PFSweb Reports Second Quarter 2013 Results
“We are pleased with our results for the June 2013 quarter. Higher than expected service fee revenue activity, including project work, partially offset the anticipated decline in revenue and profits related to client transitions. In addition, we continue to make progress implementing initiatives to drive operational efficiencies and reduce costs,” stated Mike Willoughby, Chief Executive Officer of PFSweb. “We also continue to see a number of opportunities to expand existing client engagements and sign new customers. Based on client projections, our current business pipeline has strengthened from last quarter to more than $55 million in average annual contract value.
“Our strategic relationship with transcosmos inc. is beginning to yield additional new business opportunities. In July, our management team traveled to China and Japan, where we made a series of presentations to executives on how to expand their eCommerce presence in the United States, Canada and Western Europe. In conjunction with this activity and our new relationship with transcosmos, several companies have already reached out to us to express their interest in our eCommerce solutions, and we have recently delivered our first proposal. In addition, PFSweb is in discussions with several of our existing clients to provide assistance to them with expanding into Asia. Overall, we are confident that these steps will drive growth and help unlock the operating leverage inherent in our business.
“With the higher than anticipated second quarter results and our current expectations of client volumes for the remainder of the year, including this upcoming holiday season, we now believe our 2013 Service Fee Equivalent Revenue will be toward the high end of the previously announced range of $110 million to $115 million, and we are increasing our Adjusted EBITDA target to a range of $9 million to $10.5 million for the year,” added Mr. Willoughby.
Summary of consolidated results for the second quarter ended June 30, 2013:
- Service Fee revenue decreased 7% to $26.5 million, compared to $28.4 million for the same period in 2012; Service Fee Equivalent Revenue (as defined) decreased 8% to $28.0 million, compared to $30.5 million for the same period in 2012;
- Total revenue decreased 13% to $58.2 million, compared to $67.1 million for the second quarter of 2012;
- Adjusted EBITDA (as defined) decreased 11% to $2.5 million, compared to $2.8 million for the same period in 2012; Adjusted EBITDA for the second quarter of 2013 included an incremental benefit of approximately $0.4 million applicable to certain client transition related agreements;
- Net loss was $1.0 million, or $0.07 per basic and diluted share, compared to net loss of $0.5 million, or $0.04 per basic and diluted share, for the second quarter of 2012; Net loss for the second quarter of 2013 included $0.3 million of restructuring and other charges while net loss for the second quarter of 2012 included $0.3 million of move related expenses;
- Non-GAAP net loss (as defined) was $0.4 million, or $0.03 per basic and diluted share, compared to non-GAAP net income of $0.2 million, or $0.01 per basic and diluted share, for the quarter ended June 30, 2012.
Summary of consolidated results for the six months ended June 30, 2013:
- Service Fee revenue decreased 4% to $54.5 million, compared to $56.8 million for the same period in 2012; Service Fee Equivalent Revenue (as defined) decreased 6% to $58.0 million, compared to $61.8 million for the same period in 2012;
- Total revenue decreased 13% to $121.3 million, compared to $139.8 million for the first six months of 2012;
- Adjusted EBITDA (as defined) remained flat at $5.4 million in both the six months ended June 30, 2013 and 2012; Adjusted EBITDA in the 2013 period included an incremental benefit of approximately $1.0 million applicable to certain client transition related agreements;
- Net loss was $3.5 million, or $0.26 per basic and diluted share, compared to net loss of $1.8 million, or $0.14 per basic and diluted share, for the same period in 2012; Net loss for the six months ended June 30, 2013 included $2.5 million of restructuring and other charges while net loss for the same 2012 period included $0.9 million of move related expenses and $0.5 million of lease termination costs;
- Non-GAAP net loss (as defined) was $0.4 million, or $0.03 per basic and diluted share, compared to non-GAAP net income of $0.2 million, or $0.02 per basic and diluted share, for the 2012 period.
Mr. Willoughby continued, “As we expected, the financial results for the second quarter reflect the partial impact of previously announced client transitions and certain restructuring-related activities, minimized by higher than expected client activity. We currently expect our third quarter results to be more negatively impacted as the remaining client transitions will be completed in the early part of the third quarter. We then expect to see a sequential improvement in our fourth quarter as we realize increased benefits from new and expanded client relationships, including potential new clients from our transcosmos relationship, and seasonal client volumes. Overall, we remain excited about the direction of our business and committed to enhancing value for our shareholders. Given the ramp-up time required to contract and implement new client solutions, we expect the benefits of these opportunities will primarily be reflected in our results beginning in CY2014.”
Conference Call Information
Management will host a conference call at 11:00 am Eastern Time (10:00 am Central Time) on Tuesday, August 13, 2013, to discuss the latest corporate developments and results. To listen to the call, please dial (888) 562-3356 and enter pin number 20367798 at least five minutes before the scheduled start time. Investors can also access the call in a “listen only” mode via the Internet at the Company’s website, www.pfsweb.com or www.kcsa.com. Please allow extra time prior to the call to visit the site and download any necessary audio software.
A digital replay of the conference call will be available through September 13, 2013 at (855) 859-2056, pin number 20367798. The replay also will be available at the Company’s website for a limited time.
Non-GAAP Financial Measures
This news release may contain certain non-GAAP measures, including non-GAAP net income (loss), Earnings Before Interest, Income Taxes, Depreciation and Amortization (“EBITDA”), Adjusted EBITDA and Service Fee Equivalent Revenue.
Non-GAAP net income (loss) represents net income (loss) calculated in accordance with U.S. GAAP as adjusted for the impact of non-cash stock-based compensation expense, restructuring and other charges, lease termination costs and certain move related expenses.
EBITDA represents earnings (or losses) before interest, income taxes, depreciation, and amortization. Adjusted EBITDA further eliminates the effect of stock-based compensation, restructuring and other charges, lease termination costs and certain move related expenses.
Service Fee Equivalent Revenue represents service fee revenue plus the gross profit earned on product revenue.
Non-GAAP net income (loss), EBITDA, Adjusted EBITDA and Service Fee Equivalent Revenue are used by management, analysts, investors and other interested parties in evaluating our operating performance compared to that of other companies in our industry. The calculation of non-GAAP net income (loss) eliminates the effect of stock-based compensation, restructuring and other charges, lease termination costs and certain move related expenses and EBITDA and Adjusted EBITDA further eliminate the effect of financing, income taxes and the accounting effects of capital spending, which items may vary from different companies for reasons unrelated to overall operating performance. Service Fee Equivalent Revenue allows client contracts with similar operational support models but different financial models to be combined as if all contracts were being operated on a service fee revenue basis.
PFSweb believes these non-GAAP measures provide useful information to both management and investors by excluding certain expenses that may not be indicative of its core operating results. These measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results. The non-GAAP measures included in this press release have been reconciled to the GAAP results in the attached tables.
About PFSweb, Inc.
PFSweb is engaged by iconic brands to enable and manage customized eCommerce and omni-channel commerce initiatives. PFSweb’s iCommerce Hub(SM) technology ecosystem offers retailers a multi-channel order management system that allows partner/client data integration and international payment processing. PFSweb’s iCommerce Professional Service(SM) provides interactive marketing services, eCommerce web site development and support services, IT development services, content management, customer intelligence and relationship and account management services. PFSweb’s iCommerce Centers of Excellence(SM) provides global fulfillment and logistics, high-touch customer care, client financial services and technology hosting.
Together, PFSweb’s iCommerce Solutions allows for international reach and expertise in both direct-to-consumer and business-to-business initiatives. PFSweb supports organizations across multiple industries including Procter & Gamble, L’Oreal, LEGO, Columbia Sportswear, Sorel, Carter’s, AAFES, Riverbed, Ricoh, Hawker Beechcraft Corp, Roots Canada Ltd., Diageo, BCBGMAXAZRIA, BCBGENERATION and HERVÉ LÉGER BY MAX AZRIA. PFSweb is headquartered in Allen, TX with additional locations in Tennessee, Mississippi, Canada, Belgium, and the Philippines.
To find out more about PFSweb (NASDAQ: PFSW), visit the company’s website at http://www.PFSweb.com.
The matters discussed herein consist of forward-looking information under the Private Securities Litigation Reform Act of 1995 and is subject to and involves risks and uncertainties, which could cause actual results to differ materially from the forward-looking information. PFSweb's Annual Report on Form 10-K for the year ended December 31, 2012 and the three months ended March 31, 2013 identify certain factors that could cause actual results to differ materially from those projected in any forward looking statements made and investors are advised to review the Annual and Quarterly Reports and the Risk Factors described therein. PFSweb undertakes no obligation to update publicly any forward-looking statement for any reason, even if new information becomes available or other events occur in the future. There may be additional risks that we do not currently view as material or that are not presently known.
(Financial Tables Below)
|
PFSweb, Inc. and Subsidiaries |
||||||||||||||||||
| Preliminary Unaudited Condensed Consolidated Statements of Operations (A) | ||||||||||||||||||
| (In Thousands, Except Per Share Data) | ||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||
| June 30, | June 30, | |||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||||
| REVENUES: | ||||||||||||||||||
| Product revenue, net |
$ |
22,985 |
$ | 29,423 | $ | 48,467 | $ | 63,974 | ||||||||||
| Service fee revenue | 26,496 | 28,384 | 54,498 | 56,762 | ||||||||||||||
| Pass-thru revenue | 8,704 | 9,264 | 18,361 | 19,103 | ||||||||||||||
| Total revenues | 58,185 | 67,071 | 121,326 | 139,839 | ||||||||||||||
| COSTS OF REVENUES: | ||||||||||||||||||
| Cost of product revenue | 21,479 | 27,263 | 44,994 | 58,945 | ||||||||||||||
| Cost of service fee revenue | 17,811 | 20,698 | 37,069 | 42,353 | ||||||||||||||
| Cost of pass-thru revenue | 8,704 | 9,264 | 18,361 | 19,103 | ||||||||||||||
| Total costs of revenues | 47,994 | 57,225 | 100,424 | 120,401 | ||||||||||||||
| Gross profit | 10,191 | 9,846 | 20,902 | 19,438 | ||||||||||||||
| SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 10,938 | 9,902 | 23,739 | 20,406 | ||||||||||||||
| Income (loss) from operations | (747 | ) | (56 | ) | (2,837 | ) | (968 | ) | ||||||||||
| INTEREST EXPENSE (INCOME), NET | 184 | 258 | 402 | 522 | ||||||||||||||
| Income (loss) before income taxes | (931 | ) | (314 | ) | (3,239 | ) | (1,490 | ) | ||||||||||
| INCOME TAX PROVISION (BENEFIT) | 24 | 194 | 291 | 303 | ||||||||||||||
| NET INCOME (LOSS) | $ | (955 | ) | $ | (508 | ) | $ | (3,530 | ) | $ | (1,793 | ) | ||||||
| NON-GAAP INCOME (LOSS) | $ | (421 | ) | $ | 152 | $ | (400 | ) | $ | 229 | ||||||||
| NET INCOME (LOSS) PER SHARE: | ||||||||||||||||||
| Basic | $ | (0.07 | ) | $ | (0.04 | ) | $ | (0.26 | ) | $ | (0.14 | ) | ||||||
| Diluted | $ | (0.07 | ) | $ | (0.04 | ) | $ | (0.26 | ) | $ | (0.14 | ) | ||||||
| WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: | ||||||||||||||||||
| Basic | 14,525 | 12,783 | 13,661 | 12,774 | ||||||||||||||
| Diluted | 14,525 | 12,783 | 13,661 | 12,774 | ||||||||||||||
| EBITDA | $ | 1,941 | $ | 2,134 | $ | 2,259 | $ | 3,364 | ||||||||||
| ADJUSTED EBITDA | $ | 2,475 | $ | 2,794 | $ | 5,389 | $ | 5,386 | ||||||||||
| (A) The financial data above should be read in conjunction with the audited consolidated financial statements of | ||||||||||||||||||
| PFSweb, Inc. included in its Form 10-K for the year ended December 31, 2012. | ||||||||||||||||||
|
PFSweb, Inc. and Subsidiaries |
|||||||||||||||||||
| Reconciliation of certain Non-GAAP Items to GAAP | |||||||||||||||||||
| (In Thousands, Except Per Share Data) | |||||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | ||||||||||||||||
| NET INCOME (LOSS) | $ | (955 | ) | $ | (508 | ) | $ | (3,530 | ) | $ | (1,793 | ) | |||||||
| Income tax expense | 24 | 194 | 291 | 303 | |||||||||||||||
| Interest expense, net | 184 | 258 | 402 | 522 | |||||||||||||||
| Depreciation and amortization | 2,688 | 2,190 | 5,096 | 4,332 | |||||||||||||||
| EBITDA | $ | 1,941 | $ | 2,134 | $ | 2,259 | $ | 3,364 | |||||||||||
| Stock-based compensation | 282 | 366 | 585 | 706 | |||||||||||||||
| Restructuring and other charges | 252 | - | 2,545 | - | |||||||||||||||
| Lease terminations costs | - | - | - | 450 | |||||||||||||||
| Move related expenses | - | 294 | - | 866 | |||||||||||||||
| ADJUSTED EBITDA | $ | 2,475 | $ | 2,794 | $ | 5,389 | $ | 5,386 | |||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | ||||||||||||||||
| NET INCOME (LOSS) | $ | (955 | ) | $ | (508 | ) | $ | (3,530 | ) | $ | (1,793 | ) | |||||||
| Stock-based compensation | 282 | 366 | 585 | 706 | |||||||||||||||
| Restructuring and other charges | 252 | - | 2,545 | - | |||||||||||||||
| Lease terminations costs | - | - | - | 450 | |||||||||||||||
| Move related expenses | - | 294 | - | 866 | |||||||||||||||
| NON-GAAP INCOME (LOSS) | $ | (421 | ) | $ | 152 | $ | (400 | ) | $ | 229 | |||||||||
| NET INCOME (LOSS) PER SHARE: | |||||||||||||||||||
| Basic | $ | (0.07 | ) | $ | (0.04 | ) | $ | (0.26 | ) | $ | (0.14 | ) | |||||||
| Diluted | $ | (0.07 | ) | $ | (0.04 | ) | $ | (0.26 | ) | $ | (0.14 | ) | |||||||
| NON-GAAP INCOME (LOSS) Per Share: | |||||||||||||||||||
| Basic | $ | (0.03 | ) | $ | 0.01 | $ | (0.03 | ) | $ | 0.02 | |||||||||
| Diluted | $ | (0.03 | ) | $ | 0.01 | $ | (0.03 | ) | $ | 0.02 | |||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | ||||||||||||||||
| TOTAL REVENUES | $ | 58,185 | $ | 67,071 | $ | 121,326 | $ | 139,839 | |||||||||||
| Pass-thru revenue | (8,704 | ) | (9,264 | ) | (18,361 | ) | (19,103 | ) | |||||||||||
| Cost of product revenue | (21,479 | ) | (27,263 | ) | (44,994 | ) | (58,945 | ) | |||||||||||
| SERVICE FEE EQUIVALENT REVENUE | $ | 28,002 | $ | 30,544 | $ | 57,971 | $ | 61,791 | |||||||||||
|
PFSweb, Inc. and Subsidiaries |
||||||||||
| Preliminary Unaudited Condensed Consolidated Balance Sheets | ||||||||||
| (In Thousands, Except Share Data) | ||||||||||
| June 30, | December 31, | |||||||||
| 2013 | 2012 | |||||||||
|
ASSETS |
|
|||||||||
| CURRENT ASSETS: | ||||||||||
| Cash and cash equivalents | $ | 21,638 | $ | 19,626 | ||||||
| Restricted cash | 457 | 283 | ||||||||
| Accounts receivable, net of allowance for doubtful accounts of $391 and | ||||||||||
| $450 at June 30, 2013 and December 31, 2012, respectively | 37,873 | 45,684 | ||||||||
| Inventories, net of reserves of $1,753 and $1,789 at June 30, 2013 and | ||||||||||
| December 31, 2012, respectively | 17,822 | 24,654 | ||||||||
| Other receivables | 6,984 | 7,675 | ||||||||
| Prepaid expenses and other current assets | 4,364 | 4,346 | ||||||||
| Total current assets | 89,138 | 102,268 | ||||||||
| PROPERTY AND EQUIPMENT, net | 26,611 | 27,917 | ||||||||
| OTHER ASSETS | 2,887 | 3,286 | ||||||||
| Total assets | 118,636 | 133,471 | ||||||||
|
LIABILITIES AND SHAREHOLDERS EQUITY |
||||||||||
| CURRENT LIABILITIES: | ||||||||||
| Current portion of long-term debt and capital lease obligations | $ | 8,940 | $ | 16,660 | ||||||
| Trade accounts payable | 26,760 | 40,493 | ||||||||
| Deferred revenue | 7,870 | 6,648 | ||||||||
| Accrued expenses | 18,981 | 23,097 | ||||||||
| Total current liabilities | 62,551 | 86,898 | ||||||||
| LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS, less current portion | 4,224 | 5,400 | ||||||||
| DEFERRED REVENUE | 7,343 | 7,562 | ||||||||
| DEFERRED RENT | 5,237 | 5,560 | ||||||||
| Total liabilities | 79,355 | 105,420 | ||||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||||
| SHAREHOLDERS' EQUITY: | ||||||||||
| Preferred stock, $1.00 par value; 1,000,000 shares authorized; none issued | ||||||||||
| and outstanding | - | - | ||||||||
| Common stock, $.001 par value; 35,000,000 shares authorized; | ||||||||||
| 16,138,172 and 12,812,386 shares issued at June 30, 2013 and | ||||||||||
| December 31, 2012, respectively; and 16,104,705 and 12,778,919 | ||||||||||
| shares outstanding as of June 30, 2013 and December 31, 2012, respectively | 16 | 13 | ||||||||
| Additional paid-in capital | 120,915 | 106,018 | ||||||||
| Accumulated deficit | (82,939 | ) | (79,409 | ) | ||||||
| Accumulated other comprehensive income | 1,414 | 1,554 | ||||||||
| Treasury stock at cost, 33,467 shares as of June 30, 2013 and December 31, 2012 | (125 | ) | (125 | ) | ||||||
| Total shareholders' equity | 39,281 | 28,051 | ||||||||
| Total liabilities and shareholders' equity | $ | 118,636 | $ | 133,471 | ||||||
|
PFSweb, Inc. and Subsidiaries |
||||||||||||||||||
| Preliminary Unaudited Consolidating Statements of Operations | ||||||||||||||||||
| For the Three Months Ended June 30, 2013 | ||||||||||||||||||
| (In Thousands) | ||||||||||||||||||
| Business & | ||||||||||||||||||
| PFSweb | Retail Connect | Eliminations | Consolidated | |||||||||||||||
| REVENUES: | ||||||||||||||||||
| Product revenue, net | $ | - | $ | 22,985 | $ | - | $ | 22,985 | ||||||||||
| Service fee revenue | 25,303 | 1,193 | - | 26,496 | ||||||||||||||
| Service fee revenue - affiliate | 1,915 | 435 |
(2,350 |
) |
- | |||||||||||||
| Pass-thru revenue | 8,704 | - | - | 8,704 | ||||||||||||||
| Total revenues | 35,922 | 24,613 | (2,350 | ) | 58,185 | |||||||||||||
| COSTS OF REVENUES: | ||||||||||||||||||
| Cost of product revenue | - | 21,479 | - | 21,479 | ||||||||||||||
| Cost of service fee revenue | 18,401 | 1,433 | (2,023 | ) | 17,811 | |||||||||||||
| Cost of pass-thru revenue | 8,704 | - | - | 8,704 | ||||||||||||||
| Total costs of revenues | 27,105 | 22,912 | (2,023 | ) | 47,994 | |||||||||||||
| Gross profit | 8,817 | 1,701 | (327 | ) | 10,191 | |||||||||||||
| SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 9,600 | 1,665 | (327 | ) | 10,938 | |||||||||||||
| Income (loss) from operations | (783 | ) | 36 | - | (747 | ) | ||||||||||||
| INTEREST EXPENSE (INCOME), NET | 35 | 149 | - | 184 | ||||||||||||||
| Income (loss) before income taxes | (818 | ) | (113 | ) | - | (931 | ) | |||||||||||
| INCOME TAX PROVISION (BENEFIT) | 23 | 1 | - | 24 | ||||||||||||||
| NET INCOME (LOSS) | $ | (841 | ) | $ | (114 | ) | $ | - | $ | (955 | ) | |||||||
| NON-GAAP NET INCOME (LOSS) | $ | (307 | ) | $ | (114 | ) | $ | - | $ | (421 | ) | |||||||
| EBITDA | $ | 1,865 | $ | 76 | $ | - | $ | 1,941 | ||||||||||
| ADJUSTED EBITDA | $ | 2,399 | $ | 76 | $ | - | $ | 2,475 | ||||||||||
| A reconciliation of NET INCOME (LOSS) to EBITDA and ADJUSTED EBITDA follows: | ||||||||||||||||||
| NET INCOME (LOSS) | $ | (841 | ) | $ | (114 | ) | $ | - | (955 | ) | ||||||||
| Income tax expense (benefit) | 23 | 1 | - | 24 | ||||||||||||||
| Interest expense (income), net | 35 | 149 | - | 184 | ||||||||||||||
| Depreciation and amortization | 2,648 | 40 | - | 2,688 | ||||||||||||||
| EBITDA | $ | 1,865 | $ | 76 | $ | - | $ | 1,941 | ||||||||||
| Stock-based compensation | 282 | - | - | 282 | ||||||||||||||
| Restructuring and other charges | 252 | - | - | 252 | ||||||||||||||
| ADJUSTED EBITDA | $ | 2,399 | $ | 76 | $ | - | $ | 2,475 | ||||||||||
| A reconciliation of NET INCOME (LOSS) to NON-GAAP NET INCOME (LOSS) follows: | ||||||||||||||||||
| NET INCOME (LOSS) | $ | (841 | ) | $ | (114 | ) | $ | - | $ | (955 | ) | |||||||
| Stock-based compensation | 282 | - | - | 282 | ||||||||||||||
| Restructuring and other charges | 252 | - | - | 252 | ||||||||||||||
| NON-GAAP NET INCOME (LOSS) | $ | (307 | ) | $ | (114 | ) | $ | - | $ | (421 | ) | |||||||
| Note: Business and Retail Connect includes our Supplies Distributors and PFSweb Retail Connect operations, which operate similar financial models on behalf of our client relationships. | ||||||||||||||||||
|
PFSweb, Inc. and Subsidiaries |
||||||||||||||||||
| Preliminary Unaudited Consolidating Statements of Operations | ||||||||||||||||||
| For the Six Months Ended June 30, 2013 | ||||||||||||||||||
| (In Thousands) | ||||||||||||||||||
| Business & | ||||||||||||||||||
| PFSweb | Retail Connect | Eliminations | Consolidated | |||||||||||||||
| REVENUES: | ||||||||||||||||||
| Product revenue, net | $ | - | $ | 48,467 | $ | - | $ | 48,467 | ||||||||||
| Service fee revenue | 51,744 | 2,754 | - | 54,498 | ||||||||||||||
| Service fee revenue - affiliate | 4,269 | 797 | (5,066 | ) | - | |||||||||||||
| Pass-thru revenue | 18,362 | - | (1 | ) | 18,361 | |||||||||||||
| Total revenues | 74,375 | 52,018 | (5,067 | ) | 121,326 | |||||||||||||
| COSTS OF REVENUES: | ||||||||||||||||||
| Cost of product revenue | - | 44,994 | - | 44,994 | ||||||||||||||
| Cost of service fee revenue | 38,181 | 3,080 | (4,192 | ) | 37,069 | |||||||||||||
| Cost of pass-thru revenue | 18,362 | - | (1 | ) | 18,361 | |||||||||||||
| Total costs of revenues | 56,543 | 48,074 | (4,193 | ) | 100,424 | |||||||||||||
| Gross profit | 17,832 | 3,944 | (874 | ) | 20,902 | |||||||||||||
| SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 21,162 | 3,451 | (874 | ) | 23,739 | |||||||||||||
| Income (loss) from operations | (3,330 | ) | 493 | - | (2,837 | ) | ||||||||||||
| INTEREST EXPENSE (INCOME), NET | 101 | 301 | - | 402 | ||||||||||||||
| Income (loss) before income taxes | (3,431 | ) | 192 | - | (3,239 | ) | ||||||||||||
| INCOME TAX PROVISION (BENEFIT) | 143 | 148 | - | 291 | ||||||||||||||
| NET INCOME (LOSS) | $ | (3,574 | ) | $ | 44 | $ | - | $ | (3,530 | ) | ||||||||
| NON-GAAP NET INCOME (LOSS) | $ | (444 | ) | $ | 44 | $ | - | $ | (400 | ) | ||||||||
| EBITDA | $ | 1,688 | $ | 571 | $ | - | $ | 2,259 | ||||||||||
| ADJUSTED EBITDA | $ | 4,818 | $ | 571 | $ | - | $ | 5,389 | ||||||||||
| A reconciliation of NET INCOME (LOSS) to EBITDA and ADJUSTED EBITDA follows: | ||||||||||||||||||
| NET INCOME (LOSS) | $ | (3,574 | ) | $ | 44 | $ | - | (3,530 | ) | |||||||||
| Income tax expense (benefit) | 143 | 148 | - | 291 | ||||||||||||||
| Interest expense (income), net | 101 | 301 | - | 402 | ||||||||||||||
| Depreciation and amortization | 5,018 | 78 | - | 5,096 | ||||||||||||||
| EBITDA | $ | 1,688 | $ | 571 | $ | - | $ | 2,259 | ||||||||||
| Stock-based compensation | 585 | - | - | 585 | ||||||||||||||
| Restructuring and other charges | 2,545 | - | - | 2,545 | ||||||||||||||
| ADJUSTED EBITDA | $ | 4,818 | $ | 571 | $ | - | $ | 5,389 | ||||||||||
| A reconciliation of NET INCOME (LOSS) to NON-GAAP NET INCOME (LOSS) follows: | ||||||||||||||||||
| NET INCOME (LOSS) | $ | (3,574 | ) | $ | 44 | $ | - | $ | (3,530 | ) | ||||||||
| Stock-based compensation | 585 | - | - | 585 | ||||||||||||||
| Restructuring and other charges | 2,545 | - | - | 2,545 | ||||||||||||||
| NON-GAAP NET INCOME (LOSS) | $ | (444 | ) | $ | 44 | $ | - | $ | (400 | ) | ||||||||
| Note: Business and Retail Connect includes our Supplies Distributors and PFSweb Retail Connect operations, which operate similar financial models on behalf of our client relationships. | ||||||||||||||||||
|
PFSweb, Inc. and Subsidiaries |
||||||||||||||||||
| Unaudited Consolidating Statements of Operations | ||||||||||||||||||
| For the Three Months Ended June 30, 2012 | ||||||||||||||||||
| (In Thousands) | ||||||||||||||||||
| Business & | ||||||||||||||||||
| PFSweb | Retail Connect | Eliminations | Consolidated | |||||||||||||||
| REVENUES: | ||||||||||||||||||
| Product revenue, net | $ | - | $ | 29,423 | $ | - | $ | 29,423 | ||||||||||
| Service fee revenue | 28,384 | - | - | 28,384 | ||||||||||||||
| Service fee revenue - affiliate | 1,124 | 134 | (1,258 | ) | - | |||||||||||||
| Pass-thru revenue | 9,264 | - | - | 9,264 | ||||||||||||||
| Total revenues | 38,772 | 29,557 | (1,258 | ) | 67,071 | |||||||||||||
| COSTS OF REVENUES: | ||||||||||||||||||
| Cost of product revenue | - | 27,263 | - | 27,263 | ||||||||||||||
| Cost of service fee revenue | 21,273 | 134 | (709 | ) | 20,698 | |||||||||||||
| Cost of pass-thru revenue | 9,264 | - | - | 9,264 | ||||||||||||||
| Total costs of revenues | 30,537 | 27,397 | (709 | ) | 57,225 | |||||||||||||
| Gross profit | 8,235 | 2,160 | (549 | ) | 9,846 | |||||||||||||
| SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 8,823 | 1,628 | (549 | ) | 9,902 | |||||||||||||
| Income (loss) from operations | (588 | ) | 532 | - | (56 | ) | ||||||||||||
| INTEREST EXPENSE (INCOME), NET | 57 | 201 | - | 258 | ||||||||||||||
| Income (loss) before income taxes | (645 | ) | 331 | - | (314 | ) | ||||||||||||
| INCOME TAX PROVISION (BENEFIT) | 55 | 139 | - | 194 | ||||||||||||||
| NET INCOME (LOSS) | $ | (700 | ) | $ | 192 | $ | - | $ | (508 | ) | ||||||||
| NON-GAAP NET INCOME (LOSS) | $ | (40 | ) | $ | 192 | $ | - | $ | 152 | |||||||||
| EBITDA | $ | 1,578 | $ | 556 | $ | - | $ | 2,134 | ||||||||||
| ADJUSTED EBITDA | $ | 2,238 | $ | 556 | $ | - | $ | 2,794 | ||||||||||
| A reconciliation of NET INCOME (LOSS) to EBITDA and ADJUSTED EBITDA follows: | ||||||||||||||||||
| NET INCOME (LOSS) | $ | (700 | ) | $ | 192 | $ | - | (508 | ) | |||||||||
| Income tax expense (benefit) | 55 | 139 | - | 194 | ||||||||||||||
| Interest expense (income), net | 57 | 201 | - | 258 | ||||||||||||||
| Depreciation and amortization | 2,166 | 24 | - | 2,190 | ||||||||||||||
| EBITDA | $ | 1,578 | $ | 556 | $ | - | $ | 2,134 | ||||||||||
| Stock-based compensation | 366 | - | - | 366 | ||||||||||||||
| Move related expenses | 294 | 294 | ||||||||||||||||
| ADJUSTED EBITDA | $ | 2,238 | $ | 556 | $ | - | $ | 2,794 | ||||||||||
| A reconciliation of NET INCOME (LOSS) to NON-GAAP NET INCOME (LOSS) follows: | ||||||||||||||||||
| NET INCOME (LOSS) | $ | (700 | ) | $ | 192 | $ | - | $ | (508 | ) | ||||||||
| Stock-based compensation | 366 | - | - | 366 | ||||||||||||||
| Move related expenses | 294 | - | - | 294 | ||||||||||||||
| NON-GAAP NET INCOME (LOSS) | $ | (40 | ) | $ | 192 | $ | - | $ | 152 | |||||||||
| Note: Business and Retail Connect includes our Supplies Distributors and PFSweb Retail Connect operations, which operate similar financial models on behalf of our client relationships. | ||||||||||||||||||
|
PFSweb, Inc. and Subsidiaries |
|||||||||||||||||
| Unaudited Consolidating Statements of Operations | |||||||||||||||||
| For the Six Months Ended June 30, 2012 | |||||||||||||||||
| (In Thousands) | |||||||||||||||||
| Business & | |||||||||||||||||
| PFSweb | Retail Connect | Eliminations | Consolidated | ||||||||||||||
| REVENUES: | |||||||||||||||||
| Product revenue, net | $ | - | $ | 63,974 | $ | - | $ | 63,974 | |||||||||
| Service fee revenue | 56,762 | - | - | 56,762 | |||||||||||||
| Service fee revenue - affiliate | 2,586 | 308 | (2,894 | ) | - | ||||||||||||
| Pass-thru revenue | 19,103 | - | 19,103 | ||||||||||||||
| Total revenues | 78,451 | 64,282 | (2,894 | ) | 139,839 | ||||||||||||
| COSTS OF REVENUES: | |||||||||||||||||
| Cost of product revenue | - | 58,945 | - | 58,945 | |||||||||||||
| Cost of service fee revenue | 43,543 | 308 | (1,498 | ) | 42,353 | ||||||||||||
| Cost of pass-thru revenue | 19,103 | - | - | 19,103 | |||||||||||||
| Total costs of revenues | 62,646 | 59,253 | (1,498 | ) | 120,401 | ||||||||||||
| Gross profit | 15,805 | 5,029 | (1,396 | ) | 19,438 | ||||||||||||
| SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 18,133 | 3,669 | (1,396 | ) | 20,406 | ||||||||||||
| Income (loss) from operations | (2,328 | ) | 1,360 | - | (968 | ) | |||||||||||
| INTEREST EXPENSE (INCOME), NET | 91 | 431 | - | 522 | |||||||||||||
| Income (loss) before income taxes | (2,419 | ) | 929 | - | (1,490 | ) | |||||||||||
| INCOME TAX PROVISION (BENEFIT) | (69 | ) | 372 | - | 303 | ||||||||||||
| NET INCOME (LOSS) | $ | (2,350 | ) | $ | 557 | $ | - | $ | (1,793 | ) | |||||||
| NON-GAAP NET INCOME (LOSS) | $ | (328 | ) | $ | 557 | $ | - | $ | 229 | ||||||||
| EBITDA | $ | 1,964 | $ | 1,400 | $ | - | $ | 3,364 | |||||||||
| ADJUSTED EBITDA | $ | 3,986 | $ | 1,400 | $ | - | $ | 5,386 | |||||||||
| A reconciliation of NET INCOME (LOSS) to EBITDA and ADJUSTED EBITDA follows: | |||||||||||||||||
| NET INCOME (LOSS) | $ | (2,350 | ) | $ | 557 | $ | - | (1,793 | ) | ||||||||
| Income tax expense (benefit) | (69 | ) | 372 | - | 303 | ||||||||||||
| Interest expense (income), net | 91 | 431 | - | 522 | |||||||||||||
| Depreciation and amortization | 4,292 | 40 | - | 4,332 | |||||||||||||
| EBITDA | $ | 1,964 | $ | 1,400 | $ | - | $ | 3,364 | |||||||||
| Stock-based compensation | 706 | - | - | 706 | |||||||||||||
| Lease termination costs | 450 | - | - | 450 | |||||||||||||
| Move related expenses | 866 | 866 | |||||||||||||||
| ADJUSTED EBITDA | $ | 3,986 | $ | 1,400 | $ | - | $ | 5,386 | |||||||||
| A reconciliation of NET INCOME (LOSS) to NON-GAAP NET INCOME (LOSS) follows: | |||||||||||||||||
| NET INCOME (LOSS) | $ | (2,350 | ) | $ | 557 | $ | - | $ | (1,793 | ) | |||||||
| Stock-based compensation | 706 | - | - | 706 | |||||||||||||
| Lease termination costs | 450 | - | - | 450 | |||||||||||||
| Move related expenses | 866 | 866 | |||||||||||||||
| NON-GAAP NET INCOME (LOSS) | $ | (328 | ) | $ | 557 | $ | - | $ | 229 | ||||||||
| Note: Business and Retail Connect includes our Supplies Distributors and PFSweb Retail Connect operations, which operate similar financial models on behalf of our client relationships. | |||||||||||||||||
|
PFSweb, Inc. and Subsidiaries |
||||||||||||||||||
| Unaudited Condensed Consolidating Balance Sheets | ||||||||||||||||||
| as of June 30, 2013 | ||||||||||||||||||
| (In Thousands) | ||||||||||||||||||
| Business & | ||||||||||||||||||
| PFSweb | Retail Connect | Eliminations | Consolidated | |||||||||||||||
|
ASSETS |
|
|||||||||||||||||
|
CURRENT ASSETS: |
||||||||||||||||||
| Cash and cash equivalents | $ | 15,967 | $ | 5,671 | $ | - | $ | 21,638 | ||||||||||
| Restricted cash | - | 457 | - | 457 | ||||||||||||||
| Accounts receivable, net | 27,212 | 10,906 | (245 | ) | 37,873 | |||||||||||||
| Inventories, net | - | 17,822 | - | 17,822 | ||||||||||||||
| Other receivables | - | 6,984 | - | 6,984 | ||||||||||||||
| Prepaid expenses and other current assets | 2,928 | 1,436 | - | 4,364 | ||||||||||||||
| Total current assets | 46,107 | 43,276 | (245 | ) | 89,138 | |||||||||||||
| PROPERTY AND EQUIPMENT, net | 26,392 | 219 | - | 26,611 | ||||||||||||||
| RECEIVABLE/INVESTMENT IN AFFILIATES | 13,775 | - | (13,775 | ) | - | |||||||||||||
| OTHER ASSETS | 2,786 | 101 | - | 2,887 | ||||||||||||||
| Total assets | 89,060 | 43,596 | (14,020 | ) | 118,636 | |||||||||||||
|
LIABILITIES AND SHAREHOLDERS EQUITY |
||||||||||||||||||
| CURRENT LIABILITIES: | ||||||||||||||||||
| Current portion of long-term debt and capital lease obligations | $ | 4,258 | $ | 4,682 | $ | - | $ | 8,940 | ||||||||||
| Trade accounts payable | 7,046 | 19,959 | (245 | ) | 26,760 | |||||||||||||
| Deferred revenue | 7,825 | 45 | - | 7,870 | ||||||||||||||
| Accrued expenses | 13,760 | 5,221 | - | 18,981 | ||||||||||||||
| Total current liabilities | 32,889 | 29,907 | (245 | ) | 62,551 | |||||||||||||
| LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS, less current portion | 4,224 | - | - | 4,224 | ||||||||||||||
| PAYABLE TO AFFILIATES | - | 23,045 | (23,045 | ) | - | |||||||||||||
| DEFERRED REVENUE | 7,343 | - | - | 7,343 | ||||||||||||||
| DEFERRED RENT | 5,195 | 42 | - | 5,237 | ||||||||||||||
| Total liabilities | 49,651 | 52,994 | (23,290 | ) | 79,355 | |||||||||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||||||||||||
| SHAREHOLDERS' EQUITY: | ||||||||||||||||||
| Common stock | 16 | 19 | (19 | ) | 16 | |||||||||||||
| Capital contributions | - | 1,000 | (1,000 | ) | - | |||||||||||||
| Additional paid-in capital | 120,915 | 28,060 | (28,060 | ) | 120,915 | |||||||||||||
| Retained earnings (accumulated deficit) | (82,811 | ) | (40,562 | ) | 40,434 | (82,939 | ) | |||||||||||
| Accumulated other comprehensive income | 1,414 | 2,085 | (2,085 | ) | 1,414 | |||||||||||||
| Treasury stock | (125 | ) | - | - | (125 | ) | ||||||||||||
| Total shareholders' equity | 39,409 | (9,398 | ) | 9,270 | 39,281 | |||||||||||||
| Total liabilities and shareholders' equity | $ | 89,060 | $ | 43,596 | $ | (14,020 | ) | $ | 118,636 | |||||||||
|
PFSweb, Inc. and Subsidiaries |
|||||||||||||||||||
| Unaudited Condensed Consolidating Balance Sheets | |||||||||||||||||||
| as of December 31, 2012 | |||||||||||||||||||
| (In Thousands) | |||||||||||||||||||
| 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 | ||||||||||