Live Ventures Inc.'s Q4 2025 Earnings Call: Contradictions Emerge on Active Management in Flooring, Debt Strategy, Tariffs, and Share Issuance

Date of Call: None provided

Financials Results

• Revenue: $444.9M, down $27.9M or 5.9% YOY (from $472.8M prior year)
• EPS: $4.93 per diluted share, compared to loss of $8.48 in prior year
• Gross Margin: 32.7%, up 210 basis points vs 30.6% prior year

Business Commentary:

• Operational Turnaround and Profitability Improvement:
• Live Ventures reported a $10.2 million, or 231.7%, increase in operating income compared to the prior year, excluding a goodwill impairment.

• This was driven by decisive actions such as hiring a new executive team at Flooring Liquidators, implementing strategic pricing initiatives, and targeted cost reduction measures.

• Revenue Decline and Segment Performance:

• Live Ventures' total revenue decreased by approximately $27.9 million, or 5.9%, to $444.9 million for the year ended September 30, 2025.
• 

• The decline was primarily due to a drop in the retail flooring, flooring manufacturing, and steel manufacturing segments, partially offset by an increase in the retail entertainment segment.

• Margins and Cost Reduction:

• Gross margin increased by 210 basis points to 32.7%, and general and administrative expenses decreased by approximately $4.3 million, or 3.6%, to $113.7 million.

• The improvement in margins was attributed to increased gross margins in several segments and targeted cost reduction measures.

• Debt Reduction and Liquidity:

• Total debt declined by approximately $33.5 million in Fiscal Year 2025, and interest expense decreased by approximately $1.3 million, or 7.7%, to $15.6 million.

• This was a result of a $19 million modification to the Flooring Liquidators seller note and strategic capital allocation to reduce debt levels.

• Share Repurchase and Capital Allocation:

• Live Ventures repurchased 59,704 shares of its common stock at an average price of $8.85 per share during Fiscal Year 2025.
• The company views share repurchases as a tool to create long-term value for shareholders and may use it as a form of consideration for future acquisitions.
  

  Sentiment Analysis:

  Overall Tone: Positive

  • Management described Fiscal 2025 as a "significant turnaround," citing a $10.2M (231.7%) increase in operating income excluding prior-year impairment, Adjusted EBITDA of $33.4M (up $8.9M or 36.3%), net income of $22.7M and diluted EPS of $4.93 (vs. loss prior year), debt reduced by ~$33.5M, and gross margin improvement to 32.7%.

Q&A:

• Question from Joseph Kowalsky (JD Financial Planners): With regard to the shares that are repurchased, have you ever reissued shares either in conjunction with buying a company or otherwise, or do you have some sort of a collar or price where you’d say this is a good price to buy shares or issue shares? Second, do you intend to pay down the debt entirely or keep some reasonable debt level long term? Third, have the interest rate reductions benefited the company in any way?
  Response: Shares may be issued for acquisitions and repurchases are executed flexibly versus valuation; the company will continue paying down debt until it reaches a moderate level and then re-evaluate capital allocation; recent rate cuts have reduced interest expense and should help housing demand, benefiting the business.

Contradiction Point 1

Active Management Role in Flooring

It involves the company's strategic approach to management involvement in its acquired businesses, which impacts operational efficiency and shareholder value.

Have you ever reissued shares strategically for acquisitions or other purposes? - Joseph Kowalsky (JD Financial Planners)

2025Q4: We prefer not to intervene, but we will when we have to. And in this case here, if you look at our historical financials, we have to intervene and make changes. So this is what you see today, and we're very pleased now with the changes. - [Jon Isaac](CEO)

Does Live Ventures' active involvement in the flooring sector signal a general strategy shift or is it specific to that area? - Joseph Kowalsky

2025Q3: Our strategy remains the same. Our intention is always to keep the management teams in place as long as they're delivering the operating performance that we expect. And if we're -- if we see that there's a gap, we'll step in and make sure that we put the right people, the right resources in order to generate the return for our shareholders. - [David Verret](CFO)

Contradiction Point 2

Debt Management Strategy

It addresses the company's approach to managing its debt levels, which directly impacts its financial health and ability to pursue acquisitions.

Will you fully pay down the debt? Is there a target debt level for long-term sustainability? - Joseph Kowalsky (JD Financial Planners)

2025Q4: The company plans to continue paying down debt. There may be a point where more moderate debt levels are maintained, allowing for evaluation of using funds for acquisitions or other returns for shareholders. - [Jon Isaac](CEO)

Could steel tariffs present an opportunity in steel manufacturing for your company? - Unknown Analyst

2025Q3: If we were maximizing our leverage, the last couple years, we've been utilizing that leverage. But I think now we're in a better position to start taking that down, get it to a more moderate level, and we'll do it at a pace that's justified. - [David Verret](CFO)

Contradiction Point 3

Tariffs and Supply Chain Diversification

It involves the company's approach to managing potential impacts from tariffs on its businesses, which can impact operations and costs.

Have interest rate cuts benefited the company? - Joseph Kowalsky (JD Financial Planners)

2025Q4: Interest rate reductions have benefited the company, and further benefits are expected as they trickle down to the housing market, stimulating sales and purchases. - [Jon Isaac](CEO)

Have you experienced any negative impacts from discussions, talks, or tariffs so far? - Joseph Kowalsky (JD Investments)

2025Q2: This is something that our businesses have been looking at here for the last several months, and as a part of just making sure that we're prepared for what's coming down, because there is just a lot of uncertainty in that area. - [David Verret](CFO)

Contradiction Point 4

Debt and Share Issuance Strategy

It involves differing perspectives on the company's strategy regarding debt repayment and share issuance, which affects financial management and capital allocation.

Will you pay down all the debt? Do you consider a reasonable long-term debt level? - Joseph Kowalsky (JD Financial Planners)

2025Q4: There may be a point where more moderate debt levels are maintained, allowing for evaluation of using funds for acquisitions or other returns for shareholders. - [Jon Isaac](CEO)

Could you share your thoughts on how tariffs might or might not affect your business? - Joseph Kowalsky (JD Investments)

2025Q2: As we look forward, we will continue to prioritize debt repayment. We expect to make the $5 million monthly payments as scheduled. - [David Verret](CFO)