Live Ventures Incorporated

Good day, everyone, and welcome to today's Live Ventures second quarter 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 the star and 1 on your telephone keypad. You may withdraw yourself from the queue at any time by pressing star 2. Please note this call is being recorded, and I will be standing by if you need any assistance. It is now my pleasure to turn today's conference over to Greg Powell, Director of Investor Relations.

Please go ahead, sir. Thank you, Travis. Good afternoon and welcome to the Blyde Ventures second quarter fiscal year 2024 conference call. Joining us this afternoon for the call are John Isaac, our chief executive officer and president, and David Barrett, our chief financial officer. 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. We have no obligation to publicly update any forwarded 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 direct you to our website, www.myvendors.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.

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 liquidators, which was acquired during the second quarter of fiscal year 2023, which collectively added $29.6 million in revenue. 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. 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 Harris Flooring Group Brands, which was acquired in the fourth quarter of fiscal year 2023. 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. 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. Steel manufacturing revenue of approximately 35.5 million increased 15.6 million or 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. 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. 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. 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 in general and administrative expense during the quarter. 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 and increased convention and trade show activity in the flooring manufacturing segment. Interest expense increased by approximately $925,000 as compared to the prior year period. The increase is primarily due to incremental debt incurred in connection with the acquisitions of flooring liquidators and PMW. Net loss was approximately $3.3 million, and loss per share was $1.04, compared to net income of approximately 1.6 million and diluted EPS of 49 cents 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. Turning to liquidity, We ended the quarter with total cash availability of 36 million consisting of cash on hand at 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 31st, 2024 compared to 85 million as of September 30, 2023. Total assets were 433.9 million and total stockholders' equity was 95.9 million as of March 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 11,849 shares of common stock at an average price of approximately $25.16 per share. As of March 31st, the company had approximately $2.9 million available for repurchases under our repurchase program. 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. 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 will now take questions from those of you on the conference call. Operator, please open the line for questions.