SEC Filings Section 16 Filings Only
 
PFSWEB INC filed this 8-K on 11/18/2010.
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<A — Mark Layton>: Yeah. This is Mark. So Marco, just to clarify what Tom was saying, so those quotes that he just made were revenue impacts, to give you a feel for the two, the two things that impact the SD business. In terms of criticalness of the business, this one is a very important piece of business for us, as we — as I’ve mentioned in my comments. We get intangible benefits out of many of our entities and this one obviously brings us scale, because of the size of the business that’s out there. The business is now fully — our largest client is now fully owned by Ricoh, this was previously an IBM Printing deal that we’ve had, since 1995 through a joint venture with IBM. They created InfoPrint Solutions, which is now wholly-owned subsidiary of Ricoh through the terms of the agreement that was there. Ricoh is the manufacturer of many of the printer engines that are used in this business model that’s out there, and they own a lot of technology and capability in that. So we understand that they are very committed to the space. There is an ongoing effort to freshen the product offering that’s out there and to increase market share for InfoPrint Solutions as it looks to the future.
We’ve seen relative flat results over the last few years in terms of the consumables that these printers use. The good news is, is that because consumables are kind of a trailing-edge technology when printer replacement/placement slowdown, there is still an existing base that are using these products that are out there. Now that doesn’t go on forever, but it trails a long for many years behind that because of the legacy use of equipment that’s already placed.
Clearly, we’re hopeful that Ricoh and our other clients in this segment will continue to grow as we look forward to the future, but we’ve got pretty — a pretty modest outlook on our sales in terms of where we expect things to be with that piece of the business, but because of its scale and the nature of the way the contract is oriented, it is strategically important and as a strong financial contributor to us as we look to the business going forward. Now, transitioning into that while this one is a business-to-business deal, as I mentioned in my prepared comments, we are seeing a lot of clients in our direct-to-consumer channel interested in a similar buy/sell model.
Now, the arrangements would probably be somewhat different from a financial perspective in terms of how the buy and the sell happen, if you will, but I would expect that we would see over the next few years, a growing product revenue component of our overall financial results with a higher gross margin component to it than what we see in the Supplies Distributors segment or frankly even in the eCOST technology portion of its business today. So we’re reacting to what clients are asking us to do. We have a very flexible platform, we’ve got a very flexible attitude towards working with our clients and customizing the way we work with them in order to be certain that we can be the partner that they want us to be.
<Q — Marco Rodriguez>: Okay. That’s helpful. And then in regard to the eCOST business, I was kind of interested that you mentioned in prepared remarks kind of a movement away from technology, electronics towards more consumer type products. Do you have any sort of a timeline when you think that might transpire?
<A — Mark Layton>: Well, again, the only backdrop I would provide is what I provided in the prepared comments, which is that we want to make this segment financially — the financial impact of it much better for us in 2011 than what it’s been in 2010. So our eyes are open to all the options that are available out there, and our team in L.A. are working very hard to have a successful fourth quarter in this business, and we’ll continue to look for all strategic options that we have with this, but the timeline is improved financial impact for 2011.
<Q — Marco Rodriguez>: Okay. And then kind of a housekeeping item here, can you discuss a little bit the DSOs or your account receivables in your balance sheet, they’ve been kind of picking up here the last three quarters, and then also the cash flow from operations and CapEx for the quarter?
<A — Thomas Madden>: Hold on a second. For the quarter, I’ve got the net — actually, one second, the net free cash flow for the quarter was use of 1.2 million, let me — with a — I think the

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