Press Releases
Aug 16

Liquidity Services, Inc. Announces Preliminary Fiscal Third Quarter 2013 Financial Results

WASHINGTON–(BUSINESS WIRE)–Jul. 16, 2013–
Liquidity Services, Inc. (NASDAQ: LQDT; www.liquidityservicesinc.com)
today announced certain preliminary financial results for its third
quarter fiscal year 2013 ended June 30, 2013.

Liquidity Services expects to report Gross Merchandise Volume (GMV) of
$228 million to $231 million, which is lower than the Company’s previous
expectations of $250 million to $275 million. Adjusted EBITDA, which
excludes stock based compensation and acquisition costs, is expected to
be $26 million to $27 million compared to the Company’s previous
expectations of $29 million to $32 million. The Company also expects
adjusted diluted earnings per share of $0.43 to $0.45 compared to
previous expectations of $0.49 to $0.54.

As a result of the lower than expected third quarter results, the
Company expects to lower its fiscal year 2013 guidance for GMV, Adjusted
EBITDA and Adjusted EPS. The updated guidance will be provided on the
earnings call on August 7, 2013.

Results were impacted by lower than expected GMV in the Company’s
capital assets and retail supply chain verticals as a result of lower
product flows from existing clients and slower than expected rollout of
new client programs. “While our preliminary GMV results for Q3-FY13 and
the impact on our Adjusted EBITDA and Adjusted EPS results were
disappointing and below our expectations, our emphasis has been on
profitable growth and we have made good progress with the integration of
our GoIndustry acquisition, which is now operating at near breakeven.
Overall margins in our business remain strong; we expect to report that
adjusted EBITDA margins increased to approximately 11.5% in the third
quarter from 11.3% in the second quarter primarily as a result of
sharper focus and streamlined operations,” said Bill Angrick, Chairman
and CEO of Liquidity Services. “The lower than expected top line results
during the quarter were driven by delays in new programs, weaker volumes
in the consumer electronics sector and the continued repositioning of
the GoIndustry marketplace to focus on the key global Fortune 1000
relationships that we expect will drive sustained profitable growth in
this business.”

“Fundamentally, we are confident in our competitive position and our
ability to achieve attractive organic growth over the next several years
driven by our strong client service and continued investments in
innovation. However, in the short term, results have been less
predictable and pressured due to significant integration efforts and the
timing of new large programs coming on line in our retail supply chain
vertical,” continued Angrick.

Conference Call

The Company will host a conference call to discuss preliminary fiscal
third quarter results at 9:00 a.m. Eastern Time today. Investors and
other interested parties may access the teleconference by dialing
877-703-6106 or 857-244-7305 and providing the participant pass code
77421523. A live webcast of the conference call will be provided on the
Company’s investor relations website at http://liquidityservicesinc.com.
A replay of the webcast will be available on the Company’s website for
30 calendar days ending August 15, 2013 at 11:59 p.m. ET. An audio
replay of the teleconference will also be available until August 15,
2013 at 11:59 p.m. ET. To listen to the replay, dial 888 286.8010 or 617
801.6888 and provide pass code 33868197. Both replays will be available
starting at 11:00 a.m. ET today.

Full Third Quarter Fiscal Year 2013 Financial Results

Liquidity Services will report the results of its third quarter on
Wednesday, August 7, 2013 at 8:00 a.m. Eastern Time. Investors and other
interested parties may access the teleconference by dialing 866-202-0886
or 617-213-8841 and providing the participant pass code 42835180. A live
web cast of the conference call will be provided on the Company’s
investor relations website at www.liquidityservicesinc.com/investors.

An archive of the webcast will be available on the Company’s website for
30 calendar days ending September 6, 2013 at 11:59 p.m. ET. An audio
replay of the teleconference will also be available until September 6,
2013 at 11:59 p.m. ET. To listen to the replay, dial 888-286-8010 or
617-801-6888 and provide pass code 74058780. Both replays will be
available starting at 12:30 p.m. 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, 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.

Supplemental Operating Data

To supplement our consolidated financial statements presented in
accordance with GAAP, we use certain supplemental operating data, such
as GMV, 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 also provides 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. 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.

The financial information set forth in this press release reflects our
current preliminary estimates, is subject to the completion of our third
quarter review process, and is subject to change. Our full third quarter
results could differ materially from the preliminary estimates and
outlook we have provided in this press release.

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.
retail consumer goods. 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 $3.6 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 approximately 1,300
employees. Additional information can be found at: http://www.liquidityservicesinc.com.

Source: Liquidity Services, Inc.

Liquidity Services, Inc.
Julie Davis, 202-558-6234
Director of
Investor Relations
[email protected]