Full Year 2024 Live Ventures Inc Earnings Call

Operator: Welcome to the Live Ventures Fiscal Year 2024 Year-End Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct the question-and-answer session.

Welcome to the live ventures fiscal year 2024 year end earnings conference call. At this time all participants are in a listen only mode. Later, we will conduct the question and answer session I would now like to turn the call over to Greg Powell Director of Investor Relations. Please go ahead Sir.

Greg Powell: I would now like to turn the call over to Greg Powell, Director of Investor Relations. Please go ahead.

Greg Powell: Thank you, Jen.

Speaker Change: Thank you Jen <unk>.

Greg Powell: Good afternoon, and welcome to the Live Ventures Fiscal Year 2024 conference call. Joining us this afternoon are John Isaac, our Chief Executive Officer and President, and David Verret, our Chief Financial Officer. Some of the statements we are making today are forward-looking and are based on our best view of our 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, our 10-K and our 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.

Good afternoon, and welcome to the live ventures fiscal year 2024 conference call. Joining us. This afternoon are John <unk>, Our Chief Executive Officer, and President and David <unk>, Our Chief Financial Officer.

Speaker Change: Some of the statements we're making today are forward looking and are based on our best view of our businesses as we see them today.

Speaker Change: The actual results could differ material materially due to a number of factors, including those outlined in our latest forms 10-K, and our 10-Q as filed with Securities and Exchange Commission.

Speaker Change: 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 our press release referenced on this call in the Investor Relations section of the live ventures website I direct you to our website my adventures dot com or SEC dot Gov or historical S. A.

Greg Powell: You can find our press release reference on this call in the Investor Relations section of the Live Ventures website. I direct you to our website, liveventures.com, or sec.gov, or historical sec filings.

David Verret: I will now turn the call over to David to walk us through our financial performance. David?

Speaker Change: Violence.

Speaker Change: I'll now turn the call over to David to walk us through our financial performance David.

David Verret: Thank you, Greg, and good afternoon, everyone. Let's jump right in and discuss the financial results of our fiscal year ended September 30, 2024. Total revenue for the year increased 33.1% to approximately $472.8 million. The increase is primarily attributable to the acquisitions of flooring liquidators and PMW, both of which were acquired during fiscal year 2023, and Central Steel, which was acquired in May 2024. That collectively added approximately $118.3 million, as well as an increase of approximately $15.2 million in our flooring manufacturing segment. The increase was partially offset by decreased revenue of approximately $13.7 million in the company's other businesses, primarily due to general economic conditions.

David: You, Greg and good afternoon, everyone.

David: Jump right in and discuss the financial results of our fiscal year ended September 32024.

David: Total revenue for the year increased 33, 1% to approximately $472 8 million.

David: The increase was primarily attributable to the acquisitions of foreign liquidators and pmw, both of which were acquired during fiscal year 2023, and central steel, which was acquired in May 2024.

David: That collectively added approximately $118 3 million as well as an increase of approximately $15 2 million and our flooring manufacturing segment.

David: The increase was partially offset by decreased revenue of approximately $13 7 million and the companys other businesses, primarily due to general economic conditions.

David Verret: Retail entertainment segment revenue decreased 7.1 million, or 9.1%, to approximately 71 million compared to the prior year. The decrease in revenue was primarily attributable to reduced consumer demand and a shift in sales mix towards used products, which generally have lower ticket sales prices with higher margins. Retail flooring segment revenue increased $61.1 million, or 80.6%, to approximately $137 million compared to the prior year. The increase is primarily due to the acquisition of foreign liquidators in the second quarter of fiscal year 2023. increased revenue employing Liquidator's builder design and installation segment, elite builder services, and the acquisition of carpet remanent outlet during the first quarter of fiscal year 2024.

David: Retail Entertainment segment revenue decreased $7 1 million or nine 1% to approximately $71 million compared to the prior year.

David: The decrease in revenue was primarily attributable to reduced consumer demand and a shift in sales mix towards use products, which generally have lower ticket sales prices with higher margins.

David: Retail flooring segment revenue increased $61 1 million or 86% to approximately $137 million compared to the prior year.

David: The increase was primarily due to the acquisition of foreign liquidators in the second quarter of fiscal year 2023 <unk>.

David: Increased revenue in flooring liquidators builder design and installation segment elite build to services.

David: And the acquisition of carpet remnant outlet during the first quarter of fiscal year 2024.

David Verret: Flooring manufacturing segment revenue increased $15.2 million, or 13.8%, to approximately $125 million compared to the prior year. The increase is primarily due to increased sales related to Harris Flooring Group brands, which were acquired in the fourth quarter of fiscal year 2023. Steel manufacturing segment revenue increased 50.7 million, or 57%, to approximately 139.6 million compared to the prior year. The increase is primarily due to increased revenue of approximately $51.2 million at PMW and approximately $6 million at Central Steel, partially offset by a $6.5 million decrease in the company's other steel manufacturing business. Gross profit for the year was approximately $144.8 million, up from $115.6 million in the prior year.

David: Flooring manufacturing segment revenue increased $15 2 million or 13, 8% to approximately $125 million compared to the prior year.

David: The increase was primarily due to increased sales related to Harris flooring group brands, which were acquired in the fourth quarter of fiscal year 2023.

David: Steel manufacturing segment revenue increased $57 million or 57% to approximately $139 6 million compared to the prior year.

David: The increase was primarily due to increased revenue of approximately $51 2 million at pmw and approximately $6 million at central steel, partially offset by $6 $5 million decrease in the Companys other steel manufacturing businesses.

David: Gross profit for the year was approximately $144 8 million up from $115 6 million in the prior year.

David Verret: The gross margin percentage for the company decreased to 30.6% from 32.5% in the prior year. The decrease in margin percentage is primarily due to the acquisition of PMW, which was historically generated lower margins, and decreased margins in the steel manufacturing segment due to reduced production efficiencies as a result of lower demand. The decrease in gross margin was partially offset by increased margins at retail, entertainment, and flooring manufacturing segments. General and administrative expense increased approximately $31.4 million to $118 million. The increase is primarily due to the acquisitions of flooring liquidators and PMW during fiscal year 2023.

David: The gross margin percentage for the company decreased to 36% from 32, 5% in the prior year.

The decrease in margin percentage is primarily due to the acquisition of Pmw, which was historically generated lower margins and decreased margins in the steel manufacturing segment due to reduced production efficiencies as a result of lower demand.

David: The decrease in gross margin was partially offset by increased margins at.

David: The retail entertainment and flooring manufacturing segments.

David: General and administrative expense increased approximately $31 4 million to $118 million.

David: The increase was primarily due to the acquisitions of flooring liquidators in pmw during fiscal year 2023.

David Verret: Sales and marketing expense increased approximately $8.9 million to $22.4 million. The increase is primarily due to increased sales personnel required in connection with the acquisition of Harris Flooring Group brands, increased convention and trade show activity in the flooring manufacturing segment, and an increase in sales force in the retail flooring segment.

David: Sales and marketing expense increased approximately $8 9 million to $22 4 million. The increase was primarily due to increased sales personnel acquired in connection with the acquisition of Harris flooring group brands increased convention and trade show activity and the flooring manufacturing segment.

David: And an increase in sales force and the retail flooring segment.

David Verret: During the fourth quarter of fiscal year 2024, our retail flooring segment recorded a goodwill impairment charge of $18.1 million. This charge was driven by declining performance at foreign liquidators reflecting the adverse impacts of broader economic conditions that have troubled the floor covering industry as a whole. Specifically, flooring liquidators has been impacted by high interest rates, lingering inflation, and lower consumer confidence. These factors have affected the housing market, including home resales, new construction starts, and renovation activity. Interest expense increased by approximately $4.1 million compared to fiscal year 2023. The increase is primarily attributable to the incremental debt incurred in connection with the acquisitions of flowing liquidators and PMWs.

David: During the fourth quarter of fiscal year 2020 for our retail flooring segment recorded a goodwill impairment charge of $18 1 million.

David: This charge was driven by declining performance at fluent liquidators, reflecting the adverse impacts of broader economic conditions that are troubled the floor covering industry as a whole.

David: Specifically flooring liquidators has been impacted by high interest rates lingering inflation and lower consumer confidence. These factors have affected the housing market, including home resales, new construction starts and renovation activities.

David: Interest expense increased by approximately $4 1 million compared to fiscal year 2023. The increase was primarily attributable to the incremental debt incurred in connection with the acquisitions of flooring liquidators and BMW.

David Verret: Net loss for the year was approximately $26.7 million and loss per share was $8.48 compared with a net loss of approximately $100,000 and loss per share of $0.03 in fiscal year 2023. The decrease is primarily attributable to the goodwill impairment charge, lower operating earnings, and higher interest expense compared to the prior year. Adjusted EBITDA for the year was approximately $24.5 million, a decrease of approximately $7 million as compared to the prior year. Turning to liquidity, we ended the year with total cash availability of $33.3 million, consisting of cash on hand of $4.6 million, and availability under our various lines of credit totaling $28.7 million.

David: Net loss for the year was approximately $26 7 million and loss per share was $8 48, compared with a net loss of approximately 100000 and loss per share of <unk> <unk> in fiscal year 2023.

The decrease was primarily attributable to the goodwill impairment charge lower operating earnings and higher interest expense compared to the prior year.

Adjusted EBITDA for the year was approximately $24 5 million a decrease of approximately $7 million as compared to the prior year.

David: Turning to liquidity, we ended the year with total cash availability of $33 3 million consisting of cash on hand of $4 6 million and availability under our various lines of credit totaling $28 7 million.

David Verret: Our working capital was approximately $52.3 million as of September 30, 2024, compared to $85 million as of September 30, 2023. The decrease is primarily due to increase in current portion of long-term debt associated with PMW. As of September 30, PMW was in default of one of its financial covenants. As a result, PMW's long-term debt balance and seller refinanced loans were reclassed to current liabilities. We are currently in the process of resolving the default with our creditors and hope to resolve the issue in a timely manner. As of September 30, total assets were $407.5 million and total stockholders' equity was $72.9 million.

David: Our working capital was approximately $52 3 million as of September 32024, compared to $85 million as of September 32023. The decrease was primarily due to increase in current portion of long term debt associated with BMW as of September 30, BMW was in default of <unk>.

David: One of its financial covenants as a result, pmw's long term debt balance and salary finance loans were re classed to current liabilities. We are currently in the process of resolving the default with our creditors and hope to resolve the issue in a timely manner.

David: As of September as of September 30, total assets were $407 5 million and total stockholders' equity was $72 9 million.

David Verret: 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 year, we repurchased 34,624 shares of common stock. In conclusion, we are pleased that our fiscal year 2024 revenue and gross profit increased 33% and 25% respectively. However, challenging market conditions and our retail flooring and steel manufacturing segments have adversely affected the operating results of these businesses. Despite these specific headwinds, we remain confident in our businesses and our long-term buy, build, hold strategy.

David: 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.

David: During the year, we repurchased 34624 shares of common stock.

David: In conclusion, we are pleased that our fiscal year 2020 for revenue and gross profit increased 33 of 25% respectively.

David: However, challenging market conditions, and our retail flooring as steel manufacturing segments have adversely affected the operating results of these businesses.

David: Despite these specific headwinds we remain confident in our businesses and our long term buy build hold strategy.

Operator: We will now take questions from those of you on the conference call.

Speaker Change: We will now take questions from those of you on the conference call. Operator, Please open the line for questions.

Operator: Operator, please open the line for questions. At this time, we will conduct the question and answer session. If you would like to ask a question, please press star 1 on your phone now, and you'll be placed into the queue in the order. Once again, to ask a question, press star 1 on your phone now. We are ready to.

Speaker Change: Thank you.

Speaker Change: At this time, we will conduct a question and answer session. If you would like to ask a question. Please press star one on your phone now and Youll be placed into the queue in the order received.

Speaker Change: Once again to ask a question press star one on your phone now.

Speaker Change: We are ready to begin.

Joseph Kowalsky: Let's take the question from Joseph. Joseph Kowalsky, your line is open.

Speaker Change: I'll take the question from Joseph.

Joseph: Please moderator.

Joseph: You.

Joseph: Mr. <unk> your line is open.

Joseph Kowalsky: Hello, and thank you. Thank you for the question, thank you for the information, and thank you for continuing to work on our business.

Speaker Change: Hello, and thank you for taking my question. Thank you for the information and thank you for continuing to work on our business.

Joseph Kowalsky: Hello, can you hear me?

Hello Hello.

Operator: Yes, we can hear you fine. Okay.

Hello can you hear me, yes, we can hear you fine okay.

Joseph Kowalsky: So I have a couple questions. One is, it's nice to see revenue growth, but… There's the old joke about, you know, we're losing money, but we make it up in volume. And I just want to to see where you think things are going to go with regard to Stay where they are or come down. not just the revenue, but what we're making. up, and specifically...

Speaker Change: So I have a couple of questions. One is you know, it's nice to see revenue growth but.

Speaker Change: There's the old joke about you know we were losing money, but we make it up on volume.

Speaker Change: And I just want to see where you think things are going to go with regard to the companies that you have that ensures that the expenses stay where they are have come down and the.

Not just the revenue, but what we're making on these things goes up and.

Speaker Change: And specifically.

Joseph Kowalsky: One question I have is with regard to the administrative expense of General and Administrative. You said went up with the acquisition and I was curious in what regard did they go up? What was it specifically? that was going up with those.

Speaker Change: The one question I have is with regards to the administrative expenses General and administrative you said went up with the acquisition and I was curious in what regard did they go up what what was it specifically that.

Speaker Change: What's going up with those and then I have one more question after that I don't know if you want me to wait.

Joseph Kowalsky: And then I have one more question after that. I don't know if you want to take it.

John Isaac: Okay, so the first question. So over the course of this year, and especially in the last half of this year, we started doing a lot of cost-cutting, you know, efficiency studies, things like that, in order to become, you know, kind of turn the tide that we're facing with these industry-specific economic headwinds. And so specifically in our flooring retail and in our steel manufacturing segments, there's quite a bit that's been done.

Speaker Change: Okay. So the.

Speaker Change: The first question so over the course of this year and especially in the last half of this year.

Speaker Change: We started doing a lot of our cost cutting efficiency studies things like that in order to become.

Speaker Change: Kind of turned the tide.

Speaker Change: That we're facing with these industry specific economic headwinds.

Speaker Change: And so specifically at the in.

Speaker Change: In our flooring retail and NR.

Speaker Change: Fuel manufacturing segments, there are quite a bit thats been done sometimes it takes a little bit of time to kind of realize.

John Isaac: Sometimes it takes a little bit of time to kind of realize some of those changes, so a lot of those will see, you know, a decent impact going into future years. And we're confident that with the cost-cutting measures that we've been doing, we'll also have been more active in selling.

Speaker Change: <unk> realized some of those changes so so a lot of those we'll see.

Speaker Change: A decent impact going into future years.

Speaker Change: And we're confident that with the cost cutting measures that we've been doing.

John Isaac: But obviously, I think we have to fix our cost structure, and that's really where our focus has been. And I think with that, and hopefully a little bit of turn of the tide in the overall economy, I think it'll kind of set us up nicely going forward.

Speaker Change: We're also been more active in selling but obviously I think we have to fix our cost structure and that's really where our focus has been and.

Speaker Change: I think with that.

Speaker Change: And hopefully a little bit of turn of the tide and the overall economy I think it will kind of set us up nicely going forward and the specifics as to what the increase in general and administrative expenses were yes. So the general and administrative expenses that you see especially in the flooring retail is going to be made up of.

John Isaac: And the specifics as to what the increase in general and administrative expenses were? Yeah, so the general administrative expenses that you see, especially in the flooring retail, is going to be made up of, you know, all the SG&A costs is going to be like wages, salaries and wages, and leases, and those types of costs.

Speaker Change: All the SG&A cost is going to be like wages salaries and wages.

And leases and those types of costs got it got it alright and that leads I guess my second question. My other question, which is you know Wayne Gretzky, Oh and by the way I don't want to in any way suggest that I think that cost cutting alone is an answer of that I'm looking for dramatic cost cutting I'm a long term.

Joseph Kowalsky: Got it. All right, and that leads, I guess, to my second question, my other question, which is, you know, Wayne Gretzky, oh, and by the way, I don't want to in any way suggest that I think that cost cutting alone is an answer or that I'm looking for, you know, dramatic cost cutting. I'm a long-term Thank you very much. So please don't don't think. short-term guy was looking for just tons of just cost-cutting.

Speaker Change: Investor and my clients are long term investors, we would much rather see you invest in the businesses and have higher expenses and higher costs now for better results down the road.

Speaker Change: So please don't don't think that I'm I'm short term Guy who was looking for just tons of just cost cutting and you know nothing else got.

Joseph Kowalsky: Wayne Gretzky was asked one time why he is such a great player and he said other people go to where the puck is and he goes to where the puck will be. And I just wondered, you know, I love the concept of buy and hold. and what you folks do. My question is the method that you go about for finding these companies, because in looking at, you know, like with the flooring. that we had a tremendous amount of. work being done in people's homes during the whole COVID crisis. And then it slowed down afterwards. And I just want to make sure that.

Speaker Change: Got you Wayne Gretzky.

Speaker Change: Asked one time why he did such a great player and he said other people go to where the puck is when he goes to where the puck will be.

Speaker Change: And I just wondered you know I love the concept of the buy and hold.

Speaker Change: And what you folks do my question is the method that you go about for finding these companies because in looking at you know like with the flooring companies things like that we had a tremendous amount of.

Speaker Change: Work being done in People's homes during the whole Covid crisis.

Speaker Change: And then it slowed down afterwards, and I just want to make sure that.

Joseph Kowalsky: But there's something in your methodology that's looking for where the puck will be.

Speaker Change: That theres something in your methodology, that's looking for where the puck will be as opposed to where the puck is and I just wonder what is the method that you use when you go out and look for a company and I apologize because I'm in some way or another I've kind of asked this question in the past there is.

Joseph Kowalsky: And I just wonder what is the method that you use when you go out and look for a company? And I apologize because I've, in some way or another, I've kind of asked this question in the past. I still like to hear the.

Speaker Change: Still like to hear the.

Speaker Change: The replay.

John Isaac: I think overall we're agnostic as far as what industry or what type of company we're going to buy. Typically, we look for the middle market profitable type companies, and especially over the last few years, I think when you acquire one, then you start getting the attention of others and then maybe we bought a few companies in the flooring side, and then we also have some companies that are in the steel, and they just kind of, I think, come to us based on pre and prior acquisitions.

Speaker Change: I think overall, we're agnostic as far as what industry or.

Speaker Change: What type of company, we're going to buy.

Speaker Change: Typically we look for the middle market profitable type companies.

Speaker Change: And especially over the last few years I think when you acquire one then you start getting the attention of others and then kind of maybe we bought a few.

Speaker Change: Companies in the flooring side and then we also have some companies that are in the steel and are they just kind of.

Speaker Change: I think come to us based on pre of prior acquisitions.

John Isaac: But overall, I think we're agnostic to what they are. We will take a look at kind of those mid-market profitable companies and then see if it's a right fit for what we're looking for.

Speaker Change: But overall I think we are agnostic to what they are we will take a look at kind of those mid market profitable companies in and see if it's a right fit.

Speaker Change: For what we're looking for.

John Isaac: Does that answer your question?

Joseph Kowalsky: I don't know. I guess I'm asking, you know, how do you... You must have some method of, you know, people talk about top-down methodology or bottom-up or, you know, how do you find these companies that you're... talk to in the first.

Speaker Change: Question.

Speaker Change: I guess Im asking you know how do you.

You must have some method of now people talk about top down methodology or bottom up or how do you find these companies that you are.

Speaker Change: To talk to you in the first place.

John Isaac: A lot of times, this is John, a lot of times they approach us because they've seen what we've done with other companies. A lot of times we just, our phone rings, you know, we have investment bankers or, you know, or owners of businesses that call us and say, hey, I don't want to sell to a private equity firm. I want to sell to you because you're not going to flip my company three years from now and I care about my employees who have been here for decades. So, you know, and then in other instances, we have, you know, our CEOs of our subsidiaries come in and say, hey, we know this company down the street that, you know, I know this guy, Fred, he wants to retire, we should, you know, approach him.

Speaker Change: A lot of <unk>.

Speaker Change: This is John a lot of times, a day approach us because they've seen what we've done with other companies.

Speaker Change: A lot of times, we just our phone rings, you know we have investment bankers.

Speaker Change: Sure.

Speaker Change: Businesses that call us and say, Hey, I don't want to sell to a private equity firm I want to sell to you because.

Speaker Change: Youre not going to flip my company three years from now and I care about my employees, who have been here for decades.

Speaker Change: So.

Speaker Change: And then in other instances we have.

Speaker Change: Ceos of our subsidiaries come in and say Hey, we know this company down the street.

Speaker Change: I know those guys Fred he wants to retire we should approach it.

John Isaac: You know, so it comes from different methods from different, in different ways. There is no, you know, silver bullet on how we get, it's been easier now than it was before because we've established a name, you know, and we've done what we promised. I can tell you with certainty that there are instances where we have been outbid by private equity firms, but sellers...

Speaker Change: So it comes from different methods from different in.

Speaker Change: In different ways there is no.

No silver bullet on how we how we get it's been easier now than it was before because we've established a name.

Speaker Change: And and we.

Speaker Change: We've done what we've what we've promised.

Speaker Change: I can tell you with certainty that there are instances, where we have been outbid by private equity firms, but sellers.

John Isaac: and Mark Schleifer. You know, I can't think of one of our subsidiaries that was bigger before our ownership. You know, we've always, you know, reinvested and grown all of our companies. So I appreciate that. Yeah, you know, CEOs and owners of businesses are very careful to whom they sell for. It's not just about, you know, what's the dollar figure, how much am I getting, because people who do care about their businesses care about their employees, and they care about their legacy, and they care about their name. And so they do take a, you know, a careful consideration as to who the buyer is.

Speaker Change: And up aligning with us even though.

Speaker Change: They need to be getting less economic value for their business.

Speaker Change: Because of our ideology and what we ended up doing with these companies we reinvest in their growth.

Speaker Change: I can't think of one of our subsidiaries that was bigger before our ownership we've always reinvested in growing all of our all of our companies.

Speaker Change: So at that.

Speaker Change: Yes.

Speaker Change: Ceos and owners of businesses are very careful to whom they sell for it's not just about whats the dollar figure how much of my getting because.

Speaker Change: People, who do care about their businesses care about their employees and they care about their legacy in there they care about their name and so they do take a.

Speaker Change: Careful consideration as to who the buyer is it's as important as anything else.

John Isaac: It's as important as anything.

Joseph Kowalsky: It's interesting you say that because I was just reading about Red Hill Farms, which is a goat farm in California. how they sold their company and what they looked for and who they looked for and they were saying exactly that. You know, it was a family-owned large. nationwide distribution of goat products. So it wasn't small, but they definitely were looking for exactly what you're talking about. So I think that that... I guess what I was wondering was, I did understand what you were saying when you had already someone in a particular industry that others would come to you, I didn't realize that who are not in those same industries, that they would just, you know, that you had the connection.

Speaker Change: It's interesting you say that because I was just reading about Red Hill farms, which has a goat farm in California, and how they sold their company and how they what they looked for and who they look for and they were saying exactly that that was a family owned.

Speaker Change: Large pharma and <unk>.

Speaker Change: Nationwide distribution of products. So it wasn't small, but they definitely were looking for exactly what youre talking about so I think that that is the precisely the right way to go about it and I guess, what I was wondering was I did understand what you were saying when you had already someone in a particular industry that others would come to you I didn't realize that people would come to you who are not.

Speaker Change: In those same industries that they were just.

Speaker Change: But you had the.

Speaker Change: Connection connections I guess to attract that type of.

John Isaac: I guess, to attract that type of... Yeah, I mean, our flooring CEOs know, they know almost everybody in the flooring industry. I don't think you can name anybody that has a substantial company or a company that has any size that they don't know that person. Sometimes, you know, it's our client. I mean, Flooring Liquidators is a prime example. They were, and still are, a client of, you know, one of our other companies, you know, with Marquis. So, they just come from everywhere. You know, as you know, we will look for any opportunities that exist out there and, you know, I think our reputation is important that we maintain it and we uphold it.

Speaker Change: Okay.

And yes.

Speaker Change: Our flooring Ceos know they know almost everybody in the flooring industry.

Speaker Change: I don't think you can name anybody that.

A substantial company.

Dênis: Denis that has any size that they don't know who that person is sometimes.

Dênis: Our clients I mean flooring liquidated in the Prime example, do they were and still are a client of.

Dênis: One of our other companies you know Martin with marquee. So they just come from everywhere. As you know we are we will look for any opportunities that exist out there.

Speaker Change: And I think our reputation is important that we maintain it we hold it. So I appreciate the question Jeff. Thank you. Thank you very much for the information and how many companies would you say that you.

John Isaac: So, I appreciate the question, Joe.

Joseph Kowalsky: Thank you.

Joseph Kowalsky: Thank you very much for the information.

Joseph Kowalsky: And how many companies would you say that you look at? on Twitter David Althofer, Mark Schleifer, Gregory Powell, Eric Althofer, Mark Schleifer, David Althofer, So that's, I can't give you an exact number, I really don't know, but it's less than a thousand, it's more than one, somewhere in there.

Speaker Change: Look at it.

Speaker Change: The recent year for example, and how many have you decided yes. This is when we'd like to go after and how many have you decided not not to go after and that's the end of my questions and I'll be quiet a here on out thank you.

Speaker Change: I don't know that I have an exact number I mean, sometimes we will get three to five years. If we look at it in a week the other times, where there will be silence for a month or two so I really don't know what I mean.

Speaker Change: Maybe a dozen or more.

Speaker Change: A year I would say in <unk>.

Speaker Change: To pursue the ones that are interesting.

Speaker Change: We discuss those opportunities with the.

Speaker Change: The CEO of <unk>.

Speaker Change: Steel company I'm talking to Tom about what he thinks of this and then we.

Speaker Change: It looks like it's got potential than we pursue it.

Speaker Change: So thats.

Speaker Change: I can't give you an exact number I don't know.

Speaker Change: It's less of thousands more than one somewhere in there.

Joseph Kowalsky: It gives me an idea. Thank you very much.

Speaker Change: It gives me an idea. Thank you very much. Thank you, let's take a call from Jamie Please.

James: Let's take a call from James. The questions are Good afternoon, everyone. Thanks for allowing me a chance to ask here. You mentioned Precision Metalworks defaulting on a financial covenant.

Speaker Change: The question sorry from James.

Speaker Change: Thank you Mr. Sanford good afternoon, everyone. Thanks for.

Good afternoon, everyone. Thanks for allowing me a chance to ask here you mentioned.

Speaker Change: Precision metal works defaulting on a financial covenant.

John Isaac: I was wondering if you wouldn't mind elaborating on that and also if you wouldn't mind caring if that was discovered post or pre-acquisition and what steps you're taking to alleviate that default. So it's related to a fixed charge covenant, just a financial ratio. And that covenant was breached earlier in the year, the second half of the year. So we've been working with the banks, and I think we're really close to getting that resolved. So it was post-acquisition, and it's our F, our fixed charge ratio.

Speaker Change: I was wondering if you wouldn't mind elaborating on that and also if you wouldn't mind.

Speaker Change: Sorry, if that was discovered post or pre acquisition and what steps you're taking to alleviate that default.

Speaker Change: So it's related to a fixed charge covenant just a financial ratio.

Speaker Change: And that.

Speaker Change: The covenant was breached earlier in the year.

Speaker Change: Half of the year. So we've been working with the banks and I think we're really close to kind of getting that resolved. So it was post acquisition and it's R. F. Our fixed charge ratio covenant.

James: Thank you.

Speaker Change: Thank you and would you mind sharing the financial institution that Youre working with two.

James: And would you mind sharing the financial institution that you're working with to work through this? It will be in our 10K, but we haven't called it yet.

Speaker Change: Work through this.

Speaker Change: Is it an IDE filing it'll be it'll be in our 10-K, but its fifth third.

Speaker Change: And I think I believe yes, but we havent felt it yet, but yes, it's been a year with the company called Steele, who are you with.

James: You're with a company called Steele. Who are you with? I'm with Millsteel. You're with Millsteel.

Speaker Change: I'm with mill steel.

Speaker Change: Youre with mill steel.

James: Yeah, I'm the credit manager at Millsteel, John.

Speaker Change: Yes, the credit manager at Mill Steel John.

John Isaac: You're welcome to call us directly, no need to do it in a public forum. But I know Carl, and Carl and I have a great relationship, so he's welcome to ask any questions. But what we have in the file is what we can share with you right now. Understood, sir. And we will certainly look into that.

Speaker Change: Okay. Okay.

Speaker Change: Youre welcome to call us directly and we'll need to do it in a public forum.

Speaker Change: <unk>.

Speaker Change: Carl and Karla and I have a great relationship. So these are welcome to ask any questions but.

Speaker Change: What we have in final what we can share with you right now.

Speaker Change: Understood, Sir and we will certainly look into that Carl wanted me to represent on the call today.

John Isaac: Carl wanted me to represent on the call today. Okay, that's great. I see two people from Millsteel. Yes, we've got great relationships with our suppliers, of which you're one of. I do appreciate your representation on, you know, being on the call. But, you know, what we have in the public file is what we can share with you. And if there's anything that's of concern, I'm happy to discuss it with you or Carl or anyone else. Okay, we will do that then. Thank you.

Speaker Change: Okay.

Speaker Change: There's.

Speaker Change: Two people from <unk>, Yes, we've got great relationships with our suppliers of whats Youre one of I do appreciate your representation.

Speaker Change: Being on the call but.

Speaker Change: What we have in the public filings, but we can share with you and if theres anything.

Speaker Change: Coupled with you or Karl or anyone else.

Speaker Change: Okay, we will do that thank you.

Speaker Change: Thank you.

Operator: As a reminder, if you'd like to ask a question, you can signal by pressing star 1 at this Okay. I just want to thank everyone. Looks like there's no more questions.

Speaker Change: And as a reminder, if you'd like to ask a question you can signal by pressing star one at this time.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: I want to thank everyone. It looks like there is no more questions I just want to thank everyone for joining the call and we look forward to giving you update on our next call for Q1. Thank you.

Operator: I just want to thank everyone for joining the call and we look forward to giving you an update on our next call for Q1. Thank you.

Operator: This concludes today's conference call. Thank you for attending. The host has ended this call. Goodbye.

Speaker Change: And this concludes today's conference call. Thank you for attending.

Speaker Change: The host has ended this call.