LIVE VENTURES Inc 10-Q for FY2021 Q1

LIVE VENTURES Inc (LIVE)

10-Q 2021-02-16 For: 2020-12-31

Added on April 06, 2026

About this 10-Q

LIVE VENTURES Inc filed this 10-Q on February 16, 2021, covering the quarter ended December 31, 2020 (FY2021 Q1).

Headline figures

Quarter ended December 31, 2020, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $62.45M; up 48.7% from $42M a year earlier
Net income: $5.41M; up 889.6% from net income of $547K a year earlier
Diluted EPS: $1.63; up 986.7% from $0.15 a year earlier

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Nevada	85-0206668
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

325 E. Warm Springs Road, Suite 102 Las Vegas, Nevada	89119
(Address of principal executive offices)	(Zip Code)

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.001 par value per share		LIVE		The NASDAQ Stock Market LLC (The NASDAQ Capital Market)

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☐

		Page
	PART I

	FINANCIAL INFORMATION

Item 1.	Financial Statements	3

	Condensed Consolidated Balance Sheets as of December 31, 2020 (Unaudited) and September 30, 2020	3

	Condensed Consolidated Statements of Income (Unaudited) for the Three Months December 31, 2020 and 2019	4

	Condensed Consolidated Statements of Cash Flows (Unaudited) for the Three Months Ended December 31, 2020 and 2019	5

	Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) for the Three Months Ended December 31, 2020 and 2019	6

	Notes to the Condensed Consolidated Financial Statements (Unaudited)	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	30

Item 4.	Controls and Procedures	30

	PART II

	OTHER INFORMATION	31

Item 1.	Legal Proceedings	31

Item 1A.	Risk Factors	31

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31

Item 3.	Defaults upon Senior Securities	32

Item 4.	Mine Safety Disclosures	32

Item 5.	Other Information	32

Item 6.	Exhibits	33

SIGNATURES		34

	December 31, 2020			September 30, 2020
	(Unaudited)
Assets
Cash	$	7,232		$	8,984
Trade receivables, net		17,564			20,121
Inventories, net		64,739			64,525
Prepaid expenses and other current assets		1,305			1,778
Debtor in possession assets		326			520
Total current assets		91,166			95,928
Property and equipment, net		31,127			30,376
Right of use asset - operating leases		28,971			30,894
Deposits and other assets		590			223
Deferred taxes		—			1,021
Intangible assets, net		956			1,063
Goodwill		37,754			37,754
Total assets	$	190,564		$	197,259
Liabilities and Stockholders' Equity
Liabilities:
Accounts payable	$	8,227		$	9,117
Accrued liabilities		12,896			14,822
Income taxes payable		806			736
Lease obligation short term - operating leases		6,958			7,176
Current portion of long-term debt		12,066			11,986
Current portion of long-term debt related parties		—			1,297
Debtor in possession liabilities		11,889			12,228
Total current liabilities		52,842			57,362
Long-term debt, net of current portion		57,961			63,390
Lease obligation long term - operating leases		26,503			28,101
Long-term debt related parties, net of current portion		4,000			4,000
Deferred tax liability		269			—
Other non-current obligations		404			734
Total liabilities		141,979			153,587
Commitments and contingencies
Stockholders' equity:
Series B convertible preferred stock, $0.001 par value, 1,000,000 shares authorized, 214,244 shares issued and outstanding at December 31, 2020 and September 30, 2020		—			—
Series E convertible preferred stock, $0.001 par value, 200,000 shares authorized, 47,840 shares issued and outstanding at December 31, 2020 and September 30, 2020, with a liquidation preference of $0.30 per share outstanding		—			—
Common stock, $0.001 par value, 10,000,000 shares authorized, 1,555,175 and 1,589,101 shares issued and outstanding at December 31, 2020 and September 30, 2020, respectively		2			2
Paid in capital		64,489			64,472
Treasury stock common 533,011 shares as of December 31, 2020 and 499,085 shares as of September 30, 2020		(4,481	)		(4,098	)
Treasury stock Series E preferred 50,000 shares as of December 31, 2020 and September 30, 2020		(7	)		(7	)
Accumulated deficit		(11,016	)		(16,429	)
Equity attributable to Live stockholders		48,987			43,940
Noncontrolling interest		(402	)		(268	)
Total stockholders' equity		48,585			43,672
Total liabilities and stockholders' equity	$	190,564		$	197,259

	Three Months Ended December 31,
	2020			2019
Revenues	$	62,454		$	42,001
Cost of revenues		40,185			25,375
Gross profit		22,269			16,626

Operating expenses:
General and administrative expenses		12,279			10,809
Sales and marketing expenses		2,699			2,330
Total operating expenses		14,978			13,139
Operating income		7,291			3,487
Other (expense) income:
Interest expense, net		(1,470	)		(1,357	)
Impairment charges		—			(1,207	)
Gain on disposal of fixed assets		129			—
Other income (expense)		779			(181	)
Total other (expense) income, net		(562	)		(2,745	)
Income before provision for income taxes		6,729			742
Provision for income taxes		1,450			195
Net income		5,279			547
Net loss attributable to non-controlling interest		134			—
Net income attributable to Live stockholders	$	5,413		$	547
Income per share:
Basic	$	3.45		$	0.30
Diluted	$	1.63		$	0.15
Weighted average common shares outstanding:
Basic		1,568,213			1,806,746
Diluted		3,318,728			3,540,953
Dividends declared - series B convertible preferred stock	$	—		$	—
Dividends declared - series E convertible preferred stock	$	—		$	—

	Series B Preferred Stock				Series E Preferred Stock				Common Stock							Series E Preferred Stock			Common Stock
	Shares		Amount		Shares		Amount		Shares			Amount		Paid-In Capital		Treasury Stock			Treasury Stock			Accumulated Deficit			Non-controlling interest			Total Equity
Balance, September 30, 2020		214,244	$	—		47,480	$	—		1,589,101		$	2	$	64,472	$	(7	)	$	(4,098	)	$	(16,429	)	$	(268	)	$	43,672
Stock based compensation		—		—		—		—		—			—		17		—			—			—			—			17
Purchase of common treasury stock		—		—		—		—		(33,926	)		—		—		—			(383	)		—			—			(383	)
Net income (loss)		—		—		—		—		—			—		—		—			—			5,413			(134	)		5,279
Balance, December 31, 2020		214,244	$	—		47,480	$	—		1,555,175		$	2	$	64,489	$	(7	)	$	(4,481	)	$	(11,016	)	$	(402	)	$	48,585

Twelve months ended December 31,
2021	$	8,731
2022		6,871
2023		4,879
2024		3,953
2025		2,946
Thereafter		13,660
Total		41,040
Less implied interest		(7,579	)
Present value of payments	$	33,461

	December 31, 2020			September 30, 2020
Trade receivables, current, net:
Accounts receivable, current	$	17,626		$	20,197
Less: Reserve for doubtful accounts		(62	)		(76	)
	$	17,564		$	20,121
Trade receivables , long term, net:
Accounts receivable, long term	$	—		$	196
Less: Reserve for doubtful accounts		—			(196	)
	$	—		$	—
Total trade receivables, net:
Gross trade receivables	$	17,626		$	20,393
Less: Reserve for doubtful accounts		(62	)		(272	)
	$	17,564		$	20,121
Inventory, net
Raw materials	$	12,930		$	13,175
Work in progress		11,031			11,747
Finished goods		26,474			25,009
Merchandise		16,891			17,729
		67,326			67,660
Less: Inventory reserves		(2,587	)		(3,135	)
	$	64,739		$	64,525
Property and equipment, net:
Building and improvements	$	11,405		$	9,908
Transportation equipment		122			480
Machinery and equipment		29,719			27,217
Furnishings, fixtures, office equipment and other		6,749			6,353
		47,994			43,958
Less: Accumulated depreciation		(16,868	)		(13,582	)
	$	31,127		$	30,376
Intangible assets, net:
Domain name and marketing related intangibles	$	90		$	90
Customer relationship intangibles		2,689			2,689
Purchased software		121			121
		2,900			2,900
Less: Accumulated amortization		(1,944	)		(1,837	)
	$	956		$	1,063
Accrued liabilities:
Accrued payroll	$	2,691		$	4,178
Accrued sales and use taxes		1,574			1,251
Accrued property and other tax		208			270
Accrued gift card and escheatment liability		1,683			1,534
Accrued interest payable		393			280
Accrued bank fees and overdrafts		514			2,631
Accrued professional fees		5,102			3,378
Customer deposits		35			169
Accrued expenses - other		695			1,131
	$	12,896		$	14,822

	December 31, 2020			September 30, 2020
Bank of America Revolver Loan	$	—		$	—
Encina Business Credit Revolver Loan		13,233			14,886
Texas Capital Bank Revolver Loan		5,534			7,115
Crossroads Financial Revolver Loan		828			883
Encina Business Credit Term Loan		1,576			1,663
Note Payable Comvest Term Loan		1,882			5,554
Note Payable to the Sellers of Vintage Stock		10,000			10,000
Note #1 Payable to Banc of America Leasing & Capital LLC		1,017			1,229
Note #3 Payable to Banc of America Leasing & Capital LLC		1,729			1,862
Note #4 Payable to Banc of America Leasing & Capital LLC		531			572
Note #5 Payable to Banc of America Leasing & Capital LLC		2,402			2,538
Note #6 Payable to Banc of America Leasing & Capital LLC		723			758
Note #7 Payable to Banc of America Leasing & Capital LLC		4,543			4,681
Note #8 Payable to Banc of America Leasing & Capital LLC		3,264			3,091
Note Payable to Extruded Fibers		1,600			2,900
Note Payable to JCM Holdings		1,959			—
Note Payable to the Sellers of Precision Marshall		2,500			2,500
Note Payable to Store Capital Acquisitions, LLC		9,235			9,243
Payroll Protection Program		6,150			6,151
JanOne Inc		—			—
Isaac Capital Fund		2,000			2,000
Spriggs Investments, LLC		2,000			2,000
Seller of Lonesome Oak		1,254			1,297
Note payable to individual, interest at 10-11% per annum, payable on a 90 day written notice, unsecured		707			707
Note payable to individuals, interest at 17% per annum, unsecured		130			—
Note payable to individual, noninterest bearing, monthly payments of $19 through March 2023, unsecured		726			810
Total debt		75,524			82,440
Less unamortized debt issuance costs		(1,497	)		(1,767	)
Net debt		74,027			80,673
Less current portion		(12,066	)		(13,283	)
Long-term portion	$	61,961		$	67,390

Twelve months ending December 31,
2021	$	12,066
2022		12,523
2023		33,544
2024		2,256
2025		3,353
Thereafter		11,782
Total	$	75,524

	During the three months ended December 31,
	2020			2019
Cumulative borrowing during the period	$	33,126		$	24,344
Cumulative repayment during the period		35,790			23,817
Maximum borrowed during the period		11,347			2,083
Weighted average interest for the period		0.00	%		3.66	%


	December 31, 2020			September 30, 2020
Total availability	$	24,924		$	21,732
Total outstanding		—			—

Series B Convertible Preferred
Outstanding and Exercisable
Number of Warrants		Exercise Price
	54,396	$	16.60
	17,857		16.80
	12,383		24.30
	33,393		28.50
	118,029

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life		Intrinsic Value
Outstanding at September 30, 2019		200,418		$	16.37		2.40	$	27
Forfeited		(81,250	)
Outstanding at September 30, 2020		119,168		$	19.07		2.71	$	—
Exercisable at September 30, 2020		95,001		$	15.50		1.55	$	—

Outstanding at December 31, 2020		119,168		$	19.07		2.45	$	87
Exercisable at December 31, 2020		103,168		$	15.94		1.60	$	87

Outstanding				Exercisable
Number of Options		Exercise Price ($)		Number of Options		Exercise Price ($)
	25,000		10.00		25,000		10.00
	16,668		10.86		16,668		10.86
	6,250		12.50		6,250		12.50
	6,250		15.00		6,250		15.00
	25,000		15.18		25,000		15.18
	8,000		23.41		8,000		23.41
	8,000		27.60		8,000		27.60
	8,000		31.74		8,000		31.74
	8,000		36.50		—		—
	8,000		41.98		—		—
	119,168				103,168

	Three Months Ended December 31,
	2020			2019
OPERATING ACTIVITIES:
Net income	$	5,279		$	547
Adjustments to reconcile net income to net cash provided by operating activities, net of acquisition:
Depreciation and amortization		1,714			1,085
Impairment charges		—			1,207
Gain on disposal of property and equipment		(129	)		47
Amortization of debt issuance cost		266			108
Stock based compensation expense		17			29
Warrant extension fair value adjustment		—			266
Change in deferred rent		—			370
Change in reserve for uncollectible accounts		658			415
Change in reserve for obsolete inventory		590			(170	)
Change in deferred income taxes		1,290			126
Change in other		(344	)		103
Changes in assets and liabilities:
Trade receivables		1,909			1,929
Inventories		(716	)		439
Income taxes receivable		70			74
Prepaid expenses and other current assets		478			290
Deposits and other assets		(366	)		9
Right-of-use assets		1,923			1,628
Accounts payable		(898	)		(2,182	)
Accrued liabilities		(2,256	)		(2,020	)
Lease liabilities		(1,817	)		(1,301	)
Net cash provided by operating activities		7,668			2,999

INVESTING ACTIVITIES:
Purchase of intangible assets		—			(4	)
Purchase of property and equipment		(3,258	)		(641	)
Net cash provided by (used in) investing activities		(3,258	)		(645	)

FINANCING ACTIVITIES:
Net borrowings (payments) under revolver loans		(3,289	)		(972	)
Proceeds from issuance of notes payable		2,130			—
Purchase of common treasury stock		(383	)		(343	)
Debtor in possession - cash		92			(173	)
Payments on long-term debt		(4,712	)		(2,042	)
Net cash used in financing activities		(6,162	)		(3,533	)

Non-vested Shares	Number of Shares			Average Grant-Date Fair Value
Non-vested at September 30, 2020		24,167		$	33.10
Vested		(8,167	)	$	14.15
Non-vested at December 31, 2020		16,000		$	39.24

Beginning balance, September 30, 2020	$	206
Warranties issued/accrued		—
Warranty settlements		(31	)
Ending balance, December 31, 2020	$	175

	Three Months Ended December 31, 2020
Revenues	$	296
Cost of revenues		165
Gross profit		131

Operating expenses:
General and administrative expenses		208
Total operating expenses		208
Operating income		(77	)
Other (expense) income:
Interest expense, net		(46	)
Accounts payable settlement		44
Other income (expense)		279
Total other (expense) income, net		277
Income before provision for income taxes		200

	Three Months Ended December 31, 2020						Three Months Ended December 31, 2019
				% of Total Revenue						% of Total Revenue
Statement of Income Data:
Revenue	$	62,454			100.0	%	$	42,001			100.0	%
Cost of Revenue		40,185			64.3	%		25,375			60.4	%
Gross Profit		22,269			35.7	%		16,626			39.6	%
General and Administrative Expense		12,279			19.7	%		10,809			25.7	%
Selling and Marketing Expense		2,699			4.3	%		2,330			5.5	%
Operating Income		7,291			11.7	%		3,487			8.3	%
Interest Expense, net		(1,470	)		(2.4	)%		(1,357	)		(3.2	)%
Impairment charges		—			0.0	%		(1,207	)		-2.9	%
Gain on disposal of fixed assets		129			0.3	%		—			0.0	%
Other Income (expense)		779			1.2	%		(181	)		(0.4	)%
Net Income before Income Taxes		6,729			10.8	%		742			1.8	%
Provision for Income Taxes		1,450			2.3	%		195			0.5	%
Net Income before Income Taxes		5,279			8.5	%		547			1.3	%
Net loss attributable to non-controlling interest		134			0.2	%		—			0.0	%
Net income attributable to Live stockholders	$	5,413			8.7	%	$	547			1.3	%

	Three Months Ended December 31, 2020					Three Months Ended December 31, 2019
	Net Revenue		% of Total Revenue			Net Revenue		% of Total Total Revenue
Revenue
Retail
Movies, Music, Games and Other	$	22,074		35.3	%	$	20,275		48.3	%
Appliances		296		0.5	%		1,213		2.9	%
Flooring Manufacturing		30,222		48.4	%		20,367		48.5	%
Steel Manufacturing		9,735		15.6	%		—		0.0	%
Corporate and other		127		0.2	%		146		0.3	%
Total Revenue	$	62,454		100.0	%	$	42,001		100.0	%

	Three Months Ended December 31, 2020					Three Months Ended December 31, 2019
	Gross Profit		Gross Profit % of Total Revenue			Gross Profit		Gross Profit % of Total Revenue
Gross Profit
Retail
Movies, Music, Games and Other	$	11,916		19.1	%	$	10,893		25.9	%
Appliances		131		0.2	%		227		0.5	%
Flooring Manufacturing		8,325		13.3	%		5,368		12.8	%
Steel Manufacturing		1,776		2.8	%		—		0.0	%
Corporate and other		121		0.2	%		138		0.3	%
Total Gross Profit	$	22,269		35.7	%	$	16,626		39.6	%

Period	Number of Shares		Average Purchase Price Paid		Number of Share Purchases as Part of a Publicly Announced Plan or Program		Maximum Amount that May be Purchased Under the Announced Plan or Program
October 2020		16,489	$	10.51		16,489	$	8,384,250
November 2020		11,029		11.27		11,029		8,257,891
December 2020		6,408		11.49		6,408		8,183,301
		33,926				33,926

	Live Ventures Incorporated


Dated: February 16, 2021	/s/ Jon Isaac
	President and Chief Executive Officer
	(Principal Executive Officer)


Dated: February 16, 2021	/s/ Virland A. Johnson
	Chief Financial Officer
	(Principal Financial Officer)