Q1 2022 LTM* Total Net Revenue
of $19.7 Million.
Total and
E-commerce Q1 Net Revenue Up 65% and 100%,
Respectively.
E-commerce Penetration was 73% of Total Net
Revenue in Q1 2022.
AOV increased 9% to $915.
MONTREAL, May 13, 2022
/CNW/ - LXRandCo, Inc. ("LXR" or the "Company") (TSX:
LXR) (TSX: LXR.WT), a North American socially responsible,
digital-first omni-channel retailer of authenticated pre-owned
handbags and personal accessories, today reported its financial
results for the first quarter ended March
31, 2022 ("Q1 2022").
For the last twelve-month period ("LTM") ending
March 31, 2022, total net revenue was
$19.7 million, including LTM
e-commerce net revenue of $12.0
million, which represented an increase of 92% and 140%,
respectively, over the same period last year. The Company's full
year total net revenue target for 2022 is between $25 million and $30
million.
Provided below are the financial highlights and a
discussion of our financial results for the three–months period
ended March 31, 2022, which are to be
read in conjunction with the Company's unaudited interim condensed
consolidated financial statements and the Company's Management's
Discussion and Analysis ("MD&A") for the period.
Overview of Results for the Three-Month Period Ended
March 31, 2022 ("Q1 2022") as
Compared to the Three-Month Period Ended March 31, 2021 ("Q1 2021")
- Total net revenue increased 65.1% to $4.3 million from $2.6
million.
- E-commerce net revenue increased 100.3% to $3.1 million and e-commerce average order value
("AOV") increased 8.5% to $915
per transaction. E-commerce net revenue as a proportion of total
net revenue ("E-commerce penetration") increased to 73.3% versus
60.4%.
- Retail net revenue was $1.1
million versus $1.0 million,
an increase of 11.3%. At quarter-end, we had ten stores in
operation as compared to four in Q1 2021. As at March 31, 2022, all our ten stores were in
operation.
- Gross margin increased to 35.3% as compared to 33.0%.
- Selling, general and administrative ("SG&A")
expenses increased by 61.3% to $2.0
million, representing 46.6% of net revenue, from
$1.2 million, or 47.7% of net
revenue. SG&A expenses in Q1 2021 included the benefits of
pandemic-related government wage subsidies. Excluding these
subsidies, Q1 2022 SG&A increased 43.4% versus Q1 2021.
- Adjusted Net loss (a non-IFRS measure) was $0.8 million versus a loss of $1.0 million.
- Adjusted EBITDA (a non-IFRS measure) was a loss of $0.6 million versus a loss of $0.7 million.
- Free Cash Flow (a non-IFRS measure) was negative $0.5 million as compared to negative $1.6 million.
- Cash availability at the end of Q1 2022 was $3.7 million as compared to $3.8 million in Q4 2021.
_______________________________
|
* Last twelve months ending March 31,
2022.
|
Discussion of the Three-Month Periods Ended March 31, 2022 and 2021
Unless otherwise indicated, all amounts are expressed in
Canadian dollars. Certain metrics, including those expressed on an
adjusted basis, are non-IFRS measures. See "Non-IFRS Measures"
further below. For a reconciliation of non-IFRS measures to their
most directly comparable measure calculated in accordance with
IFRS, see "Select Consolidated Financial Information" further
below.
Net Revenue
For the three-month period ended March
31, 2022, total net revenue increased by 65.1% to
$4.3 million from $2.6 million in Q1 2021. During this period,
approximately 73.3% of our total net revenue was generated from
e-commerce and 26.7% from retail activities (stores and wholesale
channels combined), as compared to 60.4% and 39.6%, respectively,
in Q1 2021.
During this period, approximately 66.5% of our net revenue was
generated in the U.S., with the balance coming from Canada, as compared to 74.9% from the U.S. in
Q1 2021. This shift in revenue mix is explained primarily by the
significant increase in our Canadian e-commerce activities.
E-commerce
E-commerce net revenue during Q1 2022 was $3.1 million, an increase of 100.3% compared to
the prior period. E-commerce penetration increased to 73.3% versus
60.4% in Q1 2021. AOV during the period was $915, an increase of 8.5% versus the comparable
period last year.
Retail
Retail net revenue during Q1 2022 was $1.1 million, an increase of 11.3% compared to
$1.0 million in Q1 2021. The increase
reflects the partial recovery of our retail activities from the
adverse economic impact of COVID-19 on customer foot traffic and
store opening restrictions.
Our store network consisted of ten stores, of which all were
open in Q1 2022, compared to ten stores as at March 31, 2021, of which four were open. During
Q1 2022, we did not open or permanently close any store
locations.
Gross Profit & Gross Profit Margin
Gross profit in Q1 2022 increased 76.3% to $1.5 million as compared to $0.9 million in Q1 2021. The increase in gross
profit is attributable to the increase in total net revenue, which
grew 65.1%, and to a higher gross margin over this period.
Gross margin in Q1 2022, came in at 35.3% compared to 33.0% in
Q1 2021, primarily due to a more profitable revenue mix made up of
higher e-commerce sales which enjoy typically higher gross margin
and to greater efficiencies in inventory management and product
sourcing.
SG&A Expenses
In Q1 2022, SG&A expenses increased by 61.3% to $2.0 million, compared to $1.2 million in Q1 2021. This net increase of
$0.8 million in expense was primarily
growth-related and due to higher advertising and promotion spend
which increased 68% to $0.4 million
as compared to Q1 2021 and to higher wages and salaries from
headcount additions, which increased by 60% to $1.0 million. During Q1 2022, our ten stores were
in operation as compared to four stores in operation in Q1 2021
which, in turn, increased store related wages and salaries and
licensing fees.
In Q1 2021, the Company recognized approximately $0.2 million in COVID-19 related payroll
subsidies from the Federal Government's Canadian Emergency Wage
Subsidy program. These subsidies, which were not available in
2022, were recorded as a reduction in the associated personnel
costs which the Company incurred, and were recognized as a
reduction in wages, salaries and employee benefits expenses.
Excluding these subsidies, Q1 2022 SG&A increased 43.4% versus
Q1 2021.
Net Loss
Despite an increase in gross profit to $1.5 million, as described above, SG&A
expense increased to $2.0 million,
which resulted in a reported Net Loss in Q1 2022 of $0.9 million as compared to a Net Loss of
$0.9 million in Q1 2021.
Adjusted Net Loss
In Q1 2022, Adjusted Net Loss was $0.8
million as compared to an Adjusted Net Loss of $1.0 million. Adjusted Net Loss as a percent of
total net revenue was 18.4% compared to 38.8% in Q1 2021. This
$0.2 million improvement was
primarily due to lower stock-based compensation expense and the
absence of pandemic-related government wage subsidies in the
period.
Adjusted EBITDA
In Q1 2022, Adjusted EBITDA improved by 21.9% to a loss of
$0.6 million as compared to an
Adjusted EBITDA loss of $0.7 million
in Q1 2021. This improvement was primarily due to lower stock-based
compensation expense and the absence of pandemic-related government
wage subsidies in the period.
Free Cash Flow
In Q1 2022, we generated negative Free Cash Flow of $0.5 million as compared to negative Free Cash
Flow of $1.6 million in Q1 2021. This
$1.1 million improvement was
primarily due to a higher relative net change in non-cash working
capital of $1.0 million. Capital
expenditures, as was the case in Q1 2021, were negligible.
Selected Consolidated Financial Information
The
following table summarizes LXR's recent results for the periods
indicated:
|
|
|
|
For the
three-month
periods ended
March 31,
Unaudited
|
|
|
|
|
|
2022
|
2021
|
|
|
|
|
|
$
|
$
|
|
Net
revenue
|
|
|
|
4,295,516
|
2,602,071
|
|
Cost of
sales
|
|
|
|
2,779,805
|
1,742,287
|
|
Gross
profit
|
|
|
|
1,515,711
|
859,784
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
|
|
2,002,452
|
1,241,274
|
|
Depreciation of
property and equipment
|
|
|
|
68,764
|
72,072
|
|
Amortization of
intangible assets
|
|
|
|
4,407
|
19,728
|
|
Results from
operating activities
|
|
|
|
(559,912)
|
(473,290)
|
|
Other income and
expenses
|
|
|
|
|
|
|
Finance
costs
|
|
|
|
141,674
|
180,642
|
|
Foreign exchange
loss
|
|
|
|
222,380
|
230,102
|
|
Net
Loss
|
|
|
|
(923,966)
|
(884,034)
|
|
|
|
|
|
|
|
|
The following table provides a reconciliation of Net Loss to
Adjusted Net Income or Adjusted Net Loss and Net Loss to EBITDA and
Adjusted EBITDA for the periods indicated:
|
|
For the three-month
periods
ended
March
31,
|
|
|
|
2022
|
2021
|
|
Reconciliation of
Net Loss to Adjusted Net Loss
|
|
$
|
$
|
|
Net Loss
|
|
(923,966)
|
(884,034)
|
|
Adjustments to Net
Loss:
|
|
|
|
|
Foreign exchange
loss
|
|
222,380
|
230,102
|
|
Stock-Based
Compensation Expense
|
|
(88,723)
|
(200,750)
|
|
Government wage subsidy
program
|
|
-
|
(154,769)
|
|
Adjusted Net
Loss
|
|
(790,309)
|
(1,009,451)
|
|
|
|
|
|
|
|
For the
three-month periods
ended
March
31,
|
|
|
|
2022
|
2021
|
|
Reconciliation of
net loss to Adjusted EBITDA
|
|
$
|
$
|
|
Net Loss
|
|
(923,966)
|
(884,034)
|
|
Add: Amortization and
depreciation expense
|
|
73,171
|
(884,034)
|
|
Add: Finance
costs
|
|
141,674
|
180,642
|
|
EBITDA
|
|
(709,121)
|
(611,592)
|
|
|
|
|
|
|
Adjustments to
EBITDA:
|
|
|
|
|
Foreign exchange
loss
|
|
222,380
|
230,102
|
|
Gain on disposals of
property and equipment
|
|
—
|
—
|
|
Stock-based
compensation expense
|
|
(88,723)
|
(200,750)
|
|
Government wage subsidy
program
|
|
-
|
(154,769)
|
|
Adjusted
EBITDA
|
|
(575,464)
|
(737,009)
|
|
Selected Quarterly Financial Information
The following table summarizes certain of our financial results
for the most recently completed eight quarters for which financial
statements have been prepared by us as a reporting issuer. This
unaudited quarterly information has been prepared in accordance
with IFRS. Due to the impact of COVID-19 and other factors such as
seasonality, the results of operations for any quarter are not
necessarily indicative of the results of operations for the full
year.
($)
|
|
|
Consolidated
statements of loss
|
Q1-2022
|
Q4-2021
|
Q3-2021
|
Q2-2021
|
Q1-2021
|
Q4-2020
|
Q3-2020
|
Q2-2020
|
Total net
revenue
|
4,295,516
|
6,415,527
|
4,987,628
|
4,026,028
|
2,602,071
|
3,391,813
|
2,857,718
|
1,430,284
|
E-commerce
revenue
|
3,149,395
|
3,958,670
|
2,506,850
|
2,522,682
|
1,572,640
|
1,715,804
|
880,373
|
807,954
|
E-commerce revenue % of
total net revenue
|
73.3%
|
61.7%
|
50.3%
|
62.7%
|
60.4%
|
50.6%
|
30.8%
|
56.5%
|
Gross margin
|
35.3%
|
37.3%
|
35.2%
|
32.8%
|
33.0%
|
32.7%
|
28.2%
|
33.6%
|
Adjusted Net (Loss)
Income
|
(790,309)
|
123,230
|
(363,117)
|
(912,914)
|
(1,009,452)
|
(887,070)
|
(746,691)
|
(934,116)
|
Adjusted
EBITDA
|
(575,464)
|
298,025
|
(166,851)
|
(684,741)
|
(737,010)
|
(708,579)
|
(372,369)
|
(643,919)
|
Adjusted EBITDA % of
total net revenue
|
(13.4%)
|
4.6%
|
(3.3%)
|
(17.0%)
|
(28.3%)
|
(20.9%)
|
(13.0%)
|
(45.0%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Run rate metrics and
growth:
|
|
|
|
|
|
|
|
|
Total net revenue –
last 12 months revenue run-rate
|
19,724,699
|
18,031,254
|
15,007,540
|
12,877,630
|
10,281,886
|
13,777,419
|
24,825,779
|
30,282,676
|
E-commerce revenue –
last 12 months revenue run-rate
|
12,137,597
|
10,560,842
|
8,317,976
|
6,691,499
|
4,976,771
|
4,379,723
|
3,839,571
|
3,944,486
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free Cash
Flow:
|
|
|
|
|
|
|
|
|
Net loss
|
(923,966)
|
(492,803)
|
59,223
|
(1,580,635)
|
(884,034)
|
(2,208,618)
|
(2,786,350)
|
(1,741,391)
|
Add: non-cash
items
|
(11,095)
|
724,391
|
(412,761)
|
889,543
|
(94,643)
|
137,960
|
1,135,973
|
24,825
|
Add: Net change in
non-cash working capital
|
393,568
|
1,221,311
|
(1,821,998)
|
(531,266)
|
(628,959)
|
1,435,622
|
1,712,028
|
994,985
|
Cash flows
provided/(used) in operating activities
|
(541,493)
|
1,452,899
|
(2,175,536)
|
(1,222,358)
|
(1,607,636)
|
(635,036)
|
61,651
|
(721,581)
|
Less: acquisition of
property and equipment
|
(4,435)
|
(4,283)
|
(15,436)
|
(9,998)
|
(14,593)
|
(4,171)
|
0
|
0
|
Free Cash
Flow
|
(545,928)
|
1,448,616
|
(2,190,972)
|
(1,232,356)
|
(1,622,229)
|
(639,207)
|
61,651
|
(721,581)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liquidity:
|
|
|
|
|
|
|
|
|
Cash
availability
|
3,662,768
|
3,810,767
|
2,640,169
|
4,481,560
|
4,775,470
|
7,334,425
|
1,213,542
|
2,567,913
|
Working
capital
|
6,833,114
|
7,052,502
|
7,083,280
|
7,033,183
|
7,133,717
|
8,949,997
|
2,877,864
|
4,523,360
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capitalization:
|
|
|
|
|
|
|
|
|
Shares
outstanding
|
92,783,155
|
92,783,155
|
92,783,155
|
92,783,155
|
92,783,155
|
92,783,155
|
32,783,145
|
32,783,145
|
Closing share
price
|
0.11
|
0.14
|
0.10
|
0.13
|
0.12
|
0.25
|
0.20
|
0.25
|
Market
capitalization
|
10,206,147
|
12,989,642
|
9,278,316
|
12,061,810
|
11,133,979
|
22,731,873
|
6,556,629
|
8,195,786
|
Add: Total
debt
|
6,526,453
|
5,999,440
|
6,272,286
|
5,758,443
|
4,814,459
|
5,733,129
|
5,173,259
|
5,438,870
|
Less: Cash
|
3,570,681
|
3,695,677
|
2,603,395
|
4,315,918
|
4,653,792
|
7,289,957
|
501,033
|
797,777
|
Enterprise value
(EV)
|
13,161,919
|
15,293,405
|
12,947,207
|
13,504,335
|
11,294,646
|
21,175,045
|
11,228,855
|
12,836,879
|
Multiple of EV/Last 12
months revenue
|
0.67x
|
0.85x
|
0.86x
|
1.05x
|
1.10x
|
1.54x
|
0.45x
|
0.42x
|
About LXR
LXR is a socially responsible, digital-first omni-channel
retailer of authenticated pre-owned handbags and personal
accessories. Since 2010, we have been providing consumers with
authenticated branded luxury products from Hermès, Louis Vuitton, Gucci, Prada and Chanel, among
other high-quality brands, by promoting their reuse and providing
an environmentally responsible way for consumers to purchase luxury
products. We achieve this through our digital-first strategy by
selling directly to consumers through our website
at www.lxrco.com and indirectly by powering the
e-commerce and other platforms of key channel partners. Our
omni-channel model is also supported by retail "shop-in-shop"
experience centers and by wholesale activities with select retail
partners across North America.
Non-IFRS Measures
This press release refers to certain non-IFRS measures. These
measures are not recognized under IFRS, do not have a standardized
meaning prescribed by IFRS and are therefore unlikely to be
comparable to similar measures presented by other companies.
Rather, these measures are provided as additional information to
complement IFRS measures by providing further understanding of
LXR's performance and results of operations from management's
perspective. Accordingly, these measures should not be considered
in isolation nor as a substitute for analysis of LXR's financial
information reported under IFRS. Management uses non-IFRS measures
including: "EBITDA," "Adjusted EBITDA," "Adjusted Net Loss", "Free
Cash Flow", "LTM Total Net Revenue", "LTM E-commerce Net Revenue"
and "Inventory Turns". These non-IFRS measures are used to provide
investors with supplemental measures of LXR's operating performance
and thus highlight trends in LXR's business that may not otherwise
be apparent when relying solely on IFRS measures. Management
believes that securities analysts, investors and other interested
parties frequently use non-IFRS measures in the evaluation of
company performance. Management also uses non-IFRS measures in
order to facilitate operating performance comparisons from period
to period, to prepare annual operating budgets and forecasts and to
determine components of management compensation. For a definition
of EBITDA, Adjusted EBITDA, and Adjusted Net Loss, and a
reconciliation of these non-IFRS measures to IFRS measures, see the
above tables presented.
Caution Regarding Forward-Looking Statements
Certain statements in this press release are prospective in
nature and constitute forward-looking information or
forward-looking statements within the meaning of applicable
securities laws (collectively, "forward-looking statements").
Forward-looking statements generally, but not always, can be
identified by the use of forward-looking terminology such as
"outlook", "objective", "may", "could", "would", "will", "expect",
"intend", "estimate", "forecasts", "project", "seek", "anticipate",
"believes", "should", "plans" or "continue", or similar expressions
suggesting future outcomes or events and the negative of any of
these terms. Forward-looking statements in this news release
include, but are not limited to, statements concerning future
objectives and strategies to achieve those objectives, including,
without limitation, store openings and closures, as well as other
statements with respect to management's beliefs, plans, estimates
and intentions, and similar statements concerning anticipated
future events, results, outlook, circumstances, performance or
expectations that are not historical facts. Forward-looking
statements reflect management's current beliefs, expectations and
assumptions and are based on information currently available to
management, which includes assumptions about continued revenues
based on historical past performance, management's historical
experience, perception of trends and current business conditions,
expected future developments, including the Company's capacity to
secure additional financing, and other factors which management
considers appropriate. With respect to the forward-looking
statements included in this press release, management has made
certain assumptions with respect to, among other things, the
Company's ability to meet its future objectives and strategies, the
Company's ability to achieve its future projects and plans and that
such projects and plans will proceed as anticipated, the expected
growth of the Company's e-commerce revenue, the expected number and
timing of store openings, entering into new and/or expanded retail
partnerships, the Company's ability to source products, the
Company's competitive position in the vintage luxury industry, and
beliefs and intentions regarding the ownership of material
trademarks and domain names used in connection with the marketing,
distribution and sale of the Company's products as well as
assumptions concerning general economic and market growth rates,
currency exchange and interest rates and competitive intensity,
notably in the context of the current COVID-19 outbreak.
Readers are cautioned not to place undue reliance on
forward-looking statements, as there can be no assurance that the
future circumstances, outcomes or results anticipated or implied by
such forward-looking statements will occur or that plans,
intentions or expectations upon which the forward-looking
statements are based will occur.
All forward-looking statements included in and incorporated
into this press release are qualified by these cautionary
statements. Unless otherwise indicated, the forward-looking
statements contained herein are made as of the date of this press
release, and except as required by applicable law, the Company does
not undertake any obligation to publicly update or revise any
forward-looking statement, whether as a result of new information,
future events or otherwise.
Readers are cautioned that the actual results achieved will
vary from the information provided herein and that such variations
may be material. Consequently, there are no representations by LXR
that actual results achieved will be the same in whole or in part
as those set out in the forward-looking statements.
SOURCE LXRandCo, Inc.