Live Ventures rporated(US:LIVE)2023-02-09 23:23Financial Data and Key Metrics Changes - Total revenue for the first quarter decreased to $69 million, down 8.2% from $75.2 million in the prior year period [53] - Net income for the quarter was $1.8 million, compared to $6.5 million in the prior year period, with diluted EPS at $0.60 per share, down from $2.04 [40] - Adjusted EBITDA for the first quarter was $7.5 million, a decrease of approximately $4.6 million compared to the prior year period [40] - Total assets increased to $279.1 million from $278.6 million as of September 30, 2022, while stockholders' equity rose to $98.4 million, an increase of $1.2 million [42] Business Line Data and Key Metrics Changes - Flooring manufacturing revenues decreased by approximately $6.4 million or 19.6% to $26.4 million, primarily due to reduced demand from economic conditions [35] - Steel manufacturing revenues increased by approximately $5.6 million or 45.4% to $18 million, mainly due to the acquisition of Kinetic [36] - Retail revenues decreased by approximately $2.9 million or 11.2% to $23.3 million, attributed to reduced demand due to inflation and supply chain issues [54] - Gross profit margin for flooring manufacturing decreased to 17.6% from 27.5% in the prior year, while steel manufacturing gross profit margin decreased to 24.4% from 29.2% [37][56] Market Data and Key Metrics Changes - The company noted macroeconomic headwinds affecting various segments, particularly in flooring manufacturing due to the housing market and increased interest rates [5][61] - The retail segment experienced reduced demand attributed to inflationary pressures and supply chain issues [54] Company Strategy and Development Direction - The company continues to execute its multi-level buy-build-hold strategic plan to maximize stockholder value, highlighted by the acquisition of Flooring Liquidators [32] - The acquisition is expected to add a significant new revenue stream of approximately $125 million per year [52] - The company is focused on investing further in acquisitions and maintaining a low level of leverage while pursuing growth opportunities [41][61] Management's Comments on Operating Environment and Future Outlook - Management acknowledged significant macroeconomic headwinds but expressed confidence in the company's ability to deploy capital effectively to create long-term stockholder value [61] - The company expects revenues from Flooring Liquidators to flow in the next quarter, with a high-level revenue expectation of around $125 million [72] Other Important Information - General and administrative expenses increased by 3.1% to approximately $14.6 million, primarily due to the acquisition of Kinetic [38] - The company repurchased 24,710 shares of common stock during the quarter, reflecting its commitment to stockholder value [32][66] Q&A Session Summary Question: What is the expected revenue flow from Flooring Liquidators? - Management indicated that revenues from Flooring Liquidators are expected to start flowing in the next quarter, with an estimated annual revenue of around $125 million [72] Question: Is there any seasonality in the steel manufacturing segment? - Management stated that there is moderate seasonality in the steel segment, but it is not significant [73] Question: How does the company view the current inflationary pressures? - Management noted that inflationary pressures are impacting the retail and flooring segments, but they believe it will take time for these pressures to abate and for margins to improve [68]