LIVE VENTURES Inc Q2 FY2025 earnings call

• Continuing the trend from the first quarter, Retail, Retail-Entertainment and Steel Manufacturing segments delivered operational improvements with higher operating income and margins.
• Flooring segments faced challenges from softness in new home construction and home refurbishment markets, and economic uncertainty.
• Brought in new executive management team for Retail-Flooring to implement operational initiatives.
• Initiated targeted cost reduction initiatives in Retail-Flooring, resulting in savings.
• Successfully negotiated a $19 million reduction in Flooring Liquidators seller notes, leading to a $22.8 million gain.
• Acquisition of Central Steel contributed to improved margins in Steel Manufacturing.

During the second quarter, Retail-Entertainment segment revenue increased $1.6 million, or 9.6%, to approximately $18.5 million. Retail-Flooring segment revenue decreased $4.6 million, or 14.5%, to approximately $27.4 million. Flooring Manufacturing segment revenue decreased $4.4 million, or 12.8%, to approximately $29.8 million. Steel Manufacturing segment revenue decreased $4.2 million, or 11.7%, to approximately $31.3 million. Both Retail, Retail-Entertainment and Steel Manufacturing segments posted higher operating income and operating margins compared to the same period last year. The Flooring segment faced challenges from industry-specific headwinds.

No specific forward-looking guidance beyond continuing focus on operational excellence and monitoring business fundamentals.

• Flooring segment facing industry-specific headwinds like softness in new home construction and home refurbishment markets.
• Uncertainty surrounding the economic outlook.
• Uncertainty regarding tariffs and the need to diversify vendors.

Q: Was the modification of the note something that was anticipated in the original agreement? Or is this something completely different?

A: This was not something that was in the original agreement. It was just renegotiated. It's a win for the company, cutting the note from around $35-37 million down to $15 million.

Q: Any idea about how tariffs might or might not affect any of your businesses?

A: Businesses have been looking at tariffs, diversifying overseas vendors and setting up domestic relationships. To date, no negative impacts, but monitoring and having alternatives to react to tariffs as they come up.