Welcome to the Liquidity Services, Inc. second quarter of fiscal year 2023 financial results conference call. My name is Therese, 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, May 4th, 2023, 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 in 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 the reconciliations of these measures with the comparable GAAP measures as available. Liquidity Services management also use 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 turn the presentation over to Liquidity Services Chairman and CEO, Bill Angrick. Good morning and welcome to our Q2 earnings call. I'll review our Q2 performance and the progress of our business segments. Next, Jorge Celaya will provide more details on the quarter. We continued to deliver strong value for our customers and shareholders in Q2 as we expanded our market share while delivering Adjusted EBITDA and EPS above our guidance range and GMV near the high end of our guidance range. Despite some persistent macro headwinds, we continue to expand the reach and relevance of our marketplaces with improving vehicle metrics and continued strong buyer demand. Our resilient business model continues to deliver strong free cash flow, and we have continued to repurchase shares as we see opportunity in our long-term prospects. Let's take a closer look at our individual segments. Our retail segment GMV grew 24% organically to $73.3 million, an all-time quarterly record driven by our flexible offerings, reliability, and high level of service to customers. Direct profit growth was flat year-over-year as retail consumers have traded down to lower value merchandise to save money in an inflationary environment versus the prior year period. We continued to drive innovation in our retail segment to deliver value and convenience to our customers. In this regard, Liquidity Services was named the 2023 Innovation Solutions Partner Award winner by the Reverse Logistics Association for our automated sell and place solution, which uses technology that delivers our customers measurable improvements in efficiency and return on investment. This is just one example of how our culture of continuous improvement uniquely benefits the customers of Liquidity Services. We've also continued to expand our direct-to-consumer channel by opening a second AllSurplus Deals location in Cincinnati, Ohio, giving consumers in this market access to exciting online auctions of unique or hard-to-find retail products at compelling values that can be picked up by the winning bidder from our new distribution center location. This direct-to-consumer channel has allowed us to deliver higher recovery to our sellers and expand our reach to a new set of buyers, resulting in a win-win outcome. Our GovDeals segment GMV decreased 7% year-over-year to $167.9 million, reflecting sharply lower results in our acquired Bid4Assets real estate marketplace versus the prior year period due to a delay in the rollout of new contracts and lower mortgage and tax sales this year versus the prior year period. Excluding Bid4Assets, our core GovDeals GMV grew 7% organically. We continue to see long-term upside in the secular growth of online real estate sales in the government market as they increase participation, deliver superior value to homeowners and communities, and are easier to administer versus in-person courthouse sales. We are currently piloting new government real estate programs in a number of regions in the United States, which will, in the end, drive long-term growth in our real estate vertical. Direct profit in our GovDeals segment grew at a higher 3% rate organically over the prior year period as we continue to deliver economies of scale in our core GovDeals marketplace, which has driven strong results for our sellers in a broad range of asset categories, helping us grow the number of new accounts and assets listed by double-digit% organically during Q2. Our CAG segment GMV grew 11% organically to $41.5 million, and direct profit grew 15% organically as we successfully executed numerous high-value transactions during the quarter for our clients across the globe. We remain the most trusted market maker for industrial capital assets, with strong interest in several sectors, including biopharma, energy, consumer packaged goods, and aerospace manufacturing. Conversion of leads to executed transactions has been slower than normal, as many of our enterprise clients continue to assess their plans amidst changes in the global economic climate. Our CAG heavy equipment fleet category continues to make progress growing signed contracts, new sellers, transacted opportunities, and net new revenue at a healthy clip. Recent wins include several national accounts with strong upside potential. Our Machinio segment continues to grow its revenue and direct profit in the low teens organically, with enhanced lead traffic and more equipment categories, continued growth of our storefront product, and financing services with third parties. We believe our Machinio platform offers business customers cost savings and convenience that are superior to other solutions and are ideally suited to a recessionary environment. In conclusion, we are focused on executing multiple drivers to create value for our shareholders over time. We continue to make multiyear investments in growing our market share, technology platform, and brand awareness to deliver long-term growth. Our results will benefit from the normalization of supply chains and our leverage of the fixed investments we've made in operational capacity. Our capital-efficient business with strong operating cash flow, $101 million in cash and zero financial debt, provides us ample financial flexibility to execute our plans. In closing, we thank all of our team members across Liquidity Services for their dedication to our mission to power the circular economy to benefit sellers, buyers, and the planet. I'll now turn it over to Jorge for more details on the quarter. Thank you, Bill. Good morning. We completed the second quarter of fiscal year 2023 with $282.7 million in GMV, up 2%, and $81.5 million in revenue, up 19% from $276.9 million and $68.3 million in the same quarter last year, respectively. Our results reinforce the power of our business model to drive cash flows. We generated $33 million from operating cash flows during the quarter and used $9.8 million to reduce our net shares outstanding by repurchasing approximately 750,000 shares. We hold $101.2 million in cash equivalents, and short-term investments. We have zero debt and $25 million of available borrowing capacity under our credit facility. Specifically comparing segment results to this second quarter to the same quarter last year, our GovDeals segment showed volume increases in its major categories, including vehicles, with the exception of foreclosed real estate, which was down versus last year, resulting in the overall GovDeals segment being down 7% on total GMV. GovDeals revenue was up 4% and up 3% on segment direct profit as the volume increases in key categories combined with pricing improvements benefited results. Our retail RSG segment was up 24% on GMV, setting a new quarterly GMV record, was up 28% on revenue and flat on segment direct profit, reflecting lower direct profit margins arising from a mix of products where lower value purchased products and related sales prices were at a high volume coming off their seasonal peak post-holiday period. Our CAG segment was up 11% on GMV, 5% on revenue, and 15% on Segment direct profit, led by its energy and heavy equipment categories. Machinio revenue was up 13%, its Segment direct profit was also up 13%. GAAP net income for this second quarter was $4.2 million, resulting in diluted GAAP earnings per share of $0.13, down from $0.35 in the same quarter last year as a result of the $0.25 per share non-recurring gain from the Bid4Assets earn out fair value adjustment last year. Non-GAAP adjusted EPS for this second quarter was $0.20, up from $0.17 in the same quarter last year. Non-GAAP Adjusted EBITDA was $9.9 million, up from $9.2 million in the same quarter last year, partly reflecting the higher GMV and revenue, partially offset by product mix, operations costs, and sales expenses to support market share expansion and longer-term growth. Our expertise in diverse sectors, a strong buyer base across numerous asset categories, and global reach are continuing to provide advantages to our clients who navigate economic change and look to us for valuable solutions. Our fiscal third quarter 2023 for GMV range is forecast consistent with the same period last year, reflecting expected growth in all our segments except GovDeals, which continues to face headwinds in its newer real estate category despite growth in its more traditional key categories. RSG will be coming off its fiscal second quarter seasonal peak, its segment direct profit margin as a percentage of revenue is expected to improve sequentially into the fiscal third quarter, driven by changes in the mix of products expected to be available for sale. The CAG segment is expected to deliver year-over-year growth led by heavy equipment, industrial sales, and projects in EMEA, many of which have been delayed from prior quarters. We also currently anticipate our consolidated revenue as a% of GMV closer to the mid-20% range, reflecting our mix of business, type of pricing model mix, and products sold. Our segment's direct profits range in total as a% of total revenue is anticipated to be similar to the same quarter last year. We anticipate continuing to invest in our business to position ourselves for long-term growth, including in sales and in technology initiatives. Management's guidance for the third quarter of fiscal year 2023 is as follows. We expect GMV to range from $300 million-$330 million. GAAP net income is expected in the range of $3 million-$5.5 million, with a corresponding GAAP diluted earnings per share ranging from $0.09-$0.16 per share. We estimate non-GAAP Adjusted EBITDA to range from $10 million-$13 million. Non-GAAP adjusted diluted earnings per share is estimated in the range of $0.16-$0.24 per share. The GAAP and non-GAAP EPS guidance assumes that we have 33.5 million fully diluted weighted average shares outstanding for the third quarter of fiscal year 2023. Thank you. We'll now take your questions. Thank you. We will now begin the question-and-answer session. If you have a question, please press star one one on your phone. If you wish to be removed from the queue, please press star one one again. Our first question comes from George Sutton from Craig-Hallum. Your line is open. My apologies. Our first question does come from Gary Prestopino. Mr. Prestopino from Barrington Research. Hey, Jorge, could you? Your line is open. Yep. Can you guys hear me? Yes, Gary. Good morning. Good morning. Hey, Jorge, I couldn't write it down fast enough. What are you looking at for a revenue to GMV percentage for this quarter coming up? In the mid-20s. This past quarter, driven by, mainly by the retail mix of purchase and consignment, drove that percentage higher. We expect it to come back down to the mid-20s. Okay, great. I just didn't get that. Bill, it looks like, you know, the GMV was up pretty dramatically in... Well, it was up nicely in the retail segment. The revenue was up, but yet your segment direct profit, you know, was up only $100,000. What exactly is going on there to cause that delta to where the profit is nowhere near what the revenue and GMV growth is? Thanks for the question. The retail consumer has shifted the basket of goods they're buying in this current year to a broader number of lower value items versus the fewer higher value items. We're seeing that play out both in the results reported by many of the omni-channel leaders in their comp store sales and then in the returns flow that ultimately hit our marketplace. Some lower margin goods which represent kind of where the sentiment of consumers are, and in some cases, we've provided our facilities to receive, sort, and sell those items, which are a higher touch flow of goods this year versus the prior year period. We're counteracting that, Gary, with some of our new programs. We were given an award for a sell and play solution as a tech-enabled solution to allow our retail partners to lot and sell on our Liquidation.com marketplace directly from their facilities. We don't even touch the goods, and that's growing very nicely. That's an area that we think has potential because it reduces sort of the total supply chain cost, the total shipping costs across the entire value chain. In other instance, we're looking to grow our margins by taking certain higher value goods that we can identify and break out and sell to a consumer audience. We're doing that in our Phoenix and now Cincinnati AllSurplus Deals locations. This allows us to capture a larger audience of consumer end user buyers who pay meaningfully more for the items that we offer for sale. The sale still occurs in an online auction format. The winning bidder picks the item up curbside from our fulfillment center. We're not involved in shipping the item to the consumer. Okay. Thank you for that. Then just, kind of just looking at the, some of the KPIs and the metrics, it looks to me like your GMV per transaction processed was up almost 25%. Yet, you know, some of your... Well, the biggest ticket item there would be real estate that was probably down, right? Given the environment you're operating in. Well, yeah. I'm sorry, Could you get maybe elaborate on that a little bit? Sure. I think you're astute in noting that we've had a mix of goods that includes more heavy equipment in our fleet business, which is another sell in place model that's covered under our CAG segment, has continued to grow much faster than the overall growth of the company, and that's a higher ticket item. We're starting to see some normalization in the vehicle supply chain, so we're handling more vehicles and we're not all the way back yet, but, you know, those tend to improve the value. The other thing we had to do in our retail business, we grouped a lot of the lower value retail returns into pallets, and that boosted the average order value up a bit versus the prior year period. Those are things that have resulted in that +20% year-over-year average transaction value. Just one last question. Could you just briefly, again, since it's kind of a new business for you, just explain what's going on in the foreclosed real estate market that is impacting Bid4Assets? Yeah. There's a couple things. There's some macro trends and then some market specific developments. I think overall it's been very interesting to see that nationally, the foreclosure rate has been near decade lows, both for mortgage foreclosure and tax foreclosure. I think there's a lot of policy decisions made to defer and prevent that from happening. If that regresses to the mean, and there's various data charts, I think, you know, we can send one to you offline. If that were to regress to more of the 10-year average, you know, you'd see probably a 50%-75% increase in just the number of foreclosures. We're talking about in 1.5%-2% going to 3%, something like that. That has put a limiter on what is in the upper funnel of assets that need to be processed and sold through our real estate marketplace. I think on the tax lien side, you've had some local government decisions made to defer and postpone those liens from being liquidated to pay the taxes. That was really sort of a consumer friendly policy coming out of the pandemic. I think those are likely to dissipate and be removed over time, those restrictions, and then you'll probably normalize the number of properties that go to sale and, you know, people collect, you know, these agencies collect their taxes to run their government functions. We saw some of that. Finally, we're working with a number of jurisdictions on legislation that will clarify online sales as a not only legal, but it may be even a recommended best practice. That is something that we're confident will improve the overall size of the market opportunity and the volume that we're processing in the Bid4Assets marketplace. Okay. Thank you very much. Thank you. Our next question comes from Craig-Hallum. Your line is open. Hey, guys, it's George. Sorry for the confusion. On the last question, Bill, I just wanna confirm or sort of in cahoots on this concept of Bid4Assets is an enormous secular opportunity. yes, there are some complications that are largely around COVID, where we sort of forewent some of these opportunities and logical moves, the secular component of this is absolutely happening, and your belief is consistent. Is that correct? That's correct. You know, we have been asked to present to staffers and state legislatures, highlighting case studies on what we've been doing from California to Pennsylvania, because I think there are a lot of people that are interested. Why are they interested in online sales? One, it's easier to administer for the government, you know, employee. Two, it does improve home values, and the increase in home values ripples through a community in terms of real estate appraisals. Everybody's assets benefit when things sell for more money, and they are harmed if assets are given away in a fire sale. The other thing to note is the borrower or homeowner keeps the upside above any lien when they sell the asset for more money. That's another key factor that I think is driving this broad secular opportunity. Finally, ease of access. You know, maybe at the margin, there's some voice in a rural location that says, "Well, we don't have access to broadband or internet," but that's very rare. Most of our high-quality opportunities are in more densified, large metro areas. Being able to log in by your phone, you know, from your laptop is far more convenient than getting in your car and driving to a county courthouse. We think accessibility is greatly enhanced for the bidder population by having a convenient online sales channel and marketplace. You know, anytime you have a disruptive technology, there are incumbents who don't like it. There are people that have benefited from the old school way, whether it be certain lawyers that made money on preparing, you know, physical tax lien documentation or, you know, a few local auctioneer players. That's normal. We've seen that in the history of other marketplaces going online. I think over time, clearly this is the most efficacious way to deal with the real estate asset class. That's great. Thank you. Bill, the most often asked question, particularly recently, from clients, is around the macro. You've been through a couple of these cycles already. Can you talk about how the macro influences the demand side of your equation and then also the supply side and what's the net dynamic? I understand it's complicated because of the different pieces of the business, but I think it'd be helpful on a call to address that because it's the most often asked question. Sure. This marketplace that we manage, this circular second, call it secondary market, value-driven market, is extremely resilient and extremely interesting for businesses, particularly small businesses and consumer buyers during a recession. People are, both on the business side and the consumer side, trading down to save money and get more value for their dollar, and we make that happen. We can give our clients access to a whole range of operating equipment, vehicles, retail consumer goods at a better price. As a very trusted, long-standing marketplace, people don't feel that they're gonna be exposed to waste, fraud, or abuse. Frankly, that's a big problem in a recession. People get all kinds of fraudulent messages and lose money by clicking on the wrong offer. The fact that we're a transparent public reporting company with a strong 20-plus year track record is very important for both the small business buyer and the consumer buyer. They're looking to save money. They're online. They can be more efficient. Rather than driving around looking for deals, they can get online and see really the whole marketplace in a one-stop shop. The buyer base has been very resilient. We've not seen any liquidity issues at all with, let's say, a banking crisis or potential crisis affecting the buyer side. We've got very strong liquidity. We've had record sales results for a number of the assets that we've sold, including some high ticket items in our Capital Assets Group business. We see very strong buyer liquidity and probably that continues to grow in a slow growth or recessionary environment. On the seller side, well, you look at any balance sheet and people want liquidity, you know. If you don't have a really good, high-quality business case for using your assets, you're gonna sell those assets, and you're gonna free up those idle assets and raise cash. We're a market maker for the industrial community, the government and retail supply chain community. The thing about our business is, you know, the velocity of how quickly we can sell things, the fact that we can cover 500 plus asset categories with a single solution, very helpful for our clients. I think they're all looking to, you know, be liquid as we move into a leaner, lower growth environment. We're having lots of conversations about, you know, allowing clients to sell directly on our marketplace, use our marketplace for a broader array of assets, and, you know, that is helping us improve our market share. Great perspective. Thanks for taking the questions. Yeah, thank you. We have no further questions at this time. Thank you, ladies and gentlemen. That concludes today's call. Thank you for participating, and you may now disconnect.