Live Ventures Inc (LIVE) 2024 Q2 法說會逐字稿

Good day, everyone, and welcome to today's Live Ventures second-quarter conference call. (Operator Instructions) Please note this call is being recorded, and I will be standing by if you need any assistance. It's now my pleasure to turn today's conference over to Greg Powell, Director of Investor Relations. Please go ahead, sir.

大家好，歡迎參加今天 Live Ventures 的第二季度電話會議。（操作員說明）請注意，此通話正在錄音，如果您需要任何協助，我將隨時待命。現在我很高興將今天的會議交給投資者關係總監格雷格·鮑威爾(Greg Powell)。請繼續，先生。

Thank you, Travis. Good afternoon, and welcome to the Live Ventures second-quarter fiscal-year 2024 conference call. Joining us this afternoon for the call are Jon Isaac, our Chief Executive Officer and President; and David Verret, our Chief Financial Officer.

謝謝你，崔維斯。下午好，歡迎參加 Live Ventures 2024 財年第二季電話會議。今天下午加入我們電話會議的有我們的執行長兼總裁喬恩‧艾薩克 (Jon Isaac)；以及我們的財務長 David Verret。

Some of the statements we are making today are forward-looking and are based on our best view of our businesses as we see them today. The actual results could differ materially due to a number of factors, including those outlined in our latest forms 10-K and 10-Q as filed with Securities and Exchange Commission.

我們今天發表的一些聲明具有前瞻性，並且基於我們今天對我們業務的最佳看法。由於多種因素，包括我們向美國證券交易委員會提交的最新表格 10-K 和 10-Q 中概述的因素，實際結果可能會存在重大差異。

We have no obligation to publicly update any forward-looking statements after this call, whether as a result of new information, future events, changes in assumptions or otherwise. You can find a copy of our press release referenced on this call in the Investor Relations section of the Investor Relations website. I'd direct you to our website, www.liveventures.com or sec.gov for our historical SEC filings. And now, I'll turn the call over to David to walk you through our financial performance for the quarter.

我們沒有義務在本次電話會議後公開更新任何前瞻性陳述，無論是由於新資訊、未來事件、假設變更或其他原因。您可以在投資者關係網站的投資者關係部分找到本次電話會議引用的我們的新聞稿副本。我會引導您造訪我們的網站 www.liveventures.com 或 sec.gov，查看我們向 SEC 提交的歷史文件。現在，我將把電話轉給大衛，向您介紹我們本季的財務表現。

Thank you, Greg, and good afternoon, everyone. Let's jump right in and discuss the financial results for the second quarter ended March 31, 2024. Total revenue for the quarter increased 30.2% to approximately $118.6 million. The increase is primarily attributable to the acquisitions of PMW, which was acquired during the fourth quarter of fiscal year 2023 and Flooring Liquidator, which was acquired during the second quarter of fiscal year 2023, which collectively added $29.6 million in revenue.

謝謝格雷格，大家下午好。讓我們直接討論截至 2024 年 3 月 31 日的第二季財務表現。該季度總營收成長 30.2%，達到約 1.186 億美元。這一成長主要歸因於收購了 2023 財年第四季度收購的 PMW 和 2023 財年第二季收購的 Flooring Liquidator，合計增加了 2,960 萬美元的收入。

In addition, the flooring manufacturing segment contributed incremental revenue of approximately $3.8 million in the quarter. The increase was partially offset by decreased revenue of approximately $5.9 million in the company's other businesses due to general economic conditions.

此外，地板製造部門在本季貢獻了約380萬美元的增量收入。由於總體經濟狀況，該公司其他業務的收入減少了約 590 萬美元，部分抵消了這一成長。

Flooring manufacturing revenue of approximately $34.2 million, increased by $3.8 million or 12.7% as compared to the prior year period. The increase is primarily due to increased sales related to the Harris Flooring Group brands, which was acquired in the fourth quarter of fiscal year 2023.

地板製造收入約3,420萬美元，較去年同期增加380萬美元，即12.7%。這一增長主要是由於與 2023 財年第四季度收購的 Harris Flooring Group 品牌相關的銷售額增加。

Retail entertainment revenue of approximately $16.8 million, decreased $2.3 million or 12.2% as compared to the prior year period. The decrease in revenue is primarily due to reduced consumer demand and a shift in sales mix towards used products, which generally have lower ticket sales with higher margins.

零售娛樂收入約1,680萬美元，比去年同期減少230萬美元，即12.2%。收入下降的主要原因是消費者需求減少以及銷售組合轉向二手產品，這些產品的門票銷售量通常較低，但利潤率較高。

Retail flooring revenue for the quarter was approximately $32 million, an increase of $11.3 million or 54.2% compared to the prior year period. The increase is due to the acquisition of flooring liquidators in fiscal year 2023 as well as the acquisitions of CRO and Johnson in Q1 2024.

該季度零售地板收入約為 3,200 萬美元，比去年同期增加 1,130 萬美元，即 54.2%。這一增長是由於 2023 財年收購了地板清算人以及 2024 年第一季度收購了 CRO 和 Johnson。

Steel manufacturing revenue of approximately $35.5 million, increased $15.6 million were 78.2% as compared to the prior year period. The increase is primarily due to increased revenue of approximately $18.3 million at PMW, partially offset by $2.7 million decrease in the company's other steel manufacturing businesses.

鋼鐵製造收入約3,550萬美元，較上年同期增加1,560萬美元，成長78.2%。這一增長主要是由於 PMW 收入增加約 1830 萬美元，部分被該公司其他鋼鐵製造業務減少 270 萬美元所抵消。

Corporate and other revenue was approximately $100,000, a decrease of $800,000 compared to the prior-year period. The decrease is primarily due to the closure of SW Financial in May 2023. Gross profit for the second quarter was $35.5 million, up from $31.6 million in the prior year period. The gross margin percentage for the company decreased to 29.9% from 34.7% in the prior year period.

公司及其他收入約為 10 萬美元，比去年同期減少 80 萬美元。減少的主因是 SW Financial 於 2023 年 5 月關閉。第二季毛利為 3,550 萬美元，高於去年同期的 3,160 萬美元。公司毛利率由去年同期的34.7%下降至29.9%。

The decrease in gross margin is primarily due to the acquisition of PMW, which has historically generated lower margins as well as overall decreased margins in the steel manufacturing segment due to general economic conditions impacting the industry. The decrease in gross margin was partially offset by the acquisition of foreign liquidators, which contributed a gross margin of 36.5% in the quarter.

毛利率下降主要是由於收購PMW，該公司歷來利潤率較低，由於產業整體經濟狀況影響，鋼鐵製造領域整體利潤率下降。毛利率的下降被外國清算人的收購部分抵消，該收購為本季貢獻了36.5%的毛利率。

General and administrative expense increased approximately $7.2 million to $29.8 million. The increase is primarily due to the acquisitions of Flooring Liquidators and PMW, which collectively contributed an additional $6.4 million and general and administrative expense during the quarter.

一般及行政費用增加約 720 萬美元，達到 2,980 萬美元。這一成長主要是由於收購了 Flooring Liquidators 和 PMW，這兩家公司在本季度總共額外貢獻了 640 萬美元以及一般和管理費用。

Sales and marketing expense increased approximately $2.4 million to $6.5 million. The increase is primarily due to increased sales personnel acquired in connection with the acquisition of Harris Flooring Group brands, an increased convention and trade show activity in the flooring manufacturing segment.

銷售和行銷費用增加約 240 萬美元至 650 萬美元。這一增長主要是由於與收購哈里斯地板集團品牌相關的銷售人員增加、地板製造領域的會議和貿易展覽活動增加。

Interest expense increased by approximately $925,000 as compared to the prior year period. The increase was primarily due to incremental debt incurred in connection with the acquisitions of Flooring Liquidators and PMW.

與去年同期相比，利息支出增加了約 925,000 美元。這一增長主要是由於收購 Flooring Liquidators 和 PMW 所產生的增量債務。

Net loss was approximately $3.3 million and loss per share was $1.4 compared to net income of approximately $1.6 million and diluted EPS of $0.49 per share in the prior year period. This decrease is primarily attributable to the quarter's operating loss and higher interest expense. Adjusted EBITDA for the second quarter was approximately $4.5 million, a decrease of approximately $4.7 million compared to the prior year period.

淨虧損約 330 萬美元，每股虧損為 1.4 美元，而去年同期淨利約 160 萬美元，稀釋後每股收益為 0.49 美元。這一下降主要歸因於該季度的營運虧損和利息支出增加。第二季調整後 EBITDA 約 450 萬美元，比去年同期減少約 470 萬美元。

Turning to liquidity, we ended the quarter with total cash availability of $36 million, consisting of cash on hand of $4.5 million and availability under our various lines of credit totaling $31.5 million. Our working capital was approximately $78.8 million as of March 31, 2024, compared to $85 million as of September 30, 2023.

談到流動性，本季末我們的可用現金總額為 3,600 萬美元，其中手頭現金 450 萬美元，各種信貸額度下的可用現金總計 3,150 萬美元。截至2024年3月31日，我們的營運資金約為7,880萬美元，而截至2023年9月30日，我們的營運資金為8,500萬美元。

Total assets were $433.9 million and total stockholders' equity was $95.9 million as of March 31. As part of our capital allocation strategy, we may make share repurchases from time to time. We believe our stock repurchases represent long-term value for our stockholders.

截至 3 月 31 日，總資產為 4.339 億美元，股東權益總額為 9,590 萬美元。作為我們資本配置策略的一部分，我們可能會不時進行股票回購。我們相信我們的股票回購代表了股東的長期價值。

During the quarter, we repurchased 11,849 shares of common stock at an average price of approximately $25.16 per share. As of March 31, the company had approximately $2.9 million available for repurchases under our repurchase program.

本季度，我們以每股約 25.16 美元的平均價格回購了 11,849 股普通股。截至 3 月 31 日，該公司有約 290 萬美元可根據我們的回購計畫進行回購。

In conclusion, we are pleased that our second-quarter revenue increased 30.2%. Despite some challenging industry-specific headwinds, we are committed to adapting to market changes, maintaining operational efficiency, and enhancing customer satisfaction.

總之，我們很高興第二季營收成長了 30.2%。儘管面臨一些具有挑戰性的行業特定阻力，我們仍致力於適應市場變化，維持營運效率並提高客戶滿意度。

As we navigate the current market conditions, we're confident about our business prospects and are steadfast in our commitment to our long-term strategy of buy, build, hold. This approach underscores our belief in creating sustainable growth and value over time. We'll now take questions from those of you on the conference call. Operator, please open the line for questions.

當我們應對當前的市場狀況時，我們對我們的業務前景充滿信心，並堅定地致力於購買、建立、持有的長期策略。這種方法強調了我們隨著時間的推移創造可持續成長和價值的信念。我們現在將在電話會議上回答你們提出的問題。接線員，請開通提問線。

(Operator Instructions)

（操作員說明）

Let's take the question from Joseph, please.

請讓我們回答約瑟夫的問題。

Joseph Kowalsky, JD Investment Partners.

約瑟夫‧科瓦爾斯基 (Joseph Kowalsky)，JD 投資合夥人。

Hello, good afternoon. Thanks for the information. Nice talking to you guys. Well, I'm very happy to hear about the increased revenue. I like the idea of having the new products. Obviously, I'm not thrilled with losses as opposed to profits, but I have a couple of questions specifically.

你好，下午好。感謝您的資訊。很高興和你們聊天。嗯，我很高興聽到收入增加的消息。我喜歡擁有新產品的想法。顯然，與利潤相比，我對損失並不感到興奮，但我有幾個具體問題。

Where do we stand on debt, and is there a timetable for the reduction of that debt? I know you said how much debt there was and so on, but what's your timetable or what's your thought on the timetable for reducing the debt?

我們的債務狀況如何？我知道你說有多少債務等等，但是你的時間表是什麼，或者你對減少債務的時間表有什麼想法？

Well, we'll reduce debt as the company has performed -- provide cash. And really, there are lines of credit that we borrow as we need for current needs. But any future acquisitions, we're going to constantly look at our leverage ratio and just make the best decisions based on the leverage ratio and what prospects we have out there in terms of acquisitions.

好吧，我們將根據公司的表現減少債務——提供現金。事實上，我們可以根據當前的需要藉款一些信用額度。但任何未來的收購，我們都會不斷關注我們的槓桿率，並根據槓桿率和我們在收購方面的前景做出最佳決策。

Okay. I love having share buybacks. But I just wonder if it would be more prudent to focus more on debt reduction as opposed to share buybacks for the foreseeable future until things become more profitable. Is that -- I presume that's part of the consideration?

好的。我喜歡股票回購。但我只是想知道，在可預見的未來，在事情變得更加有利可圖之前，更多地關注債務削減而不是股票回購是否會更加謹慎。我想這是考慮因素的一部分嗎？

It is part of the consideration. And actually the share repurchase program ends at the end of May. So that's something that we'll look at.

這是考慮的一部分。實際上，股票回購計畫將於五月底結束。這就是我們要關注的問題。

We only repurchased 11,849 shares. It's not a --

我們只回購了11,849股。這不是一個--

Right. No, I saw that. I appreciate it.

正確的。不，我看到了。我很感激。

Huge amount. Yeah, exactly. So as David stated, we will make the right money allocation decisions as they come up. A lot of our debt is submarket now anyway. So we are getting some favorable rates in some areas and others not so much. But, yes, we're keenly focused on debt repayment as one of the places that we can invest our cash.

巨額。是的，完全正確。因此，正如大衛所說，我們將在出現正確的資金分配決策時做出。無論如何，我們的許多債務現在都是次級市場的。因此，我們在某些​​地區獲得了一些優惠利率，而在其他地區則沒有那麼多。但是，是的，我們非常關注債務償還，將其作為我們可以投資現金的地方之一。

All right. Cool. So then the other two questions that I had are, you mentioned that in the entertainment world, there were more of the secondary sales, which were lower sales -- lower ticket sales with higher margins. Is it generally better in your opinions to have higher margins even if the ticket sales are lower? Or would you rather see higher ticket sales even if the margins are lower? Or is that not something that you're directing yourself? Is it something that you just say, well, what's the market looking for and we have to do it?

好的。涼爽的。那麼我的另外兩個問題是，你提到在娛樂界，有更多的二次銷售，這是較低的銷售——較低的門票銷售，但利潤較高。您認為，即使門票銷售較低，利潤率越高越好嗎？或者即使利潤較低，您仍願意看到更高的門票銷售？還是這不是你自己指揮的事情？您是否只是說，市場正在尋找什麼，我們必須這樣做？

That's probably the best case of what it is, I would characterize it, but higher margins is obviously preferable. But at the same time, we also have to offer the new products because they go hand-in-hand.

我認為這可能是最好的情況，但更高的利潤率顯然更可取。但同時，我們也必須提供新產品，因為它們是齊頭並進的。

We're focused on the bottom line, Joe. But as David stated, sometimes we have to sell the high ticket items in order to increase the momentum on the lower items. For example, the vintage stock, I know when a new console comes out, we have to sell it even though we make very, very little, we make pennies on it.

我們專注於底線，喬。但正如大衛所說，有時我們必須出售高價商品才能增加低價商品的動能。例如，老式庫存，我知道當新遊戲機問世時，我們必須出售它，即使我們賺得非常非常少，我們只賺幾分錢。

And we offer it because when we sell it, people end up -- psychologically, they come back to the same place. They buy the console, and they end up buying games. And they end up buying other items, and then they end up selling it back to us.

我們提供它是因為當我們出售它時，人們最終會在心理上回到同一個地方。他們購買遊戲機，最後購買遊戲。他們最終購買其他物品，然後最終將其賣回給我們。

So it's more of a service more than anything. But to answer your question, we're more focused, obviously, on what brings returns to shareholders and what -- how do we maximize profitability. We're not -- revenue is a great number to have, a great headline have, but at the end of the day, it's all about earnings per share and bottom line.

所以它更多的是一種服務。但為了回答你的問題，顯然，我們更關注什麼為股東帶來回報以及什麼——我們如何最大化獲利能力。我們不是——收入是一個很大的數字，一個很棒的標題，但歸根結底，這一切都是關於每股收益和利潤的。

Yeah. I'm suddenly reminded of the sales of razor blades and you see all these add for Harris. They want to -- and all these companies, they want to sell you their holders, so they can then sell you the blades because that's where the money is. So it sounds similar.

是的。我突然想起剃刀刀片的銷售情況，你會看到所有這些都為哈里斯帶來了好處。他們想要——所有這些公司，他們想向你出售他們的刀柄，這樣他們就可以向你出售刀片，因為這就是錢的來源。所以聽起來很像。

Do you plan to -- when you're looking for new companies to acquire, are you looking more into areas that are like the companies that you have or in the areas of the companies that you have? Are you looking for any type of company that you think would be beneficial? Or is there some goal to have a certain scale of the companies that you have, is what I'm getting at.

當您尋找要收購的新公司時，您是否打算更專注於與您擁有的公司類似的領域，或者您擁有的公司的領域？您是否正在尋找您認為有利的任何類型的公司？或者我的意思是，你所擁有的公司是否有一定規模的目標。

Yeah, I don't know that we look for a particular industry. I think we look for what is out there and what makes sense. It happens that as we get into the carpet industry, we have -- we start getting a lot more opportunities that complement the business that we have.

是的，我不知道我們在尋找特定的行業。我認為我們要尋找現有的東西以及有意義的東西。碰巧，當我們進入地毯行業時，我們開始獲得更多機會來補充我們現有的業務。

And to the extent that we can make our current investment even more profitable by adding on. I think that's also another positive. But I think we're industry agnostic. But to the extent of complements we have, that's a bonus.

在某種程度上，我們可以透過增加現有的投資來獲得更多的利潤。我認為這也是另一個正面因素。但我認為我們對產業不可知。但就我們擁有的互補性而言，這是一個額外的好處。

Got you. The only -- the last question I had is, and forgive me because I'm no accountant, but how does free cash flow play into all this? And do you have a timetable when you think profitability will be in hand? And then I'm done.

明白你了。我唯一的最後一個問題是，請原諒我，因為我不是會計師，但自由現金流如何影響這一切？當您認為盈利能力掌握在手中時，您是否有一個時間表？然後我就完成了。

So from an EBITDA standpoint, we like that we're positive. When you're looking at free cash flow, I think we're in good shape. And even in today's market, when everybody is having a little bit of hardships, we look at our peers, we see that we're performing about the same, if not better, in certain circumstances as well. So I think we like how we're positioned. And so when we start to see an uptick, I think that's going to just help across the board, but --

因此，從 EBITDA 的角度來看，我們喜歡我們的積極態度。當你考慮自由現金流時，我認為我們的狀況良好。即使在今天的市場上，當每個人都遇到一點困難時，我們看看我們的同行，我們發現在某些情況下我們的表現即使不是更好，也大致相同。所以我認為我們喜歡我們的定位。因此，當我們開始看到成長時，我認為這只會全面有所幫助，但是--

I don't know if it specifically answers my question. I was -- look, in my business, I don't look for profits, I look for doing the right things for customers and the profits come along with that. And that's what I would expect that you guys would be doing as well. I certainly don't expect you to say, oh, yes, we're going to profit at any cost because that's not profit in the long run as far as I'm concerned. But I was just wondering if you had a vision or an idea based on your knowledge of the markets as far as when it appears that things would turn from losses to profits. Maybe you do, maybe you don't, I don't know.

不知道是否能具體回答我的問題。我是——看，在我的生意中，我不追求利潤，我尋求為客戶做正確的事情，利潤隨之而來。這就是我期望你們也會做的事情。我當然不希望你說，哦，是的，我們將不惜一切代價獲利，因為就我而言，從長遠來看這不是利潤。但我只是想知道，根據您對市場的了解，您是否有一個願景或想法，即事情何時會從虧損轉為盈利。也許你會，也許你不會，我不知道。

No. We're in a different industry that are all somewhat related but also have its own unique aspects. But when you're looking at the flooring business, it's interest rates, interest rates is what drives consumer decisions. And so that's one of the things we're kind of keeping an eye on.

不。我們處於不同的產業，這些產業都有一定的相關性，但也有自己獨特的面向。但當你審視地板業務時，你會發現利率是推動消費者決策的因素。所以這是我們正在關注的事情之一。

When people are moving, then they're replacing carpets, they're buying new carpets. When we're building new houses, then there're more carpets getting sold. When a market is tight, interest rates are high and liquidity is down on the consumers, we're going to see less spending and that correlates even to the retail side, which --

當人們搬家時，他們會更換地毯，他們會購買新地毯。當我們建造新房子時，就會有更多的地毯被出售。當市場吃緊、利率高、消費者的流動性下降時，我們會看到支出減少，甚至與零售方面有關。--

On the retail side, on the entertainment with vintage, we see that, well, people are spending less money because they have less free cash, but they're buying higher margin items for us. So we're making up for a little bit on the back end. So yeah, there are various things, in general, manufacturing, interest rates, and just consumer sentiment.

在零售方面，在復古娛樂方面，我們看到，人們花的錢越來越少，因為他們的自由現金越來越少，但他們為我們購買利潤更高的商品。所以我們在後端做了一些彌補。所以，是的，有很多因素，一般來說，製造業、利率，還有消費者信心。

All right. So I'll go talk to Jay Powell. Thank you very much.

好的。所以我要去和傑·鮑威爾談談。非常感謝。

Let us know what he says. Thank you.

讓我們知道他說什麼。謝謝。

Will do.

會做。

We have no further questions in the queue at this time.

目前我們隊列中沒有其他問題。

Okay. I'd like to thank everyone for calling in to the second-quarter earnings call and look forward next quarter to talking with everyone. Thank you.

好的。我要感謝大家參加第二季財報電話會議，並期待下個季度與大家交談。謝謝。

Thank you.

謝謝。

This does conclude today's program. Thank you for your participation. You may disconnect at any time.

今天的節目到此結束。感謝您的參與。您可以隨時斷開連線。