2018 Q4 Form 10-Q Financial Statement

#000123546819000006 Filed on February 07, 2019

View on sec.gov

Income Statement

Concept 2018 Q4 2017 Q4 2017 Q3
Revenue $54.05M $61.14M $61.36M
YoY Change -11.6% 0.0% -21.84%
Cost Of Revenue $24.96M $27.63M $29.00M
YoY Change -9.68% -14.38% -21.62%
Gross Profit $26.47M $30.20M $27.78M
YoY Change -12.34% 0.0% -33.05%
Gross Profit Margin 48.98% 49.39% 45.28%
Selling, General & Admin $17.62M $15.97M $41.80M
YoY Change 10.29% -65.5% -9.52%
% of Gross Profit 66.54% 52.89% 150.45%
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization $1.204M $1.211M $1.570M
YoY Change -0.58% -15.31% 1.29%
% of Gross Profit 4.55% 4.01% 5.65%
Operating Expenses $31.34M $35.28M $45.90M
YoY Change -11.16% -16.47% -3.97%
Operating Profit -$5.075M -$6.542M -$18.12M
YoY Change -22.42% -20.8% 187.56%
Interest Expense $300.0K $400.0K $100.0K
YoY Change -25.0% -90.0%
% of Operating Profit
Other Income/Expense, Net
YoY Change
Pretax Income -$4.756M -$6.027M -$14.47M
YoY Change -21.09% 0.0% -40.45%
Income Tax $266.0K -$4.815M -$500.0K
% Of Pretax Income
Net Earnings -$5.000M -$1.200M -$14.00M
YoY Change 316.67% -85.71% -73.98%
Net Earnings / Revenue -9.25% -1.96% -22.81%
Basic Earnings Per Share -$0.15
Diluted Earnings Per Share -$0.15 -$37.62K -$444.4K
COMMON SHARES
Basic Shares Outstanding 32.81M shares 31.88M shares 31.50M shares
Diluted Shares Outstanding 32.81M shares 31.88M shares

Balance Sheet

Concept 2018 Q4 2017 Q4 2017 Q3
SHORT-TERM ASSETS
Cash & Short-Term Investments $68.50M $96.80M $94.30M
YoY Change -29.24% -23.72% -29.89%
Cash & Equivalents $38.51M $96.77M $94.35M
Short-Term Investments $30.00M
Other Short-Term Assets $7.000M $7.400M $11.90M
YoY Change -5.41% -36.21% 6.25%
Inventory $10.50M $17.05M $20.74M
Prepaid Expenses
Receivables $6.089M $7.442M $11.60M
Other Receivables $1.500M $0.00 $400.0K
Total Short-Term Assets $93.62M $128.7M $138.9M
YoY Change -27.23% -27.37% -24.87%
LONG-TERM ASSETS
Property, Plant & Equipment $17.27M $16.53M $16.79M
YoY Change 4.49% 6.03% 16.81%
Goodwill $59.72M $45.47M $45.39M
YoY Change 31.36% 1.52% 0.56%
Intangibles $7.035M $425.0K $427.0K
YoY Change 1555.29% -81.71% -83.89%
Long-Term Investments
YoY Change
Other Assets $14.18M $12.81M $12.74M
YoY Change 10.73% 8.12% 6.0%
Total Long-Term Assets $99.24M $76.19M $76.31M
YoY Change 30.24% 0.83% 1.48%
TOTAL ASSETS
Total Short-Term Assets $93.62M $128.7M $138.9M
Total Long-Term Assets $99.24M $76.19M $76.31M
Total Assets $192.9M $204.8M $215.2M
YoY Change -5.85% -18.94% -17.25%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $10.37M $11.51M $13.10M
YoY Change -9.91% 25.37% 34.6%
Accrued Expenses $20.90M $26.50M $30.20M
YoY Change -21.13% -38.52% -33.04%
Deferred Revenue $2.776M $0.00
YoY Change
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due $0.00 $0.00
YoY Change
Total Short-Term Liabilities $62.77M $65.74M $70.76M
YoY Change -4.53% -23.39% -17.23%
LONG-TERM LIABILITIES
Long-Term Debt $0.00 $0.00 $0.00
YoY Change
Other Long-Term Liabilities $0.00
YoY Change
Total Long-Term Liabilities $0.00 $0.00 $0.00
YoY Change
TOTAL LIABILITIES
Total Short-Term Liabilities $62.77M $65.74M $70.76M
Total Long-Term Liabilities $0.00 $0.00 $0.00
Total Liabilities $66.36M $72.33M $82.59M
YoY Change -8.25% -25.38% -15.29%
SHAREHOLDERS EQUITY
Retained Earnings -$99.32M -$89.65M -$88.23M
YoY Change 10.78% 56.09% 79.91%
Common Stock $237.7M $228.7M $227.3M
YoY Change 3.96% 2.8% 3.21%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $126.5M $132.5M $132.6M
YoY Change
Total Liabilities & Shareholders Equity $192.9M $204.8M $215.2M
YoY Change -5.85% -18.94% -17.25%

Cashflow Statement

Concept 2018 Q4 2017 Q4 2017 Q3
OPERATING ACTIVITIES
Net Income -$5.000M -$1.200M -$14.00M
YoY Change 316.67% -85.71% -73.98%
Depreciation, Depletion And Amortization $1.204M $1.211M $1.570M
YoY Change -0.58% -15.31% 1.29%
Cash From Operating Activities -$8.076M $3.496M -$17.38M
YoY Change -331.01% -169.63% -341.39%
INVESTING ACTIVITIES
Capital Expenditures $1.575M $948.0K -$1.630M
YoY Change 66.14% -59.16% 7.24%
Acquisitions
YoY Change
Other Investing Activities -$9.980M $0.00
YoY Change
Cash From Investing Activities -$11.56M -$966.0K -$1.630M
YoY Change 1096.27% -58.51% 7.24%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities $8.000K $0.00 -1.200M
YoY Change -100.0% 1400.0%
NET CHANGE
Cash From Operating Activities -$8.076M $3.496M -17.38M
Cash From Investing Activities -$11.56M -$966.0K -1.630M
Cash From Financing Activities $8.000K $0.00 -1.200M
Net Change In Cash -$19.94M $2.530M -20.21M
YoY Change -887.94% -134.58% -460.89%
FREE CASH FLOW
Cash From Operating Activities -$8.076M $3.496M -$17.38M
Capital Expenditures $1.575M $948.0K -$1.630M
Free Cash Flow -$9.651M $2.548M -$15.75M
YoY Change -478.77% -134.7% -280.62%

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CY2018Q4 us-gaap Weighted Average Number Of Share Outstanding Basic And Diluted
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CY2018Q4 us-gaap Concentration Risk Credit Risk
ConcentrationRiskCreditRisk
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Risk Associated with Certain Concentrations</font></div><div style="line-height:120%;text-align:left;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;&#160;&#160;&#160;</font></div><div style="line-height:120%;text-align:left;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company does not perform credit evaluations for the majority of its buyers. However, most sales are recorded subsequent to payment authorization being received. As a result, the Company is not subject to significant collection risk, as most goods are not shipped before payment is received.</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">For consignment sales transactions, funds are typically collected from buyers and are held by the Company on the sellers' behalf. The funds are included in cash in the consolidated financial statements. The Company releases the funds to the seller, less the Company's commission and other fees due, after the buyer has accepted the goods or within 30&#160;days, depending on the state where the buyer and seller conduct business. The amount of cash held on behalf of sellers is recorded within Payables to sellers in the accompanying Consolidated Balance Sheets.</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash in banks over FDIC limits, certificates of deposit, and accounts receivable. The Company deposits its cash with financial institutions that the Company considers to be of high credit quality.</font></div></div>
CY2018Q4 us-gaap Nature Of Operations
NatureOfOperations
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Organization</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:46px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Liquidity Services, Inc. (the &#8220;Company&#8221;) operates a network of ecommerce marketplaces that enable buyers and sellers to transact in an efficient, automated environment. The Company&#8217;s marketplaces provide professional buyers access to a global, organized supply of new, surplus, and scrap assets presented with digital images and other relevant product information. Additionally, the Company enables its corporate and government sellers to enhance their financial return on offered assets by providing a liquid marketplace and value-added services that encompass the consultative management, valuation, and sale of surplus assets. The Company's services include program management, valuation, asset management, reconciliation, returns process management, refurbishment and recycling, fulfillment, marketing and sales, warehousing and transportation, buyer support, compliance and risk mitigation, as well as self-service tools for its sellers. The Company organizes the products on its marketplaces into categories across major industry verticals such as consumer electronics, general merchandise, apparel, scientific equipment, aerospace parts and equipment, technology hardware, energy equipment, industrial capital assets, fleet and transportation equipment and specialty equipment. The Company&#8217;s marketplaces are: www.liquidation.com, www.govdeals.com, www.networkintl.com, www.secondipity.com, www.go-dove.com, and www.auctiondeals.com. The Company also operates a global search engine for listing used machinery and equipment for sale at www.machinio.com. The Company has </font><font style="font-family:inherit;font-size:10pt;">five</font><font style="font-family:inherit;font-size:10pt;"> reportable segments, Retail Supply Chain Group (RSCG), Capital Assets Group (CAG), GovDeals, Machinio and Corporate &amp; Other. See Note 13 in the Notes to the Consolidated Financial Statements for Segment Information.</font></div><div style="line-height:120%;text-indent:46px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">On July 10, 2018, the Company acquired </font><font style="font-family:inherit;font-size:10pt;">100%</font><font style="font-family:inherit;font-size:10pt;"> of Machinio Corp.("Machinio"), a privately-owned company based in Chicago, Illinois, with a second office in Berlin, Germany. Machinio operates a global online platform for listing used equipment for sale in the construction, machine tool, transportation, printing and agriculture sectors. The consideration paid to the sellers was approximately </font><font style="font-family:inherit;font-size:10pt;">$16.7 million</font><font style="font-family:inherit;font-size:10pt;"> in net cash, equity consideration of approximately </font><font style="font-family:inherit;font-size:10pt;">$2.0 million</font><font style="font-family:inherit;font-size:10pt;">, and contingent consideration payable in 2020 in an amount up to </font><font style="font-family:inherit;font-size:10pt;">$5.0 million</font><font style="font-family:inherit;font-size:10pt;">. </font></div><div style="line-height:120%;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company's operations are subject to certain risks and uncertainties, many of which are associated with technology-oriented companies, including, but not limited to, the Company's dependence on use of the Internet, the effect of general business and economic trends, the Company's susceptibility to rapid technological change, actual and potential competition by entities with greater financial and other resources, and the potential for the commercial sellers from which the Company derives a significant portion of its inventory to change the way they conduct their disposition of surplus assets or to otherwise terminate or not renew their contracts with the Company.</font></div></div>

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