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Overstock.com Inc. Reports Operating Results (10-Q)

April 28, 2011 | About:
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10qk

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Overstock.com Inc. (OSTK) filed Quarterly Report for the period ended 2011-03-31.

Overstock.com Inc. has a market cap of $346.2 million; its shares were traded at around $14.89 with a P/E ratio of 26.6 and P/S ratio of 0.3.

Highlight of Business Operations:

On a trailing twelve month basis, we experienced a $17.4 million year-over-year decrease in free cash flow (See Non-GAAP Financial Measures below for a reconciliation of Free Cash Flow to net cash provided by operating activities), from $35.0 million in Q1 2010 to $17.5 million this quarter. This was due primarily to $7.7 million of incremental capital expenditures during the last twelve months compared to the twelve month period ending Q1 2010 and to a $9.7 million decrease in operating cash flow.

Direct revenue decreased 4.8% to $48.2 million for the three months ended March 31, 2011, from $50.6 million for the three months ended March 31, 2010. Fulfillment partner revenue increased 1.7% to $217.3 million for the three months ended March 31, 2011, from $213.8 million for the three months ended March 31, 2010.

Technology expenses totaled $16.7 million and $13.9 million for the three months ended March 31, 2011 and 2010, respectively, representing 6.3% and 5.3% of total net revenue for those respective periods. The $2.8 million increase is primarily due to a $1.6 million increase in salaries and benefits expense (primarily due to increases in staffing), and a $898,000 increase in depreciation expense as a result of significant capital expenditures for information technology assets in 2010.

G&A expenses totaled $18.0 million and $14.9 million for the three months ended March 31, 2011 and 2010, respectively, representing approximately 6.8% and 5.6% of total net revenue for those respective periods. The $3.1 million increase is primarily due to a $1.8 million increase in legal fees, a $1.0 million increase in salaries and benefits expense (primarily due to increases in staffing), partially offset by a $1.1 million decrease in professional service fees for our external auditors.

Our provision for income taxes for the three months ended March 31, 2011 of $22,000 is for certain income tax uncertainties, including interest and penalties. As of March 31, 2011 and December 31, 2010 we had federal net operating loss carry forwards of approximately $167.1 million and $166.7 million, respectively, and state net operating loss carry forwards of approximately $151.1 million and $150.7 million, respectively, which may be used to offset future taxable income. We may have experienced ownership changes under Internal Revenue Code Section 382 that would limit our ability to fully use our net operating losses.

Prior to the second quarter of 2002, we financed our activities primarily through a series of private sales of equity securities, warrants to purchase our common stock and promissory notes. During the second quarter of 2002, we completed our initial public offering pursuant to which we received approximately $26.1 million in cash, net of underwriting discounts, commissions, and other related expenses. Additionally, we completed follow-on offerings in February 2003, May 2004 and November 2004, pursuant to which we received approximately $24.0 million, $37.9 million and $75.2 million, respectively, in cash, net of underwriting discounts, commissions, and other related expenses. In November 2004, we also received $116.2 million in proceeds from the issuance of our convertible senior notes in a transaction exempt from registration under the Securities Act. During 2006, we received $64.4 million from two stock offerings in May and December.

Read the The complete Report

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