PFSweb Reports Second Quarter Record Results
Q2 Service Fee Equivalent Revenue up 40% to $39.8 Million; Adjusted EBITDA up 138% to $4.1 Million
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ALLEN, TX -- (Marketwired) -- 08/10/15 -- PFSweb, Inc. (NASDAQ: PFSW), a global provider of end-to-end eCommerce solutions, reported results for the second quarter ended June 30, 2015.
Second Quarter 2015 Highlights vs. Year-Ago Quarter
- Service fee equivalent revenue (a non-GAAP measure defined below) increased 40% to a Q2 record $39.8 million
- Service fee gross margin increased 180 basis points to 31.8%
- Adjusted EBITDA (a non-GAAP measure defined below) increased 138% to a Q2 record $4.1 million
Management Commentary
"We are pleased to once again report record quarterly results," said Michael Willoughby, CEO of PFSweb. "These results reflect continued strong execution for our new and existing clients. In addition, our service fee equivalent revenue and Adjusted EBITDA again benefitted from higher margin incremental project activity in our digital agency and technology services businesses. Our second quarter was also highlighted by the acquisition of MODA, which expands our offerings into the U.K. and adds integration capabilities with the Magento software platform. We believe our continuous execution, high level of client referenceability, and expansion of agency and technology service offerings are validating our position as a leader among full-service eCommerce providers.
"As recently announced, the breadth of our agency and technology service offering has been further enhanced through our acquisition of CrossView in August. Through combining CrossView's IBM WebSphere and SAP hybris related capabilities with our Demandware, Oracle Commerce and Magento experience, we believe we are now the only provider of end-to-end eCommerce solutions in the marketplace supporting all five major eCommerce software platforms. CrossView also provides us with a robust B2B front-end commerce platform which, we believe, when combined with our strong B2B order fulfillment, customer care and financial services capabilities, creates a unique B2B offering. By providing complete platform choice and a strong B2B full-service solution, we believe we will be able to target an even larger addressable market. As a result, we plan to further ramp our sales and marketing efforts to capitalize on the newly added capabilities and the cross sell opportunities from the CrossView acquisition."
2015 Outlook
As announced in the company's CrossView acquisition press release dated August 3, 2015, PFSweb has increased its 2015 service fee equivalent revenue guidance to range between $175 million and $185 million, up from $160 million to $170 million. This reflects growth of 26% to 33% from 2014. The company has also increased its adjusted EBITDA target to range between $18 million to $20 million, up from $16 million to $18 million. This reflects growth of 32% to 47% from 2014. This guidance excludes the impact of potential future acquisitions.
The updated guidance is based on the strength of the pre-acquisition PFSweb business and the contribution from the CrossView acquisition. The new service fee equivalent revenue and adjusted EBITDA guidance also reflects the expectation that CrossView revenues will be seasonally lower in the last quarter compared to the first three quarters, which is typical of commerce system integrators. The new guidance also includes the impact from increased sales and marketing expenses in the remainder of 2015, as well as expenses related to preparation for the 2015 holiday season.
Second Quarter 2015 Financial Results
Total revenues in the second quarter of 2015 increased 17% to $63.2 million compared to $54.0 million in the same period of 2014. Service fee revenue in the second quarter of 2015 increased 43% to $39.1 million compared to $27.4 million last year. Product revenue was $13.7 million compared to $18.1 million in the same period of 2014 due to ongoing restructuring activities by the company's largest client in this segment.
Service fee equivalent revenue in the second quarter of 2015 increased 40% to a second quarter record $39.8 million compared to $28.5 million in the same period of 2014.
Service fee gross margin in the second quarter increased 180 basis points to 31.8% compared to 30.0% in the same period of 2014. The 2015 quarter included a higher proportion of professional and technology services, including the impact from our acquisitions of Rev Solutions and LiveAreaLabs and certain incremental projects.
Adjusted EBITDA increased 138% to a second quarter record $4.1 million in of 2015 compared to $1.7 million in the same period of 2014. As a percentage of service fee equivalent revenue, adjusted EBITDA increased 430 basis points to 10.3% compared to 6.0% in the year-ago quarter.
Net loss in the second quarter was $1.9 million or $(0.11) per diluted share, compared to a net loss of $2.4 million or $(0.14) per diluted share in the same period of 2014. Net loss in the second quarter of 2015 included $1.2 million in stock-based compensation expense and $1.1 million in acquisition related and restructuring costs. This compares to $0.9 million in stock-based compensation expense and $0.2 million in acquisition related and restructuring costs in the same period of 2014.
Non-GAAP net income (a non-GAAP measure defined below) in the second quarter of 2015 was $0.6 million or $0.03 per diluted share, compared to non-GAAP net loss of $1.4 million or $(0.08) per diluted share in the second quarter of 2014.
At June 30, 2015, cash and cash equivalents was $15.7 million compared to $18.1 million at December 31, 2014. Total debt decreased to $9.5 million from $10.9 million at December 31, 2014.
First Half 2015 Financial Results
Total revenues in the first six months of 2015 increased 14% to $127.0 million compared to $111.3 million in the same period of 2014. Service fee revenue in the first six months of 2015 increased 38% to $75.8 million compared to $55.0 million last year. Product revenue was $30.3 million compared to $39.8 million in the same period of 2014.
Service fee equivalent revenue in the first six months of 2015 increased 35% to $77.5 million compared to $57.3 million in the same period of 2014.
Service fee gross margin in the first six months of 2015 increased 140 basis points to 31.6% compared to 30.2% in the same period of 2014.
Adjusted EBITDA increased 97% to $7.8 million in the first six months of 2015 compared to $4.0 million in the same period of 2014. As a percentage of service fee equivalent revenue, adjusted EBITDA increased 320 basis points to 10.1% compared to 6.9% in the year-ago period.
Net loss in the first six months of 2015 was $3.6 million or $(0.21) per diluted share, compared to a net loss of $4.2 million or $(0.25) per diluted share in the same period of 2014. Net loss in the first six months of 2015 included $2.0 million in stock-based compensation expense and $1.9 million in acquisition related and restructuring costs. This compares to $1.7 million in stock-based compensation expense and $0.2 million in acquisition related and restructuring costs in the same period of 2014.
Non-GAAP net income in the first six months of 2015 was $0.7 million or $0.04 per diluted share, compared to non-GAAP net loss of $2.4 million or $(0.14) per diluted share in the same period of 2014.
Conference Call
PFSweb will conduct a conference call today at 4:30 p.m. Eastern time to discuss its results for the second quarter ended June 30, 2015.
The company's CEO Mike Willoughby and CFO Tom Madden will host the conference call, followed by a question and answer period.
Date: Monday, August 10, 2015 Time: 4:30 p.m. Eastern time (3:30 p.m. Central time) Toll-free dial-in number: 1-888-539-3678 International dial-in number: 1-719-325-2454 Conference ID: 8118507
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=115575 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 7:30 p.m. Eastern time on the same day through August 24, 2015.
Toll-free replay number: 1-877-870-5176 International replay number: 1-858-384-5517 Replay ID: 8118507
About PFSweb Inc.
PFSweb (NASDAQ: PFSW) is a global provider of end-to-end eCommerce solutions including digital agency and marketing services, technology development services, business process outsourcing services and a complete omni-channel technology ecosystem. The company provides these solutions and services to major brand names and other companies seeking to optimize every customer experience and enhance their traditional and online business channels. PFSweb supports organizations across various industries, including Procter & Gamble, L'Oreal, LEGO, Columbia Sportswear, 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, Minnesota, Washington, New York, Ohio, North Carolina, Canada, Belgium, London, Munich and India. For more information, please visit www.pfsweb.com or download the free PFSweb IR App on your iPhone, iPad or Android device.
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, acquisition related costs 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, acquisition related costs 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, acquisition related costs and 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, 2014 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
Condensed Consolidated Balance Sheets (A)
(In Thousands, Except Share Data)
June 30, December 31,
2015 2014
------------ ------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 15,721 $ 18,128
Restricted cash 374 521
Accounts receivable, net of allowance for
doubtful accounts of $446 and $447 at June 30,
2015 and December 31, 2014, respectively 42,961 59,126
Inventories, net of reserves of $635 and $768
at June 30, 2015 and December 31, 2014,
respectively 10,333 10,534
Other receivables 4,565 5,638
Prepaid expenses and other current assets 4,551 7,103
------------ ------------
Total current assets 78,505 101,050
PROPERTY AND EQUIPMENT, net 23,912 26,604
INTANGIBLE ASSETS, net 1,813 2,170
GOODWILL 10,322 8,366
OTHER ASSETS 2,101 2,556
------------ ------------
Total assets $ 116,653 $ 140,746
============ ============
LIABILITIES AND SHAREHOLDERS EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt and capital
lease obligations $ 5,717 $ 6,850
Trade accounts payable 27,839 38,842
Deferred revenue 6,806 9,098
Accrued expenses 24,124 28,473
------------ ------------
Total current liabilities 64,486 83,263
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS,
less current portion 3,739 4,062
DEFERRED REVENUE 4,481 5,355
DEFERRED RENT 4,561 4,870
OTHER LONG-TERM LIABILITIES 368 3,091
------------ ------------
Total liabilities 77,635 100,641
------------ ------------
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; 17,511,982 and 17,047,093
shares issued at June 30, 2015 and December
31, 2014, respectively; and 17,478,515 and
17,013,622 shares outstanding as of June 30,
2015 and December 31, 2014, respectively 17 17
Additional paid-in capital 132,631 129,457
Accumulated deficit (93,519) (89,926)
Accumulated other comprehensive income 14 682
Treasury stock at cost, 33,467 shares (125) (125)
------------ ------------
Total shareholders' equity 39,018 40,105
------------ ------------
Total liabilities and shareholders' equity $ 116,653 $ 140,746
============ ============
(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, 2014.
PFSweb, Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Operations (A)
(In Thousands, Except Per Share Data)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- --------------------
2015 2014 2015 2014
--------- --------- --------- ---------
REVENUES:
Product revenue, net $ 13,658 $ 18,120 $ 30,312 $ 39,842
Service fee revenue 39,075 27,384 75,783 54,982
Pass-thru revenue 10,443 8,539 20,927 16,448
--------- --------- --------- ---------
Total revenues 63,176 54,043 127,022 111,272
--------- --------- --------- ---------
COSTS OF REVENUES:
Cost of product revenue 12,911 17,039 28,619 37,555
Cost of service fee revenue 26,645 19,160 51,800 38,380
Cost of pass-thru revenue 10,443 8,539 20,927 16,448
--------- --------- --------- ---------
Total costs of revenues 49,999 44,738 101,346 92,383
--------- --------- --------- ---------
Gross profit 13,177 9,305 25,676 18,889
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 14,676 11,485 28,290 22,507
--------- --------- --------- ---------
Income (loss) from operations (1,499) (2,180) (2,614) (3,618)
INTEREST EXPENSE (INCOME), NET 223 173 541 316
--------- --------- --------- ---------
Income (loss) before income
taxes (1,722) (2,353) (3,155) (3,934)
INCOME TAX PROVISION (BENEFIT) 178 42 438 271
--------- --------- --------- ---------
NET INCOME (LOSS) $ (1,900) $ (2,395) $ (3,593) $ (4,205)
========= ========= ========= =========
NON-GAAP NET INCOME (LOSS) $ 613 $ (1,379) $ 743 $ (2,395)
========= ========= ========= =========
NET INCOME (LOSS) PER SHARE:
Basic $ (0.11) $ (0.14) $ (0.21) $ (0.25)
========= ========= ========= =========
Diluted $ (0.11) $ (0.14) $ (0.21) $ (0.25)
========= ========= ========= =========
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING:
Basic 17,368 16,736 17,257 16,630
========= ========= ========= =========
Diluted 17,368 16,736 17,257 16,630
========= ========= ========= =========
EBITDA $ 1,810 $ 698 $ 3,950 $ 2,150
========= ========= ========= =========
ADJUSTED EBITDA $ 4,083 $ 1,714 $ 7,806 $ 3,960
========= ========= ========= =========
(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, 2014.
PFSweb, Inc. and Subsidiaries
Reconciliation of certain Non-GAAP Items to GAAP
(In Thousands, Except Per Share Data)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- --------------------
2015 2014 2015 2014
--------- --------- --------- ---------
NET INCOME (LOSS) $ (1,900) $ (2,395) $ (3,593) $ (4,205)
Income tax expense (benefit) 178 42 438 271
Interest expense, net 223 173 541 316
Depreciation and amortization 3,309 2,878 6,564 5,768
--------- --------- --------- ---------
EBITDA $ 1,810 $ 698 $ 3,950 $ 2,150
Stock-based compensation 1,150 862 1,954 1,656
Acquisition related and
restructuring costs 1,123 154 1,902 154
--------- --------- --------- ---------
ADJUSTED EBITDA $ 4,083 $ 1,714 $ 7,806 $ 3,960
========= ========= ========= =========
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- --------------------
2015 2014 2015 2014
--------- --------- --------- ---------
NET INCOME (LOSS) $ (1,900) $ (2,395) $ (3,593) $ (4,205)
Stock-based compensation 1,150 862 1,954 1,656
Amortization of intangible
assets 240 - 480 -
Acquisition related and
restructuring costs 1,123 154 1,902 154
--------- --------- --------- ---------
NON-GAAP NET INCOME (LOSS) $ 613 $ (1,379) $ 743 $ (2,395)
========= ========= ========= =========
NET INCOME (LOSS) PER SHARE:
Basic $ (0.11) $ (0.14) $ (0.21) $ (0.25)
========= ========= ========= =========
Diluted $ (0.11) $ (0.14) $ (0.21) $ (0.25)
========= ========= ========= =========
NON-GAAP NET INCOME (LOSS) Per
Share:
Basic $ 0.04 $ (0.08) $ 0.04 $ (0.14)
========= ========= ========= =========
Diluted $ 0.03 $ (0.08) $ 0.04 $ (0.14)
========= ========= ========= =========
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- --------------------
2015 2014 2015 2014
--------- --------- --------- ---------
TOTAL REVENUES $ 63,176 $ 54,043 $ 127,022 $ 111,272
Pass-thru revenue (10,443) (8,539) (20,927) (16,448)
Cost of product revenue (12,911) (17,039) (28,619) (37,555)
--------- --------- --------- ---------
SERVICE FEE EQUIVALENT REVENUE $ 39,822 $ 28,465 $ 77,476 $ 57,269
========= ========= ========= =========
PFSweb, Inc. and Subsidiaries
Unaudited Consolidating Statements of Operations
For the Three Months Ended June 30, 2015
(In Thousands)
Business &
Retail
PFSweb Connect Eliminations Consolidated
--------- ---------- ------------ ------------
REVENUES:
Product revenue, net $ - $ 13,658 $ - $ 13,658
Service fee revenue 35,841 3,234 - 39,075
Service fee revenue -
affiliate 3,150 169 (3,319) -
Pass-thru revenue 10,443 - - 10,443
--------- ---------- ------------ ------------
Total revenues 49,434 17,061 (3,319) 63,176
--------- ---------- ------------ ------------
COSTS OF REVENUES:
Cost of product revenue - 12,911 - 12,911
Cost of service fee
revenue 26,611 3,198 (3,164) 26,645
Cost of pass-thru revenue 10,443 - - 10,443
--------- ---------- ------------ ------------
Total costs of
revenues 37,054 16,109 (3,164) 49,999
--------- ---------- ------------ ------------
Gross profit 12,380 952 (155) 13,177
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 14,249 582 (155) 14,676
--------- ---------- ------------ ------------
Income (loss) from
operations (1,869) 370 - (1,499)
INTEREST EXPENSE (INCOME),
NET 121 102 - 223
--------- ---------- ------------ ------------
Income (loss) before
income taxes (1,990) 268 - (1,722)
INCOME TAX PROVISION
(BENEFIT) 86 92 - 178
--------- ---------- ------------ ------------
NET INCOME (LOSS) $ (2,076) $ 176 $ - $ (1,900)
========= ========== ============ ============
NON-GAAP NET INCOME (LOSS) $ 437 $ 176 $ - $ 613
========= ========== ============ ============
EBITDA $ 1,421 $ 389 $ - $ 1,810
========= ========== ============ ============
ADJUSTED EBITDA $ 3,694 $ 389 $ - $ 4,083
========= ========== ============ ============
A reconciliation of NET INCOME (LOSS) to EBITDA and ADJUSTED EBITDA
follows:
NET INCOME (LOSS) $ (2,076) $ 176 $ - (1,900)
Income tax expense
(benefit) 86 92 - 178
Interest expense
(income), net 121 102 - 223
Depreciation and
amortization 3,290 19 - 3,309
--------- ---------- ------------ ------------
EBITDA $ 1,421 $ 389 $ - $ 1,810
Stock-based
compensation 1,150 - - 1,150
Acquisition related and
restructuring costs 1,123 - - 1,123
--------- ---------- ------------ ------------
ADJUSTED EBITDA $ 3,694 $ 389 $ - $ 4,083
========= ========== ============ ============
A reconciliation of NET INCOME (LOSS) to NON-GAAP NET INCOME (LOSS)
follows:
NET INCOME (LOSS) $ (2,076) $ 176 $ - $ (1,900)
Stock-based
compensation 1,150 - - 1,150
Amortization of
intangible assets 240 - - 240
Acquisition related and
restructuring costs 1,123 - - 1,123
--------- ---------- ------------ ------------
NON-GAAP NET INCOME (LOSS) $ 437 $ 176 $ - $ 613
========= ========== ============ ============
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 June 30, 2014
(In Thousands)
Business &
Retail
PFSweb Connect Eliminations Consolidated
--------- ---------- ------------ ------------
REVENUES:
Product revenue, net $ - $ 18,120 $ - $ 18,120
Service fee revenue 24,423 2,961 - 27,384
Service fee revenue -
affiliate 3,176 595 (3,771) -
Pass-thru revenue 8,539 - - 8,539
--------- ---------- ------------ ------------
Total revenues 36,138 21,676 (3,771) 54,043
--------- ---------- ------------ ------------
COSTS OF REVENUES:
Cost of product revenue - 17,039 - 17,039
Cost of service fee
revenue 19,557 3,093 (3,490) 19,160
Cost of pass-thru revenue 8,539 - - 8,539
--------- ---------- ------------ ------------
Total costs of
revenues 28,096 20,132 (3,490) 44,738
--------- ---------- ------------ ------------
Gross profit 8,042 1,544 (281) 9,305
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 10,719 1,047 (281) 11,485
--------- ---------- ------------ ------------
Income (loss) from
operations (2,677) 497 - (2,180)
INTEREST EXPENSE (INCOME),
NET 33 140 - 173
--------- ---------- ------------ ------------
Income (loss) before
income taxes (2,710) 357 - (2,353)
INCOME TAX PROVISION
(BENEFIT) (49) 91 - 42
--------- ---------- ------------ ------------
NET INCOME (LOSS) $ (2,661) $ 266 $ - $ (2,395)
========= ========== ============ ============
NON-GAAP NET INCOME (LOSS) $ (1,645) $ 266 $ - $ (1,379)
========= ========== ============ ============
EBITDA $ 157 $ 541 $ - $ 698
========= ========== ============ ============
ADJUSTED EBITDA $ 1,173 $ 541 $ - $ 1,714
========= ========== ============ ============
A reconciliation of NET INCOME (LOSS) to EBITDA and ADJUSTED EBITDA
follows:
NET INCOME (LOSS) $ (2,661) $ 266 $ - (2,395)
Income tax expense
(benefit) (49) 91 - 42
Interest expense
(income), net 33 140 - 173
Depreciation and
amortization 2,834 44 - 2,878
--------- ---------- ------------ ------------
EBITDA $ 157 $ 541 $ - $ 698
Stock-based
compensation 862 - - 862
Acquisition related
costs 154 - - 154
--------- ---------- ------------ ------------
ADJUSTED EBITDA $ 1,173 $ 541 $ - $ 1,714
========= ========== ============ ============
A reconciliation of NET INCOME (LOSS) to NON-GAAP NET INCOME (LOSS)
follows:
NET INCOME (LOSS) $ (2,661) $ 266 $ - $ (2,395)
Stock-based
compensation 862 - - 862
Acquisition related
costs 154 - - 154
--------- ---------- ------------ ------------
NON-GAAP NET INCOME (LOSS) $ (1,645) $ 266 $ - $ (1,379)
========= ========== ============ ============
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 Six Months Ended June 30, 2015
(In Thousands)
Business &
Retail
PFSweb Connect Eliminations Consolidated
--------- ---------- ------------ ------------
REVENUES:
Product revenue, net $ - $ 30,312 $ - $ 30,312
Service fee revenue 68,573 7,210 - 75,783
Service fee revenue -
affiliate 6,643 373 (7,016) -
Pass-thru revenue 20,927 - - 20,927
--------- ---------- ------------ ------------
Total revenues 96,143 37,895 (7,016) 127,022
--------- ---------- ------------ ------------
COSTS OF REVENUES:
Cost of product revenue - 28,619 - 28,619
Cost of service fee
revenue 51,268 7,144 (6,612) 51,800
Cost of pass-thru revenue 20,927 - - 20,927
--------- ---------- ------------ ------------
Total costs of
revenues 72,195 35,763 (6,612) 101,346
--------- ---------- ------------ ------------
Gross profit 23,948 2,132 (404) 25,676
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 27,479 1,215 (404) 28,290
--------- ---------- ------------ ------------
Income (loss) from
operations (3,531) 917 - (2,614)
INTEREST EXPENSE (INCOME),
NET 327 214 - 541
--------- ---------- ------------ ------------
Income (loss) before
income taxes (3,858) 703 - (3,155)
INCOME TAX PROVISION
(BENEFIT) 192 246 - 438
--------- ---------- ------------ ------------
NET INCOME (LOSS) $ (4,050) $ 457 $ - $ (3,593)
========= ========== ============ ============
NON-GAAP NET INCOME (LOSS) $ 286 $ 457 $ - $ 743
========= ========== ============ ============
EBITDA $ 2,990 $ 960 $ - $ 3,950
========= ========== ============ ============
ADJUSTED EBITDA $ 6,846 $ 960 $ - $ 7,806
========= ========== ============ ============
A reconciliation of NET INCOME (LOSS) to EBITDA and ADJUSTED EBITDA
follows:
NET INCOME (LOSS) $ (4,050) $ 457 $ - (3,593)
Income tax expense
(benefit) 192 246 - 438
Interest expense
(income), net 327 214 - 541
Depreciation and
amortization 6,521 43 - 6,564
--------- ---------- ------------ ------------
EBITDA $ 2,990 $ 960 $ - $ 3,950
Stock-based
compensation 1,954 - - 1,954
Acquisition related and
restructuring costs 1,902 - - 1,902
--------- ---------- ------------ ------------
ADJUSTED EBITDA $ 6,846 $ 960 $ - $ 7,806
========= ========== ============ ============
A reconciliation of NET INCOME (LOSS) to NON-GAAP NET INCOME (LOSS)
follows:
NET INCOME (LOSS) $ (4,050) $ 457 $ - $ (3,593)
Stock-based
compensation 1,954 - - 1,954
Amortization of
intangible assets 480 - - 480
Acquisition related and
restructuring costs 1,902 - - 1,902
--------- ---------- ------------ ------------
NON-GAAP NET INCOME (LOSS) $ 286 $ 457 $ - $ 743
========= ========== ============ ============
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 Six Months Ended June 30, 2014
(In Thousands)
Business &
Retail
PFSweb Connect Eliminations Consolidated
--------- ---------- ------------ ------------
REVENUES:
Product revenue, net $ - $ 39,842 $ - $ 41,703
Service fee revenue 48,576 6,406 - 55,025
Service fee revenue -
affiliate 6,866 1,210 (8,076) (1,904)
Pass-thru revenue 16,448 - - 16,448
--------- ---------- ------------ ------------
Total revenues 71,890 47,458 (8,076) 111,272
--------- ---------- ------------ ------------
COSTS OF REVENUES:
Cost of product revenue - 37,555 - 36,781
Cost of service fee
revenue 39,077 6,709 (7,406) 39,154
Cost of pass-thru revenue 16,448 - - 16,448
--------- ---------- ------------ ------------
Total costs of
revenues 55,525 44,264 (7,406) 92,383
--------- ---------- ------------ ------------
Gross profit 16,365 3,194 (670) 18,889
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 20,895 2,282 (670) 22,507
--------- ---------- ------------ ------------
Income (loss) from
operations (4,530) 912 - (3,618)
INTEREST EXPENSE (INCOME),
NET 32 284 - 316
--------- ---------- ------------ ------------
Income (loss) before
income taxes (4,562) 628 - (3,934)
INCOME TAX PROVISION
(BENEFIT) 81 190 - 271
--------- ---------- ------------ ------------
NET INCOME (LOSS) $ (4,643) $ 438 $ - $ (4,205)
========= ========== ============ ============
NON-GAAP NET INCOME (LOSS) $ (2,833) $ 438 $ - $ (2,395)
========= ========== ============ ============
EBITDA $ 1,151 $ 999 $ - $ 2,150
========= ========== ============ ============
ADJUSTED EBITDA $ 2,961 $ 999 $ - $ 3,960
========= ========== ============ ============
A reconciliation of NET INCOME (LOSS) to EBITDA and ADJUSTED EBITDA
follows:
NET INCOME (LOSS) $ (4,643) $ 438 $ - (4,205)
Income tax expense
(benefit) 81 190 - 271
Interest expense
(income), net 32 284 - 316
Depreciation and
amortization 5,681 87 - 5,768
--------- ---------- ------------ ------------
EBITDA $ 1,151 $ 999 $ - $ 2,150
Stock-based
compensation 1,656 - - 1,656
Acquisition related
costs 154 - - 154
--------- ---------- ------------ ------------
ADJUSTED EBITDA $ 2,961 $ 999 $ - $ 3,960
========= ========== ============ ============
A reconciliation of NET INCOME (LOSS) to NON-GAAP NET INCOME (LOSS)
follows:
NET INCOME (LOSS) $ (4,643) $ 438 $ - $ (4,205)
Stock-based
compensation 1,656 - - 1,656
Acquisition related
costs 154 - - 154
--------- ---------- ------------ ------------
NON-GAAP NET INCOME (LOSS) $ (2,833) $ 438 $ - $ (2,395)
========= ========== ============ ============
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 June 30, 2015
(In Thousands)
Business &
Retail
PFSweb Connect Eliminations Consolidated
--------- ---------- ------------ ------------
ASSETS
CURRENT ASSETS:
Cash and cash
equivalents $ 9,036 $ 6,685 $ - $ 15,721
Restricted cash - 374 - 374
Accounts receivable, net 30,064 13,727 (830) 42,961
Inventories, net - 10,333 - 10,333
Other receivables 160 4,405 - 4,565
Prepaid expenses and
other current assets 3,687 864 - 4,551
--------- ---------- ------------ ------------
Total current assets 42,947 36,388 (830) 78,505
PROPERTY AND EQUIPMENT,
net 23,858 54 - 23,912
RECEIVABLE/INVESTMENT IN
AFFILIATES 11,039 - (11,039) -
INTANGIBLE ASSETS, net 1,813 - - 1,813
GOODWILL 10,322 - - 10,322
OTHER ASSETS 2,101 - - 2,101
--------- ---------- ------------ ------------
Total assets 92,080 36,442 (11,869) 116,653
========= ========== ============ ============
LIABILITIES AND
SHAREHOLDERS EQUITY
CURRENT LIABILITIES:
Current portion of long-
term debt and capital
lease obligations $ 3,550 $ 2,167 $ - $ 5,717
Trade accounts payable 8,393 20,287 (841) 27,839
Deferred revenue 6,806 - - 6,806
Accrued expenses 19,394 4,730 - 24,124
--------- ---------- ------------ ------------
Total current
liabilities 38,143 27,184 (841) 64,486
LONG-TERM DEBT AND CAPITAL
LEASE OBLIGATIONS, less
current portion 3,739 - - 3,739
PAYABLE TO AFFILIATES - 22,045 (22,045) -
DEFERRED REVENUE 4,481 - - 4,481
DEFERRED RENT 4,561 - - 4,561
OTHER LONG-TERM
LIABILITIES 368 - - 368
--------- ---------- ------------ ------------
Total liabilities 51,292 49,229 (22,886) 77,635
--------- ---------- ------------ ------------
COMMITMENTS AND
CONTINGENCIES
SHAREHOLDERS' EQUITY:
Common stock 17 1,019 (1,019) 17
Capital contributions - - -
Additional paid-in
capital 134,557 28,060 (29,986) 132,631
Retained earnings
(accumulated deficit) (93,661) (43,128) 43,270 (93,519)
Accumulated other
comprehensive income - 1,262 (1,248) 14
Treasury stock (125) - - (125)
--------- ---------- ------------ ------------
Total shareholders'
equity 40,788 (12,787) 11,017 39,018
--------- ---------- ------------ ------------
Total liabilities and
shareholders' equity $ 92,080 $ 36,442 $ (11,869) $ 116,653
========= ========== ============ ============
(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, 2014.
PFSweb, Inc. and Subsidiaries
Unaudited Condensed Consolidating Balance Sheets
as of December 31, 2014
(In Thousands)
Business &
Retail
PFSweb Connect Eliminations Consolidated
--------- ---------- ------------ ------------
ASSETS
CURRENT ASSETS:
Cash and cash
equivalents $ 6,671 $ 11,457 $ - $ 18,128
Restricted cash - 521 - 521
Accounts receivable, net 42,081 18,415 (1,370) 59,126
Inventories, net - 10,534 - 10,534
Other receivables - 5,638 - 5,638
Prepaid expenses and
other current assets 6,141 962 - 7,103
--------- ---------- ------------ ------------
Total current assets 54,893 47,527 (1,370) 101,050
PROPERTY AND EQUIPMENT,
net 26,478 126 - 26,604
RECEIVABLE/INVESTMENT IN
AFFILIATES 9,938 - (9,938) -
INTANGIBLE ASSETS, net 2,170 - - 2,170
GOODWILL 8,366 - - 8,366
OTHER ASSETS 2,527 29 - 2,556
--------- ---------- ------------ ------------
Total assets 104,372 47,682 (11,308) 140,746
========= ========== ============ ============
LIABILITIES AND
SHAREHOLDERS EQUITY
CURRENT LIABILITIES:
Current portion of long-
term debt and capital
lease obligations $ 3,583 $ 3,267 $ - $ 6,850
Trade accounts payable 13,001 27,211 (1,370) 38,842
Deferred revenue 9,098 - - 9,098
Accrued expenses 21,338 7,135 - 28,473
--------- ---------- ------------ ------------
Total current
liabilities 47,020 37,613 (1,370) 83,263
LONG-TERM DEBT AND CAPITAL
LEASE OBLIGATIONS, less
current portion 4,062 - - 4,062
PAYABLE TO AFFILIATES - 22,045 (22,045) -
DEFERRED REVENUE 5,355 - - 5,355
DEFERRED RENT 4,870 - - 4,870
OTHER LONG-TERM
LIABILITIES 3,091 - - 3,091
--------- ---------- ------------ ------------
Total liabilities 64,398 59,658 (23,415) 100,641
--------- ---------- ------------ ------------
COMMITMENTS AND
CONTINGENCIES
SHAREHOLDERS' EQUITY:
Common stock 17 19 (19) 17
Capital contributions - 1,000 (1,000) -
Additional paid-in
capital 129,457 28,060 (28,060) 129,457
Retained earnings
(accumulated deficit) (90,061) (42,711) 42,846 (89,926)
Accumulated other
comprehensive income 686 1,656 (1,660) 682
Treasury stock (125) - - (125)
--------- ---------- ------------ ------------
Total shareholders'
equity 39,974 (11,976) 12,107 40,105
--------- ---------- ------------ ------------
Total liabilities
and shareholders'
equity $ 104,372 $ 47,682 $ (11,308) $ 140,746
========= ========== ============ ============
(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, 2014.
Company Contact: Michael C. Willoughby Chief Executive Officer or Thomas J. Madden Chief Financial Officer Tel 972-881-2900 Investor Relations: Liolios Group Inc. Scott Liolios or Sean Mansouri Tel 949-574-3860 Email Contact
Source: PFSweb, Inc.
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