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PFSweb Reports 35% Service Fee Revenue Growth In Second Quarter Of 2012 Compared To Prior Year

Stocks in this article: PFSW

PFSweb, Inc. (Nasdaq: PFSW), an international provider of end-to-end web commerce solutions, today announced its financial results for the second quarter ended June 30, 2012.

“We believe PFSweb is now widely considered one of the leading experts in the eCommerce market and has become an integral part of the growth and success of some of the world's leading consumer brands,” stated Mark Layton, Chairman and Chief Executive Officer of PFSweb. “Our growth proves our ability to both attract new clients and become a significant part of their eCommerce strategy. In addition to offering global reach and a scalable platform that is able to support our clients’ brands, we expect to enhance our positioning within the market even further through the rollout of an expanded multi-platform service offering. This expansion of our End2End eCommerce solution provides the opportunity for PFSweb to generate higher margin revenue streams as we enter a whole new level of services for our clients and expand our reach across all channels and customer touch points.”

“We increased Service Fee revenue for the second quarter of 2012 by 35% to $28.4 million as compared to same period in 2011,” continued Mr. Layton. “This growth was driven by increased activity among our approximately 65 eCommerce client programs including new and existing client brands. During the past several months, we launched and ramped up several new client End2End eCommerce solutions, for leading brands such as Gerber Childrenswear, Elizabeth Arden and Gore.”

Summary of consolidated results for the second quarter ended June 30, 2012:

  • Service Fee revenue increased 35% to $28.4 million, compared to $21.0 million for the same period in 2011; Service Fee Equivalent revenue (as defined) increased 25% to $30.5 million, compared to $24.4 million for the same period in 2011;
  • Total revenue increased to $68.8 million, compared to $68.0 million for the second quarter of 2011;
  • Adjusted EBITDA (as defined) increased 160% to $2.8 million, compared to $1.1 million for the same period in 2011;
  • Net loss was $0.5 million, or $0.04 per basic and diluted share, compared to a net loss of $1.2 million, or $0.10 per basic and diluted share, for the second quarter of 2011. Net loss for the second quarter of 2012 included approximately $0.3 million of relocation related costs, which were reflected in selling, general and administrative expenses;
  • Non-GAAP net income (as defined) was $0.2 million, or $0.01 per basic and diluted share, compared to a non-GAAP net loss of $0.8 million, or $0.07 per basic and diluted share, for the quarter ended June 30, 2011;

Summary of consolidated results for the six months ended June 30, 2012:

  • Service Fee revenue increased 42% to $56.8 million, compared with $39.9 million for the six months ended June 30, 2011. Service Fee Equivalent revenue (as defined) increased 34% to $61.8 million, compared to $46.1 million for the same period in 2011;
  • Total revenue was $143.3 million compared to $140.4 million for the six months ended June 30, 2011;
  • Adjusted EBITDA (as defined) was $5.4 million compared to $1.5 million for the six months ended June 30, 2011;
  • Net loss was $1.8 million, or $0.14 per basic and diluted share, compared to a net loss of $3.5 million or $0.28 per basic and diluted share, for the six months ended June 30, 2011. Net loss for the six months ended June 30, 2012 included approximately $0.9 million of relocation related costs, and $0.5 million of lease termination costs that were reflected in selling, general and administrative expenses. Net loss for the first six months of 2011 included a $0.6 million loss from discontinued operations related to eCOST.com;
  • Non-GAAP net income was $0.2 million, or $0.02 per basic and diluted share, compared to a non-GAAP net loss of $2.2 million, or $0.18 per basic and diluted share, for the six months ended June 30, 2011.

“The strong Service Fee revenue growth for the second quarter of 2012, combined with an ongoing focus on costs, resulted in a 160% increase in Adjusted EBITDA to $2.8 million,” Mr. Layton continued. “In addition, several of the client programs that we expected to conclude or significantly reduce operations in 2012, have extended their programs into late-2012 and 2013. As a result of these extensions and other client activity, we are increasing our 2012 guidance for consolidated Adjusted EBITDA to approximately $9 million to $11 million. While we are pleased with these extensions, we still expect that approximately $5 million of this quarter’s service fee revenue will not continue after this year. We continue to target growth from new clients and are focusing on operational efficiencies to mitigate this impact.”

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