Q1 2024 Live Ventures Incorporated Earnings Call

Operator: Thanks for watching! sausages and uh... and then though they move on with uh... India uh... man uh... We stand by, we're about to begin. Good afternoon everyone, and welcome to today's Live Ventures Q1 Fiscal Year 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question and answer session. You may register to ask a question at any time by pressing star 1 on your telephone keypad, and you may withdraw yourself from the queue by pressing star 2. Also, today's call is being recorded, and I will be standing by if anyone should need any assistance. Now, at this time, I will turn things over to Mr. Greg Powell, Director of Investor Relations. Please go ahead.

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Please standby we're about to begin.

Good afternoon, everyone and welcome to today's live ventures Q1 fiscal year 2024 earnings Conference call. At this time all participants are in a listen only mode. Later, you will have the opportunity to ask questions. During the question and answer session. You may registered to ask a question at any time by pressing star one.

Greg Powell: Thank you, Bo. Good afternoon, and welcome to the Live Ventures first quarter fiscal 2024 conference call. Joining us this afternoon for the call are John Isak, our Chief Executive Officer and President, David Barrett, our Chief Financial Officer, and Eric Kalthoffer, our Chief Operating Officer. And some of the statements we are making today are forward-looking and are based on our best view of the businesses as we see them today.

One on your telephone keypad and you may withdraw yourself from the queue by pressing star. Two also today's call is being recorded and I will be standing by if anyone should need any assistance now at this time I will turn things over to Mr. Greg Powell Director of Investor Relations. Please go ahead Sir.

Thank you Bob Good afternoon, and welcome to the live ventures first quarter fiscal 2024 conference call.

Joining us this afternoon for the call are John <unk>, Our Chief Executive Officer, and President David Berry, Our Chief Financial Officer, and Erik <unk>, Our Chief operating officer.

Some of the statements we're making today are forward looking and are based on our best view of the businesses as we see them today. The actual results could differ materially due to a number of factors, including those outlined in our latest forms 10-K, and 10-Q as filed with the Securities and Exchange Commission.

David Barrett: The actual results could differ materially due to a number of factors, including those outlined in our latest forms 10-K and 10-Q, as filed with the Securities and Exchange Commission. We have no obligation to publicly update any forward-looking statements after this call, whether as a result of new information, future events, changes in assumptions, or otherwise. You can find a copy of our press release and 10-Q referenced on this call in the Investor Relations section of the Live Ventures website. I direct you to our website, 5ventures.com, or sec.gov, for our historical SEC filings. I will now turn the call over to David to walk you through our financial performance. Thank you, Greg. Good afternoon, everyone.

We have no obligation to publicly update any forward looking statements. After this call whether as a result of new information future events changes in assumptions or otherwise you can find a copy of our press release and 10-Q referenced on this call in the Investor Relations section of the White ventures website I direct you to our website.

I've mentioned dot com or SEC dot Gov foreign historical SEC filings.

I will now turn the call over to David to walk you through our financial performance.

Thank you, Greg and good afternoon, everyone.

David Barrett: Before jumping into the numbers for our first quarter, let's briefly discuss two acquisitions that Florin Liquidators completed during the quarter. Flooring Liquidators, a retail flooring business, acquired two Midwest Flooring Chains, which added 10 new showrooms in Arkansas, Oklahoma, and Missouri. We executed these transactions because we believe there is a significant opportunity for Live Ventures to use our capital and resources to expand and enhance Flowing Liquidators' business and product offering into new markets. Now, I'll discuss the financial results for our first quarter ended December 31st, 2023. Total revenue for the quarter increased 70.5% to $117.6 million. The increase is primarily attributable to Flooring Liquidators and PMW, both of which were acquired after the first quarter of fiscal year 2023, as well as an increase of approximately $2.8 million in the Flooring Manufacturing segment.

Before jumping into the numbers for our first quarter lets briefly discuss two acquisitions that point liquidators completed during the quarter.

Boring liquidators are retail flooring business acquired two Midwest foreign change, which added 10, new showrooms in Arkansas, Oklahoma and Missouri.

We executed these transactions because we believe there is significant opportunity for life interest to use our capital and resources to expand and enhance flooring liquidators business and product offering into new markets.

Now I'll discuss the financial results for our first quarter ended December 31st 2023.

Total revenue for the quarter increased 70.5% C $117 6 million.

The increase is primarily attributable to flooring liquidators M. P. M. W. Both of which were acquired after the first quarter of fiscal year 2023, as well as an increase of approximately $2 8 million in the flooring manufacturing segment.

David Barrett: The increase is partially offset by decreased revenues of approximately $6.2 million and other businesses. Flooring manufacturing revenue of approximately $29.2 million increased by $2.8 million, or 10.6%, as compared to the prior year period. The increase in revenue is primarily due to the build-up of its sales force as a result of the acquisition of Harris Flooring Group Brands in the fourth quarter of fiscal year 2023. However, retail entertainment revenue of $20.6 million decreased approximately $2.7 million, or 11.5%, as compared to the prior year. The decrease in revenues is primarily due to reduced consumer demand and a shift in sales mix towards used products, which generally have lower ticket sales with higher margins. As previously announced, we added the retail flooring segment in connection with the acquisition of flooring liquidators in January 2023.

The increase was partially offset by decreased revenues of approximately $6 2 million and our other businesses.

Flooring manufacturing revenue of approximately $29 2 million increased by $2 8 million or 10, 6% as compared to the prior year period.

The increase in revenue is primarily due to the buildup of the sales force as a result of the acquisition of Harris flooring group brands in the fourth quarter of fiscal year 2023.

Retail entertainment revenue of $20 6 million decreased approximately $2 7 million or 11, 5% as compared to the prior year.

The decrease in revenues is primarily due to reduced consumer demand and a shift in sales mix towards used products, which generally have lower ticket sales with higher margins.

As previously announced we added the retail flooring segment in connection with the acquisition of <expletive> Liquidators in January 2023.

David Barrett: Revenues for retail flooring were approximately $34.3 million in the first quarter. New manufacturing revenues of approximately $33.4 million increased by approximately $15.4 million, or 85.5%, as compared to the prior year. The increase is primarily due to the acquisition of PMW in 2023, which contributed $17.5 million of revenue in the quarter. This increase was partially offset by a $2.5 million decrease in our other steel manufacturing businesses due to reduced consumer demand as a result of general economic conditions. Corporate and other revenues decreased approximately 1.2 million or 93.2% to 100,000 as compared to the prior year period. This decrease is primarily due to the closure of SW Financial in May 2023.

Revenues for retail flooring were approximately $34 3 million in the first quarter.

Steel manufacturing revenues of approximately $33 4 million.

Increased approximately $15 4 million or <unk> 85, 5% as compared to the prior year.

The increase was primarily due to the acquisition of P. M. W. In 2023, which contributed $17 5 million of revenue in the quarter.

This increase was partially offset by a $2 5 million decrease in our other steel manufacturing businesses due to reduced consumer demand as a result of general economic conditions.

Corporate and other revenues decreased approximately $1 2 million or <unk> 93, 2% to 100000 as compared to the prior year period.

Decrease is primarily due to the closure of S. W financial and made.

2023.

David Barrett: Gross profit for the quarter was $36.3 million, up from $21.9 million in the prior year period. The gross margin percentage for the company decreased to 30.9% from 31.8% in the prior year period. The decrease in gross margin is primarily attributable to reduced margins in the steel manufacturing segment.

Gross profit for the quarter was $36 3 million up from $21 9 million in the prior year period.

The gross margin percentage for the company decreased to 39% from 31, 8%.

Our year period. The decrease in gross margin is primarily attributable to reduced margins in the steel manufacturing segment.

David Barrett: Although partially offset by the acquisition of flooring liquidators, which contributed a gross margin of 38% in the quarter, the decrease in gross margin in the steel manufacturing segment is primarily due to the acquisition of PMW, which historically has generated lower margins, as well as reduced production in certain other steel manufacturing businesses. General and administrative expense increased approximately $13.1 million as compared to the prior year period. The increase is due to the acquisitions of Flooring Liquidators and PMW, which collectively incurred $14 million of general administrative expenses during the quarter. Selling and marketing expense increased approximately $2.3 million as compared to the prior year period, primarily due to increased sales personnel, trade show activity in our flooring manufacturing segment, and the acquisition of flooring liquidators. Interest expense increased by approximately $2.1 million as compared to the prior year period.

All set by the acquisition of flooring, liquidators, which contributed a gross margin of 38% in the quarter.

The decrease in gross margin and the steel manufacturing segment is primarily due to the acquisition of Pmw, which historically has generated lower margins as well as reduced production in certain other steel manufacturing businesses.

General and administrative expense increased approximately $13 1 million as compared to the prior year period.

The increase is due to the acquisitions of flooring liquidators N P M W, which collectively incurred $14 million of general and administrative expense during the quarter.

Yeah.

Selling and marketing expense increased approximately $2 3 million as compared to the prior year period, primarily due to increased sales personnel trade show activity in our flooring manufacturing segment and the acquisition of flooring liquidators.

Interest expense increased by approximately $2 1 million as compared to the prior year period.

David Barrett: The increase is primarily due to increased debt balances related to the acquisitions of flooring liquidators and PMW. Net loss was approximately $700,000, and loss per share was $0.22 as compared to net income of approximately $1.8 million and diluted EPS of $0.60 in the prior year period. The decrease in net income is attributable to lower operating income and increased interest expense.

The increase is primarily due to increased debt balances related to the acquisitions of flooring Liquidators N P. M W.

Net loss was approximately 700000 and loss per share was 22 cents as compared to net income of approximately $1 8 million and diluted EPS of <unk> 60 in the prior year period.

The decrease in net income is attributable to lower operating income and increased interest expense.

David Barrett: Adjusted EBITDA for the first quarter was approximately $8.7 million, an increase of approximately $1.2 million, or 15.3%, as compared to the prior year period. Turning to liquidity, we ended the quarter with total cash availability of $45 million. Consisting of cash on hand of $5.6 million and availability under our various lines of credit totaling $39.4 million, our working capital was approximately $81.8 million as of December 31, 2023, compared to $85 million as of September 30, 2023. Total assets were $436.6 million, and total stockholders' equity was $99.4 million as of December 31st.

Adjusted EBITDA for the first quarter was approximately $8 7 million, an increase of approximately $1 2 million or 15, 3% as compared to the prior year period.

Turning to liquidity, we ended the quarter with total cash availability of $45 million.

Consisting of cash on hand of $5 6 million and availability under our various lines of credit totaling $39 4 million.

Our working capital was approximately $81 8 million as of December 31, 2023, compared to $85 million as of September 32023.

Total assets were $436 6 million and total stockholders' equity was $99 4 million as of December 31st.

David Barrett: As part of our capital allocation strategy, we may make share repurchases from time to time. We believe our stock repurchases represent long-term value for our stockholders. During the quarter, we repurchased 4,346 shares of Comma Stock at an average price of $24.51 per share.

As part of our capital allocation strategy, we may make share repurchases from time to time, we believe our stock repurchases represent long term value for our stockholders.

During the quarter, we repurchased 4346 shares of common stock at an average price of $24 51 per share.

David Barrett: As of December 31st, the company had approximately $3.2 million available for repurchases under our repurchase program. In conclusion, we are pleased that our first quarter revenues increased 70.5% and adjusted EBITDA increased 15.3% as compared to the prior year period. However, our businesses continue to be impacted by industry-specific pressures.

As of December 31, the company had approximately $3 2 million available for repurchases under our repurchase program.

In conclusion, we are pleased that our first quarter revenues increased 75% and adjusted EBITDA increased 15, 3% as compared to the prior year period.

Our businesses continue to be impacted by industry specific pressures as a result, we remain focused on increased productivity expansion and innovation.

David Barrett: As a result, we remain focused on increased productivity, expansion, and innovation. Despite the challenging environment, we remain focused on creating long-term value for our stockholders by executing our long-term buy, build, and hold strategy. We'll now take questions from those of you on the conference call. Operator, please open the line for questions. Thank you, Mr. Barrett. Ladies and gentlemen, at this time, if you have any questions, you can press star 1 on your telephone, and you can remove yourself from the queue by pressing star 2. Once again, that's Star 1 for a question, and we'll pause for just one moment to allow questions. Gentlemen, nothing at this time, but just to give everyone one final opportunity, please star 1 for any questions. Let's take a question from Mark, please, operator. We'll go to Mark Schleifer at Alpine Global. Hi, how's it going?

Despite the challenging environment, we remain focused on creating long term value for our stockholders by executing our long term buy build and hold strategy.

We'll now take questions from those of you on the conference call Operator, Please open the line for questions.

Thank you Mr. Barrett, ladies and gentlemen at this time, if you do have any questions. You can press star one on your telephone and you can remove yourself from the queue by pressing star to once again Thats Star one for a question and we'll pause for just one moment to allow questions to queue.

And gentlemen, nothing at this time, but just to give everyone. One final opportunity. Please.

Star one for any questions. This afternoon.

Okay.

Let's take a question from from.

Mark Please operator, certainly will go to Mark Schleifer at Alpine global.

David Barrett: Thank you for taking my question. I was wondering if you guys had any updates with regard to your buyout proposal, LL Floor? The answer is we do not have an update to share with the public at this time, but I do appreciate the question, Mark.

How has it gone thank you for taking my question.

I was wondering if you guys had any updates with regards to your buyout proposal Hello flora.

Yeah.

Okay.

Okay.

The answer is we do not have an update to share with the public but I do appreciate the question Mark.

Yes.

Yes.

Operator: Thank you. And just a final reminder, ladies and gentlemen, if you have any further questions, please call 1. And gentlemen, it appears we have no further questions this afternoon. I'd like to turn the conference back over to the Live Ventures management team for any closing questions. Just want to thank everyone for joining the call, and we look forward to our next earnings release next quarter. Thank you. Thank you very much. Again, ladies and gentlemen, that will conclude the Live Ventures Q1 Fiscal Year 2024 Earnings Conference Call. We'd like to thank you all so much for joining us and wish you all a great remainder of your day. www.verbalink.com www. VenturePlanet.com

Yes.

Thank you and just a final reminder, ladies and gentlemen for any further questions Darwin.

Okay.

And gentlemen, it appears we have no further questions. This afternoon I'd like to turn the conference back over to the live ventures management team for any closing comments.

Just want to thank everyone for joining the call and we look forward to our next.

Earnings release next next quarter. Thank you.

Thank you very much again, ladies and gentlemen that will conclude the live ventures Q1 fiscal year 2024 earnings conference call, we'd like to thank you all so much for joining us and wish you all a great remainder of your day Goodbye.

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