Good day, ladies and gentlemen, and welcome to the First Quarter 2012 Liquidity Services Earnings Conference Call. My name is Alicia, and I will be your operator for today. [Operator Instructions] I will now like to turn the call over to Ms. Julie Davis, Director of Investor Relations. Please proceed.

Thank you, Alicia. Hello, and welcome to our first quarter fiscal year 2012 financial results conference call. Joining us today are Bill Angrick, our Chairman and Chief Executive Officer; and Jim Rallo, our Chief Financial Officer and Treasurer. We will be available for questions after our prepared remarks. The following discussion or responses to your questions reflects management's views as of today, February 1, 2012, and will include forward-looking statements. Actual results may differ materially. Additional information about factors that could potentially impact our financial results is included in today's press release and in our filings with the SEC, including our most recent Annual Report on Form 10-K. As you listen to today's call, we encourage you to have our press release in front of you, which includes our financial results, as well as metrics and commentary on the quarter. During this call, we will discuss certain non-GAAP financial measures. In our press release and our filings with the SEC, each of which is posted on our website, you will find additional disclosures regarding these non-GAAP measures, including reconciliations of these measures with comparable GAAP measures. We also use certain supplemental operating data as a measure of certain components of operating performance, which we 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'd like to turn the presentation over to our CEO, Bill Angrick.

Thanks, Julie. Good morning, and welcome to our Q1 earnings call. I'll begin this session by reviewing our Q1 financial performance and then provide context on where we stand in our company's overall development. Finally, I will turn it over to Jim for more details on the quarter and on our outlook for the balance of fiscal year 2012. During Q1, Liquidity Services reported strong financial results as we expanded our leadership position in reverse supply chain market by delivering significant value to our clients and buying customers. We exceeded our guidance range for GMV, adjusted EBITDA and adjusted EPS, while continuing to make important investments for the future. Q1 GMV was up 41% year-over-year to $179.2 million, driven by growth in the volume of high-value asset sales across our commercial and government clients, and improved merchandising on our platform. Adjusted EBITDA of $22.7 million was up 105% year-over-year. And adjusted EPS during Q1 was $0.37, up 118% year-over-year, driven by improved operating leverage on higher volume. As we reflect on our strong Q1 results, let me make a few observations on where we stand in our company's development. First, we address the fragmented $50 billion plus reverse supply chain market, which is still in the early stages of adopting professional, transparent solutions. This nascent market requires a leader to provide the technology platform and business rules to ensure the reliable execution, compliance and network effects in the purchase and sales of surplus goods. Liquidity Services is uniquely filling this market need and leading the way in our industry. Our consistent execution has enabled Liquidity Services to become the trusted provider of choice in the reverse supply chain market, with over 50 Fortune 500 corporations, over 4,000 federal, state and local government agencies, and over 1.6 million registered buyers utilizing…

Thanks, Bill. Our record first quarter results reflect market share gains and enhanced service levels and operating efficiencies across our entire business as a result of investments we have made to support our growth over the last several years, our strategy of bringing innovative technology to the reverse supply chain market and our efficient business model has translated into strong results for stockholders. For calendar year 2011, adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, has improved 60.3% to $64.3 million. Our strong results for the quarter were driven by record volumes in both our commercial capital assets and retail supply chain verticals. We historically have had a slowdown in the month of December in these verticals, and this quarter had an acceleration before the end of the year, driven by early returns to retailers and the need to sell assets before calendar year-end for many of our commercial capital assets clients. In addition to the strong core business operating results for the quarter, we closed the Jacobs Trading acquisition on October 1 and have commenced the integration of this business. Although we have a lot of work to complete in the near-term integration task of our largest acquisition to date, we are pleased to report that we're on plan on delivering better than expected growth. Next, I'll cover our first quarter financial results, which came in above our guidance ranges. Total GMV increased to $179.2 million, up 41.4% year-over-year. GMV in our U.S. commercial marketplace has increased to $103.7 million, up 71.8% year-over-year, as a result of the strong performance already discussed, the Jacobs acquisition on October 1, 2011, and the Truckcenter.com acquisition on June 1, 2011. GMV in our GovDeals, or state and local government marketplace, increased to $24.9 million, up 16.4% year-over-year as we continue…

[Operator Instructions] And the first question comes from the line of Ross Sandler with RBC Capital Markets.

I've just got 3 quick questions. First, Jim, on the full year guidance, given the 12.7% EBITDA to GMV margin that you reported in the first quarter, I think the midpoint of the full year assumes a 11.8%. So is there something that you're seeing which would actually cause margin to go down or is that just conservatism?

Ross, do you want to answer them one at a time or are we going to go through the other 2 right now?

Yes, and then the other 2, I guess, registered buyer growth was 12% in the quarter, down from 14%. Just a little color on, is there any saturation in the buyer base, or why is that decelerating given the acquisitions or is that like a definitional thing? And then last one was, just some color on the GovDeals growth rate has a little bit below the recent trajectory, so anything that's driving that?

Sure. As far as the full year margins go, Ross, again from my comments earlier, and I think we expect to be around 12% for the year. I didn't check your math on the 11.8%, but certainly, that is around 12%. We had a couple of nice things happen this quarter that drove margins a little higher, both in the retail side of our business and commercial capital assets. So from our full year guidance, we would expect to continue to have stronger margins. As you know when we originally guided for the year, we expected margins to be really around kind of 11% to 11.5%. So, we feel pretty strongly that our margin trend will continue, but again the 12% guidance that we've given is much higher than where we started the beginning of the year. On the registered buyer growth, I would -- nothing really specific in this quarter, Ross. The acquisitions, Truckcenter was done in June, so their buyer base is already been incorporated into that number. If you remember the Jacobs Trading model, for the most part, they are truckload buyers, so the number of buyers added to our buyer base really did not move the needle at all. You're getting a little bit of what I call the wall of large numbers here. But we haven't seen any changing dynamics as far as the buyer registrations. We continue to do the same marketing programs that we've done for years. We continue to attract new buyers every quarter, new bidders every quarter. And frankly, we'll continue to operate the way we have, growing that buyer base. On the GovDeals growth rate, a little bit -- that was a little bit of a tough comparison, year-over-year we had some pretty big sales in the prior year. This is not the strongest quarter for the year, as you know in GovDeals. The GovDeals, which is our public sector marketplace for state and local governments, really has the strong quarter in the June quarter. So the December quarter, the March quarter, they tend to be okay. We had again some good things happened in prior years, so there's nothing going on there other than a little bit of a tough comparison. But we're still pleased with that growth.

And the next question comes from the line of Colin Sebastian with RW Baird.

I have a couple of questions. First off on the outlook for Q2, what's implied here is, it's a pretty big drop off in the year-over-year growth rate and revenues, and I wonder if you could just walk through that in a little more detail, for example, if there's any shift of retail returns into December from January is one example, or maybe Jacobs is slower seasonally in the March quarter. And then if you could give us some indication as to the organic growth assumption in Q2, excluding the recent acquisitions?

Well, let me first say, Colin, the strategic plan we have is sound. We're very encouraged by the increasing interest and using our platform and service offering to manage the full range of returned, and in some cases, more industrial equipment. I think as we move through the holiday season, it was reported on and we experienced a change of behavior by many of the large players in the retail industry. In years past, we saw a heavy amount of in-store discounting. In this past season, I think many retailers were very protective of that margin, in-store margin and moved volumes out of the store earlier. That helped improve volume in our business. So it's hard to speculate if that's a structural change, but I can say that we observed that in many of our existing programs in 2011 and the December quarter. But I think overall, we're very optimistic about the progress we're making, particularly with the organic growth in our retail supply chain business. We have had a number of new relationships established. It's very difficult for us to forecast early on in these relationships, because of a lot of things that clients control operationally to roll things out. But I think if you look at the fiscal '12 outlook and beyond, we've never been more excited about our business.

Yes, Colin, if I could add just a couple of points, specifically. When we looked at -- when we look at the second quarter, really the second quarter is in line with where we expect it to be at the beginning of the year. So nothing -- nothing really out of the ordinary there. In fact, we expect that quarter to be up 25% plus year-over-year on the GMV, and 40% plus on the EBITDA line. So we feel good about where we've got it to. I think the different dynamics that maybe some folks have to remember about the second quarter of our businesses, is just some seasonality, let me be specific. So the cap-- commercial capital asset side of our business, as well as really the public-sector capital asset side, I mentioned the GovDeals comment earlier, but this is a down quarter for them, particularly on the commercial capital asset side where we're starting a new year. The focus is not really on moving surplus assets. We tend to pick up that business in the June quarter and the September quarter. But again, that's typically a down quarter. Now, we all know that this is a strong quarter for us in the retail side. We're dealing with a lot of store returns. We did get some of the benefit of that in December, and we're currently seeing strong product flow in January and would expect that to continue through the quarter. So again, I think overall, the top-line and the bottom-line for the quarter is coming in as planned.

Okay. so there's nothing you've seen in January that's giving you any concern about product flow or linearity of velocity through the second quarter?

Absolutely not, no.

And the next question comes from the line of Jason Helfstein with Oppenheimer.

So I'd-- just reiterate that and then another follow-up, so -- was that fair to say though, you probably saw some pull forward with respect to the capital assets business? So not only do you tend to see GovDeals seasonally weaker in the March quarter, but you may have also had some pull forward into the December quarter? Is that an accurate assessment of what I've heard you say?

I don't think so, Jason, because again the second quarter guidance that we've given really is in line with what we expected for the -- at the beginning of the year. So we did see, obviously, a good quarter, this quarter in capital assets. That was a little higher than we expected, obviously, as I mentioned in my comments. But I wouldn't define it as a pull forward. In other words, we don't expect Q2 to be lower more than our original expectations. We had always expected it to be lower just due to the seasonality.

So if I think about the kind of the impact of the acquired assets i.e. Truckcenter and Jacobs and how that impacts the GMV, I mean, can you talk about if you take the $175 million, what the implied contribution with those would be? So what the pro-forma growth for GMV would be using that $175 million? Because on our map, that's kind of nominal GMV growth, but we may not have the correct pro-forma assumptions for Truckcenter and Jacobs?

Well, again, we haven't provided a detailed guidance or forecast by individual marketplaces, Jason. So I'm not sure how to answer that question other than -- I will tell you that organically, we grew over 20% last quarter. We're not seeing really a change in that growth rate throughout the year. And obviously, the acquisitions are added to that. Again, the growth dynamics in the second quarter are just a little different because you've got to slow down the capital assets, Jacobs being -- let's go through each of the 2 acquisitions. Jacobs being a retail focused business is going to have pretty strong performance in the second quarter. Truckcenter will again have pretty weak performance in the quarter relative to the other quarters of the year. But again, both of those businesses right now, we expect them to perform as we had originally planned at the beginning of the year.

Okay. And then just 2 other quick ones. So, I mean, it seems to me that some of what we have learned from Amazon last night, fourth quarter, in particular is becoming a very apparel driven quarter, which they don't tend to do as well. And you're also seeing brands trying to be savvy about keeping certain things away from them to protect them, which would make it seem like they need more partners on the retail commercial side to help move inventory to the supply chain and that would seem beneficial to you, so I'm just curious if there's conversations that suggest that some of the trends we're seeing with Amazon and how the industry is trying to react, potentially is more beneficial to you. And then secondly, can you just comment on how you feel about the current stature of your balance sheet, your desire to fund acquisitions kind of this year into next year?

So in terms of -- retailers are looking for Liquidity Services to play an active role in managing, rebalancing of products in-store through the secondary marketplace, in some cases, using our channels in combination with their online channels to move returned goods. We're very integrated in that planning and thought process, which results in very attractive long-term growth prospects and how we're going to influence the management of this supply chain, this reverse supply chain. So we have a variety of activities underway with 35 or so very large retailers. We see the outlook for this current year is being another strong step forward in leveraging this online platform and value-added services. And we've seen other players in the industry increasingly look to us for advice, whether they be other partners, like I mentioned in the outset, other manufacturers who haven't figured out how to move branded goods to the marketplace. There was a comment about buyers earlier. We have a key role in maintaining compliance and brand protection for these large manufacturers and retailers, and so many of these items may move outside the country. And because of the volume requirement to export these goods, we have large, larger wholesale transactions with international export routes that don't necessarily move the number of registered buyers as high but are essential to meeting the needs of these clients. So we think the convergence on our platform is going to continue. We think the clients are looking for the professionalism and the compliance management around this area of the business. And I would say, just in terms of observing where we are for the year, we've moved our GMV up $10 million. At the midpoint, moved our EBITDA up $5 million for the year. We moved our EPS up $0.06 for the year. So it seems to me that there's some rebalancing that's got to occur between the March and June quarters, because our June quarter, historically, has included our Scrap venture incentive. And I don't know if that's been smoothed out in the way that the analysts are looking at this.

And Jason, a follow-up on your last one on the balance sheet. So look, our balance sheet is extremely strong. We added $20 million of cash in the balance sheet in the last quarter alone. We've got obviously $69 million of cash in the balance sheet now. We've got a line of credit, the $30 million, we haven't touched. And I will tell you that we have no issues, if we wanted to use debt to fund a transaction. We're very comfortable with that. To be point blank, we've got the flexibility that we need financially to achieve any of the acquisition goals that we have in our pipeline. That being said, whether or not anything is completed or not, it's speculation I think at this point. But I can tell you that, again, we've got the financial flexibility we need to do any of the long-term acquisitions that we can see right now.

And the next question comes from the line of Jordan Rohan with Stifel, Nicolaus.

I hate to refocus on the same thing, but I'm curious about the statement of the lower margins in the March quarter as noted in your guidance for EPS and EBITDA with all according to plan. Does that also mean very specifically that there should be a big lift in margins by the end of the year after you fought through the brunt of the integration-related expenses? And if you could be a little bit more specific of, what are you spending on in order to alleviate costs in the future? Am I thinking about this the right way? And finally, on the Jacobs, you may not give out pro-forma numbers, but are you making more money on the same truckloads of goods from Walmart's by increasing yield through your auction system? Do you have enough history to speak to that?

Let me take the first part of your question, Jordan and Bill will take the last part. On the margins, again, let me address that. So I think again the comment was, why lower margins in Q2? My point actually is the margins in Q2 are higher than what we expected at the beginning of the year. It typically, as you know, Jordan, our Q3 is the strongest margin quarter for us in the year. And the reason for that in Q3, as Bill mentioned earlier, is the Scrap incentive which is a straight drop to the bottom-line. Last year, that Scrap incentive was approximately $1.5 million. We would expect that Scrap incentive to be similar this year. And so, we would expect stronger margins in Q3 than we're going to see in Q2 and in Q4. That's just the natural seasonality of our business because of that incentive. But again, we started out this year thinking we'd be somewhere between 11% and 11.5% margin. We're now comfortable saying we're going to be around 12% margins. We feel good about the efficiencies we've gained throughout the year, specifically projects we're working on, we outlined in our last call. Most of them are IT related as far as the back office of Jacobs and our back office, as far as the warehouse management systems and things of that nature. So those are going on as planned. They will be rolled out throughout the year. And I'll let Bill to answer the last part of your question regarding the transactions moving through our marketplace versus their marketplace.

So I think the big picture here is every investment that we make people, process, infrastructure is answering the question, what does it take to be a several billion dollars GMV company? And we see, with the relationships and the credibility in the marketplace, our business growing at a very robust rate for many years. And so when we look at infrastructure investment this year, we're doing all the natural things one would want to do to support a highly-scalable, reliable marketplace. We've moved into a private-owned cloud infrastructure. We built a product development team of about 8 people new this year to manage our product development roadmap which effects how buyers sign on and get permission to view and bid on assets across our public sector and commercial marketplaces. We've got an integrated sales force and cerim tool that's allowing us to cross-sell, up-sell across consumer goods and industrial categories, in some cases, within the same corporate clients. So there is a whole stream of work there that -- you don't get payback in year 1, but certainly, going to give us more scalability down the road. The other thing about this business and one of the key drivers for organic growth and margin expansion is, the longer we spend with products and client programs, the better we get in yield. And in our longer-lived programs like the DoD or other public sector agencies, we are still getting improvements of 10% to 20% year-over-year, purely on improvement or lift in the sales value realized for the same item. That's a huge cumulative and compounding factor for us in our long-term growth is the ability to harness this data that's generated from every option to use that to inform our marketing and participation of the buyer base. And that in a marketplace model, drives long-term margin expansion. And the other thing that's nice for our business is the average transaction size continues to trend up. So we become more efficient. The average ticket, if you will, processed through a B2B channel is thousands of dollars and because of the increasing trust we have from many of the largest multinational companies, they are giving us higher-value equipment to sell, which is improving the average transaction size, which drops more dollars independent of margin to the bottom-line. So we like those dynamics over time and I think, with any large retailer, Walmart or others, absolutely, we'll be improving the yield over time, empirical evidence suggest that.

And the next question comes from the line of Shawn Milne with Janney CNE Capital Markets (sic) [Janney Montgomery Scott].

I just have 3 questions. First, Bill, can you expand a little bit up on the new relationship with eBay. I know that you had acquired a company that had worked with eBay previously? Is there something stepped up from that, if you can detail that a little bit? And secondly, Jim, I think people have beaten up the guidance enough for Q2, but are you factoring in now it seems like a bit more conservative Scrap number? Is that part of what's at play here? We saw it come down just a little bit through the end of the December quarter. And then lastly, it's just housekeeping, there's some comment about GovDeals, maybe not growing as fast in the quarter, but we've seen already this morning, it looks like if this is correct, the January numbers extremely strong in GovDeals. Is there-- did you have one big auction perhaps that maybe flip-flopped from December into January?

Let me just address this. Enterprise marketplace that we've been focused on since the day we opened our doors, is a very distinctly different marketplace than other consumer-facing businesses such as eBay. The reality is that large manufacturers and brands want a do-it-for-you solution, not a self-serve marketplace. And they recognize that. I think partners -- people that have observed this industry unfold, they've seen Liquidity Services successfully address those needs, they've been very interested in our ability to support the needs of these large brands and manufacturers to integrate into a turnkey solution. The large lot liquidity that's needed to absorb increasing volume, regular flow of goods with the pre-sale and post-sale of value-added services. And be able to provide important information to the buyers, understand what the buyers are looking for and have the trust of the buyers to do that. So I think, when you look at a working relationship with eBay, they're leveraging our strengths, and they're trying to solve the needs of large brands who may have a portion of their volume that's suitable for a consumer marketplace. Let's understand the consumer marketplace. The tolerance for less-than-new goods is very low. So there's a large percentage of volume that wouldn't normally flow to a direct consumer buyer and that's where we can step in and help and provide the full range of volume buyers. We can handle the processing and fulfillment of goods through our B2B channel and consumer channels like eBay quite well. It's just -- it truncates the cycle time for these large sellers that have to deal with these different marketplaces independently. We bring it all together under a sort of one integrated solution, which makes it very interesting. And I would say the same for large retailers. Increasingly, the traditional retailers have opened up online channels under their own brands and they have the same perspective. If they can partner with Liquidity Services to provide the data to determine whether items should be sold individually through their consumer channel or bulked and lotted through our wholesale channel, that increases their recovery, it reduces the complexity, accelerates the recovery of value in the channel, that's why clients are partnering with us.

So on the -- on your Scrap question about the slowdown in December and do we see that going in to the next quarter. Again, our budget for Scrap if you were at the beginning of the year is really unchanged from our guidance or expectations for next quarter. December normally is a slowdown for Scrap just because, again, it's not a big holiday item, obviously. And our government partners tend to take some time off during that period, so there's a flow-through of product for us. So the dynamic of the December Scrap really is-- did not have any effect on our outlook for Scrap for the next quarter. On GovDeals, as far as the strong January, glad to see you're keeping track on the websites. Yes, we did have a good January in GovDeals. That really was as expected. Again, on the state and local side, you get a little bit of holiday effect in there. People take off. They're not interested in selling as much assets. We do expect to have a decent quarter for GovDeals. Again, it's not the strongest quarter of the year. We would expect the June quarter to be much stronger in the GovDeals marketplace, that again, is just the seasonality and the rhythm of that business. But the January really kind of came in as expected.

Great, and just one follow-up, if I may. This is maybe one of the first quarters in a while where you've talked about improved efficiency in your existing retail business. I mean, are we starting to see -- and I talked a little bit about that on the call starting to see some better efficiencies in throughput through your distribution centers and in the core retail businesses? That's something that we also saw on the margins side in the December quarter.

I think that's an accurate statement. As I've mentioned, we've been growing the client portfolio. We've been adding new products and new programs to the marketplace and there's always a learning curve. This is a knowledge-based business, after all. So we're really focused on harnessing the data, understanding what we're seeing in the marketplace, and then improving. We have the continuous improvement process with how we merchandise and sell. And as we've had some experience now with these new relationships, relationships that may have started 9, 12, 18 months ago, we are now getting improved efficiency through better merchandising and higher yields. And that's driving efficiency in the business. And obviously, there's an absorption of fixed cost as we grow our volume.

And the next question comes from the line of Gary Prestopino with Barrington Research.

Could you give us some idea of -- you have a statement in here about funding major upgrades, technology infrastructure and all that. Incrementally, what kind of expenses related to this are going to hit your P&L this year?

Yes, Gary, as we laid out in the beginning of this year, after our December -- on our December call after our September quarter results, we expected to spend several million dollars this year really on several IT projects that Bill discussed just a few minutes ago, as well as the integration of Jacobs Trading. All of that is incorporated into our guidance, both historically and obviously, the upgraded guidance. That really is rolling out pro rata, if you would, over the year. And again, we are operating on plan.

Okay. So that's a pro rata rollout, across the quarters. And the question I have is, everybody's harping on this whole issue with the GMV going into Q2 versus Q1, but you mentioned something about that the capital assets business generally slows down in Q1. And in terms of your commercial, total commercial GMV, could you give us an idea of year-over-year, because of the acquisitions what you've done with the company, what the shift is or change in commercial versus retail GMV is? Is it now more heavily weighted towards capital assets versus retail? Or it is a vice versa?

Actually now with the Jacobs acquisition, Gary, pretty much half the business is retail and half the business is capital assets.

And has that been heavier in -- I guess your answer there it had always been maybe heavier in capital assets in the past?

That's correct.

[Operator Instructions] And the next question comes from the line of Dan Kurnos with Benchmark Company.

Just a couple of questions that you touched on briefly here. First, in terms of the cost of revenues as a percentage of GMV, you guys were able to hold that down even despite in Jacobs. I was just curious if that sort of point to the efficiencies that you're talking about, so maybe some color there? Secondly, in the press release, you guys had mentioned that it was sort of a merchandising and lotting strategy to scale back on the number of transactions and focus on ramping that average transaction value? So maybe some more color on that strategy and if that's expected to persist? And then finally, you had mentioned the Jacobs who present you with a tremendous opportunity to grow the retail business, and I'm just curious if you're seeing any initial returns on that from other retailers initiating or increasing their business with you?

Dan, I don't understand the first question on the cost of goods sold? Are you -- you said, in your model, I guess, you were expecting cost of goods sold to increase because of that...

No, I was just -- it was flat and year-over-year and I was just curious, what you're -- you had kept that flat year-over-year as a percentage of GMV, with the increase in retail and I was just curious if it was from increased operating efficiencies and how that might trend if it's just going to remain roughly flattish year-over-year as a percentage of GMV?

Well again, I don't see sort of that detailed level of guidance, but I would say is a lot of that is driven by the mix of the business. So in this quarter, we had a lot of consignment business. So GMV was up significantly due to consignment and that's because again commercial capital assets had a very good quarter this quarter, as I mentioned in my earlier remarks. So just when you look at the pure math of cost of goods sold to GMV, as a reminder, a consignment business doesn't really have a cost of goods sold. Because under the accounting rules, we're not buying anything. So you didn't really get the effect that you would have probably expected with the addition of Jacobs. You probably see a little bit more of that in the second quarter as we expect the commercial capital assets business, as I mentioned earlier, to come off a little bit and so therefore you'll have a higher mix of purchase model as it relates to the GMV. On the average transaction size, that's been a phenomenon, that's really been going on for the last 6 quarters. And that's being driven by a couple of things. One, larger transactions size in our retail business because again, historically, our clients have been trying to maximize efficiencies, the logistics, thus, buying larger lots from us on our Liquidation.com marketplace. In addition to Jacobs acquisition, simply added to that phenomena because itself is primarily a truckload model. And so therefore, obviously selling things by a truckload is going to have an higher average transaction size than selling items by just one or a couple of pallets. In addition, my earlier comment about the high level of capital assets in the quarter driving a lot of the top-line be, that again, capital assets sales tend to have a higher average transaction size. So it's really those 3 things that are driving that trend.

Dan, let me just add a couple of points. In terms of the opportunity in the retail supply chain, notice that we use the term retail supply chain. We don't just say retail. Because in retail supply chain, you have outlets that bring goods to consumers and you have the manufacturer supplier base that have to produce those goods and get them to the point-of-sale. We serve both constituents. And you've got to tip your hat to companies like Walmart. Walmart, for many years, has been focused on how do we reduce waste in that retail supply chain, how do we be more efficient. And the reality is, you can't be more efficient unless you can create marketplaces for all the material and inventory that may be viewed as surplus to the needs of retailers and vendors. That's what we do, we've been invited in to help be an active participants in creating a secondary channel of marketplace for the items that have, over the last 20 or 30 years, probably in many cases, ended up in the waste stream. And being able to provide a very expedient channel to sell everything from scrap metal to end-of-life material handling equipment to returned items, some of which are non-working or need to have new parts or are missing accessories, that's a huge opportunity. You look at the vendor base to retailers, like Procter & Gamble, another huge proponent of sustainability. We're right in the middle of that with the world’s largest secondary marketplace with large lot buyers who can stand ready to absorb a lot of this product, that's very excited and very unique. And so in many cases, we are a sustainability platform as much as the marketplace. So we'll continue to have opportunity there. In terms of the lotting strategy, recognize that certain items have to be exported and you're not going to have as many buyers, buying at the container load size, as if you would with a pallet and so that will affect the level of buyer participation in the marketplace. And in other cases, you have very specific industrial assets where the universe of potential buyers in the world would be measured in thousands. On the consumer goods side, mass merchandise items might have millions of potential buyers. So there's a big difference in the addressable market for certain equipment.

Ladies and gentlemen, this concludes the question-and-answer session for today's call. I would now like to hand the call over to Ms. Julie Davis for closing remarks.

As always, we appreciate your participation on today's call. If you have any additional questions, please contact either Jim Rallo or myself. Thank you.

Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect.