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LV

LIVE VENTURES Inc (LIVE)·Q4 2024 Earnings Summary

Executive Summary

  • Fiscal Q4 2024 (quarter ended September 30) revenue was approximately $112.7M, with gross margin 31.9%, operating loss $(17.5)M, net loss $(19.9)M, and Adjusted EBITDA ~$5.2M, reflecting segment headwinds and a goodwill impairment at Retail-Flooring that drove full-year losses .
  • Year-over-year, Q4 revenue rose 8.9% versus Q4 2023, but operating results deteriorated due to lower steel margins (PMW mix) and Retail-Flooring integration inefficiencies; Q4 2023 had near breakeven operating income but a net loss .
  • No formal guidance was issued; liquidity stood at ~$33.3M in cash and credit availability at year-end, and the $10M share repurchase program was active, signaling capital allocation discipline amid macro headwinds .
  • Wall Street consensus estimates (S&P Global) for Q4 2024 EPS/Revenue were unavailable at this time; therefore, we cannot assess beats/misses relative to the Street. Estimates from S&P Global were unavailable due to data limitations.

What Went Well and What Went Wrong

  • What Went Well
    • Revenue growth remained robust in FY24 (+33.1%), driven by acquisitions (Flooring Liquidators, PMW, Central Steel) and growth in Flooring Manufacturing; management emphasized the buy-build-hold strategy and confidence in long-term prospects .
    • Flooring Manufacturing gross margin expanded (FY GM 25.9% vs 21.8%), supported by Harris Flooring Group brand acquisition and sales mix improvements .
    • Retail-Entertainment gross margin increased to 57.6% for FY24 due to mix shift toward used products; CEO highlighted focus on sustainable value creation despite headwinds .
  • What Went Wrong
    • Retail-Flooring recorded a $18.1M goodwill impairment and higher SG&A, driving an FY operating loss of $(25.5)M; integration inefficiencies from CRO/Johnson weighed on Q2/Q3 performance .
    • Steel Manufacturing margins compressed (FY GM 15.8% vs 22.5%) due to PMW’s structurally lower margins and reduced production efficiencies amid lower demand .
    • PMW was in covenant default at June 30, requiring reclassification of debt to current; management is working with creditors to resolve, underscoring balance sheet/lender constraints in the current rate environment .

Financial Results

Quarterly trend (oldest → newest):

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$118.6 $123.9 $112.7 (FY $472.8 − 9M $360.1)
Gross Profit ($USD Millions)$35.5 $37.0 $36.0 (FY $144.8 − 9M $108.8)
Operating Income ($USD Millions)$(0.8) $1.1 $(17.5) (FY $(13.6) − 9M $3.8)
Net (Loss) Income ($USD Millions)$(3.3) $(2.9) $(19.9) (FY $(26.7) − 9M $(6.8))
Adjusted EBITDA ($USD Millions)$4.5 $6.1 $5.2 (FY $24.5 − 9M $19.3)
Gross Margin %29.9% 29.9% 31.9% (calc)
EBIT Margin %−0.7% (calc) 0.9% (calc) −15.5% (calc)
Net Income Margin %−2.8% (calc) −2.3% (calc) −17.6% (calc)
EBITDA Margin %3.8% 4.9% 4.6% (calc)

Year-over-year (Q4 2023 vs Q4 2024):

MetricQ4 2023Q4 2024
Revenue ($USD Millions)$103.5 (FY $355.2 − 9M $251.6) $112.7 (FY $472.8 − 9M $360.1)
Gross Profit ($USD Millions)$29.8 (FY $115.6 − 9M $85.7) $36.0 (FY $144.8 − 9M $108.8)
Operating Income ($USD Millions)$0.4 (FY $15.4 − 9M $15.1) $(17.5) (FY $(13.6) − 9M $3.8)
Net (Loss) Income ($USD Millions)$(4.6) (FY $(0.1) − 9M $4.5) $(19.9) (FY $(26.7) − 9M $(6.8))
Adjusted EBITDA ($USD Millions)$5.2 (FY $31.5 − 9M $26.3) $5.2 (FY $24.5 − 9M $19.3)
Gross Margin %28.8% (calc) 31.9% (calc)
EBIT Margin %0.4% (calc) −15.5% (calc)
Net Income Margin %−4.4% (calc) −17.6% (calc)
EBITDA Margin %5.1% (calc) 4.6% (calc)

Segment breakdown (FY basis for context):

SegmentFY 2024 Revenue ($USD Millions)FY 2023 Revenue ($USD Millions)FY 2024 Operating Income ($USD Millions)FY 2023 Operating Income ($USD Millions)FY 2024 Adj. EBITDA ($USD Millions)FY 2023 Adj. EBITDA ($USD Millions)
Retail – Entertainment$71.0 $78.1 $7.2 $9.3 $8.4 $10.6
Retail – Flooring$137.0 $75.9 $(25.5) $(0.3) $(2.4) $3.3
Flooring Manufacturing$124.9 $109.8 $8.2 $6.1 $11.9 $10.1
Steel Manufacturing$139.6 $88.9 $4.6 $8.0 $11.0 $12.2
Corporate & Other$0.3 $2.5 $(8.1) $(7.6) $(4.5) $(4.7)

KPIs (liquidity and capital allocation):

KPIQ2 2024Q3 2024Q4 2024
Cash + Credit Availability ($USD Millions)$36.0 $34.4 $33.3
Share Repurchases (Period)11,849 shares @ $25.16 avg (Q2) 18,156 shares (~$18 avg price per Q&A) $10M new program in effect (Aug/Sep small activity)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue (company-wide)FY2025 / FQ1 2025None disclosedNone disclosedMaintained: No formal guidance
Margins (segment/total)FY2025None disclosedNone disclosedMaintained: No formal guidance
OpEx / Tax / OI&EFY2025None disclosedNone disclosedMaintained
Capital AllocationProgram termPrior $10M program ended 6/1/24 New $10M repurchase program approved 6/4/24 (through 5/31/25) New program authorized

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
Interest rates / housing impactFlooring demand tied to rates; focus on efficiency; buy-build-hold strategy reiterated Elevated rates causing industry-specific headwinds; adapting businesses FY commentary focused on acquisition-driven growth but segment headwinds; no explicit rate guidance Persistent headwind; rates remain the key driver for Retail-Flooring
Retail-Flooring integrationsCRO/Johnson acquisitions causing temporary inefficiencies; higher SG&A Integration costs; store dispositions; expected savings from efficiency initiatives FY goodwill impairment ($18.1M) and increased SG&A drove segment loss From integration pain to impairment recognition; remediation ongoing
Steel margin mix (PMW/Central Steel)PMW mix lowered gross margin; lower demand efficiencies PMW and Central Steel boosted revenue; margins lower due to PMW; reduced efficiencies FY gross margin down (15.8% vs 22.5%) given PMW mix and demand Mix-driven margin compression continues
Liquidity / covenantsWorking capital $78.8M; debt focus vs buybacks discussed PMW covenant default; debt reclassified to current; constructive creditor dialogue Year-end cash availability $33.3M; new $10M buyback program Liquidity acceptable; covenant issue being addressed
Regulatory / supply chain——UFLPA, Red Sea, Panama Canal disruptions cited in 10-K risk; potential impact on hard-surface supply chain Heightened supply chain/regulatory risks flagged

Management Commentary

  • CFO: “Revenue increased 33.1%… primarily driven by the strategic acquisitions of Flooring Liquidators… PMW… Central Steel… and an increase in revenue in our Flooring Manufacturing segment.”
  • CEO: “Challenging market conditions in our Retail-Flooring and Steel Manufacturing segments adversely affected… Despite these industry-specific headwinds, we remain confident… in our long-term 'buy-build-hold' strategy.”
  • Q3 CFO: “PMW was in default of one of its financial covenants… we are… working through a quick and positive outcome…”
  • Q3 CFO: “We repurchased 18,156 shares… around ~$18… summarized in the 10-Q.”

Q&A Highlights

  • Integration costs and actions: Management cited headcount reductions and disposition of underperforming Johnson stores to improve efficiency; dollar impact not disclosed .
  • PMW covenant default: Resulted from leverage covenant pressure amid market conditions; reclassification to current liabilities was GAAP-driven; creditor discussions positive .
  • Capital allocation: Debate on debt reduction vs buybacks; management emphasized prudent allocation, favorable rates in some debt, and focus on leverage ratios .
  • Macro sensitivity: Flooring retail most exposed to rates; Retail-Entertainment viewed as recession resilient due to used-product mix and value proposition .

Estimates Context

  • Wall Street consensus estimates (S&P Global) for Q4 2024 EPS and Revenue were unavailable at this time due to data limitations; consequently, we cannot provide a beat/miss assessment versus Street expectations. Values retrieved from S&P Global were unavailable due to data limits.

Key Takeaways for Investors

  • Q4 showed revenue resiliency but significant operating pressure: mix-driven steel margin compression and Retail-Flooring integration issues led to a sharp operating loss despite healthy Adjusted EBITDA for the quarter .
  • FY impairment at Retail-Flooring and higher interest expense anchor the annual loss; watch for 2025 actions to enhance efficiency and margin recovery in Retail-Flooring .
  • Liquidity remains adequate with ~$33.3M cash/availability; continued discipline via active buyback program provides optionality but should be balanced with leverage and covenant considerations .
  • Rate trajectory is the primary near-term catalyst for Retail-Flooring demand; easing rates could unlock builder and retail activity, improving segment performance .
  • Steel margins likely hinge on PMW mix and demand normalization; monitor production efficiencies and order cadence to gauge margin recovery .
  • Regulatory/supply chain risks (UFLPA, shipping disruptions) warrant attention for hard-surface imports; inventory planning and sourcing diversification are strategic mitigants .
  • Near-term trading: sentiment sensitive to margin trajectory, covenant resolution, and any signs of rate relief; medium-term thesis rests on integrating acquisitions, margin normalization, and disciplined capital allocation .