Exhibit 99.1

FOR IMMEDIATE RELEASE

Contact:
Mark C. Layton		Todd Fromer / Garth Russell
Chief Executive Officer		Investor Relations
or Thomas J. Madden		KCSA Strategic Communications
Chief Financial Officer		(212) 896-1215 / (212) 896-1250
(972) 881-2900		tfromer@kcsa.com / grussell@kcsa.com

PFSweb Reports 40% Service Fee Revenue Growth in Third Quarter of 2011 Compared to Prior Year

—

PLANO, Texas, November 10, 2011 — PFSweb, Inc. (Nasdaq: PFSW), an international provider of end-to-end web commerce solutions, today announced its financial results for the third quarter and nine months ended September 30, 2011.

“This is an exciting time for PFSweb as our Service Fee business growth continues to exceed our own expectations and we expand our business globally. Overall, our consolidated revenue growth for the third quarter was driven by a 40% increase in service fee revenue, which is attributable to new client programs launched during the year and organic growth of existing client programs. In order to support this ongoing expansion as well as future growth, we continue to make incremental investments in personnel, facilities, sales and marketing and technology infrastructure,” stated Mark Layton, Chairman and Chief Executive Officer of PFSweb.

“During the third quarter, we added several new End2End eCommerce programs from a diverse group of manufacturers, including Salomon and Clarins Group. These and other new client programs implemented this year, coupled with existing client activity, are expected to drive continued strong service fee revenue growth and have put us on track to significantly exceed our previously targeted 20% increase in service fee revenue for the year. This anticipated increase in revenue is expected to be partially offset by higher costs from our expansion efforts. Overall, we are reiterating our targeted adjusted EBITDA of between $6.0 million and $7.0 million for CY2011,” continued Mr. Layton.

Summary of consolidated results for the third quarter ended September 30, 2011:

	•		Total revenue increased 11% to $70.9 million for the third quarter of 2011 compared, to $63.6 million for third quarter of 2010;
	•		Service Fee revenue increased 40% to $22.9 million, compared with $16.4 million for the same period in 2010;
	•		Adjusted EBITDA (as defined) was $0.7 million for the third quarter of 2011 compared to $1.1 million for the same period in 2010.
	•		Net loss was $1.8 million, or $0.14 per basic and diluted share, compared to net loss of $1.9 million, or $0.16 per basic and diluted share, for the third quarter of 2010. Net loss

			for the third quarter of 2011 included approximately $0.3 million of relocation related costs. Net loss for the third quarter of 2011 also included $20,000 of net income from discontinued operations related to eCOST.com, compared to a $0.3 million net loss from discontinued operations related to eCOST.com for the same period last year;
	•		Non-GAAP net loss (as defined) was $1.5 million, or $0.12 per basic and diluted share for the quarter ended September 30, 2011 compared to a Non-GAAP net loss $0.7 million, or $0.06 per basic and diluted share for the quarter ended September 30, 2010;
	•		Total cash, cash equivalents and restricted cash was $20.0 million as of September 30, 2011 compared to $20.3 million as of December 31, 2010.

Summary of consolidated results for the nine months ended September 30, 2011:

	•		Total reported revenue increased 7% to $211.3 million, compared to $198.2 million for the nine months ended September 30, 2010;
	•		Service Fee revenue increased 28% to $62.8 million, compared with $48.9 million for the nine months ended September 30, 2010;
	•		Adjusted EBITDA (as defined) was $2.2 million compared to $3.0 million for the nine months ended September 30, 2010;
	•		Net loss was $5.3 million, or $0.43 per basic and diluted share, compared to net loss of $4.6 million or $0.42 per basic and diluted share, for the nine months ended September 30, 2010. Net loss for the first nine months of 2011 included approximately $0.3 million of relocation related costs. Net loss for the first nine months of 2011 also included a $0.6 million net loss from discontinued operations related to eCOST.com compared to a $0.8 million net loss from discontinued operations related to eCOST.com in the same period last year;
	•		Non-GAAP net loss was $3.7 million, or $0.30 per basic and diluted share, compared to a non-GAAP net loss of $2.6 million, or $0.24 per basic and diluted share, for the nine months ended September 30, 2010.

“As we look to the future, we see the potential for many new partnerships on the horizon with renowned brands across the world. These brands are realizing the need for an expanded online presence to meet their customers’ ever changing shopping behavior. As we continue to prove the value of our End2End e-commerce solution, we have built awareness for our customizable solutions among leading brands in the consumer packaged goods (CPG), fashion and health and beauty industries,” concluded Mr. Layton.

Conference Call Information

Management will host a conference call at 11:00 am Eastern Time (10:00 am Central Time) on Thursday, November 10, 2011, to discuss the latest corporate developments and results. To listen to the call, please dial (888) 562-3356 and enter the pin number 24695850 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 December 10, 2011 at (855) 859-2056, pin number 24695850. 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, executive disability benefits and certain relocation related costs.

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, the accounting effects of capital spending and certain relocation related costs, 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.

Iconic brands engage PFSweb to enable their eCommerce initiatives. PFSweb’s End2End eCommerce^® solution includes interactive marketing services, robust eCommerce technology, global fulfillment and logistics, high-touch customer care, financial services, and order management. PFSweb’s eCommerce solutions provide international reach and expertise in both direct-to-consumer and business-to-business initiatives, supporting organizations across multiple industries including Procter & Gamble, LEGO, Carter’s, Lucky Brand Jeans, kate spade new york, Juicy Couture, AAFES, Riverbed, Ricoh, Hawker Beechcraft Corp, Roots Canada Ltd., and Xerox. PFSweb is headquartered in Plano, TX with additional locations in Tennessee, Mississippi, Canada, Belgium, and the Philippines.

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, 2010 and Quarterly Report on Form 10-Q for the three months and six months ended June 30, 2011 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.

(Tables Follow)

PFSweb, Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Operations (A)
(In Thousands, Except Per Share Data)

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2011				2010				2011				2010
REVENUES:
Product revenue, net		$	37,923			$	39,316			$	122,005			$	128,592
Service fee revenue			22,949				16,402				62,819				48,948
Pass-thru revenue			9,999				7,842				26,444				20,662
Total revenues			70,871				63,560				211,268				198,202
COSTS OF REVENUES:
Cost of product revenue			35,304				36,392				113,181				119,377
Cost of service fee revenue			17,663				11,981				47,241				35,422
Cost of pass-thru revenue			9,999				7,842				26,444				20,662
Total costs of revenues			62,966				56,215				186,866				175,461
Gross profit			7,905				7,345				24,402				22,741
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES			9,385				8,605				28,103				25,591
Loss from operations			(1,480	)			(1,260	)			(3,701	)			(2,850	)
INTEREST EXPENSE, NET			308				250				769				738
Loss before income taxes			(1,788	)			(1,510	)			(4,470	)			(3,588	)
INCOME TAX PROVISION			57				73				287				253
LOSS FROM CONTINUING OPERATIONS			(1,845	)			(1,583	)			(4,757	)			(3,841	)
INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAX			20				(337	)			(569	)			(783	)
NET LOSS		$	(1,825	)		$	(1,920	)		$	(5,326	)		$	(4,624	)
NON-GAAP LOSS		$	(1,499	)		$	(708	)		$	(3,702	)		$	(2,608	)
NET LOSS PER SHARE:
Basic and Diluted		$	(0.14	)		$	(0.16	)		$	(0.43	)		$	(0.42	)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING:
Basic and Diluted			12,688				12,237				12,509				10,998
EBITDA		$	57			$	199			$	874			$	1,743
ADJUSTED EBITDA		$	707			$	1,074			$	2,233			$	2,976

(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, 2010.

PFSweb, Inc. and Subsidiaries
Reconciliation of certain Non-GAAP Items to GAAP
(In Thousands, Except Per Share Data)

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2011				2010				2011				2010
NET LOSS		$	(1,825	)		$	(1,920	)		$	(5,326	)		$	(4,624	)
(Income) loss from discontinued operations, net of tax			(20	)			337				569				783
Income tax expense			57				73				287				253
Interest expense			308				250				769				738
Depreciation and amortization			1,537				1,459				4,575				4,593
EBITDA		$	57			$	199			$	874			$	1,743
Stock-based compensation			346				225				1,055				583
Executive disability benefits			—				650				—				650
Relocation related costs			304				—				304				—
ADJUSTED EBITDA		$	707			$	1,074			$	2,233			$	2,976

		Three Months Ended								Three Months Ended
		September 30,								September 30,
		2011				2010				2011				2010
NET LOSS		$	(1,825	)		$	(1,920	)		$	(5,326	)		$	(4,624	)
(Income) loss from discontinued operations, net of tax			(20	)			337				569				783
Stock-based compensation			346				225				1,055				583
Executive disability benefits			—				650				—				650
NON-GAAP LOSS		$	(1,499	)		$	(708	)		$	(3,702	)		$	(2,608	)
NET LOSS PER SHARE:
Basic and Diluted		$	(0.14	)		$	(0.16	)		$	(0.43	)		$	(0.42	)
NON-GAAP LOSS Per Share:
Basic and Diluted		$	(0.12	)		$	(0.06	)		$	(0.30	)		$	(0.24	)

PFSweb, Inc. and Subsidiaries
Unaudited Condensed Consolidated Balance Sheets
(In Thousands, Except Share Data)

		September 30,				December 31,
		2011				2010
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	19,538			$	18,430
Restricted cash			468				1,853
Accounts receivable, net of allowance for doubtful accounts of $670 and $754 at September 30, 2011 and December 31, 2010, respectively			38,906				41,438
Inventories, net of reserves of $1,453 and $1,561 at September 30, 2011 and December 31, 2010, respectively			41,292				35,161
Assets of discontinued operations			—				2,776
Other receivables			11,034				14,539
Prepaid expenses and other current assets			4,710				3,580
Total current assets			115,948				117,777
PROPERTY AND EQUIPMENT, net			13,059				9,124
ASSETS OF DISCONTINUED OPERATIONS			—				1,126
OTHER ASSETS			2,200				2,203
Total assets			131,207				130,230
LIABILITIES AND SHAREHOLDERS EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt and capital lease obligations		$	18,259			$	18,320
Trade accounts payable			55,007				55,692
Deferred revenue			6,481				5,254
Accrued expenses			17,987				15,870
Total current liabilities			97,734				95,136
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS, less current portion			1,806				2,136
OTHER LIABILITIES			4,410				3,608
Total liabilities			103,950				100,880
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; 12,782,712 and 12,255,064 shares issued at September 30, 2011 and December 31, 2010, respectively; and 12,764,351 and 12,236,703 outstanding as of September 30, 2011 and December 31, 2010, respectively			13				12
Additional paid-in capital			104,298				101,229
Accumulated deficit			(78,658	)			(73,332	)
Accumulated other comprehensive income			1,689				1,526
Treasury stock at cost, 18,361 shares			(85	)			(85	)
Total shareholders’ equity			27,257				29,350
Total liabilities and shareholders’ equity		$	131,207			$	130,230

PFSweb, Inc. and Subsidiaries
Unaudited Consolidating Statements of Operations
For the Three Months Ended September 30, 2011
(In Thousands)

						Business &
		PFSweb				Retail Connect				eCOST				Eliminations				Consolidated
REVENUES:
Product revenue, net		$	—			$	37,923			$	—			$	—			$	37,923
Service fee revenue			22,949				—				—				—				22,949
Service fee revenue — affiliate			1,518				—				—				(1,518	)			—
Pass-thru revenue			9,999				—				—				—				9,999
Total revenues			34,466				37,923				—				(1,518	)			70,871
COSTS OF REVENUES:
Cost of product revenue			—				35,304				—				—				35,304
Cost of service fee revenue			18,204				—				—				(541	)			17,663
Cost of pass-thru revenue			9,999				—				—				—				9,999
Total costs of revenues			28,203				35,304				—				(541	)			62,966
Gross profit			6,263				2,619				—				(977	)			7,905
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES			8,398				1,964				—				(977	)			9,385
Income (loss) from operations			(2,135	)			655				—				—				(1,480	)
INTEREST EXPENSE (INCOME), NET			(30	)			338				—				—				308
Income (loss) before income taxes			(2,105	)			317				—				—				(1,788	)
INCOME TAX PROVISION (BENEFIT)			(74	)			131				—				—				57
INCOME (LOSS) FROM CONTINUING OPERATIONS			(2,031	)			186				—				—				(1,845	)
INCOME FROM DISCONTINUED OPERATIONS, NET OF TAX			—				—				20								20
NET INCOME (LOSS)		$	(2,031	)		$	186			$	20			$	—			$	(1,825	)
NON-GAAP NET INCOME (LOSS)		$	(1,685	)		$	186			$	—			$	—			$	(1,499	)
EBITDA		$	(606	)		$	663			$	—			$	—			$	57
ADJUSTED EBITDA		$	44			$	663			$	—			$	—			$	707
A reconciliation of NET INCOME (LOSS) to EBITDA and ADJUSTED EBITDA follows:
NET INCOME (LOSS)		$	(2,031	)		$	186			$	20			$	—				(1,825	)
Income from discontinued operations, net of tax			—				—				(20	)			—				(20	)
Income tax expense (benefit)			(74	)			131				—				—				57
Interest expense (income)			(30	)			338				—				—				308
Depreciation and amortization			1,529				8				—				—				1,537
EBITDA		$	(606	)		$	663			$	—			$	—			$	57
Stock-based compensation			346				—				—				—				346
Relocation related costs			304																304
ADJUSTED EBITDA		$	44			$	663			$	—			$	—			$	707
A reconciliation of NET INCOME (LOSS) to NON-GAAP NET INCOME (LOSS) follows:
NET INCOME (LOSS)		$	(2,031	)		$	186			$	20			$	—			$	(1,825	)
Income from discontinued operations, net of tax			—				—				(20	)			—				(20	)
Stock-based compensation			346				—				—				—				346
NON-GAAP NET INCOME (LOSS)		$	(1,685	)		$	186			$	—			$	—			$	(1,499	)

Note: Business and Retail Connect includes our Supplies Distributors and PFSweb Retail Connect operations, which operate similar financial models on behalf of our client relationships. PFSweb and PFSweb Retail Connect include certain ongoing activity formerly reported as eCOST.

PFSweb, Inc. and Subsidiaries
Unaudited Consolidating Statements of Operations
For the Nine Months Ended September 30, 2011
(In Thousands)

						Business &
		PFSweb				Retail Connect				eCOST				Eliminations				Consolidated
REVENUES:
Product revenue, net		$	—			$	122,005			$	—			$	—			$	122,005
Service fee revenue			62,819				—				—				—				62,819
Service fee revenue — affiliate			4,769				—				—				(4,769	)			—
Pass—thru revenue			26,446				—				—				(2	)			26,444
Total revenues			94,034				122,005				—				(4,771	)			211,268
COSTS OF REVENUES:
Cost of product revenue			—				113,181				—				—				113,181
Cost of service fee revenue			48,904				—				—				(1,663	)			47,241
Cost of pass-thru revenue			26,446				—				—				(2	)			26,444
Total costs of revenues			75,350				113,181				—				(1,665	)			186,866
Gross profit			18,684				8,824				—				(3,106	)			24,402
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES			24,974				6,235				—				(3,106	)			28,103
Income (loss) from operations			(6,290	)			2,589				—				—				(3,701	)
INTEREST EXPENSE (INCOME), NET			(146	)			915				—				—				769
Income (loss) before income taxes			(6,144	)			1,674				—				—				(4,470	)
INCOME TAX PROVISION (BENEFIT)			(350	)			637				—				—				287
INCOME (LOSS) FROM CONTINUING OPERATIONS			(5,794	)			1,037				—				—				(4,757	)
LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX			—				—				(569	)							(569	)
NET INCOME (LOSS)		$	(5,794	)		$	1,037			$	(569	)		$	—			$	(5,326	)
NON-GAAP NET INCOME (LOSS)		$	(4,739	)		$	1,037			$	—			$	—			$	(3,702	)
EBITDA		$	(1,737	)		$	2,611			$	—			$	—			$	874
ADJUSTED EBITDA		$	(378	)		$	2,611			$	—			$	—			$	2,233
A reconciliation of NET INCOME (LOSS) to EBITDA and ADJUSTED EBITDA follows:
NET INCOME (LOSS)		$	(5,794	)		$	1,037			$	(569	)		$	—				(5,326	)
Loss from discontinued operations, net of tax			—				—				569				—				569
Income tax expense (benefit)			(350	)			637				—				—				287
Interest expense (income)			(146	)			915				—				—				769
Depreciation and amortization			4,553				22				—				—				4,575
EBITDA		$	(1,737	)		$	2,611			$	—			$	—			$	874
Stock-based compensation			1,055				—				—				—				1,055
Relocation related costs			304																304
ADJUSTED EBITDA		$	(378	)		$	2,611			$	—			$	—			$	2,233
A reconciliation of NET INCOME (LOSS) to NON-GAAP NET INCOME (LOSS) follows:
NET INCOME (LOSS)		$	(5,794	)		$	1,037			$	(569	)		$	—			$	(5,326	)
Loss from discontinued operations, net of tax			—				—				569				—				569
Stock-based compensation			1,055				—				—				—				1,055
NON-GAAP NET INCOME (LOSS)		$	(4,739	)		$	1,037			$	—			$	—			$	(3,702	)

Note: Business and Retail Connect includes our Supplies Distributors and PFSweb Retail Connect operations, which operate similar financial models on behalf of our client relationships. PFSweb and PFSweb 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	)
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	)
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	)
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 PFSweb Retail Connect operations, which operate similar financial models on behalf of our client relationships. PFSweb and PFSweb Retail Connect include certain ongoing activity formerly reported as eCOST.

PFSweb, Inc. and Subsidiaries
Unaudited Consolidating Statements of Operations
For the Nine Months Ended September 30, 2010
(In Thousands)

						Business &
		PFSweb				Retail Connect				eCOST				Eliminations				Consolidated
REVENUES:
Product revenue, net		$	—			$	128,592			$	—			$	—			$	128,592
Service fee revenue			48,948				—				—				—				48,948
Service fee revenue — affiliate			4,922				—				—				(4,922	)			—
Pass-thru revenue			20,681				—				—				(19	)			20,662
Total revenues			74,551				128,592				—				(4,941	)			198,202
COSTS OF REVENUES:
Cost of product revenue			—				119,377				—				—				119,377
Cost of service fee revenue			37,216				—				—				(1,794	)			35,422
Cost of pass-thru revenue			20,681				—				—				(19	)			20,662
Total costs of revenues			57,897				119,377				—				(1,813	)			175,461
Gross profit			16,654				9,215				—				(3,128	)			22,741
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES			22,266				6,453				—				(3,128	)			25,591
Income (loss) from operations			(5,612	)			2,762				—				—				(2,850	)
INTEREST EXPENSE (INCOME), NET			(178	)			916				—				—				738
Income (loss) before income taxes			(5,434	)			1,846				—				—				(3,588	)
INCOME TAX PROVISION (BENEFIT)			(406	)			659				—				—				253
INCOME (LOSS) FROM CONTINUING OPERATIONS			(5,028	)			1,187				—				—				(3,841	)
LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX			—				—				(783	)							(783	)
NET INCOME (LOSS)		$	(5,028	)		$	1,187			$	(783	)		$	—			$	(4,624	)
NON-GAAP NET INCOME (LOSS)		$	(3,795	)		$	1,187			$	—			$	—			$	(2,608	)
EBITDA		$	(1,041	)		$	2,784			$	—			$	—			$	1,743
ADJUSTED EBITDA		$	192			$	2,784			$	—			$	—			$	2,976
A reconciliation of NET INCOME (LOSS) to EBITDA and ADJUSTED EBITDA follows:
NET INCOME (LOSS)		$	(5,028	)		$	1,187			$	(783	)		$	—				(4,624	)
Loss from discontinued operations, net of tax			—				—				783				—				783
Income tax expense (benefit)			(406	)			659				—				—				253
Interest expense (income)			(178	)			916				—				—				738
Depreciation and amortization			4,571				22				—				—				4,593
EBITDA		$	(1,041	)		$	2,784			$	—			$	—			$	1,743
Stock-based compensation			583				—				—				—				583
Executive disability benefit			650																650
ADJUSTED EBITDA		$	192			$	2,784			$	—			$	—			$	2,976
A reconciliation of NET INCOME (LOSS) to NON-GAAP NET INCOME (LOSS) follows:
NET INCOME (LOSS)		$	(5,028	)		$	1,187			$	(783	)		$	—			$	(4,624	)
Loss from discontinued operations, net of tax			—				—				783				—				783
Stock-based compensation			583				—				—				—				583
Executive disability benefit			650				—				—				—				650
NON-GAAP NET INCOME (LOSS)		$	(3,795	)		$	1,187			$	—			$	—			$	(2,608	)

Note: Business and Retail Connect includes our Supplies Distributors and PFSweb Retail Connect operations, which operate similar financial models on behalf of our client relationships. PFSweb and PFSweb Retail Connect include certain ongoing activity formerly reported as eCOST.

PFSweb, Inc. and Subsidiaries
Unaudited Condensed Consolidating Balance Sheets
as of September 30, 2011
(In Thousands)

						Business &
		PFSweb				Retail Connect				Eliminations				Consolidated
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	14,508			$	5,030			$	—			$	19,538
Restricted cash			138				330				—				468
Accounts receivable, net			23,545				15,991				(630	)			38,906
Inventories, net			—				41,292				—				41,292
Other receivables			—				11,034				—				11,034
Prepaid expenses and other current assets			3,252				1,458				—				4,710
Total current assets			41,443				75,135				(630	)			115,948
PROPERTY AND EQUIPMENT, net			12,959				100				—				13,059
RECEIVABLE/INVESTMENT IN AFFILIATES			14,465				—				(14,465	)			—
OTHER ASSETS			2,038				162				—				2,200
Total assets			70,905				75,397				(15,095	)			131,207
LIABILITIES AND SHAREHOLDERS EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt and capital lease obligations		$	8,973			$	9,286			$	—			$	18,259
Trade accounts payable			9,115				46,522				(630	)			55,007
Accrued expenses			18,244				6,224				—				24,468
Total current liabilities			36,332				62,032				(630	)			97,734
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS, less current portion			1,736				70				—				1,806
PAYABLE TO AFFILIATES			—				22,245				(22,245	)			—
OTHER LIABILITIES			4,410				—				—				4,410
Total liabilities			42,478				84,347				(22,875	)			103,950
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY:
Common stock			13				19				(19	)			13
Capital contributions			—				1,000				(1,000	)			—
Additional paid-in capital			104,298				28,059				(28,059	)			104,298
Retained earnings (accumulated deficit)			(77,493	)			(40,289	)			39,124				(78,658	)
Accumulated other comprehensive income			1,694				2,261				(2,266	)			1,689
Treasury stock			(85	)			—				—				(85	)
Total shareholders’ equity			28,427				(8,950	)			7,780				27,257
Total liabilities and shareholders’ equity		$	70,905			$	75,397			$	(15,095	)		$	131,207