• Overstock Announces First Quarter 2022 Financial Results

    المصدر: Nasdaq GlobeNewswire / 28 أبريل 2022 06:00:01   America/New_York

    Eighth consecutive quarter of profitability

    Repurchased shares and ended quarter with strong cash position

    SALT LAKE CITY, April 28, 2022 (GLOBE NEWSWIRE) -- Overstock.com, Inc. (NASDAQ:OSTK) today reported financial results for the quarter ended March 31, 2022.

    First Quarter 2022 Financial Highlights, from continuing operations

    •Total net revenue of $536 million, a decrease of 19% year over year
    •Gross profit of $125 million or 23.4% of total net revenue
    •Income from continuing operations of $10 million
    •Diluted earnings per share of $0.21
    •Adjusted EBITDA (non-GAAP) of $21 million, which represents 4% of net revenue
    •Cash and cash equivalents totaled $493 million at the end of the first quarter

    “We delivered our eighth consecutive quarter of profitability in line with our stated adjusted EBITDA margin targets, even in a difficult macro environment. While the 19% revenue decline was more than we expected, I am pleased that, based on third party data, we held our market share consistent with Q4 levels.” said Overstock CEO Jonathan Johnson. “We anticipated the first quarter would be difficult considering the significant acceleration in sales last year driven by both operational improvements and pandemic-related factors. What we could not have anticipated was the magnitude of the impact of inflation coupled with an adverse geopolitical environment, which ultimately impacted consumer sentiment,” continued Johnson. “Looking ahead, we believe our unique business model positions us favorably to navigate through various macro scenarios and continue to take market share. Our business is asset-light and our smart value brand pillar delivers value that motivates our customers to buy from us even when their wallets are stretched. I look forward to providing a full update on our first quarter 2022 performance during our earnings call.”

    First Quarter 2022 Operational Highlights*

    •Active customers of 7.4 million, a decrease of 26% year over year
    •Last Twelve Months (LTM) net revenue per active customer of $356, an increase of 26% year over year
    •Orders delivered of 2.4 million, a decrease of 33% year over year
    •Average order value of $221, an increase of 21% year over year
    •Orders per active customer, measured as LTM orders divided by active customers, of 1.67, an increase of approximately 1% year over year
    •Orders placed on a mobile device were 50% of gross merchandise sales

    *Certain terms, such as active customers, LTM net revenue per active customer, orders delivered, average order value, and orders per active customer are defined under "Supplemental Operational Data" below.

    Share Repurchases

    On August 17, 2021, we announced that our Board of Directors had approved a stock repurchase program (the “Repurchase Program”), pursuant to which we may, from time to time, purchase shares of our outstanding common stock for an aggregate repurchase price not to exceed $100.0 million at any time through December 31, 2023. On March 9, 2022, we announced that our Board of Directors has expanded the Repurchase Program to permit us, from time to time, to purchase outstanding shares of our Digital Voting Series A-1 Preferred Stock and/or our Voting Series B Preferred Stock in addition to outstanding shares of our common stock.

    During the three months ended March 31, 2022, we repurchased $24.9 million of our common stock and $256,000 of our Series A-1 preferred stock under the Repurchase Program at an average price of $48.18 and $45.24 per share, respectively. As of March 31, 2022, we had approximately $74.8 million remaining under the current Repurchase Program authorization.

    Earnings Webcast Information

    Overstock will hold a conference call and webcast to discuss its first quarter 2022 financial results on Thursday, April 28, 2022, at 8:30 a.m. ET. To access the live webcast and presentation slides, go to http://investors.overstock.com. To listen to the conference call via telephone, dial (877) 673-5346 and enter conference ID 7170114 when prompted. Participants outside the U.S. or Canada who do not have Internet access should dial +1 (724) 498-4326, then enter the conference ID provided above.

    A replay of the conference call will be available at http://investors.overstock.com, starting two hours after the live call has ended. An audio replay of the webcast will be available via telephone starting at 11:30 a.m. ET on Thursday, April 28, 2022, through 11:30 a.m. ET on Thursday, May 5, 2022. To listen to the recorded webcast by phone, dial (855) 859-2056, then enter the conference ID provided above. Outside the U.S. or Canada, dial +1 (404) 537-3406 and enter the conference ID provided above.

    Questions may be emailed in advance of the call to ir@overstock.com.

    About Overstock.com

    Overstock.com, Inc. (Common Stock (NASDAQ:OSTK) / Series A-1 Preferred Stock (tZERO ATS:OSTKO) / Series B Preferred Stock (OTCQX:OSTBP)) is an online retailer and technology company based in Salt Lake City, Utah. Its leading e-commerce website sells a broad range of new home products at low prices, including furniture, décor, area rugs, bedding and bath, home improvement, and more. The online shopping site features millions of products that tens of millions of customers visit each month. In 2014, Overstock became the first major retailer to accept cryptocurrency as a form of payment and continues to do so. Overstock regularly posts information about the Company and other related matters on the Newsroom and Investor Relations pages on its website, Overstock.com.

    O, Overstock.com, O.com, and Club O are registered trademarks of Overstock.com, Inc. Other service marks, trademarks and trade names which may be referred to herein are the property of their respective owners.

    Cautionary Note Regarding Forward-Looking Statements

    This press release and the April 28, 2022 conference call and webcast to discuss our financial results may contain forward-looking statements within the meaning of the federal securities laws. Such forward-looking statements include all statements other than statements of historical fact, including forecasts of trends, market conditions, and other factors that could impact our results of operations. You should not place undue reliance on any forward-looking statements, which speak only as of the date they were made. We undertake no obligation to update any forward-looking statements as a result of any new information, future developments, or otherwise. These forward-looking statements are inherently difficult to predict. Actual results could differ materially for a variety of reasons, including but not limited to, macroeconomic changes, including higher inflation and rising interest rates, and difficulties we may have with our fulfillment partners, supply chain, access to products, shipping costs, competition, attraction/retention of employees, search engine optimization results, and/or payment processors. Other risks and uncertainties include, among others, the duration of the COVID-19 pandemic and its ultimate impact on our business and results of operations, the current conflict between Russia and Ukraine and its related geopolitical impacts, problems with our infrastructure, including cyber-attacks or data breaches affecting us, adverse tax, regulatory or legal developments, any negative business impacts associated with our strategy to exit from non-home categories, and whether our partnership with Pelion Venture Partners will be able to achieve its objectives. More information about factors that could potentially affect our financial results are included in our Form 10-K for the year ended December 31, 2021, which was filed with the SEC on February 25, 2022, and in our subsequent filings with the SEC. The Form 10-K and our subsequent filings with the SEC identify important factors that could cause our actual results to differ materially from those contained in or contemplated by our projections, estimates and other forward-looking statements.

    Contacts 
      
    Investor Relations:Media Relations:
    Lavesh HemnaniSarah Factor
    ir@overstock.com pr@overstock.com 


    Overstock.com, Inc.
    Consolidated Balance Sheets (Unaudited)
    (in thousands, except share data)
     March 31,
    2022    		 December 31,
    2021
    Assets   
    Current assets:   
    Cash and cash equivalents$493,261  $503,341 
    Restricted cash 217   25 
    Accounts receivable, net 23,749   21,190 
    Inventories 5,419   5,137 
    Prepaids and other current assets 21,159   22,097 
    Total current assets 543,805   551,790 
    Property and equipment, net 108,454   109,479 
    Deferred tax assets, net 39,076   40,035 
    Goodwill 6,160   6,160 
    Equity securities 352,833   342,682 
    Operating lease right-of-use assets 11,265   12,584 
    Other long-term assets, net 2,852   3,236 
    Total assets$1,064,445  $1,065,966 
    Liabilities and Stockholders' Equity   
    Current liabilities:   
    Accounts payable$106,380  $102,293 
    Accrued liabilities 107,909   101,902 
    Unearned revenue 61,421   59,387 
    Operating lease liabilities, current 5,478   5,402 
    Other current liabilities 3,388   3,349 
    Total current liabilities 284,576   272,333 
    Long-term debt, net 37,117   37,984 
    Operating lease liabilities, non-current 6,555   7,960 
    Other long-term liabilities 3,587   3,303 
    Total liabilities 331,835   321,580 
    Stockholders' equity:   
    Preferred stock, $0.0001 par value, authorized shares - 5,000   
    Series A-1, issued - 4,204 and 4,204   
    Series A-1, outstanding - 4,198 and 4,204 —   — 
    Series B, issued and outstanding - 357 and 357 —   — 
    Common stock, $0.0001 par value, authorized shares - 100,000   
    Issued shares - 46,910 and 46,625   
    Outstanding shares - 42,720 and 43,023 4   4 
    Additional paid-in capital 967,073   960,544 
    Accumulated deficit         (126,467)          (136,590)
    Accumulated other comprehensive loss (533)  (537)
    Treasury stock at cost - 4,196 and 3,602 (107,467)  (79,035)
    Total stockholders' equity 732,610   744,386 
    Total liabilities and stockholders' equity$1,064,445  $1,065,966 


    Overstock.com, Inc.
    Consolidated Statements of Income (Unaudited)
    (in thousands, except per share data)
     Three months ended
    March 31,
      2022   2021 
    Net revenue$536,037  $659,861 
    Cost of goods sold 410,825   506,337 
    Gross profit 125,212   153,524 
    Operating expenses   
    Sales and marketing 58,513   73,538 
    Technology 32,989   30,523 
    General and administrative 21,256   22,871 
    Total operating expenses 112,758   126,932 
    Operating income 12,454   26,592 
    Interest expense, net (125)  (155)
    Other expense, net (114)  (226)
    Income before income taxes from continuing operations 12,215   26,211 
    Provision for income taxes 2,092   193 
    Income from continuing operations 10,123   26,018 
    Loss from discontinued operations, net of income taxes —   (10,126)
    Consolidated net income 10,123   15,892 
    Less: Net loss attributable to noncontrolling interests—discontinued operations —   (201)
    Net income attributable to stockholders of Overstock.com, Inc.$10,123  $16,093 
    Consolidated net income per share of common stock:   
    Net income (loss) attributable to common shares—basic   
    Continuing operations$0.21  $0.57 
    Discontinued operations —   (0.23)
    Total$0.21  $0.34 
    Net income (loss) attributable to common shares—diluted   
    Continuing operations$0.21  $0.56 
    Discontinued operations —   (0.23)
    Total$0.21  $0.33 
    Weighted average shares of common stock outstanding:   
    Basic 43,052   42,885 
    Diluted 43,282   43,320 


    Overstock.com, Inc.
    Consolidated Statements of Cash Flows (Unaudited)
    (in thousands)
     Three months ended
    March 31,
      2022   2021 
    Cash flows from operating activities:   
    Consolidated net income$10,123  $15,892 
    Loss from discontinued operations, net of income taxes —   10,126 
    Adjustments to reconcile consolidated net income to net cash provided by operating activities:   
    Depreciation and amortization 4,307   5,146 
    Non-cash operating lease cost 1,319   1,320 
    Stock-based compensation to employees and directors 4,639   2,305 
    Decrease in deferred income taxes, net 959   1 
    Loss from equity method securities 299   — 
    Other non-cash adjustments (123)  637 
    Changes in operating assets and liabilities:   
    Accounts receivable, net (2,559)  (15,651)
    Inventories (282)  (468)
    Prepaids and other current assets 1,604   447 
    Other long-term assets, net (307)  (448)
    Accounts payable 4,339   25,589 
    Accrued liabilities 7,886   6,693 
    Unearned revenue 2,034   24,143 
    Operating lease liabilities (1,329)  (1,379)
    Other long-term liabilities 284   (269)
    Net cash provided by continuing operating activities 33,193   74,084 
    Net cash used in discontinued operating activities —   (12,353)
    Net cash provided by operating activities 33,193   61,731 
    Cash flows from investing activities:   
    Purchase of equity securities (11,420)  — 
    Capital distribution from investment 1,162   — 
    Expenditures for property and equipment (3,256)  (2,395)
    Other investing activities, net (281)  (367)
    Net cash used in continuing investing activities (13,795)  (2,762)
    Net cash provided by discontinued investing activities —   5,737 
    Net cash provided by (used in) investing activities (13,795)  2,975 
    Cash flows from financing activities:   
    Repurchase of shares (25,165)  — 
    Payments on long-term debt (854)  (551)
    Payments of taxes withheld upon vesting of employee stock awards (3,267)  (7,292)
    Other financing activities, net —   (1)
    Net cash used in continuing financing activities (29,286)  (7,844)
    Net cash provided by discontinued financing activities —   2,085 
    Net cash used in financing activities (29,286)  (5,759)
    Net increase (decrease) in cash, cash equivalents, and restricted cash (9,888)  58,947 
    Cash, cash equivalents, and restricted cash, beginning of year, inclusive of cash balances of discontinued operations 503,366   519,181 
    Cash, cash equivalents, and restricted cash, end of year, inclusive of cash balances of discontinued operations 493,478   578,128 
    Less: Cash, cash equivalents, and restricted cash of discontinued operations —   42,120 
    Cash, cash equivalents, and restricted cash, end of year$493,478  $536,008 

    Financial Reporting Presentation in Accordance with the Pelion Transaction

    Medici Ventures' blockchain businesses, including tZERO, met the criteria to be reported as held for sale and discontinued operations as of March 31, 2021, due to their anticipated deconsolidation. As a result of closing the Pelion transaction during the second quarter of 2021, these businesses' operating results for the periods prior to deconsolidation have been reflected in our consolidated statements of income as discontinued operations. As a result of closing this transaction, Overstock has reorganized its remaining businesses into a single reportable operating segment, Retail. Corporate-related overhead costs are included in Retail continuing operations.

    Supplemental Operational Data

    We measure our business using operational metrics, in addition to the financial metrics shown above and the non-GAAP financial measures explained below. We believe these metrics provide investors with additional information regarding our financial results, including indicators of our growth, customer purchasing patterns, and the mix of products purchased by our customers.

    Active customers represents the total number of unique customers who have made at least one purchase during the prior twelve-month period. This metric captures both the inflow of new customers and the outflow of existing customers who have not made a purchase during the prior twelve-month period.

    LTM net revenue per active customer represents total net revenue in a twelve-month period divided by the total number of active customers for the same twelve-month period.

    Orders delivered represents the total number of orders delivered in any given period, including orders that may eventually be returned. As we ship a large volume of packages through multiple carriers, actual delivery dates may not always be available, and in those circumstances we estimate delivery dates based on historical data.

    Average order value is defined as total net revenue in any given period divided by the total number of orders delivered in that period.

    Orders per active customer is defined as orders delivered in a twelve-month period divided by active customers for the same twelve-month period.

    The following table provides key operating metrics for the Retail business:
    (in thousands, except for LTM net revenue per active customer, average order value and orders per active customer)

     Three months ended
    March 31,
     2022 2021
    Active customers7,388 9,938
    LTM net revenue per active customer356 283
    Orders delivered2,428 3,608
    Average order value221 183
    Orders per active customer1.67 1.66

    Non-GAAP Financial Measures and Reconciliations

    We are providing certain non-GAAP financial measures in this release and related earnings conference call, including adjusted diluted earnings per share from continuing operations, adjusted EBITDA, and free cash flow. We use these non-GAAP measures internally in analyzing our financial results and we believe they are useful to investors, as a supplement to GAAP measures, in evaluating our ongoing operational performance in the same manner as our management and board of directors. We have provided reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures in this earnings release. These non-GAAP financial measures should be used in addition to and in conjunction with the results presented in accordance with GAAP and should not be relied upon to the exclusion of GAAP financial measures.

    Adjusted diluted earnings per share for continuing operations is a non-GAAP financial measure that we calculate as net income from continuing operations less the income recognized from our equity method securities, net of related tax. We believe that this adjustment to our net income before calculating per share amounts for the current period presented provides a useful comparison between our operating results from period to period.

    Adjusted EBITDA is a non-GAAP financial measure that is calculated as income from continuing operations before depreciation and amortization, stock-based compensation, interest and other income (expense), provision (benefit) for income taxes, and special items. We believe the exclusion of certain benefits and expenses in calculating adjusted EBITDA facilitates operating performance comparisons on a period-to-period basis. Exclusion of items in the non-GAAP presentation should not be construed as an inference that these items are unusual, infrequent or non-recurring.

    Free cash flow is a non-GAAP financial measure that is calculated as net cash provided by or used in continuing operating activities reduced by expenditures for property and equipment. We believe free cash flow is a useful measure to evaluate the cash impact of the continuing operations of the business including purchases of property and equipment which are a necessary component of our ongoing operations.

    The following table reflects the reconciliation of adjusted diluted earnings per share from continuing operations to diluted earnings per share from continuing operations (in thousands, except per share data):

     Three months ended
    March 31,
      2022
     Diluted EPS  Less: equity method income1  Adjusted Diluted EPS
    Numerator:       
    Income from continuing operations$10,123  $32  $10,091 
    Less: Preferred stock dividends—accumulated 182   —   182 
    Undistributed income from continuing operations 9,941   32   9,909 
    Less: Undistributed income allocated to participating securities 952   3   949 
    Net income from continuing operations attributable to common stockholders$8,989  $29  $8,960 
            
    Denominator:       
    Weighted average shares of common stock outstanding—diluted 43,282   43,282   43,282 
            
    Net income from continuing operations per share of common stock:       
    Diluted$0.21  $—  $0.21 

    1 Inclusive of tax impact from equity method activity

    The following table reflects the reconciliation of adjusted EBITDA to income from continuing operations (in thousands):

     Three months ended
    March 31,
      2022   2021 
        
    Income from continuing operations$10,123  $26,018 
    Depreciation and amortization 4,307   5,146 
    Stock-based compensation 4,639   2,305 
    Interest expense, net 125   155 
    Other expense, net 114   226 
    Provision for income taxes 2,092   193 
    Special items (see table below) 53   (187)
    Adjusted EBITDA$21,453  $33,856 
        
    Special items:   
    Special legal charges$—  $(187)
    Transaction costs 53   — 
     $53  $(187)

    The following table reflects the reconciliation of free cash flow to net cash provided by continuing operating activities (in thousands):

     Three months ended
    March 31,
      2022   2021 
    Net cash provided by continuing operating activities$33,193  $74,084 
    Expenditures for property and equipment (3,256)  (2,395)
    Free cash flow$29,937  $71,689 

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