Live Ventures Inc (LIVE) 2025 Q4 法說會逐字稿

Good day everyone and welcome to the Live Ventures fiscal year 2025 conference call. At this time, all participants are in a listen-only mode. Later, we'll conduct a question-and-answer session. Now I'll turn the call over to Greg Powell, Director of Investor Relations. Please go ahead, Greg.

Thank you, Elvis. Good afternoon and welcome to the Live Ventures fiscal year 2025 conference call. Joining us this afternoon are John Isaac, our Chief Executive Officer and President; and David Verrett, our Chief Financial Officer.

Some of the statements we are making today are forward-looking and are based on our best views 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.

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 Live Ventures website.

I direct you to our website, liveventures.com or sec.gov for historical SEC filings. I'll now turn the call over to David to walk us through our financial performance.

Thank you, Greg. Good afternoon, everyone. Before discussing our financial results, I'd like to touch on a few key highlights from the year.

We are pleased to report that our portfolio companies have spent the past year strengthening operating disciplines and optimizing their cost structures. Fiscal year 2025 marked a significant turnaround for live ventures.

Divisive actions including hiring a new executive team at Flooring liquidators, implementing strategic pricing initiatives, as well as targeted cost reduction measures drove our progress despite a mixed economy.

These efforts contributed to a $10.2 million or 231.7% increase in operating income compared to the prior year when excluding the $18.1 million goodwill impairment recorded in fiscal year 2024. Additionally, we reported adjusted EBITDA of$33.4 million, an $8.9 million, or 36.3% increase compared to fiscal year 2024.

This strong performance came despite continued softness in the new home construction and home refurbishment markets, which continued to weigh on our retail flooring and flooring manufacturing segments.

Let's now discuss the financial results for the fiscal year ending September 30, 2025. Total revenue decreased approximately $27.9 million, or 5.9% to approximately $444.9 million for the year ended September 30, 2025, compared to revenue of approximately $472.8 million in the prior year.

The decrease is attributable to the retail flooring manufacturing, and steel manufacturing segments, which decreased by approximately $33.3 million in the aggregate, partially offset by an increase of approximately $6.5 million in the retail entertainment segment.

Although revenues declined in fiscal year 2025, we are pleased to report that fourth quarter showed year over year improvement, with the fourth quarter of 2025 generating higher revenues than the fourth quarter of 2024.

Retail entertainment segment revenue for fiscal year 2025 was approximately $77.5 million, an increase of $6.5 million or 9.1% compared to the prior year. The revenue growth was driven by strong consumer demand for vintage and collectible media.

Retail flooring segment revenue for fiscal year 2025 was approximately $122.3 million, a decrease of 14.7% or $14.7 million or 10.7% compared to the prior year. The decrease was primarily attributable to the disposition of certain Johnson Floor and Home stores in May 2024, as well as decreased consumer demand driven by the ongoing weakness in the housing market.

Flooring manufacturing segment revenue for fiscal year 2025 was approximately $121.6 million, a decrease of $11.5 million or 8.6% compared to the prior year. The decline in revenue was primarily due to reduced consumer demand as a result of the ongoing weakness in the housing market.

Steel manufacturing segment revenue for fiscal year 2025 was approximately $132.6 million, a decrease of $7.2 million or 5.1% compared to the prior year. The decline was primarily driven by lower sales volumes at certain business units as we focused on higher margin business, partially offset by incremental revenue of $11.1 million at Central Steel, which was acquired in May 2024.

Despite the decline in revenues, gross profit for fiscal year 2025 increased approximately 900,000 to 145.7 million. Gross margin increased 210 basis points to 32.7% as compared to 30.6% in the prior year period. The improvement in gross profit was attributable to increased gross margins in the retail entertainment, steel manufacturing, and flooring manufacturing segments, primarily due to improved efficiencies, as well as the acquisition of central steel in May 2024, which has historically generated higher margins, partially offset by slightly lower margins at the retail flooring segment.

General and administrative expense decreased by approximately $4.3 million or 3.6% to $113.7 million. The decrease was mainly attributable to targeted cost reduction measures, including lower compensation, reduced professional fees, and other expense reductions across the retail flooring and corporate and other segments.

Selling and marketing expenses decreased by $5.1 million or 22.6% to $17.3 million. Selling and marketing expenses were lower in the retail flooring and flooring manufacturing segments as we prioritized higher impact, more efficient marketing initiatives to ensure continued support for revenue growth.

In connection with our continued efforts to strengthen the balance sheet. Total debt declined approximately 33.5 million in fiscal year 2025, which includes a '19. Million dollar modification to the flowing liquidator seller note. As a result, interest expense decreased by approximately $1.3 million or 7.7% to $15.6 million.

For fiscal year 2025, net income was approximately $22.7 million and diluted EPS was $4.93 compared to a net loss of approximately $26.7 million and a loss per share of $8.48 in the prior year. The increase in net income reflects stronger operating performance and the additive benefit of one-time gains realized during fiscal year 2025.

Net income for fiscal year 2025 includes one-time items totaling a net gain of $28.2 million primarily consisting of a $22.8 million gain from the modification of the Flooring liquidator seller note, a $2.6 million net gain on earnout and holdback settlements, and a $2.1 million gain related to employee retention credits.

Net loss for fiscal year 2024 includes an $18.1 million goodwill impairment charge in the retail flooring segment. Adjusted EBITDA for fiscal year 2025 was approximately $33.4 million, an increase of approximately $8.9 million, or 36.3% compared to $24.5 million in the prior year. The increase in adjusted EBITDA is primarily due to improved operating performance during fiscal year 2025, reflecting the company's targeted cost reduction initiatives.

Turning to liquidity, we ended the fiscal year with total cash availability of approximately $38.1 million, consisting of cash on hand of approximately $8.8 million and availability under various lines of credit of approximately $29.3 million.

Our working capital was approximately $62.1 million as of September 30, 2025 compared to $52.3 million in the prior year. As of September 30, total assets were $386.4 million and total stockholders' equity was $95.3 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. During the fiscal year ending September 30, 2025, we repurchased 59,704 shares of the company's common stock at an average price of $8.85 per share.

In conclusion, we are pleased with our results for fiscal year 2025. We are not just holding steady, we are building a durable platform of businesses that move and matter in the real economy. Throughout the year, we strengthened our operational discipline and improved our cost structure while navigating ongoing softness in the new home construction and home refurbishment markets.

Our team executed well in a challenging environment and delivered solid margin improvements. Across our portfolio companies, our businesses are stronger, more efficient, and more resilient than a year ago. Looking ahead, we believe the actions taken this year position Live Ventures for continued progress as we focus on driving sustainable profitability and enhancing the overall performance of our businesses.

We will now take questions from those of you on the conference call. Operator, please open the line for questions.

(Operator Instructions) Joseph Kowalski, [JD Financial Planners].

Hello Joe. Hi.

Good good afternoon and nice job. Thank you very much. With regard to the shares that are repurchased, have you ever, reissued shares either in conjunction with buying a company or otherwise, or do you have some sort of, a collar or price where you'd say this is a good price to to buy shares either P/E or PEG or something like that. This is a good price to buy shares. This is a good place to, issue shares. Do you do it strategically like that? That's my first question.

My second question is, with regard to debt -- do you intend to pay down the debt entirely? Is there a certain debt level that you think might be reasonable to keep for the longer-term? I don't know based on the interest rates if it would make sense, but that's my second question. And then my third question is, have the interest rate reductions benefited the company in any way? And I thank you very much, and I'll be quiet now.

Okay, so the first question is about issuance of shares. We may from time to time, we have in the past at least, issued some shares and connect.

With acquisitions to help from a financing standpoint and so I think it's going to be depending on kind of where we feel like the market is representative to our value of the company and whether that makes sense or not we do kind of monitor kind of where our purchase levels are as far as what price we will execute the, repurchase program. And it's somewhat fluid as we monitor again kind of where the markets are relative to our price and our evaluation so and.

By the way, I'm sorry to interrupt. I said I'll be quiet, but I think your purchase average purchase price was excellent either way.

Yeah. And so, and it'll -- it can be fluid depending again on how the markets are and our evaluation. So, but we also see that it is a tool in a form of, consideration that can be given in future acquisitions. So it's something that we, evaluate as we're going through the acquisition process on cash borrowing and stock. Those are kind of our levers.

With regards to the pay down a debt, yes, we're very excited about, lowering our debt levels. We will continue to pay down that debt. There will be a point where once the debt gets to kind of a little more, moderate level that we can evaluate where our money can be spent and provide the highest return for our shareholders whether that is continuing to pay down debt or using that money in in acquisitions and so forth so again that's going to be something that we'll evaluate as we go but over this last year one of the things that we focused on was really getting that debt level down.

And with regards to interest rates, we're excited that there's been, I guess, 3 rate cuts over the course of this year, so that will certainly, improve or help us on our interest expense going forward. And, also there's the Big Beautiful Bill which I believe has, also some relief on the interest rate deductions that you can take, versus where we are today.

So I think we see some positive things in the nature of that, even in the future, but yes, it has benefited us and I think actually the interest rates will also benefit us even more when that kind of trickles down into the housing market and really stimulates the housing, sales and purchases and as well as flooring remodels and things like that.

Thank you. And we have no further questions at this time. Greg, I'll turn the program back over to you for any additional or closing comments.

Okay, I just want to thank everyone for joining us today. We were really proud of the year and we look forward to delivering more results in the in the upcoming year. Thank you for joining us.

Thank you. That concludes our meeting today. You may now disconnect.