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Liquidity Services, Inc. (NASDAQ: LQDT) Show Signs Of Recovery Within Key Areas; Roumell Asset Management Increase Stake In The Company

Liquidity Services, Inc.(NASDAQ: LQDT) is showing signs of recovery within key areas after fighting the dual challenge of weakness among its customer base and working under tough conditions with the overall retail industry going through upheavals for a long time. The company has been using reverse supply chain services which were one of the reasons for its repeatedly failing sales and net losses recently.

That is why when the company officials recently came together to announce the fiscal first-quarter financial report, the investors of LQDT were not expecting any improvement in the conditions for the business surplus seller. Despite posting another loss for the quarter, the reports also indicated signs of a recovery albeit within a few key areas that the company served and it seems better times are ahead for LQDT. That is one reason shareholders of the company have become more optimistic lately.

The recent investment by Roumell Asset Management can also spike up the value of the company’s stock. Reports indicate that Jim Roumell a few days ago increased its stake in LQDT by 39.80% based on the latest 2017 third-quarter regulator filing of the company with the SEC.

The Struggle Continues For LQDT

The first quarter results from LQDT were as expected by the investors with the revenue falling 14% to 61.1 million. It was certainly a bit worse than the expected approximate $65 million fall hoped by the investors. The company posted an adjusted net loss of $4.6 million.

More heartening was the fact that the resulting $0.14 per share loss figure was less as compared to the $0.33/share forecast projected by the consensus. The fundamental metrics tracked by Liquidity Services remained a bit mixed and was a reflection of the cross-currents that are presently affecting the business. The gross profit for LQDT dropped at over 10% clip whereas the overall gross merchandise value for this quarter was cut down by 3% amounting to $155.4 million.

The number of auction participants went down from 25,000 to 519,000. However, the number of registered buyers jumped by around 2, 00,000 to 3.2 million. The completed transactions also fell down around 5% amounting to 122,000. The company discussed its earnings results on February 1, 2018.

About the author

Jeff Coen

Coen writes about the retail sector as well as real estate and finance.

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