FINANCIAL SUMMARY
Q1 2017
I.
KEY HIGHLIGHTS
•
•
•
•
•
•
•
•
Total revenue of $1.9 million, +13% to budget and +31% versus Q1 2016.
Added 7.7k new customers and repeat rates per customer were 20% higher than prior year.
HYLETE.com revenue +41% over Q1 2016 with improvements in both conversion and AOV.
Gross profit margin percentage on target and 280bps higher than Q1 2016.
Operating expenses under budget and EBITDA $116k better than plan.
Closing balance sheet cash of $1.3 million and net inventory of $1.3 million.
Two closings on Start Engine in March for total equity proceeds of over $300k.
Total commitments through mid April of over $650k; final closing to occur on April 28th.
II. SALES SUMMARY
We closed Q1 2017 with total net sales of $1.9 million, up 13% to budget and +31% ahead of
prior year. HYLETE.com continues to be our highest growth and margin channel, up 40% in Q1
with 7.7 thousand new customers added. Repeat purchases per customer increased by 20% in
Q1, driven by continued new product releases and our Spring print catalog. Our Marketplace and
B2B channels remain on target to represent approximately 10% of our total 2017 revenue.
Sales&by&Channel&($000's)
HYLETE.com
Marketplace
All&Other
Q1
2017
$&&1,718
&&&&&&&&113
&&&&&&&&&&81
$&&1,913
Q1
2017B
$&&1,509
&&&&&&&&130
&&&&&&&&&&60
$&&1,699
Q1
2016
$&&1,226
&&&&&&&&130
&&&&&&&&102
$&&1,459
+/O
+/O
2017B 2016
14%
40%
(13%) (13%)
35% (21%)
13%
31%
Note: Sales by channel are shown net of returns.
III. GROSS MARGIN and EBITDA
Our gross profit margin was 54.4% for the quarter, on plan and ahead of prior year by 280 bps.
Overall gross margin dollars are well ahead of plan, and our operating expenses came in on
budget for the quarter. As a result, our EBITDA was $116k better than plan in Q1.
Summary'P&L'($000's)
Sales
Gross'Profit
GP'%
Expenses
EBITDA
Q1
2017
$''1,913
''''1,041
54.4%
''''1,382
$''''(341)
Q1
2017B
$''1,699
''''''''926
54.5%
''''1,383
$''''(457)
Q1
2016
$''1,459
''''''''753
51.6%
''''1,188
$''''(435)
+/P
+/P
2017B 2016
13%
31%
12%
38%
(0.1%) 2.8%
0% (16%)
25%
22%
Note: EBITDA is calculated as net income plus interest, tax, depreciation and amortization.
IV. BALANCE SHEET and CASH FLOW
We closed Q1 with $1.26 million in cash and $1.27M in net inventory. Our equity offering on
Start Engine generated $315k in new equity proceeds through two initial closings in March (the
final closing is schedule for April 28 ). Our cash position is $440k ahead of plan through Q1 due
to the early equity proceeds, as well as our strong revenue growth and improved EBITDA.
th
Balance)Sheet)($000's)
Cash
Inventory)(net)
AP
Working)Capital
Debt
Equity
Months'on'Hand
DPO
Q1
2017
$))1,259
))))1,271
))))))))449
))))1,734
))))2,691
$))))(315)
'''''''''2.6
'''''''49.4
Q1
2017B
$)))))819
))))1,109
))))))))300
))))1,337
))))2,639
$))))(695)
'''''''''3.0
'''''''32.2
Q1
2016
$))))))))96
))))2,024
))))))))710
))))))(536)
))))1,792
$))))))(46)
'''''''''1.7
'''''''73.9
+/=
+/=
2017B 2016
54% 1217%
15% (37%)
50% (37%)
30% (424%)
2%
50%
(55%)
=
(15%)
51%
53% (33%)
Cash%Flows%($000's)
Beginning%Cash
Cash%from%Operations
Cash%from%Investing
Cash%from%Financing
Cash%On%Hand
Q1
2017
$%%1,175
%%%%%%(222)
%%%%%%%%%(85)
%%%%%%%%391
$%%1,259
Q1
2017B
$%%1,229
%%%%%%(363)
%%%%%%%%%(68)
%%%%%%%%%%20
$%%%%%819
Q1
2016
$%%%%%672
%%%%%%(303)
%%%%%%%%%(10)
%%%%%%(264)
$%%%%%%%%96
+/L
+/L
2017B 2016
(4%)
75%
(39%) (27%)
26% 786%
L (248%)
54% 1217%
V. MANAGEMENT 2017 OUTLOOK
Our 2017 budget targets $10.0 million in revenue with an EBITDA loss of $1.0 million. The
budget requires a minimum of $1.0 million in additional capital to be sourced through additional
equity and/or debt. As of mid April, we have received over $650k in total equity commitments
through Start Engine, and we expect to completely fill the full $1.0M offering by the final closing.
We are 13% ahead of budget and remain on plan to reach our initial targets for the year.
Income'Statement
Q1
2017
Q1
2017B
Q1
2016
Net$Sales:
HYLETE.com
Marketplace
All3Other3Channels
$3331,718,334
333333333113,196
3333333333380,997
$3331,508,930
33333333130,437
3333333333360,000
$3331,225,765
33333333130,437
33333333102,298
$333333209,405
3333333333(17,241)
3333333333320,997
14% $333333492,569
(13%) 3333333333(17,241)
35% 3333333333(21,302)
40%
(13%)
(21%)
Total$Net$Sales
$3331,912,527
$3331,699,367
$3331,458,501
$333333213,160
13% $333333454,027
31%
333333333871,694
33333333773,011
33333333705,644
3333333333398,684
13% 333333333166,050
24%
333331,040,833 33333333926,356 33333333752,857
54.4%
54.5%
51.6%
333333333114,477
10.1%
12% 333333333287,977
38%
333333333286,685
3333333333352,532
333333333539,193
333333333227,439
333333333275,902
33333333261,863
3333333333345,607
33333333547,721
33333333263,456
33333333264,598
33333333245,141
3333333333340,562
33333333493,179
33333333207,621
33333333201,137
3333333333324,822
33333333333336,925
333333333333(8,527)
3333333333(36,017)
3333333333311,305
Total$Operating$Expenses
333331,381,752
333331,383,245
333331,187,641
EBITDA
Cost3of3Goods3Sold
Gross$Profit
Gross%Margin%%
Distribution3
Sales
Marketing
Operations
G&A
Depreciation
Interest3Expense
Net$Income
+/@$2017B
+/@
+@$2016A
+/@
2.8%
3333333333341,545
3333333333311,970
3333333333346,014
3333333333319,817
3333333333374,765
17%
30%
9%
10%
37%
333333333333(1,493)
(0%) 333333333194,111
16%
3333333(340,919) 3333333(456,888) 3333333(434,784)
333333333115,970
(25%) 3333333333393,865
(22%)
3333333333(52,297) 333333333(49,493) 333333333(39,898)
3333333(198,029) 3333333(145,998) 333333333(61,743)
333333333333(2,804)
3333333333(52,031)
6% 3333333333(12,400)
36% 3333333(136,286)
31%
221%
$33333(591,245) $33333(652,380) $33333(536,425)
$33333333361,135
(9%) $3333333(54,820)
10%
9%
15%
(2%)
(14%)
4%
Balance'Sheet
March
2017
March
2017B
March
2016
$-1,259,035
---------20,021
----1,271,239
-------256,179
----2,806,474
$-----819,041
---------44,776
----1,108,933
-------287,582
----2,260,332
$-------95,581
---------25,051
----2,023,504
---------76,033
----2,220,170
$-----439,994
54%
--------(24,755)
(55%)
-------162,307
15%
--------(31,404)
(11%)
-------546,142 -----------0
-------324,066
-------104,136
---------------N
-------284,116
-------129,271
---------------N
-------326,895
-------195,831
---------11,350
---------39,950
--------(25,135)
---------------N
14% ----------(2,829)
(19%) --------(91,694)
0% --------(11,350)
$-3,234,677
$-2,673,719
$-2,754,246
$-----560,957
21% $-----480,431
Current/Liabilities
Accounts-Payable
Accrued-Liabilities
Deferred-Revenue
Short-Term-Debt
Total/Current/Liabilities
$-----449,339
-------237,637
-------172,081
-------213,260
----1,072,317
$-----300,051
-------259,089
-------171,028
-------193,571
-------923,739
$-----710,485
-------260,242
---------37,865
----1,747,118
----2,755,710
$-----149,287
--------(21,451)
-----------1,053
---------19,689
-------148,577
50%
(8%)
1%
10%
16%
Long/Term/Liabilities
Equipment-Financing
Long-Term-Debt
Total/LT/Liabilities
---------26,188
----2,451,251
----2,477,439
---------45,947
----2,399,152
----2,445,099
---------44,624
---------------N
---------44,624
--------(19,759)
---------52,099
---------32,340
Total/Liabilities
----3,549,756
----3,368,839
----2,800,333
-------180,917
Equity
Common-Stock
Preferred-Stock
Retained-EarningsTotal/Equity
----1,083,562
----4,357,758
--(5,756,399)
------(315,079)
-------764,658
----4,357,758
--(5,817,535)
------(695,119)
-------132,011
----3,429,678
--(3,607,777)
--------(46,088)
-------318,904
---------------N
---------61,136
-------380,040
Total/Liabilities/and/Equity
$-3,234,677
$-2,673,719
$-2,754,246
$-----560,957
+/./2017B
+/.
+./2016A
+/.
ASSETS
Current/Assets:
Cash
Accounts-Receivable
Inventory,-net
Prepaid-Assets
Total
Fixed-Assets,-net
Intangible-Assets,-net
Other-Long-Term-Assets
Total/Assets
$--1,163,454
1217%
----------(5,030)
(20%)
------(752,265)
(37%)
-------180,146
237%
-------586,305 -----------0
(1%)
(47%)
(100%)
17%
LIABILITIES
$----(261,147)
--------(22,605)
-------134,216
---(1,533,858)
---(1,683,393)
(37%)
(9%)
354%
(88%)
(61%)
(43%) --------(18,436)
2% ----2,451,251
0.0132 ----2,432,816
(41%)
0%
54.518
5% -------749,423
42%
0%
(1%)
(55%)
-------951,551
-------928,080
---(2,148,622)
------(268,992)
21% $-----480,431
27%
721%
27%
60%
584%
17%
Cash%Flow%Statement
Q1
2017
Q1
2017B
Q1
2016
+/G*2017B
+/G
+G*2016A
+/G
Operating*Activities:
Net$Income
$$$$$$(591,245) $$$$$$(652,380) $$$$$$(536,425)
$$$$$$$$$$61,135
(9%) $$$$$$$$(54,820)
10%
Depreciation$&$Amortization
Accounts$Receivable
Inventory
Prepaid$Assets
Accounts$Payable
Accrued$Expenses
Deferred$Revenue
Cash*From*Operating*Activities
$$$$$$$$$$$52,297
$$$$$$$$$$$27,095
$$$$$$$$$252,704
$$$$$$$$$$$43,200
$$$$$$$$$$(28,021)
$$$$$$$$$$(23,535)
$$$$$$$$$$$45,488
$$$$$$$(222,017)
$$$$$$$$$$$49,493
$$$$$$$$$$$$$2,340
$$$$$$$$415,011
$$$$$$$$$(42,194)
$$$$$$$(177,309)
$$$$$$$$$(10,117)
$$$$$$$$$$$52,468
$$$$$$$(362,687)
$$$$$$$$$$$39,898
$$$$$$$$$$$58,201
$$$$$$$$485,859
$$$$$$$$$$$46,061
$$$$$$$(334,661)
$$$$$$$$$(95,734)
$$$$$$$$$$$33,940
$$$$$$$(302,861)
$$$$$$$$$$$$$2,804
$$$$$$$$$$$24,755
$$$$$$$(162,307)
$$$$$$$$$$$85,394
$$$$$$$$$149,287
$$$$$$$$$$(13,419)
$$$$$$$$$$$$(6,980)
$$$$$$$$$140,670
6%
1058%
(39%)
(202%)
(84%)
133%
(13%)
(39%)
$$$$$$$$$$$12,400
$$$$$$$$$$(31,106)
$$$$$$$(233,155)
$$$$$$$$$$$$(2,861)
$$$$$$$$$306,639
$$$$$$$$$$$72,199
$$$$$$$$$$$11,548
$$$$$$$$$$$80,844
31%
(53%)
(48%)
(6%)
(92%)
(75%)
34%
(27%)
Investing*Activities:
Fixed$Assets
Intangible$Assets
Shareholder$Note
Cash*From*Investing*Activities
$$$$$$$$$$(80,254)
$$$$$$$$$$$$(4,865)
$$$$$$$$$$$$$$$$$U
$$$$$$$$$$(85,119)
$$$$$$$$$(37,500)
$$$$$$$$$(30,000)
$$$$$$$$$$$$$$$$U
$$$$$$$$$(67,500)
$$$$$$$$$$$$$$$$$$$$0
$$$$$$$$$$$(9,612)
$$$$$$$$$$$$$$$$U
$$$$$$$$$$$(9,612)
$$$$$$$$$$(42,754)
$$$$$$$$$$$25,135
$$$$$$$$$$$$$$$$$U
$$$$$$$$$$(17,619)
114%
(84%)
0%
26%
$$$$$$$$$$(80,254)
$$$$$$$$$$$$$4,747
$$$$$$$$$$$$$$$$$U
$$$$$$$$$$(75,508)
0%
(49%)
0%
786%
Financing*Activities:
Debt$Borrowings/(Payments)
New$Stock$Issuance
Distribution$to$Shareholders
Cash*From*Financing*Activities
$$$$$$$$$$$72,249
$$$$$$$$$318,904
$$$$$$$$$$$$$$$$$U
$$$$$$$$$391,153
$$$$$$$$$$$20,220
$$$$$$$$$$$$$$$$U
$$$$$$$$$$$$$$$$U
$$$$$$$$$$$20,220
$$$$$$$(263,563)
$$$$$$$$$$$$$$$$U
$$$$$$$$$$$$$$$$U
$$$$$$$(263,563)
$$$$$$$$$$$52,028
$$$$$$$$$318,904
$$$$$$$$$$$$$$$$$U
$$$$$$$$$370,933
257%
0%
0%
1834%
$$$$$$$$$335,811
$$$$$$$$$318,904
$$$$$$$$$$$$$$$$$U
$$$$$$$$$654,715
(127%)
0%
0%
(248%)
Increase/(Decrease)*in*Cash
$$$$$$$$$$$84,016
$$$$$$$(409,967) $$$$$$$(576,036)
$$$$$$$$$493,983
(120%) $$$$$$$$$660,052
(115%)
Cash*Beginning*of*Period
$$$$$1,175,019
$$$$$1,229,008
$$$$$$$$671,617
$$$$$$$$$$(53,989)
(4%) $$$$$$$$$503,402
75%
Cash,*End*of*Period
$$$$1,259,035
$$$$$$$819,041
$$$$$$$$$95,581
$$$$$$$439,994
54% $$$$1,163,454
1217%