Liquidity Services(LQDT) - 2023 Q2 - Quarterly Report

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]