Overstock.com 2002 Annual Report Download - page 24

Operating expenses:
Sales and marketing expenses(2) 1,413 1,710 1,230 1,431 1,219 1,313 2,083 4,054
General and administrative expenses(2) 2,128 2,170 2,402 2,741 2,802 2,195 2,372 3,456
Amortization of goodwill 774 764 759 759 — — — —
Amortization of stock-based compensation 67 113 145 324 846 806 674 577
Total operating expenses 4,382 4,757 4,536 5,255 4,867 4,314 5,129 8,087
Operating income (loss) (3,353) (4,008) (3,536) (2,670) (2,790) (1,765) (559) 1,060
Interest income 72 315 26 48 22 49 229 103
Interest expense (62) (104) (278) (285) (240) (208) (7) (10)
Other income (expense), net 7 14 (2) 10 1 (442) 63 (66)
Net income (loss) (3,336) (3,783) (3,790) (2,897) (3,007) (2,366) (274) 1,087
Deemed dividend related to redeemable common stock (100) (101) (101) (102) (111) (106) (97) (92)
Deemed dividend related to beneficial conversion feature of preferred stock — — — — (6,607) — — —
Net income (loss) attributable to common shares $ (3,436) $ (3,884) $ (3,891) $ (2,999) $ (9,725) $ (2,472) $ (371) $ 995
Net income (loss) per common share
-basic $ (0.32) $ (0.35) $ (0.35) $ (0.27) $ (0.87) $ (0.20) $ (0.03) $ 0.07
-diluted $ (0.32) $ (0.35) $ (0.35) $ (0.27) $ (0.87) $ (0.20) $ (0.03) $ 0.06
Weighted average common shares outstanding
-basic 10,596 11,036 11,172 11,178 11,171 12,280 14,447 14,486
-diluted 10,596 11,036 11,172 11,178 11,171 12,280 14,447 15,696
(1) Amounts include stock based compensation of $ 5 $ 15 $ 19 $ 39 $ 102 $ 96 $ 93 $ 82
(2) Amounts exclude stock-based compensation as follows:
Sales and marketing expenses $ 1 $ 3 $ 3 $ 7 $ 22 $ 21 $ 21 $ 19
General and administrative expenses 66 110 142 317 824 785 653 558
$ 67 $ 113 $ 145 $ 324 $ 846 $ 806 $ 674 $ 577
Three Months Ended
Mar. 31,
2001
June 30,
2001
Sept. 30,
2001
Dec. 31,
2001
Mar. 31,
2002
June 30,
2002
Sept. 30,
2002
Dec. 31,
2002
Additional Operating Data(1):
Gross merchandise sales (in thousands)(2) $ 15,889 $ 12,899 $ 15,634 $ 24,925 $ 21,989 $ 26,505 $ 38,772 $ 67,217
Number of orders(3) 151,039 111,520 131,237 222,522 177,339 212,383 290,649 578,839
Number of new B2C customers(4) 98,889 67,981 81,331 136,744 104,989 117,672 163,691 347,578
Average customer acquisition cost(5) $ 14.29 $ 25.15 $ 15.12 $ 10.46 $ 8.68 $ 9.68 $ 11.64 $ 11.20
The additional operating data sets forth certain operating data relating to our business for the eight most recent quarters for the period ended December 31, 2002. While we believe that
the information in the table above facilitates an understanding of our business and results of operations for the periods presented, such information is not in accordance with generally
accepted accounting principles and should be read in conjunction with the quarterly results of operations data set forth above. We believe that gross merchandise sales is a metric
widely used in our industry and by making this metric available to investors, we believe investors are able to compare our performance against others in our industry. We believe that
investors may use the average customer acquisition cost metric to determine how efficiently we are able to achieve growth, if any. Again, we believe this metric is widely used in our
industry, and providing these values to investors enables them to make more meaningful comparisons.
Gross merchandise sales represents the gross sales price of all sales transactions, including those for which we only record a commission under generally accepted accounting
principles, and therefore differs from GAAP revenue. The following table reconciles total revenue to gross merchandise sales (in thousands):
Three Months Ended
Mar. 31,
2001
June 30,
2001
Sept. 30,
2001
Dec. 31,
2001
Mar. 31,
2002
June 30,
2002
Sept. 30,
2002
Dec. 31,
2002
Total revenue $ 9,578 $ 7,407 $ 8,744 $14,274 $ 12,067 $ 14,380 $ 23,808 $41,529
Add: Obligations payable to third parties upon sale of third-party merchandise 3,252 3,536 4,300 7,392 7,031 9,474 12,488 21,969
Add: Sales returns and discounts 3,059 1,956 2,590 3,259 2,891 2,651 2,476 3,719
Gross merchandise sales $ 15,889 $ 12,899 $ 15,634 $24,925 $ 21,989 $ 26,505 $ 38,772 $67,217
Number of orders represents the number of individual orders for merchandise through our Websites excluding B2B orders.
Number of new B2C customers represents the number of valid new customer accounts. To establish a valid customer account, a person must provide us with the following information
and purchase merchandise on our B2C Website:
(1)
(2)
(3)
(4)