Thank you, Amy. Good afternoon, everyone.

Welcome to Live Ventures third quarter fiscal year 2021 earnings call. I'm joined by CEO, Jon Isaac.

Note that some of the statements we are making today are forward-looking and are based on our best view of our businesses as we see them today. In the last few minutes, we filed our SEC Form 10-Q.

I direct you to our website www.liveventures.com or www.sec.gov for a copy of this quarter's SEC Form 10-Q filing for Live Ventures and other historical SEC form filings. Overall, the company delivered a strong third quarter and nine months performance ended June 30, 2021.

The revenue -- the company had revenues for the quarter of $69 million -- $69.1 million, compared to $42.5 million same period last fiscal year, a 63% increase. Revenue growth was driven by our Retail segment posting $21.7 million, a 52% gain for the same quarter last year due primarily to COVID and stimulus payments from the government in the second quarter of 2021.

The Flooring segment increased revenue by 23%, $34.2 million, as compared to $28.1 million and our Steel segment recorded $13.0 million in revenue for the quarter. The company had revenues for nine months of $202.4 million, up from $130.9 million or 55%.

Revenue growth was led by our Flooring segment of $97.4 million, compared to $75.7 million or 29% increase. Retail segment revenue grew 24% recording $68.1 million, as compared to $54.7 million.

The Steel segment recorded revenue of $36.5 million. Gross profit for the third quarter was $25.1 million, up from $16.7 million for the comparable period last year.

The gross margin percentage for the company was down slightly to 36.3% from 39.4% for the same comparable period. Retail gross profit margin dipped to 53.9% from 58.0% due to various sales mixed of revenue and labor pressures.

Vintage is in the process of opening four to five new locations, with leases signed on two of those locations. Flooring gross profit also recorded a small dip in gross profit percentage to 28.8% from 30.6%.

Again due to a mix of products sold carpet versus hardwood flooring and the tightening of the labor market. Due to mainly inflationary price changes, the Steel segment reported 26.2% gross margin percentage or $30 -- $3.4 million.

Gross profit for the nine months was $73.8 million, up from $51.1 million for the comparable period last year. Gross margin percentage for the company was again down slightly to 36.5% from 39.0% for the same period last year.

Retail gross profit margin dipped to 54.0% from 56.1% due to new versus used sales mix of revenue. Flooring gross profit for the nine months was slightly up in gross profit percentage to 28.9% from 28.1%.

The Steel segment for the nine months had gross margin of $8.6 million or 23.4% on revenue. General administrative expenses were slightly up at 20% of revenue for the third quarter, as compared to 19.4%.

Sales and marketing expense has improved to 4.4% of revenue versus 5.9% of revenue for the third quarter in the same period last year. General administrative expenses for the nine months were -- are down to 19.1% of revenue, as compared to the same period last year of 23.5% of revenue.

Sales and marketing expenses were also down to 4.2% of revenue for the nine months when compared to the same period last year of 6% of revenue. Operating income was 8.2% -- $8.2 million for the third quarter, an increase of $2.2 million or 37%.

Operating income for the nine months ended June 30, 2021, was $26.6 million, as compared to $12.5 million for the same period last year, an increase of 112%. Other income included a gain on Payroll Protection Program loan forgiveness of $4.8 million for the third quarter and $6.2 million for the nine months ended June 30 2021.

Gains on debtor settlements related to the ApplianceSmart Chapter 11 proceeding in the third quarter were $650,000 for the nine months and for the nine months $1.8 million. Net income for the third quarter was $9.9 million, as compared to $3.6 million for the third quarter last year, an increase of 177%.

Net income for the nine months was $24.1 million, up from $6.5 million in the same period and our prior year a 272% increase. Earnings per basic common share for the third quarter were $6.35, 191% increase over this quarter last year of $2.18.

Earnings per basic common share for the nine months were $15.41, as compared to $3.72 for the same period last fiscal year or an increase of 314%. We ended the quarter with cash of $10.6 million and cash availability under our various lines of credit of $37.7 million for a combined total of $48.3 million.

Cash generated by operations grew to $32.2 million for the nine months, up from $18.1 million for the same period last year. Through the nine months ended June 30, 2021, the company has continued to execute upon its strategy of both investing in the growth of its subsidiaries, as well as managing balance sheet risk and providing value to its shareholders through deleveraging.

Net payments on revolving related party and notes payable were $18.3 million for the nine months, as compared to $20.3 million for the same period last year and proceeds from the issuance of notes payable were $2.3 million and $9.8 million for the nine months this year and last year, respectively. Overall, the company reduced long-term debt by approximately $23.7 million year-to-date.

Working capital for the company at the end of the third quarter was $36.8 million and the assets grew slightly to $198.7 million, up from $197.3 million as of September 30, 2020. For the nine months, the company invested $8.5 million in property and equipment, as compared to $2.4 million for the same period last year.

During the three months ended June 30, 2021, the company also continued to execute on its acquisition-based growth strategy, making a minority interest investment in Salomon Whitney LLC, DBA SW financial a broker dealer of securities for $6 million during the third quarter and it’s currently pursuing FINRA approval to acquire the balance of the shares of the company. The company continues to invest in buying back its common stocks as opportunities in the market present themselves.

As of June 30, 2021, the company has repurchased 533,011 shares of common up from 499,805 shares as of our prior year end. Stockholders equity is up applicable to live shareholders to 68 million from 43.9 million as of our prior year end or 55%.

With that, Jon and I will now take questions from those of you on the conference call.

Let's take a call from Jeremy [ph].

I'm just curious about the acquisition of Salomon Whitney and I'm curious as to like, why you founded the Tyson acquisition, what metrics did you use? What's the most if there is one and just a little bit more about the acquisition there?

It's a variety of reasons. But at a high level, we found that this to be a good acquisition for -- this is Jon's speaking.

Good acquisition long-term for Live. We -- as we've stated in our press releases that we think that there's a potentially a roll up opportunity.

Right now we have a minority interest in Salomon until we obtain FINRA approval. But we've looked at all sorts of things as we do with other acquisitions, such as the management team, we have an excellent and amazing management team running this, Larry and Tom.

And the -- historical revenues being very stable and predictable, we think it's a good investment for Live for the long-term. Thank you for your question.

Let's move over to Joseph, please. Your questions?

Hi. Thank you very much.

Inflation has been discussed in numerous contexts and some people think it's transitory, some people think it's longer term. What is your outlook on it and how do you think it's going to affect the company?

Our feeling at the moment is inflation is not going to be transitory. It is going to be somewhat longer lasting, specifically in our Steel market.

We also feel that it will affect our Flooring segment and Retail. Retail probably not as much but definitely our Flooring segments and Steel segments will be impacted by it.

In what way, I mean, what -- how do you think it’s going to?

A lot of it is pass -- as well pass-through. I mean, there's -- on the Flooring side, for example, we are a very big buyer of resin.

Resin has moved and same with Steel. We are somewhat pleased with our acquisition of Precision Marshall, when we bought the company commodity prices shut up and we've made millions of dollars on paper, so to speak, just with the true value of Steel, of course, we book according the GAAP, the lower of cost or market.

And so we are forced to book it as -- at cost. But inflation helped us in that regard.

And a lot of it I don't -- I can't tell you what percentage of it is also passed on to the customer. We've had numerous price increases at both companies that I just mentioned Marquis and Precision.

Hopefully that answers your question.

I guess what I'm asking is, how do you see the response to the market to any price increases that you might have to have, is it elastic inelastic. That's really where I was going with it?

We feel it more elastic. We feel the market is already responded to the higher prices in both segments and we feel that if there's any more continued inflation, it'll also be met with elastic changes in our pricing structures.

Okay. Thank you both.

Let's take a question from Robert [ph].

Yes. I was just wondering if the SEC were to prevail in their complaint.

What would the impact be on the company?

Robert, that's a good question. We've been instructed by counsel that not to discuss the SEC matter.

I will repeat that the company categorically denies all the charges and we will vigorously defend ourselves. And I will say again, that we look forward to our day in court and our vindication and trial.

So that's the only way really I can -- that's the only thing I can comment regarding that question that involves -- that also applies to anyone else who has a question regarding the SEC. We will -- we categorically deny everything and we will be vigorously defending ourselves.

So I appreciate the question, though. Did you have others?

No. That's really the main one.

Everything else seems to be fine.

Thank you. Thank you.

Kumar [ph]? Let’s take a question from Kumar.

Hi. Hello.

Calling from the U.K. here.

So I guess we had a question about capital allocation. No, not the same question, a different question.

Can you hear me?

Yes. Yes.

We can hear you. What is your question?

Sorry. Can you repeat it?

Hello.

Yes. Yes.

Kumar? What is your question?

Okay. Yes.

So my question was around capital allocation. Yeah.

So my question is around capital allocation? How are you planning now going forward with share buybacks versus paying down some of the debt?

Do you have any plans, given where the share price is now? Do you want to take advantage of the current market or what are you guys thinking?

That's a good question. Share buybacks or payment reduction and outstanding debt really varies on many, many, certainly -- many circumstances.

It could be, an obvious one is, what is our share price? And number two is, should we preserve cash to be ready for another acquisition?

Or three, do we have any debt that we should pay off or do we have any debt that's outstanding that's coming due soon? So it's a very, very fluid answer.

It really depends on the day – week-by-week, month-by-month basis. I can tell you that since the beginning of our stock buyback program, the company required or repurchased 533,000 shares since the beginning, which was February of 2018.

So I think we've done well. The stock has spiked since then.

In the quarter that -- in the 10-Q that we just filed, you will notice that long-term debt decreased from $63 million to $45 million, which is a pretty big decrease since September 30th, since the beginning of our fiscal year. So this last couple of quarters, we've focused on repayment of debt and we've done very, extremely well, my opinion, operationally, we've generated $32 million in cash from operations.

But I can tell you one thing is that we are keeping a very close eye on the stock price and if we feel that it is the best use of money for shareholders, we will focus on that, if we feel that we should preserve that for an acquisition or repayment of debt or whatever else, it may be, it could be opening a new plant or investing in new equipment. This is what we do predominantly.

So think about those things. We appreciate your question.

Let's move over to Marcel [ph].

Yeah. The simple question here Jon for you.

Would you talk a little bit more about your acquisition criteria?

Acquisition criteria?

Criteria?

Yeah. What do you look for in acquisition?

We look for many things. If you look at our website, we have a criteria as to what we look for.

But generally speaking, we look for companies that are, number one, profitable. Number two, as important is an amazing or stellar management team and I think we have an amazing management team at every one of our parent subsidiaries.

So those are the two easy ones. The third one is stability in earnings, we don't like volatility.

We don't like a company that generated $5 million one year and $20 million in the next year and $1 million in the third year. We like stability and we like consistency.

We look for companies that I like to call no brainer type acquisitions, companies that we know for a fact or to a high degree that they will continue to generate the amount of cash flow that they had been generating over the years prior. So that's -- I don't have anything more scientific or specifically, we evaluate and look at dozens and dozens of companies every year.

So we are very, very selective. We only make one or two or maybe three acquisitions, a lot of them or even both-on acquisitions.

We make very few acquisitions a year and we're highly selective, because we can afford to be and we can wait for the right acquisition,

Sounds good. Sounds good.

Now just a quick follow up, how do you retain current management to work for Live?

Retain management.

Yeah. I mean, generally speaking, in any acquisition that we make, we like the founders or the sellers to remain on Board, because they are the -- they know the company more than anyone else.

And so we have -- we try to sign employment contracts. We have employment contracts with most of them and with we -- financially incentivize them to perform well.

This is -- at a high level, this is what we do. I mean, we let our subsidiaries, CEOs do what they believe is best, we give them autonomy.

And we think that they like that and we let them do what they do best and we do what we do best. So it's worked well over the years.

We appreciate your question. Let's move over to Jeremy.

He's been waiting for the question.

I am also curious as, you mentioned earlier the role of strategy and I would just like to hear more about what is a roll up strategy or some further details on that?

Without going into too much details on how finance works, but roll ups is basically acquiring similar companies and similar industries that potentially would be a fit. They would, quote-unquote, roll up to the existing, to whatever company that we have today.

So in your initial question about Salomon, companies that are similar to what Salomon does, perhaps, they are smaller, perhaps, the seller wants to retire, we can acquire them and potentially make them as part of Salomon, to use your example. But that's what roll up – that’s how roll ups…

Okay.

…work.

Okay.

Let's move over to…

Yeah.

… Joseph [ph], I think, he had another question. So, let’s…

Actually, I just -- I neglected to say, well done, which I wanted to say and thank you for the -- all of you for the hard work and the company. The question did come up to me, I was listening, which is, when you're talking about roll ups, are you also considering vertical integration?

Is that similar? Is that something you're not thinking about?

But the main reason I think that got back in the queue is really just to say, thank you and well done.

We always look at vertical integration opportunities and that would also work with our roll up strategy in terms of any of our existing portfolio holdings that we have right now? So, yes, we do.

Thank you.

We thank you for your positive. Thank you for your commendation, Joseph.

We're looking at any and all opportunities. We get presented with opportunities on a weekly basis and we evaluate what's the return and what's the risk involved in all this and versus what other opportunities we have going on elsewhere and we try to do whatever is going to maximize shareholder value.

Any other questions? Our next, Robert, go ahead.

Let's take a final question for Robert.

Yes. I was just wondering, is there a stock buyback authorization in place at the moment?

There is, yes. Back in May, on May 19th, we put out a -- publish the press release that the February 2018 stock buyback program was extended to June 1, 2024.

So we have another about three years left on it and we have under the -- it was originally a $10 million program. There's around $6.7 million left on that program.

I see. Yeah.

This is an observation. It would seem like a wonderful time to exercise that authorization.

Yeah, I know you not going to tell that…

Yeah. I can tell you that since the beginning we bought 533,000 shares that I believe at a single-digit, I think $7 or $8 or something like this.

We've done very, very well and as we continue to buy back shares or whenever we see opportunities in the market, we will pounce and we will report them to you in our disclosures.

Okay. Thank you.

Thank you. John [ph].

Thank you for taking my call. Just curious on what efforts you are doing to try to increase institutional ownership and get equity research?

Interesting. Right now our stock float is somewhat low in terms of the actual shares that are floating in the market space.

We do have plans to extend to increase institutional ownership. Recent events have somewhat for to those efforts, but we will continue and work on that as we go forward.

And we already do have…

Okay.

… institutional ownership, if you look at publicly available information, you'll see we have Renaissance Technologies that own 5.3% of our company, we have Vanguard, we have Geode Capital…

You have sold that out. You have sold that out.

I was just, I mean, you're -- you personally in a lot of the shares of the stock and so just curious on how you might be trying to think about broadening out the investor base, which is…

Yes.

I think helped.

Yes. We are getting there -- we're getting to pretty quickly to a certain size that we become more and more appealing to bigger institutions.

For a long time, we had a very small market cap and our financials were much smaller than where they were today. But we are getting there.

We're getting more awareness. I could see on the call, we have people that are potentially institutions that are dialing in and listening.

And so, we think in time it's going to be -- mix will change.

Thanks. Nice job on the quarter.

Thank you very much. With that, we will end the call.

The next time we will speak I believe will be -- the next filing will be the 10-K, which is at the end of the year. But we've changed the format this time around whereby the calls will be -- the next earnings call will be mid-February, which is when we announce or publish our first fiscal quarter.

And at that point, we will discuss the year -- the full year of 2021 and we'll discuss the first quarter. So we will see everybody on the next call, which is around mid-February.

Thank you everybody for joining us and we look forward to hearing from you again on the next call.