PFSweb, Inc. (NASDAQ: PFSW) (the “Company"), a global commerce
services company, today reported results for the first quarter
ended March 31, 2022. As previously communicated, the results were
delayed as a 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 was not related
to any historical issues with PFSweb’s accounting practices or
fundamental business.
“Reporting our first quarter 2022 results today
enables us to become current with our financial filings, placing us
in full compliance with Nasdaq listing rules and SEC reporting
obligations,” said Mike Willoughby, CEO of PFSweb. “I am proud of
our team’s tireless work to complete this process within our
previously disclosed timeline. We expect to remain compliant with
Nasdaq and SEC reporting requirements going forward as we execute
on our strategic objectives and seek to maximize the value for our
shareholders.
“Our first quarter performance demonstrates our
sustained focus on becoming a leaner, more fulfillment-oriented
business. We continued to meet strong fulfillment demand within our
existing client base and new client engagements, which drove our
year-over-year PFS Operations SFE revenue growth. Though our
bottom-line performance reflects higher restructuring expenses
related to our LiveArea transaction and ongoing strategic
alternatives process, we have otherwise worked to optimize our cost
structure to better align with our current PFS operational
framework. We remain committed to providing differentiated, branded
eCommerce fulfillment operations and support services to our
clients, as well as driving increased efficiencies across our
business.”
Q1 2022 Summary vs. Q1 2021
Results and comparisons reflect the
classification of LiveArea as a discontinued operation.
- Total revenues increased 10% to
$66.5 million.
- PFS Operations service fee
equivalent (SFE) revenue (a non-GAAP measure defined and reconciled
below) increased 7% to $45.8 million.
- PFS Operations service fee gross
margin, excluding certain LiveArea-related activity, decreased to
20% compared to 25%.
- Net loss from continuing operations
was $7.5 million or $(0.33) per share, compared to net loss from
continuing operations of $1.4 million or $(0.06) per share.
- Consolidated adjusted EBITDA from
continuing operations (a non-GAAP measure defined and reconciled
below) was $(0.4) million compared to $0.9 million.
- PFS Operations adjusted EBITDA from
continuing operations (a non-GAAP measure defined and reconciled
below) was $4.3 million compared to $6.1 million.
Q1 2022 Operational
Highlights
- Recorded seven
bookings worth an estimated $6.8 million in annual contract value,
comprising new fulfillment and contact center engagements, as well
as existing client expansions.
Zach Thomann, COO of PFSweb, commented: “We have
sustained robust bookings momentum using our multi-node fulfillment
strategy coupled with our highly branded operations to create a
winning value proposition for our target market. During the first
quarter, we recorded seven bookings worth an estimated $6.8 million
in annual contract value and continued strong operational execution
for our clients, several of which have already been quickly
implemented to meet our clients’ desired timelines. To help meet
high fulfillment demand, our multi-node strategy has allowed us to
shift certain client programs to more favorable labor markets,
expand existing clients into new geographies, and ramp our
incremental capacity for new clients. To this end, we expect our
second Las Vegas fulfillment center to be operational in the third
quarter of this year, further strengthening our U.S. distribution
network.
“While our first quarter service fee gross
margin reflects the impacts of increased labor costs in an
inflationary wage environment, we have since implemented additional
contract pricing changes and productivity enhancements to help
mitigate the impact of these challenges. Given our cost reduction
initiatives and current growth trends within our business, we
remain comfortable with our previously stated full year 2022
financial outlook. I am proud of our team’s agility and strong
execution amid dynamic industry conditions, and we aim to continue
advancing towards our goals throughout the year ahead.”
2022 Outlook
The Company continues to reiterate its
previously stated 2022 financial outlook, which targets 2022 PFS
annual SFE revenue growth in the range of 5% to 10%. The Company
remains optimistic that it can achieve SFE revenue growth at the
upper end of this targeted range, driven by expected continued
organic growth from existing clients, strong bookings and a robust
sales pipeline. The Company also continues to expect 2022 estimated
PFS pro forma standalone adjusted EBITDA percentage of service fee
revenue to be within the range of 8% to 10%.
Strategic Alternatives
Process
PFSweb continues to work with its financial
advisor, Raymond James, on a review of a full range of strategic
alternatives for its PFS business. As previously disclosed, the
Company has also substantially concluded its obligations to Merkle
under a Transition Services Agreement.
PFSweb does not currently have a specific
timeline for the completion of its 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.
Update on NASDAQ Compliance
Process
As previously communicated, PFSweb received a
notice from the Nasdaq Stock Market on May 12, 2022, notifying the
Company that it was not in compliance with the periodic filing
requirements for continued listing set forth in Nasdaq Listing Rule
5250(c)(1) because the Company's Quarterly Report on Form 10-Q for
the quarter ended March 31, 2022 (the "2022 Q1 10-Q") was not filed
with the SEC by the required due date of May 10, 2022.
Nasdaq provided the Company with 60 calendar
days, until July 11, 2022, to submit a plan to regain compliance.
With the Company’s filing of the 2022 Q1 10-Q on June 13, 2022, the
Company has regained compliance. The Company expects to maintain
compliance with its SEC reporting obligations and Nasdaq listing
requirements on a go-forward basis.
Conference Call
PFSweb will conduct a conference call today,
June 13, at 5:00 p.m. Eastern time to discuss its results for the
first quarter ended March 31, 2022.
PFSweb management will host the conference call,
followed by a question and answer period.
Date: Monday, June 13, 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: 2093164
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 Group 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.ir.pfsweb.com.
A replay of the conference call will be
available after 8:00 p.m. Eastern time on the same day through June
27, 2022.
Toll-free replay number: (855)
859-2056International replay number: (404) 537-3406Replay ID:
2093164
Forward-Looking Information
This 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, the
impact of the COVID-19 pandemic on our business and 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 for the year
ended December 31, 2021, 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 news 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 Measures
This 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, restructuring and
other 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.
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, 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 PFS
PFS, 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.
Investor Relations:Cody Slach
and Jackie KeshnerGateway Group, Inc.
1-949-574-3860PFSW@gatewayir.com
PFSWEB, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE
SHEETS(In Thousands, Except Share
Data)
|
UnauditedMarch 31, 2022 |
|
December 31, 2021 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
154,781 |
|
|
$ |
152,332 |
|
Restricted cash |
|
214 |
|
|
|
214 |
|
Accounts receivable, net of allowance for doubtful accounts of $651
and $867 at March 31, 2022 and December 31, 2021,
respectively |
|
55,533 |
|
|
|
78,024 |
|
Inventories, net of reserves of $0 and $57 at March 31, 2022
and December 31, 2021, respectively |
|
— |
|
|
|
3,133 |
|
Other receivables |
|
6,579 |
|
|
|
7,005 |
|
Prepaid expenses and other current assets |
|
7,164 |
|
|
|
7,244 |
|
Total current assets |
|
224,271 |
|
|
|
247,952 |
|
Property and equipment,
net |
|
18,684 |
|
|
|
19,315 |
|
Operating lease right-of-use
assets, net |
|
33,811 |
|
|
|
35,371 |
|
Goodwill |
|
21,984 |
|
|
|
22,218 |
|
Other assets |
|
1,784 |
|
|
|
1,610 |
|
Total assets |
$ |
300,534 |
|
|
$ |
326,466 |
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
Current liabilities: |
|
|
|
Trade accounts payable |
$ |
22,759 |
|
|
$ |
36,450 |
|
Accrued expenses |
|
30,061 |
|
|
|
31,643 |
|
Current portion of operating lease liabilities |
|
10,054 |
|
|
|
10,104 |
|
Current portion of finance lease obligations |
|
138 |
|
|
|
222 |
|
Deferred revenue |
|
4,061 |
|
|
|
4,391 |
|
Total current liabilities |
|
67,073 |
|
|
|
82,810 |
|
Finance lease obligations,
less current portion |
|
69 |
|
|
|
89 |
|
Deferred revenue, less current
portion |
|
664 |
|
|
|
833 |
|
Operating lease liabilities,
less current portion |
|
28,512 |
|
|
|
30,393 |
|
Other liabilities |
|
2,675 |
|
|
|
2,565 |
|
Total liabilities |
|
98,993 |
|
|
|
116,690 |
|
|
|
|
|
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;
22,474,862 and 22,131,546 issued and 22,441,395 and 22,098,079
outstanding at March 31, 2022 and December 31, 2021,
respectively |
|
21 |
|
|
|
21 |
|
Additional paid-in capital |
|
177,250 |
|
|
|
177,511 |
|
Retained earnings |
|
26,055 |
|
|
|
33,522 |
|
Accumulated other comprehensive loss |
|
(1,660 |
) |
|
|
(1,153 |
) |
Treasury stock at cost, 33,467 shares |
|
(125 |
) |
|
|
(125 |
) |
Total shareholders’ equity |
|
201,541 |
|
|
|
209,776 |
|
Total liabilities and shareholders’ equity |
$ |
300,534 |
|
|
$ |
326,466 |
|
|
|
|
|
|
|
|
|
PFSWEB, INC. AND
SUBSIDIARIESUNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE
LOSS(In Thousands, Except Per Share
Data)
|
Three Months EndedMarch 31, |
|
|
2022 |
|
|
|
2021 |
|
Revenues: |
|
|
|
Service fee revenue |
$ |
45,531 |
|
|
$ |
45,520 |
|
Product revenue, net |
|
3,197 |
|
|
|
4,308 |
|
Pass-through revenue |
|
17,759 |
|
|
|
10,876 |
|
Total revenues |
|
66,487 |
|
|
|
60,704 |
|
Costs of Revenues: |
|
|
|
Cost of service fee revenue |
|
36,492 |
|
|
|
33,530 |
|
Cost of product revenue |
|
2,951 |
|
|
|
4,086 |
|
Cost of pass-through revenue |
|
17,759 |
|
|
|
10,876 |
|
Total costs of revenues |
|
57,202 |
|
|
|
48,492 |
|
Gross profit |
|
9,285 |
|
|
|
12,212 |
|
Selling, general and
administrative expenses |
|
16,428 |
|
|
|
12,931 |
|
Loss from operations |
|
(7,143 |
) |
|
|
(719 |
) |
Interest expense, net |
|
6 |
|
|
|
375 |
|
Loss from continuing
operations before income taxes |
|
(7,149 |
) |
|
|
(1,094 |
) |
Income tax expense, net |
|
318 |
|
|
|
279 |
|
Net loss from continuing
operations |
|
(7,467 |
) |
|
|
(1,373 |
) |
|
|
|
|
Loss from discontinued
operations before income taxes |
|
— |
|
|
|
(820 |
) |
Income tax expense, net |
|
— |
|
|
|
29 |
|
Net loss from discontinued
operations |
|
— |
|
|
|
(849 |
) |
|
|
|
|
Net loss |
$ |
(7,467 |
) |
|
$ |
(2,222 |
) |
|
|
|
|
Basic loss per share: |
|
|
|
Net loss from continuing operations per share |
$ |
(0.33 |
) |
|
$ |
(0.06 |
) |
Net loss from discontinued operations per share |
|
— |
|
|
|
(0.04 |
) |
Basic loss per share |
$ |
(0.33 |
) |
|
$ |
(0.10 |
) |
Diluted loss per share: |
|
|
|
Net loss from continuing operations per share |
$ |
(0.33 |
) |
|
$ |
(0.06 |
) |
Net loss from discontinued operations per share |
|
— |
|
|
|
(0.04 |
) |
Diluted loss per share |
$ |
(0.33 |
) |
|
$ |
(0.10 |
) |
Weighted average number of
shares outstanding: |
|
|
|
Basic |
|
22,445 |
|
|
|
21,274 |
|
Diluted |
|
22,445 |
|
|
|
21,274 |
|
Comprehensive income |
|
|
|
Net loss |
$ |
(7,467 |
) |
|
$ |
(2,222 |
) |
Foreign currency translation adjustment, net of taxes |
|
(507 |
) |
|
|
(355 |
) |
Total comprehensive loss |
$ |
(7,974 |
) |
|
$ |
(2,577 |
) |
|
|
|
|
EBITDA from continuing
operations |
$ |
(5,188 |
) |
|
$ |
1,296 |
|
Adjusted EBITDA from
continuing operations |
$ |
(371 |
) |
|
$ |
931 |
|
PFSWEB, INC. AND
SUBSIDIARIESUnaudited Reconciliation of Certain Non-GAAP
Items to GAAP(In Thousands)
|
Three Months EndedMarch 31, |
|
|
2022 |
|
|
|
2021 |
|
Net loss from continuing
operations |
$ |
(7,467 |
) |
|
$ |
(1,373 |
) |
Income tax expense, net |
|
318 |
|
|
|
279 |
|
Interest expense, net |
|
6 |
|
|
|
375 |
|
Depreciation and amortization |
|
1,955 |
|
|
|
2,015 |
|
EBITDA from continuing
operations |
|
(5,188 |
) |
|
|
1,296 |
|
Gross margin on LiveArea activity(1) |
|
— |
|
|
|
(1,268 |
) |
Stock-based compensation |
|
739 |
|
|
|
617 |
|
Restructuring and other costs |
|
4,078 |
|
|
|
286 |
|
Adjusted EBITDA from
continuing operations |
$ |
(371 |
) |
|
$ |
931 |
|
|
Three Months EndedMarch 31, |
|
|
2022 |
|
|
|
2021 |
|
Net loss from continuing
operations |
$ |
(7,467 |
) |
|
$ |
(1,373 |
) |
Stock-based compensation |
|
739 |
|
|
|
617 |
|
Restructuring and other costs |
|
4,078 |
|
|
|
286 |
|
Non-GAAP net loss from
continuing operations |
$ |
(2,650 |
) |
|
$ |
(470 |
) |
|
|
|
|
|
|
|
|
|
Three Months EndedMarch 31, |
|
|
2022 |
|
|
|
2021 |
|
Total revenues from continuing
operations |
$ |
66,487 |
|
|
$ |
60,704 |
|
Pass-through revenue |
|
(17,759 |
) |
|
|
(10,876 |
) |
Cost of product revenue |
|
(2,951 |
) |
|
|
(4,086 |
) |
Service fee revenue related to LiveArea activity(1) |
|
— |
|
|
|
(3,089 |
) |
Service fee equivalent
revenues from continuing operations |
$ |
45,777 |
|
|
$ |
42,653 |
|
|
|
|
|
|
|
|
|
(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 months ended March 31, 2022 and 2021
excluding certain unallocated corporate costs and certain
non-continuing revenues and expenses.
|
Three Months EndedMarch 31, |
PFS Operations (Non-GAAP) |
|
2022 |
|
|
|
2021 |
|
Revenues: |
|
|
|
Service fee revenue |
$ |
45,531 |
|
|
$ |
45,520 |
|
Product revenue, net |
|
3,197 |
|
|
|
4,308 |
|
Pass-through revenue |
|
17,759 |
|
|
|
10,876 |
|
Service fee revenue related to LiveArea activity(1) |
|
— |
|
|
|
(3,089 |
) |
Total revenues |
|
66,487 |
|
|
|
57,615 |
|
Costs of Revenues: |
|
|
|
Cost of service fee revenue |
|
36,492 |
|
|
|
33,530 |
|
Cost of product revenue |
|
2,951 |
|
|
|
4,086 |
|
Cost of pass-through revenue |
|
17,759 |
|
|
|
10,876 |
|
Cost of service fee revenue related to LiveArea activity(1) |
|
— |
|
|
|
(1,821 |
) |
Total costs of revenues |
|
57,202 |
|
|
|
46,671 |
|
Gross profit |
|
9,285 |
|
|
|
10,944 |
|
Direct operating
expenses(2) |
|
7,457 |
|
|
|
7,228 |
|
Direct contribution |
|
1,828 |
|
|
|
3,716 |
|
Depreciation and
amortization(3) |
|
1,979 |
|
|
|
1,885 |
|
Stock-based
compensation(4) |
|
129 |
|
|
|
152 |
|
Restructuring and other
costs(5) |
|
345 |
|
|
|
300 |
|
Adjusted EBITDA |
$ |
4,281 |
|
|
$ |
6,053 |
|
|
|
|
|
Total Revenues |
$ |
66,487 |
|
|
$ |
57,615 |
|
Pass-through revenue |
|
(17,759 |
) |
|
|
(10,876 |
) |
Cost of product revenue |
|
(2,951 |
) |
|
|
(4,086 |
) |
Service fee equivalent
revenue |
$ |
45,777 |
|
|
$ |
42,653 |
|
|
|
|
|
|
|
|
|
(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 $9.0 million and $5.7 million for the three
months ended March 31, 2022 and 2021, 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 approximately $0.0 million and $0.1 million for the
three months ended March 31, 2022 and 2021, 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
$0.6 million and $0.5 million for the three months ended
March 31, 2022 and 2021, respectively.(5) Restructuring and other
costs for PFS Operations exclude restructuring and other costs
applicable to unallocated corporate costs included in consolidated
selling, general and administrative expense of $3.7 million
and $0.0 million for the three months ended March 31, 2022 and
2021, respectively.
Pfsweb (NASDAQ:PFSW)
Graphique Historique de l'Action
De Juin 2024 à Juil 2024
Pfsweb (NASDAQ:PFSW)
Graphique Historique de l'Action
De Juil 2023 à Juil 2024