2017 Form 10-K Financial Statement

#000162828017012164 Filed on December 07, 2017

View on sec.gov

Income Statement

Concept 2017 2016 Q3 2016
Revenue $270.0M $78.51M $316.5M
YoY Change -14.67% -0.99% -20.31%
Cost Of Revenue $126.2M $37.00M $143.1M
YoY Change -11.81% 11.45% -13.78%
Gross Profit $124.5M $41.50M $162.1M
YoY Change -23.21% -9.98% -20.15%
Gross Profit Margin 46.1% 52.86% 51.23%
Selling, General & Admin $71.29M $46.20M $77.29M
YoY Change -7.76% -3.75% -6.66%
% of Gross Profit 57.27% 111.33% 47.67%
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization $5.796M $1.550M $6.502M
YoY Change -10.86% -22.5% -29.59%
% of Gross Profit 4.66% 3.73% 4.01%
Operating Expenses $161.1M $47.80M $196.2M
YoY Change -17.91% -4.4% -43.44%
Operating Profit -$40.24M -$6.300M -$34.12M
YoY Change 17.96% 61.54% -76.34%
Interest Expense $600.0K $1.000M $1.200M
YoY Change -50.0% -1100.0% -700.0%
% of Operating Profit
Other Income/Expense, Net
YoY Change
Pretax Income -$39.64M -$24.29M -$32.90M
YoY Change 20.48% -61.5% -77.21%
Income Tax -$451.0K $29.50M $27.03M
% Of Pretax Income
Net Earnings -$39.20M -$53.80M -$59.90M
YoY Change -34.56% 23.11% -42.84%
Net Earnings / Revenue -14.52% -68.52% -18.93%
Basic Earnings Per Share
Diluted Earnings Per Share -$1.248M -$1.752M -$1.958M
COMMON SHARES
Basic Shares Outstanding 31.40M shares 30.74M 30.64M shares
Diluted Shares Outstanding 31.40M shares 30.64M shares

Balance Sheet

Concept 2017 2016 Q3 2016
SHORT-TERM ASSETS
Cash & Short-Term Investments $94.30M $134.5M $134.5M
YoY Change -29.89% 40.84% 40.84%
Cash & Equivalents $94.30M $134.5M $134.5M
Short-Term Investments
Other Short-Term Assets $11.90M $11.20M $11.20M
YoY Change 6.25% -59.57% -59.57%
Inventory $20.70M $27.61M $27.60M
Prepaid Expenses
Receivables $11.60M $10.36M $10.40M
Other Receivables $400.0K $1.200M $1.200M
Total Short-Term Assets $138.9M $184.9M $184.9M
YoY Change -24.88% -1.85% -1.86%
LONG-TERM ASSETS
Property, Plant & Equipment $16.80M $14.38M $14.40M
YoY Change 16.67% 7.28% 7.46%
Goodwill $45.13M
YoY Change -29.56%
Intangibles $2.650M
YoY Change
Long-Term Investments
YoY Change
Other Assets $13.70M $12.02M $13.00M
YoY Change 5.38% -35.4% -30.11%
Total Long-Term Assets $76.30M $75.20M $75.20M
YoY Change 1.46% -24.88% -24.88%
TOTAL ASSETS
Total Short-Term Assets $138.9M $184.9M $184.9M
Total Long-Term Assets $76.30M $75.20M $75.20M
Total Assets $215.2M $260.1M $260.1M
YoY Change -17.26% -9.84% -9.84%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $40.60M $9.732M $40.40M
YoY Change 0.5% -76.72% -3.35%
Accrued Expenses $30.20M $45.10M $45.10M
YoY Change -33.04% 64.6% 64.6%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due $0.00 $0.00 $0.00
YoY Change
Total Short-Term Liabilities $70.80M $85.49M $85.50M
YoY Change -17.19% 23.54% 23.55%
LONG-TERM LIABILITIES
Long-Term Debt $0.00 $0.00 $0.00
YoY Change
Other Long-Term Liabilities
YoY Change
Total Long-Term Liabilities $0.00 $0.00 $0.00
YoY Change
TOTAL LIABILITIES
Total Short-Term Liabilities $70.80M $85.49M $85.50M
Total Long-Term Liabilities $0.00 $0.00 $0.00
Total Liabilities $82.60M $97.50M $97.50M
YoY Change -15.28% 34.48% 34.48%
SHAREHOLDERS EQUITY
Retained Earnings -$49.04M
YoY Change
Common Stock $220.2M
YoY Change
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $132.6M $162.6M $162.6M
YoY Change
Total Liabilities & Shareholders Equity $215.2M $260.1M $260.1M
YoY Change -17.26% -9.84% -9.84%

Cashflow Statement

Concept 2017 2016 Q3 2016
OPERATING ACTIVITIES
Net Income -$39.20M -$53.80M -$59.90M
YoY Change -34.56% 23.11% -42.84%
Depreciation, Depletion And Amortization $5.796M $1.550M $6.502M
YoY Change -10.86% -22.5% -29.59%
Cash From Operating Activities -$31.65M $7.200M $45.84M
YoY Change -169.05% 82.74% 5.4%
INVESTING ACTIVITIES
Capital Expenditures $7.805M -$1.520M $6.090M
YoY Change 28.16% -26.57% -16.71%
Acquisitions $0.00 $0.00
YoY Change
Other Investing Activities $0.00
YoY Change
Cash From Investing Activities -$7.924M -$1.520M -$6.152M
YoY Change 28.8% -65.77% -37.36%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities -$1.106M -80.00K -$220.0K
YoY Change 402.73% 700.0% -423.53%
NET CHANGE
Cash From Operating Activities -$31.65M 7.200M $45.84M
Cash From Investing Activities -$7.924M -1.520M -$6.152M
Cash From Financing Activities -$1.106M -80.00K -$220.0K
Net Change In Cash -$40.17M 5.600M $39.47M
YoY Change -201.77% -1198.04% 16.98%
FREE CASH FLOW
Cash From Operating Activities -$31.65M $7.200M $45.84M
Capital Expenditures $7.805M -$1.520M $6.090M
Free Cash Flow -$39.46M $8.720M $39.75M
YoY Change -199.27% 45.09% 9.86%

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9000000 USD
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9171000 USD
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9200000 USD
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3699000 USD
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3134000 USD
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133000 USD
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120000 USD
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98000 USD
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54400000 USD
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9000000 USD
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3032000 USD
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9000000 USD
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658000 USD
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185000 USD
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1700000 USD
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2100000 USD
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6502000 USD
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CY2015 us-gaap Effective Income Tax Rate Reconciliation Nondeductible Expense
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0.000
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0.000
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0.026
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0.019
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0.012
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8800000 USD
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P56Y0M0D
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0 USD
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573000 USD
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516000 USD
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76000 USD
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58000 USD
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70000 USD
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59000 USD
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254000 USD
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CY2015 us-gaap Goodwill Written Off Related To Sale Of Business Unit
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3507000 USD
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232000 USD
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3192000 USD
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137000 USD
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160000 USD
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1024000 USD
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43491000 USD
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45838000 USD
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1 reportablesegment
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3 reportablesegment
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2 item
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5 item
CY2017 us-gaap Number Of Reporting Units
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4 reportablesegment
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346965000 USD
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196231000 USD
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160839000 USD
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44873000 USD
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CY2017 us-gaap Nature Of Operations
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<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-bottom:10px;padding-top:10px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Organization</font></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Liquidity Services (the &#8220;Company&#8221;) operates a network of leading ecommerce marketplaces that enable buyers and sellers to transact in an efficient, automated environment offering over </font><font style="font-family:inherit;font-size:10pt;">500</font><font style="font-family:inherit;font-size:10pt;"> product categories. 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 broad range of services include program management, valuation, asset management, reconciliation, Return to Vendor ("RTV") and Returns Management Authorization ("RMA"), refurbishment&#160;and recycling, fulfillment, marketing&#160;and sales, warehousing&#160;and transportation, buyer support, and compliance&#160;and risk mitigation. 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.govliquidation.com, www.govdeals.com, www.networkintl.com, www.secondipity.com, www.go-dove.com, www.unclesamsretailoutlet.com, www.irondirect.com, and www.auctiondeals.com. The Company has over </font><font style="font-family:inherit;font-size:10pt;">10,000</font><font style="font-family:inherit;font-size:10pt;"> sellers, including Fortune 1000 and Global 500 organizations as well as federal, state, and local government agencies. As of September 30, 2017, the Company has </font><font style="font-family:inherit;font-size:10pt;">three</font><font style="font-family:inherit;font-size:10pt;"> reportable segments, Retail Supply Chain Group (RSCG), Capital Assets Group (CAG), and GovDeals. See Note 16 in the Notes to the Consolidated Financial Statements for Segment Information.</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 U.S. Government agencies, or 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 not renew their contracts with the Company. </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 has evaluated subsequent events through the date that these financial statements were issued and filed with the Securities and Exchange Commission. See Note 18 in the Notes to the Consolidated Financial Statements for the Subsequent Event disclosure.</font></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-indent:32px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div></div>
CY2017 us-gaap Concentration Risk Credit Risk
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<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-indent:26px;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%;padding-bottom:10px;padding-top:10px;text-indent:32px;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, substantially all 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%;padding-bottom:10px;padding-top:10px;text-indent:32px;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 and cash equivalents 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 </font><font style="font-family:inherit;font-size:10pt;">30</font><font style="font-family:inherit;font-size:10pt;">&#160;days, depending on the state where the buyer and seller conduct business. The amount of cash held on behalf of the sellers is recorded as Payables to sellers in the accompanying Consolidated Balance Sheets.</font></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-indent:32px;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 and cash equivalents in banks over FDIC limits, and accounts receivable. The Company deposits its cash with financial institutions that the Company considers to be of high credit quality.</font></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-indent:32px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company has </font><font style="font-family:inherit;font-size:10pt;">two</font><font style="font-family:inherit;font-size:10pt;"> material vendor contracts with the Department of Defense (DoD) under which it acquires, manages and sells government property. Revenue from the sale of property acquired, as well as provision of services, under the current Surplus Contract accounted for </font><font style="font-family:inherit;font-size:10pt;">27.6%</font><font style="font-family:inherit;font-size:10pt;">, </font><font style="font-family:inherit;font-size:10pt;">31.0%</font><font style="font-family:inherit;font-size:10pt;">, and </font><font style="font-family:inherit;font-size:10pt;">24.7%</font><font style="font-family:inherit;font-size:10pt;">, of the Company's consolidated revenue for the fiscal years ended September&#160;30, 2017, 2016, and 2015, respectively. Revenue from the sale of property acquired under the Scrap contract accounted for approximately </font><font style="font-family:inherit;font-size:10pt;">11.1%</font><font style="font-family:inherit;font-size:10pt;">, </font><font style="font-family:inherit;font-size:10pt;">10.2%</font><font style="font-family:inherit;font-size:10pt;"> and </font><font style="font-family:inherit;font-size:10pt;">15.3%</font><font style="font-family:inherit;font-size:10pt;"> of the Company's total revenue for the fiscal years ended September&#160;30, 2017, 2016 and 2015, respectively.</font></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-indent:32px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Additionally, we have a vendor contract with Amazon.com, Inc. under which we acquire and sell commercial merchandise. The property we purchased under this contract represented approximately </font><font style="font-family:inherit;font-size:10pt;">21.8%</font><font style="font-family:inherit;font-size:10pt;">, </font><font style="font-family:inherit;font-size:10pt;">12.1%</font><font style="font-family:inherit;font-size:10pt;">, and </font><font style="font-family:inherit;font-size:10pt;">6.9%</font><font style="font-family:inherit;font-size:10pt;"> </font></div></div>
CY2017 us-gaap Use Of Estimates
UseOfEstimates
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-indent:26px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Use of Estimates</font></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-indent:32px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect amounts in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.</font></div></div>

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