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8-K - FORM 8-K - PFSWEB INCd584493d8k.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 Second Quarter 2013 Results

-  -  -

PFSweb Increases Fiscal 2013 Adjusted EBITDA Guidance to $9-$10.5 Million

Allen, Texas, August 13, 2013 — PFSweb, Inc. (Nasdaq: PFSW), an international provider of end-to-end eCommerce solutions, today announced its financial results for the quarter ended June 30, 2013.

“We are pleased with our results for the June 2013 quarter. Higher than expected service fee revenue activity, including project work, partially offset the anticipated decline in revenue and profits related to client transitions. In addition, we continue to make progress implementing initiatives to drive operational efficiencies and reduce costs,” stated Mike Willoughby, Chief Executive Officer of PFSweb. “We also continue to see a number of opportunities to expand existing client engagements and sign new customers. Based on client projections, our current business pipeline has strengthened from last quarter to more than $55 million in average annual contract value.

“Our strategic relationship with transcosmos inc. is beginning to yield additional new business opportunities. In July, our management team traveled to China and Japan, where we made a series of presentations to executives on how to expand their eCommerce presence in the United States, Canada and Western Europe. In conjunction with this activity and our new relationship with transcosmos, several companies have already reached out to us to express their interest in our eCommerce solutions, and we have recently delivered our first proposal. In addition, PFSweb is in discussions with several of our existing clients to provide assistance to them with expanding into Asia. Overall, we are confident that these steps will drive growth and help unlock the operating leverage inherent in our business.

“With the higher than anticipated second quarter results and our current expectations of client volumes for the remainder of the year, including this upcoming holiday season, we now believe our 2013 Service Fee Equivalent Revenue will be toward the high end of the previously announced range of $110 million to $115 million, and we are increasing our Adjusted EBITDA target to a range of $9 million to $10.5 million for the year,” added Mr. Willoughby.


Summary of consolidated results for the second quarter ended June 30, 2013:

 

   

Service Fee revenue decreased 7% to $26.5 million, compared to $28.4 million for the same period in 2012; Service Fee Equivalent Revenue (as defined) decreased 8% to $28.0 million, compared to $30.5 million for the same period in 2012;

 

   

Total revenue decreased 13% to $58.2 million, compared to $67.1 million for the second quarter of 2012;

 

   

Adjusted EBITDA (as defined) decreased 11% to $2.5 million, compared to $2.8 million for the same period in 2012; Adjusted EBITDA for the second quarter of 2013 included an incremental benefit of approximately $0.4 million applicable to certain client transition related agreements;

 

   

Net loss was $1.0 million, or $0.07 per basic and diluted share, compared to net loss of $0.5 million, or $0.04 per basic and diluted share, for the second quarter of 2012; Net loss for the second quarter of 2013 included $0.3 million of restructuring and other charges while net loss for the second quarter of 2012 included $0.3 million of move related expenses;

 

   

Non-GAAP net loss (as defined) was $0.4 million, or $0.03 per basic and diluted share, compared to non-GAAP net income of $0.2 million, or $0.01 per basic and diluted share, for the quarter ended June 30, 2012.

Summary of consolidated results for the six months ended June 30, 2013:

 

   

Service Fee revenue decreased 4% to $54.5 million, compared to $56.8 million for the same period in 2012; Service Fee Equivalent Revenue (as defined) decreased 6% to $58.0 million, compared to $61.8 million for the same period in 2012;

 

   

Total revenue decreased 13% to $121.3 million, compared to $139.8 million for the first six months of 2012;

 

   

Adjusted EBITDA (as defined) remained flat at $5.4 million in both the six months ended June 30, 2013 and 2012; Adjusted EBITDA in the 2013 period included an incremental benefit of approximately $1.0 million applicable to certain client transition related agreements;

 

   

Net loss was $3.5 million, or $0.26 per basic and diluted share, compared to net loss of $1.8 million, or $0.14 per basic and diluted share, for the same period in 2012; Net loss for the six months ended June 30, 2013 included $2.5 million of restructuring and other charges while net loss for the same 2012 period included $0.9 million of move related expenses and $0.5 million of lease termination costs;

 

   

Non-GAAP net loss (as defined) was $0.4 million, or $0.03 per basic and diluted share, compared to non-GAAP net income of $0.2 million, or $0.02 per basic and diluted share, for the 2012 period.

Mr. Willoughby continued, “As we expected, the financial results for the second quarter reflect the partial impact of previously announced client transitions and certain restructuring-related activities, minimized by higher than expected client activity. We currently expect our third quarter results to be more negatively impacted as the remaining client transitions will be completed in the early part of the third quarter. We then expect to see a sequential improvement in our fourth quarter as we realize increased benefits from new and expanded client relationships,


including potential new clients from our transcosmos relationship, and seasonal client volumes. Overall, we remain excited about the direction of our business and committed to enhancing value for our shareholders. Given the ramp-up time required to contract and implement new client solutions, we expect the benefits of these opportunities will primarily be reflected in our results beginning in CY2014.”

Conference Call Information

Management will host a conference call at 11:00 am Eastern Time (10:00 am Central Time) on Tuesday, August 13, 2013, to discuss the latest corporate developments and results. To listen to the call, please dial (888) 562-3356 and enter pin number 20367798 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 September 13, 2013 at (855) 859-2056, pin number 20367798. 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, restructuring and other charges, lease termination costs and certain move related expenses.

EBITDA represents earnings (or losses) before interest, income taxes, depreciation, and amortization. Adjusted EBITDA further eliminates the effect of stock-based compensation, restructuring and other charges, 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, restructuring and other charges, 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, 2012 and the three months ended March 31, 2013 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     Six Months Ended  
     June 30,     June 30,  
     2013     2012     2013     2012  

REVENUES:

        

Product revenue, net

   $ 22,985      $ 29,423      $ 48,467      $ 63,974   

Service fee revenue

     26,496        28,384        54,498        56,762   

Pass-thru revenue

     8,704        9,264        18,361        19,103   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     58,185        67,071        121,326        139,839   
  

 

 

   

 

 

   

 

 

   

 

 

 

COSTS OF REVENUES:

        

Cost of product revenue

     21,479        27,263        44,994        58,945   

Cost of service fee revenue

     17,811        20,698        37,069        42,353   

Cost of pass-thru revenue

     8,704        9,264        18,361        19,103   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total costs of revenues

     47,994        57,225        100,424        120,401   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     10,191        9,846        20,902        19,438   

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

     10,938        9,902        23,739        20,406   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from operations

     (747     (56     (2,837     (968

INTEREST EXPENSE (INCOME), NET

     184        258        402        522   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) before income taxes

     (931     (314     (3,239     (1,490

INCOME TAX PROVISION (BENEFIT)

     24        194        291        303   
  

 

 

   

 

 

   

 

 

   

 

 

 

NET INCOME (LOSS)

   $ (955   $ (508   $ (3,530   $ (1,793
  

 

 

   

 

 

   

 

 

   

 

 

 

NON-GAAP INCOME (LOSS)

   $ (421   $ 152      $ (400   $ 229   
  

 

 

   

 

 

   

 

 

   

 

 

 

NET INCOME (LOSS) PER SHARE:

        

Basic

   $ (0.07   $ (0.04   $ (0.26   $ (0.14
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ (0.07   $ (0.04   $ (0.26   $ (0.14
  

 

 

   

 

 

   

 

 

   

 

 

 

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING:

        

Basic

     14,525        12,783        13,661        12,774   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     14,525        12,783        13,661        12,774   
  

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA

   $ 1,941      $ 2,134      $ 2,259      $ 3,364   
  

 

 

   

 

 

   

 

 

   

 

 

 

ADJUSTED EBITDA

   $ 2,475      $ 2,794      $ 5,389      $ 5,386   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(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, 2012.


PFSweb, Inc. and Subsidiaries

Reconciliation of certain Non-GAAP Items to GAAP

(In Thousands, Except Per Share Data)

 

     Three Months Ended     Six Months Ended  
     June 30,     June 30,  
     2013     2012     2013     2012  

NET INCOME (LOSS)

   $ (955   $ (508   $ (3,530   $ (1,793

Income tax expense

     24        194        291        303   

Interest expense, net

     184        258        402        522   

Depreciation and amortization

     2,688        2,190        5,096        4,332   
  

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA

   $ 1,941      $ 2,134      $ 2,259      $ 3,364   

Stock-based compensation

     282        366        585        706   

Restructuring and other charges

     252        —          2,545        —     

Lease terminations costs

     —          —          —          450   

Move related expenses

     —          294        —          866   
  

 

 

   

 

 

   

 

 

   

 

 

 

ADJUSTED EBITDA

   $ 2,475      $ 2,794      $ 5,389      $ 5,386   
  

 

 

   

 

 

   

 

 

   

 

 

 
     Three Months Ended     Six Months Ended  
     June 30,     June 30,  
     2013     2012     2013     2012  

NET INCOME (LOSS)

   $ (955   $ (508   $ (3,530   $ (1,793

Stock-based compensation

     282        366        585        706   

Restructuring and other charges

     252        —          2,545        —     

Lease terminations costs

     —          —          —          450   

Move related expenses

     —          294        —          866   
  

 

 

   

 

 

   

 

 

   

 

 

 

NON-GAAP INCOME (LOSS)

   $ (421   $ 152      $ (400   $ 229   
  

 

 

   

 

 

   

 

 

   

 

 

 

NET INCOME (LOSS) PER SHARE:

        

Basic

   $ (0.07   $ (0.04   $ (0.26   $ (0.14
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ (0.07   $ (0.04   $ (0.26   $ (0.14
  

 

 

   

 

 

   

 

 

   

 

 

 

NON-GAAP INCOME (LOSS) Per Share:

        

Basic

   $ (0.03   $ 0.01      $ (0.03   $ 0.02   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ (0.03   $ 0.01      $ (0.03   $ 0.02   
  

 

 

   

 

 

   

 

 

   

 

 

 
     Three Months Ended     Six Months Ended  
     June 30,     June 30,  
     2013     2012     2013     2012  

TOTAL REVENUES

   $ 58,185      $ 67,071      $ 121,326      $ 139,839   

Pass-thru revenue

     (8,704     (9,264     (18,361     (19,103

Cost of product revenue

     (21,479     (27,263     (44,994     (58,945
  

 

 

   

 

 

   

 

 

   

 

 

 

SERVICE FEE EQUIVALENT REVENUE

   $ 28,002      $ 30,544      $ 57,971      $ 61,791   
  

 

 

   

 

 

   

 

 

   

 

 

 


PFSweb, Inc. and Subsidiaries

Preliminary Unaudited Condensed Consolidated Balance Sheets

(In Thousands, Except Share Data)

 

     June 30,     December 31,  
     2013     2012  
ASSETS     

CURRENT ASSETS:

    

Cash and cash equivalents

   $ 21,638      $ 19,626   

Restricted cash

     457        283   

Accounts receivable, net of allowance for doubtful accounts of $391 and $450 at June 30, 2013 and December 31, 2012, respectively

     37,873        45,684   

Inventories, net of reserves of $1,753 and $1,789 at June 30, 2013 and December 31, 2012, respectively

     17,822        24,654   

Other receivables

     6,984        7,675   

Prepaid expenses and other current assets

     4,364        4,346   
  

 

 

   

 

 

 

Total current assets

     89,138        102,268   

PROPERTY AND EQUIPMENT, net

     26,611        27,917   

OTHER ASSETS

     2,887        3,286   
  

 

 

   

 

 

 

Total assets

     118,636        133,471   
  

 

 

   

 

 

 

LIABILITIES AND SHAREHOLDERS EQUITY

    

CURRENT LIABILITIES:

    

Current portion of long-term debt and capital lease obligations

   $ 8,940      $ 16,660   

Trade accounts payable

     26,760        40,493   

Deferred revenue

     7,870        6,648   

Accrued expenses

     18,981        23,097   
  

 

 

   

 

 

 

Total current liabilities

     62,551        86,898   

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

     4,224        5,400   

DEFERRED REVENUE

     7,343        7,562   

DEFERRED RENT

     5,237        5,560   
  

 

 

   

 

 

 

Total liabilities

     79,355        105,420   
  

 

 

   

 

 

 

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;
16,138,172 and 12,812,386 shares issued at June 30, 2013 and December 31, 2012, respectively; and 16,104,705 and 12,778,919 shares outstanding as of June 30, 2013 and December 31, 2012, respectively

     16        13   

Additional paid-in capital

     120,915        106,018   

Accumulated deficit

     (82,939     (79,409

Accumulated other comprehensive income

     1,414        1,554   

Treasury stock at cost, 33,467 shares as of June 30, 2013 and December 31, 2012

     (125     (125
  

 

 

   

 

 

 

Total shareholders’ equity

     39,281        28,051   
  

 

 

   

 

 

 

Total liabilities and shareholders’ equity

   $ 118,636      $ 133,471   
  

 

 

   

 

 

 


PFSweb, Inc. and Subsidiaries

Preliminary Unaudited Consolidating Statements of Operations

For the Three Months Ended June 30, 2013

(In Thousands)

 

           Business &              
     PFSweb     Retail Connect     Eliminations     Consolidated  

REVENUES:

        

Product revenue, net

   $ —        $ 22,985      $ —        $ 22,985   

Service fee revenue

     25,303        1,193        —          26,496   

Service fee revenue—affiliate

     1,915        435        (2,350     —     

Pass-thru revenue

     8,704        —          —          8,704   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     35,922        24,613        (2,350     58,185   
  

 

 

   

 

 

   

 

 

   

 

 

 

COSTS OF REVENUES:

        

Cost of product revenue

     —          21,479        —          21,479   

Cost of service fee revenue

     18,401        1,433        (2,023     17,811   

Cost of pass-thru revenue

     8,704        —          —          8,704   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total costs of revenues

     27,105        22,912        (2,023     47,994   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     8,817        1,701        (327     10,191   

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

     9,600        1,665        (327     10,938   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from operations

     (783     36        —          (747

INTEREST EXPENSE (INCOME), NET

     35        149        —          184   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) before income taxes

     (818     (113     —          (931

INCOME TAX PROVISION (BENEFIT)

     23        1        —          24   
  

 

 

   

 

 

   

 

 

   

 

 

 

NET INCOME (LOSS)

   $ (841   $ (114   $ —        $ (955
  

 

 

   

 

 

   

 

 

   

 

 

 

NON-GAAP NET INCOME (LOSS)

   $ (307   $ (114   $ —        $ (421
  

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA

   $ 1,865      $ 76      $ —        $ 1,941   
  

 

 

   

 

 

   

 

 

   

 

 

 

ADJUSTED EBITDA

   $ 2,399      $ 76      $ —        $ 2,475   
  

 

 

   

 

 

   

 

 

   

 

 

 

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

  

 

NET INCOME (LOSS)

   $ (841   $ (114   $ —          (955

Income tax expense (benefit)

     23        1        —          24   

Interest expense (income), net

     35        149        —          184   

Depreciation and amortization

     2,648        40        —          2,688   
  

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA

   $ 1,865      $ 76      $ —        $ 1,941   

Stock-based compensation

     282        —          —          282   

Restructuring and other charges

     252        —          —          252   
  

 

 

   

 

 

   

 

 

   

 

 

 

ADJUSTED EBITDA

   $ 2,399      $ 76      $ —        $ 2,475   
  

 

 

   

 

 

   

 

 

   

 

 

 

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

  

 

NET INCOME (LOSS)

   $ (841   $ (114   $ —        $ (955

Stock-based compensation

     282        —          —          282   

Restructuring and other charges

     252        —          —          252   
  

 

 

   

 

 

   

 

 

   

 

 

 

NON-GAAP NET INCOME (LOSS)

   $ (307   $ (114   $ —        $ (421
  

 

 

   

 

 

   

 

 

   

 

 

 
        

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 Six Months Ended June 30, 2013

(In Thousands)

 

           Business &               
     PFSweb     Retail Connect      Eliminations     Consolidated  

REVENUES:

         

Product revenue, net

   $ —        $ 48,467       $ —        $ 48,467   

Service fee revenue

     51,744        2,754         —          54,498   

Service fee revenue—affiliate

     4,269        797         (5,066     —     

Pass-thru revenue

     18,362        —           (1     18,361   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total revenues

     74,375        52,018         (5,067     121,326   
  

 

 

   

 

 

    

 

 

   

 

 

 

COSTS OF REVENUES:

         

Cost of product revenue

     —          44,994         —          44,994   

Cost of service fee revenue

     38,181        3,080         (4,192     37,069   

Cost of pass-thru revenue

     18,362        —           (1     18,361   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total costs of revenues

     56,543        48,074         (4,193     100,424   
  

 

 

   

 

 

    

 

 

   

 

 

 

Gross profit

     17,832        3,944         (874     20,902   

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

     21,162        3,451         (874     23,739   
  

 

 

   

 

 

    

 

 

   

 

 

 

Income (loss) from operations

     (3,330     493         —          (2,837

INTEREST EXPENSE (INCOME), NET

     101        301         —          402   
  

 

 

   

 

 

    

 

 

   

 

 

 

Income (loss) before income taxes

     (3,431     192         —          (3,239

INCOME TAX PROVISION (BENEFIT)

     143        148         —          291   
  

 

 

   

 

 

    

 

 

   

 

 

 

NET INCOME (LOSS)

   $ (3,574   $ 44       $ —        $ (3,530
  

 

 

   

 

 

    

 

 

   

 

 

 

NON-GAAP NET INCOME (LOSS)

   $ (444   $ 44       $ —        $ (400
  

 

 

   

 

 

    

 

 

   

 

 

 

EBITDA

   $ 1,688      $ 571       $ —        $ 2,259   
  

 

 

   

 

 

    

 

 

   

 

 

 

ADJUSTED EBITDA

   $ 4,818      $ 571       $ —        $ 5,389   
  

 

 

   

 

 

    

 

 

   

 

 

 

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

  

NET INCOME (LOSS)

   $ (3,574   $ 44       $ —          (3,530

Income tax expense (benefit)

     143        148         —          291   

Interest expense (income), net

     101        301         —          402   

Depreciation and amortization

     5,018        78         —          5,096   
  

 

 

   

 

 

    

 

 

   

 

 

 

EBITDA

   $ 1,688      $ 571       $ —        $ 2,259   

Stock-based compensation

     585        —           —          585   

Restructuring and other charges

     2,545        —           —          2,545   
  

 

 

   

 

 

    

 

 

   

 

 

 

ADJUSTED EBITDA

   $ 4,818      $ 571       $ —        $ 5,389   
  

 

 

   

 

 

    

 

 

   

 

 

 

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

  

NET INCOME (LOSS)

   $ (3,574   $ 44       $ —        $ (3,530

Stock-based compensation

     585        —           —          585   

Restructuring and other charges

     2,545        —           —          2,545   
  

 

 

   

 

 

    

 

 

   

 

 

 

NON-GAAP NET INCOME (LOSS)

   $ (444   $ 44       $ —        $ (400
  

 

 

   

 

 

    

 

 

   

 

 

 

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

Unaudited Consolidating Statements of Operations

For the Three Months Ended June 30, 2012

(In Thousands)

 

           Business &               
     PFSweb     Retail Connect      Eliminations     Consolidated  

REVENUES:

         

Product revenue, net

   $ —        $ 29,423       $ —        $ 29,423   

Service fee revenue

     28,384        —           —          28,384   

Service fee revenue—affiliate

     1,124        134         (1,258     —     

Pass-thru revenue

     9,264        —           —          9,264   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total revenues

     38,772        29,557         (1,258     67,071   
  

 

 

   

 

 

    

 

 

   

 

 

 

COSTS OF REVENUES:

         

Cost of product revenue

     —          27,263         —          27,263   

Cost of service fee revenue

     21,273        134         (709     20,698   

Cost of pass-thru revenue

     9,264        —           —          9,264   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total costs of revenues

     30,537        27,397         (709     57,225   
  

 

 

   

 

 

    

 

 

   

 

 

 

Gross profit

     8,235        2,160         (549     9,846   

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

     8,823        1,628         (549     9,902   
  

 

 

   

 

 

    

 

 

   

 

 

 

Income (loss) from operations

     (588     532         —          (56

INTEREST EXPENSE (INCOME), NET

     57        201         —          258   
  

 

 

   

 

 

    

 

 

   

 

 

 

Income (loss) before income taxes

     (645     331         —          (314

INCOME TAX PROVISION (BENEFIT)

     55        139         —          194   
  

 

 

   

 

 

    

 

 

   

 

 

 

NET INCOME (LOSS)

   $ (700   $ 192       $ —        $ (508
  

 

 

   

 

 

    

 

 

   

 

 

 

NON-GAAP NET INCOME (LOSS)

   $ (40   $ 192       $ —        $ 152   
  

 

 

   

 

 

    

 

 

   

 

 

 

EBITDA

   $ 1,578      $ 556       $ —        $ 2,134   
  

 

 

   

 

 

    

 

 

   

 

 

 

ADJUSTED EBITDA

   $ 2,238      $ 556       $ —        $ 2,794   
  

 

 

   

 

 

    

 

 

   

 

 

 

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

  

NET INCOME (LOSS)

   $ (700   $ 192       $ —          (508

Income tax expense (benefit)

     55        139         —          194   

Interest expense (income), net

     57        201         —          258   

Depreciation and amortization

     2,166        24         —          2,190   
  

 

 

   

 

 

    

 

 

   

 

 

 

EBITDA

   $ 1,578      $ 556       $ —        $ 2,134   

Stock-based compensation

     366        —           —          366   

Move related expenses

     294             294   
  

 

 

   

 

 

    

 

 

   

 

 

 

ADJUSTED EBITDA

   $ 2,238      $ 556       $ —        $ 2,794   
  

 

 

   

 

 

    

 

 

   

 

 

 

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

  

NET INCOME (LOSS)

   $ (700   $ 192       $ —        $ (508

Stock-based compensation

     366        —           —          366   

Move related expenses

     294        —           —          294   
  

 

 

   

 

 

    

 

 

   

 

 

 

NON-GAAP NET INCOME (LOSS)

   $ (40   $ 192       $ —        $ 152   
  

 

 

   

 

 

    

 

 

   

 

 

 

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

Unaudited Consolidating Statements of Operations

For the Six Months Ended June 30, 2012

(In Thousands)

 

      PFSweb     Business &
Retail Connect
     Eliminations     Consolidated  

REVENUES:

         

Product revenue, net

   $ —        $ 63,974       $ —        $ 63,974   

Service fee revenue

     56,762        —           —          56,762   

Service fee revenue—affiliate

     2,586        308         (2,894     —     

Pass-thru revenue

     19,103        —             19,103   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total revenues

     78,451        64,282         (2,894     139,839   
  

 

 

   

 

 

    

 

 

   

 

 

 

COSTS OF REVENUES:

         

Cost of product revenue

     —          58,945         —          58,945   

Cost of service fee revenue

     43,543        308         (1,498     42,353   

Cost of pass-thru revenue

     19,103        —           —          19,103   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total costs of revenues

     62,646        59,253         (1,498     120,401   
  

 

 

   

 

 

    

 

 

   

 

 

 

Gross profit

     15,805        5,029         (1,396     19,438   

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

     18,133        3,669         (1,396     20,406   
  

 

 

   

 

 

    

 

 

   

 

 

 

Income (loss) from operations

     (2,328     1,360         —          (968

INTEREST EXPENSE (INCOME), NET

     91        431         —          522   
  

 

 

   

 

 

    

 

 

   

 

 

 

Income (loss) before income taxes

     (2,419     929         —          (1,490

INCOME TAX PROVISION (BENEFIT)

     (69     372         —          303   
  

 

 

   

 

 

    

 

 

   

 

 

 

NET INCOME (LOSS)

   $ (2,350   $ 557       $ —        $ (1,793
  

 

 

   

 

 

    

 

 

   

 

 

 

NON-GAAP NET INCOME (LOSS)

   $ (328   $ 557       $ —        $ 229   
  

 

 

   

 

 

    

 

 

   

 

 

 

EBITDA

   $ 1,964      $ 1,400       $ —        $ 3,364   
  

 

 

   

 

 

    

 

 

   

 

 

 

ADJUSTED EBITDA

   $ 3,986      $ 1,400       $ —        $ 5,386   
  

 

 

   

 

 

    

 

 

   

 

 

 

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

  

NET INCOME (LOSS)

   $ (2,350   $ 557       $ —          (1,793

Income tax expense (benefit)

     (69     372         —          303   

Interest expense (income), net

     91        431         —          522   

Depreciation and amortization

     4,292        40         —          4,332   
  

 

 

   

 

 

    

 

 

   

 

 

 

EBITDA

   $ 1,964      $ 1,400       $ —        $ 3,364   

Stock-based compensation

     706        —           —          706   

Lease termination costs

     450        —           —          450   

Move related expenses

     866             866   
  

 

 

   

 

 

    

 

 

   

 

 

 

ADJUSTED EBITDA

   $ 3,986      $ 1,400       $ —        $ 5,386   
  

 

 

   

 

 

    

 

 

   

 

 

 

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

  

NET INCOME (LOSS)

   $ (2,350   $ 557       $ —        $ (1,793

Stock-based compensation

     706        —           —          706   

Lease termination costs

     450        —           —          450   

Move related expenses

     866             866   
  

 

 

   

 

 

    

 

 

   

 

 

 

NON-GAAP NET INCOME (LOSS)

   $ (328   $ 557       $ —        $ 229   
  

 

 

   

 

 

    

 

 

   

 

 

 

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

Unaudited Condensed Consolidating Balance Sheets

as of June 30, 2013

(In Thousands)

 

     PFSweb     Business &
Retail Connect
    Eliminations     Consolidated  
ASSETS         

CURRENT ASSETS:

        

Cash and cash equivalents

   $ 15,967      $ 5,671      $ —        $ 21,638   

Restricted cash

     —          457        —          457   

Accounts receivable, net

     27,212        10,906        (245     37,873   

Inventories, net

     —          17,822        —          17,822   

Other receivables

     —          6,984        —          6,984   

Prepaid expenses and other current assets

     2,928        1,436        —          4,364   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total current assets

     46,107        43,276        (245     89,138   

PROPERTY AND EQUIPMENT, net

     26,392        219        —          26,611   

RECEIVABLE/INVESTMENT IN AFFILIATES

     13,775        —          (13,775     —     

OTHER ASSETS

     2,786        101        —          2,887   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

     89,060        43,596        (14,020     118,636   
  

 

 

   

 

 

   

 

 

   

 

 

 
LIABILITIES AND SHAREHOLDERS EQUITY         

CURRENT LIABILITIES:

        

Current portion of long-term debt and capital lease obligations

   $ 4,258      $ 4,682      $ —        $ 8,940   

Trade accounts payable

     7,046        19,959        (245     26,760   

Deferred revenue

     7,825        45        —          7,870   

Accrued expenses

     13,760        5,221        —          18,981   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total current liabilities

     32,889        29,907        (245     62,551   

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

     4,224        —          —          4,224   

PAYABLE TO AFFILIATES

     —          23,045        (23,045     —     

DEFERRED REVENUE

     7,343        —          —          7,343   

DEFERRED RENT

     5,195        42        —          5,237   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities

     49,651        52,994        (23,290     79,355   
  

 

 

   

 

 

   

 

 

   

 

 

 

COMMITMENTS AND CONTINGENCIES

        

SHAREHOLDERS’ EQUITY:

        

Common stock

     16        19        (19     16   

Capital contributions

     —          1,000        (1,000     —     

Additional paid-in capital

     120,915        28,060        (28,060     120,915   

Retained earnings (accumulated deficit)

     (82,811     (40,562     40,434        (82,939

Accumulated other comprehensive income

     1,414        2,085        (2,085     1,414   

Treasury stock

     (125     —          —          (125
  

 

 

   

 

 

   

 

 

   

 

 

 

Total shareholders’ equity

     39,409        (9,398     9,270        39,281   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities and shareholders’ equity

   $ 89,060      $ 43,596      $ (14,020   $ 118,636   
  

 

 

   

 

 

   

 

 

   

 

 

 


PFSweb, Inc. and Subsidiaries

Unaudited Condensed Consolidating Balance Sheets

as of December 31, 2012

(In Thousands)

 

     PFSweb     Business &
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

     —          7,675        —          7,675   

Prepaid expenses and other current assets

     2,817        1,529        —          4,346   
  

 

 

   

 

 

   

 

 

   

 

 

 

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   
  

 

 

   

 

 

   

 

 

   

 

 

 

# # #