Live Ventures Inc (LIVE) Q3 2024 Earnings Call Highlights: Revenue Surge Amidst Rising Costs

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In This Article:

  • Total Revenue: Increased 35.4% to approximately $123.9 million.

  • Retail-Flooring Revenue: Approximately $37 million, an increase of 34.7%.

  • Flooring Manufacturing Revenue: Approximately $31.3 million, an increase of 14%.

  • Steel Manufacturing Revenue: Approximately $39 million, an increase of 112.1%.

  • Gross Profit: $37 million, up from $32.2 million in the prior year period.

  • Gross Margin Percentage: Decreased to 29.9% from 35.2%.

  • General and Administrative Expense: Increased by $6.8 million to $30.1 million.

  • Sales and Marketing Expense: Increased by $2.4 million to $5.9 million.

  • Interest Expense: Increased by approximately $750,000.

  • Net Loss: Approximately $2.9 million, with a loss per share of $0.91.

  • Adjusted EBITDA: Approximately $6.1 million, a decrease of $3.5 million.

  • Total Cash Availability: $34.4 million, consisting of $4.7 million cash on hand and $29.7 million in credit availability.

  • Working Capital: Approximately $57.5 million as of June 30, 2024.

  • Total Assets: $436.8 million.

  • Stockholders Equity: $92.7 million.

  • Share Repurchases: 18,156 shares repurchased; $10 million available under new repurchase program.

Release Date: August 08, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Total revenue for the third quarter increased by 35.4% to approximately $123.9 million, driven by strategic acquisitions.

  • The Retail-Flooring segment saw a significant revenue increase of $9.5 million or 34.7% compared to the prior year.

  • Steel Manufacturing revenue surged by 112.1%, primarily due to increased contributions from PMW and Central Steel.

  • The company repurchased 18,156 shares of common stock, indicating confidence in long-term value for shareholders.

  • Live Ventures Inc (NASDAQ:LIVE) maintains a strong liquidity position with total cash availability of $34.4 million.

Negative Points

  • Net loss for the quarter was approximately $2.9 million, compared to a net income of $1.1 million in the prior year period.

  • Gross margin percentage decreased to 29.9% from 35.2% due to lower margins from recent acquisitions.

  • General and administrative expenses increased by $6.8 million, largely due to costs associated with acquisitions.

  • Interest expense rose by $750,000 due to incremental debt from recent acquisitions.

  • PMW was in default of a financial covenant, leading to reclassification of its long-term debt to current liabilities.

Q & A Highlights

Q: Is any of the debt floating rate that you have? A: Yes, we do have floating rate debt. If interest rates go down, that would benefit the company. - David Verret, Chief Financial Officer

Q: There was a mention about integration costs being an issue this quarter. Did that relate to the new debt or something else? A: The integration costs were related to the Flooring Liquidator side, specifically integrating CRO and Johnson. These were smaller acquisitions operating on their own systems, and we are in the process of migrating them to Flooring Liquidators' systems for efficiency. - David Verret, Chief Financial Officer

Q: Can you estimate how much integration costs affected this quarter? A: We implemented headcount reductions and disposed of some stores, which should lead to savings. However, I can't provide a specific dollar amount at this time. - David Verret, Chief Financial Officer

Q: What was the average price of the share repurchases? A: The average price was around $18 per share. This information is summarized in the 10-Q that was recently filed. - David Verret, Chief Financial Officer

Q: There was an issue with PMW's debt. What was the issue? A: PMW failed a financial leverage covenant as of June 30. We are in positive discussions with creditors to resolve this. The default required us to classify the debt as current under US GAAP. - David Verret, Chief Financial Officer

Q: Where do you think we are in the economic cycle concerning your companies? A: We believe we are recession-resilient. Vintage Stock offers cheaper entertainment options, and Flooring Liquidators faces headwinds due to interest rates affecting the housing market. If interest rates decrease, we expect an uptick in Flooring Liquidators' performance. - David Verret, Chief Financial Officer

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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