Liquidity Services (NASDAQ: LQDT; www.liquidityservices.com), the
world’s largest B2B e-commerce marketplace for business and
government surplus, today announced the following financial results
as of the quarter ended June 30, 2021 as compared to the applicable
comparable prior periods:
- Gross Merchandise Volume (GMV) of
$244.7 million, up 88%, and Revenue of $69.7 million, up 46%
- GAAP Net Income of $8.4 million, up $8.2 million, and Non-GAAP
Adjusted EBITDA of $13.3 million, up $9.7 million
- GAAP Diluted EPS of $0.24, up $0.23, and Non-GAAP Adjusted
Diluted EPS of $0.31, up $0.26
- Cash of $112.7 million, up $25.1 million from Q2-FY21, $61.5
million trailing 12 month operating cash flow, and zero debt
- Trailing 12 month GMV up 45%, Net Income of $23.6 million,
Non-GAAP Adjusted EBITDA of $40.5 million
"Our pioneering e-commerce marketplace solutions
continue to power the $100 Billion+ circular economy and our triple
bottom line, which benefits businesses, communities and the
environment. We achieve this through our safe and effective resale
and redeployment of surplus assets; our reduction of waste; and by
creating markets for items that might otherwise have been
landfilled. During the quarter we enabled a growing number of large
enterprises, small businesses and government entities across the
world to realize meaningful financial benefits and advance their
sustainability programs. Our Q3-FY21 results reflect continued
strong growth across each of our segments fueled by our scalable
marketplace platform, software and expert services," said Bill
Angrick, Chairman and CEO of Liquidity Services.
“GMV in our GovDeals segment grew 152% over the
prior year’s comparable quarter, driven by the increasing adoption
of our digital marketplace solutions by government agencies over
traditional sales methods for a broader array of assets, including
vehicles, heavy equipment and real estate, coupled with the
re-opening of the economy. GMV in our Retail Supply Chain Group
(RSCG) segment grew 36% over the prior year’s comparable quarter,
as large and SMB retail sellers expanded their use of our digital
marketplaces and reverse supply chain solutions to capitalize on
the secular growth of e-commerce. GMV in our Capital Assets Group
(CAG) segment increased 37% over the prior year's comparable
quarter, driven by customer adoption of our online platform for the
sale of heavy equipment, energy and bio-pharma assets in North
America, and strong consignment sales events in Asia-Pacific. Our
Machinio segment grew revenue by 38% over the prior year's
comparable quarter, as equipment owners and dealers continue to
demonstrate strong engagement with our digital marketing and
inventory management solutions.
"Our newest marketplace, AllSurplus.com, also
continued to thrive as new buyer registrations on the platform grew
nearly 150% from a year ago, fueling strong GMV growth and price
realization for sellers in key asset categories such as
transportation, construction, real estate, consumer goods and
biopharma. Our nearly 4 million registered buyers, including small
businesses and entrepreneurs, continued to benefit from their
access to a global supply of inventory and equipment which, in
turn, has allowed them to grow their businesses and contribute to
the prosperity of their local communities," concluded Angrick.
Third Quarter Consolidated Operating and
Earnings ResultsThe Company reported Q3-FY21 GMV of $244.7
million, an 88% increase from $130.1 million in the prior year’s
comparable period, a period that was significantly impacted by
economic restrictions related to the COVID-19 pandemic. GMV is an
operating measure of the total sales value of all merchandise sold
by us or our sellers through our marketplaces and other channels
during a given period of time. Revenue for Q3-FY21 was $69.7
million, a 46% increase from $47.7 million in the prior year. Gross
Profit for Q3-FY21 was $41.1 million, a 63% increase from $25.2
million in the prior year. GAAP Net Income for Q3-FY21 was $8.4
million, which resulted in diluted earnings per share of $0.24
based on a weighted average of 35.4 million diluted shares
outstanding, compared to $0.2 million and $0.01, respectively, in
the prior year. Non-GAAP Adjusted Net Income was $10.9 million or
$0.31 Non-GAAP adjusted diluted earnings per share, an improvement
from $1.8 million and $0.05, respectively, in the prior period.
Non-GAAP Adjusted EBITDA was $13.3 million, a $9.7 million increase
from $3.7 million in the same period last year.
Q3-FY21 comparative year-over-year consolidated
financial results reflect increased volumes across all of our
segments, as businesses and government agencies continued to
embrace our safe and effective e-commerce solutions, coupled with a
reduction in economic restrictions related to the COVID-19
pandemic. Our full-service and self-service consignment model
increased to 85% of our total GMV, up from 78% in Q2-FY20. In
addition to the increases in volumes, this mix shift and improved
margins from higher recovery rates on assets sold drove a 63%
improvement in gross profit and our gross profit margin as a
percentage of revenue increased from 53% in Q3-FY20 to 59% in
Q3-FY21. We grew GAAP Net Income by $8.2 million and Non-GAAP
Adjusted EBITDA by $9.7 million over the corresponding prior year
period as a result of our top line growth paired with our enhanced
operating leverage delivered through investments in our scalable
marketplace platform and streamlined operational and corporate
functions.
Third Quarter Segment Operating and
Earnings ResultsWe present operating results in four
reportable segments: GovDeals, RSCG, CAG and Machinio. Each offers
separately branded marketplaces to enable sellers to achieve
channel marketing objectives to reach buyers. Across our segments,
we offer our sellers various pricing and transaction models and a
suite of services, and our revenues vary depending upon the pricing
models employed and the level of service selected by sellers.
Segment gross profit is calculated as total revenue less cost of
goods sold (excludes depreciation and amortization).
Our Q3-FY21 segment results are as follows (unaudited,
in millions):
|
|
|
Three Months Ended June 30, |
|
Nine Months Ended June 30, |
|
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
GovDeals: |
|
|
|
|
|
|
|
|
|
GMV |
|
$ |
146.1 |
|
|
$ |
57.9 |
|
|
$ |
364.6 |
|
|
$ |
214.3 |
|
|
Revenue |
|
$ |
14.7 |
|
|
$ |
6.0 |
|
|
$ |
36.4 |
|
|
$ |
21.9 |
|
|
Gross profit |
|
$ |
14.0 |
|
|
$ |
5.6 |
|
|
$ |
34.5 |
|
|
$ |
20.4 |
|
|
|
|
|
|
|
|
|
|
|
RSCG: |
|
|
|
|
|
|
|
|
|
GMV |
|
$ |
61.2 |
|
|
$ |
45.0 |
|
|
$ |
171.6 |
|
|
$ |
129.2 |
|
|
Revenue |
|
$ |
44.1 |
|
|
$ |
33.6 |
|
|
$ |
118.1 |
|
|
$ |
101.5 |
|
|
Gross profit |
|
$ |
17.8 |
|
|
$ |
12.0 |
|
|
$ |
48.3 |
|
|
$ |
34.7 |
|
|
|
|
|
|
|
|
|
|
|
CAG: |
|
|
|
|
|
|
|
|
|
GMV |
|
$ |
37.4 |
|
|
$ |
27.2 |
|
|
$ |
106.2 |
|
|
$ |
79.5 |
|
|
Revenue |
|
$ |
8.5 |
|
|
$ |
6.4 |
|
|
$ |
25.9 |
|
|
$ |
21.4 |
|
|
Gross profit |
|
$ |
7.1 |
|
|
$ |
5.9 |
|
|
$ |
20.4 |
|
|
$ |
16.6 |
|
|
|
|
|
|
|
|
|
|
|
Machinio: |
|
|
|
|
|
|
|
|
|
GMV |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
Revenue |
|
$ |
2.4 |
|
|
$ |
1.8 |
|
|
$ |
6.8 |
|
|
$ |
5.3 |
|
|
Gross profit |
|
$ |
2.3 |
|
|
$ |
1.7 |
|
|
$ |
6.4 |
|
|
$ |
5.1 |
|
|
|
|
|
|
|
|
|
|
|
Consolidated: |
|
|
|
|
|
|
|
|
|
GMV |
|
$ |
244.7 |
|
|
$ |
130.1 |
|
|
$ |
642.4 |
|
|
$ |
423.0 |
|
|
Revenue |
|
$ |
69.7 |
|
|
$ |
47.7 |
|
|
$ |
187.2 |
|
|
$ |
150.1 |
|
|
Gross profit |
|
$ |
41.1 |
|
|
$ |
25.2 |
|
|
$ |
109.7 |
|
|
$ |
76.8 |
|
Additional Third Quarter 2021 Operational
Results
- Registered Buyers — At the end of
Q3-FY21, registered buyers totaled approximately 3,970,000,
representing a 7% increase over the approximately 3,719,000
registered buyers at the end of Q3-FY20.
- Auction Participants — Auction
participants, defined as registered buyers who have bid in an
auction during the period (a registered buyer who bids in more than
one auction is counted as an auction participant in each auction in
which he or she bids), increased to approximately 617,000 in
Q3-FY21, a 47% increase from the approximately 420,000 auction
participants in Q3-FY20.
- Completed Transactions — Completed
transactions increased to approximately 185,000 in Q3-FY21, a 38%
increase from the approximately 134,000 completed transactions in
Q3-FY20.
Business Outlook
We continue to see a strong pipeline, expanding
customer relationships and other indicators of positive performance
going forward and believe we are well-positioned to create value by
focusing on platform services that deliver optimal liquidity in the
reverse supply chain and further enable our growth through asset
light, low-touch marketplace solutions. We believe that e-commerce
acceptance has permanently advanced the general macro-trends
towards greater online transacting as a result of the COVID-19
pandemic. Our online platform and cloud-based solutions should
become even more relevant and necessary for the evolving global
economy.
Our Q4-FY21 guidance range is above our results
for the same period last year, even as we expect to be sequentially
slightly below Q3-FY21 from the resumption of seasonal trends. Last
year's Q4-FY20 results included processing of seller backlog that
accumulated at the onset of the pandemic and more than offset what
would typically have been a sequentially, seasonally lower fourth
quarter. Our expected year-over-year growth reflects anticipated
increases in transaction volumes from the continued, accelerated
market adoption of the online economy that is creating strong
demand for our services from both new and existing customers
seeking to expand their use of our platform. In addition, we expect
the positive macroeconomic factors that have favorably increased
recovery rates in certain asset categories since Q4-FY20 to
continue.
The following forward-looking statements reflect the following
trends and assumptions for Q4-FY21:
- continued spending for the implementation of tools enabling
omni-channel behavioral marketing, expanded analytics, and
buyer/seller payment optimization;
- increased spending in business development activities to
capture market opportunities;
- stabilized macroeconomic factors that most directly influence
the recovery rates of asset categories, such as transportation
assets;
- marketplace seasonality converging back to prior trends;
sellers have historically made lower volumes of assets available
for sale in our fiscal Q4 as compared to fiscal Q3;
- continued mix shift to consignment pricing model which will
lower revenue as a percent of GMV but improve gross profit
margins;
- continued variability in project size and timing within our CAG
segment, especially as COVID-19 continues to impact the global
economy and the ability to conduct cross-border transactions;
- continued growth and expansion resulting from the continuing
acceleration of broader market adoption of the online economy,
particularly in our GovDeals and RSCG seller accounts and
programs;
- continued growth in Machinio subscription activity;
- no change in the nature of the valuation allowance on our
deferred tax assets in the United States; and
- our diluted weighted average number of shares outstanding will
be approximately 35.6 million. We have $15 million of
available authorization under our share repurchase program.
For Q4-FY21 our guidance is as follows:
GMV - We expect GMV for Q4-FY21 to range from $225 million
to $240 million.
GAAP Net Income - We expect GAAP Net Income for Q4-FY21 to range
from $5.5 million to $8.5 million.
GAAP Diluted EPS - We expect GAAP Diluted Earnings Per Share for
Q4-FY21 to range from $0.15 to $0.24.
Non-GAAP Adjusted EBITDA -We expect Non-GAAP Adjusted EBITDA for
Q4-FY21 to range from $10.0 million to $12.0 million.
Non-GAAP Adjusted Diluted EPS - We expect Non-GAAP Adjusted
Earnings Per Diluted Share for Q4-FY21 to range from $0.20 to
$0.28.
Liquidity
ServicesReconciliation of GAAP to Non-GAAP
Measures
Non-GAAP EBITDA and Non-GAAP Adjusted EBITDA. Non-GAAP EBITDA is
a supplemental non-GAAP financial measure and is equal to net
income (loss) plus interest and other income, net; provision for
income taxes; and depreciation and amortization. Our definition of
Non-GAAP Adjusted EBITDA differs from Non-GAAP EBITDA because we
further adjust Non-GAAP EBITDA for stock compensation expense,
acquisition costs such as transaction expenses and changes in
earn-out estimates, business realignment expenses, deferred revenue
purchase accounting adjustments, and goodwill, long-lived and other
asset impairment. A reconciliation of Net Income (Loss) to Non-GAAP
EBITDA and Non-GAAP Adjusted EBITDA is as follows:
|
|
Three Months Ended June 30, |
|
Nine Months Ended June 30, |
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
|
(Unaudited) |
Net income (loss) |
|
$ |
8,419 |
|
|
|
$ |
213 |
|
|
|
$ |
18,193 |
|
|
|
$ |
(9,221 |
) |
|
Interest and other income, net1 |
|
(157 |
) |
|
|
(156 |
) |
|
|
(191 |
) |
|
|
(489 |
) |
|
Provision for income taxes |
|
429 |
|
|
|
209 |
|
|
|
1,133 |
|
|
|
710 |
|
|
Depreciation and amortization |
|
1,705 |
|
|
|
1,567 |
|
|
|
5,246 |
|
|
|
4,716 |
|
|
Non-GAAP EBITDA |
|
$ |
10,396 |
|
|
|
$ |
1,833 |
|
|
|
$ |
24,381 |
|
|
|
$ |
(4,284 |
) |
|
Stock compensation expense |
|
1,803 |
|
|
|
1,516 |
|
|
|
5,793 |
|
|
|
3,785 |
|
|
Acquisition costs and impairment of long-lived and other
assets2 |
|
1,136 |
|
|
|
— |
|
|
|
1,338 |
|
|
|
5 |
|
|
Business realignment expenses2,3 |
|
— |
|
|
|
328 |
|
|
|
5 |
|
|
|
328 |
|
|
Fair value adjustments to acquisition earn-outs2 |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
200 |
|
|
Deferred revenue purchase accounting adjustment |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3 |
|
|
Non-GAAP Adjusted EBITDA |
|
$ |
13,335 |
|
|
|
$ |
3,677 |
|
|
|
$ |
31,517 |
|
|
|
$ |
37 |
|
|
1 Interest and other income, net, per the
Consolidated Statements of Operations, excluding the non-service
components of net periodic pension (benefit).2 Acquisition costs
and impairment of long-lived and other assets, and fair value
adjustments to acquisition earn-outs are included in Other
operating expenses on the Consolidated Statements of Operations.
For the three and nine months ended June 30, 2021, this amount
included a $1.1 million impairment expense from the settlement of a
note receivable associated with a previous divestiture.3 Business
realignment expense includes the amounts accounted for as exit
costs under ASC 420 as described in Note 11 to the Consolidated
Financial Statements, and the related impacts of business
realignment actions subject to other accounting guidance. There
were no related impacts for the three and nine months ended June
30, 2021 and 2020.
Non-GAAP Adjusted Net Income (Loss) and Non-GAAP
Adjusted Basic and Diluted Earnings (Loss) Per Share. Non-GAAP
Adjusted Net Income (Loss) is a supplemental non-GAAP financial
measure and is equal to Net Income (Loss) plus stock compensation
expense, acquisition costs such as transaction expenses and changes
in earn-out estimates, business realignment expenses, deferred
revenue purchase accounting adjustments, goodwill, long-lived and
other asset impairment, and the estimated impact of income taxes on
these non-GAAP adjustments as well as non-recurring tax
adjustments. Non-GAAP Adjusted Basic and Diluted Income (Loss) Per
Share are determined using Adjusted Net Income (Loss). For Q3-FY21
the tax rate used to estimate the impact of income taxes on the
non-GAAP adjustments was 14.4% compared to 12.8% used for the
Q3-FY20 results. These tax rates exclude the impact of the charge
to our U.S. valuation allowance. A reconciliation of Net Income
(Loss) to Non-GAAP Adjusted Net Income (Loss) and Non-GAAP Adjusted
Basic and Diluted Income (Loss) Per Share is as follows:
|
|
Three Months Ended June 30, |
|
Nine Months Ended June 30, |
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
(Dollars in thousands, except per share data) |
|
(Unaudited) |
Net income (loss) |
|
$ |
8,419 |
|
|
|
$ |
213 |
|
|
|
$ |
18,193 |
|
|
|
$ |
(9,221 |
) |
|
Stock compensation
expense |
|
1,803 |
|
|
|
1,516 |
|
|
|
5,793 |
|
|
|
3,785 |
|
|
Acquisition costs and
impairment of long-lived and other assets* |
|
1,136 |
|
|
|
— |
|
|
|
1,338 |
|
|
|
5 |
|
|
Business realignment
expenses* |
|
— |
|
|
|
328 |
|
|
|
5 |
|
|
|
328 |
|
|
Fair value adjustment to
acquisition earn-outs* |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
200 |
|
|
Deferred revenue purchase
accounting adjustment |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3 |
|
|
Income tax impact of
adjustments |
|
(423 |
) |
|
|
(236 |
) |
|
|
(1,028 |
) |
|
|
(553 |
) |
|
Non-GAAP Adjusted net income
(loss) |
|
$ |
10,935 |
|
|
|
$ |
1,821 |
|
|
|
$ |
24,301 |
|
|
|
$ |
(5,453 |
) |
|
Non-GAAP Adjusted basic income
(loss) per share |
|
$ |
0.33 |
|
|
|
$ |
0.05 |
|
|
|
$ |
0.73 |
|
|
|
$ |
(0.16 |
) |
|
Non-GAAP Adjusted diluted income
(loss) per share |
|
$ |
0.31 |
|
|
|
$ |
0.05 |
|
|
|
$ |
0.69 |
|
|
|
$ |
(0.16 |
) |
|
Basic weighted average shares
outstanding |
|
33,371,906 |
|
|
|
33,695,936 |
|
|
|
33,345,580 |
|
|
|
33,621,740 |
|
|
Diluted weighted average shares
outstanding |
|
35,437,761 |
|
|
|
33,815,332 |
|
|
|
35,006,898 |
|
|
|
33,621,740 |
|
|
*Acquisition costs and impairment of long-lived
and other assets, business realignment expenses, and fair value
adjustments to acquisition earn-outs, which are excluded from
Non-GAAP Adjusted Net Income (Loss), are included in Other
operating expenses on the Statements of Operations.
Q3-FY21 Conference CallThe Company will host a
conference call to discuss this quarter's results at 10:30 a.m.
Eastern Time today. Investors and other interested parties may
access the teleconference by dialing (888) 771-4371 or (847)
585-4405 and providing conference ID 50184238. A live web cast of
the conference call will be provided on the Company's investor
relations website at http://investors.liquidityservices.com. An
archive of the web cast will be available on the Company's website
until August 5, 2022 at 11:59 p.m. Eastern Time. The replay will be
available starting at 1:30 p.m. ET on the day of the call.
Non-GAAP Measures
To supplement our consolidated financial
statements presented in accordance with generally accepted
accounting principles (GAAP), we use certain non-GAAP measures of
certain components of financial performance. These non-GAAP
measures include earnings before interest, taxes, depreciation and
amortization (EBITDA), Adjusted EBITDA, Adjusted Net Income (Loss)
and Adjusted Earnings (Loss) per Share. These non-GAAP measures are
provided to enhance investors’ overall understanding of our current
financial performance and prospects for the future. We use EBITDA
and Adjusted EBITDA: (a) as measurements of operating performance
because they assist us in comparing our operating performance on a
consistent basis as they do not reflect the impact of items not
directly resulting from our core operations; (b) for planning
purposes, including the preparation of our internal annual
operating budget; (c) to allocate resources to enhance the
financial performance of our business; (d) to evaluate the
effectiveness of our operational strategies; and (e) to evaluate
our capacity to fund capital expenditures and expand our business.
Adjusted Earnings (Loss) per Share is the result of our Adjusted
Net Income (Loss) and diluted shares outstanding.
We believe these non-GAAP measures provide useful information to
both management and investors by excluding certain expenses that
may not be indicative of our core operating measures. In addition,
because we have historically reported certain non-GAAP measures to
investors, we believe the inclusion of non-GAAP measures provides
consistency in our financial reporting. These measures should be
considered in addition to financial information prepared in
accordance with GAAP, but should not be considered a substitute
for, or superior to, GAAP results. A reconciliation of all
historical non-GAAP measures included in this press release, to the
most directly comparable GAAP measures, may be found in the
financial tables included in this press release.
Supplemental Operating DataTo
supplement our consolidated financial statements presented in
accordance with GAAP, we use certain supplemental operating data as
a measure of certain components of operating performance. We review
GMV because it provides a measure of the volume of goods being sold
in our marketplaces and thus the activity of those marketplaces.
GMV and our other supplemental operating data, including registered
buyers, auction participants and completed transactions, also
provide a means to evaluate the effectiveness of investments that
we have made and continue to make in the areas of seller and buyer
support, value-added services, product development, sales and
marketing and operations. Therefore, we believe this supplemental
operating data provides useful information to both management and
investors. In addition, because we have historically reported
certain supplemental operating data to investors, we believe the
inclusion of this supplemental operating data provides consistency
in our financial reporting. This data should be considered in
addition to financial information prepared in accordance with GAAP,
but should not be considered a substitute for, or superior to, GAAP
results.
Forward-Looking StatementsThis
document contains forward-looking statements made pursuant to the
Private Securities Litigation Reform Act of 1995. These statements
are only predictions. The outcome of the events described in these
forward-looking statements is subject to known and unknown risks,
uncertainties and other factors that may cause our actual results,
levels of activity, performance or achievements to differ
materially from any future results, levels of activity, performance
or achievements expressed or implied by these forward-looking
statements. These statements include, but are not limited to,
statements regarding the Company’s business outlook; expected
future results; expected future effective tax rates; and trends and
assumptions about future periods. You can identify forward-looking
statements by terminology such as “may,” “will,” “should,” “could,”
“would,” “expects,” “intends,” “plans,” “anticipates,” “believes,”
“estimates,” “predicts,” “potential,” “continues” or the negative
of these terms or other comparable terminology. Our business is
subject to a number of risks and uncertainties, and our past
performance is no guarantee of our performance in future periods.
Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee
future results, levels of activity, performance or
achievements.
There are several risks and uncertainties that
could cause our actual results to differ materially from the
forward-looking statements in this document. Important factors that
could cause our actual results to differ materially from those
expressed as forward-looking statements are set forth in our
filings with the SEC from time to time, and include, among others,
potential changes in political, business and economic conditions;
the duration of the COVID-19 pandemic and the effects of COVID-19
on our business and operations and on the general economy,
including effects on our sellers and customers, any regional or
general economic downturn or crisis and any conditions that affect
e-commerce growth or cross-border trade; the Company’s ability to
realize expected growth opportunities in heavy equipment and real
estate asset categories; increases in the supply of new vehicles
and silicon chips that might disrupt favorable recovery trends; the
Company’s need to manage attracting buyers to a broad range of
asset categories with varying degrees of maturity and in many
different geographies; the ability to successfully intermediate
payments on our marketplace platform; the Company’s need to
successfully react to the increasing importance of mobile commerce
and the increasing environmental and social impact aspects of
e-commerce in an increasingly competitive environment for our
business, including not only risks of disintermediation of our
e-commerce services by our competitors but also by our buyers and
sellers; the impact of the COVID-19 pandemic on our Company, our
employees, our sellers and buyers, and global supply chains;
disruptions of cross-border transactions due to COVID-19 pandemic
restrictions on travel and shipping, including the impact of such
disruptions on the Company’s ability to generate profits, grow GMV
or accurately forecast transactions; the Company’s ability to
timely upgrade and develop our technology systems, infrastructure
and marketing and customer service capabilities at reasonable cost
while maintaining site stability and performance and adding new
products and features; the Company’s ability to attract, retain and
develop the skilled employees that we need to support our business;
the Company’s ability to integrate, manage and grow businesses that
have been acquired or may be acquired in the future; and the risks
and uncertainties set forth in the Company’s Annual Report on Form
10-K for the year ended September 30, 2020, which is available on
the SEC and Company websites. There may be other factors of which
we are currently unaware or which we deem immaterial that may cause
our actual results to differ materially from the forward-looking
statements.
All forward-looking statements attributable to us or persons
acting on our behalf apply only as of the date of this document and
are expressly qualified in their entirety by the cautionary
statements included in this document. Except as may be required by
law, we undertake no obligation to publicly update or revise any
forward-looking statement to reflect events or circumstances
occurring after the date of this document or to reflect the
occurrence of unanticipated events.
About Liquidity
ServicesLiquidity Services (NASDAQ:LQDT) operates the
world’s largest B2B e-commerce marketplace platform for surplus
assets with over $8.5 billion of completed transactions, more than
3.8 million registered buyers and 15,000 corporate and government
sellers. Our e-commerce marketplace solutions continue to power the
circular economy which benefits businesses, society, and the
environment through the safe and effective resale and redeployment
of surplus assets; reducing waste, carbon emissions and
transportation costs; and by creating markets for items that would
otherwise be landfilled. Through our vital mission of Building a
Better Future For Surplus we’ve played an integral role in many of
our clients’ zero-waste initiatives and worked with corporations,
federal and municipal government agencies to pioneer some of the
largest green initiatives to date, deferring billions of pounds of
surplus assets from landfills.
Contact:Investor
Relations800-310-4604investorrelations@liquidityservicesinc.com
Liquidity Services and
SubsidiariesUnaudited Consolidated Balance
Sheets(Dollars in Thousands, Except Par
Value)
|
June 30, 2021 |
|
September 30, 2020 |
|
(Unaudited) |
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
112,666 |
|
|
|
$ |
76,036 |
|
|
Accounts receivable, net of allowance for doubtful accounts of $634
and $389 |
5,470 |
|
|
|
5,322 |
|
|
Inventory, net |
13,799 |
|
|
|
5,607 |
|
|
Prepaid taxes and tax refund receivable |
1,600 |
|
|
|
1,652 |
|
|
Prepaid expenses and other current assets |
5,970 |
|
|
|
5,962 |
|
|
Total current assets |
139,505 |
|
|
|
94,579 |
|
|
Property and equipment, net of
accumulated depreciation of $17,834 and $14,555 |
17,003 |
|
|
|
17,843 |
|
|
Operating lease assets |
12,008 |
|
|
|
10,561 |
|
|
Intangible assets, net |
3,777 |
|
|
|
4,758 |
|
|
Goodwill |
60,023 |
|
|
|
59,839 |
|
|
Deferred tax assets |
762 |
|
|
|
806 |
|
|
Other assets |
5,325 |
|
|
|
8,248 |
|
|
Total assets |
$ |
238,403 |
|
|
|
$ |
196,634 |
|
|
Liabilities and
stockholders’ equity |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
39,748 |
|
|
|
$ |
21,957 |
|
|
Accrued expenses and other current liabilities |
22,226 |
|
|
|
19,124 |
|
|
Current portion of operating lease liabilities |
4,081 |
|
|
|
3,818 |
|
|
Deferred revenue |
4,517 |
|
|
|
3,255 |
|
|
Payables to sellers |
39,426 |
|
|
|
26,170 |
|
|
Total current liabilities |
109,998 |
|
|
|
74,324 |
|
|
Operating lease liabilities |
8,872 |
|
|
|
7,499 |
|
|
Other long-term liabilities |
2,972 |
|
|
|
2,996 |
|
|
Total liabilities |
121,842 |
|
|
|
84,819 |
|
|
Commitments and contingencies
(Note 12) |
|
|
|
Stockholders’ equity: |
|
|
|
Common stock, $0.001 par value; 120,000,000 shares authorized;
35,417,715 shares issued and outstanding at June 30, 2021;
34,082,406 shares issued and outstanding at September 30, 2020 |
35 |
|
|
|
34 |
|
|
Additional paid-in capital |
251,048 |
|
|
|
247,892 |
|
|
Treasury stock, at cost; 1,587,199 shares at June 30, 2021 and
547,508 shares at September 30, 2020 |
(21,628 |
) |
|
|
(3,983 |
) |
|
Accumulated other comprehensive loss |
(8,740 |
) |
|
|
(9,782 |
) |
|
Accumulated deficit |
(104,154 |
) |
|
|
(122,346 |
) |
|
Total stockholders’ equity |
$ |
116,561 |
|
|
|
$ |
111,815 |
|
|
Total liabilities and
stockholders’ equity |
$ |
238,403 |
|
|
|
$ |
196,634 |
|
|
Liquidity Services and
SubsidiariesUnaudited Consolidated Statements of
Operations (Dollars in Thousands, Except Per Share
Data)
|
Three Months Ended June 30, |
|
Nine Months Ended June 30, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
(Unaudited) |
Revenue |
$ |
37,862 |
|
|
|
$ |
30,442 |
|
|
|
$ |
104,902 |
|
|
|
$ |
95,994 |
|
|
Fee revenue |
31,804 |
|
|
|
17,280 |
|
|
|
82,302 |
|
|
|
54,056 |
|
|
Total revenue |
69,666 |
|
|
|
47,722 |
|
|
|
187,204 |
|
|
|
150,050 |
|
|
Costs and expenses from
operations: |
|
|
|
|
|
|
|
Cost of goods sold (excludes depreciation and amortization) |
28,543 |
|
|
|
22,494 |
|
|
|
77,501 |
|
|
|
73,289 |
|
|
Technology and operations |
12,307 |
|
|
|
9,515 |
|
|
|
34,952 |
|
|
|
32,342 |
|
|
Sales and marketing |
9,661 |
|
|
|
7,412 |
|
|
|
27,679 |
|
|
|
27,126 |
|
|
General and administrative |
7,676 |
|
|
|
6,217 |
|
|
|
21,578 |
|
|
|
21,321 |
|
|
Depreciation and amortization |
1,705 |
|
|
|
1,567 |
|
|
|
5,246 |
|
|
|
4,716 |
|
|
Other operating expenses |
1,180 |
|
|
|
319 |
|
|
|
1,390 |
|
|
|
500 |
|
|
Total costs and expenses |
61,072 |
|
|
|
47,524 |
|
|
|
168,346 |
|
|
|
159,294 |
|
|
Income (loss) from
operations |
8,594 |
|
|
|
198 |
|
|
|
18,858 |
|
|
|
(9,244 |
) |
|
Interest and other income,
net |
(254 |
) |
|
|
(224 |
) |
|
|
(468 |
) |
|
|
(733 |
) |
|
Income (loss) before provision
for income taxes |
8,848 |
|
|
|
422 |
|
|
|
19,326 |
|
|
|
(8,511 |
) |
|
Provision for income taxes |
429 |
|
|
|
209 |
|
|
|
1,133 |
|
|
|
710 |
|
|
Net income (loss) |
$ |
8,419 |
|
|
|
$ |
213 |
|
|
|
$ |
18,193 |
|
|
|
$ |
(9,221 |
) |
|
Basic income (loss) per common
share |
$ |
0.25 |
|
|
|
$ |
0.01 |
|
|
|
$ |
0.55 |
|
|
|
$ |
(0.27 |
) |
|
Diluted income (loss) per common
share |
$ |
0.24 |
|
|
|
$ |
0.01 |
|
|
|
$ |
0.52 |
|
|
|
$ |
(0.27 |
) |
|
Basic weighted average shares
outstanding |
33,371,906 |
|
|
|
33,695,936 |
|
|
|
33,345,580 |
|
|
|
33,621,740 |
|
|
Diluted weighted average shares
outstanding |
35,437,761 |
|
|
|
33,815,332 |
|
|
|
35,006,898 |
|
|
|
33,621,740 |
|
|
Liquidity Services and
Subsidiaries Unaudited Consolidated Statements of
Cash Flows (Dollars in Thousands)
|
Nine Months Ended June 30, |
|
2021 |
|
2020 |
|
(Unaudited) |
Operating
activities |
|
|
|
Net income (loss) |
$ |
18,193 |
|
|
|
$ |
(9,221 |
) |
|
Adjustments to reconcile net loss
to net cash used in operating activities: |
|
|
|
Depreciation and amortization |
5,246 |
|
|
|
4,716 |
|
|
Stock compensation expense |
5,793 |
|
|
|
3,785 |
|
|
Provision for doubtful accounts |
269 |
|
|
|
131 |
|
|
Deferred tax provision |
96 |
|
|
|
228 |
|
|
Loss (gain) on disposal of property and equipment |
87 |
|
|
|
(29 |
) |
|
Change in fair value of earnout liability |
— |
|
|
|
200 |
|
|
Impairment of long-lived and other assets |
1,338 |
|
|
|
— |
|
|
Changes in operating assets and liabilities: |
|
|
|
Accounts receivable |
(420 |
) |
|
|
1,415 |
|
|
Inventory |
(8,192 |
) |
|
|
(1,572 |
) |
|
Prepaid and deferred taxes |
57 |
|
|
|
(551 |
) |
|
Prepaid expenses and other assets |
(2,477 |
) |
|
|
942 |
|
|
Operating lease assets and liabilities |
5 |
|
|
|
(165 |
) |
|
Accounts payable |
17,791 |
|
|
|
13,951 |
|
|
Accrued expenses and other current liabilities |
2,242 |
|
|
|
(9,525 |
) |
|
Distributions payable |
— |
|
|
|
(1,675 |
) |
|
Deferred revenue |
1,262 |
|
|
|
(23 |
) |
|
Payables to sellers |
13,256 |
|
|
|
6,072 |
|
|
Other liabilities |
(275 |
) |
|
|
522 |
|
|
Net cash provided by operating
activities |
54,271 |
|
|
|
9,201 |
|
|
Investing
activities |
|
|
|
Increase in intangibles |
(23 |
) |
|
|
(53 |
) |
|
Purchases of property and
equipment, including capitalized software |
(3,488 |
) |
|
|
(3,608 |
) |
|
Proceeds from sales of property
and equipment |
68 |
|
|
|
47 |
|
|
Proceeds from promissory
note |
4,343 |
|
|
|
2,553 |
|
|
Purchases of short-term
investments |
— |
|
|
|
(25,000 |
) |
|
Maturities of short-term
investments |
— |
|
|
|
55,000 |
|
|
Net cash provided by investing
activities |
900 |
|
|
|
28,939 |
|
|
Financing
activities |
|
|
|
Payments of the principal portion
of finance lease liabilities |
(35 |
) |
|
|
(26 |
) |
|
Taxes paid associated with net
settlement of stock compensation awards |
(3,545 |
) |
|
|
(564 |
) |
|
Proceeds from exercise of stock
options |
353 |
|
|
|
36 |
|
|
Payment of earnout liability
related to business acquisition |
— |
|
|
|
(1,200 |
) |
|
Common stock repurchased |
(16,143 |
) |
|
|
— |
|
|
Net cash (used in) financing
activities |
(19,370 |
) |
|
|
(1,754 |
) |
|
Effect of exchange rate
differences on cash and cash equivalents |
829 |
|
|
|
(154 |
) |
|
Net increase in cash and cash
equivalents |
36,630 |
|
|
|
36,232 |
|
|
Cash and cash equivalents at
beginning of period |
76,036 |
|
|
|
36,497 |
|
|
Cash and cash equivalents at end
of period |
$ |
112,666 |
|
|
|
$ |
72,729 |
|
|
Supplemental disclosure
of cash flow information |
|
|
|
Cash paid for income taxes,
net |
$ |
907 |
|
|
|
$ |
203 |
|
|
Non-cash: Common stock
surrendered in the exercise of stock options |
$ |
1,502 |
|
|
|
$ |
— |
|
|
Liquidity Services (NASDAQ:LQDT)
Historical Stock Chart
From Mar 2024 to Apr 2024
Liquidity Services (NASDAQ:LQDT)
Historical Stock Chart
From Apr 2023 to Apr 2024