Overstock.com Announces $1.1 Million Net Income on 191% Revenue Growth in Fourth Quarter.Business Editors SALT LAKE CITY--(BUSINESS WIRE)--Jan. 27, 2003 Overstock.com Overstock.com (NASDAQ: OSTK) is an online retailer headquartered in Cottonwood Heights, Utah. Nearby Salt Lake City is commonly listed as the company's location in corporate filings and news accounts. Business model Overstock. Inc. (Nasdaq: OSTK) today reported financial results for its fourth quarter and year ended Dec. 31, 2002. "Our fourth quarter results surpassed even our own expectations," said Patrick Byrne Patrick Byrne is the name of several people:
adj. Lacking brightness, luster, or vitality; dull. See Synonyms at dull. Adj. 1. lackluster - lacking brilliance or vitality; "a dull lackluster life"; "a lusterless performance" quarter for many retailers, we managed to generate record sales growth and achieved net income profitability for the fourth quarter. We credit these results to our continued discipline of building a lean and efficient infrastructure that can support offering low prices to consumers with a high level of customer service." Key Financial and Operating Metrics metrics Managed care A popular term for standards by which the quality of a product, service, or outcome of a particular form of Pt management is evaluated. See TQM. : Revenue -- In Q4-02, revenue totaled a record $41.5 million, a 191 percent increase over $14.3 million recorded in Q4-01. For the year, revenue totaled a record $91.8 million, a 129 percent increase over $40.0 million recorded in 2001. Gross Profit -- In Q4-02, gross profit totaled a record $9.1 million, a 254 percent increase over $2.6 million recorded in Q4-01. For the year, gross profit totaled a record $18.3 million, a 242 percent increase over $5.4 million recorded in 2001. Gross Margin -- In Q4-02, gross margin improved to a record 22 percent compared to 18 percent recorded in Q4-01. For the year, gross margin improved to a record 20 percent compared to 13 percent recorded in 2001. Operating Income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. (Loss) -- In Q4-02, operating income totaled a record $1.1 million compared to an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $2.7 million recorded in Q4-01. For the year, operating loss totaled $4.1 million compared to an operating loss of $13.6 million recorded in 2001. Net Income (Loss) -- In Q4-02, GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). net income totaled a record $1.1 million, or diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of of $0.06, compared to a loss of $2.9 million, or $0.27 diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. loss per share recorded in Q4-01. For the year, net loss totaled $4.6 million, or $0.88 diluted loss per share, compared to a net loss of $13.8 million, or diluted loss per share of $1.29, recorded in 2001. Gross Merchandise MERCHANDISE. By this term is understood all those things which merchants sell either wholesale or retail, as dry goods, hardware, groceries, drugs, &c. It is usually applied to personal chattels only, and to those which are not required for food or immediate support, but such as remain Sales (Non-GAAP) -- During Q4-02, Overstock.com customers spent a record $67.2 million, a 170 percent increase over $24.9 million recorded in Q4-01. During 2002, Overstock.com customers spent a record $154.5 million, a 123 percent increase over $69.3 million recorded in 2001. Gross merchandise sales represents the gross sales Gross Sales A measure of overall sales that isn't adjusted for customer discounts or returns, calculated simply by adding all sales invoices, and not including operating expenses, cost of goods sold, payment of taxes, or any other charge. price of all sales transactions, including those for which the company only records a commission under generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting , and therefore differs from GAAP revenue. The following table reconciles total revenue to gross merchandise sales:
Three months ended Year ended
----------------- ------------------
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2001 2002 2001 2002
-------- -------- -------- ---------
Total revenue $14,274 $41,529 $40,003 $91,784
Add: Obligations payable to
third parties upon sale
of third-party merchandise 7,392 21,969 18,480 50,962
Add: Sales returns and
discounts 3,259 3,719 10,864 11,737
-------- -------- -------- ---------
Gross merchandise sales
(non-GAAP) $24,925 $67,217 $69,347 $154,483
======== ======== ======== =========
In conjunction conjunction, in astronomy conjunction, in astronomy, alignment of two celestial bodies as seen from the earth. Conjunction of the moon and the planets is often determined by reference to the sun. with its fourth quarter earnings release, Overstock.com will broadcast its conference call live over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the on Tuesday Tuesday: see week. , Jan. 28, at 8:30 a.m. ET (5:30 a.m. PT). Interested parties are invited to listen by logging onto http://www.shareholder.com/overstock or calling 800/289-0468 (in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. ) or 913/981-5517 (outside the United States). About Overstock.com Overstock.com is a publicly traded company publicly traded company A company whose shares of common stock are held by the public and are available for purchase by investors. The shares of publicly traded firms are bought and sold on the organized exchanges or in the over-the-counter market. listed on the NASDAQ National Market System, headquartered in Salt Lake City, and can be found online at www.overstock.com. Note Regarding Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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 our ability to build an efficient infrastructure and our ability to offer low prices to consumers with a high level of customer service. 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 Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. in economic conditions, and such other risks as identified in our Prospectus A document, notice, circular, advertisement, letter, or communication in written form or by radio or television that offers any security for sale, or confirms the sale of any security. dated May 29, 2002, filed with the Securities and Exchange Commission and all subsequent filings with the Securities and Exchange Commission, 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
--------------------------------------------
Dec. 31, Mar. 31, Jun. 30, Sept. 30, Dec. 31,
2001 2002 2002 2002 2002
-------- -------- -------- -------- --------
Direct revenue $12,392 $10,029 $11,853 $20,759 $35,302
Commission revenue 1,882 1,659 2,230 2,857 5,633
Warehouse revenue - 379 297 192 594
-------- -------- -------- -------- --------
Total revenue 14,274 12,067 14,380 23,808 41,529
Cost of goods sold 11,689 9,990 11,831 19,238 32,382
-------- -------- -------- -------- --------
Gross profit 2,585 2,077 2,549 4,570 9,147
Operating expenses:
Sales and marketing
expenses 1,431 1,219 1,313 2,083 4,054
General and
administrative expenses 2,741 2,802 2,195 2,372 3,456
Amortization of goodwill 759 - - - -
Amortization of
stock-based compensation 324 846 806 674 577
-------- -------- -------- -------- --------
Total operating expenses 5,255 4,867 4,314 5,129 8,087
-------- -------- -------- -------- --------
Operating income (loss) (2,670) (2,790) (1,765) (559) 1,060
Interest income 48 22 49 229 103
Interest expense (285) (240) (208) (7) (10)
Other income (expense),
net 10 1 (442) 63 (66)
-------- -------- -------- -------- --------
Net income (loss) (2,897) (3,007) (2,366) (274) 1,087
Deemed dividend related to
redeemable common stock (102) (111) (106) (97) (92)
Deemed dividend related to
beneficial conversion
feature of preferred
stock - (6,607) - - -
-------- -------- -------- -------- --------
Net income (loss)
attributable to common
shares $(2,999) $(9,725) $(2,472) $(371) $995
======== ======== ======== ======== ========
Net income (loss) per
share
- basic $(0.27) $(0.87) $(0.20) $(0.03) $0.07
- diluted $(0.27) $(0.87) $(0.20) $(0.03) $0.06
Weighted average common
shares outstanding
- basic 11,178 11,171 12,280 14,447 14,486
- diluted 11,178 11,171 12,280 14,447 15,696
Gross merchandise sales
(non-GAAP)
Total revenue $14,274 $12,067 $14,380 $23,808 $41,529
Add: Obligations
payable to third
parties upon sale
of third-party
merchandise 7,392 7,031 9,474 12,488 21,969
Add: Sales returns
and discounts 3,259 2,891 2,651 2,476 3,719
-------- -------- -------- -------- --------
Gross merchandise sales
(non-GAAP) $24,925 $21,989 $26,505 $38,772 $67,217
======== ======== ======== ======== ========
Overstock.com Inc.
Consolidated Statements of Operations
(in thousands, except per share amounts)
Year ended Dec. 31,
-------------------
2001 2002
--------- ---------
Direct revenue $35,243 $77,943
Commission revenue 3,965 12,379
Warehouse revenue 795 1,462
--------- ---------
Total revenue 40,003 91,784
Cost of goods sold 34,640 73,441
--------- ---------
Gross profit 5,363 18,343
Operating expenses:
Sales and marketing expenses $ 5,784 $ 8,669
General and administrative expenses 9,441 10,825
Amortization of goodwill 3,056 -
Amortization of stock-based compensation 649 2,903
--------- ---------
Total operating expenses 18,930 22,397
--------- ---------
Operating loss (13,567) (4,054)
Interest income 461 403
Interest expense (729) (465)
Other income (expense), net 29 (444)
--------- ---------
Net loss (13,806) (4,560)
Deemed dividend related to redeemable common stock (404) (406)
Deemed dividend related to beneficial conversion
feature of preferred stock - (6,607)
--------- ---------
Net loss attributable to common shares $(14,210) $(11,573)
========= =========
Net loss per common share - basic and diluted $(1.29) $(0.88)
Weighted average common shares outstanding - basic
and diluted 10,998 13,108
Overstock.com Inc.
Consolidated Balance Sheet Data
(in thousands)
Dec. 31, Dec. 31,
2001 2002
--------- ---------
Cash and marketable securities $3,729 $32,662
Inventories, net 7,586 13,954
Working capital 3,071 35,679
Total liabilities 10,450 20,322
Total stockholders' equity 5,980 39,271
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