Welcome to the Liquidity Services Incorporated first quarter of fiscal year 2022 financial results conference call. My name is Vanessa, and I will be your operator for today's call. Please note that this conference call is being recorded. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. On the call today are Bill Angrick, Liquidity Services Chairman and Chief Executive Officer, and Jorge Celaya, its Executive Vice President and Chief Financial Officer. They will be available for questions after their prepared remarks. The following discussion and responses to your questions reflect Liquidity Services management's views as of today, February 3rd, 2022, and will include forward-looking statements. Actual results may differ materially. Additional information about factors that could potentially impact the financial results is included in today's press release and filings with the SEC, including the most recent annual report on Form 10-K. As you listen to today's call, please have the press release in front of you, which includes Liquidity Services financial results, as well as metrics and commentary on the quarter. During this call, Liquidity Services management will discuss certain non-GAAP financial measures. In its press release and filings with the SEC, each of which is posted on its website, you will find additional disclosures regarding these non-GAAP measures, including reconciliations of these measures with comparable GAAP measures. Liquidity Services management also uses certain supplemental operating data as a measure of certain components of operating performance, which they also believe is useful for management and investors. This supplemental operating data includes gross merchandise volume and should not be considered a substitute for or superior to GAAP results. At this time, I will now turn the presentation over to Liquidity Services CEO, Mr. Bill Angrick. Good morning and welcome to our Q1 earnings call. I'll review our Q1 performance and provide an update on key strategic initiatives. Next, Jorge Celaya will provide more details on the quarter. Long-term investments in our people, products, and outstanding customer service have been rewarded with surging volume as we set an all-time quarterly GMV record during Q1. In Q1, we surpassed our previously stated goal of reaching $1 billion in annualized GMV. As the world's largest marketplace for surplus goods, Liquidity Services powers the $100 billion-plus circular economy by ensuring that every piece of used equipment and returned consumer merchandise quickly finds a second life and stays out of the landfill system. We deploy a sophisticated set of technology, software, and data-driven services to deliver on this mission in the most efficient manner with the highest financial recovery and lowest carbon footprint for our customers. Our mission and value proposition are resonating with sellers as we grew our GMV by 37% year-over-year in Q1 to approximately $260 million, an all-time record and our sixth consecutive quarter of 20%+ annual GMV growth. Our growth was broad-based across every sector of the economy, including energy, transportation, construction, retail consumer goods, industrial manufacturing, and our newest vertical, real estate. Our proven track record of delivering superior financial returns and lower supply chain costs for our customers is driving more higher value goods to be listed and sold on our marketplace platform on a sustained basis. In one example this past month, we sold two Bell helicopters on our marketplace for the city of Jacksonville, Florida. These items generated over $1 million of proceeds to the client, attracting over 30,000 unique buyers and thousands of bids for these assets. Our mission and value proposition is also resonating with buyers. During Q1, the number of registered buyers on our platform grew to more than $4.7 million, which provides our retail, industrial, and government agency sellers superior execution for the sale of their assets. During Q1, the number of completed transactions and auction participants on our platform were up 39% and 24% year- over- year, respectively, reflecting the growing liquidity in our marketplace. Finally, our mission and value proposition are resonating with our current and prospective employees, and benefits our efforts to acquire and retain top talent to execute our business plan. As we take aim at our next leg of growth, we grew our headcount in Q1 by approximately 12% year-over-year, principally in the areas of technology, business development, marketing, and operations. These incremental investments in talent are directly tied to capturing market share and delivering long-term shareholder value. Our market share expansion and growth is the result of long-term secular trends and the associated investments we've made in our marketplace platform to drive digital transformation in the supply chain to benefit buyers, sellers, and the planet. It is also important to underscore that our business at Liquidity Services is resilient and performs well in both periods of economic expansion and contraction. Indeed, our marketplace plays a vital role in solving the needs of both large enterprises and small businesses in navigating several macro trends, including the growth of online commerce, which drives more product returns, the increasing product obsolescence as organizations adopt next-generation technologies, and the shared goal of reducing waste and CO₂ footprints through smart asset redeployment and remarketing strategies in every sector of the global economy. Our e-commerce marketplace solutions are well-positioned to continue to power the $100+ billion circular economy and deliver value to shareholders through our ability to unleash the intrinsic value of surplus through our marketplace platforms. Our platforms ignite and enable a self-reinforcing cycle of value creation, where buyers and sellers attract one another in ever-increasing numbers. The result is a continuous flow of goods that becomes increasingly valuable as more participants join our platform, thereby creating positive network effects that benefit sellers, buyers, and our shareholders. Given our progress, we have established a new near-term target objective of scaling to $1.5 billion in annualized GMV. Accordingly, we are aggressively investing in our people, products, and technology to achieve this target. These investments will enable us to capture the market opportunity in key asset categories, such as heavy equipment, vehicles, industrial and consumer goods, and real estate, and accelerate our growth in the second half of fiscal year 2022, and drive us towards our new target of $1.5 billion in annualized GMV. With a profitable, growing business, we continue to look for intelligent uses of cash, including these outlined organic growth initiatives to further penetrate and realize opportunities in our existing markets, share repurchases, and tuck-in acquisitions. In closing, we thank our team members across Liquidity Services for their dedication to our mission to power the circular economy and build a better future for surplus. I'll now turn it over to Jorge for more details on the quarter. Good morning. Our first quarter results reflect continued momentum in our GovDeals segment and another strong quarter from our CAG segment. These results also reflect additional resources in our sales, marketing, and technology groups, and the investments in our new AllSurplus Deals growth initiative, and the operating capacity expansion in the Northeast for our RSCG segment. We are targeting our efforts and investments to support and generate profitable growth across our segments as we anticipate accelerated GMV growth in the second half of fiscal year 2022 to early 2023. We completed the first quarter of fiscal year 2022 with $260.2 million in GMV, an all-time quarterly record that exceeds the $1 billion annualized goal we set forth previously. GMV was up 37% from $190.4 million in the same quarter last year. Revenue for this first fiscal quarter was $66.7 million, a 20% increase compared to the same quarter last year. As consignment GMV sales grow faster than purchase GMV sales, and more so, the self-service component of consignment GMV, revenue as a percent of GMV would be expected to lower, as we have indicated previously. This change in mix has been part of our long-term strategy. We anticipate growth in real estate sales to reduce the ratio of revenue to GMV, given lower average take rates, with this being a high-value category. However, despite this lower ratio of revenue to GMV, gross margin for real estate are expected to be similarly as strong as our self-service, low-touch businesses, including GovDeals, and match the corresponding low operating expense, high leverage business model in line with our GovDeals segment. Net income for this first quarter was $3.6 million, resulting in diluted earnings per share of $0.10. Non-GAAP adjusted EBITDA was $9.4 million, an improvement over the same quarter last year. We hold $91.3 million in cash and a debt-free balance sheet after completing the acquisition of Bid4Assets on November 1st for $11.1 million, net of cash received, and spending $3 million in share repurchases during the quarter. As of December 31st, 2021, we have $17 million in authorization to repurchase shares and the potential to pay up to $37.5 million in earn-out based upon Bid4Assets performance over the 2020 calendar year. We currently anticipate some incremental earn-out payments in fiscal year 2023's first quarter, with a potential final payment during the second fiscal quarter of 2023. Specifically comparing segment results for this first quarter to the same quarter last year, our GovDeals segment was up 46% on GMV and 29% on revenue. Our retail or RSCG segment was up 3% on GMV and up 11% on revenue. Our CAG segment was up 60% on GMV and up 42% on revenue. Machinio was up 34% on revenue. We expect the seasonal decline in Q2 of fiscal year 2022 in advance of our typical strong third quarter. GovDeals fundamentals and trends remain solid, CAG's pipeline remains strong, and retail continues to diversify and execute on transforming our investments into additional growth. While these businesses' growth initiatives gain traction, we anticipate lower profits in the short term for Q2 of fiscal year 2022, combined with the GovDeals seasonality and change in mix for CAG project-based sales this coming quarter. We also expect the GovDeals segment GMV to be further boosted by the combination with Bid4Assets as fiscal year 2022 progresses, and we leverage Bid4Assets subject matter focus and GovDeals expansive government client base. Our second quarter of fiscal year 2022 guidance range for GMV is above the same period last year from 25%-40% at the low to high ends of our guidance range, respectively. As consignment GMV sales grow faster than under the purchase model and we integrate the sales from our growing real estate business, the ratio of revenue as a percentage of GMV is expected lower due to mix, and results in a slower revenue growth percentage versus GMV growth from this strategic business model shift. Our profit guidance for the second quarter of fiscal year 2022 is at or below the same period last year, mainly reflecting the increased costs for sales, marketing, and technology to generate and respond to the growth we expect in the second half of fiscal year 2022 and beyond. As a reminder, resulting from our reversal of our tax valuation allowance in the fourth quarter of fiscal year 2021, due to our stronger level of profitability trends, our effective tax rate is now expected to be approximately 18%-24% during fiscal year 2022. This higher effective tax rate will have no significant corresponding increase to cash paid for income taxes for 2022, yet has a negative year-over-year comparable impact to our fiscal year 2022 net income and earnings per share. Management guidance for the second quarter of fiscal year 2022 is as follows. We expect GMV to range from $260 million-$290 million. GAAP net income is expected to range from $1.5 million-$4.5 million, with a corresponding GAAP diluted earnings per share ranging from$0.0 4-$0.13 Per share. We estimate non-GAAP adjusted EBITDA to range from $6.5 million-$9.5 million. Non-GAAP adjusted diluted earnings per share is estimated in the range of $0.11-$0.20 per share. The GAAP and non-GAAP earnings per share guidance assumes that we have approximately 35.2 million fully diluted weighted average shares outstanding for the second quarter of fiscal year 2022. We will now take your questions. Thank you. We will now begin our question-and-answer session. If you have a question, please press star then one on your touch tone phone. If you wish to be removed from the queue, please press the pound sign or the hash key. If you're using a speakerphone, please pick up the handset first before pressing the numbers. Once again, with your question, please press star then one on your touch tone phone. We have our first question from Gary Prestopino with Barrington Research. Please go ahead, your line is open. Good morning, all. A couple of questions here. First of all, Bill, could you just give us some idea of what the organic growth in GMV was? Are you going to make that metric public or not? The integration of the businesses will make that more difficult to provide over time, but independent of Bid4Assets, we were in line with that six consecutive quarters of 20%+ GMV growth, Gary. Okay. The core business is performing well. You only had two months of Bid4Assets, right? Correct. It was closed on November 1st. Okay, good. All right. In terms of the revenue to GMV and the net revenue to GMV, I got it measured total revenue to GMV, 25.6%. Net revenue to GMV, about 15% this quarter. With the full quarter and growth in Bid4Assets, Jorge, do you expect those percentages to scale down from where they were in Q1? Yes, pretty much in line with what I said last quarter, which was that over the course of the year, that ratio of revenue to GMV, where it used to be in the high twenties, now is gonna be more in the low twenties. Okay. Gonna go in that direction as the year progresses. All right. That's good. One of the things that you mentioned in the release was that there were some seller constraints in the RSCG segment in the quarter. Could you just elaborate on that? Was that in, Jorge, in your business outlook section? No. You said that RSCG. I'm sorry. You had 3% growth, diversified seller product flows, but it was magnified by selective seller capacity constraints. I'm trying to get an idea of what was going on there. Well, I think certainly you've seen the retail industry struggle with getting product to store. Okay. or product to ship. The backlog in the ports is well-publicized, and, you know, the markets reflected that challenge and, you know, availability of product. So I think that's something that is resolving itself. And you know- Mm-hmm. Some of the indications in this last, you know, two-four weeks has indicated that the ports are starting to free up, and I think that would normalize that issue. That leads me into my next question in terms of the outlook. As you look in the back half of this year, you're saying that you're gonna see an acceleration of growth overall versus the first half of the year. Maybe if you could, you know, go market by market and give us some of the rationales for what you're talking about in terms of growth going forward, would help us, you know, just understand the dynamics of what's going on with the business. Sure. Well, I think first of all, across the entire business, we've front loaded, you know, significant headcount and improvement in business development, seller-facing marketing and product development, which is essentially, you know, enhancing functionality to, you know, meet seller needs, which would trigger, you know, more activity on our marketplace. You know, that investment certainly is a cost that we're carrying in the first half of the year without the return on that investment showing up immediately. That return will begin to reveal itself as we move through the June and September quarters. Mm-hmm. In the GovDeals marketplace, we have 15,000 government agency clients that are now being presented with the opportunity to fold their real estate sales into the relationship. We have probably the longest standing subject matter expert managing online real estate sales for government entities in Bid4Assets that's you know helping drive that capture of the opportunity. We certainly expect that based on contractual relationships, we will realize significant improvement in the real estate category as we move through the year. When we bought Bid4Assets, Gary, we outlined that we believe that this is a $1 billion GMV business opportunity. Mm-hmm. Now it's gonna take a few years to get it, but I think we'll make a material gain toward that goal in the first, you know, year of owning Bid4Assets. I think that stairstep's gonna start to reveal itself as we move through the second half of the year. The core GovDeals business is moving up the value chain to capture higher value construction equipment, transportation equipment, vehicle fleets, power generation assets. You know, with an infrastructure bill flowing into the local municipal government budgets, you know, we think there's opportunity for many of our clients to rotate to newer assets, and that will free up more used equipment to be moving through the GovDeals business. Okay. We're very sanguine on that. On the retail business, you know, we are picking up market share, and we're expanding our footprint to respond to needs expressed by many of our retail clients who are moving closer to high-density population centers with their last mile delivery centers. Mm-hmm. That's creating more volume, forward volume for our e-commerce and omnichannel partners, but also more returns. Our Pittston, PA facility is a great example of us creating a value-added solution for clients who expect more returns to be coming from the densely populated Northeast region. We're also picking up more business in our existing markets as you know, people have emerged from COVID still with the habit to buy you know, higher value goods online. You know, the expensive home theater electronics items, furniture and houseware items, exercise equipment, lawn and garden equipment, building tools, do-it-yourself home improvement items, all that's flowing through e-commerce and eventually coming back through our channel into the Retail Supply Chain Group marketplace. That is an important part of what we're doing to boost capacity and volume in the retail business. Also, we've created a new AllSurplus Deals direct-to-consumer channel, which is essentially the same underlying technology platform that AllSurplus provides, but for providing a stream of goods to end users who have an insatiable appetite for, you know, less than new deal-priced goods. We're leveraging a distribution center that we have there, and we're seeing good uptake of that solution. We'll keep people updated on it. It's still early, but we feel that's another way to boost our market share in the retail business. The manufacturing side, I'd also wanna underscore for the retail business. You know, lots of products that manufacturers take back from retailers are flowing through our marketplace, but because we've provided the full suite of refurbishing capabilities to certify condition of these items and then offer them in a way that helps protect the manufacturer's brands. That's an area of retail that we're gonna continue to grow. On the capital asset side, you know, that's a business that grew 60% in the last quarter. We are seeing broad-based adoption of the digital solutions by manufacturers who have plants in multiple regions, equipment in multiple regions, and you have some massive rotation in technology. You know, you look at electric vehicles affecting automotive. You know, you have a lot of semiconductor electronics manufacturing equipment that's highly sought after in the used marketplace as new supply has been curtailed. Most of our clients are very focused on asset redeployment and remarketing because of their corporate objectives around sustainability, and we provide the AssetZone asset management service attached to our marketplace, which is highly prized for these clients. In fact, we'll be sharing an award in the next few weeks from a Fortune 500 company who saved over $10 million with us by redeploying assets using our software and services. There are lots of themes around, you know, massive technology shifts in industrial markets, the priority of advancing sustainability strategies, and companies just wanting to be, you know, very liquid with their balance sheets and using our channel to recover value from these assets that's helping grow the CAG marketplace. I would also add our investment in a cloud-based marketplace system with all these tools and, you know, the ability to take payment and settle transactions and all the reporting that lives in the cloud has been very valuable to our buyers and sellers over the last few years. This is an investment, Gary, that we began several years ago, and, you know, we were ready to be very nimble as, you know, various restrictions were placed due to the COVID policies or healthcare restraints, travel constraints. That's been a nice bright spot for us, and we have a very strong business development pipeline in the CAG business, and we expect that to continue. Okay. I'll let somebody else go. Your line is still open, sir. If you have any further questions, you can proceed. Oh, okay, thanks. Yeah, just another thing, Bill. The strong global pipeline of project-based GMV going into Q3 2022. When you're talking about something like that, is that you're getting commitments from these companies to sell product online that far in advance? You know, 'cause we're just- Yes. In some cases, there's some dismantling or other preconditions to the assets being put to sale. Okay. We're brought in early in that process to help the client navigate, you know, all presale conditions. We have visibility to some very, you know, meaningful asset sales. Can you give us some idea of what that growth in that pipeline looks like? Well, I think compared to where we were a year ago, we're up about 50%. Okay. That's great news. You know, these projects sometimes span multiple quarters. What we like is that we're offering these Fortune 500, Fortune 1000 companies a full range of both self-directed solutions as well as fully managed services, and the uptake in our self-directed platform has been very robust. We have a lot of energy companies, which is another strong performer for us in the quarter. A lot of energy companies that historically would have asked us to come out and handle assets and you know, do all of the pre- and post-sale work. Now through our cloud-based system, these clients are able to upload their assets directly from multiple locations throughout the world. It's great for the client. It's great for us. Very high-margin business and one that the client really has embraced. They're taking advantage of the self-serve? Absolutely. Okay. Just lastly, with the investments that you're making, which are all good for growth, that's capable of taking you to a $1.5 billion run rate of GMV. As you stairstep growth from there, I would assume you'd be needing to make further investments or. I mean, I guess what I'm getting at is what kind of capacity does your current platform infrastructure support once you're done? We believe. with the investment this year? I think we will have set ourselves up to support, you know, growth far beyond the $1.5 billion. There is, you know, a core group that is bringing on, you know, new verticals like real estate, heavy equipment. We're doing some, you know, natural product enhancement on the self-directed business because that's growing rapidly. We would think we could go beyond, you know, the $1.5 billion, call it another $1 billion ahead of that, $2 billion-$3 billion of GMV with the core infrastructure that we've built coming out of fiscal 2022. Okay, great. I appreciate you taking my questions. Keep up the good work. Thank you. Thank you. Thank you, sir. We have no further questions at this time. Ladies and gentlemen, this concludes our call. We thank you for participating. You may now disconnect.