Overstock.com president Patrick Byrne appeared on Bloomberg Television on Friday December 23, 2005. During that appearance, Byrne said that fourth quarter growth had slowed to two times the industry average rather than the three to four times that the company had posted in the past. Byrne confirmed that Overstock.com’s revenue growth for 2005 would fall within his desired range of 60-100% growth, but stated that earnings would be a percentage or two less than his target of breakeven net income, which he defines as +/- 1% of revenue. Byrne also said that Overstock.com would be breakeven to positive on an EBITDA basis for the fourth quarter, but that it would have negative operating cash flows for 2005 due to build in inventory balances.
“We’ve had a nice holiday season, just not as nice a season as we’ve had in the past or as I’d hoped for,” said Byrne. “We have become the go-to shop for smart, savvy shoppers interested in high quality products at discount prices, and I made the determination that this holiday season would be critical for solidifying our brand in our customers’ eyes. To get above the noise, we spent a few dollars more than we had hoped, but in my experience, over time, those dollars will pay large dividends. So I decided to do what is smart for the company in the long run, rather than focus on just the quarter’s results — because I plan to be around next season as well, and to be bigger than ever.”
“Incidentally, during the interview, the Bloomberg reporter asked me about our lawsuit against Rocker and Gradient,” said Byrne. “As part of my response, I mentioned the SEC’s investigation of Gradient (see http://www.shareholder.com/overstock/downloads/DeclarantSECletters_AddressesRe dacted.pdf) for a copy of the SEC letters which I had previously provided to Bloomberg). Curiously, at that moment, Bloomberg cut away from the interview without warning to a commercial and returned midstream to the interview only when I had finished discussing the SEC’s investigation of Gradient.”
Overstock.com will announce its fourth quarter results in late January or early February.