Live Ventures Inc (LIVE) 2024 Q3 法說會逐字稿

Welcome to the Live Ventures FY 2024 third-quarter earnings conference call. (Operator Instructions) I would now like to turn the call over to Greg Powell, Director of Investor Relations. Please go ahead, sir.

歡迎參加 Live Ventures 2024 財年第三季財報電話會議。 （操作員指示）我現在想將電話轉給投資者關係總監 Greg Powell。請繼續，先生。

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

謝謝你，保羅。下午好，歡迎參加 Live Ventures 2024 財年第三季電話會議。今天下午加入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 the 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 our press release referenced on the call this afternoon in the Investor Relations section of the Live Ventures website. I direct you to our website, liveventures.com or sec.gov for our historical SEC filings.

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 Live Ventures 網站的投資者關係部分找到今天下午電話會議中引用的我們的新聞稿。我將引導您造訪我們的網站 liveventures.com 或 sec.gov，查看我們向 SEC 提交的歷史文件。

I will now turn the call over to David to walk you through our financial performance.

我現在將把電話轉給大衛，向您介紹我們的財務表現。

Thank you, Greg, and good afternoon, everyone. Let's jump right in and discuss the financial results for the third quarter ended June 30, 2024. Total revenue for the quarter increased 35.4% to approximately $123.9 million. The increase is primarily attributable to the acquisitions of PMW, which was acquired during the fourth quarter of fiscal year 2023 and Central Steel, which was acquired in May 2024, collectively adding approximately $21.1 million in revenue.

謝謝格雷格，大家下午好。讓我們直接討論截至 2024 年 6 月 30 日的第三季財務表現。該季度總營收成長 35.4%，達到約 1.239 億美元。這一成長主要歸因於 2023 財年第四季收購的 PMW 和 2024 年 5 月收購的 Central Steel，合計增加了約 2,110 萬美元的收入。

Additionally, the increase was attributable to increased revenue in the Retail-Flooring segment of approximately $9.5 million and an increase in the Flooring Manufacturing segment of approximately $3.8 million.

此外，這一增長還歸因於零售地板部門的收入增加了約 950 萬美元，地板製造部門的收入增加了約 380 萬美元。

These increases were partially offset by decreased revenue of approximately $2.2 million in the company's other businesses due to general economic conditions. Retail-Entertainment revenue of approximately $16.5 million decreased $1.5 million or 8.4% 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 prices with higher margins.

由於總體經濟狀況，公司其他業務收入減少約 220 萬美元，部分抵消了這些成長。零售娛樂收入約 1,650 萬美元，比去年同期減少 150 萬美元，即 8.4%。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，這些產品通常門票銷售價格較低，利潤率較高。

Retail-Flooring revenue for the quarter was approximately $37 million, an increase of $9.5 million or 34.7% compared to the prior year period. The increase is primarily due to increased revenue in Flooring Liquidator's builder design and installation segment, Elite Builder Services, and the acquisitions of CRO and Johnson by Flooring Liquidators during the first quarter of fiscal year 2024.

本季零售地板收入約 3,700 萬美元，比去年同期增加 950 萬美元，即 34.7%。這一增長主要是由於Flooring Liquidator的建築商設計和安裝部門Elite Builder Services的收入增加，以及Flooring Liquidators在2024財年第一季收購了CRO和Johnson。

Flooring Manufacturing revenue of approximately $31.3 million increased $3.8 million or 14% compared to the prior year. The increase is primarily due to increased sales related to Harris Flooring Group brands, which were acquired in the fourth quarter of fiscal year 2023.

地板製造收入約 3,130 萬美元，比前一年增加 380 萬美元，即 14%。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。

Steel Manufacturing revenue of approximately $39 million increased $20.6 million or 112.1% compared to the prior year period. The increase is primarily due to increased revenue of approximately $19.2 million at PMW, and approximately $1.9 million at Central Steel, partially offset by a $0.5 million decrease in the company's other Steel Manufacturing businesses.

鋼鐵製造收入約 3,900 萬美元，較上年同期增加 2,060 萬美元，即 112.1%。這一增長主要是由於 PMW 收入增加約 1,920 萬美元，Central Steel 收入增加約 190 萬美元，部分被該公司其他鋼鐵製造業務收入減少 50 萬美元所抵消。

Gross profit for the third quarter was $37 million, up from $32.2 million in the prior year period. The gross margin percentage for the company decreased to 29.9% from 35.2% in the prior year period. The decrease in gross margin percentage is primarily due to the acquisition of PMW which has historically generated lower margins and decreased margins overall in the Steel Manufacturing segment due to reduced production efficiencies as a result of lower demand.

第三季毛利為 3,700 萬美元，高於去年同期的 3,220 萬美元。公司毛利率由去年同期的35.2%下降至29.9%。毛利率下降的主要原因是收購了PMW，該公司歷來利潤率較低，而且由於需求下降導致生產效率降低，鋼鐵製造部門的整體利潤率也有所下降。

General and administrative expense increased approximately $6.8 million to $30.1 million, primarily due to the acquisitions of PMW in the Steel Manufacturing segment as well as CRO and Johnson in the Retail Flooring segment.

一般及管理費用增加約 680 萬美元至 3,010 萬美元，主要是因為收購了鋼鐵製造部門的 PMW 以及零售地板部門的 CRO 和 Johnson。

Sales and marketing expense increased approximately $2.4 million to $5.9 million. The increase is primarily due to increased sales personnel acquired in connection with the acquisition of Harris Flooring Group brands, increased convention and trade show activity in the Flooring Manufacturing segment and an increase in sales force in the Retail Flooring segment.

銷售和行銷費用增加約 240 萬美元至 590 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、地板製造部門的會議和貿易展覽活動增加以及零售地板部門銷售人員的增加。

Interest expense increased by approximately $750,000 compared to the prior year period. The increase is primarily due to incremental debt incurred in connection with the acquisitions of PMW, CRO, and Johnson. Net loss for the quarter was approximately $2.9 million, and loss per share was $0.91 compared to net income of approximately $1.1 million and diluted EPS of $0.33 per share in the prior year period.

與去年同期相比，利息支出增加了約 75 萬美元。這一增長主要是由於收購 PMW、CRO 和 Johnson 所產生的債務增量。本季淨虧損約 290 萬美元，每股虧損為 0.91 美元，去年同期淨利約 110 萬美元，稀釋後每股收益為 0.33 美元。

This decrease is primarily attributable to the quarter's lower operating earnings and higher interest expense compared to the prior year period. Adjusted EBITDA for the quarter was approximately $6.1 million, a decrease of approximately $3.5 million as compared to the prior year period.

這一下降主要是由於與去年同期相比，本季營業收入較低，利息支出較高。本季調整後 EBITDA 約 610 萬美元，比去年同期減少約 350 萬美元。

Turning to liquidity. We ended the quarter with total cash availability of $34.4 million, consisting of cash on hand of $4.7 million and availability under our various lines of credit totaling $29.7 million. Our working capital was approximately $57.5 million as of June 30, 2024, compared to $85 million as of September 30, 2023.

轉向流動性。本季結束時，我們的可用現金總額為 3,440 萬美元，其中包括 470 萬美元的手頭現金和各種信貸額度下的可用現金總計 2,970 萬美元。截至 2024 年 6 月 30 日，我們的營運資金約為 5,750 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。

The decrease is primarily due to an increase in the current portion of long-term debt associated with PMW. As of June 30, PMW was in default of one of its financial covenants. As a result, PMW's long-term debt balances and its seller finance loans were reclassified to current liabilities. We are currently in discussions with the creditors to resolve this issue in a timely manner.

減少的主要原因是與 PMW 相關的長期債務的流動部分增加。截至 6 月 30 日，PMW 未能履行其一項財務契約。因此，PMW 的長期債務餘額及其賣方融資貸款被重新分類為流動負債。目前我們正在與債權人協商，爭取及時解決這個問題。

As of June 30, total assets were $436.8 million and stockholders equity was $92.7 million. 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6月30日，總資產為4.368億美元，股東權益為9,270萬美元。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 18,156 shares of common stock. On June 4, 2024, we replaced our existing share repurchase program with a new $10 million program. As of June 30, the company had $10 million available for repurchases under the new repurchase program.

本季度，我們回購了 18,156 股普通股。2024 年 6 月 4 日，我們以新的 1,000 萬美元計畫取代了現有的股票回購計畫。截至 6 月 30 日，該公司有 1,000 萬美元可用於新回購計畫下的回購。

In conclusion, we are pleased that our third quarter revenue increased 35%. Despite elevated interest rates contributing to industry-specific headwinds, we are unwavering in our commitment to adapting our businesses to navigate these challenges. We are confident in our business prospects and long term buy build-hold strategy, highlighting our dedication to creating sustainable growth and long-term value for our shareholders. We will now take questions from those of you on the conference call.

總之，我們很高興第三季營收成長了 35%。儘管利率上升導致了特定行業的不利因素，但我們堅定不移地致力於調整我們的業務以應對這些挑戰。我們對我們的業務前景和長期買入持有策略充滿信心，凸顯我們致力於為股東創造永續成長和長期價值。我們現在將在電話會議上回答你們的問題。

Operator, please open the line for questions.

接線員，請開通提問線。

At this time, we will conduct a question and answer session. (Operator Instructions)

這時候，我們將進行問答環節。（操作員說明）

Joseph Kowalsky, JD Investments.

約瑟夫·科瓦爾斯基，JD 投資公司。

Hi, good afternoon folks. Almost good morning, I guess for you, guys. I actually have a number of questions. Is any of the debt floating rate that you have?

嗨，大家下午好。差不多早上好了，我想對你們來說，夥計們。我其實有很多問題。您的債務是否有浮動利率？

Yes, we do have -- yes, they are floating rate.

是的，我們確實有——是的，它們是浮動利率。

So if interest rates go down, that might benefit the companies?

那麼如果利率下降，公司可能會受益嗎？

That would benefit the company. That is correct.

這將使公司受益。這是正確的。

There was a mention somewhere that I read about integration costs being an issue this quarter. Did that have to do with the new debt that you were talking about? Or was there something else? I don't remember if it that specifically.

我在某處讀到整合成本是本季的一個問題。這與你所說的新債務有關嗎？或是還有其他什麼事情嗎？具體是不是這樣我不記得了。

I believe what you are referring to is on the Flooring Liquidator side, integrating CRO and Johnson. They were two smaller acquisitions that happened in the first quarter of this year. They are operating on their own systems and had their own kind of salaries and wages and administrative functions as opposed to leveraging what we have already from Flooring Liquidators.

我相信你指的是Flooring Liquidator方面，整合了CRO和Johnson。這是今年第一季發生的兩筆規模較小的收購案。他們在自己的系統上運作，有自己的工資和行政職能，而不是利用我們已經從Flooring Liquidators那裡得到的東西。

So we have been in a process to get them migrated onto Flooring Liquidators systems to be able to get efficiencies in the administrative and management processes.

因此，我們一直在努力將它們遷移到 Flooring Liquidators 系統上，以便能夠提高行政和管理流程的效率。

Do you have any estimate as to how much that affected this quarter as opposed to what we can basically ignore for future?

您是否估計這對本季的影響有多大，而不是我們未來基本上可以忽略的影響？

Yes, I'll say that if there was a number of headcount reductions that we were able to implement this in the third quarter, there was also some performance issues with the Johnson. And one of the things you will also see is that we ended up disposing of some of those stores by way of selling it back to the sellers. So we're able to kind of give back we kept one of the stores that was actually performing well and some of the other ones we sold back basically unwound what we had entered into.

是的，我會說，如果我們能夠在第三季實施大量裁員，那麼約翰遜也存在一些性能問題。您還將看到的一件事是，我們最終透過將其中一些商店賣回給賣家的方式處置了它們。因此，我們能夠以某種方式回饋我們，我們保留了一家實際上表現良好的商店，而我們回售的其他一些商店基本上解除了我們所進入的局面。

So we expect to see some decent savings coming from debt disposition as well as some of the efficiency initiatives that are starting to go into place here in the third quarter.

因此，我們預期債務處置以及第三季開始實施的一些效率措施將帶來一些可觀的節省。

If you can give us an idea of what in this quarter with attributable dollar-wise to those costs?

您能否讓我們了解本季這些成本在美元上的歸因？

Yeah, I'm not at this time. I can't.

是的，我現在不在。我不能。

Okay. What was the average price of the repurchases, please -- share repurchases?

好的。請問，股票回購的平均價格是多少？

It was around $18. I think you'll find it is summarized in the 10-Q that was recently filed.

大約是18美元。我想您會發現最近提交的 10-Q 中對此進行了總結。

I'll take a look, I'm sorry. And then you said something about, I think some PMW that had an issue now current and has to be current on its debt because there was an issue. What was the issue there? I don't, if it was in there, I didn't read it -- maybe I missed it.

我去看看，抱歉。然後你說，我認為一些 PMW 現在存在問題，並且必須償還債務，因為存在問題。那裡出了什麼問題？我不知道，如果它在那裡，我沒有讀過——也許我錯過了。

It's one of the financial leverage covenants that we have with them on. So as of June 30, they ended up failing on that covenant. The only thing I'll say is that our communications and everything with the creditors have been positive. I think we're both interested in working through a quick and positive outcome to this, but just from a US GAAP standpoint, even though we still have availability, there's still witness on far hundreds on under the credit facility. But because we were in default from a US GAAP standpoint, we put everybody in current.

這是我們與他們簽訂的財務槓桿契約之一。因此，截至 6 月 30 日，他們最終未能履行這項承諾。我唯一要說的是，我們與債權人的溝通和一切都是正面的。我認為我們都有興趣為此做出快速而積極的成果，但僅從美國公認會計準則的角度來看，即使我們仍然有可用性，但在信貸安排下仍有數百人見證。但因為從美國公認會計準則的角度來看，我們是違約的，所以我們讓每個人都處於當前狀態。

So that is that kind of is that something that was kind of expected down -- that you saw this coming? Or is this something that's a change in economy that's going to be tight or something?

所以這就是一種預料之中的事情——你預見了這種情況的發生？或者這是經濟變化導致緊縮之類的事情嗎？

Yes. We knew it was going to be tight. And just with the overall market conditions that we're seeing, they ended up busting that covenant.

是的。我們知道事情會很緊張。就我們所看到的整體市場狀況而言，他們最終違反了這項契約。

Okay. Alright. And then finally, where do you think we are in the economic cycle vis-a-vis your companies? I mean clearly you said there were some headwinds. It seems from most of what I'm reading that we're just at the very beginning of not even considering being in a recession at this point, but that things could get worse from here as far as the general economy, what about with regard to your company?

好的。好吧。最後，您認為與您的公司相比，我們在經濟週期中處於什麼位置？我的意思顯然是你說存在一些阻力。從我讀到的大部分內容看來，我們現在才剛開始考慮陷入衰退，但就整體經濟而言，情況可能會變得更糟，那麼在這方面呢？

Right. So we believe just overall, in general, we're pretty recession resilient. One of our companies, Vintage Stock, sells used products and cheaper. So what we see is a migration when money isn't flowing to the consumers like it was in the past, those are options for entertainment that's on the cheaper end.

正確的。因此，我們相信，整體而言，我們對經濟衰退的抵禦能力相當強。我們的公司之一，Vintage Stock，銷售二手產品，而且價格更便宜。因此，當資金不像過去那樣流向消費者時，我們看到的是一種遷移，這些都是更便宜的娛樂選擇。

Also, just I think our biggest company that's facing some big headwinds right now is just Flooring Liquidators given the interest rates and where they have been and what that does to the housing market, which then trickles down to the Flooring retail sales. If we start to see interest rates coming down, we believe that there is a possibility -- pretty good possibility that we'll start to see an uptick in the Flooring Liquidators segment

另外，我認為我們目前面臨一些巨大阻力的最大公司只是地板清算人，考慮到利率及其現狀以及這對房地產市場的影響，然後滲透到地板零售銷售。如果我們開始看到利率下降，我們相信有可能 - 很有可能我們會開始看到地板清算者部分的上升

Thank you very much.

非常感謝。

Thank you.

謝謝。

(Operator Instructions) I see no further questions. I'll turn the call back over to our host.

（操作員說明）我沒有看到更多問題。我會將電話轉回給我們的主持人。

Thank you for joining us for the calls today, and we'll speak to you next quarter.

感謝您今天參加我們的電話會議，我們將在下個季度與您聯繫。

Thank you, and thanks, everyone.

謝謝你們，也謝謝大家。

The meeting has now concluded. Thank you for joining. Have a pleasant day.

會議現已結束。感謝您的加入。祝你有愉快的一天。