Financial Model

All units in USD million except when stated otherwise Circ 1

> Income Statement:

Historical Projected
Particulars FY19 A FY20 A FY21 A FY22 A FY23 A FY24 P FY25 P FY26 P FY27 P FY28 P Rationale behind assumptions

Sales by segment:
United States Sales $7,765.0 $11,901.0 $11,249.0 $10,464.0 $10,482.0 $11,006.1 $11,556.4 $12,134.2 $12,740.9 $13,378.0

A 5% growth forecast for a furniture brand reflects a conservative, realistic

approach based on historical performance, expected trends in consumer behavior,
product and market developments, and external conditions. This forecast would
assume no major economic shocks and a combination of factors that support
53.3% (5.5%) (7.0%) 0.2% 5.0% 5.0% 5.0% 5.0% 5.0% >> steady, sustainable growth.
International Sales 1,362.0 2,244.0 2,459.0 1,754.0 1,521.0 1,597.1 1,676.9 1,760.7 1,848.8 1,941.2

A 5% growth forecast for a furniture brand reflects a conservative, realistic

approach based on historical performance, expected trends in consumer behavior,
product and market developments, and external conditions. This forecast would
assume no major economic shocks and a combination of factors that support
64.8% 9.6% (28.7%) (13.3%) 5.0% 5.0% 5.0% 5.0% 5.0% >> steady, sustainable growth.
Total Sales 9,127.0 14,145.0 13,708.0 12,218.0 12,003.0 12,603.2 13,233.3 13,895.0 14,589.7 15,319.2
% growth 55.0% (3.1%) (10.9%) (1.8%) 5.0% 5.0% 5.0% 5.0% 5.0%
Cost of sales (6,980.0) (10,033.0) (9,813.0) (8,802.0) (8,336.0) (6,301.6) (6,616.7) (6,947.5) (7,294.9) (7,659.6)
% of sales 76.5% 70.9% 71.6% 72.0% 69.4% 50.0% 50.0% 50.0% 50.0% 50.0%
Gross profit 2,147.0 4,112.0 3,895.0 3,416.0 3,667.0 6,301.6 6,616.7 6,947.5 7,294.9 7,659.6

A 50% growth forecast for gross profit in a furniture brand can be realistically
projected when considering an alignment of demand growth, operational
improvements, pricing strategies, market expansion, and efficient cost
management. If these factors align and the brand can capitalize on emerging
GP margin % 23.5% 29.1% 28.4% 28.0% 30.6% 50.0% 50.0% 50.0% 50.0% 50.0% >> trends and opportunities, such growth is achievable.

Selling, operations, technology, general and administrative (1,432.0) (1,540.0) (1,693.0) (2,254.0) (2,030.0) (1,198.6) (1,256.5) (1,317.5) (1,381.6) (1,449.0)
The forecasted 10% increase in SG&A costs is likely a combination of strategic
investments in growth areas (such as marketing, technology, and expansion),
higher operational costs due to inflation, and investments aimed at improving the
customer experience. Given that furniture is a competitive industry, companies
often increase their SG&A budgets to gain a market advantage or maintain
profitability while dealing with inflationary pressures and expanding their
footprint.
% of sales 15.7% 10.9% 12.4% 18.4% 16.9% 10.0% 10.0% 10.0% 10.0% 10.0% >>
Advertising (1,096.0) (1,412.0) (1,378.0) (1,473.0) (1,397.0) (630.2) (661.7) (694.7) (729.5) (766.0)

A 5% increase in advertising costs for a furniture brand is reasonable based on

competitive, economic, and technological factors. The need to maintain visibility in
a highly competitive market, especially with the shift toward digital channels,
combined with economic conditions and evolving consumer behaviors, supports
% of sales 12.0% 10.0% 10.1% 12.1% 11.6% 5.0% 5.0% 5.0% 5.0% 5.0% >> this growth forecast.
Customer service and merchant fees (357.0) (510.0) (584.0) (632.0) (557.0) (126.0) (132.3) (138.9) (145.9) (153.2)

A 1% growth forecast for customer service fees reflects a balanced approach to

accounting for inflation, operational adjustments, and service-related demands
while factoring in efficiency improvements and scale economies. The forecast
suggests that while customer service needs may increase, the company is
effectively managing costs through better technology, streamlined processes, and
% of sales 3.9% 3.6% 4.3% 5.2% 4.6% 1.0% 1.0% 1.0% 1.0% 1.0% >> gradual service enhancements.
EBITDA (738.0) 650.0 240.0 (943.0) (317.0) 4,346.8 4,566.1 4,796.3 5,037.9 5,291.4
EBITDA margin % (8.1%) 4.6% 1.8% (7.7%) (2.6%) 34.5% 34.5% 34.5% 34.5% 34.5%

Depreciation & Amortization (192.0) (286.0) (322.0) (371.0) (417.0) (61.7) (66.8) (72.0) (77.4) (82.9)
Restructuring charges - (4.0) - (31.0) (65.0) - - - - -
Impairment and other related charges - - (12.0) (39.0) (14.0) - - - - -
Operating Income (EBIT) (930.0) 360.0 (94.0) (1,384.0) (813.0) 4,285.1 4,499.3 4,724.3 4,960.5 5,208.5
EBIT margin % (10.2%) 2.5% (0.7%) (11.3%) (6.8%) 34.0% 34.0% 34.0% 34.0% 34.0%

Interest expense (55.0) (146.0) (32.0) (27.0) (17.0) (246.7) (245.5) (244.3) (243.1) (241.8)
Other income 3.0 (9.0) (4.0) (4.0) 1.0 630.2 661.7 694.7 729.5 766.0
A 5% growth forecast reflects the brand’s ability to steadily increase income
through non-core but complementary business activities, which generally grow at a
% of sales 0.0% (0.1%) (0.0%) (0.0%) 0.0% 5.0% 5.0% 5.0% 5.0% 5.0% >> stable, incremental pace over time.
Gain on debt extinguishment - - 96.0 100.0 - - - - -
PBT (982.0) 205.0 (130.0) (1,319.0) (729.0) 4,668.5 4,915.5 5,174.8 5,446.9 5,732.6
PBT margin % (10.8%) 1.4% (0.9%) (10.8%) (6.1%) 37.0% 37.1% 37.2% 37.3% 37.4%

Income tax expense (3.0) (20.0) (1.0) (12.0) (9.0) (980.4) (1,032.3) (1,086.7) (1,143.9) (1,203.9)

The forecast of a 21% increase in income tax expense could be based on the
expected rise in taxable profits due to the combination of higher sales, increased
operational efficiency, potential changes in tax rates, and other business
expansions or operational improvements. This growth in tax expense would
typically reflect a robust business performance, with the company becoming more
profitable, while also navigating external factors like tax reforms or changes in
Effective tax rate % (0.3%) 9.8% (0.8%) (0.9%) (1.2%) 21.0% 21.0% 21.0% 21.0% 21.0% >> economic conditions.
Net income (985.0) 185.0 (131.0) (1,331.0) (738.0) 3,688.1 3,883.2 4,088.1 4,303.1 4,528.8
Net income margin % (10.8%) 1.3% (1.0%) (10.9%) (6.1%) 29.3% 29.3% 29.4% 29.5% 29.6%
 Historical Projected
Particulars FY19 A FY20 A FY21 A FY22 A FY23 A FY24 P FY25 P FY26 P FY27 P FY28 P Rationale behind assumptions
> Balance Sheet:

ASSETS
Current Assets:
Cash and cash equivalents $582.8 $2,130.0 $1,706.0 $1,050.0 $1,322.0 $6,091.6 $9,863.9 $13,834.4 $18,013.2 $22,410.7
Short term investments 404.3 462.0 693.0 228.0 29.0 630.2 661.7 694.7 729.5 766.0
Accounts receivable, net 99.7 110.0 226.0 272.0 140.0 345.3 362.6 380.7 399.7 419.7
Inventories 61.7 52.0 69.0 90.0 75.0 345.3 362.6 380.7 399.7 419.7
Prepaid expenses and other current assets 228.7 292.0 318.0 293.0 289.0 1,260.3 1,323.3 1,389.5 1,459.0 1,531.9
Total Current Assets 1,377.1 3,046.0 3,012.0 1,933.0 1,855.0 8,672.6 12,574.0 16,680.1 21,001.1 25,548.0

Non-current Assets:
Operating Lease R-O-U assets 763.4 808.0 849.0 839.0 820.0 820.0 820.0 820.0 820.0 820.0
Property, plant, and equipment, net 624.5 684.0 674.0 774.0 748.0 812.8 879.0 946.7 1,016.1 1,087.5
Long-term investments 155.7 - - - - 126.0 132.3 138.9 145.9 153.2
Other assets 32.3 32.0 35.0 34.0 51.0 63.1 75.7 88.8 102.5 116.8
Total Non-current Assets 1,575.9 1,524.0 1,558.0 1,647.0 1,619.0 1,822.0 1,907.0 1,994.5 2,084.6 2,177.5
Total Assets 2,953.0 4,570.0 4,570.0 3,580.0 3,474.0 10,494.6 14,481.1 18,674.5 23,085.6 27,725.5

LIABILITIES AND STOCKHOLDERS EQUITY

Current Liabilities:
Accounts payable 908.1 1,157.0 1,166.0 1,204.0 1,234.0 1,208.5 1,268.9 1,332.4 1,399.0 1,469.0
Other accrued liabilities 703.4 1,009.0 1,051.0 868.0 949.0 1,260.3 1,323.3 1,389.5 1,459.0 1,531.9
Total current liabilities 1,611.5 2,166.0 2,217.0 2,072.0 2,183.0 2,468.8 2,592.3 2,721.9 2,858.0 3,000.9

Non-current liabilities:
Long-term debt 1,456.2 2,659.0 3,052.0 3,137.0 3,092.0 3,076.5 3,061.2 3,045.9 3,030.6 3,015.5
Revolver - - - - -
Operaiting lease 822.6 870.0 892.0 893.0 862.0 862.0 862.0 862.0 862.0 862.0
Other non-current liabilities 6.9 67.0 28.0 28.0 44.0 68.8 94.5 121.4 149.4 178.5
Total non-current liabilities 2,285.7 3,596.0 3,972.0 4,058.0 3,998.0 4,007.3 4,017.7 4,029.2 4,042.0 4,056.0
Total Liabilities 3,897.3 5,762.0 6,189.0 6,130.0 6,181.0 6,476.1 6,610.0 6,751.1 6,900.0 7,056.9

Stockholders' equity:
Class A common stock, par value $0.001 per share, 500,000,000
shares authorized, 72,980,490 and 66,642,611 shares issued and 0.1 - - - - - - - - -
outstanding at December 31, 2020 and 2019
Class B common stock, par value $0.001 per share, 164,000,000
shares authorized, 26,564,234 and 26,957,815 shares issued and 0.0 - - - - - - - - -
outstanding at December 31, 2020 and 2019
Additional paid-in capital 1,122.5 699.0 337.0 737.0 1,316.0 1,316.0 1,316.0 1,316.0 1,316.0 1,316.0
Accumulated deficit (2,065.4) (1,886.0) (1,949.0) (3,280.0) (4,018.0) (329.9) 3,553.3 7,641.4 11,944.5 16,473.3
Accumulated other comprehensive loss (1.4) (5.0) (7.0) (7.0) (5.0) (5.0) (5.0) (5.0) (5.0) (5.0)
Total stockholders' equity (944.2) (1,192.0) (1,619.0) (2,550.0) (2,707.0) 981.1 4,864.3 8,952.4 13,255.5 17,784.3
Total liabilities and stockholders' equity 2,953.0 4,570.0 4,570.0 3,580.0 3,474.0 7,457.2 11,474.3 15,703.5 20,155.4 24,841.1
Check - - - - - 3,037.4 3,006.8 2,971.0 2,930.2 2,884.4
 Historical Projected
Particulars FY19 A FY20 A FY21 A FY22 A FY23 A FY24 P FY25 P FY26 P FY27 P FY28 P Rationale behind assumptions
> Cash Flow Statement:

Cash flows from operating activities

Net income ($985.0) $185.0 ($131.0) ($1,331.0) ($738.0) $3,688.1 $3,883.2 $4,088.1 $4,303.1 $4,528.8
Adjustments:
Depreciation & Amortization 192.0 286.0 322.0 371.0 417.0 (61.2) (66.2) (71.3) (76.5) (81.9)
Equity-based compensation expense 227.0 276.0 344.0 513.0 605.0 - - - - -
Amortization of discount and issuance costs on convertible notes 62.0 134.0 7.0 8.0 8.0 - - - - -
Impairment and other related net charges - - 12.0 39.0 14.0 - - - - -
Gain on debt extinguishment - - - (96.0) (100.0) - - - - -
Other noncash adjustments (2.0) 13.0 6.0 41.0 (3.0) - - - - -
Changes in WC items:
Accounts receivable (49.0) (15.0) (118.0) (48.0) 132.0 205.3 17.3 18.1 19.0 20.0
Inventories (15.0) 10.0 (17.0) (21.0) 16.0 270.3 17.3 18.1 19.0 20.0
Prepaid expenses and other assets (33.0) (62.0) (28.0) 27.0 16.0 971.3 63.0 66.2 69.5 72.9
Accounts payable and other liabilities 406.0 590.0 13.0 (177.0) (18.0) (285.8) (123.4) (129.6) (136.1) (142.9)
Net cash provided by operating activities (197.0) 1,417.0 410.0 (674.0) 349.0 4,788.0 3,791.2 3,989.6 4,198.0 4,417.0

Cash flows from investing activities

Purchase / Sale and maturities of short- and long-term investments (439.0) 99.0 (240.0) 459.0 197.0 - - - - -
Purchase of property, plant, and equipment (272.0) (186.0) (101.0) (186.0) (148.0) 64.8 66.2 67.7 69.4 71.3
Site and software development costs (129.0) (149.0) (179.0) (272.0) (203.0) - - - - -
Acquisitions, net of cash acquired - - - - -
Other, net (15.0) - 5.0 - 2.0 - - - - -
Net cash used in investing activities (855.0) (236.0) (515.0) 1.0 (152.0) 64.8 66.2 67.7 69.4 71.3

Cash flows from financing activities

Repurchase of common stock - (380.0) (300.0) (75.0) - - - - - -
Proceeds from issuance of convertible notes 935.0 2,028.0 - 678.0 678.0 - - - - -
Premiums paid for capped call confirmations (145.0) (255.0) (80.0) (87.0) - - - - -
Payment of principal upon maturity of convertible debt - - - (3.0) - - - - - -
Payments to extinguish convertible debt - (1,040.0) - (504.0) (514.0) - - - - -
Proceeds/(Repayments) of long-term debt - - - - - (46.4) (46.1) (45.9) (45.7) (45.5)
Dividends paid (36.9) (38.8) (40.9) (43.0) (45.3)
Borrowings/(Repayments) of revolving credit facilities - - - - -
Other financing activities (3.0) - (3.0) - - - - - - -
Net cash (used in) provided by financing activities 787.0 353.0 (303.0) 16.0 77.0 (83.3) (85.0) (86.8) (88.7) (90.7)

Effect of exchange rate changes on cash, cash equivalents and restr (2.0) 13.0 (16.0) 1.0 2.0 - - - - -
Net increase (decrease) in cash, cash equivalents, and restricted ca (267.0) 1,547.0 (424.0) (656.0) 276.0 4,769.6 3,772.4 3,970.5 4,178.7 4,397.6

Cash, cash equivalents, and restricted cash at beginning of year 850.0 583.0 2,130.0 1,706.0 1,050.0 1,322.0 6,091.6 9,863.9 13,834.4 18,013.2
Cash, cash equivalents, and restricted cash at end of year 583.0 2,130.0 1,706.0 1,050.0 1,326.0 6,091.6 9,863.9 13,834.4 18,013.2 22,410.7
 Historical Projected
Particulars FY19 A FY20 A FY21 A FY22 A FY23 A FY24 P FY25 P FY26 P FY27 P FY28 P Rationale behind assumptions
> PP&E Schedule:
Opening Balance 748.0 812.8 879.0 946.7 1,016.1
Add: CapEx 126.0 132.3 138.9 145.9 153.2
Less: Depreciation (61.2) (66.2) (71.3) (76.5) (81.9)
Closing Balance 748.0 812.8 879.0 946.7 1,016.1 1,087.5
CapEx % of sales 1.0% 1.0% 1.0% 1.0% 1.0% >> Rationale?
Depreciation % of opening balance 7.0% 7.0% 7.0% 7.0% 7.0% >> Rationale?

> Other Assets Schedule:

Opening Balance 51.0 63.1 75.7 88.8 102.5
Addition 12.6 13.2 13.9 14.6 15.3
Less: Depreciation/Amortization (0.5) (0.6) (0.8) (0.9) (1.0)
Closing Balance 51.0 63.1 75.7 88.8 102.5 116.8
Addition % of Sales 0.1% 0.1% 0.1% 0.1% 0.1% >> Rationale?
Depreciation/Amortization % of opening balance 1.0% 1.0% 1.0% 1.0% 1.0% >> Rationale?

> Other Non-current Liabilities Schedule:

Opening Balance 44.0 68.8 94.5 121.4 149.4
Addition 25.2 26.5 27.8 29.2 30.6
Less: Repayment (0.4) (0.7) (0.9) (1.2) (1.5)
Closing Balance 44.0 68.8 94.5 121.4 149.4 178.5
Repayment % of opening balance 1.0% 1.0% 1.0% 1.0% 1.0% >> Rationale?
Addition % of Sales 0.2% 0.2% 0.2% 0.2% 0.2% >> Rationale?
 Historical Projected
Particulars FY19 A FY20 A FY21 A FY22 A FY23 A FY24 P FY25 P FY26 P FY27 P FY28 P Rationale behind assumptions
> Debt Schedule:
Long-term Debt:
Opening Balance 3,092.0 3,076.5 3,061.2 3,045.9 3,030.6
Less: Repayment (30.9) (30.8) (30.6) (30.5) (30.3)
Add: Borrowing 15.5 15.4 15.3 15.2 15.2
Closing Balance 3,092.0 3,076.5 3,061.2 3,045.9 3,030.6 3,015.5
Interest rate 8.0% 8.0% 8.0% 8.0% 8.0% >> Rationale?
Repayment % of opening balance 1.0% 1.0% 1.0% 1.0% 1.0% >> Rationale?
Borrowing % of opening balance 0.5% 0.5% 0.5% 0.5% 0.5% >> Rationale?

Excess cash available:

Cash at the beginning 6,138.0 9,910.1 13,880.4 18,058.9 22,456.2
Debt Repayments (30.9) (30.8) (30.6) (30.5) (30.3)
Minimum cash balance (100.0) (100.0) (100.0) (100.0) (100.0) >> Rationale?
Cash for revolver 6,007.0 9,779.3 13,749.7 17,928.4 22,325.9

Revolving Credit Facility:

Opening Balance - - - - -
Drawdown / (Paydown) - - - - -
Closing Balance - - - - -
Avg. Balance - - - - -
Interest rate 10.0% 10.0% 10.0% 10.0% 10.0% >> Rationale?

> Working Capital Schedule:

Sales 9,127.0 14,145.0 13,708.0 12,218.0 12,003.0 12,603.2 13,233.3 13,895.0 14,589.7 15,319.2
COGS 6,980.0 10,033.0 9,813.0 8,802.0 8,336.0 6,301.6 6,616.7 6,947.5 7,294.9 7,659.6

Accounts receivable 99.7 110.0 226.0 272.0 140.0 345.3 362.6 380.7 399.7 419.7
Receivable days 4 3 6 8 4 10 10 10 10 10 >> Rationale?
Inventories 61.7 52.0 69.0 90.0 75.0 345.3 362.6 380.7 399.7 419.7
Inventory days 3 2 3 4 3 20 20 20 20 20 >> Rationale?
Prepaid expenses and other current assets 228.7 292.0 318.0 293.0 289.0 1,260.3 1,323.3 1,389.5 1,459.0 1,531.9
% of sales 2.5% 2.1% 2.3% 2.4% 2.4% 10.0% 10.0% 10.0% 10.0% 10.0% >> Rationale?
Accounts payable 908.1 1,157.0 1,166.0 1,204.0 1,234.0 1,208.5 1,268.9 1,332.4 1,399.0 1,469.0
Payable days 47 42 43 50 54 70 70 70 70 70 >> Rationale?
Other accrued liabilities 703.4 1,009.0 1,051.0 868.0 949.0 1,260.3 1,323.3 1,389.5 1,459.0 1,531.9
% of sales 7.7% 7.1% 7.7% 7.1% 7.9% 10.0% 10.0% 10.0% 10.0% 10.0% >> Rationale?

> Other assumptions:

Short term investments (% of sales) 4.4% 3.3% 5.1% 1.9% 0.2% 5.0% 5.0% 5.0% 5.0% 5.0% >> Rationale?
Long term investments (% of sales) 1.7% - - - - 1.0% 1.0% 1.0% 1.0% 1.0% >> Rationale?
Dividend Payout Ratio - - - - - 1.0% 1.0% 1.0% 1.0% 1.0% >> Rationale?