Live Ventures Reports Fiscal First Quarter 2024 Financial

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Live Ventures Reports Fiscal First Quarter 2024 Financial


LAS VEGAS, Feb. 08, 2024 (GLOBE NEWSWIRE) — Live Ventures Incorporated (Nasdaq: LIVE) (“Live Ventures” or the “Company”), a diversified holding company, today announced financial results for its first fiscal quarter ended December 31, 2023. 

Fiscal First Quarter 2024 Key Highlights:

  • Revenue increased 70.5% to $117.6 million, compared to $69.0 million in the prior year period
  • Net loss was ($0.7) million and diluted loss per share was ($0.22), compared to prior year period net income of $1.8 million and diluted earnings per share (“EPS”) of $0.60
  • Adjusted EBITDA¹ increased 15.3% to $8.7 million, compared to $7.5 million in the prior year period
  • Flooring Liquidators, Inc. (“Flooring Liquidators”) acquired two Midwest flooring chains, adding 10 new showrooms in Arkansas, Oklahoma, and Missouri
  • Repurchased 4,346 shares of the Company’s common stock at an average price of $24.51 per share
  • Total assets of $436.6 million and stockholders’ equity of $99.4 million as of December 31, 2023
  • Approximately $45.0 million of cash and availability under the Company’s credit facilities as of December 31, 2023

“Our first quarter revenues increased 70.5% compared to the prior year period, primarily driven by the strategic acquisitions of Flooring Liquidators and Precision Metal Works, Inc. (“PMW”), both of which were acquired after the first quarter of fiscal year 2023, as well as an increase in revenue in our Flooring Manufacturing segment. In addition, Adjusted EBITDA¹ increased 15.3% compared to the prior year period. While our businesses continue to be impacted by industry-specific pressures, we remain focused on increased productivity, expansion, and innovation. We believe we will be well positioned and prepared when markets rebound,” commented David Verret, Chief Financial Officer of Live Ventures.

“As we begin our new fiscal year, we are committed to the strategic acquisitions we made last fiscal year. The immediate impact of these acquisitions is evident in the significant increase in our revenue, as reflected in our first quarter results,” stated Jon Isaac, President and Chief Executive Officer of Live Ventures. “We maintain our enthusiasm for the prospects of these businesses, which align with our long-term ‘buy-build-hold’ strategy.”

First Quarter FY 2024 Financial Summary (in thousands except per share amounts)
  During the three months ended December 31,
  2023   2022   % Change
Revenue $ 117,593     $ 68,986     70.5 %
Operating Income $ 3,541     $ 4,567     -22.5 %
Net (loss) Income $ (682 )   $ 1,844     -136.0 %
Diluted (loss) Earnings per share $ (0.22 )   $ 0.60     -136.0 %
Adjusted EBITDA¹ $ 8,696     $ 7,539     15.3 %
 

Revenue increased approximately $48.6 million, or 70.5%, to approximately $117.6 million for the quarter ended December 31, 2023, compared to revenue of approximately $69.0 million in the prior year period. The increase is primarily attributable to the acquisitions of 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. The increase was partially offset by decreased revenue of approximately $6.2 million in our other businesses.

Operating income decreased approximately $1.0 million to $3.5 million for the quarter ended December 31, 2023. The decrease in operating income is primarily attributable to lower gross profit margins and increased general and administrative expenses related to Flooring Liquidators and PMW. The decline in gross profit margin is primarily due to the acquisition of PMW, which historically has generated lower margins, as well as overall decreased margins in the Steel Manufacturing segment due to reduced production and lower operating margins.

For the quarter ended December 31, 2023, net loss was approximately ($0.7) million, and diluted loss per share was ($0.22), compared with net income of $1.8 million and diluted EPS of $0.60 in the prior year period. The decrease in net income is attributable to lower profit margins and higher interest expense compared to the prior year period.

Adjusted EBITDA¹ for the quarter ended December 31, 2023, was approximately $8.7 million, an increase of approximately $1.2 million, or 15.3%, compared to the prior year period. The increase is primarily due to an increase in non-operating and other non-recurring expenses, partially offset by a decrease in operating income.

As of December 31, 2023, the Company had a total cash availability of $45.0 million, consisting of cash on hand of $5.6 million and availability under its various lines of credit of $39.4 million.

First Quarter FY 2024 Segment Results (in thousands)

  During the three months ended December 31,
  2023   2022   % Change
Revenue          
Retail – Entertainment $ 20,586     $ 23,273     -11.5 %
Retail – Flooring   34,319           N/A
Flooring Manufacturing   29,245       26,432     10.6 %
Steel Manufacturing   33,354       17,981     85.5 %
Corporate & other   89       1,300     -93.2 %
Total Revenue $ 117,593     $ 68,986     70.5 %
           
  During the three months ended December 31,
  2023   2022   % Change
Operating Income (loss)          
Retail – Entertainment $ 3,143     $ 3,664     -14.2 %
Retail – Flooring   90           N/A
Flooring Manufacturing   945       751     25.8 %
Steel Manufacturing   982       1,455     -32.5 %
Corporate & other   (1,619 )     (1,303 )   -24.2 %
Total Operating Income $ 3,541     $ 4,567     -22.5 %
           
  During the three months ended December 31,
  2023   2022   % Change
Adjusted EBITDA¹          
Retail – Entertainment $ 3,667     $ 4,003     -8.4 %
Retail – Flooring   1,303           N/A
Flooring Manufacturing   1,877       1,785     5.2 %
Steel Manufacturing   2,802       2,525     11.0 %
Corporate & other   (953 )     (774 )   -23.1 %
Total Adjusted EBITDA¹ $ 8,696     $ 7,539     15.3 %
           
Adjusted EBITDA¹ as a percentage of revenue        
Retail – Entertainment   17.8 %     17.2 %    
Retail – Flooring   3.8 %          
Flooring Manufacturing   6.4 %     6.8 %    
Steel Manufacturing   8.4 %     14.0 %    
Corporate & other N/A   N/A    
Adjusted EBITDA¹   7.4 %     10.9 %    
as a percentage of revenue          
 

Retail – Entertainment

Retail – Entertainment segment revenue for the quarter ended December 31, 2023, was approximately $20.6 million, a decrease of approximately $2.7 million, or 11.5%, compared to prior year period revenue of approximately $23.3 million. Revenue decreased primarily due to reduced consumer demand and a shift in sales mix toward used products, which generally have lower ticket sales with higher margins. The shift in sales mix also contributed to the increase in gross margin to 56.0% for the quarter ended December 31, 2023, compared to 52.5% for the prior year period. Operating income for the quarter ended December 31, 2023, was approximately $3.1 million, compared to operating income of approximately $3.7 million for the prior year period.

Retail – Flooring

The Retail – Flooring segment includes Flooring Liquidators, which was acquired in January 2023. Revenue for the quarter ended December 31, 2023, was approximately $34.3 million, and gross margin was 38.0%. Operating income for the quarter ended December 31, 2023, was approximately $0.1 million.

Flooring Manufacturing

Revenue for the quarter ended December 31, 2023, was approximately $29.2 million, an increase of approximately $2.8 million, or 10.6%, compared to prior year period revenue of approximately $26.4 million. The gross margin was 22.0% for the quarter ended December 31, 2023, compared to 17.6% for the prior year period. The increase in revenue and gross margin are primarily due to the buildup of the sales force as a result of the acquisition of the Harris Flooring Group® brands in the fourth quarter of fiscal year 2023. Operating income for the year ended December 31, 2023, was approximately $0.95 million, compared to operating income of approximately $0.75 million for the prior year.

Steel Manufacturing

Revenue for the quarter ended December 31, 2023, was approximately $33.4 million, an increase of approximately $15.4 million or 85.5%, compared to the prior year period revenue of approximately $18.0 million. The increase is primarily due to increased revenue of approximately $18.3 million at The Kinetic Co., Inc. and PMW, partially offset by a $2.9 million decrease in our other Steel Manufacturing business. This decrease is primarily due to reduced customer demand as a result of general economic conditions. The gross margin was 15.8% for the quarter ended December 31, 2023, compared to 24.4% for the prior year period. The decrease in gross margin is primarily due to the acquisition of PMW, which has historically generated lower margins as well as overall decreased margins in the Steel Manufacturing segment due to reduced production. Operating income for the year ended December 31, 2023, was approximately $1.0 million, compared to operating income of approximately $1.5 million in the prior year period.

Corporate and Other

Revenue for the year ended December 31, 2023, was approximately $0.1 million, a decrease of approximately $1.2 million, or 93.2%, compared to the prior year period revenue of approximately $1.3 million. The decrease was primarily due to the closure of SW Financial in May 2023. Operating loss for the quarter ended December 31, 2023, was approximately $1.6 million, compared to a loss of approximately $1.3 million in the prior year.

Non-GAAP Financial Information

Adjusted EBITDA

We evaluate the performance of our operations based on financial measures, such as “Adjusted EBITDA,” which is a non-GAAP financial measure. We define Adjusted EBITDA as net income (loss) before interest expense, interest income, income taxes, depreciation, amortization, stock-based compensation, and other non-cash or nonrecurring charges. We believe that Adjusted EBITDA is an important indicator of the operational strength and performance of the business, including the business’s ability to fund acquisitions and other capital expenditures and to service its debt. Additionally, this measure is used by management to evaluate operating results and perform analytical comparisons and identify strategies to improve performance. Adjusted EBITDA is also a measure that is customarily used by financial analysts to evaluate a company’s financial performance, subject to certain adjustments. Adjusted EBITDA does not represent cash flows from operations, as defined by generally accepted accounting principles (“GAAP”), should not be construed as an alternative to net income or loss, and is indicative neither of our results of operations, nor of cash flow available to fund our cash needs. It is, however, a measurement that the Company believes is useful to investors in analyzing its operating performance. Accordingly, Adjusted EBITDA should be considered in addition to, but not as a substitute for, net income, cash flow provided by operating activities, and other measures of financial performance prepared in accordance with GAAP. As companies often define non-GAAP financial measures differently, Adjusted EBITDA, as calculated by Live Ventures Incorporated, should not be compared to any similarly titled measures reported by other companies.

Forward-Looking and Cautionary Statements

The use of the word “Company” refers to Live Ventures and its wholly owned subsidiaries. Certain statements in this press release contain or may suggest “forward-looking” information within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, each as amended, that are intended to be covered by the “safe harbor” created by those sections. Words such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” and similar statements are intended to identify forward-looking statements. Live Ventures may also make forward-looking statements in its periodic reports to the United States. Securities and Exchange Commission on Forms 10-K and 10-Q, Current Reports on Form 8-K, in its annual report to stockholders, in press releases and other written materials, and in oral statements made by its officers, directors or employees to third parties. There can be no assurance that such statements will prove to be accurate and there are a number of important factors that can cause actual results to differ materially from those expressed in any forward-looking statements made by the Company, including, but not limited to, plans and objectives of management for future operations or products, the market acceptance or future success of our products, and our future financial performance. The Company cautions that these forward-looking statements are further qualified by other factors including, but not limited to, those set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2023. Additionally, new risk factors emerge from time to time, and it is not possible for us to predict all such risk factors, or to assess the impact such risk factors might have on our business. Live Ventures undertakes no obligation to publicly update any forward-looking statements whether as a result of new information, future events or otherwise.

About Live Ventures Incorporated

Live Ventures is a diversified holding company with a strategic focus on value-oriented acquisitions of domestic middle-market companies. Live Ventures’ acquisition strategy is sector-agnostic and focuses on well-run, closely held businesses with a demonstrated track record of earnings growth and cash flow generation. The Company looks for opportunities to partner with management teams of its acquired businesses to build increased stockholder value through a disciplined buy-build-hold long-term focused strategy. Live Ventures was founded in 1968. In late 2011 Jon Isaac, Chief Executive Officer and strategic investor, joined the Board of Directors of the Company and later refocused it into a diversified holding company. The Company’s current portfolio of diversified operating subsidiaries includes companies in the textile, flooring, tools, steel, and entertainment industries.

Contact:
Live Ventures Incorporated
Greg Powell, Director of Investor Relations
725.500.5597
gpowell@liveventures.com
www.liveventures.com

Source: Live Ventures Incorporated

CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(dollars in thousands, except per share amounts)
 
  December 31, 2023   September 30, 2023
  (Unaudited)    
Assets      
Cash $ 5,569     $ 4,309  
Trade receivables, net of allowance for doubtful accounts of $1.5 million at December 31, 2023 and $1.6 million at September 30, 2023   42,350       41,194  
Inventories, net   132,455       131,314  
Income taxes receivable         1,116  
Prepaid expenses and other current assets   4,751       4,919  
Total current assets   185,125       182,852  
Property and equipment, net   79,683       80,703  
Right of use asset – operating leases   65,799       54,544  
Deposits and other assets   1,240       1,282  
Intangible assets, net   28,163       26,568  
Goodwill   76,639       75,866  
Total assets $ 436,649     $ 421,815  
Liabilities and Stockholders’ Equity      
Liabilities:      
Accounts payable $ 25,406     $ 27,190  
Accrued liabilities   39,123       31,826  
Income taxes payable   431        
Current portion of lease obligations – operating leases   12,799       11,369  
Current portion of lease obligations – finance leases   361       359  
Current portion of long-term debt   21,223       23,077  
Current portion of notes payable related parties   4,000       4,000  
Total current liabilities   103,343       97,821  
Long-term debt, net of current portion   78,357       78,710  
Lease obligation long term – operating leases   58,291       48,156  
Lease obligation long term – finance leases   32,981       32,942  
Notes payable related parties, net of current portion   6,919       6,914  
Seller notes – related parties   39,672       38,998  
Deferred taxes   11,714       14,035  
Other non-current obligations   5,975       4,104  
Total liabilities   337,252       321,680  
Commitments and contingencies      
Stockholders’ equity:      
Series E convertible preferred stock, $0.001 par value, 200,000 shares authorized, 47,840 shares issued and outstanding at December 31, 2023 and September 30, 2023, respectively, with a liquidation preference of $0.30 per share outstanding          
Common stock, $0.001 par value, 10,000,000 shares authorized, 3,159,984 and 3,164,330 shares issued and outstanding at December 31, 2023 and September 30, 2023, respectively   2       2  
Paid in capital   69,437       69,387  
Treasury stock common 664,409 and 660,063 shares as of December 31, 2023 and September 30, 2023, respectively   (8,312 )     (8,206 )
Treasury stock Series E preferred 80,000 shares as of December 31, 2023 and September 30, 2023, respectively   (7 )     (7 )
Retained earnings   38,277       38,959  
Total stockholders’ equity   99,397       100,135  
Total liabilities and stockholders’ equity $ 436,649     $ 421,815  
LIVE VENTURES, INCORPORATED
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(dollars in thousands, except per share)
 
  For the Three Months Ended December 31,
  2023   2022
Revenues $ 117,593     $ 68,986  
Cost of revenues   81,266       47,042  
Gross profit   36,327       21,944  
       
Operating expenses:      
General and administrative expenses   27,679       14,600  
Sales and marketing expenses   5,107       2,777  
Total operating expenses   32,786       17,377  
Operating income   3,541       4,567  
Other expense:      
Interest expense, net   (4,163 )     (2,047 )
Other expense   (284 )     (61 )
Total other expense, net   (4,447 )     (2,108 )
(Loss) income before provision for income taxes   (906 )     2,459  
(Benefit) provision for income taxes   (224 )     615  
Net (loss) income $ (682 )   $ 1,844  
       
(Loss) income per share:      
Basic $ (0.22 )   $ 0.60  
Diluted $ (0.22 )   $ 0.60  
       
Weighted average common shares outstanding:      
Basic   3,163,541       3,059,035  
Diluted   3,163,541       3,089,741  
LIVE VENTURES INCORPORATED
NON-GAAP MEASURES RECONCILIATION
Adjusted EBITDA
The following table provides a reconciliation of Net income (loss) to total Adjusted EBITDA for the periods indicated (dollars in thousands):
 
  For the Three Months Ended
  December 31,
2023
  December 31,
2022
Net (loss) income $ (682 )   $ 1,844  
Depreciation and amortization   4,295       2,651  
Stock-based compensation   50        
Interest expense, net   4,163       2,047  
Income tax (benefit) expense   (224 )     615  
Debt acquisition costs   183        
Acquisition costs   406       382  
Other non-recurring company initiatives   505        
Adjusted EBITDA $ 8,696     $ 7,539  



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