Overstock.com(OSTK) - 2023 Q1 - Quarterly Report

Financial Performance - Net revenue for Q1 2023 was $381.14 million, a decrease of 29$536.04 million in Q1 2022[19] - Gross profit for Q1 2023 was $89.71 million, down from$125.21 million in Q1 2022, reflecting a gross margin of 23.5%[19] - Operating loss for Q1 2023 was $8.36 million, compared to an operating income of$12.45 million in Q1 2022[19] - Net loss for Q1 2023 was $10.31 million, compared to a net income of$10.12 million in Q1 2022, resulting in a loss per share of $0.23[19] - The company reported a decrease in total operating expenses to$98.08 million in Q1 2023 from $112.76 million in Q1 2022[19] - For the three months ended March 31, 2023, Overstock.com reported a net loss of$10.3 million compared to a net income of $10.1 million for the same period in 2022[26] - Total cash provided by operating activities was$20.0 million, a decrease from $33.2 million in the prior year[26] - The accumulated deficit increased to$184.1 million as of March 31, 2023, compared to $126.5 million at the end of the previous year[25] - Cash, cash equivalents, and restricted cash at the end of the period totaled$374.9 million, down from $493.5 million a year earlier[26] - The company experienced a significant increase in accounts payable, which rose to$10.2 million from $4.3 million year-over-year[26] Assets and Liabilities - Total current assets increased to$421.25 million as of March 31, 2023, compared to $414.51 million at the end of 2022[16] - Total liabilities rose to$246.88 million as of March 31, 2023, up from $232.72 million at the end of 2022[16] - Cash and cash equivalents were$374.71 million as of March 31, 2023, slightly up from $371.26 million at the end of 2022[16] - Total assets as of March 31, 2023, amounted to$348,570,000, an increase from $335,872,000 as of December 31, 2022[36] - Total outstanding debt as of March 31, 2023, was$37,100,000, net of capitalized debt issuance costs[50] - Present value of lease liabilities as of March 31, 2023, was $6,854,000, with total lease payments amounting to$7,389,000[56] Shareholder Information - The company issued 268 shares of common stock upon vesting of restricted stock, up from 243 shares in the previous year[25] - Total shares of common stock outstanding increased to 45.2 million from 42.7 million year-over-year[25] - The company repurchased no shares during the current quarter, compared to $25.2 million in share repurchases in the same quarter last year[26] - No shares were repurchased under the stock repurchase program during the three months ended March 31, 2023, with$19.9 million available for future repurchases[66] Expenses - Sales and marketing expenses as a percentage of revenue increased from 10.9% in Q1 2022 to 12.3% in Q1 2023, primarily due to higher performance marketing expenses[87] - Technology expenses totaled $30.5 million for the three months ended March 31, 2023, a decrease of$2.4 million compared to the same period in 2022[88] - Sales and marketing expenses for the three months ended March 31, 2023, were $47.0 million, a decrease of 19.6$58.5 million for the same period in 2022[103] - General and administrative expenses were $20.5 million for the three months ended March 31, 2023, reflecting a 3.6$21.3 million in the same period in 2022[109] - Other expense, net increased significantly to $7.4 million for the three months ended March 31, 2023, compared to$114,000 for the same period in 2022, primarily due to a $6.9 million increase in loss from equity method securities[110] Legal and Compliance - The company is currently involved in multiple legal proceedings, which could materially affect its business and financial position[58] - The company intends to vigorously defend against ongoing legal actions, including a consolidated securities class action lawsuit[59] - The company continues to cooperate with the SEC regarding subpoenas related to insider trading policies and communications with executives[58] - The company has made certain indemnities and guarantees, but is unable to estimate potential exposure under these items[63] - The company has not recorded any liability for indemnities and guarantees in its consolidated balance sheets[63] Market and Strategy - Overstock.com is focusing on international market expansion and evolving business practices, including exiting non-home categories[13] - The strategy to exit non-home categories has been a factor in the decreased order activity and revenue[86] - International net revenues were less than 1% of total net revenues for both the three months ended March 31, 2023, and 2022[96] - The company continues to monitor macroeconomic trends, including inflation and consumer sentiment, which may impact future performance[89] - The company is actively monitoring macroeconomic conditions, including inflation and rising interest rates, to manage liquidity and operational efficiency[116] Tax and Interest - The effective tax rate for the three months ended March 31, 2023, was 21.9%, up from 17.1% in the same period in 2022, mainly due to increased tax deficiencies from stock-based compensation[113] - The company has a fixed blended annual interest rate of 4.45% on its loan agreements, resulting in no direct financial statement risk associated with changes in interest rates[131] - Most sales and operating expenses are denominated in U.S. dollars, indicating minimal exposure to foreign currency risk[132] - The company is facing inflationary pressures due to increases in commodity, shipping, energy, and labor costs, which could impact financial performance if not managed effectively[133]