Q3 2025 Live Ventures Inc Earnings Call
Good day, everyone. And welcome to the live Ventures, fiscal year, Q3 2025 conference call. At this time, all participants are in a listen-only mode later. We'll conduct a question and answer session. Now I'd like to turn the call over to Greg Powell director of investor relations. Please go ahead. Greg,
Thank you, Elvis. Good afternoon and welcome to the live Ventures third quarter fiscal year 2025 conference call joining us. This afternoon are John ISAC, our chief executive officer and president and David Barrett 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.
Form 10K and form 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. That was referenced on today's call in the investor relations section of the live Ventures website.
I direct you to our website live ventures.com or sec.gov for historical SEC filings. I will now turn the call over to David to walk through our financial performance.
Thank you, Greg. Good afternoon, everyone.
Before discussing our financial results, I'd like to touch on a few key highlights from the quarter.
We are pleased to report that all 4 of our operating segments, delivered, improved performance in the third quarter.
With each achieving higher operating income and operating margin compared to the prior year period.
These results were delivered despite continued softness in the new home construction and home refurbishment markets.
Which remain a headwind for our retail flooring and flooring manufacturing segments.
As noted last quarter, in response to the challenges, in our retail flooring segment, we have pointed a, new executive leadership team.
The new team is actively implementing operational cost-saving initiatives focused on Topline growth and improving efficiency.
Initiatives.
Are having a significant impact in generating considerable Savings in the retail flooring segment. In addition, our other segments are also benefiting from the cost-saving measures, uh, implemented during the quarter.
Now, let's discuss the financial results for the third quarter ended June 30, 2025.
For revenue, for the quarter, decreased 11.2 million, or 9.2% to approximately 112.5 million.
The decrease is primarily attributable to the retail flooring and steel manufacturing segments, which collectively decreased by approximately 12 million.
The retail entertainment, segment Revenue, increased 2.5 million or 15.2% to approximately 19 million as compared to the prior year period.
The increase in segment revenue is primarily due to increased consumer demand for new products, which typically have higher selling prices.
Retail flooring segment, Revenue decreased, 6.6 million or 17.9% to approximately 30.4 million as compared to the prior year period.
The decreases primarily attributable to the disposition of certain Johnson Floor and Home carpet. 1 stores in May 2024
and reduce consumer demand due to the weakness in the housing market.
Flooring manufacturing, segment Revenue decreased, 1.8 million or 5.7% to approximately 31.3 million as compared to the prior year period.
The decrease of primarily due to reduced consumer demand, as a result of the ongoing weakness in the housing market.
Steel. Manufacturing, segment Revenue, decreased 5.4 million or 13.8% to approximately 33.6 million as compared to the prior year period.
The decrease was primarily driven by lower sales volumes of certain business units. Partially offset by incremental revenue of 5 million at Central Steel, which was acquired in May 2024,
Gross profit for the quarter, increased 1.2 million, or 3.4% to 38.3 million.
Gross margin increased by 410 basis points to 34% from 29.9%. In the prior year period. The increase was primarily driven by higher margins and are still manufacturing and flooring Manufacturing.
The increase in gross margin and the steel manufacturing segment is primarily due to improved efficiencies.
And the May 2024 acquisition of Central Steel which has historically generated higher margins.
The increase in gross margin in the flooring. Manufacturing segment is primarily due to improved efficiencies and more favorable product mix.
General and administrative expense decreased approximately, 3.8 million or 12.6% to 26.3 million.
the decrease was primarily due to lower compensation and other operating expenses resulting from targeted cost reduction initiatives in the retail flooring and flooring manufacturing segments
Sales and marketing expense decreased approximately 1.8 million or 31.5% to 4 million.
the decrease was primarily due to lower, compensation, and marketing expenses, resulting from targeted cost reduction initiatives and the retail flooring and flooring manufacturing segments
Interest expense decreased 9% to 3.9 million. The decrease was due to lower average debt balances as compared to the prior year period.
That income was approximately 5.4 million for the quarter and diluted EPS was $1.24 compared with a net loss of approximately 2.9 Million and a loss per share of 91 cents and the prior year period.
That income for the third quarter. Includes a 1.5 million gain on employee retention credits, and a 1.3 million gain on the settlement of a whole back liability related to the Precision Marshall acquisition.
Adjusted ebita for the quarter was approximately 13.2 million, an increase of approximately 7.1 million compared to the prior year period.
The increase in adjusted evaas primarily due to the improved operating performance. During the third quarter of 2025 reflecting, the targeted cost reduction initiatives and the retail flooring and other segments.
Turning to liquidity.
We entered the quarter with total cash, availability of 37.1 million, consisting of cash on hand of 7.6 million, and availability under various lines of credit, totaling 29.5 million.
at the end of the quarter, total assets were
387.5 million and total stockholders Equity was 94.3 million.
As part of our Capital acquisition allocation strategy, we may make Sherry purchases from time to time. We believe our stock repurchases, represent long-term value for our stockholders during a quarter. We repurchase 12,695 shares of the company's common stock at an average price of 8.83 cents per share.
In conclusion, we are pleased that all 4 of our operating segments delivered. Improved performance in the third quarter of fiscal 2025, with each reporting, higher, operating income, and operating margin compared to the prior year period.
Our third quarter results, reflect the impact of our strategic pricing actions and continued focus on operational excellence these outcomes underscore the success of our disciplined cost management and efficiency initiatives across our Diversified portfolio.
We believe these results are firm our ability to enhance profitability and generate strong cash flow, even in challenging Market environments.
We will now take questions from those of you on the call.
Operator: Please open the line for questions.
Certainly if you'd like to ask a question, please press star 1 on your phone now and you'll be placed into the queue in the order. Received again press star 1 for a question and we'll pause for a moment to form a queue.
In our first question, comes from Joseph Kowalski. Please go ahead.
Gentlemen, a very nice. I like uh, what I read, what I heard sounds generally very good. I appreciate it.
Um, we're excited.
a couple questions and I'll throw them all out there and then you can
do with them as you wish.
Generally, my understanding is that your goal was to acquire companies and leave the management to those companies while you take care of, you know, the headaches and whatever overhead there is.
in this particular case where you've, uh, I think it was, you said, with flooring where you've taken a more active role is that indicative of something that you intend to do, in general with your companies, is that particular to that area,
All right, I would wait for the answer. Yeah. And then I'll give you the answer afterwards because they're all related.
Yeah, I would say, our strategy Remains the Same. Um, Our intention is always keep the management teams in place, um, as long as they're delivering the operating performance, um, that, that we expect. And, um, if we're, you know, if, if we see that there's a gap, uh, we, we'll, we'll step in and make sure that we put the right people, the right resources in order to, uh, generate the, um, you know, return for our shareholders.
Okay. John, we we we we prefer not to intervene but we will when we have to okay and and and in this case here, if you look at our historical financials we have to intervene and and make changes. So this is what you see today and we're very pleased now with the changes
What's your next step? And I appreciate that. And, and I think that that's a, a great way to to act. I was just curious to know if it, if it indicated a change which you're telling me, it, it doesn't so that that I I appreciate very much, um, all of that. Um, okay. The other, these couple questions all kind of are related. Um, when you're looking now, for companies to acquire, are you looking largely in the same general areas that you have companies already? Or are you looking to expand the footprint into different areas and build that is? Do you think you have a solid core of of, you know, the companies that you have within those areas and it's time to look outside of that, or do you think it's better to look for more to fill out?
About those core areas, um, or or are you doing both? Uh, the second question is, do you have a committee that looks for these things or is it just 1 or 2 individuals? Uh, and then the, the third question is, do you wait to have a certain amount of cash on hand to determine whether it's time to to buy another company? And then finally, um, what do you think about the marijuana space? I know it's kind of oversaturated and, and there's questions of government regulation, but I was just curious to know if that's something that's, uh, uh, on your radar screen.
The short answer Joseph is we will look at anything and everything.
All acquisitions together.
And we discussed them as they mature and uh regarding the marijuana space. Um as you know we don't have anything marijuana space. I think it's federally not legal yet so there are many other opportunities out there but any other opportunities out there for us you know that low hanging fruit and other potential Acquisitions. We don't have to
Go that far yet. So so yeah. We'll look at anything and everything though since your answer. So will there come a point, do you think where you have enough in a particular, uh, business area? And you say, you know what, we're, we're full on this, we're good, uh, and we'll just, we'll look elsewhere, or do you think it'll just be
whatever you think, you know, fits at that moment and you don't know that there will ever be a time where you'll have enough
Uh, in a particular sphere or a particular area.
We will look at opportunities as they arise.
You know, and what our opportunity costs are. And what our, you know, what we're looking at at the, at the moment, if we find, you know, that something delivers a return of X, you know, why? You know, Visa V, another acquisition that will give us a return of 2x, then we will. Look at both and evaluate what's, you know, best for shareholders, what delivers, the most returned, with the lowest amount of risk? I mean everything. This is what we, this is what we do. Uh, at the at the live level is evaluate and allocate Capital as a as possible. And then in the last question was, do you. Do you wait for a particular amount of cash on hand before you start?
Start thinking about doing something else or is it? Um, just if you find something you'll, you'll, you know, borrow as needed to do it. And, and the cash on hand is not as relevant.
We're always looking at deals and looking at opportunities as you know, deals. Take take
Is, you know, it's it's a slow process. So we're always looking at opportunities, we're not looking at a, you know, we need to have, you know, X dollars in the in the, in the bank to be able to make that we're always looking at deals and we always have come up with creative ways to finance stuff. Whether it be Bank financing, seller financing, any other type of financing. So,
Thank you.
Thank you very much.
Because I guess the best way to be uh and I really appreciate your taking the time to address my questions.
Thank you for your support. Thank you. Thank you.
Our next question comes from Todd St, Mary?
Well, gentlemen, um I am I wasn't going to comment on this but listening to the last set of questions. I I feel compelled to do so. Um I'm actually a retired executive from a company called us filter and we grew by acquisition in the 1990s. We actually did 150 deals in 2 years.
So I know something about this.
And I would have 2 suggestions. The first 1 is
I, I would recommend you continue to focus on running your business and improving it the way you have this last quarter because I think if you do that, there's a good chance that you can get your earnings on a consistent basis to 2 dollars or 3 dollars or maybe even more per share.
That would drive your share price up to 30 or 40 or 50 dollars again. And then what you can do from there.
Is use your stock as currency for deals.
So that's a far more efficient way to grow by acquisition than cash, or debt in general. If you can run, get your share price up and that was kind of the magic of what we did back in the 90s.
So, I'm just throwing that out there.
Um,
I did have a series of questions on the quarter.
And the first question I have is in regard to um the the improvements you made with margins and with your cost cutting. Um, do you see any additional improvements coming or or do you have you done everything that you've targeted?
Now, um, we're we're not done yet and still, I think when we look at the retail flooring segment, uh, we feel like there's still more work.
Uh, to do, um, we're doing, you know, much better than where we were a year ago, uh, but but I think we, we still have room for improvement and there are still initiatives, um, like lease negotiations and things like that, that we're working on, um, in that segment that are yet to yield the, you know, haven't flow through the numbers yet, so there's still more to come. Um, and, and we're continuing to focus, uh, you know, and, and so right now, just even in the retail flooring segment. There's, there's still room to go and but but
looking, um, in a special during the times when the the market is down, I guess it, you know, makes us stronger coming out of that out of a sophomore market, so,
Forward. Then I can reasonably expect that the margin Improvement, we've solved, this quarter and the cost savings and sgna will continue or even improve over time, we we will always be evaluating these things Todd, whether we're in a good Market, in a bad Market, you know, in a in a good economy, bad economy. This is the the the the jobs of the CEOs of our subsidiaries, we're always evaluating for more and more efficiencies. Uh, but yes, some of our operating subsidiaries have more opportunities than others others within our portfolio and so what David uh said was was correct we believe there's more room for improvement and our heads of of our subs are are working very very hard on on. I believe those and extracting those for our shareholders.
Question is, are any of your business segments? Seen, um, material impacts from tariffs either good or bad?
Uh, the answer, I guess, a short answer is no. Um, that there's been a little bit but it's all been very minor, not even really noticeable. We have been taking a lot of actions because, uh, you know, you never know what's going to happen that that this space has been pretty uh uh, volatile. So um, we have been diversifying our vendors, um, in different countries as well as in the US. Making sure we have those relationships. So that way we can act, if it were to become an issue. The other thing I I would just say is I think we are as as well positioned as any of our peers.
Um such that if it ultimately had to turn out that we need to increase pricing, it would be more of a market thing. Not a live thing.
You think you might have an opportunity in the steel manufacturing business because of the steel tariffs? Where could
Plus for you, it is in the steel because if those prices go up, you know, some of our subsidiaries carry a decent amount of Steel on hand. So as those prices go up, we're sitting on inventory, that's at a lower cost, which could provide for
Um, better margins and more profitability, if the space goes that way.
Okay, thank you for that.
Is on.
Um obviously Revenue has been pressured here for the reasons, you you stated, I'm wondering if you could give us a feel on um what you see going on in the next 3 to 6 months to 12 months have we bought them out or is it going to get worse?
You know, we we typically don't provide speculation on kind of our, you know, uh these types of things. But I think, what I'll say is is what I think. We all see. I think it's been pretty volatile. There's there's reasons why uh, we get
Uh, some hope and optimism. I mean, some of those would be, you know, uh, a lot of our subsidiaries are impacted by the interest rates, uh, specifically in the housing market. That's the interest, rates prices have just slowed down the housing market quite a bit that that stifles um Renovations and things like that. For new flooring, which impacts our fully manufacturer and our retailer.
Um, also in our steel industry, some of our, uh, providers make parts that's used as raw materials in the manufacturing of other items like appliances and Automobiles. So, uh, interest, those are things that are typically financed. So that's another thing that the consumers look at and with them being a big ticket items, not only is it just interest rates but it's also, um, I think the, um,
You know, the disposable income of the consumers.
So I think there's reasons for optimism and that I it seems like now the general census that I'm hearing is that it sounds like rates may be going down here in September. Uh, but at the flip side of that, also, it looks like the jobs and and Market is a little bit more softer. So how all that's going to play out. Um, we'll see but I think we've positioned ourselves uh, as well as any of our peers.
And we will see what happens with Revenue. What happens with the economy? What happens with uh the fiscal policies of the uh instead
Well, you did it. You've done a great job, this quarter with the Improvement. There's, there's no question. I was really excited when I saw the reports. I, I compliment you guys on that and I, I honestly feel if you can get any kind of Revenue growth, uh, your bottom line is going to Surge. I mean, it'll be great. Exactly, exactly. Um,
This is this might be a stupid question because I I'm not an expert at all in your business. But is there any opportunity for your flooring businesses to take advantage of what is happening with the manufacturing buildout in this country to actually do it like an office building and things like that?
No I'm not sure I follow. Well well I mean your your flooring businesses are concentrated if I understand it correctly and the residential markets.
We have residential and Commercial. Um, we also yeah we do an opportunity on the commercial side. I mean, I'm assuming with all this
Money coming in to, to increase Manufacturing in the US that there's got to be a great opportunity. There for flooring.
Yeah, we we haven't seen any of that trickle through yet. I mean, I think there's a couple of areas, right? I mean, another 1 of the areas that I was thinking about was, uh, Central Steel does, um, all the racking and stuff like that for data centers, um, and with the AI,
That's out there. They're actually doing pretty well. Um, and that was an acquisition that we had last year. So I I think there's going to be different opportunities that come up just with the, uh, you know, the, the, the, the different things that we're seeing in the market such as what you're talking about, more manufacturing here. Um, so we'll take advantage of them as we can. But yes, our we we, we do, um, some, some, uh, commercial as well as residential.
Came up, it really triggered for me. Um, met the... you might want to think about maybe trying to target a company that has access to the markets that you want to get into. Maybe not a great manufacturer per se, you know, but somebody that has access to those markets.
That you can buy basically is almost like a, a sales arm for your manufacturing, right. Right. You know, that might be a really good acquisition for you guys.
Yep.
Um, I guess that's it. You cover. Oh, I did have 1 more.
Yeah. Have you ever talked about if the business gets too? And I know this is probably a year or 2 out, but you guys are doing share BuyBacks, right now, small ones, but if you get to where the business is consistently generating earnings, a 2 or 3 or 4 dollars or more, would you ever consider, um, doing a dividend?
I don't, I don't know that we've uh, kind of gotten far enough along to to consider that. I think, at this point, 1 of the things that we're focused on is, is paying down our debt, um, and, and, and driving shareholder value by decreasing our debt, okay. Um, but but I mean, I think that's another Avenue. Uh, you know, once we start seeing some of these, uh, this improved consistent improved performance, then then those, those are things that will have to be thinking about. Well, if I if, uh,
just the last comment and I I I will just repeat it but I think it's important if
If, um, you do have more acquisition targets and that's a direction you want to go, I strongly encourage you to keep doing what you're doing and, and take the actions needed to focus on your business. And I'll drive that sharp price up and really consider using your shares as currency. I think it, it could be great for you. Plus it add a lot of liquidity to the stock
I agree, we just got to get that stock price higher.
All right, guys. Well, I appreciate your patience with me.
Thank you, Tony. Thank you for your questions. Thank you.
We have no further questions at this time, that concludes our meeting today. You may now disconnect
Thank you.