Liquidity Services, Inc. · NASDAQ:LQDT
Liquidity Services — Q2 FY2015 Earnings Presentation
28 slides from Liquidity Services's earnings presentation, May 2015
Slide 1: Investor Presentation Second Quarter, Fiscal Year 2015
Investor Presentation Second Quarter, Fiscal Year 2015 May 2015 ©2015 Liquidity Services, Inc. All Rights Reserved. 1
Slide 2: Forward-Looking Information
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. These forward-looking
Slide 3: ©2015 Liquidity Services, Inc. All Rights Reserved.
©2015 Liquidity Services, Inc. All Rights Reserved. 3
Slide 4: ©2015 Liquidity Services, Inc. All Rights Reserved.
©2015 Liquidity Services, Inc. All Rights Reserved. 4
Slide 5: Our Purpose: Clients, Buyers, Planet
OUR PURPOSE: To intelligently capture the enduring value of surplus, benefiting our clients, our buyers, and our planet. CLIENTS BUYERS PLANET For enterprises with used, idle, For organizations and consumers For the planet’s natural resources, or excess assets and inventory: looking to achieve busin
Slide 6: Delivering Maximum Value to Clients
Delivering Maximum Value to Clients Better Service OUR VALUE Superior levels of industry and asset expertise, responsiveness, PROPOSITION intelligence, and analytics that achieve high-performance results aligned to your strategic goals TO CLIENTS Better Scale Complete solutions tailored to your indu
Slide 7: Services
Services Liquidity Services provides organizations in every major industry with consultative surplus asset management, valuation, and sales solutions. ©2015 Liquidity Services, Inc. All Rights Reserved. 7
Slide 8: Client Depth Across Industries
Client Depth Across Industries Retailers Retail OEM’s Government Energy Transportation Technology Healthcare & BioPharma Industrial Asset-Based Lenders (Formerly GMAC Financial) ©2015 Liquidity Services, Inc. All Rights Reserved. 8
Slide 9: Providing Superior Buyer Experiences
Providing Superior Buyer Experiences Fair Prices OUR VALUE Auction format ensures assets are sold for fair market value; assets PROPOSITION available all over the world, making it easy to keep shipping costs low or pick up items TO CLIENTS Superior Product Quality and Information Large volumes and r
Slide 10: Your Global Partner
Your Global Partner With 53 locations in 21 countries on six continents and buyers in nearly 200 countries and territories, we provide you with global coverage for your reverse supply chain. 53 locations 21 countries 6 continents ©2015 Liquidity Services, Inc. All Rights Reserved. 10
Slide 11: North American Reach
North American Reach With 13 warehouses and fulfillment centers totaling over two million square feet and five lots totaling over 110 acres, we can meet your storage and transportation needs across North America. Warehouses Groveport, OH Lockbourne, OH Oklahoma City, OK (2) Hayward, CA Fulfillment C
Slide 12: Market Opportunity $130 Billion Total Addressable Market
Market Opportunity $50 Billion $3 Billion Retailers & U.S Public OEMs Sector $20 Billion $8 Billion $48 Billion Industrial Capital Energy Transportation Assets $130 Billion Total Addressable Market Our Clients Across Industries ©2015 Liquidity Services, Inc. All Rights Reserved. 12
Slide 13: Growth Strategy
Growth Strategy Acquire Complementary Businesses Develop and Enhance Expand Vertical Market Features and Services Segments and Expertise Grow Buyer Base and Increase Penetration of Develop New Seller Increase Penetration Existing Sellers Relationships Consistent execution of growth strategy delivers
Slide 14: Current Initiatives
Current Initiatives ©2015 Liquidity Services, Inc. All Rights Reserved. 14
Slide 15: LiquidityOne Initiative to Transform Liquidity Services
LiquidityOne Initiative to Transform Liquidity Services ©2015 Liquidity Services, Inc. All Rights Reserved. 15
Slide 16: ©2015 Liquidity Services, Inc. All Rights Reserved.
©2015 Liquidity Services, Inc. All Rights Reserved. 16
Slide 17: Key Components of LiquidityOne
Key Components of LiquidityOne Consolidation of best-in-class processes and capabilities into a single, modular platform increases our scalability and efficiency as an integrated, global business • Common process to: • Centralized management • Receive of: • Manage • Finances • Ship assets • Payroll
Slide 18: Achieving Key Milestones
Achieving Key Milestones FY’14 FY’15 FY’16 FY’17 Define Single Set of Best Practices and Processes HRIS Launch Data Warehouse Rebrand Launch Official Global Sales Operation Payroll System Launch Launch of Center of Excellence & Process Integrated Global Sales Team Infrastructure Established Platform
Slide 19: Financial Results
Financial Results ©2015 Liquidity Services, Inc. All Rights Reserved. 19
Slide 20: Financial Highlights
Financial Highlights Compelling Business Model Strong Financial Position High Customer Value $86.2 million of Cash Multiple, Recurring Revenue Streams Debt Free Large Average Transaction Values Trailing 12 month Adj. EBITDA of $52.0 million Diversified Product and Customer Mix 50 Con
Slide 21: Strong Track Record of Growth
Strong Track Record of Growth* GMV Revenue 973 932 506496 864 475 337 559 287 462 435 264 250 430 236 228 360 356 199 148 234 227 128 173 189 103 06 07 08 09 10 11 12 13 14 14 15 14 15 06 07 08 09 10 11 12 13 14 14 15 14 15 Fiscal Year ended 6 Months 3 Months Fiscal Year Ended 6 Months 3 months 9/30
Slide 22: Diversification GMV Mix
Diversification GMV Mix Pricing Model Seller Base State & Local Purchase Gov’t 36.4% 23.8% Consignment Commercial 55.6% 54.1% DoD Surplus 14.1% Profit Share 8.0% DoD Scrap Q2’FY15 8.0% Q2’FY15 ©2015 Liquidity Services, Inc. All Rights Reserved. 22
Slide 23: Profitability: Adjusted EBITDA
Profitability Adjusted EBITDA(1) $110.0 $104.6 $63.0 $52.5 $37.5 20.7% $36.7 $26.2 $23.6 12.7% $25.7 23.1% $20.4 15.6% $15.0 13.1% 14.6% $16.7 9.9% 10.0% 11.3% 10.3% 13.0% $8.6 10.2% 8.4% 06 07 08 09 10 11 12 13 14 14 15 14 15 Fiscal Year ended 6 Months 3 Months 9/30 ended 3/31 ended 3/31 Note: Perc
Slide 24: Profitability: Adjusted Net Income & Adjusted EPS
Profitability Adjusted Net Income(2) & Adjusted EPS $1.80 The six months ended Q2 FY’15 benefitted from a reduction in the effective income tax rate from $1.60 40.0% to 22.8% as a result of a goodwill and Adjusted Net Income in Millions $60.9 long-lived impairment following the termination $57.0 Adj
Slide 25: Strong Operating Cash Flow
Strong Operating Cash Flow $52.1 $46.7 $39.9 $31.9 $29.0 $28.9 $17.7 $15.9 $11.9 $8.6 $9.1 $4.5 $4.1 06 07 08 09 10 11 12 13 14 14 15 14 15 Fiscal Year ended 6 Months 3 Months 9/30 ended 3/31 ended 3/31 ©2015 Liquidity Services, Inc. All Rights Reserved. 25
Slide 26: Operating Model – Based on GMV
Operating Model – Based on GMV 1H FY 2009 FY 2010 FY 2011 FY2012 FY2013 FY2014 FY2015 Gross Merchandise Volume 100% 100% 100% 100% 100% 100% 100% Revenue 66.3% 66.7% 60.4% 55.0% 52.0% 53.2% 52.5% Cost of Goods Sold 24.3% 27.7% 24.3% 22.9% 20.5% 22.7% 22.3% Profit-Sharing Distributions 12.7% 10.0% 8.
Slide 27: Reconciliation of Financial Data
Reconciliation of Financial Data In Thousands Year ended Septem ber 30, 6 m os ended March 31, 2006 2007 2008 2009 2010 2011 2012 2013 2014 2014 2015 Net Income (Loss) $7,981 $11,019 $11,553 $5,719 $12,013 $8,512 $48,296 $41,104 $30,390 $12,724 ($62,735) Interest & other expense (income), net (431)
Slide 28: Investor Relations
Investor Relations Julie Davis, Senior Director 202.558.6234 julie.davis@liquidityservices.com ©2015 Liquidity Services, Inc. All Rights Reserved. 28