PFSW
$9.04
Pfsweb
($.07)
(.77%)
Earnings Details
2nd Quarter June 2016
Monday, August 08, 2016 4:15:31 PM
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Summary

Pfsweb (PFSW) Recent Earnings

Pfsweb (PFSW) reported a 2nd Quarter June 2016 loss of $0.03 per share on revenue of $77.2 million. The consensus estimate was a loss of $0.13 per share on revenue of $69.9 million. Revenue grew 22.2% on a year-over-year basis.

PFSweb Inc is a provider of integrated ecommerce and business process outsourcing solutions to companies in the United States, Canada and Europe.

Results
Reported Earnings
($0.03)
Earnings Whisper
-
Consensus Estimate
($0.13)
Reported Revenue
$77.2 Mil
Revenue Estimate
$69.9 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

PFSweb Reports Second Quarter 2016 Results

Company Reports Strong Revenue Growth and Expanding Distribution Facilities Footprint to Support Large New Client Wins

ALLEN, TX--(Marketwired - Aug 8, 2016) - PFSweb, Inc. (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 (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 &
 
 
 
 
 
 
 
 
PFSweb
 
 
Retail 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 &
 
 
 
 
 
 
 
 
PFSweb
 
 
Retail 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 &
 
 
 
 
 
 
 
 
PFSweb
 
 
Retail 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 &
 
 
 
 
 
 
 
 
PFSweb
 
 
Retail 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)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business &
 
 
 
 
 
 
 
 
 
PFSweb
 
 
Retail 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 &
 
 
 
 
 
 
 
 
 
PFSweb
 
 
Retail 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