PFS (NASDAQ: PFSW) (the “Company"), a premier eCommerce order
fulfillment provider, today reported Q2 2021 results and provided a
business and strategy update on the following:
- The ongoing process to file the
Company’s delayed third quarter results, as well as additional
detail on the steps PFSweb and its advisors are taking to complete
these efforts;
- The continued strong revenue growth
and operational performance of the core PFS business; and,
- The Company’s ongoing strategic
alternatives and value maximization process and its near-term
capital allocation and restructuring priorities.
Update on Delayed Financial
Statements
The Company and its advisors, which include
leading internationally recognized accounting and tax firms, have
been working diligently to bring its financial reporting up to
date. The delay in the filing of the Company’s financials for the
period ending September 30, 2021, is a direct result of the complex
tax implications and labor-intensive closing process associated
with the sale of the LiveArea global business to Merkle for
approximately $250 million in gross proceeds, which was completed
on August 25, 2021, and the required financial reporting and
accounting segmentation of previously commingled business entities.
The delay is not related to any historical issues with PFSweb’s
accounting practices or fundamental business.
Ultimately, the timeline anticipated by the
Company and its advisors did not sufficiently contemplate certain
complexities, including the varying tax treatments resulting from
the multi-national nature of the LiveArea business given its
operations in four countries (Bulgaria, India, U.K., and U.S.) and
the U.S. GAAP classification of the LiveArea financial results as
discontinued operations as of Q2 2021.
Mike Willoughby, PFSweb Chief Executive Officer,
stated: “Our team and our advisors have been working around the
clock to address these issues and are glad to have the Q2 reporting
behind us. While the delays have been unfortunate – especially
coming off the excellent value we were able to generate through the
LiveArea transaction – they have not impacted the continued
positive momentum in our PFS business or our commitment to
maximizing value for all shareholders through our strategic
alternatives process.”
As previously communicated, due to the filing
delays, the Company has received notices from Nasdaq regarding
noncompliance with its Securities and Exchange Commission ("SEC")
periodic filing requirements for continued listing. PFSweb expects
to receive a delisting notification on or around February 8, 2022.
PFSweb does not anticipate this notice will result in an immediate
impact on the trading status or listing of the Company’s shares.
The Company has been proactively communicating with Nasdaq
throughout the process and will diligently follow the Nasdaq appeal
process and take all necessary steps to remain listed while
continuing to work towards filing the delayed financial statements.
The Company will continue to make all the appropriate disclosures
of additional such notices and any future developments.
The Company expects to provide updates on the
filing of its Q3 2021 financials as the situation warrants.
Key Financial, Business and Operational
Updates
Zach Thomann, PFSweb Chief Operating Officer, commented: “We
delivered strong performance in Q2 2021. We always knew that Q2
2020 was going to be challenging to measure up to given the
historic tailwinds we experienced with heightened COVID-19-driven
ecommerce demand and a wave of client store closures. That Q2 2020
period was an unprecedented quarter for our PFS business, as we saw
a 30% increase in service fee revenue compared to Q2 of 2019, which
occurred prior to industry-wide wage inflation. While PFS service
fee revenue was lower than Q2 2020, it represented a nearly 12%
compound annual growth rate as compared to the more normalized
period of Q2 2019. We continued to execute the PFS business at a
high level throughout 2021 and have driven annualized PFS service
fee equivalent revenue ("SFE revenue"), a non-GAAP measure defined
and reconciled below, growth of approximately 6% for the year.”
Q2 2021 Highlights
Q2 results and comparisons reflect the
classification of LiveArea as a discontinued operation.
- Total service fee revenue was $43.0
million compared to $44.9 million during the same period in
2020.
- PFS SFE revenue was $39.9 million
compared to $41.7 million during the same period in 2020.
- Service fee gross margin, excluding
certain LiveArea-related activity, was 25.9% compared to
29.6%.
- Net loss from continuing operations
was $4.5 million or $0.21 per share, compared to net income from
continuing operations of $0.4 million, or $0.02 per share.
- Consolidated adjusted EBITDA from
continuing operations (a non-GAAP measure defined and reconciled
below) was $(1.7) million compared to $4.5 million.
- PFS Operations Adjusted EBITDA from
continuing operations (a non-GAAP measure defined and reconciled
below) was $3.6 million compared to $6.8 million.
Thomann added: “I’m excited by the outlook for
the PFS business. We recently announced that we hit record annual
fulfillment volumes for the second year in a row, and we are
continuing to build off this momentum with high customer
satisfaction, a healthy book of clients and a robust sales
pipeline. Our priorities for the business remain centered on making
meaningful improvements to capacity and performance, which includes
the successful execution and continued roll-out of a multi-node
fulfillment strategy. We believe that remaining laser-focused on
our strategy will best position us to expand our footprint and set
us up for accelerated growth in 2022 and beyond.”
Additional Full Year 2021 Business and
Operational Guidance
- In 2021, the Company experienced
its second straight year of record-breaking order volumes, totaling
over 29 million orders fulfilled – including setting a new
single-day record on Cyber Monday 2021.
- 2021 PFS SFE revenue is expected to
increase 6% to approximately $187 million.
- The Company anticipates a two-year
annual PFS SFE revenue compounded growth rate of approximately 15%
as compared to 2019.
- PFS signed 15 new bookings worth
$27.1 million in estimated annual contract value (“ACV”) in
2021.
- Estimated PFS pro forma standalone
AEBITDA percentage of service fee revenue is expected to be within
prior guidance of 8-10%.
- At the end of 2021, with the
benefit from the net proceeds generated from the LiveArea sale
combined with operational cash balances in the business resulted in
approximately $152 million of total cash and less than $1 million
of debt.
2022 Outlook
- The Company is targeting 2022 PFS
annual SFE revenue growth to continue to be in the range of 5% to
10%. Through a combination of expected continued overall organic
growth from existing clients, strong bookings and a robust sales
pipeline, the Company is optimistic that it can achieve SFE revenue
growth at the upper end of this targeted range.
- The Company is targeting 2022
Estimated PFS pro forma standalone AEBITDA percentage of service
fee revenue to be within the range of 8 to 10%.
Strategic Alternatives Process and
Near-Term Capital Allocation and Restructuring
Priorities
PFSweb continues to work with its financial
advisor, Raymond James, on a review of a full range of strategic
alternatives for its PFS business.
Monica Luechtefeld, Chair of PFSweb’s Board of
Directors, stated: “Our Board remains focused on expeditiously and
efficiently maximizing value for shareholders while achieving the
best outcome for clients. We are confident that the strong
performance of the PFS business throughout 2021 makes it a very
attractive platform and that we will have many compelling options
as we consider the most advantageous ways to both create additional
value and return the significant amount of capital we currently
hold to our shareholders.”
PFSweb has also been making progress towards
optimizing its business structure following the LiveArea
divestiture, including the consolidation of its business functions
and facilities into a rationalized operation and structure designed
to meet the needs of the PFS business and align with the strategic
alternatives process. The Company has previously engaged and been
working with G2 Capital Advisors to advise the management team and
Board throughout this process.
The Company has not established a timeline for
completion of this strategic review process, and it does not intend
to comment further regarding the review process unless or until a
specific transaction is approved by its Board of Directors, the
review process is concluded, or it has otherwise determined that
further disclosure is appropriate or required by law.
Conference CallPFSweb will
conduct a conference call today at 5:00 p.m. Eastern time to
address the business and strategy update.
Date: Monday, February 7, 2022Time: 5:00 p.m.
Eastern time (2:00 p.m. Pacific time)Toll-free dial-in number:
(866) 220-4153International dial-in number: (864)
663-5228Conference ID: 8047938
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 Gateway Investor Relations at
1-949-574-3860.
The conference call will be broadcast live and
available for replay here and via the investor relations section of
the Company’s website at www.pfscommerce.com.
A replay of the conference call will be
available after 8:00 p.m. Eastern time on the same day through
February 21, 2022.
Toll-free replay number: (855) 859-2056International replay
number: (404) 537-3406Replay ID: 8047938
Forward-Looking InformationThis
press release contains 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.
You can identify these forward-looking statements by words such as
“may,” “will,” “would,” “should,” “could,” “expect,” “anticipate,”
“believe,” “intend,” “plan,” “potential,” “project,” “seek,”
“strive,” “predict,” “continue,” “target,” “estimate”, and other
similar expressions. These forward-looking statements involve risks
and uncertainties and may include assumptions as to how we may
perform in the future, including the risk that Nasdaq may delist
our common stock since we have not met Nasdaq's continued listing
standards which could have a material adverse effect on our Company
and the price of our common stock and the impact of the COVID-19
pandemic on our business, results of operations and global economic
conditions. Although we believe the expectations reflected in our
forward-looking statements are reasonable, we cannot guarantee
these expectations will actually be achieved. The Company’s Annual
Report on Form 10-K, as amended, for the year ended December 31,
2020, and any subsequent amendments thereto and our quarterly
reports on Form 10-Q 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 periodic reports of the Company and the Risk Factors described
therein.
The Company 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.
Financial Statement Presentation
Matters
The LiveArea segment has been presented as a
discontinued operation for all periods presented in this news
release.
The condensed consolidated financial statements
in this new release have been revised to correct for an immaterial
error related to deferred income taxes that were incorrectly
recorded in prior periods.
Non-GAAP Financial MeasuresThis
news release contains certain non-GAAP measures, including non-GAAP
net income (loss) from continuing operations, earnings before
interest, income taxes, depreciation and amortization (EBITDA) from
continuing operations, adjusted EBITDA from continuing operations
and service fee equivalent revenue.
Non-GAAP net income (loss) from continuing
operations represents net income (loss) from continuing operations
calculated in accordance with U.S. GAAP as adjusted for the impact
of non-cash stock-based compensation expense, acquisition-related,
restructuring and other costs (including certain client related
bankruptcy costs).
EBITDA from continuing operations represents
earnings (or losses) before interest, income taxes, depreciation,
and amortization. Adjusted EBITDA from continuing operations
further eliminates the effect of stock-based compensation, as well
as restructuring, and other costs (including certain client related
bankruptcy costs).
Non-GAAP net income (loss) from continuing
operations, EBITDA from continuing operations, adjusted EBITDA from
continuing operations 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 costs (including certain client related
bankruptcy costs), and EBITDA from continuing operations and
adjusted EBITDA from continuing operations further eliminate the
effect of financing, remaining 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.
The Company has presented non-GAAP financial measures for the
PFS Operations business including total Direct contribution,
EBITDA, adjusted EBITDA and service fee equivalent revenue which
include adjustments for certain LiveArea related revenue activity
and unallocated corporate costs. Such measures are reconciled
below.
The Company 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.
About PFSPFS, the business unit
of PFSweb, Inc. (NASDAQ: PFSW) is a premier eCommerce order
fulfillment provider. We facilitate each operational step of an
eCommerce order in support of DTC and B2B retail brands and
specialize in health & beauty, fashion & apparel, jewelry,
and consumer packaged goods. Our scalable solutions support
customized pick/pack/ship services that deliver on brand ethos with
each order. A proven order management platform, as well as
high-touch customer care, reinforce our operation. With 20+ years
as an industry leader, PFS is the BPO of choice for brand-centric
companies and household brand names, such as L’Oréal USA, Champion,
Pandora, Shiseido Americas, Kendra Scott, the United States Mint,
and many more. The company is headquartered in Allen, TX with
additional locations around the globe. For more information, visit
www.pfscommerce.com or ir.pfsweb.com for investor information.
About G2 Capital AdvisorsG2
Capital Advisors provides M&A, capital markets and
restructuring advisory services to the middle market. G2 offers
integrated, multi-product and sector-focused services by pairing
highly experienced C-level executives with specialist investment
bankers. For more information, please visit www.g2cap.com.
For Media:Longacre Square PartnersDan
Zacchei/Joe Germani/Ashley
AreopagitaPFSweb@longacresquare.com
For Investors:Cody Slach or Jackie
KeshnerGateway Investor
Relations1-949-574-3860PFSW@gatewayir.com
|
PFSWEB, INC. AND SUBSIDIARIESCONDENSED
CONSOLIDATED BALANCE SHEETS(In Thousands, Except Share
Data) |
|
|
(Unaudited) June 30,2021 |
|
December 31, 2020 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
12,486 |
|
|
$ |
10,359 |
|
Restricted cash |
|
214 |
|
|
|
214 |
|
Accounts receivable, net of allowance for doubtful accounts of $548
and $611 at June 30, 2021 and December 31, 2020,
respectively |
|
49,117 |
|
|
|
69,594 |
|
Inventories, net of reserves of $107 and $96 at June 30, 2021
and December 31, 2020, respectively |
|
4,036 |
|
|
|
3,644 |
|
Other receivables |
|
2,530 |
|
|
|
3,314 |
|
Prepaid expenses and other current assets |
|
6,020 |
|
|
|
7,524 |
|
Current assets of discontinued operations |
|
54,465 |
|
|
|
13,920 |
|
Total current assets |
|
128,868 |
|
|
|
108,569 |
|
Property and equipment: |
|
|
|
Cost |
|
95,588 |
|
|
|
97,343 |
|
Less: accumulated depreciation |
|
(78,415 |
) |
|
|
(79,826 |
) |
|
|
17,173 |
|
|
|
17,517 |
|
Operating lease right-of-use
assets, net |
|
33,945 |
|
|
|
34,350 |
|
Goodwill |
|
22,358 |
|
|
|
22,358 |
|
Other assets |
|
1,557 |
|
|
|
385 |
|
Long-term assets of
discontinued operations |
|
— |
|
|
|
31,717 |
|
Total assets |
$ |
203,901 |
|
|
$ |
214,896 |
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
Current liabilities: |
|
|
|
Trade accounts payable |
$ |
26,982 |
|
|
$ |
34,613 |
|
Accrued expenses |
|
20,008 |
|
|
|
26,242 |
|
Current portion of operating lease liabilities |
|
9,391 |
|
|
|
9,399 |
|
Current portion of long-term debt and finance lease
obligations |
|
49,732 |
|
|
|
3,411 |
|
Deferred revenues |
|
3,216 |
|
|
|
4,595 |
|
Current liabilities of discontinued operations |
|
11,049 |
|
|
|
6,285 |
|
Total current liabilities |
|
120,378 |
|
|
|
84,545 |
|
Long-term debt and capital
lease obligations, less current portion |
|
151 |
|
|
|
39,069 |
|
Deferred revenue, less current
portion |
|
1,374 |
|
|
|
1,341 |
|
Operating lease liabilities,
less current portion |
|
29,279 |
|
|
|
30,012 |
|
Other liabilities |
|
6,529 |
|
|
|
5,286 |
|
Long-term liabilities of
discontinued operations |
|
— |
|
|
|
545 |
|
Total liabilities |
|
157,711 |
|
|
|
160,798 |
|
|
|
|
|
|
|
|
|
COMMITMENTS AND
CONTINGENCIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity: |
|
|
|
|
|
|
|
Preferred stock, $1.00 par value; 1,000,000 shares authorized; none
issued or outstanding |
|
— |
|
|
|
— |
|
Common stock, $0.001 par value; 35,000,000 shares authorized;
21,209,300 and 20,408,558 issued at June 30, 2021 and
December 31, 2020, respectively; and 21,175,833 and 20,375,091
outstanding at June 30, 2021 and December 31, 2020,
respectively |
|
21 |
|
|
|
20 |
|
Additional paid-in capital |
|
170,486 |
|
|
|
168,244 |
|
Accumulated deficit |
|
(123,554 |
) |
|
|
(113,712 |
) |
Accumulated other comprehensive loss |
|
(638 |
) |
|
|
(329 |
) |
Treasury stock at cost, 33,467 shares |
|
(125 |
) |
|
|
(125 |
) |
Total shareholders’ equity |
|
46,190 |
|
|
|
54,098 |
|
Total liabilities and shareholders’ equity |
$ |
203,901 |
|
|
$ |
214,896 |
|
|
|
|
|
|
|
|
|
PFSWEB, INC. AND SUBSIDIARIESUNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
LOSS(In Thousands, Except Per Share
Data) |
|
|
|
|
|
Three Months EndedJune 30, |
|
Six Months EndedJune 30, |
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service fee revenue |
$ |
43,009 |
|
|
$ |
44,852 |
|
|
$ |
88,529 |
|
|
$ |
81,577 |
|
Product revenue, net |
|
4,492 |
|
|
|
5,915 |
|
|
|
8,800 |
|
|
|
13,447 |
|
Pass-through revenue |
|
13,598 |
|
|
|
14,524 |
|
|
|
24,474 |
|
|
|
29,393 |
|
Total revenues |
|
61,099 |
|
|
|
65,291 |
|
|
|
121,803 |
|
|
|
124,417 |
|
Costs of Revenues: |
|
|
|
|
|
|
|
Cost of service fee revenue |
|
31,863 |
|
|
|
31,561 |
|
|
|
65,393 |
|
|
|
56,833 |
|
Cost of product revenue |
|
4,284 |
|
|
|
5,590 |
|
|
|
8,370 |
|
|
|
12,713 |
|
Cost of pass-through revenue |
|
13,598 |
|
|
|
14,524 |
|
|
|
24,474 |
|
|
|
29,393 |
|
Total costs of revenues |
|
49,745 |
|
|
|
51,675 |
|
|
|
98,237 |
|
|
|
98,939 |
|
Gross profit |
|
11,354 |
|
|
|
13,616 |
|
|
|
23,566 |
|
|
|
25,478 |
|
Selling, general and administrative
expenses |
|
15,678 |
|
|
|
12,514 |
|
|
|
28,609 |
|
|
|
25,075 |
|
Income (loss) from operations |
|
(4,324 |
) |
|
|
1,102 |
|
|
|
(5,043 |
) |
|
|
403 |
|
Interest expense, net |
|
333 |
|
|
|
374 |
|
|
|
708 |
|
|
|
788 |
|
Income (loss) before income
taxes |
|
(4,657 |
) |
|
|
728 |
|
|
|
(5,751 |
) |
|
|
(385 |
) |
Income tax expense (benefit), net |
|
(155 |
) |
|
|
332 |
|
|
|
124 |
|
|
|
613 |
|
Net income (loss) from
continuing operations |
|
(4,502 |
) |
|
|
396 |
|
|
|
(5,875 |
) |
|
|
(998 |
) |
|
|
|
|
|
|
|
|
Income (loss) from
discontinued operations before income taxes |
|
(590 |
) |
|
|
(1,088 |
) |
|
|
(1,410 |
) |
|
|
233 |
|
Income tax expense, net |
|
2,528 |
|
|
|
161 |
|
|
|
2,557 |
|
|
|
186 |
|
Net income (loss) from
discontinued operations |
|
(3,118 |
) |
|
|
(1,249 |
) |
|
|
(3,967 |
) |
|
|
47 |
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(7,620 |
) |
|
$ |
(853 |
) |
|
$ |
(9,842 |
) |
|
$ |
(951 |
) |
|
|
|
|
|
|
|
|
Basic earnings (loss) per
share: |
|
|
|
|
|
|
|
Net income (loss) from continuing operations per share |
$ |
(0.21 |
) |
|
$ |
0.02 |
|
|
$ |
(0.28 |
) |
|
$ |
(0.05 |
) |
Net income (loss) from discontinued operations per share |
|
(0.15 |
) |
|
|
(0.06 |
) |
|
|
(0.19 |
) |
|
|
— |
|
Basic loss per share |
$ |
(0.36 |
) |
|
$ |
(0.04 |
) |
|
$ |
(0.47 |
) |
|
$ |
(0.05 |
) |
Diluted earnings (loss) per
share: |
|
|
|
|
|
|
|
Net income (loss) from continuing operations per share |
$ |
(0.21 |
) |
|
$ |
0.02 |
|
|
$ |
(0.28 |
) |
|
$ |
(0.05 |
) |
Net income (loss) from discontinued operations per share |
|
(0.15 |
) |
|
|
(0.06 |
) |
|
|
(0.19 |
) |
|
|
— |
|
Diluted loss per share |
$ |
(0.36 |
) |
|
$ |
(0.04 |
) |
|
$ |
(0.47 |
) |
|
$ |
(0.05 |
) |
Weighted average number of
shares outstanding: |
|
|
|
|
|
|
|
Basic |
|
21,166 |
|
|
|
19,800 |
|
|
|
21,221 |
|
|
|
19,739 |
|
Diluted |
|
21,166 |
|
|
|
20,527 |
|
|
|
21,221 |
|
|
|
19,739 |
|
Comprehensive loss: |
|
|
|
|
|
|
|
Net loss |
$ |
(7,620 |
) |
|
$ |
(853 |
) |
|
$ |
(9,842 |
) |
|
$ |
(951 |
) |
Foreign currency translation adjustment |
|
46 |
|
|
|
(77 |
) |
|
|
(309 |
) |
|
|
(1,021 |
) |
Total comprehensive loss |
$ |
(7,574 |
) |
|
$ |
(930 |
) |
|
$ |
(10,151 |
) |
|
$ |
(1,972 |
) |
|
|
|
|
|
|
|
|
EBITDA from continuing
operations |
$ |
(2,477 |
) |
|
$ |
2,806 |
|
|
$ |
(1,186 |
) |
|
$ |
4,115 |
|
Adjusted EBITDA from
continuing operations |
$ |
(1,660 |
) |
|
$ |
4,494 |
|
|
$ |
(734 |
) |
|
$ |
5,388 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PFSWEB, INC. AND SUBSIDIARIESUnaudited
Reconciliation of Certain Non-GAAP Items to GAAP(In Thousands) |
|
|
Three Months EndedJune 30, |
|
Six Months EndedJune 30, |
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
Net income (loss) from
continuing operations |
$ |
(4,502 |
) |
|
$ |
396 |
|
|
$ |
(5,875 |
) |
|
$ |
(998 |
) |
Income tax expense (benefit), net |
|
(155 |
) |
|
|
332 |
|
|
|
124 |
|
|
|
613 |
|
Interest expense, net |
|
333 |
|
|
|
374 |
|
|
|
708 |
|
|
|
788 |
|
Depreciation and amortization |
|
1,847 |
|
|
|
1,704 |
|
|
|
3,857 |
|
|
|
3,712 |
|
EBITDA from continuing
operations |
|
(2,477 |
) |
|
|
2,806 |
|
|
|
(1,186 |
) |
|
|
4,115 |
|
Gross margin on LiveArea activity (1) |
|
(1,324 |
) |
|
|
(1,312 |
) |
|
|
(2,592 |
) |
|
|
(2,638 |
) |
Stock-based compensation |
|
1,781 |
|
|
|
2,893 |
|
|
|
2,398 |
|
|
|
3,299 |
|
Restructuring and other costs |
|
360 |
|
|
|
107 |
|
|
|
646 |
|
|
|
612 |
|
Adjusted EBITDA from
continuing operations |
$ |
(1,660 |
) |
|
$ |
4,494 |
|
|
$ |
(734 |
) |
|
$ |
5,388 |
|
|
Three Months EndedJune 30, |
|
Six Months EndedJune 30, |
|
|
2021 |
|
|
|
2020 |
|
|
2021 |
|
|
|
2020 |
|
Net income (loss) from
continuing operations |
$ |
(4,502 |
) |
|
$ |
396 |
|
$ |
(5,875 |
) |
|
$ |
(998 |
) |
Stock-based compensation |
|
1,781 |
|
|
|
2,893 |
|
|
2,398 |
|
|
|
3,299 |
|
Restructuring and other costs |
|
360 |
|
|
|
107 |
|
|
646 |
|
|
|
612 |
|
Non-GAAP net income (loss)
from continuing operations |
$ |
(2,361 |
) |
|
$ |
3,396 |
|
$ |
(2,831 |
) |
|
$ |
2,913 |
|
|
Three Months EndedJune 30, |
|
Six Months EndedJune 30, |
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
Total revenues from continuing
operations |
$ |
61,099 |
|
|
$ |
65,291 |
|
|
$ |
121,803 |
|
|
$ |
124,417 |
|
Pass-through revenue |
|
(13,598 |
) |
|
|
(14,524 |
) |
|
|
(24,474 |
) |
|
|
(29,393 |
) |
Cost of product revenue |
|
(4,284 |
) |
|
|
(5,590 |
) |
|
|
(8,370 |
) |
|
|
(12,713 |
) |
Service fee revenue related to LiveArea activity (1) |
|
(3,283 |
) |
|
|
(3,438 |
) |
|
|
(6,372 |
) |
|
|
(6,732 |
) |
Service fee equivalent
revenues from continuing operations |
$ |
39,934 |
|
|
$ |
41,739 |
|
|
$ |
82,587 |
|
|
$ |
75,579 |
|
(1) In completing the discontinued operations
presentation, certain LiveArea revenues, costs of revenues and
gross margin related to client contracts that were not fully
transferred to contracts directly operating under the LiveArea
operating entities as of the August 2021 transaction date were
maintained by PFSweb as part of the continuing operations
presentation. As of the LiveArea transaction date, future
activities of certain contracts where we have subcontracted
services to LiveArea are expected to be recorded as pass-through
revenue and pass-through costs, for as long as such contracts
continue to be maintained directly through PFSweb.
PFSWEB, INC. AND
SUBSIDIARIESUNAUDITED NON-GAAP OPERATING INFORMATION(In
Thousands)
The following tables represents the financial information for
PFS Operations for the three and six months ended June 30, 2021 and
2020 excluding certain unallocated corporate costs and certain
non-continuing revenues and expenses.
|
Three Months EndedJune 30, |
|
Six Months EndedJune 30, |
PFS Operations (Non-GAAP) |
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
Revenues: |
|
|
|
|
|
|
|
Service fee revenue |
$ |
43,009 |
|
|
$ |
44,852 |
|
|
$ |
88,529 |
|
|
$ |
81,577 |
|
Product revenue, net |
|
4,492 |
|
|
|
5,915 |
|
|
|
8,800 |
|
|
|
13,447 |
|
Pass-through revenue |
|
13,598 |
|
|
|
14,524 |
|
|
|
24,474 |
|
|
|
29,393 |
|
Service fee revenue related to LiveArea activity (1) |
|
(3,283 |
) |
|
|
(3,438 |
) |
|
|
(6,372 |
) |
|
|
(6,732 |
) |
Total revenues |
|
57,816 |
|
|
|
61,853 |
|
|
|
115,431 |
|
|
|
117,685 |
|
Costs of Revenues: |
|
|
|
|
|
|
|
Cost of service fee revenue |
|
31,863 |
|
|
|
31,561 |
|
|
|
65,393 |
|
|
|
56,833 |
|
Cost of product revenue |
|
4,284 |
|
|
|
5,590 |
|
|
|
8,370 |
|
|
|
12,713 |
|
Cost of pass-through revenue |
|
13,598 |
|
|
|
14,524 |
|
|
|
24,474 |
|
|
|
29,393 |
|
Cost of service fee revenue related to LiveArea activity (1) |
|
(1,959 |
) |
|
|
(2,127 |
) |
|
|
(3,780 |
) |
|
|
(4,094 |
) |
Total costs of revenues |
|
47,786 |
|
|
|
49,548 |
|
|
|
94,457 |
|
|
|
94,845 |
|
Gross profit |
|
10,030 |
|
|
|
12,305 |
|
|
|
20,974 |
|
|
|
22,840 |
|
Direct operating expenses
(2) |
|
9,080 |
|
|
|
7,903 |
|
|
|
16,309 |
|
|
|
15,348 |
|
Direct contribution |
|
950 |
|
|
|
4,402 |
|
|
|
4,665 |
|
|
|
7,492 |
|
Depreciation and amortization
(3) |
|
1,722 |
|
|
|
1,421 |
|
|
|
3,607 |
|
|
|
3,195 |
|
Stock-based compensation
(4) |
|
602 |
|
|
|
871 |
|
|
|
754 |
|
|
|
940 |
|
Restructuring and other costs
(5) |
|
360 |
|
|
|
97 |
|
|
|
646 |
|
|
|
737 |
|
Adjusted EBITDA |
$ |
3,634 |
|
|
$ |
6,791 |
|
|
$ |
9,672 |
|
|
$ |
12,364 |
|
|
|
|
|
|
|
|
|
Total Revenues |
$ |
57,816 |
|
|
$ |
61,853 |
|
|
$ |
115,431 |
|
|
$ |
117,685 |
|
Pass-through revenue |
|
(13,598 |
) |
|
|
(14,524 |
) |
|
|
(24,474 |
) |
|
|
(29,393 |
) |
Cost of product revenue |
|
(4,284 |
) |
|
|
(5,590 |
) |
|
|
(8,370 |
) |
|
|
(12,713 |
) |
Service fee equivalent
revenue |
$ |
39,934 |
|
|
$ |
41,739 |
|
|
$ |
82,587 |
|
|
$ |
75,579 |
|
(1) In completing the discontinued operations
presentation, certain LiveArea revenues, costs of revenues and
gross profit related to client contracts that were not fully
transferred to contracts directly operating under the LiveArea
operating entities as of the August 2021 transaction date were
maintained by PFSweb as part of the continuing operations
presentation. As of the LiveArea transaction date, future
activities of certain contracts where we have subcontracted
services to LiveArea are expected to be recorded as pass-through
revenue and pass-through costs, for as long as such contracts
continue to be maintained directly through PFSweb.(2) Direct
operating expenses for PFS Operations exclude unallocated corporate
costs included in consolidated selling, general and administrative
expense of $6.6 million and $4.6 million for the three months ended
June 30, 2021 and 2020, respectively and $12.3 million and $9.7
million for the six months ended June 30, 2021 and 2020,
respectively.(3) Depreciation and amortization for PFS Operations
exclude depreciation and amortization applicable to unallocated
corporate costs included in consolidated selling, general and
administrative expense of $0.1 million and $0.3 million for the
three months ended June 30, 2021 and 2020, respectively and $0.3
million and $0.5 million for the six months ended June 30, 2021 and
2020, respectively.(4) Stock based compensation for PFS Operations
exclude stock-based compensation applicable to unallocated
corporate costs included in consolidated selling, general and
administrative expense of $1.2 million and $2.0 million for the
three months ended June 30, 2021 and 2020, respectively and $1.6
million and $2.4 million for the six months ended June 30, 2021 and
2020, respectively.(5) Restructuring and other costs for PFS
Operations exclude restructuring and other costs (benefits)
applicable to unallocated corporate costs included in consolidated
selling, general and administrative expense of $(0.1) million for
the six months ended June 30, 2020.
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