|
Delaware
|
|
000-49799
|
|
87-0634302
|
(State or other jurisdiction of
|
|
(Commission File Number)
|
|
(I.R.S. Employer
|
incorporation or organization)
|
|
|
|
Identification Number)
|
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
|
|
o
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
|
|
o
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
|
|
o
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
|
|
o
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
|
|
|
OVERSTOCK.COM, INC.
|
|
|
|
|
By:
|
/s/ PATRICK M. BYRNE
|
|
|
Patrick M. Byrne
|
|
|
Chief Executive Officer
|
|
Date:
|
May 9, 2019
|
1.
|
Blockchain: Jonathan Johnson’s organization and management of Medici has been superb.
|
a.
|
tZERO:
|
i.
|
As described on the last earnings call, I calculate the security token opportunity could be in the range of tens or hundreds of billions of dollars (“as with all estimates, this rests on the validity of assumptions and extrapolations described in that call,” interject the lawyers). As a result, over four years ago we began building, buying, and assembling the components of a blockchain-based capital market. We have deployed well over $100 million of your capital over four years in that quest. Maximizing our lead in the field is an organizational imperative.
|
ii.
|
For that reason, our decision last year to move Saum Noursalehi to tZERO and give him wide latitude to develop and run that business was a great one. Saum made great strides developing tZERO's corporate roster, adding top-shelf talent in key roles and trimming legacy functions that will not fit the company as it continues to evolve. In the year he has been running tZERO, Saum has also been quick at designing and building products, again. Saum figured out how to accomplish what was needed, built the product roadmaps, and marshalled a Manhattan Project's worth of development successfully.
|
iii.
|
Our security token capital market that we dreamed of four years ago is now ready (this month) for the public to use. Starting in a few weeks and running into September, we are rolling out our full kit of technology and apps for security token trading: a great crypto trading app, a migration of OSTKP to a token, an integration
|
iv.
|
There is an extremely broad range of people who want to work with us to create security token solutions for REITs, funds (VC and PE), bonds, Hollywood finance, agricultural commodities, etc. We will be walking through some of this in our earnings call, but the main event is this: we have completed the system, it is launching in weeks, and we expect to start seeing revenue from actual security token trading in June.
|
v.
|
tZERO headquarters have moved to Freedom Tower, 58th floor. It is surprisingly affordable, and a statement.
|
b.
|
Bitt continues to break new ground in the field of blockchain central banking. Bitt’s deal with the Eastern Caribbean Central Bank (ECCB) is a global first. The Digital Central Banking platform is being built in a collaboration between Barbados and Utah, where we have much experience in building enterprise class systems (this is the strength of the model of using our Utah operations as a hatchery). My meetings with numerous central bankers, ministers of finance, heads of state, and global development institutions suggest to me that central bankers are watching the ECCB experience closely and may be eager to see digital central banking introduced in their nations.
|
c.
|
Medici Land Governance (MLG) has developed products that we believe can disrupt the field of titling with products that drop the cost of titling far below the competition and can act much faster.
|
i.
|
In Lusaka, Zambia, our pilot project of 50,000 peri-urban homes went well. I am proud to announce that we have signed a contract to do a minimum of 250,000 additional homes (and potentially a million or more) in Lusaka over 10 years (we in fact think we will complete the project far more quickly than that). This contract is a PPP (Public Private Partnership) with economics for MLG that are respectable enough that it validates the whole business model.
|
ii.
|
In Rwanda, MLG is completing the online platform through which Rwandans will be able to manage 8 million titles.
|
iii.
|
MLG’s products, working in the field successfully, are now ready to be taken global. Besides the recently announced deal in Tulum, Mexico, there are nations in the Caribbean, South Asia, the Middle East, and Latin America with which MLG is in discussions. Bringing land governance to the world's five billion people who live outside the rule of law is an opportunity measured in trillions of dollars.
|
d.
|
Other members of Medici’s
keiretsu
of blockchain firms continue to make headlines, from supply chains for sorghum in Mexico to handling voting in West Virginia and Denver.
|
e.
|
Going forward, we plan to focus on nurturing and guiding the firms in our
keiretsu,
rather than focus on expanding that cohort much more.
|
2.
|
Retail is returning to be a source of positive cash flow rather than a consumer of it.
|
a.
|
Contribution:
|
i.
|
I told shareholders that this would be a year of extraordinary growth in “contribution” (gross profit minus sales and marketing expenses). It grew 111% for Q1. I expect it to hold or increase for at least two more quarters. Why?
|
ii.
|
Our search engine rankings have seen seven consecutive months of sequential improvements. That’s real headway. Six more months of similar headway would result in a full recovery in SEO.
|
iii.
|
A new ad tech system that will allow us to better monetize our site traffic went into alpha release this week.
|
iv.
|
We have made a significant change in the architecture of our logistics. We anticipate this could lead to a savings of as much as several tens of millions of dollars per year. The nature of the change actually is hurting margins slightly now, but starting in Q3 the change pays excellent dividends. Note that notwithstanding this fact about the logistics change hurting gross margin slightly for the first half of this year, at 10.8% our contribution margin is double digit for the first time in many quarters.
|
v.
|
Last quarter, I gave guidance that our 2019 contribution would be $160 million. I am now raising that to $165 million.
|
b.
|
G&A Expenses: Our expense management has been aggressive. We have taken a tremendous (>25%) amount of cost out of our expense structure in the last 5 months. We are lean and fit as an organization.
|
c.
|
Taking the previous two points together, I am raising my Retail Adjusted EBITDA guidance for 2019 from $10 million to $15 million. I believe that by 2020, Retail positive Operating Cash Flows will be comparable with the past.
|
d.
|
It is time to cap off the Retail restructuring by naming Dave Nielsen President of Retail. Dave and I first worked together a decade ago. He has a background both in brick-and-mortar (Payless Shoes) and logistics (Global Access) and has been a star contributor to our firm. I know him to be a first-rate professional, and he is extremely highly regarded within the firm. This promotion marks the completion of a redesign of our executive structure that began near the end of last year: the result of the process is a highly skilled, competent, and cohesive Retail executive team, of which Dave is now the leader.
|
3.
|
Balance sheet & liquidity:
|
a.
|
We completed our $150 million ATM.
|
b.
|
We have accepted a $5 million investment from GSR at a $1 billion valuation, and released them from all previous binding contracts. We are still working with Makara and feel optimistic (but not certain) that something can be consummated with them (and GSR may join in again at that point).
|
c.
|
My ambition is to structure things so that for 2020, the cash thrown off by Retail largely covers the cash burn required to fuel our Medici blockchain
keiretsu,
without assuming that those firms find their own capitalization, and without assuming that any of them become oil gushers (though with tZERO, anything is possible).
|
•
|
Revenue: $367.7M vs. $445.3M (17% decrease);
|
•
|
Gross profit: $73.1M vs. $93.9M (22% decrease);
|
•
|
Gross margin: 19.9% vs. 21.1% (119 basis point decrease);
|
•
|
Sales and marketing expense: $33.5M vs. $77.2M (57% decrease);
|
•
|
G&A/Technology expense: $75.7M vs. $71.0M (6% increase);
|
•
|
Pre-tax loss: $42.0M vs. $54.7M ($12.7M decrease);
|
◦
|
Pre-tax loss - Retail: $13.2M
|
◦
|
Pre-tax loss - tZERO: $15.4M
|
◦
|
Pre-tax loss - Other: $13.4M
|
•
|
Net loss*: $39.2M vs. $50.9M ($11.7M decrease);
|
•
|
Diluted net loss per share: $1.18/share vs. $1.74/share ($0.56/share decrease);
|
•
|
Adjusted EBITDA (non-GAAP financial measure): ($23.7M) vs. ($30.6M) ($6.9M increase);
|
◦
|
Adjusted EBITDA - Retail: ($2.5M)
|
◦
|
Adjusted EBITDA - tZERO: ($13.2M)
|
◦
|
Adjusted EBITDA - Other: ($8.0M).
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
Assets
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
119,632
|
|
|
$
|
141,512
|
|
Restricted cash
|
2,483
|
|
|
1,302
|
|
||
Accounts receivable, net
|
30,819
|
|
|
35,930
|
|
||
Inventories, net
|
13,554
|
|
|
14,108
|
|
||
Prepaids and other current assets
|
18,465
|
|
|
22,415
|
|
||
Total current assets
|
184,953
|
|
|
215,267
|
|
||
Property and equipment, net
|
131,656
|
|
|
134,687
|
|
||
Intangible assets, net
|
17,243
|
|
|
13,370
|
|
||
Goodwill
|
25,434
|
|
|
22,895
|
|
||
Equity securities
|
48,466
|
|
|
60,427
|
|
||
Operating lease right-of-use assets
|
37,262
|
|
|
—
|
|
||
Other long-term assets, net
|
7,875
|
|
|
14,573
|
|
||
Total assets
|
$
|
452,889
|
|
|
$
|
461,219
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable
|
$
|
74,658
|
|
|
$
|
102,574
|
|
Accrued liabilities
|
81,224
|
|
|
87,858
|
|
||
Deferred revenue
|
39,938
|
|
|
50,578
|
|
||
Operating lease liabilities, current
|
5,726
|
|
|
—
|
|
||
Other current liabilities
|
482
|
|
|
476
|
|
||
Total current liabilities
|
202,028
|
|
|
241,486
|
|
||
Long-term debt, net
|
3,098
|
|
|
3,069
|
|
||
Operating lease liabilities, non-current
|
36,108
|
|
|
—
|
|
||
Other long-term liabilities
|
2,093
|
|
|
5,958
|
|
||
Total liabilities
|
243,327
|
|
|
250,513
|
|
||
Stockholders' equity:
|
|
|
|
|
|
||
Preferred stock, $0.0001 par value, authorized shares - 5,000
|
|
|
|
|
|
||
Series A, issued and outstanding - 127 and 127
|
—
|
|
|
—
|
|
||
Series B, issued and outstanding - 355 and 355
|
—
|
|
|
—
|
|
||
Common stock, $0.0001 par value, Authorized shares - 100,000
|
|
|
|
|
|
||
Authorized shares - 100,000
|
|
|
|
|
|
||
Issued shares - 37,802 and 35,346
|
|
|
|
|
|
||
Outstanding shares - 34,483 and 32,146
|
3
|
|
|
3
|
|
||
Additional paid-in capital
|
701,877
|
|
|
657,981
|
|
||
Accumulated deficit
|
(497,716
|
)
|
|
(458,897
|
)
|
||
Accumulated other comprehensive loss
|
(580
|
)
|
|
(584
|
)
|
||
Treasury stock at cost - 3,319 and 3,200
|
(68,753
|
)
|
|
(66,757
|
)
|
||
Equity attributable to stockholders of Overstock.com, Inc.
|
134,831
|
|
|
131,746
|
|
||
Equity attributable to noncontrolling interests
|
74,731
|
|
|
78,960
|
|
||
Total stockholders' equity
|
209,562
|
|
|
210,706
|
|
||
Total liabilities and stockholders' equity
|
$
|
452,889
|
|
|
$
|
461,219
|
|
|
Three months ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
Revenue, net
|
|
|
|
|
|
||
Retail
|
$
|
362,625
|
|
|
$
|
439,996
|
|
Other
|
5,104
|
|
|
5,335
|
|
||
Total net revenue
|
367,729
|
|
|
445,331
|
|
||
Cost of goods sold
|
|
|
|
|
|
||
Retail
|
290,640
|
|
|
347,580
|
|
||
Other
|
3,965
|
|
|
3,882
|
|
||
Total cost of goods sold
|
294,605
|
|
|
351,462
|
|
||
Gross profit
|
73,124
|
|
|
93,869
|
|
||
Operating expenses:
|
|
|
|
|
|
||
Sales and marketing
|
33,477
|
|
|
77,214
|
|
||
Technology
|
35,433
|
|
|
31,294
|
|
||
General and administrative
|
40,232
|
|
|
39,755
|
|
||
Total operating expenses
|
109,142
|
|
|
148,263
|
|
||
Operating loss
|
(36,018
|
)
|
|
(54,394
|
)
|
||
Interest income
|
403
|
|
|
544
|
|
||
Interest expense
|
(127
|
)
|
|
(874
|
)
|
||
Other income (expense), net
|
(6,272
|
)
|
|
(9
|
)
|
||
Loss before income taxes
|
(42,014
|
)
|
|
(54,733
|
)
|
||
Provision (benefit) from income taxes
|
878
|
|
|
(277
|
)
|
||
Net loss
|
$
|
(42,892
|
)
|
|
$
|
(54,456
|
)
|
Less: Net loss attributable to noncontrolling interests
|
(3,648
|
)
|
|
(3,547
|
)
|
||
Net loss attributable to stockholders of Overstock.com, Inc.
|
$
|
(39,244
|
)
|
|
$
|
(50,909
|
)
|
Net loss per common share—basic:
|
|
|
|
|
|
||
Net loss attributable to common shares—basic
|
$
|
(1.18
|
)
|
|
$
|
(1.74
|
)
|
Weighted average common shares outstanding—basic
|
32,370
|
|
|
28,566
|
|
||
Net loss per common share—diluted:
|
|
|
|
|
|
||
Net loss attributable to common shares—diluted
|
$
|
(1.18
|
)
|
|
$
|
(1.74
|
)
|
Weighted average common shares outstanding—diluted
|
32,370
|
|
|
28,566
|
|
|
Three months ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
Cash flows from operating activities:
|
|
|
|
|
|
||
Net loss
|
$
|
(42,892
|
)
|
|
$
|
(54,456
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
||
Depreciation of property and equipment
|
6,575
|
|
|
6,581
|
|
||
Amortization of intangible assets
|
1,481
|
|
|
918
|
|
||
Amortization of right-of-use assets
|
1,667
|
|
|
—
|
|
||
Stock-based compensation to employees and directors
|
3,985
|
|
|
6,435
|
|
||
Deferred income taxes, net
|
895
|
|
|
(267
|
)
|
||
Purchase price allocation adjustments
|
(1,988
|
)
|
|
—
|
|
||
(Gain)/loss on sale of cryptocurrencies
|
9
|
|
|
(1,529
|
)
|
||
Impairment of cryptocurrencies
|
318
|
|
|
8,793
|
|
||
Loss on sale of equity securities
|
977
|
|
|
—
|
|
||
Impairment of and loss on equity securities, net
|
4,601
|
|
|
—
|
|
||
Allowance on notes receivable
|
1,237
|
|
|
—
|
|
||
Other
|
1,014
|
|
|
185
|
|
||
Changes in operating assets and liabilities, net of acquisitions:
|
|
|
|
|
|
||
Accounts receivable, net
|
14,068
|
|
|
8,282
|
|
||
Inventories, net
|
554
|
|
|
1,232
|
|
||
Prepaids and other current assets
|
3,106
|
|
|
2,238
|
|
||
Other long-term assets, net
|
(189
|
)
|
|
(2,261
|
)
|
||
Accounts payable
|
(28,023
|
)
|
|
4,325
|
|
||
Accrued liabilities
|
(6,962
|
)
|
|
9,274
|
|
||
Deferred revenue
|
(10,640
|
)
|
|
284
|
|
||
Operating lease liabilities
|
(1,249
|
)
|
|
—
|
|
||
Other long-term liabilities
|
27
|
|
|
(216
|
)
|
||
Net cash used in operating activities
|
(51,429
|
)
|
|
(10,182
|
)
|
||
Cash flows from investing activities:
|
|
|
|
|
|
||
Purchase of intangible assets
|
—
|
|
|
(9,181
|
)
|
||
Purchase of equity securities
|
(2,500
|
)
|
|
(16,970
|
)
|
||
Proceeds from sale of equity securities
|
5,535
|
|
|
—
|
|
||
Disbursement of notes receivable
|
(2,000
|
)
|
|
—
|
|
||
Acquisitions of businesses, net of cash acquired
|
4,885
|
|
|
(11,769
|
)
|
||
Expenditures for property and equipment, including internal-use software and website development
|
(4,144
|
)
|
|
(4,029
|
)
|
||
Other
|
(2
|
)
|
|
(1
|
)
|
||
Net cash provided by (used in) invest
ing activities
|
1,774
|
|
|
(41,950
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
|
||
Payments on finance/capital lease obligations
|
(126
|
)
|
|
(123
|
)
|
||
Proceeds from issuance and exercise of stock warrants
|
—
|
|
|
50,562
|
|
||
Proceeds from security token offering, net of offering costs and withdrawals
|
—
|
|
|
62,073
|
|
||
Proceeds from sale of common stock, net of offering costs
|
30,957
|
|
|
—
|
|
||
Payments of taxes withheld upon vesting of restricted stock
|
(1,353
|
)
|
|
(4,034
|
)
|
||
Other
|
(522
|
)
|
|
—
|
|
||
Net cash provided by financing activities
|
28,956
|
|
|
108,478
|
|
||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
(20,699
|
)
|
|
56,346
|
|
||
Cash, cash equivalents and restricted cash, beginning of period
|
142,814
|
|
|
203,670
|
|
||
Cash, cash equivalents and restricted cash, end of period
|
$
|
122,115
|
|
|
$
|
260,016
|
|
|
Three months ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
||
Cash paid during the period:
|
|
|
|
|
|
||
Interest paid, net of amounts capitalized
|
$
|
86
|
|
|
$
|
789
|
|
Income taxes paid, net
|
130
|
|
|
7
|
|
||
Non-cash investing and financing activities:
|
|
|
|
|
|
||
Property and equipment, including internal-use software and website development costs, financed through accounts payable and accrued liabilities
|
$
|
304
|
|
|
$
|
965
|
|
Common stock repurchased through business combination
|
643
|
|
|
—
|
|
||
Note receivable converted to equity security
|
359
|
|
|
200
|
|
||
Cryptocurrency received in security token offering
|
—
|
|
|
13,878
|
|
||
Proceeds from sale of common stock included in accounts receivable
|
8,957
|
|
|
—
|
|
||
Deposit applied to business combination purchase price
|
7,347
|
|
|
—
|
|
||
Equity method security applied to business combination purchase price
|
3,707
|
|
|
—
|
|
||
Recognition of right-of-use assets upon adoption of ASC 842
|
30,968
|
|
|
—
|
|
|
Three months ended March 31,
|
||||||||||||||
|
Retail
|
|
tZERO
|
|
Other
|
|
Total
|
||||||||
2019
|
|
|
|
|
|
|
|
|
|||||||
Revenue, net
|
$
|
362,625
|
|
|
$
|
4,496
|
|
|
$
|
608
|
|
|
$
|
367,729
|
|
Cost of goods sold
|
290,640
|
|
|
3,357
|
|
|
608
|
|
|
294,605
|
|
||||
Gross profit
|
$
|
71,985
|
|
|
$
|
1,139
|
|
|
$
|
—
|
|
|
$
|
73,124
|
|
Operating expenses (1)
|
85,336
|
|
|
15,553
|
|
|
8,253
|
|
|
109,142
|
|
||||
Interest and other income (expense), net
|
135
|
|
|
(963
|
)
|
|
(5,168
|
)
|
|
(5,996
|
)
|
||||
Pre-tax loss
|
$
|
(13,216
|
)
|
|
$
|
(15,377
|
)
|
|
$
|
(13,421
|
)
|
|
(42,014
|
)
|
|
Provision for income taxes
|
|
|
|
|
|
|
|
|
878
|
|
|||||
Net loss
|
|
|
|
|
|
|
$
|
(42,892
|
)
|
||||||
|
|
|
|
|
|
|
|
||||||||
2018
|
|
|
|
|
|
|
|
|
|||||||
Revenue, net
|
$
|
439,996
|
|
|
$
|
4,852
|
|
|
$
|
483
|
|
|
$
|
445,331
|
|
Cost of goods sold
|
347,580
|
|
|
3,399
|
|
|
483
|
|
|
351,462
|
|
||||
Gross profit
|
$
|
92,416
|
|
|
$
|
1,453
|
|
|
$
|
—
|
|
|
$
|
93,869
|
|
Operating expenses
|
125,532
|
|
|
19,959
|
|
|
2,772
|
|
|
148,263
|
|
||||
Interest and other income (expense), net
|
(455
|
)
|
|
453
|
|
|
(337
|
)
|
|
(339
|
)
|
||||
Pre-tax loss
|
$
|
(33,571
|
)
|
|
$
|
(18,053
|
)
|
|
$
|
(3,109
|
)
|
|
(54,733
|
)
|
|
Benefit from income taxes
|
|
|
|
|
|
|
|
|
(277
|
)
|
|||||
Net loss
|
|
|
|
|
|
|
$
|
(54,456
|
)
|
(1)
|
— Corporate support costs have been allocated
$12.6 million
,
$1.8 million
, and
$3.6 million
to Retail, tZERO, and Other, respectively. Unallocated corporate support costs of
$1.8 million
are included in Other.
|
•
|
Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
|
•
|
Adjusted EBITDA does not reflect stock-based compensation and related taxes;
|
•
|
Adjusted EBITDA does not reflect adjustments related to the carrying values of our equity interests in unconsolidated entities;
|
•
|
Adjusted EBITDA does not reflect interest expenses associated with our borrowings;
|
•
|
Adjusted EBITDA does not reflect income tax payments that may represent a reduction in cash available to us;
|
•
|
Adjusted EBITDA does not reflect changes in our working capital; and
|
•
|
Other companies, including companies in our industry, may calculate Adjusted EBITDA differently, which reduces its usefulness as a comparative measure.
|
|
Three months ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
Adjusted EBITDA
|
|
|
|
||||
Retail
|
$
|
(2,460
|
)
|
|
$
|
(24,372
|
)
|
tZERO
|
(13,207
|
)
|
|
(4,382
|
)
|
||
Other
|
(7,995
|
)
|
|
(1,836
|
)
|
||
Adjusted EBITDA
|
(23,662
|
)
|
|
(30,590
|
)
|
||
Less: Special items (see table below)
|
1,757
|
|
|
9,870
|
|
||
Less: Depreciation and amortization
|
6,614
|
|
|
7,499
|
|
||
Less: Stock-based compensation
|
3,985
|
|
|
6,435
|
|
||
Less: Interest (income) expense, net
|
(276
|
)
|
|
330
|
|
||
Less: Other income (expense), net (1)
|
6,272
|
|
|
9
|
|
||
Less: Provision (benefit) for income taxes
|
878
|
|
|
(277
|
)
|
||
Net loss
|
$
|
(42,892
|
)
|
|
$
|
(54,456
|
)
|
|
|
|
|
||||
Special items:
|
|
|
|
||||
Severance
|
$
|
1,757
|
|
|
$
|
1,600
|
|
Cryptocurrency impairments and gains on sale, net
|
—
|
|
|
7,259
|
|
||
Legal contingencies and strategic charges
|
—
|
|
|
1,011
|
|
||
|
$
|
1,757
|
|
|
$
|
9,870
|
|
|
Three months ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
Adjusted EBITDA
|
|
|
|
||||
Retail
|
$
|
(16,856
|
)
|
|
$
|
(8,988
|
)
|
tZERO
|
(7,256
|
)
|
|
(2,077
|
)
|
||
Other
|
(3,401
|
)
|
|
(2,469
|
)
|
||
Adjusted EBITDA
|
(27,513
|
)
|
|
(13,534
|
)
|
||
Less: Special items (see table below)
|
9,565
|
|
|
—
|
|
||
Less: Depreciation and amortization
|
8,664
|
|
|
8,113
|
|
||
Less: Stock-based compensation
|
2,702
|
|
|
1,068
|
|
||
Less: Interest (income) expense, net
|
(563
|
)
|
|
589
|
|
||
Less: Other income (expense), net
|
1,999
|
|
|
1,573
|
|
||
Less: Provision (benefit) for income taxes
|
(1,939
|
)
|
|
71,915
|
|
||
Net loss
|
$
|
(47,941
|
)
|
|
$
|
(96,792
|
)
|
|
|
|
|
||||
Special items:
|
|
|
|
||||
Impairments on intangible assets
|
$
|
6,000
|
|
|
$
|
—
|
|
Losses on the disposal of various businesses and assets
|
3,565
|
|
|
—
|
|
||
|
$
|
9,565
|
|
|
$
|
—
|
|
|
Year ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
Adjusted EBITDA
|
|
|
|
||||
Retail
|
$
|
(111,537
|
)
|
|
$
|
1,795
|
|
tZERO
|
(25,271
|
)
|
|
(7,252
|
)
|
||
Other
|
(10,943
|
)
|
|
(4,253
|
)
|
||
Adjusted EBITDA
|
(147,751
|
)
|
|
(9,710
|
)
|
||
Less: Special items (see table below)
|
23,402
|
|
|
—
|
|
||
Less: Depreciation and amortization
|
31,697
|
|
|
32,847
|
|
||
Less: Stock-based compensation
|
14,356
|
|
|
4,077
|
|
||
Less: Interest (income) expense, net
|
(740
|
)
|
|
2,278
|
|
||
Less: Other income (expense), net
|
3,488
|
|
|
(1,178
|
)
|
||
Less: Provision (benefit) for income taxes
|
(2,384
|
)
|
|
64,188
|
|
||
Net loss
|
$
|
(217,570
|
)
|
|
$
|
(111,922
|
)
|
|
|
|
|
||||
Special items:
|
|
|
|
||||
Impairments on intangible assets
|
$
|
6,000
|
|
|
$
|
—
|
|
Losses on the disposal of various businesses
|
3,565
|
|
|
—
|
|
||
Cryptocurrency impairments and gains on sale, net
|
443
|
|
|
—
|
|
||
Severance
|
1,600
|
|
|
—
|
|
||
Special legal expenses (1)
|
11,794
|
|
|
—
|
|
||
|
$
|
23,402
|
|
|
$
|
—
|
|
|
Three months ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Net cash provided by (used in) operating activities
|
$
|
(51,429
|
)
|
|
$
|
(10,182
|
)
|
Expenditures for fixed assets, including internal-use software and website development
|
(4,144
|
)
|
|
(4,029
|
)
|
||
Free cash flow
|
$
|
(55,573
|
)
|
|
$
|
(14,211
|
)
|
|
Three months ended March 31,
|
||||||||||
|
Retail
|
|
tZERO & Other
|
|
Total
|
||||||
2019
|
|
|
|
|
|
|
|||||
Total net revenue
|
$
|
362,625
|
|
|
$
|
5,104
|
|
|
$
|
367,729
|
|
Cost of goods sold
|
290,640
|
|
|
3,965
|
|
|
294,605
|
|
|||
Gross profit
|
71,985
|
|
|
1,139
|
|
|
73,124
|
|
|||
Less: Sales and marketing expense
|
32,933
|
|
|
544
|
|
|
33,477
|
|
|||
Contribution
|
$
|
39,052
|
|
|
$
|
595
|
|
|
$
|
39,647
|
|
Contribution margin
|
10.8
|
%
|
|
11.7
|
%
|
|
10.8
|
%
|
|||
|
|
|
|
|
|
||||||
2018
|
|
|
|
|
|
|
|||||
Total net revenue
|
$
|
439,996
|
|
|
$
|
5,335
|
|
|
$
|
445,331
|
|
Cost of goods sold
|
347,580
|
|
|
3,882
|
|
|
351,462
|
|
|||
Gross profit
|
92,416
|
|
|
1,453
|
|
|
93,869
|
|
|||
Less: Sales and marketing expense
|
73,917
|
|
|
3,297
|
|
|
77,214
|
|
|||
Contribution
|
$
|
18,499
|
|
|
$
|
(1,844
|
)
|
|
$
|
16,655
|
|
Contribution margin
|
4.2
|
%
|
|
(34.6
|
)%
|
|
3.7
|
%
|