PFSweb Reports Third Quarter Record Results
Q3 Service Fee Equivalent Revenue up 43% to $46.2 Million; Adjusted EBITDA up 90% to $5.4 Million
/EINPresswire.com/ -- ALLEN, TX -- (Marketwired) -- 11/09/15 -- PFSweb, Inc. (NASDAQ: PFSW), a global provider of end-to-end eCommerce solutions, reported results for the third quarter ended September 30, 2015.
Third Quarter 2015 Highlights vs. Same Year-Ago Quarter
- Service fee equivalent revenue (a non-GAAP measure defined below) increased 43% to a Q3 record $46.2 million
- Service fee gross margin increased 380 basis points to 33.7%
- Adjusted EBITDA (a non-GAAP measure defined below) increased 90% to a Q3 record $5.4 million
- Acquired CrossView, an eCommerce system integrator with B2B and B2C Websphere Commerce and SAP/hybris integration capabilities, significantly expanding PFSweb's addressable market
Management Commentary
"We continued to benefit from strong growth in our agency and technology services, driving record results for the fourth consecutive quarter," said Michael Willoughby, CEO of PFSweb. "Our omni-channel operations also continued to perform well, supporting the overall strong growth in our B2C clients' volumes over the same year-ago period.
"Most notably, the third quarter was highlighted by the acquisition of CrossView, which we believe dramatically strengthens our position as a leader among full service eCommerce providers. The integration of CrossView is tracking well and according to plan. In fact, we've already begun to pursue several promising cross-sell opportunities, while also realizing synergies across our technology platforms."
"Subsequent to the quarter," continued Willoughby, "we launched our strategic commerce consulting practice, through which we'll provide high-value digital strategy and platform selection consulting to both B2B and B2C clients. This new practice demonstrates our commitment to expanding higher-margin service offerings and engaging with our clients as a strategic partner as we continue to evolve PFSweb from a full service eCommerce provider into a leading global commerce service provider.
"As we head into the all-important holiday season, we will continue to focus on client execution, with the ultimate goal of helping our clients maximize their holiday sales performance. According to eMarketer, holiday online sales are expected to grow 14% this year to a record $79.4 billion. We plan to capitalize on these secular tailwinds and leverage the unique strength of our platform to drive growth in the fourth quarter and beyond."
2015 & 2016 Outlook
Based on year-to-date results and current projections for the fourth quarter, PFSweb is increasing its service fee equivalent revenue guidance to range between $180 million to $186 million, up from $175 million to $185 million, reflecting growth of 30% to 34% from 2014. The company has also increased its adjusted EBITDA guidance to range between $18.5 million to $20.5 million, up from $18 million to $20 million, reflecting growth of 36% to 50% from 2014.
For 2016, PFSweb currently expects continued strong growth in service fee equivalent revenue and adjusted EBITDA as the company realizes a full year of benefit from its recent acquisitions, as well as incremental revenue from new and expanded client relationships. At this time, the company is targeting 2016 service fee equivalent revenue to range between $220 million to $230 million. The company is also targeting adjusted EBITDA to range between $23 million to $25 million. This adjusted EBITDA target includes the expected impact of incremental sales and marketing expenditures as well as other infrastructure expenditures to support the company's future growth strategies.
Third Quarter 2015 Financial Results
Total revenues in the third quarter of 2015 increased 25% to $71.2 million compared to $57.1 million in the same period of 2014. Service fee revenue in the third quarter of 2015 increased 45% to $45.5 million compared to $31.4 million last year. Product revenue was $14.4 million compared to $17.3 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 third quarter of 2015 increased 43% to a third quarter record $46.2 million compared to $32.4 million in the year-ago quarter.
Service fee gross margin in the third quarter increased 380 basis points to 33.7% compared to 29.9% in the same period of 2014. The increase was due to a higher proportion of agency and technology services in the 2015 quarter, in part due to the benefit from the acquisitions of REV Solutions and LiveArea that occurred in September 2014 and the CrossView acquisition completed in August 2015.
Adjusted EBITDA increased 90% to a third quarter record of $5.4 million compared to $2.9 million in the same period of 2014. As a percentage of service fee equivalent revenue, adjusted EBITDA increased 300 basis points to 11.8% compared to 8.8% in the year-ago quarter.
Net loss in the third quarter was $3.7 million or $(0.21) per diluted share, compared to a net loss of $2.5 million or $(0.15) per diluted share in the same period of 2014. Net loss in the third quarter of 2015 included $1.5 million in stock-based compensation expense, $2.6 million in acquisition-related, restructuring and other costs and $1.0 million in amortization of acquisition-related intangible assets. This compares to $0.9 million in stock-based compensation expense and $1.5 million in acquisition-related, restructuring and other costs in the same period of 2014.
Non-GAAP net income (a non-GAAP measure defined below) in the third quarter of 2015 was $1.5 million or $0.08 per diluted share, compared to non-GAAP net loss of $0.1 million or $(0.01) per diluted share in the third quarter of 2014.
At September 30, 2015, cash and cash equivalents was $13.0 million compared to $18.1 million at December 31, 2014. Total debt increased to $38.4 million from $10.9 million at December 31, 2014 as the Company entered into a new credit facility with Regions Bank, Bank of America and HSBC, primarily to facilitate the acquisition of CrossView. This new credit facility replaces the Company's previous senior banking facilities.
First Nine Months of 2015 Financial Results
Total revenues in the first nine months of 2015 increased 18% to $198.2 million compared to $168.4 million in the same period of 2014. Service fee revenue in the first nine months of 2015 increased 40% to $121.3 million compared to $86.4 million in the same period last year. Product revenue was $44.7 million compared to $57.2 million in the same period of 2014.
Service fee equivalent revenue in the first nine months of 2015 increased 38% to $123.7 million compared to $89.6 million in the same period of 2014.
Service fee gross margin in the first nine months of 2015 increased 230 basis points to 32.4% compared to 30.1% in the same period of 2014.
Adjusted EBITDA increased 94% to $13.2 million in the first nine months of 2015 compared to $6.8 million in the same period of 2014. As a percentage of service fee equivalent revenue, adjusted EBITDA increased 330 basis points to 10.7% compared to 7.6% in the year-ago period.
Net loss in the first nine months of 2015 was $7.3 million or $(0.42) per diluted share, compared to a net loss of $6.7 million or $(0.40) per diluted share in the same period of 2014. Net loss in the first nine months of 2015 included $3.4 million in stock-based compensation expense, $4.5 million in acquisition related, restructuring and other costs and $1.5 million in amortization of acquisition-related intangible assets. This compares to $2.5 million in stock-based compensation expense and $1.7 million in acquisition related, restructuring and other costs in the same period of 2014.
Non-GAAP net income in the first nine months of 2015 was $2.2 million or $0.12 per diluted share, compared to non-GAAP net loss of $2.5 million or $(0.15) per diluted share in the same period of 2014.
Conference Call
PFSweb will conduct a conference call today at 5:00 p.m. Eastern time to discuss its results for the third quarter ended September 30, 2015.
CEO Mike Willoughby and CFO Tom Madden will host the conference call, followed by a question and answer period.
Date: Monday, November 9, 2015
Time: 5:00 p.m. Eastern Time (4:00 p.m. Central time)
Toll-free dial-in number: 1-888-466-4462
International dial-in number: 1-719-785-1765
Conference ID: 4158053
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=116986 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 8:00 p.m. Eastern Time on the same day through November 23, 2015.
Toll-free replay number: 1-877-870-5176
International replay number: 1-858-384-5517
Replay ID: 4158053
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, restructuring and other charges and the amortization of acquisition-related intangible assets.
EBITDA represents earnings (or losses) before interest, income taxes, depreciation, and amortization. Adjusted EBITDA further eliminates the effect of stock-based compensation, acquisition related, restructuring and other charges and amortization of acquisition-related intangible assets.
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, restructuring and other charges and amortization of acquisition-related intangible assets 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)
September 30, December 31,
2015 2014
------------- -------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 13,000 $ 18,128
Restricted cash 52 521
Accounts receivable, net of allowance for
doubtful accounts of $469 and $447 at
September 30, 2015 and December 31, 2014,
respectively 55,552 59,126
Inventories, net of reserves of $682 and
$768 at September 30, 2015 and December
31, 2014, respectively 8,673 10,534
Other receivables 3,973 5,638
Prepaid expenses and other current assets 3,853 7,103
------------- -------------
Total current assets 85,103 101,050
PROPERTY AND EQUIPMENT, net 24,852 26,604
INTANGIBLE ASSETS, net 12,916 2,170
GOODWILL 40,778 8,366
OTHER ASSETS 2,321 2,556
------------- -------------
Total assets 165,970 140,746
============= =============
LIABILITIES AND SHAREHOLDERS EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt and
capital lease obligations $ 3,512 $ 6,850
Trade accounts payable 29,356 38,842
Deferred revenue 5,600 9,098
Accrued expenses 35,412 28,473
------------- -------------
Total current liabilities 73,880 83,263
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS,
less current portion 34,870 4,062
DEFERRED REVENUE 4,197 5,355
DEFERRED RENT 4,430 4,870
OTHER LONG-TERM LIABILITIES 5,074 3,091
------------- -------------
Total liabilities 122,451 100,641
------------- -------------
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; 18,100,589 and
17,047,093 shares issued at September 30,
2015 and December 31, 2014, respectively;
and 18,067,122 and 17,013,622 shares
outstanding as of September 30, 2015 and
December 31, 2014, respectively 18 17
Additional paid-in capital 140,890 129,457
Accumulated deficit (97,189) (89,926)
Accumulated other comprehensive income (75) 682
Treasury stock at cost, 33,467 shares (125) (125)
------------- -------------
Total shareholders' equity 43,519 40,105
------------- -------------
Total liabilities and shareholders'
equity $ 165,970 $ 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 Nine Months Ended
September 30, September 30,
---------------------- ----------------------
2015 2014 2015 2014
---------- ---------- ---------- ----------
REVENUES:
Product revenue, net $ 14,419 $ 17,340 $ 44,731 $ 57,182
Service fee revenue 45,528 31,411 121,311 86,393
Pass-thru revenue 11,236 8,344 32,163 24,792
---------- ---------- ---------- ----------
Total revenues 71,183 57,095 198,205 168,367
---------- ---------- ---------- ----------
COSTS OF REVENUES:
Cost of product revenue 13,702 16,397 42,321 53,952
Cost of service fee
revenue 30,193 22,007 81,993 60,387
Cost of pass-thru revenue 11,236 8,344 32,163 24,792
---------- ---------- ---------- ----------
Total costs of
revenues 55,131 46,748 156,477 139,131
---------- ---------- ---------- ----------
Gross profit 16,052 10,347 41,728 29,236
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 18,778 12,764 47,068 35,271
---------- ---------- ---------- ----------
Income (loss) from
operations (2,726) (2,417) (5,340) (6,035)
INTEREST EXPENSE (INCOME),
NET 706 174 1,247 490
---------- ---------- ---------- ----------
Income (loss) before
income taxes (3,432) (2,591) (6,587) (6,525)
INCOME TAX PROVISION
(BENEFIT) 238 (66) 676 205
---------- ---------- ---------- ----------
NET INCOME (LOSS) $ (3,670) $ (2,525) $ (7,263) $ (6,730)
========== ========== ========== ==========
NON-GAAP NET INCOME (LOSS) $ 1,452 $ (133) $ 2,193 $ (2,528)
========== ========== ========== ==========
NET INCOME (LOSS) PER SHARE:
Basic $ (0.21) $ (0.15) $ (0.42) $ (0.40)
========== ========== ========== ==========
Diluted $ (0.21) $ (0.15) $ (0.42) $ (0.40)
========== ========== ========== ==========
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING:
Basic 17,829 16,779 17,449 16,680
========== ========== ========== ==========
Diluted 17,829 16,779 17,449 16,680
========== ========== ========== ==========
EBITDA $ 1,355 $ 464 $ 5,305 $ 2,614
========== ========== ========== ==========
ADJUSTED EBITDA $ 5,434 $ 2,856 $ 13,238 $ 6,816
========== ========== ========== ==========
(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 Nine Months Ended
September 30, September 30,
---------------------- ----------------------
2015 2014 2015 2014
---------- ---------- ---------- ----------
NET INCOME (LOSS) $ (3,670) $ (2,525) $ (7,263) $ (6,730)
Income tax expense
(benefit) 238 (66) 676 205
Interest expense, net 706 174 1,247 490
Depreciation and
amortization 4,081 2,881 10,645 8,649
---------- ---------- ---------- ----------
EBITDA $ 1,355 $ 464 $ 5,305 $ 2,614
Stock-based
compensation 1,492 853 3,446 2,509
Acquisition related,
restructuring and
other costs 2,587 1,539 4,487 1,693
---------- ---------- ---------- ----------
ADJUSTED EBITDA $ 5,434 $ 2,856 $ 13,238 $ 6,816
========== ========== ========== ==========
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------- ----------------------
2015 2014 2015 2014
---------- ---------- ---------- ----------
NET INCOME (LOSS) $ (3,670) $ (2,525) $ (7,263) $ (6,730)
Stock-based
compensation 1,492 853 3,446 2,509
Amortization of
acquisition-related
intangible assets 1,043 - 1,523 -
Acquisition related,
restructuring and
other costs 2,587 1,539 4,487 1,693
---------- ---------- ---------- ----------
NON-GAAP NET INCOME (LOSS) $ 1,452 $ (133) $ 2,193 $ (2,528)
========== ========== ========== ==========
NET INCOME (LOSS) PER SHARE:
Basic $ (0.21) $ (0.15) $ (0.42) $ (0.40)
========== ========== ========== ==========
Diluted $ (0.21) $ (0.15) $ (0.42) $ (0.40)
========== ========== ========== ==========
NON-GAAP NET INCOME (LOSS)
Per Share:
Basic $ 0.08 $ (0.01) $ 0.13 $ (0.15)
========== ========== ========== ==========
Diluted $ 0.08 $ (0.01) $ 0.12 $ (0.15)
========== ========== ========== ==========
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------- ----------------------
2015 2014 2015 2014
---------- ---------- ---------- ----------
TOTAL REVENUES $ 71,183 $ 57,095 $ 198,205 $ 168,367
Pass-thru revenue (11,236) (8,344) (32,163) (24,792)
Cost of product revenue (13,702) (16,397) (42,321) (53,952)
---------- ---------- ---------- ----------
SERVICE FEE EQUIVALENT
REVENUE $ 46,245 $ 32,354 $ 123,721 $ 89,623
========== ========== ========== ==========
PFSweb, Inc. and Subsidiaries
Unaudited Consolidating Statements of Operations
For the Three Months Ended September 30, 2015
(In Thousands)
Business &
Retail
PFSweb Connect Eliminations Consolidated
---------- ---------- ------------ ------------
REVENUES:
Product revenue, net $ - $ 14,419 $ - $ 14,419
Service fee revenue 42,167 3,361 - 45,528
Service fee revenue -
affiliate 3,494 195 (3,689) -
Pass-thru revenue 11,236 - - 11,236
---------- ---------- ------------ ------------
Total revenues 56,897 17,975 (3,689) 71,183
---------- ---------- ------------ ------------
COSTS OF REVENUES:
Cost of product
revenue - 13,702 - 13,702
Cost of service fee
revenue 30,369 3,323 (3,499) 30,193
Cost of pass-thru
revenue 11,236 - - 11,236
---------- ---------- ------------ ------------
Total costs of
revenues 41,605 17,025 (3,499) 55,131
---------- ---------- ------------ ------------
Gross profit 15,292 950 (190) 16,052
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 18,049 919 (190) 18,778
---------- ---------- ------------ ------------
Income (loss) from
operations (2,757) 31 - (2,726)
INTEREST EXPENSE
(INCOME), NET 584 122 - 706
---------- ---------- ------------ ------------
Income (loss)
before income
taxes (3,341) (91) - (3,432)
INCOME TAX PROVISION
(BENEFIT) 171 67 - 238
---------- ---------- ------------ ------------
NET INCOME (LOSS) $ (3,512) $ (158) $ - $ (3,670)
========== ========== ============ ============
NON-GAAP NET INCOME
(LOSS) $ 1,288 $ 162 $ - $ 1,450
========== ========== ============ ============
EBITDA $ 1,309 $ 46 $ - $ 1,355
========== ========== ============ ============
ADJUSTED EBITDA $ 5,066 $ 366 $ - $ 5,432
========== ========== ============ ============
A reconciliation of NET INCOME
(LOSS) to EBITDA and ADJUSTED
EBITDA follows:
NET INCOME (LOSS) $ (3,512) $ (158) $ - (3,670)
Income tax expense
(benefit) 171 67 - 238
Interest expense
(income), net 584 122 - 706
Depreciation and
amortization 4,066 15 - 4,081
---------- ---------- ------------ ------------
EBITDA $ 1,309 $ 46 $ - $ 1,355
Stock-based
compensation 1,492 - - 1,492
Acquisition
related,
restructuring and
other costs 2,265 320 - 2,585
---------- ---------- ------------ ------------
ADJUSTED EBITDA $ 5,066 $ 366 $ - $ 5,432
========== ========== ============ ============
A reconciliation of NET INCOME
(LOSS) to NON-GAAP NET INCOME
(LOSS) follows:
NET INCOME (LOSS) $ (3,512) $ (158) $ - $ (3,670)
Stock-based
compensation 1,492 - - 1,492
Amortization of
acquisition-
related intangible
assets 1,043 - - 1,043
Acquisition
related,
restructuring and
other costs 2,265 320 - 2,585
---------- ---------- ------------ ------------
NON-GAAP NET INCOME
(LOSS) $ 1,288 $ 162 $ - $ 1,450
========== ========== ============ ============
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 September 30, 2014
(In Thousands)
Business &
Retail
PFSweb Connect Eliminations Consolidated
---------- ---------- ------------ ------------
REVENUES:
Product revenue, net $ - $ 17,340 $ - $ 17,340
Service fee revenue 28,362 3,049 - 31,411
Service fee revenue
- affiliate 3,048 238 (3,286) -
Pass-thru revenue 8,344 - - 8,344
---------- ---------- ------------ ------------
Total revenues 39,754 20,627 (3,286) 57,095
---------- ---------- ------------ ------------
COSTS OF REVENUES:
Cost of product
revenue - 16,397 - 16,397
Cost of service fee
revenue 21,972 3,145 (3,110) 22,007
Cost of pass-thru
revenue 8,344 - - 8,344
---------- ---------- ------------ ------------
Total costs of
revenues 30,316 19,542 (3,110) 46,748
---------- ---------- ------------ ------------
Gross profit 9,438 1,085 (176) 10,347
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 12,255 685 (176) 12,764
---------- ---------- ------------ ------------
Income (loss) from
operations (2,817) 400 - (2,417)
INTEREST EXPENSE
(INCOME), NET 36 138 - 174
---------- ---------- ------------ ------------
Income (loss)
before income
taxes (2,853) 262 - (2,591)
INCOME TAX PROVISION
(BENEFIT) (209) 143 - (66)
---------- ---------- ------------ ------------
NET INCOME (LOSS) $ (2,644) $ 119 $ - $ (2,525)
========== ========== ============ ============
NON-GAAP NET INCOME
(LOSS) $ (252) $ 119 $ - $ (133)
========== ========== ============ ============
EBITDA $ 22 $ 442 $ - $ 464
========== ========== ============ ============
ADJUSTED EBITDA $ 2,414 $ 442 $ - $ 2,856
========== ========== ============ ============
A reconciliation of NET INCOME
(LOSS) to EBITDA and ADJUSTED
EBITDA follows:
NET INCOME (LOSS) $ (2,644) $ 119 $ - (2,525)
Income tax expense
(benefit) (209) 143 - (66)
Interest expense
(income), net 36 138 - 174
Depreciation and
amortization 2,839 42 - 2,881
---------- ---------- ------------ ------------
EBITDA $ 22 $ 442 $ - $ 464
Stock-based
compensation 853 - - 853
Acquisition
related,
restructuring and
other costs 1,539 - - 1,539
---------- ---------- ------------ ------------
ADJUSTED EBITDA $ 2,414 $ 442 $ - $ 2,856
========== ========== ============ ============
A reconciliation of NET INCOME
(LOSS) to NON-GAAP NET INCOME
(LOSS) follows:
NET INCOME (LOSS) $ (2,644) $ 119 $ - $ (2,525)
Stock-based
compensation 853 - - 853
Acquisition
related,
restructuring and
other costs 1,539 - - 1,539
---------- ---------- ------------ ------------
NON-GAAP NET INCOME
(LOSS) $ (252) $ 119 $ - $ (133)
========== ========== ============ ============
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 Nine Months Ended September 30, 2015
(In Thousands)
Business &
Retail
PFSweb Connect Eliminations Consolidated
---------- ---------- ------------ ------------
REVENUES:
Product revenue, net $ - $ 44,731 $ - $ 44,731
Service fee revenue 110,740 10,571 - 121,311
Service fee revenue
- affiliate 10,137 568 (10,705) -
Pass-thru revenue 32,163 - - 32,163
---------- ---------- ------------ ------------
Total revenues 153,040 55,870 (10,705) 198,205
---------- ---------- ------------ ------------
COSTS OF REVENUES:
Cost of product
revenue - 42,321 - 42,321
Cost of service fee
revenue 81,637 10,467 (10,111) 81,993
Cost of pass-thru
revenue 32,163 - - 32,163
---------- ---------- ------------ ------------
Total costs of
revenues 113,800 52,788 (10,111) 156,477
---------- ---------- ------------ ------------
Gross profit 39,240 3,082 (594) 41,728
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 45,528 2,134 (594) 47,068
---------- ---------- ------------ ------------
Income (loss) from
operations (6,288) 948 - (5,340)
INTEREST EXPENSE
(INCOME), NET 911 336 - 1,247
---------- ---------- ------------ ------------
Income (loss)
before income
taxes (7,199) 612 - (6,587)
INCOME TAX PROVISION
(BENEFIT) 363 313 - 676
---------- ---------- ------------ ------------
NET INCOME (LOSS) $ (7,562) $ 299 $ - $ (7,263)
========== ========== ============ ============
NON-GAAP NET INCOME
(LOSS) $ 1,574 $ 619 $ - $ 2,193
========== ========== ============ ============
EBITDA $ 4,299 $ 1,006 $ - $ 5,305
========== ========== ============ ============
ADJUSTED EBITDA $ 11,912 $ 1,326 $ - $ 13,238
========== ========== ============ ============
A reconciliation of NET INCOME
(LOSS) to EBITDA and ADJUSTED
EBITDA follows:
NET INCOME (LOSS) $ (7,562) $ 299 $ - (7,263)
Income tax expense
(benefit) 363 313 - 676
Interest expense
(income), net 911 336 - 1,247
Depreciation and
amortization 10,587 58 - 10,645
---------- ---------- ------------ ------------
EBITDA $ 4,299 $ 1,006 $ - $ 5,305
Stock-based
compensation 3,446 - - 3,446
Acquisition
related,
restructuring and
other costs 4,167 320 - 4,487
---------- ---------- ------------ ------------
ADJUSTED EBITDA $ 11,912 $ 1,326 $ - $ 13,238
========== ========== ============ ============
A reconciliation of NET INCOME
(LOSS) to NON-GAAP NET INCOME
(LOSS) follows:
NET INCOME (LOSS) $ (7,562) $ 299 $ - $ (7,263)
Stock-based
compensation 3,446 - - 3,446
Amortization of
acquisition-
related
intangible assets 1,523 - - 1,523
Acquisition
related,
restructuring and
other costs 4,167 320 - 4,487
---------- ---------- ------------ ------------
NON-GAAP NET INCOME
(LOSS) $ 1,574 $ 619 $ - $ 2,193
========== ========== ============ ============
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 Nine Months Ended September 30, 2014
(In Thousands)
Business &
Retail
PFSweb Connect Eliminations Consolidated
---------- ---------- ------------ ------------
REVENUES:
Product revenue, net $ - $ 57,182 $ - $ 57,182
Service fee revenue 76,939 9,454 - 86,393
Service fee revenue -
affiliate 9,914 846 (10,760) -
Pass-thru revenue 24,792 - - 24,792
---------- ---------- ------------ ------------
Total revenues 111,645 67,482 (10,760) 168,367
---------- ---------- ------------ ------------
COSTS OF REVENUES:
Cost of product
revenue - 53,952 - 53,952
Cost of service fee
revenue 60,446 9,854 (9,913) 60,387
Cost of pass-thru
revenue 24,792 - - 24,792
---------- ---------- ------------ ------------
Total costs of
revenues 85,238 63,806 (9,913) 139,131
---------- ---------- ------------ ------------
Gross profit 26,407 3,676 (847) 29,236
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 33,754 2,364 (847) 35,271
---------- ---------- ------------ ------------
Income (loss) from
operations (7,347) 1,312 - (6,035)
INTEREST EXPENSE
(INCOME), NET 68 422 - 490
---------- ---------- ------------ ------------
Income (loss)
before income
taxes (7,415) 890 - (6,525)
INCOME TAX PROVISION
(BENEFIT) (128) 333 - 205
---------- ---------- ------------ ------------
NET INCOME (LOSS) $ (7,287) $ 557 $ - $ (6,730)
========== ========== ============ ============
NON-GAAP NET INCOME
(LOSS) $ (3,085) $ 557 $ - $ (2,528)
========== ========== ============ ============
EBITDA $ 1,173 $ 1,441 $ - $ 2,614
========== ========== ============ ============
ADJUSTED EBITDA $ 5,375 $ 1,441 $ - $ 6,816
========== ========== ============ ============
A reconciliation of NET INCOME
(LOSS) to EBITDA and ADJUSTED
EBITDA follows:
NET INCOME (LOSS) $ (7,287) $ 557 $ - (6,730)
Income tax expense
(benefit) (128) 333 - 205
Interest expense
(income), net 68 422 - 490
Depreciation and
amortization 8,520 129 - 8,649
---------- ---------- ------------ ------------
EBITDA $ 1,173 $ 1,441 $ - $ 2,614
Stock-based
compensation 2,509 - - 2,509
Acquisition
related,
restructuring and
other costs 1,693 - - 1,693
---------- ---------- ------------ ------------
ADJUSTED EBITDA $ 5,375 $ 1,441 $ - $ 6,816
========== ========== ============ ============
A reconciliation of NET INCOME
(LOSS) to NON-GAAP NET INCOME
(LOSS) follows:
NET INCOME (LOSS) $ (7,287) $ 557 $ - $ (6,730)
Stock-based
compensation 2,509 - - 2,509
Acquisition
related,
restructuring and
other costs 1,693 - - 1,693
---------- ---------- ------------ ------------
NON-GAAP NET INCOME
(LOSS) $ (3,085) $ 557 $ - $ (2,528)
========== ========== ============ ============
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 September 30, 2015
(In Thousands)
Business &
Retail
PFSweb Connect Eliminations Consolidated
---------- ---------- ------------ ------------
ASSETS
CURRENT ASSETS:
Cash and cash
equivalents $ 6,252 $ 6,748 $ - $ 13,000
Restricted cash - 52 - 52
Accounts receivable,
net 44,636 12,680 (1,764) 55,552
Inventories, net - 8,673 - 8,673
Other receivables 207 3,766 - 3,973
Prepaid expenses and
other current
assets 2,960 893 - 3,853
---------- ---------- ------------ ------------
Total current
assets 54,055 32,812 (1,764) 85,103
PROPERTY AND EQUIPMENT,
net 24,813 39 - 24,852
RECEIVABLE/INVESTMENT IN
AFFILIATES 60,392 - (60,392) -
INTANGIBLE ASSETS, net 12,916 - - 12,916
GOODWILL 40,778 - - 40,778
OTHER ASSETS 2,321 - - 2,321
---------- ---------- ------------ ------------
Total assets 195,275 32,851 (62,156) 165,970
========== ========== ============ ============
LIABILITIES AND
SHAREHOLDERS EQUITY
CURRENT LIABILITIES:
Current portion of
long-term debt and
capital lease
obligations $ 3,512 $ - $ - $ 3,512
Trade accounts
payable 10,679 20,428 (1,751) 29,356
Deferred revenue 5,577 23 - 5,600
Accrued expenses 32,808 2,617 (13) 35,412
---------- ---------- ------------ ------------
Total current
liabilities 52,576 23,068 (1,764) 73,880
LONG-TERM DEBT AND
CAPITAL LEASE
OBLIGATIONS, less
current portion 34,870 - - 34,870
PAYABLE TO AFFILIATES - 22,756 (22,756) -
DEFERRED REVENUE 4,197 - - 4,197
DEFERRED RENT 4,430 - - 4,430
OTHER LONG-TERM
LIABILITIES 5,074 - - 5,074
---------- ---------- ------------ ------------
Total liabilities 101,147 45,824 (24,520) 122,451
---------- ---------- ------------ ------------
COMMITMENTS AND
CONTINGENCIES
SHAREHOLDERS' EQUITY:
Common stock 18 1,019 (1,019) 18
Capital
contributions - - - -
Additional paid-in
capital 191,304 28,060 (78,474) 140,890
Retained earnings
(accumulated
deficit) (97,002) (43,286) 43,099 (97,189)
Accumulated other
comprehensive
income (67) 1,234 (1,242) (75)
Treasury stock (125) - - (125)
---------- ---------- ------------ ------------
Total
shareholders'
equity 94,128 (12,973) (37,636) 43,519
---------- ---------- ------------ ------------
Total liabilities
and shareholders'
equity $ 195,275 $ 32,851 $ (62,156) $ 165,970
========== ========== ============ ============
(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
Scott Liolios or Sean Mansouri
Tel 949-574-3860
Email Contact
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