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LAS VEGAS, NV - Live Ventures Incorporated (NASDAQ:LIVE), a diversified holding company with annual revenues of $466.75 million, has entered into a revised agreement significantly reducing its outstanding debt related to the acquisition of several companies, including Flooring Liquidators, as per a recent 8-K filing with the Securities and Exchange Commission (SEC). According to InvestingPro data, the company currently maintains a current ratio of 1.42, indicating adequate liquidity to meet short-term obligations.
According to the filing dated February 25, 2025, Live Ventures signed a Memorandum of Understanding (MOU) which adjusted the terms of its acquisition of Flooring Liquidators and related entities. The modification reduced the outstanding principal amount of the associated note from $34 million to $15 million, effectively altering the initial purchase price. This debt restructuring comes at a crucial time, as InvestingPro analysis indicates the company’s total debt to capital ratio stands at 0.91, with a debt-to-equity ratio of 3.44.
However, the MOU stipulates that if Live Ventures defaults on the revised note or fails to make required payments, the principal reduction can be revoked, potentially increasing the debt by $19 million.
Additionally, the employment agreement of Stephen J. Kellogg, a key figure in the acquired companies, was amended. Kellogg will now serve as Founder and Vice President in a part-time capacity with an annual salary of $300,000. He has also stepped down from other roles within Flooring Liquidators and its subsidiaries.
Kellogg’s potential earnings under the new terms include a performance bonus of $5 million if the Buyer’s adjusted EBITDA reaches a minimum of $10 million in any three fiscal years from 2025 to 2030, contingent on his continued employment.
The employment agreement is set to expire on February 25, 2028, but can be extended by Kellogg for up to two years if the note remains unpaid. Moreover, Flooring Liquidators now has limited grounds for terminating Kellogg’s employment, restricted to instances of ’Cause’.
This restructuring comes as Live Ventures aims to optimize its financial position following the acquisition. The company’s approach reflects a strategic shift in managing its debt obligations and executive compensation.
Investors and market watchers are taking note of these developments, as they could influence Live Ventures’ financial stability and operational efficiency. The information in this article is based on the latest SEC filing by Live Ventures.
In other recent news, Live Ventures Inc. reported its fourth-quarter 2024 earnings, revealing a significant improvement in earnings per share (EPS) alongside a decrease in revenue compared to the previous year. The company achieved a diluted EPS of $0.16, which was a turnaround from a previous loss of $0.22, but fell short of the forecasted $1.44. Revenue for the quarter was $111.5 million, exceeding expectations of $104 million, despite representing a 5.2% year-over-year decline. The company also reported a gross margin increase to 31.7% and a net income of $500,000, improving from a net loss of $700,000 in the prior year.
Live Ventures’ diversified business model, which includes retail entertainment and steel manufacturing, contributed to its stable performance despite challenges in the flooring industry. The company settled significant liabilities, generating $3.5 million in gains. David Barrett, the CFO, highlighted operational improvements in the retail entertainment and steel manufacturing segments. Analysts noted concerns over the significant EPS miss, which raises questions about future earnings potential. The company is exploring acquisition opportunities to drive future growth, although no specific plans were discussed.
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