e8vk
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): NOVEMBER 10, 2005
PFSweb, Inc.
(Exact name of registrant as specified in its charter)
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Delaware
(STATE OR OTHER JURISDICTION
OF INCORPORATION)
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000-28275
(COMMISSION FILE NUMBER)
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75-2837058
(IRS EMPLOYER
IDENTIFICATION NO.) |
500 NORTH CENTRAL EXPRESSWAY
PLANO, TX 75074
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(972) 881-2900
(REGISTRANTS TELEPHONE NUMBER, INCLUDING AREA CODE )
N/A
(FORMER NAME OR ADDRESS, IF CHANGED SINCE LAST REPORT)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
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Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)) |
INFORMATION TO BE INCLUDED IN THE REPORT
SECTION 8 OTHER EVENTS.
Item 8.01 Other Events
On November 10, 2005, PFSweb, Inc. issued a press release announcing it had signed a
non-binding letter of intent to merge with eCost.com, Inc. A copy of the press release is attached
hereto as Exhibit 99.1.
The information in this Current Report on Form 8-K, including the exhibit attached hereto, is
furnished pursuant to Item 8.01 and shall not be deemed to be filed for the purposes of Section
18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of
that section.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits
99.1 Press Release dated November 10, 2005
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned hereunto duly authorized.
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PFSweb, Inc.
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Dated: November 14, 2005 |
By: |
/s/ THOMAS J. MADDEN
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Thomas J. Madden |
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Executive Vice President,
Chief Financial and
Accounting Officer |
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exv99w1
Exhibit 99.1
Contact:
Lewis Goldberg / Todd Fromer
KCSA Worldwide
212.896.1216 / 212.896.1215
lgoldberg@kcsa.com / tfromer@kcsa.com
PFSweb and eCOST.com Sign Letter of Intent to Merge
PFSweb to Expand Product Distribution Platform and Provide Logistics and Fulfillment For
eCOST.com On-Line Retail Sales
Combined Revenue For Trailing Twelve Months Ended September 30, 2005 Totals $528
Million
Plano, Texas and Torrance, Calif., November 10, 2005 PFSweb, Inc. (Nasdaq: PFSW), a global
provider of integrated business process outsourcing (BPO) solutions, and eCOST.com (Nasdaq: ECST),
a leading online discount retailer, announced today they have entered into a non-binding Letter Of
Intent (LOI) for the merger of PFSweb and eCOST.com.
Under the terms of the proposed merger, PFSweb will issue to eCOST.com shareholders one PFSweb
common share for each outstanding share of eCOST.com in a tax-free, share-for-share transaction. As
a result, eCOST.com will become a wholly owned subsidiary of PFSweb. For the trailing twelve months
ended September 30, 2005, eCOST.com reported revenue of $192.4 million. PFSweb and eCOST.coms
combined revenue for the trailing twelve months ended September 30, 2005 is $528 million. The
transaction is subject to due diligence, the execution of a definitive agreement, the approval of
the respective Boards of Directors and shareholders of each company and other customary conditions.
PFSweb, known as the brand behind the brand, currently warehouses, manages and fulfills more than
$1.6 billion annually in merchandise and transactions for its clients from distribution facilities
located worldwide. eCOST.com is a multi-category online discount retailer of new, closeout and
refurbished products, offering more than 100,000 brand-name products including computer hardware
and software, home electronics, digital imaging, jewelry, housewares, DVDs, video games, and more,
from leading manufacturers such as Apple, Canon, Sony, HP, Nikon, Onkyo, and Toshiba. eCOST.com
markets to both consumer and business customers through its Every Day Low Price platform and
proprietary Bargain Countdown platform.
Mark Layton, CEO of PFSweb, said, The proposed merger with eCOST is incredibly exciting for both
companies. We believe eCOSTs access to PFSwebs solid financial platform and world-class
technology, distribution and customer service capabilities provides eCOST with an opportunity to
reduce costs, streamline operations and increase revenue in the high growth online retail industry segment,
including access to international markets in Canada and Europe. The combination of eCOSTs 1.3
million total customers, broad product offering, merchandising and direct marketing expertise with
PFSwebs advanced distribution and fulfillment engine and IT capabilities will bring together the
core strengths of both organizations.
According to Jupiter Research, in 2005, online retail sales are estimated to reach $79 billion, a
20% increase over 2004 and retail spending is forecasted to grow at a double-digit compound annual
growth rate of 15 percent through 2009 when it is expected to reach $130 billion.
Cindy Almond, VP of Client Services at PFSweb stated, We believe PFSwebs more than ten years
of experience in designing, implementing and operating business process outsourced solutions has
helped us to integrate new clients and businesses effectively and efficiently into our
infrastructure. We have developed a proven methodology of careful planning, diligence and
integration, supported by experienced and talented project management and implementation resources.
Given our experience and the complementary nature of our respective businesses, we expect a smooth
integration of eCOSTs distribution and fulfillment systems requirements.
Layton added, Todays announcement provides an opportunity for strong revenue and profitability
growth for our products division. We are also strongly committed to continuing our efforts to
expand our services division revenue. Collectively, we believe that the revenue and profitability
growth potential of both divisions makes for a well rounded business model.
Adam Shaffer, CEO of eCOST.com, said, We are pleased to announce our Letter of Intent to merge
with PFSweb. Our position as a leading web commerce provider with an extensive product portfolio
and strong customer base combined with PFSwebs technology and distribution infrastructure provides
long-term growth opportunities for both companies. We look forward to working closely with PFSweb
and completing this transaction in a timely fashion.
About eCOST.com, Inc.
eCOST.com is a leading multi-category online discount retailer of
high-quality new, close-out and refurbished brand-name merchandise for consumers and small
business buyers. eCOST.com markets over 100,000 different products from leading manufacturers such
as Apple, Canon, Citizen, Denon, HP, Nikon, Onkyo, Seiko, Sony, and Toshiba primarily over the
Internet (http://www.ecost.com) and through direct marketing. Prior to April 11, 2005, eCOST.com
was a subsidiary of PC Mall, Inc.
This press release contains forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Such
statements include eCOST.coms expectations, hopes or intentions regarding the future, including
but not limited to statements regarding business and financial trends and eCOST.coms expectations
regarding profitability, eCOSTs intention to merge with PFSweb and the expected benefits of such a
merger. Forward-looking statements involve risks and uncertainties and actual results may differ
materially from those discussed in any such statement. Among the factors that could cause actual
results to differ materially are the following: reliance on PC Malls maintenance of eCOST.coms
systems; eCOST.coms ability to maintain existing and build new vendor and supplier relationships;
ability to obtain favorable product pricing and vendor consideration; product availability; outages
of eCOST.coms systems and website; ability to attract customers on cost-effective terms; risks due
to shifts in market demand and the economic climate and, with respect to the proposed merger, the
inability of eCOST.com and PFSweb to, among other things, obtain approval from their respective
boards of directors and shareholders for the transaction, reach agreement on definitive terms for,
and subsequently close, the transaction, and, assuming the merger is consummated, the inability of
the companies to successfully integrate their business to achieve the anticipated benefits of the
transaction. Additional factors that could cause actual results to differ are discussed under the
heading Risk Factors and in other sections of eCOST.coms Annual Report on Form 10-K/A for the
year ended December 31, 2004 filed with the Securities and Exchange Commission and in its other
periodic reports filed from time to time with the Commission. All forward-looking statements in
this document are made as of the date hereof, based on information available to eCOST.com as of the
date hereof, and eCOST.com assumes no obligation to update any forward-looking statement.
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 Adaptec (Nasdaq:ADPT),
CHiASSO, FLAVIA® Beverage Systems,
Hewlett-Packard (NYSE:HPQ), International Business Machines (NYSE:IBM), Nokia (NYSE:NOK), Pfizer,
Inc. (NYSE:PFE), Raytheon Aircraft Company, Rene Furterer USA, Roots, Inc., Smithsonian Institution
and Xerox (NYSE:XRX).
To find out more about PFSweb, Inc. (NASDAQ: PFSW), visit our website at www.pfsweb.com.
The matters discussed in this news release (except for historical information) and, in
particular, information regarding the merger, estimates, future revenue, earnings and business
plans and goals, consist of forward-looking information under the Private Securities Litigation
Reform Act of 1995 and are subject to and involve risks and uncertainties, which could cause actual
results to differ materially from the forward-looking information. These forward-looking statements
are not guarantees of future performance and involve risks, uncertainties and assumptions that are
difficult to predict. These risks and uncertainties include, but are not limited to, PFSwebs
ability to retain and expand relationships with existing clients and attract new clients; PFSwebs
dependence upon its agreements with IBM; PFSwebs reliance on the fees generated by the transaction
volume or product sales of its clients; PFSwebs reliance on its clients projections or
transaction volume or product sales; PFSwebs client mix and the seasonality of their business;
PFSwebs ability to finalize pending contracts; the impact of new accounting standards and rules
regarding revenue recognition, stock options, and other matters; changes in accounting rules or
current interpretation of those rules; the impact of strategic alliances and acquisitions; trends
in the market for PFSwebs services; trends in e-commerce; whether PFSweb can continue and manage
growth; changes in the trend toward outsourcing; increased competition; PFSwebs ability to
generate more revenue and achieve sustainable profitability; effects of changes in profit margins;
the customer concentration of PFSwebs business; the unknown effects of possible system failures
and rapid changes in technology; trends in government regulation both foreign and domestic; foreign
currency risks and other risks of operating in foreign countries; potential litigation involving
our e-commerce intellectual property rights; PFSwebs dependency on key personnel; PFSwebs ability
to raise additional capital or obtain additional
financing; PFSwebs relationship with and its guarantees of the working capital indebtedness of its
subsidiary, Supplies Distributors; PFSwebs ability or the ability of its subsidiaries to borrow
under current financing arrangements and maintain compliance with debt covenants; whether
outstanding PFSweb warrants issued in a prior private placement will be exercised in the future
and, with respect to the proposed merger, the inability of eCOST.com and PFSweb to reach agreement
on definitive terms for, and substantially close, the transaction, and the ability of the companies
to successfully integrate their business to achieve the anticipated benefits of the transaction. A
description of these factors, as well as other factors, which could affect PFSwebs business, is
set forth in PFSwebs Form 10-K for the year ended December 31, 2004.
In addition, some forward-looking statements are based upon assumptions as to future events that
may not prove to be accurate. Therefore, actual outcomes and results may differ materially from
what is expected or forecasted in such forward-looking statements. We undertake 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.
WHERE YOU CAN FIND ADDITIONAL INFORMATION:
In connection with each companys solicitation of proxies with respect to any meeting of its
stockholders that may be called with respect to the prospective merger, each company will file with
the Securities and Exchange Commission (the SEC), and will furnish to its stockholders, a proxy
statement. Stockholders of each company are advised to read any proxy statement when it is
finalized and distributed to stockholders because it will contain important information.
Stockholders will be able to obtain a free-of-charge copy of any proxy statement (when available)
and other relevant documents filed with the SEC from the SECs website at www.sec.gov.
Stockholders will also be able to obtain a free-of-charge copy of the proxy statement and other
relevant documents (when available) by directing a request by mail or telephone to either (i)
PFSweb, Inc., 500 North Central Expressway, Suite 500, Plano, Texas 75074 Attention: Corporate
Secretary, Telephone: (972) 881-2900, or from PFSwebs website, www.pfsweb.com or (ii) eCOST.com,
Inc., 2555 West 190th Street, Suite 106, Torrance CA 90504 Attention: Corporate
Secretary, Telephone: (310) 225-5025, or from eCOST.coms website, www.ecost.com.
Each company and certain of its directors, executive officers and other members of management and
employees may, under the rules of the SEC, be deemed to be participants in the solicitation of
proxies from such companys stockholders in favor of the prospective merger. Information regarding
the persons who may be considered participants in the solicitation of proxies will be set forth
in any proxy statement that is filed with the SEC. Information regarding certain of these persons
and their beneficial ownership of the common stock of either company is also set forth in the
Schedule 14A filed by eCOST.com on May 27, 2005 with the SEC, and the Schedule 14A filed by PFSweb
on April 28, 2005 with the SEC.
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