Liquidity Services, Inc. (NASDAQ: LQDT; www.liquidityservicesinc.com) today reported its financial results for its second quarter of fiscal year 2012 (Q2-12) ended March 31, 2012. Liquidity Services, Inc. provides business and government clients and buying customers transparent, innovative and effective online marketplaces and integrated services for surplus assets.
Liquidity Services, Inc. (LSI or the Company) reported consolidated Q2-12 record revenue of $125.7 million, an increase of approximately 41% from the prior year’s comparable period. Adjusted EBITDA, which excludes stock based compensation and acquisition costs (including changes in earn out estimates), for Q2-12 was a record $30.9 million, an increase of approximately 120% from the prior year’s comparable period. Q2-12 GMV, the total sales volume of all merchandise sold through the Company’s marketplaces, was a record $218.4 million, an increase of approximately 59% from the prior year’s comparable period. Fiscal 2012 results include the operations of Jacobs Trading, which the Company acquired on October 1, 2011.
Net income in Q2-12 was $18.8 million or $0.57 diluted earnings per share. Adjusted net income, which excludes stock based compensation, acquisition costs (including changes in earn out estimates) and amortization of contract-related intangible assets associated with the Jacobs Trading acquisition – net of tax, in Q2-12 was a record $17.2 million or a record $0.52 diluted earnings per share based on 32.8 million fully diluted shares outstanding, increases of approximately 176% and 136%, respectively, from the prior year’s comparable period.
LSI has a $7.0 million credit, or income, in the Acquisition Costs line item of its Statement of Operations, as a result of reducing the estimate of the fair value of the earn out of its TruckCenter.com acquisition from $7.0 million (recorded at the acquisition), to zero as of March 31, 2012. Upon review of the estimate as of March 31, 2012, LSI determined that the operating results of TruckCenter.com are unlikely to achieve the $7.0 million earn out payment based on the last 11 months of operating history and estimates for the next 13 months. Therefore, based upon revised projections, the Company reversed the earn out liability. The change in estimate does not affect the Company’s effective income tax rate.
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