DALLAS, TX / ACCESSWIRE / April 13, 2017 / Stonegate Capital Partners initiates research coverage on Live Ventures Incorporated (NASDAQ: LIVE).
Company Description
Live Ventures Incorporated ("LIVE") is a diversified holding company that is focused on acquiring profitable companies with demonstrated success. The Company operates through several wholly-owned subsidiaries that are positioned in diverse industries. LIVE's manufacturing subsidiary, Marquis Industries, Inc. ("Marquis") is a leading manufacturer of carpet and specialized high performance yarns, and Marquis is also a reseller of hard surface flooring. LIVE' most recent acquisition, Vintage Stock, Inc., is a retail entertainment company that specializes in new and used movies, video games, music, collectibles, comics, and toys. LIVE also operates an Internet-based business, LiveDeal, a deal engine that connects restaurants with consumers. Live Ventures Incorporated is headquartered in Las Vegas, Nevada, and has approximately 1200 employees.
Summary
Over the last five years, Live Ventures has had a dramatic transformation from an Internet marketing services company with a looming threat of a NASDAQ delisting to a growing diversified holding company with assets of over $120 million, annualized revenue estimates of $140 - $148M for the current year, a subsidiary with 57 retail stores located in 9 states, and another subsidiary that is one of the top ten residential carpet manufacturers in the U.S. LIVE has demonstrated that it is capable of executing on a disciplined approach to creating value for shareholders through strategic acquisitions of profitable companies with attractive valuations.
- Proven Success of Acquisition Strategy - LIVE is industry-agnostic and buys private companies generally using debt financing. Acquisitions are based on a set of consistent and straightforward criteria. In addition to meeting stringent parameters for IRR, revenue and earnings, the businesses must compete in a growing industry, have an easily understandable business model, a management team with a background of proven performance, and a history of profitability. The demonstrated success of LIVE's most recent acquisitions, Marquis Industries and Vintage Stock, signifies a turning point in the Company's operations and validates management's acquisition strategy.
- Focus on Shareholder Value - LIVE's focus over the last five years has been to allocate cash effectively, with the goal of increasing book value per share and overall intrinsic value for the Company. Book value per share has grown from $2.24 in 2015 to $14.11 as of Q1 2017 (although we note $39M in goodwill as of 12/31/16 on balance sheet). While continuing to grow its asset base and increase revenues and income through strategic acquisitions, the Company has been reducing long-term debt and reducing shares issued and outstanding through reverse splits, buy-back policies, and redemption of preferred shares. CEO Jon Isaac's commitment to the long-term growth of the Company is reflected in his personal history of buying shares. He owns approximately 40% of outstanding shares with a voluntary 5-year lock up period and continues to buy shares in the open market.
- Recent Results - Live Ventures' revamped business plan has led to a dramatic turnaround in its financial performance. Comparing Y-O-Y Q1 17 results (ending 12/31/16), revenues rose by more than 60%, gross profits nearly doubled, operating earnings grew by over 251%, and EBITDA grew approximately 190%. We note that in November 2016, LIVE executed a 1-for-6 reverse stock split.
- Management - Jon Isaac, current President and CEO, injected private funds to save the Company in 2011 from near bankruptcy and delisting. He brings to the table his extensive experience in executing multi-faceted transactions involving the government, as well as publicly traded and private companies. And he has assembled both a management team, as well as a BOD, with strong operational and financial backgrounds across a variety of industries.
- Valuation - Based on our estimates for LIVE for FY17 E, at $15.43 per share the Company is currently trading at an EV/EBITDA of 3.6x and a P/E multiple of 4.8x. With blended long-term growth potential in the low- to mid-single digits for the top line and expectations for continued margin expansion, resulting in annual improvements to EBITDA, we believe that LIVE deserves higher multiples. See page 8 of the report for further details.
The full report can be accessed by clicking the following link:
http://stonegateinc.com/reports/LIVE_April_2017_Final.pdf
About Stonegate Capital Partners
Stonegate Capital Partners is a Dallas-based corporate advisory firm dedicated to serving the specialized needs of small-cap public companies. Since our inception, our mission has been to find innovative, undervalued public companies for our network of leading institutional investors who seek high quality investment opportunities.
SOURCE: Stonegate Capital Partners
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