Overstock.com 2002 Annual Report Download - page 19

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information should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the
Consolidated Financial Statements and the related notes thereto included elsewhere in this Form 10-K.
Year ended December 31,
1998 1999 2000 2001 2002
(in thousands, except per share data)
Consolidated Statement of Operations Data:
Direct revenue $ 584 $ 1,835 $ 21,762 $ 35,243 $ 77,943
Commission revenue — — 867 3,965 12,379
Warehouse revenue — — 2,894 795 1,462
Total revenue 584 1,835 25,523 40,003 91,784
Cost of goods sold(1) 525 2,029 27,812 34,640 73,441
Gross profit (loss) 59 (194) (2,289) 5,363 18,343
Operating expenses:
Sales and marketing expenses(2) 340 4,948 11,376 5,784 8,669
General and administrative expenses(2) 1,099 3,230 7,556 9,441 10,825
Amortization of goodwill — — 226 3,056 —
Amortization of stock-based compensation — — — 649 2,903
Total operating expenses 1,439 8,178 19,158 18,930 22,397
Operating loss (1,380) (8,372) (21,447) (13,567) (4,054)
Interest income — 52 241 461 403
Interest expense (55) (37) (73) (729) (465)
Other income (expense), net 26 — (33) 29 (444)
Net loss (1,409) (8,357) (21,312) (13,806) (4,560)
Deemed dividend related to redeemable common stock — (4) (210) (404) (406)
Deemed dividend related to beneficial conversion feature of preferred stock — — — — (6,607)
Net loss attributable to common shares $(1,409) $(8,361) $(21,522) $(14,210) $(11,573)
Net loss per common share—basic and diluted $ (1.57) $ (4.63) $ (3.63) $ (1.29) $ (0.88)
Weighted average common shares outstanding—basic and diluted 897 1,804 5,922 10,998 13,108
(1) Amounts include stock based compensation of $ — $ — $ — $ 78 $ 373
(2) Amounts exclude stock-based compensation as follows:
Sales and marketing expenses $ — $ — $ — $ 14 $ 83
General and administrative expenses — — — 635 2,820
$ — $ — $ — $ 649 $ 2,903
As of December 31,
1998 1999 2000 2001 2002
(in thousands)
Balance Sheet Data:
Cash and cash equivalents $ — $2,563 $ 8,348 $ 3,729 $11,059
Marketable securities — — — — 21,603
Working capital (639) 1,253 6,440 3,071 35,679
Total assets 104 5,735 30,401 21,714 63,956
Total indebtedness 300 378 3,591 4,677 182
Redeemable common stock — 505 4,930 5,284 4,363
Stockholders' equity (839) 1,835 12,349 5,980 39,271
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following Management's Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our
Consolidated Financial Statements and the related Notes thereto. This discussion contains forward-looking statements based upon current expectations that
involve risks and uncertainties, such as our plans, objectives, expectations and intentions, as set forth under "Special Note Regarding Forward-Looking
Statements." Our actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of
several factors, including those set forth in the following discussion and under "Risk Factors" and elsewhere in this Form 10-K.