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SEC Filings

10-Q
LIQUIDITY SERVICES INC filed this Form 10-Q on 05/03/2018
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the CAG segment decreased 32.1%, or $5.9 million, to $12.5 million for the three months ended March 31, 2018, from $18.3 million for the three months ended March 31, 2017. This decrease can primarily be attributed to the lower volume of goods sold under both our Surplus and Scrap Contracts, a change in mix of commodities to lower value commodities sold under our Scrap Contract, lower service revenue under the Surplus Contract, as well as a decrease in sales volume within our CAG Commercial business. As a percentage of revenue, gross profit remained flat at 49.5%.

RSCG. Revenue from our RSCG segment decreased 0.6%, or $0.2 million, which is insignificant. GMV from our RSCG segment increased 12.9%, or $4.1 million over fiscal 2017. The increase in GMV is attributable to increased sales under our consignment model during fiscal 2018. The slight decrease in revenue but increase in GMV is due to a change in mix from purchase to consignment model transactions. Gross profit within the RSCG segment increased 5.5%, or $0.4 million for the three months ended March 31, 2018, due to the increase in consignment model transactions. As a percentage of revenue, gross profit increased to 32.0%, from 30.1%.

Corporate & Other. Revenue from Corporate & Other primarily relates to IronDirect and certain TruckCenter operations. The decrease in revenue of $0.6 million is made up of decreases in revenue related to our decision to exit certain TruckCenter operations in January 2017, partially offset by increases in revenue from IronDirect. Gross profit within Corporate & Other decreased $0.3 million over the prior year, attributable to lower gross profit within our IronDirect business as a result of its reorganization.

Consolidated Results
 
Total Revenue.  Total consolidated revenue decreased $12.2 million, or 16.9%, to $60.1 million for the three months ended March 31, 2018, from $72.3 million for the three months ended March 31, 2017, due to an $11.9 million decrease in revenue from our CAG segment, a $0.2 million decrease in revenue from our RSCG segment, slightly offset by a $0.5 million increase in revenue from our GovDeals segment. Total consolidated GMV decreased $11.5 million, or 7.0%, to $152.2 million for the three months ended March 31, 2018, from $163.7 million for the three months ended March 31, 2017, primarily due to a $20.0 million decrease in GMV from our CAG segment, a $0.8 million decrease within Corporate & Other, partially offset by a $5.2 million increase in GMV from our GovDeals segment, and a $4.1 million increase in GMV from our RSCG segment.

Cost of goods sold.  Cost of goods sold decreased $5.9 million, or 17.1%, to $28.7 million for the three months ended March 31, 2018, from $34.6 million for the three months ended March 31, 2017.  Approximately $4.1 million of this decrease is attributable to a lower volume of sales under our Surplus Contract during the three months ended March 31, 2018, due to the wind-down of that contract. The remainder of this decrease is due to the lower volume of purchase transactions within our Retail and CAG Commercial businesses, as well as the exit of the TruckCenter land-based, live auction business in fiscal 2017, partially offset by increased cost of goods sold within our IronDirect business. Cost of goods sold remained flat at 47.8% of revenue.
 
Seller distributions.  Seller distributions decreased $1.1 million, or 22.0%, to $3.9 million for the three months ended March 31, 2018, from $5.0 million for the three months ended March 31, 2017, due to lower sales under our Scrap Contract during the three months ended March 31, 2018. As a percentage of revenue, seller distributions decreased to 6.4%, from 6.9%.

Technology and operations expenses.  Technology and operations expenses decreased $5.1 million, or 24.2%, to $16.0 million for the three months ended March 31, 2018, from $21.1 million for the three months ended March 31, 2017, due to a decrease in staff costs of approximately $2.8 million, partially the result of business realignment activities. The remaining reductions in these costs can be attributed to lower fees from external contractors and other services, and less costs due to the exit of the TruckCenter land-based, live auction business.  As a percentage of revenue, technology and operations expenses decreased to 26.5%, from 29.1%.
 
Sales and marketing expenses.  Sales and marketing expenses decreased $0.9 million, or 9.9%, to $8.2 million for the three months ended March 31, 2018, from $9.1 million for the three months ended March 31, 2017, due to a decrease in marketing labor and promotional spend as a result of certain business realignment and restructuring initiatives.  As a percentage of revenue, sales and marketing expenses increased to 13.7%, from 12.6%.
 
General and administrative expenses.  General and administrative expenses decreased $0.7 million, or 8.5%, to $7.5 million for the three months ended March 31, 2018, from $8.2 million for the three months ended March 31, 2017. This decrease includes reductions in overall staff cost of approximately $0.6 million, partially the result of business realignment and restructuring initiatives. Further reductions relate to a decrease in certain lease costs. As a percentage of revenue, general and administrative expenses increased to 12.4%, from 11.4%.
 

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