– Record fiscal year revenue of $286.8 million up 21% – Record Gross
Merchandise Volume (GMV) of $430.1 million up 21% – Record Adjusted
earnings before interest, taxes, depreciation and amortization (EBITDA)
of $37.5 million up 59% –
– Fourth quarter revenue of $72.9 million up 16% – Record GMV of
$122.0 million up 32% – Adjusted EBITDA of $8.3 million up 17% –
WASHINGTON, Dec 02, 2010 (BUSINESS WIRE) —
Liquidity Services, Inc. (NASDAQ: LQDT; www.liquidityservicesinc.com)
today reported its financial results for its fiscal year (FY-10) and
fourth quarter (Q4-10) ended September 30, 2010. 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-10 revenue of $286.8 million, an increase of
approximately 21% from the prior year. Adjusted EBITDA, which excludes
stock-based compensation and acquisition costs, for FY-10 was a record
$37.5 million, an increase of approximately 59% from the prior year.
FY-10 GMV, the total sales volume of all merchandise sold through the
Company’s marketplaces, was a record $430.1 million, an increase of
approximately 21% from the prior year.
The Company reported consolidated Q4-10 revenue of $72.9 million, an
increase of approximately 16% from the prior year’s comparable period.
Adjusted EBITDA for Q4-10 was $8.3 million, an increase of approximately
17% from the prior year’s comparable period. GMV was a record $122.0
million for Q4-10, an increase of approximately 32% from the prior
year’s comparable period.
Net income in FY-10 was a record $12.0 million or $0.44 diluted earnings
per share. Adjusted net income in FY-10, which excludes stock-based
compensation and acquisition costs, was a record $16.2 million, an
increase of approximately 92% from the prior year, and was $0.59
adjusted diluted earnings per share. Net income in Q4-10 was $2.5
million or $0.09 diluted earnings per share. Adjusted net income in
Q4-10 was $3.4 million, an increase of approximately 279% from the prior
year’s comparable period, and was $0.13 adjusted diluted earnings per
share.
Our effective income tax rate was approximately 50% for FY-10, which was
higher than expected as we incurred higher than expected losses in our
foreign subsidiaries which are not deductible against our US income. We
estimate that our future effective income tax rate will be approximately
46%, which is comprised of (1) approximately 35% for federal taxes, (2)
approximately 8% for state taxes, and (3) approximately 3% for book and
tax differences including stock based compensation expenses, primarily
related to employee stock options, which are currently expensed in our
financial statements but are not deductible for tax purposes until they
are exercised.
Operating cash flow was a record $31.9 million during FY-10, an increase
of approximately 270% from the prior year. Q4-10 operating cash flow was
$7.5 million, an increase of approximately 64% from the prior year’s
comparable period.
“LSI generated strong results during Q4-10 with GMV, adjusted EBITDA and
adjusted diluted earnings per share all coming in above our guidance
range during a seasonally low quarter for the Company. Record GMV
results were driven by growth in the volume of capital assets sales
across our commercial and government clients partially due to our recent
Network International acquisition, which has been performing well as we
continue to integrate the business,” said Bill Angrick, Chairman and CEO
of LSI.
“We made significant progress during fiscal year 2010 as we grew our
base of top retailer and municipal government clients, expanded our
commercial capital assets business which provides attractive growth
opportunities, enhanced our technology platform and operations to
support scalability, expanded our leadership team in key areas and
generated strong results for our clients and shareholders. We believe
our continued focus on driving operational efficiencies, investing in
innovation and enhancing value for our clients and buying customers
positions us well for fiscal year 2011 and continued long term
profitable growth and market leadership,” said Mr. Angrick. “During
fiscal year 2010 LSI launched the first major revision of its website
architecture since the Company’s founding. These web site improvements
were made with the input of buyers to provide more transparency allowing
them to access the most comprehensive information for surplus assets
anywhere on the web. Operationally, LSI continued to build on the
process improvements started last fiscal year resulting in overall
improved cycle times and margins. Adjusted EBITDA margins improved
significantly from 10.0% of revenue and 6.6% of GMV in FY-09 to 13.1%
and 8.7%, respectively for FY-10. However, margins in our consumer goods
business have been pressured recently due to widespread discounting
among top retailers which has impacted both supply and the prices paid
in the secondary marketplace. LSI remains focused on executing our key
initiatives to ensure the Company is well positioned to drive long term
results for shareholders.”
Business Outlook
While we are pleased with our recent results, our overall outlook
remains cautious due to the economic environment and its impact on the
retail supply chain. We are in a period of economic uncertainty and we
believe changes in consumer spending patterns may impact the volume and
value of goods sold in our commercial marketplaces resulting in lower
than optimal margins. Additionally, during fiscal year 2011 we expect to
fund major upgrades in our technology infrastructure to support further
integration of our existing businesses and online marketplaces. 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. As we improve operating efficiencies
and service, we expect our competitive position to strengthen.
The following forward looking statements reflect trends and assumptions
for the next quarter and FY 2011:
| (i) | stable commodity prices in our scrap business; | ||||||
| (ii) |
stable average sales prices realized in our capital assets marketplaces; |
||||||
| (iii) |
continued pricing pressure from buyers in our retail goods marketplaces resulting in lower than optimal margins; |
||||||
| (iv) | an effective income tax rate of 46%; | ||||||
| (v) |
improved operations and service levels in our commercial business; and |
||||||
| (vi) | improved operations and service levels in our U.K. business. | ||||||
Our results may also be materially affected by changes in business
trends and our operating environment, and by other factors, such as,
investments in infrastructure and value-added services to support new
business in both commercial and public sector markets.
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 2011 that we will again receive this incentive payment.
GMV – We expect GMV for fiscal year 2011 to
range from $465 million to $505 million. We expect GMV for Q1-11 to
range from $100 million to $110 million.
Adjusted EBITDA – We expect Adjusted EBITDA
for fiscal year 2011 to range from $40 million to $44 million. We expect
Adjusted EBITDA for Q1-11 to range from $6.0 million to $8.0 million.
Adjusted Diluted EPS – We estimate Adjusted
Earnings Per Diluted Share for fiscal year 2011 to range from $0.66 to
$0.74. In Q1-11, we estimate Adjusted Earnings Per Diluted Share to be
$0.08 to $0.12. This guidance reflects the recent impact of our stock
repurchase program under which we repurchased 110,800 shares for
approximately $1.6 million, during the prior quarter, however it does
not assume that we will continue to repurchase shares with the
approximately $11.7 million yet to be expended under the program.
Our guidance adjusts EBITDA and Diluted EPS for acquisition costs and
for the effects of FAS 123(R), which we estimate to be approximately
$2.0 million to $2.2 million per quarter for fiscal year 2011. These
stock based compensation costs are consistent with fiscal year 2010.
Key FY-10 and Q4-10 Operating Metrics
Registered Buyers — At the end of FY-10,
registered buyers totaled approximately 1,403,000, representing a 17%
increase over the approximately 1,202,000 registered buyers at the end
of FY-09.
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 2,247,000 in FY-10, an approximately
6% increase over the approximately 2,118,000 auction participants in
FY-09. Auction participants decreased to approximately 494,000 in Q4-10,
an approximately 5% decrease over the approximately 521,000 auction
participants in Q4-09, as a result of fewer transactions (see completed
transactions below).
Completed Transactions — Completed
transactions increased to approximately 522,000, an approximately 11%
increase for FY-10 from the approximately 469,000 completed transactions
in FY-09. Completed transactions decreased to approximately 119,000, an
approximately 1% decrease for Q4-10 from the approximately 121,000
completed transactions in Q4-09, as a result of an increase in average
transaction size of approximately 34% from $764 in Q4-09 to $1,025 in
Q4-10 due to our lotting strategies.
GMV and Revenue Mix — The table below
summarizes GMV and revenue by pricing model.
|
GMV Mix |
||||||||||||||||
| FY-10 | FY-09 | Q4-10 | Q4-09 | |||||||||||||
| Profit-Sharing Model: | ||||||||||||||||
| Original Surplus Contract | 0.7 | % | 12.8 | % | — | 3.7 | % | |||||||||
| Scrap Contract | 16.7 | % | 14.2 | % | 16.9 | % | 18.1 | % | ||||||||
|
Total Profit Sharing |
17.4 | % | 27.0 | % | 16.9 | % | 21.8 | % | ||||||||
| Consignment Model: | ||||||||||||||||
| GovDeals | 19.9 | % | 21.4 | % | 18.5 | % | 22.2 | % | ||||||||
| Commercial – US | 19.1 | % | 19.6 | % | 27.1 | % | 15.5 | % | ||||||||
| Total Consignment | 39.0 | % | 41.0 | % | 45.6 | % | 37.7 | % | ||||||||
| Purchase Model: | ||||||||||||||||
| Commercial – US | 21.2 | % | 18.0 | % | 17.3 | % | 17.7 | % | ||||||||
| New Surplus Contract | 19.2 | % | 9.0 | % | 18.0 | % | 17.9 | % | ||||||||
| Commercial – International | 2.1 | % | 3.6 | % | 1.4 | % | 3.5 | % | ||||||||
| Total Purchase | 42.5 | % | 30.6 | % | 36.7 | % | 39.1 | % | ||||||||
| Other | 1.1 | % | 1.4 | % | 0.8 | % | 1.4 | % | ||||||||
| Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||
|
Revenue Mix |
||||||||||||||||
| FY-10 | FY-09 | Q4-10 | Q4-09 | |||||||||||||
| Profit-Sharing Model: | ||||||||||||||||
| Original Surplus Contract | 1.0 | % | 19.2 | % | — | 5.5 | % | |||||||||
| Scrap Contract | 25.0 | % | 21.5 | % | 28.2 | % | 26.5 | % | ||||||||
| Total Profit Sharing | 26.0 | % | 40.7 | % | 28.2 | % | 32.0 | % | ||||||||
| Consignment Model: | ||||||||||||||||
| GovDeals | 2.7 | % | 2.5 | % | 2.8 | % | 2.7 | % | ||||||||
| Commercial – US | 5.6 | % | 8.1 | % | 6.0 | % | 5.7 | % | ||||||||
| Total Consignment | 8.3 | % | 10.6 | % | 8.8 | % | 8.4 | % | ||||||||
| Purchase Model: | ||||||||||||||||
| Commercial – US | 31.8 | % | 27.1 | % | 29.0 | % | 26.0 | % | ||||||||
| New Surplus Contract | 28.9 | % | 13.6 | % | 30.1 | % | 26.2 | % | ||||||||
| Commercial – International | 3.2 | % | 5.4 | % | 2.3 | % | 5.1 | % | ||||||||
| Total Purchase | 63.9 | % | 46.1 | % | 61.4 | % | 57.3 | % | ||||||||
| Other | 1.8 | % | 2.6 | % | 1.6 | % | 2.3 | % | ||||||||
| 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
less (a) interest income and other income, net; plus (b) provision for
income taxes; (c) amortization of contract intangibles; and
(d) depreciation and amortization. Our definition of Adjusted EBITDA
differs from EBITDA because we further adjust EBITDA for stock based
compensation expense and acquisition costs.
| Three Months | Twelve Months | ||||||||||||||||||
| Ended September 30, | Ended September 30, | ||||||||||||||||||
| 2010 | 2009 |
2010 |
2009 |
||||||||||||||||
| (In thousands) | |||||||||||||||||||
| Net income | $ | 2,506 | $ | 642 | $ | 12,013 | $ | 5,719 | |||||||||||
| Interest (income) and other expense (income), net | 22 | (157 | ) | (69 | ) | (516 | ) | ||||||||||||
| Provision for income taxes | 2,503 | 3,636 | 12,194 | 7,961 | |||||||||||||||
| Amortization of contract intangibles | 203 | 203 | 813 | 813 | |||||||||||||||
| Depreciation and amortization | 1,186 | 971 | 4,124 | 3,116 | |||||||||||||||
| EBITDA | 6,420 | 5,295 | 29,075 | 17,093 | |||||||||||||||
| Stock compensation expense | 1,861 | 1,764 | 7,891 | 6,465 | |||||||||||||||
| Acquisition costs | — | — | 524 | — | |||||||||||||||
| Adjusted EBITDA | $ | 8,281 | $ | 7,059 | $ | 37,490 | $ | 23,558 | |||||||||||
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 and acquisition costs. Adjusted basic and
diluted earnings per share are determined using Adjusted Net Income.
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| (Dollars in thousands, except per share data) | ||||||||||||||||
| Net income | $ | 2,506 | $ | 642 | $ | 12,013 | $ | 5,719 | ||||||||
| Stock compensation expense (net of tax) | 931 | 265 | 3,914 | 2,702 | ||||||||||||
| Acquisition costs (net of tax) | — | — | 260 | — | ||||||||||||
| Adjusted net income | $ | 3,437 | $ | 907 | $ | 16,187 | $ | 8,421 | ||||||||
| Adjusted basic earnings per common share | $ | 0.13 | $ | 0.03 | $ | 0.60 | $ | 0.30 | ||||||||
| Adjusted diluted earnings per common share | $ | 0.13 | $ | 0.03 | $ | 0.59 | $ | 0.30 | ||||||||
| Basic weighted average shares outstanding | 26,846,424 | 27,528,902 | 27,098,016 | 27,699,223 | ||||||||||||
| Diluted weighted average shares outstanding | 27,354,250 | 27,831,815 | 27,406,883 | 27,846,693 | ||||||||||||
Conference Call
The Company will host a conference call to discuss the fiscal 2010 and
fourth quarter 2010 results at 5 p.m. Eastern Time today. Investors and
other interested parties may access the teleconference by dialing
866-700-7477 or 617-213-8840 and providing the participant pass code
15893358. 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 January 2, 2011 at 11:59 p.m. ET. An audio
replay of the teleconference will also be available until January 2,
2010 at 11:59 p.m. ET. To listen to the replay, dial 888-286-8010 or
617-801-6888 and provide pass code 67389681. Both replays will be
available starting at 8:00 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 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; and our ability to successfully complete the integration of
any acquired companies into our existing 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) and its subsidiaries enable
retailers, industrial corporations and government agencies to market and
sell surplus assets quickly and conveniently using online marketplaces
and value-added services. The company, a member of the S&P SmallCap 600
Index, operates multiple global e-commerce marketplaces for surplus and
salvage assets across the retail (Liquidation.com, UK-Liquidation.com),
government (GovLiquidation.com, GovDeals.com) and capital assets
(NetworkIntl.com, Liquibiz.com) sectors. Liquidity Services is based in
Washington, D.C. and has approximately 700 employees. Additional
information can be found at: www.liquidityservicesinc.com.
| Liquidity Services, Inc. and Subsidiaries | ||||||||||
| Consolidated Balance Sheets | ||||||||||
| (Dollars in Thousands) | ||||||||||
| September 30, | ||||||||||
| 2010 | 2009 | |||||||||
| Assets | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 43,378 | $ | 33,538 | ||||||
| Short-term investments | 33,405 | 30,616 | ||||||||
|
Accounts receivable, net of allowance for doubtful accounts of $328 and $613 in 2010 and 2009, respectively |
4,475 | 4,243 | ||||||||
| Inventory | 17,321 | 14,280 | ||||||||
| Prepaid expenses, deferred taxes and other current assets | 10,122 | 8,705 | ||||||||
| Total current assets | 108,701 | 91,382 | ||||||||
| Property and equipment, net | 6,781 | 6,147 | ||||||||
| Intangible assets, net | 3,057 | 4,203 | ||||||||
| Goodwill | 39,831 | 33,738 | ||||||||
| Other assets | 6,534 | 3,118 | ||||||||
| Total assets | $ | 164,904 | $ | 138,588 | ||||||
| Liabilities and stockholders’ equity | ||||||||||
| Current liabilities: | ||||||||||
| Accounts payable | $ | 8,605 | $ | 5,456 | ||||||
| Accrued expenses and other current liabilities | 24,654 | 14,740 | ||||||||
| Profit-sharing distributions payable | 5,596 | 4,538 | ||||||||
| Customer payables | 9,783 | 6,797 | ||||||||
| Current portion of capital lease obligations | — | 56 | ||||||||
| Total current liabilities | 48,638 | 31,587 | ||||||||
| Capital lease obligations, net of current portion | — | 82 | ||||||||
| Deferred taxes and other long-term liabilities | 3,892 | 2,937 | ||||||||
| Total liabilities | 52,530 | 34,606 | ||||||||
| Stockholders’ equity: | ||||||||||
|
Common stock, $0.001 par value; 120,000,000 shares authorized; 28,827,072 shares issued and 26,894,591 shares outstanding at September 30, 2010; 28,271,983 shares issued and 27,564,521 shares outstanding at September 30, 2009 |
27 | 28 | ||||||||
| Additional paid-in capital | 85,517 | 73,641 | ||||||||
| Treasury stock, at cost | (18,343 | ) | (3,874 | ) | ||||||
| Accumulated other comprehensive loss | (4,645 | ) | (3,618 | ) | ||||||
| Retained earnings | 49,818 | 37,805 | ||||||||
| Total stockholders’ equity | 112,374 | 103,982 | ||||||||
| Total liabilities and stockholders’ equity | $ | 164,904 | $ | 138,588 | ||||||
| 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, | |||||||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||||||
| Revenue | $ | 72,945 | $ | 62,920 | $ | 286,791 | $ | 236,283 | ||||||||||||
| Costs and expenses: | ||||||||||||||||||||
| Cost of goods sold (excluding amortization) | 28,463 | 24,611 | 119,150 | 86,591 | ||||||||||||||||
| Profit-sharing distributions | 12,562 | 11,102 | 42,876 | 45,333 | ||||||||||||||||
| Technology and operations | 12,808 | 11,460 | 49,032 | 46,479 | ||||||||||||||||
| Sales and marketing | 6,370 | 4,951 | 21,250 | 18,253 | ||||||||||||||||
| General and administrative | 6,322 | 5,501 | 24,884 | 22,534 | ||||||||||||||||
| Amortization of contract intangibles | 203 | 203 | 813 | 813 | ||||||||||||||||
| Depreciation and amortization | 1,186 | 971 | 4,124 | 3,116 | ||||||||||||||||
| Acquisition costs | — | — | 524 | — | ||||||||||||||||
| Total costs and expenses | 67,914 | 58,799 | 262,653 | 223,119 | ||||||||||||||||
| Income from operations | 5,031 | 4,121 | 24,138 | 13,164 | ||||||||||||||||
| Interest income and other income, net | (22 | ) | 157 | 69 | 516 | |||||||||||||||
| Income before provision for income taxes | 5,009 | 4,278 | 24,207 | 13,680 | ||||||||||||||||
| Provision for income taxes | (2,503 | ) | (3,636 | ) | (12,194 | ) | (7,961 | ) | ||||||||||||
| Net income | $ | 2,506 | $ | 642 | $ | 12,013 | $ | 5,719 | ||||||||||||
| Basic earnings per common share | $ | 0.09 | $ | 0.02 | $ | 0.44 | $ | 0.21 | ||||||||||||
| Diluted earnings per common share | $ | 0.09 | $ | 0.02 | $ | 0.44 | $ | 0.21 | ||||||||||||
| Basic weighted average shares outstanding | 26,846,424 | 27,528,902 | 27,098,016 | 27,699,223 | ||||||||||||||||
| Diluted weighted average shares outstanding | 27,354,250 | 27,831,815 | 27,406,883 | 27,846,693 | ||||||||||||||||
| Liquidity Services, Inc. and Subsidiaries | ||||||||||||||||||||
| Consolidated Statements of Cash Flows | ||||||||||||||||||||
| (In Thousands) | ||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||||||
| Operating activities | ||||||||||||||||||||
| Net income | $ | 2,506 | $ | 642 | $ | 12,013 | $ | 5,719 | ||||||||||||
|
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||||||||||||||
| Depreciation and amortization | 1,389 | 1,175 | 4,937 | 3,929 | ||||||||||||||||
| Stock compensation expense | 1,861 | 1,763 | 7,891 | 6,465 | ||||||||||||||||
| Provision for inventory allowance | — | — | 512 | 186 | ||||||||||||||||
| Provision (benefit) for doubtful accounts | (11 | ) | 148 | (285 | ) | 93 | ||||||||||||||
| Deferred tax benefit | (893 | ) | (1,534 | ) | (893 | ) | (1,534 | ) | ||||||||||||
| Changes in operating assets and liabilities: | ||||||||||||||||||||
| Accounts receivable | 375 | (632 | ) | 547 | 356 | |||||||||||||||
| Inventory | (2,710 | ) | (795 | ) | (3,553 | ) | (987 | ) | ||||||||||||
| Prepaid expenses and other assets | 1,083 | 3,139 | 221 | 475 | ||||||||||||||||
| Accounts payable | (1,400 | ) | (200 | ) | 2,823 | (2,848 | ) | |||||||||||||
| Accrued expenses and other | 2,471 | (925 | ) | 7,041 | 4,427 | |||||||||||||||
| Profit-sharing distributions payable | 1,538 | 1,300 | 1,058 | (5,773 | ) | |||||||||||||||
| Customer payables | 1,250 | 535 | (210 | ) | (2,088 | ) | ||||||||||||||
| Other liabilities | 55 | (43 | ) | (169 | ) | 215 | ||||||||||||||
| Net cash provided by operating activities | 7,514 | 4,573 | 31,933 | 8,635 | ||||||||||||||||
| Investing activities | ||||||||||||||||||||
| Purchases of short-term investments | (24,465 | ) | (14,457 | ) | (61,024 | ) | (35,113 | ) | ||||||||||||
| Proceeds from the sale of short-term investments | 8,763 | 5,722 | 58,123 | 15,737 | ||||||||||||||||
| Increase in goodwill and intangibles and cash paid for acquisitions | (177 | ) | (793 | ) | (4,102 | ) | (954 | ) | ||||||||||||
| Purchases of property and equipment | (581 | ) | (917 | ) | (3,716 | ) | (3,681 | ) | ||||||||||||
| Net cash used in investing activities | (16,460 | ) | (10,445 | ) | (10,719 | ) | (24,011 | ) | ||||||||||||
| Financing activities | ||||||||||||||||||||
| Principal repayments of capital lease obligations and debt | — | (14 | ) | (138 | ) | (27 | ) | |||||||||||||
|
Proceeds from exercise of common stock options and warrants (net of tax) |
1,718 | 132 | 3,238 | 1,081 | ||||||||||||||||
| Incremental tax benefit from exercise of common stock options | 517 | 62 | 747 | 121 | ||||||||||||||||
| Repurchases of common stock | (1,583 | ) | — | (14,470 | ) | (3,874 | ) | |||||||||||||
| Net cash provided by (used in) financing activities | 652 | 180 | (10,623 | ) | (2,699 | ) | ||||||||||||||
| Effect of exchange rate differences on cash and cash equivalents | 144 | (224 | ) | (751 | ) | (341 | ) | |||||||||||||
| Net (decrease) increase in cash and cash equivalents | (8,150 | ) | (5,916 | ) | 9,840 | (18,416 | ) | |||||||||||||
| Cash and cash equivalents at beginning of the period | 51,528 | 39,454 | 33,538 | 51,954 | ||||||||||||||||
| Cash and cash equivalents at end of period | $ | 43,378 | $ | 33,538 | $ | 43,378 | $ | 33,538 | ||||||||||||
| Supplemental disclosure of cash flow information | ||||||||||||||||||||
| Property and equipment acquired through capital leases | — | — | — | $ | 100 | |||||||||||||||
| Cash paid for income taxes | $ | 2,991 | $ | 2,088 | $ | 12,486 | 9,215 | |||||||||||||
| Cash paid for interest | 48 | 4 | 64 | 44 | ||||||||||||||||
SOURCE: Liquidity Services, Inc.
Liquidity Services, Inc.
Julie Davis, 202-467-6868 ext. 2234
Director, Investor Relations
[email protected]
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