Liquidity Services (NASDAQ:LQDT; www.liquidityservices.com), a
leading global commerce company powering the circular economy,
today announced its financial results for the quarter ended
December 31, 2023, as compared to the corresponding prior year
quarter:
- Gross Merchandise Volume (GMV) of $305.9 million, up 13%, and
Revenue of $71.3 million, down 1%
- GAAP Net Income of $1.9 million, down $2.1 million, and GAAP
Diluted Earnings Per Share (EPS) of $0.06, down $0.06
- Non-GAAP Adjusted EBITDA of $7.3 million, down $2.6 million,
and Non-GAAP Adjusted EPS of $0.14, down $0.05
- Cash balances of $107.0 million1 with zero financial debt
- Financial results were within the Company's first quarter
Business Outlook guidance range
“We recorded double digit organic growth in
consolidated GMV this quarter led by our GovDeals segment which
benefited from strong bidder engagement on our modernized
GovDeals.com marketplace platform. Additionally, we recorded strong
subscriber growth in our Machinio segment as customers continue to
be delighted by our Machinio System dealer management software
solutions which deliver outstanding ROI by automating and improving
asset management, marketing and sales activities.
“Growth and profitability in our RSCG and CAG
segments were impacted during the quarter by an inferior product
mix and delays in selected international sales events at quarter
end, respectively. However, we expect an improvement in our RSCG
product mix as we enter the seasonally high fiscal second quarter,
and most of the delayed projects in our CAG segment are expected to
close during the fiscal second quarter resulting in the resumption
of year-over-year growth.
“In support of our long term strategy, we
continue to expand our market share in key segments and, on January
1, 2024, we acquired Sierra Auction, which strengthens and
accelerates our position as the leading online platform for the
sale of vehicles, equipment, and surplus assets by government and
commercial sellers.
“We remain the trusted provider of choice for
commercial and government clients in the circular economy and
continue to deliver outstanding value for our customers. We look to
capitalize on our strong buyer base and business pipeline across
our business to deliver improved growth and profitability in our
fiscal second quarter,” said Bill Angrick, Liquidity Services,
CEO.
Recent Business Highlights
- Liquidity Services
acquired Sierra Auction Management, Inc., a leading Arizona
auctioneer of vehicles, equipment, and surplus assets for
government and commercial organizations.
- RSCG's AllSurplus Deals location in
Pittston, Pennsylvania was featured by NBC Nightly News and CBS
Inside Edition, showcasing the thousands of retail returns and
overstock goods it processes every day.
- Machinio was selected by XCMG
E-Commerce, an Asia-based multinational corporation, to facilitate
the sale of more than 6,000 refurbished construction machinery
assets as part of its ‘Reconditioned Machine’ refurbishment
program, wherein used XCMG assets are collected and subject to a
thorough reconditioning process before leveraging Machinio’s
expansive global marketplace platform to remarket and extend the
life of these assets.
First Quarter Financial
Highlights
GMV for the fiscal first quarter of 2024 was
$305.9 million, a 13% increase from $270.8 million in the first
fiscal quarter of 2023.
- GMV in our GovDeals segment
increased 18%, driven by increased availability of vehicles and
real estate.
- GMV in our RSCG segment increased
3%, reflecting an increase in sell-in-place consignment solutions
partially offset by an inferior product mix in certain full-service
consignment and purchase programs.
- GMV in our CAG segment increased
9%, driven by increases in its global energy, industrial and
biopharma consignment categories.
- Consignment sales represented 89%
of consolidated GMV for the first fiscal quarter of 2024.
Revenue for the fiscal first quarter of 2024 was
$71.3 million, a 1% decrease from $72.3 million in the first fiscal
quarter of 2023.
- Revenue in our GovDeals segment
increased 17%, consistent with its increase in GMV.
- Revenue in our Machinio segment
increased 18% due to increased subscriptions and pricing for its
Machinio Advertising and Machinio System products.
- Revenue in our RSCG segment
decreased 5%, as GMV growth in our consignment solutions, which
provide for a lower revenue take-rate and lower overall costs,
outpaced purchase programs.
- Revenue in our CAG segment
decreased 17% due to the prior year's large international spot
purchase transactions and delayed projects at the end of the first
quarter.
The changes in our profitability metrics reflect
the decrease in our top-line results and annual increases in
operating expenses, and resulted in:
- GAAP Net Income was $1.9 million,
or $0.06 per share, for the fiscal first quarter of 2024, a
decrease from $4.0 million, or $0.12 per share, for the same
quarter last year.
- Non-GAAP Adjusted Net Income for
the fiscal first quarter of 2024 was $4.3 million, or $0.14 per
share, a decrease from $6.4 million, or $0.19 per share for the
same quarter last year.
- Non-GAAP Adjusted EBITDA for the
fiscal first quarter of 2024 was $7.3 million, a $2.6 million
decrease from $9.8 million in the same quarter last year.
1 Includes $98.6 million of Cash and cash equivalents and $8.5
million of Short-term investments.
First Quarter Segment Financial Results
We present operating results for our four
reportable segments: GovDeals, RSCG, CAG and Machinio. For further
information on our reportable segments, including Corporate and
elimination adjustments, see Note 13, Segment Information, to our
quarterly report on Form 10-Q for the period ended December 31,
2023. Segment direct profit is calculated as total revenue less
cost of goods sold (excluding depreciation and amortization).
Our Q1-FY24 segment results are as follows (unaudited, dollars
in thousands):
|
Three Months Ended December 31, |
|
|
2023 |
|
|
2022 |
|
GovDeals: |
|
|
|
|
|
GMV |
$ |
190,408 |
|
|
$ |
161,122 |
|
Total revenue |
$ |
15,900 |
|
|
$ |
13,607 |
|
Segment direct profit |
$ |
15,056 |
|
|
$ |
12,892 |
|
% of Total revenue |
|
95 |
% |
|
|
95 |
% |
|
|
|
|
|
|
RSCG: |
|
|
|
|
|
GMV |
$ |
66,561 |
|
|
$ |
64,897 |
|
Total revenue |
$ |
43,721 |
|
|
$ |
46,015 |
|
Segment direct profit |
$ |
14,112 |
|
|
$ |
16,011 |
|
% of Total revenue |
|
32 |
% |
|
|
35 |
% |
|
|
|
|
|
|
CAG: |
|
|
|
|
|
GMV |
$ |
48,895 |
|
|
$ |
44,756 |
|
Total revenue |
$ |
7,834 |
|
|
$ |
9,393 |
|
Segment direct profit |
$ |
6,943 |
|
|
$ |
8,502 |
|
% of Total revenue |
|
89 |
% |
|
|
91 |
% |
|
|
|
|
|
|
Machinio: |
|
|
|
|
|
GMV |
$ |
— |
|
|
$ |
— |
|
Total revenue |
$ |
3,886 |
|
|
$ |
3,283 |
|
Segment direct profit |
$ |
3,703 |
|
|
$ |
3,120 |
|
% of Total revenue |
|
95 |
% |
|
|
95 |
% |
|
|
|
|
|
|
Consolidated: |
|
|
|
|
|
GMV |
$ |
305,864 |
|
|
$ |
270,775 |
|
Total revenue |
$ |
71,325 |
|
|
$ |
72,282 |
|
|
|
|
|
|
|
|
|
First Quarter Operational Metrics
- Registered Buyers — At the end of
Q1-FY24, registered buyers, defined as the aggregate number of
persons or entities who have registered on one of our marketplaces,
totaled approximately 5.2 million, representing a 5% increase over
the approximately 5.0 million registered buyers at the end of
Q1-FY23.
- 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), was approximately 848,000 in Q1-FY24, a 14%
increase from the approximately 744,000 auction participants in
Q1-FY23.
- Completed Transactions — Completed
transactions, defined as the number of auctions in a given period,
were approximately 239,000 in Q1-FY24, a 12% increase from the
approximately 214,000 completed transactions in Q1-FY23.
Second Quarter Business Outlook
Our expertise in diverse sectors, our strong
buyer base across numerous asset categories, and our global reach
are continuing to provide advantages to our clients as they
navigate economic change and seek operational efficiencies.
Our fiscal second quarter 2024 guidance reflects
sequential increases from our fiscal first quarter 2024 results,
including an expected seasonal improvement for our RSCG segment
during the post-holiday return season. Our fiscal second quarter
2024 guidance range reflects the potential for a new quarterly
record for GMV at the mid-point of our guidance range with
normalized growth in our profitability metrics. GovDeals and
Machinio expect to continue with their solid year-over-year growth
rates into the fiscal second quarter, including a modest uplift
from the Sierra Auction acquisition in the GovDeals segment. CAG
enters the fiscal second quarter with a robust pipeline, including
from several large projects delayed from this past fiscal first
quarter, that should drive both sequential and year-over-year
growth. Compared to last year, RSCG expects continuing expansion of
its lower-touch consignment programs while continuing to receive a
higher mix of lower-value flows from certain seller programs. This
may result in a lower revenue as a percent of GMV for the RSCG
segment, yet with fiscal second quarter direct profit steady
year-over-year. Operating expenses will increase slightly from the
Sierra Auction acquisition and from continued investment in our
sales and technology initiatives in support of our continuing
marketplace enhancements for market share gains and long-term
growth.
We currently anticipate our consolidated revenue
as a percentage of GMV to reflect our growing consignment mix and
remain in the low-to-mid twenty percent range, which can also vary
based on our mix of asset categories. We expect our segment direct
profits as a percentage of total revenues to increase
year-over-year, while remaining a similar ratio as our fiscal first
quarter 2024 results.
Our Q2-FY24 guidance is as follows:
GMV - We expect GMV to range from $320 million to $350
million.
GAAP Net Income - We expect GAAP Net Income to range from $3.0
million to $6.0 million.
GAAP Diluted EPS - We expect GAAP Diluted EPS to range from
$0.09 to $0.19.
Non-GAAP Adjusted EBITDA -We expect Non-GAAP Adjusted EBITDA to
range from $9.0 million to $12.0 million.
Non-GAAP Adjusted Diluted EPS - We expect Non-GAAP Adjusted EPS
to range from $0.17 to $0.27.
Our Business Outlook includes forward-looking
statements which reflect these trends and assumptions for Q2-FY24
as compared to the prior year's period:
Potential Impacts to GMV, Revenue, Segment
Direct Profits, and ratios calculated using these metrics
- a longer-term trend of continued
mix shift to the consignment model, which may lower revenue as a
percent of GMV but can improve segment direct profit as a
percentage of revenue;
- variability in the inventory
product mix handled by our RSCG segment, which can cause a change
in revenues and/or segment direct profit as a percentage of
revenue, including variability from broader changes in consumer
sentiment and demand, retailers increasing product flows to us on
an episodic basis to solve capacity constraints at retailer
warehouse or distribution centers and retailers decreasing product
flows as they amend returns policies and/or solve capacity
constraints and return more product to store shelves or fulfillment
centers;
- as growth in the foreclosed real
estate category within the GovDeals segment occurs, take rates as a
percentage of GMV are expected to become lower without
significantly affecting segment direct profit as a percentage of
revenue. GMV from real estate transactions can be subject to
significant variability due to changes that include postponements
or cancellations of scheduled or expected auction events, the value
of properties to be included in the auction event, and the value of
the properties that may be withdrawn due to the property holder
curing their delinquency or taking other legal actions to delay the
sale of their property;
- continued variability in project
size and timing within our CAG segment;
- continued growth and expansion
resulting from the continuing acceleration of broader market
adoption of the digital economy, particularly in our GovDeals and
RSCG seller accounts and programs, including the execution by RSCG
on its business plans for AllSurplus Deals and its expanded
direct-to-consumer marketplace;
- continued growth in our Machinio
advertising subscription service and acceptance of other Machinio
service offerings;
Potential Impacts to Operating Expenses
- continued R&D spending to
support omni-channel behavioral marketing, analytics, and
buyer/seller payment optimization;
- spending in business development
activities to capture market opportunities, targeting efficient
payback periods;
Potential Impacts to GAAP Net Income and EPS and
Non-GAAP Adjusted Net Income and Adjusted EPS
- our Q2-FY24 effective tax rate
(ETR) is expected to range from approximately 21% to 27% and our
full fiscal year FY24 ETR is expected to range from 26% to 32%.
This range excludes any potential impacts from legislative changes
to U.S. corporate tax rates that may be enacted; and potential
impacts from items that have limited visibility and can be highly
variable, including effects of stock compensation due to
participant exercise activity and changes in our stock price. We
are expecting an increase in cash paid for income taxes in the
second half of FY24 as our remaining net operating loss
carryforward position is used; and
- our diluted weighted average number
of shares outstanding is expected to be approximately 32.0 million.
As of December 31, 2023, we have $15.8 million in remaining
authorization to repurchase shares of our common stock.
Reconciliation 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 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, and goodwill,
long-lived and other non-current asset impairment. A reconciliation
of Net Income to Non-GAAP EBITDA and Non-GAAP Adjusted EBITDA is as
follows:
|
Three Months Ended December 31, |
|
|
2023 |
|
|
2022 |
|
Net income |
$ |
1,907 |
|
|
$ |
3,967 |
|
Interest and other income,
net1 |
|
(1,141 |
) |
|
|
(303 |
) |
Provision for income
taxes |
|
881 |
|
|
|
1,149 |
|
Depreciation and
amortization |
|
2,904 |
|
|
|
2,764 |
|
Non-GAAP EBITDA |
$ |
4,551 |
|
|
$ |
7,577 |
|
Stock compensation
expense |
|
2,249 |
|
|
|
2,081 |
|
Acquisition costs and
impairment of long-lived and other non-current assets2 |
|
451 |
|
|
|
184 |
|
Non-GAAP Adjusted EBITDA |
$ |
7,251 |
|
|
$ |
9,842 |
|
1 Interest and other (income) expense, 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
non-current assets are included in Other operating expenses, net on
the Consolidated Statements of Operations.
Non-GAAP Adjusted Net Income and Non-GAAP
Adjusted Basic and Diluted Earnings Per Share. Non-GAAP Adjusted
Net Income is a supplemental non-GAAP financial measure and is
equal to Net Income plus stock compensation expense, acquisition
related costs such as transaction expenses and changes in earn-out
estimates, amortization of intangible assets, business realignment
expenses, goodwill, long-lived and other non-current asset
impairments, 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 Per Share are determined
using Non-GAAP Adjusted Net Income. For Q1-FY24 and Q1-FY23, the
tax rates used to estimate the impact of income taxes on the
non-GAAP adjustments was 32% and 25%, respectively, based upon the
GAAP effective tax rates for each period. A reconciliation of Net
Income to Non-GAAP Adjusted Net Income and Non-GAAP Adjusted Basic
and Diluted Income Per Share is as follows:
|
Three Months Ended December 31, |
|
|
2023 |
|
|
2022 |
|
Net income |
$ |
1,907 |
|
|
$ |
3,967 |
|
Stock compensation
expense |
|
2,249 |
|
|
|
2,081 |
|
Intangible asset
amortization |
|
846 |
|
|
|
982 |
|
Acquisition costs and
impairment of long-lived and other non-current assets* |
|
451 |
|
|
|
184 |
|
Income tax impact on the
adjustment items |
|
(1,121 |
) |
|
|
(805 |
) |
Non-GAAP Adjusted net
income |
$ |
4,332 |
|
|
$ |
6,409 |
|
Non-GAAP Adjusted basic
earnings per common share |
$ |
0.14 |
|
|
$ |
0.20 |
|
Non-GAAP Adjusted diluted
earnings per common share |
$ |
0.14 |
|
|
$ |
0.19 |
|
Basic weighted average shares
outstanding |
|
30,605,475 |
|
|
|
31,815,160 |
|
Diluted weighted average
shares outstanding |
|
31,938,342 |
|
|
|
32,937,600 |
|
* Acquisition related costs and impairment of
long-lived and other non-current assets, which are excluded from
Non-GAAP Adjusted Net Income, are included in Other operating
expenses, net on the Consolidated Statements of Operations.
Conference Call Details
The Company will host a conference call to discuss these results
at 10:30 a.m. Eastern Time today. Investors and other interested
parties may access the teleconference by registering here to
receive the dial-in number and unique conference pin. A live
listen-only webcast of the conference call will be provided on the
Company's investor relations website at
https://investors.liquidityservices.com. An archive of the web cast
will be available on the Company's website until February 8, 2025
at 11:59 p.m. Eastern Time. The replay will be available starting
at 1:30 p.m. Eastern Time 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 prepare Non-GAAP Adjusted EBITDA by
eliminating from Non-GAAP EBITDA the impact of items that we do not
consider indicative of our core operating performance. You are
encouraged to evaluate these adjustments and the reasons we
consider them appropriate for supplemental analysis. As an
analytical tool, Non-GAAP Adjusted EBITDA is subject to all of the
limitations applicable to Non-GAAP EBITDA. Our presentation of
Non-GAAP Adjusted EBITDA should not be construed as an implication
that our future results will be unaffected by unusual or
non-recurring items.
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.
We do not quantitatively reconcile our guidance
ranges for our non-GAAP measures to their most comparable GAAP
measures in the Business Outlook section of this press release. The
guidance ranges for our GAAP and non-GAAP financial measures
reflect our assessment of potential sources of variability in our
financial results and are informed by our evaluation of multiple
scenarios, many of which have interactive effects across several
financial statement line items. Providing guidance for individual
reconciling items between our non-GAAP financial measures and the
comparable GAAP measures would imply a degree of precision and
certainty in those reconciling items that is not a consistent
reflection of our scenario-based process to prepare our guidance
ranges. To the extent that a material change affecting the
individual reconciling items between the Company’s forward-looking
non-GAAP and comparable GAAP financial measures is anticipated, the
Company has provided qualitative commentary in the Business Outlook
section of this press release for your consideration. However, as
the impact of such factors cannot be predicted with a reasonable
degree of certainty or precision, a quantitative reconciliation is
not available without unreasonable effort.
Supplemental Operating Data
To 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 Statements
This 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:
our ability to source sufficient assets from sellers to attract and
retain active professional buyers; our 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; our 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 to allow our
operations to grow in both size and scope; our ability to attract,
retain and develop the skilled employees that we need to support
our business; retail clients investing in their warehouse
operations capacity to handle higher volumes of online returns,
resulting in retailers sending the Company a reduced volume of
returns merchandise or sending us a product mix lower in value due
to the removal of high value returns; system interruptions that
could affect our websites or our transaction systems and impair the
services we provide to our sellers and buyers; our ability to
maintain the privacy and security of personal and business
information amidst multiplying threat landscapes and in compliance
with privacy and data protection regulations globally; the numerous
factors that influence the supply of and demand for used
merchandise, equipment and surplus assets; political, business,
economic and other conditions in local, regional and global
sectors; the operations of customers, project size and timing of
auctions, operating costs, and general economic conditions; our
ability to integrate acquired companies, and execute on anticipated
business plans such as the efforts underway with local and state
governments to advance legislation that allows for online auctions
for foreclosed and tax foreclosed real estate; the continuing
impacts of geopolitical events, including armed conflicts in
Ukraine, in and adjacent to Israel, and elsewhere; and impacts from
escalating interest rates and inflation on the our operations; the
numerous government regulations of e-commerce and other services,
competition, and restrictive governmental actions; the supply of,
demand for or market values of surplus assets, such as shortages in
supply of used vehicles; and other the risks and uncertainties set
forth in the Company’s Annual Report on Form 10-K for the year
ended September 30, 2023, which are 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 Services
Liquidity Services (NASDAQ:LQDT) operates the
world's largest B2B e-commerce marketplace platform for surplus
assets with over $10 billion in completed transactions to more than
five million qualified buyers and 15,000 corporate and government
sellers worldwide. The company supports its clients' sustainability
efforts by helping them extend the life of assets, prevent
unnecessary waste and carbon emissions, and reduce the number of
products headed to landfills.
Contact:Investor
Relationsinvestorrelations@liquidityservicesinc.com
Liquidity Services and SubsidiariesUnaudited Condensed
Consolidated Balance Sheets(Dollars in Thousands, Except Par
Value) |
|
|
December 31, 2023 |
|
|
September 30, 2023 |
|
|
|
(Unaudited) |
|
Assets |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
98,557 |
|
|
$ |
110,281 |
|
Short-term investments |
|
|
8,480 |
|
|
|
7,891 |
|
Accounts receivable, net of allowance for doubtful accounts of
$1,518 and $1,424 |
|
|
7,745 |
|
|
|
7,848 |
|
Inventory, net |
|
|
14,465 |
|
|
|
11,116 |
|
Prepaid taxes and tax refund receivable |
|
|
1,426 |
|
|
|
1,783 |
|
Prepaid expenses and other current assets |
|
|
7,290 |
|
|
|
7,349 |
|
Total current assets |
|
|
137,963 |
|
|
|
146,268 |
|
Property and equipment,
net |
|
|
16,774 |
|
|
|
17,156 |
|
Operating lease assets |
|
|
9,052 |
|
|
|
9,888 |
|
Intangible assets, net |
|
|
11,612 |
|
|
|
12,457 |
|
Goodwill |
|
|
89,627 |
|
|
|
89,388 |
|
Deferred tax assets |
|
|
6,439 |
|
|
|
7,050 |
|
Other assets |
|
|
6,958 |
|
|
|
6,762 |
|
Total assets |
|
$ |
278,425 |
|
|
$ |
288,970 |
|
Liabilities and
stockholders’ equity |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable |
|
$ |
32,389 |
|
|
$ |
39,115 |
|
Accrued expenses and other current liabilities |
|
|
17,413 |
|
|
|
23,809 |
|
Current portion of operating lease liabilities |
|
|
4,009 |
|
|
|
4,101 |
|
Deferred revenue |
|
|
4,474 |
|
|
|
4,701 |
|
Payables to sellers |
|
|
48,811 |
|
|
|
48,992 |
|
Total current liabilities |
|
|
107,096 |
|
|
|
120,718 |
|
Operating lease
liabilities |
|
|
5,828 |
|
|
|
6,581 |
|
Other long-term
liabilities |
|
|
122 |
|
|
|
137 |
|
Total liabilities |
|
|
113,046 |
|
|
|
127,436 |
|
Commitments and contingencies
(Note 12) |
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
Common stock, $0.001 par
value; 120,000,000 shares authorized; 36,189,758 shares issued and
outstanding at December 31, 2023; 36,142,346 shares issued and
outstanding at September 30, 2023 |
|
|
36 |
|
|
|
36 |
|
Additional paid-in capital |
|
|
268,096 |
|
|
|
265,945 |
|
Treasury stock, at cost; 5,501,737 shares at December 31, 2023, and
5,433,045 shares at September 30, 2023 |
|
|
(85,202 |
) |
|
|
(84,031 |
) |
Accumulated other comprehensive loss |
|
|
(9,500 |
) |
|
|
(10,457 |
) |
Accumulated deficit |
|
|
(8,051 |
) |
|
|
(9,958 |
) |
Total stockholders’ equity |
|
|
165,379 |
|
|
|
161,533 |
|
Total liabilities and
stockholders’ equity |
|
$ |
278,425 |
|
|
$ |
288,970 |
|
Liquidity Services and SubsidiariesUnaudited Condensed
Consolidated Statements of Operations(Dollars in Thousands, Except
Per Share Data) |
|
|
Three Months Ended December 31, |
|
|
|
2023 |
|
|
2022 |
|
Purchase revenues |
|
$ |
36,225 |
|
|
$ |
38,634 |
|
Consignment and other fee
revenues |
|
|
35,100 |
|
|
|
33,648 |
|
Total revenue |
|
|
71,325 |
|
|
|
72,282 |
|
Costs and expenses from
operations: |
|
|
|
|
|
|
Cost of goods sold (excludes depreciation and amortization) |
|
|
31,526 |
|
|
|
31,773 |
|
Technology and operations |
|
|
14,238 |
|
|
|
14,704 |
|
Sales and marketing |
|
|
12,980 |
|
|
|
10,790 |
|
General and administrative |
|
|
7,585 |
|
|
|
7,385 |
|
Depreciation and amortization |
|
|
2,904 |
|
|
|
2,764 |
|
Other operating expenses, net |
|
|
445 |
|
|
|
139 |
|
Total costs and expenses |
|
|
69,678 |
|
|
|
67,555 |
|
Income from operations |
|
|
1,647 |
|
|
|
4,727 |
|
Interest and other income,
net |
|
|
(1,141 |
) |
|
|
(389 |
) |
Income before provision for
income taxes |
|
|
2,788 |
|
|
|
5,116 |
|
Provision for income
taxes |
|
|
881 |
|
|
|
1,149 |
|
Net income |
|
$ |
1,907 |
|
|
$ |
3,967 |
|
Basic income per common
share |
|
$ |
0.06 |
|
|
$ |
0.12 |
|
Diluted income per common
share |
|
$ |
0.06 |
|
|
$ |
0.12 |
|
Basic weighted average shares
outstanding |
|
|
30,605,475 |
|
|
|
31,815,160 |
|
Diluted weighted average
shares outstanding |
|
|
31,938,342 |
|
|
|
32,937,600 |
|
Liquidity Services and
SubsidiariesUnaudited Condensed Consolidated
Statements of Cash Flows(Dollars in
Thousands) |
|
|
|
Three Months Ended December 31, |
|
|
|
2023 |
|
|
2022 |
|
Operating
activities |
|
|
|
|
|
|
Net income |
|
$ |
1,907 |
|
|
$ |
3,967 |
|
Adjustments to reconcile net
income to net cash provided by operating activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
|
2,904 |
|
|
|
2,764 |
|
Stock compensation expense |
|
|
2,249 |
|
|
|
2,081 |
|
Provision for doubtful accounts |
|
|
101 |
|
|
|
15 |
|
Deferred tax expense |
|
|
612 |
|
|
|
1,181 |
|
Gain on disposal of property and equipment |
|
|
(14 |
) |
|
|
(45 |
) |
Changes in operating assets and liabilities: |
|
|
|
|
|
|
Accounts receivable |
|
|
64 |
|
|
|
3,954 |
|
Inventory |
|
|
(3,266 |
) |
|
|
(4,680 |
) |
Prepaid taxes and tax refund receivable |
|
|
358 |
|
|
|
(202 |
) |
Prepaid expenses and other assets |
|
|
40 |
|
|
|
(999 |
) |
Operating lease assets and liabilities |
|
|
(10 |
) |
|
|
(65 |
) |
Accounts payable |
|
|
(6,757 |
) |
|
|
(10,416 |
) |
Accrued expenses and other current liabilities |
|
|
(6,422 |
) |
|
|
(1,744 |
) |
Deferred revenue |
|
|
(227 |
) |
|
|
(417 |
) |
Payables to sellers |
|
|
(412 |
) |
|
|
(5,935 |
) |
Other liabilities |
|
|
— |
|
|
|
(120 |
) |
Net cash used in operating
activities |
|
|
(8,873 |
) |
|
|
(10,659 |
) |
Investing
activities |
|
|
|
|
|
|
Purchases of property and
equipment, including capitalized software |
|
|
(1,731 |
) |
|
|
(1,212 |
) |
Purchase of short-term
investments |
|
|
(2,369 |
) |
|
|
(1,847 |
) |
Maturities of short-term
investments |
|
|
1,986 |
|
|
|
— |
|
Other investing activities,
net |
|
|
31 |
|
|
|
44 |
|
Net cash used in investing
activities |
|
|
(2,083 |
) |
|
|
(3,015 |
) |
Financing
activities |
|
|
|
|
|
|
Common stock repurchases |
|
|
(1,168 |
) |
|
|
(7,199 |
) |
Taxes paid associated with net
settlement of stock compensation awards |
|
|
(225 |
) |
|
|
(244 |
) |
Payments of the principal
portion of finance lease liabilities |
|
|
(26 |
) |
|
|
(25 |
) |
Proceeds from exercise of
stock options, net of tax |
|
|
127 |
|
|
|
496 |
|
Net cash used in financing
activities |
|
|
(1,292 |
) |
|
|
(6,972 |
) |
Effect of exchange rate
differences on cash and cash equivalents |
|
|
524 |
|
|
|
690 |
|
Net decrease in cash and cash
equivalents |
|
|
(11,724 |
) |
|
|
(19,956 |
) |
Cash and cash equivalents at
beginning of period |
|
|
110,281 |
|
|
|
96,122 |
|
Cash and cash equivalents at
end of period |
|
$ |
98,557 |
|
|
$ |
76,166 |
|
Supplemental
disclosure of cash flow information |
|
|
|
|
|
|
Cash (received) paid for
income taxes, net |
|
$ |
(117 |
) |
|
$ |
159 |
|
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