Financial Guidance for Fiscal Year 2007

PFSweb continues to target total consolidated revenues, excluding pass-through revenues, of approximately $420 million to $435 million and consolidated Adjusted EBITDA of $8 — $10 million for 2007. Capital expenditures for 2007 are estimated to be approximately $3 — $5 million, excluding costs related to the implementation of new business contracts for the Service Fee Business. Achieving these targets will depend upon, among other things, achieving and maintaining the currently expected significant improvement in operations from eCOST.com and continued strong performance from our Service Fee and Supplies Distributors businesses on a year-over-year basis.

Conference Call Information

Management will host a conference call at 10:00 a.m. Central Time (11:00 a.m. Eastern Time) on August 14, 2007 to discuss the latest corporate developments and results. To listen to the call, please dial (888) 823-7459 and enter the pin number (9081135) at least five minutes before the scheduled start time. Investors can also access the call in a “listen only” mode via the Internet at the company’s website, www.pfsweb.com. Please allow extra time prior to the call to visit the site and download any necessary audio software.

A digital replay of the conference call will be available through September 14, 2007 at (877) 519-4471, pin number (9081135). The replay also will be available at the company’s web site for a limited time.

Non-GAAP Financial Measures

This news release contains the non-GAAP measures Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) and Adjusted EBITDA.

EBITDA represents earnings (or losses) before interest, taxes, depreciation, and amortization. Adjusted EBITDA further eliminates the effect of stock-based compensation, merger integration related expenses and a loss on a sales transaction to a former eCOST.com customer. EBITDA and Adjusted EBITDA are used by management, analysts, investors and other interested parties in evaluating our operating performance compared to that of other companies in our industry, as the calculation of EBITDA and Adjusted EBITDA eliminates the effect of financing, income taxes, the accounting effects of capital spending, stock-based compensation, merger related expenses and certain other expenses, which items may vary from different companies for reasons unrelated to overall operating performance.

Merchandise Sales

Merchandise sales represent the estimated value of all fulfillment activity that flows through PFSweb including whether or not PFSweb is the seller of the merchandise or records the full amount of such sales on its financial statements, excluding service fee revenues that PFSweb might recognize for the underlying sales transactions. PFSweb uses merchandise sales as an operating metric to allow investors to gain a more thorough understanding of its business and business volume, in addition to GAAP net revenue.

About PFSweb, Inc.

PFSweb develops and deploys integrated business infrastructure solutions and fulfilment services for Fortune 1000, Global 2000 and brand name companies, including third party logistics, call center support and e-commerce services. The company serves a multitude of industries and company types, including such clients as LEGO, Riverbed, Fathead, CHiA’SSO, FLAVIA^® Beverage Systems, Hewlett-Packard, International Business Machines, Hawker Beechcraft Corp. (formerly Raytheon Aircraft Company), Rene Furterer USA, Roots Canada Ltd. and Xerox.

Through its wholly owned eCOST.com subsidiary, PFSweb also serves as a leading multi-category online discount retailer of high-quality new, “close-out” and manufacturer recertified brand-name technology and consumer electronics for consumers and small to medium size business buyers. The eCOST.com brand markets approximately 110,000 different products from leading manufacturers such as Apple, Canon, Citizen, Denon, Hewlett-Packard, Nikon, Onkyo, Seiko and Toshiba primarily over the Internet and through direct marketing.

To find out more about PFSweb, Inc. (NASDAQ: PFSW), visit the company’s websites at http://www.pfsweb.com and http://www.ecost.com.

The matters discussed herein consist of forward-looking information under the Private Securities Litigation Reform Act of 1995 and is subject to and involves risks and uncertainties, which could cause actual results to differ materially from the forward-looking information. PFSweb’s Annual Report on Form 10-K for the year ended December 31, 2006 identifies certain factors that could cause actual results to differ materially from those projected in any forward looking statements made and investors are advised to review the Annual Report and the Risk Factors described therein. These factors include: our ability to retain and expand relationships with existing clients and attract and implement new clients; our reliance on the fees generated by the transaction volume or product sales of our clients; our reliance on our clients’ projections or transaction volume or product sales; our dependence upon our agreements with IBM; our dependence upon our agreements with our major clients; our client mix, their business volumes and the seasonality of their business; our ability to finalize pending contracts; the impact of strategic alliances and acquisitions; trends in the e-commerce, outsourcing, government regulation both foreign and domestic and the market for our services; whether we can continue and manage growth; increased competition; our ability to generate more revenue and achieve sustainable profitability; effects of changes in profit margins; the customer and supplier concentration of our business; the unknown effects of possible system failures and rapid changes in technology; foreign currency risks and other risks of operating in foreign countries; potential litigation; potential delisting; our dependency on key personnel; the impact of new accounting standards and changes in existing accounting rules or the interpretations of those rules; our ability to raise additional capital or obtain additional financing; our ability and the ability of our subsidiaries to borrow under current financing arrangements and maintain compliance with debt covenants; relationship with and our guarantees of certain of the liabilities and indebtedness of our subsidiaries; whether outstanding warrants issued in a prior private placement will be exercised in the future; our ability to successfully the anticipated benefits of the merger: eCOST’s potential indemnification obligations to its former parent; eCOST’s ability to maintain existing and build new relationships with manufacturers and vendors and the success of its advertising and marketing efforts; eCOST’s ability to increase its sales revenue and sales margin and improve operating efficiencies and eCOST’s ability to generate a profit and cash flows sufficient to cover the values of its intangible assets. PFSweb undertakes no obligation to update publicly any forward-looking statement for any reason, even if new information becomes available or other events occur in the future. There may be additional risks that we do not currently view as material or that are not presently known.

(Tables Follow)

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

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2007				2006				2007				2006
REVENUES:
Product revenue, net		$	84,678			$	89,650			$	165,135			$	179,854
Service fee revenue			17,646				16,209				34,608				32,128
Pass-thru revenue			6,076				3,445				13,064				7,990
Total revenues			108,400				109,304				212,807				219,972
COSTS OF REVENUES:
Cost of product revenue			77,798				84,486				152,569				168,809
Cost of service fee revenue			12,635				11,366				25,299				22,745
Cost of pass-thru revenue			6,076				3,445				13,064				7,990
Total costs of revenues			96,509				99,297				190,932				199,544
Gross profit			11,891				10,007				21,875				20,428
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES			10,427				11,637				21,419				22,429
STOCK-BASED COMPENSATION			188				241				397				480
MERGER INTEGRATION EXPENSE			—				449				150				642
AMORTIZATION OF IDENTIFIABLE INTANGIBLES			204				204				408				341
Total operating expenses			10,819				12,531				22,374				23,892
Income (loss) from operations			1,072				(2,524	)			(499	)			(3,464	)
INTEREST EXPENSE (INCOME), NET			658				517				1,242				948
Income (loss) before income taxes			414				(3,041	)			(1,741	)			(4,412	)
INCOME TAX PROVISION (BENEFIT)			260				143				466				359
NET INCOME (LOSS)		$	154			$	(3,184	)		$	(2,207	)		$	(4,771	)
NET LOSS PER SHARE:
Basic		$	0.00			$	(0.07	)		$	(0.05	)		$	(0.12	)
Diluted		$	0.00			$	(0.07	)		$	(0.05	)		$	(0.12	)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING:
Basic			46,477				43,072				46,476				39,011
Diluted			47,011				43,072				46,476				39,011
EBITDA		$	3,166			$	(687	)		$	3,589			$	125
Adjusted EBITDA		$	3,354			$	3			$	4,136			$	1,636

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2007				2006				2007				2006
Net income (loss)		$	154			$	(3,184	)		$	(2,207	)		$	(4,771	)
Income tax expense (benefit)			260				143				466				359
Interest expense (income)			658				517				1,242				948
Depreciation and amortization			2,094				1,837				4,088				3,589
EBITDA		$	3,166			$	(687	)		$	3,589			$	125
Stock-based compensation			188				241				397				480
Merger integration related expenses			—				449				150				642
Loss on sales transaction to former eCOST customer			—				—				—				389
Adjusted EBITDA		$	3,354			$	3			$	4,136			$	1,636

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

		June 30,				December 31,
		2007				2006
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	15,088			$	15,066
Restricted cash			1,838				2,653
Accounts receivable, net of allowance for doubtful accounts of $1,891 and $2,352 at June 30, 2007 and December 31, 2006, respectively			48,251				49,186
Inventories, net of reserves of $2,176 and $2,987 at June 30, 2007 and December 31, 2006, respectively			44,631				47,670
Other receivables			10,902				10,774
Prepaid expenses and other current assets			3,449				3,531
Total current assets			124,159				128,880
PROPERTY AND EQUIPMENT, net			12,119				12,884
IDENTIFIABLE INTANGIBLES			6,227				6,647
GOODWILL			15,362				15,362
OTHER ASSETS			840				848
Total assets			158,707				164,621
LIABILITIES AND SHAREHOLDERS EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt and capital lease obligations		$	28,533			$	23,802
Trade accounts payable			56,337				62,441
Accrued expenses			22,325				21,485
Total current liabilities			107,195				107,728
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS, less current portion			2,653				6,076
OTHER LIABILITIES			1,828				1,977
Total liabilities			111,676				115,781
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY:
Preferred stock, $1.00 par value; 1,000,000 shares authorized; none issued and outstanding			—				—
Common stock, $.001 par value; 75,000,000 shares authorized; 46,563,008 and 46,553,752 shares issued at June 30, 2007 and December 31, 2006, respectively; and 46,476,708 and 46,467,452 outstanding as of June 30, 2007 and December 31, 2006, respectively			47				47
Additional paid-in capital			91,699				91,302
Accumulated deficit			(46,561	)			(44,354	)
Accumulated other comprehensive income			1,931				1,930
Treasury stock at cost, 86,300 shares			(85	)			(85	)
Total shareholders’ equity			47,031				48,840
Total liabilities and shareholders’ equity		$	158,707			$	164,621

PFSweb, Inc. and Subsidiaries
Unaudited Consolidating Statements of Operations
For the Three Months Ended June 30, 2007
(In Thousands)

						Supplies
		PFSweb				Distributors				eCOST				Eliminations				Consolidated
REVENUES:
Product revenue, net		$	—			$	57,595			$	27,083			$	—			$	84,678
Service fee revenue			17,646				—				—				—				17,646
Service fee revenue — affiliate			2,040				—				—				(2,040	)			—
Pass-thru revenue			6,145				—				—				(69	)			6,076
Total revenues			25,831				57,595				27,083				(2,109	)			108,400
COSTS OF REVENUES:
Cost of product revenue			—				52,912				24,886				—				77,798
Cost of service fee revenue			13,297				—				—				(662	)			12,635
Cost of pass-thru revenue			6,145				—				—				(69	)			6,076
Total costs of revenues			19,442				52,912				24,886				(731	)			96,509
Gross profit			6,389				4,683				2,197				(1,378	)			11,891
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES			6,363				2,623				2,819				(1,378	)			10,427
STOCK-BASED COMPENSATION			188				—				—				—				188
MERGER INTEGRATION EXPENSE			—				—				—				—				—
AMORTIZATION OF IDENTIFIABLE INTANGIBLES			—				—				204				—				204
Total operating expenses			6,551				2,623				3,023				(1,378	)			10,819
Income (loss) from operations			(162	)			2,060				(826	)			—				1,072
INTEREST EXPENSE (INCOME), NET			11				661				(14	)			—				658
Income (loss) before income taxes			(173	)			1,399				(812	)			—				414
INCOME TAX PROVISION (BENEFIT)			(186	)			446				—				—				260
NET INCOME (LOSS)		$	13			$	953			$	(812	)		$	—			$	154
EBITDA		$	1,676			$	2,065			$	(575	)		$	—			$	3,166
Adjusted EBITDA		$	1,864			$	2,065			$	(575	)		$	—			$	3,354
A reconciliation of net income (loss) to EBITDA and Adjusted EBITDA follows:
Net income (loss)		$	13			$	953			$	(812	)		$	—			$	154
Income tax expense (benefit)			(186	)			446				—				—				260
Interest expense (income)			11				661				(14	)			—				658
Depreciation and amortization			1,838				5				251				—				2,094
EBITDA		$	1,676			$	2,065			$	(575	)		$	—			$	3,166
Stock-based compensation			188				—				—				—				188
Adjusted EBITDA		$	1,864			$	2,065			$	(575	)		$	—			$	3,354

PFSweb, Inc. and Subsidiaries
Unaudited Consolidating Statements of Operations
For the Six Months Ended June 30, 2007
(In Thousands)

						Supplies
		PFSweb				Distributors				eCOST				Eliminations				Consolidated
REVENUES:
Product revenue, net		$	—			$	116,405			$	48,730			$	—			$	165,135
Service fee revenue			34,608				—				—				—				34,608
Service fee revenue — affiliate			4,066				—				—				(4,066	)			—
Pass-thru revenue			13,241				—				—				(177	)			13,064
Total revenues			51,915				116,405				48,730				(4,243	)			212,807
COSTS OF REVENUES:
Cost of product revenue			—				107,851				44,722				(4	)			152,569
Cost of service fee revenue			26,599				—				—				(1,300	)			25,299
Cost of pass-thru revenue			13,241				—				—				(177	)			13,064
Total costs of revenues			39,840				107,851				44,722				(1,481	)			190,932
Gross profit			12,075				8,554				4,008				(2,762	)			21,875
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES			13,451				5,126				5,604				(2,762	)			21,419
STOCK-BASED COMPENSATION			397				—				—				—				397
MERGER INTEGRATION EXPENSE			—				—				150				—				150
AMORTIZATION OF IDENTIFIABLE INTANGIBLES			—				—				408				—				408
Total operating expenses			13,848				5,126				6,162				(2,762	)			22,374
Income (loss) from operations			(1,773	)			3,428				(2,154	)			—				(499	)
INTEREST EXPENSE (INCOME), NET			47				1,226				(31	)			—				1,242
Income (loss) before income taxes			(1,820	)			2,202				(2,123	)			—				(1,741	)
INCOME TAX PROVISION (BENEFIT)			(329	)			795				—				—				466
NET INCOME (LOSS)		$	(1,491	)		$	1,407			$	(2,123	)		$	—			$	(2,207	)
EBITDA		$	1,809			$	3,438			$	(1,658	)		$	—			$	3,589
Adjusted EBITDA		$	2,206			$	3,438			$	(1,508	)		$	—			$	4,136
A reconciliation of net income (loss) to EBITDA and Adjusted EBITDA follows:
Net income (loss)		$	(1,491	)		$	1,407			$	(2,123	)		$	—			$	(2,207	)
Income tax expense (benefit)			(329	)			795				—				—				466
Interest expense (income)			47				1,226				(31	)			—				1,242
Depreciation and amortization			3,582				10				496				—				4,088
EBITDA		$	1,809			$	3,438			$	(1,658	)		$	—			$	3,589
Stock-based compensation			397				—				—				—				397
Merger integration expense			—				—				150				—				150
Adjusted EBITDA		$	2,206			$	3,438			$	(1,508	)		$	—			$	4,136

PFSweb, Inc. and Subsidiaries
Unaudited Condensed Consolidating Balance Sheets
as of June 30, 2007
(In Thousands)

						Supplies
		PFSweb				Distributors				eCOST				Eliminations				Consolidated
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	11,352			$	2,196			$	1,540			$	—			$	15,088
Restricted cash			49				980				809				—				1,838
Accounts receivable, net			15,760				28,936				4,231				(676	)			48,251
Inventories, net			—				39,663				4,968				—				44,631
Other receivables			958				9,944				—				—				10,902
Prepaid expenses and other current assets			1,538				1,451				460				—				3,449
Total current assets			29,657				83,170				12,008				(676	)			124,159
PROPERTY AND EQUIPMENT, net			11,810				38				271				—				12,119
NOTES RECEIVABLE FROM AFFILIATES			17,645				—				—				(17,645	)			—
INVESTMENT IN AFFILIATES			37,737				—				—				(37,737	)			—
IDENTIFIABLE INTANGIBLES			—				—				6,227				—				6,227
GOODWILL			—				—				15,362				—				15,362
OTHER ASSETS			700				—				140				—				840
Total assets			97,549				83,208				34,008				(56,058	)			158,707
LIABILITIES AND SHAREHOLDERS EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt and capital lease obligations		$	13,450			$	15,075			$	8			$	—			$	28,533
Trade accounts payable			4,613				44,645				7,755				(676	)			56,337
Accrued expenses			10,123				7,771				4,431				—				22,325
Total current liabilities			28,186				67,491				12,194				(676	)			107,195
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS, less current portion			2,653				—				—				—				2,653
NOTES PAYABLE TO AFFILIATES			—				6,005				11,640				(17,645	)			—
OTHER LIABILITIES			1,454				—				374				—				1,828
Total liabilities			32,293				73,496				24,208				(18,321	)			111,676
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY:
Common stock			47				—				19				(19	)			47
Capital contributions							1,000								(1,000	)			—
Additional paid-in capital			91,699				—				28,059				(28,059	)			91,699
Retained earnings (accumulated deficit)			(28,336	)			6,229				(18,278	)			(6,176	)			(46,561	)
Accumulated other comprehensive income			1,931				2,483				—				(2,483	)			1,931
Treasury stock			(85	)			—				—				—				(85	)
Total shareholders’ equity			65,256				9,712				9,800				(37,737	)			47,031
Total liabilities and shareholders’ equity		$	97,549			$	83,208			$	34,008			$	(56,058	)		$	158,707

PFSweb, Inc. and Subsidiaries
Unaudited Consolidating Statements of Operations
For the Three Months Ended June 30, 2006
(In Thousands)

						Supplies
		PFSweb				Distributors				eCOST				Eliminations				Consolidated
REVENUES:
Product revenue, net		$	—			$	60,867			$	28,783			$	—			$	89,650
Service fee revenue			16,209				—				—				—				16,209
Service fee revenue — affiliate			2,075				—				—				(2,075	)			—
Pass-thru revenue			3,575				—				—				(130	)			3,445
Total revenues			21,859				60,867				28,783				(2,205	)			109,304
COSTS OF REVENUES:
Cost of product revenue			—				56,776				27,721				(11	)			84,486
Cost of service fee revenue			11,996				—				—				(630	)			11,366
Cost of pass-thru revenue			3,575				—				—				(130	)			3,445
Total costs of revenues			15,571				56,776				27,721				(771	)			99,297
Gross profit			6,288				4,091				1,062				(1,434	)			10,007
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES			5,827				2,542				4,702				(1,434	)			11,637
STOCK-BASED COMPENSATION			241				—				—				—				241
MERGER INTEGRATION EXPENSE			—				—				449				—				449
AMORTIZATION OF IDENTIFIABLE INTANGIBLES			—				—				204				—				204
Total operating expenses			6,068				2,542				5,355				(1,434	)			12,531
Income (loss) from operations			220				1,549				(4,293	)			—				(2,524	)
INTEREST EXPENSE (INCOME), NET			(30	)			538				9				—				517
Income (loss) before income taxes			250				1,011				(4,302	)			—				(3,041	)
INCOME TAX PROVISION (BENEFIT)			(200	)			343				—				—				143
NET INCOME (LOSS)		$	450			$	668			$	(4,302	)		$	—			$	(3,184	)
EBITDA		$	1,765			$	1,552			$	(4,004	)		$	—			$	(687	)
Adjusted EBITDA		$	2,006			$	1,552			$	(3,555	)		$	—			$	3
A reconciliation of net income (loss) to EBITDA and Adjusted EBITDA follows:
Net income (loss)		$	450			$	668			$	(4,302	)		$	—			$	(3,184	)
Income tax expense (benefit)			(200	)			343				—				—				143
Interest expense (income)			(30	)			538				9				—				517
Depreciation and amortization			1,545				3				289				—				1,837
EBITDA		$	1,765			$	1,552			$	(4,004	)		$	—			$	(687	)
Stock-based compensation			241				—				—				—				241
Merger integration expense			—				—				449				—				449
Adjusted EBITDA		$	2,006			$	1,552			$	(3,555	)		$	—			$	3

PFSweb, Inc. and Subsidiaries
Unaudited Consolidating Statements of Operations
For the Six Months Ended June 30, 2006
(In Thousands)

						Supplies
		PFSweb				Distributors				eCOST				Eliminations				Consolidated
REVENUES:
Product revenue, net		$	—			$	129,282			$	50,572			$	—			$	179,854
Service fee revenue			32,128				—				—				—				32,128
Service fee revenue — affiliate			4,502				—				—				(4,502	)			—
Pass-thru revenue			8,217				—				—				(227	)			7,990
Total revenues			44,847				129,282				50,572				(4,729	)			219,972
COSTS OF REVENUES:
Cost of product revenue			—				120,730				48,121				(42	)			168,809
Cost of service fee revenue			24,071				—				—				(1,326	)			22,745
Cost of pass-thru revenue			8,217				—				—				(227	)			7,990
Total costs of revenues			32,288				120,730				48,121				(1,595	)			199,544
Gross profit			12,559				8,552				2,451				(3,134	)			20,428
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES			12,388				5,248				7,927				(3,134	)			22,429
STOCK-BASED COMPENSATION			480				—				—				—				480
MERGER INTEGRATION EXPENSE			—				—				642				—				642
AMORTIZATION OF IDENTIFIABLE INTANGIBLES			—				—				341				—				341
Total operating expenses			12,868				5,248				8,910				(3,134	)			23,892
Income (loss) from operations			(309	)			3,304				(6,459	)			—				(3,464	)
INTEREST EXPENSE (INCOME), NET			(65	)			992				21				—				948
Income (loss) before income taxes			(244	)			2,312				(6,480	)			—				(4,412	)
INCOME TAX PROVISION (BENEFIT)			(499	)			858				—				—				359
NET INCOME (LOSS)		$	255			$	1,454			$	(6,480	)		$	—			$	(4,771	)
EBITDA		$	2,797			$	3,307			$	(5,979	)		$	—			$	125
Adjusted EBITDA		$	3,277			$	3,307			$	(4,948	)		$	—			$	1,636
A reconciliation of net income (loss) to EBITDA and Adjusted EBITDA follows:
Net income (loss)		$	255			$	1,454			$	(6,480	)		$	—			$	(4,771	)
Income tax expense (benefit)			(499	)			858				—				—				359
Interest expense (income)			(65	)			992				21				—				948
Depreciation and amortization			3,106				3				480				—				3,589
EBITDA		$	2,797			$	3,307			$	(5,979	)		$	—			$	125
Stock-based compensation			480				—				—				—				480
Merger integration expense			—				—				642				—				642
Loss on sales transaction to former eCOST customer											389								389
Adjusted EBITDA		$	3,277			$	3,307			$	(4,948	)		$	—			$	1,636