Liquidity Services, Inc. · NASDAQ:LQDT
Liquidity Services — Q2 FY2010 Earnings Presentation
21 slides from Liquidity Services's earnings presentation, 2010
Slide 1: Investor Presentation Q2 FY10
Investor Presentation Q2 FY10
Slide 2: Safe-Harbor Statement
Safe-Harbor Statement FORWARD-LOOKING INFORMATION This presentation contains forward-looking statements. All forward-looking statements speak only as of the date of this presentation. Except as required by applicable law, we do not intend to publicly update or revise any forward-looking statements.
Slide 3: LSI Overview
LSI Overview Leading E-Commerce Marketplace for Surplus Assets Large and Growing Market Opportunity Compelling Customer Value Proposition and Prestigious Client Roster Extensive Base of Buyers and Sellers with a Network Effect Proven Track Record of Growth and Profitability Strong Growth
Slide 4: Reverse Supply Chain Market Overview
Reverse Supply Chain Market Overview THE TRADITIONAL SUPPLY CHAIN Supplier Manufacturer Distributor Retailer End User Macro Drivers Customer Returns Overstock Damaged Return Polices Discontinued Recycled End of Life Refurbished Product Innovation Warranty Replacement Regulatory Policies Supp
Slide 5: Addressing Multiple Large Market Opportunities
Addressing Multiple Large Market Opportunities U.S. Commercial $73.3 B $63.1 B 2008 2010 Total Reverse Logistics Market – North America Source:D.F. Blumberg Associates and RLT, Inc European Commercial $51.5 B $43.4 B 2008 2010 Total Reverse Logistics Market – Europe Public Sector Source:D.F. Blumber
Slide 6: LSI Solution – A Differentiated and Scalable Online Marketplace
LSI Solution – A Differentiated and Scalable Online Marketplace Customer Returns and Shelf Pulls Government Surplus Property Salvage & Scrap Assets 6
Slide 7: The LSI Network Effect
The LSI Network Effect Broader Ef fe k ct wor Product & t Ne Service Offering New and Expanded Increased Seller Buyer Relationships Demand Increased Rate of o rk Ef tw fe ct Return Ne LSI LSI Delivers Delivers Significant Significant Value Value to to Buyers Buyers and and Sellers Sellers Creating C
Slide 8: Large and Growing Buyer Base
Large and Growing Buyer Base Our Professional Buyers Buyer Benefits Online Power Sellers Access to Large Flow of Discount Retailers Assets End Users Prices Below Wholesale Cost VARS / Refurbishers Product Search Tools & Alerts Import / Export Firms Turn-key, Low Cost Shipping Fle
Slide 9: National Distribution Center Network
National Distribution Center Network Logistics Services 8 U.S. Warehouse locations 1.5 million square feet Negotiated rates with leading national carriers Buyer pick-up services Full menu of seller services LSI LSI Provides Provides Integrated Integrated Logistics Logistics Services Servic
Slide 10: Strong Seller Relationships and Leading Reputation
Strong Seller Relationships and Leading Reputation Prestigious Seller Base Seller Benefits • 7 of the top 10 U.S. Retailers • Access to 1.3 million • 2 of the top 3 Online Retailers Professional Buyers • 2 of the top 3 Warehouse Clubs • Full Transparency • U.S. Department of Defense • Higher Net Ret
Slide 11: Growing Roster of Commercial Sellers
Growing Roster of Commercial Sellers 11
Slide 12: Differentiated Competitive Position
Differentiated Competitive Position eCommerce Online Players Consumer Focus Single units/small lots New or like-new vintage merchandise Commodity/low margin products Competition with brick & mortar Traditional Offline Players Geographically limited customer reach Outdated sales Traditi
Slide 13: Growth Strategy
Growth Strategy Acquire AcquireComplementary Complementary External Businesses Businesses Expand ExpandVertical Vertical Develop Developand andEnhance Enhance Innovation Market Features MarketSegments Segments Featuresand andServices Services and andExpertise Expertise Grow GrowBuyer BuyerBase Basea
Slide 14: Financial Highlights
Financial Highlights Compelling Business Model Strong Financial Position High Customer Value $68 Million of Cash Multiple, Recurring Revenue Streams Debt Free Large Average Transaction Values Strong Cash Flow Dynamics - $12.2 Million in Q2 2010 Diversified Product and Customer Mix 30
Slide 15: Key Operating Metrics
Key Operating Metrics Total Registered Buyers % 17 1,299K 1,202K 1,111K 999K R % CAG 685K 50 524K 386K 264K 150K 69K '02 '03 '04 '05 '06 '07 '08 '09 '09 '10 FY Ended 9/30 3 mos. Ended 3/31 Total Auction Participants Completed Transactions 2,118K 469K GR 1,751K AG R CA % %C 372K % 27% 10 26 15 1,115K
Slide 16: Financial Highlights
Financial Highlights Gross Merchandise Volume Revenue $360M $356M $264M R % R AG $234M 15 AG $236M C C % % 33 $199.1M 27 $199M % $173M $173.3M 22 % 16 $148M $141.1M % $102M $105.5M $115.3M 27 $89M $91.2M $89M $72M $76M $75.8M $61M $59.7M $49M $44M '02 '03 '04 '05 '06 '07 '08 '09 '09 '10 '09 '10 '02
Slide 17: Diversification and Growth
Diversification and Growth GMV Mix Pricing Model Seller Base Other Purchase DOD Surplus 1.3% 47.6% 20.2% U.S. Commercial Consignment DOD Scrap 40.7% 18.7% 16.8% 33.5% Profit Sharing GovDeals 17.6% (state & local govt.) Other 1.3% Int. Commercial 2.3% Q2 ‘10 Q2 ‘10 LSI Has a Diversified Business and
Slide 18: Consistent Profitability
Consistent Profitability Adjusted EBITDA (1) $26.2M $23.6M GR $20.4M 7% A 14 $18.7M C % 38 $15.0M 10.0% 9.9% % 10.3% 87 13.2% $10.2M $7.6M $6.7M 10.2% $6.1M $5.5M 13.5% $3.8M $2.5M 8.0% 7.5% 6.5% 9.1% 6.3% 5.7% '02 '03 '04 '05 '06 '07 '08 '09 '09 '10 '09 '10 FY Ended 9/30 6 mos. Ended 3/31 3 mos. En
Slide 19: Consistent Profitability
Consistent Profitability Adjusted Net Income (2) $14.2M $12.2M 6 2% $8.4M $8.4M 1 $8.8M % 42.5% 58.2% 96 46.4% $4.9M $4.4M $4.2M 40.4% 39.9% $3.4M $2.5M 22.0% 45.8% 9.3% 46.0% $0.7M 46.0% $(0.6)M 11.2% 0.0% '02 '03 '04 '05 '06 '07 '08 '09 '09 '10 '09 '10 FY Ended 9/30 6 mos. Ended 3/31 3 mos. Ended
Slide 20: Operating Model
Operating Model FY 2009 YTD 6 Mos. ‘10 Gross Merchandise Volume 100% 100% Revenue 66.3% 70.9% Cost of Goods Sold 24.3% 30.3% Profit-Sharing Distributions 12.7% 10.1% Technology and Operations 13.1% 12.2% Sales and Marketing 5.1% 4.8% General and Administration 6.3% 6.2% Add: Stock-based Compensation
Slide 21: Reconciliation of Financial Data
Reconciliation of Financial Data In Thousands Year ended Septem ber 30, 6 Mos Ended Mar 31, 3 Mos Ended Mar 31, 2002 2003 2004 2005 2006 2007 2008 2009 2009 2010 2009 2010 Net Income $1,324 $2,776 $5,269 $4,122 $7,981 $11,019 $11,553 $5,719 $1,677 $6,517 $1,675 $3,577 Interest (income) expense & oth