Overstock.com, Inc. (NASDAQ:OSTK) provides the following updates on
the company and to its financial guidance:
Board Appoints Jonathan Johnson as CEO
The Board of Directors has appointed Jonathan Johnson Chief
Executive Officer. Johnson had been serving as interim CEO since
August 22, 2019.
“Jonathan is a strong leader with a steady hand,” said Allison
Abraham, Chairwoman of Overstock’s Board of Directors. “He is the
best choice to lead Overstock. He has the right experience in both
our retail and blockchain businesses, and the Board has confidence
in his ability to deliver value to our shareholders.”
“Overstock has two unique businesses,” said Johnson. “I have run
both, and I know how to unlock the value in each. I’m confident we
can rapidly return our retail business to profitable growth. Our
transformative blockchain businesses continue to lead their
respective industries by getting real products into
production.”
Robert Hughes Appointed Acting CFO
Overstock’s Chief Financial Officer Greg Iverson has resigned,
effective September 17, 2019. The company has appointed its
previous principal financial officer, Robert Hughes, as Acting
Chief Financial Officer and begun a search for a permanent CFO.
“Rob was the company’s SVP of finance and risk management for
five years and VP and Controller for four years. He is intimately
familiar with Overstock’s businesses and financial systems,” said
Overstock CEO Jonathan Johnson. “Under his guidance, Overstock had
steady and positive financial results and reporting. I’ve worked
closely with Rob for many years and he is a great person to oversee
our finance department while we look for a permanent CFO. I
appreciate his willingness to step in during the transition. Rob
will ensure the company does not miss a beat.”
“I know the finance team well and am confident that they will
assist me in making this a positive and smooth transition while the
company searches for a new CFO,” said Hughes.
Hughes will continue to serve in his current role as president
of Medici Land Governance. Medici Land Governance, a subsidiary of
Medici Ventures, was founded in 2018 to put the power of property
ownership and the associated equity in the hands of individuals by
applying blockchain and other technologies to provide low-cost,
easy-to-use land administration systems.
Updated Retail Guidance
On its last earnings call, the company gave financial guidance
of expected $17.5M in adjusted EBITDA from the retail business in
2019. That guidance envisioned significant positive EBITDA for Q3,
but the actual Q3 results to date are at approximately break-even.
These results are below the company’s expectations. The company
still anticipates modest positive adjusted EBITDA in Q4 and will
give updated guidance during its Q3 earnings call.
There are five components driving the company’s revised retail
guidance:
- Increased costs from tariffs on goods manufactured in China
have negatively impacted revenues.
- The company’s D&O insurance premiums will significantly
increase.
- Waning consumer confidence has negatively impacted conversion
on high dollar purchases industry wide.
- In-home delivery vendor Watkins’ recent bankruptcy and the
delayed integration of a new freight carrier have combined to
significantly increase Q3 freight costs.
- Increased search traffic has taken longer than expected to
translate into purchasing customers.
“In spite of these recent headwinds, we’re confident in our
retail strategy,” said Dave Nielsen, president of Overstock Retail.
“We see positive leading indicators, including increased organic
traffic, and we believe we will deliver profitable and sustainable
growth for our retail business through our ongoing MarTech and
Supply Chain initiatives.”
Former CEO Divests His Overstock Common
Stock
Patrick Byrne filed a Form 4 on September 18, 2019 announcing
the sale and donation of all his shares of Overstock common stock.
Since his departure on Aug. 22, Byrne has not held any management
or board responsibility. Byrne continues to be a public figure, and
the views he expresses and actions he takes are his own.
About Jonathan Johnson
Jonathan Johnson joined Overstock in 2002 as the company’s
general counsel and has held various business and legal-related
positions within the company, including five years as president,
and later, as the acting CEO and executive vice chairman of the
boards. He is also a member of Overstock.com's board of directors
and served as the chairman of Overstock's board of directors from
2014 to 2017. He continues to serve as president of Medici
Ventures.
Prior to joining Overstock, Johnson was with TenFold Corporation
in various positions, including CFO and General Counsel. Before
that, he practiced corporate law in Los Angeles with two
international law firms. He also served as a judicial clerk at the
Utah Supreme Court.
Johnson received a Bachelor's Degree in Japanese from Brigham
Young University, studied at Osaka University of Foreign Studies in
Japan as a Ministry of Education Scholar, and received his Juris
Doctor Degree from the J. Reuben Clark Law School at Brigham Young
University.
About Robert Hughes
Robert Hughes is the President of Medici Land Governance (MLG),
which is applying blockchain and other technologies to improve
property registry systems in the developing world.
Before moving to MLG, Hughes was the SVP, Finance and Risk
Management, Overstock.com for five years and VP and Controller for
four years, beginning in late 2008.
In addition to his roles at Overstock, Hughes served as CFO and
Chief of Staff of TenFold Corporation and has also held a number of
senior accounting and internal audit positions with Oracle
Corporation.
Hughes received a Bachelor's Degree in Business Administration
with an emphasis in accounting and finance from the University of
California Berkeley, Haas School of Business, and is a Certified
Public Accountant (CA - inactive status).
About Overstock.com
Overstock.com, Inc Common Shares (NASDAQ:OSTK) / Digital
Voting Series A-1 Preferred Stock (Medici Ventures’ tZERO
platform:OSTKO) / Series B Preferred (OTCQX:OSTBP) is an
online retailer and technology company based in Salt Lake City,
Utah. Its leading e-commerce website sells a broad range of new
products at low prices, including furniture, décor, rugs, bedding,
home improvement, and more. The online shopping site, which is
visited by nearly 40 million customers a month, also features a
marketplace providing customers access to millions of products from
third-party sellers. Overstock was the first major retailer to
accept cryptocurrency in 2014, and in the same year founded Medici
Ventures, its wholly-owned subsidiary developing and accelerating
blockchain technologies to democratize capital, eliminate
middlemen, and re-humanize commerce. Overstock regularly posts
information about the company and other related matters on
the Newsroom and Investor Relations pages on
its website, Overstock.com.
O, Overstock.com, O.com, Club O, Main Street
Revolution, and Worldstock are registered trademarks of
Overstock.com, Inc. Other service marks, trademarks and trade names
which may be referred to herein are the property of their
respective owners.
This press release contains certain forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. Such
forward-looking statements include all statements other than
statements of historical fact, including but not limited to our
expectations provided in our updated retail guidance. Additional
information regarding factors that could materially affect results
and the accuracy of the forward-looking statements contained herein
may be found in the Company's Form 10-Q for the quarter ended June
30, 2019, which was filed with the SEC on August 8, 2019, and any
subsequent filings with the SEC.
SOURCE: Overstock.com, Inc.
Media Contact:pr@overstock.com
Investor Contact:ir@overstock.com
Photos accompanying this announcement are available at:
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