lqdt-20211231

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


(Mark One)
☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2021


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 0-51813

LIQUIDITY SERVICES, INC.

(Exact Name of Registrant as Specified in Its Charter)


Delaware						52-2209244
(State or Other Jurisdiction of						(I.R.S. Employer
Incorporation or Organization)						Identification No.)

6931 Arlington Road, Suite 200, Bethesda, MD						20814
(Address of Principal Executive Offices)						(Zip Code)

(202) 467-6868

(Registrant’s Telephone Number, Including Area Code)

(Former Name, Former Address and Former Fiscal Year, If Changed Since Last Report)

Securities registered to Section 12(b) of the Act:

Title of Each Class

Trading Symbol(s)

Name of Each Exchange on Which Registered

Common Stock, $0.001 par value

LQDT

Nasdaq

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer ☐						Accelerated filer ☒

Non-accelerated filer ☐						Smaller reporting company ☐

						Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares outstanding of the issuer’s common stock, par value $0.001 per share, as of January 31, 2022 was 35,564,964.

INDEX


		Page
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)	3

	Condensed Consolidated Balance Sheets	3

	Condensed Consolidated Statements of Operations	4

	Condensed Consolidated Statements of Comprehensive Income	5

	Condensed Consolidated Statement of Stockholders' Equity	6

	Condensed Consolidated Statements of Cash Flows	7

	Notes to the Unaudited Condensed Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	32

Item 4.	Controls and Procedures	33

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	34

Item 1A.	Risk Factors	34

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34

Item 5.	Other Information	34

Item 6.	Exhibits	35

SIGNATURES		36

Table of Contents

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

Liquidity Services, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(Dollars in Thousands, Except Par Value)


	December 31, 2021		September 30, 2021
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	91,321	$	106,335

Accounts receivable, net of allowance for doubtful accounts of $478 and $490	7,797		5,866
Inventory, net	13,225		12,468
Prepaid taxes and tax refund receivable	1,677		1,713
Prepaid expenses and other current assets	6,465		5,460
Total current assets	120,485		131,842
Property and equipment, net of accumulated depreciation of $20,058 and $18,558	18,164		17,634
Operating lease assets	15,309		13,478
Intangible assets, net	19,187		3,453
Goodwill	88,727		59,872
Deferred tax assets	19,217		23,822
Other assets	5,789		5,475
Total assets	$	286,878	$	255,576
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	31,957	$	40,611
Accrued expenses and other current liabilities	35,709		25,975
Current portion of operating lease liabilities	4,382		4,250

Deferred revenue	4,685		4,624
Payables to sellers	48,288		33,713
Total current liabilities	125,021		109,173
Operating lease liabilities	11,774		10,098
Other long-term liabilities	13,004		1,290
Total liabilities	149,799		120,561
Commitments and contingencies (Note 12)	0		0
Stockholders’ equity:
Common stock, $0.001 par value; 120,000,000 shares authorized; 35,533,071 shares issued and outstanding at December 31, 2021; 35,457,095 shares issued and outstanding at September 30, 2021	36		35
Additional paid-in capital	253,536		252,017
Treasury stock, at cost; 2,373,946 shares at December 31, 2021 and 2,222,083 shares at September 30, 2021	(39,691)		(36,628)
Accumulated other comprehensive loss	(9,142)		(9,011)
Accumulated deficit	(67,660)		(71,398)
Total stockholders’ equity	137,079		135,015
Total liabilities and stockholders’ equity	$	286,878	$	255,576

See accompanying notes to the unaudited condensed consolidated financial statements.

Table of Contents

Liquidity Services, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(Dollars in Thousands, Except Per Share Data)


	Three Months Ended December 31,
	2021		2020
	(Unaudited)
Revenue	$	36,217	$	31,071
Fee revenue	30,490		24,680
Total revenue	66,707		55,751
Costs and expenses from operations:
Cost of goods sold (excludes depreciation and amortization)	27,762		22,573

Technology and operations	13,918		10,573
Sales and marketing	10,044		9,108
General and administrative	8,230		6,996
Depreciation and amortization	2,302		1,871
Other operating (income) expenses	(32)		4
Total costs and expenses	62,224		51,125
Income from operations	4,483		4,626
Interest and other income, net	(131)		(185)
Income before provision for income taxes	4,614		4,811
Provision for income taxes	1,012		297
Net income	$	3,602	$	4,514
Basic income per common share	$	0.11	$	0.14
Diluted income per common share	$	0.10	$	0.13
Basic weighted average shares outstanding	32,971,709		33,176,895
Diluted weighted average shares outstanding	34,868,869		34,911,119

See accompanying notes to the unaudited condensed consolidated financial statements.

Table of Contents

Liquidity Services, Inc. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income

(Dollars in Thousands)

SEC Form 10-Q filed by Liquidity Services Inc.