PFSweb Reports First Quarter 2014 Results
Q1 Service Fee Equivalent Revenue of $28.8 Million; Adjusted
EBITDA of $2.2 Million
ALLEN, TX--(Marketwired - May 7, 2014) - PFSweb, Inc. (NASDAQ:
PFSW), a global provider of end-to-end eCommerce solutions,
reported financial results for the first quarter ended March 31,
2014.
First Quarter 2014 Financial Summary
Increased project activity and operating efficiencies resulted
in stronger service fee revenue and operating margin during the
first quarter of 2014 than originally anticipated, although lower
than the year-ago quarter due to impact of the previously announced
client transitions.
- Service fee equivalent revenue (a non-GAAP measure defined and
discussed below) was $28.8 million compared to $30.0 million during
the same period in 2013
- Service fee gross margin was 30.4% compared to 31.8% during the
same period in 2013
- Adjusted EBITDA (a non-GAAP measure defined and discussed
below) was $2.2 million compared to $2.9 million during the same
period in 2013
- Cash and cash equivalents totaled $23.8 million compared to
$22.4 million as of December 31, 2013
- Debt totaled $11.0 million compared to $11.1 million as of
December 31, 2013
First Quarter 2014 Financial Results
Total revenues in the first quarter of 2014 were $57.2 million
compared to $63.1 million in the same period in 2013. Service fee
revenue in the first quarter of 2014 totaled $27.6 million compared
to $28.2 million in the same period in 2013. This decrease, which
was primarily due to client transitions in 2013, was partially
offset by revenues generated from higher than expected project
activity as well as new and expanded client relationships. Product
revenue decreased to $21.7 million compared to $25.3 million in the
same period in 2013, primarily due to ongoing restructuring
activities by the company's largest client in this segment.
Service fee equivalent revenue in the first quarter of 2014 was
$28.8 million compared to $30.0 million in the same period in
2013.
Service fee gross margin in the first quarter decreased to 30.4%
compared to 31.8% in the same period in 2013. This decrease was
primarily due to the impact of client transition related activity
in 2013, partially offset by operating efficiencies with existing
clients and an increased level of higher margin project activity in
the first quarter of 2014.
Adjusted EBITDA was $2.2 million in the first quarter of 2014
compared to $2.9 million in the same period in 2013.
Net loss in the first quarter of 2014 was $1.8 million, or
$(0.11) per diluted share, compared to a net loss of $2.6 million,
or $(0.20) per diluted share, in the same period in 2013. Net loss
in the first quarter of 2014 included approximately $0.8 million in
stock-based compensation expense compared to approximately $0.3
million in stock-based compensation expense and $2.3 million in
restructuring and other charges in the same period in 2013.
Non-GAAP net loss (a non-GAAP measure defined and discussed
below) in the first quarter of 2014 was $1.0 million, or $(0.06)
per diluted share, compared to non-GAAP net income of $21,000, or
$0.00 per diluted share, in the first quarter of 2013.
Management Commentary
"The momentum in our business that we reestablished in 2013 has
carried into the first quarter of 2014," said Michael Willoughby,
CEO of PFSweb. "Higher project activity and operating efficiencies
with existing clients helped us achieve stronger service fee
revenue and operating margin during the quarter than originally
anticipated; however, the previously announced client transitions
and expected decline in lower-margin product revenue continued to
weigh on our top and bottom lines.
"Excluding the impact of these client transitions, our service
fee equivalent revenue increased 22% in the first quarter of 2014
as compared to the prior year. Given the expected benefit from our
recent client wins, such as the United States Mint that is
anticipated to rollout later this year, and our steady pipeline of
opportunities from both current and prospective clients, we believe
we are well positioned to strengthen our financial performance as
we exit 2014 and look ahead into 2015.
"In addition to the healthy U.S. e-commerce market, we continue
to experience increased traction from international markets,
particularly in Canada and Europe. We also see further
opportunities applicable to Asia in conjunction with our strategic
relationship with transcosmos. We expect our proven ability to
continuously improve our clients' sales channels through
technology, agency and infrastructure services will ultimately
define our company as a leading omni-channel commerce and business
outsourcing provider."
2014 Outlook
PFSweb reiterates its 2014 service fee equivalent revenue
guidance to range between $127 million to $133 million, increasing
7% to 12% as compared to 2013. The company also reiterates its
outlook for 2014 adjusted EBITDA target to range between $12
million and $14 million, representing an increase of 12% to 31% as
compared to 2013.
Conference Call
PFSweb will conduct a conference call today at 11:00 a.m.
Eastern time to discuss its results for the first quarter ended
March 31, 2014.
The company's CEO Mike Willoughby and CFO Tom Madden will host
the conference call, followed by a question and answer period.
Date: Wednesday, May 7, 2014 Time: 11:00 a.m. Eastern time
(10:00 a.m. Central time) Dial-in number: 1-877-941-8416
International number: 1-480-629-9808
Conference ID: 4681043
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=108924 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 2:00
p.m. Eastern time on the same day through May 21, 2014.
Toll-free replay number: 1-877-870-5176
International replay number: 1-858-384-5517
Replay ID: 4681043
About PFSweb Inc.
PFSweb (NASDAQ: PFSW) is a global 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 and restructuring and
other charges.
EBITDA represents earnings (or losses) before interest, income
taxes, depreciation, and amortization. Adjusted EBITDA further
eliminates the effect of stock-based compensation and restructuring
and other charges.
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 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, 2013 identifies certain factors
that could cause actual results to differ materially from those
projected in any forward looking statements made and investors are
advised to review the Annual Report of the Company and the Risk
Factors described therein. PFSweb undertakes no obligation to
update publicly any forward-looking statement for any reason, even
if new information becomes available or other events occur in the
future. There may be additional risks that we do not currently view
as material or that are not presently known.
|
|
PFSweb, Inc.
and Subsidiaries |
|
Preliminary Unaudited Condensed Consolidated Balance
Sheets (A) |
|
(In Thousands, Except Share Data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, |
|
|
December 31, |
|
|
2014 |
|
|
2013 |
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
CURRENT ASSETS: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
23,753 |
|
|
$ |
22,418 |
|
|
Restricted cash |
|
169 |
|
|
|
130 |
|
|
Accounts receivable, net of allowance for doubtful
accounts of $410 and $382 at March 31, 2014 and December 31, 2013,
respectively |
|
46,098 |
|
|
|
55,292 |
|
|
Inventories, net of reserves of $947 and $962 at March
31, 2014 and December 31, 2013, respectively |
|
11,372 |
|
|
|
14,169 |
|
|
Other receivables |
|
5,481 |
|
|
|
5,241 |
|
|
Prepaid expenses and other current assets |
|
4,585 |
|
|
|
4,713 |
|
|
|
Total current assets |
|
91,458 |
|
|
|
101,963 |
|
|
|
|
|
|
|
|
|
PROPERTY AND EQUIPMENT, net |
|
26,379 |
|
|
|
27,190 |
|
OTHER ASSETS |
|
3,021 |
|
|
|
2,883 |
|
|
|
Total assets |
|
120,858 |
|
|
|
132,036 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND SHAREHOLDERS EQUITY |
|
|
|
|
|
|
|
CURRENT LIABILITIES: |
|
|
|
|
|
|
|
|
Current portion of long-term debt and capital lease
obligations |
$ |
8,579 |
|
|
$ |
8,231 |
|
|
Trade accounts payable |
|
27,472 |
|
|
|
34,096 |
|
|
Deferred revenue |
|
8,813 |
|
|
|
8,181 |
|
|
Accrued expenses |
|
21,525 |
|
|
|
25,045 |
|
|
|
Total current liabilities |
|
66,389 |
|
|
|
75,553 |
|
|
|
|
|
|
|
|
|
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS, less
current portion |
|
2,440 |
|
|
|
2,876 |
|
DEFERRED REVENUE |
|
6,948 |
|
|
|
7,491 |
|
DEFERRED RENT |
|
5,041 |
|
|
|
5,191 |
|
|
|
Total liabilities |
|
80,818 |
|
|
|
91,111 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COMMITMENTS AND CONTINGENCIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS' EQUITY: |
|
|
|
|
|
|
|
|
Preferred stock, $1.00 par value; 1,000,000 shares
authorized; none issued and outstanding |
|
- |
|
|
|
- |
|
|
Common stock, $.001 par value; 35,000,000 shares
authorized; 16,653,008 and 16,540,904 shares issued at March 31,
2014 and December 31, 2013, respectively; and 16,619,541 and
16,507,437 shares outstanding as of March 31, 2014 and December 31,
2013, respectively |
|
17 |
|
|
|
17 |
|
|
Additional paid-in capital |
|
125,505 |
|
|
|
124,522 |
|
|
Accumulated deficit |
|
(87,110 |
) |
|
|
(85,300 |
) |
|
Accumulated other comprehensive income |
|
1,753 |
|
|
|
1,811 |
|
|
Treasury stock at cost, 33,467 shares |
|
(125 |
) |
|
|
(125 |
) |
|
|
Total shareholders' equity |
|
40,040 |
|
|
|
40,925 |
|
|
|
Total liabilities and shareholders' equity |
$ |
120,858 |
|
|
$ |
132,036 |
|
|
|
(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, 2013. |
|
|
|
|
|
|
PFSweb, Inc.
and Subsidiaries |
|
Preliminary Unaudited Condensed Consolidated
Statements of Operations (A) |
|
(In Thousands, Except Per Share Data) |
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
March 31, |
|
|
2014 |
|
|
2013 |
|
REVENUES: |
|
|
|
|
|
|
|
|
Product revenue, net |
$ |
21,722 |
|
|
$ |
25,267 |
|
|
Service fee revenue |
|
27,598 |
|
|
|
28,217 |
|
|
Pass-thru revenue |
|
7,909 |
|
|
|
9,657 |
|
|
|
|
Total
revenues |
|
57,229 |
|
|
|
63,141 |
|
|
|
|
|
|
|
|
|
COSTS OF REVENUES: |
|
|
|
|
|
|
|
|
Cost of product revenue |
|
20,516 |
|
|
|
23,515 |
|
|
Cost of service fee revenue |
|
19,220 |
|
|
|
19,258 |
|
|
Cost of pass-thru revenue |
|
7,909 |
|
|
|
9,657 |
|
|
|
|
Total
costs of revenues |
|
47,645 |
|
|
|
52,430 |
|
|
|
|
Gross
profit |
|
9,584 |
|
|
|
10,711 |
|
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES |
|
11,022 |
|
|
|
12,801 |
|
|
|
Income (loss) from operations |
|
(1,438 |
) |
|
|
(2,090 |
) |
INTEREST EXPENSE (INCOME), NET |
|
143 |
|
|
|
218 |
|
|
|
Income (loss) before income taxes |
|
(1,581 |
) |
|
|
(2,308 |
) |
INCOME TAX PROVISION (BENEFIT) |
|
229 |
|
|
|
267 |
|
NET INCOME (LOSS) |
$ |
(1,810 |
) |
|
$ |
(2,575 |
) |
NON-GAAP NET INCOME (LOSS) |
$ |
(1,016 |
) |
|
$ |
21 |
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS) PER SHARE: |
|
|
|
|
|
|
|
|
Basic |
$ |
(0.11 |
) |
|
$ |
(0.20 |
) |
|
Diluted |
$ |
(0.11 |
) |
|
$ |
(0.20 |
) |
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: |
|
|
|
|
|
|
|
|
Basic |
|
16,522 |
|
|
|
12,786 |
|
|
Diluted |
|
16,522 |
|
|
|
12,786 |
|
|
|
|
|
|
|
|
|
EBITDA |
$ |
1,452 |
|
|
$ |
318 |
|
ADJUSTED EBITDA |
$ |
2,246 |
|
|
$ |
2,914 |
|
|
|
(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, 2013. |
|
|
|
|
|
|
PFSweb, Inc.
and Subsidiaries |
|
Reconciliation of certain Non-GAAP Items to GAAP |
|
(In Thousands, Except Per Share Data) |
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
March 31, |
|
|
2014 |
|
|
2013 |
|
NET INCOME (LOSS) |
$ |
(1,810 |
) |
|
$ |
(2,575 |
) |
|
|
Income tax expense |
|
229 |
|
|
|
267 |
|
|
|
Interest expense, net |
|
143 |
|
|
|
218 |
|
|
|
Depreciation and amortization |
|
2,890 |
|
|
|
2,408 |
|
EBITDA |
$ |
1,452 |
|
|
$ |
318 |
|
|
|
Stock-based compensation |
|
794 |
|
|
|
303 |
|
|
|
Restructuring and other charges |
|
- |
|
|
|
2,293 |
|
ADJUSTED EBITDA |
$ |
2,246 |
|
|
$ |
2,914 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
March 31, |
|
|
2014 |
|
|
2013 |
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS) |
$ |
(1,810 |
) |
|
$ |
(2,575 |
) |
|
Stock-based compensation |
|
794 |
|
|
|
303 |
|
|
Restructuring and other charges |
|
- |
|
|
|
2,293 |
|
NON-GAAP NET INCOME (LOSS) |
$ |
(1,016 |
) |
|
$ |
21 |
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS) PER SHARE: |
|
|
|
|
|
|
|
|
Basic |
$ |
(0.11 |
) |
|
$ |
(0.20 |
) |
|
Diluted |
$ |
(0.11 |
) |
|
$ |
(0.20 |
) |
|
|
|
|
|
|
|
|
NON-GAAP NET INCOME (LOSS) Per Share: |
|
|
|
|
|
|
|
|
Basic |
$ |
(0.06 |
) |
|
$ |
0.00 |
|
|
Diluted |
$ |
(0.06 |
) |
|
$ |
0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
March 31, |
|
|
2014 |
|
|
2013 |
|
|
|
|
|
|
|
|
|
TOTAL REVENUES |
$ |
57,229 |
|
|
$ |
63,141 |
|
|
Pass-thru revenue |
|
(7,909 |
) |
|
|
(9,657 |
) |
|
Cost of product revenue |
|
(20,516 |
) |
|
|
(23,515 |
) |
SERVICE FEE EQUIVALENT REVENUE |
$ |
28,804 |
|
|
$ |
29,969 |
|
|
|
|
|
|
|
PFSweb, Inc.
and Subsidiaries |
|
Preliminary Unaudited Consolidating Statements of
Operations |
|
For the Three Months Ended March 31, 2014 |
|
(In Thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business & |
|
|
|
|
|
|
|
|
PFSweb |
|
|
Retail Connect |
|
Eliminations |
|
|
Consolidated |
|
REVENUES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product revenue, net |
|
$ |
- |
|
|
$ |
21,722 |
|
$ |
- |
|
|
$ |
21,722 |
|
|
Service fee revenue |
|
|
24,153 |
|
|
|
3,445 |
|
|
- |
|
|
|
27,598 |
|
|
Service fee revenue - affiliate |
|
|
3,690 |
|
|
|
615 |
|
|
(4,305 |
) |
|
|
- |
|
|
Pass-thru revenue |
|
|
7,909 |
|
|
|
- |
|
|
- |
|
|
|
7,909 |
|
|
|
|
Total
revenues |
|
|
35,752 |
|
|
|
25,782 |
|
|
(4,305 |
) |
|
|
57,229 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COSTS OF REVENUES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of product revenue |
|
|
- |
|
|
|
20,516 |
|
|
- |
|
|
|
20,516 |
|
|
Cost of service fee revenue |
|
|
19,520 |
|
|
|
3,615 |
|
|
(3,915 |
) |
|
|
19,220 |
|
|
Cost of pass-thru revenue |
|
|
7,909 |
|
|
|
- |
|
|
- |
|
|
|
7,909 |
|
|
|
|
Total
costs of revenues |
|
|
27,429 |
|
|
|
24,131 |
|
|
(3,915 |
) |
|
|
47,645 |
|
|
|
|
Gross
profit |
|
|
8,323 |
|
|
|
1,651 |
|
|
(390 |
) |
|
|
9,584 |
|
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES |
|
|
10,176 |
|
|
|
1,236 |
|
|
(390 |
) |
|
|
11,022 |
|
|
|
Income (loss) from operations |
|
|
(1,853 |
) |
|
|
415 |
|
|
- |
|
|
|
(1,438 |
) |
INTEREST EXPENSE (INCOME), NET |
|
|
(2 |
) |
|
|
145 |
|
|
- |
|
|
|
143 |
|
|
|
Income (loss) before income taxes |
|
|
(1,851 |
) |
|
|
270 |
|
|
- |
|
|
|
(1,581 |
) |
INCOME TAX PROVISION (BENEFIT) |
|
|
132 |
|
|
|
97 |
|
|
|
|
|
|
229 |
|
NET INCOME (LOSS) |
|
$ |
(1,983 |
) |
|
$ |
173 |
|
$ |
- |
|
|
$ |
(1,810 |
) |
NON-GAAP NET INCOME (LOSS) |
|
$ |
(1,189 |
) |
|
$ |
173 |
|
$ |
- |
|
|
$ |
(1,016 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
|
$ |
994 |
|
|
$ |
458 |
|
$ |
- |
|
|
$ |
1,452 |
|
ADJUSTED EBITDA |
|
$ |
1,788 |
|
|
$ |
458 |
|
$ |
- |
|
|
$ |
2,246 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A reconciliation of NET INCOME (LOSS) to EBITDA and
ADJUSTED EBITDA follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS) |
|
$ |
(1,983 |
) |
|
$ |
173 |
|
$ |
- |
|
|
|
(1,810 |
) |
|
|
Income tax expense (benefit) |
|
|
132 |
|
|
|
97 |
|
|
- |
|
|
|
229 |
|
|
|
Interest expense (income), net |
|
|
(2 |
) |
|
|
145 |
|
|
- |
|
|
|
143 |
|
|
|
Depreciation and amortization |
|
|
2,847 |
|
|
|
43 |
|
|
- |
|
|
|
2,890 |
|
EBITDA |
|
$ |
994 |
|
|
$ |
458 |
|
$ |
- |
|
|
$ |
1,452 |
|
|
|
Stock-based compensation |
|
|
794 |
|
|
|
- |
|
|
- |
|
|
|
794 |
|
ADJUSTED EBITDA |
|
$ |
1,788 |
|
|
$ |
458 |
|
$ |
- |
|
|
$ |
2,246 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A reconciliation of NET INCOME (LOSS) to NON-GAAP NET
INCOME (LOSS) follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS) |
|
$ |
(1,983 |
) |
|
$ |
173 |
|
$ |
- |
|
|
$ |
(1,810 |
) |
|
|
Stock-based compensation |
|
|
794 |
|
|
|
- |
|
|
- |
|
|
|
794 |
|
NON-GAAP NET INCOME (LOSS) |
|
$ |
(1,189 |
) |
|
$ |
173 |
|
$ |
- |
|
|
$ |
(1,016 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 March 31, 2013 |
|
(In Thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business & |
|
|
|
|
|
|
|
|
PFSweb |
|
|
Retail Connect |
|
Eliminations |
|
|
Consolidated |
|
REVENUES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product revenue, net |
|
$ |
- |
|
|
$ |
25,267 |
|
$ |
- |
|
|
$ |
25,267 |
|
|
Service fee revenue |
|
|
26,441 |
|
|
|
1,776 |
|
|
- |
|
|
|
28,217 |
|
|
Service fee revenue - affiliate |
|
|
2,355 |
|
|
|
362 |
|
|
(2,717 |
) |
|
|
- |
|
|
Pass-thru revenue |
|
|
9,657 |
|
|
|
- |
|
|
- |
|
|
|
9,657 |
|
|
|
|
Total
revenues |
|
|
38,453 |
|
|
|
27,405 |
|
|
(2,717 |
) |
|
|
63,141 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COSTS OF REVENUES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of product revenue |
|
|
- |
|
|
|
23,515 |
|
|
- |
|
|
|
23,515 |
|
|
Cost of service fee revenue |
|
|
19,780 |
|
|
|
1,798 |
|
|
(2,320 |
) |
|
|
19,258 |
|
|
Cost of pass-thru revenue |
|
|
9,657 |
|
|
|
- |
|
|
- |
|
|
|
9,657 |
|
|
|
|
Total
costs of revenues |
|
|
29,437 |
|
|
|
25,313 |
|
|
(2,320 |
) |
|
|
52,430 |
|
|
|
|
Gross
profit |
|
|
9,016 |
|
|
|
2,092 |
|
|
(397 |
) |
|
|
10,711 |
|
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES |
|
|
11,563 |
|
|
|
1,635 |
|
|
(397 |
) |
|
|
12,801 |
|
|
|
Income (loss) from operations |
|
|
(2,547 |
) |
|
|
457 |
|
|
- |
|
|
|
(2,090 |
) |
INTEREST EXPENSE (INCOME), NET |
|
|
67 |
|
|
|
151 |
|
|
- |
|
|
|
218 |
|
|
|
Income (loss) before income taxes |
|
|
(2,614 |
) |
|
|
306 |
|
|
- |
|
|
|
(2,308 |
) |
INCOME TAX PROVISION (BENEFIT) |
|
|
120 |
|
|
|
147 |
|
|
- |
|
|
|
267 |
|
NET INCOME (LOSS) |
|
$ |
(2,734 |
) |
|
$ |
159 |
|
$ |
- |
|
|
$ |
(2,575 |
) |
NON-GAAP NET INCOME (LOSS) |
|
$ |
(138 |
) |
|
$ |
159 |
|
$ |
- |
|
|
$ |
21 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
|
$ |
(178 |
) |
|
$ |
496 |
|
$ |
- |
|
|
$ |
318 |
|
ADJUSTED EBITDA |
|
$ |
2,418 |
|
|
$ |
496 |
|
$ |
- |
|
|
$ |
2,914 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A reconciliation of NET INCOME (LOSS) to EBITDA and
ADJUSTED EBITDA follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS) |
|
$ |
(2,734 |
) |
|
$ |
159 |
|
$ |
- |
|
|
|
(2,575 |
) |
|
|
Income tax expense (benefit) |
|
|
120 |
|
|
|
147 |
|
|
- |
|
|
|
267 |
|
|
|
Interest expense (income), net |
|
|
67 |
|
|
|
151 |
|
|
- |
|
|
|
218 |
|
|
|
Depreciation and amortization |
|
|
2,369 |
|
|
|
39 |
|
|
- |
|
|
|
2,408 |
|
EBITDA |
|
$ |
(178 |
) |
|
$ |
496 |
|
$ |
- |
|
|
$ |
318 |
|
|
|
Stock-based compensation |
|
|
303 |
|
|
|
- |
|
|
- |
|
|
|
303 |
|
|
|
Restructuring and other charges |
|
|
2,293 |
|
|
|
- |
|
|
- |
|
|
|
2,293 |
|
ADJUSTED EBITDA |
|
$ |
2,418 |
|
|
$ |
496 |
|
$ |
- |
|
|
$ |
2,914 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A reconciliation of NET INCOME (LOSS) to NON-GAAP NET
INCOME (LOSS) follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS) |
|
$ |
(2,734 |
) |
|
$ |
159 |
|
$ |
- |
|
|
$ |
(2,575 |
) |
|
|
Stock-based compensation |
|
|
303 |
|
|
|
- |
|
|
- |
|
|
|
303 |
|
|
|
Restructuring and other charges |
|
|
2,293 |
|
|
|
- |
|
|
- |
|
|
|
2,293 |
|
NON-GAAP NET INCOME (LOSS) |
|
$ |
(138 |
) |
|
$ |
159 |
|
$ |
- |
|
|
$ |
21 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 March 31, 2014 |
|
(In Thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business & |
|
|
|
|
|
|
|
|
PFSweb |
|
|
Retail Connect |
|
|
Eliminations |
|
|
Consolidated |
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
17,701 |
|
|
$ |
6,052 |
|
|
$ |
- |
|
|
$ |
23,753 |
|
|
Restricted cash |
|
- |
|
|
|
169 |
|
|
|
- |
|
|
|
169 |
|
|
Accounts receivable, net |
|
29,678 |
|
|
|
17,732 |
|
|
|
(1,312 |
) |
|
|
46,098 |
|
|
Inventories, net |
|
- |
|
|
|
11,372 |
|
|
|
- |
|
|
|
11,372 |
|
|
Other receivables |
|
- |
|
|
|
5,481 |
|
|
|
- |
|
|
|
5,481 |
|
|
Prepaid expenses and other current assets |
|
3,472 |
|
|
|
1,113 |
|
|
|
- |
|
|
|
4,585 |
|
|
|
Total current assets |
|
50,851 |
|
|
|
41,919 |
|
|
|
(1,312 |
) |
|
|
91,458 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROPERTY AND EQUIPMENT, net |
|
26,162 |
|
|
|
217 |
|
|
|
- |
|
|
|
26,379 |
|
RECEIVABLE/INVESTMENT IN AFFILIATES |
|
10,891 |
|
|
|
- |
|
|
|
(10,891 |
) |
|
|
- |
|
OTHER ASSETS |
|
2,946 |
|
|
|
75 |
|
|
|
- |
|
|
|
3,021 |
|
|
|
Total assets |
|
90,850 |
|
|
|
42,211 |
|
|
|
(12,203 |
) |
|
|
120,858 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND SHAREHOLDERS EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current portion of long-term debt and capital lease
obligations |
$ |
4,156 |
|
|
$ |
4,423 |
|
|
$ |
- |
|
|
$ |
8,579 |
|
|
Trade accounts payable |
|
7,249 |
|
|
|
21,535 |
|
|
|
(1,312 |
) |
|
|
27,472 |
|
|
Deferred revenue |
|
8,813 |
|
|
|
- |
|
|
|
- |
|
|
|
8,813 |
|
|
Accrued expenses |
|
16,211 |
|
|
|
5,314 |
|
|
|
- |
|
|
|
21,525 |
|
|
|
Total current liabilities |
|
36,429 |
|
|
|
31,272 |
|
|
|
(1,312 |
) |
|
|
66,389 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS, less
current portion |
|
2,440 |
|
|
|
- |
|
|
|
- |
|
|
|
2,440 |
|
PAYABLE TO AFFILIATES |
|
- |
|
|
|
23,045 |
|
|
|
(23,045 |
) |
|
|
- |
|
DEFERRED REVENUE |
|
6,948 |
|
|
|
- |
|
|
|
- |
|
|
|
6,948 |
|
DEFERRED RENT |
|
5,041 |
|
|
|
- |
|
|
|
- |
|
|
|
5,041 |
|
|
|
Total liabilities |
|
50,858 |
|
|
|
54,317 |
|
|
|
(24,357 |
) |
|
|
80,818 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COMMITMENTS AND CONTINGENCIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS' EQUITY: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock |
|
17 |
|
|
|
19 |
|
|
|
(19 |
) |
|
|
17 |
|
|
Capital contributions |
|
- |
|
|
|
1,000 |
|
|
|
(1,000 |
) |
|
|
- |
|
|
Additional paid-in capital |
|
125,505 |
|
|
|
28,060 |
|
|
|
(28,060 |
) |
|
|
125,505 |
|
|
Retained earnings (accumulated deficit) |
|
(87,158 |
) |
|
|
(43,503 |
) |
|
|
43,551 |
|
|
|
(87,110 |
) |
|
Accumulated other comprehensive income |
|
1,753 |
|
|
|
2,318 |
|
|
|
(2,318 |
) |
|
|
1,753 |
|
|
Treasury stock |
|
(125 |
) |
|
|
- |
|
|
|
- |
|
|
|
(125 |
) |
|
|
Total shareholders' equity |
|
39,992 |
|
|
|
(12,106 |
) |
|
|
12,154 |
|
|
|
40,040 |
|
|
|
Total liabilities and shareholders' equity |
$ |
90,850 |
|
|
$ |
42,211 |
|
|
$ |
(12,203 |
) |
|
$ |
120,858 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
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