Expanded Gross Margin in Fourth Quarter 2023 by 180 bps, compared to Fourth Quarter 2022
Grew Fiscal Year 2023 Net Cash Provided by Operating Activities by 149%, $9.2 million from Fiscal Year 2022
Grew Fiscal Year 2023 Free Cash Flow by 867%, $10.3 million from Fiscal Year 2022
CHICO, Calif., March 06, 2024 (GLOBE NEWSWIRE) -- Lulu's Fashion Lounge Holdings, Inc. ("Lulus" or the "Company") (Nasdaq: LVLU) today reported financial results for the fourth quarter and fiscal year ended December 31, 2023.
Crystal Landsem, CEO of Lulus, said:
"We continue to be focused on delivering on our core strategic pillars of improving Lulus brand awareness and broadening our reach and customer touchpoints, and are encouraged by the sequential upward revenue momentum building at the end of 2023 and into the first two months of 2024. Strong customer demand for our new and novelty products, resulting in positive sales in several of our high-volume categories, further strengthens our future reorder product funnel. In addition, our inventory levels were in line with sales in Q4, reflecting the agility of our data driven business model. Our strong balance sheet and ability to generate cash flow supported a $17 million reduction in our revolver balance in 2023. We are optimistic about our opportunities for growth in the coming quarters as we continue to improve our operational efficiency, innovation, and product offering."
Fiscal Year 2023 Highlights:
- Net revenue of $355.2 million, a 19% decrease compared to 2022, driven by an 18% decrease in Total Orders Placed with higher return rates offset by higher Average Order Value ("AOV") compared to 2022.
- Active Customers of 2.8 million, a 12% decrease compared to 3.2 million in 2022.
- AOV of $133, an increase of 2% compared to $131 in 2022.
- Gross Margin decreased 180 basis points to 41.7% and gross profit decreased 23%, in each case compared to 2022.
- Net loss of $19.3 million, compared to net income of $3.7 million in 2022.
- Adjusted EBITDA (non-GAAP financial measure defined below) of $3.2 million, compared to $29.1 million in 2022.
- Net cash provided by operating activities was $15.4 million, compared to $6.2 million in 2022.
- Free Cash Flow (non-GAAP financial measure defined below) was $11.5 million, compared to $1.2 million in 2022.
- Total debt, comprised of the revolving line of credit, decreased by $17 million during fiscal year 2023 resulting in a total debt position of $8 million at the end of 2023.
- Net Debt (non-GAAP financial measure defined below) decreased by $9.3 million during fiscal year 2023 resulting in a Net Debt position of $5.5 million at the end of 2023.
| Fiscal Years Ended | ||||||||||||
| December 31, 2023 | January 1, 2023 | YoY Change | ||||||||||
| (52 weeks) | (52 weeks) | |||||||||||
| (In thousands, except percentages) | ||||||||||||
| Net revenue | $ | 355,175 | $ | 439,652 | (19 | )% | ||||||
| Gross profit | $ | 148,226 | $ | 191,446 | (23 | )% | ||||||
| Gross Margin* | 41.7 | % | 43.5 | % | (180 | ) | bps | |||||
| Net income (loss) | $ | (19,334 | ) | $ | 3,725 | NM | ||||||
| Adjusted EBITDA* | $ | 3,231 | $ | 29,096 | (89 | )% | ||||||
| Diluted earnings (loss) per share | $ | (0.48 | ) | $ | 0.10 | NM | ||||||
| Active Customers* | 2,830 | 3,223 | (12 | )% | ||||||||
| Net cash provided by operating activities | $ | 15,421 | $ | 6,199 | 149 | % | ||||||
| Free Cash Flow* | $ | 11,486 | $ | 1,188 | 867 | % | ||||||
NM - not meaningful
* Note: Refer to "Use of Non-GAAP Financial Measures and Other Operating Metrics" section below for definitions of these metrics.
Tiffany Smith, CFO of Lulus, said:
"The fourth quarter was consistent with seasonal trends for Lulus, marking our typically lowest sales and profit quarter of the year. Our fourth quarter net revenue of $75 million was in line with our expectations for the quarter, while Adjusted EBITDA was pressured due to the relative increase in fixed costs on a smaller base. We saw our Gross Margin expand in the fourth quarter by 180 basis points compared to the same quarter last year, driven mostly by lower promotional activity and by gains in our AOV resulting from higher price point product mix, which was partially offset by higher return rates."
Fourth Quarter 2023 Highlights:
- Net revenue of $75.0 million, an 18% decrease compared to the fourth quarter of 2022, driven by a 22% decrease in Total Orders Placed with higher return rates offset by higher AOV compared to the fourth quarter of 2022.
- AOV of $136, an increase of 14% compared to $119 in the fourth quarter of 2022.
- Gross Margin increased 180 basis points to 39.1% and gross profit decreased 14%, compared to the fourth quarter of 2022.
- Net loss of $7.2 million, compared to $5.2 million in the fourth quarter of 2022.
- Adjusted EBITDA of ($2.0) million, compared to ($1.0) million in the fourth quarter of 2022.
- Net cash used in operating activities was $5.7 million, compared to $10.1 million in the fourth quarter of 2022.
- Free Cash Flow was ($6.7) million, compared to ($11.4) million in the fourth quarter of 2022.
| Fiscal Quarters Ended | ||||||||||||
| December 31, 2023 | January 1, 2023 | YoY Change | ||||||||||
| (13 weeks) | (13 weeks) | |||||||||||
| (In thousands, except percentages) | ||||||||||||
| Net revenue | $ | 74,959 | $ | 90,963 | (18 | )% | ||||||
| Gross profit | $ | 29,344 | $ | 33,968 | (14 | )% | ||||||
| Gross Margin* | 39.1 | % | 37.3 | % | 180 | bps | ||||||
| Net income (loss) | $ | (7,230 | ) | $ | (5,246 | ) | 38 | % | ||||
| Adjusted EBITDA* | $ | (1,976 | ) | $ | (972 | ) | 103 | % | ||||
| Diluted earnings (loss) per share | $ | (0.18 | ) | $ | (0.14 | ) | 29 | % | ||||
| Active Customers* | 2,830 | 3,223 | (12 | )% | ||||||||
| Net cash used in operating activities | $ | (5,679 | ) | $ | (10,134 | ) | (44 | )% | ||||
| Free Cash Flow* | $ | (6,671 | ) | $ | (11,374 | ) | (41 | )% | ||||
* Note: Refer to "Use of Non-GAAP Financial Measures and Other Operating Metrics" section below for definitions of these metrics.
Financial Outlook for Fiscal Year 2024:
- We expect net revenue to be between $350 million and $370 million, which represents between a -1.5% and 4.2% increase compared to 2023.
- We expect Adjusted EBITDA to be between $5 million and $8 million, which represents between a 55% and 148% increase compared to 2023.
- We expect capital expenditures to be between $5 million and $6 million, which represents between a 28% and 54% increase compared to 2023.
Forecasting future results or trends is inherently difficult for any business, and actual results or trends may differ materially from those forecasted. Lulus' outlook is based on current indications for its business. Lulus' outlook factors in our current best estimates for anticipated headwinds, including those related to the level of demand, spending and returns by our customers, macroeconomic uncertainties, inflation, supply chain pressures, and shipping costs. Given the volatile nature of current consumer demand and potential for further impacts to consumer behavior due to pockets of continued inflation, higher interest rates, the resumption of student loan interest and payments, combined with less predictable consumer purchasing behavior, Lulus' financial outlook is subject to change.
| LULU'S FASHION LOUNGE HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Unaudited) (In thousands, except share and per share data) | |||||||||||||||||
| Fiscal Quarters Ended | Fiscal Years Ended | ||||||||||||||||
| December 31, 2023 | January 1, 2023 | December 31, 2023 | January 1, 2023 | ||||||||||||||
| (13 weeks) | (13 weeks) | (52 weeks) | (52 weeks) | ||||||||||||||
| Net revenue | $ | 74,959 | $ | 90,963 | $ | 355,175 | $ | 439,652 | |||||||||
| Cost of revenue | 45,615 | 56,995 | 206,949 | 248,206 | |||||||||||||
| Gross profit | 29,344 | 33,968 | 148,226 | 191,446 | |||||||||||||
| Selling and marketing expenses | 15,328 | 16,466 | 76,312 | 83,559 | |||||||||||||
| General and administrative expenses | 21,810 | 23,504 | 92,129 | 99,148 | |||||||||||||
| Income (loss) from operations | (7,794 | ) | (6,002 | ) | (20,215 | ) | 8,739 | ||||||||||
| Interest expense | (337 | ) | (409 | ) | (1,728 | ) | (1,103 | ) | |||||||||
| Other income, net | 217 | 34 | 933 | 136 | |||||||||||||
| Income (loss) before provision (benefit) for income taxes | (7,914 | ) | (6,377 | ) | (21,010 | ) | 7,772 | ||||||||||
| Income tax provision (benefit) | (684 | ) | (1,131 | ) | (1,676 | ) | 4,047 | ||||||||||
| Net income (loss) and comprehensive income (loss) | $ | (7,230 | ) | $ | (5,246 | ) | $ | (19,334 | ) | $ | 3,725 | ||||||
| Basic earnings (loss) per share | $ | (0.18 | ) | $ | (0.14 | ) | $ | (0.48 | ) | $ | 0.10 | ||||||
| Diluted earnings (loss) per share | $ | (0.18 | ) | $ | (0.14 | ) | $ | (0.48 | ) | $ | 0.10 | ||||||
| Basic weighted-average shares outstanding | 40,451,597 | 38,527,759 | 39,879,121 | 38,583,854 | |||||||||||||
| Diluted weighted-average shares outstanding | 40,451,597 | 38,527,759 | 39,879,121 | 38,853,393 | |||||||||||||
| LULU'S FASHION LOUNGE HOLDINGS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands, except share and per share data) | |||||||||
| December 31, | January 1, | ||||||||
| 2023 | 2023 | ||||||||
| Assets | |||||||||
| Current assets: | |||||||||
| Cash and cash equivalents | $ | 2,506 | $ | 10,219 | |||||
| Accounts receivable | 3,542 | 3,908 | |||||||
| Inventory, net | 35,472 | 43,186 | |||||||
| Assets for recovery | 3,111 | 3,890 | |||||||
| Income tax refund receivable | 2,510 | 4,078 | |||||||
| Prepaids and other current assets | 5,379 | 3,738 | |||||||
| Total current assets | 52,520 | 69,019 | |||||||
| Property and equipment, net | 4,712 | 4,391 | |||||||
| Goodwill | 35,430 | 35,430 | |||||||
| Tradename | 18,509 | 18,509 | |||||||
| Intangible assets, net | 3,263 | 3,090 | |||||||
| Lease right-of-use assets | 29,516 | 32,514 | |||||||
| Other noncurrent assets | 5,495 | 4,251 | |||||||
| Total assets | $ | 149,445 | $ | 167,204 | |||||
| Liabilities and Stockholders' Equity | |||||||||
| Current liabilities: | |||||||||
| Accounts payable | $ | 8,900 | $ | 5,320 | |||||
| Accrued expenses and other current liabilities | 18,343 | 17,976 | |||||||
| Returns reserve | 7,854 | 9,066 | |||||||
| Stored-value card liability | 13,142 | 10,828 | |||||||
| Revolving line of credit | 8,000 | - | |||||||
| Lease liabilities, current | 5,648 | 4,456 | |||||||
| Total current liabilities | 61,887 | 47,646 | |||||||
| Revolving line of credit, noncurrent | - | 25,000 | |||||||
| Lease liabilities, noncurrent | 25,427 | 29,042 | |||||||
| Other noncurrent liabilities | 1,179 | 623 | |||||||
| Total liabilities | 88,493 | 102,311 | |||||||
| Stockholders' equity: | |||||||||
| Preferred stock: $0.001 par value, 10,000,000 shares authorized, and no shares issued or outstanding | - | - | |||||||
| Common stock: $0.001 par value, 250,000,000 shares authorized; and 40,618,206 and 39,259,328 shares issued and outstanding as of December 31, 2023 and January 1, 2023, respectively | 41 | 39 | |||||||
| Additional paid-in capital | 254,116 | 238,725 | |||||||
| Accumulated deficit | (193,205 | ) | (173,871 | ) | |||||
| Total stockholders' equity | 60,952 | 64,893 | |||||||
| Total liabilities and stockholders' equity | $ | 149,445 | $ | 167,204 | |||||
| LULU'S FASHION LOUNGE HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) | ||||||||
| Fiscal Years Ended | ||||||||
| December 31, 2023 | January 1, 2023 | |||||||
| (52 weeks) | (52 weeks) | |||||||
| Cash Flows from Operating Activities | ||||||||
| Net income (loss) | $ | (19,334 | ) | $ | 3,725 | |||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 4,819 | 4,134 | ||||||
| Noncash lease expense | 3,663 | 3,257 | ||||||
| Amortization of debt discount and debt issuance costs | 156 | 157 | ||||||
| Equity-based compensation expense | 17,694 | 16,087 | ||||||
| Deferred income taxes | (2,539 | ) | 1,658 | |||||
| Loss on disposal of property and equipment | 19 | 18 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | 366 | 1,740 | ||||||
| Inventories | 7,714 | (21,010 | ) | |||||
| Assets for recovery | 779 | (136 | ) | |||||
| Income taxes (receivable) payable | 2,752 | (4,364 | ) | |||||
| Prepaid and other current assets | (1,803 | ) | 694 | |||||
| Accounts payable | 3,580 | 1,148 | ||||||
| Accrued expenses and other current liabilities | 918 | 1,691 | ||||||
| Operating lease liabilities | (3,317 | ) | (2,608 | ) | ||||
| Other noncurrent liabilities | (46 | ) | 8 | |||||
| Net cash provided by operating activities | 15,421 | 6,199 | ||||||
| Cash Flows from Investing Activities | ||||||||
| Capitalized software development costs | (2,055 | ) | (2,500 | ) | ||||
| Purchases of property and equipment | (1,880 | ) | (2,511 | ) | ||||
| Other | (68 | ) | (112 | ) | ||||
| Net cash used in investing activities | (4,003 | ) | (5,123 | ) | ||||
| Cash Flows from Financing Activities | ||||||||
| Proceeds from borrowings on revolving line of credit | 13,000 | 30,000 | ||||||
| Repayments on revolving line of credit | (30,000 | ) | (30,000 | ) | ||||
| Proceeds from issuance of common stock under employee stock purchase plan (ESPP) | 487 | - | ||||||
| Principal payments on finance lease obligations | (983 | ) | (786 | ) | ||||
| Payment of offering costs related to the IPO | - | (832 | ) | |||||
| Withholding tax payments related to vesting of RSUs | (1,629 | ) | (1,115 | ) | ||||
| Other | (6 | ) | (32 | ) | ||||
| Net cash used in financing activities | (19,131 | ) | (2,765 | ) | ||||
| Net decrease in cash, cash equivalents and restricted cash | (7,713 | ) | (1,689 | ) | ||||
| Cash, cash equivalents and restricted cash at beginning of period | 10,219 | 11,908 | ||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 2,506 | $ | 10,219 | ||||
| Reconciliation of cash, cash equivalents and restricted cash | ||||||||
| Cash and cash equivalents | $ | 2,506 | $ | 10,219 | ||||
| Restricted cash | - | - | ||||||
| Total cash, cash equivalents and restricted cash, end of period | $ | 2,506 | $ | 10,219 | ||||
Webcast & Conference Call Information
The Company will host a conference call and live webcast with the investment community at 5:00 p.m. Eastern Time today, Wednesday, March 6, 2024, to discuss its fourth quarter and fiscal year 2023 financial results. The live webcast will be accessible through the Investor Relations section of the Company's website at https://investors.lulus.com/. To access the call through a conference line, dial 1-877-407-0792 (in the U.S.) or 1-201-689-8263 (international callers). A replay of the conference call will be posted shortly after the call and will be available for seven days following the call. To access the replay, dial 1-844-512-2921 (in the U.S.) or 1-412-317-6671 (international callers). The access code for the replay is 13743842.
About Lulus
Headquartered in California and serving millions of customers worldwide, Lulus is an attainable luxury fashion brand for women, offering modern, unapologetically feminine designs at accessible prices for all of life's fashionable moments. Our aim is to make every woman feel beautiful, celebrated and as if she's the most special version of herself for every occasion - from work desk to dream date or cozied up on the couch to the spotlight of her wedding day. Founded in 1996, Lulus delivers fresh styles to consumers daily, using direct consumer feedback and insights to refine product offerings and elevate the customer experience. Lulus' world class personal stylists, bridal concierge, and customer care team share an unwavering commitment to elevating style and quality and bring exceptional customer service and personalized shopping to customers around the world. Follow @lulus on Instagram and @lulus on TikTok. Lulus is a registered trademark of Lulu's Fashion Lounge, LLC. All rights reserved.
Forward-Looking Statements
This press release contains "forward-looking statements" within the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical or current fact included in this press release are forward-looking statements, including but not limited to statements regarding our opportunities for growth in the coming quarters and our financial outlook for the fiscal year ending December 29, 2024. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause Lulus' actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including but not limited to the following: risks related to our operations and financial results; our ability to successfully maintain our desired merchandise assortment or manage our inventory effectively; demand for our products, including our ability to anticipate, identify, measure, and respond quickly to fashion trends, customer preferences and demands; our ability to anticipate, measure and establish appropriate policies for customer merchandise returns; general economic conditions, including inflation; our fluctuating operating results; seasonality in our business; our ability to acquire products on reasonable terms; our e-commerce business model; our ability to attract and retain customers in a cost effective manner; the strength of our brand; competition; fraud; system interruptions; system security risks including security breaches; and our ability to fulfill orders. These and other important factors discussed under the caption "Risk Factors" in Lulus' Annual Report on Form 10-K for the fiscal year ended December 31, 2023, and its other filings with the Securities and Exchange Commission could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any such forward-looking statements represent management's estimates as of the date of this press release. While Lulus may elect to update such forward-looking statements at some point in the future, it disclaims any obligation to do so, except as required by law, even if subsequent events cause its views to change.
Use of Non-GAAP Financial Measures and Other Operating Metrics
To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"), we reference in this press release and the accompanying tables the following non-GAAP financial measures: Adjusted EBITDA, Adjusted EBITDA Margin, Net Debt and Free Cash Flow. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP, and our non-GAAP measures may be different from non-GAAP measures used by other companies. We use these non-GAAP financial measures to evaluate our operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. Our management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain expenses that may not be indicative of our ongoing core operating performance. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when analyzing historical performance and liquidity and when planning, forecasting, and analyzing future periods. For a reconciliation of these non-GAAP financial measures to GAAP measures, please see the tables captioned "Reconciliation of Non-GAAP Financial Measures" included at the end of this release. Definitions of our non-GAAP financial measures and other operating metrics are presented below. A reconciliation of Adjusted EBITDA guidance to net (loss) income on a forward-looking basis cannot be provided without unreasonable efforts, as we are unable to provide reconciling information with respect to equity-based compensation expense and income tax, all of which are adjustments to Adjusted EBITDA. We also use certain key operating metrics, including Gross Margin, Active Customers, Average Order Value, and Total Orders Placed.
Adjusted EBITDA
Adjusted EBITDA is a non-GAAP financial measure that we calculate as net (loss) income before interest expense, income taxes, depreciation and amortization, adjusted to exclude the effects of equity-based compensation expense. Adjusted EBITDA is a key measure used by management to evaluate our operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. In particular, the exclusion of certain expenses in calculating Adjusted EBITDA facilitates operating performance comparisons on a period-to-period basis and, in the case of exclusion of the impact of equity-based compensation, excludes an item that we do not consider to be indicative of our core operating performance.
Adjusted EBITDA Margin
Adjusted EBITDA Margin is a non-GAAP financial measure that we calculate as Adjusted EBITDA (as defined above) as a percentage of our net revenue.
Active Customers
We define Active Customers as the number of customers who have made at least one purchase across our platform in the prior 12-month period. We consider the number of Active Customers to be a key performance metric on the basis that it is directly related to consumer awareness of our brand, our ability to attract visitors to our digital platform, and our ability to convert visitors to paying customers. Active Customer counts are based on de-duplication logic using customer account and guest checkout name, address, and email information.
Average Order Value
We define Average Order Value ("AOV") as the sum of the total gross sales before returns across our platform in a given period, plus shipping revenue, less discounts and markdowns, divided by the Total Orders Placed (as defined below) in that period. AOV reflects average basket size of our customers. AOV may fluctuate as we continue investing in the development and introduction of new Lulus merchandise and as a result of our promotional discount activity.
Free Cash Flow
Free Cash Flow is a non-GAAP financial measure that we calculate as net cash provided by (used in) operating activities less cash used for capitalized software development costs and purchases of property and equipment. We view Free Cash Flow as an important indicator of our liquidity because it measures the amount of cash we generate.
Gross Margin
We define Gross Margin as gross profit as a percentage of our net revenue. Gross profit is equal to our net revenue less cost of revenue. Certain of our competitors and other retailers report cost of revenue differently than we do. As a result, the reporting of our gross profit and Gross Margin may not be comparable to other companies.
Net Debt
Net Debt is defined as total debt, which currently consists of the revolving line of credit, less cash and cash equivalents. We consider Net Debt to be an important supplemental measure of our financial position, which allows us to analyze our leverage.
Total Orders Placed
We define Total Orders Placed as the number of customer orders placed across our platform during a particular period. An order is counted on the day the customer places the order. We do not adjust the number of Total Orders Placed for any cancellation or return that may have occurred subsequent to a customer placing an order. We consider Total Orders Placed as a key performance metric on the basis that it is directly related to our ability to attract and retain customers as well as drive purchase frequency. Total Orders Placed, together with AOV, is an indicator of the net revenue we expect to generate in a particular period.
| LULU'S FASHION LOUNGE HOLDINGS, INC. KEY OPERATING AND FINANCIAL METRICS (Unaudited) | ||||||||||||||||
| Fiscal Quarters Ended | Fiscal Years Ended | |||||||||||||||
| December 31, 2023 | January 1, 2023 | December 31, 2023 | January 1, 2023 | |||||||||||||
| (13 weeks) | (13 weeks) | (52 weeks) | (52 weeks) | |||||||||||||
| (In thousands, except Average Order Value and percentages) | ||||||||||||||||
| Gross Margin | 39.1 | % | 37.3 | % | 41.7 | % | 43.5 | % | ||||||||
| Net income (loss) | $ | (7,230 | ) | $ | (5,246 | ) | $ | (19,334 | ) | $ | 3,725 | |||||
| Adjusted EBITDA | $ | (1,976 | ) | $ | (972 | ) | $ | 3,231 | $ | 29,096 | ||||||
| Adjusted EBITDA Margin | (2.6 | )% | (1.1 | )% | 0.9 | % | 6.6 | % | ||||||||
| Average Order Value | $ | 136 | $ | 119 | $ | 133 | $ | 131 | ||||||||
| Active Customers | 2,830 | 3,223 | 2,830 | 3,223 | ||||||||||||
Note: Refer to "Use of Non-GAAP Financial Measures and Other Operating Metrics" section above for definitions of these metrics.
LULU'S FASHION LOUNGE HOLDINGS, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(Unaudited)
A reconciliation to non-GAAP Net Debt from Total Debt as of December 31, 2023, and January 1, 2023, respectively, is as follows:
| As of | ||||||||
| December 31, 2023 | January 1, 2023 | |||||||
| (52 weeks) | (52 weeks) | |||||||
| (In thousands) | ||||||||
| Total Debt (1) | $ | (8,000 | ) | $ | (25,000 | ) | ||
| Cash and cash equivalents | 2,506 | 10,219 | ||||||
| Net Debt | $ | (5,494 | ) | $ | (14,781 | ) | ||
(1) Consists of the revolving line of credit
A reconciliation to non-GAAP Adjusted EBITDA from net (loss) income for the thirteen and fifty-two weeks ended December 31, 2023 and January 1, 2023 is as follows:
| Fiscal Quarters Ended | Fiscal Years Ended | |||||||||||||||
| December 31, 2023 | January 1, 2023 | December 31, 2023 | January 1, 2023 | |||||||||||||
| (13 weeks) | (13 weeks) | (52 weeks) | (52 weeks) | |||||||||||||
| (In thousands, except percentages) | ||||||||||||||||
| Net income (loss) | $ | (7,230 | ) | $ | (5,246 | ) | $ | (19,334 | ) | $ | 3,725 | |||||
| Excluding: | ||||||||||||||||
| Depreciation and amortization | 1,273 | 1,154 | 4,819 | 4,134 | ||||||||||||
| Interest expense | 337 | 409 | 1,728 | 1,103 | ||||||||||||
| Income tax provision (benefit) | (684 | ) | (1,131 | ) | (1,676 | ) | 4,047 | |||||||||
| Equity-based compensation expense (1) | 4,328 | 3,842 | 17,694 | 16,087 | ||||||||||||
| Adjusted EBITDA | $ | (1,976 | ) | $ | (972 | ) | $ | 3,231 | $ | 29,096 | ||||||
| Net income (loss) margin | (9.6 | )% | (5.8 | )% | (5.4 | )% | 0.8 | % | ||||||||
| Adjusted EBITDA margin | (2.6 | )% | (1.1 | )% | 0.9 | % | 6.6 | % | ||||||||
(1) The thirteen weeks ended December 31, 2023 and January 1, 2023 include equity-based compensation expense for restricted stock unit ("RSU") awards granted during the period, as well as equity-based awards granted in prior periods. The fifty-two weeks ended December 31, 2023 include equity-based compensation expense for performance stock units and RSU awards granted during the period, accelerated expense associated with the voluntary forfeiture of stock options, and equity-based awards granted in prior periods. The fifty-two weeks ended January 1, 2023 include equity-based compensation expense for RSU awards granted during the period, as well as equity-based awards granted in prior periods.
A reconciliation to non-GAAP Free Cash Flow from net cash provided by (used in) operating activities for the thirteen and fifty-two weeks ended December 31, 2023 and January 1, 2023 is as follows:
| Fiscal Quarters Ended | Fiscal Years Ended | |||||||||||||||
| December 31, 2023 | January 1, 2023 | December 31, 2023 | January 1, 2023 | |||||||||||||
| (13 weeks) | (13 weeks) | (52 weeks) | (52 weeks) | |||||||||||||
| Net cash provided by (used in) operating activities | $ | (5,679 | ) | $ | (10,134 | ) | $ | 15,421 | $ | 6,199 | ||||||
| Capitalized software development costs | (505 | ) | (631 | ) | (2,055 | ) | (2,500 | ) | ||||||||
| Purchases of property and equipment | (487 | ) | (609 | ) | (1,880 | ) | (2,511 | ) | ||||||||
| Free Cash Flow | $ | (6,671 | ) | $ | (11,374 | ) | $ | 11,486 | $ | 1,188 | ||||||
Contact
Abbygail Reyes
Vice President, Communications
investors@lulus.com
