PFSweb, Inc. Company▲		PFSW Ticker▲		Q2 2007 Earnings Call Event Type▲		Aug. 14, 2007 Date▲

QUESTION AND ANSWER SECTION

Operator: [Operator Instructions] Your first question is coming from John Fitzgerald of Bishop, Rosen and Company. Please go ahead.

<Q>: Gentlemen, good morning and that is indeed an exceptionally quarter quarter. A little bigger overview-type of question, Mark. Where do you see you guys in a year? You’ve got a game plan going forward, we tend to look at these companies under a microscope, week to week, quarter to quarter. What is your bigger plan going out a year with the consolidated companies?

<A — Mark Layton>: Well, John, when we set this up we really did create leverage on top of the infrastructure that we’ve got. So I mean the key for us just to continue to grow and to drive profitability out of the growth. So I’m hopeful that we can continue to maintain the momentum in top line growth and in gross profit growth that will result in expanded earnings capability. So growth is the focus and specifically for eCOST as I’ve mentioned we want to continue to expand the number of products that we offer. Some of that expansion we’d like to see come from higher margin product categories that we’re not into today so it increases the overall gross margin of the business. On the services side Mike has got a very specific focus on three industry segments. Our marketing activities remain focused in those areas. Growth there is harder to predict, it always has been that’s one of the reasons that we made the decision to move direct into the product ourselves is that so we could balance some of the growth and I think it’s somewhat business as usual in terms of the services side. And continuing to focus on bringing in blue chip client names. So in summary growth in revenue and in gross profit to drive leverage into our bottom line performance.

<Q>: Okay. One other quick question here, Mark. On the existing gross margins you have presently how much more room is there to work on improving those, forgetting bringing any new higher profit margin people in — business in, but the margins you have presently how much more room is there to work on those on an improvement level?

<A — Mark Layton>: Well on the services side there’s always opportunities to improve cost efficiencies so that’s an ongoing thing. But there’s not a 10% improvement in that area. So you can see 100 to 200 basis points of fluctuation and improvement potential in the services side based on operational improvements, and to some degree mix of the products, the services that we provide in that area.

<Q>: Okay. One last question, the present credit situation and the credit markets et cetera, whatever you want to call it credit cards etcetera, is it having any effect, do you see foresee it having any effect on your underlining bsn?

<A — Thomas Madden>: No, not at this time. As I indicated our banking relationships remain strong. Most of our debt facilities are asset-based facilities that are secured by the underlying receivables and inventory assets so the banking partners are well-secured in those facilities. As we move forward the primary needs that we’ll have based on what we see today would be capital expenditure requirements. We’re been pretty successful in the past of being able to obtain equipment financing to help support those capital expenditure needs.

<Q>: Okay. So you have revisited your banking relationships and all of you guys are on the same page here and comfortable?

<A — Thomas Madden>: That’s correct.

<Q>: Okay. Thank you very much. That’s all I have, Mark. Thank you.

<A — Mark Layton>: Thanks, John.

| |
		www.CallStreet.com  •  646.442.0270  •  Copyright © 2001-2007 CallStreet		9