LuxeYard Reports Strong Second Quarter 2012 Results

Sales Growth of 355% in Second Quarter 2012 versus Prior Quarter- -Company Targets Revenue in Range of $1.5 Million to $2.2 Million for Thir

LOS ANGELES, Aug. 20, 2012 /PRNewswire/ -- Luxury style and living flash sale online retailer, LuxeYard, Inc., (LUXR) today reported increased revenue, sales, transactions and SKUs as well as the completion of multiple corporate milestones, including expansions in its financial results report for the second quarter ended June 30, 2012.

(Logo: http://photos.prnewswire.com/prnh/20120423/LA92040LOGO) 

"By almost all measures this was an extraordinary quarter for LuxeYard," said LuxeYard, Inc. CEO Braden Richter.  "We devoted significant time and resources toward focusing on member conversion metrics instead of member count growth, and as a result, we saw a commensurate increase in number of transactions and growth in total online sales.  Alongside the growth of our brand and in order to continue achieving operational excellence, we are looking to add talented personnel to all levels to help us further build scale, drive innovation and boost our technological advantage in the market."

Growth Metrics*

During the quarter, the company focused on initiatives to increase active members, defined as any registered member who has purchased products from the company at least once during the quarter.  As a direct result:
•Active members increase by more than 160% compared with the preceding quarter;
•Total number of online transactions increased by more than 130% over first quarter 2012;
•The total number of SKUs offered in the second quarter, reflecting increased product selection, grew to roughly 30,000 from over 400 premium brands.

"LuxeYard is working to reinvent the antiquated flash sale model with social commerce innovations that fundamentally change the behaviors of online consumers," continued Richter. "We are at the crest of a tremendous online retail trend that we believe will ultimately disrupt the e-commerce marketplace.  Social networks such as Pinterest provide only the first phase of this dramatic trend, and our model completes the equation with an elegant social commerce solution that puts the power back into the hands of the online shopper."

Second Quarter 2012 Financial Results and Third Quarter 2012 Outlook

Total revenue for the second quarter was $705,963, an increase of 355% from the prior quarter.  Operating expenses were $7.6 million in Q2, due primarily to higher SG&A costs, which included expenses related to: payroll, advertising, and the decrease in the fair market value of stock issued for services provided from various vendors.  Additionally, the company recognized $19.79 million in gains on derivatives, triggered by a drop in market value of its common shares, as required by GAAP.  Giving effect to these items, net income was $10.03 million, equal to $0.08 per diluted share.

Based on current estimates, management expects third quarter revenue in the range of $1.5 million to $2.2 million, representing growth of between 112% and 211% compared with the second quarter.  LuxeYard's management team anticipates the Company's strong growth trajectory to continue as expanded service offerings and additional retail verticals, which were added throughout the second quarter, begin to contribute revenue in the third quarter while revenue from additional initiatives start to take hold.

"Revenue growth accelerated throughout the quarter as we added new product verticals, improved checkout processes and enhanced the promotional mix," added Richter.  "As we move forward, our efforts to syndicate the LuxeYard site, acquire additional ecommerce properties, and launch new separately branded sites, will help further drive revenue growth and solidify our foothold as a leader in the flash sales industry."

Recent Highlights
•Entered into a Management Services Agreement with Bari Leather Furniture, assuming management control of the company and its website BariLeatherFurniture.com, on August 6, 2012. The parties are continuing to work towards the acquisition as announced on June 27, 2012.
•Unveiled the first flash sale for Latinos, De La Fashion (www.delafashion.com), offering Latino and Hispanic shoppers access to curated luxury apparel and home decor online at discounted prices;
•Launched TradeYard (www.tradeyardusa.com), a business-to-business platform that  allows local and regional retailers access to a wide variety of additional merchandise that can be ordered on-demand, and by the unit, at wholesale-container-pricing and have it shipped to its final destination, without ever handling inventory or fulfillment;
•Entered into a strategic alliance with Australia's BuyInvite.com, broadening sales efforts internationally;
•Began syndication efforts, signing the first agreement with Sashi Chimala, a highly regarded entrepreneur in India, to launch LuxeYard in the Indian market;
•Entered into a Management Service Agreement with Home Loft, Inc. to manage LeatherGroups.com, expanding into traditional e-commerce web properties, to increase market share in the home furnishings space. The parties are continuing to work towards the acquisition as announced on May 1, 2012; and,
•Expanded logistics facilities, resulting in a quicker order shipment turnaround and increased customer satisfaction.

"While diligently managing our resource and expense levels, we actively put into place a number of revenue generating channels, including the Management Services Agreement with Bari Leather Furniture, which is expected to quickly double our revenue and immediately take advantage of increased efficiencies and economies of scale," concluded Richter. "Agreements such as this demonstrate our ability to diversify our offerings, broaden our revenue opportunities, and build shareholder value."

ABOUT LUXEYARD, INC.

LuxeYard is a quickly expanding members-only luxury style and living flash sales online retailer that provides access to distinctive and eclectic home furnishings, decor, and curated apparel sourced from an experienced team at discounted prices. LuxeYard leverages innovative social commerce technology, delivering an interactive user-generated buying model that fundamentally changes online shopping behavior by enabling shoppers to influence pricing and merchandise availability. With a veteran retail, e-commerce and digital marketing management team, LuxeYard partners with trendsetters and industry insiders to cater to savvy shoppers with sophisticated tastes with the quintessential fashion boutique culture otherwise exclusive to a select few, as epitomized by highly coveted celebrity-driven fashion retail hotspots. To become a member, visit www.LuxeYard.com. 

Investors can register to receive news releases by visiting: http://www.luxeyard.com/investors/signup.php.

*As a reminder, the company commenced operations on January 24, 2012 so there are no comparable results for prior-year periods.

Forward-Looking Statements

This press release contains forward-looking statements as defined within Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  These statements relate to future events, including our ability to raise capital, or to our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Such risks, uncertainties, and other factors include, but are not necessarily limited to, those set forth in our Form 8-K filed with the Securities and Exchange Commission on November 15, 2011. You should not place undue reliance on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and which could, and likely will, materially affect actual results, levels of activity, performance or achievements. Any forward-looking statement reflects our current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and liquidity. We assume no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. LuxeYard's actual results could differ materially from those predicted or implied and reported results should not be considered as an indication of future performance.

For a discussion of these risks and uncertainties, please see our filings with the Securities and Exchange Commission. Our public filings with the SEC are available from commercial document retrieval services and at the website maintained by the SEC at http://www.sec.gov.

Media:
The Pollack PR Marketing Group
Mark Havenner | mhavenner@ppmgcorp.com
Sara Nazarian | snazarian@ppmgcorp.com
(310) 556-4443

Investors:
PondelWilkinson
Matt Sheldon | Rob Whetstone
investors@luxeyard.com
(310) 279-5980