Overstock.com 2006 Annual Report Download - page 94

pursuant to which it received $116.2 million, net of $3.8 million of initial purchaser's discount and debt issuance costs.
During 2006, the Company closed two offerings under an existing "shelf" registration statement, pursuant to which it sold 1.0
million shares of common stock in May and 2.7 million shares of common stock in December, with proceeds to the Company of
approximately $25.0 million and $39.4 million, respectively, net of $594,000 of issuance costs.
4. RESTRUCTURING EXPENSE
During the fourth quarter of 2006, the Company commenced implementation of a facilities consolidation and restructuring
program designed to reduce the overall expense structure in an effort to improve future operating performance. The planned actions
include the termination of a co-location data center lease, marketing the current office facilities for sub-lease and marketing non-core
businesses for sale. The facilities consolidation and restructuring program should be substantially completed during calendar year
2007.
In 2006, the charges associated with the facilities consolidation and restructuring program are as follows:
Lease termination costs $ 5,499
Elimination of straight-line rent liability associated with terminated lease (913)
Accelerated amortization of leasehold improvements and asset retirement
obligation (Note 9) 1,088
Total $5,674
The Company is in the process of reducing facilities and warehouse lease costs and other expenses. Among other things, the
Company intends to move its corporate offices into existing space in its main Salt Lake City warehouse.
Lease termination costs relate primarily to the termination of leases in conjunction with the consolidation of the IT data center
and co-location facilities. The accelerated amortization of leasehold improvements relates to our current office facilities that we are
attempting to sublease. In addition, we are incurring costs to return these office facilities to their original condition as required by our
lease agreement, including the removal of an escalator system. At December 31, 2006, the accrued liability associated with the
restructuring program was approximately $5.9 million, including $5.5 million related to lease termination costs and $450,000 for the
asset retirement obligation (see Note 9), all of which is to be paid during the first quarter of 2007.
5. ACQUISITION AND SUBSEQUENT DISCONTINUED OPERATIONS
On July 1, 2005, the Company acquired all the outstanding capital stock of Ski West, Inc. ("Ski West") for an aggregate of $25.1
million (including $111,000 of capitalized acquisition related expenses). In addition, the Company may be subject to additional earn
out payments (based on a percentage of operating profits for each of the next four years beginning in 2006 as follows: 50%, 33.3%,
20%, and 10%, respectively), subject to reduction under certain circumstances, pursuant to a Stock Purchase Agreement dated
June 24, 2005 and the First Amendment to that Stock Purchase Agreement among the Company, Ski West, and all of the shareholders
of Ski West dated March 1, 2006.
Ski West is an on-line travel company whose proprietary technology provides easy consumer access to a large, fragmented, hard-
to-find inventory of lodging, vacation, cruise and transportation bargains. The travel offerings are primarily in popular ski areas in the
U.S. and Canada, with more recent expansion into the Caribbean and Mexico, as well as cruises. These factors contributed to a
purchase price in excess of the
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