Earnings release
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Luvu Brands Announces First Quarter Fiscal 2026 Results and OperationalHighlights ATLANTA, GA / ACCESS Newswire / November 14, 2025 / Luvu Brands, Inc. (OTCQB:LUVU), a vertically integrated designer, manufacturer,and marketer of consumer lifestyle brands, today reported financial and operational results for the first quarter of fiscal 2026, ended September 30,2025. Financial Highlights Three Months Ended September 30, 2025: Net revenue increased 1% to $5.84 million, compared to $5.76 million in the prior-year period. Gross profit rose to $1.66 million, up from $1.52 million, with gross margin improving to 28.4% from 26.3%. The majority of thisimprovement was driven by a reduction in unit costs from overseas vendors, as the Company successfully renegotiated sourcing contracts anddiversified its supplier base to mitigate tariff exposure and secure more favorable pricing. Net loss narrowed to $131,000, a 38% improvement from a loss of $210,000 in Q1 FY2025. Adjusted EBITDA* was $82,000, compared to a loss of $4,000 in the prior-year period. Operational Overview During the first quarter of fiscal 2026, Luvu Brands continued to execute on its strategy of margin improvement and operational discipline. Despitemacroeconomic headwinds, the Company achieved modest revenue growth and improved gross margins through tighter cost controls and refinedsourcing practices. Inventory levels increased to $3.81 million, positioning the Company to meet seasonal demand and support new product launches. Cash and cashequivalents rose to $818,000, reflecting positive operating cash flow of $80,000 for the quarter. Navigating Tariff Uncertainty and Consumer Sentiment Luvu Brands continues to manage the impact of fluctuating import tariffs and soft consumer demand with proactive sourcing and pricing strategies.The Company has diversified its supplier base to reduce reliance on tariff-sensitive imports and is actively negotiating with vendors to secure morefavorable terms. These efforts have helped stabilize input costs and protect margins. To offset variability in consumer spending, Luvu has sharpened its marketing focus on high-conversion channels and introduced product designs thatalign with evolving customer preferences. By maintaining lean operations and investing in automation, the Company is better positioned to absorbexternal shocks and sustain profitability. CEO Louis Friedman commented, "We're encouraged by the margin expansion and operational progress this quarter. Our team remains focused ondriving profitability and shareholder value through disciplined execution and strategic investment. By staying agile in the face of economic uncertainty,we're building resilience and preparing for long-term growth." Strategic Initiatives Looking ahead, the Company will prioritize initiatives that expand distribution channels, introduce new product offerings, and improve manufacturingefficiency. These efforts are designed to support long-term growth and strengthen Luvu Brands' competitive position in the lifestyle products market. Additional Information Visit www.luvubrands.com for updates on events, press releases, and product launches. For investor inquiries, please contact Christopher Knaufat chris.knauf@luvubrands.com. Company Contact:Luvu Brands, Inc.Christopher KnaufChief Financial Officer770-246-6426Chris.knauf@LuvuBrands.com Forward-Looking Statements Certain matters discussed in this press release may be forward-looking statements. Such matters involve risks and uncertainties that may cause actualresults to differ materially, including the following: changes in economic conditions; general competitive factors; acceptance of the Company'sproducts in the market; the Company's success in obtaining new customers; the Company's success in product development; the Company's ability toexecute its business model and strategic plans; the Company's success in integrating acquired entities and assets, and all the risks and relatedinformation described from time to time in the Company's filings with the Securities and Exchange Commission ("SEC"), including the financialstatements and related information contained in the Company's Annual Report on Form 10-K and interim Quarterly Reports on Form 10-Q. Examplesof forward-looking statements in this release include statements related to new products, anticipated revenue, and profitability. The Companyassumes no obligation to update the cautionary information in this release. *Use of Non-GAAP Measures - Adjusted EBITDA Luvu Brands management evaluates and makes operating decisions using various financial metrics. In addition to the Company's GAAP results,management also considers the non-GAAP measure of Adjusted EBITDA. While Adjusted EBITDA is not a measure of performance in accordance withGAAP, management believes that this non-GAAP measure provides useful information about the Company's operating results. The table below 2025-11-17 13:54 News Release https://feeds.issuerdirect.com/news-release.html?newsid=7160323368526836&symbol=LUVU 1/5
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provides a reconciliation of this non-GAAP financial measure with the most directly comparable GAAP financial measure. As used herein, AdjustedEBITDA income represents net income (loss) before interest income, interest expense, income taxes, depreciation, amortization, and stock-basedcompensation expense. Three Months Ended September 30, 2025 2024 (in thousands, exceptshare data) Net Sales $ 5,841$ 5,756 Cost of goods sold (excluding depreciation expense presented below)4,185 4,239 Gross profit 1,656 1,517 Operating expenses: Advertising and promotion 249 231 Other selling and marketing 422 414 General and administrative 913 885 Depreciation 87 109 Total operating expenses 1,671 1,639 Operating income/(loss) (15) (122) Other income (expense): Interest expense and financing costs (116) (88) Total other income (expense) (116) (88) Loss from operations before income taxes (131) (210) Provision for income taxes 0 0 Net loss $ (131) $ (210) Net loss per share: Basic $ (0) $ (0) Diluted $ (0) $ (0) Shares used in calculation of net income per share: Basic 76,834,057 76,834,057 Diluted 76,834,057 76,834,057 Consolidated Balance Sheets September30, 2025 June 30, (unaudited)2025 Assets: (in thousands, exceptshare data) Current assets: Cash and cash equivalents $ 818$ 735 2025-11-17 13:54 News Release https://feeds.issuerdirect.com/news-release.html?newsid=7160323368526836&symbol=LUVU 2/5
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Accounts receivable, net of allowance for doubtful accounts and allowance fordiscounts and returns of $35 on June 30, 2025 and $11 on June 30, 20241,552 1,600 Inventories, net of allowance for inventory reserve of $165 on June 30, 2025 and$214 on June 30, 2024 3,805 3,585 Other current assets 132 108 Total current assets 6,307 6,028 Equipment, property and leasehold improvements, net1,389 1,476 Finance lease assets 104 104 Operating lease assets 923 1,057 Other assets 96 96 Total assets $ 8,819$ 8,761 Liabilities and stockholders' equity:Current liabilities: Accounts payable $ 1,991$ 1,858 Current debt 1,936 1,949 Other accrued liabilities 733 553 Operating lease liability 620 646 Total current liabilities 5,280 5,006 Noncurrent liabilities: Deferred Tax Liability 119 119 Long-term debt 722 704 Long-term operating lease liability 401 513 Total noncurrent liabilities 1,242 1,336 Total liabilities 6,522 6,342 Stockholders' equity (deficit):Preferred stock, 5,700,000 shares authorized, $0.0001 par value none issued andoutstanding - - Series A Convertible Preferred stock, 4,300,000 shares authorized $0.0001 parvalue, 4,300,000 shares issued and outstanding with a liquidation preference of$1,000 as of December 31, 2024 and June 30, 2024 - - Common stock, $0.01 par value, 175,000,000 shares authorized, 76,834,057 and76,547,672 shares issued and outstanding as of June 30, 2025 and June 30,2024, respectively 766 766 Additional paid-in capital 6,298 6,289 Accumulated deficit (4,767) (4,636) Total stockholders' equity 2,297 2,419 Total liabilities and stockholders' equity $ 8,819$ 8,761 Consolidated Statement of Cash Flow(unaudited) Three Months Ended September 30, 2025 2024 2025-11-17 13:54 News Release https://feeds.issuerdirect.com/news-release.html?newsid=7160323368526836&symbol=LUVU 3/5
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(in thousands) OPERATING ACTIVITIES: Net income $ (131) $ (210) Adjustments to reconcile net incometo net cash provided by operating activities: Depreciation and amortization 87 109 Stock-based compensation expense 9 9 Change in operating assets and liabilities: Accounts receivable 48 (137) Inventory (219) 283 Prepaid expenses and other assets (24) (31) Accounts payable 132 (63) Accrued expenses and interest 180 178 Operating lease liability (138) (141) Amortization of operating lease asset 134 135 Net cash provided by operating activities $ 79 $ 132 INVESTING ACTIVITIES: Investment in equipment, software and leasehold improvements $ - $ (1) Net cash used in investing activities $ - $ (1) FINANCING ACTIVITIES: Borrowing (repayment) under revolving line of credit $ (59) $ 10 Repayment of unsecured line of credit - (1) Proceeds from unsecured notes payable 189 - Proceeds from unsecured line of credit 65 - Payments on equipment notes (184) (94) Principal payments on capital leases (7) (6) Net cash used in financing activities $ 5 $ (91) Net increase (decrease) in cash and cash equivalents 84 40 Cash and cash equivalents at beginning of period $ 735$ 1,028 Cash and cash equivalents at end of period $ 819$ 1,068 Supplemental Disclosure of Cash Flow Information:Cash paid during the year for: Interest $ 64 $ 86 Income taxes - - SUPPLEMENTAL FINANCIAL INFORMATIONRECONCILIATION OF NON-GAAP FINANCIAL MEASURES Reconciliation of Net Loss to Adjusted EBITDA income for the three months ended September 30, 2025 and 2024: Three Months Ended September 30, 2025 2024 2025-11-17 13:54 News Release https://feeds.issuerdirect.com/news-release.html?newsid=7160323368526836&symbol=LUVU 4/5
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(in thousands) Net income (loss) $ (131) $ (210) Plus interest expense, financing costs and income tax 116 88 Plus depreciation and amortization expense 88 109 Plus stock-based compensation expense 9 9 Adjusted EBITDA $ 82 $ (4) SOURCE: Luvu Brands, Inc. 2025-11-17 13:54 News Release https://feeds.issuerdirect.com/news-release.html?newsid=7160323368526836&symbol=LUVU 5/5