PFSweb, Inc.			PFSW			Q4 2006 Earnings Call			Apr. 2, 2007
		Company 5			Ticker 5			Event Type 5			Date 5

show some stabilization in that business. The financial results for the fourth quarter really don’t still fairly represent the tremendous changes and progress that we made during ‘06. We believe the results in ‘07 for eCOST will be a much better guide as to the success of our turnaround program.

This program includes significant improvements to more accurately monitor inventory, conduct better customer service activities as reduced the occurrence of fraudulent charges, fraudulent credit card activity in the business. Shipping fees and transportation costs have been reduced, and as I mentioned earlier, overhead costs are down as well. I’ll get into a little bit more detail on some of the eCOST.com business segments later in the call, but we think ‘07 will be a much better year in terms of operating results for eCOST.

As you look at ‘06 financial results on the Service Fee segment side, and Mike will give you more details on this in a minute, there’s really nothing short of an exceptional year on our Service Fee business during 2006. Not only did we expand on a number of existing agreements with clients we also signed a number of new clients in 2006. Our scale within the Services segment continues to grow. During ‘06 we moved about $2.7 billion of merchandise over our infrastructure and technology platform. Our Services segments, PFS and Supplies Distributors combined also had what we believed to be outstanding financial performance during 2006 in the fourth quarter doing EBITDA of about 2.2 million on an adjusted basis, and for the year at about 12.2 million of EBITDA.

Our quality of performance overall remains high. Our financial foundation remains solid and our outlook for the future continues to be exciting. Clearly I’m very pleased with the overall progress and momentum within each of the business segments and I look forward to seeing improvements in our financial results through 2007. I want to take a moment to thank our entire team worldwide for their outstanding commitment and efforts during an important and strategic but also a challenging transition year for us at PFS. Let me now turn the call over to Mike for a couple of minutes, let him give you a few details on the Service Fee and Supplies Distributors segments of our business, or the Services segment and then I’ll be back to give you a little bit more detail on the eCOST business.

Michael Willoughby, Senior Partner – President of Priority Fulfillment Services

Thank you Mark. As I have done on previous calls I’m going to refer to the Supplies Distributors and the Service Fee business collectively as our Service Fee business segment, as Mark alluded to just a moment ago. I do this because they are essentially the same operational business models although they have a different financial model behind them. This quarter we continue to experience a solid year for new business growth within our Services Business segment. PFSweb’s Service Business segment is a recognized leader in the business process outsourcing market and our customers choose us because of our reputation as a specialized global services provider. We have a broad passage to handle their needs. Our solutions aim to improve the quality, productivity, and the reliability of the global supply chain, inventory management and distribution for each of our key partners. The key reason for our success is not just our know-how but also the scale of the business we operate.

As Mark mentioned earlier our platform handled over 2.7 billion in merchandise sales in 2006. By operating at this high level we’re able to offer our clients a wide range of resources that would be totally cost prohibitive for them to obtain and maintain on their own. I’d like to now touch on several exciting new agreements that we announced since our last conference call. This year we closed approximately 15 new contracts that are estimated to be valued at approximately $12 million in annual service fee revenue. This estimate is based on full implementation and current client projections. While we did recognize the benefit of certain of these contracts during calendar year 2006 other contracts are expected to become operational during the first several months of this year. We’re pleased with this level of new business that we’ve achieved as our list of clients grows with widely recognized reputable leading brands and companies including the following. First