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SEC Filings

10-Q
LIQUIDITY SERVICES INC filed this Form 10-Q on 05/06/2016
Entire Document
 

Table of Contents

 

Results of Operations

 

The following table sets forth, for the periods indicated, selected statement of operations data expressed as a percentage of revenue.

 

 

 

Three Months Ended
March 31,

 

Six Months Ended
March 31,

 

 

 

2016

 

2015

 

2016

 

2015

 

Revenue

 

100.0

%

100.0

%

100.0

%

100.0

%

Costs and expenses:

 

 

 

 

 

 

 

 

 

Cost of goods sold

 

46.0

 

41.4

 

43.7

 

42.5

 

Profit-sharing distributions

 

2.9

 

7.4

 

3.2

 

7.5

 

Technology and operations

 

28.4

 

24.0

 

31.1

 

22.6

 

Sales and marketing

 

10.5

 

10.5

 

12.2

 

9.3

 

General and administrative

 

12.0

 

11.1

 

13.4

 

9.2

 

Amortization of contract intangibles

 

 

 

 

0.5

 

Depreciation and amortization

 

1.9

 

1.9

 

2.2

 

1.8

 

Acquisition costs and related fair value adjustments and impairment of goodwill and long-lived assets

 

 

 

0.0

 

42.2

 

 

 

 

 

 

 

 

 

 

 

Total costs and expenses

 

101.7

 

96.3

 

105.8

 

135.6

 

 

 

 

 

 

 

 

 

 

 

(Loss) income from operations

 

(1.7

)

3.7

 

(5.8

)

(35.6

)

Interest and other expense, net

 

0.4

 

(0.0

)

0.3

 

(0.0

)

 

 

 

 

 

 

 

 

 

 

(Loss) income from operations before benefit (provision) for income taxes

 

(1.3

)

3.7

 

(5.5

)

(35.6

)

Benefit (provision) for income taxes

 

0.3

 

(2.4

)

1.6

 

8.1

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income from operations

 

(1.0

)%

1.3

%

(3.9

)%

(27.5

)%

 

Three Months Ended March 31, 2016 Compared to Three Months Ended March 31, 2015

 

Revenue.  Revenue decreased $16.1 million, or 15.6%, to $86.9 million for the three months ended March 31, 2016 from $102.9 million for the three months ended March 31, 2015, primarily due to (1) a 16.6% decrease, or $9.3 million, in our commercial marketplaces due to the sale of the Jacobs Trading Company in fiscal 2015, and the wind down of the NESA refurbishment business in Canada, reduced product flows within our retail vertical, offset by stronger capital assets deal flow; and (2) a 17.5% decrease, or $7.3 million, in our DoD businesses due to lower commodity prices and a shift in property mix to lower valued property, partly offset by higher service revenue. These revenue decreases were partially offset by a 13.4% increase, or $0.6 million, in our state and local government (GovDeals) marketplace due to an increase in the number of new sellers and additional sales volume from existing clients. The amount of gross merchandise volume decreased 19.2%, or $36.4 million to $153.0 million, for the three months ended March 31, 2016 from $189.4 million for the three months ended March 31, 2015, due to (1) a 27.6% decrease, or $28.3 million, in our commercial marketplaces due to the sale of the Jacobs Trading Company, the wind down of the NESA business, reduced product flows within our retail business, and continued weakness in the energy sector; and (2) a 30.2% decrease, or $12.6 million, in our DoD contracts due to lower commodity prices and a shift in property mix to lower valued property. These GMV decreases were partially offset by a 10.1% increase, or $4.5 million, in our state and local government (GovDeals) marketplace due to an increase in the number of new sellers and additional sales volume from existing clients.

 

Cost of goods sold.  Cost of goods sold decreased $2.7 million, or 6.4%, to $39.9 million for the three months ended March 31, 2016 from $42.7 million for the three months ended March 31, 2015.  This decrease is primarily attributed to the sale of the Jacobs Trading Company, and the wind down of the NESA refurbishment business in Canada, offset by the increase in the price we pay for inventory under the current Surplus Contract as well as a greater mix of principal deals in the commercial marketplaces. In line with these changes, cost of goods sold increased to 46.0%, from 41.4%.

 

Profit-sharing distributions.  Profit-sharing distributions decreased $5.1 million, or 66.8%, to $2.5 million for the three months ended March 31, 2016 from $7.6 million for the three months ended March 31, 2015. As a percentage of revenue, profit-sharing distributions decreased to 2.9% from 7.5%. This is due to decreases in property flow from the DoD in our scrap business and lower commodity prices.

 

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