– Fiscal year revenue of $495.7 million down 2% – Gross Merchandise
Volume (GMV) of $931.6 million down 4% – Adjusted earnings before
interest, taxes, depreciation and amortization (EBITDA) of $63.0 million
down 40% – Adjusted EPS of $1.03 down 41%
– Fourth quarter revenue of $118.4 million down 8% – GMV of $223.9
million down 11% – Adjusted EBITDA of $9.1 million down 64% – Adjusted
EPS of $0.13 down 67%
WASHINGTON–(BUSINESS WIRE)–Nov. 20, 2014–
Liquidity Services, Inc. (NASDAQ: LQDT; www.liquidityservices.com)
today reported its financial results for its fiscal year (FY-14) and
fourth quarter (Q4-14) ended September 30, 2014. Liquidity Services is a
global solution provider in the reverse supply chain with the world’s
largest marketplace for business surplus.
Liquidity Services, Inc. (Liquidity Services or the Company) reported
consolidated FY-14 revenue of $495.7 million, a decrease of
approximately 2% from the prior year. Adjusted EBITDA, which excludes
stock-based compensation, acquisition costs including changes in
acquisition earn out payment estimates, and business realignment
expense, for FY-14 was $63.0 million, a decrease of approximately 40%
from the prior year. FY-14 GMV, the total sales volume of all
merchandise sold through the Company’s marketplaces, was $931.6 million,
a decrease of approximately 4% from the prior year.
The Company reported consolidated Q4-14 revenue of $118.4 million, a
decrease of approximately 8% from the prior year’s comparable period.
Adjusted EBITDA for Q4-14 was $9.1 million, a decrease of approximately
64% from the prior year’s comparable period. GMV was $223.9 million for
Q4-14, a decrease of approximately 11% from the prior year’s comparable
period.
Net income in FY-14 was $30.4 million or $0.97 diluted earnings per
share. Adjusted net income, which excludes stock-based compensation,
acquisition costs including changes in acquisition earn out payment
estimates, amortization of contract-related intangible assets associated
with the Jacobs Trading acquisition, and business realignment expense –
net of tax, in FY-14 was $32.4 million or $1.03 adjusted diluted
earnings per share based on 31.4 million fully diluted shares
outstanding, a decrease of approximately 43% and 41%, respectively, from
the prior year’s comparable period. Net loss in Q4-14 was $0.7 million
or $0.02 diluted earnings per share. Adjusted net income in Q4-14 was
$4.0 million or $0.13 adjusted diluted earnings per share based on 29.7
million fully diluted shares outstanding, a decrease of approximately
70% and 67%, respectively, from the prior year’s comparable period.
During FY-14, the Company repurchased 2,962,978 shares of common stock
which were retired during Q4-14.
“Our Q4 results were in line with our guidance expectations led by a
rebound in our energy business and continued growth in our state and
municipal government business. Adjusted EBITDA and Adjusted EPS were at
the low end of our guidance driven by less attractive property mix
within our DoD and selected retail programs,” said Bill Angrick,
chairman and chief executive officer of Liquidity Services. “We continue
to see growing demand from large U.S. retailers, government agencies and
blue chip companies in multiple regions, asset categories and service
lines, including sales, valuation and asset management, and we continue
to focus on creating value for our customers and our shareholders.
Looking forward to FY-15, continued uncertainty regarding the mix and
volume of property, final scope and timing of our new DoD non-rolling
stock surplus contract, and our continued heavy investment in IT,
product development, and marketing initiatives to support our commercial
business will dampen our growth and earnings results throughout FY-15.”
“Overall results for the full year FY-14 did not meet our original
expectations due to the changing mix and volume of our current
Department of Defense (DoD) surplus contract, weakness in our energy
marketplace and integration costs associated with our capital assets
group. However, we are proud of the progress made in FY-14 towards
building an integrated and scalable global business under our Liquidity
One transformation initiative. We have assembled the right
combination of industry expertise, modular services and marketplace
channels to reinforce our market leadership in the reverse supply chain
and generate meaningful results for over 7,600 clients worldwide in
every major sector of the economy. This past year we established strong,
centralized IT, HR, Finance, and Legal teams and, in our capital assets
business, we launched a unified sales, marketing and operations
organization to better serve our global footprint and deepen our value
with sellers and buyers. Additionally, we have surveyed the needs of our
customers and internal team and commenced developing a unified set of
processes and IT systems to support all Liquidity Services marketplaces
which will create value for customers and our internal team. During
FY15, we will continue to invest aggressively to build innovative
products, services, and new capabilities to transform how we do
business. We will also continue to evaluate all client programs to
ensure we are providing the right level of service at the right price to
maintain high value, mutually beneficial, long term relationships. We
are confident that we have the right team and strategic plan to deliver
a more extensible business model and superior customer experience to
support a multi-billion dollar GMV business that creates continued
growth and value for long term owners.”
Business Outlook
It is difficult for us to forecast the sales and margins of our business
in FY-15 while we are awaiting the final specifications and timing of
the work we will be performing under the new DoD surplus contract. In
addition, our DoD business has seen significant changes in the volume
and mix of property we handle which has reduced sales values and
increased costs. Global economic conditions have improved, however our
overall outlook remains cautious regarding our commercial capital assets
business due to volatility in capital spending patterns. Our retail
supply chain business has seen significant changes in consumer spending
habits, which have been affected by continued weakness in the consumer
goods vertical, as a result of increases in payroll taxes, and continued
high unemployment, resulting in decreased spending and decreased pricing
in the secondary market. In some cases, the mix of property received
under selected retail client programs is unpredictable, resulting in
margin pressure and actions on our part to improve the terms under which
we do business. Lastly, we plan to further allocate management time and
resources to accomplish our Liquidity One transformation program
which may result in reduced productivity and growth during FY-15 that is
difficult to forecast.
In light of these factors, we have elected to change our guidance
practices. Beginning with fiscal year 2015, we will provide shareholders
and the investment community with GMV, Adjusted EBITDA and Adjusted
Diluted EPS guidance on a quarterly basis only.
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, compliance 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 scalable solutions and the ability to make a
strategic impact in the reverse supply chain, we expect our seller base
to increase.
The following forward looking statements reflect trends and assumptions
for the first quarter FY 2015:
| (i) | stable commodity prices in our scrap business; | ||||
| (ii) |
stable average sales prices realized in our capital assets marketplaces; |
||||
| (iii) | improved margins in our commercial capital assets marketplaces; | ||||
| (iv) | an effective income tax rate of 40%; and | ||||
| (v) |
improved operations and service levels in our retail goods marketplaces. |
||||
GMV – We expect GMV for Q1-15 to range from
$200 million to $225 million.
Adjusted EBITDA – We expect Adjusted EBITDA
for Q1-15 to range from $10.0 million to $13.0 million.
Adjusted Diluted EPS – We estimate Adjusted
Earnings Per Diluted Share for Q1-15 to range from $0.16 to $0.22. This
guidance assumes that we have an average fully diluted number of shares
outstanding for the quarter of 29.8 million, and that we will not
repurchase shares with the approximately $5.1 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 2015. These stock based
compensation costs are consistent with fiscal year 2014.
Key FY-14 and Q4-14 Operating Metrics
Registered Buyers – At the end of FY-14,
registered buyers totaled approximately 2,615,000, representing an 8%
increase over the approximately 2,424,000 registered buyers at the end
of FY-13.
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 2,538,000 in FY-14, an approximately
3% increase over the approximately 2,458,000 auction participants in
FY-13. Auction participants decreased to approximately 615,000 in Q4-14,
an approximately 2% decrease over the approximately 626,000 auction
participants in Q4-13.
Completed Transactions – Completed
transactions increased to approximately 547,000, an approximately 3%
increase for FY-14 from the approximately 530,000 completed transactions
in FY-13. Completed transactions increased to approximately 139,000, an
approximately 5% increase for Q4-14 from the approximately 133,000
completed transactions in Q4-13.
GMV and Revenue Mix – The table below
summarizes GMV and revenue by pricing model.
|
GMV Mix |
||||||||
| FY-14 | FY-13 | Q4-14 | Q4-13 | |||||
| Profit-Sharing Model: | ||||||||
| Scrap Contract | 7.7% | 7.0% | 7.5% | 6.8% | ||||
| Total Profit Sharing | 7.7% | 7.0% | 7.5% | 6.8% | ||||
| Consignment Model: | ||||||||
| GovDeals | 18.4% | 15.8% | 20.0% | 16.9% | ||||
| Commercial | 39.3% | 43.3% | 38.7% | 44.8% | ||||
| Total Consignment | 57.7% | 59.1% | 58.7% | 61.7% | ||||
| Purchase Model: | ||||||||
| Commercial | 20.3% | 19.6% | 20.4% | 17.1% | ||||
| Surplus Contract | 14.3% | 14.3% | 13.4% | 14.4% | ||||
| Total Purchase | 34.6% | 33.9% | 33.8% | 31.5% | ||||
| Total | 100.0% | 100.0% | 100.0% | 100.0% | ||||
|
Revenue Mix |
||||||||
| Profit-Sharing Model: | ||||||||
| Scrap Contract | 14.4% | 13.5% | 14.2% | 13.2% | ||||
| Total Profit Sharing | 14.4% | 13.5% | 14.2% | 13.2% | ||||
| Consignment Model: | ||||||||
| GovDeals | 3.6% | 3.1% | 3.9% | 3.5% | ||||
| Commercial | 12.2% | 12.2% | 12.6% | 13.5% | ||||
| Total Consignment | 15.8% | 15.3% | 16.5% | 17.0% | ||||
| Purchase Model: | ||||||||
| Commercial | 37.2% | 38.8% | 38.1% | 33.8% | ||||
| Surplus Contract | 26.8% | 27.6% | 25.4% | 28.0% | ||||
| Total Purchase | 64.0% | 66.4% | 63.5% | 61.8% | ||||
| Other | 5.8% | 4.8% | 5.8% | 8.0% | ||||
| 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 (loss)
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,
acquisition costs including changes in earn out estimates, and business
realignment expense.
|
Three Months Ended September 30, |
Twelve Months Ended September 30, |
||||||||||||||
| 2014 | 2013 | 2014 | 2013 | ||||||||||||
| (In thousands) | |||||||||||||||
| Net (loss) income | $ | (707 | ) | $ | 10,409 | $ | 30,390 | $ | 41,104 | ||||||
| Interest and other expense (income), net | 73 | 69 | 370 | (704 | ) | ||||||||||
| Provision for income taxes | 1,157 | 6,729 | 19,657 | 27,551 | |||||||||||
| Amortization of contract intangibles | 1,816 | 1,816 | 7,265 | 7,265 | |||||||||||
| Depreciation and amortization | 1,847 | 2,583 | 9,330 | 10,109 | |||||||||||
| EBITDA | 4,186 | 21,606 | 67,012 | 85,325 | |||||||||||
| Stock compensation expense | 3,088 | 3,150 | 12,605 | 13,379 | |||||||||||
| Acquisition costs and related fair value adjustments | — | 95 | (18,384 | ) | 5,921 | ||||||||||
| Business realignment expense | 1,780 | — | 1,780 | — | |||||||||||
| Adjusted EBITDA | $ | 9,054 | $ | 24,851 | $ | 63,013 | $ | 104,625 | |||||||
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 (loss) income plus tax
effected stock compensation expense, amortization of contract-related
intangible assets associated with the Jacobs Trading acquisition,
acquisition costs including changes in earn out estimates, and business
realignment expense. Adjusted basic and diluted earnings per share are
determined using Adjusted Net Income.
|
Three Months Ended |
Twelve Months Ended |
|||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||
| (Dollars in thousands, except per share data) | ||||||||||||||
| Net (loss) income | $ | (707 | ) | $ | 10,409 | $ | 30,390 | $ | 41,104 | |||||
| Stock compensation expense (net of tax) | 2,164 | 1,890 | 7,654 | 7,998 | ||||||||||
| Amortization of contract intangibles (net of tax) | 1,273 | 1,090 | 4,412 | 4,342 | ||||||||||
| Acquisition costs and related fair value adjustments (net of tax) | — | 57 | (11,163 | ) | 3,550 | |||||||||
| Business realignment expense (net of tax) | 1,248 | — | 1,081 | — | ||||||||||
| Adjusted net income | $ | 3,978 | $ | 13,446 | $ | 32,374 | $ | 56,994 | ||||||
| Adjusted basic earnings per common share | $ | 0.13 | $ | 0.42 | $ | 1.04 | $ | 1.80 | ||||||
| Adjusted diluted earnings per common share | $ | 0.13 | $ | 0.41 | $ | 1.03 | $ | 1.75 | ||||||
| Basic weighted average shares outstanding | 29,664,259 | 31,772,379 | 31,243,932 | 31,616,926 | ||||||||||
| Diluted weighted average shares outstanding | 29,664,259 | 32,702,807 | 31,395,301 | 32,657,236 | ||||||||||
Conference Call
The Company will host a conference call to discuss the fourth quarter
and fiscal year 2014 results at 10:30 a.m. Eastern Time today. Investors
and other interested parties may access the teleconference by dialing
866-202-3048 or 617-213-8843 and providing the participant pass code
51108172. A live web cast of the conference call will be provided on the
Company’s investor relations website at www.liquidityservices.com/investors.
An archive of the web cast will be available on the Company’s website
until November 20, 2015 at 11:59 p.m. ET. An audio replay of the
teleconference will also be available until November 27, 2014 at 11:59
p.m. ET. To listen to the replay, dial 888-286-8010 or 617-801-6888 and
provide pass code 71250750. Both replays will be available starting at
2:30 p.m. ET on the day of the call.
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, plans to increase investments in technology
infrastructure and our proprietary e-commerce marketplace platform, the
supply of inventory under the DoD Surplus Contract, expected future
effective tax rates, and trends and assumptions about the first quarter
FY 2015. 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 into our existing operations and our ability to
realize any anticipated benefits of these or other acquisitions; our
ability to recognize any expected tax benefits as a result of closing
our U.K. retail consumer goods operations; and the success of our
business realignment and Liquidity One integration and
enhancement initiative. 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 $5.2 billion of
surplus assets in over 500 product categories, including consumer goods,
capital assets, and industrial equipment. The Company is headquartered
in Washington, D.C. with global locations across the Americas, Europe,
and Asia. Additional information can be found at: http://www.liquidityservices.com.
|
Liquidity Services, Inc. and Subsidiaries |
|||||||
|
Consolidated Balance Sheets |
|||||||
|
(Dollars in Thousands) |
|||||||
| September 30 | |||||||
| 2014 | 2013 | ||||||
| Assets | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 62,598 | $ | 95,109 | |||
|
Accounts receivable, net of allowance for doubtful accounts of $1,042 and $891 in 2014 and 2013, respectively |
21,688 | 24,050 | |||||
| Inventory | 78,478 | 29,261 | |||||
| Prepaid and deferred taxes | 16,777 | 11,243 | |||||
| Prepaid expenses and other current assets | 5,156 | 4,802 | |||||
| Total current assets | 184,697 | 164,465 | |||||
| Property and equipment, net | 12,283 | 10,380 | |||||
| Intangible assets, net | 17,099 | 28,205 | |||||
| Goodwill | 209,656 | 211,711 | |||||
| Other assets | 7,983 | 6,583 | |||||
| Total assets | $ | 431,718 | $ | 421,344 | |||
| Liabilities and stockholders’ equity | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 15,994 | $ | 16,539 | |||
| Accrued expenses and other current liabilities | 44,484 | 34,825 | |||||
| Profit-sharing distributions payable | 4,740 | 4,315 | |||||
| Customer payables | 41,544 | 29,497 | |||||
| Total current liabilities | 106,762 | 85,176 | |||||
| Acquisition earn out payable | — | 18,390 | |||||
| Other long-term liabilities | 7,973 | 2,899 | |||||
| Total liabilities | 114,735 | 106,465 | |||||
| Stockholders’ equity: | |||||||
|
Common stock, $0.001 par value; 120,000,000 shares authorized; 29,668,150 shares issued and outstanding at September 30, 2014; 31,811,764 shares issued and outstanding at September 30, 2013 |
28 | 31 | |||||
| Additional paid-in capital | 204,704 | 206,861 | |||||
| Accumulated other comprehensive income |
(3,451 |
) |
518 |
||||
| Retained earnings | 115,702 | 107,469 | |||||
| Total stockholders’ equity | 316,983 | 314,879 | |||||
| Total liabilities and stockholders’ equity | $ | 431,718 | $ | 421,344 | |||
|
Liquidity Services, Inc. and Subsidiaries |
|||||||||||||||
|
Consolidated Statements of Operations |
|||||||||||||||
|
(Dollars in Thousands, Except Share and Per Share Data) |
|||||||||||||||
|
Three Months Ended |
Twelve Months Ended |
||||||||||||||
| 2014 | 2013 | 2014 | 2013 | ||||||||||||
| Revenue | $ | 91,974 | $ | 96,839 | $ | 388,671 | $ | 404,041 | |||||||
| Fee revenue | 26,445 | 32,289 | 106,990 | 101,815 | |||||||||||
| Total revenue | 118,419 | 129,128 | 495,661 | 505,856 | |||||||||||
| Costs and expenses: | |||||||||||||||
| Cost of goods sold (excluding amortization) | 55,139 | 52,449 | 211,659 | 199,494 | |||||||||||
| Profit-sharing distributions | 8,372 | 8,942 | 35,055 | 35,944 | |||||||||||
| Technology and operations | 26,829 | 23,247 | 108,940 | 90,052 | |||||||||||
| Sales and marketing | 11,000 | 9,742 | 41,951 | 40,170 | |||||||||||
| General and administrative | 12,893 | 13,047 | 49,428 | 48,950 | |||||||||||
| Amortization of contract intangibles | 1,816 | 1,816 | 7,265 | 7,265 | |||||||||||
| Depreciation and amortization | 1,847 | 2,583 | 9,330 | 10,109 | |||||||||||
| Acquisition costs | — | 95 | (18,384 | ) | 5,921 | ||||||||||
| Total costs and expenses | 117,896 | 111,921 | 445,244 | 437,905 | |||||||||||
| Income from operations | 523 | 17,207 | 50,417 | 67,951 | |||||||||||
| Interest and other expense (income), net | 73 | 69 | 370 | (704 | ) | ||||||||||
| Income before provision for income taxes from operations | 450 | 17,138 | 50,047 | 68,655 | |||||||||||
| Provision for income taxes | 1,157 | 6,729 | 19,657 | 27,551 | |||||||||||
| Net (loss) income | $ | (707 | ) | $ | 10,409 | $ | 30,390 | $ | 41,104 | ||||||
| Basic earnings per common share | $ | (0.02 | ) | $ | 0.33 | $ | 0.97 | $ | 1.30 | ||||||
| Diluted earnings per common share | $ | (0.02 | ) | $ | 0.32 | $ | 0.97 | $ | 1.26 | ||||||
| Basic weighted average shares outstanding | 29,664,259 | 31,772,379 | 31,243,932 | 31,616,926 | |||||||||||
| Diluted weighted average shares outstanding | 29,664,259 | 32,702,807 | 31,395,301 | 32,657,236 | |||||||||||
|
Liquidity Services, Inc. and Subsidiaries |
||||||||||||||||
|
Unaudited Consolidated Statements of Cash Flows |
||||||||||||||||
|
(Dollars In Thousands) |
||||||||||||||||
|
Three Months Ended |
Twelve Months Ended |
|||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||
| Operating activities | ||||||||||||||||
| Net (loss) income | $ | (707 | ) | $ | 10,409 | $ | 30,390 | $ | 41,104 | |||||||
|
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||||||||||
| Depreciation and amortization | 3,664 | 4,399 | 16,595 | 17,374 | ||||||||||||
| Gain on early extinguishment of debt | — | — | — | (1,000 | ) | |||||||||||
| Change in fair value of earn out liability | — | 92 | (18,390 | ) | 5,437 | |||||||||||
| Stock compensation expense | 3,088 | 3,150 | 12,605 | 13,379 | ||||||||||||
| Provision (benefit) for inventory allowance | 49 | (13 | ) | 271 | (1,122 | ) | ||||||||||
| Provision (benefit) for doubtful accounts | 7 | (114 | ) | 151 | (357 | ) | ||||||||||
| Deferred tax expense (benefit) | 828 | (6,852 | ) | 828 | (6,852 | ) | ||||||||||
| Incremental tax benefit from exercise of common stock options | (249 | ) | (2,514 | ) | (3,805 | ) | (8,588 | ) | ||||||||
| Changes in operating assets and liabilities: | ||||||||||||||||
| Accounts receivable | 2,612 | (1,114 | ) | 2,211 | (7,466 | ) | ||||||||||
| Inventory | (9,138 | ) | (1,538 | ) | (49,488 | ) | (7,470 | ) | ||||||||
| Prepaid and deferred taxes | (1,130 | ) | 9,024 | (2,829 | ) | 14,243 | ||||||||||
| Prepaid expenses and other assets | 1,316 | 1,901 | 2,735 | (26 | ) | |||||||||||
| Accounts payable | 229 | 4,258 | (545 | ) | 6,542 | |||||||||||
| Accrued expenses and other | (5,975 | ) | 6,267 | 9,659 | (2,341 | ) | ||||||||||
| Profit-sharing distributions payable | 1,108 | 1,502 | 425 | 274 | ||||||||||||
| Customer payables | 9,829 | 1,458 | 12,046 | (4,768 | ) | |||||||||||
| Acquisition earn out payables | — | — | — | (11,422 | ) | |||||||||||
| Other liabilities | 1,231 | (397 | ) | (1,003 | ) | (198 | ) | |||||||||
| Net cash provided by operating activities | 6,762 | 29,918 | 11,856 | 46,743 | ||||||||||||
|
Investing activities |
||||||||||||||||
| Increase in goodwill and intangibles and cash paid for acquisitions | (102 | ) | (11 | ) | (141 | ) | (14,730 | ) | ||||||||
| Purchases of property and equipment | (1,045 | ) | (1,554 | ) | (7,539 | ) | (5,463 | ) | ||||||||
| Net cash used in investing activities | (1,147 | ) | (1,565 | ) | (7,680 | ) | (20,193 | ) | ||||||||
|
Financing activities |
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| Repurchases of common stock | — | — | (44,873 | ) | — | |||||||||||
| Repayment of notes payable | — | — | — | (39,000 | ) | |||||||||||
| Payment of acquisition contingent liabilities | — | — | — | (8,185 | ) | |||||||||||
| Proceeds from exercise of common stock options (net of tax) | 140 | 1,138 | 4,146 | 2,532 | ||||||||||||
| Incremental tax benefit from exercise of common stock options | 249 | 2,514 | 3,805 | 8,588 | ||||||||||||
| Net cash provided by (used in) financing activities | 389 | 3,652 | (36,922 | ) | (36,065 | ) | ||||||||||
| Effect of exchange rate differences | (354 | ) | (223 | ) | 235 | (158 | ) | |||||||||
| Net increase (decrease) in cash and cash equivalents | 5,650 | 31,782 | (32,511 | ) | (9,673 | ) | ||||||||||
| Cash and cash equivalents at beginning of the period | 56,948 | 63,327 | 95,109 | 104,782 | ||||||||||||
| Cash and cash equivalents at end of period | $ | 62,598 | $ | 95,109 | $ | 62,598 | $ | 95,109 | ||||||||
|
Supplemental disclosure of cash flow information |
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| Cash paid for income taxes | $ | 1,458 | $ | 4,539 | $ | 18,108 | $ | 16,760 | ||||||||
| Cash paid for interest | — | 5 | — | 2,034 | ||||||||||||
| Contingent purchase price accrued | — | — | — | 18,390 | ||||||||||||
Source: Liquidity Services, Inc.
Liquidity Services, Inc.
Julie Davis
Senior Director, Investor
Relations
202-467-6868 ext. 2234
[email protected]
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