Joseph Kowalsky

Joseph Kowalsky asked about Live Ventures' strategic approach to share repurchases, including criteria for buying or issuing shares and their potential use in acquisitions. He also inquired about the company's debt reduction strategy, aiming for a long-term reasonable debt level, and the financial benefits derived from recent interest rate reductions.

Answer

CEO Jon Isaac explained that share issuance for acquisitions is evaluated based on market valuation, and share repurchase levels are fluid, adapting to market conditions and valuation. He confirmed the company's commitment to debt reduction, aiming for a moderate level before re-evaluating capital allocation for acquisitions or further debt paydown. Isaac also noted that three rate cuts have benefited interest expense and are expected to stimulate the housing market, positively impacting flooring segments.

Joseph Kowalsky from JD Financial Planners inquired about Live Ventures' strategic approach to share repurchases and potential share issuance for acquisitions, including the criteria used for these decisions. He also asked about the company's long-term debt reduction strategy and the impact of recent interest rate changes on the business.

Answer

CEO and President Jon Isaac explained that Live Ventures evaluates share issuance for acquisitions based on market valuation and monitors purchase levels for its repurchase program, considering stock as a flexible tool alongside cash and borrowing for future deals. Regarding debt, Isaac stated the company is committed to lowering debt levels and will continue to do so, eventually assessing whether further debt paydown or acquisitions yield the highest shareholder return. He confirmed that three rate cuts this year have positively impacted interest expense and anticipates further benefits, particularly as lower rates stimulate the housing market.

Joseph Kowalsky inquired about the recent $19 million reduction in the Flooring Liquidators seller note and the potential impact of tariffs on the company's businesses.

Answer

CEO Jon Isaac explained that the note modification was a new renegotiation, not part of the original agreement, calling it a 'big win' that reduced the note's value to $15 million. CFO David Verret stated that while the company is monitoring potential tariffs by diversifying its supply chain, it has experienced no negative impacts to date, partially due to a strategic inventory buildup.

Joseph Kowalsky of Kowalsky Research inquired about the specifics of the settlement gain, the company's future profitability outlook, and the current status of the M&A pipeline.

Answer

Chief Financial Officer David Verret explained the $3.5 million gain was a one-time event resulting from the early settlement of a seller note and the forgiveness of an earn-out liability related to the PMW acquisition. While declining to provide forward-looking guidance, Verret mentioned that performance improvement initiatives are underway at underperforming entities. He also confirmed that while the company continually evaluates opportunities, no acquisitions are imminent.