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Shares of Overstock.com, Inc. (OSTK) are higher in today's session after the Company reported its financial results for the third quarter ended September 30, 2009.
Revenues in the third quarter of increased 4% to $195.1 million from $186.9 million in the same period last year. The Company reported a net loss of $(0.03) versus a loss of $(0.07) in the third quarter of last year. This missed analysts' estimate of ($0.02) by a penny. Adjusted EBITDA (TTM) (non-GAAP financial measure) was $19.7 million versus $4.7 million last year.
Steve Chesnut, SVP of Finance for Overstock.com, commented in a conference call, "After three quarters of negative revenue growth, it was nice to see us move back to a positive quarter of revenue growth. Our gross margins also improved by 210 basis points over last year from supply chain improvements that were offset by lower prices on many items."
He added, "We are comfortable with our cash and working capital positions heading into Q4."
Dr. Patrick Byrne, Chairman and CEO of Overstock.com, explained during the conference call, "Our contribution dollars (Gross Profit Less Sales & Marketing Expenses) were up 26% over last year. In terms of growth, we measure ourselves internally by this metric. I really don't like EBITDA as a measure of valuation.
He added, "Our marketing dollar keeps getting more efficient every year. We are very disciplined with how we spend our marketing dollars. We have also seen nice cash flows from operations, and our invetory management has become really good. We keep finding ways to squeeze costs our of the supply chain. We have very successful with this initiative, and this should enable us to continue to drop prices."
Dr. Byrne noted, "Our customer satisfaction continues to be phenomenal and far above the scoring for other U.S. companies. We are an 'all-star' in this area, and we were recently rated as having the #2 ranked customer service in the U.S."
He concluded, "I believe that we are going to have a great Q4 for our top and bottom lines. Barring any economic meltdowns, we expect to be GAAP profitable for the year."
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