Section 16 Filings Only
PFSWEB INC filed this 8-K on 08/15/2011.
« Prev Page Outline Printer Friendly Entire FilingNext Page »
 

<A — Michael Willoughby — President & Chief Information Officer>: It’s in that category so there’s a variety of different types of products. Some are liquids. Some are other powder type products. And there’s also merchandise and consumer electronic type products in there as well.
<Q — Mark Argento — Craig-Hallum Capital Group LLC>: Got you. Okay, that’s helpful. And then you guys, you expect to have it up and running by the end of the year?
<A — Michael Willoughby — President & Chief Information Officer>: Before Christmas.
<Q — Mark Argento — Craig-Hallum Capital Group LLC>: Got you, okay. And will they let you to hopefully announce the client at that time? Or...
<A — Michael Willoughby — President & Chief Information Officer>: We expect to be able to announce the client at or after the launch.
<Q — Mark Argento — Craig-Hallum Capital Group LLC>: Got you, okay. Mark, when you talk about, I mean, you guys are cool, is it just a massive pipeline of business here, and you talked about gearing up to be able to handle that business. When you’re talking about incremental spend, are you — is it hiring people to call center people, operations people, what maybe you could kind of, high level bucket out the spend a little better or help us think about that?
<A — Mark Layton — Chairman & Chief Executive Officer>: Okay well, it is a combination of people and then capital investments in other existing infrastructure to expand it or new capabilities that we have. So specifically, technology developers for example that area has grown pretty significantly over the last year. And we have a period of time during their ramp-up period as we train them on the technology backbone that we use that they are not necessary assigned to a client. So that results in a, increase in SG&A during that period of time that we would then expect will move in the cost of goods as new client programs are implemented with those people working on them.
That’s a similar scenario for account managers that manage our client relationships. We’ve seen a significant head count increase in that area as well, again there is a training period that’s involved with that. Particularly our entry level account manager are primarily new college graduates. So our recruit program and the runway run up time period if you will for their training is included in SG&A during that period of time until they are assigned specifically to a client area and then they will show in our cost of goods. So, what you’re seeing is a people component running through SG&A that we expect over time will move to cost of goods and be associated with new revenue that we would make in that area. So, that’s the people front.
On the infrastructure side of things in here we’ve made some pretty significant investments in terms of our mobile pick cart technology in our facilities in Memphis. The pick cart technology is a very highly productive picking method for many of our clients and with the growth that we’ve experienced with clients like Carter’s and a number of the others, the pick cart technology has grown significantly in that area so we’ve made significant investments there. We’ve talked about the food grade facility already that we added earlier this year so that’s some of the infrastructure.
And then we just have facility expansion needs so, for example, our call center agents will grow substantially. We have a smaller period of time where they are in SG&A but they’ve become productive much more quickly in our environment that we’re ramping up infrastructure requirements to support the seat needs for the new clients that Mike described as well a pretty significant fourth quarter peak that we expect at this point.
So that is square footage, furniture, telecom equipment I mean PCs and so on and so forth in that area that from an infrastructure needs and again a lot of that will end up in cost of goods as the revenue comes from there. So you see a bit of a ballooning in the SG&A component that will move

9