PFSweb Reports Record Fourth Quarter and Full Year 2015 Results

<< Back

PFSweb Reports Record Fourth Quarter and Full Year 2015 Results

PFSweb Reports Record Fourth Quarter and Full Year 2015 Results 94.8 KB

ALLEN, TX -- (Marketwired) -- 03/14/16 -- PFSweb, Inc. (NASDAQ: PFSW), a global commerce service provider, reported results for the fourth quarter and full year ended December 31, 2015.

Fourth Quarter 2015 Highlights vs. Same Year-Ago Quarter

Total revenues increased 14% to $90.1 million
Service fee equivalent revenue (a non-GAAP measure defined below) increased 26% to a record $61.6 million
Service fee gross margin increased 340 basis points to 31.6%
Adjusted EBITDA (a non-GAAP measure defined below) increased 9% to a Q4 record $7.5 million
Launched a new strategic commerce consulting practice to drive digital strategy for clients
Successfully concluded the 2015 holiday season with a high level of client satisfaction
Continued to aggressively build out global sales organization to support targeted future growth

Management Commentary
"2015 was a breakthrough year for PFSweb as we consistently achieved record quarterly results," said Michael Willoughby, CEO of PFSweb. "These results were driven by organic growth across all three of our core service offerings -- agency, technology and omni-channel operations -- and from the acquisitions of REV Solutions, LiveAreaLabs, Moda and CrossView. The fourth quarter was particularly strong due to heavy client volumes during the important holiday season, as well as increased project work in our higher-margin agency and technology services including the benefit of the CrossView acquisition completed in August 2015.

"During the fourth quarter, we launched our strategic commerce consulting practice, which provides high-value digital strategy and platform selection consulting to both B2B and B2C companies. Though we remain in the early stages of realizing the full benefits, we've already begun to leverage the services and insight from this practice to enhance our position and monetize earlier stages of the sales cycle.

"In 2016, we will continue to focus on driving growth through higher-margin service offerings, while serving as a strategic partner to our clients. We plan to continue leveraging the added platform and B2B capabilities from our CrossView acquisition to capitalize on a larger, more rapidly growing addressable market, with the ultimate goal of helping companies maximize their online sales across B2C and B2B channels. In order to aggressively capitalize on the opportunities we see in the market, we are making further investments in sales, marketing and infrastructure resources beginning in early 2016 to support our growth in the second half of 2016 and going forward. We will also continue to pursue strategic acquisitions to enhance our agency and technology services footprint in Western Europe. We believe the execution of these initiatives will further strengthen our leadership position in the global eCommerce marketplace."

Fourth Quarter 2015 Financial Results
Total revenues in the fourth quarter of 2015 increased 14% to $90.1 million compared to $78.7 million in the same period of 2014. Service fee revenue in the fourth quarter increased 27% to $60.9 million compared to $48.0 million last year. Product revenue was $13.9 million compared to $18.1 million in the same period of 2014 due to ongoing restructuring activities by the company's last remaining client in this segment and their discontinuation of certain product lines.

Service fee equivalent revenue increased 26% to a fourth quarter record $61.6 million compared to $49.0 million in the year-ago quarter, driven by both new and expanded client relationships, as well as approximately $8 million of service fees generated by the company's CrossView and Moda acquisitions in 2015.

Service fee gross margin in the fourth quarter increased 340 basis points to 31.6% compared to 28.2% in the same period of 2014. The increase was due to a higher proportion of agency and technology services in the 2015 quarter, in part due to the benefit from the acquisitions of REV and LiveArea that occurred in September 2014, as well as the Moda and CrossView acquisitions completed in 2015.

Adjusted EBITDA increased 9% to a fourth quarter record $7.5 million compared to $6.8 million in the same period of 2014. As a percentage of service fee equivalent revenue, adjusted EBITDA was 12.1% compared to 13.9% in the year-ago quarter.

Net loss in the fourth quarter was $0.6 million or $(0.03) per diluted share, compared to net income of $2.1 million or $0.12 per diluted share in the same period of 2014. Net loss in the fourth quarter of 2015 included $1.2 million in amortization of acquisition-related intangible assets, $1.2 million in stock-based compensation expense, and $1.3 million in acquisition-related, restructuring and other costs. This compares to $0.1 million in amortization of acquisition-related intangible assets, $0.6 million in stock-based compensation expense and $1.1 million in acquisition-related, restructuring and other costs in the same period of 2014.

Non-GAAP net income (a non-GAAP measure defined below) in the fourth quarter of 2015 was $3.1 million or $0.16 per diluted share, compared to $3.9 million or $0.21 per diluted share in the fourth quarter of 2014.

At December 31, 2015, cash and cash equivalents was $21.8 million compared to $18.1 million at December 31, 2014. Total debt was $35.4 million compared to $10.9 million at December 31, 2014, with the increase primarily due to funding of the CrossView acquisition.

Full Year 2015 Financial Results
Total revenues in 2015 increased 17% to $288.3 million compared to $247.0 million in 2014. Service fee revenue in 2015 increased 36% to a record $182.2 million compared to $134.4 million last year, while product revenue was $58.7 million compared to $75.3 million in the prior year. Service fee equivalent revenue increased 34% to a record $185.3 million compared to $138.7 million in 2014.

Service fee gross margin in 2015 increased 280 basis points to 32.2% compared to 29.4% last year.

Adjusted EBITDA increased 52% to a record $20.7 million in 2015 compared to $13.7 million in 2014.

Net loss in 2015 was $7.9 million or $(0.45) per diluted share, compared to net loss of $4.6 million or $(0.28) per diluted share in 2014. Net loss in 2015 included $2.8 million in amortization of acquisition-related intangibles, $4.6 million in stock-based compensation expense, and $5.8 million in acquisition-related, restructuring and other costs. This compares to $0.1 million in amortization of acquisition-related intangibles, $3.1 million in stock-based compensation expense and $2.8 million in acquisition-related, restructuring and other costs in 2014.

Non-GAAP net income in 2015 increased 301% to a record $5.4 million or $0.29 per diluted share, compared to non-GAAP net income of $1.4 million or $0.08 per diluted share in 2014.

2016 Outlook
PFSweb currently expects continued strong growth in service fee equivalent revenue and adjusted EBITDA as the company realizes a full year of benefit from its recent acquisitions, as well as incremental revenue from new and expanded client relationships. At this time, the company is reiterating its target for 2016 service fee equivalent revenue to range between $220 million and $230 million, reflecting growth of 19% to 24% from 2015. The company is also reiterating its target for adjusted EBITDA to range between $23 million to $25 million, up 11% to 21% from 2015. This adjusted EBITDA target includes the expected impact of incremental sales and marketing expenditures as well as other infrastructure expenditures to support the company's targeted future growth.

Conference Call
PFSweb will conduct a conference call today at 5:00 p.m. Eastern time to discuss its results for the fourth quarter and full year ended December 31, 2015.

CEO Michael Willoughby and CFO Tom Madden will host the conference call, followed by a question and answer period.

Date: Monday, March 14, 2016
Time: 5:00 p.m. Eastern Time (4:00 p.m. Central time)
Toll-free dial-in number: 1-888-523-1228
International dial-in number: 1-719-785-1765
Conference ID: 8183564

Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Liolios at 1-949-574-3860.

The conference call will be broadcast live and available for replay at http://public.viavid.com/index.php?id=118606 and via the investor relations section of the company's website at www.pfsweb.com.

A replay of the conference call will be available after 8:00 p.m. Eastern Time on the same day through March 28, 2016.

Toll-free replay number: 1-877-870-5176
International replay number: 1-858-384-5517
Replay ID: 8183564

About PFSweb, Inc.
PFSweb (NASDAQ: PFSW) is a global commerce service provider of solutions including digital strategy consulting, digital agency and marketing services, technology development services, business process outsourcing services, and a complete omni-channel technology ecosystem. The company provides these solutions and services to major brand names and other companies seeking to optimize every customer experience and enhance their traditional and online business channels. PFSweb supports organizations across various industries, including Procter & Gamble, L'Oreal, LEGO, Columbia Sportswear, ASICS, Roots Canada Ltd., PANDORA, Diageo, BCBGMAXAZRIA, ROKA Sports, T.J. Maxx , the United States Mint, and many more. PFSweb is headquartered in Allen, TX with additional locations in Tennessee, Mississippi, Minnesota, Washington, New York, Ohio, North Carolina, Canada, Belgium, London, Munich, and India. For more information, please visit www.pfsweb.com or download the free PFSweb IR App on your iPhone, iPad, or Android device.

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, acquisition related, restructuring and other costs and the amortization of acquisition-related intangible assets.

EBITDA represents earnings (or losses) before interest, income taxes, depreciation, and amortization. Adjusted EBITDA further eliminates the effect of stock-based compensation, acquisition related, restructuring and other costs and amortization of acquisition-related intangible assets.

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, acquisition related, restructuring and other costs and amortization of acquisition-related intangible assets 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 focusing on certain operational metrics and excluding certain expenses in order to present its core operating performance and 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.

Forward-Looking Statements
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, 2014 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 of the Company and the Risk Factors described therein. PFSweb undertakes no obligation to update publicly any forward-looking statement for any reason, even if new information becomes available or other events occur in the future. There may be additional risks that we do not currently view as material or that are not presently known.


PFSweb, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets (A)
(In Thousands, Except Share Data)


			December 31,			December 31,
			2015			2014

ASSETS
CURRENT ASSETS:
	Cash and cash equivalents		$	21,781		$	18,128
	Restricted cash			275			521
	Accounts receivable, net of allowance for doubtful accounts of $600 and $447 at December 31, 2015 and December 31, 2014, respectively			70,700			59,126
	Inventories, net of reserves of $739 and $768 at December 31, 2015 and December 31, 2014, respectively			9,262			10,534
	Other receivables			8,704			5,638
	Prepaid expenses and other current assets			5,662			7,103
		Total current assets		116,384			101,050

PROPERTY AND EQUIPMENT, net				24,093			26,604
INTANGIBLE ASSETS, net				8,810			2,170
GOODWILL				39,829			8,366
OTHER ASSETS				2,174			2,556
		Total assets		191,290			140,746

LIABILITIES AND SHAREHOLDERS EQUITY
CURRENT LIABILITIES:
	Current portion of long-term debt and capital lease obligations		$	3,153		$	6,850
	Trade accounts payable			51,170			38,842
	Deferred revenue			7,390			9,098
	Performance-based contingent payments			11,679			2,338
	Accrued expenses			30,563			26,135
		Total current liabilities		103,955			83,263

LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS, less current portion				32,238			4,062
DEFERRED REVENUE				4,499			5,355
DEFERRED RENT				4,362			4,870
OTHER LONG-TERM LIABILITIES				2,478			3,091
		Total liabilities		147,532			100,641

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; 18,136,218 and 17,047,093 shares issued at December 31, 2015 and December 31, 2014, respectively; and 18,102,751 and 17,013,622 shares outstanding as of December 31, 2015 and December 31, 2014, respectively			18			17
	Additional paid-in capital			141,948			129,457
	Accumulated deficit			(97,787	)		(89,926	)
	Accumulated other comprehensive income			(296	)		682
	Treasury stock at cost, 33,467 shares			(125	)		(125	)
		Total shareholders' equity		43,758			40,105
		Total liabilities and shareholders' equity	$	191,290		$	140,746

PFSweb, Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Operations (A)
(In Thousands, Except Per Share Data)

				Three Months Ended						Years Ended
				December 31,						December 31,
				2015			2014			2015			2014
REVENUES:
	Product revenue, net			$	13,928		$	18,102		$	58,659		$	75,284
	Service fee revenue				60,865			47,992			182,175			134,385
	Pass-thru revenue				15,271			12,587			47,435			37,379
			Total revenues		90,064			78,681			288,269			247,048

COSTS OF REVENUES:
	Cost of product revenue				13,215			17,067			55,587			71,019
	Cost of service fee revenue				41,633			34,471			123,574			94,858
	Cost of pass-thru revenue				15,271			12,587			47,435			37,379
			Total costs of revenues		70,119			64,125			226,596			203,256
			Gross profit		19,945			14,556			61,673			43,792
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES					19,212			12,387			66,280			47,658
		Income (loss) from operations			733			2,169			(4,607	)		(3,866	)
INTEREST EXPENSE, NET					509			323			1,757			813
		Income (loss) before income taxes			224			1,846			(6,364	)		(4,679	)
INCOME TAX PROVISION (BENEFIT)					822			(258	)		1,497			(53	)
NET INCOME (LOSS)				$	(598	)	$	2,104		$	(7,861	)	$	(4,626	)
NON-GAAP NET INCOME				$	3,132		$	3,883		$	5,435		$	1,355

NET INCOME (LOSS) PER SHARE:
	Basic			$	(0.03	)	$	0.12		$	(0.45	)	$	(0.28	)
	Diluted			$	(0.03	)	$	0.12		$	(0.45	)	$	(0.28	)

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING:
	Basic				18,080			16,905			17,608			16,737
	Diluted				18,080			18,258			17,608			16,737

EBITDA				$	4,918		$	5,195		$	10,224		$	7,809
ADJUSTED EBITDA				$	7,453		$	6,835		$	20,692		$	13,651

(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, 2014.

PFSweb, Inc. and Subsidiaries
Reconciliation of Certain Non-GAAP Items to GAAP
(In Thousands, Except Per Share Data)

			Three Months Ended						Years Ended
			December 31,						December 31,
			2015			2014			2015			2014

NET INCOME (LOSS)			$	(598	)	$	2,104		$	(7,861	)	$	(4,626	)
		Income tax expense (benefit)		822			(258	)		1,497			(53	)
		Interest expense, net		509			323			1,757			813
		Depreciation and amortization		4,185			3,026			14,831			11,675
EBITDA			$	4,918		$	5,195		$	10,224		$	7,809
		Stock-based compensation		1,191			550			4,637			3,059
		Acquisition related, restructuring and other costs		1,344			1,090			5,831			2,783
ADJUSTED EBITDA			$	7,453		$	6,835		$	20,692		$	13,651


			Three Months Ended						Years Ended
			December 31,						December 31,
			2015			2014			2015			2014

NET INCOME (LOSS)			$	(598	)	$	2,104		$	(7,861	)	$	(4,626	)
		Stock-based compensation		1,191			550			4,637			3,059
		Amortization of acquisition-related intangible assets		1,195			139			2,828			139
		Acquisition related, restructuring and other costs		1,344			1,090			5,831			2,783
NON-GAAP NET INCOME			$	3,132		$	3,883		$	5,435		$	1,355

NET INCOME (LOSS) PER SHARE:
	Basic		$	(0.03	)	$	0.12		$	(0.45	)	$	(0.28	)
	Diluted		$	(0.03	)	$	0.12		$	(0.45	)	$	(0.28	)

NON-GAAP NET INCOME PER SHARE:
	Basic		$	0.17		$	0.23		$	0.31		$	0.08
	Diluted		$	0.16		$	0.21		$	0.29		$	0.08



				Three Months Ended						Years Ended
				December 31,						December 31,
				2015			2014			2015			2014

TOTAL REVENUES			$	90,064		$	78,681		$	288,269		$	247,048
	Pass-thru revenue			(15,271	)		(12,587	)		(47,435	)		(37,379	)
	Cost of product revenue			(13,215	)		(17,067	)		(55,587	)		(71,019	)
SERVICE FEE EQUIVALENT REVENUE			$	61,578		$	49,027		$	185,247		$	138,650



PFSweb, Inc. and Subsidiaries
Unaudited Consolidating Statements of Operations
For the Three Months Ended December 31, 2015
(In Thousands)

				PFSweb			Business & Retail Connect		Eliminations			Consolidated
REVENUES:
	Product revenue, net			$	-		$	13,928	$	-		$	13,928
	Service fee revenue				54,771			6,094		-			60,865
	Service fee revenue - affiliate				5,422			250		(5,672	)		-
	Pass-thru revenue				15,271			-		-			15,271
			Total revenues		75,464			20,272		(5,672	)		90,064

COSTS OF REVENUES:
	Cost of product revenue				-			13,256		-			13,256
	Cost of service fee revenue				41,345			5,736		(5,489	)		41,592
	Cost of pass-thru revenue				15,271			-		-			15,271
			Total costs of revenues		56,616			18,992		(5,489	)		70,119
			Gross profit		18,848			1,280		(183	)		19,945
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES					18,899			496		(183	)		19,212
		Income (loss) from operations			(51	)		784		-			733
INTEREST EXPENSE, NET					414			95		-			509
		Income (loss) before income taxes			(465	)		689		-			224
INCOME TAX PROVISION					592			230		-			822
NET INCOME (LOSS)				$	(1,057	)	$	459	$	-		$	(598	)
NON-GAAP NET INCOME				$	2,673		$	459	$	-		$	3,132

EBITDA				$	4,124		$	794	$	-		$	4,918
ADJUSTED EBITDA				$	6,659		$	794	$	-		$	7,453


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

NET INCOME (LOSS)				$	(1,057	)	$	459	$	-			(598	)
		Income tax expense			592			230		-			822
		Interest expense, net			414			95		-			509
		Amortization of acquisition-related intangible assets			1,195			-		-			1,195
		Depreciation and amortization			2,980			10		-			2,990
EBITDA				$	4,124		$	794	$	-		$	4,918
		Stock-based compensation			1,191			-		-			1,191
		Acquisition related, restructuring and other costs			1,344			-		-			1,344
ADJUSTED EBITDA				$	6,659		$	794	$	-		$	7,453

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

NET INCOME (LOSS)				$	(1,057	)	$	459	$	-		$	(598	)
		Stock-based compensation			1,191			-		-			1,191
		Amortization of acquisition-related intangible assets			1,195			-		-			1,195
		Acquisition related, restructuring and other costs			1,344			-		-			1,344
NON-GAAP NET INCOME				$	2,673		$	459	$	-		$	3,132

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 December 31, 2014
(In Thousands)

				PFSweb			Business & Retail Connect		Eliminations			Consolidated
REVENUES:
	Product revenue, net			$	-		$	18,102	$	-		$	18,102
	Service fee revenue				42,634			5,358		-			47,992
	Service fee revenue - affiliate				4,642			292		(4,934	)		-
	Pass-thru revenue				12,587			-		-			12,587
			Total revenues		59,863			23,752		(4,934	)		78,681

COSTS OF REVENUES:
	Cost of product revenue				-			17,067		-			17,067
	Cost of service fee revenue				33,855			5,328		(4,712	)		34,471
	Cost of pass-thru revenue				12,587			-		-			12,587
			Total costs of revenues		46,442			22,395		(4,712	)		64,125
			Gross profit		13,421			1,357		(222	)		14,556
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES					12,025			584		(222	)		12,387
		Income from operations			1,396			773		-			2,169
INTEREST EXPENSE, NET					196			127		-			323
		Income before income taxes			1,200			646		-			1,846
INCOME TAX PROVISION (BENEFIT)					(497	)		239		-			(258	)
NET INCOME				$	1,697		$	407	$	-		$	2,104
NON-GAAP NET INCOME				$	3,476		$	407	$	-		$	3,883

EBITDA				$	4,409		$	786	$	-		$	5,195
ADJUSTED EBITDA				$	6,049		$	786	$	-		$	6,835


A reconciliation of NET INCOME to EBITDA and ADJUSTED EBITDA follows:

NET INCOME				$	1,697		$	407	$	-			2,104
		Income tax expense (benefit)			(497	)		239		-			(258	)
		Interest expense, net			196			127		-			323
		Amortization of acquisition-related intangible assets			139			-		-			139
		Depreciation and amortization			2,874			13		-			2,887
EBITDA				$	4,409		$	786	$	-		$	5,195
		Stock-based compensation			550			-		-			550
		Acquisition related, restructuring and other costs			1,090			-		-			1,090
ADJUSTED EBITDA				$	6,049		$	786	$	-		$	6,835

A reconciliation of NET INCOME to NON-GAAP NET INCOME follows:

NET INCOME				$	1,697		$	407	$	-		$	2,104
		Stock-based compensation			550			-		-			550
		Amortization of acquisition-related intangible assets			139			-		-			139
		Acquisition related, restructuring and other costs			1,090			-		-			1,090
NON-GAAP NET INCOME				$	3,476		$	407	$	-		$	3,883

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 Year Ended December 31, 2015
(In Thousands)

				PFSweb			Business & Retail Connect		Eliminations			Consolidated
REVENUES:
	Product revenue, net			$	-		$	58,659	$	-		$	58,659
	Service fee revenue				165,510			16,665		-			182,175
	Service fee revenue - affiliate				15,559			818		(16,377	)		-
	Pass-thru revenue				47,435			-		-			47,435
			Total revenues		228,504			76,142		(16,377	)		288,269

COSTS OF REVENUES:
	Cost of product revenue				-			55,587		-			55,587
	Cost of service fee revenue				122,981			16,193		(15,600	)		123,574
	Cost of pass-thru revenue				47,435			-		-			47,435
			Total costs of revenues		170,416			71,780		(15,600	)		226,596
			Gross profit		58,088			4,362		(777	)		61,673
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES					64,427			2,630		(777	)		66,280
		Income (loss) from operations			(6,339	)		1,732		-			(4,607	)
INTEREST EXPENSE, NET					1,326			431		-			1,757
		Income (loss) before income taxes			(7,665	)		1,301		-			(6,364	)
INCOME TAX PROVISION					954			543		-			1,497
NET INCOME (LOSS)				$	(8,619	)	$	758	$	-		$	(7,861	)
NON-GAAP NET INCOME				$	4,357		$	1,078	$	-		$	5,435

EBITDA				$	8,424		$	1,800	$	-		$	10,224
ADJUSTED EBITDA				$	18,572		$	2,120	$	-		$	20,692


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

NET INCOME (LOSS)				$	(8,619	)	$	758	$	-			(7,861	)
		Income tax expense (benefit)			954			543		-			1,497
		Interest expense (income), net			1,326			431		-			1,757
		Amortization of acquisition-related intangible assets			2,828			-		-			2,828
		Depreciation and amortization			11,935			68		-			12,003
EBITDA				$	8,424		$	1,800	$	-		$	10,224
		Stock-based compensation			4,637			-		-			4,637
		Acquisition related, restructuring and other costs			5,511			320		-			5,831
ADJUSTED EBITDA				$	18,572		$	2,120	$	-		$	20,692

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

NET INCOME (LOSS)				$	(8,619	)	$	758	$	-		$	(7,861	)
		Stock-based compensation			4,637			-		-			4,637
		Amortization of acquisition-related intangible assets			2,828			-		-			2,828
		Acquisition related, restructuring and other costs			5,511			320		-			5,831
NON-GAAP NET INCOME				$	4,357		$	1,078	$	-		$	5,435

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 Year Ended December 31, 2014
(In Thousands)

				PFSweb			Business & Retail Connect		Eliminations			Consolidated
REVENUES:
	Product revenue, net			$	-		$	75,284	$	-		$	75,284
	Service fee revenue				119,573			14,812		-			134,385
	Service fee revenue - affiliate				14,556			1,138		(15,694	)		-
	Pass-thru revenue				37,379			-		-			37,379
			Total revenues		171,508			91,234		(15,694	)		247,048

COSTS OF REVENUES:
	Cost of product revenue				-			71,019		-			71,019
	Cost of service fee revenue				94,301			15,182		(14,625	)		94,858
	Cost of pass-thru revenue				37,379			-		-			37,379
			Total costs of revenues		131,680			86,201		(14,625	)		203,256
			Gross profit		39,828			5,033		(1,069	)		43,792
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES					45,779			2,948		(1,069	)		47,658
		Income (loss) from operations			(5,951	)		2,085		-			(3,866	)
INTEREST EXPENSE (INCOME), NET					264			549		-			813
		Income (loss) before income taxes			(6,215	)		1,536		-			(4,679	)
INCOME TAX PROVISION (BENEFIT)					(625	)		572		-			(53	)
NET INCOME (LOSS)				$	(5,590	)	$	964	$	-		$	(4,626	)
NON-GAAP NET INCOME				$	391		$	964	$	-		$	1,355

EBITDA				$	5,669		$	2,140	$	-		$	7,809
ADJUSTED EBITDA				$	11,511		$	2,140	$	-		$	13,651


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

NET INCOME (LOSS)				$	(5,590	)	$	964	$	-			(4,626	)
		Income tax expense (benefit)			(625	)		572		-			(53	)
		Interest expense (income), net			264			549		-			813
		Amortization of acquisition-related intangible assets			139			-		-			139
		Depreciation and amortization			11,481			55		-			11,536
EBITDA				$	5,669		$	2,140	$	-		$	7,809
		Stock-based compensation			3,059			-		-			3,059
		Acquisition related, restructuring and other costs			2,783			-		-			2,783
ADJUSTED EBITDA				$	11,511		$	2,140	$	-		$	13,651

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

NET INCOME (LOSS)				$	(5,590	)	$	964	$	-		$	(4,626	)
		Stock-based compensation			3,059			-		-			3,059
		Amortization of acquisition-related intangible assets			139			-		-			139
		Acquisition related, restructuring and other costs			2,783			-		-			2,783
NON-GAAP NET INCOME				$	391		$	964	$	-		$	1,355

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 December 31, 2015
(In Thousands)

			PFSweb			Business & Retail Connect			Eliminations			Consolidated

ASSETS
CURRENT ASSETS:
	Cash and cash equivalents		$	7,962		$	13,819		$	-		$	21,781
	Restricted cash			51			224			-			275
	Accounts receivable, net			51,231			20,348			(879	)		70,700
	Inventories, net			-			9,262			-			9,262
	Other receivables			2,621			6,083			-			8,704
	Prepaid expenses and other current assets			4,744			918			-			5,662
		Total current assets		66,609			50,654			(879	)		116,384

PROPERTY AND EQUIPMENT, net				24,065			28			-			24,093
RECEIVABLE/INVESTMENT IN AFFILIATES				9,577			-			(9,577	)		-
INTANGIBLE ASSETS, net				8,810			-			-			8,810
GOODWILL				39,829			-			-			39,829
OTHER ASSETS				2,174			-			-			2,174
		Total assets		151,064			50,682			(10,456	)		191,290

LIABILITIES AND SHAREHOLDERS EQUITY
CURRENT LIABILITIES:
	Current portion of long-term debt and capital lease obligations		$	3,153		$	-		$	-		$	3,153
	Trade accounts payable			15,329			36,710			(869	)		51,170
	Deferred revenue			7,390			-			-			7,390
	Performance-based contingent payments			11,679			-			-			11,679
	Accrued expenses			26,015			4,558			(10	)		30,563
		Total current liabilities		63,566			41,268			(879	)		103,955

LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS, less current portion				32,238			-			-			32,238
PAYABLE TO AFFILIATES				-			22,056			(22,056	)		-
DEFERRED REVENUE				4,499			-			-			4,499
DEFERRED RENT				4,362			-			-			4,362
OTHER LONG-TERM LIABILITIES				2,478			-			-			2,478
		Total liabilities		107,143			63,324			(22,935	)		147,532


COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY:
	Common stock			18			19			(19	)		18
	Capital contributions			-			1,000			(1,000	)		-
	Additional paid-in capital			141,948			28,060			(28,060	)		141,948
	Retained earnings (accumulated deficit)			(97,616	)		(42,827	)		42,656			(97,787	)
	Accumulated other comprehensive income			(304	)		1,106			(1,098	)		(296	)
	Treasury stock			(125	)		-			-			(125	)
		Total shareholders' equity		43,921			(12,642	)		12,479			43,758
		Total liabilities and shareholders' equity	$	151,064		$	50,682		$	(10,456	)	$	191,290

(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, 2014.


PFSweb, Inc. and Subsidiaries
Unaudited Condensed Consolidating Balance Sheets
as of December 31, 2014
(In Thousands)

			PFSweb			Business & Retail Connect			Eliminations			Consolidated

ASSETS
CURRENT ASSETS:
	Cash and cash equivalents		$	6,671		$	11,457		$	-		$	18,128
	Restricted cash			-			521			-			521
	Accounts receivable, net			42,081			18,415			(1,370	)		59,126
	Inventories, net			-			10,534			-			10,534
	Other receivables			-			5,638			-			5,638
	Prepaid expenses and other current assets			6,141			962			-			7,103
		Total current assets		54,893			47,527			(1,370	)		101,050

PROPERTY AND EQUIPMENT, net				26,478			126			-			26,604
RECEIVABLE/INVESTMENT IN AFFILIATES				9,938			-			(9,938	)		-
INTANGIBLE ASSETS, net				2,170			-			-			2,170
GOODWILL				8,366			-			-			8,366
OTHER ASSETS				2,527			29			-			2,556
		Total assets		104,372			47,682			(11,308	)		140,746

LIABILITIES AND SHAREHOLDERS EQUITY
CURRENT LIABILITIES:
	Current portion of long-term debt and capital lease obligations		$	3,583		$	3,267		$	-		$	6,850
	Trade accounts payable			13,001			27,211			(1,370	)		38,842
	Deferred revenue			9,098			-			-			9,098
	Performance-based contingent payments			2,338			-			-			2,338
	Accrued expenses			19,000			7,135			-			26,135
		Total current liabilities		47,020			37,613			(1,370	)		83,263

LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS, less current portion				4,062			-			-			4,062
PAYABLE TO AFFILIATES				-			22,045			(22,045	)		-
DEFERRED REVENUE				5,355			-			-			5,355
DEFERRED RENT				4,870			-			-			4,870
OTHER LONG-TERM LIABILITIES				3,091			-			-			3,091
		Total liabilities		64,398			59,658			(23,415	)		100,641


COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY:
	Common stock			17			19			(19	)		17
	Capital contributions			-			1,000			(1,000	)		-
	Additional paid-in capital			129,457			28,060			(28,060	)		129,457
	Retained earnings (accumulated deficit)			(90,061	)		(42,711	)		42,846			(89,926	)
	Accumulated other comprehensive income			686			1,656			(1,660	)		682
	Treasury stock			(125	)		-			-			(125	)
		Total shareholders' equity		39,974			(11,976	)		12,107			40,105
		Total liabilities and shareholders' equity	$	104,372		$	47,682		$	(11,308	)	$	140,746

(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, 2014.

Company Contact:
Michael C. Willoughby
Chief Executive Officer
or
Thomas J. Madden
Chief Financial Officer
Tel 972-881-2900

Investor Relations:
Liolios
Scott Liolios or Sean Mansouri
Tel 949-574-3860
Email Contact

Source: PFSweb, Inc.

News Provided by Acquire Media

Press Release

PFSweb Reports Record Fourth Quarter and Full Year 2015 Results

Search Investor Relations