LXRandCO Reports Financial Results for the Fourth Quarter and Full Year 2020 and Provides Update on Strong E-Commerce Momentum

MONTREAL, March 31, 2021 /CNW/ - LXRandCo, Inc. ("LXRandCo" 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 fourth quarter and full year ended December 31, 2020 ("Q4 2020" and "FY 2020", respectively).

"Positioned for continued growth after a record fourth quarter in 2019, FY 2020 was a challenging year for the Company. As the pressures of the pandemic took a toll on the well-being of our employees, customers and our communities alike, we strategically repositioned the Company to a digital-first business model and undertook swift actions to enhance our short-term liquidity while safeguarding the long-term financial strength of our business. During the year, we recapitalized the Company by raising in excess of $10.5 million and we made key investments in e-commerce talent and infrastructure. In Q4 2020, our e-commerce revenue grew by 56% relative to last year, and we delivered a gross profit margin of 33%, which matched the level previously achieved in 2019. We also continued to proactively manage our expenses and working capital and despite a loss in total revenue of $11.0 million in the quarter, which was a 77% decrease from the prior year, we generated negative Free Cash Flow of only $0.6 million. We are proud of these achievements." said Cam di Prata, the Company's interim CEO.

"While the effects of the pandemic are still prevalent, there are encouraging early signs pointing to a positive outlook in 2021 and we are positioning to take advantage of the growing interest in the luxury resale market both online and at retail, where recently, wholesale momentum has been building. On February 17, 2021, we reported that in the first six-weeks of 2021, the Company's e-commerce revenue grew 65% over last year. We now anticipate that e-commerce revenue growth for the full first quarter of 2021 will exceed 75%. It is our intention to continue growing across all our channels and to have all our ten remaining stores back in operation in time for the Spring season" added Cam di Prata.

Provided below is a summary of the impact of COVID-19 on our business as well as the financial highlights and a discussion of the Company's financial results for the three and twelve–month periods ended December 31, 2020, which are to be read in conjunction with the Company's audited condensed consolidated financial statements and Management's Discussion and Analysis ("MD&A") for the period.

Impact of COVID-19 on our Business in 2020

Since the World Health Organization's declaration of COVID-19 as a global pandemic in March 2020, our priorities have focused on the well-being of our employees, customers and supporting our communities while safeguarding the long-term financial strength of our business. The following is a summary of several events that affected our operations during the year:

• On March 20, 2020, in response to the COVID-19 outbreak and to the recommendations of various health and government authorities, we announced the temporary closure of our 80 stores across North America until April 1, 2020. During this period, we remained open to serve customers through our online site;
  
  
• On April 3, 2020, as the pandemic persisted, we extended our store closures indefinitely;
  
  
• On May 11, 2020, Stage Stores, our largest U.S. wholesale customer, filed for bankruptcy;
  
  
• On May 13, 2020, while certain of our U.S. retail partners began gradual store re-openings in select markets, we remained closed as we felt it was imprudent to open at that time, given the limited foot traffic within these stores and the potential health risks to our employees;
  
  
• In August and September 2020, Lord & Taylor, Stein Mart and Century 21, U.S. retail partners, filed for bankruptcy; and
  
  
• In Q3 2020, we gradually reopened our retail network which on December 31, 2020, consisted of ten stores located in Canada and only three of which were operational due to Public Health regulations and restrictions.

As these events unfolded, we proactively safeguarded our liquidity and the long-term viability of our Company by undertaking the following measures:

• We renegotiated our $12.5 million line of credit for a new three-year period, which matures on May 25, 2023;
  
  
• We participated in all applicable COVID-19 government support programs, which included applying for all relevant employee wage subsidies;
  
  
• We secured a new $3.0 million, three-year term loan, which matures on May 25, 2023;
  
  
• We delayed all capital and discretionary operating expenditures, with the exception of growth infrastructure investments related to our e-commerce activities;
  
  
• We reduced our costs throughout the organization by minimizing non-essential operating costs and maintaining ongoing negotiations with suppliers and vendors for concessions; and
  
  
• On December 23, 2020, we completed a $7.5 million equity financing to, among other things, fund our transformation to a digital-first strategy.

Overview of Results for the Three-Month Period Ended December 31, 2020 ("Q4 2020")
as Compared to the Three-Month Period Ended December 31, 2019 ("Q4 2019")

• Total net revenue decreased 76.5% to $3.4 million from $14.4 million, due to the adverse impact of COVID-19 and the significantly lower number of retail locations compared to the same period last year.
  
  
• E-commerce net revenue increased 45.9% to $1.7 million and e-commerce average order value ("AOV") increased 10.3% to $892 per transaction. E-commerce net revenue as a proportion of total net revenue increased to 50.6% versus 8.1%.
  
  
• E-commerce net revenue excluding the U.S. Partner Bankruptcies, increased 55.6%.
  
  
• Retail net revenue was $0.4 million versus $7.9 million, a decrease of 94.4%, due to the significantly lower number of retail locations. At year-end, three stores were in operation, compared to 80 stores at the end of 2019.
  
  
• Gross profit margin was stable at 32.7% compared to 32.8%.
  
  
• Selling, general and administrative ("SG&A") expenses decreased by 61.4% to $2.2 million, representing 65.8% of net revenue, from $5.8 million, or 40.0% of net revenue.
  
  
• Adjusted Net loss (a non-IFRS measure) was $0.9 million versus an Adjusted Net Loss of $0.5 million.
  
  
• Adjusted EBITDA Loss (a non-IFRS measure) was $0.7 million versus an Adjusted EBITDA Loss of $0.1 million.
  
  
• Free Cash Flow (a non-IFRS measure) decreased to an outflow of ($0.6) million as compared to $0.8 million, this despite a 76.5% decrease in revenue in the quarter.
  
  
• Cash availability at the end of Q4 2020 totalled $7.3 million as compared to $3.5 million.

Overview of Results for the Year Ended December 31, 2020 ("FY 2020")
as Compared to the Year Ended December 31, 2019 ("FY 2019")

• Total net revenue decreased 65.6% to $13.8 million from $40.1 million, due to the adverse impact of COVID-19 and the significantly lower number of retail locations compared to the same period last year.
  
  
• E-commerce net revenue increased 17.6% to $4.4 million and e-commerce AOV increased 11.6% to $876 per transaction. E-commerce net revenue as a proportion of total net revenue increased to 31.8% versus 9.3%.
  
  
• E-commerce net revenue excluding the U.S. Partner Bankruptcies, increased 21.4%.
  
  
• Retail net revenue was $7.4 million versus $28.6 million, a decrease of 74.2 %.
  
  
• Gross profit margin increased to 31.3% compared to 30.9%.
  
  
• SG&A expenses decreased by 46.1 % to $10.4 million, or 75.2% of net revenue, from $19.2 million, or 47.9% of net revenue in FY 2019. SG&A expenses included $1.7 million of charges related to the U.S. Partner Bankruptcies. Excluding these items, SG&A during the period decreased by 55.1%.
  
  
• Adjusted Net Loss (a non-IFRS measure) improved to $4.5 million from an Adjusted Net Loss of $6.3 million.
  
  
• Adjusted EBITDA Loss (a non-IFRS measure) improved to a loss of $3.3 million from an Adjusted EBITDA Loss of $4.7 million.
  
  
• Free Cash Flow (a non-IFRS measure) was ($1.4) million, an improvement of 73.5% as compared to negative Free Cash Flow of ($5.3) million.

Discussion of the Three-Month Periods and the Years Ended December 31, 2020 and 2019

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

Due to the adverse impact of COVID-19 on our retail store and wholesale channel activities, our total net revenue mix changed materially in Q4 2020. For the three-month period ended December 31, 2020, total net revenue decreased by 76.5% to $3.4 million from $14.4 million in Q4 2019. During this period, approximately 50.6% of our total net revenue was generated from e-commerce and 49.4% from retail activities (i.e. stores and wholesale channels combined), as compared to 8.1% and 91.9%, respectively, in Q4 2019. During this period, approximately 70% of our net revenue was generated in the U.S., with the balance coming from Canada, as compared to 90% from the U.S. in Q4 2019. This shift in revenue mix was due to the geographic impact of the U.S. Partner Bankruptcies, which reduced our U.S. business in Q4 2020 and the growth in e-commerce revenue as compared to Q4 2019. Excluding the impact of U.S. Partner Bankruptcies, total net revenue in Q4 2020 decreased by 33.7% versus Q4 2019.

Total net revenue in FY 2020 decreased by 65.6% to $13.8 million from $40.1 million. During the year, approximately 31.8% of total net revenue was generated from e-commerce and 68.2% from retail activities (i.e. stores and wholesale channels combined), as compared to 9.3% and 90.7% in FY 2019. Also, during this period, approximately 80.7% of our net revenue was generated in the U.S., with the balance coming from Canada, as compared to 90.0% coming from the U.S. in FY 2019. As discussed above, this shift in revenue mix is due to the geographic impact of the U.S. Partner Bankruptcies. Excluding the impact of the U.S. Partner Bankruptcies, total net revenue in FY 2020 decreased by 37.8% versus FY 2019.

E-commerce

E-commerce net revenue as a percentage of total net revenue increased to 50.6% versus 8.1% in Q4 2019. E-commerce net revenue during Q4 2020 was $1.7 million, an increase of 45.9% compared to prior period. Included in e-commerce net revenue is online revenue from the retail partners affected by the U.S. Partner Bankruptcies. Excluding the impact of the U.S. Partner Bankruptcies, e-commerce net revenue in Q4 2020 increased by 55.6% versus Q4 2019. E-commerce AOV during the period was $892, an increase of 10.3% versus the comparable period last year.

LXRCO.com net revenue, which represented 68.0% of e-commerce net revenue, was $1.2 million in Q4 2020, an increase of 58.8% versus last year. This increase was due in part to a shift in consumer buying patterns from traditional brick-and-mortar channels to online, and the result of infrastructure investments in both e-commerce talent and digital marketing spend.

E-commerce net revenue as a percentage of total net revenue increased to 31.8% versus 9.3% in FY 2019. E-commerce net revenue in FY 2020 was $4.4 million, an increase of 17.6% versus the prior year. Included in e-commerce net revenue is online revenue from retail partners affected by the U.S. Partner Bankruptcies, which given the impact of COVID-19, performed at a much lower rate than that of last year. Excluding the impact of the U.S. Partner Bankruptcies, e-commerce net revenue in FY 2020 increased by 21.4% versus FY 2019. E-commerce AOV during the period was $876 an increase of 11.6% versus the comparable period last year.

LXRCO.com net revenue, which represented 68.0% of e-commerce net revenue, was $3.0 million in FY 2020, an increase of 52.9% versus last year.

Retail and Wholesale

For the three-month period ended December 31, 2020, retail net revenue (which includes net revenue from stores and wholesale channels) decreased 87.4% to $1.7 million as compared to $13.3 million in Q4 2019. The decrease reflects the lingering adverse economic impact of COVID-19 on our retail activities, as well as the material permanent impact from store closures relating to the U.S. Partner Bankruptcies. As at December 31, 2020, our retail store network consisted of ten stores of which only three were open due to COVID-19 related restrictions compared to 80 stores open as at December 31, 2019. During Q4 2020, we did not open any new stores and closed one permanently.

In FY 2020, retail net revenue decreased by 74.1% to $9.4 million as compared to $36.3 million in FY 2019. As discussed above, the decrease in total net revenue primarily reflects the lingering adverse impact of COVID-19 on our retail activities, as well as the significant impact from store closures relating to the U.S. Partner Bankruptcies.

Discontinued Net Revenue from U.S. Partner Bankruptcies

In contrast with Q4 2019, where the revenue generated was quite substantial, we generated no revenue from partners affected by the U.S. Partner Bankruptcies in Q4 2020 (2019—$9.3 million total net revenue, including $0.1 million e-commerce revenue).

In FY 2020, approximately $6.1 million, or 44.1%, of our total net revenue and approximately $0.2 million, or 4.7% of our e-commerce net revenue was attributable to our long-standing partners affected by the U.S. Partner Bankruptcies (2019—$27.7 million, and $0.3 million, respectively).

As these partners have permanently ceased their operations, we plan to replace their revenue over time through a combination of increased e-commerce activity and the addition of other retail and/or wholesale channel partners. To facilitate greater comparability, the financial table "Revenue by Channel (Excluding Impact of the U.S. Partner Bankruptcies)" provided below sets forth the net revenue by channel excluding the impact of the U.S. Partner Bankruptcies.

Revenue by Channel (Excluding Impact of the U.S. Partner Bankruptcies)

	Three months ended December 31								Twelve months ended December 31
($000s)	2020	2019		Increase/ (Decrease)					2020	2019	Increase/ (Decrease)
Total Net Revenue:
Total net revenue	$3,391,813	$14,440,173		(76.5%)					$13,777,419	$40,069,288	(65.6%)
Less: Revenue from U.S. Bankrupt Partners	–	$9,316,661		n/a					$6,077,296	$27,697,456	(78.1%)
Adjusted Total net revenue	$3,391,813	$5,123,512		(33.7%)					$7,700,123	$12,371,832	(37.8%)
E-commerce:
E-commerce net revenue	$1,715,804	$1,175,652		45.9%					$4,379,723	$3,724,488	17.6%
Less: Revenue from U.S. Bankrupt Partners	–	$72,940		n/a					$204,244	$286,355	(28.7%)
Adjusted e-commerce net revenue	$1,715,804	$1,102,712		55.6%					$4,175,479	$3,438,133	21.4%

Gross Profit & Gross Profit Margin

Gross profit in Q4 2020 decreased by 76.6% to $1.1 million as compared to $4.7 million in Q4 2019. The decrease in gross profit is attributable to the decline in total net revenue discussed above, which decreased by 76.5%. Gross profit margin in Q4 2020, however, was 32.7% compared to 32.8% in Q4 2019. Despite the significant cost pressures brought about from the pandemic on our operations, our gross profit margin remained stable with the level achieved in prior year, which was a record quarter for the Company.

Gross profit in FY 2020 decreased by 65.2% to $4.3 million as compared to $12.4 million in FY 2019. The decrease in gross profit is primarily attributable to the decline in total net revenue discussed above, which decreased by 65.6%. Gross profit margin in FY 2020 was 31.3% compared to 30.9% in FY 2019. Despite the uncertainty from the pandemic on our operations, and due in part to the cost reduction plan put in place by the Company, our gross profit margin in 2020 exceeded the level achieved in the prior year, which was a record year for the Company.

SG&A Expenses

Given the significant loss in net revenue from the pandemic, where possible, we have been proactive in reducing SG&A costs and in restructuring operations.

In Q4 2020, SG&A expenses decreased by 61.4% to $2.2 million, compared to $5.8 million in Q4 2019. This decrease was primarily due to a materially reduced retail store network, the partial furloughing of store employees and the furloughing and/or reduced work hour arrangements with most of our head office staff, all as a result of the COVID-19 pandemic. On December 31, 2020, we employed 42 people across our retail network and our two office locations in Montreal, Canada and Tokyo, Japan. At the end of Q4 2019, our employee headcount was 164 (or 294 people if retail partner employees under our direct supervision and on our payroll are included). This decrease in headcount is mainly the result of a streamlined retail salesforce resulting from pandemic-related store closures.

In FY 2020, SG&A expenses decreased by 46.1% to $10.4 million, compared to $19.2 million in FY 2019. This decrease was primarily due to the COVID-19 related issues discussed above, offset by $0.4 million in payroll subsidies received under the Federal Government's Canadian Emergency Wage Subsidy program, all as a result of the COVID-19 pandemic. On December 31, 2020, we employed 42 people across our ten retail stores, and our two office locations in Montreal, Canada and Tokyo, Japan. At the end of FY 2019, our employee headcount was 164 (or 294 people, if retail partner employees under our direct supervision (and on our payroll) are included).

In FY 2020, SG&A expense was adversely impacted by $1.7 million in charges relating to the U.S. Partner Bankruptcies, which included $0.7 million attributable to bad debt expenses and non-recurring expenses of $1.0 million from to the write-down of store fixtures and dislocation costs related to store closures. Excluding these items, SG&A during the year would have decreased by 55.1%.

Net Loss

In Q4 2020, the Company's net loss improved to $2.2 million from $2.5 million in Q4 2019, in FY 2020, the Company's net loss improved to $7.7 million from $10.4 million in the FY 2019. This was primarily due to decreased SG&A costs and a decrease in amortization and depreciation expense in the period as compared to Q4 2019.

Adjusted Net Loss

In Q4 2020, Adjusted Net Loss increased to $0.9 million as compared to $0.5 million in Q4 2019, in FY 2020, Adjusted Net Loss improved $4.5 million as compared to $6.3 million in the FY 2019. This increase was primarily due to lower adjustments pertaining to the: write-off of property and equipment; losses from discontinued operations; and losses on disposition of subsidiaries, all expenses incurred in Q4 2019 but not materially present in 2020. The financial table below provides the reconciliation of Net Loss to Adjusted Net Loss.

Adjusted EBITDA

In Q4 2020, Adjusted EBITDA loss increased to $0.7 million as compared to $0.1 million in Q4 2019, in Q4 2020, Adjusted EBITDA improved to a loss of $3.3 million as compared to $4.7 million in FY 2019. This increase was primarily due to lower adjustments pertaining to: amortization and depreciation expense; the write-off of property and equipment; losses from discontinued operations; and losses on disposition of subsidiaries, all expenses incurred in Q4 2019 but not materially present in 2020. The financial table below provides the reconciliation of Net Loss to Adjusted EBITDA.

Free Cash Flow

In Q4 2020, Free Cash Flow decreased to a deficit of $0.6 million as compared to positive Free Cash Flow of $0.8 million in Q4 2019. In FY 2020, Free Cash Flow improved to a deficit of $1.5 million as compared to $5.3 million in FY 2019. The financial table under "Selected Quarterly Information" below provides the computation of Free Cash Flow.

Consolidated Financial Statements and Management's Discussion and Analysis

The Company's unaudited interim condensed consolidated financial statements for the three-month and twelve–month periods ended December 31, 2020, and MD&A thereon are available on the Company's web site at http://investors.lxrco.com/financials-reports-information and under the Company's profile on SEDAR at www.sedar.com.

Selected Consolidated Financial Information
The following table summarizes LXRandCo's recent results for the periods indicated:

LXRandCo, Inc.
Consolidated statements of loss and comprehensive loss
(in Canadian dollars, except per share amounts, unaudited)

		For the three-month period ended December 31,			For the twelve-month period ended December 31,
		2020	2019		2020	2019
Net revenue		3,391,813	14,440,173		13,777,419	40,069,288
Cost of sales		2,283,756	9,710,949		9,466,577	27,694,255
Gross profit		1,108,057	4,729,225		4,310,842	12,375,034
Operating expenses
Selling, general and administrative expenses		2,230,635	5,777,456		10,359,037	19,212,602
Amortization and depreciation expenses		89,352	331,962		622,151	1,094,133
Results from operating activities		(1,211,930)	(1,380,194)		(6,670,346)	(7,931,702)
Other income and expenses
Finance costs		150,480	133,120		606,858	485,164
Foreign exchange loss		907,549	459,467		431,567	1,467,716
Loss on disposition of subsidiaries		—	112,683		—	112,682
Loss before income taxes		(2,269,959)	(2,085,464)		(7,708,771)	(9,997,264)
Income tax expense
Current		(61,341)	(16,841)		1,734	37,516
Deferred		—	—		—	—
		(61,341)	(16,841)		63,075	54,357
Net loss from continuing operations		(2,208,618)	(2,068,623)		(7,710,505)	(10,034,780)
Net loss discontinuing operations		—	(382,846)		—	(382,846)
Net loss for the period		(2,208,618)	(2,451,469)		(7,710,505)	(10,417,626)

The following table provides a reconciliation of Net Loss to Adjusted Net Loss and Net Loss to EBITDA and Adjusted EBITDA for the periods indicated:

		For the three-month period ended December 31,			For the twelve-month period ended December 31,
		2020	2019		2020	2019
Reconciliation of Net Loss to Adjusted Net Loss
Net loss		(2,208,618)	(2,451,469)		(7,710,505)	(10,417,626)
Adjustments to net income:
Foreign exchange loss		907,549	459,468		431,567	1,467,716
Write-off of property and equipment		(33,442)	—		1,049,930	—
Write-off of the right of use liability		—	—		(40,077)	—
Stock-Based Compensation Expense		441,832	394,391		1,018,483	572,620
Loss on disposition of subsidiaries		—	112,682		—	112,682
Loss (Gain) on disposals of property and equipment		—	555,129		(282)	983,027
Loss due to bad debt from U.S. bankruptcy filings		6,100	—		703,725	—
Professional fees related to strategic review and private placement		—	—		—	474,853
Store closing costs (recovery)		(112)	24,770		11,856	130,714
Loss from discontinued operations		—	382,486		—	382,846
Adjusted Net Loss		(886,691)	(522,183)		(4,535,303)	(6,293,168)
Reconciliation of net loss to Adjusted EBITDA
Net loss		(2, 208,618)	(2,451,469)		(7,710,505)	(10,417,626)
Add: Amortization and depreciation expenses		89,352	331,962		622,151	1,094,133
Add: Finance costs		150,480	133,120		606,858	485,164
Add: Income tax expense		(61,341)	(16,841)		1,734	37,516
EBITDA		(2,030,127)	(2,003,228)		(6,479,762)	(8,800,813)
Adjustments to EBITDA:
Foreign exchange loss		907,549	459,468		431,567	1,467,716
Loss (gain) on disposals of property and equipment		—	555,129		431,567	1,467,716
Write-off of property and equipment		(33,442)	—		(282)	983,027
Write-off of the right of use liability		—	—		1,049,930	—
Loss due to bad debt from U.S. bankruptcy filings		6,100	—		(40,077)	—
Loss on disposition of subsidiaries		—	112,682		703,725	—
Stock-based compensation expense		441,832	394,391		—	112,682
Professional fees related to strategic review and private placement		—	—		1,018,483	572,620
Store (recovery) closing costs		(112)	24,770		—	474,853
Loss from discontinued operations		—	382,846		11,856	130,174
Adjusted EBITDA		(708,200)	(73,942)		(3,304,560)	(4,676,355)

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 our recent change in strategy, 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.

($)	FY 2020				FY 2019
Consolidated statements of loss	Q4	Q3	Q2	Q1	Q4	Q3	Q2	Q1
Total net revenue	3,391,813	2,857,718	1,430,284	6,097,604	14,440,173	8,314,615	8,558,435	8,756,063
E-commerce revenue	1,715,804	885,669	802,658	975,592	1,175,652	985,288	959,525	604,023
E-commerce revenue % of total net revenue	50.60%	31.00%	56.10%	16.00%	8.10%	11.90%	11.20%	6.90%
Gross margin	32.7%	28.2%	33.6%	31.4%	32.8%	31.4%	33.4%	24.9%
Adjusted Net Loss	-886,691	-1,156,584	-934,116	-1,967,708	-522,182	-1,790,769	-1,596,709	-2,584,344
Adjusted EBITDA	-708,200	-782,262	-643,919	-1,579,975	-73,941	-1,404,384	-1,186,171	-2,212,694
Adjusted EBITDA % of total net revenue	-20.9%	-27.4%	-45.0%	-25.9%	-0.5%	-16.9%	-13.9%	-25.3%
Run rate metrics and growth:
Total net revenue – last 12 months revenue run-rate	13,777,419	24,825,779	30,282,676	37,410,827	40,069,286	36,493,740	38,254,627	38,982,959
E-commerce revenue – last 12 months revenue run-rate	4,379,723	3,839,571	3,939,190	4,096,057	3,724,488	3,057,856	2,654,334	2,294,094
E-commerce revenue – period over period growth	45.9%	-10.1%	-16.3%	61.5%	131.0%	69.4%	60.1%	-18.2%
Free Cash Flow:
Net loss	-2,208,618	-2,786,350	-1,741,391	-974,146	-1,685,777	-2,310,792	-2,178,660	-3,859,556
Add: non-cash items	97,883	1,128,770	23,573	642,166	976,914	1,092,204	398,334	297,817
Add: Net change in non-cash working capital	1,475,699	1,712,028	994,985	177,852	1,525,191	-1,527,515	-557,302	2,514,331
Cash flows provided/(used) in operating activities	-635,036	54,448	-722,833	-154,128	816,328	-2,746,103	-2,337,628	-1,047,408
Less: acquisition of property and equipment	-4,171	0	0	-1,337	-6,770	2,204	-3,085	-13,002
Free Cash Flow	-639,207	54,448	-722,833	-155,465	809,558	-2,743,899	-2,340,713	-1,060,410
Liquidity:
Cash availability	7,289,957	501,033	797,777	1,393,351	3,498,824	2,004,827	3,528,437	5,126,105
Working capital	8,949,997	2,877,864	4,523,360	-584,103	1,332,673	9,125,764	9,373,667	10,037,224
Capitalization:
Shares outstanding	92,783,155	32,783,145	32,783,145	28,176,012	28,176,012	28,176,012	28,176,012	28,176,012
Closing share price	0.245	0.200	0.250	0.280	0.205	0.220	0.285	0.380
Market capitalization	22,731,873	6,556,629	8,195,786	7,889,283	5,776,082	6,198,723	8,030,163	10,706,885
Add: Total debt	5,733,129	5,173,259	5,438,870	6,009,844	8,044,331	7,078,735	5,860,611	5,041,377
Less: Cash	7,289,957	501,033	797,777	1,393,351	3,498,824	2,004,827	3,528,437	5,126,105
Enterprise value (EV)	21,175,045	11,228,855	12,836,879	12,505,776	10,321,589	11,272,631	10,362,337	10,622,157
Multiple of EV/Last 12 months revenue	1.54x	0.45x	0.42x	0.33x	0.26x	0.31x	0.27x	0.27x

About LXRandCo

LXRandCo 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 LXRandCo'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 LXRandCo's financial information reported under IFRS. Management uses non-IFRS measures including: "EBITDA," "Adjusted EBITDA," and "Adjusted Net Loss". These non-IFRS measures are used to provide investors with supplemental measures of LXRandCo's operating performance and thus highlight trends in LXRandCo'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 LXRandCo 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.

Nadine Eap, Chief Financial Officer, LXRandCo. Inc., [phone] ext: 037, [email protected]