Good day, ladies and gentlemen, and welcome to the Third Quarter 2012 Liquidity Services, Inc. Earnings Conference Call. My name is Keith, and I'll be your operator for today. [Operator Instructions] As a reminder, today's conference is being recorded for replay purposes. And I would now like to turn the conference over to your to Ms. Julie Davis, Director of Investor Relations. Please go ahead.

Thank you, Keith. Hello, and welcome to our third 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 reflect management's views as of today, July 31, 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. The supplemental operating data includes Gross Merchandise Volume and should not be considered as substitute for, or superior to, GAAP results. At this time, I'd like to turn the presentation over to your our CEO, Bill Angrick.

Thanks, Julie. Good morning, and welcome to our Q3 earnings call. I'll begin the session by reviewing our Q3 financial performance. Next, I will turn it over to Jim for more details on the quarter and on our outlook for the remainder of fiscal year 2012. Finally, I'll provide context on where we stand in our company's overall development. During Q3, Liquidity Services reported strong financial results as we expanded our share and leadership position in the 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. Q3 GMV was up 52% year-over-year to $225.6 million, driven by growth in the volume of goods in our retail supply chain and government marketplaces by both existing and new clients. Adjusted EBITDA of $33.4 million was up 121% year-over-year. And adjusted EPS during Q3 was $0.56, up 115% year-over-year when excluding tax items, driven by improved operating leverage on higher volume. In addition to generating strong financial results, our team advanced all key elements of our growth strategy during this quarter, driving organic growth, innovation and external growth via acquisitions. During the quarter, we enjoyed broad-based organic growth as we expanded our market share within both the commercial and public sector market. Our value proposition is resonating with retailers, manufacturers and public sector agencies, which is reinforcing our network effect and resulting in new client wins in the reverse supply chain market. Our team has done an excellent job handling our increased volumes while maintaining a high level of service and quality to our clients and buying customers. Our consistent execution has enabled Liquidity Services to become the trusted provider of choice in our industry with over…

Thanks, Bill. Our record third quarter results have put 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, exemplified by $99.5 million of adjusted EBITDA over the last year. Our seller base has continued to grow, as corporations and public sector agencies focus on reducing costs, improving transparency and working capital flows by outsourcing reverse supply chain activities. As corporations and public sector agencies increasingly prefer service providers with a proven track record, innovative technology solutions and demonstrated financial strength, we have continued to penetrate our large, highly fragmented markets. Our strong results for the quarter were driven by a record volume, in both our retail supply chain group, which did not slow down from its seasonal high in the second quarter, as we've continued to add new clients and further penetrate existing clients, and continued growth in our public sector verticals. In addition to strong core business operating results for the quarter, we continue to make investments to drive long-term growth. early July, we closed the GoIndustry acquisition and commenced the integration of this business. Next, I'll comment on the third quarter financial results which came in above our guidance ranges. Total GMV increased to a record $225.6 million, up 52.3% year-over-year. GMV in our commercial marketplaces increased to a record $133.5 million, up 112.9% year-over-year as a result of the strong performance already discussed and the Jacobs acquisition. GMV in our GovDeals for state and local government marketplace increased to a record $37.9 million, up 9.5% year-over-year as we continue to add…

Thank you, Jim. As we reflect on our strong Q3 results, we have renewed excitement of where we can take our business. Though now have the scale of a $1 billion GMV business, we have only 1% penetration of the highly-fragmented $100 billion global reverse supply chain market. Indeed, we are merely at the beginning of our journey to transform the global reverse supply chain. We have conviction that the asset recovery process will move online just as other business functions have to capture efficiencies and improve transparency for professional sellers and buyers. Liquidity Services will provide the expertise, marketplace platform and services to accelerate this trend. Why do we have conviction that we can lead this transformation? Our credibility. We have an outstanding record of past performance serving the world's largest organizations in the biggest industry sectors in the world: retail, energy, transportation, health care, consumer packaged goods, technology and the public sector. Our strong client relationships and track record with the leading companies, in each of these industry sectors, is resulting in the referral of new business across the supply chain. We are being introduced by retailers to their OEM suppliers, by OEM suppliers to their retail partners, and by service providers to complement their offering. Second, we have outstanding domain expertise and global coverage. Liquidity service has unmatched scale and expertise in bringing surplus goods to market for the world's largest organizations. Blue-chip multinational clients and public sector agencies are increasingly choosing to work with Liquidity Services because we cover the full range of products and asset conditions used in their business footprint and supply chain; we support all geographic regions where they conduct business; we are secure and compliant to local, federal and international laws and regulations; we integrate with their IT and financial infrastructure to…

[Operator Instructions] Your first question is from the line of Colin Sebastian from Robert W. Baird. Colin A. Sebastian - Robert W. Baird & Co. Incorporated, Research Division: I guess, first, to drill down a little bit in the organic growth in the commercial segment, you talked about growth for both the new customers and existing partners. I wonder if you can maybe put a finer line on that? Perhaps, even how much is from new customers versus greater allocation that you're seeing from your existing partners? And then secondly, I want to ask about the operating leverage a bit. You've been showing good leverage across each operating expense line and -- for several years now, and going forward, I wonder where we should expect the bulk of operating leverage to continue? On which items you expect to see that?

Colin, let me just give you 2 remarks on growth. I think when you see the investor deck, that we normally update quarterly, you'll note a quite expanded range of blue-chip global companies that are working with us across the supply chain. In fact, we have about 140 Fortune 1000 clients now doing business with us. And what we find, frankly, is that blue-chip companies are more comfortable working with solutions providers and partners used by other blue-chip companies. And that's really benefiting us. We see a modest penetration today in the breath of services we can provide with these existing clients. We have a significant opportunity to cross both services across these large global clients. I'd say that we also meet with, regularly, the senior management of these clients. And not only are they pleased with the progress we're making and with our services, but they're increasingly viewing us as a strategic supply chain partner that can do more for them and not just in a region or a country, but on a global basis. And we're attacking issues that are very macro in nature and where these clients are inviting us in to help address things like sustainability. We're launching first of their kind programs across asset management, redeployment, asset disposition, valuation services, scrap recycling, helping attack Zero Waste initiatives. So whether it's on the manufacturer side, working with suppliers to improve the return to vendor process, eliminate transportation cost, to maximize margin because we're able to turn products quicker through our global marketplace, on the retailer side, to streamline and outsource the entire process, we're seeing outstanding receptivity for what we're doing and we'd never had a broader portfolio of organic growth opportunities. Now I think you followed us for a long while, we have long had a secular growth target of 15% to 20% organic growth. And we're, frankly, significantly achieving that, today. And we see that as sustainable, given the breadth of clients.

Colin, I think, on the operating leverage, when we continue to get strong leverage really across the entire organization, I think, obviously, you're familiar with our business model, most of our fixed costs are in our G&A line, and so I expect to get the most leverage out of that line followed by technology and operations, where we make it a little leverage. [indiscernible] the marketing, as you know, we continue to invest in future growth, I wouldn't expect to see a whole lot of leverage on that line as we continue to try to penetrate fragmented markets. Colin A. Sebastian - Robert W. Baird & Co. Incorporated, Research Division: And Jim, just a clarification on that. So if we continue to see more of a mixed shift to the commercial segment, there's -- we should still assume that there's room for margins to expand?

Again, I mean , I think, it depends, Colin, on your measurement of GMV versus revenue. As we've discussed with our acquisition of GoIndustry, we're currently running that business at a breakeven -- so it's small profit. I think next year, while we see a profit tally but it will be less than our corporate average as far as margins. And then we'll be bringing those backup over fiscal '14 to '15 to really our corporate average.

Your next question is from the line of Jordan Rohan with Stifel, Nicolaus. Jordan Rohan - Stifel, Nicolaus & Co., Inc., Research Division: I have a couple of questions. First of all, I'm trying to dig into the guidance a little bit on GMV. I think you beat the high-end of your prior guided range for the fiscal third quarter by around $20 million, meaning, the fact that you raised the bar for the annual by $60 million means there's a $40 million net increase at the high-end. How much of that is due to GoIndustry-DoveBid? I think the deal closed in early July, so you got most of the quarter there. And what kind of seasonality might there be in that business? And how do we think about what the GMV that exists for that business, for your next fiscal year starts October 1?

Absolutely, Jordan. On the -- let me take the seasonality call first, because I think it'll be easy to understand that -- how it affects the last quarter and, obviously, next -- your numbers for next fiscal year. When you look at the GoIndustry business, obviously, selling high-value capital assets, particularly towards the manufacturing sector, very similar seasonal business to a lot of our energy clients. Most of these clients have a calendar year-end, which means there's normally a larger push in the December quarter to move things out before the end of the fiscal year. Summertime tends to be a little light and the first quarter tends to be a lot -- I say the first quarter, first quarter of the calendar year, so the March quarter tends to be a little lighter. So when you look at the next quarter, we expect somewhere around 35 -- kind of the high 30s in GMV from GoIndustry. And again, that would have really an immaterial effect on the bottom line, as we indicated it already in our earnings release -- I mean, I'm sorry, acquisition release going on. Jordan Rohan - Stifel, Nicolaus & Co., Inc., Research Division: Great. And one follow-up question. You said an immaterial effect on the bottom line, but obviously, there's some reduction in net interest income that you get on the cash that was spent. What I'm trying to figure out is, if you back into the EBITDA impact for the quarter and for next fiscal year, how should I actually think about modeling GoIndustry-DoveBid. There must be some EBITDA.

Sure. Well, again, it's not a lot in this quarter here, Jordan, as we indicated. First off, cash out of the door for the acquisition was not very significant. And as you know, the total overall deal was about $31 million. Most of that would be assumption of liabilities which should not have get paid off with the transaction. I would call it more a working capital liability. We already gave an $11 million equity value for the business. So the -- as you know, the interest return on cash in the bank today is not very significant. So again, immaterial effect especially after taxes on that front. I think when you look at EBITDA, again, you can trail-blaze that based on the $0.01 to $0.03 guidance that we've already given for that business for next year. And you'll back into that number, obviously, we would expect our share count to be similar to what it is right now, around that $33 million-bogey. And we expect our tax rate to be consistent next year with this year, which is around that 40% mark. Jordan Rohan - Stifel, Nicolaus & Co., Inc., Research Division: Last follow-up question, if the impact is so immaterial, what is the strategic value of doing this acquisition? When will the financial impact be more significant?

When you look at how these global clients think and operate, it takes years to penetrate them in multiple geographies. And we give high marks to GoIndustry's organization for penetrating these clients, not just in the corporate headquarters' suite, but throughout their supply chain in multiple continents. And so, there's a really fertile ground for us to do a couple of things. One is, introduce a technology platform, really a software-as-a-service platform, called Asset Zone, to allow these global companies to collaborate and manage the asset -- disposition asset recovery function. In some cases, these clients have more than 100 manufacturing locations globally and we're moving all that activity online, and then we're connecting it to a transactional marketplace. No one else is doing this in the manufacturers supply chains, so a very interesting opportunity. We think that take rates, actually, with the capital assets clients are very robust. Why is that? Well, there are many factors other than price that these clients value in choosing a service provider in a marketplace. Brand reputation, asset redeployment, recycling solutions, customized reporting, export control compliance, you have the ability to drive this internal collaboration across that function, not like a sales force function for that sales organization. So we're going to see take rates, we think, expand, as these global clients adopt more and more of our value-added services in a lean economic time, we believe this functions right for outsourcing in a way that allows us to improve take rates and drive double-digit EBITDA margin, as a percentage of GMV, when fully integrated. So, I think, that can give you what you need in terms of where this business is growing for us. And it's also the case that we have many large retailers that we only work with in the United States, but they are global in scale and own a lot of property, plant and equipment, they're very interested in leveraging those set of services and geographic support to grow their business with us. So, that's where we see a lot of cross-pollination by having this range of services. And of course, there's more detail on why we view this as strategic in our acquisition announcement and our closing announcement. And we're happy to elaborate on that off-line.

Your next question is from the line of Shawn Milne from Janney Capital Markets.

I want to just, Jim, follow-up briefly on GoIndustry. Can you just confirm the bulk of that is -- would be booked through the consignment part of your model? And then secondly, just given the -- what you talked about in terms of the acquisition, I mean still very good take rates but, I think, their cost structure was somewhat bloated. Should we expect that accretion to be a more back half weighted in fiscal '13, and I have a follow-up.

Sure, absolutely Shawn. If you take a look at the top line sources of revenue from GoIndustry, in way they have a couple of different value-added services, Shawn, where the bulk of their fees are based on the consignment model. So again, they're selling capital assets in the consignment model, in place around the world. Very similar to what we do with all of our energy and large industrial clients today. When you look at some of the value-added services they've provided, Bill mentioned a couple of them already, Asset Zone, they've got valuation services, inspection services, and inventory of assets for clients, when needed. So they've got a whole field service organizations spread out around the world, they get paid fees for these services. So again, it's a high value to the client, as indicated by the higher take rates that Bill discussed earlier. So when you look at where that's going to come through on the bottom line, you'll have some fee-for-service that's just pure revenue, meaning there won't be GMV associated with it. That, for the most part, will be immaterial to the organization as a whole. And then you have the largest portion of the business will be consignment. On the cost structure, the reality is that they have scaled this business to provide the high level of service for all these multinational clients. Now as a small company, that's a difficult task to do and try to leverage your scale. The reality shown us, as that the cross-selling opportunities we have, with all these multinational clients and, by the way, a model that we've proven already would be the Fidelity International acquisition, the TruckCenter acquisition, our ability to provide additional services, sell additional assets for these clients around the world, is where we're going to get a lot of synergy to enable them to scale their growth. Obviously, we've got the largest amount of cost savings and synergies here in the U.S., because we can support them from the technology front, accounting front and back-office. In addition, they were a publicly traded company on the A market in the U.K. Those costs are eliminated already. In addition, we did remove the CFO and the CEO, obviously, there's no board fees or anything else, as well as any sort of directors and officers. In short, it's all the things you can imagine. Listing fees as being as a being publicly traded company. Those costs were over $2 million a year, and we've already removed them. So again, the business will get off the ground running, albeit, not optimal margins, as Bill indicated. We think we can get those margins up over the next couple of years as we grow the business.

Let me just add one other comment. Some folks would say, why do more capital assets? So when you look at the roster of corporate clients that GoIndustry has served, at a very high level for many years, and look at our clients, there are just obvious conversations that are of a strategic nature for us to have. It's public knowledge that GoIndustry-DoveBid was Supplier of the Year for Procter & Gamble, which had something like 30,000 vendors. They're the world's largest supplier to retailers globally. While we happen to work with the world's largest retailer, since 2005 had an excellent relationship at a very high level. And here you have 2 companies focused on removing waste and be more efficient in the handling of material, equipment, inventory. And we're in a unique situation, in a unique role to be a strategic buyer's advisor to both these companies, to help them streamlining and the improve the reverse supply chain. That's unique and that's one of the elements of this acquisition that underscores the strategic value of The Liquidity Services.

And Jim, just a follow-up to you're made a -- prepared remarks that your retail business did not slow down sequentially. I noticed some retailers happen to run some programs on consignment, some on purchase from quarter-to-quarter. But looks like the purchased business was down quarter-over-quarter, is that just Jacobs coming off of a very high level of holiday returns and slowing down into that seasonally into the summer or is it some other -- something else going on there?

Yes, really, Shawn, that was just a mix shift. There was very little change in the Jacobs business quarter-to-quarter. Again, almost -- I would call it almost flat which, again, was a positive result given the seasonality of the retail nature of that business. The mix of consignment in purchases, just depends on various factors, meaning penetration of clients and programs, product flows with various clients and, what I'll tell you is that, very difficult to predict. As you don't model our business based on consignment or purchase, we're focused on top line GMV and driving profitability based on that GMV. We did have some new programs come online this quarter that really deflected that seasonality that we have seen in prior years. So again, continued growth in what I would call the legacy retail supply chain business, for that matter. And again, strong continued performance with our existing clients.

Your next question is from Jason Helfstein with Oppenheimer. Jason S. Helfstein - Oppenheimer & Co. Inc., Research Division: Two questions, most of my questions have been answered already. Bill, you referenced kind of -- in the Investor Day, certain new clients, is there any metric you guys can break out? Total number of clients versus the year ago, just to get a sense of new client growth because, I think, their numbers have been pretty impressive. Secondly, for those who are new to the Liquidity story, can you review the RFP process for both the surplus, scrap contacts so people can get a better understanding of how that goes?

Sure. I'd say we doubled our global 1,000 client base in the last year. We have expanded our industry coverage, we've expanded our asset and flash product, coverage and expertise. We have expanded our geographic coverage that where we serve these clients. We've expanded our service offering, Jim mentioned valuation. Every auction that's completed provides information that is valuable to people in the reverse supply chain, combined with GoIndustry-DoveBid, we've appraised 3 million individual assets in the history of the company, services like desktop appraisal or, obviously, addressable for our clients, something that they would highly value. And most of the technology and the product roadmap is directly responsive to conversations we've had at the senior level within these blue-chip corporate clients. So we look at advancing our strategic plan, we believe we've made great progress on that. Many of the services that we provide are applicable not only in the commercial market, but also the public sector market. And with respect to the DoD. I think the DoD has continued to ask us to expand our scope of services, providing technology, software, storage services, compliance management services. I think the strongest statement of their sentiment is what they have done in their public announcement of awarding us the large business vendor excellence award. This is the second year in row that we've won that, we've won that award, that Vendors Excellence Award from the DLA and the fourth over the history of the company. And we've worked with 4,700 government clients and 4,700 contracts. And I can tell you that past performance is an important distinguishing factor in the way these clients look at us. And I believe that the DoD values the compliance management and Zero Defect process that has been built together with them and deployed across such a variety of geographic locations and property that it's a very important element to their go forward plans. I also believe this a non-zero probability of the DoD having to manage multiple property searches in the future. And that it's important for them to have consistency in preset software services logistics and support during those periods where they're changing either the internal management team, streamlining resources and managing potential global requirements within the military branches for their services, all of which, we believe, strengthens the probability of us serving them for many years into the future. The procurement process is something that is managed by the DLA centrally. We have no role in that process. We have high confidence that they will exercise the renewal options for everything that I just explained and, at such time, we'll make that publicly available to both to us and to the market.

If I can follow up, Jason, on that too, I mean as Bill indicated, really REP the process itself is a 2-part process. The most important thing to the Department of Defense is the compliance, the ability to actually perform on the contract, and all the things that Bill had indicated earlier. So to get even to the economic part of this discussion, if you would, around an RFP, you've got to pass that first part and that's where the 10 years of serving this client, actually, I'm sorry, we're now in our 11th year of serving this client, make the difference. And the other thing I'd like to point out is that there's a lot of discussion about the DoD on budgets, tightening the belt, if you would, and you have to remember we are a cost-saving solution for the Department of Defense. They have been able to eliminate hundreds of the employees because of our service and our ability to efficiently sell these product in online auction marketplace versus having to sell them in place at over 200 bases around the country. Today, if you remember, we operate in over 78 bases, where we physically man posts. We also put people remotely in places once property is accumulated. And when you look at what the DoD is trying to do, if there's going to be a cost restructuring with inside the organization, they are talk about closing bases. Something that really has not happened in the past. Although there's been discussion of graphing a path, we have not seen -- -- maybe, much as the handful of bases closed over the last couple of years, really since 2005. There's only been about 8 bases that have closed since 2005. So really not a significant number if that's an…

Sure. I think, Jason, we've been doing this for a long time. We have priced over 4,700 government contracts. We have a proven track record of generating good returns on effort and investment, and margins reflect the range of services we're asked to provide, the level of risk assumption that we take on, the range of products we're asked to handle and sell. And as we have shown, we'll be good stewards of value in working through whatever the procurement requires. And we're very confident that we have, again, the experience to manage through any pricing model, we have the data to support our decision-making and I'm very comfortable about that.

Your next question is from the line of Gary Prestopino with Barrington Research.

Did you -- have you made public what the take rate is on GoIndustry, percentage?

I think, we've said, probably -- during conversations, when we initial announced this transaction, this is a company that commands 20% gross commission on the asset value sold.

Yes, Gary, these, I can remember, GoIndustry was traded on the AIM, all their historical financials are currently available. To be clear, we will be filing an 8-K that specifically identifies the performance of that business over the last 9 months, as well as calendar year 2011. They were a calendar year-based company, so that calendar year information, by the way, is already available, if you'd like to get...

And I would add, this is a business where there's a inventory risk, that take rate can be higher or lower, depending upon the range of services that the client elects to use.

Okay. So that, you said the take rate is 20% gross commission on the actual assets? That doesn't include the services or it does?

That's the historical average, Gary. And what I'm saying is, we're rolling out additional services that can move that higher, should the client elects to use those. In other cases, clients may take on some of their own responsibilities to load assets into a marketplace, like we do for our GovDeals clients, in which case we charge a lower fee.

So when you're talking about capital assets, are you talking about things like industrial equipment? Machines? Or is it more or less kind of parallel to what you're doing in the United States with network services, in terms of what you're selling.

Well, the answer is both. We've expanded the volume of equipment and things like transportation. In terms of scrap metal, material handling equipment, machine tools, but GoIndustry, as noted when we acquired the company, also is expanding us into a brand new industry verticals that require the same ability to connect supply with demand, and do so efficiently and globally, such as health care and biopharma. If you look at the CapEx on lab and test equipment, for example, it's significant. And there's a refresh of that equipment every year or 2. And so, there's a consistent supply that these to be managed and sold in that market. We also have global manufacturers with process lines inside the 4 walls of a warehouse or manufacturing plant. That equipment is upgraded and replaced on a regular basis. We do a lot of additional work in the technology marketplace. We talked about surface-mount technology that's being sold today in Japan and South Korea. These are global electronics manufacturing enterprises that are constantly upgrading the equipment to provide the competitive cost advantage of producing surface-mount circuit boards, chips, mobile chips and devices. So we love the idea that we can handle the full range of inventory and equipment associated with the manufacturing supply chain.

Okay. And you said about 50% is North America? And is the rest Europe or there's split between Europe and the PacRim?

Split between Europe and the PacRim, and increasing our clients don't really look at themselves by geography, but more by industry vertical and supply chain.

And I would assume that they have their own infrastructure system there with warehouses and all similar to what you have in the U.S.?

We don't have warehouses globally and the reason is this is equipment that is sold in place from client locations. And the only thing I would say to the extent that we have business in Europe, and it's very attractive business for us. We're a countercyclical business model and we're in high demand as these industries look to be more efficient across the global supply chain.

So you're sold in place, you don't have physical, really physical locations so you have these employees going out doing valuations and instructions, et cetera. Do you go directly to where the equipment is located.

Most of the valuation work is information-based. So if you've valued over $3 million pieces of equipment, as we have, you're really able to do that work efficiently and allow clients to upload information that can be then be reviewed and feedback, provided.

Okay. And the just last question, with your growth, are we looking at maybe an uptick in capital spending, do you have to add any physical locations in the U.S. or any other parts of the world where you're operating now just because of the growth that you have '13?

Gary, we don't really perceive that at this time. I mean, certainly, adding a facility, as you know, is not very expensive. We're leasing those facilities here the U.S. we're paying $1.99, $5 or $6 a square foot. It's not very expensive. We don't really have facilities globally today, other than office location for staff. We don't foresee that being a part of the growth factor in the future but, if we do, we don't really see that as a significant cost. And when you look at our CapEx spend every year of about $5 million to $6 million, I wouldn't be surprised to see that go up a little bit, and I say a little bit, you have a couple million dollars just try to take advantage of the leadership position that we have today. But again, you're not going to see us double our CapEx spend next year or the year after.

Your next question is from the line of Dan Kurnos with The Benchmark Company.

Not much -- not too much left here to pick at but, for me this a actually a couple of high-level questions here. Could you remind us your thoughts about further international expansion now that you closed GoIndustry and whether that's an internal initiative [indiscernible] your sellers for asking for more global exposure and then now that you've really diversified the business over the past years, are there any verticals in particular where you feel you're either under-penetrated or have a strong growth opportunity either through existing assets or potential acquisitions?

Sure. We've always been a client-driven organization and as we have observed, interest on behalf of clients or industries that we're currently serving to be able to provide support outside the United States, that naturally piques our interest. In the case of the retail supply chain, clearly there is -- you peel the onion back, you've got not only the points of presence where retailers sell, you have -- instead of global suppliers that are responsible, in many cases, for taking back products from the retailer, often called a return-to-vendor process, we are having very productive conversations with those global manufacturers and their retail counterparts to step in and provide service to both sides of that equation and eliminate transportation cost, accelerate the sales cycle, recovery value for both parties and allow them to share in that margin savings. And that's one of the things that's likely to take us beyond the United States. In terms of these global manufacturers, we also recognize that, in addition to supplying retailers, they own a lot of property and plant equipment and they want to have transparency, they want to have a uniform process around the world and the way these assets are tracked and managed. They want collaboration tools they can work on internally to manage the potential redeployment of the asset before it's sold. We provide all those services in a turnkey fashion to make that process far simpler, far more convenient, and it's a standard that, we think, we can be -- become really the best practice in the manufacturing supply chain. And so, naturally, that will take us to all the growth pockets of the world. You look at a place like Asia, 60% of the world's population there, it's very young, you have a GDP that's growing at 5x to 6x the growth rate of the United States. So we're ahead of the curve and that we're -- where most of those manufacturers would want to -- are going to want to have support, we're going to be there already. Many of these companies like to have these public compliant organizations, like Liquidity Services, as their partners, because we're very sensitive to compliance with local, national or international regulations. So that's a very comforting thing and why we are being invited into these blue-chip companies.

I think in terms of the verticals...

Yes, your second question on industry verticals. Well we have a lot to do in our core markets. Yes, we're 1% penetrated. So we picked our verticals by where we see a high degree of product obsolescence due to technology development, due to wear-and-tear, due to the constant need to upgrade and replenish equipment for EPA and regulatory needs. So when you look at our markets, retail, it's a very dynamic global market. It's in need of a solution that to help clients improve cost management, transparency. A lot of these clients are shrinking to a core focus on the other target markets. They want to outsource non-core activities. That's a great match for our services. It also picks up the retail OEM supplier base, many of which are consumer electronics companies, the branded home improvement tools, housewares, computer technology companies. There's a great synergy between 2 areas. Energy. Energy spend, $350 billion a year in CapEx. They spend it whether the economy is up or down, it's a 20-year investment cycle for them. So there's a massive market there, in terms of the month of line pipe that's sold every year. The amount of transportation equipment, material handling equipment used to stage, either the exploration and production process or the downstream distribution of energy. We've had a rejuvenation of activity in the shale formations in the United States, in the frac-ing business in the United States. So there's a lot of opportunity in that core energy business for us. The transportation vertical, rolling stock, it's constantly being upgraded and replaced, either to fuel efficiency issues, driver safety issues, EPA regulation issues. We have relationships with large retailers that own thousands of units of trucks and tractor trailers that are looking for that global service. We have many large asset-based…

Bill, just one quick point of clarification that, correct me if I'm wrong, but with the GoIndustry acquisition, you guys also picked up a more robust global currency platform, yes or no?

Absolutely. Yes, multicurrency, multilingual. Yes, we render auctions now in Chinese language, in a variety of other in-country languages to help bring this global buyer base onto our marketplace.

Ladies and gentlemen, we reached the time limit for our call today, so I'd like to turn it back over to Ms. Davis for some closing remarks.

Thank you for joining our call. Unfortunately, we did exceed the time limit for our call, but Jim, Bill and I will be available for any follow-up questions and discussions.

Ladies and gentlemen, that will conclude today's conference. Thank you very much for your joining us and you may now disconnect. Have a good day.