UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
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
(Exact Name of Registrant as Specified in Its Charter)
(State or Other Jurisdiction of |
(I.R.S. Employer |
Incorporation or Organization) |
Identification No.) |
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(Address of Principal Executive Offices) |
(Zip Code) |
(
(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 |
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.
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).
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 ☐ |
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Non-accelerated filer ☐ |
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Smaller reporting company |
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Emerging growth company |
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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
The number of shares outstanding of the issuer’s common stock, par value $0.001 per share, as of May 1, 2023, was
INDEX |
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Page |
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3 |
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3 |
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4 |
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5 |
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6 |
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7 |
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Notes to the Unaudited Condensed Consolidated Financial Statements |
8 |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
20 |
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31 |
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31 |
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32 |
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32 |
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32 |
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33 |
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34 |
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35 |
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2
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Liquidity Services, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Dollars in Thousands, Except Par Value)
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March 31, 2023 |
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September 30, 2022 |
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(Unaudited) |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Short-term investments |
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Accounts receivable, net of allowance for doubtful accounts of $ |
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Inventory, net |
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Prepaid taxes and tax refund receivable |
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Prepaid expenses and other current assets |
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Total current assets |
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Property and equipment, net |
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Operating lease assets |
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Intangible assets, net |
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Goodwill |
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Deferred tax assets |
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Other assets |
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Total assets |
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$ |
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$ |
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Liabilities and stockholders’ equity |
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Current liabilities: |
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Accounts payable |
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$ |
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$ |
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Accrued expenses and other current liabilities |
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Current portion of operating lease liabilities |
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Deferred revenue |
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Payables to sellers |
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Total current liabilities |
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Operating lease liabilities |
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Other long-term liabilities |
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Total liabilities |
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Stockholders’ equity: |
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Common stock, $ |
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Additional paid-in capital |
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Treasury stock, at cost; |
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( |
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( |
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Accumulated other comprehensive loss |
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( |
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( |
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Accumulated deficit |
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( |
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( |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
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$ |
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$ |
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See accompanying notes to the unaudited condensed consolidated financial statements.
3
Liquidity Services, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Dollars in Thousands, Except Per Share Data)
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Three Months Ended March 31, |
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Six Months Ended March 31, |
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2023 |
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2022 |
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2023 |
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2022 |
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Purchase revenues |
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$ |
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$ |
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$ |
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$ |
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Consignment and other fee revenues |
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Total revenue |
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Costs and expenses from operations: |
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Cost of goods sold (excludes depreciation and amortization) |
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Technology and operations |
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Sales and marketing |
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General and administrative |
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Depreciation and amortization |
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Fair value adjustment of acquisition earn-outs |
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— |
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( |
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— |
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( |
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Other operating (income) expenses, net |
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( |
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( |
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Total costs and expenses |
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Income from operations |
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Interest and other income, net |
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( |
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( |
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( |
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Income before provision for income taxes |
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Provision for income taxes |
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Net income |
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$ |
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$ |
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$ |
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$ |
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Basic income per common share |
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$ |
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$ |
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$ |
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$ |
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Diluted income per common share |
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$ |
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$ |
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$ |
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$ |
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Basic weighted average shares outstanding |
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Diluted weighted average shares outstanding |
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See accompanying notes to the unaudited condensed consolidated financial statements.
4
Liquidity Services, Inc. and Subsidiaries
Condensed Consolidated Statements of Comprehensive Income
(Dollars in Thousands)
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Three Months Ended March 31, |
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Six Months Ended March 31, |
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2023 |
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2022 |
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2023 |
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2022 |
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Net income |
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$ |
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$ |
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$ |
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$ |
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Other comprehensive income (loss): |
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Foreign currency translation |
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( |
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( |
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Other comprehensive income (loss), net of taxes |
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( |
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( |
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Comprehensive income |
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$ |
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$ |
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$ |
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$ |
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See accompanying notes to the unaudited condensed consolidated financial statements.
5
Liquidity Services, Inc. and Subsidiaries
Condensed Consolidated Statement of Stockholders’ Equity
(Dollars In Thousands)
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Additional |
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Accumulated |
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Common Stock |
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Paid-in |
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Treasury Stock |
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Comprehensive |
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Retained |
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Shares |
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Amount |
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Capital |
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Shares |
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Amount |
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Loss |
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Earnings |
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Total |
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Balance at September 30, 2022 |
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$ |
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$ |
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( |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
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Net Income |
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— |
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— |
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— |
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— |
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— |
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Exercise of common stock options, grants of restricted stock awards, and vesting of restricted stock units |
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— |
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— |
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— |
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— |
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— |
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Taxes paid associated with net settlement of stock compensation awards |
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( |
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— |
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( |
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— |
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— |
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— |
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— |
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( |
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Common stock repurchase |
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— |
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— |
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— |
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( |
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( |
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— |
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— |
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( |
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Stock compensation expense |
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— |
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— |
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— |
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— |
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— |
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— |
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Foreign currency translation |
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— |
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— |
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— |
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— |
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— |
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— |
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Balance at December 31, 2022 |
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$ |
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$ |
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( |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
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Net income |
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— |
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— |
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— |
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— |
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— |
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— |
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Exercise of common stock options, grants of restricted stock awards, and vesting of restricted stock units |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Taxes paid associated with net settlement of stock compensation awards |
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( |
) |
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— |
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( |
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— |
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— |
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— |
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— |
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( |
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Common stock repurchase |
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— |
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— |
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— |
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( |
) |
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( |
) |
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— |
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— |
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( |
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Shares swapped to exercise stock options |
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— |
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— |
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( |
) |
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( |
) |
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— |
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— |
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( |
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Stock compensation expense |
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— |
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— |
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— |
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— |
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— |
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— |
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Foreign currency translation |
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— |
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— |
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— |
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— |
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— |
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— |
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Balance at March 31, 2023 |
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$ |
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$ |
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( |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
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See accompanying notes to the unaudited condensed consolidated financial statements.
6
Liquidity Services, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Dollars In Thousands)
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Six Months Ended March 31, |
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2023 |
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2022 |
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Operating activities |
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Net income |
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$ |
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$ |
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Adjustments to reconcile net income to net cash provided by operating activities: |
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Depreciation and amortization |
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Stock compensation expense |
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Inventory adjustment to net realizable value |
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Provision for doubtful accounts |
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Deferred tax expense |
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Impairment of long-lived and other non-current assets |
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Gain on disposal of property and equipment |
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( |
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( |
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Gain on termination of lease |
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( |
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Change in fair value of earn-out liability |
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( |
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Changes in operating assets and liabilities: |
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Accounts receivable |
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( |
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Inventory |
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( |
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( |
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Prepaid taxes and tax refund receivable |
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( |
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( |
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Prepaid expenses and other assets |
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( |
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Operating lease assets and liabilities |
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( |
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Accounts payable |
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Accrued expenses and other current liabilities |
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( |
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Deferred revenue |
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Payables to sellers |
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( |
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Other liabilities |
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( |
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( |
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Net cash provided by operating activities |
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Investing activities |
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Cash paid for business acquisitions, net of cash acquired |
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( |
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Purchases of property and equipment, including capitalized software |
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( |
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( |
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Purchase of short-term investments |
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( |
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Other investing activities, net |
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Net cash used in investing activities |
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( |
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( |
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Financing activities |
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Common stock repurchases |
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( |
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( |
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Taxes paid associated with net settlement of stock compensation awards |
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( |
) |
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( |
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Payments of the principal portion of finance lease liabilities |
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( |
) |
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( |
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Payment for debt issuance cost |
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( |
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Proceeds from exercise of stock options, net of tax |
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Net cash used in financing activities |
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( |
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( |
) |
Effect of exchange rate differences on cash and cash equivalents |
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( |
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Net decrease in cash and cash equivalents |
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