Overstock.com 2010 Annual Report Download - page 71

Table of Contents
Comparison of Years Ended December 31, 2010 and 2009
Historical sources of liquidity
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.
Current sources of liquidity
While we believe that the cash and cash equivalents currently on hand, amounts available under our credit facility and expected cash flows from future
operations will be sufficient to continue operations for at least the next twelve months, we may require additional financing. However, there can be no
assurance that if additional financing is necessary it will be available, or, if available, that such financing can be obtained on satisfactory terms. Failure to
generate sufficient revenues, profits or to raise additional capital could have a material adverse effect on our ability to continue as a going concern and to
achieve our intended business objectives. Any projections of future cash needs and cash flows are subject to substantial uncertainty.
Our principal sources of liquidity are cash flows generated from operations and our existing cash, cash equivalents. At December 31, 2010, our cash and
cash equivalents balance was $124.0 million.
Cash flow information is as follows:
Year ended December 31
2010 2009 2008
Cash provided by (used in):
Operating activities $ 16,322 $ 46,117 $ 6,444
Investing activities (22,700) 2,868 19,533
Financing activities (9,358) (5,685) (22,327)
Free Cash Flow
"Free Cash Flow" (a non-GAAP measure) for the years ended December 31, 2010, 2009 and 2008, was $(4.2) million, $38.8 million and $(12.3) million.
See "Non-GAAP Financial Measures" below for a reconciliation of Free Cash Flow to net cash provided by operating activities.
Cash provided by (used in) operating activities
For the years ended December 31, 2010 and 2009, our operating activities resulted in net cash inflows of $16.3 million and $46.1 million, respectively.
Cash received from customers generally corresponds to our net sales as our customers primarily use credit cards to buy from us causing our receivables
from these sales transactions to settle quickly. We have payment terms with our fulfillment partners that generally extend beyond the amount of time
necessary to collect proceeds from our customers. As a result, following our seasonally strong fourth quarter sales, at December 31 of each year, our cash,
cash equivalents and accounts payable balances typically reach their highest level (other than as a result of cash flows provided by or used in investing
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