Hello, and welcome to the First Quarter 2024 Beyond Inc. Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. It is now my pleasure to introduce Vice President of Investor Relations and Public Relations, Alexis Callahan.

Thank you, operator. 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, Adrianne 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. Actual results could differ materially from such statements. 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.beyond.com contain important additional disclosures regarding these non-GAAP measures, including reconciliations of these measures to the most comparable GAAP measures. Following management's prepared remarks, we will open up questions. A slide presentation with supporting data is available for download on our Investor Relations website. Please review the important forward-looking statements disclosure on Slide 2 of that presentation. With that, let me turn the call over to you, Marcus.

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. My mission in 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, I see green shoots everywhere. And where I don't, we will correct. 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 3 individual brands that have the potential to become $1 billion revenue brands, 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 the internal movement within our management team. 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. 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 we look to monetize this brand and its acquisition, you can expect us…

Thank you, Marcus. I started as CEO optimistic about the strength of the Bed Bath & Beyond brand. And now 90 days later, I am even more excited about the brand's potential. During the quarter, Bed Bath & Beyond legacy categories delivered industry-leading results. GMV 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 3 strategic priorities. 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 aesthetics. 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 is edited to ensure an easy shopping experience for our customers. As part of these efforts, I'm excited to share that I've hired a new Chief Merchandising Officer, Stacey Shively. Stacey brings 30 years of retail merchandising experience and has held key leadership roles at companies such as Target, Container Store and legacy Bed Bath & Beyond. The second strategic priority is life events. 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 adults to college. In Q1, GMV for the baby category was another triple-digit green shoot, up 211%. 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 am pleased to share that Angela Minor has recently started as the Chief Marketing Officer for Bed Bath & Beyond. Angela brings 2 decades of marketing experience to the team. The third strategic priority is 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. Guncha brings over 25 years of experience to beyond and will be leading our transformation technology road map. 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 Dave.

Thank you, Chandra. I am so proud of the Overstock team for recognizing the need to pull up the soft launch by 6 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, each is known for, is fundamental to setting the groundwork for future profitable growth. As Marcus mentioned, it's important to note, Overstock was soft launched without its 24 years of online history, as it was redirected for the Bed Bath & Beyond launch last August. I am encouraged, however, that even though we're starting from scratch with Overstock, the soft launch, site 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 e-mail list and other acquisition channels. We are on schedule to complete the e-mail warm up by the end of May, addressing our total e-mail list population of 31 million. 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 the website and with a few more experience enhancements, we'll be launching our mobile app download campaign within the next 30 days. Sales and conversion rates have improved each consecutive week over the first 5 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. As we ramp Overstock over…

Thank you, Dave. Revenue increased year-over-year in the first quarter, led by 26% growth in active customers and a 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 in category trade-downs. We are acutely focused on closing the $47 year-over-year gap in AOV. 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 over time. Gross margin landed at 19.5% for the quarter, a 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 cost drove 270 basis points of pressure. First quarter gross margin improved 20 basis points versus the fourth quarter, driven in part by actioning against some of the 6 tactics that we shared on our last earnings call. 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. Relaunching Overstock.com. Overstock was soft launched at the end of March. Since launch, this brand has been accretive to our gross margin profile, providing integration add-ons. As of April, customers are now able to purchase product warranties and shipping insurance from our sites, reintroducing owned brands and embarking on licensing activity. This is in the early innings, but something we continue to pursue and eliminating inefficient discounting. We expect this to…

Thank you, Adrianne. 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 turns into an investment. It just feels like wasteful spending, and we won't be doing that. Let's go ahead and take some Q&A. Back to the operator, please.

[Operator Instructions] Our first question comes from the line of Thomas Forte with Maxim Group.

Great. So you talked a lot about this in the prepared remarks, but I was hoping you could distill it to 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 Zulily?

We can take a look -- first of all, we had a difficult time 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 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 3 brands, the cleansing of those 3 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 the commodity purchase and who looks like based on technology and data is here to stay. The one thing that I noticed in quarter 1 is that while we had a significant increase in transactions, I think there could have been anywhere from 100,000 to 200,000 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 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 to returning. When they provide us their e-mail, 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 reengaged in a meaningful and multiple time way.

Great. And then for my follow-up, and thank you for that, Marcus. So this is similar -- you talked a lot in the prepared remarks on this, but I was hoping you could distill it to 60 to 90 seconds. In the earnings release, you indicate that all three brands have the potential to generate $1 billion or more of revenue. We want to focus on Zulily. Its high watermark is $1.8 billion in 2018. What gives you confidence you could surpass $1 billion in revenue for Zulily? And how should we think about the relative profitability of those sales versus those from Bed Bath and Overstock?

Well, my records may be wrong, but I show some historical data back when QVC, HSN 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 T.J. Maxx's, the Ross', the Marshals 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. 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're being served properly. 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, 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's 50%, 60% and 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…

And our next question comes from the line of Anna Andreeva with Needham.

Two questions. You had previously 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 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.

Yes. I think it's an excellent question. After really digging into the first 100 days, we realized that the investment required to build these three stand-alone 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 technology stack is clear, that the customer experience is unique, that their vendor relationships are set up 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 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 is going to be unprofitable transactions, 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 3 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 contribution through the end of this year, but I want to caveat that. That delta between what we previously thought and now isn't the 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 allocate our capital to invest intelligently in building the right foundation. 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 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 has nothing more than a true investment that is going to run through the P&L. No wasteful spending. I can guarantee you that.

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?

Well, I can't wait until 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 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. So what we're seeing right now in the core competency categories, the patio, furniture, area rugs and even jewelry, we're seeing 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 few categories live, with very few e-mails going up. It was averaging, call it, $50,000, $60,000 a 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 we running? And we have slowly started adding SKUs, we have slowly started adding e-mail to that file. 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 e-mails have such been deployed. And every single day that goes by where more categories are added, and more e-mails are deployed of our total pool, we are seeing that incrementality 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 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 $1 billion-plus brand over time. Our confidence that this thing gets back to a $1 billion brand isn't really low at all.…

Our next question comes from the line of Rick Patel with Raymond James.

This is Josh Reiss filling in for Rick. 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 from our 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 2 primary factors: the Bed Bath & Beyond customer coming back to life.

Yes. And we're seeing growth with reengaging the historical Bed Bath & Beyond customer and then also acquiring new customers through use of performance marketing. So we had significant customer growth, and we continue to see that because -- but there is white space in the market, and Bed Bath & 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 & Beyond customers coming back to the site.

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 -- 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 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. 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 a 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 road map to them returning.

Very helpful. And one follow-up -- just -- 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 a bunch of the KPIs moving and like in terms of like 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. We believe we have 3 very specific things going on with 3 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 AOV targets are going to be materially lower than Overstocks because it will not encompass some of the larger ticket items that Overstock has. 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 item -- higher ticket items like mattresses, like beds, like kitchen tools and kitchen lighting, that's abnormal for Bed Bath & Beyond, but the customers have responded in a way 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 [Audio Gap] separated it out with a bright line from Bed Bath & Beyond because Bed Bath & 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 very clear value proposition combined with some off-price liquidations and [Audio Gap] 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 experience and whether that's from Saks Fifth Avenue, Bergdorf, Zulily themselves or any other off-pricer, have a specific and acute focus around fashion and beauty for the working mom. Are there going to be other products there? Of course, they are. We're capitalist. 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, over time, the reward system, our accounting, HR, technology and legal infrastructure. And other than that, those are 3 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.

Our next question comes from the line of Peter Keith with Piper Sandler.

I was wondering -- I know -- I believe it was Anna 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 you're getting Bed Bath & Beyond growing and ramping Overstock, now you have Zulily, how do you feel about that $2 billion target for this year at this point?

I early on myself, nobody else on February 2, felt 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, 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. And while I believe this company could get to $2 billion, 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 in other industries to 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 Zulily outpaces our expectations? You bet. 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 build foundational stability for the long term. Do I believe that $2 billion, $3 billion and $4 billion are possible? You bet. And quite frankly, that's the only reason I'm here working for free. 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…

Okay. Very helpful, Marcus. And I guess I want to ask a second question, maybe directed more to Adrianne. And maybe framing up how we should think about Q2 revenues because there's 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. 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 -- 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?

Yes. And thanks, Peter. And I think to Marcus' 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 focus on how do we secure a revenue outcome kind of similar to what we have, but doing it more profitably. And that's going to be our goal for Q2.

So said more clearly, Peter, I want to build models that we can understand more intimately 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, improve transaction count, but not burn money recklessly. 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 ahead a number. So really clearly, our goal and we intentionally created this goal, by the way, is to target being flat to Q1 revenue. 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 pools and pushes are. Because so many new businesses have come on and the categories have changed so dramatically that 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. 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 business looks like in a vacuum. 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 our 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 -- with certainty with absolute certainty, have the ability to do that today, and I can't stand for that.

And our next question comes from the line of Jonathan Matuszewski with Jefferies.

The first one was on margins. 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 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?

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 2 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 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. In Zulily, we only have historical data to go by. And that historical data, we believe, 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 stacks has its own margin profile. And we need to have probably 3 to 6 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. 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 3, they're going to normalize over the next 3 to 6 months, and we will unpack that for you with absolute transparency and then when…

That's really helpful. And I guess my follow-up question, just on the cost actions, congrats 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 impacting business performance?

Yes. So the key element, and I will tell you that I couldn't be happier having Adrianne 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 brands and cut costs at the exact same time? It's very 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, 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 the overall efficiency. But when you look at expenses, there are other 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 #1. 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 given a finite amount of money. So you should rest assured that Adrianne has put us on lockdown, you can't 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 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 and lastly and most importantly, looking for ways to monetize the brands and unlock the debt assets. We don't mention Pelion because we want to be difficult. But we are not going to continue to allow that asset to continue to deteriorate. We love GrainChain. We love tZERO, 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 business as they want it to be done.

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, thank you for participating. This does conclude today's program, and you may now disconnect.