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SEC Filings

10-K
LIQUIDITY SERVICES INC filed this Form 10-K on 11/21/2016
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Table of Contents


Liquidity Services, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

7. Intangible Assets (Continued)

Consolidated Statements of Operations. Intangible assets at September 30, 2016 and September 30, 2015 consisted only of definite-lived intangible assets, and were the following:

 
   
  September 30, 2016   September 30, 2015  
 
  Useful
Life
(in years)
  Gross
Carrying
Amount
  Accumulated
Amortization
  Net
Carrying
Amount
  Gross
Carrying
Amount
  Accumulated
Amortization
  Net
Carrying
Amount
 
 
  (dollars in thousands)
 

Contract intangibles

    10   $ 1,500   $ (150 ) $ 1,350   $ 1,500   $   $ 1,500  

Brand and technology

    3 - 5     5,749     (5,018 )   731     5,749     (3,926 )   1,823  

Covenants not to compete

    3 - 5     700     (533 )   167     700     (433 )   267  

Patent and trademarks

    3 - 10     820     (418 )   402     792     (331 )   461  

Total intangible assets, net

        $ 8,769   $ (6,119 ) $ 2,650   $ 8,741   $ (4,690 ) $ 4,051  

        Future expected amortization of intangible assets at September 30, 2016 is as follows:

Years ending September 30,
  Amortization  
 
  (in thousands)
 

2017

  $ 1,073  

2018

    281  

2019

    207  

2020

    957  

2021 and after

    132  

Total

  $ 2,650  

        Amortization expense related to intangible assets for the years ended September 30, 2016, 2015 and 2014 was $1.4 million, $3.1 million, and $11.0 million, respectively. In prior years the Company presented amortization of contract intangibles on a separate line item within the Consolidated Statements of Operations. During fiscal year 2016, the Company reclassified amortization of contract intangibles to the depreciation and amortization line item.

8. Debt

    Senior Credit Facility

        In 2010, the Company entered into a senior credit facility (the Agreement) with a bank, which provided for borrowings up to $75.0 million, as amended. On May 1, 2015, the Company amended this credit facility extending the term to May 31, 2018. Borrowings under the Agreement bore interest at an annual rate equal to the 30 day LIBOR rate plus 1.25% (1.451% at September 30, 2015) due monthly. As of September 30, 2015, the Company had no outstanding borrowings under the Agreement, and the Company's borrowing availability was $37.5 million, of which the Company had used $13.9 million for issued letters of credit. Borrowings under the Agreement were secured by substantially all of the assets of the Company. The Agreement contained certain financial and non-financial restrictive covenants including, among others, the requirements to maintain a minimum level of earnings before interest, income taxes, depreciation and amortization (EBITDA) and a minimum debt coverage ratio.

        Effective March 25, 2016, the Company terminated its $75 million senior credit facility. There were no outstanding borrowings under the Agreement at the time of its termination.

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