PFSweb, Inc. (Nasdaq: PFSW), an international business
process outsourcing services provider of end-to-end web commerce
solutions and an online discount retailer, today announced its
financial results for the first quarter ended March 31, 2009.
�We are pleased to report solid first quarter 2009 financial
results given the overall economic climate,� stated Mark Layton,
Chairman and Chief Executive Officer of PFSweb. �On lower revenue
and cost levels, our consolidated Adjusted EBITDA performance of
$2.7 million for the quarter was virtually flat compared to last
year. Given the economic challenges that many companies have been
facing, including us, and the non-renewal of a large U.S.
Government contract effective in the March quarter, I am quite
pleased with our overall performance for the quarter.�
Mr. Layton continued, �During the quarter we shed costs and
adjusted our operational approach to better align our business with
the evolving macroeconomic landscape, while also ensuring that we
preserve our ability to effectively compete for new opportunities
as they arise. Our services segment�s new business pipeline remains
at near record levels. We believe many of these new business
opportunities are a result of PFSweb�s End2End eCommerceSM offering
that we launched last year. The successful rollout of this new
capability has made us a leader in the web commerce solutions
market.�
Summary of consolidated results for the first quarter ended
March 31, 2009:
- Total reported revenue was $88.9
million compared to $118.5 million for the first quarter of
2008;
- Adjusted EBITDA (as defined) was
$2.7 million versus $2.8 million for the same period last
year;
- Net loss was $0.2 million, or
$(0.02) per basic and diluted share, compared to net income of $0.4
million, or $0.04 per basic and diluted share, for the first
quarter of 2008;
- Non-GAAP net loss (as defined)
was $0.1 million, or $(0.01) per basic and diluted share, compared
to non-GAAP net income of $0.8 million, or $0.08 per basic and
diluted share, for the first quarter of 2008;
- Total cash, cash equivalents and
restricted cash equaled $17.6 million as of March 31, 2009 compared
to $18.1 million as of December 31, 2008.
Summary of results by business:
Service Fee Business:
For the first quarter of 2009, Service Fee revenue was $17.1
million, compared with $20.8 million for the same period in 2008.
This decline was primarily due to reduced service fee revenues
earned under our U.S. Government contract. The Service Fee business
reported Adjusted EBITDA of $1.6 million for the first quarter of
2009, consistent with $1.6 million for the same period last
year.
Mike Willoughby, President of PFSweb�s services division,
commented, �The quarterly results for the Service Fee business
include new client programs such as Sunglass Hut and Sephora, which
were implemented in the fourth quarter of 2008, as well as our
relationship with an iconic brand name company that was signed last
year and implemented during this March quarter.�
Mr. Willoughby continued, �During the quarter we launched the
first eCommerce site for one of the brands under our previously
announced master agreement with a luxury goods retailer. We
launched an additional eCommerce site for a second brand under the
same master agreement on May 11 with additional branded sites set
to launch over the next twelve to eighteen months. We also
announced a five-year agreement with the Army & Air Force
Exchange Service (AAFES) to provide a comprehensive global
fulfillment solution that supports the All Services Exchange
Catalog and Online Store.�
�In April, we entered into a new client relationship with a
Fortune 100 company, which is expected to be implemented by the end
of this year, and we are in final contracting stages with several
other companies. Our current pipeline of potential new agreements,
including those in process of being finalized, remains at near
record levels with more than $45 million in estimated annual
contract value. We believe that our expanded e-commerce capability
has made us more competitive and is playing an important role in
helping us win large client agreements, particularly among
prestigious and luxury brands.�
Supplies Distributors Business:
For the first quarter of 2009, Supplies Distributors revenue was
$45.3 million, compared to $62.3 million for the same period last
year. Adjusted EBITDA was $1.4 million for the first quarter of
2009, compared to $1.7 million for the same period last year.
Mr. Willoughby concluded, �The Supplies Distributors business,
which operates primarily as a master distributor of certain
client�s products, saw a decrease in demand during the quarter.
This decrease is primarily attributable to overall global economic
pressures and inventory rationalization by its customer base.�
eCOST.com Business:
For the first quarter of 2009, eCOST.com revenue was $20.9
million, compared to $28.0 million for the same period in 2008.
While revenue of our business-to-consumer (B2C) segment continued
to experience growth over the prior year, this growth was more than
offset by a decline in our business-to-business (B2B) segment.
Adjusted EBITDA for eCOST.com in the quarter was a loss of $0.4
million, an improvement compared to the loss of $0.5 million for
the same period last year.
�eCOST.com reported a higher gross margin percentage and a lower
Adjusted EBITDA loss compared to the first quarter of 2008 due to
our continued focus on the higher margin business-to-consumer (B2C)
segment. We remain focused on growing the B2C segment as we believe
it is more financially attractive. During the past several months,
we increased the number of products offered on the eCOST.com
website to more than 250,000 SKUs and expect more to be added in
the next several quarters. Some of these expanded offerings include
housewares, watches, floor covering and kitchen products,�
concluded Mr. Layton.
Conference Call Information
Management will host a conference call at 10:00 a.m. Central
Time (11:00 a.m. Eastern Time) on Wednesday, May 13, 2009, to
discuss the latest corporate developments and results. To listen to
the call, please dial (888) 562-3356 and enter the pin number
(98896975) at least five minutes before the scheduled start time.
Investors can also access the call in a �listen only� mode via the
Internet at the Company�s website, www.pfsweb.com. Please allow
extra time prior to the call to visit the site and download any
necessary audio software.
A digital replay of the conference call will be available
through June 13, 2009 at (800) 642-1687, pin number (98896975). The
replay also will be available at the Company�s website for a
limited time.
Non-GAAP Financial Measures
This news release contains the non-GAAP measures non-GAAP net
income (loss), Earnings Before Interest, Income Taxes, Depreciation
and Amortization (�EBITDA�) and Adjusted EBITDA.
Non-GAAP net income (loss) represents net income (loss)
calculated in accordance with U.S. GAAP as adjusted for the impact
of non-cash stock-based compensation expense, amortization of
identifiable intangible assets and impairment of goodwill and
identifiable intangible assets.
EBITDA represents earnings (or losses) before interest, income
taxes, depreciation, and amortization. Adjusted EBITDA further
eliminates the effect of stock-based compensation, merger
integration related expenses and impairment of goodwill and
identifiable intangible assets.
Non-GAAP net income (loss), EBITDA and Adjusted EBITDA are used
by management, analysts, investors and other interested parties in
evaluating our operating performance compared to that of other
companies in our industry. The calculation of non-GAAP net income
(loss) eliminates the effect of stock-based compensation,
amortization of intangible assets and impairment of goodwill and
intangible assets and EBITDA and Adjusted EBITDA further eliminates
the effect of financing, income taxes, the accounting effects of
capital spending and certain other merger related expenses, which
items may vary from different companies for reasons unrelated to
overall operating performance.
PFSweb believes these non-GAAP measures provide useful
information to both management and investors by excluding certain
expenses that may not be indicative of its core operating results.
These measures should be considered in addition to results prepared
in accordance with GAAP, but should not be considered a substitute
for, or superior to, GAAP results. These non-GAAP measures included
in this press release have been reconciled to the GAAP results in
the attached tables.
About PFSweb, Inc.
PFSweb develops and deploys integrated business infrastructure
solutions and fulfillment services for Fortune 1000, Global 2000
and brand name companies, including third party logistics, call
center support and e-commerce services. The company serves a
multitude of industries and company types, including such clients
as LEGO, Riverbed, Hewlett-Packard, International Business
Machines, Hawker Beechcraft Corp., Rene Furterer USA, Roots Canada
Ltd. and Xerox.
Through its wholly owned eCOST.com subsidiary, PFSweb also
serves as a leading multi-category online discount retailer of
high-quality new, "close-out" and manufacturer recertified
brand-name merchandise for consumers and small to medium size
business buyers. The eCOST.com brand markets approximately 250,000
different products from leading manufacturers such as Sony,
Hewlett-Packard, Denon, JVC, Canon, Nikon, Panasonic, Toshiba,
Microsoft, Dyson, Kitchen Aid, Braun, Black & Decker,
Cuisinart, Coleman, and Citizen primarily over the Internet and
through direct marketing.
To find out more about PFSweb, Inc. (NASDAQ: PFSW), visit the
company's websites at http://www.pfsweb.com and
http://www.ecost.com.
The matters discussed herein consist of forward-looking
information under the Private Securities Litigation Reform Act of
1995 and is subject to and involves risks and uncertainties, which
could cause actual results to differ materially from the
forward-looking information. PFSweb's Annual Report on Form 10-K
for the year ended December 31, 2008 identifies certain factors
that could cause actual results to differ materially from those
projected in any forward looking statements made and investors are
advised to review the Annual Report and the Risk Factors described
therein. These factors include: our ability to retain and expand
relationships with existing clients and attract and implement new
clients; our reliance on the fees generated by the transaction
volume or product sales of our clients; our reliance on our
clients' projections or transaction volume or product sales; our
dependence upon our agreements with IBM and Infoprint Solutions;
our dependence upon our agreements with our major clients; our
client mix, their business volumes and the seasonality of their
business; our ability to finalize pending contracts; the impact of
strategic alliances and acquisitions; trends in the e-commerce,
outsourcing, government regulation both foreign and domestic and
the market for our services; whether we can continue and manage
growth; increased competition; our ability to generate more revenue
and achieve sustainable profitability; effects of changes in profit
margins; the customer and supplier concentration of our business;
the unknown effects of possible system failures and rapid changes
in technology; foreign currency risks and other risks of operating
in foreign countries; potential litigation; the impact of our
reverse stock split; potential delisting; our dependency on key
personnel; the impact of new accounting standards and changes in
existing accounting rules or the interpretations of those rules;
our ability to raise additional capital or obtain additional
financing; our ability and the ability of our subsidiaries to
borrow under current financing arrangements and maintain compliance
with debt covenants; relationship with and our guarantees of
certain of the liabilities and indebtedness of our subsidiaries;
taxation on the sale of our products; eCOST's potential
indemnification obligations to its former parent; eCOST's ability
to maintain existing and build new relationships with manufacturers
and vendors and the success of its advertising and marketing
efforts; eCOST's ability to increase its sales revenue and sales
margin and improve operating efficiencies and eCOST�s ability to
generate a profit and cash flows sufficient to cover the values of
its intangible assets. PFSweb undertakes no obligation to update
publicly any forward-looking statement for any reason, even if new
information becomes available or other events occur in the future.
There may be additional risks that we do not currently view as
material or that are not presently known.
(Tables Follow)
� � � Three Months Ended March 31, � 2009 � � 2008 REVENUES:
Product revenue, net $ 66,263 $ 90,291 Service fee revenue 17,119
20,812 Pass-thru revenue � 5,555 � � 7,366 Total revenues � 88,937
� � 118,469 � COSTS OF REVENUES: Cost of product revenue 60,832
83,979 Cost of service fee revenue 11,319 13,844 Cost of pass-thru
revenue � 5,555 � � 7,366 Total costs of revenues � 77,706 � �
105,189 Gross profit � 11,231 � � 13,280 SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 10,667 12,094 AMORTIZATION OF IDENTIFIABLE
INTANGIBLES � 26 � � 202 Total operating expenses � 10,693 � �
12,296 Income from operations 538 984 INTEREST EXPENSE, NET � 357 �
� 330 Income before income taxes 181 654 INCOME TAX PROVISION � 429
� � 240 NET INCOME (LOSS) $ (248 ) $ 414 NON-GAAP NET INCOME (LOSS)
$ (119 ) $ 817 � NET INCOME (LOSS) PER SHARE: Basic $ (0.02 ) $
0.04 Diluted $ (0.02 ) $ 0.04 � WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING: Basic � 9,924 � � 9,892 Diluted � 9,924 � � 10,042 �
EBITDA $ 2,566 � $ 2,565 ADJUSTED EBITDA $ 2,669 � $ 2,766
�
�
(A) The financial data above
should be read in conjunction with the audited consolidated
financial statements of PFSweb, Inc. included in its Form 10-K for
the year ended December 31, 2008.
� �
PFSweb, Inc. and Subsidiaries
Reconciliation of certain Non-GAAP Items to GAAP (In Thousands,
Except Per Share Data) � � � Three Months Ended March 31, 2009 2008
NET INCOME (LOSS) $ (248 ) $ 414 Income tax expense 429 240
Interest expense 357 330 Depreciation and amortization � 2,028 � �
1,581 EBITDA $ 2,566 $ 2,565 Stock-based compensation � 103 � � 201
ADJUSTED EBITDA $ 2,669 � $ 2,766 � � Three Months Ended March 31,
2009 2008 � NET INCOME (LOSS) $ (248 ) $ 414 Stock-based
compensation 103 201 Amortization of identifiable intangible assets
� 26 � � 202 NON-GAAP NET INCOME (LOSS) $ (119 ) $ 817 � NET INCOME
(LOSS) PER SHARE: Basic $ (0.02 ) $ 0.04 Diluted $ (0.02 ) $ 0.04 �
NON-GAAP NET INCOME (LOSS) Per Share: Basic $ (0.01 ) $ 0.08
Diluted $ (0.01 ) $ 0.08 � �
PFSweb, Inc. and Subsidiaries
Unaudited Condensed Consolidated Balance Sheets (In Thousands,
Except Share Data) � � � � March 31, December 31, � 2009 � � 2008 �
ASSETS
CURRENT ASSETS: Cash and cash equivalents $ 15,458 $ 16,050
Restricted cash 2,168 2,008 Accounts receivable, net of allowance
for doubtful accounts of $695 and $980 at March 31, 2009 and
December 31, 2008, respectively 33,123 44,546 Inventories, net of
reserves of $1,983 and $2,124 at March 31, 2009 and December 31,
2008, respectively 45,759 47,186 Other receivables 13,820 13,072
Prepaid expenses and other current assets � 3,110 � � 3,802 � Total
current assets � 113,438 � � 126,664 � � PROPERTY AND EQUIPMENT,
net 11,356 12,106 IDENTIFIABLE INTANGIBLES 922 961 GOODWILL 3,602
3,602 OTHER ASSETS � 1,037 � � 1,188 � Total assets � 130,355 � �
144,521 � �
LIABILITIES AND SHAREHOLDERS EQUITY
CURRENT LIABILITIES: Current portion of long-term debt and capital
lease obligations $ 17,783 $ 22,251 Trade accounts payable 57,618
61,988 Accrued expenses � 18,146 � � 21,054 � Total current
liabilities � 93,547 � � 105,293 � � LONG-TERM DEBT AND CAPITAL
LEASE OBLIGATIONS, less current portion 3,681 4,951 OTHER
LIABILITIES � 867 � � 1,192 � Total liabilities � 98,095 � �
111,436 � � � COMMITMENTS AND CONTINGENCIES � SHAREHOLDERS' EQUITY:
Preferred stock, $1.00 par value; 1,000,000 shares authorized; none
issued and outstanding - - Common stock, $.001 par value;
75,000,000 shares authorized; 9,942,140 and 9,935,095 shares issued
at March 31, 2009 and December 31, 2008, respectively; and
9,923,779 and 9,916,734 outstanding as of March 31, 2009 and
December 31, 2008, respectively 10 10 Additional paid-in capital
92,836 92,728 Accumulated deficit (61,641 ) (61,393 ) Accumulated
other comprehensive income 1,140 1,825 Treasury stock at cost,
18,361 shares � (85 ) � (85 ) Total shareholders' equity � 32,260 �
� 33,085 � Total liabilities and shareholders' equity $ 130,355 � $
144,521 � � �
PFSweb, Inc. and Subsidiaries
Unaudited Consolidating Statements of Operations For the Three
Months Ended March 31, 2009 (In Thousands) � � � � � Supplies
PFSweb Distributors eCOST Eliminations Consolidated REVENUES:
Product revenue, net $ - $ 45,331 $ 20,932 $ - $ 66,263 Service fee
revenue 17,119 - - - 17,119 Service fee revenue - affiliate 2,059 -
- (2,059 ) - Pass-thru revenue � 5,586 � � - � - � � (31 ) � 5,555
� Total revenues � 24,764 � � 45,331 � 20,932 � � (2,090 ) � 88,937
� � COSTS OF REVENUES: Cost of product revenue - 41,951 18,881 -
60,832 Cost of service fee revenue 11,964 - - (645 ) 11,319 Cost of
pass-thru revenue � 5,586 � � - � - � � (31 ) � 5,555 � Total costs
of revenues � 17,550 � � 41,951 � 18,881 � � (676 ) � 77,706 �
Gross profit � 7,214 � � 3,380 � 2,051 � � (1,414 ) � 11,231 �
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 7,617 1,964 2,500
(1,414 ) 10,667 AMORTIZATION OF IDENTIFIABLE INTANGIBLES � � � 26 �
� � 26 � Total operating expenses � 7,617 � � 1,964 � 2,526 � �
(1,414 ) � 10,693 � Income (loss) from operations (403 ) 1,416 (475
) - 538 INTEREST EXPENSE (INCOME), NET � (23 ) � 377 � 3 � � - � �
357 � Income (loss) before income taxes (380 ) 1,039 (478 ) - 181
INCOME TAX PROVISION (BENEFIT) � (52 ) � 481 � - � � - � � 429 �
NET INCOME (LOSS) $ (328 ) $ 558 $ (478 ) $ - � $ (248 ) NON-GAAP
NET INCOME (LOSS) $ (225 ) $ 558 $ (452 ) $ - � $ (119 ) � EBITDA $
1,532 � $ 1,426 $ (392 ) $ - � $ 2,566 � ADJUSTED EBITDA $ 1,635 �
$ 1,426 $ (392 ) $ - � $ 2,669 � � � A reconciliation of NET INCOME
(LOSS) to EBITDA and ADJUSTED EBITDA follows: � NET INCOME (LOSS) $
(328 ) $ 558 $ (478 ) $ - $ (248 ) Income tax expense (benefit) (52
) 481 - - 429 Interest expense (income) (23 ) 377 3 - 357
Depreciation and amortization � 1,935 � � 10 � 83 � � - � � 2,028 �
EBITDA $ 1,532 $ 1,426 $ (392 ) $ - $ 2,566 Stock-based
compensation � 103 � � - � - � � - � � 103 � ADJUSTED EBITDA $
1,635 � $ 1,426 $ (392 ) $ - � $ 2,669 � � A reconciliation of NET
INCOME (LOSS) to NON-GAAP NET INCOME (LOSS) follows: � NET INCOME
(LOSS) $ (328 ) $ 558 $ (478 ) $ - $ (248 ) Stock-based
compensation 103 - - - 103 Amortization of intangible assets � - �
� - � 26 � � - � � 26 � NON-GAAP NET INCOME (LOSS) $ (225 ) $ 558 $
(452 ) $ - � $ (119 ) � �
PFSweb, Inc. and Subsidiaries
Unaudited Condensed Consolidating Balance Sheets as of March 31,
2009 (In Thousands) � � � � � � � Supplies PFSweb Distributors
eCOST Eliminations Consolidated
ASSETS
CURRENT ASSETS: Cash and cash equivalents $ 11,044 $ 2,294 $ 2,120
$ - $ 15,458 Restricted cash 1,550 405 213 - 2,168 Accounts
receivable, net 14,648 18,308 1,861 (1,694 ) 33,123 Inventories,
net - 41,036 4,723 - 45,759 Other receivables - 13,820 - - 13,820
Prepaid expenses and other current assets � 1,525 � � 1,463 � 122 �
� - � � 3,110 � Total current assets � 28,767 � � 77,326 � 9,039 �
� (1,694 ) � 113,438 � � PROPERTY AND EQUIPMENT, net 10,807 71 478
- 11,356 NOTES RECEIVABLE FROM AFFILIATES 20,845 - - (20,845 ) -
INVESTMENT IN AFFILIATES 37,585 - - (37,585 ) - IDENTIFIABLE
INTANGIBLES 421 - 501 - 922 GOODWILL - - 3,602 - 3,602 OTHER ASSETS
� 897 � � - � 140 � � - � � 1,037 � Total assets � 99,322 � �
77,397 � 13,760 � � (60,124 ) � 130,355 � �
LIABILITIES AND SHAREHOLDERS EQUITY
CURRENT LIABILITIES: Current portion of long-term debt and capital
lease obligations $ 6,512 $ 11,271 $ - $ - $ 17,783 Trade accounts
payable 7,076 45,660 6,576 (1,694 ) 57,618 Accrued expenses �
10,005 � � 5,401 � 2,740 � � - � � 18,146 � Total current
liabilities � 23,593 � � 62,332 � 9,316 � � (1,694 ) � 93,547 � �
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS, less current portion
3,681 - - - 3,681 NOTES PAYABLE TO AFFILIATES - 5,505 15,340
(20,845 ) - OTHER LIABILITIES � 739 � � - � 128 � � - � � 867 �
Total liabilities � 28,013 � � 67,837 � 24,784 � � (22,539 ) �
98,095 � � COMMITMENTS AND CONTINGENCIES � SHAREHOLDERS' EQUITY:
Common stock 10 - 19 (19 ) 10 Capital contributions 1,000 (1,000 )
- Additional paid-in capital 92,836 - 28,059 (28,059 ) 92,836
Retained earnings (accumulated deficit) (22,595 ) 6,560 (39,096 )
(6,510 ) (61,641 ) Accumulated other comprehensive income 1,143
2,000 (6 ) (1,997 ) 1,140 Treasury stock � (85 ) � - � - � � - � �
(85 ) Total shareholders' equity � 71,309 � � 9,560 � (11,024 ) �
(37,585 ) � 32,260 � Total liabilities and shareholders' equity $
99,322 � $ 77,397 $ 13,760 � $ (60,124 ) $ 130,355 � �
PFSweb, Inc. and Subsidiaries
Unaudited Consolidating Statements of Operations For the Three
Months Ended March 31, 2008 (In Thousands) � � � � � � Supplies
PFSweb Distributors eCOST Eliminations Consolidated REVENUES:
Product revenue, net $ - $ 62,322 $ 27,969 $ - $ 90,291 Service fee
revenue 20,812 - - - 20,812 Service fee revenue - affiliate 2,151 -
- (2,151 ) - Pass-thru revenue � 7,366 � � - � - � � - � � 7,366
Total revenues � 30,329 � � 62,322 � 27,969 � � (2,151 ) � 118,469
� COSTS OF REVENUES: Cost of product revenue - 58,252 25,727 -
83,979 Cost of service fee revenue 14,551 - - (707 ) 13,844 Cost of
pass-thru revenue � 7,366 � � - � - � � - � � 7,366 Total costs of
revenues � 21,917 � � 58,252 � 25,727 � � (707 ) � 105,189 Gross
profit � 8,412 � � 4,070 � 2,242 � � (1,444 ) � 13,280 SELLING,
GENERAL AND ADMINISTRATIVE EXPENSES 8,313 2,418 2,807 (1,444 )
12,094 AMORTIZATION OF IDENTIFIABLE INTANGIBLES � - � � - � 202 � �
- � � 202 Total operating expenses � 8,313 � � 2,418 � 3,009 � �
(1,444 ) � 12,296 Income (loss) from operations 99 1,652 (767 ) -
984 INTEREST EXPENSE (INCOME), NET � (60 ) � 389 � 1 � � - � � 330
Income (loss) before income taxes 159 1,263 (768 ) - 654 INCOME TAX
PROVISION (BENEFIT) � (195 ) � 435 � - � � - � � 240 NET INCOME
(LOSS) $ 354 � $ 828 $ (768 ) $ - � $ 414 NON-GAAP NET INCOME
(LOSS) $ 555 � $ 828 $ (566 ) $ - � $ 817 � � EBITDA $ 1,434 � $
1,656 $ (525 ) $ - � $ 2,565 ADJUSTED EBITDA $ 1,635 � $ 1,656 $
(525 ) $ - � $ 2,766 � � A reconciliation of NET INCOME (LOSS) to
EBITDA and ADJUSTED EBITDA follows: � NET INCOME (LOSS) $ 354 $ 828
$ (768 ) $ - $ 414 Income tax expense (benefit) (195 ) 435 - - 240
Interest expense (income) (60 ) 389 1 - 330 Depreciation and
amortization � 1,335 � � 4 � 242 � � - � � 1,581 EBITDA $ 1,434 $
1,656 $ (525 ) $ - $ 2,565 Stock-based compensation � 201 � � - � -
� � - � � 201 ADJUSTED EBITDA $ 1,635 � $ 1,656 $ (525 ) $ - � $
2,766 � A reconciliation of NET INCOME(LOSS) to NON-GAAP NET INCOME
(LOSS) follows: � NET INCOME (LOSS) $ 354 $ 828 $ (768 ) $ - $ 414
Stock-based compensation 201 - - - 201 Amortization of intangible
assets � - � � - � 202 � � - � � 202 NON-GAAP NET INCOME (LOSS) $
555 � $ 828 $ (566 ) $ - � $ 817 � �
PFSweb, Inc. and Subsidiaries
Unaudited Condensed Consolidating Balance Sheets as of December 31,
2008 (In Thousands) � � � � � � � Supplies PFSweb Distributors
eCOST Eliminations Consolidated
ASSETS
CURRENT ASSETS: Cash and cash equivalents $ 11,570 $ 3,870 $ 610 $
- $ 16,050 Restricted cash 1,550 242 216 - 2,008 Accounts
receivable, net 21,676 22,103 2,065 (1,298 ) 44,546 Inventories,
net - 41,382 5,804 - 47,186 Other receivables - 13,072 - - 13,072
Prepaid expenses and other current assets � 2,222 � � 1,526 � 54 �
� - � � 3,802 � Total current assets � 37,018 � � 82,195 � 8,749 �
� (1,298 ) � 126,664 � � PROPERTY AND EQUIPMENT, net 11,544 85 477
- 12,106 NOTES RECEIVABLE FROM AFFILIATES 20,845 - - (20,845 ) -
INVESTMENT IN AFFILIATES 37,541 - - (37,541 ) - IDENTIFIABLE
INTANGIBLES 434 - 527 - 961 GOODWILL - - 3,602 - 3,602 OTHER ASSETS
� 1,054 � � - � 134 � � - � � 1,188 � Total assets � 108,436 � �
82,280 � 13,489 � � (59,684 ) � 144,521 � �
LIABILITIES AND SHAREHOLDERS EQUITY
CURRENT LIABILITIES: Current portion of long-term debt and capital
lease obligations $ 9,045 $ 13,206 $ - $ - $ 22,251 Trade accounts
payable 9,063 48,640 5,583 (1,298 ) 61,988 Accrued expenses �
12,665 � � 5,434 � 2,955 � � - � � 21,054 � Total current
liabilities � 30,773 � � 67,280 � 8,538 � � (1,298 ) � 105,293 � �
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS, less current portion
4,951 - - - 4,951 NOTES PAYABLE TO AFFILIATES - 5,505 15,340
(20,845 ) - OTHER LIABILITIES � 1,029 � � - � 163 � � - � � 1,192 �
Total liabilities � 36,753 � � 72,785 � 24,041 � � (22,143 ) �
111,436 � � COMMITMENTS AND CONTINGENCIES � SHAREHOLDERS' EQUITY:
Common stock 10 - 19 (19 ) 10 Capital contributions 1,000 (1,000 )
- Additional paid-in capital 92,728 - 28,059 (28,059 ) 92,728
Retained earnings (accumulated deficit) (22,825 ) 6,002 (38,618 )
(5,952 ) (61,393 ) Accumulated other comprehensive income 1,855
2,493 (12 ) (2,511 ) 1,825 Treasury stock � (85 ) � - � - � � - � �
(85 ) Total shareholders' equity � 71,683 � � 9,495 � (10,552 ) �
(37,541 ) � 33,085 � Total liabilities and shareholders' equity $
108,436 � $ 82,280 $ 13,489 � $ (59,684 ) $ 144,521 � � �
eCOST.com, Inc.
Selected Operating Data � � � � � Three Months Ended March 31, 2009
2008 � Total Customers (1) 1,920,418 1,775,636 � Active Customers
(2) 199,677 164,416 � New Customers (3) 32,168 22,939 � Number of
Orders (4) 78,268 61,432 � Average Order Value (5) $ 265 $ 450 �
Advertising Expense (6) $ 200,722 $ 189,676 � Cost to Acquire a New
Customer (7) $ 5.84 $ 7.10 � (1 ) Total customers have been
calculated as the cumulative number of customers for which orders
have been taken from eCOST.com's inception to the end of the
reported period. � (2 ) Active customers consist of the approximate
number of customers who placed orders during the 12 months prior to
the end of the reported period. � (3 ) New Customers represent the
number of persons that established a new account and placed an
order during the reported period. � (4 ) Number of orders
represents the total number of orders shipped during the reported
period (not reflecting returns). � (5 ) Average order value has
been calculated as gross sales divided by the total number of
orders during the period presented. The impact of returns is not
reflected in average order value. � (6 ) Advertising expense
includes the total dollars spent on advertising during the reported
period, including internet, direct mail, print and e-mail
advertising, as well as customer list enhancement services. � (7 )
Catalog expense of $12,789 and $26,711 was not included in the 2009
and 2008 calculation, respectively, as it is used for retention and
not acquisition.
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