sales for the second quarter were $160.5 million, reflecting a year-over-year increase of 2.5% [5][33] - Gross margin decreased by 260 basis points to 56.4% of net sales compared to 59.0% in the prior year period, primarily due to increased transportation costs and higher promotional discounting [35][39] - Net loss for the quarter was $6.7 million, or negative $0.45 per common share, compared to a net loss of $5.9 million, or negative $0.38 per common share in the prior year period [39][41] Business Line Data and Key Metrics Changes - Sactionals net sales increased by 4.6%, while Sac net sales decreased by 22.5% [34] - Showroom net sales increased by $10.3 million, or 10.4%, driven by an increase in omnichannel comparable net sales [33] - Internet net sales decreased by $1.8 million, or 4.1% [33] Market Data and Key Metrics Changes - The overall furniture category is estimated to have declined approximately 4% for the comparable period, with the company gaining market share despite these headwinds [6][13] - Furniture spend was down 3.7% from May through July, with July showing the best performance of the three months [13] Company Strategy and Development Direction - The company is transitioning from a product-focused approach to a brand-focused strategy, with a brand evolution refresh underway [9][10] - The new product line, Snug by Lovesac, is positioned to capture a share of the $14 billion couch category and has been launched in over 100 showrooms [11][24] - The company aims to reach 3 million Lovesac households by 2030, focusing on long-term value creation and brand loyalty [17] Management's Comments on Operating Environment and Future Outlook - Management noted ongoing challenges due to tariffs and competitive discounting but remains optimistic about market share gains and growth opportunities [15][16] - The company expects to mitigate tariff impacts through a four-point plan and anticipates a solid year of market share gains despite a declining category [16][33] - Future product launches and marketing strategies are expected to drive growth, with a focus on enhancing customer acquisition and brand awareness [19][20] Other Important Information - The company reported a healthy balance sheet with $34.2 million in cash and cash equivalents and no borrowings on its credit facility [39][40] - The exit from the Best Buy partnership was completed ahead of schedule and under budget, allowing for a more focused customer acquisition strategy [28] Q&A Session Summary Question: Anticipated changes to customer acquisition approach with brand evolution - Management indicated significant changes in marketing and customer acquisition strategies, with a focus on a new campaign featuring celebrity endorsements [48][49] Question: Partnerships for Snug by Lovesac - Management noted that Snug's simpler product design allows for potential distribution in non-Lovesac environments, emphasizing online sales as a primary channel [53][54] Question: Changes in EBITDA outlook - Management explained that increased tariffs and promotional activity have negatively impacted gross margins, leading to a revised EBITDA outlook [59][62] Question: Long-term growth outlook - Management confirmed that the long-term growth strategy remains intact despite current challenges, with plans to return to previous growth trajectories [70][71]

Financial Data and Key Metrics Changes - Total net sales for the second quarter were $160.5 million, reflecting a year-over-year increase of 2.5% [5][34] - Gross margin decreased by 260 basis points to 56.4% of net sales compared to 59.0% in the prior year period, primarily due to increased transportation costs and higher promotional discounting [36][39] - Net loss for the quarter was $6.7 million, or -$0.45 per common share, compared to a net loss of $5.9 million, or -$0.38 per common share in the prior year period [39][41] Business Line Data and Key Metrics Changes - Sactionals net sales increased by 4.6%, while Sac net sales decreased by 22.5% [35] - Showroom net sales increased by $10.3 million, or 10.4%, driven by an increase in omnichannel comparable net sales [34] - Internet net sales decreased by $1.8 million, or 4.1% [34] Market Data and Key Metrics Changes - The overall furniture category is estimated to have declined approximately 4% for the comparable period [6] - Furniture spend was down 3.7% from May through July, with July being the best month [13] Company Strategy and Development Direction - The company is transitioning from a product-focused approach to a brand-focused strategy, with a brand evolution refresh underway [9][10] - The new product line, Snugg by Lovesac, aims to capture the $14 billion couch category and has been launched in over 100 showrooms [11][24] - The company is focused on leveraging brand equity and expanding into new product categories while maintaining profitability [10][17] Management's Comments on Operating Environment and Future Outlook - Management noted ongoing headwinds in the furniture category but expressed confidence in achieving growth through strategic initiatives [5][16] - The company anticipates a full-year furniture category decline of mid-single digits but expects to grow net sales within its original guidance [14][41] - Management highlighted the importance of maintaining a strong balance sheet and flexibility to invest in growth despite external pressures [7][39] Other Important Information - The company has successfully exited its partnership with Best Buy ahead of schedule and under budget [28] - A four-point mitigation plan has been implemented to address tariff pressures, including cost management and manufacturing diversification [32][34] Q&A Session Summary Question: Anticipated changes to customer acquisition approach during brand evolution - Management indicated significant changes in brand and marketing strategies, including a new campaign for Snugg featuring a popular celebrity [48][49] Question: Partnerships or distribution strategies for Snugg - Management noted that Snugg's simpler product nature allows for potential partnerships outside of Lovesac-owned environments, with a focus on online sales [53][54] Question: Changes in EBITDA outlook due to tariffs and promotional activity - Management explained that increased tariffs and the need for higher promotional discounts have negatively impacted gross margins, leading to a revised EBITDA outlook [58][61] Question: Long-term growth outlook and product launches - Management confirmed that while there are exciting products to launch in the near term, significant new room launches are expected to take longer than initially anticipated [66][67] Question: Levers for expanding gross margins - Management discussed historical improvements in gross margins and outlined measures to return to high margin levels, despite current challenges [72][73]

Financial Data and Key Metrics Changes - Total net sales for Q2 2026 were $160.5 million, reflecting a year-over-year increase of 2.5% [4][31] - Gross margin decreased by 260 basis points to 56.4% compared to 59.0% in the prior year, primarily due to increased transportation costs and higher promotional discounting [33][36] - Net loss for the quarter was $6.7 million, or negative $0.45 per share, compared to a net loss of $5.9 million, or negative $0.38 per share in the prior year [36][41] Business Line Data and Key Metrics Changes - Showroom net sales increased by $10.3 million, or 10.4%, to $109.1 million, driven by a 0.9% increase in omnichannel comparable net sales and the addition of 16 new showrooms [31] - Internet net sales decreased by $1.8 million, or 4.1%, to $42.5 million [31] - Sactionals net sales increased by 4.6%, while Sac net sales decreased by 22.5% [32] Market Data and Key Metrics Changes - The overall furniture category is estimated to have declined approximately 4% for the comparable period, with the company gaining market share despite these headwinds [5][11] - Furniture spend was down 3.7% from May through July, with July showing the best performance of the three months [11] Company Strategy and Development Direction - The company is transitioning from a product-focused approach to a brand-focused strategy, with a brand evolution refresh aimed at building a multifaceted home brand [7][8] - The new product line, Snug by Lovesac, is positioned to capture a significant share of the $14 billion couch category, with a marketing campaign featuring celebrity Britney Snow [9][21] - The company aims to reach 3 million Lovesac households by 2030, focusing on long-term value creation and brand loyalty [15] Management's Comments on Operating Environment and Future Outlook - Management noted ongoing challenges due to tariffs and competitive discounting but remains optimistic about market share gains and growth despite a declining category [12][14] - The company expects to achieve net sales of $710 to $740 million for the full year, with adjusted EBITDA between $42 and $55 million [40][41] - Management emphasized the importance of maintaining a strong balance sheet and flexibility to invest in growth [5][37] Other Important Information - The company has successfully exited its partnership with Best Buy ahead of schedule and under budget, allowing for a more focused customer acquisition strategy [25][34] - The company is implementing a four-point mitigation plan to address tariff impacts, including cost management and manufacturing diversification [29][30] Q&A Session Summary Question: Anticipated changes to customer acquisition approach with brand evolution - Management indicated that significant changes in marketing effectiveness and customer acquisition strategies are expected, particularly with the launch of the Snug campaign and the onboarding of a new CMO [45][46] Question: Details on Snug by Lovesac partnerships and distribution - Management stated that while it is too early to discuss specific partnerships, the Snug product line's simpler nature allows for broader distribution opportunities beyond Lovesac-owned locations [49][50] Question: Changes in EBITDA outlook due to tariffs and promotional activity - Management explained that increased tariffs and the need for higher promotional discounts have negatively impacted the EBITDA outlook, with a focus on managing controllable expenses [54][57] Question: Levers to expand gross margins moving into Q4 - Management highlighted historical improvements in gross margins and outlined measures to return to high margin levels, including operational efficiencies and strategic pricing [68]