Live Ventures Incorporated (Nasdaq: LIVE), a diversified holding
company, today announced financial results for its first quarter
ended December 31, 2021.
Q1 FY2022 Key Highlights:
- Revenues of $75.2 million increased
20.3% over the prior year period;
- Gross profit of $27.6 million
increased 24.0% over the prior year period;
- Operating income of $10.4 million
increased 42.7% over the prior year period;
- Interest Expense of $1.0 million
decreased 30.8% over the prior year period;
- Net income of $6.5 million
increased 24.0% over the prior year period;
- Adjusted EBTIDA1 of $12.1 million
increased 21.9% over the prior year period;
- Q1 2022 Basic and Fully Diluted EPS
were $4.14 and $2.04, respectively, increased 20.0% and 25.4%,
respectively, over the prior year period;
- Total assets of $219.0 million;
and
- Approximately $38.8 million of cash
and availability under our credit facilities.
“I continue to be pleased with the result of
Live Ventures’ efforts, as demonstrated by our strong financial
performance for the first fiscal quarter of this year,” Jon Isaac,
President and CEO of Live Ventures commented. “Live Ventures has
continued to execute upon its strategic plan, deliver meaningful
financial results, and demonstrate resiliency in uncertain
times.”
Live Ventures reported revenues of $75.2
million, and basic earnings per share (“EPS”) of $4.14, which
represents an increase of 20.3% and 20.0%, respectively, over the
prior year period. The company also reported operating income of
$10.4 million and net income of $6.5 million, representing an
increase of 42.7% and 24.0%, respectively, over the same period
last year.
Net income for the quarter includes
approximately $0.8 million from SW Financial, which is included as
part of the company’s Corporate & other segment. As of December
31, 2021, the company reported total assets of $219.0 million, and
total cash and cash availability under its various lines of credit
of $38.8 million. Stockholders’ equity attributable to Live
Ventures’ stockholders was approximately $82.1 million as of
December 31, 2021.
Each of the company’s three main reporting
segments continued to demonstrate meaningful growth on a topline
and operating income basis compared to the prior year period.
“We started our fiscal 2022 in a fantastic
position with each of our diverse reporting segments continuing to
provide meaningful contribution and providing Live Ventures
continued liquidity and availability to invest in both new
acquisitions and our existing operations,” Mr. Isaac concluded.
________________________1 Adjusted EBTIDA is a
non-GAAP measure. A reconciliation of the non-GAAP measure is
included below.
Q1 FY2022 Financial Summary (in
thousands)
|
During the three months ended December 31, |
|
2021 |
|
2020 |
|
% Change |
Revenues |
$ |
75,158 |
|
$ |
62,454 |
|
20.3 |
% |
Operating Income |
$ |
10,407 |
|
$ |
7,291 |
|
42.7 |
% |
Net income applicable to common stock |
$ |
6,546 |
|
$ |
5,413 |
|
20.9 |
% |
Basic earnings per share |
$ |
4.14 |
|
$ |
3.45 |
|
20.0 |
% |
|
During the three months ended December 31, |
|
2021 |
|
2020 |
|
% Change |
Revenues |
|
|
|
|
|
Retail |
$ |
26,211 |
|
$ |
22,370 |
|
17.2 |
% |
Flooring Manufacturing |
$ |
32,872 |
|
$ |
30,222 |
|
8.8 |
% |
Steel Manufacturing |
$ |
12,366 |
|
$ |
9,735 |
|
27.0 |
% |
Corporate & other |
$ |
3,709 |
|
$ |
127 |
|
2820.5 |
% |
Total |
$ |
75,158 |
|
$ |
62,454 |
|
20.3 |
% |
|
|
|
|
|
|
|
During the three months ended December 31, |
|
2021 |
|
2020 |
|
% Change |
Operating income (loss) |
|
|
|
|
|
Retail |
$ |
4,810 |
|
|
$ |
4,493 |
|
|
7.1 |
% |
Flooring
Manufacturing |
$ |
4,608 |
|
|
$ |
4,150 |
|
|
11.0 |
% |
Steel
Manufacturing |
$ |
1,654 |
|
|
$ |
144 |
|
|
1048.6 |
% |
Corporate
& other |
$ |
(665 |
) |
|
$ |
(1,496 |
) |
|
55.5 |
% |
Total |
$ |
10,407 |
|
|
$ |
7,291 |
|
|
42.7 |
% |
|
|
|
|
|
|
|
For the Three Months EndedDecember 31, 2021 |
For the Three Months Ended December 31,
2020 |
Adjusted EBITDA |
|
|
|
Retail business |
$ |
5,202 |
|
|
$ |
5,182 |
|
Flooring Manufacturing business |
|
5,255 |
|
|
|
5,098 |
|
Steel Manufacturing business |
|
1,844 |
|
|
|
497 |
|
Corporate & Other |
|
(199 |
) |
|
|
(847 |
) |
Total Adjusted EBITDA |
$ |
12,102 |
|
|
$ |
9,930 |
|
|
|
|
|
Adjusted EBITDA as a percentage of revenue |
|
|
|
Retail business |
|
19.8 |
% |
|
|
23.2 |
% |
Flooring Manufacturing business |
|
16.0 |
% |
|
|
16.9 |
% |
Steel Manufacturing business |
|
14.9 |
% |
|
|
5.1 |
% |
Corporate & Other |
|
-5.4 |
% |
|
|
-664.0 |
% |
Consolidated adjusted EBITDA as a percentage of revenue |
|
16.1 |
% |
|
|
15.9 |
% |
|
|
|
|
Retail
Retail Segment Revenue for the three months
ended December 31, 2021 increased by approximately $4.0 million or
17.2%, over the prior year period, primarily due to increased
retail pricing and additional locations added at Vintage Stock,
offset by decreasing sales by ApplianceSmart primarily due to
decreases in sales resulting from increased competition. Retail
price increases were primarily due to higher product costs relating
to inflationary pressures that were passed on to customers. Cost of
revenue increased proportionately with the increase in revenue.
Operating income for the three months ended December 31, 2021 was
approximately $4.8 million, as compared to operating income of
approximately $4.5 million for the prior year period.
Flooring Manufacturing
Flooring Manufacturing Segment Revenue for the
three months ended December 31, 2021 increased by approximately
$2.7 million, or 8.8%, over the prior year period, primarily due to
greater demand for various grades of flooring, as well increases in
sales prices. The shift in demand in flooring grades was generally
toward higher priced product. Sales price increases were primarily
due to higher product costs relating to inflationary pressures that
were passed on to customers. Cost of revenue for the three months
ended December 31, 2021 increased proportionately with revenue, as
compared to the prior year period. Operating income for the three
months ended December 31, 2021 was approximately $4.6 million, as
compared to operating income of approximately $4.2 million for the
prior year period.
Steel Manufacturing
Steel Manufacturing Segment Revenue for the
three months ended December 31, 2021 increased by $2.6 million, or
27%, as compared to the prior year period, primarily due to
increased sales prices resulting from rising costs. Cost of
revenue for the three months ended December 31, 2021 decreased as a
percentage of sales due to improved manufacturing efficiencies and
increased revenue due to price increases, over the prior year
period. Operating income for the three months ended December 31,
2021 was approximately $1.7 million, as compared to operating
income of approximately $0.1 million in the prior year period. The
increase in operating income is primarily due to an increase in
gross profit.
Corporate and Other
The increase in Corporate and Other Revenue is
primarily attributable to the consolidation of Salomon Whitney in
June 2021. Operating loss for the three months ended December 31,
2021 decreased by approximately $0.8 million as compared to the
prior year period.
Non-GAAP Financial
Information
Adjusted EBTIDA
We evaluate the performance of our operations
based on financial measures such as revenue and “Adjusted EBITDA.”
Adjusted EBITDA is defined as net income (loss) before interest
expense, interest income, income taxes, depreciation, amortization,
stock-based compensation, and other non-cash or nonrecurring
charges. We believe that Adjusted EBITDA is an important indicator
of the operational strength and performance of the business,
including the business’ ability to fund acquisitions and other
capital expenditures, and to service its debt. Additionally, this
measure is used by management to evaluate operating results and
perform analytical comparisons and identify strategies to improve
performance. Adjusted EBITDA is also a measure that is customarily
used by financial analysts to evaluate a company's financial
performance, subject to certain adjustments. Adjusted EBITDA does
not represent cash flows from operations, as defined by generally
accepted accounting principles (“GAAP”), and should not be
construed as an alternative to net income or loss and is indicative
neither of our results of operations, nor of cash flows available
to fund all of our cash needs. It is, however, a measurement that
the Company believes is useful to investors in analyzing its
operating performance. Accordingly, Adjusted EBITDA should be
considered in addition to, but not as a substitute for, net income,
cash flow provided by operating activities, and other measures of
financial performance prepared in accordance with GAAP. Adjusted
EBITDA is a non-GAAP financial measure. As companies often define
non-GAAP financial measures differently, Adjusted EBITDA, as
calculated by Live Ventures, Incorporated, should not be compared
to any similarly titled measures reported by other companies.
About Live Ventures
Live Ventures Incorporated (Nasdaq: LIVE) (“Live
Ventures” or the “Company”) is a rapidly growing, diversified
holding company with a strategic focus on value-oriented
acquisitions of domestic middle-market companies. Live Venture’s
acquisition strategy is sector agnostic, and focuses on well-run,
closely held businesses with a demonstrated track record of
earnings growth and cash flow generation. The Company looks for
opportunities to partner with management to build increased
shareholder value through a disciplined buy-build-hold long-term
focused strategy. Live Ventures was founded in 1968 and refocused
in 2011 under our CEO and strategic investor, Jon Isaac. The
Company’s current portfolio of diversified operating subsidiaries
includes companies in the textile, flooring, tools, steel,
entertainment, and financial services industries.
About Our Main Operating
Subsidiaries
Marquis Industries
Based in Chatsworth, GA, and acquired by Live
Ventures in 2015, Marquis Industries (“Marquis”) is a leading
manufacturer of residential and commercial carpets sold primarily
in North America and focused on residential, niche commercial, and
hospitality end-markets. In addition to a diverse offering of
carpeting products, Marquis Industries also designs, sources, and
sells hard-surface flooring products.
Vintage Stock
Based in Joplin, MO and acquired by Live
Ventures in 2016, Vintage Stock Inc. (“Vintage Stock”) is an
award-winning entertainment retailer that sells new and pre-owned
movies, classic and current generation video games and systems,
music on CD & LP, collectible comics, books, toys, and more
through a unique buy-sell-trade model. Vintage Stock sells through
its 60+ retail stores and its website, allowing the company to ship
product worldwide directly to the customer’s doorstep.
ApplianceSmart
ApplianceSmart® (“ApplianceSmart”) is based in
Columbus, Ohio and was acquired by Live Ventures in 2017.
ApplianceSmart sells new major household appliances in the United
States through its retail store. ApplianceSmart is the first
independent retailer in the nation to become a voluntary member of
the Environmental Protection Agency's Responsible Appliance
Disposal (RAD) Program. On December 9, 2019,
ApplianceSmart filed a voluntary petition in the United States
Bankruptcy Court for the Southern District of New York, seeking
relief under Chapter 11 of Title 11 of the United States Code.
Precision Marshall
Based in Washington, PA and acquired by Live
Ventures in 2020, Precision Industries, Inc. (“Precision Marshall”)
is a leading manufacturer of premium steel tools and specialty
alloys. Precision Marshall manufactures pre-finished decarb-free
tool and die steel. For over 70 years, Precision Marshall has been
known by steel distributors for its quick and accurate service and
has led the industry with exemplary availability and value-added
processing.
Salomon Whitney
Based in Melville, NY, Salomon Whitney LLC
(“Salomon Whitney”) is a licensed broker-dealer and investment bank
offering clients a broad range of products and services, including
broker retailing of corporate equity and debt securities, private
placement of securities, corporate finance consulting regarding
mergers and acquisitions, broker selling of variable life insurance
or annuities, and broker retailing of U.S. government and municipal
securities. Salomon Whitney has over 70 registered representatives
and is licensed to operate in all 50 states. As of December 31,
2021, Live Ventures owns a 24.9% interest in Salomon Whitney.
However, Salomon Whitney is consolidated into Live Ventures
financial statements as a variable interest entity.
Contact:Live Ventures IncorporatedTim Matula, Investor
Relations(425)
836-9035tmatula@liveventures.comhttp://liveventures.com
Source: Live Ventures Incorporated
|
LIVE VENTURES INCORPORATEDCONSOLIDATED
BALANCE SHEETS(dollars in thousands) |
|
|
|
December 31, 2021 |
|
September 30, 2021 |
|
|
(Unaudited) |
|
|
Assets |
|
|
|
|
Cash |
|
$ |
10,031 |
|
|
$ |
4,664 |
|
Trade receivables, net of allowance for doubtful accounts of $61 at
December 31, 2021 and September 30, 2021 |
|
|
19,117 |
|
|
|
21,559 |
|
Inventories, net of reserves of approximately $1.9 million at
December 31, 2021, and approximately $1.8 million atSeptember 30,
2021 |
|
|
73,898 |
|
|
|
70,747 |
|
Prepaid expenses and other current assets |
|
|
2,042 |
|
|
|
1,640 |
|
Debtor in possession assets |
|
|
143 |
|
|
|
180 |
|
Total current assets |
|
|
105,231 |
|
|
|
98,790 |
|
Property and equipment, net of accumulated depreciation of
approximately $21.8 million at December 31, 2021,and approximately
$20.6 million at September 30, 2021 |
|
|
37,440 |
|
|
|
35,632 |
|
Right of use asset - operating leases |
|
|
29,090 |
|
|
|
30,466 |
|
Deposits and other assets |
|
|
1,345 |
|
|
|
682 |
|
Intangible assets, net of accumulated amortization of approximately
$2.5 million at December 31, 2021 andapproximately $2.2 million at
September 30, 2021 |
|
|
4,410 |
|
|
|
4,697 |
|
Goodwill |
|
|
41,471 |
|
|
|
41,471 |
|
Total assets |
|
$ |
218,987 |
|
|
$ |
211,738 |
|
Liabilities and Stockholders' Equity |
|
|
|
|
Liabilities: |
|
|
|
|
Accounts payable |
|
$ |
9,713 |
|
|
$ |
10,644 |
|
Accrued liabilities |
|
|
14,304 |
|
|
|
17,048 |
|
Income taxes payable |
|
|
734 |
|
|
|
876 |
|
Current portion of lease obligations - operating leases |
|
|
7,196 |
|
|
|
7,202 |
|
Current portion of long-term debt |
|
|
17,553 |
|
|
|
16,055 |
|
Current portion of notes payable related parties |
|
|
2,000 |
|
|
|
2,000 |
|
Debtor-in-possession liabilities |
|
|
11,184 |
|
|
|
11,135 |
|
Total current liabilities |
|
|
62,684 |
|
|
|
64,960 |
|
Long-term debt, net of current portion |
|
|
40,305 |
|
|
|
37,559 |
|
Lease obligation long term - operating leases |
|
|
28,008 |
|
|
|
29,343 |
|
Notes payable related parties, net of current portion |
|
|
2,000 |
|
|
|
2,000 |
|
Deferred taxes |
|
|
4,346 |
|
|
|
2,796 |
|
Total liabilities |
|
|
137,343 |
|
|
|
136,658 |
|
Commitments and contingencies |
|
|
|
|
Stockholders' equity: |
|
|
|
|
Series B convertible preferred stock, $0.001 par value, 1,000,000
shares authorized, 315,790 sharesissued and outstanding at December
31, 2021 and September 30, 2021, respectively |
|
|
— |
|
|
|
— |
|
Series E convertible preferred stock, $0.001 par value, 200,000
shares authorized, 47,840 shares issuedand outstanding at December
31, 2021 and September 30, 2021, respectively, with a liquidation
preference of $0.30 per share outstanding |
|
|
— |
|
|
|
— |
|
Common stock, $0.001 par value, 10,000,000 shares authorized,
1,582,334 and 1,582,334 shares issuedand outstanding at December
31, 2021 and September 30, 2021, respectively |
|
|
2 |
|
|
|
2 |
|
Paid in capital |
|
|
65,302 |
|
|
|
65,284 |
|
Treasury stock common 534,520 shares as of December 31, 2021 and
September 30, 2021, respectively |
|
|
(4,519 |
) |
|
|
(4,519 |
) |
Treasury stock Series E preferred 50,000 shares as of December 31,
2021 and of September 30, 2021, respectively |
|
|
(7 |
) |
|
|
(7 |
) |
Retained earnings |
|
|
21,314 |
|
|
|
14,768 |
|
Equity attributable to Live stockholders |
|
|
82,092 |
|
|
|
75,528 |
|
Non-controlling interest |
|
|
(448 |
) |
|
|
(448 |
) |
Total stockholders' equity |
|
|
81,644 |
|
|
|
75,080 |
|
Total liabilities and stockholders' equity |
|
$ |
218,987 |
|
|
$ |
211,738 |
|
|
|
|
|
|
The accompanying notes are an integral part of
these consolidated financial statements.
|
LIVE VENTURES, INCORPORATEDCONSOLIDATED
STATEMENTS OF INCOME(dollars in thousands, except per
share) |
|
|
|
|
For the Three Months Ended December 31, |
|
|
|
2021 |
|
2020 |
Revenues |
|
|
$ |
75,158 |
|
|
$ |
62,454 |
|
Cost of revenues |
|
|
|
47,542 |
|
|
|
40,185 |
|
Gross profit |
|
|
|
27,616 |
|
|
|
22,269 |
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
General and administrative expenses |
|
|
|
14,157 |
|
|
|
12,279 |
|
Sales and marketing expenses |
|
|
|
3,052 |
|
|
|
2,699 |
|
Total operating expenses |
|
|
|
17,209 |
|
|
|
14,978 |
|
Operating income |
|
|
|
10,407 |
|
|
|
7,291 |
|
Other (expense) income: |
|
|
|
|
|
Interest expense, net |
|
|
|
(1,017 |
) |
|
|
(1,470 |
) |
Gain on disposal of fixed assets |
|
|
|
— |
|
|
|
129 |
|
Loss on bankruptcy settlement |
|
|
|
(10 |
) |
|
|
— |
|
Other income (expense) |
|
|
|
126 |
|
|
|
779 |
|
Total other (expense) income, net |
|
|
|
(901 |
) |
|
|
(562 |
) |
Income before provision for income taxes |
|
|
|
9,506 |
|
|
|
6,729 |
|
Provision for income taxes |
|
|
|
2,960 |
|
|
|
1,450 |
|
Net income |
|
|
|
6,546 |
|
|
|
5,279 |
|
Net loss attributable to non-controlling interest |
|
|
|
- |
|
|
|
134 |
|
Net income attributable to Live stockholders |
|
|
$ |
6,546 |
|
|
$ |
5,413 |
|
|
|
|
|
|
|
Income per share: |
|
|
|
|
|
Basic |
|
|
$ |
4.14 |
|
|
$ |
3.45 |
|
Diluted |
|
|
$ |
2.04 |
|
|
$ |
1.63 |
|
|
|
|
|
|
|
Weighted average common shares outstanding: |
|
|
|
|
|
Basic |
|
|
|
1,582,334 |
|
|
|
1,568,213 |
|
Diluted |
|
|
|
3,202,057 |
|
|
|
3,319,088 |
|
|
|
|
|
|
|
Dividends declared - series B convertible preferred stock |
|
|
$ |
— |
|
|
$ |
— |
|
Dividends declared - series E convertible preferred stock |
|
|
$ |
— |
|
|
$ |
— |
|
Dividends declared - common stock |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
|
|
|
|
LIVE VENTURES
INCORPORATEDNON-GAAP MEASURES
RECONCILIATION(dollars in thousands, except per share)
Adjusted EBITDA
The following table provides a reconciliation of Net (loss)
income to total Adjusted EBITDA for the periods indicated (amounts
in thousands):
|
For the Three Months Ended |
|
December 31, 2021 |
|
December 31, 2020 |
Net income |
$ |
6,546 |
|
$ |
5,279 |
Depreciation and amortization |
|
1,549 |
|
|
1,714 |
Stock-based compensation |
|
18 |
|
|
17 |
Interest expense, net |
|
1,017 |
|
|
1,470 |
Income tax expense (benefit) |
|
2,960 |
|
|
1,450 |
Other |
|
12 |
|
|
— |
Adjusted EBITDA |
$ |
12,102 |
|
$ |
9,930 |
|
|
|
|
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