99
PFSWEB, INC.
NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS
(UNAUDITED)
The unaudited pro forma combined statements of operations of PFSweb, Inc.
for the fiscal year ended March 31, 1999 and the six months ended September 30,
1999 have been prepared based on the combined financial statements and unaudited
condensed interim combined financial statements and related notes presented
elsewhere in this prospectus. The unaudited pro forma combined statements of
operations and the unaudited pro forma combined balance sheet have been prepared
as if the transactions and events described in the following paragraphs had
occurred as of the beginning of the respective periods presented, and as of
September 30, 1999, respectively.
PFSweb based the following pro forma adjustments on available information
and certain estimates and assumptions. Therefore, it is likely that the actual
adjustments will differ from the pro forma adjustments. PFSweb believes that
such assumptions provide a reasonable basis for presenting all of the
significant effects of the following transactions and events and that the pro
forma adjustments give appropriate effect to those assumptions and are properly
applied in the unaudited pro forma combined financial statements.
The unaudited pro forma combined statements of operations of PFSweb, Inc.
for the fiscal year ended March 31, 1999 and the six months ended September 30,
1999 do not reflect certain estimated incremental selling, general and
administrative expenses associated with PFSweb operating as a stand-alone
publicly traded company, including executive management, overhead and public
company costs, insurance and risk management costs, and other costs estimated to
be $2.2 million and $1.1 million, respectively.
(1) Reflects the reclassification of Daisytek's net equity investment as
common stock and additional paid-in capital.
(2) Reflects the issuance of 3,100,000 shares of common stock in this
offering, assuming an initial public offering price of $13.00 per
share, and the application of the estimated $35.0 million net proceeds
to settle the outstanding payable to Daisytek, reduce deferred offering
costs, and increase cash. The pro forma adjustments reflect the
reduction of interest expense associated with our payable to Daisytek.
See "Capitalization" and "Use of Proceeds" elsewhere in this
prospectus.
(3) Reflects the contribution from Daisytek of $20,000 for 14,305,000
shares of PFSweb's common stock.
(4) Reflects income taxes determined in accordance with the provisions of
SFAS No. 109 "Accounting for Income Taxes." The pro forma adjustments
to the provision (benefit) for taxes reflect income taxes as if these
transactions and events had occurred as of the beginning of the
respective period presented. These pro forma effective income tax rates
may not be indicative of performance in future periods.
(5) Reflects basic pro forma net income per share calculated based on
common stock outstanding of 17,405,000 shares upon completion of this
offering. It does not include up to 465,000 shares of common stock
which the underwriters have the option to exercise solely to cover
over-allotments. If the underwriters exercise their over-allotment
option in full, basic and diluted pro forma net income per share would
be $0.05 for the fiscal year ended March 31, 1999. Basic and diluted
pro forma net loss per share would be ($0.01) and basic for the six
months ended September 30, 1999.
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