Financial Data and Key Metrics Changes - Total revenue for Q3 2022 decreased slightly to $68.3 million, down 1.2% from $69.1 million in the prior year period [9] - Gross profit for Q3 2022 was $22.3 million, down from $25.1 million in the prior year period, with gross margin percentage decreasing to 32.7% from 36.3% [11] - Operating income was $5.9 million for Q3 2022, a decrease of $2.4 million or 28% compared to the prior year period [15] - Net income for Q3 2022 was $3.5 million, a decrease of $6.5 million or 65.1% compared to the prior year period [15] - Adjusted EBITDA for Q3 2022 decreased 9.5% to $8.8 million compared to $9.8 million in the prior year period [16] Business Line Data and Key Metrics Changes - Flooring segment revenue decreased 6% to $32.2 million from $34.2 million in the prior year period due to reduced customer demand [10] - Retail segment revenue decreased 11.5% to $19.2 million from $21.7 million in the prior year period, primarily due to inflationary factors [10] - Steel segment revenue increased 15% to $15 million from $13 million in the prior year period, driven by increased sales prices due to rising costs [10] - Gross profit margin for the Flooring segment decreased to 23.2% from 28.8% in the prior year period, while the Steel segment's gross profit margin increased to 26.8% from 26.2% [12] Market Data and Key Metrics Changes - The company ended the quarter with cash of $3.6 million and cash availability under various lines of credit of $32 million, totaling $35.6 million in liquidity [17] - Working capital increased to $72 million from $33.8 million as of September 30, 2021, primarily due to net assets from the acquisition of Kinetic and an increase in inventory [18] - Total assets increased by $51 million or 24.1% to $262.8 million compared to $211.7 million as of September 30, 2021 [18] Company Strategy and Development Direction - The company executed a multi-pronged capital allocation strategy to maximize shareholder value, including the acquisition of The Kinetic Co., Inc. [7][8] - The company may consider share repurchases as part of its capital allocation strategy, with a repurchase plan announced in 2018 [20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about navigating the challenging business environment and driving long-term returns for shareholders [21] - The company acknowledged increasing economic headwinds and inflationary pressures impacting performance [7] Other Important Information - General administrative expenses decreased by 2.8% to approximately $13.4 million for Q3 2022 compared to the prior year period [13] - Sales and marketing expenses for Q3 2022 were $3.1 million, slightly up from $3 million in the prior year period [14] Q&A Session Summary Question: Clarification on corporate and other revenue - Management clarified that corporate and other revenue primarily includes Salomon Whitney and a small amount from the corporate office [25][26] Question: Free cash flow information - Management confirmed that free cash flow was not listed but is available in the cash flow statement in the 10-Q [27][29] Question: Current outstanding debt - Management provided that the current portion of debt is $18.4 million and long-term debt is $58.5 million [45] Question: Share repurchase percentage of total shares outstanding - Management indicated that there are 3,081,000 shares outstanding, making the repurchased shares approximately half a percent of total shares [49][50] Question: Consideration of new ventures - Management stated that they are open to various acquisition opportunities, focusing on family-run, founder-owned businesses, and are flexible in exploring different sectors [55]

[PART I - FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) Presents Live Ventures' unaudited condensed consolidated financial statements and detailed notes on accounting, acquisitions, and segment performance [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Provides Live Ventures' unaudited condensed consolidated financial statements, including balance sheets, income, cash flows, and equity, with explanatory notes [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Presents the Company's financial position, detailing assets, liabilities, and stockholders' equity at specific reporting dates Condensed Consolidated Balance Sheet Highlights ($ in thousands) | Metric | June 30, 2022 | Sept 30, 2021 | Change ($k) | Change (%) | | :-------------------------- | :------------ | :------------ | :---------- | :--------- | | Total Assets | 262,767 | 211,738 | 51,029 | 24.1% | | Total Liabilities | 164,802 | 136,658 | 28,144 | 20.6% | | Total Stockholders' Equity | 97,965 | 75,080 | 22,885 | 30.5% | | Total Current Assets | 129,156 | 98,790 | 30,366 | 30.7% | | Total Current Liabilities | 57,187 | 64,960 | (7,773) | -12.0% | | Inventories, net | 95,961 | 70,747 | 25,214 | 35.6% | | Goodwill | 43,653 | 41,471 | 2,182 | 5.3% | [Condensed Consolidated Statements of Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Details the Company's revenues, expenses, and net income for the three and nine months ended June 30 Condensed Consolidated Statements of Income Highlights (Three Months Ended June 30, $ in thousands) | Metric | 2022 | 2021 | Change ($k) | Change (%) | | :--------------- | :--- | :--- | :---------- | :--------- | | Revenue | 68,269 | 69,095 | (826) | -1.2% | | Gross Profit | 22,349 | 25,066 | (2,717) | -10.8% | | Operating Income | 5,864 | 8,232 | (2,368) | -28.8% | | Net Income | 3,472 | 9,933 | (6,461) | -65.0% | | Basic EPS | 1.12 | 6.35 | (5.23) | -82.4% | | Diluted EPS | 1.11 | 3.01 | (1.90) | -63.1% | Condensed Consolidated Statements of Income Highlights (Nine Months Ended June 30, $ in thousands) | Metric | 2022 | 2021 | Change ($k) | Change (%) | | :--------------- | :--- | :--- | :---------- | :--------- | | Revenue | 213,133 | 202,439 | 10,694 | 5.3% | | Gross Profit | 74,918 | 73,825 | 1,093 | 1.5% | | Operating Income | 24,720 | 26,648 | (1,928) | -7.2% | | Net Income | 25,376 | 23,907 | 1,469 | 6.1% | | Basic EPS | 8.11 | 15.41 | (7.30) | -47.4% | | Diluted EPS | 8.01 | 7.31 | 0.70 | 9.6% | [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Outlines the Company's cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows Highlights (Nine Months Ended June 30, $ in thousands) | Metric | 2022 | 2021 | Change ($k) | Change (%) | | :---------------------------------------- | :--- | :--- | :---------- | :--------- | | Net cash provided by operating activities | 10,844 | 32,199 | (21,355) | -66.3% | | Net cash used in investing activities | (32,659) | (14,470) | (18,189) | 125.7% | | Net cash provided by (used in) financing activities | 20,776 | (16,148) | 36,924 | 228.7% | | Increase (decrease) in cash | (1,039) | 1,581 | (2,620) | -165.7% | | Cash, end of period | 3,625 | 10,565 | (6,940) | -65.7% | [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Reports changes in the Company's equity, including stock conversions and share repurchases - Total Stockholders' Equity increased from **$75,080k** at September 30, 2021, to **$97,965k** at June 30, 2022[17](index=17&type=chunk) - Series B Convertible Preferred Stock was fully converted into **1,578,950 common shares** in March 2022[17](index=17&type=chunk)[61](index=61&type=chunk) - The Company purchased **79,828 shares** of common treasury stock for approximately **$2.5 million** during the nine months ended June 30, 2022[17](index=17&type=chunk)[63](index=63&type=chunk) [Notes to the Condensed Consolidated Financial Statements (Unaudited)](index=7&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) Provides detailed explanations and disclosures supporting the condensed consolidated financial statements [Note 1: Background and Basis of Presentation](index=7&type=section&id=Note%201%3A%20Background%20and%20Basis%20of%20Presentation) Describes Live Ventures as a diversified holding company, its operating segments, and the impact of the COVID-19 pandemic - Live Ventures is a diversified holding company with four operating segments: **Retail**, **Flooring Manufacturing**, **Steel Manufacturing**, and **Corporate and Other**[19](index=19&type=chunk) - ApplianceSmart ceased operations on **April 1, 2022**[19](index=19&type=chunk) - The COVID-19 pandemic continues to create significant uncertainties and may materially adversely affect revenues, earnings, liquidity, and cash flows[21](index=21&type=chunk) [Note 2: Summary of Significant Accounting Policies](index=8&type=section&id=Note%202%3A%20Summary%20of%20Significant%20Accounting%20Policies) Outlines the Company's significant accounting policies, key estimates, and the anticipated impact of recent accounting pronouncements - The consolidated financial statements include the Company, its majority-owned subsidiaries, and a variable interest entity (VIE)[23](index=23&type=chunk) - Significant estimates are made for doubtful accounts, obsolete inventory, warranty, stock-based compensation, goodwill impairment, deferred tax assets, and asset useful lives[25](index=25&type=chunk) - Recently issued ASUs (ASU No. 2016-13, ASU No. 2019-12, ASU No. 2020-04, ASU No. 2021-04) are not anticipated to have a material impact on the Company's financial statements[27](index=27&type=chunk)[28](index=28&type=chunk)[29](index=29&type=chunk) [Note 3: Acquisitions](index=9&type=section&id=Note%203%3A%20Acquisitions) Details Precision Marshall's acquisition of The Kinetic Co., Inc. for $24.6 million, including funding and preliminary goodwill allocation - Precision Marshall acquired **100%** of The Kinetic Co., Inc. and its Real Estate on **June 28, 2022**, for approximately **$24.6 million**[31](index=31&type=chunk) - The acquisition was funded by credit facility borrowings, proceeds from a sale-leaseback of the Real Estate (**$8.9 million**), a **$3.0 million** subordinated promissory note, a contingent earn-out liability, and cash on-hand[31](index=31&type=chunk)[32](index=32&type=chunk) - Preliminary purchase price allocation recognized goodwill of approximately **$2.2 million**[34](index=34&type=chunk) Proforma Net Revenue (Nine Months Ended June 30, $ in thousands) | Entity | 2022 | 2021 | | :------------------ | :--- | :--- | | Live (As Reported) | 213,133 | 202,439 | | Kinetic (Unaudited) | 15,418 | 16,449 | | Live (Proforma) | 228,551 | 218,888 | [Note 4: Leases](index=11&type=section&id=Note%204%3A%20Leases) Describes the Company's operating lease agreements, including a new sale-leaseback arrangement and key lease terms - The Company leases various properties under noncancelable operating lease agreements expiring through **2042**[37](index=37&type=chunk) - A sale-leaseback agreement for Kinetic's Real Estate was entered into on **June 28, 2022**, with a **20-year lease term** and two **five-year renewal options**[38](index=38&type=chunk) - As of **June 30, 2022**, the weighted average remaining lease term is **16.9 years**, and the weighted average discount rate is **5.82%**[39](index=39&type=chunk) Right of Use Assets and Lease Liabilities ($ in thousands) | Metric | June 30, 2022 | Sept 30, 2021 | | :-------------------------------- | :------------ | :------------ | | Right of use asset - operating leases | 31,487 | 30,466 | | Current - operating lease liabilities | 7,293 | 7,202 | | Current - finance lease liabilities | 376 | — | | Long term - operating lease liabilities | 31,014 | 29,343 | | Long term - finance lease liabilities | 7,803 | — | [Note 5: Inventory](index=12&type=section&id=Note%205%3A%20Inventory) Total net inventory significantly increased to $96.0 million, primarily driven by a substantial rise in raw materials Inventory Breakdown ($ in thousands) | Category | June 30, 2022 | Sept 30, 2021 | Change ($k) | Change (%) | | :--------------- | :------------ | :------------ | :---------- | :--------- | | Raw materials | 37,246 | 18,604 | 18,642 | 100.2% | | Work in progress | 7,959 | 12,404 | (4,445) | -35.8% | | Finished goods | 30,024 | 22,584 | 7,440 | 32.9% | | Merchandise | 23,002 | 18,948 | 4,054 | 21.4% | | Total inventory, net | 95,961 | 70,747 | 25,214 | 35.6% | [Note 6: Property and Equipment](index=12&type=section&id=Note%206%3A%20Property%20and%20Equipment) Net property and equipment increased to $52.4 million due to additions, while depreciation expense decreased year-over-year Property and Equipment, Net ($ in thousands) | Category | June 30, 2022 | Sept 30, 2021 | Change ($k) | Change (%) | | :-------------------------------- | :------------ | :------------ | :---------- | :--------- | | Land | 2,029 | 2,029 | 0 | 0.0% | | Building and improvements | 16,058 | 11,737 | 4,321 | 36.8% | | Machinery and equipment | 51,105 | 35,284 | 15,821 | 44.8% | | Furnishings and fixtures | 4,213 | 3,907 | 306 | 7.8% | | Office, computer equipment and other | 2,981 | 2,792 | 189 | 6.8% | | Total property and equipment, net | 52,437 | 35,632 | 16,805 | 47.2% | - Depreciation expense for the three months ended June 30, 2022, was approximately **$1.4 million**, down from **$1.6 million** in 2021[43](index=43&type=chunk) - Depreciation expense for the nine months ended June 30, 2022, was **$3.9 million**, down from **$4.8 million** in 2021[43](index=43&type=chunk) [Note 7: Goodwill](index=13&type=section&id=Note%207%3A%20Goodwill) Goodwill increased to $43.7 million due to the Kinetic acquisition in Steel Manufacturing, with no impairment identified - Goodwill increased by **$2,182k** due to the acquisition of Kinetic in the Steel Manufacturing segment[45](index=45&type=chunk) Goodwill by Segment ($ in thousands) | Segment | Sept 30, 2021 | Additions | June 30, 2022 | | :--------------------- | :------------ | :-------- | :------------ | | Retail | 36,947 | — | 36,947 | | Flooring Manufacturing | 807 | — | 807 | | Steel Manufacturing | — | 2,182 | 2,182 | | Corporate | 3,717 | — | 3,717 | | Total | 41,471 | 2,182 | 43,653 | - No triggering events for goodwill impairment testing were identified as of **June 30, 2022**[45](index=45&type=chunk) [Note 8: Accrued Liabilities](index=14&type=section&id=Note%208%3A%20Accrued%20Liabilities) Total accrued liabilities decreased to $13.7 million, driven by lower professional fees and payroll, partially offset by increased accounts payable Accrued Liabilities ($ in thousands) | Category | June 30, 2022 | Sept 30, 2021 | Change ($k) | Change (%) | | :----------------------------------- | :------------ | :------------ | :---------- | :--------- | | Accrued payroll | 3,844 | 4,765 | (921) | -19.3% | | Accrued sales and use taxes | 1,117 | 1,692 | (575) | -34.0% | | Accrued professional fees | 1,913 | 4,937 | (3,024) | -61.2% | | Accrued accounts payable and bank overdrafts | 1,132 | 503 | 629 | 125.0% | | Total accrued liabilities | 13,689 | 17,048 | (3,359) | -19.7% | [Note 9: Long-Term Debt](index=14&type=section&id=Note%209%3A%20Long-Term%20Debt) Long-term debt increased to $58.5 million, primarily from new loans for the Kinetic acquisition, with the Company in covenant compliance - Total long-term debt, net of current portion, increased by **$20,916k (55.7%)** from **$37,559k** to **$58,475k**[48](index=48&type=chunk) - New debt includes Fifth-Third Bank Revolver (**$20,564k**), Fifth-Third Bank Term Loans (**$3,292k**, **$4,000k**, **$1,000k**), and a Note Payable to the Sellers of Kinetic (**$3,000k**)[48](index=48&type=chunk) - Precision Marshall refinanced its Encina Business Credit loans with Fifth Third Bank on **January 20, 2022**, reducing interest costs and improving liquidity[52](index=52&type=chunk) - The Company was in compliance with all loan covenants as of **June 30, 2022**[58](index=58&type=chunk) [Note 10: Notes Payable, Related Parties](index=16&type=section&id=Note%2010%3A%20Notes%20Payable%2C%20Related%20Parties) Notes payable to related parties remained stable at $4.0 million, with the current portion decreasing to zero - Total notes payable to related parties remained at **$4,000k** as of **June 30, 2022**[59](index=59&type=chunk) - The current portion of related party notes payable decreased from **$2,000k** to **$0**[59](index=59&type=chunk) - Future maturities of related party debt are **$2,000k** in **2024** and **$2,000k** in **2025**[59](index=59&type=chunk) [Note 11: Stockholders' Equity](index=17&type=section&id=Note%2011%3A%20Stockholders'%20Equity) All Series B Preferred Stock converted to common shares, and treasury stock increased due to $2.5 million in repurchases - All **315,790 shares** of Series B Convertible Preferred Stock were converted into **1,578,950 common shares** in **March 2022**[61](index=61&type=chunk) - The Company purchased **79,828 shares** of common stock for approximately **$2.5 million** during the nine months ended June 30, 2022, increasing treasury stock[63](index=63&type=chunk) - As of **June 30, 2022**, there were **614,348 shares** of common treasury stock[63](index=63&type=chunk) [Note 12: Stock-Based Compensation](index=17&type=section&id=Note%2012%3A%20Stock-Based%20Compensation) Stock-based compensation expense decreased to $37k, with no unrecognized expense remaining as of June 30, 2022 - Stock-based compensation expense was **$37k** for the nine months ended June 30, 2022, down from **$230k** in the prior year[65](index=65&type=chunk) - No unrecognized compensation expense associated with stock option awards remained as of **June 30, 2022**[66](index=66&type=chunk) - Outstanding stock options at **June 30, 2022**, were **87,500 shares** with a weighted average exercise price of **$18.81** and a remaining contractual life of **1.03 years**[65](index=65&type=chunk) [Note 13: Earnings Per Share](index=18&type=section&id=Note%2013%3A%20Earnings%20Per%20Share) Provides basic and diluted EPS computations, noting the impact of Series B Preferred Stock conversion on prior year diluted shares Basic and Diluted EPS (Nine Months Ended June 30) | Metric | 2022 | 2021 | | :---------------------------------------- | :--- | :--- | | Net income applicable to common stock ($k) | 25,376 | 24,085 | | Weighted average common shares outstanding (Basic) | 3,128,813 | 1,563,025 | | Basic earnings per share | $8.11 | $15.41 | | Assumed weighted average common shares outstanding (Diluted) | 3,169,258 | 3,294,815 | | Diluted earnings per share | $8.01 | $7.31 | - The conversion of Series B Preferred Stock (**1,578,950 shares**) was a significant dilutive factor in **2021** but not in **2022**[69](index=69&type=chunk) [Note 14: Related Party Transactions](index=19&type=section&id=Note%2014%3A%20Related%20Party%20Transactions) Details ongoing related party transactions, including loans with Isaac Capital Group and a promissory note with Spriggs Investments - Isaac Capital Group LLC (ICG), controlled by the CEO, beneficially owns **50%** of the Company's stock[70](index=70&type=chunk) - A **$2.0 million** ICG Term Loan with **12.5% interest** matures on **May 1, 2025**[71](index=71&type=chunk) - The ICG Revolving Promissory Note was increased to **$6.0 million** in **June 2022** to fund the Kinetic acquisition, with a **$4.5 million** advance repaid by **June 30, 2022**[72](index=72&type=chunk) - A **$2.0 million** Spriggs Promissory Note, with Rodney Spriggs (CEO of Vintage Stock) as the sole member of Spriggs Investments, LLC, matures on **July 10, 2023**[77](index=77&type=chunk) [Note 15: Commitments and Contingencies](index=20&type=section&id=Note%2015%3A%20Commitments%20and%20Contingencies) Addresses the ongoing SEC investigation, pending motions to dismiss, and ApplianceSmart's bankruptcy settlement and cessation of operations - The SEC filed a civil complaint against the Company and two executive officers on **August 2, 2021**, alleging financial, disclosure, and reporting violations from **2016-2018**[80](index=80&type=chunk)[166](index=166&type=chunk) - Motions to dismiss the SEC complaint were filed by the Defendants on **October 1, 2021**, and are currently under submission[81](index=81&type=chunk)[167](index=167&type=chunk) - ApplianceSmart's plan for reorganization was approved on **February 28, 2022**, resulting in an **$11.4 million** gain on bankruptcy settlement[82](index=82&type=chunk)[169](index=169&type=chunk) - ApplianceSmart ceased operations on **April 1, 2022**[82](index=82&type=chunk) [Note 16: Segment Reporting](index=22&type=section&id=Note%2016%3A%20Segment%20Reporting) Provides detailed financial performance for the Company's four operating segments, highlighting revenue and profitability shifts Revenues by Segment ($ in thousands) | Segment | 3 Months Ended June 30, 2022 | 3 Months Ended June 30, 2021 | 9 Months Ended June 30, 2022 | 9 Months Ended June 30, 2021 | | :------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Retail | 19,227 | 21,719 | 66,179 | 68,092 | | Flooring Manufacturing | 32,188 | 34,234 | 97,832 | 97,428 | | Steel Manufacturing | 14,974 | 13,018 | 41,367 | 36,546 | | Corporate and Other | 1,880 | 124 | 7,755 | 373 | | **Total revenues** | **68,269** | **69,095** | **213,133** | **202,439** | Operating Income (Loss) by Segment ($ in thousands) | Segment | 3 Months Ended June 30, 2022 | 3 Months Ended June 30, 2021 | 9 Months Ended June 30, 2022 | 9 Months Ended June 30, 2021 | | :------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Retail | 2,202 | 3,860 | 10,144 | 13,424 | | Flooring Manufacturing | 3,289 | 3,997 | 11,772 | 14,158 | | Steel Manufacturing | 1,268 | 1,928 | 5,641 | 3,814 | | Corporate and Other | (895) | (1,553) | (2,837) | (4,748) | | **Total operating income** | **5,864** | **8,232** | **24,720** | **26,648** | [Note 17: Subsequent Events](index=22&type=section&id=Note%2017%3A%20Subsequent%20Events) No subsequent events requiring adjustments or disclosures were identified through the Form 10-Q filing date - No subsequent events requiring adjustments or disclosures were identified through the filing date of the Form 10-Q[88](index=88&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the Company's financial condition and results for the three and nine months ended June 30, covering segment performance, Adjusted EBITDA, and liquidity [Overview](index=23&type=section&id=Overview) Live Ventures is a diversified holding company, using Adjusted EBITDA as a key non-GAAP performance indicator - Live Ventures is a holding company acquiring and operating diversified businesses in **Retail**, **Flooring Manufacturing**, **Steel Manufacturing**, and **Corporate and Other** segments[94](index=94&type=chunk) - The Company uses "Adjusted EBITDA" (net income before interest, taxes, depreciation, amortization, stock-based compensation, and other non-cash/nonrecurring charges) as an important indicator of operational strength[108](index=108&type=chunk) - Forward-looking statements are included, subject to risks and uncertainties detailed in the **2021 Form 10-K**[92](index=92&type=chunk) [Results of Operations Three Months Ended June 30, 2022 and 2021](index=26&type=section&id=Results%20of%20Operations%20Three%20Months%20Ended%20June%2030%2C%202022%20and%202021) Revenue decreased by 1.2% to $68.3 million, and net income fell by 65.0% to $3.5 million, driven by demand shifts and lower gross profit Financial Performance (Three Months Ended June 30, $ in thousands) | Metric | 2022 | 2021 | Change ($k) | Change (%) | | :--------------- | :--- | :--- | :---------- | :--------- | | Revenue | 68,269 | 69,095 | (826) | -1.2% | | Cost of revenue | 45,920 | 44,029 | 1,891 | 4.3% | | Net income | 3,472 | 9,933 | (6,461) | -65.0% | | Adjusted EBITDA | 8,840 | 9,770 | (930) | -9.5% | - Revenue decrease was primarily due to reduced demand in **Retail** and **Flooring Manufacturing** segments, offset by increased **Steel Manufacturing** revenue from price increases[114](index=114&type=chunk) - Cost of revenue increased by **4.3%** due to inflationary pressures and the consolidation of SW Financial[115](index=115&type=chunk) - Interest expense, net, decreased by **28.1%** due to debt payoff, favorable refinancing rates, and PPP loan forgiveness[118](index=118&type=chunk) [Results of Operations Nine Months Ended June 30, 2022 and 2021](index=27&type=section&id=Results%20of%20Operations%20Nine%20Months%20Ended%20June%2030%2C%202022%20and%202021) Revenue increased by 5.3% to $213.1 million, net income rose by 6.1% to $25.4 million, but Adjusted EBITDA decreased by 5.5% Financial Performance (Nine Months Ended June 30, $ in thousands) | Metric | 2022 | 2021 | Change ($k) | Change (%) | | :--------------- | :--- | :--- | :---------- | :--------- | | Revenue | 213,133 | 202,439 | 10,694 | 5.3% | | Cost of revenue | 138,215 | 128,614 | 9,601 | 7.5% | | Net income | 25,376 | 23,907 | 1,469 | 6.1% | | Adjusted EBITDA | 31,193 | 33,020 | (1,827) | -5.5% | - Revenue increase was primarily from **Corporate and Other** (SW Financial consolidation) and **Steel Manufacturing**, with a decrease in **Retail**[122](index=122&type=chunk) - Cost of revenue increased by **7.5%** due to higher revenues and inflationary product costs[123](index=123&type=chunk) - General and administrative expenses increased by **5.4%** due to Kinetic acquisition costs, employee compensation, and SW Financial consolidation[124](index=124&type=chunk) [Results of Operations by Segment (Three Months)](index=29&type=section&id=Results%20of%20Operations%20by%20Segment%20(Three%20Months)) Details segment-specific revenue and operating income changes for the three months, driven by demand, inflation, and acquisition costs [Retail Segment (Three Months)](index=29&type=section&id=Retail%20Segment%20(Three%20Months)) Retail revenue decreased by 11.5% to $19.2 million due to reduced demand and ApplianceSmart shutdown, with operating income declining - Revenue decreased by **$2.5 million (11.5%)** to **$19.2 million**[129](index=129&type=chunk) - Decrease attributed to reduced demand from inflationary factors and ApplianceSmart shutdown[129](index=129&type=chunk) - Operating income decreased to **$2.2 million** from **$3.9 million**[129](index=129&type=chunk) [Flooring Manufacturing Segment (Three Months)](index=30&type=section&id=Flooring%20Manufacturing%20Segment%20(Three%20Months)) Flooring Manufacturing revenue decreased by 6% to $32.2 million due to reduced demand and higher raw material costs, impacting operating income - Revenue decreased by **$2.0 million (6%)** to **$32.2 million** due to reduced customer demand from inflationary pressures[130](index=130&type=chunk) - Cost of revenue increased due to higher raw material costs[130](index=130&type=chunk) - Operating income decreased to **$3.3 million** from **$4.0 million**[130](index=130&type=chunk) [Steel Manufacturing Segment (Three Months)](index=30&type=section&id=Steel%20Manufacturing%20Segment%20(Three%20Months)) Steel Manufacturing revenue increased by 15% to $15.0 million from price increases, but operating income decreased due to acquisition costs - Revenue increased by **$2.0 million (15%)** to **$15.0 million** due to product price increases passed to customers[131](index=131&type=chunk) - Operating income decreased to **$1.3 million** from **$1.9 million**, primarily due to Kinetic acquisition costs[131](index=131&type=chunk) [Corporate and Other Segment (Three Months)](index=30&type=section&id=Corporate%20and%20Other%20Segment%20(Three%20Months)) Corporate and Other revenue increased by $1.8 million due to SW Financial consolidation, narrowing the operating loss - Revenue increased by **$1.8 million** primarily due to SW Financial consolidation in **June 2021**[132](index=132&type=chunk) - Operating loss narrowed to **$895k** from **$1.6 million**[132](index=132&type=chunk) - Directory services business revenue and operating income are expected to continue to decline[132](index=132&type=chunk) [Results of Operations by Segment (Nine Months)](index=30&type=section&id=Results%20of%20Operations%20by%20Segment%20(Nine%20Months)) Details segment-specific revenue and operating income changes for the nine months, influenced by demand, inflation, and acquisition costs [Retail Segment (Nine Months)](index=30&type=section&id=Retail%20Segment%20(Nine%20Months)) Retail revenue decreased by 2.8% to $66.2 million due to demand and ApplianceSmart shutdown, despite price increases and new locations - Revenue decreased by **$1.9 million (2.8%)** to **$66.2 million**[134](index=134&type=chunk) - Decrease attributed to reduced demand, supply chain issues, ApplianceSmart shutdown, and lack of stimulus payments, partially offset by price increases and new Vintage Stock locations[134](index=134&type=chunk) - Operating income decreased to **$10.1 million** from **$13.4 million**[134](index=134&type=chunk) [Flooring Manufacturing Segment (Nine Months)](index=31&type=section&id=Flooring%20Manufacturing%20Segment%20(Nine%20Months)) Flooring Manufacturing revenue moderately increased from demand and price hikes, but operating income decreased due to higher raw material and marketing costs - Revenue increased moderately due to greater demand for various flooring grades and increased sales prices[136](index=136&type=chunk) - Cost of revenue increased due to higher raw material costs[136](index=136&type=chunk) - Operating income decreased to **$11.8 million** from **$14.2 million**[136](index=136&type=chunk) [Steel Manufacturing Segment (Nine Months)](index=31&type=section&id=Steel%20Manufacturing%20Segment%20(Nine%20Months)) Steel Manufacturing revenue increased by 13.2% to $41.4 million due to price increases, significantly boosting operating income - Revenue increased by **$4.8 million (13.2%)** to **$41.4 million** due to increased sales prices from rising costs[137](index=137&type=chunk) - Operating income increased to **$5.6 million** from **$3.8 million**, primarily due to increased gross profit[137](index=137&type=chunk) [Corporate and Other Segment (Nine Months)](index=31&type=section&id=Corporate%20and%20Other%20Segment%20(Nine%20Months)) Corporate and Other revenue increased by $7.4 million due to SW Financial consolidation, narrowing the operating loss - Revenue increased by **$7.4 million** primarily due to SW Financial consolidation in **June 2021**[138](index=138&type=chunk) - Operating loss narrowed to **$2.8 million** from **$4.7 million**[138](index=138&type=chunk) - Directory services business revenue and operating income are expected to continue to decline, while SW Financial revenues are anticipated to trend upward[138](index=138&type=chunk) [Adjusted EBITDA Reconciliation](index=31&type=section&id=Adjusted%20EBITDA%20Reconciliation) Adjusted EBITDA decreased by 9.5% for three months and 5.5% for nine months, primarily due to lower revenue and increased expenses Adjusted EBITDA Reconciliation ($ in thousands) | Metric | 3 Months Ended June 30, 2022 | 3 Months Ended June 30, 2021 | 9 Months Ended June 30, 2022 | 9 Months Ended June 30, 2021 | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income | 3,472 | 9,933 | 25,376 | 23,907 | | Depreciation and amortization | 1,571 | 1,670 | 4,616 | 5,089 | | Stock-based compensation | — | (56) | 37 | 230 | | Interest expense, net | 674 | 938 | 2,549 | 4,057 | | Income tax expense | 1,365 | 2,703 | 7,848 | 7,381 | | Gain on bankruptcy settlement | — | (650) | (11,352) | (1,765) | | Gain/loss on extinguishment of debt | (279) | (4,768) | 84 | (6,150) | | Acquisition costs | 974 | — | 974 | — | | Write-off of fixed assets | 438 | — | 438 | — | | Write-off of ROU assets | 522 | — | 522 | — | | Other non-recurring company initiatives | 103 | — | 101 | — | | Non-recurring loan costs | — | — | — | 271 | | **Adjusted EBITDA** | **8,840** | **9,770** | **31,193** | **33,020** | - Adjusted EBITDA decreased by **$930k (9.5%)** for the three months and **$1.8 million (5.5%)** for the nine months ended June 30, 2022, primarily due to decreases in revenue and gross profit, and increases in cost of revenue and SG&A expenses[140](index=140&type=chunk) [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) The Company maintains $3.6 million cash and $32.0 million in credit, with working capital at $72.0 million, sufficient for the next 12 months - Cash on hand: **$3.6 million** (June 30, 2022) vs **$4.7 million** (Sept 30, 2021)[141](index=141&type=chunk)[144](index=144&type=chunk) - Available borrowing under revolving credit facilities: **$32.0 million** (June 30, 2022)[141](index=141&type=chunk) - Working capital: **$72.0 million** (June 30, 2022) vs **$33.8 million** (Sept 30, 2021), an increase of **$38.1 million**[143](index=143&type=chunk) - Net cash provided by operating activities: **$10.8 million** (9 months ended June 30, 2022) vs **$32.2 million** (9 months ended June 30, 2021), a decrease of **$21.4 million**[144](index=144&type=chunk) - Net cash used in investing activities: **$32.7 million** (9 months ended June 30, 2022), primarily for Kinetic acquisition and property/equipment purchases[146](index=146&type=chunk) - Net cash provided by financing activities: **$20.8 million** (9 months ended June 30, 2022), mainly from new debt for Kinetic acquisition[147](index=147&type=chunk) - The Company believes current liquidity is sufficient for the next **12 months**[142](index=142&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The Company does not participate in market risk-sensitive commodity instruments and is not materially exposed to foreign currency or commodity price risk - The Company did not participate in market risk-sensitive commodity instruments as of **June 30, 2022**[152](index=152&type=chunk) - The Company believes it is not materially subject to foreign currency exchange risk or commodity price risk[152](index=152&type=chunk) [Item 4. Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls were ineffective due to material weaknesses in internal control, though financial statements are fairly presented, with remediation underway - Disclosure controls and procedures were not effective as of **June 30, 2022**, due to material weaknesses in internal control over financial reporting[153](index=153&type=chunk) - Identified material weaknesses: (1) insufficient written documentation of internal control policies, (2) lack of rigorous procedures for evaluating subsidiary controls, and (3) insufficient resources for adequate segregation of duties[158](index=158&type=chunk) - Despite weaknesses, management concluded that the consolidated financial statements present fairly in conformity with GAAP[154](index=154&type=chunk) - Remediation initiatives are underway, including improving documentation and developing an internal testing plan, expected to conclude during fiscal year **2022**[159](index=159&type=chunk) [PART II - OTHER INFORMATION](index=36&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This section provides additional information, including legal proceedings, risk factors, equity sales, and exhibits [Item 1. Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) Details the ongoing SEC civil complaint regarding financial and reporting violations, with motions to dismiss pending, and ApplianceSmart's bankruptcy approval - An SEC civil complaint was filed on **August 2, 2021**, alleging financial, disclosure, and reporting violations against the Company and two executive officers[166](index=166&type=chunk) - Motions to dismiss the SEC complaint were filed on **October 1, 2021**, and are under submission, with discovery stayed[167](index=167&type=chunk) - The Company strongly disputes and denies the SEC allegations[168](index=168&type=chunk) - ApplianceSmart's plan for reorganization was approved on **February 28, 2022**[169](index=169&type=chunk) [Item 1A. Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) No new material risk factors were reported in this quarterly report - No new material risk factors were disclosed[170](index=170&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=36&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The Company repurchased 79,828 common shares for $2.5 million, with $4.2 million remaining in the repurchase program - The Company repurchased **79,828 shares** of common stock for approximately **$2.5 million** during the nine months ended June 30, 2022[171](index=171&type=chunk) - Approximately **$4.2 million** remains available under the **$10 million** common stock repurchase program[171](index=171&type=chunk) [Item 3. Defaults upon Senior Securities](index=36&type=section&id=Item%203.%20Defaults%20upon%20Senior%20Securities) No defaults upon senior securities were reported - No defaults upon senior securities were disclosed[172](index=172&type=chunk) [Item 4. Mine Safety Disclosures](index=37&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) No mine safety disclosures were provided - No mine safety disclosures were provided[173](index=173&type=chunk) [Item 5. Other Information](index=37&type=section&id=Item%205.%20Other%20Information) No other information was disclosed - No other information was disclosed[174](index=174&type=chunk) [Item 6. Exhibits](index=38&type=section&id=Item%206.%20Exhibits) Lists exhibits filed with the Quarterly Report, including credit agreements, acquisition documents, and certifications - Includes Credit and Security Agreement with Fifth Third Bank (**Jan 20, 2022**)[177](index=177&type=chunk) - Includes Purchase Agreement and Real Estate Purchase/Sales Agreements related to The Kinetic Co., Inc. acquisition (**June 2022**)[177](index=177&type=chunk) - Includes certifications from the President/CEO and CFO (Sections **302** and **906** of Sarbanes-Oxley Act)[177](index=177&type=chunk) [SIGNATURES](index=39&type=section&id=SIGNATURES) This section contains the official signatures for the report by the President/CEO and CFO [SIGNATURES](index=39&type=section&id=SIGNATURES) Report signed by Jon Isaac (President and CEO) and David Verret (CFO) on August 11, 2022 - Report signed by **Jon Isaac** (President and CEO) and **David Verret** (CFO) on **August 11, 2022**[180](index=180&type=chunk)

For the quarterly period ended March 31, 2022 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________ to _______________ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 001-33937 Live Ventures Incorporated (Exact name of registrant as specified in its charter) Nevada 85-020 ...

Live Ventures Incorporated (NASDAQ:LIVE) Q1 2022 Earnings Conference Call February 10, 2022 5:00 PM ET Company Participants Jon Isaac - CEO David Verret - CAO Eric Althofer - COO Conference Call Participants Operator Good day, everyone. And welcome to today's Live Ventures Incorporated Earnings Call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question-and-answer session. Please note today's call maybe recorded. [Operator Instruc ...

PART I - FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents Live Ventures Incorporated's unaudited condensed consolidated financial statements for Q1 FY2022 and Q1 FY2021, including balance sheets, income statements, cash flows, and equity changes, with detailed notes [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to $219.0 million as of December 31, 2021, driven by higher cash and inventories, while total stockholders' equity grew to $81.6 million Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 31, 2021 (Unaudited) | Sep 30, 2021 | | :--- | :--- | :--- | | **Total Current Assets** | $105,231 | $98,790 | | **Total Assets** | **$218,987** | **$211,738** | | **Total Current Liabilities** | $62,684 | $64,960 | | **Total Liabilities** | **$137,343** | **$136,658** | | **Total Stockholders' Equity** | **$81,644** | **$75,080** | | **Total Liabilities & Equity** | **$218,987** | **$211,738** | [Condensed Consolidated Statements of Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Revenues increased 20.3% year-over-year to $75.2 million for Q1 FY2022, with net income attributable to Live Stockholders rising to $6.5 million Statement of Income Summary (in thousands, except per share) | Metric | Q1 FY2022 (ended Dec 31, 2021) | Q1 FY2021 (ended Dec 31, 2020) | Change | | :--- | :--- | :--- | :--- | | **Revenues** | $75,158 | $62,454 | +20.3% | | **Gross Profit** | $27,616 | $22,269 | +24.0% | | **Operating Income** | $10,407 | $7,291 | +42.7% | | **Net Income to Live Stockholders** | $6,546 | $5,413 | +20.9% | | **Diluted EPS** | $2.04 | $1.63 | +25.2% | [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities decreased to $4.2 million for Q1 FY2022, with a net cash increase of $5.4 million for the quarter Cash Flow Summary (in thousands) | Activity | Three Months Ended Dec 31, 2021 | Three Months Ended Dec 31, 2020 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $4,244 | $7,668 | | Net Cash from Investing Activities | ($3,070) | ($3,258) | | Net Cash from Financing Activities | $4,193 | ($6,162) | | **Increase (Decrease) in Cash** | **$5,367** | **($1,752)** | | **Cash, End of Period** | **$10,031** | **$7,232** | [Notes to the Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, business segments including Retail, Flooring, and Steel Manufacturing, long-term debt of $57.9 million, and significant legal contingencies like the SEC investigation and ApplianceSmart bankruptcy - The company operates through three main segments: **Retail** (Vintage Stock, ApplianceSmart), **Flooring Manufacturing** (Marquis Industries), and **Steel Manufacturing** (Precision Marshall)[20](index=20&type=chunk)[81](index=81&type=chunk) - Total long-term debt, including current portions, was **$57.9 million** as of December 31, 2021[39](index=39&type=chunk) - The company is involved in an **SEC investigation** and a civil complaint filed in August 2021, alleging financial, disclosure, and reporting violations, which the company is defending against[70](index=70&type=chunk)[71](index=71&type=chunk)[72](index=72&type=chunk) - Subsidiary ApplianceSmart's Chapter 11 reorganization plan was confirmed in December 2021, with the company expecting to emerge upon full satisfaction of the plan[74](index=74&type=chunk)[76](index=76&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 FY2022 financial results, highlighting a 20% revenue growth to $75.2 million, increased Adjusted EBITDA to $12.1 million, and sufficient liquidity for the next 12 months Q1 FY2022 Performance Highlights (in thousands) | Metric | Q1 FY2022 | Q1 FY2021 | | :--- | :--- | :--- | | Revenues | $75,158 | $62,454 | | Gross Profit | $27,616 | $22,269 | | Net Income | $6,546 | $5,279 | | Adjusted EBITDA | $12,102 | $9,930 | - Revenue increased by **$12.7 million (20%)** due to increased sales pricing and demand across Flooring, Steel, and Retail segments, including new store openings[112](index=112&type=chunk) - As of December 31, 2021, the company held **$10.0 million in cash** and had **$28.8 million available** under revolving credit facilities[125](index=125&type=chunk) [Results of Operations by Segment](index=26&type=section&id=Results%20of%20Operations%20by%20Segment) All operating segments reported year-over-year revenue growth, with Retail up 17% to $26.2 million, Flooring Manufacturing up 9% to $32.9 million, and Steel Manufacturing up 27% to $12.4 million, significantly boosting its operating income Segment Revenue (in thousands) | Segment | Q1 FY2022 | Q1 FY2021 | Change | | :--- | :--- | :--- | :--- | | Retail | $26,211 | $22,370 | +17.2% | | Flooring Manufacturing | $32,872 | $30,222 | +8.8% | | Steel Manufacturing | $12,366 | $9,735 | +27.0% | Segment Operating Income (in thousands) | Segment | Q1 FY2022 | Q1 FY2021 | Change | | :--- | :--- | :--- | :--- | | Retail | $4,810 | $4,493 | +7.1% | | Flooring Manufacturing | $4,608 | $4,150 | +11.0% | | Steel Manufacturing | $1,654 | $144 | +1048.6% | [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) Working capital increased to **$42.5 million** as of December 31, 2021, with management confident in sufficient liquidity from current cash, operations, and credit lines for the next 12 months - Working capital was approximately **$42.5 million** as of December 31, 2021, an increase from **$33.8 million** as of September 30, 2021[127](index=127&type=chunk) - Net cash provided by operations was **$4.2 million**, a decrease from **$7.7 million** in the prior year, primarily due to inventory purchases and payments on accrued liabilities[128](index=128&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=29&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company states that it does not participate in market risk-sensitive commodity instruments and believes it is not subject in any material way to other market risks such as foreign currency exchange risk or commodity price risk - The company reports no material exposure to market risk, including foreign currency or commodity price risk[136](index=136&type=chunk) [Controls and Procedures](index=29&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were ineffective as of December 31, 2021, due to material weaknesses in internal control over financial reporting, with remediation efforts planned for fiscal year 2022 - Management concluded that disclosure controls and procedures were **not effective** as of December 31, 2021[137](index=137&type=chunk) - Identified material weaknesses include insufficient written documentation of internal control policies, inadequate procedures for evaluating subsidiary controls, and insufficient resources for segregation of duties[142](index=142&type=chunk) - The company plans to improve documentation and develop an internal testing plan to remediate these weaknesses during fiscal year 2022[142](index=142&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=31&type=section&id=Item%201.%20Legal%20Proceedings) This section details ongoing legal matters, primarily an SEC civil complaint filed in August 2021 alleging financial and disclosure violations, which the company is disputing, and the expected emergence of subsidiary ApplianceSmart from Chapter 11 bankruptcy - The SEC filed a civil complaint against the company and two executives on August 2, 2021, alleging violations related to financial reporting, stock promotion, and executive compensation[150](index=150&type=chunk) - The company filed a motion to dismiss the SEC complaint on October 1, 2021, and intends to defend itself vigorously[151](index=151&type=chunk)[152](index=152&type=chunk) - A reorganization plan for the subsidiary ApplianceSmart was confirmed on December 14, 2021, with an expectation to emerge from Chapter 11 bankruptcy[153](index=153&type=chunk) [Risk Factors](index=31&type=section&id=Item%201A.%20Risk%20Factors) The company reported no new material risk factors during the quarter - No new risk factors are disclosed in this report[154](index=154&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=31&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not repurchase common stock during Q1 FY2022, with approximately **$6.8 million** remaining available under its **$10 million** repurchase program - No common stock was repurchased during the quarter ended December 31, 2021[155](index=155&type=chunk) - Approximately **$6.8 million** remains available under the company's stock repurchase program as of December 31, 2021[155](index=155&type=chunk) [Defaults upon Senior Securities](index=31&type=section&id=Item%203.%20Defaults%20upon%20Senior%20Securities) The company reported no defaults upon senior securities - None reported[156](index=156&type=chunk) [Mine Safety Disclosures](index=32&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) The company reported no mine safety disclosures - None reported[157](index=157&type=chunk) [Other Information](index=32&type=section&id=Item%205.%20Other%20Information) The company reported no other information - None reported[158](index=158&type=chunk) [Exhibits](index=33&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with or incorporated by reference into the Quarterly Report, including corporate governance documents and officer certifications

UNITED STATES SECURITIES AND EXCHANGE COMMISSION | Nevada | | 85-0206668 | | --- | --- | --- | | (State or Other Jurisdiction of Incorporation or Organization) | | (IRS Employer Identification No.) | | 325 E Warm Springs Road, Suite 102, Las Vegas, Nevada | | | | 89119 | | | | (Address of principal executive offices) | | (Zip Code) | | Registrant's telephone number, including area code: (702) 997-5968 | | | | Securities registered under Section 12(b) of the Exchange Act: | | | | Title of each class Trading ...

Live Ventures Incorporated (NASDAQ:LIVE) Q3 2021 Earnings Conference Call August 16, 2021 5:00 PM ET Company Participants Virland Johnson - Chief Financial Officer Jon Isaac - Chief Executive Officer Conference Call Participants Operator Good day, everyone. And welcome to today's Live Ventures Incorporated Third Quarter Fiscal Earnings Call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question-and-answer session. [Operator Instru ...

PART I - FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company reported significant growth in revenue and net income for the nine months ended June 30, 2021 Key Financial Metrics | Financial Metric | Nine Months Ended June 30, 2021 | Nine Months Ended June 30, 2020 | | :--- | :--- | :--- | | **Revenues** | $202,439 thousand | $130,904 thousand | | **Gross Profit** | $73,825 thousand | $51,115 thousand | | **Operating Income** | $26,648 thousand | $12,545 thousand | | **Net Income Attributable to Live Stockholders** | $24,085 thousand | $6,451 thousand | | **Diluted EPS** | $7.31 | $1.87 | Condensed Consolidated Balance Sheets | Balance Sheet Item | June 30, 2021 (Unaudited) | September 30, 2020 | | :--- | :--- | :--- | | **Total Current Assets** | $92,882 thousand | $95,928 thousand | | **Total Assets** | $198,708 thousand | $197,259 thousand | | **Total Current Liabilities** | $56,346 thousand | $57,362 thousand | | **Total Liabilities** | $131,127 thousand | $153,587 thousand | | **Total Stockholders' Equity** | $67,581 thousand | $43,672 thousand | Condensed Consolidated Statements of Cash Flows | Cash Flow Activity | Nine Months Ended June 30, 2021 | Nine Months Ended June 30, 2020 | | :--- | :--- | :--- | | **Net Cash from Operating Activities** | $32,199 thousand | $18,075 thousand | | **Net Cash used in Investing Activities** | ($14,470) thousand | ($2,992) thousand | | **Net Cash used in Financing Activities** | ($16,148) thousand | ($12,075) thousand | | **Increase in Cash** | $1,581 thousand | $3,008 thousand | [Notes to the Condensed Consolidated Financial Statements (Unaudited)](index=8&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) The notes detail the company's operating segments, a pending acquisition, debt reduction, and ongoing SEC litigation - The company operates through three segments: **Retail** (Vintage Stock and ApplianceSmart), **Flooring Manufacturing** (Marquis), and **Steel Manufacturing** (Precision Marshall)[20](index=20&type=chunk)[107](index=107&type=chunk) - On June 14, 2021, the company agreed to acquire **100% of SW Financial**, a registered broker-dealer, for approximately **$7.0 million**, pending regulatory approval[37](index=37&type=chunk)[44](index=44&type=chunk) - The SEC filed a civil complaint in August 2021 regarding **financial reporting violations from 2016-2018**, which the company denies[89](index=89&type=chunk) - The **ApplianceSmart subsidiary** continues to operate under Chapter 11 bankruptcy protection[94](index=94&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes strong performance to growth across all segments, boosted by operational gains and one-time events [Results of Operations](index=33&type=section&id=Results%20of%20Operations) Revenues grew 55% and net income surged, driven by broad segment growth and a $6.15 million PPP loan forgiveness gain Overall Performance Comparison | Performance Metric | Nine Months Ended June 30, 2021 | Nine Months Ended June 30, 2020 | | :--- | :--- | :--- | | **Revenues** | $202,439 thousand | $130,904 thousand | | **Gross Profit** | $73,825 thousand | $51,115 thousand | | **Operating Income** | $26,648 thousand | $12,545 thousand | | **Net Income** | $23,907 thousand | $6,451 thousand | - A gain of **$6.15 million** was recorded from the forgiveness of PPP loans during the nine months ended June 30, 2021[154](index=154&type=chunk) - A gain of **$1.765 million** was recorded from the discharge of certain payables in bankruptcy proceedings[155](index=155&type=chunk) [Results of Operations by Segment](index=37&type=section&id=Results%20of%20Operations%20by%20Segment) All segments reported strong operating income growth, with Retail up 145% and Flooring Manufacturing up 51% Segment Operating Income | Segment | Operating Income (9M 2021) | Operating Income (9M 2020) | % Change | | :--- | :--- | :--- | :--- | | Retail | $13,424 thousand | $5,481 thousand | +145% | | Flooring Manufacturing | $14,158 thousand | $9,381 thousand | +51% | | Steel Manufacturing | $3,814 thousand | $0 | N/A | | Corporate & Other | ($4,748) thousand | ($2,317) thousand | -105% | [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with $10.6 million in cash and $37.7 million available under credit facilities - As of June 30, 2021, the company had **$10.6 million in cash** and an additional **$37.7 million available** under its revolving credit facilities[168](index=168&type=chunk) - Net cash provided by operations was **$32.2 million** for the nine months ended June 30, 2021, compared to $18.1 million for the same period in 2020[171](index=171&type=chunk) - Working capital was **$36.8 million** as of June 30, 2021, a slight decrease from $38.6 million as of September 30, 2020[170](index=170&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=42&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company reports no material exposure to market risks such as foreign currency or commodity price fluctuations - The company believes it is **not subject in any material way to market risks**, including foreign currency exchange risk or commodity price risk[184](index=184&type=chunk) [Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were not effective due to material weaknesses in internal control - Management concluded that **disclosure controls and procedures were not effective** as of the end of the period covered by the report[185](index=185&type=chunk) - Material weaknesses identified include a **lack of written documentation** of internal control policies and procedures and a failure to establish rigorous evaluation procedures[191](index=191&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=44&type=section&id=Item%201.%20Legal%20Proceedings) The company faces a civil complaint from the SEC and a shareholder class-action lawsuit, both of which it intends to defend - The SEC filed a civil complaint on August 2, 2021, against the company and two executives alleging **financial and reporting violations between 2016 and 2018**[197](index=197&type=chunk) - A shareholder class-action lawsuit was filed on August 13, 2021, alleging the company made **materially false and misleading statements**[198](index=198&type=chunk) [Risk Factors](index=44&type=section&id=Item%201A.%20Risk%20Factors) A new risk factor has been added concerning the potential adverse impact of the SEC complaint and shareholder lawsuit - A new risk factor highlights that the SEC complaint and shareholder lawsuit could **divert management's focus**, result in **substantial litigation expense**, and an adverse outcome could **materially harm the business**, reputation, and stock price[201](index=201&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=45&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No shares were repurchased during the quarter, with approximately $6.8 million remaining under the buyback program - The company **did not repurchase any common stock** during the quarter; approximately **$6.8 million remains available** under the existing stock repurchase program[206](index=206&type=chunk) [Other Information](index=45&type=section&id=Item%205.%20Other%20Information) The company announced the upcoming separation of its Senior Vice President & General Counsel, Michael J. Stein - The company's Senior Vice President & General Counsel, Michael J. Stein, will **separate from the company**, with his employment ending on November 12, 2021[209](index=209&type=chunk) [Exhibits](index=46&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the report, including corporate documents, officer certifications, and XBRL data - Lists all exhibits filed with the quarterly report, including corporate charters, bylaws, officer certifications (Sections 302 and 906), and XBRL data[212](index=212&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________ to _______________ Commission File Number 001-33937 Live Ventures Incorporated (Exact name of registrant as specified in its charter) (State or oth ...

[PART I FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Presents unaudited condensed consolidated financial statements, including balance sheets, income, cash flows, and equity changes, with explanatory notes [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to **$190.6 million**, liabilities reduced to **$142.0 million**, and stockholders' equity increased to **$48.6 million** Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 31, 2020 (Unaudited) | Sep 30, 2020 | | :--- | :--- | :--- | | **Total Assets** | **$190,564** | **$197,259** | | Total Current Assets | $91,166 | $95,928 | | Goodwill | $37,754 | $37,754 | | **Total Liabilities** | **$141,979** | **$153,587** | | Total Current Liabilities | $52,842 | $57,362 | | Long-term debt, net | $57,961 | $63,390 | | **Total Stockholders' Equity** | **$48,585** | **$43,672** | [Condensed Consolidated Statements of Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Revenues grew 48.7% to **$62.5 million**, operating income doubled to **$7.3 million**, and net income surged to **$5.4 million** Consolidated Income Statement Highlights (in thousands, except per share) | Metric | Three Months Ended Dec 31, 2020 | Three Months Ended Dec 31, 2019 | | :--- | :--- | :--- | | **Revenues** | **$62,454** | **$42,001** | | Gross Profit | $22,269 | $16,626 | | Operating Income | $7,291 | $3,487 | | **Net Income Attributable to Live Stockholders** | **$5,413** | **$547** | | Basic EPS | $3.45 | $0.30 | | Diluted EPS | $1.63 | $0.15 | [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow increased to **$7.7 million**, investing cash outflow rose to **$3.3 million**, and financing cash outflow was **$6.2 million** Consolidated Cash Flow Summary (in thousands) | Cash Flow Activity | Three Months Ended Dec 31, 2020 | Three Months Ended Dec 31, 2019 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $7,668 | $2,999 | | Net Cash from Investing Activities | ($3,258) | ($645) | | Net Cash from Financing Activities | ($6,162) | ($3,533) | | **Net Change in Cash** | **($1,752)** | **($1,179)** | | Cash at End of Period | $7,232 | $1,502 | [Notes to the Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) Details business segments, accounting policies, COVID-19 impact, long-term debt, related party transactions, and contingencies - The company operates through three segments: Retail (Vintage Stock, ApplianceSmart), Flooring Manufacturing (Marquis), and Steel Manufacturing (Precision Marshall)[20](index=20&type=chunk) - The COVID-19 pandemic continues to create uncertainty, with potential for future closures or adverse impacts on revenues, earnings, and cash flows despite all Vintage Stock retail locations reopening by June 30, 2020[23](index=23&type=chunk) - Total long-term debt decreased from **$82.4 million** at September 30, 2020, to **$75.5 million** at December 31, 2020[35](index=35&type=chunk) - The company and three executive officers received "Wells Notices" from the SEC Staff in August and October 2020, indicating a preliminary determination to recommend an enforcement action, which the company intends to vigorously defend[70](index=70&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=23&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Discusses financial performance, attributing 49% revenue growth to Flooring and Steel Manufacturing segments, covering liquidity and COVID-19 impact [Results of Operations](index=25&type=section&id=Results%20of%20Operations) Total revenue increased 49% to **$62.5 million**, driven by Flooring and Steel Manufacturing, with operating income more than doubling Revenue by Segment (in thousands) | Segment | Q1 FY2021 Revenue | Q1 FY2020 Revenue | % Change | | :--- | :--- | :--- | :--- | | Retail | $22,370 | $21,488 | +4.1% | | Flooring Manufacturing | $30,222 | $20,367 | +48.4% | | Steel Manufacturing | $9,735 | $0 | N/A | | **Total Revenue** | **$62,454** | **$42,001** | **+48.7%** | - The increase in Flooring Manufacturing revenue was attributed to new product development and the acquisition of Lonesome Oak in January 2020[115](index=115&type=chunk) - The Steel Manufacturing segment's revenue is a new contribution following the acquisition of Precision Marshall in July 2020[116](index=116&type=chunk) [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) Total liquidity was **$40.0 million**, with **$7.2 million** cash and **$32.8 million** available credit, supporting operations for 12 months - The company had total liquidity of **$40.0 million**, consisting of **$7.2 million** in cash and **$32.8 million** in available borrowing capacity as of December 31, 2020[133](index=133&type=chunk) - Net cash provided by operations increased to **$8.7 million** for the quarter, compared to **$3.0 million** for the same period in 2019, primarily due to higher net income[136](index=136&type=chunk) - The company utilizes three main asset-based revolver lines of credit with Texas Capital Bank, Bank of America, and Encina Business Credit for its subsidiaries[132](index=132&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=30&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company believes it is not subject to material market risks, including foreign currency or commodity price risk - The company does not believe it has material exposure to market risks, including foreign currency exchange risk or commodity price risk[149](index=149&type=chunk) [Controls and Procedures](index=30&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were deemed ineffective due to material weaknesses in documentation and evaluation, with remediation planned - Management concluded that disclosure controls and procedures were not effective as of December 31, 2020[150](index=150&type=chunk) - Two material weaknesses were identified: a lack of written documentation for internal control policies and a lack of rigorous procedures for evaluating internal controls across all subsidiaries[154](index=154&type=chunk) - The company plans to remediate these weaknesses by documenting its internal control policies and developing an internal testing plan, with an expected conclusion during the fiscal year ending September 30, 2021[155](index=155&type=chunk) [PART II OTHER INFORMATION](index=31&type=section&id=PART%20II%20OTHER%20INFORMATION) [Legal Proceedings](index=31&type=section&id=Item%201.%20Legal%20Proceedings) No new material legal proceedings or developments in previously disclosed cases occurred during the quarter - There were no new material legal proceedings or material developments in previously disclosed proceedings during the quarter[159](index=159&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=31&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased 33,926 common shares at an average price of **$10.98**, extending the **$10 million** repurchase plan Common Stock Repurchases (Q1 FY2021) | Period | Number of Shares Repurchased | Average Price Paid | | :--- | :--- | :--- | | October 2020 | 16,489 | $10.51 | | November 2020 | 11,029 | $11.27 | | December 2020 | 6,408 | $11.49 | | **Total** | **33,926** | **-** | - The Board of Directors approved an extension of the **$10 million** stock repurchase program from February 15, 2021, to June 1, 2021[161](index=161&type=chunk) [Exhibits](index=33&type=section&id=Item%206.%20Exhibits) Lists exhibits filed with the report, including CEO and CFO certifications and XBRL data files - The report includes CEO and CFO certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act[167](index=167&type=chunk)