Overstock.com, Inc.

Good day, and thank you for standing by. Welcome to the Q1 2022 Overstock.com earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. Please limit yourself to one question. If you have additional questions, please re-enter the queue. Please be advised that today's conference is being recorded. To ask a question during the session, please press star then 1 on your telephones, If you require any assistance during the call, please press star zero. I would now like to hand the conference over to your host of today's call, Mr. Lavesh Hemnani, Head of Investor Relations. Please begin.

Thank you, Operator. Good morning and welcome to Overstock's first quarter 2022 earnings conference call. I'm Lavesh Hemnani. Joining me on the call today are Jonathan Johnson, CEO, and Adrian Lee, CFO. Additionally, Dave Nielsen, President of Overstock, will be available for Q&A. Please note that we are conducting today's call remotely. Next slide, please. Let me remind you that the following discussion and our responses to your questions reflect management's views as of today, April 28, 2022, and may include forward-looking statements. Actual results could differ materially from staff statements. Additional information about factors that could potentially impact our financial results is included in our Form 10-K for the year ended December 31, 2021, and in our subsequent filings with the SEC. A slide presentation accompanying today's webcast has been posted to our investor relations website and is available to download. Please review the important forward-looking statements disclosure on slide two of today's presentation. During this call, we'll discuss certain non-GAAP financial measures. The slides accompanying this webcast and our filings with the SEC contain additional disclosures regarding these non-GAAP measures, including reconciliations of these measures to the most comparable GAAP measures. Finally, instructions to ask questions during our Q&A session are also available in the slide presentation. With that, let me turn the call to our first speaker for today, Jonathan Johnson. Thank you.

Thank you, LaVash, and good morning, everyone. During today's call, we will follow the agenda on slide three. Next slide. This morning, Overstock reported first quarter 2022 results. We were profitable for the eighth consecutive quarter with adjusted EBITDA margin at 4% of revenue, the low end of our stated targets. Revenue in the quarter declined 19% compared to the first quarter last year. For home only revenue, the decline was 16% compared to last year. Later, Adrian will share more on how our non-home exit efforts are impacting active customer counts and revenue. Our two-year revenue growth rate was up 58% Q1 2022 compared to Q1 20. The operational improvements we have made during the pandemic have made a difference and are sticking. We anticipated the first quarter would be challenging considering the significant acceleration in sales last year driven by pandemic related factors. What we didn't anticipate when we last spoke with you was the level of impact that macroeconomic factors would have on the business, such as consumer sentiment and spending resulting from a steep rise in inflation coupled with various impacts of the war in Ukraine. Even though our sales performance was not what I anticipated, I am pleased that based on third-party data, We held our market share in line with fourth quarter levels, and we continued our two-year track record of profitability. We are focused on delivering annual revenue growth, outpacing the market, while generating profits and improving our healthy balance sheet. While much has changed from a consumer and macro standpoint, we continue to execute against our 2022 initiatives. Our monthly sales trends improved sequentially from December through February, including Overstock's largest President's Day in company history. As I have mentioned before, our team has developed an expertise in eventizing key shopping holidays. However, March was much softer than we anticipated, in part driven by the removal of non-home SKUs from our site and pandemic period comparisons, and in part driven by macro and geopolitical events. The U.S. consumer is navigating a 40-year high inflation rate, which is having an immediate adverse impact on discretionary spending. Additionally, after two years of pent-up demand, consumers are spending at higher levels on travel, dining, and entertainment. We anticipate consumer spending will return to a more normalized mix of goods and services. We think this will continue to include a shift to more online shopping compared to pre-pandemic levels, a belief that is supported by third-party forecasts. Over the near term, a challenging macro environment could continue to drive volatility in performance as we experienced in the first quarter. I remain calm. I am confident in our business as our model continues to position us well to navigate jolts in the market and consumer behavior and to deliver profitable results. We have a strong balance sheet with very little debt. We are asset light, allowing us to be nimble when market challenges arise. And our smart value brand pillar delivers real price value, something of growing importance for more and more consumers as their wallets are stretched. Slide five, please. Now for a brief update on recent corporate events. In March, we announced plans to simplify Overstock's capital structure. At our annual shareholder meeting next month, we are seeking shareholder approval for the conversion of both our Series A1 and Series B preferred stock into common stock. The Overstock Board of Directors fully supports this conversion. Following shareholder approval, each preferred share will be converted into 0.9 shares of common stock. Additional details and information related to this proposed conversion are available on our website and in our proxy statement filed with the SEC on March 23rd. We expanded our $100 million share repurchase program to include the ability to repurchase preferred shares in addition to common shares. During the first quarter, we repurchased approximately $25 million of our equity, consisting predominantly of common shares, but also including some Series A1 preferred shares. Earlier this month, Overstock officially kicked off its Future of Remote Work and Reentry Design, or FORWARD plan. As part of this plan, we held a two-day homecoming event that was attended by almost all our employees. Teams gathered at our campus headquarters in Utah to connect, collaborate, and celebrate the Overstock culture. We view the event as the beginning of a new and bright chapter for Overstock. The FORWARD plan's design has allowed us to expand the geographic locations from which we are able to recruit employees. We are already benefiting from access to a deep and diverse talent pools across the country to help drive long-term growth for Overstock. In fact, many of our recent senior hires work remotely from states other than Utah. We are attracting and retaining top tier talent that will help us continue to improve and grow the business. While the pandemic is still expected to impact day-to-day life to some extent, our employees remain highly motivated to work hard to achieve positive results. I'll now ask Adrienne to review our first quarter financial results in more detail.