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Junior Consumer Manufacturer Announces Strong Q2 Revenue Results, Including Positive EBITDA
By: AllPennyStocks.com News
February 15, 2012
There’s not much denying that there has been a trend shift in sexual awareness and wellness over the past few decades. It wasn’t that many years ago that most things related to sex were considered taboo, but thanks to increased efforts to promote sexual wellness in schools and mainstream media breaking ancient molds about how sex is portrayed, there has been quite a shift in modality.
Plenty of companies have profited handsomely from sexual wellness no longer being relegated to the bottom shelves or hidden behind counters at stores. Condom wrappers that were once extremely plain as to not embarrass a purchaser are now in the open in prime shelf space in bright colors. The new marketability has helped line the coffers of major companies such as Trojan condom maker Church & Dwight Co., Inc. (NYSE:CHD) and Johnson & Johnson (NYSE:JNJ), the name behind the K-Y Brand of lubricants that now graces vaunted television commercial space.
There’s a smaller, well-established company that has turned the corner to profitability in the industry that has been sneaking under the radar of investors. Liberator, Inc. (OTCBB:LUVU), maker of a full-line of sexual awareness products marketed under the “Liberator® brand, released results from its 2012 fiscal second quarter ended December 31, 2011 yesterday after the bell that command a closer look.
The results show quite a transition for the company that has had its products featured in popular media outlets such as Men`s Health, Rolling Stone, Redbook, Maxim, Cosmopolitan, the Dr. Oz Show, Meet the Fockers, Burn after Reading and the Real Housewives of Atlanta. Operating through its wholly-owned subsidiary, OneUp Innovations, Liberator was able to trumpet quite a few accomplishments recently. Just a few highlights from the financial report showed a 16% increase in revenue for the quarter to $4.3 million compared to $3.7 million in the year prior; gross profits of $1.3 million in 2012 compared to Q2 2011’s $935,000; net income of $40,000 in the latest quarter compared to a loss of $361,000 the year prior; and a positive adjusted EBITDA of $194,000 compared to a loss of $296,000 in Q2 2011.
“We are very pleased by the shift to a positive EBITDA, the increased revenue and the overall direction of our company at this point,” said Liberator Chief Financial Officer Ronald Scott in an exclusive interview with AllPennyStocks.com. “The sexual wellness industry is really still just gaining traction. The Baby Boomers really ushered in the industry and experts seem to believe that it is going to grow rapidly with Generation Y. We think that leaves us in a prime position as an industry leader going forward.”
Liberators’ products include Liberator brand shapes and positioning systems, pleasure objects, and sensual accessories. The company manufactures many of the products in its 140,000 square foot vertically integrated manufacturing facility in a suburb of Atlanta, Georgia, which also houses its more than 100 employees, including staff for in-house design, advertising, sales and customer service. Liberator products are being sold directly to consumers and through hundreds of domestic resellers, on-line affiliates and six international licensees.
This is not one of the tiny, struggling upstarts that pack the OTC markets. Liberator has been in business for a decade; positioning itself to continue to snare more market share as the sexual wellness industry continues to grow exponentially.
About a week ago, Liberator retired 25 million shares in connection with the company's October 2011 sale of its former subsidiary, Web Merchants Inc., bringing its total to only about 67 million shares outstanding. Moreover, solid numbers were just posted, yet the market cap remains at only $17 million. Apparently, investors have yet to notice and react to 27 percent of the company’s shares being shelved, a fact that could be providing a value proposition for those savvy enough to notice. “It’s always difficult to put your thumb on why the share price hasn’t responded,” said Scott. “The reality is that we have only just begun trading about six weeks ago and we are already seeing our shareholder base increase as we have started ramping-up our investor relations initiatives. We are confident that it is only a matter of time before our share price is an accurate reflection of our true value as more investors recognize the quality of our company.”
As the Liberator CFO alluded to, LUVU is still a relatively fresh issue, only being publicly traded for a limited amount of time. The company has cash in the bank, a strong management team and is capitalizing on a growing sexual wellness category which rose 31 percent from 2007 to 2009, according to research firm Mintel. As more and more retailers embrace the evolution, Liberator could be a company to keep a close eye on. Proper due diligence on this sleeper of a company is, as always, encouraged.
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