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 second quarter and six months ended June
30, 2009.
“Our consolidated results for the second quarter are within our
expectations, which take into account the current economic
environment and changes to our client mix. We are encouraged by the
addition of several new service fee client programs that have been
or are in the process of being finalized and which we expect to
ramp up in the second half of 2009 and first quarter of 2010. When
combined with our existing operations, we expect these new client
agreements to help us achieve improved top and bottom line results
on a consolidated basis starting in the third quarter,” stated Mark
Layton, Chairman and Chief Executive Officer of PFSweb. “We have a
solid financial footing to support our operations through this
tough economic period, with approximately $17 million in cash and
cash equivalents in addition to our lenders renewing our lines of
credit earlier this year. We continue to target breakeven to
positive free cash flow performance in calendar year 2009.”
Summary of consolidated results for the quarter ended June
30, 2009:
- Total reported revenue was $82.3
million compared to $110.7 million for the second quarter of
2008;
- Adjusted EBITDA (as defined) was
$(0.7) million versus $2.5 million for the same period last
year;
- Net loss was $2.5 million, or
$0.25 per basic and diluted share, compared to net income of $0.1
million, or $0.01 per basic and diluted share, for the second
quarter of 2008;
- Non-GAAP net loss (as defined)
was $2.4 million, or $0.24 per basic and diluted share, compared to
non-GAAP net income of $0.4 million, or $0.04 per basic and diluted
share, for the second quarter of 2008; and
- Total cash, cash equivalents and
restricted cash equaled $17.2 million as of June 30, 2009 compared
to $18.1 million as of December 31, 2008.
Summary of consolidated results for the six months ended June
30, 2009:
- Total reported revenue was
$171.3 million, compared to $229.2 million for the six months ended
June 30, 2008;
- Adjusted EBITDA (as defined) was
$1.9 million versus $5.2 million for the same period last
year;
- Net loss was $2.8 million, or
$0.28 per basic and diluted share, compared to net income of $0.5
million, or $0.05 per basic and diluted share, for the six month
period ended June 30, 2008;
- Non-GAAP net loss (as defined)
was $2.5 million, or $0.25 per basic and diluted share, compared to
non-GAAP net income of $1.2 million, or $0.12 per basic and diluted
share, for the same period last year;
Summary of results by business:
Service Fee Business:
For the second quarter of 2009, Service Fee revenue was $12.4
million, compared with $21.3 million for the same period in 2008.
This decline was primarily due to the non-renewal of a U.S.
Government agency client relationship and lower activity among
existing clients as a result of the economy, partially offset by
increased service fees generated from new service contract
relationships. The Service Fee business reported Adjusted EBITDA of
$(1.3) million for the second quarter of 2009, compared to Adjusted
EBITDA of $1.0 million for the same period last year.
For the six months ended June 30, 2009, Service Fee revenue was
$29.5 million, compared with $42.1 million for the same period in
2008. This decline was primarily due to the non-renewal of a U.S.
Government agency client relationship and lower activity among
existing clients as a result of the economy, partially offset by
increased service fees generated from new service contract
relationships. The Service Fee business reported Adjusted EBITDA of
$0.3 million for the six months ended June 30, 2009, compared to
$2.7 million for the same period last year.
Mike Willoughby, President of PFSweb’s services division,
commented, “We believe we are on the right path towards reporting
improved financial performance in the second half of this year.
Currently there are several new client agreements in different
phases of contracting and implementation that are expected to have
a positive impact on service fee revenue and bottom line
performance as they become operational.”
Mr. Willoughby continued, “One of the game changing events for
us has been our End2End solution, which we launched in 2008. The
feedback from potential clients regarding this solution has been
extremely positive and has reinvigorated our new business outreach.
In a relatively short period of time we have signed or are in final
contracting phase with several new client agreements for this
solution, and continue to maintain a robust pipeline of potential
new agreements. Also, we recently received an extremely positive
endorsement from Roots Canada, one of the first companies to
utilize the End2End solution, stating that its business has
improved dramatically since transitioning to the new service
approximately one year ago.”
Supplies Distributors Business:
For the second quarter of 2009, Supplies Distributors revenue
was $45.3 million, compared to $60.0 million for the same period
last year. Adjusted EBITDA was $1.0 million for the second quarter
of 2009, compared to $2.1 million for the same period last
year.
For the six months ended June 30, 2009, Supplies Distributors
revenue was $90.6 million, compared to $122.3 million for the same
period last year. Adjusted EBITDA was $2.4 million for the six
month period of 2009, compared to $3.7 million for six month period
in 2008.
Mr. Willoughby concluded, “Revenue for the Supplies Distributors
business continued to be negatively impacted by the overall global
economic pressures and inventory rationalization by customers.
While the decline in activity is disappointing, this business
continues to be profitable with steady net income each quarter.
”
eCOST.com Business:
For the second quarter of 2009, eCOST.com revenue was $20.3
million, compared to $23.0 million for the same period in 2008.
Adjusted EBITDA for eCOST.com in the quarter was $(0.4) million, an
improvement compared to $(0.6) million for the same period last
year.
For the six months ended June 2009, eCOST.com revenue was $41.2
million, compared to $51.0 million for the same period in 2008.
While revenue from 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 six month period ended June
30, 2009 was $(0.8) million, an improvement compared to $(1.2)
million for the same period last year.
“In the second quarter we were able to limit the impact of the
economic challenges on eCOST.com through special promotions to club
members. Our club membership programs have resulted in greater
customer loyalty, which is a key metric for our long-term success,”
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 Monday, August 17, 2009, to
discuss the latest corporate developments and results. To listen to
the call, please dial (888) 562-3356 and enter the pin number
(24525973) 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 September 17, 2009 at (800) 642-1687, pin number
(24525973). 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 free cash flow,
non-GAAP net income (loss), Earnings Before Interest, Income Taxes,
Depreciation and Amortization (“EBITDA”) and Adjusted EBITDA.
Free cash flow is defined as net cash provided by operating
activities less capital expenditures.
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 and impairment of
goodwill and identifiable intangible assets.
Free cash flow, 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. Free cash flow is used
as a supplemental financial measure in our evaluation of liquidity
and financial strength. 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, and the accounting effects
of capital spending, 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, InfoPrint Solutions Company (a joint venture
company owned by Ricoh and 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 300,000
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)
PFSweb, Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Operations (A) (In
Thousands, Except Per Share Data)
Three Months Ended Six Months Ended June 30, June 30,
2009 2008 2009 2008
REVENUES: Product revenue, net $ 65,546 $ 83,048 $ 131,809 $
173,339 Service fee revenue 12,367 21,254 29,486 42,066 Pass-thru
revenue 4,417 6,382 9,972
13,748 Total revenues 82,330 110,684
171,267 229,153 COSTS OF REVENUES: Cost of
product revenue 60,303 76,368 121,134 160,347 Cost of service fee
revenue 9,414 15,105 20,733 28,949 Cost of pass-thru revenue
4,417 6,382 9,972 13,748 Total
costs of revenues 74,134 97,855 151,839
203,044 Gross profit 8,196
12,829 19,428 26,109 SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 10,643 11,849 21,310 23,943 AMORTIZATION OF
IDENTIFIABLE INTANGIBLES 27 201 53
403 Total operating expenses 10,670
12,050 21,363 24,346 Income (loss) from
operations (2,474 ) 779 (1,935 ) 1,763 INTEREST EXPENSE, NET
321 366 678 696 Income (loss)
before income taxes (2,795 ) 413 (2,613 ) 1,067 INCOME TAX
PROVISION (BENEFIT) (266 ) 351 164
591 NET INCOME (LOSS) $ (2,529 ) $ 62 $ (2,777 ) $ 476
NON-GAAP NET INCOME (LOSS) $ (2,393 ) $ 391 $ (2,512 ) $ 1,208
NET INCOME (LOSS) PER SHARE: Basic $ (0.25 ) $ 0.01 $ (0.28
) $ 0.05 Diluted $ (0.25 ) $ 0.01 $ (0.28 ) $ 0.05 WEIGHTED
AVERAGE NUMBER OF SHARES OUTSTANDING: Basic 9,927
9,900 9,925 9,896 Diluted 9,927
10,037 9,925 10,045
EBITDA $ (851 ) $ 2,341 $ 1,716 $ 4,906 ADJUSTED EBITDA $
(742 ) $ 2,469 $ 1,928 $ 5,235
(A) The financial data above
should be read in conjunction with the audited consolidated
financial statements ofPFSweb, 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 Six Months Ended June 30, June 30,
2009 2008 2009 2008 NET INCOME
(LOSS) $ (2,529 ) $ 62 $ (2,777 ) $ 476 Income tax expense
(benefit) (266 ) 351 164 591 Interest expense 321 366 678 696
Depreciation and amortization 1,623 1,562
3,651 3,143 EBITDA $ (851 ) $ 2,341 $ 1,716 $
4,906 Stock-based compensation 109 128
212 329 ADJUSTED EBITDA $ (742 ) $ 2,469 $ 1,928
$ 5,235 Three Months Ended Six Months Ended
June 30, June 30, 2009 2008 2009
2008 NET INCOME (LOSS) $ (2,529 ) $ 62 $ (2,777 ) $
476 Stock-based compensation 109 128 212 329 Amortization of
identifiable intangible assets 27 201
53 403 NON-GAAP NET INCOME (LOSS) $ (2,393 ) $ 391 $
(2,512 ) $ 1,208 NET INCOME (LOSS) PER SHARE: Basic $ (0.25
) $ 0.01 $ (0.28 ) $ 0.05 Diluted $ (0.25 ) $ 0.01 $ (0.28 ) $ 0.05
NON-GAAP NET INCOME (LOSS) Per Share: Basic $ (0.24 ) $ 0.04
$ (0.25 ) $ 0.12 Diluted $ (0.24 ) $ 0.04 $ (0.25 ) $ 0.12
PFSweb, Inc. and Subsidiaries
Unaudited Condensed Consolidated Balance Sheets (In Thousands,
Except Share Data) June 30,
December 31, 2009 2008
ASSETS
CURRENT ASSETS: Cash and cash equivalents $ 15,147 $ 16,050
Restricted cash 2,089 2,008 Accounts receivable, net of allowance
for doubtful accounts of $625 and $980 at June 30, 2009 and
December 31, 2008, respectively 32,704 44,546 Inventories, net of
reserves of $1,997 and $2,124 at June 30, 2009 and December 31,
2008, respectively 40,540 47,186 Other receivables 11,847 13,072
Prepaid expenses and other current assets 3,468
3,802 Total current assets 105,795
126,664 PROPERTY AND EQUIPMENT, net 10,878
12,106 IDENTIFIABLE INTANGIBLES 883 961 GOODWILL 3,602 3,602 OTHER
ASSETS 1,560 1,188 Total assets
122,718 144,521
LIABILITIES AND SHAREHOLDERS EQUITY
CURRENT LIABILITIES: Current portion of long-term debt and capital
lease obligations $ 22,010 $ 22,251 Trade accounts payable 47,240
61,988 Accrued expenses 19,431 21,054
Total current liabilities 88,681 105,293
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS, less
current portion 1,858 4,951 OTHER LIABILITIES 1,534
1,192 Total liabilities 92,073
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; 35,000,000 shares authorized; 9,946,585 and
9,935,095 shares issued at June 30, 2009 and December 31, 2008,
respectively; and 9,928,224 and 9,916,734 outstanding as of June
30, 2009 and December 31, 2008, respectively 10 10 Additional
paid-in capital 92,949 92,728 Accumulated deficit (64,170 ) (61,393
) Accumulated other comprehensive income 1,941 1,825 Treasury stock
at cost, 18,361 shares (85 ) (85 ) Total
shareholders' equity 30,645 33,085
Total liabilities and shareholders' equity $ 122,718 $
144,521
PFSweb, Inc. and Subsidiaries
Unaudited Consolidating Statements of Operations For the Three
Months Ended June 30, 2009 (In Thousands)
Supplies PFSweb
Distributors eCOST Eliminations Consolidated REVENUES: Product
revenue, net $ - $ 45,269 $ 20,277 $ - $ 65,546 Service fee revenue
12,367 - - - 12,367 Service fee revenue - affiliate 1,736 - -
(1,736 ) - Pass-thru revenue 4,451 -
- (34 ) 4,417 Total revenues
18,554 45,269 20,277
(1,770 ) 82,330 COSTS OF REVENUES: Cost
of product revenue - 41,984 18,319 - 60,303 Cost of service fee
revenue 10,052 - - (638 ) 9,414 Cost of pass-thru revenue
4,451 - - (34 )
4,417 Total costs of revenues 14,503
41,984 18,319 (672 ) 74,134
Gross profit 4,051 3,285
1,958 (1,098 ) 8,196 SELLING, GENERAL
AND ADMINISTRATIVE EXPENSES 7,033 2,304 2,404 (1,098 ) 10,643
AMORTIZATION OF IDENTIFIABLE INTANGIBLES - -
27 27 Total operating
expenses 7,033 2,304 2,431
(1,098 ) 10,670 Income (loss) from
operations (2,982 ) 981 (473 ) - (2,474 ) INTEREST EXPENSE
(INCOME), NET (59 ) 377 3
- 321 Income (loss) before income taxes (2,923
) 604 (476 ) - (2,795 ) INCOME TAX PROVISION (BENEFIT) (62 )
(213 ) 9 - (266 ) NET
INCOME (LOSS) $ (2,861 ) $ 817 $ (485 ) $ - $ (2,529
) NON-GAAP NET INCOME (LOSS) $ (2,752 ) $ 817 $ (458 ) $ -
$ (2,393 ) EBITDA $ (1,452 ) $ 989 $ (388 ) $
- $ (851 ) ADJUSTED EBITDA $ (1,343 ) $ 989 $ (388 )
$ - $ (742 ) A reconciliation of NET INCOME
(LOSS) to EBITDA and ADJUSTED EBITDA follows: NET INCOME
(LOSS) $ (2,861 ) $ 817 $ (485 ) $ - $ (2,529 ) Income tax expense
(benefit) (62 ) (213 ) 9 - (266 ) Interest expense (income) (59 )
377 3 - 321 Depreciation and amortization 1,530
8 85 - 1,623
EBITDA $ (1,452 ) $ 989 $ (388 ) $ - $ (851 ) Stock-based
compensation 109 - -
- 109 ADJUSTED EBITDA $ (1,343 ) $ 989
$ (388 ) $ - $ (742 ) A reconciliation of NET
INCOME (LOSS) to NON-GAAP NET INCOME (LOSS) follows: NET
INCOME (LOSS) $ (2,861 ) $ 817 $ (485 ) $ - $ (2,529 ) Stock-based
compensation 109 - - - 109 Amortization of intangible assets
- - 27 - 27
NON-GAAP NET INCOME (LOSS) $ (2,752 ) $ 817 $ (458 )
$ - $ (2,393 )
PFSweb, Inc. and Subsidiaries
Unaudited Consolidating Statements of Operations For the Six Months
Ended June 30, 2009 (In Thousands)
Supplies PFSweb
Distributors eCOST Eliminations Consolidated REVENUES: Product
revenue, net $ - $ 90,600 $ 41,209 $ - $ 131,809 Service fee
revenue 29,486 - - - 29,486 Service fee revenue - affiliate 3,795 -
- (3,795 ) - Pass-thru revenue 10,037 -
- (65 ) 9,972 Total revenues
43,318 90,600 41,209 (3,860 )
171,267 COSTS OF REVENUES: Cost of product
revenue - 83,934 37,200 - 121,134 Cost of service fee revenue
22,016 - - (1,283 ) 20,733 Cost of pass-thru revenue 10,037
- - (65 ) 9,972
Total costs of revenues 32,053 83,934
37,200 (1,348 ) 151,839 Gross profit
11,265 6,666 4,009 (2,512
) 19,428 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
14,650 4,268 4,904 (2,512 ) 21,310 AMORTIZATION OF IDENTIFIABLE
INTANGIBLES - - 53
53 Total operating expenses 14,650
4,268 4,957 (2,512 ) 21,363
Income (loss) from operations (3,385 ) 2,398 (948 ) - (1,935 )
INTEREST EXPENSE (INCOME), NET (82 ) 754 6
- 678 Income (loss) before
income taxes (3,303 ) 1,644 (954 ) - (2,613 ) INCOME TAX PROVISION
(BENEFIT) (114 ) 269 9 -
164 NET INCOME (LOSS) $ (3,189 ) $ 1,375 $ (963 ) $ -
$ (2,777 ) NON-GAAP NET INCOME (LOSS) $ (2,977 ) $ 1,375 $
(910 ) $ - $ (2,512 ) EBITDA $ 80 $ 2,416 $
(780 ) $ - $ 1,716 ADJUSTED EBITDA $ 292 $
2,416 $ (780 ) $ - $ 1,928 A
reconciliation of NET INCOME (LOSS) to EBITDA and ADJUSTED EBITDA
follows: NET INCOME (LOSS) $ (3,189 ) $ 1,375 $ (963 ) $ - $
(2,777 ) Income tax expense (benefit) (114 ) 269 9 - 164 Interest
expense (income) (82 ) 754 6 - 678 Depreciation and amortization
3,465 18 168 -
3,651 EBITDA $ 80 $ 2,416 $ (780 ) $ - $ 1,716
Stock-based compensation 212 - -
- 212 ADJUSTED EBITDA $ 292 $
2,416 $ (780 ) $ - $ 1,928 A reconciliation of
NET INCOME (LOSS) to NON-GAAP NET INCOME (LOSS) follows: NET
INCOME (LOSS) $ (3,189 ) $ 1,375 $ (963 ) $ - $ (2,777 )
Stock-based compensation 212 - - - 212 Amortization of intangible
assets - - 53 -
53 NON-GAAP NET INCOME (LOSS) $ (2,977 ) $ 1,375 $
(910 ) $ - $ (2,512 )
PFSweb, Inc. and Subsidiaries
Unaudited Condensed Consolidating Balance Sheets as of June 30,
2009 (In Thousands)
Supplies PFSweb Distributors
eCOST Eliminations Consolidated
ASSETS
CURRENT ASSETS: Cash and cash equivalents $ 10,760 $ 2,751 $ 1,636
$ - $ 15,147 Restricted cash 1,551 314 224 - 2,089 Accounts
receivable, net 13,197 20,423 1,411 (2,327 ) 32,704 Inventories,
net - 36,290 4,250 - 40,540 Other receivables - 11,847 - - 11,847
Prepaid expenses and other current assets 1,785
1,631 52 - 3,468
Total current assets 27,293 73,256
7,573 (2,327 ) 105,795 PROPERTY
AND EQUIPMENT, net 10,345 69 464 - 10,878 NOTES RECEIVABLE FROM
AFFILIATES 21,095 - - (21,095 ) - INVESTMENT IN AFFILIATES 38,859 -
- (38,859 ) - IDENTIFIABLE INTANGIBLES 408 - 475 - 883 GOODWILL - -
3,602 - 3,602 OTHER ASSETS 1,418 - 142
- 1,560 Total assets
99,418 73,325 12,256 (62,281 )
122,718
LIABILITIES AND SHAREHOLDERS EQUITY
CURRENT LIABILITIES: Current portion of long-term debt and capital
lease obligations $ 9,523 $ 12,487 $ - $ - $ 22,010 Trade accounts
payable 4,955 39,041 5,571 (2,327 ) 47,240 Accrued expenses
11,464 5,457 2,510 -
19,431 Total current liabilities 25,942
56,985 8,081 (2,327 ) 88,681
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS, less
current portion 1,858 - - - 1,858 NOTES PAYABLE TO AFFILIATES -
5,505 15,590 (21,095 ) - OTHER LIABILITIES 1,441
- 93 - 1,534 Total
liabilities 29,241 62,490 23,764
(23,422 ) 92,073 COMMITMENTS AND
CONTINGENCIES SHAREHOLDERS' EQUITY: Common stock 10 - 19 (19
) 10 Capital contributions 1,000 (1,000 ) - Additional paid-in
capital 92,949 - 28,059 (28,059 ) 92,949 Retained earnings
(accumulated deficit) (24,640 ) 7,377 (39,581 ) (7,326 ) (64,170 )
Accumulated other comprehensive income 1,943 2,458 (5 ) (2,455 )
1,941 Treasury stock (85 ) - - -
(85 ) Total shareholders' equity 70,177
10,835 (11,508 ) (38,859 ) 30,645
Total liabilities and shareholders' equity $ 99,418 $
73,325 $ 12,256 $ (62,281 ) $ 122,718
PFSweb, Inc. and Subsidiaries
Unaudited Consolidating Statements of Operations For the Three
Months Ended June 30, 2008 (In Thousands)
Supplies PFSweb
Distributors eCOST Eliminations Consolidated REVENUES: Product
revenue, net $ - $ 60,025 $ 23,023 $ - $ 83,048 Service fee revenue
21,254 - - - 21,254 Service fee revenue - affiliate 2,069 - -
(2,069 ) - Pass-thru revenue 6,389 - -
(7 ) 6,382 Total revenues 29,712
60,025 23,023 (2,076 ) 110,684
COSTS OF REVENUES: Cost of product revenue - 55,247 21,121 -
76,368 Cost of service fee revenue 15,771 - - (666 ) 15,105 Cost of
pass-thru revenue 6,389 - -
(7 ) 6,382 Total costs of revenues 22,160
55,247 21,121 (673 )
97,855 Gross profit 7,552 4,778 1,902
(1,403 ) 12,829 SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 7,946 2,721 2,585 (1,403 ) 11,849
AMORTIZATION OF IDENTIFIABLE INTANGIBLES - -
201 - 201 Total operating
expenses 7,946 2,721 2,786
(1,403 ) 12,050 Income (loss) from operations (394 )
2,057 (884 ) - 779 INTEREST EXPENSE (INCOME), NET (1 )
361 6 - 366 Income (loss)
before income taxes (393 ) 1,696 (890 ) - 413 INCOME TAX PROVISION
(BENEFIT) (249 ) 600 - -
351 NET INCOME (LOSS) $ (144 ) $ 1,096 $ (890 ) $ - $
62 NON-GAAP NET INCOME (LOSS) $ (16 ) $ 1,096 $ (689 ) $ - $
391 EBITDA $ 919 $ 2,063 $ (641 ) $ - $
2,341 ADJUSTED EBITDA $ 1,047 $ 2,063 $ (641 ) $ - $
2,469 A reconciliation of NET INCOME (LOSS) to EBITDA
and ADJUSTED EBITDA follows: NET INCOME (LOSS) $ (144 ) $
1,096 $ (890 ) $ - $ 62 Income tax expense (benefit) (249 ) 600 - -
351 Interest expense (income) (1 ) 361 6 - 366 Depreciation and
amortization 1,313 6 243
- 1,562 EBITDA $ 919 $ 2,063 $ (641 ) $ - $ 2,341
Stock-based compensation 128 - -
- 128 ADJUSTED EBITDA $ 1,047 $ 2,063 $
(641 ) $ - $ 2,469 A reconciliation of NET
INCOME(LOSS) to NON-GAAP NET INCOME (LOSS) follows: NET
INCOME (LOSS) $ (144 ) $ 1,096 $ (890 ) $ - $ 62 Stock-based
compensation 128 - - - 128 Amortization of intangible assets
- - 201 - 201
NON-GAAP NET INCOME (LOSS) $ (16 ) $ 1,096 $ (689 ) $ - $
391
PFSweb, Inc. and Subsidiaries
Unaudited Consolidating Statements of Operations For the Six Months
Ended June 30, 2008 (In Thousands)
Supplies PFSweb
Distributors eCOST Eliminations Consolidated REVENUES: Product
revenue, net $ - $ 122,347 $ 50,992 $ - $ 173,339 Service fee
revenue 42,066 - - - 42,066 Service fee revenue - affiliate 4,220 -
- (4,220 ) - Pass-thru revenue 13,706 -
- 42 13,748 Total revenues
59,992 122,347 50,992 (4,178 )
229,153 COSTS OF REVENUES: Cost of product revenue -
113,499 46,848 - 160,347 Cost of service fee revenue 30,322 - -
(1,373 ) 28,949 Cost of pass-thru revenue 13,706
- - 42 13,748 Total costs
of revenues 44,028 113,499 46,848
(1,331 ) 203,044 Gross profit 15,964
8,848 4,144 (2,847 )
26,109 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 16,259 5,139
5,392 (2,847 ) 23,943 AMORTIZATION OF IDENTIFIABLE INTANGIBLES
- - 403 -
403 Total operating expenses 16,259 5,139
5,795 (2,847 ) 24,346 Income (loss)
from operations (295 ) 3,709 (1,651 ) - 1,763 INTEREST EXPENSE
(INCOME), NET (61 ) 750 7 -
696 Income (loss) before income taxes (234 ) 2,959
(1,658 ) - 1,067 INCOME TAX PROVISION (BENEFIT) (444 )
1,035 - - 591 NET INCOME
(LOSS) $ 210 $ 1,924 $ (1,658 ) $ - $ 476 NON-GAAP
NET INCOME (LOSS) $ 539 $ 1,924 $ (1,255 ) $ - $
1,208 EBITDA $ 2,353 $ 3,719 $ (1,166 ) $ -
$ 4,906 ADJUSTED EBITDA $ 2,682 $ 3,719 $ (1,166 ) $
- $ 5,235 A reconciliation of NET INCOME
(LOSS) to EBITDA and ADJUSTED EBITDA follows: NET INCOME
(LOSS) $ 210 $ 1,924 $ (1,658 ) $ - $ 476 Income tax expense
(benefit) (444 ) 1,035 - - 591 Interest expense (income) (61 ) 750
7 - 696 Depreciation and amortization 2,648 10
485 - 3,143 EBITDA $ 2,353 $
3,719 $ (1,166 ) $ - $ 4,906 Stock-based compensation 329
- - - 329 ADJUSTED
EBITDA $ 2,682 $ 3,719 $ (1,166 ) $ - $ 5,235
A reconciliation of NET INCOME(LOSS) to NON-GAAP NET INCOME (LOSS)
follows: NET INCOME (LOSS) $ 210 $ 1,924 $ (1,658 ) $ - $
476 Stock-based compensation 329 - - - 329 Amortization of
intangible assets - - 403
- 403 NON-GAAP NET INCOME (LOSS) $ 539 $ 1,924
$ (1,255 ) $ - $ 1,208
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 June 30, 2009 2008 Total
Customers (1) 1,969,610 1,805,076 Active Customers (2)
222,095 171,794 New Customers (3) 49,192 29,440
Number of Orders (4) 96,186 61,851 Average Order Value (5) $
203 $ 364 Advertising Expense (6) $ 218,943 $ 171,252
Cost to Acquire a New Customer (7) $ 4.44 $ 5.69 (1)
Total customers have been
calculated as the cumulative number of customers for which
ordershave 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 duringthe 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 anorder 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
ordersduring 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 listenhancement services.
(7)
Catalog expense of $303 and $3,842
was not included in the 2009 and 2008 calculation,respectively, as
it is used for retention and not acquisition.
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