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Live Ventures rporated(LIVE) - 2022 Q3 - Earnings Call Transcript

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]