PFSweb, Inc. (NASDAQ: PFSW) (the “Company"), a global
commerce services company, today reported results for the third
quarter ended September 30, 2022. The Company also provided an
update on its strategic review and corporate restructuring
processes, including the approval of a special cash dividend of
$4.50 per share.
Q3 2022 Summary vs. Q3 2021
Results and comparisons reflect the
classification of LiveArea as a discontinued operation; all
comparisons are to the comparable period in 2021.
- Total revenues increased 7% to
$65.5 million.
- PFS Operations service fee
equivalent (SFE) revenue (a non-GAAP measure defined and reconciled
below) increased 4% to $43.7 million.
- PFS Operations service fee gross
margin, excluding certain LiveArea-related activity, was 23%
compared to 24%.
- Net loss from continuing operations
was $6.1 million or $(0.27) per share, compared to net loss from
continuing operations of $6.8 million or $(0.32) per share.
- Consolidated adjusted EBITDA from
continuing operations (a non-GAAP measure defined and reconciled
below) improved significantly to $0.2 million compared to $(1.3)
million.
- PFS Operations adjusted EBITDA from
continuing operations (a non-GAAP measure defined and reconciled
below) increased 30% to $4.9 million compared to $3.8 million.
“During the third quarter, we continued to
benefit from robust fulfillment demand across our growing client
base,” said Mike Willoughby, CEO of PFSweb. “We have maintained our
PFS Operations service fee equivalent revenue momentum, driving
over 8% growth year-to-date compared to the same period last year.
We also saw sequential improvements in our third quarter service
fee gross margin, reflecting increased productivity and the
benefits of client contract pricing adjustments that went into
effect this year.
“To further support our growth as a standalone
order fulfillment platform, we have continued to optimize our cost
structure to align more closely with our current operations and
generate greater savings into 2023. As we move into the peak
holiday season and prepare for the year ahead, we are building an
even stronger foundation to facilitate additional client growth and
maximize shareholder value.”
Recent Operational
Highlights
- Recorded nine
bookings in Q3 worth an estimated $19 million in annual contract
value (ACV). Q3 2022 marks PFS’ strongest sales bookings quarter
since the Company began reporting this metric separately for its
business units in 2018.
- Year-to-date
through the third quarter of 2022, PFS has recorded 26 bookings
worth an estimated $37 million in combined ACV, eclipsing the full
year all-time PFS record.
- Fully exited the
Allen, Texas headquarters building in October 2022 as the Company
continues to implement its Work Anywhere hybrid workplace featuring
office spaces co-located with all production facilities and
continued full support for remote work. The Company anticipates
significant cost savings and benefits to company culture with the
Work Anywhere initiative.
- Opened new
fulfillment center in North Las Vegas, the Company’s second
fulfillment center in the region.
- Entered a new lease
agreement for a second fulfillment center in the Dallas area. The
facility is expected to open in the first half of 2023 and is
expected to continue to improve productivity, reduce costs and
provide co-located office space for corporate personnel.
Zach Thomann, COO of PFSweb, commented: “Across
our core verticals of health and beauty, fashion and apparel,
jewelry and collectibles, and consumer packaged goods, the premier
and luxury brands we serve have generally remained resilient
despite the macroeconomic headwinds that have impacted major
big-box and eCommerce retailers. This resilience is evidenced by
the fact that we have already achieved a record bookings year, with
the fourth quarter remaining. We are focused on the future as we
work to convert client prospects in our substantial pipeline to
launches in early 2023 and expect continued demand for our
brand-centric, multi-node fulfillment service offering.”
2022 Outlook
Based on continued strong consumer and
fulfillment service demand across its core verticals, PFSweb is
maintaining its previously stated 2022 financial targets, which
includes 2022 PFS Operations annual SFE annual 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.
The Company is maintaining its previously stated target for its
annual estimated PFS pro forma standalone adjusted EBITDA
percentage of service fee revenue to be within the range of 8% to
10%.
Strategic Review Process Update and
Special Dividend
PFSweb continues to work with its financial
advisor, Raymond James, on a review of a full range of strategic
alternatives for its PFS business.
Willoughby continued: “While the completion of
our strategic evaluation has been slowed by a combination of
macroeconomic headwinds and the need to complete our internal
restructuring, we have made great strides to streamline our
organization through right-sizing corporate SG&A and addressing
the excess cash on our balance sheet from the LiveArea transaction.
We believe these initiatives, along with our expectation of
continued strong growth in service fee revenue and profitability,
will allow us to continue our strategic alternatives process in
2023 on a much stronger footing. We remain focused on maximizing
value for our shareholders.”
The Company does not intend to comment further
regarding the process unless there are material developments to
discuss.
The Company’s board has approved a $4.50 per
share special dividend, returning approximately $111 million of
capital from the LiveArea divestiture to shareholders. The dividend
is payable on December 15, 2022, to shareholders of record as of
December 1, 2022.
Willoughby concluded: “Given the substantial
excess cash generated from the LiveArea divestiture, we believe a
special dividend is the optimal pathway to return capital to our
shareholders. In fact, we believe we can best position our
strategic review process for success by returning excess cash and
maintaining more traditional levels of operating liquidity.”
Executive Transition Update
The Company also announced today that Michael
Willoughby will take on the role of Executive Director of the Board
of Directors, in addition to his CEO role. In this position, he
will primarily focus on the strategic alternatives process while
transitioning management responsibilities to COO Zach Thomann.
Thomann is expected to take on the CEO role in 2023.
Monica Luechtefeld, Chair of PFSweb’s Board of
Directors, stated: “The board is focused on expeditiously and
efficiently driving shareholder value. The special dividend we
announced today advances this goal as we continue to explore ways
to return capital to shareholders. To that end, we have tasked Mike
with devoting most of his time and energy to driving the strategic
alternatives process to completion and the transition of the CEO
position to Zach Thomann in 2023. We appreciate Mike’s willingness
to work proactively with the board to restructure his compensation
program to provide significant cost benefits to the Company in
2023, as well as his enthusiasm for conducting a smooth and orderly
CEO transition next year. We are also grateful to Zach for taking
on increased responsibilities within his role as COO as he
completes his preparation to become CEO, and we have the utmost
confidence in his ability to lead PFS moving forward.”
Corporate Restructuring Process
Update
The Company has continued to progress on its
comprehensive corporate restructuring initiatives, with the goal of
aligning its cost structure more closely with its current size and
focus as a result of the LiveArea divestiture, while driving
greater cost savings in fiscal year 2023. Since August 2021,
several key milestones have already been completed, and the Company
is targeting substantial completion of its corporate restructuring
plan by year-end 2022.
Recent updates and initiatives include:
- Completion of the Company’s
obligations under a Transition Services Agreement (TSA) with Merkle
following the LiveArea transaction. The completion of the TSA
resulted in personnel reductions throughout the first three
quarters of 2022 and a reduction of ongoing SG&A expenses.
- Successful negotiation of the early
termination of the Company’s Allen, TX corporate headquarters,
resulting in an incremental restructuring cost of $1.6 million
recorded in Q3 2022 and a reduction of almost $2 million in related
annualized SG&A expenses beginning in November 2022.
- Restructuring of the executive
leadership team and the current CEO compensation program to better
reflect the expected normalized leadership cost of PFS’ continuing
operations on a pro forma standalone adjusted EBITDA basis.
- The completion of additional cost
center initiatives, including reductions in certain ongoing
professional services costs, and other cost reductions based on the
Company’s current business model. Additionally, this cost
optimization process includes ongoing efforts into early 2023 to
optimize the structure and operation of the Company’s accounting
and finance functions, including conversion of certain contract
positions to full-time positions and the further integration of
offshore resources at the Company’s Bangalore operation.
Taken together, since August 2021, the above
initiatives are estimated to have resulted in total ongoing annual
cost savings of approximately $9 million.
Board of Directors Update
The Company also announced today that Shinichi
Nagakura will be stepping down as a member of the board, effective
immediately, to focus on his role at transcosmos, Inc. Mr.
Nagakura’s departure is not the result of any disagreement with the
board. With his departure, the size of the board will be reduced to
six directors.
Luechtefeld concluded: “On behalf of the entire
board, I would like to thank Shinichi for his many years of
valuable service and wish him the best in his future
endeavors.”
Conference Call
PFSweb will conduct a conference call today,
November 9, at 5:00 p.m. Eastern time to discuss its results for
the third quarter ended September 30, 2022 and additional corporate
updates.
PFSweb management will host the conference call,
followed by a question-and-answer period.
Date: Wednesday, November 9, 2022Time: 5:00 p.m. Eastern time
(2:00 p.m. Pacific time)Registration Link:
https://register.vevent.com/register/BIc53322fdfc41498b9c141013da43c78e
Please call the conference telephone number 5-10
minutes prior to the start time. 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.
About PFSweb, Inc.
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 Irving,
TX with additional locations around the globe. For more
information, visit www.pfscommerce.com or www.ir.pfsweb.com for
investor information.
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.
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 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, 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 (SFE) 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
(SFE) 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.
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)
|
Unaudited September 30, 2022 |
|
December 31, 2021 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
140,350 |
|
|
$ |
152,332 |
|
Restricted cash |
|
— |
|
|
|
214 |
|
Accounts receivable, net of allowance for doubtful accounts of $375
and $867 at September 30, 2022 and December 31, 2021,
respectively |
|
50,705 |
|
|
|
78,024 |
|
Inventories, net of reserves of $0 and $57 at September 30,
2022 and December 31, 2021, respectively |
|
— |
|
|
|
3,133 |
|
Other receivables |
|
7,935 |
|
|
|
7,005 |
|
Prepaid expenses and other current assets |
|
6,254 |
|
|
|
7,244 |
|
Total current assets |
|
205,244 |
|
|
|
247,952 |
|
Property and equipment,
net |
|
20,254 |
|
|
|
19,315 |
|
Operating lease right-of-use
assets, net |
|
32,098 |
|
|
|
35,371 |
|
Goodwill |
|
20,904 |
|
|
|
22,218 |
|
Other assets |
|
1,669 |
|
|
|
1,610 |
|
Total assets |
$ |
280,169 |
|
|
$ |
326,466 |
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
Current liabilities: |
|
|
|
Trade accounts payable |
$ |
24,599 |
|
|
$ |
36,450 |
|
Accrued expenses |
|
22,295 |
|
|
|
31,643 |
|
Current portion of operating lease liabilities |
|
10,581 |
|
|
|
10,104 |
|
Current portion of finance lease obligations |
|
72 |
|
|
|
222 |
|
Deferred revenue |
|
2,039 |
|
|
|
4,391 |
|
Total current liabilities |
|
59,586 |
|
|
|
82,810 |
|
Finance lease obligations,
less current portion |
|
34 |
|
|
|
89 |
|
Deferred revenue, less current
portion |
|
852 |
|
|
|
833 |
|
Operating lease liabilities,
less current portion |
|
26,864 |
|
|
|
30,393 |
|
Other liabilities |
|
2,676 |
|
|
|
2,565 |
|
Total liabilities |
|
90,012 |
|
|
|
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;
22,677,666 and 22,131,546 issued and 22,644,199 and 22,098,079
outstanding at September 30, 2022 and December 31, 2021,
respectively |
|
22 |
|
|
|
21 |
|
Additional paid-in capital |
|
178,643 |
|
|
|
177,511 |
|
Retained earnings |
|
15,642 |
|
|
|
33,522 |
|
Accumulated other comprehensive loss |
|
(4,025 |
) |
|
|
(1,153 |
) |
Treasury stock at cost, 33,467 shares |
|
(125 |
) |
|
|
(125 |
) |
Total shareholders’ equity |
|
190,157 |
|
|
|
209,776 |
|
Total liabilities and shareholders’ equity |
$ |
280,169 |
|
|
$ |
326,466 |
|
PFSWEB, INC. AND
SUBSIDIARIESUNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (In Thousands, Except Per
Share Data)
|
Three Months EndedSeptember
30, |
|
Nine Months Ended September 30, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Revenues: |
|
|
|
|
|
|
|
Service fee revenue |
$ |
43,658 |
|
|
$ |
44,275 |
|
|
$ |
134,423 |
|
|
$ |
132,804 |
|
Product revenue, net |
|
14 |
|
|
|
4,096 |
|
|
|
3,333 |
|
|
|
12,896 |
|
Pass-through revenue |
|
21,813 |
|
|
|
12,970 |
|
|
|
58,850 |
|
|
|
37,444 |
|
Total revenues |
|
65,485 |
|
|
|
61,341 |
|
|
|
196,606 |
|
|
|
183,144 |
|
Costs of Revenues: |
|
|
|
|
|
|
|
Cost of service fee revenue |
|
33,785 |
|
|
|
33,383 |
|
|
|
105,922 |
|
|
|
98,776 |
|
Cost of product revenue |
|
4 |
|
|
|
3,895 |
|
|
|
3,059 |
|
|
|
12,265 |
|
Cost of pass-through revenue |
|
21,813 |
|
|
|
12,970 |
|
|
|
58,850 |
|
|
|
37,444 |
|
Total costs of revenues |
|
55,602 |
|
|
|
50,248 |
|
|
|
167,831 |
|
|
|
148,485 |
|
Gross profit |
|
9,883 |
|
|
|
11,093 |
|
|
|
28,775 |
|
|
|
34,659 |
|
Selling, general and
administrative expenses |
|
16,341 |
|
|
|
16,161 |
|
|
|
46,846 |
|
|
|
44,768 |
|
Loss from operations |
|
(6,458 |
) |
|
|
(5,068 |
) |
|
|
(18,071 |
) |
|
|
(10,109 |
) |
Interest (income) expense, net |
|
(554 |
) |
|
|
165 |
|
|
|
(699 |
) |
|
|
873 |
|
Loss on extinguishment of debt |
|
— |
|
|
|
426 |
|
|
|
— |
|
|
|
426 |
|
Loss from continuing
operations before income taxes |
|
(5,904 |
) |
|
|
(5,659 |
) |
|
|
(17,372 |
) |
|
|
(11,408 |
) |
Income tax expense, net |
|
186 |
|
|
|
1,152 |
|
|
|
688 |
|
|
|
1,276 |
|
Net loss from continuing
operations |
|
(6,090 |
) |
|
|
(6,811 |
) |
|
|
(18,060 |
) |
|
|
(12,684 |
) |
|
|
|
|
|
|
|
|
Income from discontinued
operations before income taxes |
|
— |
|
|
|
197,920 |
|
|
|
180 |
|
|
|
196,508 |
|
Income tax expense, net |
|
— |
|
|
|
33,758 |
|
|
|
— |
|
|
|
36,315 |
|
Income from discontinued
operations |
|
— |
|
|
|
164,162 |
|
|
|
180 |
|
|
|
160,193 |
|
|
|
|
|
|
|
|
|
Net income (loss) |
$ |
(6,090 |
) |
|
$ |
157,351 |
|
|
$ |
(17,880 |
) |
|
$ |
147,509 |
|
|
|
|
|
|
|
|
|
Basic earnings (loss) per
share |
|
|
|
|
|
|
|
Income (loss) from continuing operations per share |
$ |
(0.27 |
) |
|
$ |
(0.32 |
) |
|
$ |
(0.80 |
) |
|
$ |
(0.60 |
) |
Income from discontinued operations per share |
|
— |
|
|
|
7.71 |
|
|
|
0.01 |
|
|
|
7.57 |
|
Basic earnings (loss) per share |
$ |
(0.27 |
) |
|
$ |
7.39 |
|
|
$ |
(0.79 |
) |
|
$ |
6.97 |
|
Diluted earnings (loss) per
share |
|
|
|
|
|
|
|
Income (loss) from continuing operations per share |
$ |
(0.27 |
) |
|
$ |
(0.32 |
) |
|
$ |
(0.80 |
) |
|
$ |
(0.60 |
) |
Income from discontinued operations per share |
|
— |
|
|
|
7.71 |
|
|
|
0.01 |
|
|
|
7.57 |
|
Diluted earnings (loss) per share |
$ |
(0.27 |
) |
|
$ |
7.39 |
|
|
$ |
(0.79 |
) |
|
$ |
6.97 |
|
Weighted average number of
shares outstanding: |
|
|
|
|
|
|
|
Basic |
|
22,644 |
|
|
|
21,282 |
|
|
|
22,580 |
|
|
|
21,164 |
|
Diluted |
|
22,644 |
|
|
|
21,282 |
|
|
|
22,580 |
|
|
|
21,164 |
|
|
|
|
|
|
|
|
|
EBITDA from continuing
operations |
$ |
(4,585 |
) |
|
$ |
(3,173 |
) |
|
$ |
(12,521 |
) |
|
$ |
(4,357 |
) |
Adjusted EBITDA from
continuing operations |
$ |
185 |
|
|
$ |
(1,307 |
) |
|
$ |
(547 |
) |
|
$ |
(2,039 |
) |
PFSWEB, INC. AND
SUBSIDIARIESUnaudited Reconciliation of Certain Non-GAAP
Items to GAAP(In Thousands)
|
Three Months EndedSeptember
30, |
|
Nine Months Ended September 30, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Net loss from continuing
operations |
$ |
(6,090 |
) |
|
$ |
(6,811 |
) |
|
$ |
(18,060 |
) |
|
$ |
(12,684 |
) |
Income tax expense, net |
|
186 |
|
|
|
1,152 |
|
|
|
688 |
|
|
|
1,276 |
|
Loss on extinguishment of debt |
|
— |
|
|
|
426 |
|
|
|
— |
|
|
|
426 |
|
Interest expense, net |
|
(554 |
) |
|
|
165 |
|
|
|
(699 |
) |
|
|
873 |
|
Depreciation and amortization |
|
1,873 |
|
|
|
1,895 |
|
|
|
5,550 |
|
|
|
5,752 |
|
EBITDA from continuing
operations |
|
(4,585 |
) |
|
|
(3,173 |
) |
|
|
(12,521 |
) |
|
|
(4,357 |
) |
Gross margin on LiveArea activity (1) |
|
— |
|
|
|
(1,023 |
) |
|
|
— |
|
|
|
(3,615 |
) |
Stock-based compensation |
|
1,629 |
|
|
|
1,405 |
|
|
|
2,945 |
|
|
|
3,803 |
|
Restructuring and other costs |
|
3,141 |
|
|
|
1,484 |
|
|
|
9,029 |
|
|
|
2,130 |
|
Adjusted EBITDA from
continuing operations |
$ |
185 |
|
|
$ |
(1,307 |
) |
|
$ |
(547 |
) |
|
$ |
(2,039 |
) |
|
Three Months EndedSeptember
30, |
|
Nine Months Ended September 30, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Net loss from continuing
operations |
$ |
(6,090 |
) |
|
$ |
(6,811 |
) |
|
$ |
(18,060 |
) |
|
$ |
(12,684 |
) |
Stock-based compensation |
|
1,629 |
|
|
|
1,405 |
|
|
|
2,945 |
|
|
|
3,803 |
|
Restructuring and other costs |
|
3,141 |
|
|
|
1,484 |
|
|
|
9,029 |
|
|
|
2,130 |
|
Non-GAAP net loss from
continuing operations |
$ |
(1,320 |
) |
|
$ |
(3,922 |
) |
|
$ |
(6,086 |
) |
|
$ |
(6,751 |
) |
|
Three Months EndedSeptember
30, |
|
Nine Months Ended September 30, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Total revenues from continuing
operations |
$ |
65,485 |
|
|
$ |
61,341 |
|
|
$ |
196,606 |
|
|
$ |
183,144 |
|
Pass-through revenue |
|
(21,813 |
) |
|
|
(12,970 |
) |
|
|
(58,850 |
) |
|
|
(37,444 |
) |
Cost of product revenue |
|
(4 |
) |
|
|
(3,895 |
) |
|
|
(3,059 |
) |
|
|
(12,265 |
) |
Service fee revenue related to LiveArea activity (1) |
|
— |
|
|
|
(2,441 |
) |
|
|
— |
|
|
|
(8,813 |
) |
Service fee equivalent
revenues from continuing operations |
$ |
43,668 |
|
|
$ |
42,035 |
|
|
$ |
134,697 |
|
|
$ |
124,622 |
|
(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.
PFSWEB, INC. AND
SUBSIDIARIESUNAUDITED NON-GAAP OPERATING INFORMATION(In
Thousands)
The following table represents the financial information for PFS
Operations for the three and nine months ended September 30, 2022
and 2021 excluding certain unallocated corporate costs and certain
non-continuing revenues and expenses.
|
Three Months EndedSeptember
30, |
|
Nine Months Ended September 30, |
PFS Operations (Non-GAAP) |
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Revenues: |
|
|
|
|
|
|
|
Service fee revenue |
$ |
43,658 |
|
|
$ |
44,275 |
|
|
$ |
134,423 |
|
|
$ |
132,804 |
|
Product revenue, net |
|
14 |
|
|
|
4,096 |
|
|
|
3,333 |
|
|
|
12,896 |
|
Pass-through revenue |
|
21,813 |
|
|
|
12,970 |
|
|
|
58,850 |
|
|
|
37,444 |
|
Service fee revenue related to LiveArea activity (1) |
|
— |
|
|
|
(2,441 |
) |
|
|
— |
|
|
|
(8,813 |
) |
Total revenues |
|
65,485 |
|
|
|
58,900 |
|
|
|
196,606 |
|
|
|
174,331 |
|
Costs of Revenues: |
|
|
|
|
|
|
|
Cost of service fee revenue |
|
33,785 |
|
|
|
33,383 |
|
|
|
105,922 |
|
|
|
98,776 |
|
Cost of product revenue |
|
4 |
|
|
|
3,895 |
|
|
|
3,059 |
|
|
|
12,265 |
|
Cost of pass-through revenue |
|
21,813 |
|
|
|
12,970 |
|
|
|
58,850 |
|
|
|
37,444 |
|
Cost of service fee revenue related to LiveArea activity(1) |
|
— |
|
|
|
(1,418 |
) |
|
|
— |
|
|
|
(5,198 |
) |
Total costs of revenues |
|
55,602 |
|
|
|
48,830 |
|
|
|
167,831 |
|
|
|
143,287 |
|
Gross profit |
|
9,883 |
|
|
|
10,070 |
|
|
|
28,775 |
|
|
|
31,044 |
|
Direct operating
expenses(2) |
|
7,607 |
|
|
|
8,535 |
|
|
|
22,173 |
|
|
|
24,844 |
|
Direct contribution |
|
2,276 |
|
|
|
1,535 |
|
|
|
6,602 |
|
|
|
6,200 |
|
Depreciation and
amortization(3) |
|
1,673 |
|
|
|
1,709 |
|
|
|
5,329 |
|
|
|
5,316 |
|
Stock-based
compensation(4) |
|
711 |
|
|
|
438 |
|
|
|
1,068 |
|
|
|
1,192 |
|
Restructuring and other
costs(5) |
|
248 |
|
|
|
81 |
|
|
|
846 |
|
|
|
727 |
|
Adjusted EBITDA |
$ |
4,908 |
|
|
$ |
3,763 |
|
|
$ |
13,844 |
|
|
$ |
13,435 |
|
|
|
|
|
|
|
|
|
Total Revenues |
$ |
65,485 |
|
|
$ |
58,900 |
|
|
$ |
196,606 |
|
|
$ |
174,331 |
|
Pass-through revenue |
|
(21,813 |
) |
|
|
(12,970 |
) |
|
|
(58,850 |
) |
|
|
(37,444 |
) |
Cost of product revenue |
|
(4 |
) |
|
|
(3,895 |
) |
|
|
(3,059 |
) |
|
|
(12,265 |
) |
Service fee equivalent
revenue |
$ |
43,668 |
|
|
$ |
42,035 |
|
|
$ |
134,697 |
|
|
$ |
124,622 |
|
(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 $8.7 million and $7.6 million for the three
months ended September 30, 2022 and 2021, respectively, and
$24.7 million and $19.9 million for the nine months ended
September 30, 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 $0.2 million and $0.2 million for the three
months ended September 30, 2022 and 2021, respectively, and
$0.2 million and $0.4 million for the nine months ended
September 30, 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 $0.9 million
and $1.0 million for the three months ended September 30, 2022
and 2021, respectively, and $1.9 million and $2.6 million
for the nine months ended September 30, 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 $2.9 million and $1.4 million
for the three months ended September 30, 2022 and 2021,
respectively, and $8.2 million and $1.4 million for the
nine months ended September 30, 2022 and 2021, respectively.
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