Overstock.com(OSTK) - 2022 Q1 - Quarterly Report

Financial Performance - Net revenue for the quarter ended March 31, 2022, was $536,037, a decrease of 19% compared to $659,861 for the same period in 2021[22] - Gross profit for the quarter was $125,212, down from $153,524 in the prior year, reflecting a gross margin decline[22] - Operating income decreased to $12,454, compared to $26,592 in the same quarter last year, indicating a significant reduction in profitability[22] - Consolidated net income for the quarter was $10,123, down from $15,892 in the previous year, representing a decline of approximately 36%[23] - The company reported a basic net income per share of $0.21 for the quarter, down from $0.34 in the same quarter of the previous year[22] - Net income attributable to stockholders for the three months ended March 31, 2022, was $10.123 million, compared to $16.093 million for the same period in 2021, representing a decrease of 37.5%[32] - The net income from continuing operations attributable to common stockholders for the three months ended March 31, 2022, was $8.989 million, compared to $24.307 million for the same period in 2021[98] - Basic net income per share of common stock for the three months ended March 31, 2022, was $0.21, down from $0.57 for the same period in 2021[98] Assets and Liabilities - Total current assets as of March 31, 2022, were $543,805, a slight decrease from $551,790 at the end of 2021[18] - Total liabilities increased to $331,835 from $321,580 at the end of the previous year, indicating a rise in financial obligations[20] - Cash and cash equivalents were $493,261, down from $503,341 at the end of 2021, reflecting a decrease in liquidity[18] - The accumulated deficit decreased to $(126.467) million as of March 31, 2022, from $(509.140) million at the end of the same period in 2021, showing an improvement of 75.2%[28] - Cash, cash equivalents, and restricted cash at the end of the period were $493.478 million, down from $578.128 million at the end of the same period in 2021, a decrease of 14.7%[34] - Total outstanding debt was $40.5 million, net of $478,000 in capitalized debt issuance costs[62] Cash Flow and Investments - Cash flows from operating activities provided $33.193 million for the three months ended March 31, 2022, compared to $61.731 million for the same period in 2021, indicating a decrease of 46.3%[34] - The company reported a net cash used in investing activities of $(13.795) million for the three months ended March 31, 2022, compared to a net cash provided of $2.975 million for the same period in 2021[34] - Financing activities led to a net cash outflow of $29.3 million in Q1 2022, primarily due to stock repurchases of $25.2 million[138] Operational Changes and Strategy - Overstock.com continues to focus on its core home category, exiting non-home categories to streamline operations and improve financial performance[13] - The company is focusing on growing its Canadian customer base and market share by enhancing product findability and improving delivery support[104] - The company is exiting non-home categories to strengthen its brand association with home expertise, which has resulted in reduced revenues that may not be fully offset in the future[167] Expenses and Cost Management - Operating expenses totaled $112,758, a decrease from $126,932 in the prior year, showing cost management efforts[22] - Sales and marketing expenses decreased by 20.4% year-over-year for the three months ended March 31, 2022, representing 10.9% of net revenues compared to 11.1% in the same period in 2021[121] - General and administrative expenses decreased to $21.26 million in Q1 2022 from $22.87 million in Q1 2021, a year-over-year change of -7.1%, accounting for 4.0% of net revenues versus 3.5% previously[131] - Technology expenses totaled $33.0 million for the three months ended March 31, 2022, a $2.5 million increase compared to the same period in 2021, driven by staff-related costs[108] Stock and Shareholder Information - The company repurchased $25.165 million worth of shares during the three months ended March 31, 2022, compared to no repurchases in the same period of 2021[34] - The company announced a stock repurchase program with an aggregate repurchase price not to exceed $100.0 million, effective through December 31, 2023, and repurchased $24.9 million of common stock and $256,000 of Series A-1 preferred stock during the three months ended March 31, 2022[82] - Total shares of common stock outstanding as of March 31, 2022, were 42.720 million, a decrease from 43.000 million at the end of the same period in 2021, representing a reduction of 0.65%[28] Market and Economic Conditions - The company continues to monitor macroeconomic trends, including inflation and geopolitical tensions, which have negatively impacted consumer confidence and spending[109] - Consumer prices rose by 7% from December 2020 to December 2021, the largest increase since 1981, which could adversely affect consumer discretionary spending[164] - The ongoing conflict in Ukraine and related sanctions could lead to increased costs and disruptions in the supply chain, negatively impacting the company's financial condition[162] Legal and Compliance - The company has accrued $63,000 in liabilities related to legal contingencies as of March 31, 2022[76] - The company is in compliance with its debt covenants and continues to monitor ongoing compliance[66] - There were no changes in disclosure controls and procedures or internal control over financial reporting during the quarter ended March 31, 2022, that materially affected the company's operations[157] - The evaluation of disclosure controls concluded that they were effective in ensuring timely and accurate reporting as required by the SEC[155]