Liquidity Services, Inc. · NASDAQ:LQDT
Liquidity Services — Q4 and FY2012 Earnings Presentation
22 slides from Liquidity Services's earnings presentation, Nov 29, 2012
Slide 1: Investor Presentation Q4 and FY’12
November 29, 2012 NASDAQ: LQDT Investor Presentation Q4 and FY’12 http://www.liquidityservicesinc.com/investors
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: Liquidity Services Overview
Liquidity Services 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
Slide 4: Reverse Supply Chain Market Overview
Reverse Supply Chain Market Overview THE TRADITIONAL SUPPLY CHAIN Supplier Manufacturer Distributor Retailer End User Macro Drivers Overstock Customer Returns Damaged RTV Return Polices Discontinued Idle Equipment Recycled Product Innovation End of Life Refurbished Warranty Regulatory Policies
Slide 5: Addressing Multiple Large Market Opportunities
Addressing Multiple Large Market Opportunities U.S. Retail Global Capital Assets U.S. Public Sector $63.3 B $100 B $3.0 B $49.7 B 2010 2015 2012 2012 Total Reverse Logistics Market – North America Source: D.F. Blumberg Associates and RLT, Inc. Source: Manfredi & Associates Source: Company Research h
Slide 6: The Liquidity Services Network Effect
The Liquidity Services Network Effect Broader Product & Service Offering New and Expanded Increased Seller Buyer Relationships Demand Increased Rate of Return Liquidity Services Delivers Significant Value to Buyers and Sellers Creating a Network Effect http://www.liquidityservicesinc.com/investors 6
Slide 7: A Strong Network Effect Drives Stair Step Growth
A Strong Network Effect Drives Stair Step Growth Strong growth is result of building trust and awareness +$845 mil GMV ($ mil) +$271 mil +$72 mil First 5 Years Second 5 years Third 5 years 7 http://www.liquidityservicesinc.com/investors 7
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: Global Presence in over 25 Countries
Global Presence in over 25 Countries Global Network of Asset Valuation and Field Services Professionals http://www.liquidityservicesinc.com/investors 9
Slide 10: Domestic Distribution Center Network
Domestic Distribution Center Network Logistics Services 7 U.S. Warehouse locations totaling 1.7 million square feet 5 U.S. Lot/Yard New Castle DELAWARE Locations totaling 62 Fontana CALIFORNIA Indianapolis INDIANA acres Negotiated rates with Atlanta GEORGIA leading national Fort Worth carriers
Slide 11: Strong Seller Relationships and Leading Reputation
Strong Seller Relationships and Leading Reputation Professional Seller Base Seller Benefits • 139 of the Fortune 1000 • Access to 2.2 million • 7 of the top 10 U.S. Retailers Professional Buyers • 2 of the top 3 Online Retailers • Full Transparency • 3 of the top 4 Warehouse Clubs • Higher Net Retur
Slide 12: Blue Chip, Global Clients Across All Major Industries
Blue Chip, Global Clients Across All Major Industries Retailers Retail OEM’s Government Energy Transportation Technology Healthcare & BioPharma Industrial Asset-Based Lenders (Formerly GMAC Financial) http://www.liquidityservicesinc.com/investors 12
Slide 13: Differentiated Competitive Position
Differentiated Competitive Position eCommerce 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 Traditional Outdated sales me
Slide 14: Growth Strategy
Growth Strategy Acquire Complementary External Businesses Expand Vertical Develop and Enhance Innovation Market Segments Features and Services and Expertise Grow Buyer Base and Increase Penetration of Develop New Organic Increase Participation Existing Sellers Seller Relationships Achieve $2.0 billi
Slide 15: Financial Highlights
Financial Highlights Compelling Business Model Strong Financial Position High Customer Value $45.5 million of Cash, net of early payment of note totaling $41 million and $18.3 million cash acquisition payment Multiple, Recurring Revenue Streams Debt Free Large Average Transaction Values
Slide 16: Liquidity Services Key Operating Metrics
Liquidity Services Key Operating Metrics* Total Registered Buyers Total Auction Participants Completed Transactions *All numbers are in thousands and indicate Fiscal Year ended of September 30. http://www.liquidityservicesinc.com/investors 16
Slide 17: Financial Highlights
Financial Highlights* Gross Merchandise Volume Revenue Fiscal Year Ended Fiscal Year Ended 9/30 9/30 Multiple, Synergistic Revenue Streams Consignment Model Purchase Model Profit Sharing Model Buyer Premium Fees * All numbers are in millions. http://www.liquidityservicesinc.com/investors 17
Slide 18: Diversification and Growth
Diversification and Growth GMV Mix Pricing Model Seller Base FY ‘12 FY ‘12 Liquidity Services Has a Diversified Business and Seller Base http://www.liquidityservicesinc.com/investors 18
Slide 19: Consistent Profitability
Consistent Profitability Adjusted EBITDA(1) 23.1% 15.6% 13.1% 10.3% 9.9% 10.0% 10.2% 6.3% 8.0% 7.5% 5.7% Fiscal Year ended 9/30 Note: Percentages indicate margin based on GAAP Revenue (1) Adjusted EBITDA shown for fiscal years 2002 – 2012 includes adjustments for stock-based compensation and acquisi
Slide 20: Consistent Profitability
Consistent Profitability Adjusted Net Income(2) FY’11 benefitted from a reduction in the effective income tax rate from 50.0% to 34.0% as a result of a tax benefit related to the closure of the company’s U.K. operations. 39.6% 34.0% 50.4% 40.4% 42.5% 39.9% 58.2% 9.3% 22.0% 0.0% 11.2% Fiscal Year end
Slide 21: Operating Model
Operating Model FY 2009 FY 2010 FY 2011 FY 2012 Gross Merchandise Volume 100% 100% 100% 100% Revenue 66.3% 66.7% 60.4% 55.0% Cost of Goods Sold 24.3% 27.7% 24.3% 22.9% Profit-Sharing Distributions 12.7% 10.0% 8.9% 5.0% Technology and Operations 13.1% 11.4% 9.9% 7.8% Sales and Marketing 5.1% 5.0% 4.3
Slide 22: Reconciliation of Financial Data
Reconciliation of Financial Data In Thousands Year ended Septem ber 30, 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Net Income (Loss) $1,324 $2,776 $5,269 $4,122 $7,981 $11,019 $11,553 $5,719 $12,013 $8,512 $48,296 Interest (income) expense & other income, net 169 391 621 570 (431) (2,176
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