Q1 2024 Beyond Inc Earnings Call

Operator: Hello, and welcome to the first quarter 2024 Beyond Inc. Earnings Conference. At this time, all participants are in a listen-only mode.

Okay.

Speaker Change: Hello, and welcome to the first quarter 2024 Beyond Inc earnings Conference call.

Speaker Change: At this time all participants are in a listen only mode.

Operator: After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press Star 1-1 on your television. You will then hear an automated message advising that your hand has been raised. To withdraw your question, please press star 1 1 again. Please advise me that today's conference is being recorded. It is now my pleasure to introduce you, Vice President of Investor Relations and Public Relations. Lexus Cali. Thank you, Operator.

Speaker Change: After the speaker presentation, there will be a question and answer session.

Speaker Change: A question. During this session you will need to press star one on your telephone.

Speaker Change: Didn't hear an automated message advising that your hain has been raised.

Speaker Change: Your question. Please press star one again.

Speaker Change: Please be advised that today's conference is being recorded.

Speaker Change: It is now my pleasure to introduce vice President of Investor Relations and public relations Alexis Callahan.

Alexis Callahan: Good morning, and welcome to BEYOND's first quarter 2024 Earnings Conference Call. Joining me on the call today are Executive Chairman Marcus Lemonis, Chief Financial and Administrative Officer Adrienne Lee, CEO of Bed Bath & Beyond, Chandra Holt, and CEO of Overstock, Dave Nielsen. Today's discussion and our responses to your questions reflect management's views as of today, May 7, 2024, and may include forward-looking statements, including, without limitation, regarding our future goals, performance, profitability, and financial results. However, actual results could differ materially from such statements.

Alexis Callahan: Thank you operator, good morning, and welcome to the beyond first quarter 'twenty 'twenty four earnings conference call. Joining me on the call today, our executive Chairman, Marcus Winona, Chief financial and administrative officer, Adrian Lee CEO.

Alexis Callahan: CEO of bed Bath, and beyond Sondra hope and CEO of Overstock, Dave Nielsen.

Alexis Callahan: Today's discussion and our responses to your questions reflect management's views as of today May seven 2024 and May include forward looking statements.

Alexis Callahan: Clothing without limitation regarding our future goal performance profitability and financial results actual results could differ materially from such statements.

Alexis Callahan: Additional information about risks, uncertainties, and other important factors that could potentially impact our financial results is included in our Form 10-K for the year ended December 31, 2023, and in our subsequent filings with the SEC. During this call, we'll discuss certain non-GAAP financial measures. Our filings with the SEC, including our first quarter earnings release, which is available on our investor relations website at investors.beyonds.com, contain important additional disclosures regarding these non-GAAP measures, including reconciliations of these measures to the most comparable GAAP measures.

Alexis Callahan: Additional information about risks uncertainties and other important factors that could potentially impact our financial results is included in our Form 10-K for the year ended December 31st 2023, and in our subsequent filings with the FCC.

Alexis Callahan: During this call, we'll discuss certain non-GAAP financial measures are filings with the SEC, including our first quarter earnings release, which is available on our Investor Relations website at investors <unk> beyond dot com contain important additional disclosures regarding these non-GAAP measures, including reconciliations of these measures to the most comparable.

Alexis Callahan: Following management's prepared remarks, we will open the call for questions. A slide presentation with supporting data is available for download on our restoration website. Please review the important forward-looking statements disclosure on slide two of that presentation. With that, I will turn the call over to you, Marcus. Good morning, and thanks, Alexis.

Alexis Callahan: <unk> GAAP measures.

Speaker Change: Following managements prepared remarks, we will open the call for questions.

Alexis Callahan: <unk> presentation with supporting data is available for download on our Investor Relations website.

Alexis Callahan: Please review the important forward looking statements disclosure on slide two of that presentation.

Alexis Callahan: With that let me turn the call over to you Mark.

Marcus Lemonis: Today, we're going to review our first quarter results and the significant progress we are making as we work to build something bigger and better. My mission in being part of this company was to quickly reframe, reposition, and retool the company so that the next several years look materially different than they did before. And early on, I see green shoots everywhere.

Mark: Good morning, and thanks, Alexis today, we're going to review, our first quarter results and the significant progress we are making as we work to build something bigger and better.

Mark: My mission and being part of the company was to quickly reframe reposition and retool the company. So that the next several years look materially different than they did before and early on.

Marcus Lemonis: And where I don't, we will correct it. During my first 100 days at the company, I spent a great deal of time studying the last 10 years, looking at capital allocation, revenue swings, stock price swings, brand positioning, vendor relationships, customer experience, and how to improve each of them. I believe that while it takes time to build the right foundation, we have three individual brands that have the potential to become billion-dollar revenue brands.

Mark: Green shoots everywhere and we're I don't we will correct during.

Mark: During my first 100 days that the company has spent a great deal of time studying the last 10 years looking at capital allocation revenue swings stock price swings brand positioning vendor relationships customer experience and how to improve each of them.

Mark: I believe that while it takes time to build the right Foundation, we have three individual brands that have the potential to become billion dollar revenue brands.

Marcus Lemonis: Brands that drive growth worth investing in, growth driven by customer retention and lifetime value, and growth to make a profit. That growth and leverage of our scale and infrastructure requires an assessment of talent, technology, and process. And while that assessment continues, last week we announced both the addition of new leadership across key roles, as well as internal movement within our management team. Additionally, we announced a new and wide-ranging relationship with Salesforce, along with other new technology partnerships. I believe we now have the best players on the field.

Mark: <unk> that drive growth worth investing in growth driven by customer retention and lifetime value and growth to make a profit.

Mark: That growth and leverage of our scale and infrastructure requires an assessment of talent technology and process and while that assessment continues last week, we announced both the addition of new leadership across keyword roles as well as the internal movement within our management team.

Mark: Additionally, we announced a new and wide scoping relationship with Salesforce, along with other new technology partnerships I believe we now have the best players on the field.

Marcus Lemonis: As you look specifically at the first quarter, nearly 100% of the 2.2 million transactions were done through the Bed Bath & Beyond website, with explosive growth in categories like soft home, kitchen, and the legacy bed bath categories, which just proves that the brand is very strong. As you look to monetize this brand and its acquisition, you can expect us to leverage the power of the brand both domestically and internationally. Recently, we completed the sale of Wamsutta, a legacy textile brand inside of Bed Bath & Beyond, for $10.25 million, nearly half of the original purchase price of the acquisition of the entire Bed Bath & Beyond intellectual property pool.

Mark: As you look specifically at the first quarter nearly 100% of the $2 2 million transactions were done through the bed Bath <unk> beyond website with explosive growth in categories like soft home kitchen, and the legacy bed Bath carrier categories, which just proves that the brand is very.

Mark: Strong.

Mark: As we look to monetize this brand and its acquisition you can expect us to leverage the power of the brand both domestically and internationally.

Mark: Recently, we completed the sale of warm setup, a legacy textile brand inside of bed Bath <unk> beyond for $10 million to $5 million nearly half of the original purchase price of the acquisition of the entire bed Bath <unk> beyond intellectual property pool.

Marcus Lemonis: Additionally, we are currently working on the start of a four-store test in the UAE with one of the largest retailers in the region, as well as an agreement to license the Bed Bath & Beyond brand on an omni-channel basis in Mexico. We're pleased to see the power of the legacy brand and categories through both licensing opportunities and our solid performance on our Canadian Bed Bath & Beyond website, which did well in the first quarter.

Mark: Additionally, we are currently working on the start of a four store test in the UAE with one of the largest retailers in the region.

Mark: As well as an agreement to license the bed Bath <unk> beyond brand on an omnichannel basis in Mexico. We're.

Mark: We're pleased to see the power of the legacy brands and categories through both licensing opportunities and our solid performance in our Canadian bed Bath <unk> beyond website, which has done well in the first quarter.

Marcus Lemonis: Going forward, our goal is for Bed Bath to have a highly curated and largely brand-recognizable assortment for its 30 plus million unique customers. This assortment, we believe, will maximize profitable revenue with an aim to grow it sequentially for years to come in its core categories and all around life events. We want to make sure that we have everything for the bedroom, including bedding, pillows, mattresses, bedroom furniture, rugs, lighting, closet organization, and decor.

Mark: Going forward our goal is for bed Bath to have a highly curated and largely brand recognizable assortment to its 30 plus million unique customers. This assortment, we believe will maximize profitable revenue with an aim to grow it sequentially for years to come in its core categories and.

Mark: Our all around life events, we want to make sure that we have everything for the bedroom, including bedding pillows mattresses bedroom furniture rugs lighting closet organization and the core it will own the bathroom, including Taos rugs curtains vanities mirrors lighting access.

Marcus Lemonis: It will own the bathroom, including towels, rugs, curtains, vanities, mirrors, lighting, accessories, and beauty and wellness. In the kitchen, it will continue to grow by focusing on small appliances, tabletop, kitchen furniture, and lighting, as well as kitchen accessories. And as an extension of the house, particularly the kitchen for entertaining, we will focus on the patio through furniture, grills, smokers, heaters, games, lighting, and other backyard toys and accessories. Average order size finished at $173, materially higher than traditional Bed Bath & Beyond, but lower than what Overstock had previously experienced with larger and higher-ticket furniture categories. That delta was caused by an increase in mix in traditional bed-bath categories and a decrease in penetration in the historical furniture, rugs, and large patio categories.

Mark: <unk> and beauty and wellness.

Mark: In the kitchen, it will continue to grow by focusing on small appliances, tabletop kitchen furniture, and lighting as well as kitchen accessories and as extension of the house, particularly the kitchen for entertaining we will focus on patio through furniture grills smokers heaters games lighting and all other.

Mark: Backyard toys and accessories.

Mark: Average order size finished at $173 materially higher than traditional bed bath, <unk> beyond but lower than what overstock had previously experienced with larger and higher ticket furniture categories.

Mark: That delta is caused by an increase of mix on traditional debt vascular categories and the decrease of penetration in the historical furniture rugs, and large patio categories, a slight mismatch of mixing apples and oranges propelling our strategy of re launching overstock sooner than we originally.

Marcus Lemonis: A slight mismatch of mixing apples and oranges, propelling our strategy of relaunching Overstock sooner than we originally planned and returning Bed Bath & Beyond to its historical categories, but enhancing them with room-specific furniture being sold as an understandable adjacency, just like selling mattresses and beds around the top of the bed. And while Bed Bath had some success selling into historical Overstock categories, like family room furniture, large area rugs, and case goods, the performance didn't meet our team's KPI goals around margin contribution and the cost of acquisition the way we believe Overstock can perform and return to its historical performance in those categories.

Mark: We planned.

Mark: And returning bed bath towards historical categories, but enhancing them with room specific furniture being sold as an understandable adjacency just like selling mattresses embeds around top of bed.

Mark: And while bed Bath has some success selling into historical overstock categories like family room furniture large area rugs and case goods. The performance didn't meet our teams kpis goals around margin contribution and the cost of acquisition. The way, we believe overstock can perform and return to its historical perform.

Marcus Lemonis: Those results reaffirmed our conclusion during the quarter around the specific muscles of both brands that can thrive separately while complementing each other. We are optimistic that in its full mature state, Bed Bath & Beyond has the potential to be north of a billion dollar brand with positive contribution and a higher frequency of visit driven by our focus on life events like baby, wedding, home purchase, home renovation, college, etc. All the things everybody's always known Bed Bath for.

Mark: <unk> in those categories.

Mark: Those results reaffirmed our conclusion during the quarter around the specific muscles that both brands can thrive separately, while complementing each other.

Mark: We're optimistic that in its full mature state bed Bath has the potential to be north of a billion dollar brands with positive contribution and a higher frequency of visits driven by our focus of life events like baby wedding home purchase home renovation college et cetera, all of the things everybody is all.

Marcus Lemonis: As part of that continued learning and reframing, we also believe Overstock has a clear path to return to its billion-dollar-plus revenue performance. For the last several decades, Overstock has been one of, if not the premier name in broad category online value shopping, and while it veered in and out of products over time, its reputation always remains strong as the place to get a crazy good deal. We, largely led by Dave Nielsen, fought hard to bring this brand back sooner than later.

Mark: These known bed Bath for.

Mark: As part of that continued learning and Reframing. We also believe overstock has a clear path to return to its $1 billion plus revenue performance for the last several decades overstock has been one of if not the premier name in broad category online value shopping and while it veered in and out of products over.

Mark: Time, its reputation always remained strong as the place to get a crazy good deal.

Mark: Yes.

Mark: <unk> largely led by Dave Nielsen fought hard to bring this brand back sooner than later, we were duly focused under reestablish a of revenue and gross profit as we were convinced that the brand was not only strong but could do more.

Marcus Lemonis: We were duly focused on the reestablishment of revenue and gross profit as we were convinced that the brand was not only strong but could do more. The soft launch of Overstock on March 28th was on the new platform, literally starting from scratch since the historical technology used by Overstock.com had been given to Bed Bath last fall. We collectively chose to push forward six months earlier than previously anticipated. The team spent nights, weekends, and days they didn't have to create a brand new platform, integrate new and existing vendors, learn to integrate a new system into Supplier Oasis, and all the new sales and reporting functions, to my amazement. They also collectively made the decision to build it carefully, adding layers as the former ones solidified.

Mark: The soft launch on our Overstock on March 28 was on the new platform literally starting from scratch since the historical technology used by Overstock Dot com had been given to bed Bath last fall, we collectively chose to push forward six months earlier than previously anticipated.

Mark: The team spent nights weekends and days they didn't have to create a brand new platform integrate new and existing vendors learned to integrate a new system into supplier Oasis and all the new sales and reporting functions to my amazement. They also collectively made the decision to build a carefully adding layers.

Mark: As the former ones solidified.

Marcus Lemonis: The launch requires proper ramping, a few additions, transaction volume, and email and marketing deployment, and I am very pleased with the steady ramp and the early numbers are encouraging. Now, positioning for Overstock is simple. A wide array of products at crazy good deals. Now, obviously, the core categories are anchored in furniture throughout the house, rugs, patio furniture, apparel, footwear, jewelry, and a variety of other vendor-supplied special buys, close

Mark: The launch requires proper ramping our SKU additions transaction volume and E mail and marketing deployment and I am very pleased with the steady ramp in the early numbers are encouraging.

Mark: And our positioning for Overstock is simple a wide array of array of products and crazy. Good deals now obviously the core categories are anchored in furniture throughout the house rugs, patio furniture apparel footwear jewelry, and Avaya and a variety of other vendor supplied special buys closeouts.

Marcus Lemonis: As we continue to think about the power of this brand built over 20 years, we realized we could get more out of it. We intend to further leverage the Overstock brand as the leader in excess, factory direct, liquidations, and reverse logistics businesses. We are currently in discussions around the final term sheet for a partnership with one of the largest liquidators in America. We believe there is a moat to be established if you create a circle that provides whims for the vendor community.

Mark: And access.

Mark: As we continue to think about the power of this brand built over 20 years, we realized we could get more out of it we intend to further leverage the overstock brand as the leader in excess factory direct liquidations and reverse logistics businesses.

Mark: We are currently in discussions around the final term sheet for a partnership with one of the largest liquidators in America.

Mark: We believe there is a note to be established if you create a circle that provides wins for the vendor community. The first half of the circle is a true traditional relationship to consumers built on the power of those brands yourself successfully coupled with a mechanism to complete the circle to help those same vendors.

Marcus Lemonis: The first half of the circle is a true traditional relationship to consumers built on the power of those brands you sell successfully, coupled with a mechanism to complete the circle to help those same vendors with their domestic returns, creating a more seamless experience for the customer, processing and handling, and the remarketing of those same products that have been returned. We believe that if we can be part of improving their supply chain for the vendors on the backend, which is where the game is often won or lost, we will have found another way to monetize the Overstock brand again in an asset-like way.

Mark: With our domestic returns, creating a more seamless experience for the customer processing and handling and the remarketing of those same products that have been returns. We believe that if we can be part of improving their supply chain for the vendors on the backend, which is where the game is often won or lost we will have.

Mark: Found another way to monetize the overstock brand again in an asset light way.

Marcus Lemonis: Lastly, on March 7th, we acquired the intellectual property, consumer database, and technology platform of Zulily, the historical off-price darling of beauty and fashion and accessories. Over its history, Zulily ranged from year to year between $1 to $2 billion in revenue.

Mark: Lastly on March 7th we acquired the intellectual property consumer database and technology platform <unk> Xu Lily.

Mark: The historical off price Darling of the beauty and fashion and accessories space over its history Zuccarelli range.

Mark: From year to year between $1 billion to $2 billion of revenue.

Marcus Lemonis: Over the last 60 days, we have been successful in reengaging with the top 10 vendors and have started the onboarding process.,,,,,,, So far, we have identified four key leaders to run that business on a day-to-day basis. Utilizing the shared services technology team, maybe the first time we'll see real scale in this business as the revenue grows without the high level of follow-on fixed expenses. Additionally, one of the very unique properties of Zulily is the way it goes to market. Cost-effective email marketing, not soliciting for product in an open marketplace.

Mark: Over the last 60 days, we have been successful in re engaging with the top 10 vendors and have started the onboarding process.

Mark: Couric lean margins in that business were in excess of 20%, but we see a path to a higher number closer to 24% once mature we have and will continue to be diligent about any expense added to this business.

Mark: So far we have identified four key leaders to run that business on a day to day basis utilizing the shared services technology team maybe the first time, we will see real scale in this business as the revenue growth without the high level of follow on fixed expense. Additionally.

Mark: Additionally, one of the very unique properties. The zoo Lilly is the way it goes to market.

Marcus Lemonis: By the way, the vendors love that, and you spend money winning retention with great prices and great service. We anticipate launching Zulily in the next few months, and we'll update you as we get closer. And I firmly believe we're ready. I'd like to turn the call now over to...

Mark: Effective E mail marketing not soliciting for product in an open marketplace by the wave of vendors loves that and you spend money winning retention with great prices and great service, we anticipate launching Xu Lilly in the next few months and we'll update you as we get closer and firmly believe we're ready I'd like to turn the call.

Chandra Holt: Thank you, Marcus. I started as CEO optimistic about the strength of the Bed Bath & Beyond brand. And now, 90 days later, I'm even more excited about the brand's potential. During the quarter, Bed Bath & Beyond Legacy Categories delivered industry-leading results.

Chandra: Now over to Chandra.

Chandra: Thank you Markus I started as CEO optimistic about the strength of the bed Bath <unk> beyond brand and now 90 days later I am even more excited about the brands potential.

Chandra: During the quarter bed Bath <unk> beyond legacy categories delivered industry, leading results for Q1 was up triple digits for bedding Bath and kitchen.

Chandra Holt: GMB for Q1 was up triple digits for bedding, bath, and kitchen. I believe building on brand equity while modernizing the customer experience is the formula that will deliver differentiation and long-term profitable growth. As such, during the quarter, we established three strategic priorities.

Chandra: I believe building brand equity while modernizing the customer experience is the formula that will deliver differentiation and long term profitable growth.

Chandra Holt: The first strategic priority is assortment curation. We will curate complete solutions for the most important spaces in the home, including bedroom, bath, kitchen, and backyard, and ensure every item meets our quality and design aesthetic. Our assortment curation will be a key component to our value proposition, and you will see us move away from our marketplace-like assortment of 12 million skews to one that has enough breadth and depth to be category-leading for our suppliers but is edited to ensure an easy shopping experience for our customers.

Mark: As such during the quarter, we established three strategic priorities.

Mark: The first strategic priority is assortment curation.

Mark: Sure It complete solutions for the most important spaces in the home, including bedroom Bath kitchen, and backyard and ensure every item with our quality and design aesthetics.

Mark: Our assortment curation will be a key component to our value proposition and you will see us move away from our marketplace like assortment of 12 million Skus to one that is that has enough breadth and depth to be category, leading to our suppliers, but as edited to ensure an easy shopping experience for our customers.

Chandra Holt: As part of these efforts, I'm excited to share that I've hired a new Chief Merchandising Officer, Stacey Schreiber. Stacey brings 30 years of retail merchandising experience and has held key leadership roles at companies such as Target, The Container Store, and Legacy Bed Bath & Beyond. The second strategic priority is life. Bed Bath & Beyond has been a go-to retailer for life's special events, such as having a baby, getting married, or sending a young adult to college. In Q1, GMV for the baby category was another triple-digit growth shoot, up 211%.

Mark: As part of these efforts I am excited to share that I've hired a new chief merchant Chief Merchandising Officer Stacey Shively.

Mark: Stacy brings 30 years of retail merchandising experience and has held key leadership roles at companies such as target container store and legacy bed Bath and beyond.

Mark: The second strategic priority is life events bed Bath and beyond has been a go to retailer for life special events, such as having a baby getting married or sending a young adult to college in.

Mark: In Q1 <unk> for the Baby category was another triple digit green shoots up 211%.

Chandra Holt: Our thoughtful assortment, registry capabilities, new CRM platform, and inspirational marketing will help grow our brand equity as a retailer for life events. Our new focus on inspirational marketing requires an exceptional leader, so I'm pleased to share that Angela Minor has recently started as the Chief Marketing Officer for Bed Bath & Beyond.

Mark: Our thoughtful assortment registry capabilities, new CRM platform and inspirational marketing will help grow our brand equity as a retailer for life events.

Mark: Our new focus on inspirational marketing requires an exceptional leader so I am pleased to share that Angela miner has recently started as the chief marketing officer for bed Bath and beyond.

Chandra Holt: Angela brings two decades of marketing experience. The third strategic priority is the experience. In order to elevate our authority as a category leader and best serve our customers during their special life events, we need to create a unique shopping experience. Delivering this experience will require us to modernize our e-commerce technology. With that said, I'm also happy to share that we have hired Guncha Mehta as our new Chief Information and Digital Officer.

Mark: Angela brings two decades of marketing experience to the team.

Mark: The third strategic priority is experience.

Mark: In order to elevate our authority as a category leader and best serve our customers during their special live events, we need to create a unique shopping experience.

Mark: Delivering this experience will require us to modernize our E Commerce technology.

Mark: With that said I'm also happy to share that we have hired Ghansham meta as our new chief information and digital officer.

Chandra Holt: Gunja brings over 25 years of experience to BEYOND and will be leading our transformation technology. I am proud of the results our team delivered for Q1, including positive revenue, a double-digit increase in transactions, and positive customer growth. But I am even more excited about our strategic priorities and how we are refocusing resources to drive capabilities that will help differentiate us and drive greater customer lifetime value. I'll now turn the call over to you today. Thank you, Chandra.

Ghansham Meta: Peter brings over 25 years of experience to beyond and will be leading our transformation technology roadmap.

Mark: I am proud of the results our team delivered for Q1, including positive revenue a double digit increase in transactions.

Mark: Positive customer growth.

Mark: But I am even more excited about our strategic priorities and how we are refocusing resources to drive capabilities that will help differentiate us and drive greater customer lifetime value.

Mark: I'll now turn the call over to Dave.

David J. Nielsen: I am so proud of the Overstock team for recognizing the need to pull up the soft launch by six months in order to maximize both top and bottom line performance of each brand. As you just heard from Chandra, aligning each brand with the legacy product categories it is known for is fundamental to setting the groundwork for future profitable growth. As Marcus mentioned, it's important to know Overstock during its soft launch without its 24 years of online history, as it was redirected for the Bed Bath & Beyond launch last August.

David J. Nielsen: Thank you Chandra I'm, so proud of the overstock team for recognizing the need to pull up the soft launch by six months in order to maximize both top and bottom line performance of each brand.

David J. Nielsen: As you just heard from Chandra aligning each brand with the legacy product categories. Each is known for is fundamental to setting the groundwork for future profitable growth as.

Mark: As Marcus mentioned, it's important to know overstocked with soft launch without its 24 years of online history as it was redirected for the bed Bath <unk> beyond launch last August.

David J. Nielsen: I am encouraged, however, that even though we're starting from scratch with Overstock, the soft launch and site visits are exceeding our initial expectations. We anticipate continued visit growth as we engage our robust customer file and ramp the warmup of our email list and other acquisition channels. We're on schedule to complete the email warm up by the end of May, addressing our total email list population of 31 million. To expedite the overstock growth, we soft-launched our mobile app last. The most loyal Overstock customers historically shopped on the mobile app, and it was our highest converting, highest average order size, and highest repeat purchase platform. We're taking the same iterative approach we did to launching the website, and with a few more experience enhancements, we'll be launching our mobile app download campaign within the next 30 days.

Mark: I'm encouraged however that even though we're starting from scratch with overstock the soft launch.

Mark: Visits are exceeding our initial expectations. We anticipate continued visit growth as we engage our robust customer file and ramp the warm up of our email list and other acquisition channels.

Mark: We are on schedule to complete the email warm up by the end of May.

Mark: Addressing our total email list population of $31 million.

Mark: To expedite the overstock growth, we soft launched our mobile App last week, the most loyal overstock customers historically shopped on the mobile App and it was our highest converting highest average order size and highest repeat purchase platform. We're taking the same iterative approach, we did to launching a website and with a few more.

Mark: Enhancements, we will be launching our mobile app download campaign within the next 30 days.

David J. Nielsen: Sales and conversion rates have improved each consecutive week over the first five weeks of the soft launch. Average order size and contribution margin are right in line with expectations. And customers are back to their previous purchasing habits of buying furniture, patio, and, of course, a wide range of area rugs, as we knew they would.

Mark: Sales and conversion rates have improved each consecutive week over the first five weeks of the soft launch.

Mark: Average order size and contribution margin are right in line with expectations and customers are back to their previous purchasing habits of buying furniture patio and of course, a wide range of area rugs as we knew they would.

David J. Nielsen: As we ramp up stock over the coming weeks and months, it will play a pivotal role in driving higher average order size and contribution margin for the BEYOND portfolio. The assortment ramp-up is progressing nicely. We're transitioning more of our patio, furniture, and area rugs from Bed Bath & Beyond, as well as actively pursuing Crazy Good Deals. Our merchandising and our marketing leadership team is top tier, and I'm thrilled to have proven executives in place to take both Overstock and Zulily to new heights. Over the coming weeks and months, you will see this team add new product categories in apparel, footwear, sporting goods, and tools, just to name a few. As I've said before, we're going back to our roots.

Mark: As we ramp overstock over the coming weeks and months.

Mark: It will play a pivotal role in driving higher average order size and contribution margin for the beyond portfolio.

Mark: The assortment ramp up is progressing nicely, we're transitioning more of our products and patio furniture and area rugs from bed Bath and beyond as well as actively pursuing crazy good deal.

Mark: Our merchandising and our marketing leadership team is top tier and I'm thrilled to have proven executives in place to take both overstock and zoo Lilly to all new Heights.

Mark: Over the coming weeks and months you will see this team add new product categories in apparel footwear sporting goods and tools just to name a few.

Mark: As I've said before we're going back to our roots.

David J. Nielsen: Turning to Zulily, we're making terrific progress and expect a soft launch in the third quarter. Our vision for Zulily is to focus on the segment of customers who loved it before, working moms who enjoy shopping for themselves and their families. Shopping is fun for them, and they like to browse frequently.

Mark: Turning to Julie, we're making terrific progress and expect to soft launch in the third quarter our.

Mark: Our vision for Zoo Lilly is to focus on the segment of customers, who love jewelry before working moms, who enjoy shopping for themselves and their families shopping is fun for them and they like to browse frequently they have an emotional attachment to the thrill and excitement of finding the best deals at the same time to bolster the P&L, we will provide an.

David J. Nielsen: They have an emotional attachment to the thrill and excitement of finding the best deals. At the same time, to bolster the P&L, we'll provide an evergreen must-have basics assortment in a highly curated everyday shopping experience that will require a customer login. We're actively onboarding strategic brands that focus on mom and her family. We've hired a team of experienced merchants who were previously with Zulily, know the Zulily customer, and have established working relationships with these brand partners. Each of these brands plays a critical role in our future success, and I look forward to coming back next quarter with the progress we've made on each. I'll now turn the call over to Adrianne.

Mark: <unk> must have basic assortment and a highly curated everyday shopping experience.

Mark: That will require customer login.

Mark: We're actively on boarding strategic brands the.

Mark: Our focus on mom and her family we've hired a team of experienced merchants, who were previously virtually no visibility customer and have established working relationships with these brand partners. Each of these brands plays a critical role in our future success and I look forward to coming back next quarter with the progress we've made with each other.

Mark: I'll now turn the call over to Adrian.

Adrianne B. Lee: Thank you, Dan. Revenue increased year over year in the first quarter, led by 26% growth in active customers and corresponding 27% growth in orders delivered. Average order value remains a headwind. AOV declined 21% versus last year, primarily due to sales shifting into bedding and bath categories and out of furniture and rugs, as well as category trades.

Adrianne B. Lee: Thank you David.

Adrianne B. Lee: Revenue increased year over year in the first quarter led by 26% growth in active customers and a corresponding 27% growth in orders delivered.

Adrianne B. Lee: Average order value remains a headwind adobe declined 21% versus last year, primarily due to sales shifting into bedding and bath categories and out of furniture and rod as well as in category trade Downs.

Adrianne B. Lee: We are acutely focused on closing the $47 year-over-year gap in AOPA. To break that down, the $30 improvement on one half of the transaction would have been $33 million in additional revenue. We believe providing a more curated assortment on Bed Bath & Beyond and relaunching Overstock will help us close this gap. Growth margin landed at 19.5% for the quarter, a 720 basis point improvement over the same period. Increased discounting drove about 400, Welcome Rewards Redemptions drove for almost 90 days, and increased shipping costs drove $270.

Adrianne B. Lee: We are acutely focused on closing the $47 year over year gap in AOA to break to break that down a 30 dollar improvement on one half of the transaction would have been $33 million in additional revenue, we believe providing a more curated assortment on bed bath and beyond and Relaunching Overstock will help us close this gap over.

Adrianne B. Lee: Time.

Adrianne B. Lee: Gross margin landed at 19, 5% for the quarter of 720 basis point decrease versus the same period last year increased discounting drove about 400 basis points. Welcome rewards redemptions drove almost 90 basis points and increased shipping costs drove 270 basis points of pressure.

Adrianne B. Lee: First quarter growth margin improved 20 basis points versus the fourth quarter, driven in part by actioning again tactics that we shared on our last call. We are renegotiating freight rates. This is essentially complete with our carriers, and we expect to see improvement in our run rate going forward. Improving vendor relations for more favorable products. This is an ongoing effort for our merchandise. Relaunching Overstock.com. Overstock was soft launched at the end of March.

Adrianne B. Lee: First quarter gross margin improved 20 basis points versus the fourth quarter driven in part by accident and against some of the six tactics that we shared on our last earnings call.

Adrianne B. Lee: Renegotiating freight rates. This is essentially complete with our carriers and we expect to see improvement in our run rate going forward improving vendor relations for more favorable product costs. This is an ongoing effort for our merchandising team.

Adrianne B. Lee: Re launching overstock Dot com Overstock was soft launched at the end of March since launch. This brand has been accretive to our gross margin profile.

Adrianne B. Lee: Since launch, this brand has been accretive to our growth margin profile, providing integration add-ons. As of April, customers are now able to purchase product warranties and shipping insurance from our Reintroducing Owned Brands and Embarking on Life brands. This is in the early innings, but something we will continue.

Adrianne B. Lee: Providing integration add on as of April customers are now able to purchase product warranties and shipping insurance from our site.

Adrianne B. Lee: Reintroducing owned brands and embarking embarking on licensing activity. This is in the early innings, it's something we continue to pursue.

Adrianne B. Lee: We expect this to be realized over time as our brands and course value propositions are clear. G&A and tech expense decreased $1 million year-over-year, primarily driven by cost-cutting actions, supporting our plan to reduce fixed costs by 45%.

Adrianne B. Lee: And eliminating inefficient discounting we expect this to be realized over time as our brands and corresponding value propositions are clear to customers.

Adrianne B. Lee: G&A and tech expense decreased $1 million year over year, primarily driven by cost cutting actions supporting our plan to reduce fixed cost by $45 million to that end I am pleased to report we have delivered half of the annualized savings with a path to secure the balance.

Adrianne B. Lee: To that end, I am pleased to report we have delivered half of the annualized savings with a path to secure the balance. We changed the presentation of our customer service and merchandise to better reflect how we manage the business and to ease comparability. This expense was historically included in gross profit. For additional details, a historical recast was provided in the slides posted to our IRB. All in, adjusted EBITDA was a loss of $48 million.

Adrianne B. Lee: We changed the presentation of our customer service and merchant fees to better reflect how we manage the business and to ease of comparability to peers. This expenses. Historically included in gross profit for additional details a historic recast was provided in the slides posted to our IR site.

Adrianne B. Lee: All in adjusted EBITDA was a loss of $48 million.

Adrianne B. Lee: On a margin basis, this was a negative 12.5% 1,500 basis point decline year-over-year, with approximately 50% of the decline driven by gross margin. Our reported GAP EPS loss was $1. Leukemia and Loss is recognized from our, The Bulletproof Executive 2013, Our balance sheet remains strong. On a net basis, our cash balance is $222 million. As Marcus shared, we expect to reduce spend on acquiring transactional customers and invest in our brands and corresponding customers to improve the lifetime value of each.

Adrianne B. Lee: On a margin basis. This was negative 12, 5%, a 300 basis point decline year over year with approximately 50% of the decline driven by gross margin pressure.

Adrianne B. Lee: On a GAAP EPS loss was $1 62 for the first quarter, excluding losses recognized from our equity method Securities. We reported adjusted diluted loss per share of $1 22.

Adrianne B. Lee: Our balance sheet remains strong on a net basis, our cash balance was $222 million as mark shared we expect to reduce spend on acquiring transactional customers and invest in our brands and corresponding customer experience to improve the lifetime value of each customer. We will also continue to opportunistically monetize.

Adrianne B. Lee: We will also continue to opportunistically monetize non-performing assets. As an example, we sold Lomstada and reinvested in Zulily, a brand that has a more recent active customer file. Notably, we did these transactions with a net positive cash flow. Our headquarters, our headquarters building in Utah, is still listed for sale, and we will continue to keep you apprised of our progress.

Adrianne B. Lee: Nonperforming assets as an example, we sold one Sara and reinvested in new Lilly a brand that has a more recent active customer file notably we did these transactions was a net positive cash impact.

Adrianne B. Lee: Our headquarters our headquarter building and Utah is still listed for sale and we will continue to keep you apprised of our progress.

Adrianne B. Lee: Additionally, as it relates to Pellion, Marcus and I have been working for several months to improve the relationship with Pellion and multiple Outset Advisors to evaluate all of our options as it relates to this aspect. As it stands today, we are dissatisfied with the decline in value of this asset since the transfer to the portfolio.

Adrianne B. Lee: Additionally, as it relates to <unk> markets and I have been working for several months to improve the relationship with <unk> and have engaged multiple outside advisers to evaluate all of our options as it relates to this asset as it stands today, we are dissatisfied with the decline in value of this asset since the transfer to the portfolio.

Adrianne B. Lee: Chandra and Dave are focused on growing our three. And, as I mentioned, our margin improvements and cost-saving actions are well underway. There is still significant work to be done, but I am confident in our path forward. And now, I will turn the call back. Thank you, Adrian.

Adrianne B. Lee: Chandra Dave our focus on growing our three anchor brands and as I mentioned, our margin improvement and cost saving actions are well underway. There is still significant work to be done, but I'm confident in our path forward and now I will turn the call back to you Mark.

Marcus Lemonis: Before we move on to Q&A, I want to make one final point. I understand the P&L of this company now to its core, but I don't like seeing when there's a loss. The only justification for any loss running through the P&L is when each of those dollars actually provides a return on investment at some point. In the absence of that, it no longer becomes an investment; it just feels like wasteful spending, and we won't be doing that.

Mark: Thank you Adrian before we move on to Q&A I want to make one final point I understand the P&L of this company now to its core, but I don't like seeing when Theres a loss.

Mark: The only justification for any loss running through the P&L is when each of those dollars actually provides a return on investment at some point.

Mark: In the absence of that it no longer turns into an investment it just feels like wasteful spending and we won't be doing that.

Marcus Lemonis: Let's go ahead and take some Q&A back to the operator, please. Thank you. As a reminder, to ask a question, please press star one on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again. Due to time constraints, we ask that you please limit yourself to one question and one follow-up question. The first question comes from the line of Thomas Forte with Maxim.

Speaker Change: Let's go ahead and take some Q&A back to the operator please.

Speaker Change: Thank you.

Speaker Change: As a reminder to ask a question. Please press star one one on your telephone and wait for your name to be announced to withdraw your question. Please press star one again.

Speaker Change: And due to time constraints, we ask that you. Please limit yourselves to one question and one follow up question.

Speaker Change: Our first question comes from the line of Thomas Forte with Maxim Group.

Thomas Ferris Forte: Great, thanks for taking my question. So, you talked a lot about this in your prepared remarks, but I was hoping you could distill it into kind of 60 to 90 seconds. What gives you confidence you're acquiring customers whose lifetime value exceeds the related customer acquisition costs for Bed Bath & Beyond, more recently Overstock, and then looking ahead to Zulily? We can take a look. First of all, we had a difficult time analyzing those things in the past, and we brought in far more data analytics folks to help us do that.

Thomas Ferris Forte: Great. Thanks for taking my question, so you've talked a lot about this in your prepared remarks, but I was hoping you could just fill it to kind of 60 to 90.

Thomas Ferris Forte: What gives you confidence you're acquiring customers, whose lifetime value exceeds the related customer acquisition costs for bed Bath <unk> beyond more recently overstock and then looking ahead do Lily.

Speaker Change: We can take a look first of all we had a difficult time.

Speaker Change: Analyzing those things in the past and we brought on far more data analytics folks to help us do that but what was the missing element inside of all of that is a platform that really divided and conquered our actual transactions with each customer. We recently engaged with salesforce after months and months of scoping alternatives.

Thomas Ferris Forte: But what was the missing element inside of all of that was a platform that really divided and conquered our actual transactions with each customer. We recently engaged with Salesforce after months and months of scoping alternatives, and now we realize that understanding who that customer is, what their propensity is to buy, how they behave, and what the different things that give us those key indicators are now in place. As we move forward for the balance of the quarters, I'm looking for maturation of those three brands, the cleansing of those three unique databases, the ability to find the through line where each of those databases can actually transact in the other businesses, and the direct understanding of who is here for just a commodity purchase and who looks like, based on technology and data, is here to stay.

Speaker Change: And now realize that understanding who that customer is what their propensity is to buy how they behave and what are the different things that give us those key indicators is now in place as we move forward for the balance of quarters I'm looking for maturation of those three brands the cleansing of those three unique databases.

Speaker Change: The ability to find the through line, where each of those databases can actually transact in the other businesses and the direct understanding of who is here for just a commodity purchase and who will looks like based on technology and data is here to stay so one thing that I noticed in quarter one is that.

Thomas Ferris Forte: The one thing that I noticed in quarter one is that while we had a significant increase in transactions, I think there could have been anywhere from 100 to 200,000 transactions in the quarter that were done simply to take advantage of the deal.

Speaker Change: While we had a significant increase in transactions I think there could have been anywhere from 100 to 200000 transactions in the quarter that were done simply to take advantage of the deal and when I look at the overall transaction that those customers engaged in the revenue generated the gross profit generated in.

Marcus Lemonis: And when I look at the overall transaction that those customers engaged in, the revenue generated, the gross profit generated, and the cost to acquire that customer, it just didn't make sense to me. So, as I said earlier in my prepared remarks, we are no longer going to be making investments into customers that we believe are here just to take advantage of the deal of the day with no intention of returning. When they provide us with their email address, answer other questions, and engage in other ways, they start to identify themselves as long-term prospects. Particularly when we see old customers from the 30 million plus database re-engage in a meaningful and multiple times. Great. And then for my follow-up, and thank you for that. So this is similar.

Speaker Change: The cost to acquire that customer it just didn't make sense to me. So as I said earlier in my prepared remarks, we are no longer going to be making investments investments into customers that we believe are here just to take advantage of the deal of the day with no intention to returning when they provide us through E mail.

Speaker Change: Now answer other questions engage in other ways they start to identify themselves as long term prospects, particularly when we see old customers from the $30 million plus database reengage in a meaningful and multiple time way.

Speaker Change: Great and then for my follow up and thank you for that market. So this and similar you talked a lot in the prepared remarks on this but was hoping you could just fill up to 60 to 90 seconds in the earnings release, you indicate that all three brands have the potential to generate $1 billion of more revenue I wanted to focus on Jubilee. It's high watermark is $1 8 billion in 2008.

Thomas Ferris Forte: You talked a lot in your prepared remarks on this, but I was hoping you could distill it to 60 to 90 seconds. In the earnings release, you indicated that all three brands have the potential to generate a billion or more revenue. Now, I want to focus on Zulily.

Marcus Lemonis: Its high watermark is $1.8 billion in 2018. What gives you confidence that you could surpass a billion in revenue for Zulily, and how should we think about the relative profitability of those sales? as well as those from Bed Bath and Beyond.

Speaker Change: What gives you confidence you could surpass $1 billion in revenue for <unk> and how should we think about the relative profitability of those sales versus those from bed Bath and overstock.

Marcus Lemonis: Well, my records may be wrong, but I show some historical data back when QVCHSM was involved that it may have crossed the $2 billion mark. But when Dave and I walked the streets of New York, reengaging with all the powerful vendors that actually drove that site, we learned that there is truly white space in this marketplace. When you look at off-price apparel, there are the major retailers that do it at the brick-and-mortar level, the TJ Maxxes, the Rosses, the Marshalls of the world.

Speaker Change: Well My records may be wrong, but I show some historical data back win.

Speaker Change: QVC HSN was involved that it may have crossed the $2 billion Mark.

Speaker Change: When Dave when Dave and I walk the streets of New York re engaging with all the power for vendors that actually drove that site. We learned that there is truly white space in this marketplace. When you look at off price apparel. There are the major retailers that do it at the brick and mortar level. The T. J Maxx is the Ross is.

Marcus Lemonis: But when you go to the online sector, there really isn't anybody playing in that space. Now, there are certain people that play in the upper-tier space, the true, true luxury that are an aggregator of what other people have on their shelves. But in addition to that, we believe those sites need some competition. But, in addition to that, we believe that as you go down the price-value stack all the way to every man or every lady in the middle of America, we don't believe that they're being served properly.

Speaker Change: The Marshalls of the world, but when you go to the online sector. There really isn't anybody playing in that space now there are certain people that play in the upper tier space. The true true luxury that are an aggregator of what other people have on their shelves, but in addition to that we believe those sites need some competition.

Speaker Change: But in addition to that we believe that as you go down the price value stack all the way to the every man or every Lady in the Middle of America. We don't believe that they are being served properly we believe theres more volume opportunity and margin opportunity. When you play in that mid level tier we want to be able to.

Marcus Lemonis: We believe there's more volume opportunity and margin opportunity when you play in that mid-level tier. We want to be able to have Zulily provide the greatest shopping experience for that working mom, for her, potentially her husband, and definitely her child, up and down the price pendulum, providing superior value at each one of those levels. If we're selling a superior luxury brand, there is still a perception of value when it's 50%, 60%, and 70% off for all buyers.

Speaker Change: <unk> Xu Lilly provide the greatest shopping experience for that working mom for her potentially her husband definitely her child up and down the price pendulum, providing a superior value at each one of those levels. If we're selling a superior luxury brand there still is a perception of value when it.

Speaker Change: 50%, 60%, 70% off for all buyers, but as you think about the general consumer in the marketplace. We can't just serve that consumer and subsequently we can't just serve the consumer that needs to buy an outfit to go to work for $49 95, and we say that because we think thats, where the bulk of transactions are <unk>.

Marcus Lemonis: But as you think about the general consumer in the marketplace, we can't just serve that consumer, and, subsequently, we can't just serve the consumer that needs to buy an outfit to go to work for $49.95. And we say that because we think that's where the bulk of transactions are. As we look to warm up that Zulily customer, and that fashion space is something that our team knows a lot about, we want to find different entry points as that aspirational lady graduates from college and now needs to modify her wardrobe to go to work and to have a good time on Friday night.

Speaker Change: As we look to warm up that zoo Lilly customer in that fashion space is something that our team knows a lot about we want to find different entry points as that aspirational Lady graduates from college and now needs to modify her wardrobe to go to work and to have a good time on Friday night, we need to make sure that we are there to serve her.

Marcus Lemonis: We need to make sure that we are there to serve her from that point all the way to the time she gets married, has kids, becomes a professional working woman, becomes an empty nester, becomes a retiree, all the way through her life events.

Speaker Change: From that point, all the way to the time. She gets married has kids becomes a professional working women becomes an empty nester becomes a retiree all the way through her life events, and we want to do that not only with fashion, but with fashion accessories and beauty. When you look at that overall space and the need to serve that.

Marcus Lemonis: And we want to do that not only with fashion but with fashion accessories and beauty. When you look at that overall space and the need to serve that consumer, including plus sizes, which we think is an absolutely ignored market, we think that that is easily, over time, in a mature process, over the next several years, a billion-dollar brand. But more importantly, we think it will have much better margins than some of the current categories we play in. We believe those margins will be north of 22, hopefully 24%.

Speaker Change: Consumer, including plus sizes, which we think is an absolutely ignored market. We think that that is easily overtime in a mature process over the next several years, a $1 billion brand, but more importantly, we think it will have much better margins than some of the current categories. We plan.

Speaker Change: We believe those margins will be north of 22, hopefully, 24% and without adding all of the fixed costs that <unk> had corporate offices giant warehouses and all those things we believe our competitive advantage will be exposed for the first time when do we start to gain revenue Wow.

Marcus Lemonis: And without adding all of the fixed costs that Zulily had, corporate offices, giant warehouses, and all those things, we believe our competitive advantage will be exposed for the first time when we start to gain revenue while we're tightening up costs at the same time. We think that the revenue ramp is going to be slow and methodical because we want to make sure, particularly with apparel, that the experience of buying that garment, properly sizing that garment, being able to receive it in your home and figure out what you're going to keep, and curating them in a more highly stylized environment is going to take several months.

Speaker Change: We're tightening up cost at the same time, we think that revenue ramp is going to be slow and methodical because we want to make sure, particularly with apparel that the experience to buy that garment properly size that garment be able to receive it in your home and figure out whats youre going to keep and to curate them with our hub.

Speaker Change: More highly stylized environment is going to take several months. This isn't one of those situations, where you just plug in the vendor and start selling your customer service needs to be improved that's one thing that <unk> struggled with your delivery times from the time you order to the time, we receive it in your home has to be improved that's one of the things that <unk>.

Marcus Lemonis: This isn't one of those situations where you just plug in the vendor and start selling. Your customer service needs to be improved. That's one thing that Zulily struggled with. Your delivery times from the time you order to the time you receive it in your home have to be improved. That's another thing that Zulily struggled with.

Marcus Lemonis: So we are making sure that we're doing a lot of research with older consumers, meaning historical Zulily consumers, talking to every one of the vendors that sold tens and 20s of millions of dollars worth of product there to find out what went right and what didn't, so that we can assure that we don't make the same mistakes. The last piece, and this is a development concept only, is that Adrienne and I are putting our heads together with a number of advisors to try to figure out how to get those very, very crucial vendors who make up 90% of all of the fashion in America to become sticky to the Zulily brand by properly incentivizing them on the growth of that business through some creative mechanism.

Speaker Change: Struggled with so we are making sure that we're doing a lot of research with older consumers, meaning historical zulli consumers talking to every one of the vendors that sold tens and twenties of millions of dollars worth of product there to find out what went right and what did it. So that we can assure that we don't make the same mistake.

Speaker Change: The last piece and this is in a development concept only is it adriana <unk> or putting our heads together with a number of advisers to try to figure out how to get those very very crucial vendors, who make up 90% of all of the fashion in America.

Speaker Change: It becomes sticky to the zoo Lilly brand by properly incentivizing them on the growth of that business through some creative mechanism.

Marcus Lemonis: And while we want to be vendors and supplier relationships, we also want to help them improve their turns and margins. We also want to help them with their returns. We also want to help them with their customer and brand experience. And in exchange for that, we have goal alignment. And we think that's one thing that's been missing across all these brands, a true goal alignment between what the vendor needs to accomplish for their own shareholders and what we need to accomplish for our shareholders, and how those two things can meet in one place and become very sticky to each other. Thank you so much, Marcus.

Speaker Change: And while we want to be vendors and supplier relationship. We also want to help them improve their turns and margins. We also want to help them with their returns. We also want to help them with their customer and brand experience and in exchange for that we have goal alignment and we think that's one thing that's been missing across all these brands is a true.

Speaker Change: Golar alignment between what the vendor needs to accomplish for their own shareholders and what we need to accomplish for our shareholders and how those two things can meet in one place and become very sticky to each other.

Speaker Change: Thank you so much market.

Operator: Thank you. One moment, please, for our next question, and our next question comes from the line of Anna Andreeva with Needham. Great. Thanks so much and good morning.

Speaker Change: Okay.

Speaker Change: Thank you.

Speaker Change: Please for our next question.

Speaker Change: And our next question comes from the line of Anne and Andrew <unk> with Needham.

Anna A. Andreeva: Two questions. Good morning. You had previously talked about profitability and the back half, and the comments this morning, I think, are about more of a sequential improvement as we go through the year. So should we still expect BEYOND to be profitable in 3Q and 4Q? And as you look out to 25, do you think low single-digit EBITDA margins is a realistic level for the business? And then we had a follow-up. Yeah, I think it's an excellent question.

Speaker Change: Great. Thanks, so much and good morning to.

Speaker Change: Two questions.

Speaker Change: Good morning.

Speaker Change: <unk> talked about profitability in the back half and the comments. This morning, I think are about more of a sequential improvement as we go through the year. So should we still expect beyond to be profitable in <unk> and <unk> and as you look out to 'twenty five do you think low single digit EBITDA.

Speaker Change: <unk> is a realistic level for the business and then we had a follow up.

Marcus Lemonis: After really digging into the first hundred days, we realized that the investment required to build these three stand-alone brands in a way that is foundational and will last us a lifetime will take longer than we expected. We need to ensure that the technology stack is clear, that the customer experience is unique, that their vendor relationships are set up in a way that is profitable, and that every single dollar that runs through our P&L between now and the end of the year is exclusively and singularly related to building the technology stack, improving the customer experience, hiring and bringing on the best talent that we believe is possible, and acquiring and retaining customers that we believe have a lifetime value proposition As we unpack the financial statement for the balance of the year, what we have decided is we are not going to chase what we believe are going to be unprofitable transactions.

Speaker Change: Yes, I think it's an excellent question after really digging into the first 100 days, we realize that the investment required to build these three standalone brands in a way that is foundational that will last us a lifetime will take longer than we expected we need to ensure that the.

Marcus Lemonis: But there still needs to be an investment in waking up historical customers that haven't been communicated to in months, in identifying target specific audiences through the Salesforce CRM that we can mature, water, and create green shoots out of, and quite honestly, bringing those three brands back to life in different ways. And whether that's licensing or branding or partnering, there is work to be done. So, no, I do not expect there to be positive contributions through the end of this year. But I want to caveat that.

Speaker Change: Technology stock is clear that the customer experience is unique that their vendor relationships our setup in a way that are profitable and that every single dollar that runs through our P&L between now and the end of the year is exclusively and singularly related to either building the tech.

Speaker Change: <unk> stack, improving the customer experience hiring and bringing on the best talent that we believe is possible and acquiring and retaining customers that we believe have a lifetime value proposition as we unpack the financial statement for the balance of the year, what we have decided is.

Speaker Change: We are not going to chase, what we believe is going to be unprofitable transactions, but there still needs to be an investment in waking up historical customers that haven't been communicated two in months and identifying target specific audiences through the salesforce CRM that we can.

Speaker Change: Mature water and create green shoots out of and quite honestly, bringing those three brands back to life in different ways, and whether thats licensing our brand or branding or partnering there is work to be done. So now I do not expect there to be positive contribution through the end of this year, but I wanted to.

Marcus Lemonis: That delta between what we previously thought and now isn't a function of us not managing our costs. We are well on our way of eliminating the 45 million dollars that we've identified. We're slightly more than half that, and have a very clear path to finishing that.

Speaker Change: Caveat that.

Speaker Change: That delta between what we previously thought and now isn't a function of us not managing our cost we are well on our way of eliminating the $45 million that we've identified we're slightly more than half and have a very clear path to finishing that the delta is truly related to how we want to add.

Marcus Lemonis: The delta is truly related to how we want to allocate our capital to invest intelligently in building the right foundation. I wish that a lot of these costs could be capitalized, but Gap Accounting doesn't allow that.

Speaker Change: Allocate our capital to invest intelligently in building the right Foundation.

Speaker Change: I wish that a lot of these costs could be capitalized, but GAAP accounting doesn't allow that and when you launch a brand new business like overstock, while it had a legacy name. It does not have a legacy platform and while you launched a legacy business like zoo Lilly that stopped a year ago at <unk>.

Marcus Lemonis: And when you launch a brand new business like Overstock, while it has a legacy name, it does not have a legacy platform. And while you launch a legacy business like Zulily that stopped a year ago, it costs money on the human capital side, on the technology side, on the customer experience side, and the marketing side. And I would strongly encourage and respectfully request that everybody look at all of the costs that are going to go on through the balance of this year as nothing more than a true investment that is going to run through the P&L. No wasteful spending. I can guarantee it to you.

Speaker Change: Cost money on the human capital side on the technology side on the customer experience side, and the marketing side and I would strongly encourage and respectfully request that everybody look at all of the costs that are going to go on through the balance of this year has nothing more.

Speaker Change: In a true investment that is going to run through the P&L no wasteful spending I can guarantee you that.

David J. Nielsen: Okay, that's helpful. And as a follow-up to Dave, it sounds like the Overstock soft launch is proceeding on plan. How should we think about the contribution of Overstock in the second quarter and then for the year, if you have any color there? Thanks.

Speaker Change: Okay, that's helpful and as a follow up to Dave.

Speaker Change: Sounds like the overstock soft launch is proceeding on plan, how should we think about the contribution of overstock in the second quarter and then for the year. If you have any color there. Thanks so much.

David J. Nielsen: Well, I can't wait till next year when it is at such a great pace that we're reporting it individually to you because the performance and contribution margin performance of Overstock is better than it was previously, so far in the test. It has performed incredibly well. And as Adrianne said, it's accretive to the total, even in the month, the total contribution margin, even in the month of April, as we were launching from scratch.

David J. Nielsen: Well I can't wait till next year when it is on such a great pace that we're reporting it individually to you because the performance and contribution margin performance of overstock.

Speaker Change: Is better than it was previously so far in the test it has performed incredibly well and as Adrienne said, it's accretive to the total even in the month. The total contribution margin even in the month of April as we were launching from scratch.

David J. Nielsen: So what we're seeing right now in the core competency categories of patio, furniture, area rugs, and even jewelry, we're seeing mid-teens of contribution margin to high teens. It's exciting. Well, let's give you a little revenue perspective, even though we don't break it out that way. In the early days of the soft launch, with very, very few categories live, and very few emails going out, it was averaging, call it, $50,000, $60,000 a day.

Speaker Change: So what we're seeing right now in the core competency categories.

Speaker Change: Patio furniture area rugs, and even jewelry.

Speaker Change: We are seeing.

Speaker Change: Mid teens of contribution margin to high teens, it's exciting let's give you a little revenue perspective, even though we don't break it out that way in the early days of the soft launch with very very skewed categories live with very few emails going up it was averaging call it $50 $60000 of.

David J. Nielsen: And we were processing transactions so that we could understand how that customer is moving through the funnel, which is on a new platform. How is their customer experience? What kind of feedback did they give us?

Speaker Change: Day, and we were processing transactions. So that we can understand how is that customer moving through the funnel, which is on a new platform. How is their customer experience what kind of feedback what focus groups are you running and we have slowly started adding skus. We have slowly started adding E mail, so that file and little by little in a very short period of time it went.

David J. Nielsen: What focus groups are we running? And we have slowly started adding SKUs. We have slowly started adding emails to that file.

David J. Nielsen: And little by little, in a very short period of time, it went from $50,000 a day to $80,000 a day to $100,000 a day to $150,000 a day. And by the way, when I mentioned $150,000 a day, that's at a point where only 3 million of the 20-plus million emails have been deployed. And every single day that goes by where more categories are added and more emails are deployed from our total pool, we are seeing that incrementality on the revenue side.

Speaker Change: From 50000, a day to 80000, a day to 100000, a day to 150000, a day and by the way when I mentioned 150000, a day, that's at a point, where only $3 million of the 20 plus million E. Mails have such been deployed in every single day that goes by we're more categories are added and <unk>.

Speaker Change: More E mails are deployed of our total pool, we are seeing that incrementals on the revenue side, but more importantly, we're seeing the conversion of those customers improve we were worried about our conversion in the first couple of weeks and as we were trying to figure out what was happening we realized there were some bugs in the system by the way when you drive a nuc.

David J. Nielsen: But more importantly, we're seeing the conversion of those customers improve. We were worried about our conversion rate in the first couple of weeks, and as we were trying to figure out what was happening, we realized there were some bugs in the system.

David J. Nielsen: By the way, when you drive a new car, buy a new house, or do anything like that, there's always a punch list of things that need to be repaired because you just built it. We wanted to make sure that our slow, proper growth was going to create a billion-dollar plus brand over time. Our confidence that this thing gets back to a billion-dollar brand isn't really low at all. It's actually high.

Speaker Change: Car buying a new house or do anything like that there is always a punch list of things that need to be repaired because you just built it we wanted to make sure that our slow proper growth was going to create a $1 billion plus brand over time, our confidence that this thing gets back to a $1 billion brand isn't really low at all its act.

Marcus Lemonis: But I want to make one defining clarification. The biggest challenge that we faced in the last 60 days was threading the needle between the categories that existed at Bed Bath & Beyond that were generating revenue but weren't meeting our gross profit requirements or our cost of acquisition requirements, slowly moving over to Overstock in a way that would be seamless to the customer, but, most importantly, would have zero impact on our vendors.

Speaker Change: <unk> high, but I want to make one defining clarification.

Speaker Change: The biggest challenge that we faced in the last 60 days is threading the needle between the categories that existed at bed Bath and beyond that were generating revenue, but werent meeting our gross profit requirements or our cost of acquisition acquired requirements slowly moving over to overstock in <unk>.

Speaker Change: Way that would be seamless to the customer, but most importantly would have zero impact on our vendors and we have taken it in the teeth for a few weeks by continuing to sell product at a margin rate that we will not continue to do to ensure that our vendors do not miss a beat.

Marcus Lemonis: And we have taken it in the teeth for a few weeks by continuing to sell products at a margin rate that we will not continue to do to ensure that our vendors do not miss a beat. I think that's the one big change in the way this company is being managed and will forever be managed as long as we're here, that the vendors need to be made a priority. And we had to balance that.

Speaker Change: That's the one big change in the way. This company is being managed and will forever be managed as long as we're here is that the vendors need to be made a priority.

Marcus Lemonis: So over the course of the next several weeks, I would expect that 150 to go to 250, 250 to go to 350 as we work our way back up. But I would not plan or put into any model that this business is going to be doing five to $6 million a month anytime soon, or, excuse me, a day, five to $6 million a day anytime soon, like it did before. And as it grows, there will be some degradation of the Bed Bath & Beyond brand because some of those categories, but not all of them, are moving over.

Speaker Change: And we had to balance that so over the course of the next several weeks I would expect that 150 to go to $2 $52 50 to go to $3 50, as we work our way back up but I would not plan or put into any model that this business is going to be doing $5 million to $6 million a month any.

Speaker Change: Time soon excuse me a day $5 million to $6 million a day anytime soon like it did before and as it grows some of there will be some degradation of the bed Bath <unk> beyond brand because some of those categories not all of them are moving over as a clarifying point, we will still sell bedroom.

Marcus Lemonis: As a clarifying point, we will still sell bedroom furniture at Bed Bath & Beyond, kitchen furniture at Bed Bath & Beyond that is largely driven by kitchens, bathroom furniture at Bed Bath & Beyond, and patio furniture because it has a backyard, but we will have pulled away all those unobvious non-endemic pieces and moved them over to Overstock as we ramp up.

Speaker Change: <unk> furniture at bed Bath, <unk> beyond kitchen furniture at bed Bath <unk> beyond that is largely is driven by kitchen bathroom and furniture at bed Bath <unk> beyond patio furniture, because it has backyard, but we will have pulled away all of those on the obvious non endemic pieces and move them over to overstock as we ramp up so I.

Marcus Lemonis: So I would almost think about Overstock going up by $2 and Bed Bath & Beyond potentially dropping by $1 or $1.20 as things move over. But you should be happy to know that as it moves over, the margin profile and the total gross margin contribution of those transactions will improve over time, and we've already started to see that. All right, appreciate all the color, Mark.

Speaker Change: I would almost think about overstock going up by $2 and bed Bath <unk> beyond potentially dropping by $1 or $1 20, as things move over but you should be happy to know that as it moves over the margin profile and the total gross margin contribution of those transactions over time will improve and we've already started to see.

Speaker Change: Yes.

Speaker Change: Alright, I appreciate all the color market.

Rakesh Babarbhai Patel: Thank you. One moment, please, for our next question. And our next question comes from the line of Rick Patel with Raymond James: Hey guys, thanks for taking my question. This is Josh Reese filling in for Rick.

Speaker Change: Thank you.

Speaker Change: Please for our next question.

Speaker Change: And our next question comes from the line of Rick Patel with Raymond James.

Speaker Change: Hey, guys. Thanks for taking my question. This is Josh filling in for Rick.

Joshua David Reiss: I'm just trying to dig in a little bit deeper on what you're seeing with customer acquisition. Does the growth reflect legacy bed bath customers coming back, former overstock customers, or just completely new people? And where do you see the opportunity ahead? The growth in the first quarter was largely driven by two primary factors: the Bed Bath & Beyond customer coming back to life.

Josh: I'm, just trying to dig in a little bit deeper on what youre seeing with customer acquisition does the growth.

Josh: Reflect legacy bed Bath customers coming back from our overstock customers are just completely new <unk> and where do you see the opportunity ahead.

Josh: The growth in the first quarter was largely driven by two primary factors the bed Bath <unk> beyond customer coming back to life.

Chandra Holt: Yes, and we're seeing growth with, you know, reengaging the historical Bed Bath & Beyond customer and then also acquiring new customers through the use of performance marketing. So we had, you know, significant customer growth, and we continue to see that. Because, you know, there is white space in the market, and Bed Bath & Beyond offers products that you can't find other places.

Josh: Yes.

Josh: We're seeing growth with re engaging the historical bed Bath <unk> beyond customer and then also acquiring new customers through use of performance marketing. So we had.

Josh: <unk> customer growth and we continue to see that because.

Josh: There is white space in the market and bed Bath <unk> beyond offers products that you can't find other places. So we are seeing new customers entering the site as well as the historical bed Bath <unk> beyond customers coming back to the site and agenda and I looked at the $2 2 million transactions for the quarter that were almost 100% of them through the bed.

Marcus Lemonis: So we are seeing new customers entering the site as well as the historical Bed Bath & Beyond customer. And when Chandra and I looked at the 2.2 million transactions for the quarter that were almost 100% of them through the Bed Bath & Beyond site, while a portion was made up by legacy customers, and a portion was made up by a small portion, maybe by some overstock customers, we spent a lot of money trying to find new customers. And we've identified that there are two separate pots inside of that, the one customer that we believe is going to retain and return based on certain behaviors we've seen, and ones that came in specifically because they saw a heck of a deal in the buy box on Google.

Josh: Bath <unk> be onsite, while a portion was made up by legacy customers and a portion was made up a small portion maybe by some overstock customers. We spent a lot of money to find new customers and we've identified that there are two separate parts inside of that the one customer that we believe is going to retain in return based on certain behaviors we've seen.

Josh: And ones that came in specifically because they saw a heck of a deal in the buy box on Google and we want to be very careful to improve our metrics. While we want to have the best pricing in our core categories. We don't want to continue to chase revenue. When we know it's not endemic to the bed Bath <unk> beyond brand or it's not going to give.

Marcus Lemonis: And we want to be very careful to improve our metrics. While we want to have the best pricing in our core categories, we don't want to continue to chase revenue when we know it's not endemic to the Bed Bath & Beyond brand, or it's not going to give us lifetime value monetization. If it's just essentially a customer that's coming in to buy something today, say thank you very much, and we'll never see them again. That's not a customer that we believe today, today we can afford to invest in, today, because we don't have a clear roadmap for them coming back. Oh, thanks. Very helpful.

Josh: As a lifetime value monetization if its just essentially a customer that's coming in to buy something today say, thank you very much and we'll never see them again thats not a customer that we believe today today, we can afford to invest in today, because we don't have a clear roadmap to have returning.

Joshua David Reiss: And one follow up. Just you guys got a lot going on. So I was just hoping you guys could provide a little bit more color on how you see a bunch of the KPIs moving, especially in terms of customer growth, AOV, purchase frequency, especially with the recent relaunch of Overstock and Zulily coming online in the coming months. Well, thank you for the question. We actually don't believe we have a lot going on.

Speaker Change: Thanks, very helpful and one follow up.

Speaker Change: You guys got a lot of moving pieces going on so I was just hoping you guys could provide a little bit more color on how you see.

Speaker Change: A bunch of the Kpis moving and liked in terms of like customer growth it will be.

Speaker Change: Purchase frequency, especially with the recent relaunch of overstock and Sue will be coming online in the coming months.

Marcus Lemonis: We believe we have three very specific things going on, with three very specific management teams that have been assembled, world-class managers that have an acute knowledge of those specific brands. And with Chandra and Stacey and Angela all leading the charge at Bed Bath & Beyond and its related properties, I have the highest level of confidence that the execution will be flawless, that the curation will be flawless, that the vendor relationship model will be flawless, and it will have its own AOV targets. Those ARV targets are going to be materially lower than Overstock's because they will not encompass some of the larger ticket items that Overstock carries.

Speaker Change: Well. Thank you for the question, we actually don't believe we have a lot going on we believe we have three very specific things going on with three very specific management teams that have been assembled world class managers that have an acute knowledge of those specific brands and with Chandra and Stacey and Angela all leading.

Speaker Change: The charge at bed Bath and beyond and its related properties I have the highest level of confidence that the execution will be flawless that the curation will be flawless that the vendor relationship model will be full hours and it will have its own <unk>.

Marcus Lemonis: But I will tell you one thing, that company's ability today to outperform its historical AOV, which was down in the 70s and 80s, is exceptional. This team's ability to capture some higher-ticket items, like mattresses, like beds, like kitchen stools, and kitchen lighting, that's abnormal for Bed Bath & Beyond, but the customers have responded in a way that it's logical to them. As we move over to the Overstock brand, we have very specific managers who understand that off-price value proposition—crazy good deals.

Speaker Change: <unk> targets those ARV targets are going to be materially lower than overstock, because it will not encompass some of the larger ticket items that overstock cats, but I will tell you one thing that company's ability today to outperform its historical.

Speaker Change: Which was down in the Seventy's and Eighty's is exceptional this team's ability to capture some higher item higher ticket items like mattresses like beds like kitchen, stools, and kitchen lighting, that's abnormal for bed Bath <unk> beyond but the customers have responded in a way.

Marcus Lemonis: And the DNA of that business and its management team is very different and should be separated out with a bright line from Bed Bath & Beyond because Bed Bath & Beyond is there to inspire, inform, and give ideas. Overstock is there to cast a wide net in the marketplace, to find very specific vendor relationships that are going to provide the value proposition of 30 to 70% off every day. This is not a gimmick like some of our competitors have, but a very clear value proposition combined with some off-price liquidations and reverse logistics inside of it to bring value to the average customer.

Speaker Change: Where it's logical to them as we move over to the Overstock brand, we have very specific managers, who understand that off price value proposition crazy good deals and the DNA of that business and its management team is very different and should be separated out with a bright line from bed Bath <unk> beyond.

Speaker Change: Because bed Bath and beyond is there to inspire inform give ideas overstock is there to cast a wide net in the marketplace to find very specific vendor relationships that are going to provide the value proposition of 30% to 70% off every day not a gimmick like some of our competitors have but a <unk>.

Speaker Change: Very clear value proposition combined with some off price liquidations and reverse logistics inside of it to bring value to the average customer as I move to the third stack, which is very clear we have a clear management team that is hyper focused and have his experience and whether thats from Saks Fifth Avenue Bergdorf Xu Lily.

Marcus Lemonis: As I move to the third stack, which is very clear, we have a clear management team that is hyper-focused and has experience. And whether that's Saks Fifth Avenue, Bergdorf's, Zulily itself, or any other off-price retailer, they have a specific and acute focus around fashion and beauty for the working mom.

Speaker Change: Themselves or any other off pricer have a specific an acute focus around fashion and beauty for the working mom are there going to be other products. There of course, they are we're capitalists, but each one of those brands has an acute awareness and the only shared service the only through line between those things.

Marcus Lemonis: Are there going to be other products there? Of course there are. We're capitalists. But each one of those brands has an acute awareness. And the only shared service, the only through-line between those things is the credit card.

Marcus Lemonis: Over time, the reward system, our accounting, HR, technology, and legal infrastructure. And other than that, those are three distinct big, bold silos that are being tasked with running their company with an iron fist SG&A model with the goal to have profitable growth quickly, but not reckless. Thanks so much for the caller.

Speaker Change: Is the credit card.

Speaker Change: Over time, the reward system, our accounting HR technology and legal infrastructure.

Speaker Change: And other than that those are three distinct big bold silos that are being tasked with running their company with an iron fist SG&A model with the goal to have profitable growth quickly, but not recklessly.

Speaker Change: Thanks, So much further color best of luck.

Operator: Best of luck. Thank you. One moment, please, for our next question. And our next question comes from the line of Piper Sandler. Hi, thank you. Good morning, everyone.

Speaker Change: Thank you one moment please for our next question.

Speaker Change: And our next question comes from the line of Peter Keith with Piper Sandler.

Peter Jacob Keith: Hi, Thank you good morning, everyone.

Peter Jacob Keith: Good morning, Peter. I was wondering, like Anna asked earlier about some of the profitability targets, I guess I'm also curious just about the $2 billion revenue target for 2024 as you get, you know, Bed Bath & Beyond growing and ramping, Overstock, now you have Zulily. How do you feel about that $2 billion revenue target for this year at this point? I, early on myself, and nobody else, on February 2nd, felt like a $2 billion annualized revenue goal was something that was possible.

Peter Jacob Keith: Good morning paid up.

Peter Jacob Keith: Was wondering I know believe as Ana asked earlier about some of the profitability target I guess I'm also curious just about around the $2 billion revenue target for 2024 as Youre getting.

Peter Jacob Keith: Bed Bath <unk> beyond growing and ramping overstock may have zulli, how do you feel about that $2 billion target for this year at this point.

Peter Jacob Keith: I early on myself nobody else on February 2nd.

Peter Jacob Keith: Like a $2 billion annualized revenue goal was something that was possible as I dug in deeper and understood more clearly how to best manage our cash best manage our vendor relationships best manage our human capital and most importantly manage this business to drive towards profitability.

Peter Jacob Keith: As I dug in deeper and understood more clearly how to best manage our cash, best manage our vendor relationships, best manage our human capital, and most importantly, manage this business to drive towards profitability, I've revised my outlook and no longer want to spend recklessly to try to get there. Quite frankly, in the first 100 days, I learned a lot.

Peter Jacob Keith: <unk> revised my outlook and no longer want to spend recklessly to try to get there quite frankly in the first 100 days I learned a lot and while I believe this company could get to $2 billion.

Marcus Lemonis: And while I believe this company could get to $2 billion, the cost of doing it does not seem prudent. And if I were managing this business as if it were my own personal business, I would not make the leap to spend money recklessly. As a capitalist, I understand how hard it is to make a dollar.

Peter Jacob Keith: The cost of doing it does not seem prudent and if I was managing this business as if it was my own personal business I would not make the leap to spend money recklessly as a capitalist I understand how hard it is to make a dollar and to watch people in other companies and other industries.

Marcus Lemonis: And to watch people in other companies and in other industries burn money as if it's okay is just something we're not going to do. Now, is there an outside shot that Overstock hits the moon and takes off? You bet. Is there a chance that Zulily outpaces our expectations? You bet.

Peter Jacob Keith: Burn money as if it's okay. It's just something we're not going to do now is there an outside shot that overstock hits the Moon and takes off you bet is there a chance that zuccarelli outpaces, our expectations you bet, but what we're not going to do is poured gas on it and light it on fire while cash is burning.

Marcus Lemonis: But what we're not going to do is pour gas on it and light it on fire while cash is burning just to be able to hit a number that we don't believe builds foundational stability for the long term. Do I believe that two, three, and four billion dollars are possible? You bet. And, quite frankly, that's the only reason I'm here working for free.

Peter Jacob Keith: Just to be able to hit a number that we don't believe builds foundational stability for the long term view I believe that two three and $4 billion or possible you bet and quite frankly, that's the only reason I'm here working for free.

Marcus Lemonis: I have my time and my reputation on the line, and I only make money when this company hits a certain level of performance, which would indicate that the stock would go up or down in a certain place. And I will invest as many hours and as much time as I need to, because I truly believe that I see green shoots everywhere, everywhere in monetizing the brand, finding new ways to make money, and finding new ways to cut costs.

Peter Jacob Keith: I have my time and my reputation on the line and I only make money when this company hits, a certain level of performance, which would indicate that the stock would go to a certain place and I will invest as many hours and as much time as I need to because I truly believe that IC gruner green shoots everywhere.

Peter Jacob Keith: Everywhere in monetizing the brand and finding new ways to make money and finding new ways to cut costs.

Marcus Lemonis: I'm confident that the proclamation that I made in February could be achieved, but as a management team, we look at your capital differently. We do not want to be the company that gets the two and three billion by taking on billions of dollars of debt. We're debt-free other than the mortgage on our building.

Peter Jacob Keith: I am confident that the proclamation that I made in February we could do.

Peter Jacob Keith: But as a management team we look at your capital differently, we do not want to be the company that gets to $2 3 billion by taking on billions of dollars of debt we're debt free other than the mortgage on our building $256 million in our bank account, we do not want to be the company that has to take on.

Marcus Lemonis: $256 million in our bank account. We do not want to be the company that has to take on more equity holders and dilute our current shareholders just to hit a temporary number. If I were the shareholder of this company, which I am, I don't want to be diluted. I want the management team to earn and work hard to receive their compensation, to earn and work hard to grow my investment without diluting it, without taking on debt, and I want them to do it prudently and smart. And that's my vantage point as an investor, as a person who's working here for free, and as a good capitalist who understands how hard it is to make a dollar. Okay, very helpful, Marcus.

Peter Jacob Keith: More equity holders and dilute our current shareholders just to hit a temporary number.

Peter Jacob Keith: If I was a shareholder of this company, which I am I don't want to be diluted.

Peter Jacob Keith: Want the management team to earn and work hard to receive their compensation to earn and work hard to grow my investment without diluting me without taking on debt and I want them to do it prudently and smart and Thats My vantage point as an investor as a person who is working here for free and has a good capital.

Peter Jacob Keith: List, who understands how hard it is to make a dollar.

Peter Jacob Keith: And I guess I want to ask a second question, maybe directed more to Adrian, and maybe framing up how we should think about Q2 revenues, because there are a lot of moving pieces. I guess one point I'm a little worried about is you're indicating you're going to pull back on promotions. And by my math, based on the orders that you got on promotions in Q1, that added about 8% to 9% of sales.

Peter Jacob Keith: Okay very helpful. Marcus.

Speaker Change: I guess I want to ask a second question, maybe directed more to Adrian.

Speaker Change: Maybe framing up how we should think about Q2 revenues because theres a lot of moving pieces.

Speaker Change: I guess, one point I'm, a little worried about as youre, indicating you're going to pull back on promotions and by my math based on the orders that you got on promotions in Q1 and that added about 8% 9% of sales so pulling back on that but you have overstock ramping should we expect sales growth in Q2, and maybe some parameters on how it could shake out.

Peter Jacob Keith: So pulling back on that, but you have overstock ramping. Should we expect sales growth in Q2? Maybe some parameters on how it could shake out. So let me address you. I don't want you to be worried about anything. I noticed that you started; you were worried.

Speaker Change: So let me address I don't want you to be worried about anything I noticed that you started you were worried we don't want anybody to be worried other than are we making the right decisions as stewards of this business.

Adrianne B. Lee: We don't want anybody to be worried other than, "Are we making the right decisions as stewards of this business?" And thanks, Peter. And I think to Marcus's point, and kind of what we talked about in our scripted remarks, our goal is going to continue to improve our profitability, how we're investing our capital, how we're spending money. So I would just think about, you know, one of the things we're going to do as a management team is really focus on how do we secure a revenue outcome kind of similar to what we have, but doing it more profitably

Speaker Change: Yes, and thanks, Peter and I think the market at this point and kind of what we talked about in our scripted remarks. Our goal is going to continue to improve our profitability. How we're investing our capital how we're spending money. So I would just think about one of the things we're going to do as a management team is really focused on how do we sit here our revenue outcome kind of similar to what we have been doing it more profitably.

Speaker Change: And that's going to be our goal for Q2.

Adrianne B. Lee: And that's going to be our, So said more clearly, Peter, I wanna build models that we can understand more intimately when we get a certain amount of revenue from wherever it's coming from, how do we maximize profitability, maximize value creation with the customer base, improve transaction count, but not burn money recklessly. We unfortunately have laid off a ton of people.

Speaker Change: So said more clearly Peter I want to build models that we can understand more intimately when when we do a certain amount of revenue from wherever it's coming from how do we maximize profitability maximize value creation with the customer base improved transaction count but.

Speaker Change: Not burn money retro slee, we unfortunately have laid off a ton of people. We continue to work at getting out of leases and things of that nature, but what we don't want to do is use today's takeaway tomorrow's investment dollars today just to hit a number so really clearly our goal and we.

Marcus Lemonis: We continue to work at getting out of leases and things of that nature. But what we don't wanna do is use today's, take away tomorrow's investment dollars today just to hit a number. So really clearly, our goal, and we intentionally created this goal, by the way, is to target being flat to Q1 revenue. But we intentionally created a goal of being flat to Q1 revenue and seeing how much more profitable we could be on that revenue, so we understand going forward where the pulls and pushes are.

Speaker Change: Intentionally created this goal by the way is to target being flat to Q1 revenue.

Speaker Change: We intentionally created a goal from being flat to Q1 revenue, but seeing how much more profitable we could be on that revenue. So we understand going forward, where the pulls and pushes our because so many new businesses have come on and categories have changed so dramatically that we don't have.

Marcus Lemonis: Because so many new businesses have come on board, and categories have changed so dramatically, we don't have good visibility using historical data because the historical data is contaminated by the way the mixes have shifted with the addition of Bed Bath & Beyond.

Speaker Change: Good visibility using historical data because the historical data is contaminated by the way the mixes have shift with the addition of bed Bath <unk> beyond we need to get a level set and so good right wrong or indifferent, we have made a decision to scientifically understand for our shareholders exactly what this.

Marcus Lemonis: We need to get a baseline, and so good, right, wrong, or indifferent, we have made a decision to scientifically understand for our shareholders exactly what this business looks like in a vacuum. And then once we understand what that is, we will come back to you and show you what it is, and then we can ramp from there. So our ramping is really logical, is very sound, and is specific to each brand. And we can tell you that for every dollar we invest, this is what we get in return. And we don't, with certainty, with absolute certainty, have the ability to do that today. And I can't stand for it.

Speaker Change: Business looks like in a vacuum.

Speaker Change: And then once we understand what that is come back to you and show you. What it is and then ramp from there. So that are ramping is really logical is very sound is specific to each brand and we can tell you for every dollar we invest this is what we get in return and we don't know with certainty with App.

Speaker Change: Absolute certainty have the ability to do that today and I can't stand for that.

Peter Jacob Keith: Okay, very helpful. Thank you so much. Thank you. One moment, please, for our next question. And our next question comes from the line of Jonathan Matuszewski with Jef: Oh, hey, good morning. And thanks for taking my question. The first one was on the margin.

Speaker Change: Okay very helpful. Thank you so much.

Speaker Change: Thank you one moment please for our next question.

Speaker Change: And our next question comes from the line of Jonathan <unk> with Jefferies.

Jonathan Richard Matuszewski: Just wanted to follow up on Anna's question regarding profitability. So it sounds like you're going to have a heightened focus on repeat ad spend. I imagine that'll result in sequential improvement in, you know, sales and marketing spend as a percentage of sales as we move through the year. Is there just a way to help us understand the magnitude of potential improvement as the year progresses? I want to break it down, unpack it in a couple of different buckets.

Jonathan: Oh, Hey, good morning, and thanks for taking my question. The first one was on margin just wanted to follow up on <unk> question regarding profitability.

Jonathan: So it sounds like Youre going to have a heightened focus on repeat ad spend.

Jonathan: And that will result in sequential improvement in sales and marketing spend as a percentage of sales as we move through the year is there just a way to help us understand the magnitude of potential improvement as the year progresses.

Jonathan: Well I want to I want to break that unpack that in a couple of different buckets. The first bucket is on gross margin and gross margin profiles are going to become more clear to us by business division in the coming two quarters, where bed Bath and beyond has a pure curated assortment and we can see the March.

Marcus Lemonis: The first bucket is gross margin, and gross margin profiles are going to become more clear to us by business division in the coming two quarters where Bed Bath & Beyond has a pure curated assortment, and we can see the margin profile, and we will report back on that. We expect Overstock, we hope that Overstock, and we believe strongly that Overstock can return to its historical margin performance that you have seen prior to.

Jonathan: <unk> profile and we will report back on that.

Jonathan: We expect overstock, we hope that overstock, and we believe strongly that overstock and returned back to its historical margin performance that you have seen prior to and we're looking at ways to expand that through the addition of apparel and other things that we think could be margin accretive.

Marcus Lemonis: And we're looking at ways to expand that through the addition of apparel and other things that we think could be margin accretive. With Zulily, we only have historical data to go by. And that historical data, we believe, is only okay at best. We don't trust it.

Jonathan: <unk>, we only have historical data to go by and that historical data. We believe is is okay. At best We don't trust. It we've done a lot of work to believe that the margin profile could be north of 20%. The challenge that we have now and what we're asking for your patience in is that each one of those individual revenue.

Marcus Lemonis: We've done a lot of work to believe that the margin profile could be north of 20%. The challenge that we have now, and we're asking for your patience with, is that each one of those individual revenue stacks has its own margin profile. And we need to have probably three to six months where we see that uncontaminated transaction count happen with that margin profile inside of them. Additionally, when you drop below a couple of lines, you're going to see the SG&A associated with, in the case of Bed Bath, growing that installed base.

Jonathan: Stacks has its own margin profile.

Jonathan: We need to have probably three to six months, where we see that uncontaminated transaction count happen with that margin profile inside of that.

Jonathan: Additionally, when you dropped below a couple of lines youre going to see the SG&A associated with in the case of bed Bath growing that installed base in the case of overstock restarting that company, which has a different expense structure than a business, it's already going and launching Xu Lilly, which has even a more painful.

Marcus Lemonis: In the case of Overstock, restarting that company, which has a different expense structure than a business that's already going, and launching Zulily, which has even a more painful start. So if I looked at gross margin across the three, they're going to normalize over the next three to six months, and we will unpack that for you with absolute transparency. And then when we get into the SG&A, those three things we will report separately to the best of our ability, not from an SEC perspective, but in our narrative around why it is a certain way, what we think the improvement can be, what we think the one-time costs are going to be, because we believe that through the balance of the year, there are more one-time costs to actually fully launch Overstock, because we've spent very little marketing money, and there will be the same launch and marketing costs associated with Zulily, which is the only reason that it's causing our P&L to look like it has more investment than anything else in the given year.

Jonathan: So if I looked at gross margin across the three theyre going to normalize over the next three to six months and we will unpack that for you with absolute transparency and then when we get into the SG&A. Those three things we will report separately to the best of our ability not from an SEC perspective, but in our narrative.

Jonathan: Around why it has a certain way what we think the improvement can be what we think the onetime costs are going to be because we believe that through the balance of the year. There are more onetime cost to actually fully launch overstock, because we've spent very little marketing money and there will be the same launch.

Jonathan: And marketing costs associated with <unk>, which is the only reason that it is causing our P&L to look like it has more investment than anything else in the given year.

Marcus Lemonis: I don't think it's a good idea going forward for this company to report average order, gross margin, or cost of those brands combined because it doesn't tell the proper picture, because as you start selling dresses and shoes and kids clothes and Zulily, it's going to break the global average order. So we are working to give you that average order individually, and we expect within the next 90 days to start to be able to give you more insight on what that looks like. That's really helpful. Thanks for the color there.

Jonathan: Don't think it's a good idea going forward for this company to report average order.

Jonathan: Gross margin or cost of those brands combined because it doesn't tell the proper picture because as you start selling dresses and shoes and kids clothing, Xu Lily, it's going to break the global average order. So we are working to give you that average order individually and we expect within the next 90 days.

Jonathan: <unk> to start to be able to give you more insight on what that looks like.

Speaker Change: That's really helpful. Thanks for the color there and.

Jonathan Richard Matuszewski: And, my follow-up question just on the cost action. You know, congratulations on the progress so far in moving towards that $45 million annualized target. Maybe just any more color in terms of what's to come and how the remaining portions will be achieved without, you know, impacting business performance. Thank you.

Speaker Change: I guess my follow up question just on the cost actions.

Speaker Change: Congrats on the progress so far in <unk>.

Speaker Change: Moving towards that $45 million annualized target.

Speaker Change: Maybe just any more color in terms of whats to come.

Speaker Change: And how the remaining portions will be.

Speaker Change: Achieved without.

Speaker Change: Impacting business performance. Thank you.

Marcus Lemonis: Yeah, so the key, the key element, and I will tell you that I couldn't be happier having Adrian as a teammate through this process, is really understanding what, from a headcount standpoint, revenue-generating, and non-revenue-generating, and how do we really understand how to do that? And people have said to me over the last week, how are you going to grow $3 billion brands and cut costs at the exact same time? It's very easy.

Speaker Change: Yes, so the key the key element and I will tell you that I couldnt be.

Speaker Change: Happier, having adrian as a teammate through this process is really understanding what from a head count standpoint revenue generating non revenue generating and how do we really understand how to do that and people have said to me over the last week. How are you going to grow 3 billion dollar brands and cut costs at the exact same time it is very.

Marcus Lemonis: We have a very acute and hyper-focused silo in each one of those brands, and the additions that we recently announced, we made material cuts, unfortunate, very difficult material headcount cuts to fund that. Every other cost going forward is selling the building, which we've received a couple of offers that did not meet our standards. We're still working and hope to have an update here shortly. Continuing to work ourselves out of unnecessary leases and unnecessary consulting and long-term technology agreements and just improving overall efficiency, like return expense. There are a variety of things that are out there.

Speaker Change: Simple, we have a very acute and hyper focused silo in each one of those brands and the additions that we recently announced we made material cuts unfortunate very difficult material head count cuts to fund that every other cost going forward is selling the building.

Speaker Change: <unk>, which we've received a couple of offers that did not meet our standards, we're still working and hope to have an update here shortly concerning to work ourselves out of unnecessary leases and unnecessary consulting in long term technology agreements and just improving the overall efficiency, but when you look at when you look at expenses there are others.

Speaker Change: Things to think about like shipping expense like return expense, there's a variety of things that are out there and I think the single biggest expense in our company is really people and marketing marketing being number one Chandra and Dave have a very surgical approach to ensuring while we're doing some branding efforts.

Marcus Lemonis: And I think the single biggest expense in our company is really people in marketing, marketing being number one. Chandra and Dave have a very surgical approach to ensuring, while we're doing some branding efforts, to ensuring that the performance marketing is yielding them what they ultimately want because they're giving up on given a finite amount of money. So you should rest assured that Adrienne has put us on lockdown. You can't order a pack of gum in this building.

Speaker Change: Two ensuring that the performance marketing is yielding them, what they ultimately want because theyre, giving up given a finite amount of money.

Speaker Change: So you should rest assured that Adrian has put us on lockdown you can order a pack of gum in this building and I say that with severity because when we look at the shareholders' dollars. We have been tasked and then given a financial incentive as a management team to drive shareholder value and you don't drive.

Marcus Lemonis: And I say that with severity because when we look at the shareholders' dollars, we have been tasked with and have been given a financial incentive as a management team to drive shareholder value. And you don't drive shareholder value by taking on debt or diluting your shareholders. You create shareholder value by delivering revenue, by delivering profitable revenue, by thinking about every single dollar that you spend, and you squeeze it as if it's your last dollar.

Speaker Change: Their value by taking on debt or diluting your shareholders.

Speaker Change: Create shareholder value by delivering revenue by delivering profitable revenue by thinking about every single dollar that you spend and you squeeze it as if it's your last dollar and lastly, and most importantly, looking for ways to monetize the brands and unlock the debt assets, we don't MEH.

Marcus Lemonis: And lastly, and most importantly, looking for ways to monetize the brands and unlock the debt assets. We don't mention Pellion because we want to be difficult, but we are not going to allow that asset to continue to deteriorate. We love Grain Chain.

Speaker Change: <unk> <unk>, because we want to be difficult, but we are not we are not going to continue to allow that asset to do to continue to deteriorate, we love grain chain, we loved to zero and we see the value in those businesses, but we haven't seen the management of those businesses meet our expectations on the PERC.

Marcus Lemonis: We love GZERO, and we see the value in those businesses, but we haven't seen the management of those businesses meet our expectations on the performance side. So Adrianne and I have gotten more involved, and we'll continue to get more involved because the exploration and the realization of value in those businesses is nothing more than additional seed money that our shareholders are giving us to either give them a return in one form or reinvest in their businesses as they want it to be done.

Speaker Change: Foreman side, so Adrian and I have gotten more involved and we will continue to get more involved because the exploration and the realization of value in those businesses is nothing more than additional seed money that our shareholders are giving us to either give them a return in one form or reinvest in their business as they.

Speaker Change: They want it to be done.

Marcus Lemonis: Thank you. I'll now hand the call back over to Executive Chairman of the Board, Marcus Lemonis, for any closing remarks. Thank you very much for joining us on this call. We look forward to being out in the marketplace at conferences and meeting people over the next quarter. And we look forward to reporting our second quarter results and goals to you shortly. Thank you. Ladies and gentlemen, this does conclude today's program, and you may now disconnect. The Ultimate Parody Site-Limited, The Overstock Publishing Company, LLC. [inaudible] The Overstock Publishing Company, LLC.

Speaker Change: Thank you.

Speaker Change: I'll now hand, the call back over to executive Chairman of the board Marcus <unk> for any closing remarks.

Marcus Lemonis: Thank you very much for joining us on this call we look forward to being out in the marketplace at conferences and meeting people over the next quarter and we look forward to reporting our second quarter results and goals to you shortly thank you.

Speaker Change: Ladies and gentlemen, thank you for participating this does conclude today's program and you may now disconnect.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Uh huh.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yeah.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Sure.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Sure.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: Tim.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Yeah.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Sure.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Sure.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: In.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Yeah.

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Uh huh.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Sure.

Speaker Change: Sure.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Sure.

Speaker Change: Yes.

Speaker Change: Tim.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: <unk>.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Sure.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Sure.

Speaker Change: Yeah.

Speaker Change: Yes.

Speaker Change: In.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yeah.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Sure.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: <unk>.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: Tim.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Sure.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: In.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Thanks.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Sure.

Speaker Change: In.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Sure.

Speaker Change: Yes.

Speaker Change: Jim.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Sure.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Thanks.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: In.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: <unk>.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Sure.

Speaker Change: Sure.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Sure.

Speaker Change: Yes.

Speaker Change: Tim.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Sure.

Speaker Change: In.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Sure.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Sure.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Yeah.

Speaker Change: Yeah.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: So.

Speaker Change: In.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: No.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Sure.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: So.

Speaker Change: Tim.

Speaker Change: [music].

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: So.

Speaker Change: Tim.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Sure.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: [music].