PFSweb Reports Profitable Second Quarter 2008 Results
PFSweb, Inc. (Nasdaq: PFSW), an international business process outsourcing provider of end-to-end web commerce solutions and an online discount retailer, today announced its financial results for the second quarter and six months ended June 30, 2008.
Summary of consolidated results for the second quarter ended June 30, 2008:
-- Total reported revenue was $110.7 million, compared to $108.4 million for the second quarter of 2007;
-- Adjusted EBITDA (as defined) was $2.5 million versus $3.4 million for the same period last year;
-- Net income was $62,000, or $0.01 per basic and diluted share, compared to a net income of $154,000, or $0.02 per basic and diluted share, for the second quarter of 2007;
-- Non-GAAP net income (as defined) was $0.4 million, or $0.04 per basic and diluted share, compared to non-GAAP net income of $0.5 million, or $0.06 per basic and $0.05 per diluted share, for the second quarter of 2007;
-- Merchandise sales (as defined) totaled approximately $631 million for the second quarter of 2008 versus $649 million for the same period last year;
-- Total cash, cash equivalents and restricted cash equaled $17.8 million as of June 30, 2008 compared to $16.3 million as of December 31, 2007.
Summary of consolidated results for the six months ended June 30, 2008:
-- Total reported revenue was $229.2 million, compared to $212.8 million for the six months ended June 30, 2007;
-- Adjusted EBITDA (as defined) was $5.2 million versus $4.1 million for the same period last year;
-- Net income was $476,000, or $0.05 per basic and diluted share, compared to a net loss of $2.2 million, or $0.22 per basic and diluted share, for the six months ended June 30, 2007;
-- Non-GAAP net income (as defined) was $1.2 million, or $0.12 per basic and diluted share, compared to a non-GAAP net loss of $1.4 million, or $0.14 per basic and diluted share, for the same period last year;
-- Merchandise sales (as defined) totaled nearly $1.4 billion versus $1.3 billion for the same period last year.
Mark Layton, Chairman and Chief Executive Officer of PFSweb, stated, "During the second quarter we continued to perform within our expectations for this year, delivering our fifth consecutive profitable quarter and Adjusted EBITDA of $2.5 million. Notwithstanding the macroeconomics affecting the U.S. retail industry, our diversified roster of new and existing clients and customers in multiple industries have allowed us to increase revenue, generate positive cash flow and maintain a sound balance sheet during this year."
All share data and per share data in this press release reflect the impact of the Company's 1 for 4.7 reverse stock split effected June 2, 2008.
Summary of results by business:
Service Fee Business:
For the second quarter of 2008, Service Fee revenue increased 20.4% to $21.3 million, compared with $17.6 million for the same period in 2007. The Service Fee business reported Adjusted EBITDA of $1.0 million for the second quarter of 2008, compared to $1.9 million for the same period last year.
For the six months ended June 30, 2008, Service Fee revenue increased 21.5% to $42.1 million, from $34.6 million for the same period in 2007. The Service Fee business reported Adjusted EBITDA of $2.7 million for the six months ended June 30, 2008, compared to $2.2 million for the same period last year.
Mike Willoughby, President of PFSweb's services division, commented, "Second quarter revenue for our Service Fee business, which increased approximately 20% from the prior year period, was driven by new contracts, temporary increased activity for one of our largest Service Fee clients and incremental project activity. Over the past several months, we participated in the launch of a new web commerce site for Ashley Stewart providing order management, customer care and fulfillment services for the initiative. We also completed the development of a new platform for Roots.com. This new platform utilizes our enhanced end-to-end offering, which features the Demandware eCommerce platform and integration with select interactive marketing partners, including Sitebrand and Coremetrics. The Roots.com Canadian and U.S. online storefronts, which also feature a new user experience design by Fluid, were officially launched last week.
"I am also pleased to report continued progress in winning new business, including both signed contracts as well as contracts still being finalized, which we partially attribute to our new end-to-end offering. PFSweb will formally announce each agreement in a press release or quarterly conference call if such disclosure is approved by the client. Many of these new arrangements are with brand name companies that are either moving from one of our competitors' services to take advantage of our new end-to-end offering or are looking to take advantage of the eCommerce space for the first time. We believe these new client wins demonstrates significant demand for our Service Fee business, particularly with our new end-to-end offering. Our current pipeline for potential new business is in excess of $35 million, including contracts still being finalized, which is in line with our expectations for this time of year and is targeted to increase during the fall season."
Supplies Distributors Business:
For the second quarter of 2008, Supplies Distributors revenue was $60.0 million, compared to $57.6 million for the same period last year. Adjusted EBITDA was $2.1 million for the second quarter of 2008, consistent with $2.1 million for the same period last year.
For the six months ended June 30, 2008, Supplies Distributors revenue was $122.3 million, compared to $116.4 million for the same period last year. Adjusted EBITDA was $3.7 million for the six months ended June 30, 2008, a slight increase compared to $3.4 million for the same period last year.
Mr. Willoughby continued, "For the quarter and first half of 2008, the Supplies Distributors business has continued to perform well. Revenue increased approximately four percent in the second quarter and gross margins were approximately 8%, which is slightly above their normal range due to the impact of certain incremental inventory cost reductions."
eCOST.com Business:
For the second quarter of 2008, eCOST.com revenue was $23.0 million, compared to $27.1 million for the same period in 2007. Adjusted EBITDA for eCOST.com in the quarter was a loss of $0.6 million, consistent with the Adjusted EBITDA loss of $0.6 million for the same period last year.
For the six months ended June 30, 2008, eCOST.com revenues were $51.0 million, compared to $48.7 million for the same period in 2007. Adjusted EBITDA for eCOST.com in the six months ended June 30, 2008 was a loss of $1.2 million, compared to a loss of $1.5 million for the same period last year.
Mr. Layton continued, "Considering the macroeconomic forces pressuring the entire U.S. retail industry, we believe the overall health of eCOST.com continues to improve due to the enhancements we have made to the site and underlying business. During the quarter, eCOST.com experienced a softening in its business to business segment, and its business to consumer segment was relatively flat compared to last year. We improved our gross profit margin through implementation of new and more sophisticated automated pricing tools and from a growing mix of higher margin product sales, including our new 'For the Home' and 'Sports and Leisure' stores, especially in our business to consumer segment, and we continue to focus increased efforts here.
"Throughout the quarter we continued to make progress towards the overall site redevelopment and launching our new 'For the Home' and 'Sports and Leisure' products. We remain confident our continued emphasis on making site enhancements, introducing new products and focus on achieving higher gross margins will help us in our goal to achieve cash flow breakeven at eCOST.com," Mr. Layton concluded.
Financial Targets for Fiscal Year 2008
PFSweb continues to target total consolidated revenues, excluding pass-through revenues, of approximately $445 million to $475 million and consolidated Adjusted EBITDA of $10 - $12 million for calendar year 2008. Non-GAAP net income, which excludes the impact of stock-based compensation and amortization of identifiable intangible assets, is targeted to be approximately $1 - $3 million for 2008. However, further weakening in the U.S. economy may cause us to fall toward the lower end of these targets.
Conference Call Information
Management will host a conference call at 9 a.m. Central Time (10 a.m. Eastern Time) on August 14, 2008 to discuss the latest corporate developments and results. To listen to the call, please dial (888) 562-3356 and enter the pin number (59375549) 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. 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 14, 2008 at (800) 642-1687, pin number (59375549). The replay also will be available at the Company's website for a limited time.
Non-GAAP Financial Measures
This news release contains the non-GAAP measures non-GAAP net income (loss), Earnings Before Interest, Income Taxes, Depreciation and Amortization ("EBITDA"), and Adjusted EBITDA.
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 and amortization of identifiable intangible assets.
EBITDA represents earnings (or losses) before interest, income taxes, depreciation, and amortization. Adjusted EBITDA further eliminates the effect of stock-based compensation and merger integration related expenses.
Non-GAAP net income (loss), EBITDA and Adjusted EBITDA are used by management, analysts, investors and other interested parties in evaluating our operating performance compared to that of other companies in our industry, as the calculation of non-GAAP net income (loss) eliminates the effect of stock-based compensation and amortization of intangible assets and EBITDA and Adjusted EBITDA further eliminates the effect of financing, income taxes, the accounting effects of capital spending and certain other merger related expenses, which items may vary from different companies for reasons unrelated to overall operating performance.
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. These non-GAAP measures included in this press release have been reconciled to the GAAP results in the attached tables.
Merchandise Sales
Merchandise sales represent the estimated value of all fulfillment activity that flows through PFSweb including whether or not PFSweb is the seller of the merchandise or records the full amount of such sales on its financial statements, excluding service fee revenues that PFSweb might recognize for the underlying sales transactions. PFSweb uses merchandise sales as an operating metric to allow investors to gain a more thorough understanding of its business and business volume, in addition to GAAP net revenue.
About PFSweb, Inc.
PFSweb develops and deploys integrated business infrastructure solutions and fulfillment services for Fortune 1000, Global 2000 and brand name companies, including third party logistics, call center support and e-commerce services. The company serves a multitude of industries and company types, including such clients as LEGO, Discovery Commerce, Riverbed, MARS Drinks North America, Hewlett-Packard, International Business Machines, Hawker Beechcraft Corp., Rene Furterer USA, Roots Canada Ltd. and Xerox.
Through its wholly owned eCOST.com subsidiary, PFSweb also serves as a leading multi-category online discount retailer of high-quality new, "close-out" and manufacturer recertified brand-name merchandise for consumers and small to medium size business buyers. The eCOST.com brand markets approximately 170,000 different products from leading manufacturers such as Sony, JVC, Canon, Hewlett-Packard, Garmin, Panasonic, Toshiba, Microsoft, Kitchen Aid, Panasonic, Black & Decker, Cuisinart, Coleman, Wilson and Nike primarily over the Internet and through direct marketing.
To find out more about PFSweb, Inc. (NASDAQ: PFSW), visit the company's websites at http://www.pfsweb.com and http://www.ecost.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, 2007 and Quarterly Report on From 10-Q for the quarter ended June 30, 2008 identifies 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 Report and the Risk Factors described therein. These factors include: our ability to retain and expand relationships with existing clients and attract and implement new clients; our reliance on the fees generated by the transaction volume or product sales of our clients; our reliance on our clients' projections or transaction volume or product sales; our dependence upon our agreements with IBM and Infoprint Solutions; our dependence upon our agreements with our major clients; our client mix, their business volumes and the seasonality of their business; our ability to finalize pending contracts; the impact of strategic alliances and acquisitions; trends in the e-commerce, outsourcing, government regulation both foreign and domestic and the market for our services; whether we can continue and manage growth; increased competition; our ability to generate more revenue and achieve sustainable profitability; effects of changes in profit margins; the customer and supplier concentration of our business; the unknown effects of possible system failures and rapid changes in technology; foreign currency risks and other risks of operating in foreign countries; potential litigation; the impact of our reverse stock split; our dependency on key personnel; the impact of new accounting standards and changes in existing accounting rules or the interpretations of those rules; our ability to renew or replace our credit facilities or find alternative financing; our ability to raise additional capital or obtain additional financing; our ability and the ability of our subsidiaries to borrow under current financing arrangements and maintain compliance with debt covenants; relationship with and our guarantees of certain of the liabilities and indebtedness of our subsidiaries; our ability to successfully achieve the anticipated benefits of the eCOST merger: eCOST's potential indemnification obligations to its former parent; eCOST's ability to maintain existing and build new relationships with manufacturers and vendors and the success of its advertising and marketing efforts; eCOST's ability to increase its sales revenue and sales margin and improve operating efficiencies and eCOST's ability to generate a profit and cash flows sufficient to cover the values of its intangible assets. 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.
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,
------------------ ------------------
2008 2007 2008 2007
--------- -------- -------- ---------
REVENUES:
Product revenue, net $ 83,048 $ 84,678 $173,339 $165,135
Service fee revenue 21,254 17,646 42,066 34,608
Pass-thru revenue 6,382 6,076 13,748 13,064
--------- -------- -------- ---------
Total revenues 110,684 108,400 229,153 212,807
--------- -------- -------- ---------
COSTS OF REVENUES:
Cost of product revenue 76,368 77,798 160,347 152,569
Cost of service fee revenue 15,105 12,635 28,949 25,299
Cost of pass-thru revenue 6,382 6,076 13,748 13,064
--------- -------- -------- ---------
Total costs of revenues 97,855 96,509 203,044 190,932
--------- -------- -------- ---------
Gross profit 12,829 11,891 26,109 21,875
--------- -------- -------- ---------
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 11,849 10,615 23,943 21,816
MERGER INTEGRATION EXPENSE - - - 150
AMORTIZATION OF IDENTIFIABLE
INTANGIBLES 201 204 403 408
--------- -------- -------- ---------
Total operating expenses 12,050 10,819 24,346 22,374
--------- -------- -------- ---------
Income (loss) from
operations 779 1,072 1,763 (499)
INTEREST EXPENSE, NET 366 658 696 1,242
--------- -------- -------- ---------
Income (loss) before income
taxes 413 414 1,067 (1,741)
INCOME TAX PROVISION 351 260 591 466
--------- -------- -------- ---------
NET INCOME (LOSS) $ 62 $ 154 $ 476 $ (2,207)
========= ======== ======== =========
NET INCOME (LOSS) PER SHARE (B)
Basic $ 0.01 $ 0.02 $ 0.05 $ (0.22)
========= ======== ======== =========
Diluted $ 0.01 $ 0.02 $ 0.05 $ (0.22)
========= ======== ======== =========
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING (B):
Basic 9,900 9,889 9,896 9,888
========= ======== ======== =========
Diluted 10,037 10,002 10,045 9,888
========= ======== ======== =========
--------- -------- -------- ---------
NON-GAAP NET INCOME (LOSS) $ 391 $ 546 $ 1,208 $ (1,402)
========= ======== ======== =========
EBITDA $ 2,341 $ 3,166 $ 4,906 $ 3,589
========= ======== ======== =========
ADJUSTED EBITDA $ 2,469 $ 3,354 $ 5,235 $ 4,136
========= ======== ======== =========
(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, 2007.
(B) Historical share and per share data has been restated to represent
the effect of the 1-for-4.7 reverse stock split that occurred on June
2, 2008.
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,
------------------ ----------------
2008 2007 2008 2007
--------- -------- ------- --------
NET INCOME (LOSS) $ 62 $ 154 $ 476 $(2,207)
Income tax expense 351 260 591 466
Interest expense 366 658 696 1,242
Depreciation and amortization 1,562 2,094 3,143 4,088
--------- -------- ------- --------
EBITDA $ 2,341 $ 3,166 $ 4,906 $ 3,589
Stock-based compensation 128 188 329 397
Merger integration related
expenses - - - 150
--------- -------- ------- --------
ADJUSTED EBITDA $ 2,469 $ 3,354 $ 5,235 $ 4,136
========= ======== ======= ========
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ----------------
2008 2007 2008 2007
--------- -------- ------- --------
NET INCOME (LOSS) $ 62 $ 154 $ 476 $(2,207)
Stock-based compensation 128 188 329 397
Amortization of identifiable
intangible assets 201 204 403 408
--------- -------- ------- --------
NON-GAAP NET INCOME (LOSS) $ 391 $ 546 $ 1,208 $(1,402)
========= ======== ======= ========
NET INCOME (LOSS) PER SHARE:
Basic $ 0.01 $ 0.02 $ 0.05 $ (0.22)
========= ======== ======= ========
Diluted $ 0.01 $ 0.02 $ 0.05 $ (0.22)
========= ======== ======= ========
NON-GAAP NET INCOME (LOSS) Per
Share:
Basic $ 0.04 $ 0.06 $ 0.12 $ (0.14)
========= ======== ======= ========
Diluted $ 0.04 $ 0.05 $ 0.12 $ (0.14)
========= ======== ======= ========
PFSweb, Inc. and Subsidiaries
----------------------------------------------------------------------
Unaudited Condensed Consolidated Balance Sheets
(In Thousands, Except Share Data)
June 30, December 31,
2008 2007
----------- ------------
ASSETS
---------------------------------------------
CURRENT ASSETS:
Cash and cash equivalents $ 13,972 $ 14,272
Restricted cash 3,836 2,021
Accounts receivable, net of allowance for
doubtful accounts of $999 and $1,483 at
June 30, 2008 and December 31, 2007,
respectively 39,669 48,493
Inventories, net of reserves of $2,358 and
$2,080 at June 30, 2008 and December 31,
2007, respectively 52,715 46,392
Other receivables 15,995 10,372
Prepaid expenses and other current assets 3,795 2,608
----------- ------------
Total current assets 129,982 124,158
----------- ------------
PROPERTY AND EQUIPMENT, net 11,122 11,918
IDENTIFIABLE INTANGIBLES 5,421 5,824
GOODWILL 15,362 15,362
OTHER ASSETS 933 911
----------- ------------
Total assets 162,820 158,173
=========== ============
LIABILITIES AND SHAREHOLDERS EQUITY
---------------------------------------------
CURRENT LIABILITIES:
Current portion of long-term debt and
capital lease obligations $ 17,601 $ 22,238
Trade accounts payable 69,117 56,975
Accrued expenses 22,357 22,438
----------- ------------
Total current liabilities 109,075 101,651
----------- ------------
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS,
less current portion 2,561 6,378
OTHER LIABILITIES 831 1,302
----------- ------------
Total liabilities 112,467 109,331
----------- ------------
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; 75,000,000
shares authorized; 9,911,762 and 9,909,401
shares issued at June 30, 2008 and
December 31, 2007, respectively; and
9,930,123 and 9,891,040 outstanding as of
June 30, 2008 and December 31, 2007,
respectively 10 10
Additional paid-in capital 92,496 92,121
Accumulated deficit (45,262) (45,738)
Accumulated other comprehensive income 3,194 2,534
Treasury stock at cost, 18,361 shares (85) (85)
----------- ------------
Total shareholders' equity 50,353 48,842
----------- ------------
Total liabilities and shareholders'
equity $ 162,820 $ 158,173
=========== ============
PFSweb, Inc. and Subsidiaries
----------------------------------------------------------------------
Unaudited Consolidating Statements of Operations
For the Three Months Ended June 30, 2008
(In Thousands)
Supplies
PFSweb Distributors eCOST
-------- ------------ ---------
REVENUES:
Product revenue, net $ - $ 60,025 $23,023
Service fee revenue 21,254 - -
Service fee revenue - affiliate 2,069 - -
Pass-thru revenue 6,389 - -
-------- ------------ ---------
Total revenues 29,712 60,025 23,023
-------- ------------ ---------
COSTS OF REVENUES:
Cost of product revenue - 55,247 21,121
Cost of service fee revenue 15,771 - -
Cost of pass-thru revenue 6,389 - -
-------- ------------ ---------
Total costs of revenues 22,160 55,247 21,121
-------- ------------ ---------
Gross profit 7,552 4,778 1,902
-------- ------------ ---------
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES 7,946 2,721 2,585
AMORTIZATION OF IDENTIFIABLE
INTANGIBLES - - 201
-------- ------------ ---------
Total operating expenses 7,946 2,721 2,786
-------- ------------ ---------
Income (loss) from operations (394) 2,057 (884)
INTEREST EXPENSE (INCOME), NET (1) 361 6
-------- ------------ ---------
Income (loss) before income taxes (393) 1,696 (890)
INCOME TAX PROVISION (BENEFIT) (249) 600 -
-------- ------------ ---------
NET INCOME (LOSS) $ (144) $ 1,096 $ (890)
======== ============ =========
NON-GAAP NET INCOME (LOSS) $ (16) $ 1,096 $ (689)
======== ============ =========
EBITDA $ 919 $ 2,063 $ (641)
======== ============ =========
ADJUSTED EBITDA $ 1,047 $ 2,063 $ (641)
======== ============ =========
A reconciliation of NET INCOME (LOSS) to EBITDA and ADJUSTED EBITDA
follows:
NET INCOME (LOSS) $ (144) $ 1,096 $ (890)
Income tax expense (benefit) (249) 600 -
Interest expense (income) (1) 361 6
Depreciation and amortization 1,313 6 243
-------- ------------ ---------
EBITDA $ 919 $ 2,063 $ (641)
Stock-based compensation 128 - -
-------- ------------ ---------
ADJUSTED EBITDA $ 1,047 $ 2,063 $ (641)
======== ============ =========
A reconciliation of NET INCOME(LOSS) to NON-GAAP NET INCOME (LOSS)
follows:
NET INCOME (LOSS) $ (144) $ 1,096 $ (890)
Stock-based compensation 128 - -
Amortization of intangible assets - - 201
-------- ------------ ---------
NON-GAAP NET INCOME (LOSS) $ (16) $ 1,096 $ (689)
======== ============ =========
Eliminations Consolidated
------------ ------------
REVENUES:
Product revenue, net $ - $ 83,048
Service fee revenue - 21,254
Service fee revenue - affiliate (2,069) -
Pass-thru revenue (7) 6,382
------------ ------------
Total revenues (2,076) 110,684
------------ ------------
COSTS OF REVENUES:
Cost of product revenue - 76,368
Cost of service fee revenue (666) 15,105
Cost of pass-thru revenue (7) 6,382
------------ ------------
Total costs of revenues (673) 97,855
------------ ------------
Gross profit (1,403) 12,829
------------ ------------
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES (1,403) 11,849
AMORTIZATION OF IDENTIFIABLE INTANGIBLES - 201
------------ ------------
Total operating expenses (1,403) 12,050
------------ ------------
Income (loss) from operations - 779
INTEREST EXPENSE (INCOME), NET - 366
------------ ------------
Income (loss) before income taxes - 413
INCOME TAX PROVISION (BENEFIT) - 351
------------ ------------
NET INCOME (LOSS) $ - $ 62
============ ============
NON-GAAP NET INCOME (LOSS) $ - $ 391
============ ============
EBITDA $ - $ 2,341
============ ============
ADJUSTED EBITDA $ - $ 2,469
============ ============
A reconciliation of NET INCOME (LOSS) to EBITDA and ADJUSTED EBITDA
follows:
NET INCOME (LOSS) $ - $ 62
Income tax expense (benefit) - 351
Interest expense (income) - 366
Depreciation and amortization - 1,562
------------ ------------
EBITDA $ - $ 2,341
Stock-based compensation - 128
------------ ------------
ADJUSTED EBITDA $ - $ 2,469
============ ============
A reconciliation of NET INCOME(LOSS) to NON-GAAP NET INCOME (LOSS)
follows:
NET INCOME (LOSS) $ - $ 62
Stock-based compensation - 128
Amortization of intangible assets - 201
------------ ------------
NON-GAAP NET INCOME (LOSS) $ - $ 391
============ ============
PFSweb, Inc. and Subsidiaries
----------------------------------------------------------------------
Unaudited Consolidating Statements of Operations
For the Six Months Ended June 30, 2008
(In Thousands)
Supplies
PFSweb Distributors eCOST
-------- ------------ ---------
REVENUES:
Product revenue, net $ - $ 122,347 $50,992
Service fee revenue 42,066 - -
Service fee revenue - affiliate 4,220 - -
Pass-thru revenue 13,706 - -
-------- ------------ ---------
Total revenues 59,992 122,347 50,992
-------- ------------ ---------
COSTS OF REVENUES:
Cost of product revenue - 113,499 46,848
Cost of service fee revenue 30,322 - -
Cost of pass-thru revenue 13,706 - -
-------- ------------ ---------
Total costs of revenues 44,028 113,499 46,848
-------- ------------ ---------
Gross profit 15,964 8,848 4,144
-------- ------------ ---------
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES 16,259 5,139 5,392
AMORTIZATION OF IDENTIFIABLE
INTANGIBLES - - 403
-------- ------------ ---------
Total operating expenses 16,259 5,139 5,795
-------- ------------ ---------
Income (loss) from operations (295) 3,709 (1,651)
INTEREST EXPENSE (INCOME), NET (61) 750 7
-------- ------------ ---------
Income (loss) before income taxes (234) 2,959 (1,658)
INCOME TAX PROVISION (BENEFIT) (444) 1,035 -
-------- ------------ ---------
NET INCOME (LOSS) $ 210 $ 1,924 $(1,658)
======== ============ =========
NON-GAAP NET INCOME (LOSS) $ 539 $ 1,924 $(1,255)
======== ============ =========
EBITDA $ 2,353 $ 3,719 $(1,166)
======== ============ =========
ADJUSTED EBITDA $ 2,682 $ 3,719 $(1,166)
======== ============ =========
A reconciliation of NET INCOME (LOSS) to EBITDA and
ADJUSTED EBITDA follows:
NET INCOME (LOSS) $ 210 $ 1,924 $(1,658)
Income tax expense (benefit) (444) 1,035 -
Interest expense (income) (61) 750 7
Depreciation and amortization 2,648 10 485
-------- ------------ ---------
EBITDA $ 2,353 $ 3,719 $(1,166)
Stock-based compensation 329 - -
-------- ------------ ---------
ADJUSTED EBITDA $ 2,682 $ 3,719 $(1,166)
======== ============ =========
A reconciliation of NET INCOME(LOSS) to NON-GAAP NET
INCOME (LOSS) follows:
NET INCOME (LOSS) $ 210 $ 1,924 $(1,658)
Stock-based compensation 329 - -
Amortization of intangible assets - - 403
-------- ------------ ---------
NON-GAAP NET INCOME (LOSS) $ 539 $ 1,924 $(1,255)
======== ============ =========
Eliminations Consolidated
------------ ------------
REVENUES:
Product revenue, net $ - $ 173,339
Service fee revenue - 42,066
Service fee revenue - affiliate (4,220) -
Pass-thru revenue 42 13,748
------------ ------------
Total revenues (4,178) 229,153
------------ ------------
COSTS OF REVENUES:
Cost of product revenue - 160,347
Cost of service fee revenue (1,373) 28,949
Cost of pass-thru revenue 42 13,748
------------ ------------
Total costs of revenues (1,331) 203,044
------------ ------------
Gross profit (2,847) 26,109
------------ ------------
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES (2,847) 23,943
AMORTIZATION OF IDENTIFIABLE INTANGIBLES - 403
------------ ------------
Total operating expenses (2,847) 24,346
------------ ------------
Income (loss) from operations - 1,763
INTEREST EXPENSE (INCOME), NET - 696
------------ ------------
Income (loss) before income taxes - 1,067
INCOME TAX PROVISION (BENEFIT) - 591
------------ ------------
NET INCOME (LOSS) $ - $ 476
============ ============
NON-GAAP NET INCOME (LOSS) $ - $ 1,208
============ ============
EBITDA $ - $ 4,906
============ ============
ADJUSTED EBITDA $ - $ 5,235
============ ============
A reconciliation of NET INCOME (LOSS) to EBITDA and ADJUSTED EBITDA
follows:
NET INCOME (LOSS) $ - $ 476
Income tax expense (benefit) - 591
Interest expense (income) - 696
Depreciation and amortization - 3,143
------------ ------------
EBITDA $ - $ 4,906
Stock-based compensation - 329
------------ ------------
ADJUSTED EBITDA $ - $ 5,235
============ ============
A reconciliation of NET INCOME(LOSS) to NON-GAAP NET INCOME (LOSS)
follows:
NET INCOME (LOSS) $ - $ 476
Stock-based compensation - 329
Amortization of intangible assets - 403
------------ ------------
NON-GAAP NET INCOME (LOSS) $ - $ 1,208
============ ============
PFSweb, Inc. and Subsidiaries
----------------------------------------------------------------------
Unaudited Condensed Consolidating Balance Sheets
as of June 30, 2008
(In Thousands)
Supplies
PFSweb Distributors eCOST
--------- ------------ ---------
ASSETS
-------------------------------------
CURRENT ASSETS:
Cash and cash equivalents $ 12,217 $ 1,698 $ 57
Restricted cash 1,575 1,644 617
Accounts receivable, net 14,294 24,249 1,713
Inventories, net - 45,731 6,984
Other receivables - 15,995 -
Prepaid expenses and other current
assets 2,275 1,421 99
--------- ------------ ---------
Total current assets 30,361 90,738 9,470
--------- ------------ ---------
PROPERTY AND EQUIPMENT, net 10,664 92 366
NOTES RECEIVABLE FROM AFFILIATES 19,595 - -
INVESTMENT IN AFFILIATES 39,242 - -
IDENTIFIABLE INTANGIBLES - - 5,421
GOODWILL - - 15,362
OTHER ASSETS 788 - 145
--------- ------------ ---------
Total assets 100,650 90,830 30,764
========= ============ =========
LIABILITIES AND SHAREHOLDERS EQUITY
-------------------------------------
CURRENT LIABILITIES:
Current portion of long-term debt
and capital lease obligations $ 5,126 $ 12,475 $ -
Trade accounts payable 9,156 53,590 6,958
Accrued expenses 11,748 8,043 2,566
--------- ------------ ---------
Total current liabilities 26,030 74,108 9,524
--------- ------------ ---------
LONG-TERM DEBT AND CAPITAL LEASE
OBLIGATIONS, less current portion 2,561 - -
NOTES PAYABLE TO AFFILIATES - 5,505 14,090
OTHER LIABILITIES 597 - 234
--------- ------------ ---------
Total liabilities 29,188 79,613 23,848
--------- ------------ ---------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Common stock 10 - 19
Capital contributions - 1,000 -
Additional paid-in capital 92,496 - 28,059
Retained earnings (accumulated
deficit) (24,150) 6,761 (21,162)
Accumulated other comprehensive
income 3,191 3,456 -
Treasury stock (85) - -
--------- ------------ ---------
Total shareholders' equity 71,462 11,217 6,916
--------- ------------ ---------
Total liabilities and
shareholders' equity $100,650 $ 90,830 $ 30,764
========= ============ =========
Eliminations Consolidated
------------ ------------
ASSETS
--------------------------------------------
CURRENT ASSETS:
Cash and cash equivalents $ - $ 13,972
Restricted cash - 3,836
Accounts receivable, net (587) 39,669
Inventories, net - 52,715
Other receivables - 15,995
Prepaid expenses and other current assets - 3,795
------------ ------------
Total current assets (587) 129,982
------------ ------------
PROPERTY AND EQUIPMENT, net - 11,122
NOTES RECEIVABLE FROM AFFILIATES (19,595) -
INVESTMENT IN AFFILIATES (39,242) -
IDENTIFIABLE INTANGIBLES - 5,421
GOODWILL - 15,362
OTHER ASSETS - 933
------------ ------------
Total assets (59,424) 162,820
============ ============
LIABILITIES AND SHAREHOLDERS EQUITY
--------------------------------------------
CURRENT LIABILITIES:
Current portion of long-term debt and
capital lease obligations $ - $ 17,601
Trade accounts payable (587) 69,117
Accrued expenses - 22,357
------------ ------------
Total current liabilities (587) 109,075
------------ ------------
LONG-TERM DEBT AND CAPITAL LEASE
OBLIGATIONS, less current portion - 2,561
NOTES PAYABLE TO AFFILIATES (19,595) -
OTHER LIABILITIES - 831
------------ ------------
Total liabilities (20,182) 112,467
------------ ------------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Common stock (19) 10
Capital contributions (1,000) -
Additional paid-in capital (28,059) 92,496
Retained earnings (accumulated deficit) (6,711) (45,262)
Accumulated other comprehensive income (3,453) 3,194
Treasury stock - (85)
------------ ------------
Total shareholders' equity (39,242) 50,353
------------ ------------
Total liabilities and shareholders'
equity $ (59,424) $ 162,820
============ ============
PFSweb, Inc. and Subsidiaries
----------------------------------------------------------------------
Unaudited Consolidating Statements of Operations
For the Three Months Ended June 30, 2007
(In Thousands)
Supplies
PFSweb Distributors eCOST
-------- ------------ ---------
REVENUES:
Product revenue, net $ - $ 57,595 $27,083
Service fee revenue 17,646 - -
Service fee revenue - affiliate 2,040 - -
Pass-thru revenue 6,145 - -
-------- ------------ ---------
Total revenues 25,831 57,595 27,083
-------- ------------ ---------
COSTS OF REVENUES:
Cost of product revenue - 52,912 24,886
Cost of service fee revenue 13,297 - -
Cost of pass-thru revenue 6,145 - -
-------- ------------ ---------
Total costs of revenues 19,442 52,912 24,886
-------- ------------ ---------
Gross profit 6,389 4,683 2,197
-------- ------------ ---------
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES 6,551 2,623 2,819
AMORTIZATION OF IDENTIFIABLE
INTANGIBLES - - 204
-------- ------------ ---------
Total operating expenses 6,551 2,623 3,023
-------- ------------ ---------
Income (loss) from operations (162) 2,060 (826)
INTEREST EXPENSE (INCOME), NET 11 661 (14)
-------- ------------ ---------
Income (loss) before income taxes (173) 1,399 (812)
INCOME TAX PROVISION (BENEFIT) (186) 446 -
-------- ------------ ---------
NET INCOME (LOSS) $ 13 $ 953 $ (812)
======== ============ =========
NON-GAAP NET INCOME (LOSS) $ 201 $ 953 $ (608)
======== ============ =========
EBITDA $ 1,676 $ 2,065 $ (575)
======== ============ =========
ADJUSTED EBITDA $ 1,864 $ 2,065 $ (575)
======== ============ =========
A reconciliation of NET INCOME (LOSS) to EBITDA and ADJUSTED EBITDA
follows:
NET INCOME (LOSS) $ 13 $ 953 $ (812)
Income tax expense (benefit) (186) 446 -
Interest expense (income) 11 661 (14)
Depreciation and amortization 1,838 5 251
-------- ------------ ---------
EBITDA $ 1,676 $ 2,065 $ (575)
Stock-based compensation 188 - -
-------- ------------ ---------
ADJUSTED EBITDA $ 1,864 $ 2,065 $ (575)
======== ============ =========
A reconciliation of NET INCOME (LOSS) to NON-GAAP NET INCOME (LOSS)
follows:
NET INCOME (LOSS) $ 13 $ 953 $ (812)
Stock-based compensation 188 - -
Amortization of intangible assets - - 204
-------- ------------ ---------
NON-GAAP NET INCOME (LOSS) $ 201 $ 953 $ (608)
======== ============ =========
Eliminations Consolidated
------------ ------------
REVENUES:
Product revenue, net $ - $ 84,678
Service fee revenue - 17,646
Service fee revenue - affiliate (2,040) -
Pass-thru revenue (69) 6,076
------------ ------------
Total revenues (2,109) 108,400
------------ ------------
COSTS OF REVENUES:
Cost of product revenue - 77,798
Cost of service fee revenue (662) 12,635
Cost of pass-thru revenue (69) 6,076
------------ ------------
Total costs of revenues (731) 96,509
------------ ------------
Gross profit (1,378) 11,891
------------ ------------
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES (1,378) 10,615
AMORTIZATION OF IDENTIFIABLE INTANGIBLES - 204
------------ ------------
Total operating expenses (1,378) 10,819
------------ ------------
Income (loss) from operations - 1,072
INTEREST EXPENSE (INCOME), NET - 658
------------ ------------
Income (loss) before income taxes - 414
INCOME TAX PROVISION (BENEFIT) - 260
------------ ------------
NET INCOME (LOSS) $ - $ 154
============ ============
NON-GAAP NET INCOME (LOSS) $ - $ 546
============ ============
EBITDA $ - $ 3,166
============ ============
ADJUSTED EBITDA $ - $ 3,354
============ ============
A reconciliation of NET INCOME (LOSS) to EBITDA and ADJUSTED EBITDA
follows:
NET INCOME (LOSS) $ - $ 154
Income tax expense (benefit) - 260
Interest expense (income) - 658
Depreciation and amortization - 2,094
------------ ------------
EBITDA $ - $ 3,166
Stock-based compensation - 188
------------ ------------
ADJUSTED EBITDA $ - $ 3,354
============ ============
A reconciliation of NET INCOME (LOSS) to NON-GAAP NET INCOME (LOSS)
follows:
NET INCOME (LOSS) $ - $ 154
Stock-based compensation - 188
Amortization of intangible assets - 204
------------ ------------
NON-GAAP NET INCOME (LOSS) $ - $ 546
============ ============
PFSweb, Inc. and Subsidiaries
----------------------------------------------------------------------
Unaudited Consolidating Statements of Operations
For the Six Months Ended June 30, 2007
(In Thousands)
Supplies
PFSweb Distributors eCOST
-------- ------------ ---------
REVENUES:
Product revenue, net $ - $ 116,405 $48,730
Service fee revenue 34,608 - -
Service fee revenue - affiliate 4,066 - -
Pass-thru revenue 13,241 - -
-------- ------------ ---------
Total revenues 51,915 116,405 48,730
-------- ------------ ---------
COSTS OF REVENUES:
Cost of product revenue - 107,851 44,722
Cost of service fee revenue 26,599 - -
Cost of pass-thru revenue 13,241 - -
-------- ------------ ---------
Total costs of revenues 39,840 107,851 44,722
-------- ------------ ---------
Gross profit 12,075 8,554 4,008
-------- ------------ ---------
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES 13,848 5,126 5,604
MERGER INTEGRATION EXPENSE - - 150
AMORTIZATION OF IDENTIFIABLE
INTANGIBLES - - 408
-------- ------------ ---------
Total operating expenses 13,848 5,126 6,162
-------- ------------ ---------
Income (loss) from operations (1,773) 3,428 (2,154)
INTEREST EXPENSE (INCOME), NET 47 1,226 (31)
-------- ------------ ---------
Income (loss) before income taxes (1,820) 2,202 (2,123)
INCOME TAX PROVISION (BENEFIT) (329) 795 -
-------- ------------ ---------
NET INCOME (LOSS) $(1,491) $ 1,407 $(2,123)
======== ============ =========
NON-GAAP NET INCOME (LOSS) $(1,094) $ 1,407 $(1,715)
======== ============ =========
EBITDA $ 1,809 $ 3,438 $(1,658)
======== ============ =========
ADJUSTED EBITDA $ 2,206 $ 3,438 $(1,508)
======== ============ =========
A reconciliation of NET INCOME (LOSS) to EBITDA and ADJUSTED EBITDA
follows:
NET INCOME (LOSS) $(1,491) $ 1,407 $(2,123)
Income tax expense (benefit) (329) 795 -
Interest expense (income) 47 1,226 (31)
Depreciation and amortization 3,582 10 496
-------- ------------ ---------
EBITDA $ 1,809 $ 3,438 $(1,658)
Stock-based compensation 397 - -
Merger integration expense - - 150
-------- ------------ ---------
ADJUSTED EBITDA $ 2,206 $ 3,438 $(1,508)
======== ============ =========
A reconciliation of NET INCOME (LOSS) to NON-GAAP NET INCOME (LOSS)
follows:
NET INCOME (LOSS) $(1,491) $ 1,407 $(2,123)
Stock-based compensation 397 - -
Amortization of intangible assets - - 408
-------- ------------ ---------
NON-GAAP NET INCOME (LOSS) $(1,094) $ 1,407 $(1,715)
======== ============ =========
Eliminations Consolidated
------------ ------------
REVENUES:
Product revenue, net $ - $ 165,135
Service fee revenue - 34,608
Service fee revenue - affiliate (4,066) -
Pass-thru revenue (177) 13,064
------------ ------------
Total revenues (4,243) 212,807
------------ ------------
COSTS OF REVENUES:
Cost of product revenue (4) 152,569
Cost of service fee revenue (1,300) 25,299
Cost of pass-thru revenue (177) 13,064
------------ ------------
Total costs of revenues (1,481) 190,932
------------ ------------
Gross profit (2,762) 21,875
------------ ------------
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES (2,762) 21,816
MERGER INTEGRATION EXPENSE - 150
AMORTIZATION OF IDENTIFIABLE INTANGIBLES - 408
------------ ------------
Total operating expenses (2,762) 22,374
------------ ------------
Income (loss) from operations - (499)
INTEREST EXPENSE (INCOME), NET - 1,242
------------ ------------
Income (loss) before income taxes - (1,741)
INCOME TAX PROVISION (BENEFIT) - 466
------------ ------------
NET INCOME (LOSS) $ - $ (2,207)
============ ============
NON-GAAP NET INCOME (LOSS) $ - $ (1,402)
============ ============
EBITDA $ - $ 3,589
============ ============
ADJUSTED EBITDA $ - $ 4,136
============ ============
A reconciliation of NET INCOME (LOSS) to EBITDA and ADJUSTED EBITDA
follows:
NET INCOME (LOSS) $ - $ (2,207)
Income tax expense (benefit) - 466
Interest expense (income) - 1,242
Depreciation and amortization - 4,088
------------ ------------
EBITDA $ - $ 3,589
Stock-based compensation - 397
Merger integration expense - 150
------------ ------------
ADJUSTED EBITDA $ - $ 4,136
============ ============
A reconciliation of NET INCOME (LOSS) to NON-GAAP NET INCOME (LOSS)
follows:
NET INCOME (LOSS) $ - $ (2,207)
Stock-based compensation - 397
Amortization of intangible assets - 408
------------ ------------
NON-GAAP NET INCOME (LOSS) $ - $ (1,402)
============ ============
PFSweb, Inc. and Subsidiaries
----------------------------------------------------------------------
Unaudited Condensed Consolidating Balance Sheets
as of December 31, 2007
(In Thousands)
Supplies
PFSweb Distributors eCOST
--------- ------------ ---------
ASSETS
-------------------------------------
CURRENT ASSETS:
Cash and cash equivalents $ 10,835 $ 1,757 $ 1,680
Restricted cash 50 1,464 507
Accounts receivable, net 21,366 25,126 2,585
Inventories, net - 39,596 6,796
Other receivables 211 10,161 -
Prepaid expenses and other current
assets 923 1,321 364
--------- ------------ ---------
Total current assets 33,385 79,425 11,932
--------- ------------ ---------
PROPERTY AND EQUIPMENT, net 11,549 21 348
NOTES RECEIVABLE FROM AFFILIATES 18,645 - -
INVESTMENT IN AFFILIATES 38,609 - -
IDENTIFIABLE INTANGIBLES - - 5,824
GOODWILL - - 15,362
OTHER ASSETS 762 - 149
--------- ------------ ---------
Total assets 102,950 79,446 33,615
========= ============ =========
LIABILITIES AND SHAREHOLDERS EQUITY
-------------------------------------
CURRENT LIABILITIES:
Current portion of long-term debt
and capital lease obligations $ 10,063 $ 12,175 $ -
Trade accounts payable 5,615 43,265 8,679
Accrued expenses 11,604 7,416 3,418
--------- ------------ ---------
Total current liabilities 27,282 62,856 12,097
--------- ------------ ---------
LONG-TERM DEBT AND CAPITAL LEASE
OBLIGATIONS, less current portion 6,378 - -
NOTES PAYABLE TO AFFILIATES - 6,005 12,640
OTHER LIABILITIES 998 - 304
--------- ------------ ---------
Total liabilities 34,658 68,861 25,041
--------- ------------ ---------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Common stock 10 - 19
Capital contributions - 1,000 -
Additional paid-in capital 92,121 - 28,059
Retained earnings (accumulated
deficit) (26,288) 6,601 (19,504)
Accumulated other comprehensive
income 2,534 2,984 -
Treasury stock (85) - -
--------- ------------ ---------
Total shareholders' equity 68,292 10,585 8,574
--------- ------------ ---------
Total liabilities and
shareholders' equity $102,950 $ 79,446 $ 33,615
========= ============ =========
Eliminations Consolidated
------------ ------------
ASSETS
--------------------------------------------
CURRENT ASSETS:
Cash and cash equivalents $ - $ 14,272
Restricted cash - 2,021
Accounts receivable, net (584) 48,493
Inventories, net - 46,392
Other receivables - 10,372
Prepaid expenses and other current assets - 2,608
------------ ------------
Total current assets (584) 124,158
------------ ------------
PROPERTY AND EQUIPMENT, net - 11,918
NOTES RECEIVABLE FROM AFFILIATES (18,645) -
INVESTMENT IN AFFILIATES (38,609) -
IDENTIFIABLE INTANGIBLES - 5,824
GOODWILL - 15,362
OTHER ASSETS - 911
------------ ------------
Total assets (57,838) 158,173
============ ============
LIABILITIES AND SHAREHOLDERS EQUITY
--------------------------------------------
CURRENT LIABILITIES:
Current portion of long-term debt and
capital lease obligations $ - $ 22,238
Trade accounts payable (584) 56,975
Accrued expenses - 22,438
------------ ------------
Total current liabilities (584) 101,651
------------ ------------
LONG-TERM DEBT AND CAPITAL LEASE
OBLIGATIONS, less current portion - 6,378
NOTES PAYABLE TO AFFILIATES (18,645) -
OTHER LIABILITIES - 1,302
------------ ------------
Total liabilities (19,229) 109,331
------------ ------------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Common stock (19) 10
Capital contributions (1,000) -
Additional paid-in capital (28,059) 92,121
Retained earnings (accumulated deficit) (6,547) (45,738)
Accumulated other comprehensive income (2,984) 2,534
Treasury stock - (85)
------------ ------------
Total shareholders' equity (38,609) 48,842
------------ ------------
Total liabilities and shareholders'
equity $ (57,838) $ 158,173
============ ============
eCOST.com, Inc.
----------------------------------------------------------------------
Selected Operating Data
Three Months Ended
June 30,
---------------------
2008 2007
---------- ----------
Total Customers (1) 1,805,076 1,698,797
Active Customers (2) 171,794 231,601
New Customers (3) 29,440 25,417
Number of Orders (4) 61,851 64,111
Average Order Value (5) $ 364 $ 422
Advertising Expense (6) $ 171,252 $ 303,921
Cost to Acquire a New Customer (7) $ 5.69 $ 9.76
(1) Total customers have been calculated as the cumulative number of
customers for which orders have been taken from eCOST.com's
inception to the end of the reported period.
(2) Active customers consist of the approximate number of customers
who placed orders during the 12 months prior to the end of the
reported period.
(3) New Customers represent the number of persons that established a
new account and placed an order during the reported period.
(4) Number of orders represents the total number of orders shipped
during the reported period (not reflecting returns).
(5) Average order value has been calculated as gross sales divided by
the total number of orders during the period presented. The
impact of returns is not reflected in average order value.
(6) Advertising expense includes the total dollars spent on
advertising during the reported period, including internet,
direct mail, print and e-mail advertising, as well as customer
list enhancement services.
(7) Catalog expense of $3,842 and $55,858 was not included in the 2008
and 2007 calculation, respectively, as it is used for retention
and not acquisition.
SOURCE: PFSweb, Inc.
PFSweb, Inc. Mark C. Layton, 972-881-2900 Senior Partner and Chief Executive Officer or Thomas J. Madden, 972-881-2900 Senior Partner and Chief Financial Officer or Investor Relations: KCSA Strategic Communications Todd Fromer / Garth Russell 212-896-1215 / 212-896-1250 tfromer@kcsa.com / grussell@kcsa.com