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8-K - FORM 8-K - PFSWEB INCd511454d8k.htm

Exhibit 99.1

 

LOGO

 

Contact:   
Mike Willoughby    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 Fourth Quarter and Year-End 2012 Results

Full Year 2012 Adjusted EBITDA Nearly Doubles to $12.0 Million Compared to 2011

Allen, Texas, March 27, 2013 — PFSweb, Inc. (Nasdaq: PFSW), an international provider of end-to-end eCommerce solutions, today announced its financial results for the fourth quarter and year ended December 31, 2012.

Mike Willoughby, Chief Executive Officer of PFSweb, stated, “Driven by strong overall eCommerce activity with our existing and new client relationships, PFSweb reported record Service Fee Equivalent Revenue for both the December quarter and calendar year 2012. Meanwhile, we continued to execute on our strategy to achieve scale in our business while increasing operational efficiencies. Those efforts paid off, resulting in the Company nearly doubling its Adjusted EBITDA to $12.0 million for the year ended December 31, 2012, compared to $6.1 million in the year prior.

“During the past four months, we launched six End2End programs for new clients, including sites for BCBGMAXAZRIA, BCBGENERATION, HERVÉ LÉGER BY MAX AZRIA, Pandora and Diageo. We also launched new fulfillment programs for two health and beauty brands under a new master contract with a major consumer packaged goods company. In addition, we continue to have a strong business pipeline with more than $45 million in average annual contract value based on client projections. As a result of the capital investments we made in 2012 to improve the scalability and efficiency of our warehouse, distribution and technology capabilities to handle holiday peak seasons, our operational performance during our fourth quarter was very strong. With our recent holiday success behind us, we are poised to not just meet, but exceed, our clients’ expectations while demonstrating that we can deploy best-in-class eCommerce solutions for our clients and drive value for shareholders,” added Mr. Willoughby.

Summary of consolidated results for the fourth quarter ended December 31, 2012:

 

   

Service Fee revenue increased 9% to a record level of $35.4 million, compared to $32.5 million for the same period in 2011; Service Fee Equivalent Revenue (as defined) increased 7% to a record level of $38.0 million, compared to $35.4 million for the same period in 2011;

 

   

Total revenue decreased 12% to $77.0 million, compared to $87.5 million for the fourth quarter of 2011;


   

Adjusted EBITDA (as defined) decreased 2% to $3.8 million, compared to $3.9 million for the same period in 2011;

 

   

Net income was $0.7 million, or $0.05 per basic and diluted share, compared to net income of $0.8 million, or $0.06 per basic and diluted share, for the fourth quarter of 2011;

 

   

Non-GAAP net income (as defined) was $1.0 million, or $0.08 and $0.07 per basic and diluted share, respectively, compared to non-GAAP net income of $1.7 million, or $0.13 per basic and diluted share, for the quarter ended December 31, 2011.

Summary of consolidated results for the year ended December 31, 2012:

 

   

Service Fee revenue increased 26% to a record level of $120.4 million, compared to $95.3 million for the year ended December 31, 2011; Service Fee Equivalent Revenue (as defined) increased 21% to a record level of $130.0 million, compared to $107.1 million for the year ended December 31, 2011;

 

   

Total revenue decreased 6% to $281.6 million compared to $298.8 million for the year ended December 31, 2011;

 

   

Adjusted EBITDA (as defined) was $12.0 million compared to $6.1 million for year ended December 31, 2011;

 

   

Net loss was $1.5 million, or $0.12 per basic and diluted share, compared to a net loss of $4.6 million or $0.36 per basic and diluted share, for year ended December 31, 2011. Net loss for 2012 included approximately $0.9 million of move related expenses and $0.5 million of lease termination costs. Net loss for 2011 included approximately $0.5 million of move related expenses and a $0.9 million loss from discontinued operations related to eCOST.com;

 

   

Non-GAAP net income (as defined) was $1.1 million, or $0.09 per basic and diluted share, compared to a non-GAAP net loss of $1.7 million, or $0.14 per basic and diluted share, for the year ended December 31, 2011.

Mr. Willoughby continued, “As we announced yesterday, I have assumed the role of CEO from Mark Layton, who is leaving the company to pursue other business opportunities. As part of the transition, the management team and I began a comprehensive review of our business and we have begun implementing a set of new initiatives, including headcount reductions and organizational realignment, new internal systems and procedures to improve operating efficiency, and investing in our agency services business that provides high value to our clients and generates higher margins. We will continue this review to find ways to capture additional profitable revenue and further reduce operating costs throughout the Company. We believe these activities will help ensure PFSweb becomes a sustainably profitable, growing company.”

“I am very pleased with our strong performance to close out 2012. While we are excited by the opportunities we see in 2013, particularly in current client expansion, international markets and the omni-channel arena, we will be challenged by the previously disclosed transition of certain service fee client programs and by reduced product revenues in our Business & Retail Connect Segment. As a result, we are currently targeting calendar year 2013 Service Fee Equivalent Revenue to be in the range of $110 million to $115 million, compared with $130 million in 2012. The initiatives discussed above have enabled us to mitigate much of the impact of this revenue decline on Adjusted EBITDA, which we expect will be in the range of $8 million to $10 million, excluding the impact of any restructuring expenses, which are expected to be primarily recognized in our March 2013 quarter. We further expect the impact of the revenue decline to be primarily focused in our June and September


quarters, as we expect to launch new client engagements in the next few months which will positively impact our fourth quarter. With these new clients and the anticipated expansion of several existing clients, we believe we are well positioned for a strong resurgence in calendar year 2014,” Mr. Willoughby concluded.

Conference Call Information

Management will host a conference call at 11:00 am Eastern Time (10:00 am Central Time) on Wednesday, March 27, 2013, to discuss the latest corporate developments and results. To listen to the call, please dial (888) 562-3356 and enter pin number 22248664 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 or www.kcsa.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 29, 2013 at (855) 859-2056, pin number 22248664. 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”), Adjusted EBITDA and Service Fee Equivalent Revenue.

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, loss from discontinued operations, lease termination costs and certain move related expenses.

EBITDA represents earnings (or losses) before loss from discontinued operations, interest, income taxes, depreciation, and amortization. Adjusted EBITDA further eliminates the effect of stock-based compensation, lease termination costs and certain move related expenses.

Service Fee Equivalent Revenue represents service fee revenue plus the gross profit earned on product revenue.

Non-GAAP net income (loss), EBITDA, Adjusted EBITDA and Service Fee Equivalent Revenue 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, loss from discontinued operations, lease termination costs and certain move related expenses 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. Service Fee Equivalent Revenue allows client contracts with similar operational support models but different financial models to be combined as if all contracts were being operated on a service fee revenue basis.

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 is engaged by iconic brands to enable and manage customized eCommerce and omni-channel commerce initiatives. PFSweb’s iCommerce Hub(SM) technology ecosystem offers retailers a multi-channel order management system that allows partner/client data integration and international payment processing. PFSweb’s iCommerce Professional Service(SM) provides interactive marketing services, eCommerce web site development and support services, IT development services, content management, customer intelligence and relationship and account management services. PFSweb’s iCommerce Centers of Excellence(SM) provides global fulfillment and logistics, high-touch customer care, client financial services and technology hosting.

Together, PFSweb’s iCommerce Solutions allows for international reach and expertise in both direct-to-consumer and business-to-business initiatives. PFSweb supports organizations across multiple industries including Procter & Gamble, L’Oreal, LEGO, Columbia Sportswear, Sorel, Carter’s, AAFES, Riverbed, Ricoh, Hawker Beechcraft Corp, Roots Canada Ltd., Diageo, BCBGMAXAZRIA, BCBGENERATION and HERVÉ LÉGER BY MAX AZRIA. PFSweb is headquartered in Allen, TX with additional locations in Tennessee, Mississippi, Canada, Belgium, and the Philippines.

To find out more about PFSweb (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, 2011 and Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2012 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.

(Financial Tables Below)


PFSweb, Inc. and Subsidiaries

Preliminary Unaudited Condensed Consolidated Statements of Operations (A)

(In Thousands, Except Per Share Data)

 

     Three Months Ended
December 31,
    Twelve Months Ended
December 31,
 
     2012      2011     2012     2011  

REVENUES:

         

Product revenue, net

   $ 28,290       $ 40,442      $ 119,740      $ 162,447   

Service fee revenue

     35,411         32,526        120,433        95,345   

Pass-thru revenue

     13,269         14,530        41,390        40,974   
  

 

 

    

 

 

   

 

 

   

 

 

 

Total revenues

     76,970         87,498        281,563        298,766   
  

 

 

    

 

 

   

 

 

   

 

 

 

COSTS OF REVENUES:

         

Cost of product revenue

     25,700         37,557        110,183        150,738   

Cost of service fee revenue

     26,119         24,510        89,249        71,751   

Cost of pass-thru revenue

     13,269         14,530        41,390        40,974   
  

 

 

    

 

 

   

 

 

   

 

 

 

Total costs of revenues

     65,088         76,597        240,822        263,463   
  

 

 

    

 

 

   

 

 

   

 

 

 

Gross profit

     11,882         10,901        40,741        35,303   

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

     10,813         9,409        40,620        37,512   
  

 

 

    

 

 

   

 

 

   

 

 

 

Income (loss) from operations

     1,069         1,492        121        (2,209

INTEREST EXPENSE, NET

     230         316        988        1,085   
  

 

 

    

 

 

   

 

 

   

 

 

 

Income (loss) before income taxes

     839         1,176        (867     (3,294

INCOME TAX PROVISION

     187         93        644        380   
  

 

 

    

 

 

   

 

 

   

 

 

 

INCOME (LOSS) FROM CONTINUING OPERATIONS

     652         1,083        (1,511     (3,674

LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX

     —           (323     —          (892
  

 

 

    

 

 

   

 

 

   

 

 

 

NET INCOME (LOSS)

   $ 652       $ 760      $ (1,511   $ (4,566
  

 

 

    

 

 

   

 

 

   

 

 

 

NON-GAAP INCOME (LOSS)

   $ 963       $ 1,674      $ 1,130      $ (1,724
  

 

 

    

 

 

   

 

 

   

 

 

 

NET INCOME (LOSS) PER SHARE:

         

Basic

   $ 0.05       $ 0.06      $ (0.12   $ (0.36
  

 

 

    

 

 

   

 

 

   

 

 

 

Diluted

   $ 0.05       $ 0.06      $ (0.12   $ (0.36
  

 

 

    

 

 

   

 

 

   

 

 

 

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING:

         

Basic

     12,779         12,764        12,777        12,574   
  

 

 

    

 

 

   

 

 

   

 

 

 

Diluted

     12,907         12,909        12,777        12,574   
  

 

 

    

 

 

   

 

 

   

 

 

 

EBITDA

   $ 3,482       $ 3,261      $ 9,369      $ 4,135   
  

 

 

    

 

 

   

 

 

   

 

 

 

ADJUSTED EBITDA

   $ 3,793       $ 3,852      $ 12,010      $ 6,085   
  

 

 

    

 

 

   

 

 

   

 

 

 

 

(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, 2011.


PFSweb, Inc. and Subsidiaries

Reconciliation of certain Non-GAAP Items to GAAP

(In Thousands, Except Per Share Data)

 

     Three Months Ended
December 31,
    Twelve Months Ended
December 31,
 
     2012     2011     2012     2011  

NET INCOME (LOSS)

   $ 652      $ 760      $ (1,511   $ (4,566

Loss from discontinued operations, net of tax

     —          323        —          892   

Income tax expense

     187        93        644        380   

Interest expense, net

     230        316        988        1,085   

Depreciation and amortization

     2,413        1,769        9,248        6,344   
  

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA

   $ 3,482      $ 3,261      $ 9,369      $ 4,135   

Stock-based compensation

     311        347        1,325        1,402   

Lease terminations costs

     —          —          450        —     

Move related expenses

     —          244        866        548   
  

 

 

   

 

 

   

 

 

   

 

 

 

ADJUSTED EBITDA

   $ 3,793      $ 3,852      $ 12,010      $ 6,085   
  

 

 

   

 

 

   

 

 

   

 

 

 
     Three Months Ended
December 31,
    Twelve Months Ended
December 31,
 
     2012     2011     2012     2011  

NET INCOME (LOSS)

   $ 652      $ 760      $ (1,511   $ (4,566

Loss from discontinued operations, net of tax

     —          323        —          892   

Stock-based compensation

     311        347        1,325        1,402   

Lease terminations costs

     —          —          450        —     

Move related expenses

     —          244        866        548   
  

 

 

   

 

 

   

 

 

   

 

 

 

NON-GAAP INCOME (LOSS)

   $ 963      $ 1,674      $ 1,130      $ (1,724
  

 

 

   

 

 

   

 

 

   

 

 

 

NET INCOME (LOSS) PER SHARE:

        

Basic

   $ 0.05      $ 0.06      $ (0.12   $ (0.36
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 0.05      $ 0.06      $ (0.12   $ (0.36
  

 

 

   

 

 

   

 

 

   

 

 

 

NON-GAAP INCOME (LOSS) Per Share:

        

Basic

   $ 0.08      $ 0.13      $ 0.09      $ (0.14
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 0.07      $ 0.13      $ 0.09      $ (0.14
  

 

 

   

 

 

   

 

 

   

 

 

 
     Three Months Ended
December 31,
    Twelve Months Ended
December 31,
 
     2012     2011     2012     2011  

TOTAL REVENUES

   $ 76,970      $ 87,498      $ 281,563      $ 298,766   

Pass-thru revenue

     (13,269     (14,530     (41,390     (40,974

Cost of product revenue

     (25,700     (37,557     (110,183     (150,738
  

 

 

   

 

 

   

 

 

   

 

 

 

SERVICE FEE EQUIVALENT REVENUE

   $ 38,001      $ 35,411      $ 129,990      $ 107,054   
  

 

 

   

 

 

   

 

 

   

 

 

 


PFSweb, Inc. and Subsidiaries

Preliminary Unaudited Condensed Consolidated Balance Sheets

(In Thousands, Except Share Data)

 

     December 31,
2012
    December 31,
2011
 

ASSETS

    

CURRENT ASSETS:

    

Cash and cash equivalents

   $ 19,626      $ 17,695   

Restricted cash

     283        827   

Accounts receivable, net of allowance for doubtful accounts of $450 and $663 at December 31, 2012 and December 31, 2011, respectively

     45,684        52,679   

Inventories, net of reserves of $1,789 and $1,555 at December 31, 2012 and December 31, 2011, respectively

     24,654        30,487   

Other receivables

     7,676        11,915   

Prepaid expenses and other current assets

     4,345        4,697   
  

 

 

   

 

 

 

Total current assets

     102,268        118,300   
  

 

 

   

 

 

 

PROPERTY AND EQUIPMENT, net

     27,917        14,945   

OTHER ASSETS

     3,286        3,127   
  

 

 

   

 

 

 

Total assets

     133,471        136,372   
  

 

 

   

 

 

 

LIABILITIES AND SHAREHOLDERS EQUITY

    

CURRENT LIABILITIES:

    

Current portion of long-term debt and capital lease obligations

   $ 16,660      $ 23,939   

Trade accounts payable

     40,493        48,544   

Deferred revenue

     6,648        6,766   

Accrued expenses

     23,097        18,657   
  

 

 

   

 

 

 

Total current liabilities

     86,898        97,906   

LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS, less current portion

     5,400        3,583   

DEFERRED REVENUE

     7,562        5,908   

DEFERRED RENT

     5,560        901   
  

 

 

   

 

 

 

Total liabilities

     105,420        108,298   
  

 

 

   

 

 

 

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; 12,812,386 and 12,782,907 shares issued at December 31, 2012 and December 31, 2011, respectively; and 12,778,919 and 12,764,546 shares outstanding as of December 31, 2012 and December 31, 2011, respectively

     13        13   

Additional paid-in capital

     106,018        104,645   

Accumulated deficit

     (79,409     (77,898

Accumulated other comprehensive income

     1,554        1,399   

Treasury stock at cost, 33,467 and 18,361 shares as of December 31, 2012 and December 31, 2011, respectively

     (125     (85
  

 

 

   

 

 

 

Total shareholders’ equity

     28,051        28,074   
  

 

 

   

 

 

 

Total liabilities and shareholders’ equity

   $ 133,471      $ 136,372   
  

 

 

   

 

 

 


PFSweb, Inc. and Subsidiaries

Preliminary Unaudited Consolidating Statements of Operations

For the Three Months Ended December 31, 2012

(In Thousands)

 

     PFSweb      Business &
Retail Connect
     Eliminations     Consolidated  

REVENUES:

          

Product revenue, net

   $ —         $ 28,290       $ —        $ 28,290   

Service fee revenue

     35,411         —           —          35,411   

Service fee revenue—affiliate

     1,776         229         (2,005     —     

Pass-thru revenue

     13,269         —           —          13,269   
  

 

 

    

 

 

    

 

 

   

 

 

 

Total revenues

     50,456         28,519         (2,005     76,970   
  

 

 

    

 

 

    

 

 

   

 

 

 

COSTS OF REVENUES:

          

Cost of product revenue

     —           25,700         —          25,700   

Cost of service fee revenue

     26,866         229         (976     26,119   

Cost of pass-thru revenue

     13,269         —           —          13,269   
  

 

 

    

 

 

    

 

 

   

 

 

 

Total costs of revenues

     40,135         25,929         (976     65,088   
  

 

 

    

 

 

    

 

 

   

 

 

 

Gross profit

     10,321         2,590         (1,029     11,882   

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

     9,456         2,386         (1,029     10,813   
  

 

 

    

 

 

    

 

 

   

 

 

 

Income from operations

     865         204         —          1,069   

INTEREST EXPENSE, NET

     63         167         —          230   
  

 

 

    

 

 

    

 

 

   

 

 

 

Income before income taxes

     802         37         —          839   

INCOME TAX PROVISION

     174         13         —          187   
  

 

 

    

 

 

    

 

 

   

 

 

 

NET INCOME

   $ 628       $ 24       $ —        $ 652   
  

 

 

    

 

 

    

 

 

   

 

 

 

NON-GAAP NET INCOME

   $ 939       $ 24       $ —        $ 963   
  

 

 

    

 

 

    

 

 

   

 

 

 

EBITDA

   $ 3,243       $ 239       $ —        $ 3,482   
  

 

 

    

 

 

    

 

 

   

 

 

 

ADJUSTED EBITDA

   $ 3,554       $ 239       $ —        $ 3,793   
  

 

 

    

 

 

    

 

 

   

 

 

 

A reconciliation of NET INCOME to EBITDA and ADJUSTED EBITDA follows:

  

NET INCOME

   $ 628       $ 24       $  —          652   

Income tax expense

     174         13         —          187   

Interest expense , net

     63         167         —          230   

Depreciation and amortization

     2,378         35         —          2,413   
  

 

 

    

 

 

    

 

 

   

 

 

 

EBITDA

   $ 3,243       $ 239       $ —        $ 3,482   

Stock-based compensation

     311         —           —          311   
  

 

 

    

 

 

    

 

 

   

 

 

 

ADJUSTED EBITDA

   $ 3,554       $ 239       $ —        $ 3,793   
  

 

 

    

 

 

    

 

 

   

 

 

 

A reconciliation of NET INCOME to NON-GAAP NET INCOME follows:

  

NET INCOME

   $ 628       $ 24       $ —        $ 652   

Stock-based compensation

     311         —           —          311   
  

 

 

    

 

 

    

 

 

   

 

 

 

NON-GAAP NET INCOME

   $ 939       $ 24       $ —        $ 963   
  

 

 

    

 

 

    

 

 

   

 

 

 

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, Inc. and Subsidiaries

Preliminary Unaudited Consolidating Statements of Operations

For the Twelve Months Ended December 31, 2012

(In Thousands)

 

           Business &               
     PFSweb     Retail Connect      Eliminations     Consolidated  

REVENUES:

         

Product revenue, net

   $ —        $ 119,740       $ —        $ 119,740   

Service fee revenue

     120,433        —           —          120,433   

Service fee revenue—affiliate

     5,397        679         (6,076     —     

Pass-thru revenue

     41,390        —           —          41,390   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total revenues

     167,220        120,419         (6,076     281,563   
  

 

 

   

 

 

    

 

 

   

 

 

 

COSTS OF REVENUES:

         

Cost of product revenue

     —          110,183         —          110,183   

Cost of service fee revenue

     92,196        679         (3,626     89,249   

Cost of pass-thru revenue

     41,390        —           —          41,390   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total costs of revenues

     133,586        110,862         (3,626     240,822   
  

 

 

   

 

 

    

 

 

   

 

 

 

Gross profit

     33,634        9,557         (2,450     40,741   

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

     35,664        7,406         (2,450     40,620   
  

 

 

   

 

 

    

 

 

   

 

 

 

Income (loss) from operations

     (2,030     2,151         —          121   

INTEREST EXPENSE, NET

     203        785         —          988   
  

 

 

   

 

 

    

 

 

   

 

 

 

Income (loss) before income taxes

     (2,233     1,366         —          (867

INCOME TAX PROVISION

     82        562         —          644   
  

 

 

   

 

 

    

 

 

   

 

 

 

NET INCOME (LOSS)

     (2,315     804         —          (1,511
  

 

 

   

 

 

    

 

 

   

 

 

 

NON-GAAP NET INCOME

   $ 326      $ 804       $ —        $ 1,130   
  

 

 

   

 

 

    

 

 

   

 

 

 

EBITDA

   $ 7,117      $ 2,252       $ —        $ 9,369   
  

 

 

   

 

 

    

 

 

   

 

 

 

ADJUSTED EBITDA

   $ 9,758      $ 2,252       $ —        $ 12,010   
  

 

 

   

 

 

    

 

 

   

 

 

 

A reconciliation of NET INCOME (LOSS) to EBITDA and ADJUSTED EBITDA follows:

  

NET INCOME (LOSS)

   $ (2,315   $ 804       $ —          (1,511

Income tax expense

     82        562         —          644   

Interest expense, net

     203        785         —          988   

Depreciation and amortization

     9,147        101         —          9,248   
  

 

 

   

 

 

    

 

 

   

 

 

 

EBITDA

   $ 7,117      $ 2,252       $ —        $ 9,369   

Stock-based compensation

     1,325        —           —          1,325   

Lease termination costs

     450        —           —          450   

Move related expenses

     866        —           —          866   
  

 

 

   

 

 

    

 

 

   

 

 

 

ADJUSTED EBITDA

   $ 9,758      $ 2,252       $ —        $ 12,010   
  

 

 

   

 

 

    

 

 

   

 

 

 

A reconciliation of NET INCOME (LOSS) to NON-GAAP NET INCOME follows:

  

NET INCOME (LOSS)

   $ (2,315   $ 804       $ —        $ (1,511

Stock-based compensation

     1,325        —           —          1,325   

Lease termination costs

     450        —           —          450   

Move related expenses

     866        —           —          866   
  

 

 

   

 

 

    

 

 

   

 

 

 

NON-GAAP NET INCOME

   $ 326      $ 804       $ —        $ 1,130   
  

 

 

   

 

 

    

 

 

   

 

 

 

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 December 31, 2011

(In Thousands)

 

           Business &                     
     PFSweb     Retail Connect      eCOST     Eliminations     Consolidated  

REVENUES:

           

Product revenue, net

   $ —        $ 40,442       $ —        $ —        $ 40,442   

Service fee revenue

     32,526        —           —          —          32,526   

Service fee revenue—affiliate

     1,732        —           —          (1,732     —     

Pass-thru revenue

     14,530        —           —          —          14,530   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Total revenues

     48,788        40,442         —          (1,732     87,498   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

COSTS OF REVENUES:

           

Cost of product revenue

     —          37,557         —          —          37,557   

Cost of service fee revenue

     25,463        —           —          (953     24,510   

Cost of pass-thru revenue

     14,530        —           —          —          14,530   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Total costs of revenues

     39,993        37,557         —          (953     76,597   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Gross profit

     8,795        2,885         —          (779     10,901   

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

     7,918        2,270         —          (779     9,409   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Income from operations

     877        615         —          —          1,492   

INTEREST EXPENSE, NET

     6        310         —          —          316   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Income before income taxes

     871        305         —          —          1,176   

INCOME TAX PROVISION (BENEFIT)

     (51     144         —          —          93   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

INCOME FROM CONTINUING OPERATIONS

     922        161         —          —          1,083   

LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX

     —          —           (323       (323
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

NET INCOME (LOSS)

   $ 922      $ 161       $ (323   $ —        $ 760   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

NON-GAAP NET INCOME

   $ 1,513      $ 161       $ —        $ —        $ 1,674   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

EBITDA

   $ 2,629      $ 632       $ —        $ —        $ 3,261   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

ADJUSTED EBITDA

   $ 3,220      $ 632       $ —        $ —        $ 3,852   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

A reconciliation of NET INCOME (LOSS) to EBITDA and ADJUSTED EBITDA follows:

  

 

NET INCOME (LOSS)

   $ 922      $ 161       $ (323   $ —          760   

Loss from discontinued operations, net of tax

     —          —           323        —          323   

Income tax expense (benefit)

     (51     144         —          —          93   

Interest expense, net

     6        310         —          —          316   

Depreciation and amortization

     1,752        17         —          —          1,769   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

EBITDA

   $ 2,629      $ 632       $ —        $ —        $ 3,261   

Stock-based compensation

     347        —           —          —          347   

Move related expenses

     244               244   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

ADJUSTED EBITDA

   $ 3,220      $ 632       $ —        $ —        $ 3,852   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

A reconciliation of NET INCOME (LOSS) to NON-GAAP NET INCOME follows:

  

 

NET INCOME (LOSS)

   $ 922      $ 161       $ (323   $ —        $ 760   

Loss from discontinued operations, net of tax

     —          —           323        —          323   

Stock-based compensation

     347        —           —          —          347   

Move related expenses

     244        —           —          —          244   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

NON-GAAP NET INCOME

   $ 1,513      $ 161       $ —        $ —        $ 1,674   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

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 Twelve Months Ended December 31, 2011

(In Thousands)

 

           Business &                     
     PFSweb     Retail Connect      eCOST     Eliminations     Consolidated  

REVENUES:

           

Product revenue, net

   $ —        $ 162,447       $ —        $ —        $ 162,447   

Service fee revenue

     95,345        —           —          —          95,345   

Service fee revenue—affiliate

     6,501        —           —          (6,501     —     

Pass-thru revenue

     40,976        —           —          (2     40,974   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Total revenues

     142,822        162,447         —          (6,503     298,766   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

COSTS OF REVENUES:

           

Cost of product revenue

     —          150,738         —          —          150,738   

Cost of service fee revenue

     74,367        —           —          (2,616     71,751   

Cost of pass-thru revenue

     40,976        —           —          (2     40,974   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Total costs of revenues

     115,343        150,738         —          (2,618     263,463   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Gross profit

     27,479        11,709         —          (3,885     35,303   

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

     32,892        8,505         —          (3,885     37,512   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Income (loss) from operations

     (5,413     3,204         —          —          (2,209

INTEREST EXPENSE (INCOME), NET

     (140     1,225         —          —          1,085   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Income (loss) before income taxes

     (5,273     1,979         —          —          (3,294

INCOME TAX PROVISION (BENEFIT)

     (401     781         —          —          380   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

INCOME (LOSS) FROM CONTINUING OPERATIONS

     (4,872     1,198         —          —          (3,674

LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX

     —          —           (892       (892
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

NET INCOME (LOSS)

   $ (4,872   $ 1,198       $ (892   $ —        $ (4,566
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

NON-GAAP NET INCOME (LOSS)

   $ (2,922   $ 1,198       $ —        $ —        $ (1,724
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

EBITDA

   $ 892      $ 3,243       $ —        $ —        $ 4,135   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

ADJUSTED EBITDA

   $ 2,842      $ 3,243       $ —        $ —        $ 6,085   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

A reconciliation of NET INCOME (LOSS) to EBITDA and ADJUSTED EBITDA follows:

  

      

NET INCOME (LOSS)

   $ (4,872   $ 1,198       $ (892   $ —          (4,566

Loss from discontinued operations, net of tax

     —          —           892        —          892   

Income tax expense (benefit)

     (401     781         —          —          380   

Interest expense (income), net

     (140     1,225         —          —          1,085   

Depreciation and amortization

     6,305        39         —          —          6,344   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

EBITDA

   $ 892      $ 3,243       $ —        $ —        $ 4,135   

Stock-based compensation

     1,402        —           —          —          1,402   

Move related expenses

     548               548   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

ADJUSTED EBITDA

   $ 2,842      $ 3,243       $ —        $ —        $ 6,085   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

A reconciliation of NET INCOME (LOSS) to NON-GAAP NET INCOME (LOSS) follows:

  

      

NET INCOME (LOSS)

   $ (4,872   $ 1,198       $ (892   $ —        $ (4,566

Loss from discontinued operations, net of tax

     —          —           892        —          892   

Stock-based compensation

     1,402        —           —          —          1,402   

Move related expenses

     548               548   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

NON-GAAP NET INCOME (LOSS)

   $ (2,922   $ 1,198       $ —        $ —        $ (1,724
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

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 December 31, 2012

(In Thousands)

 

           Business &              
     PFSweb     Retail Connect     Eliminations     Consolidated  

ASSETS

        

CURRENT ASSETS:

        

Cash and cash equivalents

   $ 13,079      $ 6,547      $ —        $ 19,626   

Restricted cash

     —          283        —          283   

Accounts receivable, net

     34,831        11,574        (721     45,684   

Inventories, net

     —          24,654        —          24,654   

Other receivables

     —          7,676        —          7,676   

Prepaid expenses and other current assets

     2,817        1,528        —          4,345   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total current assets

     50,727        52,262        (721     102,268   
  

 

 

   

 

 

   

 

 

   

 

 

 

PROPERTY AND EQUIPMENT, net

     27,651        266        —          27,917   

RECEIVABLE/INVESTMENT IN AFFILIATES

     13,396        —          (13,396     —     

OTHER ASSETS

     3,166        120        —          3,286   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

     94,940        52,648        (14,117     133,471   
  

 

 

   

 

 

   

 

 

   

 

 

 

LIABILITIES AND SHAREHOLDERS EQUITY

        

CURRENT LIABILITIES:

        

Current portion of long-term debt and capital lease obligations

   $ 13,072      $ 3,588      $ —        $ 16,660   

Trade accounts payable

     12,109        29,105        (721     40,493   

Deferred revenue

     6,573        75        —          6,648   

Accrued expenses

     16,743        6,354        —          23,097   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total current liabilities

     48,497        39,122        (721     86,898   

LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS, less current portion

     5,400        —          —          5,400   

PAYABLE TO AFFILIATES

     —          22,795        (22,795     —     

DEFERRED REVENUE

     7,562        —          —          7,562   

DEFERRED RENT

     5,482        78        —          5,560   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities

     66,941        61,995        (23,516     105,420   
  

 

 

   

 

 

   

 

 

   

 

 

 

COMMITMENTS AND CONTINGENCIES

        

SHAREHOLDERS’ EQUITY:

        

Common stock

     13        19        (19     13   

Capital contributions

     —          1,000        (1,000     —     

Additional paid-in capital

     106,018        28,059        (28,059     106,018   

Retained earnings (accumulated deficit)

     (79,461     (40,606     40,658        (79,409

Accumulated other comprehensive income

     1,554        2,181        (2,181     1,554   

Treasury stock

     (125     —          —          (125
  

 

 

   

 

 

   

 

 

   

 

 

 

Total shareholders’ equity

     27,999        (9,347     9,399        28,051   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities and shareholders’ equity

   $ 94,940      $ 52,648      $ (14,117   $ 133,471   
  

 

 

   

 

 

   

 

 

   

 

 

 


PFSweb, Inc. and Subsidiaries

Unaudited Condensed Consolidating Balance Sheets

as of December 31, 2011

(In Thousands)

 

           Business &              
     PFSweb     Retail Connect     Eliminations     Consolidated  

ASSETS

        

CURRENT ASSETS:

        

Cash and cash equivalents

   $ 12,818      $ 4,877      $ —        $ 17,695   

Restricted cash

     138        689        —          827   

Accounts receivable, net

     35,881        17,133        (335     52,679   

Inventories, net

     —          30,487        —          30,487   

Other receivables

     —          11,915        —          11,915   

Prepaid expenses and other current assets

     3,273        1,424        —          4,697   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total current assets

     52,110        66,525        (335     118,300   
  

 

 

   

 

 

   

 

 

   

 

 

 

PROPERTY AND EQUIPMENT, net

     14,884        61        —          14,945   

RECEIVABLE/INVESTMENT IN AFFILIATES

     13,130        —          (13,130     —     

OTHER ASSETS

     2,973        154        —          3,127   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

     83,097        66,740        (13,465     136,372   
  

 

 

   

 

 

   

 

 

   

 

 

 

LIABILITIES AND SHAREHOLDERS EQUITY

        

CURRENT LIABILITIES:

        

Current portion of long-term debt and capital lease obligations

   $ 13,918      $ 10,021      $ —        $ 23,939   

Trade accounts payable

     12,089        36,790        (335     48,544   

Deferred revenue

     6,749        17        —          6,766   

Accrued expenses

     11,998        6,659        —          18,657   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total current liabilities

     44,754        53,487        (335     97,906   

LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS, less current portion

     3,513        70        —          3,583   

PAYABLE TO AFFILIATES

     —          22,495        (22,495     —     

DEFERRED REVENUE

     5,908        —          —          5,908   

DEFERRED RENT

     901        —          —          901   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities

     55,076        76,052        (22,830     108,298   
  

 

 

   

 

 

   

 

 

   

 

 

 

COMMITMENTS AND CONTINGENCIES

        

SHAREHOLDERS’ EQUITY:

        

Common stock

     13        19        (19     13   

Capital contributions

     —          1,000        (1,000     —     

Additional paid-in capital

     104,645        28,059        (28,059     104,645   

Retained earnings (accumulated deficit)

     (77,950     (40,446     40,498        (77,898

Accumulated other comprehensive income

     1,398        2,056        (2,055     1,399   

Treasury stock

     (85     —          —          (85
  

 

 

   

 

 

   

 

 

   

 

 

 

Total shareholders’ equity

     28,021        (9,312     9,365        28,074   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities and shareholders’ equity

   $ 83,097      $ 66,740      $ (13,465   $ 136,372   
  

 

 

   

 

 

   

 

 

   

 

 

 

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