Overstock.com(US:OSTK)2024-07-31 00:54Financial Performance - Net revenue for the three months ended June 30, 2024, was $398.1 million, a decrease of 5.7% compared to $422.2 million for the same period in 2023[23]. - Gross profit for the three months ended June 30, 2024, was $80.2 million, down 25.4% from $107.6 million in the prior year[23]. - Operating loss for the three months ended June 30, 2024, was $(47.0) million, compared to a loss of $(4.2) million for the same period in 2023[23]. - Net loss for the three months ended June 30, 2024, was $(42.6) million, compared to $(73.5) million in the same period last year[23]. - Net loss for the three months ended June 30, 2024, was $42,578 thousand, compared to a net loss of $73,493 thousand for the same period in 2023, representing a 42% improvement[25]. - For the six months ended June 30, 2024, the net loss was $116,506 thousand, an increase from $83,800 thousand in the prior year, indicating a 39% increase in losses[25]. - The company reported a comprehensive loss of $42,574 thousand for the three months ended June 30, 2024, compared to a comprehensive loss of $73,489 thousand for the same period in 2023[25]. Assets and Liabilities - Total current assets decreased to $232.2 million as of June 30, 2024, from $350.1 million as of December 31, 2023, representing a decline of 33.7%[18]. - Total liabilities decreased to $246.4 million as of June 30, 2024, down from $276.7 million at the end of 2023, a reduction of 10.9%[18]. - Cash and cash equivalents were $186.2 million as of June 30, 2024, down from $302.6 million at December 31, 2023, a decrease of 38.5%[18]. - Total cash, cash equivalents, and restricted cash decreased to $186,342 thousand at the end of the period from $343,076 thousand a year earlier, reflecting a decline of 46%[31]. - As of June 30, 2024, total contractual cash obligations amount to $46.354 million, with $4.312 million due within one year and $35.610 million due after five years[150]. Expenses - Sales and marketing expenses increased to $66.3 million for the three months ended June 30, 2024, up 34.7% from $49.2 million in the same period last year[23]. - Technology expenses totaled $27.3 million for the three months ended June 30, 2024, a decrease of $364,000 compared to the same period in 2023[108]. - General and administrative expenses decreased by $3.1 million for the three months ended June 30, 2024, compared to the same period in 2023[109]. - Customer service and merchant fees increased by $1.8 million for the three months ended June 30, 2024, primarily due to increased outsourced labor and credit card costs[109]. - Operating lease costs for the three months ended June 30, 2024, were $677,000, compared to $1,492,000 for the same period in 2023[68]. Stock and Equity - The company reported a weighted average of 45.7 million shares of common stock outstanding for the three months ended June 30, 2024[23]. - The total shares of common stock outstanding remained at 45,750 thousand as of June 30, 2024, unchanged from the previous year[29]. - The company had approximately 2.7 million shares of common stock remaining available under the Employee Stock Purchase Plan (ESPP) as of June 30, 2024[91]. - Stock-based compensation to employees and directors was $10,035 thousand for the six months ended June 30, 2024, down from $12,065 thousand in the prior year, a decrease of 17%[31]. - The stock-based compensation expense for the three months ended June 30, 2024, was $5,259,000, down from $6,270,000 for the same period in 2023[82]. Cash Flow - Operating cash flows showed a net cash used of $110,502 thousand for the six months ended June 30, 2024, compared to a net cash provided of $18,772 thousand in the same period of 2023[31]. - Net cash used in operating activities for the six months ended June 30, 2024, was $110.5 million, primarily due to a loss from operating activities adjusted for non-cash items[146]. - Investing activities resulted in a net cash outflow of $3.3 million for the six months ended June 30, 2024, mainly due to $8.0 million in property and equipment expenditures[147]. - Financing activities resulted in a net cash outflow of $2.6 million for the six months ended June 30, 2024, primarily due to tax payments upon vesting of employee stock awards[148]. Business Operations and Strategy - The company anticipates continued challenges in generating positive cash flow from operations due to ongoing market conditions and competition[12]. - The company is modifying its business model and expanding product offerings, which increases operational complexity and associated risks[170]. - The company is planning to sell its corporate headquarters, which could lead to an increase in remote work[173]. - The company continues to monitor liquidity and expects cash flows from future operations to be sufficient for at least the next twelve months[142]. - The company is evaluating the impact of recently issued accounting standards on its consolidated financial statements[41]. Legal and Regulatory Risks - The company is exposed to various legal proceedings that could materially affect its business and financial position[166]. - The company is subject to a wide variety of laws and regulations that may impede growth and increase expenses[154]. - Accrued tax contingencies as of June 30, 2024, stand at $3.8 million, with potential for additional assessments within the next 12 months[151]. Management and Workforce - The company underwent significant changes to its executive management team and board of directors in 2023 and 2024, with key positions still remaining open[173]. - In 2023, the company implemented a reduction in force and structural changes, including the elimination of Co-Chief Executive roles and dual Chief Merchant roles[173]. - The company emphasizes the importance of attracting and retaining highly-skilled personnel for future success[173]. - Uncertainties related to leadership changes and performance-based compensation may negatively impact employee retention and engagement[173].