WASHINGTON–(BUSINESS WIRE)–May 29, 2007–Liquidity Services,
Inc. (LSI), a leading online auction marketplace for wholesale,
surplus and salvage assets, today announced its joint effort with the
U.S. Department of Defense (DoD) to strengthen control procedures
related to the mutilation of DoD scrap property offered for sale to
the public. In addition, LSI will broaden the geographic scope of its
services and commence the sale of DoD scrap property located in Hawaii
and Guam. These initiatives expand LSI’s scope of work under its Scrap
Venture contract (the Scrap Contract) with the Defense Reutilization
and Marketing Service (DRMS) and leverage LSI’s surplus property and
supply chain management domain expertise.
Through a modification to LSI’s existing Scrap Contract with the
DoD, LSI will provide additional value-added services designed to
ensure compliance with requirements relating to the mutilation of
scrap material as part of the sales process LSI manages. As part of
these value-added services, LSI will manage centralized processing
centers that provide a secure area to complete the mutilation of scrap
metal prior to removal of the material from the DoD sales location. In
addition, LSI will provide oversight and verification procedures to
enhance the audit trail related to sales of scrap material. The
modification of the Scrap Contract increases LSI’s share of net
proceeds to 23% from 20% in exchange for LSI’s agreement to provide
the additional value-added services.
Also, under the terms of the contract modification, LSI will
manage the receipt, marketing and sale of virtually all surplus scrap
property generated by the DoD in Hawaii and Guam. All terms and
conditions set forth in the modified Scrap Contract will apply to
material processed and sold in these locations.
The contract modification will be effective June 1, 2007. All
other principal terms of the original contract remain in effect.
LSI believes the marginal benefits and costs of the modified Scrap
Contract will offset one another, resulting in no change to its fiscal
year 2007 guidance at this time.
About Liquidity Services, Inc. (LQDT)
Liquidity Services, Inc. (NASDAQ:LQDT) and its subsidiaries enable
corporations and government agencies to market and sell surplus assets
and wholesale goods quickly and conveniently using online auction
marketplaces and value-added services. The company is based in
Washington, D.C. and has over 500 employees. Additional information
can be found at: www.liquidityservicesinc.com.
This document contains forward-looking statements made pursuant to
the Private Securities Litigation Reform Act of 1995, including,
without limitation, statements regarding the potential costs and
benefits of the new joint initiative under LSI’s Scrap Contract and
statements relating to LSI’s projected results of operations for
fiscal year 2007. 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 to
differ materially from any future results expressed or implied by
these forward-looking statements. You can identify forward-looking
statements by terminology such as “expects,” or the negative of these
terms or other comparable terminology. 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 the Company’s Annual Report on Form 10-K
for the year ended September 30, 2006, including, but not limited to,
those set forth in Part II, Item IA (Risk Factors). There may be other
factors of which we are currently unaware that may cause our actual
results to differ materially from the forward-looking statements. All
forward-looking statements apply only as of the date of this document
and are expressly qualified in their entirety by the cautionary
statements included in this document. We undertake no obligation to
publicly update or revise any forward-looking statement occurring
after the date of this document.
CONTACT: Liquidity Services, Inc.
Director, Corporate Communications
202-467-6868 ext. 2234
SOURCE: Liquidity Services, Inc.