Overstock.com 2004 Annual Report Download - page 47

Interest income, interest expense and other income (expense). The increase in interest income from $403,000 in 2002 to $461,000 in 2003 is due to the
increase in our cash and marketable securities from our follow-on offering in the first quarter of 2003. Interest expense decreased from $465,000 in 2002 to
$76,000 in 2003, primarily as a result of our termination of our inventory lines of credit in June 2002 and the reduction in our capital leases. Other income
(expense) changed from expense of $444,000 in 2002 to income of $115,000 in 2003 primarily because the company paid $439,000 of selling costs on behalf
of a selling shareholder as part of the initial public offering in 2002.
Income taxes. We incurred net operating losses in 2002 and 2003, and consequently paid insignificant amounts of federal, state and foreign income
taxes. As of December 31, 2003, we had $62.4 million of net operating loss carryforwards, of which $14.4 million is subject to limitation. These net operating
loss carryforwards will begin to expire in 2019.
Quarterly Results of Operations
The following tables set forth our unaudited quarterly results of operations data for the eight most recent quarters for the period ended December 31,
2004, as well as such data expressed as a percentage of our total revenue for the periods presented. The information in the table below should be read in
conjunction with the Consolidated Financial Statements and the Notes thereto included elsewhere in this Form 10-K. We have prepared this information on
the same basis as the Consolidated Financial Statements and the information includes all adjustments, consisting only of normal recurring adjustments, that
we consider necessary for a fair statement of our financial position and operating results for the quarters presented. Our quarterly operating results have varied
substantially in the past and may vary substantially in the future. You should not draw any conclusions about our future results from the results of operations
for any particular quarter.
Three Months Ended
Mar. 31,
2003
June 30,
2003
Sept. 30,
2003
Dec. 31,
2003
Mar. 31,
2004
June 30,
2004
Sept. 30,
2004
Dec. 31,
2004
(in thousands, except per share data)
Consolidated Statement of Operations Data:
Revenue
Direct revenue $ 25,198 $ 25,402 $ 29,284 $ 58,250 $ 38,580 $ 41,113 $ 43,928 $ 89,589
Fulfillment partner revenue 3,966 3,431 28,504 64,910 43,498 46,679 59,516 131,732
Total revenue 29,164 28,833 57,788 123,160 82,078 87,792 103,444 221,321
Cost of goods sold
Direct 23,484 23,014 26,674 51,130 34,816 36,786 38,594 75,194
Fulfillment partner 1,055 1,016 26,863 60,256 38,793 41,114 51,103 112,458
Total cost of goods sold 24,539 24,030 53,537 111,386 73,609 77,900 89,697 187,652
Gross profit 4,625 4,803 4,251 11,774 8,469 9,892 13,747 33,669
Operating expenses:
Sales and marketing expenses 3,848 2,572 3,855 9,898 4,377 6,605 9,398 20,153
General and administrative expenses 4,545 3,367 4,059 4,940 6,251 5,567 7,376 11,041
Amortization of stock-based compensation 328 112 171 145 135 123 18 84
Total operating expenses 8,721 6,051 8,085 14,983 10,763 12,295 16,792 31,278
Operating income (loss) (4,096) (1,248) (3,834) (3,209) (2,294) (2,403) (3,045) 2,391
Interest income 152 142 98 69 98 127 168 780
Interest expense (7) (55) (8) (6) (16) (46) (77) (636)
Other income (expense), net 10 25 79 1 2 — 3 (54)
Net income (loss) (3,941) (1,136) (3,665) (3,145) (2,210) (2,322) (2,951) 2,481
Deemed dividend related to redeemable common stock (77) (78) (58) (49) (48) (46) (47) (47)
Net income (loss) attributable to common shares $ (4,018) $ (1,214) $ (3,723) $ (3,194) $ (2,258) $ (2,368) $ (2,998) $ 2,434
Net income (loss) per common share
—basic $ (0.26) $ (0.07) $ (0.23) $ (0.19) $ (0.14) $ (0.13) $ (0.16) $ 0.13
—diluted $ (0.26) $ (0.07) $ (0.23) $ (0.19) $ (0.14) $ (0.13) $ (0.16) $ 0.12
Weighted average common shares outstanding
—basic 15,486 16,384 16,419 16,473 16,646 17,577 18,284 19,016
—diluted 15,486 16,384 16,419 16,473 16,646 17,577 18,284 20,780
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