Live Ventures LIVE Q2 2026 Earnings Transcript

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DATE

Thursday, May 14, 2026 at 5 p.m. ET

CALL PARTICIPANTS

• Chief Financial Officer — David Verret

TAKEAWAYS

• Revenue -- $102.9 million, down 3.8%, reflecting a $7.2 million decrease in Retail Flooring revenue, partially offset by a $2.7 million increase in Retail Entertainment revenue.
• Retail Entertainment Revenue -- $21.2 million, up 14.8%, driven by increased consumer demand across all product lines.
• Retail Flooring Revenue -- $20.2 million, down 26.2% due to lower retail and contractor sales amid headwinds in new home construction and home refurbishment markets.
• Flooring Manufacturing Revenue -- $30.3 million, down 3.2% due to continued softness in the housing market.
• Steel Manufacturing Revenue -- $32.5 million, up 3.4%, fueled by higher sales volumes in fabricated, hardened ware, and tool and die businesses, partially offset by lower revenue in metal forming, assembly, and finishing solutions.
• Gross Profit -- $34.6 million, down 1.6%, impacted primarily by reduced Retail Flooring revenues.
• Gross Margin -- 33.6%, up 80 basis points due to higher margins in multiple segments and an increased proportion of higher-margin Retail Entertainment revenue.
• General and Administrative Expense -- $27.7 million, down 2.3%, mainly from cost reductions in Retail Flooring and Flooring Manufacturing, partially offset by increased costs in Retail Entertainment.
• Sales and Marketing Expense -- $4.9 million, up 3.4%, driven by higher activity in Retail Flooring.
• Operating Loss -- $2 million, compared to operating income of $2.1 million in the prior period, with the decrease driven primarily by a $4 million noncash goodwill impairment in Steel Manufacturing.
• Goodwill Impairment Charge -- $4 million noncash charge in Steel Manufacturing, attributed to a decline in market conditions affecting the stamping and metal forming business.
• Excluding Goodwill Impairment -- Operating income would have been $2 million, in line with the prior year period.
• Net Loss -- $2.4 million, or $0.80 diluted loss per share, compared to net income of $15.9 million or $5.05 diluted EPS in the prior year, with the prior period benefiting from a $22.8 million gain on the Flooring Liquidators’ seller note modification.
• Adjusted EBITDA -- $5.9 million, down 8.8%, driven mainly by lower gross profit.
• Total Cash Availability -- $39.8 million, consisting of $15.2 million in cash on hand and $24.6 million available under credit lines.
• Working Capital -- $74.4 million, up from $62.1 million as of September 30, 2025.
• Total Assets -- $392.5 million; Stockholders’ Equity -- $92.9 million.
• Interest Expense -- $3.9 million, unchanged from the prior year period.
• Debt Reduction -- Management stated debt was paid down by $8 million compared to March of the prior year.

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RISKS

• Steel Manufacturing segment recorded a $4 million goodwill impairment charge due to "continued uncertainty in the market" and declining production demand from customers in appliances and automobiles.
• Retail Flooring revenue fell 26.2% due to persistent headwinds in new home construction and home refurbishment markets.
• Net loss for the quarter was $2.4 million, reversing a profit in the prior year period, and included the goodwill impairment charge.

SUMMARY

Live Ventures (NASDAQ:LIVE) reported a decline in consolidated revenue linked primarily to underperformance in the Retail Flooring segment, only partially offset by gains in Retail Entertainment and Steel Manufacturing. Management disclosed a $4 million noncash goodwill impairment in the Steel Manufacturing segment, directly connected to weakened demand from customers in appliance and automotive end markets. Although gross margin improved due to favorable segment mix, overall profitability turned negative, with a $2.4 million net loss and a notable year-over-year fall in adjusted EBITDA. Liquidity remained stable with total cash availability of $39.8 million and reported working capital growth. Management confirmed ongoing cost reduction and debt repayment strategies while remaining open to future opportunistic acquisitions within and outside its core industries.

• Management described its acquisition process as evolving, noting improvements in post-transaction due diligence and emphasizing lessons learned from past "missteps."
• Flooring Manufacturing, while impacted by broader housing market weakness, still showed 24% operating income growth, indicating margin enhancements under challenging top-line conditions.
• Retail Entertainment operating income grew 32.8%, accompanying the segment’s 14.8% revenue growth and a broadened share of consolidated revenue.
• General and administrative savings arose from "targeted cost reduction initiatives" in both Retail Flooring and Flooring Manufacturing, supporting margin defense.
• The prior year's net income benefited significantly from a $22.8 million one-time gain, highlighting a non-recurring element in year-over-year comparisons.

INDUSTRY GLOSSARY

• Goodwill Impairment: A noncash accounting charge reflecting a write-down of the value assigned to acquired intangibles, mandated when future cash flows for a segment are expected to fall below prior assumptions.
• Adjusted EBITDA: Earnings before interest, taxes, depreciation, and amortization, adjusted for significant nonrecurring or noncash items, used to gauge underlying operational performance.

Full Conference Call Transcript

David Verret: Thank you, Greg. Good afternoon, everyone. Before discussing our financial results, I'd like to touch on a few key highlights from the quarter. During the quarter, our Retail Entertainment and Flooring Manufacturing segments delivered strong operating income growth of 32.8% and 24%, respectively. However, these gains were offset by a $1.9 million decrease in operating loss -- increase in operating loss in the Retail Flooring segment and a noncash goodwill impairment charge of approximately $4 million in our Steel Manufacturing segment. Excluding the impairment charge, consolidated operating income would have been approximately $2 million, essentially in line with the prior year period. Let's now discuss the financial results for the second quarter ended March 31, 2026.

Revenue decreased approximately $4.1 million or 3.8% to $102.9 million compared to revenue of $107 million in the prior year period. The decrease in revenue primarily reflects a decline of approximately $7.2 million in the Retail Flooring segment, partially offset by an increase of approximately $2.7 million in the Retail Entertainment segment. Retail Entertainment segment revenue increased approximately $2.7 million or 14.8% to $21.2 million compared to $18.5 million in the prior year period. The revenue growth was driven by strong consumer demand across all product lines. Retail Flooring segment revenue decreased approximately $7.2 million or 26.2% to $20.2 million compared to $27.4 million in the prior year period.

The decline was primarily driven by lower retail and contractor sales due to the continued headwinds in the new home construction and home refurbishment markets. Flooring Manufacturing revenue decreased approximately $1 million or 3.2% to $30.3 million compared to $31.3 million in the prior year period. The decline was primarily attributable to continued softness in the housing market. Net of intercompany eliminations, revenue decreased approximately $600,000 compared to the prior year period. Steel Manufacturing segment revenue increased approximately $1.1 million or 3.4% to $32.5 million compared to the prior year period.

The increase in revenue was primarily driven by higher sales volumes in the fabricated, hardened ware, tool and die businesses, partially offset by lower revenue in the metal forming, assembly and finishing solutions business. Net of intercompany eliminations, revenue increased approximately $900,000 compared to the prior year period. Gross profit decreased approximately $600,000 or 1.6% to $34.6 million compared to $35.1 million in the prior year period. The decrease in gross profit was driven primarily by the lower revenues in the Retail Flooring segment.

Gross margin increased 80 basis points to 33.6% compared to 32.8% in the prior year period, reflecting improved margins in the Steel Manufacturing, Flooring Manufacturing and Retail Flooring segments as well as a more favorable revenue mix as the higher-margin Retail Entertainment segment represented a larger share of consolidated revenue. General and administrative expense decreased 2.3% to approximately $27.7 million. The decline was driven primarily by targeted cost reduction initiatives in our Retail Flooring and our Flooring Manufacturing segments, including lower compensation expense and reduced professional fees, partially offset by increased compensation and occupancy costs in our Retail Entertainment segment.

Sales and marketing expense increased 3.4% to approximately $4.9 million, primarily reflecting higher sales and marketing activity in the Retail Flooring segment. Operating loss was $2 million compared to operating income of $2.1 million in the prior year period. The decrease was primarily driven by a noncash goodwill charge of $4 million in the Steel Manufacturing segment. Excluding the noncash goodwill impairment charge, consolidated operating income would have been $2 million compared to $2.1 million in the prior year period. Interest expense remained consistent at approximately $3.9 million as compared to the prior year period.

Net loss was approximately $2.4 million and diluted loss per share was $0.80 compared with net income of approximately $15.9 million and diluted EPS of $5.05 in the prior year period. The net loss in the quarter -- for the quarter ended March 31, 2026, includes the goodwill impairment charge as well as a $1.4 million gain related to employee retention credits in the Retail Flooring segment. The prior year period benefited from a $22.8 million gain related to the modification of the Flooring Liquidators' seller note. Adjusted EBITDA was $5.9 million, a decrease of approximately $600,000 or 8.8% compared to the prior year period. The decrease in adjusted EBITDA was primarily due to the lower gross profit.

Turning to liquidity. We ended the second quarter with total cash availability of approximately $39.8 million, consisting of cash on hand of $15.2 million and availability under our various lines of credit of $24.6 million. Our working capital was $74.4 million as of March 31, 2026, compared to $62.1 million as of September 30, 2025. As of March 31, total assets were $392.5 million and total stockholders' equity was $92.9 million. In conclusion, this quarter demonstrated both the resilience of our business model and the ongoing challenges in the Retail Flooring market. We are focused on reducing costs and improving operations across our businesses, and we are pleased with the operating improvements in our Retail Entertainment and Flooring Manufacturing segments.

We remain committed to building on that progress in the second half of the fiscal year while driving further efficiencies in our Retail Flooring business. We will now take questions from those of you on the conference call. Operator, please open the line for questions.

Operator: [Operator Instructions] First up, we have Joseph Kowalsky of JD Financial Planners.

Joseph Kowalsky: I hope there's not an echo here. I have to actually step out to a different room and have to leave the other phone. I'm just curious about the goodwill impairment. I generally understand accounting. But when it comes to things like goodwill, I always find it a little bit confusing. Could you go into just what exactly that refers to, please?

David Verret: Sure. So for accounting purposes, there's an annual goodwill test. Ours is in Q4. But if there's ever a triggering event that happens before that or outside of that testing period, then you're required to do kind of impromptu test. And essentially, because of some of the loss in production that we're seeing, really stemming from a decline in the market, namely, this has to do with -- in our steel industry with our stamping and metal forming business. And a lot of what they do relates to appliances and automobiles and things like that.

And then as we're seeing our customers pull back because sales are lagging on their end, we're coming in lower than what we expected to produce in the period because they're adjusting their volume as they go. So really, it's all stemming just from just continued uncertainty in the market. Interest rates...

Joseph Kowalsky: Is that a paper loss, but you still have the revenues coming in? Is it...

David Verret: That is correct. It is all just a paper loss. So it has no impact on EBITDA. There is no cash aspect related to it. It is just a charge that kind of wipes out the goodwill. In the old days, you used to amortize goodwill down over 15 years for book purposes, but GAAP had changed that where you do not amortize it. So the only way it ever comes off the book is if, I guess, you run to an impairment.

Joseph Kowalsky: I understand. Is the company -- has the company been considering acquiring anyone at this point? Or is the focus on paying down the debt from prior acquisitions and...

David Verret: Yes. I think our strategy has remained the same. I think if there are good opportunities that are coming up, we're absolutely interested in looking at those. And while there isn't anything out there, we are taking advantage of that time and paying down our debt. I believe our debt was paid down about $8 million from March of last year to the current year, so.

Joseph Kowalsky: And then the final question is, when you are looking for other potential acquisitions, and this is similar to a question I've asked in the past, but maybe I'm looking at it a little differently. Do you tend to look in the same areas that you currently have companies? Or are you looking more to diversify the portfolio into other areas? Or does that just depend on what comes up in the market?

David Verret: I think it depends on what comes up in the market. But I think what we've seen is as we begin to establish a presence in a certain market, i.e., like in the steel industry, we start to see more of opportunities just from our presence in that space. But we will diversify it. If there's something that kind of meets our criteria, then it doesn't matter the industry.

Joseph Kowalsky: And there is actually one final question. You've had a couple of missteps in the past. And I just wonder what you can say you've learned from those missteps as far as acquiring companies in the future. And then I will be quiet and listen.

David Verret: Yes. Well, that's kind of a tough one right there. I just think really it's all just around due diligence. And every time there may be a little nuance related to an acquisition that we will kind of pick up on and then try to fine-tune that kind of going forward. So I mean, after every acquisition, I believe we get better. We get a little bit more knowledgeable. And so all we do is kind of look at what has happened, do a postmortem type of assessment on acquisitions and find out what worked and what didn't work and just trying to build on the positives and mitigate those negative aspects.

Operator: [Operator Instructions] We have no further questions at this time. David, back over to you for any closing comments.

David Verret: Thank you. I want to thank everyone for joining our Q2 earnings call, and we look forward to seeing you next quarter. Thank you.

Operator: That concludes our meeting today. You may now disconnect.

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