Final Transcript
May. 16. 2007 / 11:00AM ET, PFSW — Q1 2007 PFSweb, Inc. Earnings Conference Call
No, there is no change on it. There’s been a couple of letters gone back and forth. We
continue to believe our position is correct. We are accruing taxes for ‘07 which is where we
believe is the right way on the formula from there. But we believe our position is very solid going
back and — but there is no date in terms of that and they’ve been slow on their side to respond to
moving things forward. So at this point, I don’t see any risk there.
George Walsh - Gilford Securities — Analyst
Okay. All right. I will get back in queue and come back. Thanks.
Operator
(OPERATOR INSTRUCTIONS) George Walsh, Gilford Securities.
George Walsh - Gilford Securities — Analyst
That was easy. Could you go into a bit of the — you mentioned that this quarter on eCOST
there was a lot of word-of-mouth. Just you did have marketing initiatives that you were looking at
and many of them off-line. Can you just go into some of the aspects that is going at and how that
is ramping up?
Mark Layton - PFSweb, Inc. — CEO
The primary things that we’re testing a lot of stuff at this point. Off line we tried some
radio advertising in December. I think we’ve concluded that the results from that are probably a
lot longer-term than what we are after. So that was one that probably didn’t work as well as we
would have thought at least near-term.
I think I mentioned we are getting back into a regular catalog, direct-mail program and we have to
watch the Postal Service costs a little bit to see what is going to go on there later this year and
get that settled. But at this point that is a very effective way for us and we’re seeing good
reinvigoration of our existing customers that may not have bought from us since ‘03 or ‘04 that are
coming back into the fray for us from there. We would not prospect catalogs in that area.
On the new account side, we were trying to use an affiliate and second tier sites, I mentioned Woot
on the call, Woot.com for those that are unfamiliar is a really interesting community site that
offers one product a day and we are doing some affiliated marketing with them. It is at this point
a cost effective way for us to acquire customers. It’s obviously one site so it in itself isn’t
particularly scalable but it is an example of the kinds of things we want to do in that area in
order to build from there.
We are looking at other community opportunities in terms of Web communities out there where we can
entrench ourselves into demographics of areas that are high-technology users, males in that 25 to
55 segment has been the typical sweet spot for eCOST in years past.
So we’ve got a pretty good idea at this point what we can pay and achieve the kind of profitability
that we want over the live value of the customer. We need to increase the list of places that cost
is affected out there. And at this point most of the shopping BOTs are not. So we have backed off
of that significantly and are beginning to rely on a number of other activities as I described.
George Walsh - Gilford Securities — Analyst
Okay, what is the balance between customer additions and product additions in terms of driving
the top-line and getting that — I guess your breakeven quarterly is around $25.5 million. Between
those two, what is the real driver?
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