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What changed in LIVE VENTURES Inc's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of LIVE VENTURES Inc's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+211 added−193 removedSource: 10-K (2024-12-19) vs 10-K (2023-12-22)

Top changes in LIVE VENTURES Inc's 2024 10-K

211 paragraphs added · 193 removed · 166 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

61 edited+19 added−6 removed45 unchanged
Biggest changeProducts Flooring Liquidators is the go-to destination for a comprehensive selection of flooring, cabinets, and countertops. Its extensive range includes top-quality imported options in hardwood, laminate, and vinyl categories, along with strong partnerships with renowned brands like Shaw/Coretec, Mohawk, MSI, Mannington, and more.
Biggest changeIts extensive range includes top-quality imported options in hardwood, laminate, and vinyl categories, along with strong partnerships with renowned brands like Shaw/Coretec, Mohawk, MSI, Mannington, and more. With esteemed manufacturers such as Lions Flooring, Gaia, Phenix, Compass Hardwood, Johnson Hardwood, Republic, Eternity, and Koville on display, Flooring Liquidators provides its customers with access to the highest quality products available.
Competition and Competitive Advantage Flooring Liquidators’ primary competitors are big box brands like Home Depot and Lowes, as well as other prominent players such as Floor and Decor, LL Flooring, Empire, and regional flooring companies. 4 Table of Contents Flooring Liquidators’ competitive advantages are grounded in its commitment to providing the lowest prices on flooring, countertops, and a wide range of other products.
Competition and Competitive Advantage Flooring Liquidators’ primary competitors are big box brands like Home Depot and Lowes, as well as other prominent players such as Floor and Decor, Empire, and regional flooring companies. 4 Table of Contents Flooring Liquidators’ competitive advantages are grounded in its commitment to providing the lowest prices on flooring, countertops, and a wide range of other products.
ITEM 1. Business Our Company The “Company,” “Live Ventures,”, “Live”, “we,” “our,” and “us” are used interchangeably to refer to Live Ventures Incorporated and its subsidiaries, as appropriate in the context. Live Ventures Incorporated (Nasdaq: LIVE) is a diversified holding company with a strategic focus on value-oriented acquisitions of domestic middle-market companies.
ITEM 1. Business Our Company The “Company,” “Live Ventures”, “Live”, “we,” “our,” and “us” are used interchangeably to refer to Live Ventures Incorporated and its subsidiaries, as appropriate in the context. Live Ventures Incorporated (Nasdaq: LIVE) is a diversified holding company with a strategic focus on value-oriented acquisitions of domestic middle-market companies.
For over 75 years, Precision Marshall has served steel distributors through quick and accurate service. Precision Marshall has led the industry with availability and value-added processing that saves distributors time and processing costs. Founded in 1948, Precision Marshall “The Deluxe Company” has built a reputation of high integrity, speed of service and doing things the “Deluxe Way”.
For over 75 years, Precision Marshall has served steel distributors through quick and accurate service. Precision Marshall has led the industry with availability and value-added processing that saves distributors time and processing costs. Founded in 1948, Precision Marshall “The Deluxe Company” has built a reputation of integrity, speed of service and doing things the “Deluxe Way”.
It also competes with sellers of pre-owned and value video game products. Additionally, it competes with other forms of entertainment activities, including casual and mobile games, movies, television, theater, sporting events and family entertainment centers. Retail-Flooring Segment Flooring Liquidators, Inc. The Company acquired Flooring Liquidators, Inc. (“Flooring Liquidators“) in January 2023.
It also competes with sellers of pre-owned and value video game products. Additionally, it competes with other forms of entertainment activities, including casual and mobile games, movies, television, theater, sporting events and family entertainment centers. Retail-Flooring Segment Flooring Liquidators, Inc. The Company acquired Flooring Liquidators, Inc. (“Flooring Liquidators") in January 2023.
The cost savings that it offers not only benefit its customers but also generates organic word-of-mouth marketing, amplifying its brand presence. To further expand its reach, it has expanded its social media footprint, utilizing platforms such as Facebook, Instagram, LinkedIn, and other channels. Additionally, its targeted paid search advertising leverages co-op funds from manufacturers, creating impactful co-branded campaigns.
The cost savings that it offers not only benefits its customers but also generates organic word-of-mouth marketing, amplifying its brand presence. To further expand its reach, it has expanded its social media footprint, utilizing platforms such as Facebook, Instagram, LinkedIn, and other channels. Additionally, its targeted paid search advertising leverages co-op funds from manufacturers, creating impactful co-branded campaigns.
Marketing Marquis has a team of approximately 75 full-time salespeople, who deepen customer relationships throughout its markets. 7 Table of Contents Steel-Manufacturing Segment Precision Industries, Inc. The Company acquired Precision Industries, Inc. (“Precision Marshall”) in July 2020. Precision Marshall is the North American leader in providing and manufacturing pre-finished de-carb-free tool and die steel.
Marketing Marquis has a team of approximately 70 full-time salespeople, who deepen customer relationships throughout its markets. 7 Table of Contents Steel-Manufacturing Segment Precision Industries, Inc. The Company acquired Precision Industries, Inc. (“Precision Marshall”) in July 2020. Precision Marshall is the North American leader in providing and manufacturing pre-finished de-carb-free tool and die steel.
Any information contained on our website or any other websites referenced in this Form 10-K is not incorporated by reference into this Form 10-K and should not be considered a part of this Form 10-K. Products and Services Retail-Entertainment Segment Vintage Stock, Inc. Vintage Stock, Inc. ("Vintage Stock") is an award-winning, specialty entertainment retailer with 70 storefronts across the U.S.
Any information contained on our website or any other websites referenced in this Form 10-K is not incorporated by reference into this Form 10-K and should not be considered a part of this Form 10-K. Products and Services Retail-Entertainment Segment Vintage Stock, Inc. Vintage Stock, Inc. ("Vintage Stock") is an award-winning, specialty entertainment retailer with 73 storefronts across the U.S.
It competes with mass merchants and regional chains; computer product and consumer electronics stores; other video game and PC software specialty stores; toy retail chains; direct sales by software publishers; and online retailers and game rental companies. However, it has established a presence in areas where it believe that it can take a greater portion of market share.
It competes with mass merchants and regional chains; computer product and consumer electronics stores; other video game and PC software specialty stores; toy retail chains; direct sales by software publishers; and online retailers and game rental companies. However, it has established a presence in areas where it believes that it can take a greater portion of market share.
Live Ventures was founded in 1968 and later refocused under our Chief Executive Officer and strategic investor, Jon Isaac. The Company’s current portfolio of diversified operating subsidiaries includes companies in the textile, flooring, tools, steel, entertainment, and financial services industries. Live's operating businesses are managed on a decentralized basis.
Live Ventures was founded in 1968 and later refocused under our Chief Executive Officer and strategic investor, Jon Isaac. The Company’s current portfolio of diversified operating subsidiaries includes companies in the textile, flooring, tools, steel, and entertainment industries. Live's operating businesses are managed on a decentralized basis.
These flat bars are finished to a 32 RMS finish within an .001 tolerance on the surface and are produced and available off the shelf in 18, 24, 36, and 72 inch and one-meter lengths. Custom, special tolerance items are made to order and typically shipped in three calendar days or less.
These flat bars are finished to a 32 RMS finish within a tolerance of +/- .001 on the surface and are produced and available off the shelf in 18, 24, 36, and 72 inch and one-meter lengths. Custom, special tolerance items are made to order and typically shipped in three calendar days or less.
Deluxe Alloy Plate The De-Carb Free Alloy Plate Industry through distribution provides steel for molds and tooling across virtually all manufacturing segments with a dominance in the automobile industry. The alloy plate trade named “Marshalloy” comes in Heat Treat, Annealed and the superior proprietary mold quality which provides tighter chemistry and higher machine and polish ability.
Deluxe Alloy Plate The De-Carb Free Alloy Plate Industry provides steel for molds and tooling across virtually all manufacturing segments with a dominance in the automobile industry. The alloy plate trade named “Marshalloy” comes in Heat Treat, Annealed and the superior proprietary mold quality which provides tighter chemistry and higher machine and polish ability.
A quality workforce of approximately 54 employees was transitioned as part of the purchase, and that workforce is critical to maintaining the high level of quality. 5 Table of Contents At September 30, 2023, Marquis operated its business through ten brands, each specializing in a distinct area of the business.
A quality workforce of approximately 54 employees was transitioned as part of the purchase, and that workforce is critical to maintaining the high level of quality. 5 Table of Contents At September 30, 2024, Marquis operated its business through ten brands, each specializing in a distinct area of the business.
Vintage Stock sells its new and used movies, video games, music, and toys through http://www.vintagestock.com. Vintage Stock’s “Cooler Than Cash” program is its customer-reward program. When Vintage Stock customers bring in items to sell, they have two options: (i) sell their pre-owned products for cash or (ii) opt for store credit and receive a 50% bonus.
Vintage Stock sells its new and used movies, video games, music, and toys through its website at www.vintagestock.com. Vintage Stock’s “Cooler Than Cash” program is its customer-reward program. When Vintage Stock customers bring in items to sell, they have two options: (i) sell their pre-owned products for cash or (ii) opt for store credit and receive a 50% bonus.
With its integrated buy-sell-trade business model, Vintage Stock buys, sells and trades new and pre-owned movies, music, video games, electronics and collectibles through various brand names including, Vintage Stock, Movie Trading Company, EntertainMart and V-Stock strategically positioned across Arkansas, Colorado, Idaho, Illinois, Kansas, Missouri, Nebraska, New Mexico, Oklahoma, Texas, and Utah.
With its integrated buy-sell-trade business model, Vintage Stock buys, sells and trades new and pre-owned movies, music, video games, electronics, and collectibles through various brand names including, Vintage Stock, Movie Trading Company, EntertainMart, and V-Stock strategically positioned across Alabama, Arkansas, Colorado, Idaho, Illinois, Kansas, Missouri, Montana, Nebraska, New Mexico, Oklahoma, Tennessee, Texas, and Utah.
The Kinetic sales team consists of direct salespeople comprised of both employee Territory Sales Managers and outside sales representatives. This team of salespeople calls on customers and prospects located throughout the US. Kinetic also has a seasoned six-person inside sales team which is specialized in the market, and offers tremendous technological knowledge and insight to its customers.
The Kinetic sales team consists of direct salespeople comprised of both employee Territory Sales Managers and outside sales representatives. This team of salespeople calls on customers and prospects located throughout the U.S. Kinetic also has a seasoned six-person inside sales team which is specialized in the market, and offers tremendous technological knowledge and insight to its customers.
The 2022 Essential Facts About the Computer and Video Game Industry Report (the “Video Game Industry Report”) underscores how video games have evolved into a mass medium, noting that over 215 million adults in the United States play video games, and 69% of Americans have at least one gamer in their household.
The 2022 Essential Facts About the Computer and Video Game Industry Report (the “Video Game Industry Report”) underscores how video games have evolved into a mass medium, noting that over 215 million adults in the United States play video games, 69% of Americans have at least one gamer in their household, and two in three Americans play video games at least weekly.
Drill Rod Nine grades with approximately 1,000 diameter/grade combinations of polished round bars in lengths of 36, 72, and 144 inches are available for immediate shipment from the national distribution center. 8 Table of Contents The Kinetic Co., Inc.
Drill Rod Nine grades with approximately 1,000 diameter/grade combinations of polished round bars in lengths of 36, 72, and 144 inches are available for immediate shipment from the national distribution center. The Kinetic Co., Inc.
Founded in 1947, Louisville, Kentucky-based PMW manufactures and supplies highly engineered parts and components across 400,000 square feet of manufacturing space in Kentucky. It offers world-class metal forming, assembly, and finishing solutions in the automotive and appliance industries. PMW ships in excess of 35 million stampings and assemblies per year. Products Precision Industries, Inc.
Founded in 1947 in Louisville, Kentucky, PMW manufactures and supplies highly engineered parts and components across 400,000 square feet of manufacturing space in Kentucky. It offers world-class metal forming, assembly, and finishing solutions in the automotive and appliance industries. PMW ships in excess of 35 million stampings and assemblies per year.
Automotive original equipment manufacturers usually source directly with the steel mills and pass the pricing down to the tier one and on to PMW. Large appliance manufacturers direct PMW where to purchase the steel from for each specific part. PMW does have freedom to select suppliers for some items such as paint or cardboard.
Automotive original equipment manufacturers usually source directly with the steel mills and pass the pricing down to the tier one and on to PMW. Large 11 Table of Contents appliance manufacturers direct PMW where to purchase the steel from for each specific part. PMW does have freedom to select suppliers for some items such as paint or cardboard.
Quotations are managed by the Cost Estimator through the tooling engineering group. The VP of Engineering and the engineering staff are integral to the quotation process with direct contact with the customers. Customers are throughout North America and Mexico with a heavy concentration of less than 400 miles of our plant.
Quotations are managed by the Cost Estimator through the tooling engineering group. The VP of Engineering and the engineering staff are integral to the quotation process with direct contact with the customers. Customers are located throughout North America and Mexico with a heavy concentration of customers located less than 400 miles from its plant.
Products range from flat sheet metal blanks, appliance interior and show components such as fan shrouds, hinge assemblies, and refrigerator mullions. Automotive customers purchase structural components such as transmission support cross members, frame brackets, hinge components. PMW has hundreds of unique tools producing hundreds of different parts. Industry and Market Precision Industries, Inc.
Products range from flat sheet metal blanks, appliance interior and show components such as fan shrouds, hinge assemblies, and refrigerator mullions. Automotive customers purchase structural components such as transmission support cross members, frame brackets, hinge components. PMW has hundreds of unique tools producing hundreds of different parts.
The carpet and rugs industry has two primary markets, residential and commercial, with the residential market making up the largest portion of the industry. The industry has two primary sub-markets, replacement and new construction, with the replacement market making up the larger portion of the sub-markets. Approximately 56.7% of industry shipments are made in response to residential replacement demand.
The carpet and rugs industry has two primary markets, residential and commercial, with the residential market making up the largest portion of the industry. The industry has two primary sub-markets, replacement and new construction, with the replacement market making up the larger portion of the sub-markets. Approximately 52.0% of industry shipments are made in response to residential replacement demand.
PMW has full engineering, tooling and project management support for all phases of the development and manufacturing process. The market is large and highly specialized since no two stampings are the same. PMW works with large customers in the appliance and tier one automotive industry. Relationships are long and highly integrated. Market Precision Industries, Inc.
PMW has full engineering, tooling, and project management support for all phases of the development 9 Table of Contents and manufacturing process. The market is large and highly specialized since no two stampings are the same. PMW works with large customers in the appliance and tier one automotive industry. Relationships are long and highly integrated.
Industry and Market Marquis is an integrated carpet manufacturer and distributor of carpet and hard-surface flooring within a fragmented industry composed of a wide variety of companies from small privately held firms to large multinationals. In 2022, the U.S. floor covering industry had an estimated $37.6 billion in sales.
Industry and Market Marquis is an integrated carpet manufacturer and distributor of carpet and hard-surface flooring within a fragmented industry composed of a wide variety of companies from small privately held firms to large multinationals. In 2023, the U.S. floor covering industry had an estimated $34.1 billion in sales.
In addition, the level of sales in the floor covering industry is influenced by consumer confidence, spending for durable goods, the condition of residential and commercial construction, and overall strength of the economy. 6 Table of Contents Market Carpet and Rugs The carpet and rug industry had shipments of approximately $12.7 billion in 2022.
In addition, the level of sales in the floor covering industry is influenced by consumer confidence, spending for durable goods, the condition of residential and commercial construction, and overall strength of the economy. 6 Table of Contents Market Carpet and Rugs The carpet and rug industry had shipments of approximately $11.4 billion in 2023.
Hard Surfaces Hard flooring surfaces, such as ceramic, luxury vinyl tile, hardwood, stone, and laminate, had shipments of approximately $24.9 billion in 2022. As with carpet and rugs, the market is split between residential and commercial and replacement and new construction, with residential replacement being the largest segment of the market.
Hard Surfaces Hard flooring surfaces, such as ceramic, luxury vinyl tile, hardwood, stone, and laminate, had shipments of approximately $22.7 billion in 2023. As with carpet and rugs, the market is split between residential and commercial and replacement and new construction, with residential replacement being the largest segment of the market.
Flooring Liquidators is a leading retailer and installer of flooring, carpeting, cabinets, and countertops to consumers, builders, and contractors in California, operating 19 warehouse-format stores and design centers. Over the years, the company has established a strong reputation for innovation, efficiency and service in the home renovation and improvement market.
Flooring Liquidators is a leading retailer and installer of flooring, carpeting, cabinets, and countertops to consumers, builders, and contractors in California, operating 25 warehouse-format stores and design centers operated in Arkansas, California, Minnesota, Missouri, and Nevada. Over the years, the company has established a strong reputation for innovation, efficiency and service in the home renovation and improvement market.
Marquis’s product offering has remained on the cutting edge of this rapidly evolving segment of the flooring industry and will continue to be an innovator in new technology and design. Marquis Hard Surface currently offers dry-back, click-and-lock luxury vinyl plank and hundreds of rolls of vinyl flooring.
Marquis’s product offering has remained on the cutting edge of this rapidly evolving segment of the flooring industry and will continue to be an innovator in new technology and design. Marquis Hard Surface currently offers engineered hardwood, dry-back, loose lay vinyl plank, click-and-lock rigid core plank and tile, and rolls of sheet vinyl flooring.
Metal stampings are generally heavy and large so shipping long distances or from overseas is not generally cost effective. Many of our customers have the ability to produce metal stampings however it is not the focus of their business.
Competition is based on expertise, price, quality, location, and customer service. Metal stampings are generally heavy and large so shipping long distances or from overseas is not generally cost effective. Many of our customers have the ability to produce metal stampings however it is not the focus of their business.
Precision Marshall has developed a strength by securing a dedicated supply chain across several of its product offerings. Precision Marshall works with almost all the highly specialized providers and has more than adequate sourcing options. The Kinetic Co., Inc. There are a limited number of specialized tool steel suppliers in the world, and many are located in Europe.
There are a limited number of suppliers in the world market across each product category. Precision Marshall has developed a strength by securing a dedicated supply chain across several of its product offerings. Precision Marshall works with most of the highly specialized providers and has more than adequate sourcing options. The Kinetic Co., Inc.
The largest industry served by Kinetic is the tissue industry with in excess of 400 customers. Kinetic also serves 200 steel mills or steel service centers across the US and Canada.
The largest industry served by Kinetic is the tissue industry with in excess of 350 customers. Kinetic also serves 130 steel mills or steel service centers across the U.S. and Canada.
Kinetic has established long-term relationships with all of its foreign and domestic tool steel suppliers. Long lead times have become an added challenge in recent years, however, Kinetic does significant advanced planning to assure the timely receipt and stocking of inventory levels. Precision Metal Works, Inc. Metal suppliers are generally contracted by our customers as part of larger purchase.
Long lead times have become an added challenge in recent years, however, Kinetic does significant advanced planning to assure the timely receipt and stocking of inventory levels. Precision Metal Works, Inc. Metal suppliers are generally contracted by our customers as part of larger purchases.
Precision Marshall is a fully-integrated manufacturer of the above-mentioned steel products. Precision Marshall provides steel service centers and distributors with immediate availability, allowing customers to have access to all sizes and grades without having to make an inventory investment. Precision Marshall only sells to distributors and steel service centers and has a strict policy of not selling to end-users.
Industry and Market Precision Industries, Inc. Precision Marshall is a fully integrated manufacturer of the above-mentioned steel products. Precision Marshall provides steel service centers and distributors with immediate availability, allowing customers to have access to all sizes and grades without having to make an inventory investment.
The primary process involves converting metal sheet into complex shapes using custom tooling specifically designed for those components. In addition, PMW has a powder coating process that applies a thin coat of paint and bakes the powder to form an aesthetically pleasing surface that is visible to the end user and also prevents corrosion on the surface of the metal.
In addition, PMW has a powder coating process that applies a thin coat of paint and bakes the powder to form an aesthetically pleasing surface that is visible to the end user and also prevents corrosion on the surface of the metal.
Since commencing operations in 1995, Marquis has built a strong reputation for outstanding value, styling, and customer service. Our innovation has yielded products and technologies that differentiate its brands in the flooring marketplace. Marquis’ state-of-the-art operations enable high quality products, unique customization, and short lead-times.
Our innovation has yielded products and technologies that differentiate its brands in the flooring marketplace. Marquis’ state-of-the-art operations enable high quality products, unique customization, and short lead-times.
Deluxe Tool Steel Plate The De-Carb Free Tool Steel Plate Market in North America supplies pre-heat-treated plates that are commonly used to make tools, dies and industrial knives used in a variety of industries with a dominance in the automotive industry. 9 Table of Contents Precision Ground Flat Stock The Precision Ground Flat Stock market provides refined tool steel, alloy and stainless flat bars that are used to make tools, dies, holder blocks and industrial knives across all North American Manufacturing categories.
Deluxe Tool Steel Plate The De-Carb Free Tool Steel Plate Market in North America supplies pre-heat-treated plates that are commonly used to make tools, dies, and industrial knives used in a variety of industries with a dominance in the automotive industry.
There are several long-standing competitors in each product segment. Precision Marshall competes through speed of service by having high inventory availability and an easy to purchase customer experience. The Kinetic Co., Inc. A number of companies compete with Kinetic in the tissue/paper industry.
The tool and die steel market in North America is highly competitive and requires a significant investment in inventory, manufacturing, and service infrastructure. There are several long-standing competitors in each product segment. Precision Marshall competes through speed of service by having high inventory availability and an easy to purchase customer experience. The Kinetic Co., Inc.
The primary competitors are International Knife and Saw (“IKS”), located in South Carolina, Everwear, located in Missouri, and TKM, located in Germany. Kinetic produces a wider range of products than its competitors in the tissue/paper industry. Competitors in the steel industry include IKS, American Shear Knife (“ASKO”), which manufactures in Mexico, or overseas, and Modern Machine located in Indiana.
A number of companies compete with Kinetic in the tissue/paper industry. The primary competitors are International Knife and Saw (“IKS”), located in South Carolina, Everwear, located in Missouri, and TKM, located in Germany. Kinetic produces a wider range of products than its competitors in the tissue/paper industry.
Deluxe Alloy Plate Precision Marshall provides three alloy plate products in sizes from 1/4 inch to 8 inches in thickness. These decarb-free heat treated, and annealed plates are square and within a .020 tolerance on the surface allowing distributors to save cutting time, kerf loss and machining time.
These decarb-free heat treated and annealed plates are square and within a .020 tolerance on the surface allowing distributors to save cutting time, kerf loss, and machining time.
Intellectual Property Our success will depend significantly on our ability to develop and maintain the proprietary aspects of our technology and operate without infringing upon the intellectual property rights of third parties.
Intellectual Property Our success will depend significantly on our ability to develop and maintain the proprietary aspects of our technology and operate without infringing upon the intellectual property rights of third parties. We currently rely primarily on a combination of copyright, trade secret and trademark laws, confidentiality procedures, contractual provisions, and similar measures to protect our intellectual property.
Precision Marshall has more than 18 people selling, marketing, and distributing its products. The Kinetic Co., Inc. Kinetic distributes all of its products from its Greendale, Wisconsin headquarters facility. Kinetic carries some finished goods inventory from its headquarters or at a warehouse facility in Milwaukee, Wisconsin. The majority of Kinetic products are manufactured in Greendale and shipped upon completion.
Kinetic distributes its products from its Greendale, Wisconsin headquarters facility, and its Milwaukee, Wisconsin manufacturing facility, as well as its recently-acquired Midwest Grinding location in Milwaukee, Wisconsin. Kinetic carries some finished goods inventory from its headquarters or at a warehouse facility in Milwaukee, Wisconsin. The majority of Kinetic products are manufactured in Greendale and shipped upon completion.
Kinetic manufactures more than 90 types of knives and numerous associated parts with modifications and customizations available to each. Kinetic employs approximately 100 non-union employees. Precision Metal Works, Inc. On July 20, 2023, the Company acquired Precision Metal Works, Inc. (“PMW”).
Kinetic manufactures more than 90 types of knives and numerous associated parts with modifications and customizations available to each. Kinetic employs approximately 100 non-union employees. On June 10, 2024, Kinetic acquired certain assets and assumed certain liabilities of Midwest Grinding.
Deluxe Tool Steel Plate Offering six different grades from 1/4 inch to 8 inches in thickness commonly used in the tooling industry, these square decarb-free, pre-heat-treated plates are finished to .020 tolerance, to provide distributors with the perfect plate to service their customers.
Deluxe Tool Steel Plate Offering six different grades from 1/4 inch to 8 inches in thickness commonly used in the tooling industry, these square decarb-free, pre-heat-treated plates are finished to .020 tolerance, to provide distributors with the perfect plate to service their customers. 8 Table of Contents Precision Ground Flat Stock Over 4,000 size/grade combinations across ten grades of tool steel, alloy and stainless steel are available every day and shipped the same day out of Precision Marshall’s national distribution center in Bolingbrook, Illinois over 99% of the time.
Small machine shops are competitors to the Kinetic contract segment. Precision Metal Works, Inc. The industry is made up of many small and midsized stampers that service appliance, automotive, aerospace, medical, and other markets. Competition is based on expertise, price, quality, location and customer service.
Competitors in the steel industry include IKS, American Shear Knife (“ASKO”), which manufactures in Mexico, or overseas, and Modern Machine located in Indiana. Small machine shops are competitors to the Kinetic contract segment. Precision Metal Works, Inc. The industry is made up of many small and midsized stampers that service appliance, automotive, aerospace, medical, and other markets.
Offering tight tolerances and a line ground finish, this product saves tool and die makers time and money by the off-the-shelf product being closer to the finished tool, die or industrial knife. Drill Rod Drill Rod are tight tolerance pre-hardened round bars below two inches in diameter used in punching presses and screw applications. The Kinetic Co., Inc.
Offering tight tolerances and a line ground finish, this product saves tool and die makers time and money by the off-the-shelf product being closer to the finished tool, die, or industrial knife.
Kinetic has a customer base consisting of approximately 800 customers that is diversified, broad and stable. Ninety-five percent of Kinetic's revenues are from sales to companies located in the U.S. Precision Metal Works, Inc. PMW is part of the metal stamping industry that supplies complex components to the appliance and transportation industries.
Much of the work done by Kinetic is specialized and its customers demand high quality and reliable products to keep production lines running. Kinetic has a customer base consisting of approximately 700 customers that is diversified, broad and stable. Ninety-five percent of Kinetic's revenues are from sales to companies located in the U.S. Precision Metal Works, Inc.
Homeowners have the flexibility to choose installation options, whether it's through the Flooring Liquidators team, their preferred installer, or a DIY approach. Its e-commerce platform offers cash and carry for most products, with exceptions made for customers within a specific radius of its retail stores.
Its e-commerce platform offers cash and carry for most products, with exceptions made for customers within a specific radius of its retail stores.
Notwithstanding the use of this open-source code, we do not believe our usage requires public disclosure of our own source code nor do we believe the use of open-source code will have a material impact on our business. We register some of our product names, slogans and logos in the United States.
Our proprietary software is not significantly dependent on any third-party software, although our software does utilize open-source code. Notwithstanding the use of this open-source 12 Table of Contents code, we do not believe our usage requires public disclosure of our own source code nor do we believe the use of open-source code will have a material impact on our business.
Kinetic has a strong reputation and is a respected brand in the industries it serves. Kinetic differentiates itself from its competition by being a one-stop-shop for grinding, machining, and heat treating. Much of the work done by Kinetic is specialized and its customers demand high quality and reliable products to keep production lines running.
The majority of Kinetic's revenues are derived from replacement knives or products specifically designed and manufactured to replace wear parts on cutting equipment. Kinetic has a strong reputation and is a respected brand in the industries it serves. Kinetic differentiates itself from its competition by being a one-stop-shop for grinding, machining, and heat treating.
We generally own (or have permissive licenses for) the intellectual property provided by third-party contractors, even though we hire such contractors to help develop our proprietary software and to provide various fulfillment services. Our proprietary software is not significantly dependent on any third-party software, although our software does utilize open-source code.
We estimate that reliance upon trade secrets and unpatented proprietary know-how will continue to be our principal method of protecting our trade secrets and other proprietary technologies. We generally own (or have permissive licenses for) the intellectual property provided by third-party contractors, even though we hire such contractors to help develop our proprietary software and to provide various fulfillment services.
Sales, Marketing, and Distribution Precision Industries, Inc. Precision Marshall has two distribution centers that hosts its products. The national distribution center is strategically located and can service the tooling hub of the Midwest. The Company manufactures all products and holds the inventory for the Deluxe Alloy and Deluxe Tool Steel plate products at its corporate headquarters in Washington, Pennsylvania.
Central Steel's integrated enterprise resource planning system facilitates efficient purchasing, production planning, and inventory management. Sales, Marketing, and Distribution Precision Industries, Inc. Precision Marshall has two distribution centers that hosts its products. The national distribution center is strategically located and can service the tooling hub of the Midwest.
(“Marquis”) is a leading carpet manufacturer and a manufacturer of innovative yarn products, as well as a reseller of hard surface flooring products. Over the last decade, Marquis has been an innovator and leader in the value-oriented polyester carpet sector. Marquis focus on the residential, niche commercial, and hospitality end-markets and serve thousands of customers.
Over the last decade, Marquis has been an innovator and leader in the value-oriented polyester carpet sector. Marquis focuses on the residential, niche commercial, and hospitality end-markets and serves thousands of customers. Since commencing operations in 1995, Marquis has built a strong reputation for outstanding value, styling, and customer service.
In addition, we require our employees, contractors and many of those with whom we have business relationships to sign non-disclosure and confidentiality agreements. Neither intellectual property laws, contractual arrangements, nor any of the other steps we have taken to protect our intellectual property, can ensure that third parties will not exploit our technologies or develop similar technologies.
Neither intellectual property laws, contractual arrangements, nor any of the other steps we have taken to protect our intellectual property, can ensure that third parties will not exploit our technologies or develop similar technologies. Our proprietary publishing system provides an advanced set of integrated tools for design, service, and modifications to support our mobile web app services.
Human Capital Resources As of September 30, 2023, we had approximately 1,751 employees, of whom approximately 1,424 were full-time employees, in the United States. We employ both unionized and non-unionized employees and believe we have a good relationship with all employees. We recognize that attracting, motivating and retaining talent at all levels is vital to continuing our growth and success.
We employ both unionized and non-unionized employees and believe we have a good relationship with all employees. We recognize that attracting, motivating, and retaining talent at all levels is vital to continuing our growth and success. We offer industry-competitive wages and benefits; we are committed to maintaining a workplace environment that promotes employee productivity and satisfaction.
Adhering to a lean marketing approach, Flooring Liquidators carefully allocates its advertising budget, ensuring every dollar spent yields a return on investment. Continual monitoring allows it to maintain tight control over campaigns, avoiding any significant missteps that may hinder performance. Flooring-Manufacturing Segment Marquis Industries, Inc. Marquis Industries, Inc.
Adhering to a lean marketing approach, Flooring Liquidators carefully allocates its advertising budget, ensuring every dollar spent yields a return on investment. Flooring-Manufacturing Segment Marquis Industries, Inc. Marquis Industries, Inc. (“Marquis”) is a leading carpet manufacturer and a manufacturer of innovative yarn products, as well as a reseller of hard surface flooring products.
The tool steel market is a niche market within the steel industry. The Kinetic Co., Inc. Kinetic primarily serves three industries or market segments, which include the tissue industry, steel industry, and contract work. The majority of Kinetic's revenues are derived from replacement knives or products specifically designed and manufactured to replace wear parts on cutting equipment.
Precision Marshall only sells to distributors and steel service centers and has a strict policy of not selling to end-users. The tool steel market is a niche market within the steel industry. The Kinetic Co., Inc. Kinetic primarily serves three industries or market segments, which include the tissue industry, steel industry, and contract work.
Stainless Steel Exhaust PMW produces housing and heat shield components for tier one heavy truck exhaust systems. These are heavy metal stampings made from stainless steel. Competition Precision Industries, Inc. The tool and die steel market in North America is highly competitive and requires a significant investment in inventory, manufacturing, and service infrastructure.
Stainless Steel Exhaust PMW produces housing and heat shield components for tier one heavy truck exhaust systems. These are heavy metal stampings made from stainless steel. 10 Table of Contents Central Steel Fabricators Central Steel diverse product line encompasses the entire infrastructure spectrum, providing us with a competitive edge in cost and logistics.
Our proprietary publishing system provides an advanced set of integrated tools for design, service, and modifications to support our mobile web app services. Our mobile web app builder software enables easy and efficient design, end user modification and administration, and includes a variety of other tools accessible by our team members.
Our mobile web app builder software enables easy and efficient design, end user modification and administration, and includes a variety of other tools accessible by our team members. Human Capital Resources As of September 30, 2024, we had approximately 1,770 employees, of whom approximately 1,429 were full-time employees, in the United States.
These are some of our 10 Table of Contents many competitors; Challenge Manufacturing, Choice Fabricators Inc., Stone City Products Inc., Big Rapids Products., UltraTech. Raw Material and Suppliers Precision Industries, Inc. There are a limited number of suppliers in the world market across each product category.
These are some of our many competitors; Challenge Manufacturing, Choice Fabricators Inc., Stone City Products Inc., Big Rapids Products., UltraTech. Central Steel Fabricators Its primary competitors in the telecom space are Newton Instruments and Moreng Telecom, both of which boast long histories in the industry.
Flooring Liquidators serves retail and builder customers through two businesses: retail customers through its Flooring Liquidators retail stores, and builder and contractor customers through Elite Builder Services, Inc. On June 2, 2023, Flooring Liquidators acquired certain fixed assets and other intangible assets of Cal Coast Carpets, Inc. (“Cal Coast”), and its Shareholders.
Flooring Liquidators serves retail and builder customers through two businesses: retail customers through its Flooring Liquidators retail stores, and builder and contractor customers through Elite Builder Services, Inc. Products Flooring Liquidators is the go-to destination for a comprehensive selection of flooring, cabinets, and countertops.
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Today, two in three Americans play video games at least weekly, and nine in 10 players say they spend as much or more time playing now as they did at the pandemic’s peak. According to the Video Game Industry Report, the average video game player is 33 years old.
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According to ESA , the average video game player is 36 years old.
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Ages 18-34 make up 36% in the age breakdown and 76% of all players are over 18. 65% of American adults play video games, an increase from 45% in 2015. 97% of American players view games as beneficial in some ways and 89% view games as useful for building skills. 88% of American players agree video games can bring different types of people together and 90% of American players agree video games can create accessible experiences for people with different abilities.
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Ages 18 and under make up 24% in the age breakdown and 46% of all players are 18-50 years old. 61% of American adults report playing a video game for at least one hour every week. 68% of American players view games as a way to pass time or relax and 67% of American players say it is simply to have fun.
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With esteemed manufacturers such as Lions Flooring, Gaia, Phenix, Compass Hardwood, Johnson Hardwood, Republic, Eternity, and Koville on display, Flooring Liquidators provides its customers with access to the finest products available. Market Flooring Liquidators serves a diverse customer base consisting of homeowners, property managers, builders, and contractors.
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Gen Alpha and Gen Z players report that console play is their primary platform at 58%, followed by PC at 54%. 78% of all American households report playing at least one gaming device in the past 12 months. The video game industry reported $57 billion in consumer spending in [year].
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Precision Ground Flat Stock Over 4,000 size/grade combinations across ten grades of tool steel, alloy and stainless steel are available every day and shipped the same day out of Precision Marshall national distribution center in Bolingbrook, Illinois over 99% of the time.
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Market Flooring Liquidators serves a diverse customer base consisting of homeowners, property managers, builders, and contractors. Homeowners have the flexibility to choose installation options, whether it's through the Flooring Liquidators team, their preferred installer, or a DIY approach.
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We currently rely primarily on a combination of copyright, trade secret and trademark laws, confidentiality procedures, contractual provisions, and similar measures to protect our intellectual property. 11 Table of Contents We estimate that reliance upon trade secrets and unpatented proprietary know-how will continue to be our principal method of protecting our trade secrets and other proprietary technologies.
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Founded in 1961 in Milwaukee, Wisconsin, Midwest Grinding is a grinding house dedicated to precision Blanchard and specialty surface grinding of small to extra-large capacity. Precision Metal Works, Inc. On July 20, 2023, the Company acquired Precision Metal Works, Inc. (“PMW”).
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We offer industry-competitive wages and benefits; we are committed to maintaining a workplace environment that promotes employee productivity and satisfaction.
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Central Steel Fabricators On May 17, 2024, Precision Marshall acquired Central Steel Fabricators (“Central Steel”). Founded in 1969 in Chicago, Illinois, Central Steel is a manufacturer of specialized fabricated metal products. Central Steel offers over 2,300 unique products to more than 500 customers.
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Its extensive product line, primarily for data centers, includes cable racks, auxiliary framing, hardware, insulation products, and network bays. Products Precision Industries, Inc. Deluxe Alloy Plate Precision Marshall provides three alloy plate products in sizes from 1/4 inch to 8 inches in thickness.
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Central Steel Fabricators Central Steel specializes in manufacturing and distributing a range of infrastructure and cable management solutions tailored for the communication industry. Its product offerings include equipment frames and cabinets to mount electronics such as routers and switches; cable racking to manage low voltage and power cables; grounding and isolation products; and all the related installation hardware.
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PMW is part of the metal stamping industry that supplies complex components to the appliance and transportation industries. The primary process involves converting metal sheet into complex shapes using custom tooling specifically designed for those components.
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Central Steel Fabricators Central Steel serves carriers involved in legacy wireline, wireless, and VoIP communications. The convergence of data technologies has opened new avenues for its products, prompting it to adapt its offerings for the evolving data and IP markets. Its flexibility positions it well as its customers transition to these innovative technologies. Market Precision Industries, Inc.
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Precision Ground Flat Stock The Precision Ground Flat Stock market provides refined tool steel, alloy, and stainless flat bars that are used to make tools, dies, holder blocks, and industrial knives across all North American Manufacturing categories.
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Drill Rod Drill Rod are tight tolerance pre-hardened round bars below two inches in diameter used in the manufacturing of dies, punching presses, drills, pins, screw applications, and other machine parts that require high strength and durability. Drill rod is commonly used in the construction, machinery, and manufacturing industries. The Kinetic Co., Inc.
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It maintains a robust inventory of stock products, enabling quick fulfillment of customer orders. Additionally, its ability to develop and manufacture site-specific solutions helps it meet the needs of clients who are upgrading their facilities to align with current technologies. Competition Precision Industries, Inc.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAlso, projections of any evaluations of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. 14 Table of Contents If we fail to remediate a material weakness, or are otherwise unable to maintain effective internal control over financial reporting, management could be required to expend significant resources and we could fail to meet our public reporting requirements on a timely basis, and be subject to fines, penalties, investigations or judgements, all of which could negatively affect investor confidence and adversely impact our stock price.
Biggest changeIf we fail to remediate a material weakness, or are otherwise unable to maintain effective internal control over financial reporting, management could be required to expend significant resources and we could fail to meet our public reporting requirements on a timely basis, and be subject to fines, penalties, investigations or judgements, all of which could negatively affect investor confidence and adversely impact our stock price. 15 Table of Contents Our failure to comply with various applicable federal and state employment and labor laws and regulations could have a material, adverse impact on our business.
The acquisition of a company or business is accompanied by a number of risks, including: • failure of due diligence during the acquisition process; • adverse short-term effects on reported operating results; • the potential loss of key partners or key personnel in connection with, or as the result of, a transaction; • the impairment of relationships with clients of the acquired business, or our own customers, partners or employees, as a result of any integration of operations or the expansion of our offerings; 17 Table of Contents • the recording of goodwill and intangible assets that will be subject to impairment testing on a regular basis and potential periodic impairment charges; • the diversion of management’s time and resources; • the risk of entering into markets or producing products where we have limited or no experience, including the integration or removal of the acquired or disposed products with or from our existing products; and • the inability properly to implement or remediate internal controls, procedures and policies appropriate for a public company at businesses that prior to our acquisition were not subject to federal securities laws and may have lacked appropriate controls, procedures and policies.
The acquisition of a company or business is accompanied by a number of risks, including: • failure of due diligence during the acquisition process; • adverse short-term effects on reported operating results; • the potential loss of key partners or key personnel in connection with, or as the result of, a transaction; • the impairment of relationships with clients of the acquired business, or our own customers, partners or employees, as a result of any integration of operations or the expansion of our offerings; • the recording of goodwill and intangible assets that will be subject to impairment testing on a regular basis and potential periodic impairment charges; • the diversion of management’s time and resources; 18 Table of Contents • the risk of entering into markets or producing products where we have limited or no experience, including the integration or removal of the acquired or disposed products with or from our existing products; and • the inability properly to implement or remediate internal controls, procedures and policies appropriate for a public company at businesses that prior to our acquisition were not subject to federal securities laws and may have lacked appropriate controls, procedures, and policies.
The SEC seeks permanent injunctions against the Company Defendants, permanent officer-and-director bars, disgorgement of profits, and civil penalties. The foregoing is only a general summary of the SEC Complaint, which may be accessed on the SEC’s website at https://www.sec.gov/litigation/litreleases/2021/lr25155.htm. On October 1, 2021, the Company Defendants and third-party defendants moved to dismiss the SEC complaint.
The SEC seeks permanent injunctions against the Company Defendants, permanent officer-and-director bars, disgorgement of profits, and civil penalties. The foregoing is only a general summary of the SEC Complaint, which may be accessed on the SEC’s website at www.sec.gov/litigation/litreleases/2021/lr25155.htm. On October 1, 2021, the Company Defendants and third-party defendants moved to dismiss the SEC complaint.
These factors include, but are not limited to: • the timing and allocations of new product releases; • the timing of new store openings or closings; 19 Table of Contents • shifts in the timing or content or certain promotions or service offerings; • the effect of changes in tax rates in the jurisdictions in which we are operating; • acquisition costs and the integration of companies we acquire or invest in; and • the costs associated with the exit of unprofitable markets or stores.
These factors include, but are not limited to: • the timing and allocations of new product releases; • the timing of new store openings or closings; • shifts in the timing or content or certain promotions or service offerings; • the effect of changes in tax rates in the jurisdictions in which we are operating; 20 Table of Contents • acquisition costs and the integration of companies we acquire or invest in; and • the costs associated with the exit of unprofitable markets or stores.
There 16 Table of Contents can be no assurance that payment of such additional amounts upon final adjudication of any disputes will not have a material impact on our results of operations and financial position. We also need to comply with new, evolving or revised tax laws and regulations.
There can be no assurance that payment of such additional amounts upon final adjudication of any disputes will not have a material impact on our results of operations and financial position. 17 Table of Contents We also need to comply with new, evolving or revised tax laws and regulations.
Failure to comply with the requirements may result in administrative, civil, and criminal penalties, revocation of permits to conduct business or construct certain facilities, substantial fines or sanctions, enforcement actions (including orders limiting our operations or requiring corrective measures), natural resource damages claims, cleanup and closure costs, and third-party claims for property damage and personal injury as a result of violations of, or liabilities under, environmental laws, regulations, codes and common law.
Failure to comply with the requirements may result in administrative, civil, and criminal penalties, revocation of permits to conduct business or construct certain facilities, substantial fines or sanctions, enforcement actions (including orders limiting our operations or 24 Table of Contents requiring corrective measures), natural resource damages claims, cleanup and closure costs, and third-party claims for property damage and personal injury as a result of violations of, or liabilities under, environmental laws, regulations, codes and common law.
If these consoles and other advances in technology continue to expand our customers’ ability to access and download the current format of video, music and games and incremental content from their games and videos through these and other 18 Table of Contents sources, our customers may no longer choose to purchase videos, DVDs, video games and music in our stores or they may reduce their purchases in favor of other forms of video, digital, and game delivery.
If these consoles and other advances in technology continue to expand our customers’ ability to access and download the current format of video, music and games and incremental content from their games and videos through these and other sources, our customers may no longer choose to purchase videos, DVDs, video games and music in our stores or they may reduce their purchases in favor of other forms of video, digital, and game delivery.
As a result, Jon Isaac, both individually and through ICG, is able to exercise significant influence over all matters that require us to obtain stockholder approval, including the election of directors to our Board and approval of significant corporate transactions that we may consider, such as a merger or other sale of our Company or its assets.
As a result, Jon Isaac, both individually and through ICG, is able to exercise 25 Table of Contents significant influence over all matters that require us to obtain stockholder approval, including the election of directors to our Board and approval of significant corporate transactions that we may consider, such as a merger or other sale of our Company or its assets.
If North American (primarily, the U.S.) manufacturing is transferred offshore, then the need for our products to make tools and dies will decrease, which will have a negative impact on the steel manufacturing segment’s business, financial condition (including, without limitation, its liquidity), results of operations, and cash flows.
If North American (primarily, the U.S.) manufacturing is transferred offshore, then the need for our products to make tools and dies will decrease, which will have 22 Table of Contents a negative impact on the steel manufacturing segment’s business, financial condition (including, without limitation, its liquidity), results of operations, and cash flows.
Moreover, such a concentration of voting power could have the effect of delaying or preventing a third party from acquiring us. This significant concentration of share ownership may also adversely affect the trading price 24 Table of Contents for our common stock because investors may perceive disadvantages in owning stock in companies with concentrated stock ownership.
Moreover, such a concentration of voting power could have the effect of delaying or preventing a third party from acquiring us. This significant concentration of share ownership may also adversely affect the trading price for our common stock because investors may perceive disadvantages in owning stock in companies with concentrated stock ownership.
Imports of polyvinyl chloride (“PVC”), a major component in the production of luxury vinyl flooring and sourced from the Xinjiang region, may be examined pursuant to the UFLPA under 20 Table of Contents the presumption it was produced using forced labor.
Imports of polyvinyl chloride (“PVC”), a major component in the production of luxury vinyl flooring and sourced from the Xinjiang region, may be examined pursuant to the UFLPA under the presumption it was produced using forced labor.
We face risks relating to changes in U.S. and foreign tariffs, trade agreements, laws, and policies Our steel manufacturing segment’s business depends on manufacturing products in North America.
We face risks relating to changes and proposed changes in U.S. and foreign tariffs, trade agreements, laws, and other isolationist policies Our steel manufacturing segment’s business depends on manufacturing products in North America.
As a result, our sales and earnings could decline. Vintage Stock may not compete effectively as browser, mobile and social video viewing and gaming becomes more popular. Listening to music, gaming, and viewing video and digital content continues to evolve rapidly.
As a result, our sales and earnings could decline. 19 Table of Contents Vintage Stock may not compete effectively as browser, mobile, and social video viewing and gaming becomes more popular. Listening to music, gaming, and viewing video and digital content continues to evolve rapidly.
Due to our current borrowings under our floating rate credit facilities, or if we were to increase our floating rate credit borrowings, an increase in interest rates could have an adverse effect on our financial condition and results of operations. As of the year ended September 30, 2023, our amount of floating rate credit borrowings was approximately $56.8 million.
Due to our current borrowings under our floating rate credit facilities, or if we were to increase our floating rate credit borrowings, an increase in interest rates could have an adverse effect on our financial condition and results of operations. As of the year ended September 30, 2024, our amount of floating rate credit borrowings was approximately $60.2 million.
As of September 30, 2023, we had approximately $152.8 million of total consolidated principal indebtedness outstanding consisting of (in 000's): Notes Payable Revolver loans $ 56,779 Equipment loans 15,486 Term loans 14,290 Other notes payable 15,789 Subtotal notes payable 102,344 Related Party Notes Payable Isaac Capital Group, LLC, 12.5% interest rate, matures May 2025 $ 2,000 Spriggs Investments, LLC, 10% interest rate, matures July 2024 2,000 Spriggs Investments, LLC for Flooring Liquidators, 12% interest rate, matures July 2024 1,000 Isaac Capital Group, LLC revolver, 12% interest rate, matures April 2024 1,000 Isaac Capital Group, LLC for Flooring Liquidators, 12% interest rate, matures January 2028 5,000 Subtotal related party notes payable 11,000 Sellers Notes Payable - Related Party Seller of Flooring Liquidators, 8.24% interest rate, matures January 2028 34,000 Seller of PMW, 8.0% interest rate, matures July 2028 2,500 Seller of Kinetic, 7.% interest rate, matures September 2027 3,000 Subtotal sellers notes payable 39,500 Total indebtedness $ 152,844 These financial obligations may have significant negative consequences for us, including: • limiting our ability to satisfy our obligations; • increasing our vulnerability to general adverse economic and industry conditions; • limiting our flexibility in planning for, or reacting to, changes in our businesses and the markets in which we operate; • placing us at a competitive disadvantage compared to competitors that have less debt; • increasing our vulnerability to, and limiting our ability to react to, changing market conditions, changes in our industry and economic downturns; • limiting our ability to obtain additional financing to fund working capital requirements, capital expenditures, debt service, acquisitions, general corporate or other obligations; 13 Table of Contents • subjecting us to a number of restrictive covenants that, among other things, limit our ability to pay dividends and distributions, make acquisitions and dispositions, borrow additional funds and make capital expenditures and other investments; • restricting our and our wholly-owned subsidiaries ability to make dividend payments and other payments; • limiting our ability to use operating cash flow in other areas of our business because we must dedicate a significant portion of these funds to make principal and/or interest payments on our outstanding debt; • exposing us to interest rate risk due to the variable interest rate on borrowings under certain of our credit facilities; and • causing our failure to comply with the financial and restrictive covenants contained in our current or future indebtedness, which could cause a default under such indebtedness and which, if not cured or waived, could have a material adverse effect on us.
As of September 30, 2024, we had approximately $151.2 million of total consolidated principal indebtedness outstanding consisting of (in 000's): Notes Payable Revolver loans $ 60,199 Equipment loans 13,346 Term loans 10,465 Other long-term debt 15,227 Subtotal notes payable 99,237 Related Party Notes Payable Isaac Capital Group, LLC, 12.5% interest rate, matures May 2025 $ 2,000 Isaac Capital Group, LLC revolver, 12% interest rate, matures April 2025 2,600 Isaac Capital Group, LLC for Flooring Liquidators, 12% interest rate, matures January 2028 5,000 Spriggs Investments, LLC, 12% interest rate, matures July 2025 800 Spriggs Investments, LLC for Flooring Liquidators, 12% interest rate, matures July 2025 1,000 Subtotal related party notes payable 11,400 Sellers Notes Payable - Related Party Seller of Flooring Liquidators, 8.24% interest rate, matures January 2028 34,000 Seller of PMW, 8.0% interest rate, matures July 2028 2,500 Seller of Kinetic, 7.0% interest rate, matures September 2027 3,000 Seller of Central Steel, 8.0% interest rate, matures May 2029 1,100 Subtotal sellers notes payable 40,600 Total indebtedness $ 151,237 These financial obligations may have significant negative consequences for us, including: • limiting our ability to satisfy our obligations; • increasing our vulnerability to general adverse economic and industry conditions; • limiting our flexibility in planning for, or reacting to, changes in our businesses and the markets in which we operate; • placing us at a competitive disadvantage compared to competitors that have less debt; • increasing our vulnerability to, and limiting our ability to react to, changing market conditions, changes in our industry and economic downturns; • limiting our ability to obtain additional financing to fund working capital requirements, capital expenditures, debt service, acquisitions, general corporate, or other obligations; • subjecting us to a number of restrictive covenants that, among other things, limit our ability to pay dividends and distributions, make acquisitions and dispositions, borrow additional funds, and make capital expenditures and other investments; • restricting our and our wholly-owned subsidiary’s ability to make dividend payments and other payments; 14 Table of Contents • limiting our ability to use operating cash flow in other areas of our business because we must dedicate a significant portion of these funds to make principal and/or interest payments on our outstanding debt; • exposing us to interest rate risk due to the variable interest rate on borrowings under certain of our credit facilities; and • causing our failure to comply with the financial and restrictive covenants contained in our current or future indebtedness, which could cause a default under such indebtedness and which, if not cured or waived, could have a material adverse effect on us.
These laws and regulations relate to matters, such as employment discrimination, wage and hour laws, requirements to provide meal and rest periods or other benefits, family leave mandates, requirements regarding working conditions and accommodations to certain employees, citizenship or work authorization and related requirements, insurance and workers’ compensation rules, healthcare laws and regulations (including with respect to the COVID-19 pandemic), and anti-discrimination and anti-harassment laws.
These laws and regulations relate to matters, such as employment discrimination, wage and hour laws, requirements to provide meal and rest periods or other benefits, family leave mandates, requirements regarding working conditions and accommodations to certain employees, citizenship or work authorization and related requirements, insurance and workers’ compensation rules, healthcare laws and regulations, and anti-discrimination and anti-harassment laws.
In addition, such claims or litigation could force us to do one or more of the following: • cease selling or using any of our products and services that incorporate the subject intellectual property, which would adversely affect our revenue; • attempt to obtain a license from the holder of the intellectual property right alleged to have been infringed or misappropriated, which license may not be available on reasonable terms, if at all; and 15 Table of Contents • attempt to redesign or, in the case of trademark claims, rename our products or services to avoid infringing or misappropriating the intellectual property rights of third parties, which may be costly and time-consuming and fail to gain market acceptance.
In addition, such claims or litigation could force us to do one or more of the following: • cease selling or using any of our products and services that incorporate the subject intellectual property, which would adversely affect our revenue; • attempt to obtain a license from the holder of the intellectual property right alleged to have been infringed or misappropriated, which license may not be available on reasonable terms, if at all; and • attempt to redesign or, in the case of trademark claims, rename our products or services to avoid infringing or misappropriating the intellectual property rights of third parties, which may be costly and time-consuming and fail to gain market acceptance. 16 Table of Contents Even if we were to prevail, such claims or litigation could be time-consuming and expensive to prosecute or defend and could result in the diversion of our management’s time and attention.
Such factors include the following: • fluctuating demand for our products and services; • changes in economic conditions and the amount of consumers’ discretionary spending; • changes in technologies favored by consumers; • customer refunds or cancellations; • our ability to continue to bill our customers through existing means; • market acceptance of new or enhanced versions of our services or products; • new product offerings or price competition (or pricing changes) by us or our competitors; • with respect to our retail segment, the opening of new stores by competitors in our markets; • with respect to our manufacturing segment, changes in import tariffs; • the amount and timing of expenditures for the acquisition of new businesses and the expansion of our operations, including the hiring of new employees, capital expenditures, and related costs (including 12 Table of Contents wage cost increases due to historically low unemployment rates and staffing shortages in certain industries); • inflationary trends, including recent steep increases in the costs of consumer goods (as measured by CPI), including rising prices for gasoline, may dampen consumer spending at our retail establishments; • the COVID-19 pandemic and the resulting adverse economic conditions the pandemic has had and may continue to have on our business, financial condition and results of operations; • technical difficulties or failures affecting our technical and operating systems in general; and • the fixed nature of a significant amount of our operating expenses.
Such factors include the following: • fluctuating demand for our products and services; • changes in economic conditions and the amount of consumers’ discretionary spending; • changes in technologies favored by consumers; • customer refunds or cancellations; • our ability to continue to bill our customers through existing means; • market acceptance of new or enhanced versions of our services or products; • new product offerings or price competition (or pricing changes) by us or our competitors; • with respect to our retail segment, the opening of new stores by competitors in our markets; • with respect to our manufacturing segment, changes or proposed changes in import or export tariffs and other isolationist trade practices and policies; • the amount and timing of expenditures for the acquisition of new businesses and the expansion of our operations, including the hiring of new employees, capital expenditures, and related costs (including wage cost increases due to historically low unemployment rates and staffing shortages in certain industries); 13 Table of Contents • inflationary trends, including recent steep increases in the costs of consumer goods (as measured by CPI), including rising prices for gasoline, may dampen consumer spending at our retail establishments; • technical difficulties or failures affecting our technical and operating systems in general; and • the fixed nature of a significant amount of our operating expenses.
There have been in the past, and may be in the future, periods of time during which increases in these costs cannot be recovered. During such periods of time, the occurrence of such events may materially adversely affect Marquis’ business, financial condition, and results of operations and, indirectly, ours.
There have been in the past, and may be in the future, periods of time during which increases in these costs cannot be recovered. During such periods of time, the occurrence of such events may materially adversely affect Marquis’ business, financial condition, and results of operations and, indirectly, ours. Marquis may be subject to disruptions in the global supply chain.
As of December 11, 2023, Isaac Capital Group LLC (“ICG”), together with Jon Isaac, our President and CEO and the President and sole member of ICG, control approximately 48.8% of the outstanding voting power of our company (assuming the exercise of all outstanding and exercisable warrants held by them).
As of December 6, 2024, Isaac Capital Group LLC (“ICG”), together with Jon Isaac, our President and CEO and the President and sole member of ICG, control approximately 49.3% of the outstanding voting power of our company (assuming the exercise of all outstanding and exercisable warrants held by them).
If tariffs were to rise disproportionally on raw materials compared to finished goods, we would be at risk for manufacturers to cease purchasing the products from it and instead purchasing products from third parties who are not subject to such tariffs, trade agreements, laws, and/or policies.
If import or export tariffs were to increase disproportionally on raw materials compared to finished goods, we would be at risk for manufacturers to cease purchasing the products and instead purchase products from third parties that are not subject to such tariffs, trade agreements, laws, and/or other isolationist policies.
Specific to our Retail-Flooring Segment The floor covering industry may face supply chain restrictions based upon legislation enacted limiting imports from certain global regions.
The floor covering industry may face supply chain restrictions based upon legislation enacted limiting imports from certain global regions.
Third parties may, in the future, claim our current or future services, products, trademarks, technologies, business methods or processes infringe their intellectual property rights, or challenge the validity of our intellectual property rights.
Our success depends, in part, on our ability to operate without infringing the intellectual property rights of others. Third parties may, in the future, claim our current or future services, products, trademarks, technologies, business methods or processes infringe their intellectual property rights, or challenge the validity of our intellectual property rights.
If those automakers do not introduce a new model in any given year, our sales may decrease which will have a negative impact on 21 Table of Contents our business, financial condition (including, without limitation, our liquidity), results of operations, and cash flows and, indirectly, ours.
If those automakers do not introduce a new model in any given year, our sales may decrease which will have a negative impact on our business, financial condition (including, without limitation, our liquidity), results of operations, and cash flows. Limited availability, or volatility in prices of raw materials and energy may constrain operating levels and reduce profit margins.
RISKS RELATED TO OUR FLOORING MANUFACTURING SEGMENT The floor covering industry is sensitive to changes in general economic conditions, such as consumer confidence and income, corporate and government spending, interest rate levels, availability of credit and demand for housing.
RISKS RELATED TO OUR FLOORING MANUFACTURING SEGMENT The floor covering industry is sensitive to changes in general economic conditions, such as consumer confidence and income, corporate and government spending, interest rate levels, availability of credit, and demand for housing. 21 Table of Contents Significant or prolonged declines in the U.S. or global economies could have a material adverse effect on the Company’s flooring manufacturing business.
Failure to respond quickly and effectively to changing customer demand or technological developments could materially adversely affect Marquis’ business, financial condition and results of operations and, indirectly, ours.
Marquis operates in a market sector where demand is strongly influenced by rapidly changing customer preferences as to product design and technical features. Failure to respond quickly and effectively to changing customer demand or technological developments could materially adversely affect Marquis’ business, financial condition and results of operations and, indirectly, ours.
Future negotiations prior to the expiration of the collective bargaining agreements may result in labor unrest for which a strike or work stoppage is possible.
Future negotiations prior to the expiration of the collective bargaining agreements may result in labor unrest for which a strike or 23 Table of Contents work stoppage is possible. Strikes and/or work stoppages could negatively affect Precision Marshall’s operational and financial results and may increase operating expenses and, indirectly, ours.
The amount and timing of environmental expenditures is difficult to predict, and, in some cases, liability may be imposed without regard to contribution or to whether we knew of, or caused, the release of hazardous substances. 23 Table of Contents In addition, our steel manufacturing segment outsources all disposal of waste material, non-compliance by third party providers could result in additional costs to defend environmental claims or additional costs to replace the outsourced entities.
In addition, our steel manufacturing segment outsources all disposal of waste material, non-compliance by third party providers could result in additional costs to defend environmental claims or additional costs to replace the outsourced entities.
Strikes and/or work stoppages could negatively affect Precision Marshall’s operational and financial results and may increase operating expenses and, indirectly, ours. 22 Table of Contents We rely on third parties for transportation services, and increases in costs or the availability of transportation may adversely affect our business and operations Our steel manufacturing segment’s business depends on the transportation of a large number of products.
We rely on third parties for transportation services, and increases in costs or the availability of transportation may adversely affect our business and operations Our steel manufacturing segment’s business depends on the transportation of a large number of products. It relies primarily on third parties for transportation of its products, as well as delivery of its raw materials.
The court subsequently entered a discovery scheduling order and the parties exchanged initial disclosures. The parties participated in a mediation in June 2023. The mediation was not successful and the case is currently in the midst of discovery.
The court subsequently entered a discovery scheduling order and the parties exchanged initial disclosures. The parties participated in a mediation in June 2023. The mediation was not successful. Fact discovery was completed on May 20, 2024. The parties completed expert discovery in September 2024 and filed cross motions for summary judgement.
Our failure to comply with various applicable federal and state employment and labor laws and regulations could have a material, adverse impact on our business. Various federal and state employment and labor laws and regulations govern our relationships with our employees.
Various federal and state employment and labor laws and regulations govern our relationships with our employees.
Significant or prolonged declines in the U.S. or global economies could have a material adverse effect on the Company’s flooring manufacturing business. Downturns in the U.S. and global economies, along with the residential and commercial markets in such economies, negatively impact the floor covering industry and our flooring manufacturing business.
Downturns in the U.S. and global economies, along with the residential and commercial markets in such economies, negatively impact the floor covering industry and our flooring manufacturing business. Although difficult economic conditions have improved in the U.S., there may be additional downturns in the future that could cause the industry to deteriorate.
Even if we were to prevail, such claims or litigation could be time-consuming and expensive to prosecute or defend and could result in the diversion of our management’s time and attention. These expenses and diversion of managerial resources could have a material adverse effect on our business operations and prospects, financial condition, cash flow, profitability, and results of operations generally.
These expenses and diversion of managerial resources could have a material adverse effect on our business operations and prospects, financial condition, cash flow, profitability, and results of operations generally. We may be subject to intellectual property claims that create uncertainty about ownership or use of technology essential to our business and divert our managerial and other resources.
Although difficult economic conditions have improved in the U.S., there may be additional downturns in the future that could cause the industry to deteriorate. A significant or prolonged decline in residential or commercial remodeling or new construction activity could materially adversely affect our business, financial condition, and results of operations.
A significant or prolonged decline in residential or commercial remodeling or new construction activity could materially adversely affect our business, financial condition, and results of operations. Marquis may be unable to predict customer preferences or demand accurately, or to respond to technological developments.
Removed
We may be subject to intellectual property claims that create uncertainty about ownership or use of technology essential to our business and divert our managerial and other resources. Our success depends, in part, on our ability to operate without infringing the intellectual property rights of others.
Added
Also, projections of any evaluations of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Removed
Discovery deadlines have been extended because counsel for JanOne and Virland Johnson moved to withdraw on August 18, 2023, which motion the court granted on October 2, 2023. JanOne and Virland Johnson have until January 4, 2024, to obtain new counsel, after which time the Company anticipates depositions will commence.
Added
The parties are currently preparing oppositions to the respective motions. We expect it will take a number of months for the Court to rule on the motions, during which time much of the activity in the case will be on pause.
Removed
Marquis may be unable to predict customer preferences or demand accurately, or to respond to technological developments. Marquis operates in a market sector where demand is strongly influenced by rapidly changing customer preferences as to product design and technical features.
Added
During fiscal year 2024, Houthi attacks in the Red Sea and a drought in the Panama Canal have caused increased costs and delays to our supply chain. Additionally, a port strike in the Gulf and East Coast regions of the United States began on October 1, 2024.
Removed
Limited availability, or volatility in prices of raw materials and energy may constrain operating levels and reduce profit margins.
Added
These disruptions, as well as the continued conflicts in Ukraine and the Middle East and U.S.-China tensions, may impact our future business by creating increases and volatility in shipping costs along with delays in delivery lead times, and may also create increases in our raw material costs.
Removed
It relies primarily on third parties for transportation of its products, as well as delivery of its raw materials.
Added
The degree to which this conflict impacts our future business, results of operations, financial condition, and cash flows will depend on future developments, which are uncertain, including but not limited to the duration of, potential spread and severity of, and additional governmental actions in response to, the conflict and when and to what extent normal business and economic activity and conditions resume and continue without further disruption.
Added
The amount and timing of environmental expenditures is difficult to predict, and, in some cases, liability may be imposed without regard to contribution or to whether we knew of, or caused, the release of hazardous substances.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe following is a breakdown of Flooring Liquidator's retail stores by city and state: City State Locations Brand(s) Arroyo Grande California 1 FL Retail Bakersfield California 2 FL Retail Clovis California 2 FL Retail Fresno California 2 FL Retail, A&M Retail Merced California 1 FL Retail Modesto California 2 FL Retail, House of Carpets Rancho Cordova California 1 FL Retail Roseville California 1 FL Retail Sacramento California 1 FL Retail San Diego California 1 FL Retail San Marcos California 1 FL Retail Santa Clara California 1 FL Retail Stockton California 1 FL Retail Tulare California 1 FL Retail Yuba City California 1 FL Retail Flooring Manufacturing Segment Marquis owns or leases all of the land, and owns all of the improvements on such leased land, as described in the following table, which also provides information regarding the general location and use at September 30, 2023: Property Location Coating Plant Chatsworth, Georgia Corporate Offices and Warehouse Chatsworth, Georgia Distribution Chatsworth, Georgia Eton Tufting Facility Eton, Georgia Machine Storage and Forklift Chatsworth, Georgia Office and Storage Chatsworth, Georgia Printing Facility Calhoun, Georgia Sales Offices, Showroom and Warehouse Chatsworth, Georgia Storage and Extrusion Dalton, Georgia Tufting Department Chatsworth, Georgia Twist and Heat Set Facility Chatsworth, Georgia Warehouse Chatsworth, Georgia Yarn Processing Facility Dalton, Georgia Yarn Winding Facility Chatsworth, Georgia Steel Manufacturing Segment At September 30, 2023, Precision Marshall leased the buildings for its two locations in Illinois and Pennsylvania, and its corporate office is also located in Pennsylvania.
Biggest changeThe following is a breakdown of Flooring Liquidator's retail stores by city and state: City State Locations Brand(s) Arroyo Grande California 1 FL Retail Bakersfield California 1 FL Retail Bentonville Arkansas 1 FL Retail Clovis California 2 FL Retail Fayetteville Arkansas 1 FL Retail Fresno California 2 FL Retail, A&M Retail Joplin Missouri 1 FL Retail Merced California 1 FL Retail Modesto California 2 FL Retail, House of Carpets Plymouth Minnesota 1 MFS Retail Reno Nevada 1 FL Retail Rogers Arkansas 1 FL Retail Roseville California 1 FL Retail Sacramento California 1 FL Retail San Diego California 1 FL Retail San Marcos California 1 FL Retail Springdale Arkansas 2 FL Retail Springfield Missouri 1 FL Retail Stockton California 1 FL Retail Tulare California 1 FL Retail Yuba City California 1 FL Retail 28 Table of Contents Flooring Manufacturing Segment Marquis owns or leases all of the land, and owns all of the improvements on such leased land, as described in the following table, which also provides information regarding the general location and use at September 30, 2024: Property Location Coating Plant Chatsworth, Georgia Corporate Offices and Warehouse Chatsworth, Georgia Distribution Chatsworth, Georgia Eton Tufting Facility Eton, Georgia Machine Storage and Forklift Chatsworth, Georgia Office and Storage Chatsworth, Georgia Printing Facility Calhoun, Georgia Sales Offices, Showroom and Warehouse Chatsworth, Georgia Storage and Extrusion Dalton, Georgia Tufting Department Chatsworth, Georgia Twist and Heat Set Facility Chatsworth, Georgia Warehouse Chatsworth, Georgia Yarn Processing Facility Dalton, Georgia Yarn Winding Facility Chatsworth, Georgia Steel Manufacturing Segment At September 30, 2024, Precision Marshall leased the buildings for its two locations in Illinois and Pennsylvania, and its corporate office is also located in Pennsylvania.
Flooring Liquidators leases its corporate offices in Modesto, California, as well as its distribution center in Plymouth, MN.
Flooring Liquidators leases its corporate offices in Modesto, California, as well as its distribution center in Plymouth, Minnesota.
The following is a breakdown by state and brand of Vintage Stock retail stores: State Retail Stores Brand(s) Arkansas 3 Vintage Stock Colorado 4 EntertainMart Idaho 3 EntertainMart Illinois 1 Vintage Stock Kansas 6 Vintage Stock and EntertainMart Missouri 20 Vintage Stock, V-Stock, and EntertainMart Nebraska 1 EntertainMart New Mexico 1 EntertainMart Oklahoma 12 Vintage Stock Texas 17 Movie Trading Co. and EntertainMart Utah 2 EntertainMart 26 Table of Contents Retail-Flooring Segment As of September 30, 2023, Flooring Liquidators leased all 19 of its retail stores and warehouses under agreements that vary as to rental amounts, expiration dates, renewal options and other rental provisions.
Vintage Stock leases its corporate offices in Joplin, Missouri. 27 Table of Contents The following is a breakdown by state and brand of Vintage Stock retail stores: State Retail Stores Brand(s) Alabama 1 Vintage Stock Arkansas 3 Vintage Stock Colorado 4 EntertainMart Idaho 3 EntertainMart Illinois 1 Vintage Stock Kansas 6 Vintage Stock and EntertainMart Missouri 19 Vintage Stock, V-Stock, and EntertainMart Montana 1 EntertainMart Nebraska 1 EntertainMart New Mexico 1 EntertainMart Oklahoma 13 Vintage Stock Tennessee 1 Vintage Stock Texas 17 Movie Trading Co. and EntertainMart Utah 2 EntertainMart Retail-Flooring Segment As of September 30, 2024, Flooring Liquidators leased all 25 of its retail stores and warehouses under agreements that vary as to rental amounts, expiration dates, renewal options and other rental provisions.
Properties At September 30, 2023, we leased approximately 16,500 square feet of space located in Las Vegas, Nevada which we utilize as principal executive and administrative offices. 25 Table of Contents Retail-Entertainment Segment Vintage Stock At September 30, 2023, Vintage Stock leased all 70 of its stores under agreements that vary as to rental amounts, expiration dates, renewal options and other rental provisions.
Retail-Entertainment Segment Vintage Stock At September 30, 2024, Vintage Stock leased all 73 of its stores under agreements that vary as to rental amounts, expiration dates, renewal options, and other rental provisions.
Kinetic leases the buildings for its two locations in Wisconsin. PMW leases the buildings for its three locations in Kentucky. 27 Table of Contents
Kinetic has three locations in Wisconsin, two are leased and one is owned. Central Steel leases the buildings for its two locations in Illinois. PMW leases the buildings for its three locations in Kentucky.
Removed
Vintage Stock leases its corporate offices in Joplin, Missouri.
Added
ITEM 2. Properties At September 30, 2024, we leased approximately 16,500 square feet of space located in Las Vegas, Nevada which we utilize as principal executive and administrative offices.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. Legal Proceedings The information in response to this item is included in Note 17, Commitments and Contingencies, to the Consolidated Financial Statements included in Part II, Item 8, of this Form 10-K. ITEM 4 . Mine Safety Disclosures Not applicable. 28 Table of Contents PART II
Biggest changeITEM 3. Legal Proceedings The information in response to this item is included in Note 18, Commitments and Contingencies, to the Consolidated Financial Statements included in Part II, Item 8, of this Form 10-K. ITEM 4 . Mine Safety Disclosures Not applicable. 29 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

4 edited+3 added−3 removed2 unchanged
Biggest changeWe have no record of the number of holders of our common stock who hold their shares in “street name” with various brokers. Dividend Policy We have one class of authorized preferred stock. As of September 30, 2023, our Series E Preferred Stock had 47,840 shares issued and outstanding.
Biggest changeHolders of Record As of September 30, 2024, there were (i) 198 holders of record of our common stock, and (ii) 29 holders of record of our Series E Preferred Stock. We have no record of the number of holders of our common stock who hold their shares in “street name” with various brokers.
Presently, we do not pay dividends on shares of our common stock. Our declaration and payment of cash dividends in the future and the amount thereof will depend upon our results of operations, financial condition, cash requirements, prospects, limitations imposed by credit agreements and/or indentures governing debt securities and other factors deemed relevant by our Board of Directors.
Our declaration and payment of cash dividends in the future and the amount thereof will depend upon our results of operations, financial condition, cash requirements, prospects, limitations imposed by credit agreements and/or indentures governing debt securities, and other factors deemed relevant by our Board of Directors.
Each share of Series E Preferred Stock is entitled to and receives a dividend of $0.015 per year. During the year ending September 30, 2023, dividends of approximately $900 were paid to holders of Series E Preferred Stock. At September 30, 2023, the Company had no accrued and unpaid preferred stock dividends.
During the year ending September 30, 2024, dividends of approximately $540 were paid to holders of Series E Preferred Stock. At September 30, 2024, the Company had accrued and unpaid preferred stock dividends of approximately $180. Presently, we do not pay dividends on shares of our common stock.
ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Holders of Record As of September 30, 2023, there were (i) 198 holders of record of our common stock, and (ii) 29 holders of record of our Series E Preferred Stock.
ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities Common Stock Our common stock is traded on the Nasdaq Capital Market under the symbol “LIVE”.
Removed
The following table provides information regarding repurchases of our common stock during the period of October 1, 2021 through September 30, 2023.
Added
Dividend Policy We have one class of authorized preferred stock. As of September 30, 2024, our Series E Preferred Stock had 47,840 shares issued and outstanding. Each share of Series E Preferred Stock is entitled to and receives a dividend of $0.015 per year.
Removed
Period Number of Shares Average Purchase Price Paid Number of Shares Purchased as Part of a Publicly Announced Plan or Program Maximum Amount that May be Purchased Under the Announced Plan or Program Balance Forward as September 2022 504,921 11.62 504,921 4,034,751 October 2022 14,224 25.14 14,224 3,677,127 November 2022 6,596 25.25 6,596 3,510,595 December 2022 3,890 25.07 3,890 3,413,066 January 2023 674 25.30 674 3,396,012 May 2023 193 25.64 193 3,391,064 June 2023 13,413 25.70 3,509 3,302,316 July 2023 102 25.79 102 3,299,685 August 2023 — — — 3,299,685 September 2023 — — — 3,299,685 Totals 544,013 534,109 29 Table of Contents On June 13, 2023, Tony Isaac, a member of the Company's board of directors exercised stock options for which he received 9,904 shares of the Company's common stock, which was repurchased by the Company (see Note 13).
Added
The following table provides information regarding repurchases of our common stock during the period of October 1, 2023 through June 1, 2024: Period Number of Shares Average Purchase Price Paid Number of Shares Purchased as Part of a Publicly Announced Plan or Program Maximum Amount that May be Purchased Under the Announced Plan or Program Balance Forward as September 2023 544,013 12.54 534,109 3,299,685 October 2023 — — — 3,299,685 November 2023 — — — 3,299,685 December 2023 4,346 24.51 4,346 3,193,153 January 2024 135 26.10 135 3,189,629 February 2024 10,114 25.15 10,114 2,935,292 March 2024 1,600 25.19 1,600 2,894,985 April 2024 1,820 25.26 1,820 2,849,006 May 2024 16,336 25.18 16,336 2,437,737 June 2024 — — — 2,437,737 Totals 578,364 13.52 568,460 30 Table of Contents On June 4, 2024, the Company announced a new $10 million common stock repurchase program (“2024 Program”), which was approved by our Board of Directors and will remain effective until May 31, 2025, unless extended, canceled, or modified by the Company’s Board of Directors.
Removed
Securities Authorized for Issuance under Equity Compensation Plans See “Item 11 – Executive Compensation – Executive Compensation Plan Information.” Recent Sales of Unregistered Securities None. ITEM 6. [Reserved] 30 Table of Contents
Added
The following table provides information regarding repurchases of our common stock during the period of June 4, 2024 through September 30, 2024: Period Number of Shares Average Purchase Price Paid Number of Shares Purchased as Part of a Publicly Announced Plan or Program Maximum Amount that May be Purchased Under the Announced Plan or Program June 2024 — — — 10,000,000 July 2024 — — — 10,000,000 August 2024 10 16.29 10 9,999,837 September 2024 263 15.31 263 9,995,812 Totals 273 15.34 273 Securities Authorized for Issuance under Equity Compensation Plans See “Item 12 – Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matter ” Recent Sales of Unregistered Securities None.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeFinancial Statements and Supplementary Data 40 Reports of Independent Registered Public Accounting Firms F- 1 Consolidated Financial Statements: Consolidated Balance Sheets at September 30, 202 3 and 202 2 F- 3 Consolidated Statements of ( Loss) Income for the Years Ended September 30, 202 3 and 202 2 F- 4 Consolidated Statements of Stockholders' Equity for the Years Ended September 30, 202 3 and 202 2 F- 5 Consolidated Statements of Cash Flows for the Years Ended September 30, 202 3 and 202 2 F- 6 Notes to Consolidated Financial Statements F- 8
Biggest changeFinancial Statements and Supplementary Data 41 Reports of Independent Registered Public Accounting Firms F- 1 Consolidated Financial Statements: Consolidated Balance Sheets at September 30, 202 4 and 202 3 F- 3 Consolidated Statements of (Loss) Income for the Years Ended September 30, 202 4 and 202 3 F- 4 Consolidated Statements of Stockholders' Equity for the Years Ended September 30, 202 4 and 20 23 F- 5 Consolidated Statements of Cash Flows for the Years Ended September 30, 202 4 and 202 3 F- 6 Notes to Consolidated Financial Statements F- 8
Item 6. [Reserved] 30 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 31 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 39 Item 8.
Item 6. [Reserved] 31 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 32 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 40 Item 8.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeResults of Operations The following table sets forth certain statement of income items and as a percentage of revenue, for the periods indicated (in $000’s): Year Ended September 30, 2023 Year Ended September 30, 2022 % of Total Revenue % of Total Revenue Selected Data Revenue $ 355,171 $ 286,913 Cost of revenue 239,605 67.5 % 189,086 65.9 % General and administrative expenses 86,670 24.4 % 54,531 19.0 % Sales and marketing expenses 13,447 3.8 % 12,459 4.3 % Impairment expense — — % 4,910 1.7 % Interest expense, net 12,741 3.6 % 4,209 1.5 % Provision for income taxes 1,571 0.4 % 6,875 2.4 % Net (loss) income $ (102) — % $ 24,741 8.6 % Adjusted EBITDA (a) Retail - Entertainment $ 10,581 $ 14,054 Retail - Flooring 3,321 — Flooring Manufacturing 10,100 17,043 Steel Manufacturing 12,210 10,230 Corporate and other (4,674) (2,943) Total adjusted EBITDA $ 31,538 $ 38,384 Adjusted EBITDA as a percentage of revenue Retail - Entertainment 13.5 % 16.3 % Retail - Flooring 4.4 % NA Flooring Manufacturing 9.2 % 13.0 % Steel Manufacturing 13.7 % 16.9 % Corporate and other NA NA Consolidated adjusted EBITDA as a percentage of revenue 8.9 % 13.4 % 33 Table of Contents The following table sets forth revenues by segment (in $000’s): Year Ended September 30, 2023 Year Ended September 30, 2022 Net Revenue % of Total Revenue Net Revenue % of Total Revenue Revenue Retail - Entertainment $ 78,124 22.0 % $ 86,156 30.0 % Retail - Flooring 75,872 21.4 % — — % Flooring Manufacturing 109,770 30.9 % 130,850 45.6 % Steel Manufacturing 88,912 25.0 % 60,617 21.1 % Corporate and other 2,493 0.7 % 9,290 3.2 % Total revenue $ 355,171 100.0 % $ 286,913 100.0 % The following table sets forth gross profit and gross profit as a percentage of total revenue by segment (in $000’s): Year Ended September 30, 2023 Year Ended September 30, 2022 Gross Profit Gross Profit % of Total Revenue Gross Profit Gross Profit % of Total Revenue Gross Profit Retail - Entertainment $ 42,751 37.0 % $ 45,583 46.6 % Retail - Flooring 27,769 24.0 % — — % Flooring Manufacturing 23,891 20.7 % 31,908 32.6 % Steel Manufacturing 20,023 17.3 % 16,878 17.3 % Corporate and other 1,132 1.0 % 3,458 3.5 % Total revenue $ 115,566 100.0 % $ 97,827 100.0 % Critical Accounting Policies Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
Biggest changeResults of Operations The following table sets forth certain statement of income items and as a percentage of revenue, for the periods indicated (in $000’s): Year Ended September 30, 2024 Year Ended September 30, 2023 % of Total Revenue % of Total Revenue Selected Data Revenue $ 472,840 $ 355,171 Cost of revenue 328,016 69.4 % 239,605 67.5 % General and administrative expenses 118,040 25.0 % 86,670 24.4 % Sales and marketing expenses 22,372 4.7 % 13,447 3.8 % Impairment expense 18,056 3.8 % — — % Interest expense, net 16,847 3.6 % 12,741 3.6 % (Benefit) provision for income taxes (4,658) (1.0) % 1,571 0.4 % Net loss $ (26,685) (5.6) % $ (102) — % Adjusted EBITDA (a) Retail - Entertainment $ 8,407 $ 10,581 Retail - Flooring (2,357) 3,321 Flooring Manufacturing 11,868 10,100 Steel Manufacturing 11,039 12,210 Corporate and other (4,460) (4,674) Total adjusted EBITDA $ 24,497 $ 31,538 Adjusted EBITDA as a percentage of revenue Retail - Entertainment 11.8 % 13.5 % Retail - Flooring (1.7) % 4.4 % Flooring Manufacturing 9.5 % 9.2 % Steel Manufacturing 7.9 % 13.7 % Corporate and other NA NA Consolidated adjusted EBITDA as a percentage of revenue 5.2 % 8.9 % 34 Table of Contents The following table sets forth revenue by segment (in $000’s): Year Ended September 30, 2024 Year Ended September 30, 2023 Net Revenue % of Total Revenue Net Revenue % of Total Revenue Revenue Retail - Entertainment $ 71,023 15.0 % $ 78,124 22.0 % Retail - Flooring 136,989 29.0 % 75,872 21.4 % Flooring Manufacturing 124,929 26.4 % 109,770 30.9 % Steel Manufacturing 139,566 29.5 % 88,912 25.0 % Corporate and other 333 0.1 % 2,493 0.7 % Total revenue $ 472,840 100.0 % $ 355,171 100.0 % The following table sets forth gross profit and gross profit as a percentage of total revenue by segment (in $000’s): Year Ended September 30, 2024 Year Ended September 30, 2023 Gross Profit % of Total Gross Profit Gross Profit % of Total Gross Profit Gross Profit Retail - Entertainment $ 40,929 28.3 % $ 42,751 37.0 % Retail - Flooring 49,177 34.0 % 27,769 24.0 % Flooring Manufacturing 32,351 22.3 % 23,891 20.7 % Steel Manufacturing 22,058 15.2 % 20,023 17.3 % Corporate and other 309 0.2 % 1,132 1.0 % Total gross profit $ 144,824 100.0 % $ 115,566 100.0 % Critical Accounting Policies Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
We acquire and operate companies in various industries that have historically demonstrated a strong history of earnings power. We currently have five segments to our business: Retail-Entertainment, Retail-Flooring, Flooring Manufacturing, Steel Manufacturing, and Corporate & Other. Under the Live Ventures brand, we seek opportunities to acquire profitable and well-managed companies.
We acquire and operate companies in various industries that have historically demonstrated a strong history of earnings power. We currently operate our business in five segments: Retail-Entertainment, Retail-Flooring, Flooring Manufacturing, Steel Manufacturing, and Corporate & Other. Under the Live Ventures brand, we seek opportunities to acquire profitable and well-managed companies.
On July 1, 2022, Marquis acquired certain assets and intellectual property related to the carpet-backing operations of Better Backers, a Georgia corporation. On September 20, 2023, Marquis acquired the Harris Flooring Group® brands from Q.E.P., a designer, manufacturer, and distributor of a broad range of best-in-class flooring and installation solutions for commercial and home improvement projects.
On September 20, 2023, Marquis acquired the Harris Flooring Group® brands from Q.E.P., a designer, manufacturer, and distributor of a broad range of best-in-class flooring and installation solutions for commercial and home improvement projects. On July 1, 2022, Marquis acquired certain assets and intellectual property related to the carpet-backing operations of Better Backers, a Georgia corporation.
Cash Flows from Financing Activities Our cash flows provided by financing activities of approximately $37.6 million for the year ended September 30, 2023 primarily consisted of approximately $15.8 million in proceeds from the issuance of notes payable, net proceeds from revolver loans of approximately $13.7 million, proceeds from failed sales and leaseback transactions of $12.7 million, and proceeds from the issuance of related party debt of $7.0 million, partially offset by payments on notes payable and finance leases of approximately $10.5 million, and purchases of treasury stock of approximately $1.0 million.
Our cash flows provided by financing activities of approximately $37.6 million for the year ended September 30, 2023 primarily consisted of approximately $15.8 million in proceeds from the issuance of notes payable, net proceeds from revolver loans of approximately $13.7 million, proceeds from failed sales and leaseback transactions of $12.7 million, and proceeds from the issuance of related party debt of $7.0 million, partially offset by payments on notes payable and finance leases of approximately $10.5 million, and purchases of treasury stock of approximately $1.0 million.
Warm Springs Road, Suite 102, Las Vegas, Nevada 89119, our telephone number is (702) 939-0231, and our corporate website (which does not form part of this report Form 10-K) is located at www.liveventures.com. Our common stock trades on the Nasdaq Capital Market under the symbol “LIVE”.
Warm Springs Road, Suite 102, Las Vegas, Nevada 89119, our telephone number is (702) 939-0231, and our corporate website (which does not form part of this Form 10-K) is located at www.liveventures.com. Our common stock trades on the Nasdaq Capital Market under the symbol “LIVE”.
Cash Flows from Investing Activities Our cash flows used in investing activities of approximately $64.0 million for the year ended September 30, 2023 consisted primarily of purchases of property and equipment and our acquisitions of Flooring Liquidators, PMW, and Cal Coast Carpets.
Our cash flows used in investing activities of approximately $64.0 million for the year ended September 30, 2023 consisted primarily of purchases of property and equipment and our acquisitions of Flooring Liquidators, PMW, and Cal Coast Carpets.
Management’s Discussion and Analysis of Financial Condition and Results of Operations For a description of our significant accounting policies and an understanding of the significant factors that influenced our performance during the year ended September 30, 2023, this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (hereafter referred to as “MD&A”) should be read in conjunction with the consolidated financial statements, including the related notes, appearing in Part II, Item 8 of this Annual Report on Form 10-K for the fiscal year ended September 30, 2023 (this “Form 10-K”).
Management’s Discussion and Analysis of Financial Condition and Results of Operations For a description of our significant accounting policies and an understanding of the significant factors that influenced our performance during the year ended September 30, 2024, this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (hereafter referred to as “MD&A”) should be read in conjunction with the consolidated financial statements, including the related notes, appearing in Part II, Item 8 of this Annual Report on Form 10-K for the fiscal year ended September 30, 2024 (this “Form 10-K”).
The increase was primarily attributable to inflationary cost increases, as well as the acquisition of PMW, which historically has generated lower margins, partially offset by the acquisition of Flooring Liquidators, which historically has generated higher margins.
The increase was primarily attributable to the acquisition of PMW, as well as inflationary cost increases, partially offset by the acquisition of Flooring Liquidators, which historically has generated higher margins.
Kinetic manufactures more than 90 types of knives and numerous associated parts with modifications and customizations available to each. Kinetic employs approximately 100 non-union employees. PMW On July 20, 2023, Precision Marshall acquired PMW. Founded nearly 76 years ago in 1947 in Louisville, Kentucky, PMW manufactures and supplies highly engineered parts and components across 400,000 square feet of manufacturing space.
Kinetic manufactures more than 90 types of knives and numerous associated parts with modifications and customizations available to each. Kinetic employs approximately 100 non-union employees. PMW On July 20, 2023, we acquired PMW. Founded nearly 76 years ago in 1947 in Louisville, Kentucky, PMW manufactures and supplies highly engineered parts and components across 400,000 square feet of manufacturing space.
The amount, nature and timing of any borrowings or sales of debt or equity securities will depend on our 37 Table of Contents operating performance and other circumstances; our then-current commitments and obligations; the amount, nature and timing of our capital requirements; any limitations imposed by our current credit arrangements; and overall market conditions.
The amount, nature, and timing of any borrowings or sales of debt or equity securities will depend on our operating performance and other circumstances; our then-current commitments and obligations; the amount, nature and timing of our capital requirements; any limitations imposed by our current credit arrangements; and overall market conditions.
We have the following five asset-based revolver lines of credit: (i) Texas Capital Bank Revolver Loan (“TCB Revolver”) utilized by Vintage Stock, (ii) Bank of America Revolver Loan (“BofA Revolver”) utilized by Marquis, (iii) two Fifth Third Bank Revolver Loans (“Fifth Third Revolvers”), one utilized by Precision Marshall and the other by PMW, and (iv) Eclipse Business Capital Revolver Loan (“Eclipse Revolver”) utilized by Flooring Liquidators.
We have the following five asset-based revolver lines of credit: (i) Bank Midwest Revolver Loan (“Bank Midwest Revolver”) utilized by Vintage Stock, (ii) Bank of America Revolver Loan (“BofA Revolver”) utilized by Marquis, (iii) two Fifth Third Bank Revolver Loans (“Fifth Third Revolvers”), one utilized by Precision Marshall and the other by PMW, and (iv) Eclipse Business Capital Revolver Loan (“Eclipse Revolver”) utilized by Flooring Liquidators.
With its integrated buy-sell-trade business model, Vintage Stock buys, sells and trades new and pre-owned movies, music, video games, electronics and collectibles through 70 retail locations strategically positioned across Arkansas, Colorado, Idaho, Illinois, Kansas, Missouri, Nebraska, New Mexico, Oklahoma, Texas, and Utah. Retail-Flooring Segment Our Retail-Flooring Segment is composed of Flooring Liquidators, Inc. (“Flooring Liquidators”).
With its integrated buy-sell-trade business model, Vintage Stock buys, sells and trades new and pre-owned movies, music, video games, electronics and collectibles through 73 retail locations strategically positioned across Alabama, Arkansas, Colorado, Idaho, Illinois, Kansas, Missouri, Montana, Nebraska, New Mexico, Oklahoma, Tennessee, Texas, and Utah. Retail-Flooring Segment Our Retail-Flooring Segment is composed of Flooring Liquidators, Inc. (“Flooring Liquidators”).
Flooring Liquidators is a leading retailer and installer of flooring, carpeting, and countertops to consumers, builders, and contractors in California and Nevada, operating 19 warehouse-format stores and design centers. Over the years, the company has established a strong reputation for innovation, efficiency and service in the home renovation and improvement market.
Flooring Liquidators is a leading retailer and installer of flooring, carpeting, and countertops to consumers, builders, and contractors in California and Nevada, operating 25 warehouse-format stores and a design center. Over the years, the company has established a strong reputation for innovation, efficiency, and service in the home renovation and improvement market.
Net cash provided by operations was approximately $26.0 million for the year ended September 30, 2023, as compared to net cash provided by operations of approximately $6.4 million for the same period in 2022.
Net cash provided by operations was approximately $20.6 million for the year ended September 30, 2024, as compared to net cash provided by operations of approximately $26.0 million for the same period in 2023.
Operating income for the year ended September 30, 2023 was approximately $9.3 million, as compared to approximately $12.6 million during the prior year period primarily due to those factors discussed above. Retail-Flooring Segment Our Retail-Flooring segment consists of Flooring Liquidators, which we acquired in January 2023.
Operating income for the year ended September 30, 2024 was approximately $7.2 million, as compared to approximately $9.3 million during the prior year period primarily due to the factors discussed above. Retail-Flooring Segment Our Retail-Flooring segment consists of Flooring Liquidators, which we acquired in January 2023.
Steel Manufacturing Segment Our Steel Manufacturing segment is comprised of Precision Industries, Inc. (“Precision Marshall”), its wholly-owned subsidiary The Kinetic Co., Inc. (“Kinetic”), and Precision Metal Works, Inc. (“PMW”) . Precision Marshall Precision Marshall is the North American leader in providing and manufacturing, pre-finished de-carb free tool and die steel.
Steel Manufacturing Segment Our Steel Manufacturing segment is comprised of Precision Industries, Inc. (“Precision Marshall”), and its wholly-owned subsidiaries, The Kinetic Co., Inc. (“Kinetic”), CSF Holdings, LLC (“Central Steel”), and Precision Metal Works, Inc. (“PMW”). Precision Marshall Precision Marshall is the North American leader in providing and manufacturing pre-finished de-carb free tool and die steel.
General and administrative expenses increased by approximately $440,000, and was primarily attributable to increased compensation and other general and administrative expenses related to a higher volume of retail locations open during the year.
General and administrative expenses increased by approximately $0.3 million, and was primarily attributable to increased compensation and other general and administrative expenses related to a higher volume of retail locations open during the year.
Cash Flows from Operating Activities The Company’s cash at September 30, 2023 was approximately $4.3 million compared to approximately $4.6 million at September 30, 2022, a decrease of approximately $300,000.
Cash Flows from Operating Activities The Company’s cash at September 30, 2024 was approximately $4.6 million compared to approximately $4.3 million at September 30, 2023, an increase of approximately $300,000.
Provision for Income Taxes For the year ended September 30, 2023, the Company recorded a provision for income tax of approximately $1.6 million, compared to a provision for income tax of approximately $6.9 million for the year ended September 30, 2022.
Benefit or Provision for Income Taxes For the year ended September 30, 2024, the Company recorded a benefit for income tax of approximately $4.7 million, compared to a provision for income tax of approximately $1.6 million for the year ended September 30, 2023.
General and administrative expenses increased by approximately $4.0 million, or 54.4%, primarily due to the acquisitions of Kinetic and PMW, partially offset by reduced compensation expense at Precision Marshall. Operating income was approximately $8.0 million and $9.0 million, for the years ended September 30, 2023 and 2022, respectively.
General and administrative expenses increased by approximately $5.4 million, or 46.6%, primarily due to the acquisitions of PMW and Central Steel, as well as higher compensation costs at Kinetic, partially offset by reduced compensation expense at Precision Marshall. Operating income was approximately $4.6 million and $8.0 million, for the years ended September 30, 2024 and 2023, respectively.
Its innovation has yielded products and technologies that differentiate its brands in the flooring marketplace. 31 Table of Contents Marquis’s state-of-the-art operations enable high quality products, unique customization, and short lead-times. Furthermore, the Company has recently invested in additional capacity to grow several attractive lines of business, including printed carpet and yarn extrusion.
Marquis’s state-of-the-art operations enable high quality products, unique customization, and short lead-times. Furthermore, the Company has recently invested in additional capacity to grow several attractive lines of business, including printed carpet and yarn extrusion.
Corporate and Other revenue decreased by approximately $6.8 million, or 73.2%, to approximately $2.5 million for the year ended September 30, 2023, as compared to approximately $9.3 million for the year ended September 30, 2022. The decrease was primarily due to the shutdown and deconsolidation of SW Financial in May 2023.
Corporate and Other revenue decreased by approximately $2.2 million, or 86.6%, to approximately $333,000 for the year ended September 30, 2024, as compared to approximately $2.5 million for the year ended September 30, 2023. The decrease was primarily due to the closure of SW Financial in May 2023.
Cost of Revenue Cost of revenue increased by approximately $50.5 million, or 26.7% for the year ended September 30, 2023 as compared to the year ended September 30, 2022. Cost of revenue as a percentage of revenues was 67.5% for the year ended September 30, 2023, as compared to 65.9% for the year ended September 30, 2022.
Cost of Revenue Cost of revenue increased by approximately $88.4 million, or 36.9% for the year ended September 30, 2024 as compared to the year ended September 30, 2023. Cost of revenue as a percentage of revenues was 69.4% for the year ended September 30, 2024, as compared to 67.5% for the year ended September 30, 2023.
Our cash flows provided by financing activities of approximately $33.6 million for the year ended September 30, 2022 primarily consisted in net proceeds from revolver loans of approximately $21.6 million, approximately $17.0 million in proceeds from the issuance of notes payable, and proceeds from a failed sales and leaseback transaction of approximately $8.2 million, partially offset by payments on notes payable and finance leases of approximately $10.6 million, and purchases of treasury stock of approximately $2.7 million.
Cash Flows from Financing Activities Our cash flows provided by financing activities of approximately $1.2 million for the year ended September 30, 2024 primarily consisted of proceeds from failed sales and leaseback transactions of approximately $7.9 million, net borrowings under revolver loans of approximately $3.4 million, net borrowings under related party revolver loans of approximately $1.6 million, and proceeds from the issuance of notes payable of approximately $0.6 million, partially offset by payments on notes payable of approximately $6.7 million, payments for finance leases of approximately $3.6 million, payments of related party notes payable of $1.2 million, and purchases of treasury stock of approximately $0.9 million.
Our critical and significant accounting policies include Trade and Other Receivables, Inventories, Goodwill, Revenue Recognition, Fair Value Measurements, Income Taxes, Segment Reporting and Concentrations of Credit Risk. Revenue Revenue increased by approximately $68.3 million to approximately $355.2 million for the year ended September 30, 2023 as compared to approximately $286.9 million for the year ended September 30, 2022.
Our critical and significant accounting policies include Trade and Other Receivables, Inventories, Goodwill, Revenue Recognition, Fair Value Measurements, and Income Taxes. Revenue Revenue increased by approximately $117.7 million to approximately $472.8 million for the year ended September 30, 2024 as compared to approximately $355.2 million for the year ended September 30, 2023.
Liquidity and Capital Resources Overview Based on our current operating plans, we believe that available cash balances, cash generated from our operating activities and funds available under our asset-based revolver lines of credit will provide sufficient liquidity to fund our operations, pay our scheduled loan payments, allow for the repurchase of shares under our share buyback program, and pay dividends on our shares of Series E Preferred Stock as declared by the Board of Directors, for at least the next 12 months.
Liquidity and Capital Resources Overview Based on our current operating plans, we believe that available cash balances, cash generated from our operating activities and funds available under our asset-based revolver lines of credit will provide sufficient liquidity to fund our operations, pay our contractual obligations for at least the next 12 months.
Adjusted EBITDA Reconciliation The following table presents a reconciliation of Adjusted EBITDA to net income, its nearest GAAP measure, for the years ended September 30, 2023 and 2022 (in $000’s): For the Year Ended September 30, 2023 2022 Net (loss) income $ (102) $ 24,741 Depreciation and amortization 14,257 7,168 Stock-based compensation 446 37 Interest expense, net 12,741 4,209 Income tax expense 1,571 6,875 Gain on bankruptcy settlement — (11,352) Loss on extinguishment of debt — 84 SW Financial settlement gain (2,750) — Disposition of SW Financial 1,697 — Acquisition costs 3,554 1,470 Write-off of fixed assets — 438 Impairment of goodwill and intangibles — 4,910 Other non-recurring company initiatives 124 (196) Adjusted EBITDA $ 31,538 $ 38,384 Adjusted EBITDA decreased by approximately $6.8 million, or 17.8%, for the year ended September 30, 2023, as compared to the prior year period.
Adjusted EBITDA Reconciliation The following table presents a reconciliation of net loss to Adjusted EBITDA, its nearest GAAP measure, for the years ended September 30, 2024 and 2023 (in $000’s): For the Year Ended September 30, 2024 2023 Net loss $ (26,685) $ (102) Depreciation and amortization 17,215 14,257 Stock-based compensation 325 446 Interest expense, net 16,847 12,741 Income tax (benefit) expense (4,658) 1,571 Debt acquisition costs 183 — Disposition of Johnson 301 — SW Financial settlement gain — (2,750) Disposition of SW Financial — 1,697 Acquisition costs 2,314 3,554 Impairment of goodwill 18,056 — Other non-recurring company initiatives 599 124 Adjusted EBITDA $ 24,497 $ 31,538 Adjusted EBITDA decreased by approximately $7.1 million, or 22.3%, for the year ended September 30, 2024, as compared to the prior year period.
Other sources of financing may include stock issuances and additional loans; or other forms of financing. Any financing obtained may further dilute or otherwise impair the ownership interest of our existing stockholders.
Any financing obtained may further dilute or otherwise impair the ownership interest of our existing stockholders.
The reclassification decreased fiscal year 2022 cash generated from operating activities from $14.6 million as previously reported to $6.4 million as adjusted. Our primary sources of cash inflows are from customer receipts from sales on account, factored accounts receivable proceeds, and net remittances from directory services customers processed in the form of ACH billings.
Our primary sources of cash inflows are from customer receipts from sales on account, factored accounts receivable proceeds, and net remittances from directory services customers processed in the form of ACH billings.
Proceeds from borrowings under revolver loans, the issuance of notes payable and related party notes payable was primarily associated with the acquisitions of Flooring Liquidators and PMW.
Proceeds from borrowings under revolver loans, the issuance of notes payable and related party notes payable was primarily associated with the acquisitions of Flooring Liquidators and PMW. 39 Table of Contents Currently, the Company is not issuing common shares for liquidity purposes.
Selling and Marketing Expense Selling and marketing expense increased by approximately $1.0 million for the year ended September 30, 2023 as compared to the year ended September 30, 2022 primarily due to convention and trade show activity in our Flooring Manufacturing segment and Retail-Flooring segment due to the acquisition of Flooring Liquidators.
Sales and Marketing Expense Selling and marketing expense increased by approximately $8.9 million, or 66.4% for the year ended September 30, 2024 as compared to the year ended September 30, 2023, primarily due to expanding our sales force in connection with the acquisition of the Harris Flooring Group® brands, increased convention and trade show activity in our Flooring Manufacturing segment, as well as the acquisition of Flooring Liquidators.
Operating income for the year ended September 30, 2023 was approximately $6.1 million, as compared to operating income of approximately $14.2 million for the prior year period primarily due to those factors discussed above.
Operating income for the year ended September 30, 2024 was approximately $8.2 million, as compared to operating income of approximately $6.1 million for the prior year period primarily due to the factors discussed above. Steel Manufacturing Segment Revenue for the year ended September 30, 2024 increased by approximately $50.7 million, or 57.0%, as compared to the prior year.
Cost of revenue as a percentage of revenue was 77.5% for the year ended September 30, 2023, as opposed to 72.2% for the year ended September 30, 2022. The increase was primarily due to the acquisition of PMW, which has historically generated lower margins.
Cost of revenue as a percentage of revenue was 84.2% for the year ended September 30, 2024, as opposed to 77.5% for the year ended September 30, 2023. 37 Table of Contents The decrease in gross margin is primarily due to the acquisition of PMW, which has historically generated lower margins, as well as overall decreased margins in the Steel Manufacturing segment due to reduced production.
Corporate and Other Segment Revenues for the year ended September 30, 2023 decreased by approximately $6.8 million. The decrease was primarily due to the shutdown and deconsolidation of SW Financial in May 2023. Cost of revenue was 54.6% for the year ended 36 Table of Contents September 30, 2023, as opposed to 62.8% for the year ended September 30, 2022.
Corporate and Other Segment Revenues for the year ended September 30, 2024 decreased by approximately $2.2 million. The decrease was primarily due to the closure of SW Financial in May 2023. Operating loss for the year ended September 30, 2024 was approximately $8.1 million, as compared to a loss of approximately $7.6 million in the prior year.
The year over year decrease is primarily due to a decrease in net income due to overall reduced customer demand as a result of general economic conditions. 35 Table of Contents Results of Operations by Segment The following table sets forth the results of operations by segment (in $000’s): For the Year Ended Sep 30, 2023 For the Year Ended Sep 30, 2022 Retail-Entertainment Retail-Flooring Flooring Manufacturing Steel Manufacturing Corporate & Other Total Retail-Entertainment Retail-Flooring Flooring Manufacturing Steel Manufacturing Corporate & Other Total Revenue $ 78,124 $ 75,872 $ 109,770 $ 88,912 $ 2,493 $ 355,171 $ 86,156 $ — $ 130,850 $ 60,617 $ 9,290 $ 286,913 Cost of Revenue 35,373 48,103 85,879 68,889 1,361 239,605 40,573 — 98,942 43,739 5,832 189,086 Gross Profit 42,751 27,769 23,891 20,023 1,132 115,566 45,583 — 31,908 16,878 3,458 97,827 General and Administrative Expense 32,751 27,640 6,330 11,490 8,459 86,670 32,312 — 6,522 7,444 8,253 54,531 Selling and Marketing Expense 735 421 11,500 555 236 13,447 643 — 11,232 568 16 12,459 Impairment Expense — — — — — — — — — — 4,910 4,910 Operating Income (Loss) $ 9,265 $ (292) $ 6,061 $ 7,978 $ (7,563) $ 15,449 $ 12,628 $ — $ 14,154 $ 8,866 $ (9,721) $ 25,927 Retail-Entertainment Segment Revenue for the year ended September 30, 2023 decreased by approximately $8.0 million, or 9.3%, as compared to the prior year, primarily due to a deterioration in economic conditions.
The year over year decrease is primarily due to a decrease in pre-tax income due to overall reduced customer demand as a result of general economic conditions. 36 Table of Contents Results of Operations by Segment The following table sets forth the results of operations by segment (in $000’s): For the Year Ended Sep 30, 2024 For the Year Ended Sep 30, 2023 Retail-Entertainment Retail-Flooring Flooring Manufacturing Steel Manufacturing Corporate & Other Total Retail-Entertainment Retail-Flooring Flooring Manufacturing Steel Manufacturing Corporate & Other Total Revenue $ 71,023 $ 136,989 $ 124,929 $ 139,566 $ 333 $ 472,840 $ 78,124 $ 75,872 $ 109,770 $ 88,912 $ 2,493 $ 355,171 Cost of Revenue 30,094 87,812 92,578 117,508 24 328,016 35,373 48,103 85,879 68,889 1,361 239,605 Gross Profit 40,929 49,177 32,351 22,058 309 144,824 42,751 27,769 23,891 20,023 1,132 115,566 General and Administrative Expense 33,091 52,841 6,852 16,844 8,412 118,040 32,751 27,640 6,330 11,490 8,459 86,670 Selling and Marketing Expense 661 3,800 17,259 630 22 22,372 735 421 11,500 555 236 13,447 Impairment Expense — 18,056 — — — 18,056 — — — — — — Operating Income (Loss) $ 7,177 $ (25,520) $ 8,240 $ 4,584 $ (8,125) $ (13,644) $ 9,265 $ (292) $ 6,061 $ 7,978 $ (7,563) $ 15,449 Retail-Entertainment Segment Revenue for the year ended September 30, 2024 decreased by approximately $7.1 million, or 9.1%, as compared to the prior year.
The increase is primarily due to a reduction in purchases of inventory, a reduction in income taxes receivable, as well as an increase in accrued liabilities during the period.
The decrease was primarily due to an increase in net loss, reduction in purchases of inventory, increases in depreciation and amortization and the amortization of right-of-use assets, as well as a decrease in accrued liabilities during the period.
Adjusted EBITDA is also a measure that is customarily used by financial analysts to evaluate a 32 Table of Contents company’s financial performance, subject to certain adjustments.
Additionally, this measure is used by management to evaluate operating results and perform analytical comparisons and identify strategies to improve performance. Adjusted EBITDA is also a measure that is customarily used by financial analysts to evaluate a company’s financial performance, subject to certain adjustments.
Operating loss for the year ended September 30, 2023 was approximately $7.6 million, as compared to a loss of approximately $9.7 million in the prior year. Revenues and operating income for our legacy directory services business continue to decline due to decreasing renewals. We expect revenue and operating income from this segment to continue to decrease in the future.
Revenues and operating income for our legacy directory services business continue to decline due to decreasing renewals. We expect revenue and operating income from this segment to continue to decrease in the future. We are no longer accepting new customers in our directory services business.
PMW offers world-class metal forming, assembly, and finishing solutions across diverse industries, including appliance, automotive, hardware, electrical, electronic, medical products, and devices.
PMW offers world-class metal forming, assembly, and finishing solutions across diverse industries, including appliance, automotive, hardware, electrical, electronic, medical products, and devices. Central Steel On May 17, 2024, Precision Marshall acquired Central Steel. Founded in 1969 in Chicago, Illinois, Central Steel is a manufacturer of specialized fabricated metal products.
General and Administrative Expense General and administrative expense increased by approximately $32.1 million or 58.9%, for the year ended September 30, 2023 as compared to the year ended September 30, 2022, primarily due to the acquisitions of Kinetic in June 2022, Flooring Liquidators in January 2023, and PMW in July 2023, which collectively contributed $33.8 million of general and administrative expense.
General and Administrative Expense General and administrative expense increased by approximately $31.4 million, or 36.2%, for the year ended September 30, 2024 as compared to the year ended September 30, 2023. The increase is primarily due to the acquisitions of Flooring Liquidators and PMW during fiscal year 2023.
Contractual Obligations The following table summarizes our contractual obligations consisting of debt obligations and lease agreements and the effect such obligations are expected to have on our future liquidity and cash flows (in $000's): Payments due by Period Less Than One Year One to Three Years Three to Five Years More Than Five Years Total Notes payable $ 23,077 $ 34,275 $ 34,017 $ 10,418 $ 101,787 Notes payable - related party 4,000 2,000 4,914 — 10,914 Seller notes - related party — 500 38,498 — 38,998 Lease obligations 18,984 31,864 22,846 134,998 208,692 Total $ 46,061 $ 68,639 $ 100,275 $ 145,416 $ 360,391 Off-Balance Sheet Arrangements At September 30, 2023, we had no off-balance sheet arrangements, commitments or guarantees that require additional disclosure or measurement.
Contractual Obligations The following table summarizes our contractual obligations consisting of debt obligations and lease agreements and the effect such obligations are expected to have on our future liquidity and cash flows (in $000's): Payments due by Period Less Than One Year One to Three Years Three to Five Years More Than Five Years Total Notes payable $ 43,816 $ 43,134 $ 2,591 $ 9,269 $ 98,810 Notes payable - related party 6,400 — 4,934 — 11,334 Seller notes - related party 2,500 3,000 37,361 — 42,861 Lease obligations 21,608 36,274 23,371 153,946 235,199 Total $ 74,324 $ 82,408 $ 68,257 $ 163,215 $ 388,204 Off-Balance Sheet Arrangements At September 30, 2024, we had no off-balance sheet arrangements, commitments, or guarantees that require additional disclosure or measurement.
Over the last decade, Marquis has been an innovator and leader in the value-oriented polyester carpet sector, which is currently the market’s fastest-growing fiber category. Marquis focuses on the residential, niche commercial, and hospitality end-markets and serves thousands of customers. Since commencing operations in 1995, Marquis has built a strong reputation for outstanding value, styling, and customer service.
Over the last decade, Marquis has been an innovator and leader in the value-oriented polyester carpet sector, which is currently the market’s fastest-growing fiber category.
Our cash flows used in investing activities of approximately $40.0 million for the year ended September 30, 2022 consisted primarily of purchases of property and equipment and our acquisitions of Kinetic and Better Backers.
Cash Flows from Investing Activities Our cash flows used in investing activities of approximately $21.5 million for the year ended September 30, 2024 consisted of the acquisitions of CRO by Flooring Liquidators, Johnson by CRO, Central Steel by Precision Marshall, and Midwest Grinding by Kinetic, as well as purchases of property and equipment.
Retail-Entertainment segment revenue decreased by approximately $8.0 million, or 9.3%, to approximately $78.1 million for the year ended September 30, 2023, as compared to $86.2 million for the year ended September 30, 2022, and was primarily due to reduced demand caused by a deterioration in economic conditions. Our Retail-Flooring segment consists of Flooring Liquidators, which we acquired in January 2023.
Retail-Entertainment segment revenue decreased by approximately $7.1 million, or 9.1%, to approximately $71.0 million for the year ended September 30, 2024, as compared to $78.1 million for the year ended September 30, 2023, and was primarily due reduced consumer demand and a shift in sales mix toward used products, which generally have lower ticket sales with higher margins.
Flooring Manufacturing Segment Revenue for the year ended September 30, 2023 decreased by approximately $21.1 million, or 16.1%, as compared to the prior year, primarily due to reduced customer demand as a result of general economic conditions.
Flooring Manufacturing Segment Revenue for the year ended September 30, 2024 increased by approximately $15.2 million, or 13.8%, as compared to the prior year. Cost of revenue as a percentage of revenue was 74.1% for the year ended September 30, 2024, as opposed to 78.2% for the year ended September 30, 2023.
Flooring Liquidators serves retail and builder customers through two businesses: retail customers through its Flooring Liquidators retail stores, and builder and contractor customers through Elite Builder Services, Inc. Flooring Manufacturing Segment Our Flooring Manufacturing segment is comprised of Marquis Industries, Inc. (“Marquis”). Marquis is a leading carpet manufacturer and distributor of carpet and hard-surface flooring products.
("CRO"), a floor covering retailer and installer serving residential and commercial customers throughout Northwest Arkansas. Flooring Manufacturing Segment Our Flooring Manufacturing segment is comprised of Marquis Industries, Inc. (“Marquis”). Marquis is a leading carpet manufacturer and distributor of carpet and hard-surface flooring products.
Additionally, we have an unsecured revolving line of credit with Isaac Capital Group (“ICG Revolver”), a related party, which is utilized by the Company. As of September 30, 2023, we had total cash availability of approximately $37.1 million, comprised of approximately $4.3 million in cash, as well as approximately $32.8 million of available borrowing under our revolving credit facilities.
Additionally, we 38 Table of Contents have an unsecured revolving line of credit with Isaac Capital Group (“ICG Revolver”), a related party, which is utilized by the Company.
Adjusted EBITDA We evaluate the performance of our operations based on financial measures such as “Adjusted EBITDA,” which is a non-GAAP financial measure. We define Adjusted EBITDA as net income (loss) before interest expense, interest income, income taxes, depreciation, amortization, stock-based compensation, and other non-cash or nonrecurring charges.
We define Adjusted EBITDA as net income (loss) before interest expense, interest income, income taxes, depreciation, amortization, stock-based compensation, and other non-cash or nonrecurring charges. We believe that Adjusted EBITDA is an important indicator of the operational strength and performance of the business, including the business’ ability to fund acquisitions and other capital expenditures, and to service its debt.
The increase is primarily due to increased debt balances related to the acquisitions of Flooring Liquidators, Kinetic, and PMW, and to fund operations, and also higher interest rates during the period.
Interest Expense, net Interest expense, net increased by approximately $4.1 million or 32.2%, for the year ended September 30, 2024 as compared to the year ended September 30, 2023, primarily due to increased debt balances related to the acquisitions of Flooring Liquidators and PMW, and to fund operations, and increased interest rates during the period.
The increase is primarily due to the net assets received from the acquisitions of Flooring Liquidators and PMW, increases in accounts receivable and inventories, partially offset by increases in accounts payable, accrued liabilities, the current portion of long-term debt and the current portion of operating lease obligations. 38 Table of Contents Future Sources of Cash; New Products and Services We may require additional debt financing or capital to finance new acquisitions, refinance existing indebtedness or other strategic investments in our business.
Future Sources of Cash; New Products and Services We may require additional debt financing or capital to finance new acquisitions, refinance existing indebtedness or other strategic investments in our business. Other sources of financing may include stock issuances and additional loans; or other forms of financing.
Corporate and Other Segment Our Corporate and Other segment consists of certain corporate general and administrative costs, Salomon Whitney LLC, which was shut down during the three months ended June 30, 2023, and operations of certain legacy products and service offerings for which we are no longer accepting new customers.
Corporate and Other Segment Our Corporate and Other segment consists of certain corporate general and administrative costs, and operations of certain legacy products and service offerings for which we are no longer accepting new customers. 33 Table of Contents Adjusted EBITDA We evaluate the performance of our operations based on financial measures such as “Adjusted EBITDA,” which is a non-GAAP financial measure (defined below).
General and administrative expenses decreased slightly during the year ended September 30, 2023, as compared to the year ended September 30, 2022. Sales and marketing expenses increased slightly during the year ended September 30, 2023, as compared to the year ended September 30, 2022.
The increase in revenue and gross margin are primarily due to increased sales associated with the acquisition of the Harris Flooring Group® brands in the fourth quarter of fiscal year 2023. General and administrative expenses increased slightly during the year ended September 30, 2024, as compared to the year ended September 30, 2023.
Occasionally, as our Company history has demonstrated, we will issue stock and derivative instruments linked to stock for services and/or debt settlement. Working Capital We had working capital of approximately $85.0 million as of September 30, 2023 as compared to approximately $78.4 million as of September 30, 2022.
We prefer to use asset-based lending arrangements and mezzanine financing together with Company provided capital to finance acquisitions and have done so historically. Occasionally, as our Company history has demonstrated, we will issue stock and derivative instruments linked to stock for services and/or debt settlement.
The decrease was due to reduced customer demand as a result of general economic conditions. 34 Table of Contents Steel Manufacturing revenue increased by approximately $28.3 million, or 46.7%, to approximately $88.9 million for the year ended September 30, 2023, as compared to approximately $60.6 million for the year ended September 30, 2022.
The increase was primarily due to increased sales associated with the acquisition of the Harris Flooring Group® brands in the fourth quarter of fiscal year 2023. Steel Manufacturing revenue increased by approximately $50.7 million, or 57.0%, to approximately $139.6 million for the year ended September 30, 2024, as compared to approximately $88.9 million for the year ended September 30, 2023.
Steel Manufacturing Segment Revenue for the year ended September 30, 2023 increased by approximately $28.3 million, or 46.7%, as compared to the prior year, primarily due to the acquisitions of Kinetic during June 2022 and PMW during July 2023.
Sales and marketing expenses increased by approximately $5.8 million, or 50.1% during the year ended September 30, 2024, as compared to the year ended September 30, 2023, primarily due to increased compensation and benefit costs for additional sales staff related to the sales of the Harris Flooring Group® brands.
Flooring Manufacturing revenue decreased by approximately $21.1 million, or 16.1%, to approximately $109.8 million for the year ended September 30, 2023, as compared to approximately $130.9 million for the year ended September 30, 2022.
Revenue for the year ended September 30, 2024 increased by approximately $61.1 million, or 80.6%, to approximately $137.0 million, as compared to $75.9 million for the year ended September 30, 2023, and was primarily due the acquisition of Flooring Liquidators in the second quarter of fiscal year 2023, as well as the acquisition of CRO by Flooring Liquidators during the first quarter of fiscal year 2024. 35 Table of Contents Flooring Manufacturing revenue increased by approximately $15.2 million, or 13.8%, to approximately $124.9 million for the year ended September 30, 2024, as compared to approximately $109.8 million for the year ended September 30, 2023.
Revenue for the year ended September 30, 2023 was approximately $75.9 million, and cost of revenue as a percentage of revenue was 63.%. Operating loss for the year ended September 30, 2023 was approximately $290,000.
Operating loss for the year ended September 30, 2024 was approximately $25.5 million, compared to operating loss of approximately $0.3 million for the prior year period.
Removed
We believe that Adjusted EBITDA is an important indicator of the operational strength and performance of the business, including the business’ ability to fund acquisitions and other capital expenditures, and to service its debt. Additionally, this measure is used by management to evaluate operating results and perform analytical comparisons and identify strategies to improve performance.
Added
Flooring Liquidators serves retail and builder customers through two businesses: retail customers through its Flooring Liquidators retail stores, and builder and contractor customers through Elite Builder Services, Inc. On October 13, 2023, Flooring Liquidators acquired certain assets and assumed certain liabilities of Carpet Remnant Outlet, Inc.
Removed
Revenue for the year ended September 30, 2023 was approximately $75.9 million. During the year ended September 30, 2023, Flooring Liquidators acquired certain assets of Cal Coast Carpet Warehouse, Inc.
Added
Marquis focuses on the residential, niche commercial, and hospitality end-markets and serves thousands of customers. 32 Table of Contents Since commencing operations in 1995, Marquis has built a strong reputation for outstanding value, styling, and customer service. Its innovation has yielded products and technologies that differentiate its brands in the flooring marketplace.
Removed
The increase is primarily due to the acquisitions of Kinetic during June 2022 and PMW during July 2023, partially offset by a decrease of $6.4 million from Precision Marshall. The decrease by Precision Marshall was due to reduced customer demand as a result of general economic conditions.
Added
Central Steel offers over 2,300 unique products to more than 500 customers. Its extensive product line, primarily for data centers, includes cable racks, auxiliary framing, hardware, insulation products, and network bays.
Removed
General and administrative expense for Flooring Liquidators was approximately $27.6 million for the year ended September 30, 2023, and was primarily comprised of compensation, rent, and amortization expense.
Added
The Retail-Flooring segment consists of Flooring Liquidators, which we acquired in January 2023.
Removed
Loss on Impairment of Intangibles and Goodwill For the year ended September 30, 2022, in connection with quantitative impairment testing performed on SW Financial, we recorded a $4.9 million charge for impairment of intangibles and goodwill. This amount includes approximately $3.7 million for full impairment of goodwill, and approximately $1.2 million in partial impairment of customer relationships and trade names.
Added
The increase is primarily due to increased revenue of approximately $51.2 million at PMW, which was acquired during the fourth quarter of fiscal year 2023, and $6.0 million at Central Steel, which was acquired during May 2024, partially offset by a $6.5 million decrease in the Company’s other Steel Manufacturing businesses.
Removed
There were no similar impairments recognized during the year ended September 30, 2023. Interest Expense, net Interest expense, net increased by approximately $8.5 million or 202.7%, for the year ended September 30, 2023 as compared to the year ended September 30, 2022.
Added
Impairment of Intangibles and Goodwill During the fourth quarter of fiscal 2024, Flooring Liquidators recognized an $18.1 million goodwill impairment charge as a result of declining operations stemming from the negative impacts of general economic conditions (see Note 8 below). No impairment charges were recognized during the year ended September 30, 2023.
Removed
Gain on Bankruptcy Settlement During the year ended September 30, 2022, we recorded a gain of approximately $11.4 million due to the discharge of certain obligations relating to the ApplianceSmart bankruptcy. No similar gains or losses were recognized during the year ended September 30, 2023.
Added
Revenue decreased primarily due to reduced consumer demand and a shift in sales mix toward used products, which generally have lower ticket sales with higher margins. The shift in sales mix also contributed to the increase in gross margin to 57.6% for the year ended September 30, 2024, compared to 54.7% for the year ended September 30, 2023.
Removed
Cost of revenue as a percentage of revenue was 45.3% for the year ended September 30, 2023, as opposed to 47.1% for the year ended September 30, 2022. This decrease was primarily due to a higher percentage of used product sales, which generate higher margins.
Added
Revenue for the year ended September 30, 2024 was approximately $137.0 million, an increase of approximately $61.1 million, or 80.6%, compared to the prior year period revenue of $75.9 million.
Removed
Cost of revenue as a percentage of revenue was 78.2% for the year ended September 30, 2023, as opposed to 75.6% for the year ended September 30, 2022, and was primarily due to increases in raw material costs, as compared to the prior year.
Added
The increase is primarily due to increased revenue in Flooring Liquidator's builder design and installation segment, EBS, and the acquisitions of CRO and Johnson by Flooring Liquidators during the first quarter of fiscal year 2024. Gross margin for the year ended September 30, 2024 was 35.9%, compared to 36.6% for the prior year period.
Removed
We are no longer accepting new customers in our directory services business.
Added
The increase in operating loss was primarily due to the recognition of goodwill impairment of approximately $18.1 million, as discussed above, as well as a general decline in operations due to higher interest rates and a volatile housing market.
Removed
For the year ended September 30, 2022, the Company has reclassified approximately $8.2 million from operating activities to financing activities in its consolidated statement of cash flows for the period, which relates to proceeds received from a failed sales and leaseback transaction as part of the Kinetic acquisition.
Added
The increase is primarily due to increased revenue of approximately $51.2 million at PMW, which was acquired during the fourth quarter of fiscal year 2023, and $6.0 million at Central Steel, which was acquired in May 2024, partially offset by a $6.5 million decrease in the Company’s other Steel Manufacturing businesses.
Removed
Proceeds from borrowings under revolver loans and the issuance of notes payable was primarily associated with the acquisition of Kinetic. Currently, the Company is not issuing common shares for liquidity purposes. We prefer to use asset-based lending arrangements and mezzanine financing together with Company provided capital to finance acquisitions and have done so historically.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeITEM 7A. Quantitative and Qualitative Disclosures about Market Risk As of September 30, 2023, we did not participate in any market risk-sensitive commodity instruments for which fair value disclosure would be required.
Biggest changeITEM 7A. Quantitative and Qualitative Disclosures about Market Risk As of September 30, 2024, we did not participate in any market risk-sensitive commodity instruments for which fair value disclosure would be required.
We believe we are not subject in any material way to other forms of market risk, such as foreign currency exchange risk or foreign customer purchases or commodity price risk. 39 Table of Contents
We believe we are not subject in any material way to other forms of market risk, such as foreign currency exchange risk or foreign customer purchases or commodity price risk. 40 Table of Contents

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