Live Ventures Incorporated Price & Performance (LIVE)

Thank you, Jen. Good afternoon, and welcome to the Live Ventures first quarter fiscal year twenty twenty five conference call. Joining us this afternoon is 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, 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 an insult of any new information, future events, changes in assumptions or otherwise. You can find our press release that we referenced on this call today in the Investor Relations section of the Live Ventures website. I will direct you to our website, liveventures.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, and good afternoon, everyone. Let's jump right in and discuss the financial results for the first quarter ended 12/31/2024. Total revenue for the quarter decreased 5.2% to approximately $111,500,000 The decrease is attributable to the Flooring Manufacturing, Retail Flooring and Steel Manufacturing segments, which decreased by approximately $6,700,000 in the aggregate. Retail entertainment revenue increased $700,000 or 3.3% compared to the prior year period to approximately $21,300,000 The increase in revenue was primarily due to an increase in the number of stores from 70 in Q1 twenty twenty four as compared to 73 in Q1 twenty twenty five. Retail flooring segment revenue decreased $2,600,000 or 7.5% compared to the prior year period to approximately $31,700,000 The decrease is primarily due to reduced demand in the flooring industry. Flooring manufacturing segment revenue decreased $3,200,000 dollars or 11.1% compared to the prior year period to approximately $26,000,000 The decrease in revenue was also primarily due to reduced demand in the flooring industry. Steel Manufacturing segment revenue decreased $900,000 or 2.8% compared to the prior year period to approximately $32,400,000 The decrease is primarily due to reduced consumer demand, partially offset by revenue of $3,100,000 at Central Steel, which was acquired in May 2024.

Gross profit for the quarter was approximately $35,400,000 a decrease of $1,000,000 compared to the prior year period. The gross margin percentage for the company increased to 31.7% from 30.9% in the prior year period. The increase is primarily attributable to increased margins in our retail entertainment segment as well as the steel manufacturing segment, primarily due to product mix. General and administrative expense increased approximately $2,400,000 to $30,100,000 The increase is primarily due to increased compensation and other general and administrative expenses in the retail flooring segment. Sales and marketing expense decreased approximately $600,000 to $4,500,000 This decrease was primarily due to reduced sales and marketing activities in the retail flooring segment. Interest expense remained constant at $4,200,000 in the current quarter as compared to the prior year period. Net income for the quarter was approximately $500,000 and diluted EPS was $0.16 compared to net loss of approximately $700,000 and loss per share of $0.22 in the prior year period. The increase in net income is primarily attributable to a $2,800,000 gain on the settlement of the earn out liability related to the PMW acquisition and a $700,000 gain on the settlement of PMW seller notes. Adjusted EBITDA for the quarter was approximately $5,700,000 a decrease of approximately $3,000,000 as compared to the prior year period.

Turning to liquidity, we ended the quarter with total cash availability of $31,100,000 consisting of cash on hand of $7,400,000 and availability under our various lines of credit totaling $23,700,000 Our working capital was approximately $51,000,000 as of 12/31/2024, compared to $52,300,000 as of 09/30/2024. As of December 31, total assets were $395,500,000 and total stockholders' equity was $73,300,000 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 approximately 15,700 shares of common stock. In conclusion, we are pleased that both our retail entertainment and steel manufacturing segments delivered improved operating performance in the first quarter with increases in operating revenue and operating margins as compared to the prior year period. However, challenging market conditions continue to impact our retail flooring and our flooring manufacturing segments as reduced consumer demand weighed on performance. To address this, we are implementing measures to enhance efficiency of our flowing businesses. Despite these challenges, we remain confident in the long term strategy of our businesses. We will now take questions from those of you on the conference call. Operator, please open the line for questions.

Thank you. And our first question will come from Joseph Kowalski with JD Investments.

Hello and nice to see earnings. I just wondered if you could give me some color, give us some color on the settlement, what it relates to, how it works, is there more to it in the future, is it a one time thing?

Sure. Yes. This is a one time thing. It was our goal to get the sellers kind of out completely out of the picture going forward. So we had approached them on settling. It was a $2,500,000 seller notes and as well as eliminating the earn out liability, which was a five year earn out period. And we were able to negotiate with them, paying off the loan early at a discount and forgiving the earnout for basically, that helped us get a, about a $3,500,000 gain out of the deal.

Very nice. So without that and into the future, how do things look? I mean, obviously, we had losses last year. Do you anticipate losses continuing for this year? And in which divisions? Or do you anticipate earnings profits?

Yes. I'll start off with that. We don't kind of give guidance on expectations for projections in the future. I will say that there has been a number of initiatives that we have been implementing across a couple of our entities whose performance have struggled more than others. And I think we're pleased with what we're seeing. And we're expecting to see some results of these initiatives that we're enacting here in the near future.

Okay, fair enough. And then, last question. Anything on the horizon as far as new company to be added to the portfolio? Are there things that you're working on in the near term as opposed to just looking around out there?

Yes. There's always opportunities that come up. I'll say that there's really nothing that's hot at the moment that is worthy of discussing.

Okay. Thank you very much.

And it appears we have no further questions. Mr. Verett, I'll turn the conference back to you for any additional or closing remarks.

Okay. I just want to thank everyone for attending our Q1 earnings call, and we look forward to giving you an update in Q2. Thank you.

And this does conclude today's conference call. Thank you for attending.