SOURCE: PFSweb, Inc.

PFSweb, Inc.

March 06, 2014 08:30 ET

PFSweb Reports Fourth Quarter and Full Year 2013 Results

2013 Service Fee Equivalent Revenue of $118.7 Million Drives Adj. EBITDA of $10.7 Million; Service Fee Equivalent Revenue in 2014 Expected to Increase 7%-12% to $127-$133 Million, With Adj. EBITDA Increasing 12%-31% to $12-$14 Million

ALLEN, TX--(Marketwired - Mar 6, 2014) - PFSweb, Inc. (NASDAQ: PFSW), an international provider of end-to-end eCommerce solutions, reported financial results for the fourth quarter and full year ended December 31, 2013 and provided its financial outlook for 2014.

Fourth Quarter 2013 Financial Highlights

  • Service fee equivalent revenue (a non-GAAP measure defined and discussed below) decreased to $35.6 million compared to $38.0 million in the same period in 2012.
  • Service fee gross margin increased 410 basis points to 30.3% compared to 26.2% in the same period in 2012.
  • Adjusted EBITDA (a non-GAAP measure defined and discussed below) increased to $3.9 million versus $3.8 million in the same period in 2012.
  • Cash and cash equivalents totaled $22.4 million compared to $19.6 million as of December 31, 2012.
  • Debt totaled $11.1 million, declining 50% from December 31, 2012.

Fourth Quarter 2013 Financial Results

Total revenues in the fourth quarter totaled $66.7 million compared to $77.0 million in the same period in 2012. The decrease in total revenues was primarily due to the expected decline in product revenue to $21.3 million compared to $28.3 million in the same period in 2012 as a result of restructuring activities by the company's largest client in this segment. Service fee revenue in the fourth quarter of 2013 totaled $34.3 million compared to $35.4 million the same period in 2012.

Service fee equivalent revenue was $35.6 million compared to $38.0 million in the same period in 2012. This decrease, which was primarily due to previously announced client transitions earlier in the year, was partially offset by revenues generated from new and expanded client relationships as well as higher seasonal client volumes.

Service fee gross margin in the fourth quarter increased 410 basis points to 30.3% compared to 26.2% in the same period in 2012. This increase resulted primarily from a change in the client mix, an increased level of higher margin professional and technology services, including project activity, and improved operating efficiencies.

Adjusted EBITDA increased to $3.9 million compared to $3.8 million in the same period in 2012, despite reduced revenue levels.

Net loss in the fourth quarter of 2013 was $0.4 million, or $(0.03) per diluted share, compared to net income of $0.7 million, or $0.05 per diluted share, in the same period in 2012. Net loss in the fourth quarter of 2013 included approximately $1.4 million in stock-based compensation expense. Net loss in the fourth quarter of 2012 included approximately $0.3 million in stock-based compensation expense.

Non-GAAP net income (a non-GAAP measure defined and discussed below) in the fourth quarter of 2013 was $1.0 million, or $0.06 per diluted share, compared to non-GAAP net income of $1.0 million, or $0.07 per diluted share, for the fourth quarter of 2012.

At December 31, 2013, the company's cash and cash equivalents increased $2.8 million to $22.4 million compared to $19.6 million at December 31, 2012. Total debt at December 31, 2013 was reduced by 50% to $11.1 million compared to $22.1 million at December 31, 2012. The decrease in debt primarily resulted from the inflow of cash proceeds from the company's May 2013 equity offering.

Full Year 2013 Financial Results

Total revenues decreased to $241.6 million in 2013 compared to $281.6 million in 2012. Product revenue decreased to $91.0 million in 2013 compared to $119.7 million in 2012. Service fee revenue in 2013 decreased to $113.0 million compared to $120.4 million in 2012. Service fee equivalent revenue was $118.7 million compared to $130.0 million in 2012.

Service fee gross margin in 2013 increased 580 basis points to 31.7% compared to 25.9% in 2012.

Adjusted EBITDA was $10.7 million in 2013 compared to $12.0 million in 2012.

Net loss in 2013 was $5.9 million, or $(0.39) per diluted share, compared to a net loss of $1.5 million, or $(0.12) per diluted share, in 2012. Net loss in 2013 included approximately $2.6 million in stock-based compensation expense and $2.5 million in restructuring charges. Net loss in 2012 included approximately $1.3 million in stock-based compensation expense, $0.9 million in move related expenses and $0.5 million in lease termination costs.

Non-GAAP net loss in 2013 was $0.8 million, or $(0.05) per diluted share, compared to non-GAAP net income of $1.1 million, or $0.09 per diluted share, in 2012.

Management Commentary

"2013 was a pivotal year as we refocused our operations on expanding our higher-margin service business and improving overall operating efficiencies," said Michael Willoughby, CEO of PFSweb. "As expected during the fourth quarter, the continued year-over-year decline in our lower-margin product revenue segment and transition of certain previously announced client programs weighed on our top line. However, we generated stronger than anticipated service fee equivalent revenue, the metric we use to measure our primary business activity. This was largely the result of robust client sales experienced throughout the U.S. and Europe during the all-important holiday season. Additionally, our cost initiatives implemented throughout the year helped expand service fee revenue gross margin and Adjusted EBITDA as compared to the prior year, despite reduced revenue levels."

Willoughby concluded: "As we move into 2014, we remain very excited about our opportunities for growth in revenue and profitability through new and expanded client relationships and a continued emphasis on controlling costs. In addition to the strong U.S. ecommerce market, we are pleased to see increased opportunities in Europe and Canada, as well as through our strategic relationship with transcosmos. While our new client activity and existing client growth in the first half of 2014 is expected to be more than offset by the remaining impact of client transitions that occurred in 2013, we expect to exit 2014 as a much stronger company, especially given the expected rollout of the U.S. Mint and other recent client wins in the second half of the year."

2014 Outlook

PFSweb is currently targeting 2014 service fee equivalent revenue to range between $127 million to $133 million, increasing 7% to 12% from 2013. The company is also targeting Adjusted EBITDA in 2014 to range between $12 million and $14 million, representing an increase of 12% to 31% from 2013.

Conference Call

PFSweb will conduct a conference call today at 11:00 a.m. Eastern time to discuss its results for the fourth quarter and full year ended December 31, 2013.

The company's CEO Mike Willoughby and CFO Tom Madden will host the conference call, followed by a question and answer period.

Date: Thursday, March 6, 2014
Time: 11:00 a.m. Eastern time (10:00 a.m. Central time)
Dial-in number: 1-877-941-4774
International number: 1-480-629-9760
Conference ID: 4670781

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 Group at 1-949-574-3860.

The conference call will be broadcast live and available for replay at http://public.viavid.com/index.php?id=108042 and via the investor relations section at www.pfsweb.com.

A replay of the conference call will be available after 2:00 p.m. Eastern time on the same day through March 20, 2014.

Toll-free replay number: 1-877-870-5176
International replay number: 1-858-384-5517
Replay ID: 4670781

About PFSweb Inc.
PFSweb, Inc. (NASDAQ: PFSW) is an international business process outsourcing provider of end-to-end eCommerce solutions. The company provides these solutions and services to major brand names and other companies seeking to optimize their supply chain and enhance their traditional and online business channels, which include both direct-to-consumer and business-to-business sales channels. PFSweb supports organizations across various industries, including Procter & Gamble, L'Oreal, LEGO, Columbia Sportswear, Riverbed, Ricoh, Roots Canada Ltd., Diageo, BCBGMAXAZRIA, T.J. Maxx, the United States Mint, and many more. PFSweb is headquartered in Allen, TX with additional locations in Tennessee, Mississippi, Canada, Belgium, and the Philippines. For more information, please visit www.pfsweb.com.

Non-GAAP Financial Measures
This news release may contain certain non-GAAP measures, including non-GAAP net income (loss), earnings before interest, income taxes, depreciation and amortization (EBITDA), Adjusted EBITDA and service fee equivalent revenue.

Non-GAAP net income (loss) represents net income (loss) calculated in accordance with U.S. GAAP as adjusted for the impact of non-cash stock-based compensation expense, restructuring and other charges, lease termination costs and certain move related expenses.

EBITDA represents earnings (or losses) before interest, income taxes, depreciation, and amortization. Adjusted EBITDA further eliminates the effect of stock-based compensation, restructuring and other charges, lease termination costs and certain move related expenses.

Service fee equivalent revenue represents service fee revenue plus the gross profit earned on product revenue.

Non-GAAP net income (loss), EBITDA, Adjusted EBITDA and service fee equivalent revenue are used by management, analysts, investors and other interested parties in evaluating our operating performance compared to that of other companies in our industry. The calculation of non-GAAP net income (loss) eliminates the effect of stock-based compensation, restructuring and other charges, lease termination costs and certain move related expenses and EBITDA and adjusted EBITDA further eliminate the effect of financing, income taxes and the accounting effects of capital spending, which items may vary from different companies for reasons unrelated to overall operating performance. Service fee equivalent revenue allows client contracts with similar operational support models but different financial models to be combined as if all contracts were being operated on a service fee revenue basis.

PFSweb believes these non-GAAP measures provide useful information to both management and investors by 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, 2012 and Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2013 identify certain factors that could cause actual results to differ materially from those projected in any forward looking statements made and investors are advised to review the Annual and Quarterly Reports 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  
Preliminary Unaudited Condensed Consolidated Balance Sheets (A)  
(In Thousands, Except Share Data)  
             
             
    December 31,     December 31,  
    2013     2012  
ASSETS            
CURRENT ASSETS:                
  Cash and cash equivalents   $ 22,418     $ 19,626  
  Restricted cash     130       283  
  Accounts receivable, net of allowance for doubtful accounts of $382 and $450 at December 31, 2013 and December 31, 2012, respectively                
  55,292       45,684  
  Inventories, net of reserves of $962 and $1,789 at December 31, 2013 and December 31, 2012, respectively                
  14,169       24,654  
  Other receivables     5,241       7,675  
  Prepaid expenses and other current assets     4,713       4,346  
    Total current assets     101,963       102,268  
                 
PROPERTY AND EQUIPMENT, net     27,190       27,917  
OTHER ASSETS     2,883       3,286  
    Total assets     132,036       133,471  
                 
LIABILITIES AND SHAREHOLDERS EQUITY                
CURRENT LIABILITIES:                
  Current portion of long-term debt and capital lease obligations   $ 8,231     $ 16,660  
  Trade accounts payable     34,096       40,493  
  Deferred revenue     8,181       6,648  
  Accrued expenses     25,045       23,097  
    Total current liabilities     75,553       86,898  
                 
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS, less current portion     2,876       5,400  
DEFERRED REVENUE     7,491       7,562  
DEFERRED RENT     5,191       5,560  
    Total liabilities     91,111       105,420  
                 
                 
COMMITMENTS AND CONTINGENCIES                
                 
SHAREHOLDERS' EQUITY:                
  Preferred stock, $1.00 par value; 1,000,000 shares authorized; none issuedand outstanding                
  -       -  
  Common stock, $.001 par value; 35,000,000 shares authorized; 16,540,904 and 12,812,386 shares issued at December 31, 2013 and December 31, 2012, respectively; and 16,507,437 and 12,778,919 shares outstanding as of December 31, 2013 and December 31, 2012, respectively                
             
             
  17       13  
  Additional paid-in capital     124,522       106,018  
  Accumulated deficit     (85,300 )     (79,409 )
  Accumulated other comprehensive income     1,811       1,554  
  Treasury stock at cost, 33,467 shares     (125 )     (125 )
    Total shareholders' equity     40,925       28,051  
    Total liabilities and shareholders' equity   $ 132,036     $ 133,471  
     
(A)   The financial data above should be read in conjunction with the audited consolidated financial statements of PFSweb, Inc. included in its Form 10-K for the year ended December 31, 2012.
     
     
 PFSweb, Inc. and Subsidiaries  
Preliminary Unaudited Condensed Consolidated Statements of Operations (A)  
(In Thousands, Except Per Share Data)  
                       
    Three Months Ended   Twelve Months Ended  
    December 31,   December 31,  
    2013     2012   2013     2012  
REVENUES:                              
  Product revenue, net   $ 21,322     $ 28,290   $ 90,982     $ 119,740  
  Service fee revenue     34,269       35,411     112,977       120,433  
  Pass-thru revenue     11,133       13,269     37,644       41,390  
    Total revenues     66,724       76,970     241,603       281,563  
                               
COSTS OF REVENUES:                              
  Cost of product revenue     20,022       25,700     85,237       110,183  
  Cost of service fee revenue     23,895       26,119     77,160       89,249  
  Cost of pass-thru revenue     11,133       13,269     37,644       41,390  
    Total costs of revenues     55,050       65,088     200,041       240,822  
    Gross profit     11,674       11,882     41,562       40,741  
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES     11,840       10,813     46,235       40,620  
  Income (loss) from operations     (166 )     1,069     (4,673 )     121  
INTEREST EXPENSE (INCOME), NET     115       230     679       988  
  Income (loss) before income taxes     (281 )     839     (5,352 )     (867 )
INCOME TAX PROVISION (BENEFIT)     128       187     539       644  
NET INCOME (LOSS)   $ (409 )   $ 652   $ (5,891 )   $ (1,511 )
NON-GAAP NET INCOME (LOSS)   $ 970     $ 963   $ (772 )   $ 1,130  
                               
NET INCOME (LOSS) PER SHARE:                              
  Basic   $ (0.03 )   $ 0.05   $ (0.39 )   $ (0.12 )
  Diluted   $ (0.03 )   $ 0.05   $ (0.39 )   $ (0.12 )
                               
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING:                              
  Basic     16,345       12,779     14,957       12,777  
  Diluted     16,345       12,907     14,957       12,777  
                               
EBITDA   $ 2,511     $ 3,482   $ 5,537     $ 9,369  
ADJUSTED EBITDA   $ 3,890     $ 3,793   $ 10,656     $ 12,010  
     
(A)   The financial data above should be read in conjunction with the audited consolidated financial statements of PFSweb, Inc. included in its Form 10-K for the year ended December 31, 2012.
     
     
PFSweb, Inc. and Subsidiaries  
Reconciliation of certain Non-GAAP Items to GAAP  
(In Thousands, Except Per Share Data)  
                         
    Three Months Ended     Twelve Months Ended  
    December 31,     December 31,  
    2013     2012     2013     2012  
NET INCOME (LOSS)   $ (409 )   $ 652     $ (5,891 )   $ (1,511 )
  Income tax expense     128       187       539       644  
  Interest expense, net     115       230       679       988  
  Depreciation and amortization     2,677       2,413       10,210       9,248  
EBITDA   $ 2,511     $ 3,482     $ 5,537     $ 9,369  
  Stock-based compensation     1,379       311       2,574       1,325  
  Restructuring and other charges     -       -       2,545       -  
  Lease terminations costs     -       -       -       450  
  Move related expenses     -       -       -       866  
ADJUSTED EBITDA   $ 3,890     $ 3,793     $ 10,656     $ 12,010  
                                 
                                 
    Three Months Ended     Twelve Months Ended  
    December 31,     December 31,  
    2013     2012     2013     2012  
                                 
NET INCOME (LOSS)   $ (409 )   $ 652     $ (5,891 )   $ (1,511 )
  Stock-based compensation     1,379       311       2,574       1,325  
  Restructuring and other charges     -       -       2,545       -  
  Lease terminations costs     -       -       -       450  
  Move related expenses     -       -       -       866  
NON-GAAP NET INCOME (LOSS)   $ 970     $ 963     $ (772 )   $ 1,130  
                                 
NET INCOME (LOSS) PER SHARE:                                
  Basic   $ (0.03 )   $ 0.05     $ (0.39 )   $ (0.12 )
  Diluted   $ (0.03 )   $ 0.05     $ (0.39 )   $ (0.12 )
                                 
NON-GAAP NET INCOME (LOSS) Per Share:                                
  Basic   $ 0.06     $ 0.08     $ (0.05 )   $ 0.09  
  Diluted   $ 0.06     $ 0.07     $ (0.05 )   $ 0.09  
                                 
                                 
                                 
    Three Months Ended     Twelve Months Ended  
    December 31,     December 31,  
    2013     2012     2013     2012  
                                 
TOTAL REVENUES   $ 66,724     $ 76,970     $ 241,603     $ 281,563  
  Pass-thru revenue     (11,133 )     (13,269 )     (37,644 )     (41,390 )
  Cost of product revenue     (20,022 )     (25,700 )     (85,237 )     (110,183 )
SERVICE FEE EQUIVALENT REVENUE   $ 35,569     $ 38,001     $ 118,722     $ 129,990  
                                 
                                 
PFSweb, Inc. and Subsidiaries  
Preliminary Unaudited Consolidating Statements of Operations  
For the Three Months Ended December 31, 2013  
(In Thousands)  
                       
          Business &            
    PFSweb     Retail Connect   Eliminations     Consolidated  
REVENUES:                              
  Product revenue, net   $ -     $ 21,322   $ -     $ 21,322  
  Service fee revenue     30,580       3,689     -       34,269  
  Service fee revenue - affiliate     3,779       338     (4,117 )     -  
  Pass-thru revenue     11,133       -     -       11,133  
    Total revenues     45,492       25,349     (4,117 )     66,724  
                               
COSTS OF REVENUES:                              
  Cost of product revenue     -       20,022     -       20,022  
  Cost of service fee revenue     24,028       3,547     (3,680 )     23,895  
  Cost of pass-thru revenue     11,133       -     -       11,133  
    Total costs of revenues     35,161       23,569     (3,680 )     55,050  
    Gross profit     10,331       1,780     (437 )     11,674  
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES     11,036       1,241     (437 )     11,840  
  Income (loss) from operations     (705 )     539     -       (166 )
INTEREST EXPENSE (INCOME), NET     (29 )     144     -       115  
  Income (loss) before income taxes     (676 )     395     -       (281 )
INCOME TAX PROVISION (BENEFIT)     (15 )     143             128  
NET INCOME (LOSS)   $ (661 )   $ 252   $ -     $ (409 )
NON-GAAP NET INCOME (LOSS)   $ 718     $ 252   $ -     $ 970  
                               
EBITDA   $ 1,929     $ 582   $ -     $ 2,511  
ADJUSTED EBITDA   $ 3,308     $ 582   $ -     $ 3,890  
                               
                               
A reconciliation of NET INCOME (LOSS) to EBITDA and ADJUSTED EBITDA follows:                              
                               
NET INCOME (LOSS)   $ (661 )   $ 252   $ -       (409 )
  Income tax expense (benefit)     (15 )     143     -       128  
  Interest expense (income), net     (29 )     144     -       115  
  Depreciation and amortization     2,634       43     -       2,677  
EBITDA   $ 1,929     $ 582   $ -     $ 2,511  
  Stock-based compensation     1,379       -     -       1,379  
ADJUSTED EBITDA   $ 3,308     $ 582   $ -     $ 3,890  
                               
A reconciliation of NET INCOME (LOSS) to NON-GAAP NET INCOME (LOSS) follows:                              
                               
NET INCOME (LOSS)   $ (661 )   $ 252   $ -     $ (409 )
  Stock-based compensation     1,379       -     -       1,379  
NON-GAAP NET INCOME (LOSS)   $ 718     $ 252   $ -     $ 970  
 
Note: Business and Retail Connect includes our Supplies Distributors and PFSweb Retail Connect operations, which operate similar financial models on behalf of our client relationships.
 
 
PFSweb, Inc. and Subsidiaries  
Preliminary Unaudited Consolidating Statements of Operations  
For the Twelve Months Ended December 31, 2013  
(In Thousands)  
                       
          Business &            
    PFSweb     Retail Connect   Eliminations     Consolidated  
REVENUES:                              
  Product revenue, net   $ -     $ 90,982   $ -     $ 90,982  
  Service fee revenue     104,448       8,529     -       112,977  
  Service fee revenue - affiliate     10,246       1,448     (11,694 )     -  
  Pass-thru revenue     37,644       -     -       37,644  
    Total revenues     152,338       100,959     (11,694 )     241,603  
                               
COSTS OF REVENUES:                              
  Cost of product revenue     -       85,237     -       85,237  
  Cost of service fee revenue     78,843       8,708     (10,391 )     77,160  
  Cost of pass-thru revenue     37,644       -     -       37,644  
    Total costs of revenues     116,487       93,945     (10,391 )     200,041  
    Gross profit     35,851       7,014     (1,303 )     41,562  
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES     41,709       5,829     (1,303 )     46,235  
  Income (loss) from operations     (5,858 )     1,185     -       (4,673 )
INTEREST EXPENSE (INCOME), NET     84       595     -       679  
  Income (loss) before income taxes     (5,942 )     590     -       (5,352 )
INCOME TAX PROVISION (BENEFIT)     185       354     -       539  
NET INCOME (LOSS)   $ (6,127 )   $ 236   $ -     $ (5,891 )
NON-GAAP NET INCOME (LOSS)   $ (1,008 )   $ 236   $ -     $ (772 )
                               
EBITDA   $ 4,193     $ 1,344   $ -     $ 5,537  
ADJUSTED EBITDA   $ 9,312     $ 1,344   $ -     $ 10,656  
                               
                               
A reconciliation of NET INCOME (LOSS) to EBITDA and ADJUSTED EBITDA follows:                              
                               
NET INCOME (LOSS)   $ (6,127 )   $ 236   $ -       (5,891 )
  Income tax expense (benefit)     185       354     -       539  
  Interest expense (income), net     84       595     -       679  
  Depreciation and amortization     10,051       159     -       10,210  
EBITDA   $ 4,193     $ 1,344   $ -     $ 5,537  
  Stock-based compensation     2,574       -     -       2,574  
  Restructuring and other charges     2,545       -     -       2,545  
ADJUSTED EBITDA   $ 9,312     $ 1,344   $ -     $ 10,656  
                               
A reconciliation of NET INCOME (LOSS) to NON-GAAP NET INCOME (LOSS) follows:                              
                               
NET INCOME (LOSS)   $ (6,127 )   $ 236   $ -     $ (5,891 )
  Stock-based compensation     2,574       -     -       2,574  
  Restructuring and other charges     2,545       -     -       2,545  
NON-GAAP NET INCOME (LOSS)   $ (1,008 )   $ 236   $ -     $ (772 )
 
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, 2012
(In Thousands)
                   
        Business &          
    PFSweb   Retail Connect   Eliminations     Consolidated
REVENUES:                          
  Product revenue, net   $ -   $ 28,290   $ -     $ 28,290
  Service fee revenue     35,411     -     -       35,411
  Service fee revenue - affiliate     1,776     229     (2,005 )     -
  Pass-thru revenue     13,269     -     -       13,269
    Total revenues     50,456     28,519     (2,005 )     76,970
                           
COSTS OF REVENUES:                          
  Cost of product revenue     -     25,700     -       25,700
  Cost of service fee revenue     26,866     229     (976 )     26,119
  Cost of pass-thru revenue     13,269     -     -       13,269
    Total costs of revenues     40,135     25,929     (976 )     65,088
    Gross profit     10,321     2,590     (1,029 )     11,882
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES     9,456     2,386     (1,029 )     10,813
  Income (loss) from operations     865     204     -       1,069
INTEREST EXPENSE (INCOME), NET     63     167     -       230
  Income (loss) before income taxes     802     37     -       839
INCOME TAX PROVISION (BENEFIT)     174     13     -       187
NET INCOME (LOSS)   $ 628   $ 24   $ -     $ 652
NON-GAAP NET INCOME (LOSS)   $ 939   $ 24   $ -     $ 963
                           
EBITDA   $ 3,243   $ 239   $ -     $ 3,482
ADJUSTED EBITDA   $ 3,554   $ 239   $ -     $ 3,793
                           
                           
A reconciliation of NET INCOME (LOSS) to EBITDA and ADJUSTED EBITDA follows:                          
                           
NET INCOME (LOSS)   $ 628   $ 24   $ -       652
  Income tax expense (benefit)     174     13     -       187
  Interest expense (income), net     63     167     -       230
  Depreciation and amortization     2,378     35     -       2,413
EBITDA   $ 3,243   $ 239   $ -     $ 3,482
  Stock-based compensation     311     -     -       311
ADJUSTED EBITDA   $ 3,554   $ 239   $ -     $ 3,793
                           
A reconciliation of NET INCOME (LOSS) to NON-GAAP NET INCOME (LOSS) follows:                          
                           
NET INCOME (LOSS)   $ 628   $ 24   $ -     $ 652
  Stock-based compensation     311     -     -       311
NON-GAAP NET INCOME (LOSS)   $ 939   $ 24   $ -     $ 963
 
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 Twelve Months Ended December 31, 2012  
(In Thousands)  
                       
          Business &            
    PFSweb     Retail Connect   Eliminations     Consolidated  
REVENUES:                              
  Product revenue, net   $ -     $ 119,740   $ -     $ 119,740  
  Service fee revenue     120,433       -     -       120,433  
  Service fee revenue - affiliate     5,397       679     (6,076 )     -  
  Pass-thru revenue     41,390       -             41,390  
    Total revenues     167,220       120,419     (6,076 )     281,563  
                               
COSTS OF REVENUES:                              
  Cost of product revenue     -       110,183     -       110,183  
  Cost of service fee revenue     92,196       679     (3,626 )     89,249  
  Cost of pass-thru revenue     41,390       -     -       41,390  
    Total costs of revenues     133,586       110,862     (3,626 )     240,822  
    Gross profit     33,634       9,557     (2,450 )     40,741  
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES     35,664       7,406     (2,450 )     40,620  
  Income (loss) from operations     (2,030 )     2,151     -       121  
INTEREST EXPENSE (INCOME), NET     203       785     -       988  
  Income (loss) before income taxes     (2,233 )     1,366     -       (867 )
INCOME TAX PROVISION (BENEFIT)     82       562     -       644  
NET INCOME (LOSS)   $ (2,315 )   $ 804   $ -     $ (1,511 )
NON-GAAP NET INCOME (LOSS)   $ 326     $ 804   $ -     $ 1,130  
                               
EBITDA   $ 7,117     $ 2,252   $ -     $ 9,369  
ADJUSTED EBITDA   $ 9,758     $ 2,252   $ -     $ 12,010  
                               
                               
A reconciliation of NET INCOME (LOSS) to EBITDA and ADJUSTED EBITDA follows:                              
                               
NET INCOME (LOSS)   $ (2,315 )   $ 804   $ -       (1,511 )
  Income tax expense (benefit)     82       562     -       644  
  Interest expense (income), net     203       785     -       988  
  Depreciation and amortization     9,147       101     -       9,248  
EBITDA   $ 7,117     $ 2,252   $ -     $ 9,369  
  Stock-based compensation     1,325       -     -       1,325  
  Lease termination costs     450       -     -       450  
  Move related expenses     866       -     -       866  
ADJUSTED EBITDA   $ 9,758     $ 2,252   $ -     $ 12,010  
                               
A reconciliation of NET INCOME (LOSS) to NON-GAAP NET INCOME (LOSS) follows:                              
                               
NET INCOME (LOSS)   $ (2,315 )   $ 804   $ -     $ (1,511 )
  Stock-based compensation     1,325       -     -       1,325  
  Lease termination costs     450       -     -       450  
  Move related expenses     866       -     -       866  
NON-GAAP NET INCOME (LOSS)   $ 326     $ 804   $ -     $ 1,130  
 
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, 2013  
(In Thousands)  
                         
                         
          Business &              
    PFSweb     Retail Connect     Eliminations     Consolidated  
ASSETS                                
CURRENT ASSETS:                                
  Cash and cash equivalents   $ 15,028     $ 7,390     $ -     $ 22,418  
  Restricted cash     -       130       -       130  
  Accounts receivable, net     37,857       18,697       (1,262 )     55,292  
  Inventories, net     -       14,169       -       14,169  
  Other receivables     -       5,241       -       5,241  
  Prepaid expenses and other current assets     3,552       1,161       -       4,713  
    Total current assets     56,437       46,788       (1,262 )     101,963  
                                 
PROPERTY AND EQUIPMENT, net     26,945       245       -       27,190  
RECEIVABLE/INVESTMENT IN AFFILIATES     12,777       -       (12,777 )     -  
OTHER ASSETS     2,800       83       -       2,883  
    Total assets     98,959       47,116       (14,039 )     132,036  
                                 
LIABILITIES AND SHAREHOLDERS EQUITY                                
CURRENT LIABILITIES:                                
  Current portion of long-term debt and capital lease obligations   $ 4,419     $ 3,812     $ -     $ 8,231  
  Trade accounts payable     11,602       23,756       (1,262 )     34,096  
  Deferred revenue     8,181       -       -       8,181  
  Accrued expenses     18,114       6,931       -       25,045  
    Total current liabilities     42,316       34,499       (1,262 )     75,553  
                                 
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS, less current portion     2,876       -       -       2,876  
PAYABLE TO AFFILIATES     -       23,045       (23,045 )     -  
DEFERRED REVENUE     7,491       -       -       7,491  
DEFERRED RENT     5,191       -       -       5,191  
    Total liabilities     57,874       57,544       (24,307 )     91,111  
                                 
COMMITMENTS AND CONTINGENCIES                                
                                 
SHAREHOLDERS' EQUITY:                                
  Common stock     17       19       (19 )     17  
  Capital contributions     -       1,000       (1,000 )     -  
  Additional paid-in capital     124,522       28,060       (28,060 )     124,522  
  Retained earnings (accumulated deficit)     (85,146 )     (41,850 )     41,696       (85,300 )
  Accumulated other comprehensive income     1,817       2,343       (2,349 )     1,811  
  Treasury stock     (125 )     -       -       (125 )
    Total shareholders' equity     41,085       (10,428 )     10,268       40,925  
    Total liabilities and shareholders' equity   $ 98,959     $ 47,116     $ (14,039 )   $ 132,036  
                                 
                                 
PFSweb, Inc. and Subsidiaries  
Unaudited Condensed Consolidating Balance Sheets  
as of December 31, 2012  
(In Thousands)  
                         
                         
          Business &              
    PFSweb     Retail Connect     Eliminations     Consolidated  
ASSETS                        
CURRENT ASSETS:                                
  Cash and cash equivalents   $ 13,079     $ 6,547     $ -     $ 19,626  
  Restricted cash     -       283       -       283  
  Accounts receivable, net     34,831       11,574       (721 )     45,684  
  Inventories, net     -       24,654       -       24,654  
  Other receivables     -       7,675       -       7,675  
  Prepaid expenses and other current assets     2,817       1,529       -       4,346  
    Total current assets     50,727       52,262       (721 )     102,268  
                                 
PROPERTY AND EQUIPMENT, net     27,651       266       -       27,917  
RECEIVABLE/INVESTMENT IN AFFILIATES     13,396       -       (13,396 )     -  
OTHER ASSETS     3,166       120       -       3,286  
    Total assets     94,940       52,648       (14,117 )     133,471  
                                 
LIABILITIES AND SHAREHOLDERS EQUITY                                
CURRENT LIABILITIES:                                
  Current portion of long-term debt and capital lease obligations   $ 13,072     $ 3,588     $ -     $ 16,660  
  Trade accounts payable     12,109       29,105       (721 )     40,493  
  Deferred revenue     6,573       75       -       6,648  
  Accrued expenses     16,743       6,354       -       23,097  
    Total current liabilities     48,497       39,122       (721 )     86,898  
                                 
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS, less current portion     5,400       -       -       5,400  
PAYABLE TO AFFILIATES     -       22,795       (22,795 )     -  
DEFERRED REVENUE     7,562       -       -       7,562  
DEFERRED RENT     5,482       78       -       5,560  
    Total liabilities     66,941       61,995       (23,516 )     105,420  
                                 
COMMITMENTS AND CONTINGENCIES                                
                                 
SHAREHOLDERS' EQUITY:                                
  Common stock     13       19       (19 )     13  
  Capital contributions     -       1,000       (1,000 )     -  
  Additional paid-in capital     106,018       28,059       (28,059 )     106,018  
  Retained earnings (accumulated deficit)     (79,461 )     (40,606 )     40,658       (79,409 )
  Accumulated other comprehensive income     1,554       2,181       (2,181 )     1,554  
  Treasury stock     (125 )     -       -       (125 )
    Total shareholders' equity     27,999       (9,347 )     9,399       28,051  
    Total liabilities and shareholders' equity   $ 94,940     $ 52,648     $ (14,117 )   $ 133,471  
                                     

Contact Information

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

    Investor Relations:
    Liolios Group Inc.
    Cody Slach or Greg Falesnik
    Tel 949-574-3860
    Email Contact