Live Ventures Inc. (LIVE) - Q1 2026 10-Q Summary
Business Context and Reporting Period
This filing covers the quarterly period ended December 31, 2025 (Q1 Fiscal 2026). Live Ventures Inc. is a diversified holding company operating through five segments: Retail-Entertainment (Vintage Stock), Retail-Flooring (Flooring Liquidators), Flooring Manufacturing (Marquis), Steel Manufacturing (Precision Marshall, Kinetic, PMW, Central Steel), and Corporate/Other. The company is classified as a non-accelerated filer and a smaller reporting company.
Key Financial Metrics
| Metric | Q1 2026 (Dec 31, 2025) | Q1 2025 (Dec 31, 2024) |
|---|---|---|
| Revenue | $108.5 million | $111.5 million |
| Gross Profit | $35.4 million | $35.4 million |
| Gross Margin | 32.6% | 31.7% |
| Operating Income | $3.5 million | $0.8 million |
| Net (Loss) Income | ($0.1) million | $0.5 million |
| Adjusted EBITDA | $7.8 million | $5.7 million |
| Cash and Equivalents | $15.1 million | $7.4 million |
| Working Capital | $69.1 million | $62.1 million |
| Total Debt (Current + Long-Term) | $76.8 million | $78.2 million |
Material Changes vs. Prior Period
- Revenue Decline: Total revenue decreased 2.7% year-over-year, driven by a 20.2% drop in the Retail-Flooring segment (due to store closures and housing market softness) and a 4.3% decline in Steel Manufacturing. These were partially offset by growth in Retail-Entertainment (+11.0%) and Flooring Manufacturing (+1.1% net of eliminations).
- Margin Expansion: Despite lower revenue, gross margin improved by 90 basis points to 32.6%, attributed to better product mix in Retail-Entertainment and Flooring Manufacturing, and operational efficiencies in Steel Manufacturing.
- Operating Efficiency: Operating income increased significantly to $3.5 million from $0.8 million, aided by a 7.4% reduction in General and Administrative expenses and a 10.4% drop in Sales and Marketing expenses.
- Net Loss: The company reported a net loss of $64,000 compared to net income of $492,000 in the prior year, primarily due to the absence of one-time gains (gain on extinguishment of debt and earnout settlement) recorded in Q1 2024.
- Liquidity Improvement: Cash on hand increased by $6.3 million to $15.1 million, supported by strong operating cash flow of $9.8 million.
Guidance, Outlook, and Risks
- Liquidity Outlook: Management believes current cash balances, operating cash flow, and approximately $23.6 million in available revolver capacity are sufficient to fund operations and debt service for the next 12 months.
- Debt Refinancing: Significant refinancing activity occurred in late Q1. Precision Marshall refinanced Fifth Third Bank loans with a new $47.0 million facility from Legacy Corporate Lending. Flooring Liquidators extended its Eclipse Business Capital facility maturity to February 2026.
- Legal Proceedings: The company is involved in ongoing litigation, including an SEC civil complaint regarding financial reporting from 2016-2018 and a related shareholder class action (Sieggreen). The SEC case is currently on hold pending summary judgment motions. A wage and hour class action against a subsidiary (Elite Builders) remains in discovery.
- Related Party Debt: The company holds significant related-party debt, including a $12.0 million revolver with Isaac Capital Group (controlled by the CEO) and seller notes totaling approximately $18.2 million. A specific seller note for Flooring Liquidators includes a provision where the principal could revert from $15.0 million to $34.0 million in the event of default.
Investor Verification Checklist
- Debt Covenants: Verify compliance with covenants on the new Legacy Corporate Lending facility and the Eclipse Business Capital facility, particularly given the recent refinancing and extension.
- Related Party Note Terms: Review the specific default triggers for the Flooring Liquidators seller note that could increase the principal obligation by $19.0 million.
- Legal Exposure: Monitor the status of the SEC summary judgment motions and the potential financial impact of the Sieggreen class action settlement or judgment.
- Segment Performance: Assess the sustainability of the Retail-Flooring segment's recovery given the reported store closures and housing market headwinds.
- Inventory Valuation: Review the $5.8 million inventory reserve and the rationale for the "aged inventory" mix mentioned in the Retail-Flooring segment analysis.