Liquidity Services, Inc. Announces Preliminary Fiscal Third Quarter 2013
WASHINGTON -- July 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.
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
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.
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,
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.
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:
Liquidity Services, Inc.
Julie Davis, 202-558-6234
Director of Investor Relations
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