PR
Newswire -- August 5, 2010 SALT
LAKE CITY, Aug. 5 /PRNewswire-FirstCall/ -- Overstock.com, Inc. (Nasdaq:
OSTK)
today reported financial results for the quarter ended June 30, 2010. Key
Q2 2010 metrics (comparison to Q2 2009):
-- Revenue: $231.3M vs. $174.9M (32% increase);
-- Gross margin: 18.0% vs.
20.7% (270 basis point decrease);
-- Gross profit: $41.6M vs. $36.3M (15%
increase);
-- Sales and marketing expense: $14.2M vs. $11.2M (27% increase);
-- Contribution (non-GAAP measure): $27.4M vs. $25.1M (9% increase);
-- G&A/Technology
expense: $28.7M vs. $25.0M (15% increase);
-- Net income (loss) attributable
to common shares: $(1.4)M vs. $319,000
($1.7M decrease); and
-- Diluted
EPS: $(0.06)/share vs. $0.01/share ($0.07/share decrease). The
Company will hold a conference call and webcast to discuss its second quarter
2010 financial results on Monday, August 9, 2010 at 3:00 p.m. Eastern Time. Webcast
information To
access the live webcast and presentation slides, please go to http://investors.overstock.com.
To listen to the conference call via telephone, dial (866) 551-1816 and enter
conference ID 90318167 when prompted. Participants outside the United States or
Canada who do not have Internet access should dial
+1 (706) 758-1198 and enter
conference ID 90318167 when prompted. Replay A
replay of the webcast will be available at http://investors.overstock.com starting
2 hours after the live call has ended. An audio replay of the webcast will be
available via telephone starting at 6:00 p.m. Eastern Time on Monday, August 9,
2010, through 11:59 p.m. Eastern Time on Monday, August 16, 2010. To listen to
the recorded webcast by phone, please dial (800) 642-1687 and enter conference
ID 90318167 when prompted. Outside the U.S. or Canada please dial +1
(706)
645-9291 and enter conference ID 90318167 when prompted. Please
email questions to Kevin Moon at kmoon@overstock.com prior to the conference call. Key
financial and operating metrics discussion: Total
revenue -- Total revenue for the second quarter of 2010 and 2009 was
$231.3
million and $174.9 million, respectively, a 32% increase. Gross
profit -- Gross profit for the second quarter of 2010 and 2009 was $41.6 million
and $36.3 million, respectively, a 15% increase, representing 18.0% and 20.7%
of total revenue for those respective periods. Contribution
(a non-GAAP financial measure) and contribution margin (a non-GAAP financial measure)
-- Contribution for the second quarter of 2010 and 2009 was
$27.4 million (11.8%
contribution margin) and $25.1 million (14.4% contribution margin), respectively,
a 9% increase in contribution, and a 260 basis point decrease in contribution
margin. Contribution
(a non-GAAP financial measure) (which we reconcile to "gross profit"
in our statement of operations) consists of gross profit less sales and marketing
expense and reflects an additional way of viewing our results.
Contribution
margin is contribution as a percentage of total net revenue. When viewed with
our GAAP gross profit less sales and marketing expenses, we believe contribution
and contribution margin provides management and users of the financial statements
information about our ability to cover our fixed operating costs, such as technology
and general and administrative expenses. Contribution and contribution margin
are used in addition to and in conjunction with results presented in accordance
with GAAP and should not be relied upon to the exclusion of GAAP financial measures.
You should review our financial statements and publicly-filed reports in their
entirety and not rely on any single financial measure. The material limitation
associated with the use of contribution is that it is an incomplete measure of
profitability as it does not include all operating expenses or non-operating income
and expenses. Management compensates for these limitations when using this measure
by looking at other GAAP measures, such as operating income (loss) and net income
(loss). For
further details on contribution, see the calculation of this non-GAAP financial
measure below (in thousands):
Three months ended
June 30,
2010 2009
---- ----
Total net revenue $231,253 $174,898
Cost of goods sold 189,674 138,611
------- -------
Gross profit 41,579 36,287
Less: Sales and
marketing expense 14,179 11,162
------ ------
Contribution $27,400 $25,125
------- -------
Contribution margin 11.8% 14.4% Sales
and marketing expenses -- Sales and marketing expenses totaled $14.2 million and
$11.2 million for the second quarter of 2010 and 2009, respectively, a 27% increase,
and representing 6.1% and 6.4% of revenue for those respective periods. Technology
expenses -- Technology expenses totaled $14.2 million and $12.7 million for the
second quarter of 2010 and 2009, respectively, a 12% increase, and representing
6.1% and 7.3% of revenue for those respective periods. General
and administrative ("G&A") expenses -- G&A expenses totaled
$14.5 million and $12.3 million for the second quarter of 2010 and 2009, respectively,
an 18% increase, and representing 6.3% and 6.9% of total revenue for those respective
periods. Operating
income (loss) -- Operating loss for the second quarter of 2010 was $
(1.3)
million compared to $157,000 income for 2009, a $1.4 million decrease. Interest
income and interest expense -- Interest income for the second quarter of 2010
and 2009 was $40,000 and $27,000, respectively, while interest expense was $760,000
and $808,000 for the same respective periods. Interest expense is largely related
to interest incurred on our Senior Notes, and to a lesser extent our capital lease
obligations. Other
income, net -- Other income, net for the second quarter of 2010 and 2009 was $652,000
and $954,000, respectively. During the second quarter of 2010, we recognized a
gain of $204,000 on the extinguishment of $9.3 million of our Senior Notes. Net
income (loss) attributable to common shares -- Net loss attributable to common
shares for the second quarter of 2010 was $(1.4) million, or $(0.06) per share
on a fully diluted basis, compared to net income attributable to common shares
of $319,000, or $0.01 per share on a fully diluted basis for the second quarter
of 2009. Free
cash flow (a non-GAAP financial measure) -- Free cash flow for the second quarter
of 2010 and 2009 totaled $(22.1) million and $(7.0) million, respectively. On
a trailing twelve month basis, free cash flow for the period ending June 30, 2010
and 2009 was $19.9 million and $(914,000), respectively. Free
cash flow reflects an additional way of viewing our cash flows and liquidity that,
when viewed with our GAAP results, provides a more complete understanding of factors
and trends affecting our cash flows and liquidity. Free cash flow, which we reconcile
to "net cash provided by (used in) operating activities," is cash flow
from operations reduced by "expenditures for fixed assets, including internal-use
software and website development." We believe that cash flows from operating
activities is an important measure, since it includes both the cash impact of
the continuing operations of the business and changes in the balance sheet that
impact cash. However, we believe free cash flow is a useful measure to evaluate
our business since purchases of fixed assets are a necessary component of ongoing
operations and free cash flow measures the amount of cash we have available for
future investment, debt retirement or other changes to our capital structure after
we have paid all of our expenses. Therefore, we believe it is important to view
free cash flow as a complement to our entire consolidated statements of cash flows. Our
calculation of free cash flow is set forth below (in thousands):
Three months ended Twelve months ended
June 30, June 30,
------------------
-------------------
2010 2009 2010 2009
---- ---- ---- ----
Net cash
(used
in) provided by
operating
activities $(11,772) $(5,255) $38,464
$14,867
Expenditures for
fixed assets,
including
internal-use
software and
website
development (10,361) (1,787) (18,579) (15,781)
Free cash flow $(22,133) $(7,042) $19,885 $(914)
-------- ------- -------
-----
Cash
and working capital -- At June 30, 2010, Overstock.com had cash and cash equivalents
of $76.0 million. Working capital was $37.1 million and $51.2 million at June
30, 2010 and December 31, 2009, respectively.
About
Overstock.com Overstock.com,
Inc. is an online retailer offering brand-name merchandise at discount prices.
The company offers its customers an opportunity to shop for bargains conveniently,
while offering its suppliers an alternative inventory distribution channel. Overstock.com,
headquartered in Salt Lake City, is a publicly traded company listed on the NASDAQ
Global Market System and can be found online at http://www.overstock.com. Overstock.com
regularly posts information about the company and other related matters on its
website under the heading "Investor Relations." Overstock.com
is a registered trademark of Overstock.com, Inc. Any other trademarks are the
property of their respective owners. This
press release may contain forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934. Such forward-looking statements include all statements other than statements
of historical fact. Our Form 10-K for the year ended December 31, 2009, our subsequent
quarterly reports on Form 10-Q, or any amendments thereto, and our other subsequent
filings with the Securities and Exchange Commission identify important factors
that could cause our actual results to differ materially from those contained
in any projections, estimates or forward-looking statements.
Overstock.com, Inc.
Consolidated Statements of Operations (unaudited)
(in thousands, except per share data)
Three months ended Six months ended
June 30, June 30,
-------- --------
2010 2009 2010 2009
---- ---- ---- ----
Revenue, net
Direct $42,382 $28,685 $92,950 $63,567
Fulfillment partner
188,871 146,213 402,633 297,060
------- ------- ------- -------
Total net revenue 231,253 174,898 495,583 360,627
------- ------- -------
------- Cost
of goods sold
Direct 37,434 23,532 81,018 53,929
Fulfillment partner 152,240
115,079 325,715 234,280
------- ------- ------- -------
Total cost of goods
sold 189,674 138,611 406,733 288,209
------- -------
------- -------
Gross profit 41,579 36,287 88,850 72,418
------ ------ ------ ------
Operating expenses:
Sales and marketing 14,179 11,162 28,458 24,749
Technology
14,178 12,708 28,126 26,299
General and
administrative 14,503 12,326 29,409
26,160
Restructuring - (66) (136) (66)
--- --- ---- ---
Total operating
expenses 42,860 36,130 85,857 77,142
------ ------ ------
------ Operating
income
(loss) (1,281) 157 2,993 (4,724)
Interest income 40 27 56 150
Interest expense (760) (808) (1,562) (1,730)
Other income, net 652 954 1,023 2,690
--- --- ----- -----
Income (loss)
before taxes (1,349) 330 2,510 (3,614)
Benefit for income
taxes (7) - 122 -
--- --- --- ---
Net income (loss) $(1,342) $330 $2,388 $(3,614)
------- ---- ------ -------
Deemed dividend
related to
redeemable common
stock (63) (11) (77)
(22)
--- --- --- ---
Net income (loss)
attributable to
common shares $(1,405) $319 $2,311 $(3,636)
------- ---- ------ -------
Net income (loss)
per common share -
basic: $(0.06) $0.01 $0.10 $(0.16)
Net income (loss)
per common share -
diluted: $(0.06) $0.01 $0.10 $(0.16)
Weighted average
common shares
outstanding -
basic: 23,013 22,817
22,978 22,810
Weighted average
common shares
outstanding -
diluted:
23,013 23,049 23,329 22,810
Other data:
Gross bookings (in
000s) $251,797 $192,191 $544,823 $395,812
Auction gross
merchandise volume
(in 000s) $3,105 $3,223 $7,810 $8,431
Average customer
acquisition cost
(shopping) $20.06 $20.26 $17.55 $21.25
Overstock.com, Inc.
Consolidated Balance Sheets
(in thousands)
June 30, December 31,
-------- ------------
2010 2009
---- ----
Assets (Unaudited)
Current assets:
Cash and cash equivalents $76,008 $139,757
Restricted cash 2,928 4,414
Accounts receivable, net 8,285 11,640
Inventories,
net 25,726 23,375
Prepaid inventories, net 2,718 2,879
Prepaids and other
assets 11,805 10,275
------ ------
Total current assets 127,470 192,340
Fixed assets, net 29,952 20,618
Goodwill 2,784 2,784
Other long-term assets,
net 1,368 758
----- ---
Total assets $161,574 $216,500
-------- --------
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable
$40,934 $76,623
Accrued liabilities 28,563 43,296
Deferred revenue 20,186
20,665
Capital lease obligations, current 701 520
--- ---
Total current
liabilities 90,384 141,104
Capital lease obligations, non-current 268 806
Other long-term liabilities
3,401 3,580
Convertible senior notes, net 50,347 59,466
------ ------
Total liabilities 144,400 204,956
------- -------
Redeemable common stock 821 744
Stockholders' equity:
Common stock 2 2
Additional paid-in capital 346,936
343,040
Accumulated deficit (253,828) (256,056)
Treasury stock (76,757)
(76,186)
------- -------
Total stockholders' equity 16,353 10,800
------ ------
Total liabilities and stockholders'
equity $161,574 $216,500
-------- --------
Overstock.com, Inc.
Consolidated Statements of Cash Flows (unaudited)
(in thousands)
Three months ended
June 30,
------------------
2010 2009
----
----
Cash flows
from operating activities:
Net income (loss) $(1,342) $330
Adjustments
to reconcile net income (loss)
to cash (used in) provided by
operating
activities:
Depreciation and amortization 3,552 3,046
Realized loss on
marketable securities - -
Loss on settlement of notes receivable - -
Loss
(gain) on disposition of fixed assets - -
Stock-based compensation to employees
and
directors 1,270 1,165
Stock-based compensation to consultants
for services - -
Stock-based compensation relating to
performance share
plan - -
Amortization of debt discount 106 71
Gain from early extinguishment
of debt (204) (884)
Restructuring reversals - (66)
Notes receivable accretion
- -
Changes in operating assets and
liabilities
Restricted cash 101
-
Accounts receivable, net 126 580
Inventories, net (6,085) (97)
Prepaid
inventories, net 752 (505)
Prepaids and other assets (2,174) (1,905)
Other
long-term assets, net (251) 259
Accounts payable 1,717 (4,365)
Accrued
liabilities (8,354) (2,367)
Deferred revenue (1,009) (508)
Other long-term
liabilities 23 (9)
--- ---
Net cash (used in) provided by operating
activities (11,772) (5,255)
-------
------ Cash flows
from investing activities:
Purchases of trading securities held in a
rabbi
trust (33) -
Purchases of marketable securities - -
Maturities of marketable
securities - -
Investment in precious metals (90) -
Sales of marketable
securities prior to
maturity - -
Expenditures for fixed assets, including
internal-use software
and website development (10,361) (1,787)
Collection
of note receivable - -
--- ---
Net cash (used in) provided by investing
activities (10,484) (1,787)
-------
------ Cash flows
from financing activities:
Payments on capital lease obligations (304) (154)
Drawdowns on line of credit - -
Payments on line of credit - -
Capitalized
financing costs - -
Paydown on direct financing arrangement (48) (53)
Payments to retire convertible senior
notes (9,048) (1,587)
Purchase of
treasury stock (26) (6)
Exercise of stock options 1,488 -
----- ---
Net cash used in financing activities (7,938) (1,800)
------ ------
Effect of exchange rate changes on cash - -
Net (decrease) increase in cash and cash
equivalents (30,194) (8,842)
Cash and cash equivalents, beginning of
period 106,202 74,487
-------
------ Cash and
cash equivalents, end of period $76,008 $65,645
------- -------
Twelve months ended
June 30,
-------------------
2010 2009
----
---- Cash flows
from operating activities:
Net income (loss) $13,749 $(4,699)
Adjustments
to reconcile net income (loss)
to cash (used in) provided by
operating
activities:
Depreciation and amortization 12,496 17,410
Realized loss
on marketable securities 9 373
Loss on settlement of notes receivable - 3,929
Loss (gain) on disposition of fixed assets (1) 324
Stock-based compensation
to employees and
directors 4,906 4,316
Stock-based compensation to consultants
for services - (46)
Stock-based compensation relating to
performance share
plan - (1,300)
Amortization of debt discount 395 307
Gain from early extinguishment
of debt (204) (5,659)
Restructuring reversals (136) (66)
Notes receivable
accretion - (273)
Changes in operating assets and
liabilities
Restricted
cash 1,357 4,462
Accounts receivable, net 628 1,610
Inventories, net (9,557)
6,231
Prepaid inventories, net (812) 108
Prepaids and other assets 1,192
(1,707)
Other long-term assets, net (940) (973)
Accounts payable 15,849
(1,931)
Accrued liabilities (2,992) (4,211)
Deferred revenue 2,853 (3,139)
Other long-term liabilities (328) (199)
---- ----
Net cash (used in) provided by operating
activities 38,464 14,867
------
------ Cash flows
from investing activities:
Purchases of trading securities held in a
rabbi
trust (63) -
Purchases of marketable securities - (10,186)
Maturities
of marketable securities - 64,542
Investment in precious metals (90) -
Sales of marketable securities prior to
maturity (9) (24,697)
Expenditures
for fixed assets, including
internal-use software
and website development
(18,579) (15,781)
Collection of note receivable - 1,500
--- -----
Net cash (used in) provided by investing
activities (18,741) 15,378
-------
------ Cash flows
from financing activities:
Payments on capital lease obligations (551) (154)
Drawdowns on line of credit - 8,179
Payments on line of credit - (8,179)
Capitalized financing costs (245) -
Paydown on direct financing arrangement
(208) (106)
Payments to retire convertible senior
notes (9,048) (11,113)
Purchase of treasury stock (825) (1,785)
Exercise of stock options 1,517 547
----- --- Net
cash used in financing activities (9,360) (12,611)
------ -------
Effect of exchange rate changes on cash - 32
Net (decrease) increase in cash and cash
equivalents 10,363 17,666
Cash
and cash equivalents, beginning of
period 65,645 47,979
------ ------
Cash and cash equivalents, end of period $76,008 $65,645
------- ------- SOURCE
Overstock.com, Inc.
Subject
Codes: PC/t.100805194627454, PT/lang.en, PC/ticker, IN/REA,
IN/ITE, IN/WEB,
SU/ERN, SU/CCA, RE/Utah, PC/priority.r,
PC/category.f, PC/class.1277, PC/WAVO_....7.,
PC/APT_....7, PC/trade_7, PC/wavo5_7, PC/Billing_FC1,
PC/Billing_IRW, PC/Billing_RWB,
PC/Billing_TNW,
PC/Billing_US1, PC/1stAcc_152766, PC/bureau_LA,
PC/port_01,
PC/port_31, PC/port_19, PC/port_91,
PC/contact, PC/website, PC/id_LA46902
Company Codes: NASDAQ-NMS:OSTK
|
