PFSweb Reports Third Quarter 2013 Results

Strong Recent Client Wins Expected to Fuel Future Growth

Nov 14, 2013, 08:10 ET from PFSweb, Inc.

ALLEN, Texas, Nov. 14, 2013 /PRNewswire/ --PFSweb, Inc. (Nasdaq: PFSW), an international provider of end-to-end eCommerce solutions, today announced its financial results for the quarter ended September 30, 2013.

"During the third quarter, we continued to make progress toward driving PFSweb to sustainable, profitable, long-term growth through new and expanded client relationships and our continued focus on driving operational efficiencies through the business," stated Mike Willoughby, Chief Executive Officer of PFSweb. "In September, we signed a contract to develop and deploy an end-to-end solution for the United States Mint. The contract win came on the heels of a number of successful program launches during the period, including TJ Maxx and two L'Oreal USA brands: Clarisonic and em michelle phan. We believe our recent success in winning new business and launching new programs demonstrates the quality of our eCommerce solutions and the traction we enjoy in the marketplace. Our current business pipeline remains strong at approximately $45 million in average annual contract value based on client projections, following the transition of the United States Mint into implementation status."

Mr. Willoughby continued, "Our financial results for the quarter ended September 2013 were impacted by previously announced client transitions, partially offset by growth in new and existing clients, including project work, and the impact of our ongoing cost control efforts. As previously mentioned, we expect to see sequential improvement in the fourth quarter as we realize further benefit from new and expanded client relationships and also experience higher volumes during the holiday season. Based on our projections, we are reiterating our 2013 Service Fee Equivalent Revenue guidance of $110 million to $115 million and our Adjusted EBITDA guidance of $9 million to $10.5 million, and currently expect to be toward the higher end of the range for both targets."

Summary of consolidated results for the third quarter ended September 30, 2013:

  • Service Fee revenue decreased 15% to $23.9 million, compared to $28.3 million for the same period in 2012;  Service Fee Equivalent Revenue (as defined) decreased 17% to $25.2 million, compared to $30.2 million for the same period in 2012;
  • Total revenue decreased 17% to $53.6 million, compared to $64.8 million for the third quarter of 2012;
  • Adjusted EBITDA (as defined) decreased to $1.4 million, compared to $2.8 million for the same period in 2012;
  • Net loss was $2.0 million, or $0.12 per basic and diluted share, compared to net loss of $0.4 million, or $0.03 per basic and diluted share, for the third quarter of 2012;
  • Non-GAAP net loss (as defined) was $1.3 million, or $0.08 per basic and diluted share, compared to non-GAAP net loss of 62,000, or less than $0.01 per basic and diluted share, for the quarter ended September 30, 2012.

Summary of consolidated results for the nine months ended September 30, 2013:

  • Service Fee revenue decreased 7% to $78.7 million, compared to $85.0 million for the same period in 2012; Service Fee Equivalent Revenue (as defined) decreased 10% to $83.2 million, compared to $92.0 million for the same period in 2012;
  • Total revenue decreased 15% to $174.9 million, compared to $204.6 million for the first nine months of 2012;
  • Adjusted EBITDA (as defined) decreased to $6.8 million, compared to $8.2 for the same period in 2012;
  • Net loss was $5.5 million, or $0.38 per basic and diluted share, compared to net loss of $2.2 million, or $0.17 per basic and diluted share, for the same period in 2012;
  • Non-GAAP net loss (as defined) was $1.7 million, or $0.12 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 2012 period.

Mr. Willoughby continued, "Looking toward 2014, we expect to complete our recovery from the impact of the previously announced client transitions as we benefit from our 2013 restructuring activities and the onset of new client contracts, including the United States Mint.  At this time, we are targeting 2014 Service Fee Equivalent Revenue to be in the range of $127 million to $133 million and Adjusted EBITDA to be in the range of $12 million to $14 million.  With the anticipated launch of the United States Mint contract in the third quarter of 2014, we expect the new contract revenue to be substantially back-loaded during the year."

Conference Call Information

Management will host a conference call at 11:00 am Eastern Time (10:00 am Central Time) on Thursday, November 14, 2013, to discuss the latest corporate developments and results. To listen to the call, please dial (888) 562-3356 and enter pin number 93467776 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 December 14, 2013 at (855) 859-2056, pin number 93467776. 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, product 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 and client financial services.

Together, PFSweb's iCommerce Solutions allow 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, HERVE LEGER BY MAX AZRIA, The TJX Companies, Inc., T.J. Maxx, and the United States Mint. 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 Quarterly Report on Form 10-Q for the three and six months ended June 30, 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 of the Company 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.

 

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, Inc. and Subsidiaries

Preliminary Unaudited Condensed Consolidated Statements of Operations (A)

(In Thousands, Except Per Share Data)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2013

2012

2013

2012

 REVENUES:  

 Product revenue, net  

$          21,495

$          27,476

$          69,660

$          91,450

 Service fee revenue  

23,908

28,260

78,708

85,022

 Pass-thru revenue 

8,150

9,018

26,511

28,121

 Total revenues 

53,553

64,754

174,879

204,593

 COSTS OF REVENUES:  

 Cost of product revenue  

20,221

25,538

65,215

84,483

 Cost of service fee revenue  

16,196

20,777

53,265

63,130

 Cost of pass-thru revenue 

8,150

9,018

26,511

28,121

 Total costs of revenues  

44,567

55,333

144,991

175,734

 Gross profit 

8,986

9,421

29,888

28,859

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES  

10,656

9,401

34,395

29,807

         Income (loss) from operations  

(1,670)

20

(4,507)

(948)

 INTEREST EXPENSE (INCOME), NET  

162

236

564

758

          Income (loss) before income taxes  

(1,832)

(216)

(5,071)

(1,706)

 INCOME TAX PROVISION (BENEFIT) 

120

154

411

457

 NET INCOME (LOSS) 

$           (1,952)

$              (370)

$           (5,482)

$           (2,163)

 NON-GAAP INCOME (LOSS) 

$           (1,342)

$                (62)

$           (1,742)

$               167

 NET INCOME (LOSS) PER SHARE: 

Basic

$             (0.12)

$             (0.03)

$             (0.38)

$             (0.17)

Diluted

$             (0.12)

$             (0.03)

$             (0.38)

$             (0.17)

 WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: 

Basic

16,121

12,783

14,490

12,777

Diluted

16,121

12,783

14,490

12,777

 EBITDA 

$               767

$            2,522

$            3,026

$            5,886

 ADJUSTED EBITDA 

$            1,377

$            2,830

$            6,766

$            8,216

(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

Nine Months Ended

September 30,

September 30,

2013

2012

2013

2012

 NET INCOME (LOSS) 

$           (1,952)

$              (370)

$           (5,482)

$           (2,163)

      Income tax expense  

120

154

411

457

      Interest expense, net 

162

236

564

758

      Depreciation and amortization  

2,437

2,502

7,533

6,834

 EBITDA 

$               767

$            2,522

$            3,026

$            5,886

      Stock-based compensation  

610

308

1,195

1,014

      Restructuring and other charges 

-

-

2,545

-

      Lease terminations costs 

-

-

-

450

      Move related expenses 

-

-

-

866

 ADJUSTED EBITDA 

$            1,377

$            2,830

$            6,766

$            8,216

Three Months Ended

Nine Months Ended

September 30,

September 30,

2013

2012

2013

2012

 NET INCOME (LOSS) 

$           (1,952)

$              (370)

$           (5,482)

$           (2,163)

      Stock-based compensation  

610

308

1,195

1,014

      Restructuring and other charges 

-

-

2,545

-

      Lease terminations costs 

-

-

-

450

      Move related expenses 

-

-

-

866

 NON-GAAP INCOME (LOSS) 

$           (1,342)

$                (62)

$           (1,742)

$               167

 NET INCOME (LOSS) PER SHARE: 

Basic

$             (0.12)

$             (0.03)

$             (0.38)

$             (0.17)

Diluted

$             (0.12)

$             (0.03)

$             (0.38)

$             (0.17)

 NON-GAAP INCOME (LOSS) Per Share: 

Basic

$             (0.08)

$             (0.00)

$             (0.12)

$              0.01

Diluted

$             (0.08)

$             (0.00)

$             (0.12)

$              0.01

Three Months Ended

Nine Months Ended

September 30,

September 30,

2013

2012

2013

2012

TOTAL REVENUES

$          53,553

$          64,754

$        174,879

$        204,593

Pass-thru revenue

(8,150)

(9,018)

(26,511)

(28,121)

Cost of product revenue

(20,221)

(25,538)

(65,215)

(84,483)

SERVICE FEE EQUIVALENT REVENUE

$          25,182

$          30,198

$          83,153

$          91,989

 

PFSweb, Inc. and Subsidiaries

Preliminary Unaudited Condensed Consolidated Balance Sheets

(In Thousands, Except Share Data)

September 30,

December 31,

2013

2012

ASSETS

CURRENT ASSETS:

              Cash and cash equivalents

$         21,293

$        19,626

              Restricted cash

466

283

              Accounts receivable, net of allowance for doubtful accounts of $367 and                       $450 at September 30, 2013 and December 31, 2012, respectively

37,715

45,684

              Inventories, net of reserves of $1,688 and $1,789 at September 30, 2013 and                      December 31, 2012, respectively

17,326

24,654

              Other receivables

7,645

7,675

              Prepaid expenses and other current assets

4,590

4,346

Total current assets

89,035

102,268

PROPERTY AND EQUIPMENT, net

26,667

27,917

OTHER ASSETS

2,880

3,286

Total assets

118,582

133,471

LIABILITIES AND SHAREHOLDERS EQUITY

CURRENT LIABILITIES:

              Current portion of long-term debt and capital lease                  obligations

$           8,820

$        16,660

              Trade accounts payable

26,153

40,493

              Deferred revenue

9,166

6,648

              Accrued expenses

21,299

23,097

Total current liabilities

65,438

86,898

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

3,473

5,400

DEFERRED REVENUE

6,177

7,562

DEFERRED RENT

5,142

5,560

Total liabilities

80,230

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;                      16,199,431 and 12,812,386 shares issued at September 30, 2013 and                     December 31, 2012, respectively; and 16,165,964 and 12,778,919                      shares outstanding as of September 30, 2013 and                      December 31, 2012, respectively

16

13

              Additional paid-in capital

121,663

106,018

              Accumulated deficit

(84,891)

(79,409)

              Accumulated other comprehensive income

1,689

1,554

              Treasury stock at cost, 33,467 shares

(125)

(125)

  Total shareholders' equity

38,352

28,051

                           Total liabilities and shareholders' equity

$       118,582

$      133,471

 

PFSweb, Inc. and Subsidiaries

Preliminary Unaudited Consolidating Statements of Operations

For the Three Months Ended September 30, 2013

(In Thousands)

Business &

PFSweb

Retail Connect

Eliminations

Consolidated

 REVENUES:  

 Product revenue, net  

$                            -

$                  21,495

$                            -

$                  21,495

 Service fee revenue  

22,123

1,785

-

23,908

 Service fee revenue - affiliate 

2,198

312

(2,510)

-

 Pass-thru revenue 

8,150

-

-

8,150

 Total revenues 

32,471

23,592

(2,510)

53,553

 COSTS OF REVENUES:  

 Cost of product revenue  

-

20,221

-

20,221

 Cost of service fee revenue  

16,634

1,862

(2,300)

16,196

 Cost of pass-thru revenue 

8,150

-

-

8,150

 Total costs of revenues  

24,784

22,083

(2,300)

44,567

 Gross profit 

7,687

1,509

(210)

8,986

 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES  

9,510

1,356

(210)

10,656

         Income (loss) from operations  

(1,823)

153

-

(1,670)

 INTEREST EXPENSE (INCOME), NET  

11

151

-

162

          Income (loss) before income taxes  

(1,834)

2

-

(1,832)

 INCOME TAX PROVISION (BENEFIT) 

58

62

120

 NET INCOME (LOSS) 

$                  (1,892)

$                       (60)

$                            -

$                  (1,952)

 NON-GAAP NET INCOME (LOSS) 

$                  (1,282)

$                       (60)

$                            -

$                  (1,342)

 EBITDA  

$                       576

$                       191

$                            -

$                       767

 ADJUSTED EBITDA 

$                    1,186

$                       191

$                            -

$                    1,377

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

 NET INCOME (LOSS) 

$                  (1,892)

$                       (60)

$                            -

(1,952)

      Income tax expense (benefit) 

58

62

-

120

      Interest expense (income), net 

11

151

-

162

      Depreciation and amortization  

2,399

38

-

2,437

 EBITDA 

$                       576

$                       191

$                            -

$                       767

      Stock-based compensation  

610

-

-

610

      Restructuring and other charges 

-

-

-

-

 ADJUSTED EBITDA 

$                    1,186

$                       191

$                            -

$                    1,377

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

 NET INCOME (LOSS) 

$                  (1,892)

$                       (60)

$                            -

$                  (1,952)

      Stock-based compensation  

610

-

-

610

      Restructuring and other charges 

-

-

-

-

 NON-GAAP NET INCOME (LOSS) 

$                  (1,282)

$                       (60)

$                            -

$                  (1,342)

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 Nine Months Ended September 30, 2013

(In Thousands)

Business &

PFSweb

Retail Connect

Eliminations

Consolidated

 REVENUES:  

 Product revenue, net  

$                            -

$                  69,660

$                            -

$                  69,660

 Service fee revenue  

73,868

4,840

-

78,708

 Service fee revenue - affiliate 

6,467

1,110

(7,577)

-

 Pass-thru revenue 

26,511

-

-

26,511

 Total revenues 

106,846

75,610

(7,577)

174,879

 COSTS OF REVENUES:  

 Cost of product revenue  

-

65,215

-

65,215

 Cost of service fee revenue  

54,815

5,161

(6,711)

53,265

 Cost of pass-thru revenue 

26,511

-

-

26,511

 Total costs of revenues  

81,326

70,376

(6,711)

144,991

 Gross profit 

25,520

5,234

(866)

29,888

 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES  

30,673

4,588

(866)

34,395

         Income (loss) from operations  

(5,153)

646

-

(4,507)

 INTEREST EXPENSE (INCOME), NET  

113

451

-

564

          Income (loss) before income taxes  

(5,266)

195

-

(5,071)

 INCOME TAX PROVISION (BENEFIT) 

200

211

-

411

 NET INCOME (LOSS) 

$                  (5,466)

$                       (16)

$                            -

$                  (5,482)

 NON-GAAP NET INCOME (LOSS) 

$                  (1,726)

$                       (16)

$                            -

$                  (1,742)

 EBITDA  

$                    2,264

$                       762

$                            -

$                    3,026

 ADJUSTED EBITDA 

$                    6,004

$                       762

$                            -

$                    6,766

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

 NET INCOME (LOSS) 

$                  (5,466)

$                       (16)

$                            -

(5,482)

      Income tax expense (benefit) 

200

211

-

411

      Interest expense (income), net 

113

451

-

564

      Depreciation and amortization  

7,417

116

-

7,533

 EBITDA 

$                    2,264

$                       762

$                            -

$                    3,026

      Stock-based compensation  

1,195

-

-

1,195

      Restructuring and other charges 

2,545

-

-

2,545

 ADJUSTED EBITDA 

$                    6,004

$                       762

$                            -

$                    6,766

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

 NET INCOME (LOSS) 

$                  (5,466)

$                       (16)

$                            -

$                  (5,482)

      Stock-based compensation  

1,195

-

-

1,195

      Restructuring and other charges 

2,545

-

-

2,545

 NON-GAAP NET INCOME (LOSS) 

$                  (1,726)

$                       (16)

$                            -

$                  (1,742)

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 September 30, 2012

(In Thousands)

Business &

PFSweb

Retail Connect

Eliminations

Consolidated

 REVENUES:  

 Product revenue, net  

$                            -

$                  27,476

$                            -

$                  27,476

 Service fee revenue  

28,260

-

-

28,260

 Service fee revenue - affiliate 

1,034

143

(1,177)

-

 Pass-thru revenue 

9,018

-

-

9,018

 Total revenues 

38,312

27,619

(1,177)

64,754

 COSTS OF REVENUES:  

 Cost of product revenue  

-

25,538

-

25,538

 Cost of service fee revenue  

21,336

143

(702)

20,777

 Cost of pass-thru revenue 

9,018

-

-

9,018

 Total costs of revenues  

30,354

25,681

(702)

55,333

 Gross profit 

7,958

1,938

(475)

9,421

 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES  

8,526

1,350

(475)

9,401

         Income (loss) from operations  

(568)

588

-

20

 INTEREST EXPENSE (INCOME), NET  

49

187

-

236

          Income (loss) before income taxes  

(617)

401

-

(216)

 INCOME TAX PROVISION (BENEFIT)  

(23)

177

-

154

 NET INCOME (LOSS)  

$                     (594)

$                       224

$                            -

$                     (370)

 NON-GAAP NET INCOME (LOSS) 

$                     (286)

$                       224

$                            -

$                       (62)

 EBITDA  

$                    1,908

$                       614

$                            -

$                    2,522

 ADJUSTED EBITDA 

$                    2,216

$                       614

$                            -

$                    2,830

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

 NET INCOME (LOSS) 

$                     (594)

$                       224

$                            -

(370)

      Income tax expense (benefit) 

(23)

177

-

154

      Interest expense (income), net 

49

187

-

236

      Depreciation and amortization  

2,476

26

-

2,502

 EBITDA 

$                    1,908

$                       614

$                            -

$                    2,522

      Stock-based compensation  

308

-

-

308

 ADJUSTED EBITDA 

$                    2,216

$                       614

$                            -

$                    2,830

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

 NET INCOME (LOSS) 

$                     (594)

$                       224

$                            -

$                     (370)

      Stock-based compensation  

308

-

-

308

 NON-GAAP NET INCOME (LOSS) 

$                     (286)

$                       224

$                            -

$                       (62)

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 Nine Months Ended September 30, 2012

(In Thousands)

Business &

PFSweb

Retail Connect

Eliminations

Consolidated

 REVENUES:  

 Product revenue, net  

$                            -

$                  91,450

$                            -

$                  91,450

 Service fee revenue  

85,022

-

-

85,022

 Service fee revenue - affiliate 

3,620

451

(4,071)

-

 Pass-thru revenue 

28,121

-

28,121

 Total revenues 

116,763

91,901

(4,071)

204,593

 COSTS OF REVENUES:  

 Cost of product revenue  

-

84,483

-

84,483

 Cost of service fee revenue  

64,879

451

(2,200)

63,130

 Cost of pass-thru revenue 

28,121

-

-

28,121

 Total costs of revenues  

93,000

84,934

(2,200)

175,734

 Gross profit 

23,763

6,967

(1,871)

28,859

 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES  

26,659

5,019

(1,871)

29,807

         Income (loss) from operations  

(2,896)

1,948

-

(948)

 INTEREST EXPENSE (INCOME), NET  

140

618

-

758

          Income (loss) before income taxes  

(3,036)

1,330

-

(1,706)

 INCOME TAX PROVISION (BENEFIT)  

(92)

549

-

457

 NET INCOME (LOSS)  

$                  (2,944)

$                       781

$                            -

$                  (2,163)

 NON-GAAP NET INCOME (LOSS) 

$                     (614)

$                       781

$                            -

$                       167

 EBITDA  

$                    3,872

$                    2,014

$                            -

$                    5,886

 ADJUSTED EBITDA 

$                    6,202

$                    2,014

$                            -

$                    8,216

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

 NET INCOME (LOSS) 

$                  (2,944)

$                       781

$                            -

(2,163)

      Income tax expense (benefit)  

(92)

549

-

457

      Interest expense (income), net 

140

618

-

758

      Depreciation and amortization  

6,768

66

-

6,834

 EBITDA 

$                    3,872

$                    2,014

$                            -

$                    5,886

      Stock-based compensation  

1,014

-

-

1,014

      Lease termination costs 

450

-

-

450

      Move related expenses 

866

866

 ADJUSTED EBITDA 

$                    6,202

$                    2,014

$                            -

$                    8,216

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

 NET INCOME (LOSS) 

$                  (2,944)

$                       781

$                            -

$                  (2,163)

      Stock-based compensation  

1,014

-

-

1,014

      Lease termination costs 

450

-

-

450

      Move related expenses 

866

866

 NON-GAAP NET INCOME (LOSS) 

$                     (614)

$                       781

$                            -

$                       167

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 September 30, 2013

(In Thousands)

Business &

PFSweb

Retail Connect

Eliminations

Consolidated

ASSETS

CURRENT ASSETS:

               Cash and cash equivalents

$         14,845

$         6,448

$          -

$          21,293

               Restricted cash

-

466

-

466

               Accounts receivable, net

26,840

11,600

(725)

37,715

               Inventories, net

-

17,326

-

17,326

               Other receivables

-

7,645

-

7,645

               Prepaid expenses and other current assets

3,204

1,386

-

4,590

Total current assets

44,889

44,871

(725)

89,035

PROPERTY AND EQUIPMENT, net

26,406

261

-

26,667

RECEIVABLE/INVESTMENT IN AFFILIATES

13,992

-

(13,992)

OTHER ASSETS

2,787

93

-

2,880

Total assets

88,074

45,225

(14,717)

118,582

LIABILITIES AND SHAREHOLDERS EQUITY

CURRENT LIABILITIES:

               Current portion of long-term debt and capital lease obligations

$         4,094

$         4,726

$         -

$         8,820

               Trade accounts payable

6,142

20,736

(725)

26,153

               Deferred revenue

9,161

5

-

9,166

               Accrued expenses

15,306

5,993

-

21,299

Total current liabilities

34,703

31,460

(725)

65,438

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

3,473

-

-

3,473

PAYABLE TO AFFILIATES

-

23,045

(23,045)

DEFERRED REVENUE

6,177

-

-

6,177

DEFERRED RENT

5,142

-

-

5,142

Total liabilities

49,495

54,505

(23,770)

80,230

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY:

               Common stock

16

19

(19)

16

               Capital contributions

-

1,000

(1,000)

               Additional paid-in capital

121,663

28,060

(28,060)

121,663

               Retained earnings (accumulated deficit)

(84,664)

(40,623)

40,396

(84,891)

               Accumulated other comprehensive income

1,689

2,264

(2,264)

1,689

               Treasury stock

(125)

-

-

(125)

Total shareholders' equity

38,579

(9,280)

9,053

38,352

Total liabilities and shareholders' equity

$         88,074

$         45,225

$         (14,717)

$         118,582

 

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 

-

7,675

-

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

SOURCE PFSweb, Inc.



RELATED LINKS

http://www.pfsweb.com