Luvu Brands Inc

Greetings, ladies and gentlemen, and welcome to Vuvu Brands, Inc.' 's fiscal third quarter 2023 conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce Alex Senecov, the company's chief financial officer. Mr. Senecov, you may begin.

Thank you, Holly, and thank you to everyone who has joined us today for Louisville Brand's fiscal third quarter conference call. Joining me today is Louis Friedman, our founder, president, and chief executive officer, and Jordan Friedman, our sales director. On Monday, we filed our quarterly report on Form 10Q for the three and nine months ended March 31, 2023. And Tuesday morning, we issued an earnings release that highlighted the company's third quarter performance. There are a number of items that we look forward to discussing with you this morning, including Lubu Brand's financial results for the three and nine months ended March 31st, 2023, recent developments in Lubu Brand's operational activities, as well as the company's near-term plans for the future. At the conclusion of this call, we will be answering questions during a brief Q&A session. Before we get started, I would like to remind you that some of the information discussed will include forward-looking statements regarding future events and our future financial performance. These include statements about our future expectations, financial projections, and our plans and prospects. Actual results may differ materially from those set forth in such statements. For discussion of these risks and uncertainties, you should review the company's filings with the SEC, which includes today's press release. You should not rely on our forward-looking statements as predictions of future events. All forward-looking statements that we make on this call are based on assumptions and beliefs as of today, and we undertake no obligations to update them except as required by applicable law. Our discussions today will include non-GAAP financial measures, including EBITDA and adjusted EBITDA. These non-GAAP measures should be considered in addition to and not as a substitute for or in isolation from our GAAP results. A reconciliation of the most direct comparable GAAP financial measure to such non-GAAP financial measure has been provided as supplemental financial information in our press release. Now with that completed, I'd like to start the call with a few words from Luvu Brand Sales Director Jordan Friedman. Jordan?

Thank you, Alex. Good morning, everyone. Thank you for joining us on Luvu Brand's second quarter conference call. I'm pleased to share with you our business update with results through the end of third quarter 2023. The sales for this quarter were $6.9 million and are above the third quarter of 2022, rising 2.2%. In review of our business segment, the Liberator collection is at a five-year high, rising to 65% of sales. This is up from 48% last year. This increase is primarily due to marketing across our mainstream channels. Moving ahead, we also plan to introduce and curate the most compelling collection of erotic luxury home products for bedroom activities. Liberator has been performing really strongly. The JAX collection of sofas, daybeds, and children's seating, beanbags, and panelist headboards have been strong sales contributors this quarter as well. We also have had exciting developments in our retail distribution as starting this current quarter, Rooms to Go has placed orders for Jax beanbags in their stores across the southeast. Our efforts to elevate and expand this Jax collection will continue with the introduction of new collections scheduled to launch over the next few months. This will include new convertible daybeds, ideally suited and marketed for small spaces or apartment living. Our Jax outdoor collection represents the most significant challenge. contributing to a drop in Q3 of 36%. There are three factors affecting Jack's outdoor beanbags. First, the weather has been challenging over the last few quarters. Second, since the pandemic sales surge, outdoor furniture sales overall have softened. And finally, competition has risen dramatically in this category. The Ivana collection was initially created to contribute free foam trim for our Jack's beanbag collection. Avana is now deployed as a Liberator surrogate brand for sexual wellness products into mainstream channels. Although the Avana mainstream collection is down 12% for the third quarter of 2023, Avana branded chaises as a subcategory of Liberator added $2.4 million onto Liberator sales year to date. We use this brand to help contribute towards Liberator growth, and those sales are booked as Liberator products. sales on the financials, even though our Avana brand is still present in contributing. Regarding CREATL, contract sales are also down for the third quarter, primarily due to the decline in outdoor beanbags. We expect rooms to go and other contracts from school suppliers and furniture designers to dramatically change this trend into positive territory. Our hospitality marketing efforts with resorts and beachfront hotel groups will also continue to elevate RJAC's revenue. Although Luvu Brands is up 15% in revenue for the first nine months with improving gross margins, we are moving forward with conservative growth expectations for the business in the remainder of fiscal 2023. We share concerns about potential broader challenges facing the U.S. and world economies. However, we remain optimistic with our capabilities and position in the markets moving forward. Now I will turn this over to Louis, our CEO, to talk a little bit about manufacturing.