LIVE 10-K & 10-Q changes, risk factors and insider trading

•with respect to all segments, but particularly our manufacturing segment, changes or proposed changes in import or export tariffstrade restrictions or tariffs, and other isolationist trade practices and policies;

•restricting our and our wholly-ownedwholly owned subsidiary’s ability to make dividend payments and other payments;

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,judgments, all of which could negatively affect investor confidence and adversely impact our stock price.

Data breaches or other cybersecurity incidents involving customer or employee data stored by us could adversely affect our reputation and revenues.

We collect and store confidential information with respect to our customers and employees. A compromise of our data security systems or those of businesses with which we interact could result in information related to our customers or employees being obtained by unauthorized persons. Any such breach of or cybersecurity incident involving our systems could lead to fraudulent activity resulting in claims and lawsuits against us or other operational problems or interruptions in connection with such breaches. Any breach or unauthorized access in the future could result in significant legal and financial exposure and damage to our reputation that could potentially have an adverse effect on our business. While we also seek to obtain assurances that others with whom we interact will protect confidential information, there is a risk the confidentiality of data held or accessed by others may be compromised. If a compromise of our data security or function of our computer systems or website were to occur, it could have a material adverse effect on our operating results and financial condition, cash flows and liquidity and possibly, subject us to additional legal, regulatory and operating costs and damage our reputation in the marketplace.

On October 1, 2021, the Company Defendants and third-party defendants moved to dismiss the SEC complaint. On September 7, 2022, the court denied the Company Defendants’ motion to dismiss, but granted one of the third-party defendant’s motions to dismiss, granting the SEC leave to file an amended complaint. On September 21, 2022, the SEC filed an amended complaint to which the Company Defendants filed an answer on October 11, 2022, denying liability. 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 20242025 and filed cross Motions for Summary Judgment in October 2025. The court has not ruled on the motions for summary judgement.judgment 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 inand the case will beis on pause.hold until the motions are ruled upon.

Some of our suppliers relydepend on foreign sources to manufacture a portion of thecertain products orand raw materials that we purchasepurchase. from them. As a result,Consequently, any event causing a disruption ofto imports, includingsuch naturalas disasters,uncertainty supply chain disruptions or the imposition of import restrictions orsurrounding trade restrictionsnegotiations, changes in the form of tariffs or quotas, rapidly shifting trade policies, natural disasters, or other supply chain interruptions, could increase the costcosts and reduce theproduct supplyavailability. ofThese productsimpacts available, which couldmay lower theirour suppliers’ sales and profitability and, indirectly,in turn, adversely affect ours.

The floor covering industry is sensitive to changes in general economic conditions, such as consumer confidence and income, corporate and government spending, trade policy, interest rate levels, availability of credit, and demand for housing. Significant or prolonged declines in the U.S. or global economies could have a material adverse effect on the Company’s flooring manufacturing business.

The prices of raw materials and fuel-related costs vary significantly with market conditions. Although Marquis generally attempts to pass on increases in raw material, energy, and fuel-related costs to its customers, its ability to do so is dependent upon the rate and magnitude of any increase, competitive pressures, and market conditions for its products. These pressures are compounded by the imposition of import or export restrictions or trade restrictions by the United States government or foreign countries, in the form of tariffs or quotas, or rapidly changing trade policy, all of which impact the prices of raw goods. 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.

Our steel manufacturing segment and other steel producers have periodically faced problems obtaining sufficient raw materials in a timely manner, and sometimes at all, due to a limited number of suppliers, delays, defaults, trade restrictions, severe weather conditions, force majeure events (including public health crises, such as the COVID-19 pandemic and global supply chain issues and disruptions), shortages, or transportation problems (such as shortages of barges, vessels, rail cars or trucks, or disruption of rail lines, waterways, or natural gas transmission lines), resulting in production curtailments. As a result, we may be exposed to risks concerning pricing and availability of raw materials from third parties, as well as supply and logistics constraints moving its own raw materials to its plants. In addition, if the already limited number of suppliers consolidate, it would limit our steel manufacturing segment’s negotiating power for raw material purchases.

Precision Marshall’s manufacturing employees are covered by a collective bargaining agreement through the United Steelworkers and its warehouse and distribution workforce employees are covered by a collective bargaining agreement through the International Association of AeronauticalMachinists and Machinists.Aerospace Workers. These agreements were successfully renegotiated during 2021 without a work stoppage, and were extended through September 2026 and April 2026, respectively. 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. Strikes and/or work stoppages could negatively affect Precision Marshall’s operational and financial results and may increase operating expenses and, indirectly, ours.

Our steel manufacturing segment’s business depends on manufacturing products in North America. 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.policies.The imposition of import or export restrictions or trade restrictions by the United States government or foreign countries, in the form of tariffs or quotas, or rapidly changing trade policy, could have a material adverse effect on our steel manufacturing segment’s business.

Because we have no current plans to pay cash dividends on our common stock for the foreseeable future, you may not receive any return on investment unless you sell your shares of common stock for a price greater than your purchase price for your shares.

Our principal offices are located at 3258548 E.Rozita WarmLee Springs Road,Avenue, Suite 102,305, Las Vegas, Nevada 89119,89113, 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”.

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. 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.

Our Steel Manufacturing segment is comprised of Precision Industries, Inc. (“Precision Marshall”), and its wholly-ownedwholly subsidiaries,owned subsidiaries The Kinetic Co., Inc. (“Kinetic”), CSF Holdings, LLC (“Central Steel”), and Precision Metal Works, Inc. (“PMW”), and Central Steel Fabricators, LLC. ("Central Steel").

On July 20, 2023, wePrecision 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. PMW offers world-class metal forming, assembly, and finishing solutions across diverse industries, including appliance, automotive, hardware, electrical, electronic, medical products, and devices.

FlooringRevenue Manufacturing revenue increaseddecreased by approximately $15.2$27.9 million, or 13.8%,million to approximately $124.9$444.9 million for the year ended September 30, 2024,2025 as compared to approximately $109.8$472.8 million for the year ended September 30, 2023. 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 2023.2024.

CorporateRetail-Entertainment and Othersegment revenue decreasedincreased by approximately $2.2$6.5 million, or 86.6%,9.1%, to approximately $333,000$77.5 million for the year ended September 30, 2025, as compared to approximately $71.0 million 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 Financialchanges in Mayproduct 2023.mix toward new products, which typically have higher selling prices.

General and administrative expense increaseddecreased by approximately $31.4$4.3 million, or 36.2%,3.6%, for the year ended September 30, 20242025 as compared to the year ended September 30, 2023.2024. TheThis increasedecrease iswas primarily duedriven toby thetargeted acquisitionscost ofreduction Flooringinitiatives Liquidatorsin our Retail-Flooring segment and PMWlower duringcompensation fiscaland yearother 2023.general and administrative expenses in our Corporate and Other segment.

SalesSelling and Marketing Expense

Selling and marketing expense increaseddecreased by approximately $8.9$5.1 million, or 66.4%22.6% for the year ended September 30, 20242025 as compared to the year ended September 30, 2023,2024, primarily due to expanding ourreduced sales force in connection with the acquisition of the Harris Flooring Group® brands, increased convention and trademarketing show activityactivities in our Retail-Flooring and Flooring Manufacturing segment, as well as the acquisition of Flooring Liquidators.segments.

No impairment charges were recognized during the year ended September 30, 2025. 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 87 below). No impairment charges were recognized during the year ended September 30, 2023.

Interest expense, net increaseddecreased by approximately $4.1$1.3 million or 32.2%,7.7%, for the year ended September 30, 20242025 as compared to the year ended September 30, 2023,2024, primarily due to increasedlower average debt balances related to the acquisitions of Flooring Liquidators and PMW, and to fund operations, and increased interest rates during the period.balances.

OurThe Retail-FlooringRetail-Entertainment segment consists of Flooring Liquidators, which we acquired in January 2023. Revenuerevenue for the fiscal year ended September 30, 20242025, was approximately $137.0$77.5 million, an increase of approximately $61.1$6.5 million, or 80.6%,9.1%, compared to approximately $71.0 million in the prior yearyear. periodThe revenue ofgrowth $75.9was million.driven Theby increasestrong isconsumer primarilydemand duefor to increased revenue in Flooring Liquidator's builder designvintage and installationcollectible segment,media. EBS, andFor 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, 20242025, wasgross 35.9%,margin increased to 57.9%, compared to 36.6%57.6% in the prior year. Operating income for the prior year period. Operating loss for thefiscal year ended September 30, 20242025, was approximately $25.5$10.7 million,million compared to operating loss of approximately $0.3$7.2 million forin the prior yearyear. period.Strong Therevenue increasegrowth and disciplined general and administrative expense management drove the improvement 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.results.

Adjusted EBITDA decreasedincreased by approximately $7.1$8.9 million, or 22.3%,36.3%, for the year ended September 30, 2024,2025, as compared to the prior year period. The decreaseincrease was primarily due to an overall decreasedecreases in operating income,expenses due to targeted cost reduction initiatives, as discussed above.

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, and pay our contractual obligations for at least the next 12 months.

As of September 30, 2024,2025, we had total cash and borrowing availability of approximately $33.3$38.1 million, comprised of approximately $4.6$8.8 million in cash, as well as approximately $28.7$29.3 million of available borrowing under our revolving credit facilities. As of September 30, 2024, the Company concluded that PMW was in default of its Fixed Cost Coverage Ratio (“FCCR”) covenant, as specified in the credit agreement governing the Revolving Credit Facility. This default provides the creditor rights to accelerate and made immediately due the borrowings under the Revolving Credit Facility and Fifth Third M&E Loan. As of the date of the filing of this 10-K, Fifth Third Bank has not exercised these rights and management is actively working with Fifth Third Bank to resolve the default. As such, as of September 30, 2024, PMW’s long-term debt balances, in the amount of approximately $16.9 million, have been reclassified to current liabilities. As we continue to pursue acquisitions and other strategic transactions to expand and grow our business, we regularly monitor capital market conditions and may raise additional funds through borrowings or public or private sales of debt or equity securities. 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.

The Company’s cash at September 30, 20242025 was approximately $4.6$8.8 million compared to approximately $4.3$4.6 million at September 30, 2023,2024, an increase of approximately $300,000.$4.2 million. Net cash provided by operations was approximately $20.6$28.7 million for the year ended September 30, 2024,2025, as compared to net cash provided by operations of approximately $26.0$20.6 million for the same period in 2023.2024. The decreaseincrease was primarily duedriven toby an increase inhigher net loss,income, reductionreduced ininventory purchasespurchases, increased collections of inventory,accounts increases in depreciationreceivable, and amortization and thegreater amortization of right-of-use assets, aspartially welloffset asby ahigher decreasepayments infor accounts payable and accrued liabilities during the period.liabilities.

Our cash flows used in investing activities of approximately $7.7 million for the year ended September 30, 2025 consisted of purchases of property and equipment. 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. 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.

We had working capital of approximately $62.1 million as of September 30, 2025 as compared to approximately $52.3 million as of September 30, 2024 as compared to approximately $85.0 million as of September 30, 2023; aan decreaseincrease of approximately $32.0$9.8 million. The decrease iswas primarily due to increases in the current portion of long-term debt, an increase in obligations under accounts payable, and a decrease in inventory balances, partially offset by an increase in accounts receivable.

For a description of our significant accounting policies and an understanding of the significant factors that influenced our performance during the three and sixnine months ended MarchJune 31,30, 2026, 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 unaudited condensed consolidated financial statements, including the related notes, appearing in Part I, Item 1 of this Quarterly Report on Form 10-Q, as well as our Annual Report on Form 10-K for the fiscal year ended September 30, 2025 (the “2025 Form 10-K”).

Our Steel Manufacturing segment is comprised of Precision Metal Works, Inc. (“PMW”), Precision Industries, Inc. (“Precision Marshall”), and its wholly-owned subsidiaries The Kinetic Co., Inc. (“Kinetic”), and Central Steel Fabricators, LLC.LLC (“Central Steel”).

Our unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Preparation of these statements requires us to make judgments and estimates. Some accounting policies have a significant and material impact on amounts reported in these unaudited condensed consolidated financial statements. Estimates and assumptions are based on management's experience and other information available prior to the issuance of our unaudited condensed consolidated financial statements. Our actual realized results may differ materially from management’s initial estimates as reported. Our critical and significant accounting policies include Trade Receivables, Inventories, Goodwill, Revenue Recognition, Fair Value Measurements, and Income Taxes. For a summary of our significant accounting policies and the means by which we develop estimates thereon, see Part II, Item 8 – Financial Statement and Supplementary Data - Notes to Consolidated Financial Statements Note 2 – Summary of Significant Accounting Policies in our 2025 Form 10-K.

Results of Operations Three Months Ended MarchJune 31,30, 2026 and 2025

The following table sets forth certain statement of income items and as a percentage of revenue, for the three months ended MarchJune 31,30, 2026 and 2025 (in $000’s):

Revenue decreased approximately $4.1$3.6 million, or 3.8%,3.2%, to $102.9$108.9 million for the quarter ended MarchJune 31,30, 2026, compared to $107.0$112.5 million in the prior-year period. TheRevenue decreasedecreased primarily reflectsdue to a decline of approximately $7.2$9.0 million in the Retail-Flooring segment, partially offset by an increaseincreases of approximately $2.7$2.4 million in the Retail-Entertainment segment, $1.8 million in the Steel Manufacturing segment, and $1.1 million in the Flooring Manufacturing segment.

Gross profit decreased approximately $0.6$1.2 million, or 1.6%,3.1%, to $34.6$37.1 million for the quarter ended MarchJune 31,30, 2026, compared to $35.1$38.3 million in the prior-year period,period. The decline was driven primarily by lower revenuesrevenue in the Retail-Flooring segment. Gross margin increased 80approximately 10 basis points to 33.6%,34.1%, compared to 32.8%34.0% in the prior-year period, reflecting improved margins in the Steel Manufacturing, Flooring Manufacturing,Retail-Flooring and RetailSteel -Manufacturing Flooring segments as well as a more favorable revenue mix, as the higher-margin Retail-Entertainment segment represented a larger share of consolidated revenue.segments.

General and Administrative expenses decreasedincreased by 2.3%approximately 5.0% to approximately $27.7$27.6 million for the three months ended MarchJune 31,30, 2026, as compared to $26.3 million for the three months ended MarchJune 31,30, 2025. The decreaseincrease was driven primarily by targetedhigher cost‑reduction initiativescompensation in our Retail‑FlooringRetail-Entertainment and Flooring Manufacturing segments,segments includingand lowerby higher compensation expense and reduced professional fees,fees at the corporate level. These increases were partially offset by increasedlower compensationG&A and occupancy costsexpense in our Retail-EntertainmentRetail-Flooring segment.segment, primarily due to reduced compensation, as well as lower G&A expense in our Steel Manufacturing segment due mainly to reduced depreciation and other costs.

Sales and marketing expense increased 3.4%5.4% to approximately $4.9$4.2 million for the three months ended March 31, June 30, 2026, compared with the three months ended March 31, June 30, 2025, primarily reflecting higher sales and marketing activity in the RetailRetail-Flooring Flooringand segment.Retail-Entertainment segments.

Interest expense, net, was approximately $3.9$3.8 million for both the three months ended MarchJune 31,30, 2026, and flat as compared to the three months ended MarchJune 31,30, 2025 due to lower average debt balances.2025.

Results of Operations SixNine Months Ended MarchJune 31,30, 2026 and 2025

The following table sets forth certain statement of income items and as a percentage of revenue, for the sixnine months ended MarchJune 31,30, 2026 and 2025 (in $000’s):

Revenue decreased approximately $7.1$10.7 million, or 3.2%, to $211.4$320.4 million for the sixnine months ended MarchJune 31,30, 2026, compared to revenue of $218.5$331.1 million in the prior-year period. NetRevenue of intercompany sales eliminations, the decreasedecreased primarily reflectsdue to a decline of approximately $12.2$22.6 million in the Retail-Flooring,Retail-Flooring Flooring Manufacturing, and Steel Manufacturing segments,segment, partially offset by an increaseincreases of approximately $5.1$7.5 million in the Retail-Entertainment segment, $2.3 million in the Flooring Manufacturing segment, and $2.1 million in the Steel Manufacturing segment.

Gross profit decreased by approximately $0.6$1.8 million, or 0.8%,1.6%, to approximately $69.9$107.0 million for the sixnine months ended MarchJune 31,30, 2026, compared to $70.5$108.8 million in the prior-year period, primarily due to lower revenue in the Retail-Flooring segment. Gross margin increased 8050 basis points to 33.1%,33.4%, compared to 32.3%32.9% in the prior-year period, reflecting improved operating efficiencies in the Flooring Manufacturing and Steel Manufacturing segments, as well as a more favorable revenue mix, as the higher-margin Retail-Entertainment segment represented a larger share of consolidated revenue.

General and Administrative expenses decreased by 4.9%1.8% to approximately $55.5$83.1 million for the sixnine months ended MarchJune 31,30, 2026, as compared to the prior-year period. The decrease was driven primarily by targeted cost‑reductioncost-reduction initiatives in our Retail‑Flooring,Retail-Flooring Flooring Manufacturing, and Corporate and Other segments,segment, including lower compensation expense and reduced professionalbank and credit card fees, partially offset by increased compensationcompensation, depreciation, and occupancy costs in our Retail-Entertainment segment, as well as higher professional fees in our Retail-Flooring segment.

Sales and marketing expense decreasedwas byessentially 3.3% to approximately $9.0 millionunchanged for the sixnine months ended MarchJune 31,30, 2026, as compared to the prior-year period, primarily due to reduced sales and marketing activities in our Flooring Manufacturing segment.period.

During the sixnine months ended MarchJune 31,30, 2026, PMW recognized a $4.0 million goodwill impairment charge due to sustained operating losses and revenue and gross margin performance below internal projections (see Note 7). No goodwill impairment charges were recognized during the sixnine months ended MarchJune 31,30, 2025.

Interest expense, net, decreased by approximately $0.6$0.7 million for the sixnine months ended MarchJune 31,30, 2026 as compared to the sixnine months ended MarchJune 31,30, 2025 due to lower average debt balances.

Results of Operations by Segment for the Three Months Ended MarchJune 31,30, 2026 and 2025

Retail-Entertainment segment revenue for the quarter ended MarchJune 31,30, 2026 was $21.2$21.4 million, an increase of approximately $2.7$2.4 million, or 14.8%,12.7%, compared to $18.5$19.0 million in the prior-year period. The revenueRevenue growth was driven by strong consumer demand across all product lines. Gross margin forwas theunchanged quarterat decreased to 57.9%, from 59.1% in the prior-year period, reflecting a shift in the sales mix toward new products, which typically have lower margins.57.4%. Operating income for the quarter ended MarchJune 31,30, 2026 was $3.3$3.1 million compared to y $2.5$2.3 million in the prior-year period. StrongThe revenue growth and disciplined management of general and administrative expenses drove the improvementincrease in operating results.income was primarily driven by the segment's revenue growth.

Retail-Flooring segment revenue for the quarter ended MarchJune 31,30, 2026 was $20.2$21.4 million, a decrease of approximately $7.2$9.0 million, or 26.2%,29.4%, compared to $27.4$30.4 million in the prior-year period. The decline was primarily driven by lower retail and contractor sales due to the continued headwinds in the new-home construction and home-refurbishment markets. Gross margin forincreased theto quarter was 34.9%,37.1%, compared to 34.4%35.5% in the prior-year period.period, Thereflecting increasea wasmore primarily due tofavorable sales mix. Operating loss for the quarter ended MarchJune 31,30, 2026 was $4.6$3.2 million, compared to an operating loss of $2.7$0.7 million in the prior-year period. The increase in operating loss was driven mainlyprimarily by lower revenue and gross profit,revenue, partially offset by lower general and administrative expenses resulting from cost-reduction initiatives implemented during fiscal year 2025.initiatives.

Flooring Manufacturing segment revenue for the quarter ended MarchJune 31,30, 2026 was $30.3$31.8 million, aan decreaseincrease of approximately $1.0$0.8 million, or 3.2%,2.8%, compared to $31.3$31.0 million in the prior-year period. TheFlooring declineManufacturing wassegment primarilyrevenue, attributable to reduced demand in the new-home construction and home-refurbishment markets. Netnet of intercompany eliminations, revenue decreasedincreased approximately $0.6$1.1 million compared to the prior-year period. Gross margin for the quarter increaseddecreased to 26.9%,25.8%, compared to 26.5%27.6% in the prior-year period. The increase in gross margin wasperiod, primarily due to improvedincreased manufacturingraw efficiency.material and other input costs. Operating income for the quarter ended MarchJune 31,30, 2026 was $2.0$2.5 million, compared to $1.6$2.7 million for the prior-year period. The increase in operating incomedecrease was primarily duedriven toby improvedreduced gross marginsmargins, andpartially offset by lower operating expenses resulting from cost-reductioncost reduction initiatives.

Steel Manufacturing segment revenue for the quarter ended MarchJune 31,30, 2026 was $32.5$36.3 million, an increase of approximately $1.1$2.5 million, or 3.4%,7.3%, compared to $31.5$33.8 million in the prior-year period. The increase in revenue was primarily driven by higher sales volumes in the fabricated, hardened wear, and tool and die businesses, partially offset by lower revenue in the metal forming, assembly, and finishing solutions business. NetSteel Manufacturing segment revenue, net of intercompany eliminations, revenue increased approximately $0.9$1.8 million compared to the prior-year period. Gross margin was 22.1% for the quarter,24.6%, compared to 21.0%23.0% forin the prior-year period.period, The increase in gross margin was primarily due toreflecting a more favorable sales mix. Operating lossincome was $1.7$3.9 million for the quarter ended MarchJune 31,30, 2026 compared to operating income of $2.2$2.3 million in the prior-year period, representing a $3.9 million year-over-year decrease.period. The decreaseincrease was primarily driven by aimproved non-cashgross goodwillprofit impairmentand chargelower ofoperating aexpenses $4.0resulting millionfrom relatedcost toreduction PMW.initiatives.

Results of Operations by Segment for the SixNine Months Ended MarchJune 31,30, 2026 and 2025

Retail-Entertainment segment revenue for the sixnine months ended MarchJune 31,30, 2026 was $44.8$66.3 million, an increase of approximately $5.1$7.5 million, or 12.8%, compared to $39.7$58.8 million in the prior-year period. The revenue growthincrease was driven by strong consumer demand across all product lines. Gross margin for the sixnine months ended MarchJune 31,30, 2026 was 57.7%,57.6%, essentially flat compared to 57.8%57.7% in the prior-year period. Operating income for the sixnine months ended MarchJune 31,30, 2026 was $8.0$11.1 million compared to $5.9$8.2 million in the prior-year period. StrongThe revenue growth and disciplined management of general and administrative expenses drove continued improvementincrease in operating results.income was primarily driven by the segment's revenue growth.

Retail FlooringRetail-Flooring segment revenue for the sixnine months ended MarchJune 31,30, 2026 was $45.5$67.0 million, a decrease of approximately $13.6$22.6 million, or 23.0%,25.2%, compared to $59.1$89.5 million in the prior-year period. The decline was primarily driven by lower retail and contractor sales due to the continued headwinds in the new-home construction and home-refurbishment markets. Gross margin for the sixnine months ended MarchJune 31,30, 2026 was 33.1%,34.4%, compared to 35.9%35.7% in the prior-year period. The decreasedecline in gross margin was primarily due to a less favorable overall product mix. Operating loss for the sixnine months ended MarchJune 31,30, 2026 was $8.3$11.5 million, compared to an operating loss of $4.9$5.6 million in the prior-year period. The increase in operating loss was driven mainlyprimarily by lower revenue and gross margin,revenue, partially offset by reduced operating expenses resulting from cost-reduction initiatives implemented during fiscal year 2025.initiatives.

Flooring Manufacturing segment revenue for the sixnine months ended MarchJune 31,30, 2026 was $59.1$91.0 million, a decrease of approximately $1.3$0.6 million, or 2.2%,0.7%, compared to $60.5$91.6 million in the prior-year period. The decline wasreflected primarilylower attributableintercompany sales to reducedthe Retail-Flooring segment as demand in the new-home construction and home-refurbishment markets.markets Netremained soft. Flooring Manufacturing segment revenue, net of intercompany eliminations, revenue increased approximately $1.3$2.3 million compared to the prior‑year period. Gross margin for the sixnine months ended MarchJune 31,30, 2026 increased to 26.0%25.9% from 24.1%25.2% in the prior‑year period, primarily due to improved manufacturing efficiency. Operating income for the sixnine months ended MarchJune 31,30, 2026, was $4.3$6.8 million, an increase of 92.0%,38.7%, compared to $2.2$4.9 million for the prior-year period. The improvement in operating income reflects the combined impact of higher gross margins and the ongoing benefits of cost‑reduction actions implemented across the segment.actions.

Steel Manufacturing segment revenue for the sixnine months ended MarchJune 31,30, 2026 was $64.4$100.7 million, aan decreaseincrease of approximately $0.4$2.1 million, or 0.6%,2.1%, compared to $64.8$98.6 million in the prior-year period. The declineincrease in revenue was primarily attributable to lower sales in the metal forming, assembly, and finishing solutions business, partially offsetdriven by increasedhigher sales volumes in the fabricated, hardened wear, and tool and die businesses.businesses, Netpartially ofoffset intercompanyby sales eliminations,lower revenue increased approximately $0.2 million compared toin the prior-yearmetal period.forming, assembly, and finishing solutions business. Gross margin increased to 21.0%22.3% for the sixnine months ended MarchJune 31,30, 2026, compared to 19.4%20.7% for the prior-year period. The increase in gross margin was primarily due to a more favorable sales mix. Operating lossincome for the sixnine months ended MarchJune 31,30, 2026 was $50,000,$3.8 million, compared to operating income of $3.4$5.7 million in the prior-year period, a decrease of approximately $3.3$1.9 million driven primarily byattributable to a non-cash goodwill impairment charge of approximately $4.0 million related to PMW.PMW, partially offset by higher gross profit.

Corporate and Other segment operating loss was $2.1$3.0 million and $2.9 million for the sixnine months ended MarchJune 31,30, 2026, and 2025, respectively. The reduction in operating loss was primarily attributable to lower corporate expenses, including compensation and professional fees.

The following table presents a reconciliation of net income (loss) to Adjusted EBITDA for the three and sixnine months ended MarchJune 31,30, 2026 and 2025 (in 000's):

Adjusted EBITDA for the quarter ended MarchJune 31,30, 2026 was approximately $5.9$9.3 million, a decrease of approximately $0.6$3.9 million, or 8.8%,29.5%, compared to the prior-year period. The decrease is primarily due to a decrease in gross profit,revenue, as discussed above.

Adjusted EBITDA for the sixnine months ended MarchJune 31,30, 2026 was approximately $13.7$23.0 million, ana increasedecrease of approximately $1.5$2.4 million, or 12.2%,9.5%, compared to the prior-year period. The increasedecrease is primarily due to a decrease in operatingrevenue, expenses.as discussed above.

As of MarchJune 31,30, 2026, we had total cash on hand of approximately $15.2$10.9 million and approximately $24.6$28.9 million of available borrowing under our revolving credit facilities. As we continue to pursue acquisitions and other strategic transactions to expand and grow our business, we regularly monitor capital market conditions and may raise additional funds through borrowings or public or private sales of debt or equity securities. 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 had working capital of approximately $74.4$45.5 million as of MarchJune 31,30, 2026, as compared to working capital of approximately $62.1 million as of September 30, 2025; ana increasedecrease of approximately $12.3$16.6 million. The increasedecrease in working capital was primarily driven by an aggregate decreaseincrease in current liabilities of approximately $6.0 $18.0 million, reflecting reductions in income taxes payable, accounts payable, and the current portion of long‑term debtdebt. andIn income taxes payable. These changes were partially offset by an aggregate increase inaddition, current assets ofincreased by approximately $6.3 $1.4 million, driven by higher cash balances and increases in cashprepaids and inventories.other current assets.

The Company’s cash, as of MarchJune 31,30, 2026, was approximately $15.2$10.9 million compared to approximately $8.8 million as of September 30, 2025, an increase of approximately $6.4$2.1 million. Net cash provided by operations was approximately $7.1$14.7 million and $9.6$21.9 million for the sixnine months ended MarchJune 31,30, 2026 and 2025, respectively. The decrease in net cash provided by operating activities was primarily driven by an increaseunfavorable change in inventorydeferred levelsincome totaxes supportand operational demand, which represented a use oflower cash collections on trade receivables compared to the prior period.period’s unusually strong collections. Operating cash flows were also unfavorably impactedaffected by anhigher increaseinventory inlevels income taxes receivable resulting fromduring the timingcurrent of tax payments relative to expense accruals.period. These uses of cashimpacts were partially offset by a favorable changechanges in accrued liabilities,liabilities reflectingand accounts payable driven by the timing of accruedobligations obligations, as well as a normalization ofand vendor payment timing in accounts payable compared to the prior period.payments.

Our cash flows providedused byin financing activities of approximately $2.5$7.0 million during the sixnine months ended MarchJune 31,30, 2026 consisted of proceeds from the issuance of notes payable of approximately $9.8 million and net borrowings under revolver loans, partially offset by payments on notes payable of approximately $8.3$10.0 million, net borrowings under revolver loans of approximately $3.2 million, payments for finance leases of approximately $2.1$3.0 million, payments for debt issuance costs of approximately $0.9 million, and payments on related party seller notes of approximately $140,000.$0.2 million, partially offset by proceeds from the issuance of notes payable of approximately $9.8 million and net borrowings under related party revolver loans of approximately $0.4 million.

Our cash flows used in financing activities of approximately $3.0$13.1 million during the sixnine months ended MarchJune 31,30, 2025 consisted of net payments under revolver loans of approximately $9.3 million, payments on notes payable of approximately $3.4$5.2 million, payments of related party notes payable of $2.9 million, payments for finance leases of approximately $2.0$2.7 million, cash paid for the settlement of seller notes of approximately $1.9 million, net borrowings under revolver loans of approximately $1.3 million, payments of related party notes payable of $0.6 million, and purchases of treasury stock of approximately $0.4$0.5 million, partially offset by net borrowings under related party revolver loans of approximately $4.3$7.1 million, proceeds from the issuance of related party notes payable of approximately $1.9 million, and proceeds from the issuance of notes payable of approximately $0.5 million.