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spk03: Good afternoon, everyone, and welcome to today's Live Ventures Q1 Fiscal Year 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question and answer session. You may register to ask a question at any time by pressing star 1 on your telephone keypad, and you may withdraw yourself from the queue by pressing star 2. Also, today's call is being recorded, and I will be standing by if anyone should need any assistance. Now, at this time, I will turn things over to Mr. Greg Powell, Director of Investor Relations. Please go ahead, sir.
spk02: Thank you, Beau. Good afternoon, and welcome to the Live Ventures first quarter fiscal 2024 conference call. Joining us this afternoon for the call are John Isick, our Chief Executive Officer and President, David Barrett, our Chief Financial Officer, and Eric Goldhofer, our Chief Operating Officer. Some of the statements we are making today are forward-looking and are based on our best view of the businesses as we see them today. The actual results could differ material 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 and 10-Q referenced on this call in the Investor Relations section of the Live Ventures website. I direct you to our website, 5Ventures.com or SEC.gov, for historical SEC violence. I will now turn the call over to David to walk you through our financial performance. Thank you, Greg, and good afternoon, everyone.
spk05: Before jumping into the numbers for our first quarter, let's briefly discuss two acquisitions that Flooring Liquidators completed during the quarter. Flooring Liquidators, a retail flooring business, acquired two Midwest Flooring Changes, which added 10 new showrooms in Arkansas, Oklahoma, and Missouri. We executed these transactions because we believe there is significant opportunity for live ventures to use our capital and resources to expand and enhance Plowing Liquidator's business and product offering into new markets. Now I'll discuss the financial results for our first quarter ended December 31st, 2023. Total revenue for the quarter increased 70.5% to $117.6 million. The increase is primarily attributable to flooring liquidators and PMW, both of which were acquired after the first quarter of fiscal year 2023, as well as an increase of approximately $2.8 million in the flooring manufacturing segment. The increase is partially offset by decreased revenues of approximately $6.2 million in our other businesses. Flooring manufacturing revenue of approximately $29.2 million increased by $2.8 million, or 10.6% as compared to the prior year period. The increase in revenue is primarily due to the buildup of its sales force as a result of the acquisition of Harris Flooring Group brands in the fourth quarter of fiscal year 2023. Retail entertainment revenue of 20.6 million decreased approximately 2.7 million, or 11.5% as compared to the prior year. The decrease in revenues 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. As previously announced, we added the retail flooring segment in connection with the acquisition of flooring liquidators in January, 2023. Revenues for retail flooring were approximately 34.3 million in the first quarter. Fuel manufacturing revenues of approximately 33.4 million increased approximately 15.4 million or 85.5% as compared to the prior year. The increase is primarily due to the acquisition of PMW in 2023, which contributed 17.5 million of revenue in the quarter. This increase was partially offset by a $2.5 million decrease in our other steel manufacturing businesses due to reduced consumer demand as a result of general economic conditions. Corporate and other revenues decreased approximately $1.2 million or 93.2% to $100,000 as compared to the prior year period. The decrease is primarily due to the closure of SW Financial in May 2023. Gross profit for the quarter was $36.3 million, up from $21.9 million in the prior year period. The gross margin percentage for the company decreased to 30.9% from 31.8% in the prior year period. The decrease in gross margin is primarily attributable to reduced margins in the steel manufacturing segment, partially offset by the acquisition of flooring liquidators which contributed a gross margin of 38% in the quarter. The decrease in gross margin in the steel manufacturing segment is primarily due to the acquisition of PMW, which historically has generated lower margins, as well as reduced production in certain other steel manufacturing businesses. General and administrative expense increased approximately 13.1 million as compared to the prior year period. The increase is due to the acquisitions of flooring liquidators and PMW, which collectively incurred $14 million of general administrative expense during the quarter. Selling and marketing expense increased approximately $2.3 million as compared to the prior year period, primarily due to increased sales personnel, trade show activity in our flooring manufacturing segment, and the acquisition of flooring liquidators. Interest expense increased by approximately $2.1 million as compared to the prior year period, The increase is primarily due to increased debt balances related to the acquisitions of flooring liquidators and PMW. Net loss was approximately $700,000 and loss per share was $0.22 as compared to net income of approximately $1.8 million and diluted EPS of $0.60 in the prior year period. The decrease in net income is attributable to the lower operating income and increased interest expense. Adjusted EBITDA. for the first quarter was approximately 8.7 million, an increase of approximately 1.2 million, or 15.3% as compared to the prior year period. Turning to liquidity, we ended the quarter with total cash availability of 45 million, consisting of cash on hand of 5.6 million, and availability under our various lines of credit totaling 39.4 million. Our working capital was approximately 81.8 million, as of December 31st, 2023, compared to 85 million as of September 30, 2023. Total assets were 436.6 million and total stockholders' equity was 99.4 million as of December 31st. 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 quarter, we repurchased 4,346 shares of Comma stock at an average price of $24.51 per share. As of December 31st, the company had approximately $3.2 million available for repurchases under our repurchase program. In conclusion, we are pleased that our first quarter revenues increased 70.5% and adjusted EBITDA increased 15.3% as compared to the prior year period. However, our businesses continue to be impacted by industry-specific pressures. As a result, we remain focused on increased productivity, expansion, and innovation. Despite the challenging environment, we remain focused on creating long-term value for our stockholders by executing our long-term buy, build, hold strategy. We'll now take questions from those of you on the conference call. Operator, please open the line for questions.
spk03: Thank you, Mr. Barrett. Ladies and gentlemen, at this time, if you do have any questions, you can press star 1 on your telephone, and you can remove yourself from the queue by pressing star 2. Once again, that's star 1 for a question, and we'll pause for just one moment to allow questions to queue.
spk04: Gentlemen, nothing at this time, but just to give everyone one final opportunity, please star one for any questions this afternoon.
spk01: Let's take a question from Mark, please, operator.
spk03: Certainly. We'll go to Mark Schleifer at Alpine Global.
spk00: Hi, how's it going? Thank you for taking my question. I was wondering if you guys had any updates with regards to your buyout proposal of LL Flora.
spk06: The answer is we do not have an update to share with the public at this time. But I do appreciate the question, Mark. Thank you.
spk01: And just a final reminder, ladies and gentlemen, for this question is our one chance.
spk03: And, gentlemen, it appears we have no further questions this afternoon. I'd like to turn the conference back over to the Live Ventures management team for any closing comments.
spk05: I just want to thank everyone for joining the call. We look forward to our next earnings release next quarter. Thank you.
spk03: Thank you very much. Again, ladies and gentlemen, that will conclude the Live Ventures Q1 Fiscal Year 2024 Earnings Conference Call. We'd like to thank you all so much for joining us and wish you all a great remainder of your day. Goodbye.
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