PFSweb Reports Second Quarter 2016 Results
Company Reports Strong Revenue Growth and Expanding Distribution Facilities Footprint to Support Large New Client Wins
/EINPresswire.com/ -- ALLEN, TX -- (Marketwired) -- 08/08/16 -- PFSweb, Inc. (NASDAQ: PFSW), a global commerce service provider, reported results for the second quarter ended June 30, 2016.
Second Quarter 2016 Highlights vs. Same Year-Ago Quarter (where applicable)
- Total revenues increased 22% to $77.2 million
- Service fee equivalent revenue (a non-GAAP measure defined below) increased 30% to $51.8 million
- Service fee gross margin increased 100 basis points to 32.8%
- Acquired Conexus, a European eCommerce System Integrator
- Expanded its distribution facilities footprint in the Memphis, TN area to support several large new client wins
Management Commentary
"Our incremental investments in sales and marketing continue to yield strong results, as reflected by the 22% increase in total revenues and 30% increase in service fee equivalent revenue, as well as several large new client wins during the second quarter," said Mike Willoughby, CEO of PFSweb. "To accommodate our new client wins, we launched a new distribution facility in the second quarter and are building out two additional footprints to further support our omni-channel operations. Though we are incurring upfront costs associated with the implementation of these new clients and facilities, we expect the benefit of these investments, along with the multi-year recurring revenue streams from these large clients, to greatly outweigh the short-term effect on profitability.
"During the second quarter, we also acquired Conexus, a European eCommerce system integrator that solidifies our positioning in Western Europe with a strong footprint in the U.K. Though we remain in the early stages of integration, we've already begun to realize synergies across our combined SAP Hybris practices, and believe we are now even better equipped to enable B2B, B2C and mobile commerce for leading brands and retailers across the globe.
"In the back half of 2016, we intend to continue positioning ourselves as a valued strategic partner for our clients and seek to drive growth through our various eCommerce service offerings. We look forward to launching this quarter's new client wins by the holiday season. We believe these client wins provide enhanced visibility to our revenue growth and profitability objectives as we look ahead into 2017."
Second Quarter 2016 Financial Results
Total revenues in the second quarter of 2016 increased 22% to $77.2 million compared to $63.2 million in the same period of 2015. Service fee revenue in the second quarter increased 31% to $51.2 million compared to $39.1 million last year. Product revenue was $11.4 million compared to $13.7 million in the same period of 2015 due to ongoing restructuring activities by the company's last remaining client in this segment and their discontinuation of certain product lines.
Service fee equivalent revenue increased 30% to $51.8 million compared to $39.8 million in the year-ago quarter, driven by both new and expanded client relationships, as well as approximately $8.3 million of incremental service fees generated in the second quarter of 2016 by the company's acquired entities -- CrossView, Moda and Conexus -- which were acquired in 2015 and 2016.
Service fee gross margin in the second quarter of 2016 increased 100 basis points to 32.8% compared to 31.8% in the same period of 2015. The increase was due to a higher proportion of agency and technology services in the second quarter of 2016, in part due to the benefit from the Moda, CrossView and Conexus acquisitions.
Net loss in the second quarter of 2016 was $2.2 million or $(0.12) per share, compared to a net loss of $1.9 million or $(0.11) per share in the same period of 2015. Net loss in the second quarter of 2016 included $0.9 million in acquisition-related, restructuring and other costs, $0.8 million in amortization of acquisition-related intangible assets, and $0.6 million in stock-based compensation expense. This compares to $1.1 million in acquisition-related, restructuring and other costs, $0.2 million in amortization of acquisition-related intangible assets, and $1.2 million in stock-based compensation expense in the same period of 2015.
Adjusted EBITDA (a non-GAAP measure defined below) was $3.9 million compared to $4.1 million in the same period of 2015. As a percentage of service fee equivalent revenue, adjusted EBITDA was 7.5% compared to 10.3% in the year-ago quarter. The decline in adjusted EBITDA margin was driven by the expected increase in sales and marketing to support the company's targeted growth, as well as investment in infrastructure resources, particularly for several large new client wins that are requiring the build-out of new distribution operations.
Non-GAAP net income (a non-GAAP measure defined below) in the second quarter of 2016 was $0.2 million, compared to $0.6 million in the second quarter of 2015.
At June 30, 2016, cash and cash equivalents totaled $16.7 million compared to $21.8 million at December 31, 2015. Total debt was $55.0 million compared to $35.4 million at December 31, 2015, with the increase primarily driven by funds used to support the June 2016 Conexus acquisition and payment of calendar 2015 related earn-out liabilities applicable to prior acquisitions.
2016 Outlook
PFSweb is reiterating its target for 2016 service fee equivalent revenue to range between $220 million and $230 million, reflecting growth of 19% to 24% from 2015. The company is revising its target for adjusted EBITDA and now expects it to range between $21.5 million to $23.5 million (previously $23 million to $25 million), reflecting growth of 4% to 14% from 2015. These targets include the expected impact of the Conexus acquisition, lower than previously targeted revenue and profit contribution from the company's CrossView business, as well as incremental sales, marketing, and other infrastructure expenditures to support certain new client activity and the company's targeted future growth.
Conference Call
PFSweb will conduct a conference call today at 5:00 p.m. Eastern time to discuss its results for the second quarter ended June 30, 2016.
CEO Michael Willoughby and CFO Tom Madden will host the conference call, followed by a question and answer period.
Date: Monday, August 8, 2016
Time: 5:00 p.m. Eastern Time (4:00 p.m. Central time)
Toll-free dial-in number: 1-888-417-8465
International dial-in number: 1-719-325-2452
Conference ID: 9515441
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 at 1-949-574-3860.
The conference call will be broadcast live and available for replay at http://public.viavid.com/index.php?id=120456 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 August 22, 2016.
Toll-free replay number: 1-877-870-5176
International replay number: 1-858-384-5517
Replay ID: 9515441
About PFSweb, Inc.
PFSweb (NASDAQ: PFSW) is a global commerce service provider of solutions including digital strategy consulting, 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, Canada Goose, ASICS, Roots Canada Ltd., PANDORA, Diageo, Anastasia Beverly Hills, 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, United Kingdom, Bulgaria, Germany, 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 contains 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 costs 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 costs.
Service fee equivalent revenue represents service fee revenue plus the gross profit earned on product revenue and does not alter existing revenue recognition.
Our service fee equivalent revenue target for 2016 includes an estimated gross margin on product sales of approximately $3 million (based on targeted product revenue of $50 million less targeted cost of product revenue of $47 million) plus a targeted range of between $217 million to $227 million of service fee revenue.
The adjusted EBITDA outlook for 2016 have not been reconciled to the company's net loss outlook for the same period because certain items that would impact interest expense, income tax provision (benefit), depreciation and amortization, stock-based compensation, amortization of acquisition-related intangible assets and acquisition related and restructuring costs, all of which are reconciling items between net loss and adjusted EBITDA, cannot be reasonably predicted. Accordingly, reconciliation of adjusted EBITDA outlook to net loss outlook for 2016 is not available without unreasonable effort.
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 costs 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, 2015 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)
(Unaudited)
June 30, December 31,
2016 2015
------------ ------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 16,692 $ 21,781
Restricted cash 219 275
Accounts receivable, net of allowance for
doubtful accounts of $485 and $600 at June 30,
2016 and December 31, 2015, respectively 60,418 70,700
Inventories, net of reserves of $607 and $739
at June 30, 2016 and December 31, 2015,
respectively 8,049 9,262
Other receivables 4,926 8,704
Prepaid expenses and other current assets 5,841 5,662
------------ ------------
Total current assets 96,145 116,384
PROPERTY AND EQUIPMENT, net 26,915 24,093
INTANGIBLE ASSETS, net 9,295 8,810
GOODWILL 45,601 39,829
OTHER ASSETS 2,294 2,174
------------ ------------
Total assets $ 180,250 $ 191,290
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt and capital
lease obligations 5,166 3,153
Trade accounts payable 39,649 51,170
Deferred revenue 6,377 7,390
Performance-based contingent payments 867 11,679
Accrued expenses 23,950 30,563
------------ ------------
Total current liabilities 76,009 103,955
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS,
less current portion 49,864 32,238
DEFERRED REVENUE 4,413 4,499
DEFERRED RENT 4,918 4,362
OTHER LONG-TERM LIABILITIES 543 2,478
------------ ------------
Total liabilities 135,747 147,532
------------ ------------
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; 18,724,551 and 18,136,218
shares issued at June 30, 2016 and December
31, 2015, respectively; and 18,691,084 and
18,102,751 shares outstanding as of June 30,
2016 and December 31, 2015, respectively 18 18
Additional paid-in capital 144,662 141,948
Accumulated deficit (100,721) (97,787)
Accumulated other comprehensive income 669 (296)
Treasury stock at cost, 33,467 shares (125) (125)
------------ ------------
Total shareholders' equity 44,503 43,758
------------ ------------
Total liabilities and shareholders' equity $ 180,250 $ 191,290
============ ============
(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, 2015.
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,
-------------------- --------------------
2016 2015 2016 2015
--------- --------- --------- ---------
REVENUES:
Service fee revenue $ 51,166 $ 39,075 $ 100,484 $ 75,783
Product revenue, net 11,380 13,658 24,987 30,312
Pass-thru revenue 14,653 10,443 26,809 20,927
--------- --------- --------- ---------
Total revenues 77,199 63,176 152,280 127,022
--------- --------- --------- ---------
COSTS OF REVENUES:
Cost of service fee revenue 34,381 26,645 66,655 51,800
Cost of product revenue 10,742 12,911 23,644 28,619
Cost of pass-thru revenue 14,653 10,443 26,809 20,927
--------- --------- --------- ---------
Total costs of revenues 59,776 49,999 117,108 101,346
--------- --------- --------- ---------
Gross profit 17,423 13,177 35,172 25,676
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 18,808 14,676 36,358 28,290
--------- --------- --------- ---------
Income (loss) from operations (1,385) (1,499) (1,186) (2,614)
INTEREST EXPENSE (INCOME), NET 609 223 1,094 541
--------- --------- --------- ---------
Income (loss) before income
taxes (1,994) (1,722) (2,280) (3,155)
INCOME TAX PROVISION (BENEFIT) 188 178 654 438
--------- --------- --------- ---------
NET INCOME (LOSS) $ (2,182) $ (1,900) $ (2,934) $ (3,593)
========= ========= ========= =========
NON-GAAP NET INCOME (LOSS) $ 153 $ 613 $ 194 $ 743
========= ========= ========= =========
NET INCOME (LOSS) PER SHARE:
Basic $ (0.12) $ (0.11) $ (0.16) $ (0.21)
========= ========= ========= =========
Diluted $ (0.12) $ (0.11) $ (0.16) $ (0.21)
========= ========= ========= =========
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING:
Basic 18,627 17,368 18,477 17,257
========= ========= ========= =========
Diluted 18,627 17,368 18,477 17,257
========= ========= ========= =========
EBITDA $ 2,415 $ 1,810 $ 6,217 $ 3,950
========= ========= ========= =========
ADJUSTED EBITDA $ 3,903 $ 4,083 $ 7,654 $ 7,806
========= ========= ========= =========
(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, 2015.
PFSweb, Inc. and Subsidiaries
Unaudited Reconciliation of Certain Non-GAAP Items to GAAP
(In Thousands, Except Per Share Data)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- --------------------
2016 2015 2016 2015
--------- --------- --------- ---------
NET INCOME (LOSS) $ (2,182) $ (1,900) $ (2,934) $ (3,593)
Income tax expense (benefit) 188 178 654 438
Interest expense, net 609 223 1,094 541
Depreciation and amortization 3,800 3,309 7,403 6,564
--------- --------- --------- ---------
EBITDA $ 2,415 $ 1,810 $ 6,217 $ 3,950
Stock-based compensation 629 1,150 1,396 1,954
Acquisition related,
restructuring and other
costs, net 859 1,123 41 1,902
--------- --------- --------- ---------
ADJUSTED EBITDA $ 3,903 $ 4,083 $ 7,654 $ 7,806
========= ========= ========= =========
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- --------------------
2016 2015 2016 2015
--------- --------- --------- ---------
NET INCOME (LOSS) $ (2,182) $ (1,900) $ (2,934) $ (3,593)
Stock-based compensation 629 1,150 1,396 1,954
Amortization of acquisition-
related intangible assets 847 240 1,691 480
Acquisition related,
restructuring and other
costs, net 859 1,123 41 1,902
--------- --------- --------- ---------
NON-GAAP NET INCOME (LOSS) $ 153 $ 613 $ 194 $ 743
========= ========= ========= =========
NET INCOME (LOSS) PER SHARE:
Basic $ (0.12) $ (0.11) $ (0.16) $ (0.21)
========= ========= ========= =========
Diluted $ (0.12) $ (0.11) $ (0.16) $ (0.21)
========= ========= ========= =========
NON-GAAP NET INCOME (LOSS) Per
Share:
Basic $ 0.01 $ 0.04 $ 0.01 $ 0.04
========= ========= ========= =========
Diluted $ 0.01 $ 0.03 $ 0.01 $ 0.04
========= ========= ========= =========
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- --------------------
2016 2015 2016 2015
--------- --------- --------- ---------
TOTAL REVENUES $ 77,199 $ 63,176 $ 152,280 $ 127,022
Pass-thru revenue (14,653) (10,443) (26,809) (20,927)
Cost of product revenue (10,742) (12,911) (23,644) (28,619)
--------- --------- --------- ---------
SERVICE FEE EQUIVALENT REVENUE $ 51,804 $ 39,822 $ 101,827 $ 77,476
========= ========= ========= =========
PFSweb, Inc. and Subsidiaries
Unaudited Consolidating Statements of Operations
For the Three Months Ended June 30, 2016
(In Thousands)
Business
&
Retail
PFSweb Connect Eliminations Consolidated
-------- -------- ------------ ------------
REVENUES:
Service fee revenue $ 47,638 $ 3,528 $ - $ 51,166
Service fee revenue -
affiliate 3,193 222 (3,415) -
Product revenue, net - 11,380 - 11,380
Pass-thru revenue 14,653 - - 14,653
-------- -------- ------------ ------------
Total revenues 65,484 15,130 (3,415) 77,199
-------- -------- ------------ ------------
COSTS OF REVENUES:
Cost of service fee revenue 33,689 3,474 (2,782) 34,381
Cost of product revenue 16 10,726 - 10,742
Cost of pass-thru revenue 14,653 - 14,653
-------- -------- ------------ ------------
Total costs of revenues 48,358 14,200 (2,782) 59,776
-------- -------- ------------ ------------
Gross profit 17,126 930 (633) 17,423
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 18,943 498 (633) 18,808
-------- -------- ------------ ------------
Income (loss) from
operations (1,817) 432 - (1,385)
INTEREST EXPENSE (INCOME),
NET 526 83 609
-------- -------- ------------ ------------
Income (loss) before
income taxes (2,343) 349 - (1,994)
INCOME TAX PROVISION
(BENEFIT) 72 116 188
-------- -------- ------------ ------------
NET INCOME (LOSS) $ (2,415) $ 233 $ - $ (2,182)
======== ======== ============ ============
NON-GAAP NET INCOME (LOSS) $ (80) $ 233 $ - $ 153
======== ======== ============ ============
$ -
EBITDA $ 1,977 $ 438 $ - $ 2,415
======== ======== ============ ============
ADJUSTED EBITDA $ 3,465 $ 438 $ - $ 3,903
======== ======== ============ ============
A reconciliation of NET INCOME (LOSS) to EBITDA and ADJUSTED EBITDA follows:
NET INCOME (LOSS) $ (2,415) $ 233 $ - (2,182)
Income tax expense
(benefit) 72 116 - 188
Interest expense
(income), net 526 83 - 609
Depreciation and
amortization 2,947 6 - 2,953
Amortization of
acquisition-related
intangible assets 847 - - 847
-------- -------- ------------ ------------
EBITDA $ 1,977 $ 438 $ - $ 2,415
Stock-based compensation 629 - - 629
Acquisition related,
restructuring and other
costs, net 859 - - 859
-------- -------- ------------ ------------
ADJUSTED EBITDA $ 3,465 $ 438 $ - $ 3,903
======== ======== ============ ============
A reconciliation of NET INCOME (LOSS) to NON-GAAP NET INCOME (LOSS) follows:
NET INCOME (LOSS) $ (2,415) $ 233 $ - $ (2,182)
Stock-based compensation 629 - - 629
Amortization of
acquisition-related
intangible assets 847 - - 847
Acquisition related,
restructuring and other
costs, net 859 - - 859
-------- -------- ------------ ------------
NON-GAAP NET INCOME (LOSS) $ (80) $ 233 $ - $ 153
======== ======== ============ ============
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, 2015
(In Thousands)
Business
&
Retail
PFSweb Connect Eliminations Consolidated
-------- -------- ------------ ------------
REVENUES:
Service fee revenue $ 35,841 $ 3,234 $ - $ 39,075
Service fee revenue -
affiliate 3,150 169 (3,319) -
Product revenue, net - 13,658 - 13,658
Pass-thru revenue 10,443 - - 10,443
-------- -------- ------------ ------------
Total revenues 49,434 17,061 (3,319) 63,176
-------- -------- ------------ ------------
COSTS OF REVENUES:
Cost of service fee revenue 26,611 3,198 (3,164) 26,645
Cost of product revenue - 12,911 - 12,911
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, 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,
restructuring and other
costs, net 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,
restructuring and other
costs, net 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 Six Months Ended June 30, 2016
(In Thousands)
Business
&
Retail
PFSweb Connect Eliminations Consolidated
-------- -------- ------------ ------------
REVENUES:
Service fee revenue $ 92,854 $ 7,630 $ - $ 100,484
Service fee revenue -
affiliate 6,811 457 (7,268) -
Product revenue, net - 24,987 - 24,987
Pass-thru revenue 26,809 - - 26,809
-------- -------- ------------ ------------
Total revenues 126,474 33,074 (7,268) 152,280
-------- -------- ------------ ------------
COSTS OF REVENUES:
Cost of service fee revenue 65,156 7,460 (5,961) 66,655
Cost of product revenue 16 23,628 - 23,644
Cost of pass-thru revenue 26,809 - - 26,809
-------- -------- ------------ ------------
Total costs of revenues 91,981 31,088 (5,961) 117,108
-------- -------- ------------ ------------
Gross profit 34,493 1,986 (1,307) 35,172
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 36,607 1,058 (1,307) 36,358
-------- -------- ------------ ------------
Income (loss) from
operations (2,114) 928 - (1,186)
INTEREST EXPENSE (INCOME),
NET 921 173 - 1,094
-------- -------- ------------ ------------
Income (loss) before
income taxes (3,035) 755 - (2,280)
INCOME TAX PROVISION
(BENEFIT) 398 256 - 654
-------- -------- ------------ ------------
NET INCOME (LOSS) $ (3,433) $ 499 $ - $ (2,934)
======== ======== ============ ============
NON-GAAP NET INCOME (LOSS) $ (305) $ 499 $ - $ 194
======== ======== ============ ============
$ -
EBITDA $ 5,276 $ 941 $ - $ 6,217
======== ======== ============ ============
ADJUSTED EBITDA $ 6,713 $ 941 $ - $ 7,654
======== ======== ============ ============
A reconciliation of NET INCOME (LOSS) to EBITDA and ADJUSTED EBITDA
follows:
NET INCOME (LOSS) $ (3,433) $ 499 $ - $ (2,934)
Income tax expense
(benefit) 398 256 - 654
Interest expense, net 921 173 - 1,094
Depreciation and
amortization 5,699 13 - 5,712
Amortization of
acquisition-related
intangible assets 1,691 - - 1,691
-------- -------- ------------ ------------
EBITDA $ 5,276 $ 941 $ - $ 6,217
Stock-based compensation 1,396 - - 1,396
Acquisition related,
restructuring and other
costs, net 41 - - 41
-------- -------- ------------ ------------
ADJUSTED EBITDA $ 6,713 $ 941 $ - $ 7,654
======== ======== ============ ============
A reconciliation of NET INCOME (LOSS) to NON-GAAP NET INCOME (LOSS)
follows:
NET INCOME (LOSS) $ (3,433) $ 499 $ - $ (2,934)
Stock-based compensation 1,396 - - 1,396
Amortization of
acquisition-related
intangible assets 1,691 - - 1,691
Acquisition related,
restructuring and other
costs, net 41 - - 41
-------- -------- ------------ ------------
NON-GAAP NET INCOME (LOSS) $ (305) $ 499 $ - $ 194
======== ======== ============ ============
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:
Service fee revenue $ 68,573 $ 7,210 $ - $ 75,783
Service fee revenue -
affiliate 6,643 373 (7,016) -
Product revenue, net - 30,312 - 30,312
Pass-thru revenue 20,927 - - 20,927
-------- -------- ------------ ------------
Total revenues 96,143 37,895 (7,016) 127,022
-------- -------- ------------ ------------
COSTS OF REVENUES:
Cost of service fee revenue 51,268 7,144 (6,612) 51,800
Cost of product revenue - 28,619 - 28,619
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,
restructuring and other
costs, net 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,
restructuring and other
costs, net 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 Condensed Consolidating Balance Sheets
as of June 30, 2016
(In Thousands)
Busines
s &
Retail
PFSweb Connect Eliminations Consolidated
--------- ------- ------------ ------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 6,621 10,071 $ - $ 16,692
Restricted cash - 219 - 219
Accounts receivable, net 46,457 14,988 (1,027) 60,418
Inventories, net - 8,049 - 8,049
Other receivables 825 4,101 - 4,926
Prepaid expenses and other
current assets 4,997 844 - 5,841
--------- ------- ------------ ------------
Total current assets 58,900 38,272 (1,027) 96,145
PROPERTY AND EQUIPMENT, net 26,879 15 - 26,894
RECEIVABLE/INVESTMENT IN
AFFILIATES 9,451 - (9,451) -
INTANGIBLE ASSETS, net 9,316 - - 9,316
GOODWILL 45,601 - - 45,601
OTHER ASSETS 2,294 - - 2,294
--------- ------- ------------ ------------
Total assets 152,441 38,287 (10,478) 180,250
========= ======= ============ ============
LIABILITIES AND SHAREHOLDERS
EQUITY
CURRENT LIABILITIES:
Current portion of long-
term debt and capital
lease obligations $ 4,491 - $ - $ 4,491
Trade accounts payable 13,878 26,798 (1,027) 39,649
Deferred revenue 6,377 - - 6,377
Performance-based
contingent payments 867 - - 867
Accrued expenses 21,354 2,596 - 23,950
--------- ------- ------------ ------------
Total current
liabilities 46,967 29,394 (1,027) 75,334
LONG-TERM DEBT AND CAPITAL
LEASE OBLIGATIONS, less
current portion 50,539 - - 50,539
PAYABLE TO AFFILIATES - 22,045 (22,045) -
DEFERRED REVENUE 4,413 - - 4,413
DEFERRED RENT 4,918 - - 4,918
OTHER LONG-TERM LIABILITIES 543 - - 543
--------- ------- ------------ ------------
Total liabilities 107,380 51,439 (23,072) 135,747
--------- ------- ------------ ------------
COMMITMENTS AND
CONTINGENCIES
SHAREHOLDERS' EQUITY:
Common stock 18 19 (19) 18
Capital contributions - 1,000 (1,000) -
Additional paid-in capital 144,662 28,060 (28,060) 144,662
Retained earnings
(accumulated deficit) (100,525) (43,438) 43,242 (100,721)
Accumulated other
comprehensive income 1,031 1,207 (1,569) 669
Treasury stock (125) - - (125)
--------- ------- ------------ ------------
Total shareholders'
equity 45,061 (13,152) 12,594 44,503
--------- ------- ------------ ------------
Total liabilities and
shareholders' equity $ 152,441 38,287 $ (10,478) $ 180,250
========= ======= ============ ============
(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, 2015.
PFSweb, Inc. and Subsidiaries
Unaudited Condensed Consolidating Balance Sheets
as of December 31, 2015
(In Thousands)
Business
&
Retail
PFSweb Connect Eliminations Consolidated
-------- -------- ------------ ------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 7,962 $ 13,819 $ - $ 21,781
Restricted cash 51 224 - 275
Accounts receivable, net 51,231 20,348 (879) 70,700
Inventories, net - 9,262 - 9,262
Other receivables 2,621 6,083 - 8,704
Prepaid expenses and other
current assets 4,744 918 - 5,662
-------- -------- ------------ ------------
Total current assets 66,609 50,654 (879) 116,384
PROPERTY AND EQUIPMENT, net 24,065 28 - 24,093
RECEIVABLE/INVESTMENT IN
AFFILIATES 9,577 - (9,577) -
INTANGIBLE ASSETS, net 8,810 - - 8,810
GOODWILL 39,829 - - 39,829
OTHER ASSETS 2,174 - - 2,174
-------- -------- ------------ ------------
Total assets 151,064 50,682 (10,456) 191,290
======== ======== ============ ============
LIABILITIES AND SHAREHOLDERS
EQUITY
CURRENT LIABILITIES:
Current portion of long-
term debt and capital
lease obligations $ 3,153 $ - $ - $ 3,153
Trade accounts payable 15,329 36,710 (869) 51,170
Deferred revenue 7,390 - - 7,390
Performance-based
contingent payments 11,679 - - 11,679
Accrued expenses 26,015 4,558 (10) 30,563
-------- -------- ------------ ------------
Total current
liabilities 63,566 41,268 (879) 103,955
LONG-TERM DEBT AND CAPITAL
LEASE OBLIGATIONS, less
current portion 32,238 - - 32,238
PAYABLE TO AFFILIATES - 22,056 (22,056) -
DEFERRED REVENUE 4,499 - - 4,499
DEFERRED RENT 4,362 - - 4,362
OTHER LONG-TERM LIABILITIES 2,478 - - 2,478
-------- -------- ------------ ------------
Total liabilities 107,143 63,324 (22,935) 147,532
-------- -------- ------------ ------------
COMMITMENTS AND
CONTINGENCIES
SHAREHOLDERS' EQUITY:
Common stock 18 19 (19) 18
Capital contributions - 1,000 (1,000) -
Additional paid-in capital 141,948 28,060 (28,060) 141,948
Retained earnings
(accumulated deficit) (97,616) (42,827) 42,656 (97,787)
Accumulated other
comprehensive income (304) 1,106 (1,098) (296)
Treasury stock (125) - - (125)
-------- -------- ------------ ------------
Total shareholders'
equity 43,921 (12,642) 12,479 43,758
-------- -------- ------------ ------------
Total liabilities and
shareholders' equity $151,064 $ 50,682 $ (10,456) $ 191,290
======== ======== ============ ============
(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, 2015.
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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