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

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.”

Conference Call Information

Management will host a conference call at 11:00 am Eastern Time (10:00 am Central Time) on Thursday, August 9, 2012, to discuss the latest corporate developments and results. To listen to the call, please dial (888) 562-3356 and enter the pin number 11911131 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 9, 2012 at (855) 859-2056, pin number 11911131. 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, income (loss) from discontinued operations, lease termination costs and certain move related expenses.

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

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

To find out more about PFSweb, Inc. (NASDAQ: PFSW), visit the company’s website at http://www.PFSweb.com.

The matters discussed herein consist of forward-looking information under the Private Securities Litigation Reform Act of 1995 and is subject to and involves risks and uncertainties, which could cause actual results to differ materially from the forward-looking information. PFSweb's Annual Report on Form 10-K for the year ended December 31, 2011 and 10-Q for the period ended March 31, 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
Unaudited Condensed Consolidated Statements of Operations (A)
(In Thousands, Except Per Share Data)
           
Three Months Ended Six Months Ended
June 30, June 30,
2012 2011 2012 2011
REVENUES:
Product revenue, net $ 29,557 $ 38,799 $ 64,282 $ 84,082
Service fee revenue 28,384 20,970 56,762 39,870
Pass-thru revenue   10,819     8,239     22,228     16,445  
Total revenues   68,760     68,008     143,272     140,397  
 
COSTS OF REVENUES:
Cost of product revenue 27,397 35,411 59,253 77,877
Cost of service fee revenue 20,340 15,795 41,599 29,578
Cost of pass-thru revenue   10,819     8,239     22,228     16,445  
Total costs of revenues   58,556     59,445     123,080     123,900  
Gross profit 10,204 8,563 20,192 16,497
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES   10,260     9,430     21,160     18,718  
Loss from operations (56 ) (867 ) (968 ) (2,221 )
INTEREST EXPENSE, NET   258     270     522     461  
Loss before income taxes (314 ) (1,137 ) (1,490 ) (2,682 )
INCOME TAX PROVISION   194     95     303     230  
LOSS FROM CONTINUING OPERATIONS (508 ) (1,232 ) (1,793 ) (2,912 )
INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAX   -     14     -     (589 )
NET LOSS $ (508 ) $ (1,218 ) $ (1,793 ) $ (3,501 )
NON-GAAP INCOME (LOSS) $ 152   $ (833 ) $ 229   $ (2,203 )
 
NET LOSS PER SHARE:
Basic $ (0.04 ) $ (0.10 ) $ (0.14 ) $ (0.28 )
Diluted $ (0.04 ) $ (0.10 ) $ (0.14 ) $ (0.28 )
 
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING:
Basic   12,783     12,567     12,774     12,418  
Diluted   12,783     12,567     12,774     12,418  
 
EBITDA $ 2,134   $ 676   $ 3,364   $ 817  
ADJUSTED EBITDA $ 2,794   $ 1,075   $ 5,386   $ 1,526  
 
(A) The financial data above should be read in conjunction with the audited consolidated financial statements ofPFSweb, 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 Six Months Ended
June 30, June 30,
2012 2011 2012 2011
NET LOSS $ (508 ) $ (1,218 ) $ (1,793 ) $ (3,501 )
Loss (income) from discontinued operations, net of tax - (14 ) - 589
Income tax expense 194 95 303 230
Interest expense 258 270 522 461
Depreciation and amortization   2,190     1,543     4,332     3,038  
EBITDA $ 2,134 $ 676 $ 3,364 $ 817
Stock-based compensation 366 399 706 709
Lease terminations costs - - 450 -
Move related expenses   294     -     866     -  
ADJUSTED EBITDA $ 2,794   $ 1,075   $ 5,386   $ 1,526  
 
 
Three Months Ended Six Months Ended
June 30, June 30,
2012 2011 2012 2011
 
NET LOSS $ (508 ) $ (1,218 ) $ (1,793 ) $ (3,501 )
Loss (Income) from discontinued operations, net of tax - (14 ) - 589
Stock-based compensation 366 399 706 709
Lease terminations costs - - 450 -
Move related expenses   294     -     866     -  
NON-GAAP INCOME (LOSS) $ 152   $ (833 ) $ 229   $ (2,203 )
 
NET LOSS PER SHARE:
Basic $ (0.04 ) $ (0.10 ) $ (0.14 ) $ (0.28 )
Diluted $ (0.04 ) $ (0.10 ) $ (0.14 ) $ (0.28 )
 
NON-GAAP INCOME (LOSS) Per Share:
Basic $ 0.01   $ (0.07 ) $ 0.02   $ (0.18 )
Diluted $ 0.01   $ (0.07 ) $ 0.02   $ (0.18 )
 
 
 
Three Months Ended Six Months Ended
June 30, June 30,
2012 2011 2012 2011
 
TOTAL REVENUES $ 68,760 $ 68,008 $ 143,272 $ 140,397
Pass-thru revenue (10,819 ) (8,239 ) (22,228 ) (16,445 )
Cost of product revenue   (27,397 )   (35,411 )   (59,253 )   (77,877 )
SERVICE FEE EQUIVALENT REVENUE $ 30,544   $ 24,358   $ 61,791   $ 46,075  
 

PFSweb, Inc. and Subsidiaries

Unaudited Condensed Consolidated Balance Sheets(In Thousands, Except Share Data)
         
 
June 30, December 31,
2012 2011
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 17,107 $ 17,695
Restricted cash 728 827
Accounts receivable, net of allowance for doubtful accounts of $656 and
$663 at June 30, 2012 and December 31, 2011, respectively 39,172 52,679
Inventories, net of reserves of $1,677 and $1,555 at June 30, 2012 and
December 31, 2011, respectively 27,060 30,487
Other receivables 7,983 11,915
Prepaid expenses and other current assets 4,335 4,697
Total current assets 96,385 118,300
 
PROPERTY AND EQUIPMENT, net 25,574 14,945
OTHER ASSETS 3,052 3,127
Total assets 125,011 136,372
 
LIABILITIES AND SHAREHOLDERS EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt and capital lease obligations $ 19,196 $ 23,939
Trade accounts payable 35,658 48,544
Deferred revenue 7,365 6,766
Accrued expenses 19,023 18,657
Total current liabilities 81,242 97,906
 
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS, less current portion 6,284 3,583
DEFERRED REVENUE 5,112 5,908
DEFERRED RENT 5,571 901
Total liabilities 98,209 108,298
 
 
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 June 30, 2012 and December 31, 2011, respectively; and 12,789,325 and 12,764,546 shares outstanding as of June 30, 2012 and December 31, 2011, respectively
13 13
Additional paid-in capital 105,399 104,645
Accumulated deficit (79,691) (77,898)
Accumulated other comprehensive income 1,178 1,399
Treasury stock at cost, 23,061 and 18,361 shares as of June 30, 2012 and December 31, 2011, respectively
(97) (85)
Total shareholders' equity 26,802 28,074
Total liabilities and shareholders' equity $ 125,011 $ 136,372
 

PFSweb, Inc. and Subsidiaries
Unaudited Consolidating Statements of Operations
For the Three Months Ended June 30, 2012
(In Thousands)
         
PFSweb

Business &Retail Connect
Eliminations Consolidated
REVENUES:
Product revenue, net $ - $ 29,557 $ - $ 29,557
Service fee revenue 28,384 - - 28,384
Service fee revenue - affiliate 1,124 - (1,124 ) -
Pass-thru revenue   10,819    

-
  -     10,819  
Total revenues   40,327     29,557   (1,124 )   68,760  
 
COSTS OF REVENUES:
Cost of product revenue - 27,397 - 27,397
Cost of service fee revenue 21,049 - (709 ) 20,340
Cost of pass-thru revenue   10,819     -   -     10,819  
Total costs of revenues   31,868     27,397   (709 )   58,556  
Gross profit 8,459 2,160 (415 ) 10,204
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES   9,047     1,628   (415 )   10,260  
Income from operations (588 ) 532 - (56 )
INTEREST EXPENSE, NET   57     201   -     258  
Income before income taxes (645 ) 331 - (314 )
INCOME TAX PROVISION (BENEFIT)   55     139   -     194  
NET INCOME (LOSS) $ (700 ) $ 192 $ -   $ (508 )
NON-GAAP NET INCOME $ (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 , 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 costs   294     -   -     294  
ADJUSTED EBITDA $ 2,238   $ 556 $ -   $ 2,794  
 
A reconciliation of NET INCOME (LOSS) to NON-GAAP NET INCOME follows:
 
NET INCOME (LOSS) $ (700 ) $ 192 $ - $ (508 )
Stock-based compensation 366 - - 366
Move related costs   294     -   -     294  
NON-GAAP NET INCOME $ (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)
         
Business &
PFSweb Retail Connect Eliminations Consolidated
REVENUES:
Product revenue, net $ - $ 64,282 $ - $ 64,282
Service fee revenue 56,762 - - 56,762
Service fee revenue - affiliate 2,586 - (2,586 ) -
Pass-thru revenue   22,228     -   -     22,228  
Total revenues   81,576     64,282   (2,586 )   143,272  
 
COSTS OF REVENUES:
Cost of product revenue - 59,253 - 59,253
Cost of service fee revenue 43,097 - (1,498 ) 41,599
Cost of pass-thru revenue   22,228     -   -     22,228  
Total costs of revenues   65,325     59,253   (1,498 )   123,080  
Gross profit 16,251 5,029 (1,088 ) 20,192
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES   18,579     3,669   (1,088 )   21,160  
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) 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 costs   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 costs   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 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 June 30, 2011
(In Thousands)
       
Business &
PFSweb Retail Connect eCOST Eliminations Consolidated
REVENUES:
Product revenue, net $ - $ 38,799 $ - $ - $ 38,799
Service fee revenue 20,970 - - - 20,970
Service fee revenue - affiliate 1,588 - - (1,588) -
Pass-thru revenue 8,240 - - (1) 8,239
Total revenues 30,798 38,799 - (1,589) 68,008
 
COSTS OF REVENUES:
Cost of product revenue - 35,411 - - 35,411
Cost of service fee revenue 16,354 - - (559) 15,795
Cost of pass-thru revenue 8,240 - - (1) 8,239
Total costs of revenues 24,594 35,411 - (560) 59,445
Gross profit 6,204 3,388 - (1,029) 8,563
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 8,245 2,214 - (1,029) 9,430
Income (loss) from operations (2,041) 1,174 - - (867)
INTEREST EXPENSE (INCOME), NET (61) 331 - - 270
Income (loss) before income taxes (1,980) 843 - - (1,137)
INCOME TAX PROVISION (BENEFIT) (251) 346 - - 95
INCOME (LOSS) FROM CONTINUING OPERATIONS (1,729) 497 - - (1,232)
LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX - - 14   14
NET INCOME (LOSS) $ (1,729) $ 497 $ 14 $ - $ (1,218)
NON-GAAP NET INCOME (LOSS) $ (1,330) $ 497 $ - $ - $ (833)
 
EBITDA $ (505) $ 1,181 $ - $ - $ 676
ADJUSTED EBITDA $ (106) $ 1,181 $ - $ - $ 1,075
 
 
A reconciliation of NET INCOME (LOSS) to EBITDA and ADJUSTED EBITDA follows:
 
NET INCOME (LOSS) $ (1,729) $ 497 $ 14 $ - (1,218)
Loss from discontinued operations, net of tax - - (14) - (14)
Income tax expense (benefit) (251) 346 - - 95
Interest expense (income) (61) 331 - - 270
Depreciation and amortization 1,536 7 - - 1,543
EBITDA $ (505) $ 1,181 $ - $ - $ 676
Stock-based compensation 399 - - - 399
ADJUSTED EBITDA $ (106) $ 1,181 $ - $ - $ 1,075
 
A reconciliation of NET INCOME (LOSS) to NON-GAAP NET INCOME (LOSS) follows:
 
NET INCOME (LOSS) $ (1,729) $ 497 $ 14 $ - $ (1,218)
Loss from discontinued operations, net of tax - - (14) - (14)
Stock-based compensation 399 - - - 399
NON-GAAP NET INCOME (LOSS) $ (1,330) $ 497 $ - $ - $ (833)
 
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 Six Months Ended June 30, 2011
(In Thousands)
           
Business &
PFSweb Retail Connect eCOST Eliminations Consolidated
REVENUES:
Product revenue, net $ - $ 84,082 $ - $ - $ 84,082
Service fee revenue 39,870 - - - 39,870
Service fee revenue - affiliate 3,252 - - (3,252) -
Pass-thru revenue 16,446 - - (1) 16,445
Total revenues 59,568 84,082 - (3,253) 140,397
 
COSTS OF REVENUES:
Cost of product revenue - 77,877 - - 77,877
Cost of service fee revenue 30,702 - - (1,124) 29,578
Cost of pass-thru revenue 16,446 - - (1) 16,445
Total costs of revenues 47,148 77,877 - (1,125) 123,900
Gross profit 12,420 6,205 - (2,128) 16,497
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 16,460 4,386 - (2,128) 18,718
Income (loss) from operations (4,040) 1,819 - - (2,221)
INTEREST EXPENSE (INCOME), NET (116) 577 - - 461
Income (loss) before income taxes (3,924) 1,242 - - (2,682)
INCOME TAX PROVISION (BENEFIT) (276) 506 - - 230
INCOME (LOSS) FROM CONTINUING OPERATIONS (3,648) 736 - - (2,912)
LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX - - (589)   (589)
NET INCOME (LOSS) $ (3,648) $ 736 $ (589) $ - $ (3,501)
NON-GAAP NET INCOME (LOSS) $ (2,939) $ 736 $ - $ - $ (2,203)
 
EBITDA $ (1,016) $ 1,833 $ - $ - $ 817
ADJUSTED EBITDA $ (307) $ 1,833 $ - $ - $ 1,526
 
 
A reconciliation of NET INCOME (LOSS) to EBITDA and ADJUSTED EBITDA follows:
 
NET INCOME (LOSS) $ (3,648) $ 736 $ (589) $ - (3,501)
Loss from discontinued operations, net of tax - - 589 - 589
Income tax expense (benefit) (276) 506 - - 230
Interest expense (income) (116) 577 - - 461
Depreciation and amortization 3,024 14 - - 3,038
EBITDA $ (1,016) $ 1,833 $ - $ - $ 817
Stock-based compensation 709 - - - 709
ADJUSTED EBITDA $ (307) $ 1,833 $ - $ - $ 1,526
 
A reconciliation of NET INCOME (LOSS) to NON-GAAP NET INCOME (LOSS) follows:
 
NET INCOME (LOSS) $ (3,648) $ 736 $ (589) $ - $ (3,501)
Loss from discontinued operations, net of tax - - 589 - 589
Stock-based compensation 709 - - - 709
NON-GAAP NET INCOME (LOSS) $ (2,939)

 
$ 736 $ - $ - $ (2,203)
 
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 June 30, 2012
(In Thousands)
           
 
Business &
PFSweb Retail Connect Eliminations Consolidated

ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 13,977 $ 3,130 $ - $ 17,107
Restricted cash - 728 - 728
Accounts receivable, net 26,180 13,073 (81 ) 39,172
Inventories, net - 27,060 - 27,060
Other receivables - 7,983 - 7,983
Prepaid expenses and other current assets   2,853     1,482     -     4,335  
Total current assets   43,010     53,456     (81 )   96,385  
 
PROPERTY AND EQUIPMENT, net 25,448 126 - 25,574
RECEIVABLE/INVESTMENT IN AFFILIATES 12,857 - (12,857 ) -
OTHER ASSETS   2,913     139     -     3,052  
Total assets   84,228     53,721     (12,938 )   125,011  
 
LIABILITIES AND SHAREHOLDERS EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt and capital lease obligations $ 12,685 $ 6,511 $ - $ 19,196
Trade accounts payable 8,024 27,715 (81 ) 35,658
Deferred revenue 7,328 37 - 7,365
Accrued expenses   12,449     6,574     -     19,023  
Total current liabilities   40,486     40,837     (81 )   81,242  
 
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS, less current portion 6,249 35 - 6,284
PAYABLE TO AFFILIATES - 22,695 (22,695 ) -
DEFERRED REVENUE 5,112 - - 5,112
DEFERRED RENT   5,539     32     -     5,571  
Total liabilities   57,386     63,599     (22,776 )   98,209  
 
COMMITMENTS AND CONTINGENCIES
 
SHAREHOLDERS' EQUITY:
Common stock 13 19 (19 ) 13
Capital contributions - 1,000 (1,000 ) -
Additional paid-in capital 105,399 28,059 (28,059 ) 105,399
Retained earnings (accumulated deficit) (79,643 ) (40,854 ) 40,806 (79,691 )
Accumulated other comprehensive income 1,170 1,898 (1,890 ) 1,178
Treasury stock   (97 )   -     -     (97 )
Total shareholders' equity   26,842     (9,878 )   9,838     26,802  
Total liabilities and shareholders' equity $ 84,228   $ 53,721   $ (12,938 ) $ 125,011  
 

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  

Copyright Business Wire 2010

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