CALDWELL, N.J., Jan. 12, 2024 (GLOBE NEWSWIRE) -- GovDeals is pleased to announce that the Borough of Caldwell,   Cape May County, and Dennis Township in New Jersey, have all joined more than 15,000 GovDeals sellers to offer their surplus real estate for sale to the public on its leading online marketplace for government agencies and educational institutions to sell surplus assets. By choosing to sell these properties online, these agencies can expose them to a wider range of potential buyers, resulting in ...

Financial Data and Key Metrics Changes - Liquidity Services concluded fiscal year 2023 with a record GMV of $1.2 billion, up 5% year-over-year, and revenue grew to $314.5 million, up 12% [13] - GAAP net income for the year was $21 million, a 33% increase when excluding nonrecurring gains from the prior year, while overall it was down 48% due to that gain [13] - Non-GAAP adjusted EBITDA increased by 7% to $45.9 million, the highest in nine years [13] Business Line Data and Key Metrics Changes - The retail segment's GMV grew 18% organically to $74.7 million, with direct profit increasing by 4% year-over-year [7] - The GovDeals segment's GMV rose 14% year-over-year to $184 million, with revenue and direct profit also increasing by 13% [9][15] - The CAG segment saw a 4% decline in GMV but a 9% increase in direct profit, driven by strong sales in biopharma, energy, and heavy equipment categories [10][16] - Machinio's revenue and direct profit grew by 15%, reflecting increased subscriptions and active listings [11][16] Market Data and Key Metrics Changes - The overall market environment has been challenging due to inflation and tightening by the Fed, impacting consumer spending [5] - The retail segment is experiencing a shift towards lower-value products, affecting profit margins [29] Company Strategy and Development Direction - The company is focused on consolidating its market position and expanding its service offerings, particularly in the retail sector [8][38] - Investments are being made in technology and sales to enhance marketplace capabilities and drive long-term growth [12][32] - The company is exploring potential acquisitions to strengthen its market presence [40] Management's Comments on Operating Environment and Future Outlook - Management noted a challenging economic environment with consumers shifting spending habits, impacting the mix of goods sold [29][43] - There is optimism about future growth opportunities, particularly in the heavy equipment and biopharma sectors [10][32] - The company anticipates a strong post-holiday demand as retailers may have excess inventory [29] Other Important Information - The company ended the quarter with $118 million in cash and no debt, providing financial flexibility for future investments [12] - The first quarter of fiscal year 2024 guidance expects GMV to range from $295 million to $325 million, with GAAP net income projected between $1.5 million and $4 million [20] Q&A Session Summary Question: Did you repurchase any shares this quarter? - Management indicated that there was none to very little share repurchase this quarter due to funding growth and exploring partnerships [22][23] Question: What was the percentage of consignment sales in GMV for the quarter? - Approximately 87% of GMV was under the consignment model, up from 82% in the prior year [26] Question: Why is direct profit not growing as dramatically as revenue in the retail segment? - The lower direct profit growth is attributed to a higher volume of consignment sales with lower fees and a shift in consumer purchasing behavior towards lower-value items [28][29] Question: Where will the increase in expenses come from in Q1? - The increase in expenses is expected mainly in capacity and sales, with a disciplined approach to marketing [31][32] Question: Can you elaborate on the opportunity for consolidation in the retail space? - Management highlighted a unique opportunity to consolidate market position due to the disintegration of smaller players and increased demand for their services [38][39]

Buyer and Market Growth - The number of registered buyers increased from 4.9 million to 5.1 million, representing a growth of 5%[9] - The registered buyer base grew by 4.8%, adding 234,000 new buyers in fiscal 2023[25] - As of September 30, 2023, the company had 5.1 million registered buyers in its marketplaces, with a 4.8% increase in the registered buyer base, adding approximately 234,000 buyers during fiscal 2023[25] - Approximately 3.3 million auction participants engaged in online auctions during the year ended September 30, 2023[25] Financial Performance - Gross merchandise volume (GMV) for the year ended September 30, 2023, was $1.2 billion, with total revenue of $314.5 million[9] - GMV has grown at a compound annual growth rate of 13.9% since 2018[9] - The global reverse logistics market is projected to reach $958 billion by 2028, growing at a compound annual growth rate of 5.6% from 2021 to 2028[15] - The retail industry experiences approximately $816 billion in merchandise returns annually, equating to nearly 18% of total sales[16] - Liquidity Services estimates that at least $100 billion of returned merchandise is moved through secondary markets[16] - The global used equipment market is valued at approximately $350 billion[16] Marketplace and Service Offerings - The company provides access to over 600 product categories, facilitating a continuous flow of surplus assets for buyers[23] - The company aims to maximize sellers' net recovery through channel strategies and dedicated programs[22] - The company operates multiple marketplace brands, serving various industries and product categories, including consumer goods, capital assets, and machinery[42][44] - The AllSurplus marketplace aggregates assets globally, enhancing buyer experience through mobile optimization and machine learning-driven recommendations[32][33] - The AllSurplus marketplace, launched in fiscal year 2020, connects the global buyer base with assets from across the company's network, enhancing the buyer experience through technology and innovation[45] - The company provides value-added services to sellers, including merchandising and channel optimization, logistics, and settlement support, which improve operational efficiencies and recovery rates[48] Technology and Innovation - The company is investing significant resources in enhancing marketplace user experiences and seller tools, leveraging generative AI and automation technologies[69] - The company’s technology investments have led to the development of the AllSurplus marketplace, which utilizes machine learning for site search and recommendations, optimizing asset visibility for buyers[32] - The company successfully migrated the GovDeals.com marketplace to a modernized platform in October 2023, enhancing user experience with AI and machine learning algorithms[66] - In fiscal year 2023, the company expanded capabilities of its flagship e-commerce platform, AllSurplus, including the introduction of Rapid Bid and AllSurplus Deals[67] - The company’s technology infrastructure leverages cloud services from Amazon Web Services and Microsoft Azure for scalability and resilience[65] Operational Efficiency - The company’s operations group includes buyer relations, shipping logistics, and warehouse network management to enhance transaction efficiency[74] - The company employs a robust cybersecurity program, including annual training for all employees to promote a culture of cybersecurity awareness[71] - The company intends to improve operating expense leverage through cost control and technology innovation, enhancing productivity and scalability[38] Employee and Workplace Culture - The company has 716 employees worldwide, with 91% located in North America, 6% in the EMEA region, and 3% in the Asia-Pacific region as of September 30, 2023[83] - The company emphasizes diversity, equity, and inclusion in its workforce, utilizing various recruiting strategies to attract talented candidates[85] - The company provides a range of health benefits, including multiple medical plans, dental and vision coverage, and paid parental leave, with a significant portion of premiums covered by the company[86] - The company operates a remote-first work environment to promote flexibility, high performance, and retention[89] - The company’s culture is built on core values such as integrity, customer focus, and continuous improvement, which are reinforced through performance management and employee engagement surveys[87] Community Engagement and Sustainability - The company engages in community outreach and sustainability initiatives, including disaster relief and zero-waste programs[88] - The company aims to benefit businesses and the environment by enabling the continued use of surplus assets, reducing waste and emissions[91] - The company’s e-commerce marketplaces promote sustainability by facilitating the resale and redeployment of surplus assets, reducing waste, and supporting corporate environmental initiatives[32]

Liquidity Services, Inc. (NASDAQ:LQDT) Q3 2023 Earnings Conference Call August 3, 2023 10:30 AM ET Company Participants William Angrick - Chairman & Chief Executive Officer Jorge Celaya - Executive Vice President & Chief Financial Officer Conference Call Participants Gary Prestopino - Barrington Research George Sutton - Craig-Hallum Operator Welcome to the Liquidity Services, Inc. Third Quarter of Fiscal Year 2023 Financial Results Conference Call. My name is Felicia Crabtree, and I will be your operator f ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 0-51813 A Better Future for Surplus LIQUIDITY SERVICES, INC. (Exact Name of Registrant as Specified in Its Charter) Delaware 52-22092 ...

Liquidity Services, Inc. (NASDAQ:LQDT) Q2 2023 Earnings Conference Call May 4, 2023 10:30 AM ET Company Participants Bill Angrick - Chairman & Chief Executive Officer Jorge Celaya - Executive Vice President & Chief Financial Officer Conference Call Participants Gary Prestopino - Barrington Research George Sutton - Craig-Hallum Operator Welcome to the Liquidity Services Incorporated Second Quarter of Fiscal Year 2023 Financial Results Conference Call. My name is Therese, and I will be your operator for today ...

Financial Performance - Total revenue for the three months ended March 31, 2023, was $81,453,000, representing a 19.5% increase from $68,275,000 in the same period of 2022[17] - Net income for the three months ended March 31, 2023, was $4,245,000, a decrease of 64.5% compared to $11,970,000 for the same period in 2022[19] - Basic income per common share for the three months ended March 31, 2023, was $0.14, down from $0.37 in the same period of 2022[17] - Net income for the six months ended March 31, 2023, was $8,211 million, a decrease of 47.3% compared to $15,572 million for the same period in 2022[26] - Total consolidated revenue increased by $13.2 million, or 19.3%, from $68.3 million to $81.5 million for the three months ended March 31, 2023[155] - Net income decreased by $7.7 million, or 64.5%, from $12.0 million to $4.2 million for the three months ended March 31, 2023[155] Assets and Liabilities - Total current assets as of March 31, 2023, were $130,577,000, slightly up from $129,594,000 as of September 30, 2022[14] - Total liabilities decreased to $132,023,000 as of March 31, 2023, from $133,568,000 as of September 30, 2022[14] - Total stockholders' equity as of March 31, 2023, was $151,074,000, down from $154,536,000 as of September 30, 2022[14] - Cash and cash equivalents were $95,583,000 as of March 31, 2023, compared to $96,122,000 as of September 30, 2022[14] Cash Flow - Net cash provided by operating activities increased to $22,335 million from $14,627 million, representing a growth of 52.5% year-over-year[26] - The company reported a net cash used in investing activities of $6,356 million, a decrease from $14,727 million in the prior year, indicating improved cash management[26] - Net cash used in financing activities was $17.3 million for the six months ended March 31, 2023, down from $21.9 million in the same period of 2022, a decrease of $4.6 million[187] Revenue Segments - Purchase revenue for the Retail Supply Chain Group (RSCG) segment was $53,672,000 for the three months ended March 31, 2023, up from $41,825,000 in the same period of 2022, marking a growth of 28.5%[106] - The total revenue for the Capital Assets Group (CAG) segment was $9,418,000 for the three months ended March 31, 2023, compared to $8,992,000 in the same period of 2022, reflecting a growth of 4.7%[106] - Revenue from the Machinio segment increased by 14.3%, or $0.8 million, driven by price increases and subscriber growth[161] Expenses - Cost of goods sold for the three months ended March 31, 2023, was $40,366,000, an increase of 39.4% from $28,968,000 in the same period of 2022[17] - Other costs and expenses from operations for the three months ended March 31, 2023, were $35,852,000, compared to $34,801,000 for the same period in 2022, an increase of 3.0%[107] - Technology and operations expenses rose by $1.7 million, or 6.1%, due to distribution network growth and inflationary cost increases[163] Stock and Shareholder Activity - The company had 36,049,719 shares issued and outstanding as of March 31, 2023, compared to 35,724,057 shares as of September 30, 2022[14] - Common stock repurchases amounted to $16,963 million, down from $19,998 million, showing a reduction in buyback activity[26] - The Company authorized a new stock repurchase plan of up to $8.0 million through December 31, 2025[183] Taxation - The effective income tax rate for the first six months of fiscal year 2023 is 24.9%, up from 11.7% in the same period of fiscal year 2022, primarily due to state and foreign taxes and the inclusion of an $8.5 million non-cash gain from a prior acquisition[67] - The effective income tax rate for the six months ended March 31, 2023, was 24.9%[144] Acquisitions - The acquisition of Bid4Assets was valued at approximately $42.7 million, consisting of $14.7 million in cash and $28.0 million in earn-out consideration[46] - Goodwill recorded from the Bid4Assets acquisition amounted to approximately $30.1 million, reflecting the value of the assembled workforce and growth opportunities[47] - The total identifiable net assets acquired from Bid4Assets were $12.656 million after accounting for liabilities assumed[47] Market and Economic Conditions - The company is unable to predict the likelihood, magnitude, and timing of inflationary risks to its business, which may impact GMV, revenues, and costs of revenues[118] - The company continues to monitor the ongoing Russia-Ukraine conflict, which has not materially affected its consolidated financial results for the three and six months ended March 31, 2023[121] Miscellaneous - The company did not identify any indicators of impairment requiring an interim test on goodwill or long-lived assets during the three and six months ended March 31, 2023[63] - The company has a credit facility agreement with a maximum principal amount of $25 million, with no outstanding borrowings as of March 31, 2023[70][73]

Liquidity Services, Inc. (NASDAQ:LQDT) Q1 2023 Earnings Conference Call February 2, 2023 10:30 AM ET Company Participants Bill Angrick - Chairman & Chief Executive Officer Jorge Celaya - Executive Vice President & Chief Financial Officer Conference Call Participants George Sutton - Craig Hallum Gary Prestopino - Barrington Research Operator Welcome to the Liquidity Services, Inc. First Quarter of Fiscal Year 2023 Financial Results Conference Call. My name is Gigi and I will be your operator for today's call ...

PART I. FINANCIAL INFORMATION [Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) For the quarter ended December 31, 2022, Liquidity Services reported total revenues of **$72.3 million**, an **8.4% increase** year-over-year, and a net income of **$4.0 million**, up from **$3.6 million** in the prior-year period [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of December 31, 2022, the company's total assets were **$269.2 million**, a decrease from **$288.1 million** on September 30, 2022, primarily driven by a decrease in cash and cash equivalents Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 31, 2022 | Sep 30, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $76,166 | $96,122 | | Total current assets | $113,638 | $129,594 | | Total assets | $269,201 | $288,104 | | **Liabilities & Equity** | | | | Total current liabilities | $105,437 | $123,503 | | Total liabilities | $114,248 | $133,568 | | Total stockholders' equity | $154,953 | $154,536 | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended December 31, 2022, total revenue increased by **8.4%** to **$72.3 million** compared to **$66.7 million** in the prior-year period, with net income rising to **$4.0 million** from **$3.6 million** Statement of Operations Summary (in thousands, except per share data) | Metric | Three Months Ended Dec 31, 2022 | Three Months Ended Dec 31, 2021 | | :--- | :--- | :--- | | Total revenue | $72,282 | $66,707 | | Income from operations | $4,727 | $4,483 | | Net income | $3,967 | $3,602 | | Diluted income per common share | $0.12 | $0.10 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the three months ended December 31, 2022, net cash used in operating activities was **$10.7 million**, a significant decrease from the **$1.9 million** provided in the same period last year, while net cash used in investing activities decreased to **$3.0 million** Cash Flow Summary (in thousands) | Activity | Three Months Ended Dec 31, 2022 | Three Months Ended Dec 31, 2021 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(10,659) | $1,871 | | Net cash used in investing activities | $(3,015) | $(13,021) | | Net cash used in financing activities | $(6,972) | $(3,841) | | Net decrease in cash and cash equivalents | $(19,956) | $(15,014) | [Notes to the Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the company's four reportable segments, significant Cost of Goods Sold attribution to Amazon.com, Inc., goodwill from the Bid4Assets acquisition, and the status of its **$25.0 million** credit facility and **$7.2 million** common stock repurchases - The company operates through four reportable segments: **GovDeals**, **Retail Supply Chain Group (RSCG)**, **Capital Assets Group (CAG)**, and **Machinio**[31](index=31&type=chunk)[105](index=105&type=chunk) - Property purchased under contracts with Amazon.com, Inc. represented **57.3%** of consolidated Cost of Goods Sold for the three months ended December 31, 2022[41](index=41&type=chunk) - The acquisition of Bid4Assets on November 1, 2021, resulted in goodwill of approximately **$30.1 million**, which is included in the GovDeals reportable segment[43](index=43&type=chunk)[47](index=47&type=chunk) - As of December 31, 2022, the company had a **$25.0 million** credit facility with no outstanding borrowings[70](index=70&type=chunk)[72](index=72&type=chunk) - During the quarter, the company repurchased **531,819 shares** for **$7.2 million**, and a new stock repurchase plan of up to **$8.4 million** was authorized on December 6, 2022[89](index=89&type=chunk)[90](index=90&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reports an **8.4% increase** in total revenue for the quarter, driven by strong performance in the RSCG segment, which offset declines in the CAG segment and modest decreases in GovDeals, with Gross Merchandise Volume (GMV) reaching **$270.8 million** Key Business Metrics | Metric | Q1 FY23 (ended Dec 31, 2022) | Q1 FY22 (ended Dec 31, 2021) | | :--- | :--- | :--- | | Gross Merchandise Volume (GMV) | $270.8 million | $260.2 million | | Registered Buyers (at period end) | 5.0 million | 4.7 million | | Auction Participants | 744,000 | 642,000 | | Completed Transactions | 214,000 | 211,000 | - Macroeconomic challenges, including supply chain constraints in new vehicle production, are limiting the supply of used vehicles for sale and creating volatility in used car prices[117](index=117&type=chunk) - The company identifies several positive long-term industry trends, including the growth of online retail returns, increased need for corporate sustainability solutions, and rising demand for low-touch online transaction solutions[123](index=123&type=chunk) Non-GAAP Adjusted EBITDA Reconciliation (in thousands) | Metric | Three Months Ended Dec 31, 2022 | Three Months Ended Dec 31, 2021 | | :--- | :--- | :--- | | Net income | $3,967 | $3,602 | | EBITDA | $7,577 | $6,883 | | Non-GAAP Adjusted EBITDA | $9,842 | $9,374 | [Segment Results](index=27&type=section&id=Segment%20Results) The RSCG segment was the primary growth driver, with revenue increasing **18.9%** due to client program diversification, while the Machinio segment also grew by **15.3%** from higher subscriptions Segment Performance Summary (in thousands) | Segment | Revenue Q1 FY23 | Revenue Q1 FY22 | % Change | | :--- | :--- | :--- | :--- | | GovDeals | $13,607 | $13,984 | (2.7%) | | RSCG | $46,015 | $38,684 | 18.9% | | CAG | $9,393 | $11,207 | (16.2%) | | Machinio | $3,267 | $2,832 | 15.3% | - GovDeals revenue decreased due to macroeconomic challenges slowing the supply of used vehicles, despite a GMV increase from real estate category expansion[152](index=152&type=chunk) - RSCG revenue and GMV grew due to continued diversification in client programs and expanded buyer channels[153](index=153&type=chunk) - CAG revenue and GMV decreased primarily due to project timing and the availability of international spot purchase transactions[154](index=154&type=chunk) [Liquidity and Capital Resources](index=29&type=section&id=Liquidity%20and%20Capital%20Resources) The company ended the quarter with **$76.2 million** in cash and cash equivalents and an undrawn **$25.0 million** credit facility, repurchasing **$7.2 million** of its stock while experiencing negative cash flow from operations of **$10.7 million** - As of December 31, 2022, the company had **$76.2 million** in cash and cash equivalents[167](index=167&type=chunk) - The company maintains a **$25.0 million** Credit Agreement, which was undrawn during the quarter and had full availability as of December 31, 2022[170](index=170&type=chunk) - The company repurchased **531,819 shares** for **$7.2 million** during the quarter and had **$7.8 million** of remaining share repurchase authorization[176](index=176&type=chunk) - The **$12.6 million** decrease in cash from operating activities was mainly due to a net decrease of **$18.7 million** in cash flows associated with accounts payable and payables to sellers[176](index=176&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks from interest rates and foreign currency exchange rates, with a hypothetical **100 basis point** decline in interest rates impacting pre-tax earnings by less than **$1.0 million** annually and a **10%** adverse movement in foreign exchange rates reducing total expected revenues by approximately **1%** - A hypothetical **100 basis point** decline in interest rates would impact pre-tax earnings by less than **$1.0 million** on an annualized basis[179](index=179&type=chunk) - A hypothetical **10%** decrease in foreign exchange rates would reduce total expected revenues by approximately **1%**[181](index=181&type=chunk) [Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures as of December 31, 2022, concluding they were effective at a reasonable assurance level, with no material changes in internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of December 31, 2022[183](index=183&type=chunk) - No material changes occurred in the company's internal controls over financial reporting during the three months ended December 31, 2022[184](index=184&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in two separate legal matters with former employees alleging wrongful termination based on gender, race, and age, with the company believing the claims are without merit and unable to estimate potential liability - A former VP of Human Resources has filed a lawsuit alleging wrongful termination based on gender and race, which is proceeding after a partial denial of the company's motion for summary judgment[101](index=101&type=chunk) - A former Chief Marketing Officer has filed a lawsuit alleging wrongful termination based on race and age, with the company believing these claims are without merit[103](index=103&type=chunk) [Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes from the risk factors previously disclosed in the company's Annual Report on Form 10-K for the fiscal year ended September 30, 2022 - No material changes to risk factors have occurred since the last Annual Report on Form 10-K[187](index=187&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=32&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities, repurchased **531,819 shares** for **$7.2 million** during the quarter, and authorized a new stock repurchase plan of up to **$8.4 million** on December 6, 2022 Issuer Purchases of Equity Securities (Q1 FY23) | Period | Total Shares Purchased | Average Price Paid Per Share | Approx. Dollar Value Remaining (in millions) | | :--- | :--- | :--- | :--- | | Oct 2022 | — | N/A | $6.6 | | Nov 2022 | — | N/A | $6.6 | | Dec 2022 | 531,819 | $13.53 | $7.8 | | **Total** | **531,819** | | | - On December 6, 2022, the Board of Directors authorized a new stock repurchase plan of up to **$8.4 million**[192](index=192&type=chunk) [Exhibits](index=34&type=section&id=Item%206.%20Exhibits) The report includes several exhibits, such as the company's amended bylaws, forms of executive employment and indemnification agreements, and certifications by the CEO and CFO as required by the Sarbanes-Oxley Act - Key exhibits filed include the Amended and Restated Bylaws, forms of executive employment and change in control agreements, and CEO/CFO certifications[195](index=195&type=chunk)[196](index=196&type=chunk)[197](index=197&type=chunk)[199](index=199&type=chunk)[200](index=200&type=chunk)

Part I [Business](index=4&type=section&id=Item%201.%20Business) Liquidity Services operates as a global commerce company with marketplace platforms for surplus assets, positioning itself within the circular economy FY 2022 Performance Overview | Metric | FY 2022 | Growth | | :--- | :--- | :--- | | Gross Merchandise Volume (GMV) | $1,145 million | - | | Revenue | $280.1 million | - | | Registered Buyers | 4.9 million | 22% YoY | - The company's business is organized into four reportable segments: GovDeals, Retail Supply Chain Group (RSCG), Capital Assets Group (CAG), and Machinio[13](index=13&type=chunk) - On November 1, 2021, the company acquired Bid4Assets, Inc., an online marketplace for real property auctions for government entities, to bolster its GovDeals segment[14](index=14&type=chunk) - The company's growth strategy, RISE, is built on four pillars: Recovery Maximization, Increase Volume, Service Expansion, and Expense Leverage[35](index=35&type=chunk) - The RSCG segment has multiple vendor contracts with Amazon.com, Inc., which accounted for **55% of the company's consolidated cost of goods sold** in fiscal year 2022[70](index=70&type=chunk) - As of September 30, 2022, the company had **735 employees worldwide**, with the majority (91%) located in North America[73](index=73&type=chunk) [Risk Factors](index=20&type=section&id=Item%201A.%20Risk%20Factors) The company faces various business, operational, legal, regulatory, and general financial risks, including dependency on key vendors and asset sourcing, intense competition, and potential goodwill impairment - A significant portion of purchased inventory is acquired through vendor contracts with Amazon.com, Inc., with these purchases representing **55% of cost of goods sold in FY2022**, and disruption to this relationship could materially harm revenues and operating results[94](index=94&type=chunk) - The business faces intense competition from other e-commerce platforms, auction websites, traditional liquidators, and government agencies' own sales websites[68](index=68&type=chunk)[96](index=96&type=chunk) - The company is exposed to risks from its international operations, including local economic and political conditions, government regulations, foreign currency exchange fluctuations, and compliance with laws like the U.S. Foreign Corrupt Practices Act[123](index=123&type=chunk)[124](index=124&type=chunk)[126](index=126&type=chunk) - The company must maintain the privacy and security of personal and business information against increasing cybersecurity threats, such as phishing and ransomware attacks, to avoid reputational damage, litigation, and regulatory action[107](index=107&type=chunk)[108](index=108&type=chunk) - Under the purchase transaction model, the company assumes inventory and credit risk, which is significant for assets subject to rapid technological change, obsolescence, and price erosion[112](index=112&type=chunk) - As of September 30, 2022, the company carried **$88.9 million in goodwill** on its balance sheet, which is subject to impairment risk from adverse changes in the business climate or other factors[160](index=160&type=chunk) [Unresolved Staff Comments](index=34&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports that it has no unresolved staff comments from the SEC - None[161](index=161&type=chunk) [Properties](index=34&type=section&id=Item%202.%20Properties) The company leases numerous properties for its operations, including its corporate headquarters and various warehouses, and owns a significant warehouse in North Carolina Leased Properties | Type | Location | Segment | Square Feet | Lease Expiration | | :--- | :--- | :--- | :--- | :--- | | Corp. HQ | Bethesda, MD | Corporate | 7,774 | Apr 2023 | | Warehouse | Plainfield, IN | RSCG | 187,704 | Apr 2024 | | Warehouse | Garland, TX | RSCG | 127,144 | Jan 2026 | | Warehouse | Pittston, PA | RSCG | 108,536 | Jan 2027 | | Warehouse | North Las Vegas, NV | RSCG | 102,400 | Jun 2026 | - The company owns a **420,000 square foot warehouse** located in North Wilkesboro, North Carolina[161](index=161&type=chunk) [Legal Proceedings](index=34&type=section&id=Item%203.%20Legal%20Proceedings) The company may be involved in litigation from time to time in the ordinary course of business, with specific details available in Note 15 of the financial statements - Information regarding the Company's legal proceedings can be found in Note 15 - Legal Proceedings, of the accompanying Notes to the Consolidated Financial Statements[162](index=162&type=chunk) [Mine Safety Disclosures](index=34&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company - Not applicable[162](index=162&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=34&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on Nasdaq under LQDT, has not paid cash dividends, and has an active stock repurchase program - The company's common stock has traded on the Nasdaq Stock Market under the symbol LQDT since February 23, 2006[163](index=163&type=chunk) - The company has not paid any cash dividends on its common stock and has no present intention to do so[166](index=166&type=chunk) - On May 13, 2022, the Board authorized a new stock repurchase plan of up to **$12 million**, with **$6.6 million** remaining available under this plan as of September 30, 2022[171](index=171&type=chunk) - On December 6, 2022, the Board authorized the repurchase of up to an additional **$8.4 million** of common stock through December 31, 2024[171](index=171&type=chunk)[278](index=278&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, macroeconomic impacts, industry trends, revenue models, segment-level operating results, liquidity, capital resources, and non-GAAP financial measures [Results of Operations](index=42&type=section&id=Results%20of%20Operations) For fiscal year 2022, consolidated revenue increased to $280.1 million and GMV to $1.15 billion, while net income decreased due to a prior-year tax benefit, despite a non-cash gain from an acquisition earn-out adjustment Consolidated Financial Performance (in millions, except EPS) | Metric | FY 2022 | FY 2021 | % Change | | :--- | :--- | :--- | :--- | | Total Revenues | $280.1M | $257.5M | 8.7% | | Gross Profit | $160.6M | $149.9M | 7.2% | | Income from Operations | $47.4M | $27.2M | 74.5% | | Net Income | $40.3M | $50.9M | (20.9)% | | Diluted EPS | $1.20 | $1.45 | (17.2)% | Segment Revenue Performance (in millions) | Segment | FY 2022 Revenue | FY 2021 Revenue | % Change | | :--- | :--- | :--- | :--- | | GovDeals | $59.4M | $49.6M | 19.7% | | RSCG | $166.1M | $158.8M | 4.6% | | CAG | $42.6M | $39.6M | 7.4% | | Machinio | $12.1M | $9.6M | 26.4% | - GovDeals revenue grew **19.7%** due to a **44.4%** increase in GMV, driven by new sellers and higher volumes in transportation and real estate, including contributions from the Bid4Assets acquisition[209](index=209&type=chunk) - FY2022 results include a **$24.5 million** non-cash gain from a reduction in the fair value of the Bid4Assets earn-out liability[217](index=217&type=chunk) - The decrease in net income from FY2021 to FY2022 was primarily due to a **$27.9 million** release of the valuation allowance on U.S. deferred tax assets in FY2021, which created a large tax benefit in that year[218](index=218&type=chunk) [Non-GAAP Financial Measures](index=47&type=section&id=Non-GAAP%20Financial%20Measures) The company uses Non-GAAP EBITDA and Non-GAAP Adjusted EBITDA as supplemental performance measures, with Non-GAAP Adjusted EBITDA at $42.7 million for FY2022, adjusted for various non-cash and acquisition-related items Non-GAAP Financial Performance (in thousands) | (in thousands) | FY 2022 | FY 2021 | FY 2020 | | :--- | :--- | :--- | :--- | | Net income (loss) | $40,324 | $50,949 | $(3,774) | | **Non-GAAP EBITDA** | **$58,101** | **$34,472** | **$2,740** | | **Non-GAAP Adjusted EBITDA** | **$42,747** | **$42,888** | **$9,013** | - Non-GAAP Adjusted EBITDA is calculated by adjusting Non-GAAP EBITDA for stock-based compensation, acquisition costs, business realignment expenses, and fair value adjustments to acquisition earn-outs[227](index=227&type=chunk)[232](index=232&type=chunk) [Liquidity and Capital Resources](index=48&type=section&id=Liquidity%20and%20Capital%20Resources) As of September 30, 2022, the company had $96.1 million in cash, $44.8 million in operating cash flow, an undrawn $25.0 million credit facility, and utilized capital for the Bid4Assets acquisition and share repurchases - The company held **$96.1 million** in cash and cash equivalents as of September 30, 2022[233](index=233&type=chunk) Cash Flow Summary (in millions) | (in millions) | FY 2022 | FY 2021 | | :--- | :--- | :--- | | Net cash from operating activities | $44.8 | $65.4 | | Net cash used in investing activities | $(21.1) | $(1.0) | | Net cash used in financing activities | $(31.9) | $(34.7) | - On November 1, 2021, the company acquired Bid4Assets for approximately **$14.7 million** in cash (net) and potential earn-out consideration up to **$37.5 million**[241](index=241&type=chunk)[242](index=242&type=chunk) - The company repurchased a total of **1,567,277 shares** for **$25.4 million** during fiscal year 2022[463](index=463&type=chunk)[464](index=464&type=chunk) - The company maintains a **$25.0 million** Credit Agreement due March 31, 2024, with no outstanding indebtedness as of September 30, 2022[236](index=236&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=51&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company is exposed to market risks primarily from interest rate sensitivity and foreign currency exchange rate fluctuations, with a hypothetical 10% decrease in foreign exchange rates estimated to reduce total revenues by approximately 1% - The company's primary market risks are interest rate sensitivity on its cash and investments and foreign currency exchange rate sensitivity from its international operations[254](index=254&type=chunk)[255](index=255&type=chunk) - A hypothetical **10% decrease** in foreign exchange rates is estimated to reduce total revenues by **approximately 1%**[256](index=256&type=chunk) [Financial Statements and Supplementary Data](index=51&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section indicates that the consolidated financial statements and accompanying notes are included in Part IV, Item 15(a)(1) of the Annual Report - The consolidated financial statements and accompanying notes are included in Part IV, Item 15(a)(1) of this Annual Report on Form 10-K[257](index=257&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=51&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[257](index=257&type=chunk) [Controls and Procedures](index=51&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and internal control over financial reporting were effective as of September 30, 2022, excluding the recently acquired Bid4Assets from the internal control assessment scope - Management concluded that as of September 30, 2022, the company's disclosure controls and procedures were **effective**[261](index=261&type=chunk) - Management concluded that the company's internal control over financial reporting was **effective** as of September 30, 2022[266](index=266&type=chunk) - The assessment of internal control over financial reporting excluded the newly acquired Bid4Assets, which was acquired on November 1, 2021[264](index=264&type=chunk)[272](index=272&type=chunk) [Other Information](index=56&type=section&id=Item%209B.%20Other%20Information) On December 6, 2022, the Board of Directors authorized an additional $8.4 million for the stock repurchase program through December 31, 2024 - On December 6, 2022, the Board authorized an additional **$8.4 million** for the stock repurchase program, running through December 31, 2024[278](index=278&type=chunk) Part III [Directors, Executive Compensation, and Corporate Governance](index=56&type=section&id=Item%2010-14) Information for Items 10 through 14 is incorporated by reference from the company's Proxy Statement for its 2023 Annual Meeting of Stockholders - Items 10, 11, 12, 13, and 14 are incorporated by reference from the Company's Proxy Statement for its 2023 Annual Meeting of Stockholders[280](index=280&type=chunk)[282](index=282&type=chunk)[283](index=283&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=57&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section contains the company's consolidated financial statements, the reports of the independent registered public accounting firms (Deloitte & Touche LLP and Ernst & Young LLP), and a list of all exhibits filed as part of the Form 10-K report [Financial Statements](index=58&type=section&id=Financial%20Statements) The consolidated financial statements for the fiscal year ended September 30, 2022, include various financial statements and notes, with an unqualified opinion from Deloitte & Touche LLP on both the financial statements and internal control effectiveness Consolidated Balance Sheet Highlights (in thousands) | (in thousands) | Sept 30, 2022 | Sept 30, 2021 | | :--- | :--- | :--- | | **Total Assets** | **$288,104** | **$255,576** | | Total Current Assets | $129,594 | $131,842 | | Goodwill | $88,910 | $59,872 | | **Total Liabilities** | **$133,568** | **$120,561** | | Total Current Liabilities | $123,503 | $109,173 | | **Total Stockholders' Equity** | **$154,536** | **$135,015** | - The independent auditor, Deloitte & Touche LLP, identified the valuation of the Bid4Assets earn-out obligation and the complexity of revenue recognition as critical audit matters[293](index=293&type=chunk)[297](index=297&type=chunk) [Form 10-K Summary](index=102&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company has not provided a summary of the Form 10-K report - None[516](index=516&type=chunk)