Business Context and Reporting Period
Company: Live Ventures Inc (LIVE)
Filing Type: Form 10-Q (Quarterly Report)
Period Ended: June 30, 2026
Business Overview: Live Ventures is a diversified holding company operating in four reportable segments: Retail-Entertainment (Vintage Stock), Retail-Flooring (Flooring Liquidators), Flooring Manufacturing (Marquis), and Steel Manufacturing (Precision Marshall, Kinetic, PMW, Central Steel). The company focuses on value-oriented acquisitions of domestic middle-market companies.
Key Financial Metrics
| Metric | Three Months Ended June 30, 2026 | Nine Months Ended June 30, 2026 |
|---|---|---|
| Revenue | $108.9 million | $320.4 million |
| Gross Profit | $37.1 million (34.1% margin) | $107.0 million (33.4% margin) |
| Operating Income | $5.3 million | $6.7 million |
| Net Income (Loss) | $(1.1) million | $(3.6) million |
| Adjusted EBITDA | $9.3 million | $23.0 million |
| Cash and Equivalents | $10.9 million (as of June 30, 2026) | |
| Total Debt (Current + Long-Term) | ~$91.1 million (excluding related party notes) | |
| Working Capital | $45.5 million |
Material Changes vs. Prior Period
- Revenue Decline: Revenue decreased 3.2% year-over-year for both the quarter and nine-month periods. The decline was primarily driven by a significant drop in the Retail-Flooring segment (down 29.4% for the quarter), attributed to headwinds in new-home construction and home-refurbishment markets. This was partially offset by growth in Retail-Entertainment (+12.7%) and Steel Manufacturing (+7.3%).
- Net Loss: The company reported a net loss of $1.1 million for the quarter and $3.6 million for the nine months, compared to net income of $5.4 million and $21.7 million in the prior-year periods. The shift to a loss was driven by lower revenue, higher interest expenses, and a non-cash goodwill impairment charge.
- Goodwill Impairment: A $4.0 million goodwill impairment charge was recorded in the Steel Manufacturing segment (specifically PMW) during the nine months ended June 30, 2026, due to sustained operating losses and performance below projections.
- Segment Performance:
- Retail-Flooring: Reported an operating loss of $3.2 million for the quarter, worsening from a $0.7 million loss in the prior year.
- Steel Manufacturing: Operating income increased to $3.9 million for the quarter, driven by improved gross margins and cost reductions, despite the impairment charge impacting the nine-month view.
Guidance, Risks, and Contingencies
- Debt Default and Forbearance (PMW): Precision Metal Works (PMW), a subsidiary in the Steel Manufacturing segment, was in default of its Fixed Charge Coverage Ratio covenant under its credit facility with Fifth Third Bank as of June 30, 2026. A forbearance agreement was in place through June 15, 2026, and subsequently extended via a Sixth Amendment on July 19, 2026, through August 19, 2026. The company is evaluating refinancing options, but there is no assurance of success. Management states this default does not trigger cross-defaults and is not expected to be material to the consolidated company, though it poses a risk to PMW's operations.
- Liquidity: Management believes cash on hand ($10.9 million) and available borrowing capacity (~$28.9 million) are sufficient to fund operations and debt service for the next 12 months.
- Legal Proceedings: The company is a defendant in an SEC civil enforcement action regarding financial reporting and disclosures from 2016-2018. Cross-motions for summary judgment were denied in February 2026, and a trial date has not been set. A related class action lawsuit (Sieggreen) is ongoing with discovery in progress.
- Related Party Transactions: Significant debt obligations exist with related parties, including Isaac Capital Group (controlled by the CEO) and sellers of acquired businesses. These notes carry interest rates up to 12% and have various maturity dates extending to 2030.
Investor Verification Checklist
- PMW Debt Resolution: Verify the status of the PMW forbearance agreement and the likelihood of refinancing the ~$10.6 million Fifth Third Bank debt by the August 19, 2026 deadline.
- Retail-Flooring Recovery: Assess the sustainability of the Retail-Flooring segment's revenue decline and the effectiveness of cost-reduction initiatives in mitigating operating losses.
- Related Party Debt Terms: Review the terms of the $22.4 million in related party notes payable, specifically the 12% interest rates and conversion features (e.g., ICG Revolver), to understand potential dilution or cash flow impacts.
- Legal Exposure: Monitor developments in the SEC enforcement action and the Sieggreen class action for potential financial penalties or injunctions.
- Goodwill Valuation: Evaluate the remaining goodwill balance ($57.1 million) and the assumptions used in the impairment test for PMW to gauge future impairment risks.