| |
|
|
|
|
|
|
|
|
|
|
|
|
|
PFSweb, Inc.
|
|
|
PFSW
|
|
|
Q1 2009 Earnings Call
|
|
|
May 13, 2009 |
|
|
Company5
|
|
|
Ticker5
|
|
|
Event Type5
|
|
|
Date5 |
| |
|
|
|
|
|
|
|
|
|
| |
|
sequential
quarter standpoint. And as a result, I would expect the year-on-year comparisons to begin to
improve for the B2B segment in the coming quarters. |
| |
| |
|
As we discussed on previous calls, it’s important to note the additional intangible value that our
eCOST.com segment has for our Services business in terms of its pioneering and innovation. eCOST,
in addition to being its own business, serves as sort of a development laboratory for new
capabilities be it check out methods or customer acquisition models or marketing approaches,
customer lifecycle analysis, virtual warehouse partnerships, and many, many other things that are
out there in the web commerce frontier. |
| |
| |
|
As we find successful tools and they become fully developed at eCOST, we can then offer them as
additional products and capabilities in our Services business segment. From our experiences at
eCOST, we believe we are developing significant web commerce retailing expertise that is becoming
increasingly valuable to our Services division and its clients. |
| |
| |
|
In summary, eCOST continues to evolve in what I believe to be a positive direction. When you peel
back the layers of our Q1 results as I’ve laid out for you here, it does show significant and
positive development and progress in many areas. |
| |
| |
|
I’d like to now turn the call over to Tom Madden, our Chief Financial Officer and he’ll cover the
financial details for the quarter. Tom? |
Thomas J. Madden, Senior Partner, Chief Financial Officer and Chief Accounting Officer
| |
|
Thank you, Mark. Let me first start by providing a brief overview of our consolidated operating
results for the quarter ended March 31, 2009. Then I will provide some select operating highlights
for individual business segments as well as an update on our recent credit renewals. |
| |
| |
|
As reported in our press release, our consolidated revenue for PFSweb in the quarter ended March
31, 2009 was $88.9 million compared to $118.5 million reported in the first quarter of 2008. Gross
profit for the first quarter of 2009 was $11.2 million or 12.6% of net revenue excluding pass-thru
revenue, as compared to $13.3 million or 12% of net revenue excluding pass-thru revenue in the
first quarter of 2008. The increase in consolidated gross margin percentage is primarily
attributable to a decrease in product revenue, our lower gross margin business. |
| |
| |
|
As we have discussed previously, we utilize adjusted EBITDA as a key metric in evaluating our
operation performance. In the first quarter, our consolidated adjusted EBITDA was $2.7 million,
relatively consistent with the $2.8 million reported in the prior year period. For the first
quarter, net loss was $248,000 or $0.02 per basic and diluted shares, compared to net income of
approximately $414,000 or $0.04 per basic and diluted share for the same period of the prior year. |
| |
| |
|
Another key metric we use in evaluating our financial performance is non-GAAP net income. To
calculate this we exclude from net income calculated in accordance with GAAP the impact of
stock-based compensation, goodwill, and intangible asset impairments, and amortization of
identifiable and tangible assets. For the quarter – for the first quarter, non-GAAP net income was
a loss of approximately $119,000 or $0.01 per basic and diluted shares as compared to non-GAAP net
income of about $817,000 or $0.08 per basic and diluted share for the prior year. As Mark indicated
earlier, our March quarter results were about break-even from a bottom-line standpoint. |
| |
| |
|
Let’s turn now to the performance of select business segments for the year – for the quarter ended
March 31. First, Service Fee revenues decreased approximately 18% to $17.1 million from $20.8
million in the prior year. This decrease is attributable to the economy, and the non-renewal impact
of a large U.S. government contract, which was effective during the March quarter, although we did
continue to perform some project work under this U.S. government contract throughout this quarter. |
6
|