Boston, MA 04/03/2014 (wallstreetpr) – Liquidity Services, Inc. (NASDAQ:LQDT), a global reverse supply chain solutions provider trading surplus assets on its online marketplaces, today announced the primary results of the real time auction bidding program.
Results For The Bidding Events
The U.S. Defense Logistics Agency had held auction bidding events from April 1 to April 2 in order to buy, manage and sell excess assets of the country’s Department of Defense. Liquidity Services was the highest bidder on the first day of the event for non rolling surplus assets agreement. The company’s bid valued 4.35% higher than the DoD’s actual acquisition value for the contract which has a base period of 2 years with a scope of four annual renewals.
Liquidity Services, Inc. (NASDAQ:LQDT) had withdrawn from bidding on April 2 as the bids had reached a level which the company forecasts to be economically unsustainable given the new contract terms. It believed that the contract could hamper the service level which it had been providing the agency client until now.
In this context, the company’s Chairman and Chief Executive Officer, Bill Angrick, said that Liquidity Services seeks opportunities which control the company’s strengths to deliver value to its customers, while gaining returns for its investment and efforts. He said that the company looks forward to continuing selling excess non-rolling stock assets to the DoD, keeping up with the 14 year relationship it shares with the DLA.
Liquidity Services, Inc. (NASDAQ:LQDT) declined being able to provide any expected financial results but speculated to increase the contract to 4.35% of the actual acquisition value from the initial 1.8%. This, it said could result in increased Cost of Goods Sold in the next year. Liquidity Services seeks to stop the sale of DoD rolling stock as per the new contract terms. Since this had accounted for almost 35% of the company’s overall GMV for the present DoD surplus agreement, it expects a decline in the overall GMV looking forward. The bids will not affect the company’s 2014 financial results.