Overstock.com(US:OSTK)2022-08-01 16:00Financial Performance - Net revenue for Q2 2022 was $528.1 million, a decrease of 33.6% from $794.5 million in Q2 2021[24]. - Gross profit for Q2 2022 was $121.1 million, down 30.6% from $174.8 million in Q2 2021[24]. - Operating income for Q2 2022 was $11.5 million, a decline of 68.4% compared to $36.5 million in Q2 2021[24]. - Consolidated net income for Q2 2022 was $7.1 million, significantly lower than $309.8 million in Q2 2021[24]. - Income from continuing operations for Q2 2022 was $7.1 million, compared to $82.4 million in Q2 2021[24]. - Total operating expenses for Q2 2022 were $109.6 million, down 20.8% from $138.3 million in Q2 2021[24]. - Basic net income per share for continuing operations was $0.12 in Q2 2022, down from $1.73 in Q2 2021[24]. - Consolidated net income for the six months ended June 30, 2022, was $17,270, compared to $325,669 for the same period in 2021, indicating a significant decrease[32]. - For the six months ended June 30, 2022, net revenue decreased by 26.8% to $1,064.2 million from $1,454.4 million in the same period in 2021, driven by a 38% decrease in customer orders[112]. - Gross profit for the six months ended June 30, 2022, decreased by 25.0% to $246.3 million from $328.4 million in the same period in 2021, with a gross margin of 23.1%[116]. Assets and Liabilities - As of June 30, 2022, total assets decreased to $1,006,950,000 from $1,065,966,000 as of December 31, 2021, reflecting a decline of approximately 5.5%[18]. - Total current liabilities decreased to $253,644,000 from $272,333,000, a reduction of approximately 6.8%[18]. - Stockholders' equity decreased to $708,710,000 from $744,386,000, representing a decline of about 4.8%[20]. - Long-term debt decreased to $36,248,000 from $37,984,000, a decline of approximately 4.6%[18]. - The total liabilities decreased to $298,240,000 from $321,580,000, a reduction of approximately 7.3%[18]. - The company holds equity securities valued at $350,580,000, up from $342,682,000, an increase of about 2.6%[18]. - The carrying amount of equity method securities was $350.2 million as of June 30, 2022, with $114.9 million valued under the fair value option[55]. Cash Flow and Financing Activities - Net cash provided by continuing operating activities was $21,822 for the six months ended June 30, 2022, down from $120,047 in the prior year[32]. - The company reported a net cash used in financing activities of $65,232 for the six months ended June 30, 2022, compared to a net cash used of $7,094 in the same period of 2021[34]. - Cash, cash equivalents, and restricted cash at the end of the period were $442,787, down from $537,653 at the end of June 2021[34]. - Financing activities led to a net cash outflow of $65.2 million for the six months ended June 30, 2022, mainly due to $60.1 million for stock repurchases[136]. - The company has total contractual cash obligations of $63.9 million as of June 30, 2022, including operating leases and loan agreements[139]. Stock and Shareholder Information - Total shares of common stock outstanding increased to 45.7 million by the end of Q2 2022 from 43.0 million at the end of Q2 2021[29]. - The stock repurchase program allows for an aggregate repurchase price not to exceed $100.0 million through December 31, 2023[79]. - During the three months ended June 30, 2022, the company repurchased $34.9 million of common stock at an average price of $30.69 per share[80]. - For the six months ended June 30, 2022, the company repurchased $59.8 million of common stock at an average price of $36.16 per share[80]. - A total of 1,136,926 common shares were purchased under the stock repurchase program during the quarter ended June 30, 2022[173]. Operational Insights - The company operates as a single segment primarily consisting of e-commerce product sales through its website[39]. - The company experienced a heightened inflationary environment impacting consumer confidence and spending, negatively affecting sales during the second quarter of 2022[105]. - Employee turnover and inflation in product costs have increased, impacting operational costs significantly[105]. - The company continues to work with partners to limit price increases in response to higher costs while improving gross margins year over year[105]. - The average order value increased by 16%, driven by a continued product mix shift into furniture and home furnishings categories[102]. Economic and Market Conditions - The company anticipates continued challenges from macroeconomic conditions, including inflation and geopolitical factors, which may impact future performance[113]. - Economic factors such as inflation and recession could adversely affect consumer discretionary spending, impacting financial performance[164]. - Global conflicts and sanctions could increase costs and disrupt supply chains, negatively impacting business operations[163]. - Inflationary pressures have impacted the supply chain, with increased costs in commodities, shipping, energy, and labor[151]. Regulatory and Compliance Issues - New regulations could increase the cost of doing business and expose the company to compliance risks, impacting financial results[167]. - Restrictions on cookie tracking technologies could limit the accuracy of online user information collected, adversely affecting customer acquisition[170]. - The company is involved in litigation that could result in significant damages or costs, potentially impacting financial position and cash flows[160].