PFSweb Reports Third Quarter 2016 Results
Third Quarter 2016 Summary vs.
- Total revenues increased 12% to
$79.9 million - Service fee equivalent revenue (a non-GAAP measure defined below) increased 18% to
$54.5 million - Service fee gross margin was 31.4% compared to 33.7%
- Net loss was
$1.0 million or$(0.06) per share compared to a loss of$3.7 million or$(0.21) per share
Management Commentary
"As described in our
"Our incremental investments in sales, marketing and infrastructure this year continue to drive improved results as we generated another solid quarter of long-term engagements and project wins from new and existing clients. We continue to maintain a strong pipeline and expect 2016 to mark the largest number of bookings in the history of our company.
"As we prepare for the upcoming holiday season, we will continue to strive toward enabling our clients to maximize their holiday sales performance through our support and execution of their ecommerce initiatives."
Third Quarter 2016 Financial Results
Total revenues in the third quarter of 2016 increased 12% to
Service fee equivalent revenue increased 18% to
Service fee gross margin in the third quarter of 2016 was 31.4% compared to 33.7% in the same period of 2015. The decrease was primarily due to higher facility and other operating costs applicable to certain new large fulfillment clients won during the year, as well as incremental labor and operating costs for the newly launched client referred to above. This was partially offset by higher-margin professional services activity.
Net loss in the third quarter of 2016 was
Adjusted EBITDA (a non-GAAP measure defined below) was
Non-GAAP net loss (a non-GAAP measure defined below) in the third quarter of 2016 was
At
2016 & 2017 Outlook
As disclosed in the company's October pre-announcement release, PFS expects 2016 service fee equivalent revenue to range between
For 2017, PFS expects continued strong growth in service fee equivalent revenue as the company realizes the full year benefit of 2016 client wins and generates incremental revenue from new and expanded client relationships. At this time, the company is targeting 2017 service fee equivalent revenue to range between
Conference Call
PFS will conduct a conference call today at
CEO
Date:
Time:
Toll-free dial-in number: 1-888-452-4005
International dial-in number: 1-719-325-2262
Conference ID: 7262018
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=121850 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
Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay ID: 7262018
About
Non-GAAP Financial Measures
This news release contains 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
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 (income) costs.
Service fee equivalent revenue represents service fee revenue plus the gross profit earned on product revenue and does not alter existing revenue recognition.
Our service fee equivalent revenue target for 2016 includes an estimated gross margin on product sales of approximately
The adjusted EBITDA outlook for 2016 have not been reconciled to the company's net loss outlook for the same period because certain items that would impact interest expense, income tax provision (benefit), depreciation and amortization (including amortization of acquisition-related intangible assets), stock-based compensation, and acquisition-related, restructuring and other (income) costs, all of which are reconciling items between net loss and adjusted EBITDA, cannot be reasonably predicted. Accordingly, reconciliation of adjusted EBITDA outlook to net loss outlook for 2016 is not available without unreasonable effort.
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 (income) 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.
PFS 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. PFS' Annual Report on Form 10-K for the year ended
Condensed Consolidated Balance Sheets (A) | ||||||||||
(In Thousands, Except Share Data) | ||||||||||
(Unaudited) | ||||||||||
2016 | 2015 | |||||||||
ASSETS | ||||||||||
CURRENT ASSETS: | ||||||||||
Cash and cash equivalents | $ | 15,699 | $ | 21,781 | ||||||
Restricted cash | 219 | 275 | ||||||||
Accounts receivable, net of allowance for doubtful accounts of |
64,934 | 70,700 | ||||||||
Inventories, net of reserves of |
7,155 | 9,262 | ||||||||
Other receivables | 4,821 | 8,704 | ||||||||
Prepaid expenses and other current assets | 5,017 | 5,662 | ||||||||
Total current assets | 97,845 | 116,384 | ||||||||
PROPERTY AND EQUIPMENT, net | 28,812 | 24,093 | ||||||||
INTANGIBLE ASSETS, net | 8,125 | 8,810 | ||||||||
45,929 | 39,829 | |||||||||
OTHER ASSETS | 2,433 | 2,174 | ||||||||
Total assets | 183,144 | 191,290 | ||||||||
LIABILITIES AND SHAREHOLDERS EQUITY | ||||||||||
CURRENT LIABILITIES: | ||||||||||
Current portion of long-term debt and capital lease obligations | $ | 5,672 | $ | 3,153 | ||||||
Trade accounts payable | 38,009 | 51,170 | ||||||||
Deferred revenue | 6,238 | 7,390 | ||||||||
Performance-based contingent payments | - | 11,679 | ||||||||
Accrued expenses | 25,109 | 30,563 | ||||||||
Total current liabilities | 75,028 | 103,955 | ||||||||
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS, less current portion | 54,749 | 32,238 | ||||||||
DEFERRED REVENUE | 4,280 | 4,499 | ||||||||
DEFERRED RENT | 4,849 | 4,362 | ||||||||
PERFORMANCE-BASED CONTINGENT PAYMENTS | 380 | 2,478 | ||||||||
Total liabilities | 139,286 | 147,532 | ||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||||
SHAREHOLDERS' EQUITY: | ||||||||||
Preferred stock, |
- | - | ||||||||
Common stock, |
19 | 18 | ||||||||
Additional paid-in capital | 145,045 | 141,948 | ||||||||
Accumulated deficit | (101,760 | ) | (97,787 | ) | ||||||
Accumulated other comprehensive income (loss) | 679 | (296 | ) | |||||||
(125 | ) | (125 | ) | |||||||
Total shareholders' equity | 43,858 | 43,758 | ||||||||
Total liabilities and shareholders' equity | $ | 183,144 | $ | 191,290 |
(A) The financial data above should be read in conjunction with the audited consolidated financial statements of |
Unaudited Condensed Consolidated Statements of Operations (A) | |||||||||||||||||||
(In Thousands, Except Per Share Data) | |||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||||
REVENUES: | |||||||||||||||||||
Service fee revenue | $ | 53,788 | $ | 45,528 | $ | 154,271 | $ | 121,311 | |||||||||||
Product revenue, net | 11,671 | 14,419 | 36,658 | 44,731 | |||||||||||||||
Pass-thru revenue | 14,451 | 11,236 | 41,259 | 32,163 | |||||||||||||||
Total revenues | 79,910 | 71,183 | 232,188 | 198,205 | |||||||||||||||
COSTS OF REVENUES: | |||||||||||||||||||
Cost of service fee revenue | 36,903 | 30,193 | 103,547 | 81,993 | |||||||||||||||
Cost of product revenue | 10,994 | 13,702 | 34,649 | 42,321 | |||||||||||||||
Cost of pass-thru revenue | 14,451 | 11,236 | 41,259 | 32,163 | |||||||||||||||
Total costs of revenues | 62,348 | 55,131 | 179,455 | 156,477 | |||||||||||||||
Gross profit | 17,562 | 16,052 | 52,733 | 41,728 | |||||||||||||||
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 17,568 | 18,778 | 53,926 | 47,068 | |||||||||||||||
Income (loss) from operations | (6 | ) | (2,726 | ) | (1,193 | ) | (5,340 | ) | |||||||||||
INTEREST EXPENSE (INCOME), NET | 714 | 706 | 1,807 | 1,247 | |||||||||||||||
Income (loss) before income taxes | (720 | ) | (3,432 | ) | (3,000 | ) | (6,587 | ) | |||||||||||
INCOME TAX EXPENSE (BENEFIT) | 319 | 238 | 973 | 676 | |||||||||||||||
NET INCOME (LOSS) | $ | (1,039 | ) | $ | (3,670 | ) | $ | (3,973 | ) | $ | (7,263 | ) | |||||||
NON-GAAP NET INCOME (LOSS) | $ | (60 | ) | $ | 1,452 | $ | 134 | $ | 2,193 | ||||||||||
NET INCOME (LOSS) PER SHARE: | |||||||||||||||||||
Basic | $ | (0.06 | ) | $ | (0.21 | ) | $ | (0.21 | ) | $ | (0.42 | ) | |||||||
Diluted | $ | (0.06 | ) | $ | (0.21 | ) | $ | (0.21 | ) | $ | (0.42 | ) | |||||||
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: | |||||||||||||||||||
Basic | 18,699 | 17,829 | 18,552 | 17,449 | |||||||||||||||
Diluted | 18,699 | 17,829 | 18,552 | 17,449 | |||||||||||||||
EBITDA | $ | 3,797 | $ | 1,355 | $ | 10,013 | $ | 5,305 | |||||||||||
ADJUSTED EBITDA | $ | 3,599 | $ | 5,434 | $ | 11,252 | $ | 13,238 |
(A) The financial data above should be read in conjunction with the audited consolidated financial statements of |
Unaudited Reconciliation of Certain Non-GAAP Items to GAAP | |||||||||||||||||
(In Thousands, Except Per Share Data) | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||
NET INCOME (LOSS) | $ | (1,039 | ) | $ | (3,670 | ) | $ | (3,973 | ) | $ | (7,263 | ) | |||||
Income tax expense (benefit) | 319 | 238 | 973 | 676 | |||||||||||||
Interest expense, net | 714 | 706 | 1,807 | 1,247 | |||||||||||||
Depreciation and amortization | 3,803 | 4,081 | 11,206 | 10,645 | |||||||||||||
EBITDA | $ | 3,797 | $ | 1,355 | $ | 10,013 | $ | 5,305 | |||||||||
Stock-based compensation | 347 | 1,492 | 1,743 | 3,446 | |||||||||||||
Acquisition-related, restructuring and other (income) costs | (545 | ) | 2,587 | (504 | ) | 4,487 | |||||||||||
ADJUSTED EBITDA | $ | 3,599 | $ | 5,434 | $ | 11,252 | $ | 13,238 | |||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||
NET INCOME (LOSS) | $ | (1,039 | ) | $ | (3,670 | ) | $ | (3,973 | ) | $ | (7,263 | ) | |||||
Stock-based compensation | 347 | 1,492 | 1,743 | 3,446 | |||||||||||||
Amortization of acquisition-related intangible assets | 1,177 | 1,043 | 2,868 | 1,523 | |||||||||||||
Acquisition-related, restructuring and other (income) costs | (545 | ) | 2,587 | (504 | ) | 4,487 | |||||||||||
NON-GAAP NET INCOME (LOSS) | $ | (60 | ) | $ | 1,452 | $ | 134 | $ | 2,193 | ||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||
TOTAL REVENUES | $ | 79,910 | $ | 71,183 | $ | 232,188 | $ | 198,205 | |||||||||
Pass-thru revenue | (14,451 | ) | (11,236 | ) | (41,259 | ) | (32,163 | ) | |||||||||
Cost of product revenue | (10,994 | ) | (13,702 | ) | (34,649 | ) | (42,321 | ) | |||||||||
SERVICE FEE EQUIVALENT REVENUE | $ | 54,465 | $ | 46,245 | $ | 156,280 | $ | 123,721 |
Unaudited Consolidating Statements of Operations | |||||||||||||||||
For the Three Months Ended |
|||||||||||||||||
(In Thousands) | |||||||||||||||||
Business & Retail Connect |
Eliminations |
Consolidated |
|||||||||||||||
REVENUES: | |||||||||||||||||
Service fee revenue | $ | 50,339 | $ | 3,449 | $ | - | $ | 53,788 | |||||||||
Service fee revenue - affiliate | 2,978 | 231 | (3,209 | ) | - | ||||||||||||
Product revenue, net | - | 11,671 | - | 11,671 | |||||||||||||
Pass-thru revenue | 14,451 | - | - | 14,451 | |||||||||||||
Total revenues | 67,768 | 15,351 | (3,209 | ) | 79,910 | ||||||||||||
COSTS OF REVENUES: | |||||||||||||||||
Cost of service fee revenue | 36,700 | 3,359 | (3,156 | ) | 36,903 | ||||||||||||
Cost of product revenue | - | 10,994 | - | 10,994 | |||||||||||||
Cost of pass-thru revenue | 14,451 | - | - | 14,451 | |||||||||||||
Total costs of revenues | 51,151 | 14,353 | (3,156 | ) | 62,348 | ||||||||||||
Gross profit | 16,617 | 998 | (53 | ) | 17,562 | ||||||||||||
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 17,064 | 557 | (53 | ) | 17,568 | ||||||||||||
Income (loss) from operations | (447 | ) | 441 | - | (6 | ) | |||||||||||
INTEREST EXPENSE (INCOME), NET | 631 | 83 | - | 714 | |||||||||||||
Income (loss) before income taxes | (1,078 | ) | 358 | - | (720 | ) | |||||||||||
INCOME TAX EXPENSE (BENEFIT) | 195 | 124 | - | 319 | |||||||||||||
NET INCOME (LOSS) | $ | (1,273 | ) | $ | 234 | $ | - | $ | (1,039 | ) | |||||||
NON-GAAP NET INCOME (LOSS) | $ | (294 | ) | $ | 234 | $ | - | $ | (60 | ) | |||||||
EBITDA | $ | 3,350 | $ | 447 | $ | - | $ | 3,797 | |||||||||
ADJUSTED EBITDA | $ | 3,152 | $ | 447 | $ | - | $ | 3,599 | |||||||||
A reconciliation of NET INCOME (LOSS) to EBITDA and ADJUSTED EBITDA follows: | |||||||||||||||||
NET INCOME (LOSS) | $ | (1,273 | ) | $ | 234 | $ | - | (1,039 | ) | ||||||||
Income tax expense (benefit) | 195 | 124 | - | 319 | |||||||||||||
Interest expense (income), net | 631 | 83 | - | 714 | |||||||||||||
Depreciation and amortization | 2,620 | 6 | - | 2,626 | |||||||||||||
Amortization of acquisition-related intangible assets | 1,177 | - | - | 1,177 | |||||||||||||
EBITDA | $ | 3,350 | $ | 447 | $ | - | $ | 3,797 | |||||||||
Stock-based compensation | 347 | - | - | 347 | |||||||||||||
Acquisition-related, restructuring and other income | (545 | ) | - | - | (545 | ) | |||||||||||
ADJUSTED EBITDA | $ | 3,152 | $ | 447 | $ | - | $ | 3,599 | |||||||||
A reconciliation of NET INCOME (LOSS) to NON-GAAP NET INCOME (LOSS) follows: | |||||||||||||||||
NET INCOME (LOSS) | $ | (1,273 | ) | $ | 234 | $ | - | $ | (1,039 | ) | |||||||
Stock-based compensation | 347 | - | - | 347 | |||||||||||||
Amortization of acquisition-related intangible assets | 1,177 | - | - | 1,177 | |||||||||||||
Acquisition-related, restructuring and other income | (545 | ) | - | - | (545 | ) | |||||||||||
NON-GAAP NET INCOME (LOSS) | $ | (294 | ) | $ | 234 | $ | - | $ | (60 | ) |
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. |
Unaudited Consolidating Statements of Operations | ||||||||||||||||||
For the Nine Months Ended |
||||||||||||||||||
(In Thousands) | ||||||||||||||||||
Business & Retail Connect |
Eliminations |
Consolidated |
||||||||||||||||
REVENUES: | ||||||||||||||||||
Service fee revenue | $ | 143,193 | $ | 11,078 | $ | - | $ | 154,271 | ||||||||||
Service fee revenue - affiliate | 9,787 | 689 | (10,476 | ) | - | |||||||||||||
Product revenue, net | - | 36,658 | - | 36,658 | ||||||||||||||
Pass-thru revenue | 41,259 | - | - | 41,259 | ||||||||||||||
Total revenues | 194,239 | 48,425 | (10,476 | ) | 232,188 | |||||||||||||
COSTS OF REVENUES: | ||||||||||||||||||
Cost of service fee revenue | 103,077 | 10,815 | (10,345 | ) | 103,547 | |||||||||||||
Cost of product revenue | - | 34,649 | - | 34,649 | ||||||||||||||
Cost of pass-thru revenue | 41,259 | - | - | 41,259 | ||||||||||||||
Total costs of revenues | 144,336 | 45,464 | (10,345 | ) | 179,455 | |||||||||||||
Gross profit | 49,903 | 2,961 | (131 | ) | 52,733 | |||||||||||||
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 52,419 | 1,638 | (131 | ) | 53,926 | |||||||||||||
Income (loss) from operations | (2,516 | ) | 1,323 | - | (1,193 | ) | ||||||||||||
INTEREST EXPENSE (INCOME), NET | 1,551 | 256 | - | 1,807 | ||||||||||||||
Income (loss) before income taxes | (4,067 | ) | 1,067 | - | (3,000 | ) | ||||||||||||
INCOME TAX EXPENSE (BENEFIT) | 593 | 380 | - | 973 | ||||||||||||||
NET INCOME (LOSS) | $ | (4,660 | ) | $ | 687 | $ | - | $ | (3,973 | ) | ||||||||
NON-GAAP NET INCOME (LOSS) | $ | (553 | ) | $ | 687 | $ | - | $ | 134 | |||||||||
EBITDA | $ | 8,672 | $ | 1,341 | $ | - | $ | 10,013 | ||||||||||
ADJUSTED EBITDA | $ | 9,911 | $ | 1,341 | $ | - | $ | 11,252 | ||||||||||
A reconciliation of NET INCOME (LOSS) to EBITDA and ADJUSTED EBITDA follows: | ||||||||||||||||||
NET INCOME (LOSS) | $ | (4,660 | ) | $ | 687 | $ | - | (3,973 | ) | |||||||||
Income tax expense (benefit) | 593 | 380 | - | 973 | ||||||||||||||
Interest expense (income), net | 1,551 | 256 | - | 1,807 | ||||||||||||||
Depreciation and amortization | 8,320 | 18 | - | 8,338 | ||||||||||||||
Amortization of acquisition-related intangible assets | 2,868 | - | - | 2,868 | ||||||||||||||
EBITDA | $ | 8,672 | $ | 1,341 | $ | - | $ | 10,013 | ||||||||||
Stock-based compensation | 1,743 | - | - | 1,743 | ||||||||||||||
Acquisition-related, restructuring and other income | (504 | ) | - | - | (504 | ) | ||||||||||||
ADJUSTED EBITDA | $ | 9,911 | $ | 1,341 | $ | - | $ | 11,252 | ||||||||||
A reconciliation of NET INCOME (LOSS) to NON-GAAP NET INCOME (LOSS) follows: | ||||||||||||||||||
NET INCOME (LOSS) | $ | (4,660 | ) | $ | 687 | $ | - | $ | (3,973 | ) | ||||||||
Stock-based compensation | 1,743 | - | - | 1,743 | ||||||||||||||
Amortization of acquisition-related intangible assets | 2,868 | - | - | 2,868 | ||||||||||||||
Acquisition-related, restructuring and other income | (504 | ) | - | - | (504 | ) | ||||||||||||
NON-GAAP NET INCOME (LOSS) | $ | (553 | ) | $ | 687 | $ | - | $ | 134 |
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. |
Unaudited Consolidating Statements of Operations | |||||||||||||||||||
For the Three Months Ended |
|||||||||||||||||||
(In Thousands) | |||||||||||||||||||
Business & Retail Connect |
Eliminations |
Consolidated |
|||||||||||||||||
REVENUES: | |||||||||||||||||||
Service fee revenue | $ | 42,167 | $ | 3,361 | $ | - | $ | 45,528 | |||||||||||
Service fee revenue - affiliate | 3,494 | 195 | (3,689 | ) | - | ||||||||||||||
Product revenue, net | - | 14,419 | - | 14,419 | |||||||||||||||
Pass-thru revenue | 11,236 | - | - | 11,236 | |||||||||||||||
Total revenues | 56,897 | 17,975 | (3,689 | ) | 71,183 | ||||||||||||||
COSTS OF REVENUES: | |||||||||||||||||||
Cost of service fee revenue | 30,369 | 3,323 | (3,499 | ) | 30,193 | ||||||||||||||
Cost of product revenue | - | 13,702 | - | 13,702 | |||||||||||||||
Cost of pass-thru revenue | 11,236 | - | - | 11,236 | |||||||||||||||
Total costs of revenues | 41,605 | 17,025 | (3,499 | ) | 55,131 | ||||||||||||||
Gross profit | 15,292 | 950 | (190 | ) | 16,052 | ||||||||||||||
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 18,049 | 919 | (190 | ) | 18,778 | ||||||||||||||
Income (loss) from operations | (2,757 | ) | 31 | - | (2,726 | ) | |||||||||||||
INTEREST EXPENSE (INCOME), NET | 584 | 122 | - | 706 | |||||||||||||||
Income (loss) before income taxes | (3,341 | ) | (91 | ) | - | (3,432 | ) | ||||||||||||
INCOME TAX EXPENSE (BENEFIT) | 171 | 67 | - | 238 | |||||||||||||||
NET INCOME (LOSS) | $ | (3,512 | ) | $ | (158 | ) | $ | - | $ | (3,670 | ) | ||||||||
NON-GAAP NET INCOME (LOSS) | $ | 1,288 | $ | 162 | $ | - | $ | 1,450 | |||||||||||
EBITDA | $ | 1,309 | $ | 46 | $ | - | $ | 1,355 | |||||||||||
ADJUSTED EBITDA | $ | 5,066 | $ | 366 | $ | - | $ | 5,432 | |||||||||||
A reconciliation of NET INCOME (LOSS) to EBITDA and ADJUSTED EBITDA follows: | |||||||||||||||||||
NET INCOME (LOSS) | $ | (3,512 | ) | $ | (158 | ) | $ | - | (3,670 | ) | |||||||||
Income tax expense (benefit) | 171 | 67 | - | 238 | |||||||||||||||
Interest expense (income), net | 584 | 122 | - | 706 | |||||||||||||||
Depreciation and amortization | 3,023 | 15 | - | 3,038 | |||||||||||||||
Amortization of acquisition-related intangible assets | 1,043 | - | - | 1,043 | |||||||||||||||
EBITDA | $ | 1,309 | $ | 46 | $ | - | $ | 1,355 | |||||||||||
Stock-based compensation | 1,492 | - | - | 1,492 | |||||||||||||||
Acquisition-related, restructuring and other costs | 2,265 | 320 | - | 2,585 | |||||||||||||||
ADJUSTED EBITDA | $ | 5,066 | $ | 366 | $ | - | $ | 5,432 | |||||||||||
A reconciliation of NET INCOME (LOSS) to NON-GAAP NET INCOME (LOSS) follows: | |||||||||||||||||||
NET INCOME (LOSS) | $ | (3,512 | ) | $ | (158 | ) | $ | - | $ | (3,670 | ) | ||||||||
Stock-based compensation | 1,492 | - | - | 1,492 | |||||||||||||||
Amortization of acquisition-related intangible assets | 1,043 | - | - | 1,043 | |||||||||||||||
Acquisition-related, restructuring and other costs | 2,265 | 320 | - | 2,585 | |||||||||||||||
NON-GAAP NET INCOME (LOSS) | $ | 1,288 | $ | 162 | $ | - | $ | 1,450 |
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. |
Unaudited Consolidating Statements of Operations | ||||||||||||||||||
For the Nine Months Ended |
||||||||||||||||||
(In Thousands) | ||||||||||||||||||
Business & | ||||||||||||||||||
Retail Connect | Eliminations | Consolidated | ||||||||||||||||
REVENUES: | ||||||||||||||||||
Service fee revenue | $ | 110,740 | $ | 10,571 | $ | - | $ | 121,311 | ||||||||||
Service fee revenue - affiliate | 10,137 | 568 | (10,705 | ) | - | |||||||||||||
Product revenue, net | - | 44,731 | - | 44,731 | ||||||||||||||
Pass-thru revenue | 32,163 | - | - | 32,163 | ||||||||||||||
Total revenues | 153,040 | 55,870 | (10,705 | ) | 198,205 | |||||||||||||
COSTS OF REVENUES: | ||||||||||||||||||
Cost of service fee revenue | 81,637 | 10,467 | (10,111 | ) | 81,993 | |||||||||||||
Cost of product revenue | - | 42,321 | - | 42,321 | ||||||||||||||
Cost of pass-thru revenue | 32,163 | - | - | 32,163 | ||||||||||||||
Total costs of revenues | 113,800 | 52,788 | (10,111 | ) | 156,477 | |||||||||||||
Gross profit | 39,240 | 3,082 | (594 | ) | 41,728 | |||||||||||||
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 45,528 | 2,134 | (594 | ) | 47,068 | |||||||||||||
Income (loss) from operations | (6,288 | ) | 948 | - | (5,340 | ) | ||||||||||||
INTEREST EXPENSE (INCOME), NET | 911 | 336 | - | 1,247 | ||||||||||||||
Income (loss) before income taxes | (7,199 | ) | 612 | - | (6,587 | ) | ||||||||||||
INCOME TAX EXPENSE (BENEFIT) | 363 | 313 | - | 676 | ||||||||||||||
NET INCOME (LOSS) | $ | (7,562 | ) | $ | 299 | $ | - | $ | (7,263 | ) | ||||||||
NON-GAAP NET INCOME (LOSS) | $ | 1,574 | $ | 619 | $ | - | $ | 2,193 | ||||||||||
EBITDA | $ | 4,299 | $ | 1,006 | $ | - | $ | 5,305 | ||||||||||
ADJUSTED EBITDA | $ | 11,912 | $ | 1,326 | $ | - | $ | 13,238 | ||||||||||
A reconciliation of NET INCOME (LOSS) to EBITDA and ADJUSTED EBITDA follows: | ||||||||||||||||||
Amortization of acquisition-related intangible assets | ||||||||||||||||||
NET INCOME (LOSS) | $ | (7,562 | ) | $ | 299 | $ | - | (7,263 | ) | |||||||||
Income tax expense (benefit) | 363 | 313 | - | 676 | ||||||||||||||
Interest expense (income), net | 911 | 336 | - | 1,247 | ||||||||||||||
Depreciation and amortization | 9,064 | 58 | - | 9,122 | ||||||||||||||
Amortization of acquisition-related intangible assets | 1,523 | - | - | 1,523 | ||||||||||||||
EBITDA | $ | 4,299 | $ | 1,006 | $ | - | $ | 5,305 | ||||||||||
Stock-based compensation | 3,446 | - | - | 3,446 | ||||||||||||||
Acquisition-related, restructuring and other costs | 4,167 | 320 | - | 4,487 | ||||||||||||||
ADJUSTED EBITDA | $ | 11,912 | $ | 1,326 | $ | - | $ | 13,238 | ||||||||||
A reconciliation of NET INCOME (LOSS) to NON-GAAP NET INCOME (LOSS) follows: | ||||||||||||||||||
NET INCOME (LOSS) | $ | (7,562 | ) | $ | 299 | $ | - | $ | (7,263 | ) | ||||||||
Stock-based compensation | 3,446 | - | - | 3,446 | ||||||||||||||
Amortization of acquisition-related intangible assets | 1,523 | - | - | 1,523 | ||||||||||||||
Acquisition-related, restructuring and other costs | 4,167 | 320 | - | 4,487 | ||||||||||||||
NON-GAAP NET INCOME (LOSS) | $ | 1,574 | $ | 619 | $ | - | $ | 2,193 |
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. |
Unaudited Condensed Consolidating Balance Sheets | ||||||||||||||||||
as of |
||||||||||||||||||
(In Thousands) | ||||||||||||||||||
Business & Retail Connect |
Eliminations |
Consolidated |
||||||||||||||||
ASSETS | ||||||||||||||||||
CURRENT ASSETS: | ||||||||||||||||||
Cash and cash equivalents | $ | 5,639 | $ | 10,060 | $ | - | $ | 15,699 | ||||||||||
Restricted cash | - | 219 | - | 219 | ||||||||||||||
Accounts receivable, net | 50,844 | 14,993 | (903 | ) | 64,934 | |||||||||||||
Inventories, net | - | 7,155 | - | 7,155 | ||||||||||||||
Other receivables | 600 | 4,221 | - | 4,821 | ||||||||||||||
Prepaid expenses and other current assets | 4,173 | 844 | - | 5,017 | ||||||||||||||
Total current assets | 61,256 | 37,492 | (903 | ) | 97,845 | |||||||||||||
PROPERTY AND EQUIPMENT, net | 28,803 | 9 | - | 28,812 | ||||||||||||||
RECEIVABLE/INVESTMENT IN AFFILIATES | 9,342 | - | (9,342 | ) | - | |||||||||||||
INTANGIBLE ASSETS, net | 8,125 | - | - | 8,125 | ||||||||||||||
45,929 | - | - | 45,929 | |||||||||||||||
OTHER ASSETS | 2,433 | - | - | 2,433 | ||||||||||||||
Total assets | 155,888 | 37,501 | (10,245 | ) | 183,144 | |||||||||||||
LIABILITIES AND SHAREHOLDERS EQUITY | ||||||||||||||||||
CURRENT LIABILITIES: | ||||||||||||||||||
Current portion of long-term debt and capital lease obligations | $ | 5,672 | $ | - | $ | - | $ | 5,672 | ||||||||||
Trade accounts payable | 13,395 | 25,517 | (903 | ) | 38,009 | |||||||||||||
Deferred revenue | 6,238 | - | - | 6,238 | ||||||||||||||
Performance-based contingent payments | - | - | - | - | ||||||||||||||
Accrued expenses | 22,270 | 2,839 | - | 25,109 | ||||||||||||||
Total current liabilities | 47,575 | 28,356 | (903 | ) | 75,028 | |||||||||||||
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS, less current portion | 54,749 | - | - | 54,749 | ||||||||||||||
PAYABLE TO AFFILIATES | - | 22,045 | (22,045 | ) | - | |||||||||||||
DEFERRED REVENUE | 4,280 | - | - | 4,280 | ||||||||||||||
DEFERRED RENT | 4,849 | - | - | 4,849 | ||||||||||||||
PERFORMANCE-BASED CONTINGENT PAYMENTS | 380 | - | - | 380 | ||||||||||||||
Total liabilities | 111,833 | 50,401 | (22,948 | ) | 139,286 | |||||||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||||||||||||
SHAREHOLDERS' EQUITY: | ||||||||||||||||||
Common stock | 19 | 19 | (19 | ) | 19 | |||||||||||||
Capital contributions | - | 1,000 | (1,000 | ) | - | |||||||||||||
Additional paid-in capital | 145,045 | 28,060 | (28,060 | ) | 145,045 | |||||||||||||
Retained earnings (accumulated deficit) | (101,563 | ) | (43,205 | ) | 43,008 | (101,760 | ) | |||||||||||
Accumulated other comprehensive income (loss) | 679 | 1,226 | (1,226 | ) | 679 | |||||||||||||
(125 | ) | - | - | (125 | ) | |||||||||||||
Total shareholders' equity | 44,055 | (12,900 | ) | 12,703 | 43,858 | |||||||||||||
Total liabilities and shareholders' equity | $ | 155,888 | $ | 37,501 | $ | (10,245 | ) | $ | 183,144 |
(A) The financial data above should be read in conjunction with the audited consolidated financial statements of |
Unaudited Condensed Consolidating Balance Sheets | ||||||||||||||||||
as of |
||||||||||||||||||
(In Thousands) | ||||||||||||||||||
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 | ||||||||||||||
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 | ||||||||||||||
PERFORMANCE-BASED CONTINGENT PAYMENTS | 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 (loss) | (304 | ) | 1,106 | (1,098 | ) | (296 | ) | |||||||||||
(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 |
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