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|Overstock.com Announces 3Q 2003 Financial Results|
SALT LAKE CITY, Oct 29, 2003 /PRNewswire-FirstCall via COMTEX/ -- Overstock.com(R) (Nasdaq: OSTK) today announced financial results for the third quarter ended September 30, 2003.
The Company reported year-over-year gross merchandise sales grew 57% to $61.0 million this quarter from $38.8 million for the same period last year. GAAP total revenue was $57.8 million for the quarter. Net loss for the third quarter was $3.7 million or $0.23 loss per share compared to $371,000 or $0.03 loss per share a year earlier.
"While our revenue took a sharp turn upward this quarter, I am concerned by our loss; however, much of our incremental expenses during the quarter reflect investments in the business that I believe make us a much stronger company," said Patrick M. Byrne, president and CEO of Overstock.com.
"Clearly I executed poorly in some areas: we have addressed our internal processes and I will discuss these in detail in the call. In addition, my decision to super-size our systems to support growth creates drag on gross margins at our current size. Lastly, in the Q2 conference call I alluded to four Q3 projects: the first three were a new search engine, our first nationwide radio and television advertising campaign, and a travel tab (alas, the fourth project is not quite ready to be unveiled). I believe the investments we made this quarter in scale and in these projects are the right decisions for creating long-term shareholder value."
More information about the strategic initiatives mentioned above can be found at the following links:
Overstock.com Announces Second Quarter Results Overstock.com Enhances Website with Advanced Search Technology Overstock.com Launches National Advertising Campaign Overstock.com Launches Discount Travel Store
Key financial and operating metrics
Note: Due to a change in Overstock.com customer return policies and procedures announced last quarter, we will record revenue from sales transactions from our fulfillment partners on a gross basis instead of on a net basis. As a result, GAAP revenue increased significantly and gross margins decreased significantly this reporting period compared to previous reporting periods. Therefore, gross merchandise sales comparisons year-over-year may be more relevant than GAAP revenue comparisons. Moreover, we believe gross profit dollar comparisons year-over-year may be more relevant than gross margin comparisons.
GAAP total revenue -- Overstock.com reported GAAP revenue of $57.8 million for the three-month period ending September 30, 2003.
GAAP gross profit -- Overstock.com reported GAAP gross profit of $4.3 million for the three-month period ending September 30, 2003, a 7% decrease compared to the $4.6 million recorded in the same period a year ago.
GAAP gross margins -- GAAP gross margins were 7% for the three-month period ending September 30, 2003.
GAAP net loss -- Overstock.com reported a GAAP net loss of $3.7 million or $0.23 loss per share for the three-month period ending September 30, 2003, compared to $371,000 million or $0.03 loss per share for the same period a year earlier.
Overstock.com had cash and marketable securities of $20.7 million as of September 30, 2003.
Gross merchandise sales (non-GAAP) -- Overstock.com reported gross merchandise sales (GMS) of $61.0 million for the third quarter 2003, a 57% increase over the $38.8 million GMS reported for the third quarter 2002, and a 19% increase over the $51.3 million GMS reported in the second quarter 2003.
Gross merchandise sales represents the gross sales price of all sales transactions, including those for which the company only records a commission under generally accepted accounting principles, and therefore differs from GAAP revenue. The following table reconciles total revenue to gross merchandise sales:
Three months ended (millions) Sept. 30, Sept. 30, 2002 2003 Total revenue $23.8 $57.8 Add: Obligations payable to third parties upon sale of third-party merchandise $12.5 -- Add: Sales returns and discounts $2.5 $3.2 Gross merchandise sales (non-GAAP) $38.8 $61.0
Overstock.com Inc. is an online "closeout" retailer offering discount, brand-name merchandise for sale over the Internet. The company offers its customers an opportunity to shop for bargains conveniently, while offering its suppliers an alternative inventory liquidation distribution channel. Overstock.com is a publicly traded company listed on the NASDAQ National Market System, headquartered in Salt Lake City, and can be found online at www.overstock.com .
Overstock.com is a registered trademark of Overstock.com, Inc.
This press release contains certain 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, but are not limited to, statements regarding the company's strength and growth, future performance and value for customers and shareholders, and customer service enhancements. These forward-looking statements involve certain risks and uncertainties that could cause actual results to differ, including, but not limited to, our limited operating history, our ability to manage growth, a general downturn in economic conditions, and such other risks as identified in our Prospectus dated May 29, 2002, filed with the Securities and Exchange Commission and all subsequent filings with the Securities and Exchange Commission, including our Form 10- K for the year ended December 31, 2002, and our Prospectus dated February 12, 2003, which contain and identify important factors that could cause the actual results to differ materially from those contained in our projections or forward-looking statements.
Overstock.com, Inc. Consolidated Statements of Operations (in thousands, except per share amounts) Three months ended Sept. 30, Dec. 31, Mar. 31, Jun. 30, Sept. 30, 2002 2002 2003 2003 2003 Direct revenue $20,759 $35,302 $24,962 $25,159 $29,011 Commission revenue 2,857 5,633 3,966 3,431 28,504 Warehouse revenue 192 594 236 243 273 Total revenue 23,808 41,529 29,164 28,833 57,788 Cost of goods sold 19,238 32,382 24,539 24,030 53,537 Gross profit 4,570 9,147 4,625 4,803 4,251 Operating expenses: Sales and marketing expenses 2,083 4,054 3,848 2,572 3,855 General and administrative expenses 2,372 3,456 4,545 3,367 4,059 Amortization of stock-based compensation 674 577 328 112 171 Total operating expenses 5,129 8,087 8,721 6,051 8,085 Operating income (loss) (559) 1,060 (4,096) (1,248) (3,834) Interest income 229 103 152 142 98 Interest expense (7) (10) (7) (55) (8) Other income (expense), net 63 (66) 10 25 79 Net income (loss) (274) 1,087 (3,941) (1,136) (3,665) Deemed dividend related to redeemable common stock (97) (92) (77) (78) (59) Net income (loss) attributable to common shares $(371) $995 $(4,018) $(1,214) $(3,724) Net income (loss) per share - basic $(0.03) $0.07 $(0.26) $(0.07) $(0.23) - diluted $(0.03) $0.06 $(0.26) $(0.07) $(0.23) Weighted average common shares outstanding - basic 14,447 14,486 15,486 16,384 16,419 - diluted 14,447 15,696 15,486 16,384 16,419 Reconciliation of total revenue (GAAP) to gross merchandise sales (non-GAAP) Total revenue $23,808 $41,529 $29,164 $28,833 $57,788 Add: Obligations payable to third parties upon sale of third-party merchandise 12,488 21,969 20,527 19,399 -- Add: Sales returns and discounts 2,476 3,719 2,579 3,083 3,230 Gross merchandise sales (non-GAAP) $38,772 $67,217 $52,270 $51,315 $61,018 Overstock.com, Inc. Consolidated Statements of Operations (in thousands, except per share amounts) Nine months ended September 30, 2002 2003 Direct revenue $42,641 $79,132 Commission revenue 6,746 35,901 Warehouse revenue 868 752 Total revenue 50,255 115,785 Cost of goods sold 41,059 102,106 Gross profit 9,196 13,679 Operating expenses: Sales and marketing expenses 4,615 10,275 General and administrative expenses 7,369 11,971 Amortization of stock-based compensation 2,326 611 Total operating expenses 14,310 22,857 Operating loss (5,114) (9,178) Interest income 300 392 Interest expense (455) (70) Other income (expense), net (378) 114 Net loss (5,647) (8,742) Deemed dividend related to redeemable common stock (314) (214) Deemed dividend related to beneficial conversion feature of preferred stock (6,607) -- Net loss attributable to common shares $(12,568) $(8,956) Net loss per common share $(0.99) $(0.56) Weighted average common shares outstanding 12,644 16,100 Overstock.com, Inc. Consolidated Balance Sheet Data (in thousands) December 31, September 30, 2002 2003 Cash and marketable securities $32,662 $20,714 Inventories, net 13,954 24,945 Working capital 35,679 49,459 Total liabilities 20,322 14,088 Total stockholders' equity 39,271 57,553
investors, Kathryn Huang, Investor Relations, +1-801-947-3282, firstname.lastname@example.org , or media, Scott Blevins, Public Relations, +1-801-947-3133, email@example.com , both of Overstock.com /Photo: http://www.newscom.com/cgi-bin/prnh/20030520/LATU020LOGO-a AP Archive: http://photoarchive.ap.org PRN Photo Desk, firstname.lastname@example.org
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