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PFSweb, Inc.
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PFSW
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Q1 2009 Earnings Call
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May 13, 2009 |
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This decrease was partially offset by revenue from new clients related to the newly implemented
client programs Mike referred to earlier. |
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SG&A decreased in 2009 versus the prior year, primarily due to certain cost reduction activities
implemented throughout the fourth quarter of 2008 as well as the first quarter of 2009. For our
Supplies Distributors business segment, revenue declined to $45.3 million in the first quarter 2009
as compared to $62.3 million for the prior year first quarter, as Supplies Distributors saw a
decrease in demand during the quarter, which is primarily attributable to overall global economic
pressures as well as inventory rationalization by our customer base. Gross margins as well as net
profit in this business were generally in line with prior year results and our expectations. |
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As for eCOST.com, revenue in the first quarter of 2009 was $20.9 million compared to $28 million
for the same period last year. As Mark indicated earlier, our enhanced focus and success in the
Business-to-Consumer segment was more than offset by the revenue decline in the
Business-to-Business segment. However, our bottom line results for eCOST.com improved as a result
of the higher margins in the B2C business segment as well as our continued cost focus. |
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From a value sheet perspective, our current assets and current liabilities declined from the
December quarter levels primarily due to the December amounts reflecting the seasonal uptick in
working capital requirements for many of our business segments. We are pleased to report that our
cash balance, including restricted cash, of $17.6 million at the end of March was relatively
consistent with the 18.1 million reported at the end of December. This occurred while at the same
time our debt balance decreased to $21.5 million from $27.2 million at the end of December. So cash
remained relatively constant. Debt balance ended up decreasing by about $6 million. |
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As discussed on the last conference call in late March, on a collective basis we have renewed
virtually all of our financing facilities since the beginning of this year. This includes
facilities that we have in place with IBM Global Finance, Comerica, Wachovia, and Fortis. And we
believe we have the financing in place to support our current business needs. |
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Now I’d like to turn the call back over to Mark for some closing remarks. |
Mark C. Layton, Chairman, Senior Partner and Chief Executive Officer
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Okay. Thank you, Tom. So to recap before we go to questions here, but despite the tough economy we
obviously believe our results on the first quarter was solid. We believe we’ve made necessary
adjustments to our business that weather the economic challenges that we currently see out here in
front of us. |
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As Tom mentioned just a minute ago, we have support from our banking partnerships going forward and
more importantly, we believe we have some great growth prospects as Mike’s described in both our
new business pipeline and the Services business as well as the exciting activity we have going on
with the eCOST consumer channel. All of these things taken together are a testament to our ability
to overcome adversity, and we believe it will put us in a stronger position to deliver value and
higher share price when the marketplace begins to recover. We believe the
Company is in good position to continue executing its business strategies and to build its
shareholder equity. |
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As I stated during our last conference call, we do expect that growth in 2009 on a year-on-year
basis may be challenging due to the economic situation and because of the client changes we’ve
experienced. But even with this adversity, we believe our financial foundation remains strong and
we continue to target a breakeven to positive free cash flow performance in calendar year 2009. |
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That’s our prepared comments for today. Operator, we’ll now be available for questions. |
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