Liquidity Services Provides Update on Bidding Results for U.S. Department of
Defense Non-Rolling Stock and Rolling Stock Surplus Contracts
Liquidity Services determined apparent high bidder for non-rolling stock
surplus contract; withdraws from bidding for rolling stock surplus contract
WASHINGTON -- April 3, 2014
Liquidity Services, Inc. (NASDAQ: LQDT), a global solutions provider in the
reverse supply chain with leading online marketplaces for surplus assets,
today announced the preliminary results of the live auction bidding events
held by the U.S. Defense Logistics Agency (DLA) on April 1-2, 2014 to
purchase, manage and sell surplus assets of the U.S. Department of Defense
As announced on April 1, 2014, the Company remains the apparent high bidder
for the non-rolling stock surplus contract with a bid equal to 4.35% of the
DoD’s original acquisition value (OAV). The non-rolling stock surplus contract
has a base term of two years with four one-year renewal options.
Following the bidding event on April 2, 2014 for the DoD rolling stock
contract, Liquidity Services announced that it withdrew from the live auction
bidding for this contract. Bidding reached a level that Liquidity Services
determined would be economically unsustainable under the terms of the new
contract, jeopardizing the high level of service it has historically provided
the agency client. Final contract awards are subject to a protest period and a
pre-award survey by the DoD regarding the bidder’s ability to satisfactorily
perform the work in accordance with their technical proposal submitted in
step-one of the solicitation.
“Liquidity Services’ longstanding philosophy is to focus on opportunities that
leverage our strengths to provide value to our clients and which deliver
attractive returns on our effort and investment,” said Bill Angrick, Chairman
and Chief Executive Officer of Liquidity Services. “We are excited with the
prospect of continuing our 14 year relationship with the DLA to sell surplus
non-rolling stock assets which builds on our experience selling over 240
million surplus items for the DoD since 2001.”
Because the contracting process is not complete, the Company cannot at this
time provide a revised forecast on future financial results. However, based on
the unofficial April 1-2 bid results, the price for the non-rolling stock
contract is expected to increase from 1.8% to 4.35% of OAV, resulting in
significantly higher Cost of Goods Sold (COGS) in fiscal year 2015 and beyond.
Additionally, the Company expects to cease the sale of DoD rolling stock under
the new contract, which has historically accounted for approximately 30-35% of
the overall GMV for the current DoD surplus contract, resulting in lower GMV
in future periods. Together, this will require a material reset of the
Company’s EBITDA forecast in fiscal year 2015.
Liquidity Services will continue to operate its existing DoD surplus contract
to sell all useable surplus assets of the DoD, including rolling stock and
non-rolling stock assets, for the base term ending December 2014, with two
additional one-month renewal options. As such, the Company expects the April
1-2 bid results will not affect fiscal year 2014 results.
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 $4.4 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 more
than 1,300 employees. Additional information can be found at:
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 and Wal-Mart 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 and Go-Industry, 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 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
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.
Liquidity Services, Inc.
Senior Director, Investor Relations
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