Liquidity Services, Inc. (LQDT) saw its loss widen to $8.25 million, or $0.26 a share for the quarter ended Mar. 31, 2017. In the previous year period, the company reported a loss of $0.85 million, or $0.03 a share. On an adjusted basis, net loss for the quarter stood at $6.56 million, or $0.21 a share compared with a net profit of $1.10 million, or $0.04 a share in the last year period.
Revenue during the quarter dropped 16.74 percent to $72.34 million from $86.88 million in the previous year period. Gross margin for the quarter contracted 580 basis points over the previous year period to 45.36 percent. Operating margin for the quarter stood at negative 11.61 percent as compared to a negative 1.73 percent for the previous year period.
Operating loss for the quarter was $8.40 million, compared with an operating loss of $1.51 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at negative $4.42 million compared with $2.88 million in the prior year period. At the same time, adjusted EBITDA margin stood at negative 6.11 percent for the quarter compared to 3.31 percent in the last year period.
"We are pleased with our results this quarter which demonstrate the advancement of our long-term transformation plan and growth strategy. Investments in our global sales organization, enhanced service offerings, and buyer network have resulted in continued organic growth across our commercial and GovDeals marketplaces. Our Network International energy marketplace GMV was up 108%, our GovDeals state and local government marketplace GMV was up 30%, and our retail GMV was up 7% over the prior year period, demonstrating our ability to attract new clients and expand existing relationships across our entire business," said Bill Angrick, chairman and chief executive officer of Liquidity Services.
For the third-quarter, Liquidity Services projects net loss to be in the range of $10 million to $7 million. The company expects diluted loss per share to be in the range of negative $0.32 to $0.22. On an adjusted basis, the company expects diluted loss per share to be in the range of $0.29 to $0.19.
Operating cash flow turns negative
Liquidity Services, Inc. has spent $14.35 million cash to meet operating activities during the first half as against cash inflow of $24.70 million in the last year period. The company has spent $4 million cash to meet investing activities during the first six months as against cash outgo of $2.76 million in the last year period.
Cash flow from financing activities was $0.08 million for the first six months as against cash outgo of $0.21 million in the last year period.
Cash and cash equivalents stood at $116.11 million as on Mar. 31, 2017, down 1.21 percent or $1.42 million from $117.53 million on Mar. 31, 2016.
Working capital declines
Liquidity Services, Inc. has witnessed a decline in the working capital over the last year. It stood at $84.86 million as at Mar. 31, 2017, down 21.76 percent or $23.61 million from $108.47 million on Mar. 31, 2016. Current ratio was at 2.07 as on Mar. 31, 2017, down from 2.59 on Mar. 31, 2016.
Cash conversion cycle (CCC) has decreased to 32 days for the quarter from 69 days for the last year period. Days sales outstanding went up to 32 days for the quarter compared with 25 days for the same period last year.
Days inventory outstanding has decreased to 26 days for the quarter compared with 64 days for the previous year period. At the same time, days payable outstanding went up to 26 days for the quarter from 20 for the same period last year.
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