LIVE VENTURES INCORPORATED FORM 10-K FOR THE YEAR ENDED SEPTEMBER 30, 2024

Live Ventures Incorporated: Diversifying for Growth

Live Ventures Incorporated is a holding company that operates a diverse portfolio of businesses across several industries. The company has reported its financial results for the fiscal year ended September 30, 2024, providing insights into its performance and future outlook.

Common Stock and Dividends

Live Ventures’ common stock trades on the Nasdaq Capital Market under the symbol “LIVE”. As of September 30, 2024, there were 198 holders of record of the company’s common stock. Live Ventures does not currently pay dividends on its common stock, but it does pay dividends on its Series E Preferred Stock.

The company has an ongoing stock repurchase program, which was initially announced in 2018 and has been extended several times. During the period from October 1, 2023, through June 1, 2024, the company repurchased 568,460 shares of its common stock at an average price of $13.52 per share. In June 2024, the company announced a new $10 million stock repurchase program, which will remain in effect until May 31, 2025.

Segment Performance

Live Ventures operates its business in five segments: Retail-Entertainment, Retail-Flooring, Flooring Manufacturing, Steel Manufacturing, and Corporate & Other.

Retail-Entertainment Segment The Retail-Entertainment segment, which consists of Vintage Stock, a specialty entertainment retailer, saw a 9.1% decrease in revenue to $71.0 million for the year ended September 30, 2024. This was primarily due to reduced consumer demand and a shift in sales mix toward used products, which generally have lower ticket sales but higher margins. Gross profit margin increased to 57.6% from 54.7% in the prior year, but operating income decreased to $7.2 million from $9.3 million due to higher general and administrative expenses.

Retail-Flooring Segment The Retail-Flooring segment, which includes Flooring Liquidators, a leading retailer and installer of flooring, carpeting, and countertops, saw a significant increase in revenue of 80.6% to $137.0 million. This was primarily due to the acquisition of Flooring Liquidators in January 2023 and the subsequent acquisition of Carpet Remnant Outlet in the first quarter of fiscal year 2024. However, the segment reported an operating loss of $25.5 million, which was primarily due to a $18.1 million goodwill impairment charge and a general decline in operations due to higher interest rates and a volatile housing market.

Flooring Manufacturing Segment The Flooring Manufacturing segment, which consists of Marquis Industries, a leading carpet manufacturer and distributor, saw a 13.8% increase in revenue to $124.9 million. This was primarily due to increased sales associated with the acquisition of the Harris Flooring Group® brands in the fourth quarter of fiscal year 2023. Gross margin improved to 74.1% from 78.2% in the prior year, and operating income increased to $8.2 million from $6.1 million.

Steel Manufacturing Segment The Steel Manufacturing segment, which includes Precision Marshall, Kinetic, Central Steel, and Precision Metal Works, saw a 57.0% increase in revenue to $139.6 million. This was primarily due to the acquisitions of Precision Metal Works in the fourth quarter of fiscal year 2023 and Central Steel in May 2024. However, operating income decreased to $4.6 million from $8.0 million, primarily due to lower margins and increased general and administrative expenses related to the acquisitions.

Corporate and Other Segment The Corporate and Other segment, which includes certain corporate general and administrative costs and operations of legacy products and service offerings, saw a decrease in revenue of 86.6% to $333,000. The operating loss for this segment increased to $8.1 million from $7.6 million in the prior year, as revenues and operating income from the legacy directory services business continue to decline.

Financial Performance

Live Ventures reported a net loss of $26.7 million for the year ended September 30, 2024, compared to a net loss of $0.1 million in the prior year. This was primarily due to the $18.1 million goodwill impairment charge in the Retail-Flooring segment and increased general and administrative expenses related to the company’s recent acquisitions.

Adjusted EBITDA, a non-GAAP financial measure used by the company to evaluate its performance, decreased by 22.3% to $24.5 million for the year ended September 30, 2024, compared to $31.5 million in the prior year. The decrease was primarily due to the overall decrease in operating income across the company’s segments.

Liquidity and Capital Resources

Live Ventures believes that its available cash balances, cash generated from operating activities, and funds available under its asset-based revolver lines of credit will provide sufficient liquidity to fund its operations for at least the next 12 months. The company has five asset-based revolver lines of credit, which are utilized by its various subsidiaries.

As of September 30, 2024, the company had $9.9 million in cash and cash equivalents, and $123.4 million in total debt. The company’s debt-to-equity ratio was 0.58 as of September 30, 2024, compared to 0.49 as of September 30, 2023, reflecting the increased debt levels related to its recent acquisitions.

Outlook and Strategies

Live Ventures’ diversified business model and recent acquisitions have positioned the company for potential growth, but the company also faces some challenges. The Retail-Flooring segment’s performance was impacted by a volatile housing market and higher interest rates, while the Steel Manufacturing segment experienced margin pressures and increased expenses related to its acquisitions.

To address these challenges, Live Ventures is focused on integrating its recent acquisitions, optimizing operations, and exploring synergies across its business segments. The company is also closely monitoring market conditions and adjusting its strategies accordingly.

In the Retail-Entertainment segment, Live Ventures is working to adapt to changing consumer preferences and maintain its competitive edge. In the Flooring Manufacturing segment, the company is leveraging its recent acquisitions to expand its product offerings and customer base. The Steel Manufacturing segment is focused on streamlining operations and capitalizing on its strong market position.

Overall, Live Ventures’ diversified business model and strategic acquisitions have provided the company with a solid foundation for growth, but it will need to navigate the current economic challenges and effectively integrate its recent acquisitions to achieve long-term success.