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Edited Transcript of LFGR earnings conference call or presentation 11-May-20 9:00pm GMT

SANTA MONICA May 12, 2020 (Thomson StreetEvents) — Edited Transcript of Leaf Group Ltd earnings conference call or presentation Monday, May 11, 2020 at 9:00:00pm GMT

Leaf Group Ltd. – CFO

* Sean P. Moriarty

Leaf Group Ltd. – CEO & Director

Leaf Group Ltd. – IR Contact

Good afternoon. My name is Chantel, and I’ll be your conference operator today. At this time, I would like to welcome everyone to the Leaf Group’s First Quarter 2020 Earnings Call. On the call with me today is Sean Moriarty, CEO; Jantoon Reigersman, CFO; and Shawn Milne, Investor Relations.

Shawn Milne, you may begin your conference.

Shawn Christopher Milne, Leaf Group Ltd. – IR Contact [2]

Good afternoon, everyone. On behalf of Leaf Group, welcome to our conference call. I’m pleased to have Sean Moriarty, our Chief Executive Officer; and Jantoon Reigersman, our Chief Financial Officer, on the call with me today.

Any metrics discussed on the call without reference to a specific third-party source are based on our internal data. You will find the letter to shareholders and a related release, along with supplemental materials, posted on the Investor Relations section of our corporate website located at ir.leafgroup.com.

Before we get started, we need to make the following safe harbor statement. We would like to remind everyone that during today’s conference call, management will make certain forward-looking statements, which are subject to various risks and uncertainties that could cause actual results to differ materially from our current expectations discussed in such forward-looking statements. In particular, comments about our anticipated future revenue, earnings, operating expenses, operating metrics and growth rates as well as statements regarding our business strategy and objectives plans, intentions, operating outlook, planned investments and the impact of recent acquisitions are considered forward-looking statements. Factors that could cause actual results to differ materially from anticipated results are detailed in our letter to shareholders, earnings release and our SEC filings.

I would like to point out that during the call, we will discuss certain non-GAAP financial measures while talking about the company’s financial and operating performance, including adjusted EBITDA and free cash flow. Reconciliations of these non-GAAP financial measures to their most directly comparable GAAP measures can be found in the financial tables included at the end of our letter to shareholders and press release.

Lastly, I would like to remind everyone that today’s conference call is being recorded and that it is also available via webcast through the Investor Relations section of our corporate website. A replay will also be available on our website.

With that, I’ll now turn the call over to our CEO, Sean Moriarty.

Sean P. Moriarty, Leaf Group Ltd. – CEO & Director [3]

Thank you, Shawn. Given all that has changed since we last spoke to you on March 16, we thought it fitting to kick off today’s call for me to share with you the intro to our Q1 2020 shareholder letter and provide some context about what’s happened over the past 8 weeks and where we are headed. Following that, Jantoon will provide further detail on the financials and recent performance, and we will then move to Q&A.

The most appropriate theme for our Q1 2020 shareholder letter is adapting to crisis, and the most critical point for us to make is how well our team of people have answered the call and risen to the occasion in the early days of a world forever changed by a global pandemic. From mid-February through early March, we watched with growing concern the news of the novel coronavirus spreading across the globe as we continued to operate our business. Until mid-March, our revenue growth trend for Q1 was positive year-over-year. In particular, Society6 returned to growth in its U.S. direct-to-consumer business in February.

On March 11, the WHO declared a global pandemic, and the very next day, Leaf Group commenced work from home for the vast majority of our employees. And home is where the majority of us remain living and working some eight weeks later. By March 13, we began to see the effects of the pandemic and the ensuing market volatility on our businesses, with traffic and revenues dropping as people across the globe turned their attention to the growing crisis. Our media and marketplace businesses saw immediate audience and revenue declines, and we rescheduled or canceled eight The Other Art Fair events for 2020. The precipitous decline in our business in the last two weeks of March was met with swift and pragmatic decision-making to protect us from the storm, reducing costs aggressively, freezing hiring and asking our entire team to share in the sacrifice of significant salary reductions for all employees in an effort to avoid layoffs and protect our employees to the very best of our abilities, which so far we have been able to do. We have also taken steps to strengthen our balance sheet, which gives us substantially more capacity to navigate through the present crisis.

Since then, our people have rallied in the moment of crisis, and across our businesses, one can see very clear evidence of their resilience, imagination and creativity. Saatchi Art and The Other Art Fair launched virtual versions of its postponed global fairs that were planned in several cities, including London, Sydney, Brooklyn, Los Angeles, Chicago and Dallas. While we don’t expect The Other Art Fair online studios to generate revenue at the same level as the in-person fairs, the online studios has helped fill a void in the schedules of hundreds of independent artists from across the globe. Thus far, the support from the artist community has been tremendous, with 94% of artists scheduled to show at a spring fair, participating in this new digital offering. With this online studio, we can now bring people from across the world to a fair in a particular city, and the physical and virtual worlds can come together to provide even more opportunity for artists and collectors.

Society6 has enabled many of the millions of people now working from or confined to home to beautify their living space and emerge themselves in the art and design of hundreds of thousands of artists across the globe. The Society6 platform is also enabling hundreds of thousands of independent artists to earn income in a highly restricted stay-at-home environment, and we saw a record number of artwork uploads in April.

Hunker has provided information and inspiration on home and design to millions of consumers and, we are sure, lifted many low spirits on difficult days as people contemplate home improvement ideas and projects. Well+ Good and Livestrong have focused their editorial efforts on content relevant to these trying times: how to stay healthy with diet and exercise, home workouts, and keys to emotional well-being. OnlyInYourState has focused on preparing its audience for a world slowly returning to a new normal with rich content that is aimed at helping people to explore the world outside with purpose and meaning, and most likely, an even longer bucket list of must-see attractions, often off the beaten path.

The challenges we saw in mid-March continued through early April. But by the end of the first week of April, we also began to see signs of measured but steady improvements across our brands, with a healthy rebound of traffic for our media businesses, stabilization of RPVs in the programmatic channels and very healthy traffic and new customer metrics for Society6 and Saatchi Art. Those trends largely hold today. And Q2 is off to a far stronger start overall than we would have expected based on performance in late March, with strong media traffic recovery in April despite lower RPV, healthy traffic and transaction growth at Saatchi Art despite lower AOV and record growth in new artists and new and repeat customers at Society6. Of course, we don’t know, nor can anyone know, in times like these what will happen in the coming weeks and months. While we do not give guidance, we will, in these unprecedented times, provide more specific color on Q2 later in our letter.

When the world changed in mid-March, we saw profound shifts in consumer buying behavior driven by global stay-at-home orders, retail store closures and a desire to improve one’s living space in this environment. This shift is driving a significant acceleration in e-commerce penetration rates globally as well as in the $300 billion U.S. home goods market, benefiting both our marketplace brands.

In early April, Society6 growth accelerated alongside this macro shift. And for the month of April, Society6 Group GTV increased 101% year-over-year. Saatchi Art online transaction growth was up 46% year-over-year, and Saatchi Art new customers was up 67% year-over-year. While the shift in consumer behavior online has created a significant tailwind for Society6, the ability of the brand to drive rapid growth and capture market share underscores the significant platform work done by the team and the caliber of the leadership team we’ve put in place over the course of the past year. We believe that consumer purchasing behavior has been changed forever, and this change will benefit those online businesses who move quickly to take advantage of this shift.

We’re grateful that at its core, Leaf Group is a portfolio of businesses that help people live healthier and more fulfilling lives and provide them with opportunities to explore their passions. We believe that Saatchi Art and Society6 are becoming invaluable platforms for hundreds of thousands of artists who make a living through their creative talent. Livestrong and Well+ Good provide essential information and insight into living healthier and more rewarding lives. And our brand hallmarks across Leaf Group are passion, accessibility, affordability and trust.

We believe our world has forever changed. But exactly how, we will all learn in the months and years ahead. As we acknowledge the terrible tragedy in human costs of this pandemic and the uncertainty that lies ahead, we also believe that this shock to our system and way of life will accelerate changes we’ve already observed in moving to an increasingly digital world.

We believe we are in the right categories to win: home, art and design, fitness and wellness, with young online businesses that have the opportunity to capture consumer adoption now that may have taken years pre pandemic. And we are very excited about what we can achieve in this new world. We believe we have the people, the persistence of vision, the platform, the audience and the market potential for us to create tremendous value in the years ahead for our shareholders and stakeholders. Whatever the future brings, we will be ready for it.

I’ll now turn it over to Jantoon to review our financials.

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Jantoon Reigersman, Leaf Group Ltd. – CFO [4]

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Thank you, Sean. Before we jump into the Q&A, I will provide an update on our business for the first quarter of the year, growth trends in April and address our overall liquidity position.

We believe our portfolio of digital brands is proving its resilience and underscoring value to both consumer and artists in key categories of art and design and fitness and wellness. These categories are massive in size, fragmented and are becoming increasingly important in a world where consumers focus on healthy living and having a healthy space around them.

In Q1, Leaf Group revenue decreased 3% year-over-year from $34.0 million to $32.9 million due to a 10% decrease in Marketplace revenue partially offset by a 7% increase in Media revenue. Q1 2020 adjusted EBITDA was negative $5.4 million for the quarter, reflecting an [improvement] (corrected by company after the call) of $300,000 year-over-year as margins in our Society6 business continued to improve, with Society6 gross profit up 12% year-over-year. Additionally, in Q1, we incurred corporate and legal expenses of $0.7 million associated with strategic review costs, including fees of legal, financial and other advisers.

As Sean mentioned, our revenue growth trend was positive year-over-year prior to the COVID-19 pandemic. Since February, Society6 turned the corner to positive year-over-year GTV growth in its U.S. direct-to-consumer segment driven by structural improvements implemented by the team over the course of the past several quarters.

As the pandemic unfolded, leading to increasing macro uncertainty, we took quick and decisive action, including steps to protect the safety and well-being of our employees, contain costs and further support our online communities, including several hundred thousand artists around the globe. First, our team’s first response was to focus on the health and safety of our employees as we rapidly had to work from home on March 16. Given the digital nature of our business and a great effort from all our resilient employees, this transition has been smooth across all our offices.

Second, on April 1, we took strong measures to contain costs, including significant salary or compensation reductions for executives and employees, suspended compensation for our Board of Directors and deferred bonus payments for the executive team. Third, we reduced spending across fixed and variable costs, including content and marketing. Given the continued macro uncertainties, we aggressively continue such cost containment to date.

In the midst of implementing these measures, we saw profound changes across our businesses, most notably in accelerated consumer demand at Society6. In order to provide further visibility in this ever-changing world, we wanted to include several observations on growth trends for the month of April.

Our marketplace brands saw very strong levels of consumer demand, with April GTV increasing 81% year-over-year. Society6 Group GTV increased 101% year-over-year, fueled by 135% U.S. direct-to-consumer GTV growth and strong 63% international GTV growth. The Society6 Group GTV for the month of April was an all-time monthly record for the brand. This growth is driven by a macro shift to e-commerce as consumers are self-isolated and brick-and-mortar retailers closed their doors, a strong value proposition of high-quality made-to-order home decor products at affordable prices and the many initiatives the Society6 team has implemented over the past quarters. These initiatives included restructuring, paid marketing, a new promotional strategy, new home page and product detail pages, better mobile usability and a significantly improved international customer experience. In many ways, Society6 has enhanced its merchandising approach, thinking much more like a retailer around strategic seasonal and departmental sales and much less like a flash goods site. As a result, the brand is experiencing significant growth in new customers, and customer satisfaction is at an all-time high.

In April, Saatchi Art Online saw strong consumer trends, with transactions up significantly year-over-year and with the new customer growth setting a monthly record. Saatchi Art online GTV was up 4% in April, reflecting a lower average order value partly due to a higher mix of new customers spending less on average than a repeat buyer. This is a trade-off we’re happy to take in the near term as the marketplace rapidly expands with new art buyers.

Saatchi Art Group overall growth is constrained by the first two quarters of 2020 by the previously announced cancellation of three fairs and postponement of five fairs for The Other Art Fair. Nonetheless, we saw positive early results from our recently introduced The Other Art Fair Online Studios, which not only represents a possible additional growth opportunity for the Saatchi brand in the future, but most importantly also helps further engage our artist community.

For April, Media revenue was down 26% year-over-year. Post-COVID-19 and into late March, we saw traffic decline as consumers turned to financial and pandemic-related news. Beginning in April, we saw traffic beginning to improve as consumers actively engaged with content in our key categories such as healthy living, home decor and DIY projects. Traffic ended up higher year-over-year by the end of April.

Conversely, as advertisers pulled back in response to the crisis, our ad rates or revenue per visit declined in late March and into early April and stabilized by the middle of the month. Based on our cost containment efforts in the Media business, we expect to maintain a healthy segment operating contribution margin.

Leaf Group ended March 2020 with $11.6 million in cash and $4 million in debt on our receivables facility. On April 20, we entered into a loan agreement for $7.1 million pursuant to the Paycheck Protection Program under the CARES Act.

On April 24, Leaf Group transferred ownership of a library of content currently displayed on selected Hearst websites to Hearst in exchange for $9.5 million, of which $4 million was paid at signing and an additional $5.5 million will be paid upon completion of the content migration, which is expected to be finalized in the third quarter of 2020. The Hearst deal underscores the underlying value of our content library and Media business. As a result, we are now confident in our capital position against a broad range of overall economic recovery scenarios.

Lastly, I want to remind everyone that the strategic alternative review announced on April 15, 2019, is still ongoing. We will not be making any further announcement until the Board has approved the course of action requiring disclosure.

With that summary, we’re now ready to take your questions. Operator, please open the line.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question comes from Jason Kreyer with Craig-Hallum.

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Jason Michael Kreyer, Craig-Hallum Capital Group LLC, Research Division – Senior Research Analyst [2]

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Just wanted to say congrats on the strength you’re seeing in April. Obviously, it’s been a pretty volatile ride recently, but it’s nice to see the good traction there. On that note, can you just talk about where the strength is coming from in S6? Are you seeing specific pockets of strength in certain product categories generating consumer interest? Or are you pretty much seeing everything broad-based?

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Sean P. Moriarty, Leaf Group Ltd. – CEO & Director [3]

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Yes. No, great question. It’s broad based, Jason. It’s U.S. and international and across categories, we’ve seen very, very strong performance. AI do certainly want to acknowledge that over the course of the past eight months or so, our team has done a tremendous job putting us in a position to capture some of the benefits that we’re seeing in the age of a pandemic where people are spending considerable time at home. But Julie Matrat, Alan Waldman, Oliver Foley and the team have worked incredibly hard to make changes to UI, UX, paid marketing campaigns, improving the customer experience, completely revamping the merchandising strategy. And so all of that is bearing fruit, and certainly we are benefiting in an otherwise very unfortunate circumstance from that trend of off-line to online. But it really does reflect the work that the team has done. It’s broad-based and it’s significant, and we’re certainly very happy to see it.

Keep in mind also, Jason, that we started seeing recovery in the U.S. DTC business as early as February and then again through March. And we’ve been working very closely on this business to get it back to growth. And if you recall, going back a year ago, I said it was going to take some time, but we felt that this was a business that should get back to historical growth rates and then some.

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Jason Michael Kreyer, Craig-Hallum Capital Group LLC, Research Division – Senior Research Analyst [4]

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Okay. That’s helpful. Jantoon, you gave some nice detailed remarks on kind of the capital position. Just wondering if you could sum that up or as I kind of do the quick math here, I’m coming up with kind of ballpark cash of $20 million to $25 million right now with about $6 million in liquidity beyond that on the revolver. So I don’t know — can you help me? Am I in the right ballpark there? Or can you correct any of those figures?

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Jantoon Reigersman, Leaf Group Ltd. – CFO [5]

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Sure. So we ended the quarter at $11.6 million. We obviously have $4 million already drawn on the facility. And then we added $7.1 million as part of the PPP program. We added another $4 million of an upfront payment from Hearst. And we’re expecting another $5.5 million once that migration is done, and that is expected in Q3 of this year. We’ve also as part of the macro uncertainty, we’re fairly aggressive in our working capital management. And so overall, we are confident in our current cash position.

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Jason Michael Kreyer, Craig-Hallum Capital Group LLC, Research Division – Senior Research Analyst [6]

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Okay. On the Media segment, we’ve been talking a lot over the last year about working with specific advertisers, striking these longer-term engagements that just create a more sticky relationship with those advertisers. So wondering if there’s any callouts in terms of incremental successes there over the last 90 days. And then are you seeing that pay off in more attractive CPMs in this environment versus maybe what Leaf would have seen before those agreements were in place?

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Jantoon Reigersman, Leaf Group Ltd. – CFO [7]

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So Jason, I think it’s a really good point. It’s hard to measure exactly from a financial perspective right now. But I do think what these type of markets reiterate is the strength of the relationship and the creativity with which the sales team work with their clients. So if you take, for example, The Other Art Fair and you move from a physical fair to an online fair, what are other things you can do there with advertisers? Or for example, if you think of Hunker and you think of the relationship that Hunker has with Walmart and you think of really people thinking through in a more levered way how to design and decorate their houses. So there are many different ways we’re engaging, and the strength of these relationships are important, especially of this time where you need more creativity. And so I think it will translate in the long term. In the near term and midterm, obviously direct sales is a little bit more volatile, purely because obviously deployment of capital for a lot of these advertisers is somewhat more uncertain [environment] (added by company after the call). But we are very confident in the relationships we have and the long-term nature of these relationships.

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Sean P. Moriarty, Leaf Group Ltd. – CEO & Director [8]

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Yes. And Jason, I’d like to call out too what we’re seeing, our advertisers who really look to us as long-term partners, which is key, and coming to us for creative ideas, how in these times we can help them stay in front of the audiences that they want to be in front of. And we continue to work very, very closely with Walmart on Hunker. Bombay Sapphire is, as you know, a very important partner of ours. And we’ve taken that real-life experience and actually moved it virtual through social media. And so to Jantoon’s point, in the near term, the revenue picture is obviously going to be somewhat murky. But what we’re really heartened by are strong brands who we know value our audiences, reaching out to us to do more in very, very difficult times. And it speaks to the strength of the relationships we’ve already built and certainly gives us confidence that we’ve got a tremendous future in working with them going forward.

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Jantoon Reigersman, Leaf Group Ltd. – CFO [9]

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Yes. And maybe one piece to add is also that our branded direct business was good for Q1. So it’s also a good base as you go into greater uncertainty going forward.

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Jason Michael Kreyer, Craig-Hallum Capital Group LLC, Research Division – Senior Research Analyst [10]

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Okay. Last one for me, Sean. We’ve experienced a lot of volatility in the last year or two. And in that environment, we’ve seen kind of a changeover where media has been a bigger driver for the business, while marketplace has been somewhat of a laggard. And then now over the course of the last 4 to 6 weeks here, that’s turned itself around a little bit. I mean tough to make longer-term decisions in this six-week weird period, but just kind of wondering, does this create any changes to your view of your portfolio of business? Or any changes to what segments of the business you’re making investments in?

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Sean P. Moriarty, Leaf Group Ltd. – CEO & Director [11]

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Yes. Great question. I think really what it points to, Jason, is the strength and diversity and resilience in the business overall. If you look, there was a time a few years ago when our Media business was struggling. And it took us a couple of years to get that business right and build it back to a position of strength. And despite the present circumstance, we have tremendous long-term conviction about the Media business that we’ve built. And when the world gets back to a new normal, we think we’re going to be in a very good position with those media brands.

And as you know, when the Media businesses were struggling a couple of years back and we had tremendous conviction around what we could build, our Marketplace businesses, in particular Society6, were very, very strong. And so there are puts and takes, particularly if you go back to 2015. This was a turnaround of a business that had multiple years of real problems. And out of that, we’ve built a really well diversified and, we believe, a very resilient business. And it’s taken some time, and certainly there have been growing pains and some uncertainty along the way. But we couldn’t be more confident about the quality of the brands that we have today, their future potential and the strength of the categories that we’re in.

We are digital-first businesses in home, art and design and fitness and wellness with real audiences and increasingly strong brands that deliver on the expectation of those audiences. So we absolutely believe in the diversity and resilience of this portfolio and the future opportunities that it presents for us.

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Operator [12]

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Our next question comes Maria Ripps with Canaccord Genuity.

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Maria Ripps, Canaccord Genuity Corp., Research Division – Analyst [13]

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It’s really great to see strong trends for your Marketplaces in the month of April. How are you thinking about leveraging this strength and building on it once the pandemic passes? And can you talk about your supply chain capabilities to fulfill this heightened demand in the near term?

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Sean P. Moriarty, Leaf Group Ltd. – CEO & Director [14]

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Sure. Maria, thank you for your question. So first of all, as I said, we’ve done an awful lot of work over the course of the past year, with both Society6 and Saatchi Art and improving products quality and service quality and continuing to innovate. And so a lot of those gains are being made manifest in the results right now.

One thing that we’re very much heartened by is the strength of the new customers that we’re bringing on platform, right? So new customer numbers are way up in April. Customer satisfaction, as Jantoon pointed out, is very high. And so we feel very, very good about our ability to take these new customers and turn them into customers for life.

We also have a lot of excitement around the things that we haven’t done yet. So many of the changes we’ve made, for example, with Society6 and Saatchi Art and improving the platforms and the user experience, have helped us. But when we look out over the course of the next 6 to 12 months, that product road map is full of innovation, which will deliver more and more value to customers.

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Maria Ripps, Canaccord Genuity Corp., Research Division – Analyst [15]

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Good. And on supply chain?

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Sean P. Moriarty, Leaf Group Ltd. – CEO & Director [16]

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So far, we have been very fortunate. Our vendors are truly partners of ours. And , depending on where you are in the globe, there’s been I think anybody in a business like ours is subject to the realities of what goes on in the last mile or moving across borders. But overall the supply chain has been extremely resilient and very, very stable for us. And if the last eight weeks is an indicator on what the future looks like, we feel pretty good about the strength and resiliency of that global supply chain. It’s held up very, very well.

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Jantoon Reigersman, Leaf Group Ltd. – CFO [17]

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Yes. And Maria, I want to add one thing maybe, which is also, obviously — so if you think of the GTV growth in April, 135% was U.S. DTC, but it was also 63% international. As we outlined before, international is a very big theme for us going forward and obviously has tremendous opportunities. So , the customers we’re gaining internationally will provide a really good base for us to continue growth there long term. I think overall, this is a really good opportunity for Society6 and its growth prospects.

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Maria Ripps, Canaccord Genuity Corp., Research Division – Analyst [18]

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Got it. And can you talk about your marketing strategies? Are there any changes in terms of your messaging in light of the pandemic? And how are you thinking about balancing cost controls with possibly being more aggressive with marketing spend given lower Media costs here in the near term?

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Sean P. Moriarty, Leaf Group Ltd. – CEO & Director [19]

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Yes. So really good question, Maria. I would say it’s highly specific to the business and certainly to the category. The marketing and merchandising approach on Society6, for example, is very much now category specific. So our marketing efforts are around categories and themes and certainly much less about deep discounting. And then at a time when people are spending a whole heck of a lot more time in their homes and probably staring at blank walls or walls they don’t like so much anymore, we have an awful lot to offer them. And so we are very much leaning into that, giving people the ability to affordably beautify the space that they live in every day. And thematically, that also runs through all of our social media, our performance marketing and our e-mail campaigns. And so we think we’re at the right place and the right time to market that.

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Jantoon Reigersman, Leaf Group Ltd. – CFO [20]

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And so I think in terms of the cost side of things or the cost containment side of things, I think what’s important to remember is we are a portfolio, and these are moments where a portfolio of brands really comes to its strength. Our ability to dial savings as well as investments per brand, depending on different layers of time and return, is something that we do every day, and we’re very proud of doing. And so I think we have a lot of opportunity to really focus on near term, midterm and long term. If you think of the different brands, I think there are a lot of opportunities for each of the brands, right? Even though Society6 is growing and Media is somewhat down at the moment, there’s still a lot of opportunities within Media and within the different Marketplaces to focus.

A good example is the art fairs that are not being held physically, but then we can actually deploy a little bit of capital to actually deploy against the online studios and really make that initiative a big initiative. So the adaptability of Leaf overall in its investments and capital expenditure has been really great while maintaining also a real cost focus of [cost containment] (corrected by company after the call) in times of great uncertainty.

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Sean P. Moriarty, Leaf Group Ltd. – CEO & Director [21]

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The other thing to point out, Maria, I just noticed, so if you look at the Media business itself, we’re very, very confident, certainly with our top brands, Hunker and Well+ Good and OnlyInYourState and Livestrong that as that — because we’re engaging these audiences so deeply with such intent-driven traffic, when the advertising market comes back, and it’s in the process of reconstituting itself right now with all sorts of puts and takes, we think that our audiences will become increasingly valuable. And we also know that there are many advertisers representing very healthy companies that have effectively parked their spend on the sidelines. And while we don’t know how long it’s going to take, as the world comes back, for sure, those advertisers will be looking to get in front of the exact right audience at the right time. And we’re certainly going to be ready for that.

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Operator [22]

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Ladies and gentlemen, we have reached the end of the allotted time for the question-and-answer session. This concludes today’s conference call. You may now disconnect.