Live Ventures rporated(LIVE) - 2024 Q1 - Quarterly Report

PART I - FINANCIAL INFORMATION This section provides the unaudited condensed consolidated financial statements and management's discussion and analysis for Live Ventures Incorporated Item 1. Financial Statements This section presents Live Ventures Incorporated's unaudited condensed consolidated financial statements, including balance sheets, income, cash flow, and equity statements, with explanatory notes Condensed Consolidated Balance Sheets Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 31, 2023 | Sep 30, 2023 | | :--- | :--- | :--- | | Assets | | | | Cash | $5,569 | $4,309 | | Inventories, net | $132,455 | $131,314 | | Total current assets | $185,125 | $182,852 | | Goodwill | $76,639 | $75,866 | | Total assets | $436,649 | $421,815 | | Liabilities & Equity | | | | Total current liabilities | $103,343 | $97,821 | | Long-term debt, net | $78,357 | $78,710 | | Total liabilities | $337,252 | $321,680 | | Total stockholders' equity | $99,397 | $100,135 | Condensed Consolidated Statements of (Loss) Income Condensed Consolidated Statements of (Loss) Income (Unaudited, in thousands) | Metric | Three Months Ended Dec 31, 2023 | Three Months Ended Dec 31, 2022 | | :--- | :--- | :--- | | Revenues | $117,593 | $68,986 | | Gross profit | $36,327 | $21,944 | | Operating income | $3,541 | $4,567 | | Net (loss) income | $(682) | $1,844 | | Basic (Loss) income per share | $(0.22) | $0.60 | | Diluted (Loss) income per share | $(0.22) | $0.60 | Condensed Consolidated Statements of Cash Flows Condensed Consolidated Statements of Cash Flows (Unaudited, in thousands) | Cash Flow Activity | Three Months Ended Dec 31, 2023 | Three Months Ended Dec 31, 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $7,872 | $6,254 | | Net cash used in investing activities | $(3,189) | $(1,282) | | Net cash (used in) provided by financing activities | $(3,423) | $3,193 | | Increase in cash | $1,260 | $8,165 | | Cash, beginning of period | $4,309 | $4,600 | | Cash, end of period | $5,569 | $12,765 | Condensed Consolidated Statements of Stockholders' Equity - Total stockholders' equity decreased from $100.1 million at September 30, 2023, to $99.4 million at December 31, 2023, primarily driven by a net loss of $682 thousand and the repurchase of common treasury stock for $106 thousand, partially offset by stock-based compensation of $50 thousand[17] Notes to the Condensed Consolidated Financial Statements - The company operates as a diversified holding company with five segments: Retail-Entertainment, Retail-Flooring, Flooring Manufacturing, Steel Manufacturing, and Corporate and Other[19] - During the quarter, the company completed two acquisitions in the Retail-Flooring segment: Carpet Remnant Outlet, Inc. (CRO) on October 13, 2023, for approximately $1.8 million, and Johnson Floor & Home (Johnson) on November 30, 2023, for $2.0 million[27][29][30] - The company is involved in an ongoing SEC investigation and related class action lawsuit concerning financial reporting and disclosures from 2016 to 2018, with the company denying allegations and defending itself vigorously[106][107][110] Segment Revenues (in thousands) | Segment | Q1 FY2024 | Q1 FY2023 | | :--- | :--- | :--- | | Retail-Entertainment | $20,586 | $23,273 | | Retail-Flooring | $34,319 | $0 | | Flooring Manufacturing | $29,245 | $26,432 | | Steel Manufacturing | $33,354 | $17,981 | | Corporate & Other | $89 | $1,300 | | Total revenues | $117,593 | $68,986 | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the 70.5% revenue increase driven by acquisitions, resulting in a net loss despite higher Adjusted EBITDA, and assesses the company's liquidity position Our Company - Live Ventures is a holding company focused on acquiring and operating profitable, well-managed companies across various industries[125][126] - The company's business is structured into five segments: Retail-Entertainment (Vintage Stock, 70 stores), Retail-Flooring (Flooring Liquidators, 20 stores, including CRO and Johnson acquisitions), Flooring Manufacturing (Marquis Industries), Steel Manufacturing (Precision Marshall, Kinetic, and PMW), and Corporate and Other[128][130][133][136] Results of Operations - Revenue increased 70.5% to $117.6 million, primarily due to the acquisitions of Flooring Liquidators and PMW[149] - General and Administrative expenses rose by 89.6% to $27.9 million, and interest expense increased by $2.1 million, largely as a result of recent acquisitions[151][153] - Adjusted EBITDA increased 15.3% to $8.7 million for the quarter, up from $7.5 million in the prior-year period[161] Segment Operating Income (Loss) (in thousands) | Segment | Q1 FY2024 | Q1 FY2023 | | :--- | :--- | :--- | | Retail-Entertainment | $3,143 | $3,664 | | Retail-Flooring | $90 | $0 | | Flooring Manufacturing | $945 | $751 | | Steel Manufacturing | $982 | $1,455 | | Corporate & Other | $(1,619) | $(1,303) | | Total Operating Income | $3,541 | $4,567 | Liquidity and Capital Resources - As of December 31, 2023, the company had $5.6 million in cash and $39.4 million available for borrowing under its revolving credit facilities[162] - Working capital decreased by $3.2 million during the quarter, from $85.0 million to $81.8 million, mainly due to increased accrued liabilities and lease obligations[164] - Net cash provided by operations was $7.9 million, while cash used in investing was $3.2 million (primarily for acquisitions) and cash used in financing was $3.4 million (primarily for debt payments)[165][167][168] Item 3. Quantitative and Qualitative Disclosures about Market Risk The company states that as of December 31, 2023, it did not engage in any market risk-sensitive commodity instruments and does not believe it is subject to material market risks such as foreign currency exchange 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[172] Item 4. Controls and Procedures Management concluded that the company's disclosure controls and internal controls over financial reporting were effective as of December 31, 2023 - Based on an evaluation as of December 31, 2023, the company's principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective[173] - Management concluded that the company's internal controls over financial reporting were operating effectively as of December 31, 2023[176] PART II - OTHER INFORMATION This section covers legal proceedings, risk factors, equity security sales, and other required disclosures Item 1. Legal Proceedings This section refers to Note 17 for legal proceedings, confirming no new material developments since the last annual report - Information regarding legal proceedings is detailed in Note 17, Commitments and Contingencies, with no new material legal proceedings or developments reported[180] Item 1A. Risk Factors The company reported no new risk factors during the period - No new risk factors were reported for the period[181] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Details are provided on the common stock repurchase program, including shares repurchased and remaining authorization Common Stock Repurchases (Q1 FY2024) | Month | Shares Purchased | Average Price Paid (USD) | Amount Remaining in Plan (USD) | | :--- | :--- | :--- | :--- | | October 2023 | 0 | $0.00 | $3,299,685 | | November 2023 | 0 | $0.00 | $3,299,685 | | December 2023 | 4,346 | $24.51 | $3,193,153 | | Total | 4,346 | $24.51 | $3,193,153 | Item 3. Defaults Upon Senior Securities The company reported no defaults upon senior securities - None reported[183] Item 4. Mine Safety Disclosures This item is not applicable to the company - None reported[184] Item 5. Other Information The company reported no other information - None reported[185] Item 6. Exhibits This section lists the exhibits filed with or incorporated by reference into the quarterly report, including credit agreements, employment agreement amendments, and officer certifications - The report includes various exhibits, such as credit agreements, amendments to employment agreements, and certifications from the CEO and CFO as required by the Sarbanes-Oxley Act[187][188]