PFSweb, Inc. (Nasdaq: PFSW), an international business
process outsourcing services provider of end-to-end web commerce
solutions, today announced its financial results for the fourth
quarter and year ended December 31, 2010.
Mark Layton, Chairman and Chief Executive Officer of PFSweb,
stated, “Our results for the fourth quarter and year ended December
31, 2010 are a testament to the renewed strength of our business
and our ability to capitalize on new opportunities in the expanding
eCommerce industry. Our Service Fee revenue increased more than 35%
during the fourth quarter of 2010 as compared to the prior year,
and more than 20% for the full calendar year. This strong Service
Fee revenue growth, combined with a continued focus on cost
effective technology development and operational management,
resulted in an increased Adjusted EBITDA performance of 328% in the
fourth quarter of 2010, as compared to the prior year, and more
than 55% for the full calendar year.
“We continue to see strong acceptance of our eCommerce services
in the U.S. as well as in Europe, which has recently shown vast
opportunity for our solutions. This led to us launching more than
10 new client programs during 2010, including Carter’s, Juicy
Couture, Kensie, Monet, Volcom, Havaianas, and several brands under
a master agreement with a leading fragrance and beauty company.
Most of these new client arrangements include new custom branded
eCommerce sites supported by our complete End2End solution, which
is a packaged offering that generally includes the Demandware
eCommerce platform, along with our logistics and fulfillment
capabilities, high-touch customer care, financial services and
various interactive marketing services.”
Summary of consolidated results for the fourth quarter ended
December 31, 2010:
- Total revenue increased to $76.3
million for the fourth quarter of 2010 compared to $72.8 million
for fourth quarter of 2009;
- Service Fee revenue increased more than
35% to $21.7 million, compared with $16.0 million for the same
period in 2009;
- Adjusted EBITDA (as defined) was $2.6
million versus $0.6 million for the fourth quarter of 2009;
- Net loss was $2.7 million, or $0.22 per
basic and diluted share, compared to net loss of $0.9 million, or
$0.10 per basic and diluted share, for the fourth quarter of 2009.
Net loss for the fourth quarter of 2010 included a $3.2 million
loss from discontinued operations related to eCOST.com. Net loss
for the fourth quarter of 2009 included $0.4 million income from
discontinued operations related to eCOST.com;
- Non-GAAP net income (as defined) was
$0.7 million, or $0.05 per basic and diluted share, compared to a
non-GAAP net loss of $1.3 million, or $0.13 per basic and diluted
share, for the fourth quarter of 2009;
- Total cash, cash equivalents and
restricted cash was $20.3 million as of December 31, 2010 compared
to $16.9 million as of December 31, 2009.
Summary of consolidated results for the year ended December
31, 2010:
- Total reported revenue was $274.5
million compared to $267.9 million for the year ended December 31,
2009;
- Service Fee revenue increased 20.5% to
$70.6 million, compared with $58.6 million for the same period in
2009;
- Adjusted EBITDA (as defined) was $5.5
million compared to $3.5 million for the year ended December 31,
2009;
- Net loss was $7.4 million, or $0.65 per
basic and diluted share, compared to net loss of $4.6 million, or
$0.46 per basic and diluted share, for the year ended December 31,
2009. Net loss for 2010 included a $4.0 million loss from
discontinued operations related to eCOST.com. Net loss for 2009
included $0.3 million income from discontinued operations
applicable to eCOST.com;
- Non-GAAP net loss was $1.9 million, or
$0.17 per basic and diluted share, compared to non-GAAP net loss of
$4.5 million, or $0.45 per basic and diluted share, for the year
ended December 31, 2009.
“We believe we are well positioned to maintain strong growth
moving forward, as we expect demand for our services will continue
to increase. Our pipeline for potential new Service Fee business
currently totals more than $50 million, based on client
projections, the largest in PFSweb’s history, with potential new
clients in several expanding markets, including the fashion,
cosmetics and consumer packaged goods markets. To support the
ongoing growth of our business, we are in the process of expanding
capacity at select warehouse and customer care facilities and
making other strategic investments that will also allow us to offer
new capabilities. Based on our expected Service Fee revenue growth
of approximately 20% in calendar year 2011, combined with the
incremental investments we are making to support our long-term
initiatives, we are currently targeting to report Adjusted EBITDA
between $6.0 million to $7.0 million for the year ended December
31, 2011,” continued Mr. Layton.
“In an effort to streamline our operations and improve our
overall financial results, we made the strategic decision to divest
the eCOST.com business. We believe this action will allow us take
what we have learned at the frontline of the web commerce retail
world and focus that knowledge more resourcefully on our growing
Service Fee business. As a result of this divestiture, we reported
certain financial results as ‘discontinued operations’ for the
quarters and years ended December 31, 2010 and 2009. In addition,
we recorded a non-cash goodwill impairment charge of approximately
$2.8 million for the quarter and year ended December 31, 2010,
which is included in the discontinued operations,” concluded Mr.
Layton.
Conference Call Information
Management will host a conference call at 10:30 am Eastern Time
(9:30 am Central Time) on Wednesday, March 23, 2011, to discuss the
latest corporate developments and results. To listen to the call,
please dial (888) 562-3356 and enter the pin number 49410379 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 April 23, 2011 at (800) 642-1687, pin number 49410379. The
replay also will be available at the Company’s website for a
limited time.
Non-GAAP Financial Measures
This news release may contain certain non-GAAP measures,
including 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, income (loss) from
discontinued operations and executive disability benefits.
EBITDA represents earnings (or losses) before income (loss) from
discontinued operations, interest, income taxes, depreciation, and
amortization. Adjusted EBITDA further eliminates the effect of
stock-based compensation and executive disability benefits.
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, income
(loss) from discontinued operations and executive disability
benefits and EBITDA and Adjusted EBITDA further eliminate 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. The 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 comprehensive end-to-end eCommerce
solutions for Fortune 1000, Global 2000 and brand name companies,
including interactive marketing services, global fulfillment and
logistics and high-touch customer care. The company serves a
multitude of industries and company types, including such clients
as P&G, LEGO, Carter's, Lucky Brand Jeans, Juicy Couture,
Kensie, Monet, kate spade new york, AAFES, Riverbed, InfoPrint
Solutions Company, Hawker Beechcraft Corp., Roots Canada Ltd. and
Xerox.
To find out more about PFSweb, Inc. (NASDAQ: PFSW), visit the
company's website at http://www.pfsweb.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, 2009 and Quarterly Report on Form
10-Q for the nine months ended September 30, 2010 identify 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 and Quarterly Reports
and the Risk Factors described therein. 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.
PFSweb, Inc. and
Subsidiaries
Unaudited Condensed Consolidated Statements of Operations (A) (In
Thousands, Except Per Share Data)
Three Months Ended Twelve Months Ended December 31, December
31, 2010 2009 2010
2009 REVENUES: Product revenue, net $ 46,021 $ 47,288 $
174,613 $ 183,008 Service fee revenue 21,688 16,015 70,636 58,619
Pass-thru revenue 8,605 9,517
29,267 26,265 Total revenues 76,314
72,820 274,516 267,892
COSTS OF REVENUES: Cost of product revenue 43,108
44,048 162,485 168,864 Cost of service fee revenue 15,722 11,492
51,144 41,898 Cost of pass-thru revenue 8,605
9,517 29,267 26,265 Total costs
of revenues 67,435 65,057
242,896 237,027 Gross profit 8,879 7,763
31,620 30,865 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
8,020 8,844 33,611 34,270
Income (loss) from operations 859 (1,081 ) (1,991 ) (3,405 )
INTEREST EXPENSE, NET 202 233
940 1,186 Income (loss) before income taxes
657 (1,314 ) (2,931 ) (4,591 ) INCOME TAX PROVISION (BENEFIT)
210 60 463 321
INCOME (LOSS) FROM CONTINUING OPERATIONS 447 (1,374 ) (3,394
) (4,912 ) INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAX
(3,192 ) 427 (3,975 ) 342
NET LOSS $ (2,745 ) $ (947 ) $ (7,369 ) $ (4,570 ) NON-GAAP INCOME
(LOSS) $ 673 $ (1,276 ) $ (1,935 ) $ (4,505 ) NET
LOSS PER SHARE: Basic and Diluted $ (0.22 ) $ (0.10 ) $ (0.65 ) $
(0.46 ) WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: Basic
and Diluted 12,237 9,934 11,310
9,929 EBITDA $ 2,326 $ 497
$ 4,069 $ 3,139 ADJUSTED EBITDA $ 2,552
$ 595 $ 5,528 $ 3,546 (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, 2009.
PFSweb, Inc. and
Subsidiaries
Reconciliation of certain Non-GAAP Items to GAAP (In Thousands,
Except Per Share Data) Three
Months Ended Twelve Months Ended December 31, December 31,
2010 2009 2010 2009
NET LOSS $ (2,745 ) $ (947 ) $ (7,369 ) $ (4,570 ) (Income)
loss from discontinued operations, net of tax 3,192 (427 ) 3,975
(342 ) Income tax expense (benefit) 210 60 463 321 Interest expense
202 233 940 1,186 Depreciation and amortization 1,467
1,578 6,060 6,544 EBITDA
$ 2,326 $ 497 $ 4,069 $ 3,139 Stock-based compensation 226 98 809
407 Executive disability benefits - -
650 - ADJUSTED EBITDA $ 2,552 $
595 $ 5,528 $ 3,546 Three Months
Ended Twelve Months Ended December 31, December 31, 2010
2009 2010 2009
NET LOSS $ (2,745 ) $ (947 ) $ (7,369 ) $ (4,570 ) (Income)
loss from discontinued operations, net of tax 3,192 (427 ) 3,975
(342 ) Stock-based compensation 226 98 809 407 Executive disability
benefits - - 650 -
NON-GAAP INCOME (LOSS) $ 673 $ (1,276 ) $ (1,935 ) $
(4,505 ) NET LOSS PER SHARE: Basic and Diluted $ (0.22 ) $
(0.10 ) $ (0.65 ) $ (0.46 ) NON-GAAP INCOME (LOSS) Per
Share: Basic and Diluted $ 0.05 $ (0.13 ) $ (0.17 ) $ (0.45
)
PFSweb, Inc. and
Subsidiaries
Unaudited Condensed Consolidated Balance Sheets (In Thousands,
Except Share Data) December 31,
December 31, 2010 2009
ASSETS
CURRENT ASSETS: Cash and cash equivalents $ 18,430 $ 14,812
Restricted cash 1,853 2,096 Accounts receivable, net of allowance
for doubtful accounts of $754 and $973 at December 31, 2010 and
December 31, 2009, respectively 41,438 39,861 Inventories, net of
reserves of $1,561 and $1,760 at December 31, 2010 and December 31,
2009, respectively 35,161 33,577 Assets of discontinued operations
2,776 4,372 Other receivables 14,539 11,605 Prepaid expenses and
other current assets 3,580 4,170 Total
current assets 117,777 110,493
PROPERTY AND EQUIPMENT, net 9,124 10,314 ASSETS OF DISCONTINUED
OPERATIONS 1,126 4,024 OTHER ASSETS 2,203
2,938 Total assets 130,230 127,769
LIABILITIES AND
SHAREHOLDERS EQUITY
CURRENT LIABILITIES: Current portion of long-term debt and capital
lease obligations $ 18,320 $ 19,179 Trade accounts payable 55,692
53,642 Deferred revenue 5,254 5,164 Accrued expenses 15,870
13,180 Total current liabilities 95,136 91,165
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS, less current
portion 2,136 3,348 OTHER LIABILITIES 3,608
3,903 Total liabilities 100,880 98,416
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; 12,255,064 and
9,952,164 shares issued at December 31, 2010 and December 31, 2009,
respectively; and 12,236,703 and 9,933,803 outstanding as of
December 31, 2010 and December 31, 2009, respectively 12 10
Additional paid-in capital 101,229 93,152 Accumulated deficit
(73,332 ) (65,963 ) Accumulated other comprehensive income 1,526
2,239 Treasury stock at cost, 18,361 shares (85 ) (85
) Total shareholders' equity 29,350 29,353
Total liabilities and shareholders' equity $ 130,230
$ 127,769
PFSweb, Inc. and
Subsidiaries
Unaudited Consolidating Statements of Operations For the Three
Months Ended March 31, 2010 (In Thousands)
Business & PFSweb Retail Connect eCOST
Eliminations Consolidated REVENUES: Product revenue, net $ - $
45,622 $ - $ - $ 45,622 Service fee revenue 15,979 - - - 15,979
Service fee revenue - affiliate 1,700 - - (1,700 ) - Pass-thru
revenue 6,637 - - (3 )
6,634 Total revenues 24,316
45,622 - (1,703 ) 68,235
COSTS OF REVENUES: Cost of product revenue - 42,362 - - 42,362 Cost
of service fee revenue 12,101 - - (647 ) 11,454 Cost of pass-thru
revenue 6,637 - - (3 )
6,634 Total costs of revenues 18,738
42,362 - (650 ) 60,450
Gross profit 5,578 3,260 - (1,053 ) 7,785 SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 7,400 2,261 -
(1,053 ) 8,608 Income (loss) from
operations (1,822 ) 999 - - (823 ) INTEREST EXPENSE (INCOME), NET
(56 ) 310 - - 254
Income (loss) before income taxes (1,766 ) 689 - - (1,077 )
INCOME TAX PROVISION (BENEFIT) (130 ) 256 -
- 126 INCOME (LOSS) FROM
CONTINUING OPERATIONS (1,636 ) 433 - - (1,203 ) INCOME (LOSS) FROM
DISCONTINUED OPERATIONS, NET OF TAX - -
(6 ) (6 ) NET INCOME (LOSS) $ (1,636 ) $ 433 $ (6 ) $
- $ (1,209 ) NON-GAAP NET INCOME (LOSS) $ (1,540 ) $ 433 $ -
$ - $ (1,107 ) EBITDA $ (276 ) $ 1,007 $ -
$ - $ 731 ADJUSTED EBITDA $ (180 ) $ 1,007 $ -
$ - $ 827 A reconciliation of
NET INCOME (LOSS) to EBITDA and ADJUSTED EBITDA follows: NET
INCOME (LOSS) $ (1,636 ) $ 433 $ (6 ) $ - (1,209 ) (Income) loss
from discontinued operations, net of tax - - 6 - 6 Income tax
expense (benefit) (130 ) 256 - - 126 Interest expense (income) (56
) 310 - - 254 Depreciation and amortization 1,546
8 - - 1,554 EBITDA
$ (276 ) $ 1,007 $ - $ - $ 731 Stock-based compensation 96
- - - 96
ADJUSTED EBITDA $ (180 ) $ 1,007 $ - $ - $ 827
A reconciliation of NET INCOME (LOSS) to NON-GAAP NET INCOME
(LOSS) follows: NET INCOME (LOSS) $ (1,636 ) $ 433 $ (6 ) $
- $ (1,209 ) (Income) loss from discontinued operations, net of tax
- - 6 - 6 Stock-based compensation 96 -
- - 96 NON-GAAP NET INCOME
(LOSS) $ (1,540 ) $ 433 $ - $ - $ (1,107 )
Note: Business and Retail Connect includes our Supplies
Distributors and PFS Retail Connect operations, which operate
similar financial models on behalf of our client relationships.
PFSweb and PFS Retail Connect include certain ongoing activity
formerly reported as eCOST.
PFSweb, Inc. and
Subsidiaries
Unaudited Consolidating Statements of Operations For the Three
Months Ended June 30, 2010 (In Thousands)
Business & PFSweb Retail Connect eCOST
Eliminations Consolidated REVENUES: Product revenue, net $ - $
43,654 $ - $ - $ 43,654 Service fee revenue 16,567 - - - 16,567
Service fee revenue - affiliate 1,738 - - (1,738 ) - Pass-thru
revenue 6,202 - - (16 )
6,186 Total revenues 24,507
43,654 - (1,754 ) 66,407
COSTS OF REVENUES: Cost of product revenue - 40,623 - - 40,623 Cost
of service fee revenue 12,572 - - (585 ) 11,987 Cost of pass-thru
revenue 6,202 - - (16 )
6,186 Total costs of revenues 18,774
40,623 - (601 ) 58,796
Gross profit 5,733 3,031 - (1,153 ) 7,611 SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 7,310 2,221 -
(1,153 ) 8,378 Income (loss) from
operations (1,577 ) 810 - - (767 ) INTEREST EXPENSE (INCOME), NET
(59 ) 293 - - 234
Income (loss) before income taxes (1,518 ) 517 - - (1,001 )
INCOME TAX PROVISION (BENEFIT) (142 ) 196 -
- 54 INCOME (LOSS) FROM
CONTINUING OPERATIONS (1,376 ) 321 - - (1,055 ) INCOME (LOSS) FROM
DISCONTINUED OPERATIONS, NET OF TAX - -
(440 ) (440 ) NET INCOME (LOSS) $ (1,376 ) $ 321 $
(440 ) $ - $ (1,495 ) NON-GAAP NET INCOME (LOSS) $ (1,114 )
$ 321 $ - $ - $ (793 ) EBITDA $ (4 ) $ 817 $ -
$ - $ 813 ADJUSTED EBITDA $ 258 $ 817 $
- $ - $ 1,075 A reconciliation
of NET INCOME (LOSS) to EBITDA and ADJUSTED EBITDA follows:
NET INCOME (LOSS) $ (1,376 ) $ 321 $ (440 ) $ - (1,495 ) (Income)
loss from discontinued operations, net of tax - - 440 - 440 Income
tax expense (benefit) (142 ) 196 - - 54 Interest expense (income)
(59 ) 293 - - 234 Depreciation and amortization 1,573
7 - 1,580 EBITDA $ (4 ) $
817 $ - $ - $ 813 Stock-based compensation 262
- - - 262 ADJUSTED EBITDA
$ 258 $ 817 $ - $ - $ 1,075 A
reconciliation of NET INCOME (LOSS) to NON-GAAP NET INCOME (LOSS)
follows: NET INCOME (LOSS) $ (1,376 ) $ 321 $ (440 ) $ - $
(1,495 ) (Income) loss from discontinued operations, net of tax - -
440 - 440 Stock-based compensation 262 -
- - 262 NON-GAAP NET
INCOME (LOSS) $ (1,114 ) $ 321 $ - $ - $ (793 )
Note: Business and Retail Connect includes our Supplies
Distributors and PFS Retail Connect operations, which operate
similar financial models on behalf of our client relationships.
PFSweb and PFS Retail Connect include certain ongoing activity
formerly reported as eCOST.
PFSweb, Inc. and
Subsidiaries
Unaudited Consolidating Statements of Operations For the Three
Months Ended September 30, 2010 (In Thousands)
Business & PFSweb Retail Connect eCOST
Eliminations Consolidated REVENUES: Product revenue, net $ - $
39,316 $ - $ - $ 39,316 Service fee revenue 16,402 - - - 16,402
Service fee revenue - affiliate 1,484 - - (1,484 ) - Pass-thru
revenue 7,843 - - (1 )
7,842 Total revenues 25,729
39,316 - (1,485 ) 63,560
COSTS OF REVENUES: Cost of product revenue - 36,392 - - 36,392 Cost
of service fee revenue 12,543 - - (562 ) 11,981 Cost of pass-thru
revenue 7,843 - - (1 )
7,842 Total costs of revenues 20,386
36,392 - (563 ) 56,215
Gross profit 5,343 2,924 - (922 ) 7,345 SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 7,556 1,971 -
(922 ) 8,605 Income (loss) from
operations (2,213 ) 953 - - (1,260 ) INTEREST EXPENSE (INCOME), NET
(63 ) 313 - - 250
Income (loss) before income taxes (2,150 ) 640 - - (1,510 )
INCOME TAX PROVISION (BENEFIT) (134 ) 207 -
- 73 INCOME (LOSS) FROM
CONTINUING OPERATIONS (2,016 ) 433 - - (1,583 ) INCOME (LOSS) FROM
DISCONTINUED OPERATIONS, NET OF TAX - -
(337 ) (337 ) NET INCOME (LOSS) $ (2,016 ) $ 433 $
(337 ) $ - $ (1,920 ) NON-GAAP NET INCOME (LOSS) $ (1,141 )
$ 433 $ - $ - $ (708 ) EBITDA $ (761 ) $ 960 $
- $ - $ 199 ADJUSTED EBITDA $ 114 $ 960
$ - $ - $ 1,074 A reconciliation
of NET INCOME (LOSS) to EBITDA and ADJUSTED EBITDA follows:
NET INCOME (LOSS) $ (2,016 ) $ 433 $ (337 ) $ - (1,920 ) (Income)
loss from discontinued operations, net of tax - - 337 - 337 Income
tax expense (benefit) (134 ) 207 - - 73 Interest expense (income)
(63 ) 313 - - 250 Depreciation and amortization 1,452
7 - 1,459 EBITDA $ (761 )
$ 960 $ - $ - $ 199 Stock-based compensation 225 - - - 225
Executive disability benefit 650
650 ADJUSTED EBITDA $ 114 $ 960 $ - $ -
$ 1,074 A reconciliation of NET INCOME (LOSS)
to NON-GAAP NET INCOME (LOSS) follows: NET INCOME (LOSS) $
(2,016 ) $ 433 $ (337 ) $ - $ (1,920 ) (Income) loss from
discontinued operations, net of tax - - 337 - 337 Stock-based
compensation 225 - - - 225 Executive disability benefit 650
650 NON-GAAP NET INCOME
(LOSS) $ (1,141 ) $ 433 $ - $ - $ (708 ) Note:
Business and Retail Connect includes our Supplies Distributors and
PFS Retail Connect operations, which operate similar financial
models on behalf of our client relationships. PFSweb and PFS Retail
Connect include certain ongoing activity formerly reported as
eCOST.
PFSweb, Inc. and
Subsidiaries
Unaudited Consolidating Statements of Operations For the Three
Months Ended December 31, 2010 (In Thousands)
Business & PFSweb Retail Connect eCOST
Eliminations Consolidated REVENUES: Product revenue, net $ - $
46,021 $ - $ - $ 46,021 Service fee revenue 21,688 - - - 21,688
Service fee revenue - affiliate 1,701 - - (1,701 ) - Pass-thru
revenue 8,612 - - (7 )
8,605 Total revenues 32,001
46,021 - (1,708 ) 76,314
COSTS OF REVENUES: Cost of product revenue - 43,108 - - 43,108 Cost
of service fee revenue 16,328 - - (606 ) 15,722 Cost of pass-thru
revenue 8,612 - - (7 )
8,605 Total costs of revenues 24,940
43,108 - (613 ) 67,435
Gross profit 7,061 2,913 - (1,095 ) 8,879 SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 6,893 2,222 -
(1,095 ) 8,020 Income (loss) from
operations 168 691 - - 859 INTEREST EXPENSE (INCOME), NET
(79 ) 281 - - 202
Income (loss) before income taxes 247 410 - - 657 INCOME TAX
PROVISION (BENEFIT) 51 159 -
- 210 INCOME (LOSS) FROM CONTINUING
OPERATIONS 196 251 - - 447 INCOME (LOSS) FROM DISCONTINUED
OPERATIONS, NET OF TAX - - (3,192 )
(3,192 ) NET INCOME (LOSS) $ 196 $ 251 $
(3,192 ) $ - $ (2,745 ) NON-GAAP NET INCOME (LOSS) $ 422
$ 251 $ - $ - $ 673 EBITDA $
1,628 $ 698 $ - $ - $ 2,326 ADJUSTED
EBITDA $ 1,854 $ 698 $ - $ - $ 2,552
A reconciliation of NET INCOME (LOSS) to EBITDA and
ADJUSTED EBITDA follows: NET INCOME (LOSS) $ 196 $ 251 $
(3,192 ) $ - (2,745 ) (Income) loss from discontinued operations,
net of tax - - 3,192 - 3,192 Income tax expense (benefit) 51 159 -
- 210 Interest expense (income) (79 ) 281 - - 202 Depreciation and
amortization 1,460 7 -
1,467 EBITDA $ 1,628 $ 698 $ - $ - $ 2,326
Stock-based compensation 226 - -
- 226 ADJUSTED EBITDA $ 1,854 $
698 $ - $ - $ 2,552 A reconciliation of
NET INCOME (LOSS) to NON-GAAP NET INCOME (LOSS) follows: NET
INCOME (LOSS) $ 196 $ 251 $ (3,192 ) $ - $ (2,745 ) (Income) loss
from discontinued operations, net of tax - - 3,192 - 3,192
Stock-based compensation 226 - -
- 226 NON-GAAP NET INCOME (LOSS) $ 422
$ 251 $ - $ - $ 673 Note:
Business and Retail Connect includes our Supplies Distributors and
PFS Retail Connect operations, which operate similar financial
models on behalf of our client relationships. PFSweb and PFS Retail
Connect include certain ongoing activity formerly reported as
eCOST.
PFSweb, Inc. and
Subsidiaries
Unaudited Consolidating Statements of Operations For the Twelve
Months Ended December 31, 2010 (In Thousands)
Business & PFSweb Retail Connect eCOST
Eliminations Consolidated REVENUES: Product revenue, net $ - $
174,613 $ - $ - $ 174,613 Service fee revenue 70,636 - - - 70,636
Service fee revenue - affiliate 6,622 - - (6,622 ) - Pass-thru
revenue 29,294 - - (27 )
29,267 Total revenues 106,552
174,613 - (6,649 ) 274,516
COSTS OF REVENUES: Cost of product revenue - 162,485 - -
162,485 Cost of service fee revenue 53,543 - - (2,399 ) 51,144 Cost
of pass-thru revenue 29,294 - -
(27 ) 29,267 Total costs of revenues
82,837 162,485 - (2,426 )
242,896 Gross profit 23,715 12,128 - (4,223 ) 31,620
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 29,158
8,676 - (4,223 ) 33,611
Income (loss) from operations (5,443 ) 3,452 - - (1,991 ) INTEREST
EXPENSE (INCOME), NET (257 ) 1,197 -
- 940 Income (loss) before income taxes
(5,186 ) 2,255 - - (2,931 ) INCOME TAX PROVISION (BENEFIT)
(355 ) 818 - - 463
INCOME (LOSS) FROM CONTINUING OPERATIONS (4,831 ) 1,437 - - (3,394
) INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAX -
- (3,975 ) (3,975 ) NET INCOME
(LOSS) $ (4,831 ) $ 1,437 $ (3,975 ) $ - $ (7,369 ) NON-GAAP
NET INCOME (LOSS) $ (3,372 ) $ 1,437 $ - $ - $ (1,935
) EBITDA $ 589 $ 3,480 $ - $ - $ 4,069
ADJUSTED EBITDA $ 2,048 $ 3,480 $ - $ -
$ 5,528 A reconciliation of NET INCOME (LOSS)
to EBITDA and ADJUSTED EBITDA follows: NET INCOME (LOSS) $
(4,831 ) $ 1,437 $ (3,975 ) $ - $ (7,369 ) (Income) loss from
discontinued operations, net of tax - - 3,975 - 3,975 Income tax
expense (benefit) (355 ) 818 - - 463 Interest expense (income) (257
) 1,197 - - 940 Depreciation and amortization 6,032
28 - 6,060 EBITDA $ 589 $
3,480 $ - $ - $ 4,069 Stock-based compensation 809 - - 809
Executive disability benefits 650 -
- 650 ADJUSTED EBITDA $ 2,048 $
3,480 $ - $ - $ 5,528 A reconciliation
of NET INCOME (LOSS) to NON-GAAP NET INCOME (LOSS) follows:
NET INCOME (LOSS) $ (4,831 ) $ 1,437 $ (3,975 ) $ - $ (7,369 )
(Income) loss from discontinued operations, net of tax - - 3,975 -
3,975 Stock-based compensation 809 - - - 809 Executive disability
benefits 650 - - -
650 NON-GAAP NET INCOME (LOSS) $ (3,372 ) $ 1,437 $ -
$ - $ (1,935 ) Note: Business and Retail
Connect includes our Supplies Distributors and PFS Retail Connect
operations, which operate similar financial models on behalf of our
client relationships. PFSweb and PFS Retail Connect include certain
ongoing activity formerly reported as eCOST.
PFSweb, Inc. and
Subsidiaries
Unaudited Condensed Consolidating Balance Sheets as of December 31,
2010 (In Thousands)
Supplies PFSweb Distributors eCOST Eliminations Consolidated
ASSETS
CURRENT ASSETS: Cash and cash equivalents $ 13,471 $ 3,110 $ 1,849
$ - $ 18,430 Restricted cash 777 884 192 - 1,853 Accounts
receivable, net 21,234 19,524 987 (307 ) 41,438 Inventories, net -
35,161 - - 35,161 Assets of discontinued operations - - 2,776 -
2,776 Other receivables - 13,822 717 - 14,539 Prepaid expenses and
other current assets 2,006 1,469 105
- 3,580 Total current assets
37,488 73,970 6,626 (307
) 117,777 PROPERTY AND EQUIPMENT, net 8,861 22
95 - 8,978 RECEIVABLE/INVESTMENT IN AFFILIATES 14,255 - - (14,255 )
- ASSETS OF DISCONTINUED OPERATIONS - - 1,272 - 1,272 OTHER ASSETS
2,013 - 190 -
2,203 Total assets 62,617 73,992
8,183 (14,562 ) 130,230
LIABILITIES AND
SHAREHOLDERS EQUITY
CURRENT LIABILITIES: Current portion of long-term debt and capital
lease obligations $ 8,332 $ 9,953 $ 35 $ - $ 18,320 Trade accounts
payable 6,356 44,896 4,747 (307 ) 55,692 Accrued expenses
12,994 6,260 1,870 -
21,124 Total current liabilities 27,682 61,109 6,652
(307 ) 95,136 LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS,
less current portion 2,031 - 105 - 2,136 PAYABLE TO AFFILIATES -
4,255 18,490 (22,745 ) - OTHER LIABILITIES 3,608
- - - 3,608 Total
liabilities 33,321 65,364 25,247
(23,052 ) 100,880 COMMITMENTS AND
CONTINGENCIES SHAREHOLDERS' EQUITY: Common stock 12 - 19 (19
) 12 Capital contributions - 1,000 - (1,000 ) - Additional paid-in
capital 101,229 - 28,059 (28,059 ) 101,229 Retained earnings
(accumulated deficit) (73,387 ) 5,410 (45,148 ) 39,793 (73,332 )
Accumulated other comprehensive income 1,527 2,218 6 (2,225 ) 1,526
Treasury stock (85 ) - - -
(85 ) Total shareholders' equity 29,296
8,628 (17,064 ) 8,490 29,350
Total liabilities and shareholders' equity $ 62,617 $
73,992 $ 8,183 $ (14,562 ) $ 130,230
PFSweb, Inc. and
Subsidiaries
Unaudited Consolidating Statements of Operations For the Three
Months Ended December 31, 2009 (In Thousands)
Business & PFSweb Retail Connect eCOST
Eliminations Consolidated REVENUES: Product revenue, net $ - $
47,288 $ - $ - $ 47,288 Service fee revenue 16,015 - - - 16,015
Service fee revenue - affiliate 1,700 - - (1,700 ) - Pass-thru
revenue 9,520 - - (3 )
9,517 Total revenues 27,235
47,288 - (1,703 ) 72,820
COSTS OF REVENUES: Cost of product revenue - 44,048 - - 44,048 Cost
of service fee revenue 12,143 - - (651 ) 11,492 Cost of pass-thru
revenue 9,520 - - (3 )
9,517 Total costs of revenues 21,663
44,048 - (654 ) 65,057
Gross profit 5,572 3,240 - (1,049 ) 7,763 SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 7,459 2,434 -
(1,049 ) 8,844 Income (loss) from
operations (1,887 ) 806 - - (1,081 ) INTEREST EXPENSE (INCOME), NET
(68 ) 301 - - 233
Income (loss) before income taxes (1,819 ) 505 - - (1,314 )
INCOME TAX PROVISION (BENEFIT) (122 ) 182 -
- 60 INCOME (LOSS) FROM
CONTINUING OPERATIONS (1,697 ) 323 - - (1,374 ) INCOME (LOSS) FROM
DISCONTINUED OPERATIONS, NET OF TAX - -
427 427 NET INCOME (LOSS) $ (1,697 ) $
323 $ 427 $ - $ (947 ) NON-GAAP NET INCOME (LOSS) $
(1,599 ) $ 323 $ - $ - $ (1,276 ) EBITDA $
(318 ) $ 815 $ - $ - $ 497 ADJUSTED EBITDA $
(220 ) $ 815 $ - $ - $ 595 A
reconciliation of NET INCOME (LOSS) to EBITDA and ADJUSTED EBITDA
follows: NET INCOME (LOSS) $ (1,697 ) $ 323 $ 427 $ - $ (947
) (Income) loss from discontinued operations, net of tax - - (427 )
- (427 ) Income tax expense (benefit) (122 ) 182 - - 60 Interest
expense (income) (68 ) 301 - - 233 Depreciation and amortization
1,569 9 - -
1,578 EBITDA $ (318 ) $ 815 $ - $ - $ 497 Stock-based
compensation 98 - - -
98 ADJUSTED EBITDA $ (220 ) $ 815 $ - $
- $ 595 A reconciliation of NET INCOME (LOSS)
to NON-GAAP NET INCOME (LOSS) follows: NET INCOME (LOSS) $
(1,697 ) $ 323 $ 427 $ - $ (947 ) (Income) loss from discontinued
operations, net of tax - - (427 ) - (427 ) Stock-based compensation
98 - - - 98
NON-GAAP NET INCOME (LOSS) $ (1,599 ) $ 323 $ - $ -
$ (1,276 ) Note: Business and Retail Connect includes
our Supplies Distributors and PFS Retail Connect operations, which
operate similar financial models on behalf of our client
relationships. PFSweb includes certain ongoing activity formerly
reported as eCOST.
PFSweb, Inc. and
Subsidiaries
Unaudited Consolidating Statements of Operations For the Twelve
Months Ended December 31, 2009 (In Thousands)
Business & PFSweb Retail Connect eCOST
Eliminations Consolidated REVENUES: Product revenue, net $ - $
183,008 $ - $ - $ 183,008 Service fee revenue 58,619 - - - 58,619
Service fee revenue - affiliate 7,093 - - (7,093 ) - Pass-thru
revenue 26,335 - - (70 )
26,265 Total revenues 92,047
183,008 - (7,163 ) 267,892
COSTS OF REVENUES: Cost of product revenue - 168,864 - -
168,864 Cost of service fee revenue 44,453 - - (2,555 ) 41,898 Cost
of pass-thru revenue 26,335 - -
(70 ) 26,265 Total costs of revenues
70,788 168,864 - (2,625 )
237,027 Gross profit 21,259 14,144 - (4,538 ) 30,865
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 30,029
8,779 - (4,538 ) 34,270
Income (loss) from operations (8,770 ) 5,365 - - (3,405 ) INTEREST
EXPENSE (INCOME), NET (202 ) 1,388 -
- 1,186 Income (loss) before income
taxes (8,568 ) 3,977 - - (4,591 ) INCOME TAX PROVISION (BENEFIT)
(734 ) 1,055 - -
321 INCOME (LOSS) FROM CONTINUING OPERATIONS (7,834 ) 2,922
- - (4,912 ) INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAX
- - 342 342
NET INCOME (LOSS) $ (7,834 ) $ 2,922 $ 342 $ - $
(4,570 ) NON-GAAP NET INCOME (LOSS) $ (7,427 ) $ 2,922 $ - $
- $ (4,505 ) EBITDA $ (2,261 ) $ 5,400 $ - $ -
$ 3,139 ADJUSTED EBITDA $ (1,854 ) $ 5,400 $ -
$ - $ 3,546 A reconciliation of NET
INCOME (LOSS) to EBITDA and ADJUSTED EBITDA follows: NET
INCOME (LOSS) $ (7,834 ) $ 2,922 $ 342 $ - $ (4,570 ) (Income) loss
from discontinued operations, net of tax - - (342 ) - (342 ) Income
tax expense (benefit) (734 ) 1,055 - - 321 Interest expense
(income) (202 ) 1,388 - - 1,186 Depreciation and amortization
6,509 35 - -
6,544 EBITDA $ (2,261 ) $ 5,400 $ - $ - $ 3,139
Stock-based compensation 407 - -
- 407 ADJUSTED EBITDA $ (1,854 ) $
5,400 $ - $ - $ 3,546 A reconciliation
of NET INCOME (LOSS) to NON-GAAP NET INCOME (LOSS) follows:
NET INCOME (LOSS) $ (7,834 ) $ 2,922 $ 342 $ - $ (4,570 ) (Income)
loss from discontinued operations, net of tax - - (342 ) - (342 )
Stock-based compensation 407 - -
- 407 NON-GAAP NET INCOME (LOSS) $
(7,427 ) $ 2,922 $ - $ - $ (4,505 ) Note:
Business and Retail Connect includes our Supplies Distributors and
PFS Retail Connect operations, which operate similar financial
models on behalf of our client relationships. PFSweb includes
certain ongoing activity formerly reported as eCOST.
PFSweb, Inc. and
Subsidiaries
Unaudited Condensed Consolidating Balance Sheets as of December 31,
2009 (In Thousands)
Supplies PFSweb Distributors eCOST Eliminations Consolidated
ASSETS
CURRENT ASSETS: Cash and cash equivalents $ 9,698 $ 2,628 $ 2,486 $
- $ 14,812 Restricted cash 732 1,137 227 - 2,096 Accounts
receivable, net 19,499 18,764 1,719 (121 ) 39,861 Inventories, net
- 33,577 - - 33,577 Assets of discontinued operations - - 4,372 -
4,372 Other receivables 49 11,556 - - 11,605 Prepaid expenses and
other current assets 2,515 1,575 80
- 4,170 Total current assets
32,493 69,237 8,884 (121
) 110,493 PROPERTY AND EQUIPMENT, net 9,900 54
31 - 9,985 RECEIVABLE/INVESTMENT IN AFFILIATES 20,696 - - (20,696 )
- ASSETS OF DISCONTINUED OPERATIONS - - 4,353 - 4,353 OTHER ASSETS
2,627 - 311 -
2,938 Total assets 65,716 69,291
13,579 (20,817 ) 127,769
LIABILITIES AND
SHAREHOLDERS EQUITY
CURRENT LIABILITIES: Current portion of long-term debt and capital
lease obligations $ 8,770 $ 10,374 $ 35 $ - $ 19,179 Trade accounts
payable 8,396 38,753 6,614 (121 ) 53,642 Accrued expenses
10,994 4,701 2,649 -
18,344 Total current liabilities 28,160 53,828 9,298
(121 ) 91,165 LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS,
less current portion 3,208 - 140 - 3,348 PAYABLE TO AFFILIATES -
5,005 15,840 (20,845 ) - OTHER LIABILITIES 3,880
- 23 - 3,903 Total
liabilities 35,248 58,833 25,301
(20,966 ) 98,416 COMMITMENTS AND
CONTINGENCIES SHAREHOLDERS' EQUITY: Common stock 10 - 19 (19
) 10 Capital contributions - 1,000 - (1,000 ) - Additional paid-in
capital 93,152 - 28,059 (28,059 ) 93,152 Retained earnings
(accumulated deficit) (64,828 ) 6,781 (39,805 ) 31,889 (65,963 )
Accumulated other comprehensive income 2,219 2,677 5 (2,662 ) 2,239
Treasury stock (85 ) - - -
(85 ) Total shareholders' equity 30,468
10,458 (11,722 ) 149 29,353
Total liabilities and shareholders' equity $ 65,716 $
69,291 $ 13,579 $ (20,817 ) $ 127,769
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