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their need to expend management time and resources to coordinate these services
from different providers. By utilizing our services, our clients can capitalize
on our economies of scale and expertise to grow their e-commerce business
without incurring the substantial fixed costs necessary to create and maintain
their own transaction management infrastructure. Our clients also have the
flexibility to purchase any or all of our offered services according to their
transaction volume and existing transaction management infrastructure so that
they do not have to invest scarce capital resources as their business grows.
Access a Sophisticated Technology Infrastructure. We provide our clients
with ready access to a sophisticated technology infrastructure, which is
designed to interface seamlessly with their systems. We provide our clients with
vital product and customer information which can be immediately available to
them on their own systems for use in data mining, analyzing sales and marketing
trends, monitoring inventory levels and performing other transaction management
functions.
The key elements of our business strategy are to:
Target Clients with Major Brand Names We intend to aggressively expand our
business by targeting brand names who are seeking to enter the e-commerce
marketplace or introduce new products or business programs. We believe that the
electronic commerce marketplace will be led by companies with major brand names
and our focus on these companies will provide us with meaningful opportunities
to grow along with our clients' e-commerce initiatives.
Expand Existing Client Relationships. By providing superior operating
results, we believe we can expand relationships with existing clients to serve
additional products and business segments and to provide additional services.
Our objective is to integrate ourselves as our clients' "virtual infrastructure"
so that we become a critical component of their transaction management process
across the enterprise. Based upon our clients' needs, we plan to introduce new
services to solve e-commerce transaction processing problems as they emerge. We
also intend to continue our commitment to invest in state-of-the-art technology,
equipment and systems to provide new, high-quality, innovative services to our
existing clients and to attract new clients.
Promote Our PFSweb Brand. We intend to build PFSweb brand awareness by
expanding the number of clients, increasing our advertising in trade journals
and other print media and by further participation in trade shows and similar
expositions. We also intend to increase our Internet advertising and search
engine presence.
Seek Strategic Alliances and Acquisitions. We intend to pursue strategic
alliances with Web site designers, Web hosting services, e-commerce software
companies and other providers of Internet related services to assist in
developing relationships with major brand names that are entering the e-commerce
marketplace. We may also consider acquisitions of synergistic e-commerce
businesses in order to offer a complete Internet implementation solution to
clients looking to introduce the sale of their products over the Internet.
Expand Our International Presence. We intend to expand the availability of
our services throughout the world so that we can enhance our
international-commerce transaction processing solutions. For example, in
response to market opportunities, we intend to expand our multi-lingual call
center services and foreign currency order processing.
ADJUSTED FINANCIAL PRESENTATION
We believe our historical financial statements may not provide a meaningful
comparison to our future financial statements. This is because the financial
presentation of our operations in the future will be different from what they
have been historically, as described below.
In 1996, we entered into an agreement with the printer supplies division of
IBM. Under this agreement, we provided IBM with various transaction management
services, such as call center services and order fulfillment and distribution.
We also served as an IBM master distributor of printer supply products. Under
this master distributor arrangement, we purchased the printer supply products
from IBM and resold them to IBM customers. Following our initial agreement with
the printer supplies division, we entered into several
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