– Record fiscal year revenue of $475.3 million up 41% – Record Gross
Merchandise Volume (GMV) of $864.2 million up 55% – Record Adjusted
earnings before interest, taxes, depreciation and amortization (EBITDA)
of $110.1 million up 109% –
– Fourth quarter revenue of $122.3 million up 52% – Record GMV of
$241.0 million up 65% – Adjusted EBITDA of $23.1 million up 85% –
WASHINGTON–(BUSINESS WIRE)–Nov. 29, 2012–
Liquidity Services, Inc. (NASDAQ: LQDT; www.liquidityservicesinc.com)
today reported its financial results for its fiscal year (FY-12) and
fourth quarter (Q4-12) ended September 30, 2012. Liquidity Services,
Inc. provides business and government clients and buying customers
transparent, innovative and effective online marketplaces and integrated
services for surplus assets.
Liquidity Services, Inc. (LSI or the Company) reported record
consolidated FY-12 revenue of $475.3 million, an increase of
approximately 41% from the prior year. Adjusted EBITDA, which excludes
stock-based compensation and acquisition costs including changes in
acquisition earn out payment estimates, for FY-12 was a record $110.1
million, an increase of approximately 109% from the prior year. FY-12
GMV, the total sales volume of all merchandise sold through the
Company’s marketplaces, was a record $864.2 million, an increase of
approximately 55% from the prior year. Comparisons to FY-11 results
include our U.K. operations, which were shut down, effective September
30, 2011, and are accounted for as discontinued operations in our
statement of operations.
The Company reported consolidated Q4-12 revenue of $122.3 million, an
increase of approximately 52% from the prior year’s comparable period.
Adjusted EBITDA for Q4-12 was $23.1 million, an increase of
approximately 85% from the prior year’s comparable period. GMV was a
record $241.0 million for Q4-12, an increase of approximately 65% from
the prior year’s comparable period. These comparisons include the
results of our U.K. operations, as noted above.
Net income in FY-12 was $48.3 million or $1.47 diluted earnings per
share. Adjusted net income in FY-12, which excludes stock-based
compensation and acquisition costs including changes in acquisition earn
out payment estimates, was a record $60.9 million, an increase of
approximately 100% from the prior year, and was a record $1.86 adjusted
diluted earnings per share. Net income in Q4-12 was $5.5 million or
$0.17 diluted earnings per share. Adjusted net income in Q4-12 was $13.1
million, an increase of approximately 216% from the prior year’s
comparable period, and was $0.40 adjusted diluted earnings per share.
Adjusted net income excludes stock-based compensation and acquisition
costs including changes in acquisition earn out payment estimates, net
of tax. These comparisons include the results of our U.K. operations, as
noted above.
Annual operating cash flow was a record $52.1 million during FY-12, an
increase of approximately 31% from the prior year. Q4-12 operating cash
flow was $12.9 million, an increase of approximately 13% from the prior
year’s comparable period.
“Liquidity Services generated strong results during Q4-12 as we
continued to grow our market share and build on our leadership position
in the reverse supply chain market during a seasonally low quarter for
the Company. We continued to benefit from large commercial and
government clients placing their trust in us to handle more of their
excess inventory and high value capital asset sales, which drove strong
growth this quarter,” said Bill Angrick, Chairman and CEO of LSI. “Our
recent acquisition, of NESA, further enhances our position as the
leading reverse supply chain solution for large retailers and their
suppliers, and we are excited by the numerous related opportunities to
create value for our buyers and clients, which we plan to demonstrate
during fiscal year 2013.”
“During fiscal year 2012, we continued to advance our business strategy
of building a defensible, leadership position in the reverse supply
chain market and generated strong results for our clients and
shareholders. With our large and growing buyer marketplace, integrated
services and domain expertise, we are enabling retailers, manufacturers
and government agencies to drive efficiencies in their global supply
chains and better compete in an increasingly complex environment. We
believe our continued focus on delivering the breadth of services,
geographic coverage and global market data that large enterprises
require in the reverse supply chain positions us well for fiscal year
2013 and continued long term profitable growth and market leadership,”
said Mr. Angrick. “Operationally, Liquidity Services continued to build
on the process improvements and scale efficiencies started last fiscal
year resulting in overall improved cycle times and margins. Adjusted
EBITDA margins improved significantly from 15.6% of revenue and 9.4% of
GMV in FY-11 to 23.2% and 12.7%, respectively for FY-12. Liquidity
Services remains focused on executing our long term growth strategy to
ensure the Company is well positioned to drive attractive returns for
shareholders.”
Business Outlook
While economic conditions have improved, our overall outlook remains
cautious due to the volatility in the macro environment and its
potential impact on the retail and industrial supply chains and GDP
growth. Additionally, we plan to further invest in our technology
infrastructure and product roadmap to support further expansion and
integration of our existing businesses and online marketplaces which are
proceeding according to our original plan. In the longer term, we expect
our business to continue to benefit from the following trends: (i) as
consumers trade down and seek greater value, we anticipate stronger
buyer demand for the surplus merchandise sold in our marketplaces, (ii)
as corporations and public sector agencies focus on reducing costs,
improving transparency and working capital flows by outsourcing reverse
supply chain activities, we expect our seller base to increase, and
(iii) as corporations and public sector agencies increasingly prefer
service providers with a proven track record, innovative technology
solutions and demonstrated financial strength, we expect our seller base
to increase.
The following forward looking statements reflect trends and assumptions
for the next quarter and FY 2013:
(i) stable commodity prices in our scrap business;
(ii) stable average sales prices realized in our capital assets
marketplaces;
(iii) an effective income tax rate of 40%; and
(iv) improved operations and service levels in our retail goods
marketplaces.
Our results may also be materially affected by changes in business
trends and our operating environment, and by other factors, such as: (i)
investments in infrastructure and value-added services to support new
business in both commercial and public sector markets; and (ii) pricing
pressure from buyers in selected categories of our retail goods
marketplaces, which can result in lower than optimal margins.
Our Scrap Contract with the Department of Defense (DoD) includes an
incentive feature, which can increase the amount of profit sharing
distribution we receive from 23% up to 25%. Payments under this
incentive feature are based on the amount of scrap we sell for the DoD
to small businesses during the preceding 12 months as of June 30th
of each year. We are eligible to receive this incentive in each year of
the term of the Scrap Contract and have assumed for purposes of
providing guidance regarding our projected financial results for fiscal
year 2013 that we will again receive this incentive payment.
In addition, we estimate that we will make investments totaling several
million dollars to fully integrate GoIndustry into Liquidity Services
over the next year resulting in a drag on our earnings during the first
half of fiscal year 2013. This is a change in our expectation that
GoIndustry would be accretive to the bottom line throughout fiscal year
2013. We believe this investment is required to fully realize the
synergies available across the Company’s buyer marketplaces and clients
and to position us for growth within the $100 billion global market for
capital assets.
GMV – We expect GMV for fiscal year 2013 to
range from $1.1 billion to $1.2 billion. We expect GMV for Q1-13 to
range from $240 million to $250 million.
Adjusted EBITDA – We expect Adjusted EBITDA
for fiscal year 2013 to range from $123 million to $133 million. We
expect Adjusted EBITDA for Q1-13 to range from $22.0 million to $24.0
million.
Adjusted Diluted EPS – We estimate Adjusted
Earnings Per Diluted Share for fiscal year 2013 to range from $2.05 to
$2.23. In Q1-13, we estimate Adjusted Earnings Per Diluted Share to be
$0.36 to $0.40. This guidance assumes that we have an average fully
diluted number of shares outstanding for the year of 33.4 million, and
that we will not repurchase shares with the approximately $18.1 million
yet to be expended under the share repurchase program.
Our guidance adjusts EBITDA and Diluted EPS for (i) acquisition costs
including transaction costs and changes in earn out estimates; (ii)
amortization of contract intangible assets of $33.3 million from our
acquisition of Jacobs Trading; and (iii) for stock based compensation
costs, which we estimate to be approximately $3.0 million to $3.5
million per quarter for fiscal year 2013. These stock based compensation
costs are consistent with fiscal year 2012.
Key FY-12 and Q4-12 Operating Metrics
Registered Buyers — At the end of FY-12,
registered buyers totaled approximately 2,186,000, representing a 36%
increase over the approximately 1,604,000 registered buyers at the end
of FY-11.
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), increased to approximately 2,105,000 in FY-12, an approximately
9% increase over the approximately 1,936,000 auction participants in
FY-11. Auction participants increased to approximately 565,000 in Q4-12,
an approximately 28% increase over the approximately 442,000 auction
participants in Q4-11.
Completed Transactions — Completed
transactions increased to approximately 501,000, an approximately 5%
increase for FY-12 from the approximately 475,000 completed transactions
in FY-11. Completed transactions increased to approximately 140,000, an
approximately 35% increase for Q4-12 from the approximately 104,000
completed transactions in Q4-11. Average transaction sizes increased
approximately 47% from $1,175 in FY-11 to $1,725 in FY-12, and 23% from
$1,400 in Q4-11 to $1,716 in Q4-12, due to our lotting and merchandising
strategies.
GMV and Revenue Mix — GMV continues to
diversify due to the continued growth in our commercial business and
state and local government business (the GovDeals.com marketplace). As a
result, the percentage of GMV derived from our DoD Contracts during
FY-12 decreased to 23.7% compared to 33.9% in the prior year and in
Q4-12 decreased to 20.7% compared to 35.1% in the prior year period. The
table below summarizes GMV and revenue by pricing model. The purchase
model revenue mix has increased, as a result of the Jacobs Trading
acquisition.
|
GMV Mix |
||||||||||||
| FY-12 | FY-11 | Q4-12 | Q4-11 | |||||||||
| Profit-Sharing Model: | ||||||||||||
| Scrap Contract | 8.9 | % | 15.4 | % | 6.7 | % | 16.8 | % | ||||
| Total Profit Sharing | 8.9 | % | 15.4 | % | 6.7 | % | 16.8 | % | ||||
| Consignment Model: | ||||||||||||
| GovDeals | 15.2 | % | 20.0 | % | 13.2 | % | 20.2 | % | ||||
| Commercial | 37.1 | % | 24.7 | % | 45.0 | % | 30.1 | % | ||||
| Total Consignment | 52.3 | % | 44.7 | % | 58.2 | % | 50.3 | % | ||||
| Purchase Model: | ||||||||||||
| Commercial | 24.0 | % | 21.1 | % | 21.1 | % | 14.6 | % | ||||
| Surplus Contract | 14.8 | % | 18.5 | % | 14.0 | % | 18.3 | % | ||||
| Total Purchase | 38.8 | % | 39.6 | % | 35.1 | % | 32.9 | % | ||||
| Other | 0.0 | % | 0.3 | % | 0.0 | % | 0.0 | % | ||||
| Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||
|
Revenue Mix |
||||||||||||
| Profit-Sharing Model: | ||||||||||||
| Scrap Contract | 16.1 | % | 25.5 | % | 13.3 | % | 30.3 | % | ||||
| Total Profit Sharing | 16.1 | % | 25.5 | % | 13.3 | % | 30.3 | % | ||||
| Consignment Model: | ||||||||||||
| GovDeals | 2.6 | % | 3.0 | % | 2.5 | % | 3.4 | % | ||||
| Commercial | 9.9 | % | 5.8 | % | 13.7 | % | 6.9 | % | ||||
| Total Consignment | 12.5 | % | 8.8 | % | 16.2 | % | 10.3 | % | ||||
| Purchase Model: | ||||||||||||
| Commercial | 44.5 | % | 34.9 | % | 42.9 | % | 26.4 | % | ||||
| Surplus Contract | 26.9 | % | 30.3 | % | 27.6 | % | 32.9 | % | ||||
| Total Purchase | 71.4 | % | 65.2 | % | 70.5 | % | 59.3 | % | ||||
| Other | 0.0 | % | 0.5 | % | 0.0 | % | 0.1 | % | ||||
| Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||
Liquidity Services, Inc.
Reconciliation
of GAAP to Non-GAAP Measures
EBITDA and Adjusted EBITDA. EBITDA
is a supplemental non-GAAP financial measure and is equal to net income
plus interest expense and other expense, net; provision for income
taxes; amortization of contract intangibles; and depreciation and
amortization. Our definition of Adjusted EBITDA differs from EBITDA
because we further adjust EBITDA for stock based compensation expense,
and acquisition costs including changes in earn out estimates and
goodwill impairment. Adjusted EBITDA for the three and twelve months
ended September 30, 2011 includes the operating losses generated by our
UK operations, which were closed down as of September 30, 2011.
|
Three Months Ended September 30, |
Twelve Months Ended September 30, |
|||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||
| (In thousands) | ||||||||||||
| Net income | $ | 5,545 | $ | 3,126 | $ | 48,296 | $ | 8,512 | ||||
| Interest and other expense, net | 593 | 62 | 2,218 | 111 | ||||||||
| Provision for income taxes | 2,627 | 2,527 | 31,652 | 4,419 | ||||||||
| Amortization of contract intangibles | 1,884 | 203 | 7,943 | 813 | ||||||||
| Depreciation and amortization | 1,715 | 1,587 | 6,223 | 5,519 | ||||||||
| EBITDA | 12,364 | 7,505 | 96,332 | 19,374 | ||||||||
| Stock compensation expense | 3,462 | 2,387 | 12,117 | 9,136 | ||||||||
| Acquisition costs and goodwill impairment | 7,256 | 2,578 | 1,695 | 24,167 | ||||||||
| Adjusted EBITDA | $ | 23,082 | $ | 12,470 | $ | 110,144 | $ | 52,677 | ||||
Adjusted Net Income and Adjusted Basic and Diluted
Earnings Per Share. Adjusted net income is a supplemental
non-GAAP financial measure and is equal to net income plus tax effected
stock compensation expense, amortization of contract-related intangible
assets associated with the Jacobs Trading acquisition and acquisition
costs including changes in earn out estimates and goodwill impairment.
Adjusted basic and diluted earnings per share are determined using
Adjusted Net Income. Adjusted net income for the three and twelve months
ended September 30, 2011 includes the operating losses generated by our
UK operations, which were closed down as of September 30, 2011.
|
Three Months Ended
September 30, |
Twelve Months Ended
September 30, |
|||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||
| (Dollars in thousands, except per share data) | ||||||||||||
| Net income | $ | 5,545 | $ | 3,126 | $ | 48,296 | $ | 8,512 | ||||
| Stock compensation expense (net of tax) | 2,077 | 1,034 | 7,270 | 6,029 | ||||||||
| Amortization of contract intangibles (net of tax) | 1,090 | — | 4,359 | — | ||||||||
| Acquisition costs and goodwill impairment (net of tax) | 4,354 | (26 | ) | 1,017 | 15,950 | |||||||
| Adjusted net income | $ | 13,066 | $ | 4,134 | $ | 60,942 | $ | 30,491 | ||||
| Adjusted basic earnings per common share | $ | 0.42 | $ | 0.15 | $ | 1.98 | $ | 1.10 | ||||
| Adjusted diluted earnings per common share | $ | 0.40 | $ | 0.14 | $ | 1.86 | $ | 1.05 | ||||
| Basic weighted average shares outstanding | 31,045,293 | 28,512,433 | 30,854,796 | 27,736,865 | ||||||||
| Diluted weighted average shares outstanding | 32,788,205 | 30,527,438 | 32,783,079 | 29,081,933 | ||||||||
Conference Call
The Company will host a conference call to discuss the fiscal 2012 and
fourth quarter 2012 results at 10:30 a.m. Eastern Time today. Investors
and other interested parties may access the teleconference by dialing
800-561-2731 or 617-614-3528 and providing the participant pass code
20943794. A live web cast of the conference call will be provided on the
Company’s investor relations website at http://www.liquidityservicesinc.com.
A replay of the web cast will be available on the Company’s website for
30 calendar days ending December 29, 2012 at 11:59 p.m. ET. An audio
replay of the teleconference will also be available until December 29,
2012 at 11:59 p.m. ET. To listen to the replay, dial 888-286-8010 or
617-801-6888 and provide pass code 18384625. Both replays will be
available starting at 12:30 p.m. today.
Non-GAAP Measures
To supplement our consolidated financial statements presented in
accordance with 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 and Adjusted Earnings 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.
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 generally accepted accounting
principles, 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.
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 customer 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 generally accepted
accounting principles, 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 and expected future effective tax rates. 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. 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 a number of risks and uncertainties that could cause our
actual results to differ materially from the forward-looking statements
contained 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 dependence on our
contracts with the DoD and Walmart for a significant portion of our
revenue and profitability; our ability to successfully expand the supply
of merchandise available for sale on our online marketplaces; our
ability to attract and retain active professional buyers to purchase
this merchandise; the timing and success of upgrades to our technology
infrastructure; our ability to successfully complete the integration of
any acquired companies, including NESA, GoIndustry, Jacobs Trading and
Truckcenter.com, into our existing operations and our ability to realize
any anticipated benefits of these or other acquisitions; and our ability
to recognize any expected tax benefits as a result of closing our U.K.
operations. There may be other factors of which we are currently unaware
or 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 LSI
Liquidity Services, Inc. (NASDAQ: LQDT) provides leading corporations,
public sector agencies and buying customers the world’s most
transparent, innovative and effective online marketplaces and integrated
services for surplus assets. On behalf of its clients, Liquidity
Services has completed the sale of over $3.0 billion of surplus,
returned and end-of-life assets, in over 500 product categories,
including consumer goods, capital assets and industrial equipment. The
Company is based in Washington, D.C. and has nearly 1,200 employees.
Additional information can be found at: http://www.liquidityservicesinc.com.
|
Liquidity Services, Inc. and Subsidiaries Consolidated Balance Sheets (Dollars in Thousands) |
|||||||
| September 30, | |||||||
| 2012 | 2011 | ||||||
| Assets | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 104,782 | $ | 128,984 | |||
|
Accounts receivable, net of allowance for doubtful accounts of $1,248 and $514 in 2012 and 2011, respectively |
16,226 | 6,049 | |||||
| Inventory | 20,669 | 15,065 | |||||
| Prepaid and deferred taxes | 16,927 | 16,073 | |||||
| Prepaid expenses and other current assets | 3,973 | 4,805 | |||||
| Current assets of discontinued operations | — | 277 | |||||
| Total current assets | 162,577 | 171,253 | |||||
| Property and equipment, net | 10,382 | 7,042 | |||||
| Intangible assets, net | 34,204 | 2,993 | |||||
| Goodwill | 185,771 | 40,549 | |||||
| Other assets | 7,474 | 5,970 | |||||
| Total assets | $ | 400,408 | $ | 227,807 | |||
| Liabilities and stockholders’ equity | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 9,997 | $ | 8,590 | |||
| Accrued expenses and other current liabilities | 36,425 | 23,411 | |||||
| Profit-sharing distributions payable | 4,041 | 7,267 | |||||
| Current portion of acquisition earn out payable | 14,511 | 5,410 | |||||
| Customer payables | 34,255 | 12,728 | |||||
| Current portion of note payable | 10,000 | — | |||||
| Current liabilities of discontinued operations | 154 | 2,160 | |||||
| Total current liabilities | 109,383 | 59,566 | |||||
| Acquisition earn out payable | — | 4,741 | |||||
| Note payable, net of current portion | 32,000 | — | |||||
| Deferred taxes and other long-term liabilities | 9,022 | 2,087 | |||||
| Total liabilities | 150,405 | 66,394 | |||||
| Stockholders’ equity: | |||||||
|
Common stock, $0.001 par value; 120,000,000 shares authorized; 31,138,111 shares issued and outstanding at September 30, 2012; 31,192,608 shares issued and 29,030,552 shares outstanding at September 30, 2011 |
31 | 29 | |||||
| Additional paid-in capital | 182,361 | 124,886 | |||||
| Treasury stock, at cost | — | (21,884 | ) | ||||
| Accumulated other comprehensive income | 1,246 | 52 | |||||
| Retained earnings | 66,365 | 58,330 | |||||
| Total stockholders’ equity | 250,003 | 161,413 | |||||
| Total liabilities and stockholders’ equity | $ | 400,408 | $ | 227,807 | |||
|
Liquidity Services, Inc. and Subsidiaries Consolidated Statements of Operations (Dollars in Thousands, Except Share and Per Share Data) |
|||||||||||||
|
Three Months Ended
September 30, |
Twelve Months Ended
September 30, |
||||||||||||
| 2012 | 2011 | 2012 | 2011 | ||||||||||
| Revenue | $ | 102,424 | $ | 70,814 | $ | 415,829 | $ | 297,584 | |||||
| Fee revenue | 19,851 | 8,391 | 59,475 | 29,794 | |||||||||
| Total revenue from continuing operations | 122,275 | 79,205 | 475,304 | 327,378 | |||||||||
| Costs and expenses from continuing operations: | |||||||||||||
| Cost of goods sold (excluding amortization) | 50,626 | 25,440 | 198,123 | 126,395 | |||||||||
| Profit-sharing distributions | 9,125 | 14,788 | 43,242 | 49,318 | |||||||||
| Technology and operations | 20,025 | 13,239 | 67,553 | 52,178 | |||||||||
| Sales and marketing | 10,444 | 5,970 | 31,252 | 23,279 | |||||||||
| General and administrative | 12,435 | 6,849 | 37,107 | 26,484 | |||||||||
| Amortization of contract intangibles | 1,884 | 203 | 7,943 | 813 | |||||||||
| Depreciation and amortization | 1,715 | 1,342 | 6,223 | 4,881 | |||||||||
| Acquisition costs | 7,256 | 1,762 | 1,695 | 6,702 | |||||||||
| Total costs and expenses | 113,510 | 69,593 | 393,138 | 290,050 | |||||||||
| Income from continuing operations | 8,765 | 9,612 | 82,166 | 37,328 | |||||||||
| Interest and other expense, net | 593 | 401 | 2,218 | 1,190 | |||||||||
| Income before provision for income taxes from continuing operations | 8,172 | 9,211 | 79,948 | 36,138 | |||||||||
| Provision for income taxes | 2,627 | 2,528 | 31,652 | 15,459 | |||||||||
| Income from continuing operations | 5,545 | 6,683 | 48,296 | 20,679 | |||||||||
| Loss from discontinued operations, net of tax | — | (3,557 | ) | — | (12,167 | ) | |||||||
| Net income | $ | 5,545 | $ | 3,126 | $ | 48,296 | $ | 8,512 | |||||
| Basic earnings (loss) per common share: | |||||||||||||
|
From continuing operations |
$ | 0.18 | $ | 0.23 | $ | 1.57 | $ | 0.75 | |||||
| From discontinued operations | — | (0.12 | ) | — | (0.44 | ) | |||||||
| Basic earnings per common share | $ | 0.18 | $ | 0.11 | $ | 1.57 | $ | 0.31 | |||||
| Diluted earnings (loss) per common share: | |||||||||||||
| From continuing operations | $ | 0.17 | $ | 0.22 | $ | 1.47 | $ | 0.71 | |||||
| From discontinued operations | — | (0.12 | ) | — | (0.42 | ) | |||||||
| Diluted earnings per common share | $ | 0.17 | $ | 0.10 | $ | 1.47 | $ | 0.29 | |||||
| Basic weighted average shares outstanding | 31,045,293 | 28,512,433 | 30,854,796 | 27,736,865 | |||||||||
| Diluted weighted average shares outstanding | 32,788,205 | 30,527,438 | 32,783,079 | 29,081,933 | |||||||||
|
Liquidity Services, Inc. and Subsidiaries Consolidated Statements of Cash Flows (In Thousands) |
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Three Months Ended
September 30, |
Twelve Months Ended
September 30, |
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| 2012 | 2011 | 2012 | 2011 | |||||||||||
| Operating activities | ||||||||||||||
| Net income | $ | 5,545 | $ | 3,126 | $ | 48,296 | $ | 8,512 | ||||||
| Less: Discontinued operations, net of tax | — | (3,557 | ) | — | (12,167 | ) | ||||||||
| Income from continuing operations | 5,545 | 6,683 | 48,296 | 20,679 | ||||||||||
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Adjustments to reconcile income from continuing operations to net cash provided by operating activities from continued operations: |
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| Depreciation and amortization | 3,599 | 1,545 | 14,166 | 5,694 | ||||||||||
| Stock compensation expense | 3,462 | 2,386 | 12,117 | 9,136 | ||||||||||
| Provision (benefit) for inventory allowance | 1,660 | (73 | ) | 884 | (22 | ) | ||||||||
| Provision (benefit) for doubtful accounts | 334 | 90 | 117 | 221 | ||||||||||
| Deferred tax (benefit) provision | (1,719 | ) | 66 | (1,719 | ) | 66 | ||||||||
| Incremental tax benefit from exercise of common stock options | (1,765 | ) | (4,146 | ) | (16,953 | ) | (6,597 | ) | ||||||
| Changes in operating assets and liabilities: | ||||||||||||||
| Accounts receivable | (483 | ) | (883 | ) | (1,596 | ) | (1,809 | ) | ||||||
| Inventory | 4,384 | (1,693 | ) | (132 | ) | (392 | ) | |||||||
| Prepaid expenses and other assets | 4,490 | 1,480 | 17,890 | 7,815 | ||||||||||
| Accounts payable | (1,331 | ) | 2,582 | (7,570 | ) | 1,552 | ||||||||
| Accrued expenses and other | (15,298 | ) | 4,312 | (8,534 | ) | (691 | ) | |||||||
| Profit-sharing distributions payable | 1,103 | 1,909 | (3,226 | ) | 1,671 | |||||||||
| Customer payables | 2,677 | (608 | ) | 2,510 | 2,945 | |||||||||
| Acquisition earn out payable | 6,242 | (1,838 | ) | (3,826 | ) | 358 | ||||||||
| Other liabilities | 77 | (21 | ) | 205 | (1 | ) | ||||||||
| Net cash provided by operating activities from continuing activities | 12,977 | 11,791 | 52,629 | 40,625 | ||||||||||
| Net cash used in operating activities from discontinued operations | (102 | ) | (405 | ) | (483 | ) | (739 | ) | ||||||
| Net cash provided by operating activities | 12,875 | 11,386 | 52,146 | 39,886 | ||||||||||
| Investing activities | ||||||||||||||
| Purchases of short-term investments | — | (1,462 | ) | — | (10,292 | ) | ||||||||
| Proceeds from the sale of short-term investments | — | 12,392 | — | 43,812 | ||||||||||
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Cash paid for acquisitions and decrease (increase) in goodwill and intangibles |
8,267 | (62 | ) | (71,796 | ) | (9,092 | ) | |||||||
| Purchases of property and equipment | (3,965 | ) | (423 | ) | (6,793 | ) | (4,822 | ) | ||||||
| Net cash provided by (used in) investing activities | 4,302 | 10,445 | (78,589 | ) | 19,606 | |||||||||
| Financing activities | ||||||||||||||
| Proceeds from exercise of common stock options (net of tax) | 1,469 | 10,590 | 15,491 | 23,639 | ||||||||||
| Incremental tax benefit from exercise of common stock options | 1,765 | 4,146 | 16,953 | 6,597 | ||||||||||
| Repurchases of common stock | — | — | (29,999 | ) | (3,541 | ) | ||||||||
| Net cash provided by financing activities | 3,234 | 14,736 | 2,445 | 26,695 | ||||||||||
| Effect of exchange rate differences on cash and cash equivalents | (288 | ) | (990 | ) | (309 | ) | (476 | ) | ||||||
| Net increase (decrease) in cash and cash equivalents | 20,123 | 35,577 | (24,307 | ) | 85,711 | |||||||||
| Cash and cash equivalents at beginning of the period | 84,659 | 93,512 | 129,089 | 43,378 | ||||||||||
| Cash and cash equivalents at end of period | $ | 104,782 | $ | 129,089 | $ | 104,782 | $ | 129,089 | ||||||
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Less: Cash and cash equivalents of discontinued operations at end of year |
— | 105 | — | 105 | ||||||||||
| Cash and cash equivalents of continuing operations at end of year | $ | 104,782 | $ | 128,984 | $ | 104,782 | $ | 128,984 | ||||||
| Supplemental disclosure of cash flow information | ||||||||||||||
| Cash paid for income taxes | $ | 2,721 | $ | 12 | $ | 14,482 | $ | 6,245 | ||||||
| Cash paid for interest | 65 | 14 | 117 | 62 | ||||||||||
| Contingent purchase price accrued | 6,242 | — | 7,438 | 6,989 | ||||||||||
| Note payable issued in connection with acquisition | — | — | 40,000 | — | ||||||||||
Source: Liquidity Services, Inc.
Liquidity Services, Inc.
Julie Davis, 202-467-6868 ext. 2234
Director,
Investor Relations
[email protected]
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