For the year ended December 31, 2007, Supplies Distributors revenue was $235.4 million, compared to $245.0 million during the prior year. Adjusted EBITDA was $6.6 million for the year ended December 31, 2007, as compared to $7.6 million in 2006.

Mr. Willoughby continued, “In the fourth quarter, Supplies Distributors’ revenue remained relatively constant compared to the prior year period. On a calendar year basis, the decline in revenue in 2007 from 2006 reflects a decline year-over-year due to reduced vendor promotional activity, the impact of foreign currency fluctuations and lower unit volumes as compared to the prior year.”

eCOST.com Business:

For the fourth quarter of 2007, eCOST.com revenue increased 35% to $28.5 million, compared to $21.1 million in the fourth quarter of 2006. Adjusted EBITDA for eCOST.com in the quarter was a loss of $0.3 million, a significant improvement as compared to a loss of $1.6 million in the same quarter of 2006, and a continued improvement as compared to a loss of $0.4 million in the third quarter of 2007, a loss of $0.6 million in the second quarter of 2007 and a loss of $0.9 million for the first quarter of 2007.

For the year ended December 31, 2007, eCOST.com revenues increased 18% to $104.1 million, compared to $88.3 million in 2006. Adjusted EBITDA for eCOST.com in 2007 was a loss of $2.2 million, compared to a loss of $9.7 million in 2006. The prior year results for eCOST.com reflect only 11 months of activity from the date of acquisition of February 1, 2006 through December 31, 2006.

Mr. Layton continued, “In the fourth quarter of 2007, eCOST.com increased revenue by 35% from the prior year period, and improved gross margins to 9%, compared to 8% in the third quarter of 2007. Specifically, the improving fundamentals in the eCOST.com business continue to be driven by a broader mix of products, improved pricing and freight controls and a greater number of Virtual Warehouse agreements.

“In the coming weeks we will begin to aggressively market an increased number of home, sports and leisure products on eCOST.com. This will bring the total number of SKU’s available at eCOST.com to 170,000. We plan to continue our emphasis on expanding into new product categories and increasing the total merchandise available on the site as we believe these actions have great potential to drive continued sales growth and gross margin expansion in 2008,” concluded Mr. Layton.

Significant operating events for fourth quarter of 2007 and 2008 year-to-date:

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Service Fee Business signed three new clients totaling $6 to $8 million in annualized service fee revenue, based on client projections once fully implemented.

	•		Urban Brands selected PFSweb to support its Marianne and Ashley Stewart Online Stores
	•		The Discovery Channel Store, Inc. signed a new agreement selecting PFSweb to provide a seamless solution in the U.S. that supports its catalog and eCommerce business
	•		PFSweb launched a new European eCommerce site for a major outdoor lifestyle brand. Under this agreement, PFSweb will provide a complete end-to-end solution, including ongoing site management, customer care services, fulfillment and on-line payment processing

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PFSweb implemented and launched a new eCommerce site for a large retail farm and ranch store chain in November 2007 for which it is providing technology, customer care and fulfillment services.