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.

Thank you, Jordan, and welcome everybody to this conference. We also recognize the need to stimulate business. This is important for 2023 and also builds the foundation for future years. Therefore, we are working to maximize business through multiple efforts, including our marketing strategy. Regarding our manufacturing improvements, we have added talent to our purchasing team, focusing on just-in-time, international sourcing, and auditing every component part and sub-assembly ordered. Within this month, significant savings have already been obtained. As a made-in-America company, we constantly strive for continuous improvement lean manufacturing, and this month adding additional automation is being installed in our sewing plant to reduce our labor costs. The shift in customer demand combined with high production output in Atlanta and Mexico factories have created a challenging situation with respect to inventory and immediate production requirements. While our cash flow is a strong position today, we know lowering inventory over time is important to protect the future positions. We are targeting an inventory reduction of about 20% in the remaining months of fiscal 2023. We are also launching new collections at the highest rate since 2022. Reducing inventory will ensure that we have room for new products to stimulate the business. Now I'll turn this call back over to Alex to summarize some of the financial highlights of the third quarter.

Thank you, Louis. I will briefly touch on some of the financial highlights. from the fiscal third quarter and first nine months ended March 31, 2023. For the fiscal third quarter, net sales increased to $6.9 million from $6.8 million in prior year's third quarter, an increase of 2.2%. Liberator sales increased 38% to $4.5 million from $3.3 million in the prior year. And Jack's product sales decreased 36% to $1.2 million compared to $1.9 million a year ago. And Havana product sales decreased 12% to $0.6 million from $0.7 million a year ago. For the nine months, net sales increased to $23.1 million from $20.2 million, an increase of 15%. Liberator sales increased 56% to $14.5 million from $9.3 million in the prior year. Jaxx product sales decreased 17% to $5.1 million compared to last fiscal year's $6.1 million. And Havana product sales decreased 23% to $1.7 million from $2.3 million a year ago. Gross profit for the fiscal third quarter totaled $1.8 million, which is flat to the same $1.8 million in the prior year. Gross profit as percentage of net sales was 25.6% compared to 26.6% in the prior year's third quarter. Year-to-date gross profit was 26% compared to 24% in the prior year nine months. Total operating expenses for the three months ended March 31st, 2023 were approximately 20% of net sales or approximately $1,386,000 compared to 19% of net sales or approximately $1,261,000 for the same period in the prior year. For the nine months, operating expenses were $4.3 million compared to $3.8 million a year ago. Net income for the fiscal third quarter was $293,000 compared to net income of $452,000 in the prior year. Net income for the nine months was $1,480,000 compared to $846,000 in the prior year nine months. If we talk about adjusted EBITDA, it was $484,000 compared to $616,000 in the prior year's third quarter. For the nine months, adjusted EBITDA was $2 million, compared to $1,348,000 in the prior year's nine months. Cash and cash equivalents on March 31, 2023, totaled $1,353,000, compared to $859,000 at the end of the prior fiscal year. Working capital increased from $774,000 on June 30th to $1,785,000 at the end of the fiscal third quarter 2023. Now, I'd like to turn the call back to Louis for some additional comments regarding current development. Louis? Thank you, Alex.

In summary, we must adjust to the current market trends. However, we also must recognize that demand remains historically strong and gives us a great position to pursue future growth. The investments made in the past few years will pay off as we move beyond 2023. We are confident in our business position and outstanding operational capabilities. We remain grateful and committed to our partners whose strengths and value our proposition have made us successful for the many years. Therefore, we remain optimistic and look forward to a strong future. Please reach out to me with any questions and comments. I'm always available. And thank you. This wraps up our formal presentation. Operators, we will now be open for Q&A.

Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment while we poll for questions. Your first question for today is coming from Oliver Colombo, a private investor. Oliver, your line is live.

Yes, good morning. This is Olivier out of Switzerland. Hey, Olivier.

Hey, how are you?

Fine, thanks. I have a handful of questions for you. The first one is regarding the Jacks, which is still above pre-COVID levels, but after hitting a high in the December 21 quarter with 2.3 million, it has been a downward trend since then. What do you have in mind to revigorate the brand? And, I mean, I've seen over the last couple of months that you have done some very interesting and entertaining videos regarding the various products that they have under this brand. But I would like to know what you have in mind here.

You know, I appreciate you watching those videos because we are getting better at it. We do have a full-time ad agency here of about seven people, and we're producing creative all the time. I'll elaborate a little bit and I'll turn it back over to Jordan. In terms of the outdoor segment of beanbags, pretty weather sensitive and certainly doesn't compare to the pandemic boom that took place during that time. The other beanbags were constantly innovating. and you might take a look at what Lovesac does in terms of their segment of beanbags, but I think they're well over $20 million in their beanbags. The nice thing about us is we're vertically integrated, and all our scrap stream goes into beanbags, approximately 5,000 pounds a day. So it puts us in a pretty good position to compete, and certainly Jaxx is very diverse in terms of the panelists, the headboard collection, the children's products, So we're constantly shooting. We just came back from a three-day shoot. A lot of content, a lot of video, more promotion. There's an ad in this month's Rolling Stone coming out that supports Jax. There's been ads in other magazines. So it's a combination of breadth of collection, new creative, constant promotion, new products, and feeding our channels, of which are pretty well established. Jordan, you want to elaborate a little bit?

Yeah. You know, I think one thing that all companies have been dealing with is kind of this pandemic boom and how we're coming back from that. I mean, I know recently in the news, you know, a lot of the home improvement stores were in the news that they had kind of this multi-year period of pure growth, and now they're finally trailing previous years with Home Depot and Lowe's and some of these other stores that, you know, are kind of coming taking a step back from this big boom period. And I mean, a lot of shoppers just, they bought tons and tons of home furniture, tons and tons of outdoor furniture in 2021 and 2022. So people are just still using the things they bought last year. So there's, you know, a little bit of a challenge there at just maintaining growth for this year. But I think it will definitely bounce back in next year and the following year, you know, as we kind of get a little bit further away from that big pandemic boom. You know, the other thing that's affecting pretty much everyone is the mortgage rates being really high and just home, you know, new home buying being down a little bit. So those are kind of the challenges we face. I mean, what we're doing is, you know, some of the other things we're working on other than just new products, as Lewis mentioned. I mean, we are pretty excited about those as well. But I'm doing some level of pricing reassessment across the board, seeing what can be our really good discount leaders that can be, you know, really high volume discounted products on, you know, Amazon and some of these high volume marketplace sites. And then for other products, I'm kind of reassessing our pricing and trying to get more retail distribution on them. So we're kind of reassessing our entire pricing model across the entire line to try to have both some discount leaders for marketplace sites and also some true wholesale items that we can really establish further relationships with retailers across the country.

Thank you. I hope that answers your question. It does, thank you very much. But I know the environment is not easy with the housing market and so on. Regarding the inventory level that is a bit higher and you wanted to bring it down by roughly 20% before the end of the year, if you had to split your inventory with the various brands that you have, which is the highest?

you have i mean does liberator represent a big chunk of that or is jax how does it split well the inventory is primarily raw materials in terms of finished product i think we're we're doing okay the finished product inventory is a little heavy but we did uh we did need to reduce our fabric inventory and uh we we have in some cases purchased larger than expected quantities of outdoor material that are that is imported and obviously outdoor has taken a hit and so we we have some of that inventory here and some of the inventory at our suppliers that we haven't brought in as of yet so we're aggressively move you know making every attempt to move that inventory out and reduce it we also are in a building of 140 000 square feet which is pretty stuffed at this point so With new equipment coming in and we have to maximize our space and be able to grow the business in the space that we have.

Yeah, I think it's a combination of all three brands. I mean, it's not, you know, it kind of varies by each specific SKU. Some products are, you know, higher inventory levels than others, so. We're focusing our sales efforts on trying to run promotions and things like that on the items where we really have excess inventory.

I see. That's perfect. And I think Jordan mentioned at the beginning of his comments regarding the Liberator brand that you're going to launch something special there. I didn't understand exactly what it was.

Well, Liberator is doing quite well, as you can see from the numbers. There's a trend that has been going on for quite some time of mainstream embracing sexual wellness products. We're producing more products that could work as furniture in the home, as well as for bedroom play. For instance, Some of the Jaxx products that you see on Jaxx have been re-swizzled as Liberator products, just marketed a little differently in different sizes. Some have play cuffs on them. There's a daybed that we sell on Jaxx that has been retrofitted to sell on Liberator. And believe it or not, these things sell every day. So we have a section coming up on Liberator very shortly, which is how to build a sex room. And there'll be an assortment of products that are in that area. Some are existing. Some are going to be new. There's some new fabrics, some prints, some other things that will kind of embrace the playscape. But Liberator's potential has to do with, A, we're compressed, so all of our big products can go into retail. Second of all, mainstream is embracing sexual wellness. And as we move further and further into it, as we have done with the Ivana brand and Liberator brand, companies like Brookstone and Wayfair and others are selling sex goods. And we're also embracing the sex room.

Yeah, I think the main thing we were talking about there is kind of a more luxury line. Since, as Lewis said, the whole, you know, people are... People are willing to spend more money now on dedicated kind of sex room build-outs, given the success of the show on Netflix last year. And, you know, people are interested in kind of more robust, you know, luxury sex furniture than ever before.

That's perfect, yeah. Makes a lot of sense. Regarding Luis's comments that you see kind of conservative growth between now and the end of the year, what would you characterize as conservative growth? Do you still think that you will have a growth year in 23 versus 24? Excuse me, 22?

Well, you know, there's always some surprises. So, for instance, Rooms to Go has placed a pretty substantial order for beanbags that we're in the process of fulfilling now. And it's interesting that they... that they placed it during the summertime, and the indoor beanbag business is massive during the holiday season starting in October. So this particular test that they've had is a substantial amount of goods that they purchased, which we haven't billed yet. It's just starting to go out. There are some factors that could change that outlook. certainly if Rooms to Go comes forward with a $2 million order for Christmas. That would be nice. That would change their outlook. We're expecting the Netflix series, How to Build a Sex Room, which has been a big boom for the industry.

Well, that's going into the next fiscal year.

Well, there's both calendar year and fiscal year. There's only a month and a half left for this fiscal year. So I'm thinking through Christmas as well. So it's really... there's a lot that's kind of hard to say. I'd rather be conservative with our inventory and our cash and move ahead and develop products and be optimistic and try to, you know, what's also interesting about our business, and of course Jordan could elaborate on this, is we have access to a wide variety of mainstream channels, whether it's Wayfair or Brookstone or Overstock or just, I mean, there are dozens of these mainstream channels that we have access to these huge websites. And we feed them with product on a constant basis. So adding, there's only two ways to grow our business. New product, new channels, more sales for existing products, and new products. And would you say, Jordan, we're about 85% e-commerce at this particular point between our own websites and all the channels that you represent?

That sounds about right. I

Maybe you can elaborate on this just a little bit, that with these channels that you have, you're able to control inventory and pricing and product mix.

Yeah. So, I mean, my staff here is very well trained on just all of the different websites that we sell to. And it's very easy for us to launch new products and have them turn to good sellers within just a couple weeks or a month or so. that, you know, our creative staff is always kind of driving this new growth with just great content and great photography, and our design team is pumping out a lot of really good designs. So, I mean, that's how we stay ahead of competition is just with being innovative. But, yeah, I mean, we have, you know, complete control over our content, and, you know, most of the websites that we do business with and pretty much all of them are on this quick-to-launch, A lot of them have this quick-to-launch marketplace type of environment where we can submit a product and have it launched within just a few days, which makes us able to adjust to consumer interest very quickly.

So, Jordan, you take a company like Tractor Supply that we just loaded 60 products, 60 JAX products on Tractor Supply. One thing we don't know, and kind of nice to be conservative about it, is we don't know what Tractor Supply is going to buy because we don't know what they're going to sell. They don't even know what they're going to sell. But the fact of the matter is we have access to the site, we've loaded A-plus content, we've loaded 60-some-odd products, and now it's simply a matter of the customer base that Tractor Supply has, will these products convert?

Yeah, so I guess we know a little bit faster if customer demand is actually there as opposed to a big, you know, if we were dealing with a specific retail model. A big box store. Where we were waiting, you know, where the big box store places their order and then we don't know if it's actually selling off the shelf. Yeah, we don't know the sell-through, right? Yeah, it's like we know the sell-through.

But in an item like tractor supply, Jordan could adjust the mix, he can adjust the pricing, he can look at the products, he can bring products up, bring products down, and so... We run a lot of websites, even though we only have three websites or four websites of our own. We run probably another 20 some odd websites, maybe more. Yeah, for our own product, our own products.

Yeah. That's very helpful. Thank you very much. And maybe the last question is regarding the kind of valuation of the company today. I mean, trading at seven million valuation, which seems extremely ridiculous to me. What do you plan to do there to bring the story out? I mean, have you plans for this summer to attend some microcap events to really bring the name out to investors? Because for me, I'm scratching my head on a daily basis.

Right. I understand. We are truly a value bought. I can... Start with that a little bit, and maybe you can back me up or comment further. So we do recognize that the stock value today does not really represent or doesn't really colorate with the coordinate. Right, yeah. I'm trying to say, with an actual company's position, we are a profitable company. We are still able to maintain a steady growth, and we're able to maintain a good profitability and good profit margins. At the same time, we still consider ourselves as a small, mid-sized company, and we have to be very, very careful when we evaluate the potential opportunities for, should I say, investor-relation initiatives, right? Because we always have to think about the situations where the initiative can bring a short-term increase in stock price and then negatively impact the company in the long term. So we are looking at the few opportunities, and we're just basically very, very carefully evaluating them.

Okay. For the longest time, I've had the, I guess, the plan. One was to dramatically increase sales, which over the course of time, we have. Not necessarily this period, but we have in the past. The last couple of years were pretty good. We needed to... substantially reduce our debt, which we also did. We need to remove the going concern, which we did. And the last part of the deal is to increase the stock price. To have a going concern in flat sales is certainly not a criteria for growing a stock price. But we have two out of the three so far. We're not going to incur any more debt. We're going to continually strive to reduce our debt. We're going to continually strive to increase sales. And we need to work on the stock price now that we have that in place.

Yeah, I mean, I think a lot of it is just we're focused on the day-to-day activities of our business and keeping our business running smoothly, growing our sales and margin. And, you know, with a relatively small management staff here, it's just hard to find the time in the day to think about things stock price when we are looking at sales and day-to-day and employee-related things. We're running a business here that requires constant attention. We would have to have a dedicated IR person, and that's an extra salary on our book.

Well, we have to go to an IR firm. But one thing I'd like to do before the end of the year, and I'm hoping that I can accomplish this, and if you have any ideas, perhaps you can send them our way, I want to redo our investor website and bring it up to date and enhance the content and package it accordingly so that we can, in fact, promote going forward in the second year. We haven't Haven't done a whole lot in that investor website from a content standpoint, and we have content to add. If you know of another investor website that you think has good layout and so on, perhaps you can send it over. We can look at it. But that's one of the things I'm going to task our creative department to work on and really have a great investor website going forward. Alex, anything else? I'll let you know. Yeah, maybe you have one you can send over. Anyway, we are available anytime to chat outside this conference. So we're open for calls any day of the week up until 7 p.m. Eastern Standard Time and even on Saturdays.

Perfect. Nice to know. Thank you.

Okay. Well, thank you.

Once again, if there are any questions, please press star 1. Your next question is coming from Boris Sabouris at three main points.

Hello, my name is Boris. I'm based in Sunnyvale, California. I was an investor for the last couple of years. I'm like, this enjoys its life. Can you hear me well?

You're a little choppy, Boris, but we're doing our best.

Sorry. Okay. And I use Liberator product after my meniscus tear. But my question is, I see that your Liberator product line is growing really well, especially since 2021. And I'm trying to understand what are key drivers for this growth?

Okay. Well, first of all, we're a brand category. We've spent to date approximately, I don't know, was it $15 million promoting it and just in print ads alone over the course of the years. Going back about five years ago, we figured out how to compress it so it fits on a wide variety of shelves in retail stores. There's also been that trend of sex goods or sexual well-being into mainstream. So companies like Target and whatever have dipped their toe into sex goods, including sex toys, which we're actually working on at the moment, our Liberator brand sex toys. So we have a very strong brand. We're recognized by consumers. We've appeared in TV shows. We've appeared in movies. We've been in Rolling Stone every month for the last 17 years. There are very few consumer-known sex brands out there. Most of them are B2B brands. So we keep promoting and working on it every day. I think the website gets about 6,000 uniques a day visiting the website. And there's an opportunity to expand the Liberator brand into other categories that are home goods, that are sex toys, that are lubricants. All of that really needs to be done because we have, in fact, a very strong brand.

Yeah, and I think just with the way society is going in general, people are continuing to realize how important their sex lives are to their overall general happiness. There's a lot of negative things in the news and things that are depressing people on a daily basis. And then there's sex. And then there's sex lives, which is the one thing that people can kind of turn to to have an enjoyable time in their lives.

So it's relatively low cost.

Yeah. So I mean, compared to buying some liberator items to improve your overall general pleasure in your life.

Let's not forget the aging population. If you read the reviews, there also is an assistive component to Liberator. Couples of different sizes, physical conditions, overweight, whatever. People buy Liberator for a wide variety of reasons. At the end of the day, they want to have better sex, but they buy it because of this problem or that problem, or maybe they don't have any problems at all. But Those are the reasons. We have done business with the Christopher Reeves Foundation. We've done business with a company called Intimate Rider that makes assistive products for people to have sex who are missing limbs or what have you. Right, so there's a wide variety of reasons. They could be simply bored. They could have a bad back. They could be whatever. Who knows? But, yeah, we have a customer survey that they answer, you know, that we look at every week, and we have, you know, Pretty good feedback of what consumers are saying about all of our products.

Plus, if we're talking about this year, we're talking about this year in particular, so we have a big bump in sales from the Netflix show, right? And then, as Jordan mentioned, Havana brands started selling the sex chases as their own brand on Amazon, which actually helped us to start selling the sex-related product on the mainstream channels. Including Wayfair. Including Wayfair, yes.

Okay, did we answer your question, or do you want to have a follow-up?

What I hear is that it's a lot of brand marketing, magazines, shows, brand placements. I was curious if you're utilizing performance marketing, like advertising on social media directly to your website for purchase. Is it something you're looking at? Is it a driver of growth for you or not really?

Yeah, so we're doing a lot with pay-per-click on Google and Amazon and other sites that allow just paid search. We do some level of paid content advertising as well on those channels just in the marketplaces. We do social media ads as well, but unfortunately Meta, which is the owners of Facebook and Instagram, they're not super keen on sex products and they put up some some roadblocks into advertising things of an adult content. So that, you know, that makes our lives a little bit difficult and you can, you know, there's a lot of adult manufacturers who have raised concerns and are not super happy with the metacorporation in general regarding these kinds of, you know, antiquated practices of theirs. So, you know, we We do utilize those methods for the Jaxx brand mostly, and we try to grow our following kind of naturally through Liberator, but our advertising is a little bit limited there.

Now, we do have another site called Liberator Store, which has helped us get more social exposure. Liberator Store does not have couples per se, has some illustrations, and complies with some of the Google requirements to what they deem to be adult advertising. We kind of fit in a strange place because there's no pornography, but we're in the business of sexual posturing and positions and what have you. So they follow the rules, and I go, you know, you're an adult. So if you go to liberatorsstore.com, you'll see a more neutral site with pictures of product and just some illustrations and single poses of people without couples.

I haven't realized that. That actually explains it a lot. Thank you. I did want to mention that I bought, before I bought your stock, I bought a bunch of your products and kids really enjoy Zipline. And I bought this Liberator. I think it's like a curve or it's something that's like S, that's flat. I use it actually. Maybe, yes. I tore my meniscus five times before the surgery and I used it a lot just for that. I use it as a medical device.

More so than in my section. Oh, yeah, lots of people have reasons to buy Liberator, and many of them are medical-related. Well, we appreciate that. Thank you. Are there any other questions you might have? You can reach us any time. Absolutely. Okay, well, thank you. I appreciate it.

Gentlemen, it appears there are no further questions from the phone lines.

Okay, so we have one more question coming through the website. It says, during Q4 and during the summer, should we expect JAGS growth? Demand seems to be there since some products are currently out of stock.

Some products out of stock?

I'm not really sure what they're referring to as far as some products out of stock.

Maybe there's some colors or something.

Yeah. Yeah, I mean, whoever asked that question, if you want to reach out to me specifically with items you're seeing that are out of stock, please feel free to do that. But, yeah, as far as I know, there shouldn't be any items that are listed out of stock anywhere. But, yeah, I mean, we're seeing some turnaround on JAX. I mean, Q4 is the quarter that we're in currently, so I can't give specific numbers on where we're at quarter to date. Um, but I mean, I think, you know, the decline and the pretty significant decline last quarter is something that we're hoping not to see again. And I don't think we're going to see a decline that significant again.

Um, but certainly the rooms to go order will ship in this last quarter, wouldn't it?

Uh, part of it is part of it. Yeah.

So that's going to, not all of it, but, but outdoor is kicking off. We just did a three day, uh, photo shoot with, uh, with both new and existing outdoor products, and those photos are going to be uploaded next week on an assortment of websites. And we're doing whatever we can to take advantage of the window of opportunity for both outdoor. We also are expanding the panelist line with new fabrics and new sizes. We also have expanded the daybed line, both indoor and outdoor. So there's lots of energy put into JAX, and I'm confident that the next month and a half will be good for fourth quarter.

Yeah, I think we're going to see way better results this quarter. I mean, I don't know if we're going to be in the positive territory or maybe flat or maybe slightly down, but we were down pretty significantly last quarter, and we don't intend on repeating that again.

Okay, we hope that answers that question. If there's any other questions, we'd be happy to chat.

Right, there are no further questions on the website. So, operator, thank you very much for the call.

Okay, yes, and thank you, everyone, for participating. We really appreciate your support. Thank you, and have a good day, and reach out to us anytime.

Thank you, ladies and gentlemen. This does conclude today's conference call. You may disconnect your phone lines at this time. And have a wonderful day. Thank you for your participation.