Liquidity Services (LQDT) Says Wal-Mart (WMT) Terminated Agreement; Maintains Q1 Guidance

Liquidity Services (NASDAQ: LQDT) disclosed after the close Friday that on December 1, 2014, Wal-Mart (NYSE: WMT) provided the Company written notice terminating the Wal-Mart Agreement, effective December 8, 2014. The Termination Notice alleges that the Company failed to comply with certain provisions under the Wal-Mart Agreement with respect to service level requirements and restrictions on the disposition of merchandise. The Company disputes these allegations and is contesting the termination of the Wal-Mart Agreement with Wal-Mart. The Company had been in negotiations with Wal-Mart to address Wal-Mart’s failure to honor the Company’s exclusive right to purchase selected merchandise from Wal-Mart but was unable to reach a satisfactory resolution. The Company is currently evaluating all of its options, reserves all rights with respect to this matter and will continue to seek appropriate relief from Wal-Mart for its failure to honor the Company’s exclusive rights to purchase selected merchandise and any related actual damages the Company has incurred.

The Company does not believe that the purported termination of the Wal-Mart Agreement will result in the Company being unable to meet its financial guidance for its first fiscal quarter ending December 31, 2014.

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