false000123546800012354682023-12-072023-12-07

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December 07, 2023

 

 

 

 

 

 

 

Liquidity Services, Inc.

(Exact name of Registrant as Specified in Its Charter)

 

 

Delaware			0-51813	52-2209244
(State or Other Jurisdiction of Incorporation)			(Commission File Number)	(IRS Employer Identification No.)
6931 Arlington Road Suite 460
Bethesda, Maryland				20814
(Address of Principal Executive Offices)				(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: 202 4676868

 

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.001 par value		LQDT		The Nasdaq Stock Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

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Item 2.02 Results of Operations and Financial Condition.

On December 7, 2023, Liquidity Services, Inc. (the “Company”) announced its financial results for the quarter ended September 30, 2023. The full text of the press release (the “Press Release”) issued in connection with the announcement is attached as Exhibit 99.1 to this Current Report on Form 8-K.

The information contained in the Press Release shall be considered “furnished” pursuant to Item 2.02 of Form 8-K and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended, nor shall it be deemed incorporated by reference into any of the Company’s reports or filings with the Securities and Exchange Commission, whether made before or after the date hereof, except as expressly set forth by specific reference in such report or filing.
 

Item 9.01 Financial Statements and Exhibits.

 

99.1	Press Release of Liquidity Services, Inc., dated December 7, 2023, announcing financial results for the quarter ended September 30, 2023.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

			LIQUIDITY SERVICES, INC.
			(Registrant)
Date:	December 7, 2023	By:	/s/ Mark A. Shaffer
			Mark A. Shaffer
			Chief Legal Officer and Corporate Secretary

 

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Exhibit 99.1

LIQUIDITY SERVICES ANNOUNCES FOURTH QUARTER FISCAL YEAR 2023 FINANCIAL RESULTS

 

Bethesda, MD - December 7, 2023 - Liquidity Services (NASDAQ:LQDT; www.liquidityservices.com), a leading global commerce company powering the circular economy, today announced the following financial results as of the quarter ended September 30, 2023, as compared to the applicable prior year periods:

 

 

"We concluded our fiscal year with strong fourth quarter results, setting a new annual record for GMV at $1.2 billion and delivering our highest full-year Non-GAAP Adjusted EBITDA performance since 2014. Across our segments, we are continuing to design and deliver flexible service offerings that are relevant to sellers, and continuing to drive buyer engagement and demand for the assets listed on our marketplaces. Looking forward to fiscal year 2024, we have launched our modernized GovDeals marketplace, and are increasingly leveraging our Retail Supply Chain Group's (RSCG) network of warehouses to offer consumer goods for curbside pickup by extending our AllSurplus Deals marketplace to additional locations. Our pipeline remains strong, and we continue to see opportunities to drive growth and long-term shareholder value through expanding our technology-enabled, asset-light services," said Bill Angrick, Liquidity Services CEO.

 

Recent Business Highlights

 

 

Fourth Quarter Financial Highlights

 

GMV for the fiscal fourth quarter of 2023 was $315.6 million, an 11% increase from $283.3 million in the fourth fiscal quarter of 2022.

 

Revenue for the fiscal fourth quarter of 2023 was $80.0 million, a 6% increase from $75.2 million in the fourth fiscal quarter of 2022.

GAAP Net Income was $6.3 million, or $0.20 per share, for the fiscal fourth quarter of 2023, a decrease from $8.3 million1, or $0.25 per share1, for the same quarter last year.

 

Non-GAAP Adjusted Net Income for the fiscal fourth quarter of 2023 was $8.4 million, or $0.26 per share, an increase from $6.4 million, or $0.19 per share last year.

 

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Non-GAAP Adjusted EBITDA for the fiscal fourth quarter of 2023 was $12.8 million, a $0.5 million increase from $12.3 million in the fiscal fourth quarter of 2022, reflecting increased GMV and revenue results, partially offset by year-over-year increases in sales, marketing, technology and operations expenses to support market share expansion, diversification and longer-term growth.

 

1 The prior year results included an $4.5 million, or $0.14 per share, non-cash benefit from a reduction in the fair value of the Bid4Assets earn-out liability. For further information, see Note 13, Fair Value Measurement, to our annual report on Form 10-K for the year ended September 30, 2023.

 

2 Includes $110.3 million of Cash and cash equivalents and $7.9 million of Short-term investments.

 

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Fourth 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 16, Segment Information, to our annual report on Form 10-K for the year ended September 30, 2023. Segment direct profit is calculated as total revenue less cost of goods sold (excluding depreciation and amortization).

Our Q4-FY23 segment results are as follows (unaudited, dollars in thousands):

 

		Three Months Ended September 30,								Twelve Months Ended September 30,
		2023				2022				2023				2022
GovDeals:
GMV		$	184,100			$	160,894			$	726,124			$	720,323
Total revenue		$	16,054			$	14,223			$	62,010			$	59,352
Segment direct profit		$	15,238			$	13,496			$	58,810			$	56,408
Segment direct profit as a percentage of total revenue			94.9	%			95.0	%			94.8	%			95.0	%
RSCG:
GMV		$	74,661			$	63,306			$	285,574			$	236,236
Total revenue		$	49,561			$	43,218			$	200,218			$	166,100
Segment direct profit		$	17,505			$	16,886			$	68,068			$	63,704
Segment direct profit as a percentage of total revenue			35.3	%			39.0	%			34.0	%			38.4	%
CAG:
GMV		$	56,814			$	59,139			$	191,333			$	188,813
Total revenue		$	10,681			$	14,578			$	38,476			$	42,575
Segment direct profit		$	8,749			$	8,044			$	32,215			$	29,120
Segment direct profit as a percentage of total revenue			81.9	%			55.0	%			83.7	%			68.4	%
Machinio:
GMV		—					—			—					—
Total revenue		$	3,678			$	3,200			$	13,821			$	12,083
Segment direct profit		$	3,499			$	3,048			$	13,110			$	11,471
Segment direct profit as a percentage of total revenue			95.2	%			95.2	%			94.9	%			94.9	%
Consolidated:
GMV		$	315,575			$	283,339			$	1,203,031			$	1,145,372
Total revenue		$	79,957			$	75,202			$	314,462			$	280,050

 

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Fourth Quarter Operational Metrics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Business Outlook

Our expertise in diverse sectors, our strong buyer base across numerous asset categories, and our global reach are continuing to provide advantages as our clients navigate economic change and look to us for valuable solutions.

Our fiscal first quarter 2024 guidance range for GMV is expected to exceed the same quarter last year. This fiscal first quarter GMV guidance range is also consistent with our historical seasonal trends, where our fiscal first quarter results typically decline sequentially compared to the fiscal fourth quarter of the prior year. Consistent with prior year trends, operating expenses increase in the fiscal first quarter while our operating leverage typically improves during the second half of our fiscal year.

For the fiscal first quarter, GovDeals is expecting year-over-year growth that includes improved availability of vehicles for sale while it faced headwinds in that category last year. CAG is also expecting a solid year-over-year improvement in GMV from selected global industrial projects, while revenue is expected to increase at a lower rate than GMV as selected CAG projects are being conducted with partner organizations this year. The RSCG segment is currently receiving a higher volume of lower-value products than last year, while the broader consumer demand for retail goods has softened. This current dynamic in our RSCG segment is reflected in our profit guidance ranges for this fiscal first quarter of 2024.

We currently anticipate our consolidated revenue as a percentage of GMV to remain in the mid twenty percent range, reflecting our anticipated mix of business and marketplace asset categories. We expect our segment direct profits as a percentage of total revenues to be in a range similar to the same quarter last year. We anticipate continued investment in our sales and technology initiatives in support of our marketplace enhancements, market share gains and long-term growth.

For Q1-FY24 our guidance is as follows:

GMV - We expect GMV to range from $295 million to $325 million.

GAAP Net Income - We expect GAAP Net Income to range from $1.5 million to $4.0 million.

GAAP Diluted EPS - We expect GAAP Diluted EPS to range from $0.05 to $0.12.

Non-GAAP Adjusted EBITDA -We expect Non-GAAP Adjusted EBITDA to range from $7.0 million to $10.0 million.

Non-GAAP Adjusted Diluted EPS - We expect Non-GAAP Adjusted EPS to range from $0.12 to $0.19.

Our Business Outlook includes forward-looking statements which reflect these trends and assumptions for Q1-FY24 as compared to the prior year's period:

Potential Impacts to GMV, Revenue, Segment Direct Profits, and ratios calculated using these metrics

 

Potential Impacts to Operating Expenses

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Potential Impacts to GAAP Net Income and EPS and Non-GAAP Adjusted Net Income and Adjusted EPS

 

 

 

 

 

 

 

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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) expense, 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 September 30,								Twelve Months Ended September 30,
		2023				2022				2023				2022
Net income		$	6,279			$	8,345			$	20,978			$	40,324
Interest and other (income) expense, net(1)			(1,161	)			(88	)			(2,859	)			126
Provision for income taxes			2,774				3,075				8,039				7,329
Depreciation and amortization			2,821				2,776				11,255				10,322
Non-GAAP EBITDA		$	10,713			$	14,108			$	37,412			$	58,101
Stock compensation expense			1,975				2,325				8,191				8,482
Acquisition costs and impairment of goodwill and long-lived and other non-current assets(2)			69				179				252				473
Business realignment expenses(2,3)			—				191				—				191
Fair value adjustments to acquisition earn-outs			—				(4,500	)			—				(24,500	)
Non-GAAP Adjusted EBITDA		$	12,757			$	12,303			$	45,855			$	42,747

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.

3 Business realignment expenses include the amounts accounted for as exit costs under ASC 420, and the related impacts of business realignment actions subject to other accounting guidance.

 

 

 

 

 

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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 Q4-FY23, the tax rate used to estimate the impact of income taxes on the non-GAAP adjustments was 28% compared to 32% used for the Q4-FY22 results. These tax rates exclude the impacts of the fair value adjustments to acquisition earn-out liabilities. 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 September 30,								Twelve Months Ended September 30,
		2023				2022				2023				2022
Net income		$	6,279			$	8,345			$	20,978			$	40,324
Stock compensation expense			1,975				2,325				8,191				8,482
Intangible asset amortization			846				1,005				3,791				3,740
Acquisition costs and impairment of long-lived and other non-current assets*			69				179				252				473
Business realignment expenses			—				191				—				191
Fair value adjustment of acquisition earn-outs			—				(4,500	)			—				(24,500	)
Income tax impact on the adjustment items			(801	)			(1,173	)			(3,389	)			(4,085	)
Non-GAAP Adjusted net income		$	8,368			$	6,372			$	29,823			$	24,625
Non-GAAP Adjusted basic earnings per common share		$	0.27			$	0.20			$	0.96			$	0.76
Non-GAAP Adjusted diluted earnings per common share		$	0.26			$	0.19			$	0.93			$	0.73
Basic weighted average shares outstanding			30,576,142				31,731,111				31,075,648				32,292,978
Diluted weighted average shares outstanding			31,749,902				33,072,803				32,074,561				33,719,424

* 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.

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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 December 7, 2024 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.

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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: changes in political, business and economic conditions; the duration and impact of shortages in supply of used vehicles; 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 Company’s operations; the operations of customers, project size and timing of auctions, operating costs, and general economic conditions; 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; the numerous factors that influence the supply of and demand for used merchandise, equipment and surplus assets; the Company’s need to manage the attraction of sellers and buyers in a broad range of asset categories with varying degrees of maturity and in many geographies; economic and other conditions in local, regional and global sectors; the Company’s 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 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 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; 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.

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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 Relations

investorrelations@liquidityservicesinc.com

 

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Liquidity Services and Subsidiaries

Unaudited Condensed Consolidated Balance Sheets

(Dollars in Thousands, Except Par Value)

 

		September 30,
		2023					2022
Assets
Current assets:
Cash and cash equivalents		$	110,281				$	96,122
Short-term investments			7,891					1,819
Accounts receivable, net of allowance for doubtful accounts of $1,424 and $449			7,848					11,792
Inventory, net			11,116					11,679
Prepaid taxes and tax refund receivable			1,783					1,631
Prepaid expenses and other current assets			7,349					6,551
Total current assets			146,268					129,594
Property and equipment, net			17,156					19,094
Operating lease assets			9,888					13,207
Intangible assets, net			12,457					16,234
Goodwill			89,388					88,910
Deferred tax assets			7,050					13,628
Other assets			6,762					7,437
Total assets		$	288,970				$	288,104
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable		$	39,115				$	41,982
Accrued expenses and other current liabilities			23,809					23,304
Current portion of operating lease liabilities			4,101					4,540
Deferred revenue			4,701					4,439
Payables to sellers			48,992					49,238
Total current liabilities			120,718					123,503
Operating lease liabilities			6,581					9,687
Other long-term liabilities			137					378
Total liabilities			127,436					133,568
Commitments and contingencies (Note 15)
Stockholders’ equity:
Common stock, $0.001 par value; 120,000,000 shares authorized; 36,142,346 shares issued and outstanding at September 30, 2023; 35,724,057 shares issued and outstanding at September 30, 2022			36					36
Additional paid-in capital			265,945					258,275
Treasury stock, at cost; 5,433,045 shares at September 30, 2023, and 3,813,199 shares at September 30, 2022			(84,031	)				(62,554	)
Accumulated other comprehensive loss			(10,457	)				(10,285	)
Accumulated deficit			(9,958	)				(30,936	)
Total stockholders’ equity			161,533					154,536
Total liabilities and stockholders’ equity		$	288,970				$	288,104

 

 

 

 

 

 

 

 

 

 

 

 

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Liquidity Services and Subsidiaries

Unaudited Condensed Consolidated Statements of Operations

(Dollars in Thousands, Except Per Share Data)

 

		Three Months Ended September 30,								Twelve Months Ended September 30,
		2023				2022				2023				2022
Purchase revenues		$	43,373			$	42,162			$	172,089			$	151,271
Consignment and other fee revenues			36,584				33,040				142,373				128,779
Total revenue			79,957				75,202				314,462				280,050
Costs and expenses from operations:
Cost of goods sold (excludes depreciation and amortization)			34,982				33,745				142,322				119,407
Technology and operations			13,655				13,949				57,078				55,522
Sales and marketing			13,731				11,007				49,443				43,224
General and administrative			6,832				6,610				28,074				28,282
Depreciation and amortization			2,821				2,776				11,255				10,322
Fair value adjustment of acquisition earn-outs			—				(4,500	)			—				(24,500	)
Other operating expenses, net			58				370				186				388
Total costs and expenses			72,079				63,957				288,358				232,645
Income from operations			7,878				11,245				26,105				47,405
Interest and other income, net			(1,175	)			(175	)			(2,912	)			(248	)
Income before provision for income taxes			9,053				11,420				29,016				47,653
Provision (benefit) for income taxes			2,774				3,075				8,039				7,329
Net income		$	6,279			$	8,345			$	20,978			$	40,324
Basic income per common share		$	0.21			$	0.26			$	0.68			$	1.25
Diluted income per common share		$	0.20			$	0.25			$	0.65			$	1.20
Basic weighted average shares outstanding			30,576,142				31,731,111				31,075,648				32,292,978
Diluted weighted average shares outstanding			31,749,902				33,072,803				32,074,561				33,719,424

 

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Liquidity Services and Subsidiaries

Unaudited Condensed Consolidated Statements of Cash Flows

(Dollars in Thousands)

 

		Year Ended September 30,
		2023				2022
Operating activities
Net income		$	20,978			$	40,324
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			11,255				10,322
Change in fair value of earn-out liability			—				(24,500	)
Stock compensation expense			8,191				8,482
Inventory adjustment to net realizable value			1,048				194
Provision for doubtful accounts			1,390				136
Deferred tax expense (benefit)			6,578				6,287
Impairment of long-lived and other non-current assets			—				31
(Gain) loss on disposal of property and equipment			(36	)			(14	)
Gain on disposal of lease assets			—				(240	)
Changes in operating assets and liabilities:
Accounts receivable			2,725				(6,290	)
Inventory			(479	)			441
Prepaid taxes and tax refund receivable			(152	)			82
Prepaid expenses and other assets			(1,166	)			(1,805	)
Operating lease assets and liabilities			(228	)			396
Accounts payable			(2,889	)			1,548
Accrued expenses and other current liabilities			277				(2,653	)
Deferred revenue			262				(185	)
Payables to sellers			(581	)			13,000
Other liabilities			(157	)			(723	)
Net cash provided by operating activities			47,016				44,833
Investing activities
Purchases of property and equipment, including capitalized software			(5,386	)			(8,121	)
Purchase of short-term investments			(8,037	)			(1,820	)
Maturities of short-term investments			1,923				—
Cash paid for business acquisition, net of cash acquired			—				(11,164	)
Other investing activities, net			68				21
Net cash used in investing activities			(11,432	)			(21,084	)
Financing activities
Payments of the principal portion of finance lease liabilities			(101	)			(99	)
Payments of debt issuance costs			—				(91	)
Proceeds from exercise of common stock options, net of tax			496				—
Taxes paid associated with net settlement of stock compensation awards			(1,262	)			(2,806	)
Payment of earn-out liability related to business acquisition			—				(3,500	)
Common stock repurchases			(21,198	)			(25,447	)
Net cash used in financing activities			(22,065	)			(31,943	)
Effect of exchange rate differences on cash and cash equivalents			640				(2,019	)
Net increase (decrease) in cash and cash equivalents			14,159				(10,213	)
Cash and cash equivalents at beginning of year			96,122				106,335
Cash and cash equivalents at end of year		$	110,281			$	96,122
Supplemental disclosure of cash flow information
Cash paid for income taxes, net		$	1,590			$	885
Non-cash: Common stock surrendered in the exercise of stock options		$	200			$	479

 

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