Record fiscal year revenue of $505.9 million up 6% – Record Gross
Merchandise Volume (GMV) of $973.3 million up 13% – Adjusted earnings
before interest, taxes, depreciation and amortization (EBITDA) of $104.6
million down 5% – Adjusted EPS of $1.75 down 6%
– Fourth quarter revenue of $129.1 million up 6% – GMV of $250.5
million up 4% – Adjusted EBITDA of $24.9 million up 8% – Adjusted EPS of
$0.41 up 3%
WASHINGTON–(BUSINESS WIRE)–Nov. 21, 2013–
Liquidity Services, Inc. (NASDAQ: LQDT; www.liquidityservicesinc.com)
today reported its financial results for its fiscal year (FY-13) and
fourth quarter (Q4-13) ended September 30, 2013. 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. (Liquidity Services or the Company) reported
record consolidated FY-13 revenue of $505.9 million, an increase of
approximately 6% from the prior year. Adjusted EBITDA, which excludes
stock-based compensation and acquisition costs including changes in
acquisition earn out payment estimates, for FY-13 was $104.6 million, a
decrease of approximately 5% from the prior year. FY-13 GMV, the total
sales volume of all merchandise sold through the Company’s marketplaces,
was a record $973.3 million, an increase of approximately 13% from the
prior year.
The Company reported consolidated Q4-13 revenue of $129.1 million, an
increase of approximately 6% from the prior year’s comparable period.
Adjusted EBITDA for Q4-13 was $24.9 million, an increase of
approximately 8% from the prior year’s comparable period. GMV was $250.5
million for Q4-13, an increase of approximately 4% from the prior year’s
comparable period.
Net income in FY-13 was $41.1 million or $1.26 diluted earnings per
share. Adjusted net income in FY-13, which excludes stock-based
compensation and acquisition costs including changes in acquisition earn
out payment estimates and amortization of contract-related intangible
assets associated with the Jacobs Trading acquisition – net of tax, was
$57.0 million, a decrease of approximately 6% from the prior year, or
$1.75 adjusted diluted earnings per share based on 32.7 million fully
diluted shares outstanding. Net income in Q4-13 was $10.4 million or
$0.32 diluted earnings per share. Adjusted net income in Q4-13 was $13.4
million, an increase of approximately 3% from the prior year’s
comparable period, or $0.41 adjusted diluted earnings per share based on
32.7 million fully diluted shares outstanding.
Annual operating cash flow was $46.7 million during FY-13, a decrease of
approximately 10% from the prior year. Q4-13 operating cash flow was a
record $29.9 million, an increase of approximately 131% from the prior
year’s comparable period.
“Liquidity Services generated improved results during Q4-13 based on the
expansion of our services with retail supply chain clients and strong
growth in our public sector business highlighted by 33% growth in our
GovDeals marketplace this quarter. Both our retail supply chain and
capital assets businesses grew sequentially during a seasonally low
quarter for the Company and we continued to make progress with our
integration of GoIndustry to deliver profitable growth going forward,”
said Bill Angrick, Chairman and CEO of Liquidity Services.
“During fiscal year 2013, we enhanced our industry coverage, breadth of
services, geographic reach and global buyer base which have expanded our
addressable market and reinforced our leadership position. We are
excited by the numerous related opportunities to create value for our
buyers and clients by delivering supply chain efficiencies, protecting
their brands and providing technology enabled services to better compete
in an increasingly complex environment,” said Mr. Angrick.
“There are compelling opportunities to more broadly extend our
technology platform, buyer liquidity and marketplace data to existing
and new customers and partners. During FY14 we will establish and fund a
new directive focused on developing new on demand services in these
areas to further penetrate and serve our target market. We believe our
continued investments in our people, technology platform and service
offering position us well for long term profitable growth and market
leadership. Liquidity Services remains focused on executing our long
term growth strategy to ensure the Company is well positioned to drive
attractive returns for shareholders,” said Mr. Angrick.
Business Outlook
While general economic conditions have improved, our overall outlook
remains cautious due to the volatility in the macro environment. The
retail vertical of our business has seen significant changes in consumer
spending habits in certain categories, such as electronics, which has
been affected by increases in payroll taxes, continued high
unemployment, and reduced innovation in the sector resulting in
decreased spending. Additionally, we plan to increase our investment in
technology infrastructure and innovation for our proprietary e-commerce
marketplaces to support further expansion and integration of our
existing and recently acquired businesses. 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 2014:
| (i) | stable commodity prices in our scrap business; | |
| (ii) |
stable average sales prices realized in our capital assets marketplaces; |
|
| (iii) |
improved margins in our GoIndustry marketplace as we continue to integrate the acquisition and complete our restructuring plans; |
|
| (iv) |
continued product flows under the DoD Surplus contract under the existing terms; |
|
| (v) | an effective income tax rate of 40%; and | |
| (vi) |
improved operations and service levels in our retail goods marketplaces. |
|
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 2014 that we will again receive this incentive payment.
GMV – We expect GMV for fiscal year 2014 to
range from $1.0 billion to $1.075 billion. We expect GMV for Q1-14 to
range from $200 million to $225 million.
Adjusted EBITDA – We expect Adjusted EBITDA
for fiscal year 2014 to range from $100 million to $108 million. We
expect Adjusted EBITDA for Q1-14 to range from $14.0 million to $17.0
million.
Adjusted Diluted EPS – We estimate Adjusted
Earnings Per Diluted Share for fiscal year 2014 to range from $1.60 to
$1.76. In Q1-14, we estimate Adjusted Earnings Per Diluted Share to be
$0.20 to $0.24. This guidance assumes that we have an average fully
diluted number of shares outstanding for the year of 33.3 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 related 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 $3.5 million
to $4.0 million per quarter for fiscal year 2014. These stock based
compensation costs are consistent with fiscal year 2013.
Key FY-13 and Q4-13 Operating Metrics
Registered Buyers — At the end of FY-13,
registered buyers totaled approximately 2,424,000, representing an 11%
increase over the approximately 2,186,000 registered buyers at the end
of FY-12.
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 2,458,000 in FY-13, an approximately
17% increase over the approximately 2,105,000 auction participants in
FY-12. Auction participants increased to approximately 626,000 in Q4-13,
an approximately 11% increase over the approximately 565,000 auction
participants in Q4-12.
Completed Transactions — Completed
transactions increased to approximately 530,000, an approximately 6%
increase for FY-13 from the approximately 501,000 completed transactions
in FY-12. Completed transactions decreased to approximately 133,000, an
approximately 5% decrease for Q4-13 from the approximately 140,000
completed transactions in Q4-12.
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-13 decreased to 21.3% compared to 23.7% in the prior year. The table
below summarizes GMV and revenue by pricing model.
|
GMV Mix |
||||||||
| FY-13 | FY-12 | Q4-13 | Q4-12 | |||||
| Profit-Sharing Model: | ||||||||
| Scrap Contract | 7.0% | 8.9% | 6.8% | 6.7% | ||||
| Total Profit Sharing | 7.0% | 8.9% | 6.8% | 6.7% | ||||
| Consignment Model: | ||||||||
| GovDeals | 15.8% | 15.2% | 16.9% | 13.2% | ||||
| Commercial | 43.3% | 37.1% | 44.8% | 45.0% | ||||
| Total Consignment | 59.1% | 52.3% | 61.7% | 58.2% | ||||
| Purchase Model: | ||||||||
| Commercial | 19.6% | 24.0% | 17.1% | 21.1% | ||||
| Surplus Contract | 14.3% | 14.8% | 14.4% | 14.0% | ||||
| Total Purchase | 33.9% | 38.8% | 31.5% | 35.1% | ||||
| Total | 100.0% | 100.0% | 100.0% | 100.0% | ||||
|
Revenue Mix |
||||||||
| Profit-Sharing Model: | ||||||||
| Scrap Contract | 13.5% | 16.1% | 13.2% | 13.3% | ||||
| Total Profit Sharing | 13.5% | 16.1% | 13.2% | 13.3% | ||||
| Consignment Model: | ||||||||
| GovDeals | 3.1% | 2.6% | 3.5% | 2.5% | ||||
| Commercial | 12.2% | 9.9% | 13.5% | 13.7% | ||||
| Total Consignment | 15.3% | 12.5% | 17.0% | 16.2% | ||||
| Purchase Model: | ||||||||
| Commercial | 38.8% | 44.5% | 33.8% | 42.9% | ||||
| Surplus Contract | 27.6% | 26.9% | 28.0% | 27.6% | ||||
| Total Purchase | 66.4% | 71.4% | 61.8% | 70.5% | ||||
| Other | 4.8% | 0.0% | 8.0% | 0.0% | ||||
| Total | 100.0% | 100.0% | 100.0% | 100.0% | ||||
|
Liquidity Services, Inc. |
|
Reconciliation of GAAP to Non-GAAP |
|
EBITDA and Adjusted EBITDA. EBITDA is a supplemental non-GAAP financial measure and is equal to net income plus interest and other expense (income), 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. |
| Three Months | Twelve Months | ||||||||||||
| Ended September 30, | Ended September 30, | ||||||||||||
| 2013 | 2012 | 2013 | 2012 | ||||||||||
| (In thousands) | |||||||||||||
| Net income | $ | 10,409 | $ | 5,545 | $ | 41,104 | $ | 48,296 | |||||
| Interest and other expense (income), net | 69 | 593 | (704 | ) | 2,218 | ||||||||
| Provision for income taxes | 6,729 | 2,627 | 27,551 | 31,652 | |||||||||
| Amortization of contract intangibles | 1,816 | 1,884 | 7,265 | 7,943 | |||||||||
| Depreciation and amortization | 2,583 | 1,715 | 10,109 | 6,223 | |||||||||
| EBITDA | 21,606 | 12,364 | 85,325 | 96,332 | |||||||||
| Stock compensation expense | 3,150 | 3,462 |
13,379 |
12,117 | |||||||||
| Acquisition costs | 95 | 7,256 | 5,921 | 1,695 | |||||||||
| Adjusted EBITDA | $ | 24,851 | $ | 23,082 | $ | 104,625 | $ | 110,144 | |||||
|
Adjusted Net Income and Adjusted Basic and |
| Three Months Ended | Twelve Months Ended | |||||||||||
| September 30, | September 30, | |||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||
| (Dollars in thousands, except per share data) | ||||||||||||
| Net income | $ | 10,409 | $ | 5,545 | $ | 41,104 | $ | 48,296 | ||||
| Stock compensation expense (net of tax) | 1,890 | 2,077 | 7,998 | 7,270 | ||||||||
| Amortization of contract intangibles (net of tax) | 1,090 | 1,090 | 4,342 | 4,359 | ||||||||
| Acquisition costs (net of tax) | 57 | 4,354 | 3,550 | 1,017 | ||||||||
| Adjusted net income | $ | 13,446 | $ | 13,066 | $ | 56,994 | $ | 60,942 | ||||
| Adjusted basic earnings per common share | $ | 0.42 | $ | 0.42 | $ | 1.80 | $ | 1.98 | ||||
| Adjusted diluted earnings per common share | $ | 0.41 | $ | 0.40 | $ | 1.75 | $ | 1.86 | ||||
| Basic weighted average shares outstanding | 31,772,379 | 31,045,293 | 31,616,926 | 30,854,796 | ||||||||
| Diluted weighted average shares outstanding | 32,702,807 | 32,788,205 | 32,657,236 | 32,783,079 | ||||||||
Conference Call
The Company will host a conference call to discuss the fiscal 2013 and
fourth quarter 2013 results at 10:30 a.m. Eastern Time today. Investors
and other interested parties may access the teleconference by dialing
866-510-0712 or 617-597-5380 and providing the participant pass code
53127384. 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 21, 2013 at 11:59 p.m. ET. An audio
replay of the teleconference will also be available until December 21,
2013 at 11:59 p.m. ET. To listen to the replay, dial 888-286-8010 or
617-801-6888 and provide pass code 38390837. Both replays will be
available starting at 2:30 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 Wal-Mart 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 and Go-Industry, 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. retail consumer
goods 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 Liquidity Services, Inc.
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 $4.0 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 over 1,300 employees.
Additional information can be found at: http://www.liquidityservicesinc.com.
| Liquidity Services, Inc. and Subsidiaries | ||||||
| Consolidated Balance Sheets | ||||||
| (Dollars in Thousands) | ||||||
| September 30, | ||||||
| 2013 | 2012 | |||||
| Assets | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 95,109 | $ | 104,782 | ||
|
Accounts receivable, net of allowance for doubtful accounts of $891 and $1,248 in 2013 and 2012, respectively |
24,050 | 16,226 | ||||
| Inventory | 29,261 | 20,669 | ||||
| Prepaid and deferred taxes | 11,243 | 16,927 | ||||
| Prepaid expenses and other current assets | 4,802 | 3,973 | ||||
| Total current assets | 164,465 | 162,577 | ||||
| Property and equipment, net | 10,380 | 10,382 | ||||
| Intangible assets, net | 28,205 | 34,204 | ||||
| Goodwill | 211,711 | 185,771 | ||||
| Other assets | 6,583 | 7,474 | ||||
| Total assets | $ | 421,344 | $ | 400,408 | ||
| Liabilities and stockholders’ equity | ||||||
| Current liabilities: | ||||||
| Accounts payable | $ | 16,539 | $ | 9,997 | ||
| Accrued expenses and other current liabilities | 34,825 | 36,425 | ||||
| Profit-sharing distributions payable | 4,315 | 4,041 | ||||
| Current portion of acquisition earn out payable | — | 14,511 | ||||
| Customer payables | 29,497 | 34,255 | ||||
| Current portion of note payable | — | 10,000 | ||||
| Current liabilities of discontinued operations | — | 154 | ||||
| Total current liabilities | 85,176 | 109,383 | ||||
| Acquisition earn out payable | 18,390 | — | ||||
| Note payable, net of current portion | — | 32,000 | ||||
| Deferred taxes and other long-term liabilities | 2,899 | 9,022 | ||||
| Total liabilities | 106,465 | 150,405 | ||||
| Stockholders’ equity: | ||||||
|
Common stock, $0.001 par value; 120,000,000 shares authorized; 31,811,764 shares issued and outstanding at September 30, 2013; 31,138,111 shares issued and outstanding at September 30, 2012 |
31 | 31 | ||||
| Additional paid-in capital | 206,861 | 182,361 | ||||
| Accumulated other comprehensive income | 518 | 1,246 | ||||
| Retained earnings | 107,469 | 66,365 | ||||
| Total stockholders’ equity | 314,879 | 250,003 | ||||
| Total liabilities and stockholders’ equity | $ | 421,344 | $ | 400,408 | ||
| Liquidity Services, Inc. and Subsidiaries | |||||||||||||
| Consolidated Statements of Operations | |||||||||||||
| (Dollars in Thousands, Except Share and Per Share Data) | |||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||
| September 30, | September 30, | ||||||||||||
| 2013 | 2012 | 2013 | 2012 | ||||||||||
| Revenue | $ | 96,839 | $ | 102,424 | $ | 404,041 | $ | 415,829 | |||||
| Fee revenue | 32,289 | 19,851 | 101,815 | 59,475 | |||||||||
| Total revenue | 129,128 | 122,275 | 505,856 | 475,304 | |||||||||
| Costs and expenses: | |||||||||||||
| Cost of goods sold (excluding amortization) | 52,449 | 50,626 | 199,494 | 198,123 | |||||||||
| Profit-sharing distributions | 8,942 | 9,125 | 35,944 | 43,242 | |||||||||
| Technology and operations | 23,247 | 20,025 | 90,052 | 67,553 | |||||||||
| Sales and marketing | 9,742 | 10,444 | 40,170 | 31,252 | |||||||||
| General and administrative | 13,047 | 12,435 | 48,950 | 37,107 | |||||||||
| Amortization of contract intangibles | 1,816 | 1,884 | 7,265 | 7,943 | |||||||||
| Depreciation and amortization | 2,583 | 1,715 | 10,109 | 6,223 | |||||||||
| Acquisition costs | 95 | 7,256 | 5,921 | 1,695 | |||||||||
| Total costs and expenses | 111,921 | 113,510 | 437,905 | 393,138 | |||||||||
| Income from operations | 17,207 | 8,765 | 67,951 | 82,166 | |||||||||
| Interest and other expense (income), net | 69 | 593 | (704 | ) | 2,218 | ||||||||
| Income before provision for income taxes from operations | 17,138 | 8,172 | 68,655 | 79,948 | |||||||||
| Provision for income taxes | 6,729 | 2,627 | 27,551 | 31,652 | |||||||||
| Income from operations | 10,409 | 5,545 | 41,104 | 48,296 | |||||||||
| Net income | $ | 10,409 | $ | 5,545 | $ | 41,104 | $ | 48,296 | |||||
| Basic earnings per common share | $ | 0.33 | $ | 0.18 | $ | 1.30 | $ | 1.57 | |||||
| Diluted earnings per common share | $ | 0.32 | $ | 0.17 | $ | 1.26 | $ | 1.47 | |||||
| Basic weighted average shares outstanding | 31,772,379 | 31,045,293 | 31,616,926 | 30,854,796 | |||||||||
| Diluted weighted average shares outstanding | 32,702,807 | 32,788,205 | 32,657,236 | 32,783,079 | |||||||||
| Liquidity Services, Inc. and Subsidiaries | ||||||||||||||||
| Consolidated Statements of Cash Flows | ||||||||||||||||
| (In Thousands) | ||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| Operating activities | ||||||||||||||||
| Net income | $ | 10,409 | $ | 5,545 | $ | 41,104 | $ | 48,296 | ||||||||
|
Adjustments to reconcile net income to cash provided by operating activities: |
||||||||||||||||
| Depreciation and amortization | 4,399 | 3,599 | 17,374 | 14,166 | ||||||||||||
| Gain on early extinguishment of debt | — | — | (1,000 | ) | — | |||||||||||
| Stock compensation expense | 3,150 | 3,462 | 13,379 | 12,117 | ||||||||||||
| Inventory allowance | (13 | ) | 1,660 | (1,122 | ) | 884 | ||||||||||
| Doubtful accounts | (114 | ) | 334 | (357 | ) | 117 | ||||||||||
| Deferred tax provision | (6,852 | ) | (1,719 | ) | (6,852 | ) | (1,719 | ) | ||||||||
| Incremental tax benefit from exercise of common stock options | (2,514 | ) | (1,765 | ) | (8,588 | ) | (16,953 | ) | ||||||||
| Changes in operating assets and liabilities: | ||||||||||||||||
| Accounts receivable | (1,114 | ) | (433 | ) | (7,466 | ) | (1,548 | ) | ||||||||
| Inventory | (1,538 | ) | 4,383 | (7,470 | ) | (132 | ) | |||||||||
| Prepaid expenses and other assets | 10,925 | 4,594 | 14,217 | 18,003 | ||||||||||||
| Accounts payable | 4,258 | (1,017 | ) | 6,542 | (7,260 | ) | ||||||||||
| Accrued expenses and other | 6,267 | (15,806 | ) | (2,341 | ) | (9,507 | ) | |||||||||
| Profit-sharing distributions payable | 1,502 | 1,103 | 274 | (3,226 | ) | |||||||||||
| Customer payables | 1,458 | 2,696 | (4,768 | ) | 2,529 | |||||||||||
| Acquisition earn out payables | 92 | 6,242 | (5,985 | ) | (3,826 | ) | ||||||||||
| Other liabilities | (397 | ) | 77 | (198 | ) | 205 | ||||||||||
| Net cash provided by operating activities | 29,918 | 12,955 | 46,743 | 52,146 | ||||||||||||
| Investing activities | ||||||||||||||||
|
Cash paid for acquisitions and decrease (increase) in goodwill and intangibles |
(11 | ) | 8,267 | (14,730 | ) | (71,796 | ) | |||||||||
| Purchases of property and equipment | (1,554 | ) | (3,965 | ) | (5,463 | ) | (6,793 | ) | ||||||||
| Net cash (used in) provided by investing activities | (1,565 | ) | 4,302 | (20,193 | ) | (78,589 | ) | |||||||||
| Financing activities | ||||||||||||||||
| Repayment of notes payable | — | — | (39,000 | ) | — | |||||||||||
| Payment of acquisition contingent liabilities | — | — | (8,185 | ) | — | |||||||||||
| Proceeds from exercise of common stock options (net of tax) | 1,138 | 1,469 | 2,532 | 15,491 | ||||||||||||
| Incremental tax benefit from exercise of common stock options | 2,514 | 1,765 | 8,588 | 16,953 | ||||||||||||
| Repurchases of common stock | — | — | — | (29,999 | ) | |||||||||||
| Net cash provided by (used in) financing activities | 3,652 | 3,234 | (36,065 | ) | 2,445 | |||||||||||
| Effect of exchange rate differences on cash and cash equivalents | (223 | ) | (288 | ) | (158 | ) | (309 | ) | ||||||||
| Net increase (decrease) in cash and cash equivalents | 31,782 | 20,203 | (9,673 | ) | (24,307 | ) | ||||||||||
| Cash and cash equivalents at beginning of the period | 63,327 | 84,659 | 104,782 | 129,089 | ||||||||||||
| Cash and cash equivalents at end of period | $ | 95,109 | $ | 104,862 | $ | 95,109 | $ | 104,782 | ||||||||
| Supplemental disclosure of cash flow information | ||||||||||||||||
| Cash paid for income taxes | $ | 4,539 | $ | 2,721 | $ | 16,760 | $ | 14,482 | ||||||||
| Cash paid for interest | 5 | 64 | 2,034 | 117 | ||||||||||||
| Contingent purchase price accrued | — | 6,242 | 18,390 | 7,438 | ||||||||||||
| Note payable issued in connection with acquisition | — | — | — | 40,000 | ||||||||||||
Source: Liquidity Services, Inc.
Liquidity Services, Inc.
Julie Davis
Director, Investor
Relations
202-467-6868 ext. 2234
[email protected]
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