Non-GAAP net income, EBITDA and Adjusted EBITDA are used by management, analysts, investors and
other interested parties in evaluating our operating performance compared to that of other
companies in our industry, as the calculation of non-GAAP net income eliminates the effect of
stock-based compensation, amortization of intangible assets and goodwill impairment and EBITDA and
Adjusted EBITDA further eliminates the effect of financing, income taxes, the accounting effects of
capital spending, certain other merger related expenses and certain other expenses, which items may
vary from different companies for reasons unrelated to overall operating performance.
PFSweb believes these non-GAAP measures provide useful information to both management and investors
by excluding certain expenses that may not be indicative of its core operating results. These
measures should be considered in addition to results prepared in accordance with GAAP, but should
not be considered a substitute for, or superior to, GAAP results. These non-GAAP measures included
in this press release have been reconciled to the GAAP results in the attached tables.
Merchandise Sales
Merchandise sales represent the estimated value of all fulfillment activity that flows through
PFSweb including whether or not PFSweb is the seller of the merchandise or records the full amount
of such sales on its financial statements, excluding service fee revenues that PFSweb might
recognize for the underlying sales transactions. PFSweb uses merchandise sales as an operating
metric to allow investors to gain a more thorough understanding of its business and business
volume, in addition to GAAP net revenue.
About PFSweb, Inc.
PFSweb develops and deploys integrated business infrastructure solutions and fulfillment services
for Fortune 1000, Global 2000 and brand name companies, including third party logistics, call
center support and eCommerce services. The company serves a multitude of industries and company
types, including such clients as LEGO, Riverbed, Fathead, CHiA’SSO, MARS Drinks North America
(formerly FLAVIA® Beverage Systems), Hewlett-Packard, International Business Machines, Hawker
Beechcraft Corp. (formerly Raytheon Aircraft Company), Rene Furterer USA, Roots Canada Ltd. and
Xerox.
Through its wholly owned eCOST.com subsidiary, PFSweb also serves as a leading multi-category
online discount retailer of high-quality new, “close-out” and manufacturer recertified brand-name
products across a broad group of categories, including technology, consumer electronics, home and
sports and leisure. The eCOST.com brand markets approximately 170,000 different products from
leading manufacturers such as Sony, JVC, Canon, Hewlett-Packard, Denon, Onkyo, Garmin, Panasonic,
Toshiba and Microsoft primarily over the Internet and through direct marketing.
To find out more about PFSweb, Inc. (NASDAQ: PFSW), visit the company’s websites at
http://www.pfsweb.com and http://www.ecost.com.
The matters discussed herein consist of forward-looking information under the Private Securities
Litigation Reform Act of 1995 and is subject to and involves risks and uncertainties, which could
cause actual results to differ materially from the forward-looking information. PFSweb’s Annual
Report on Form 10-K for the year ended December 31, 2006 and Form 10-Q for the three and
nine-months ended September 30, 2007 identify certain factors that could cause actual results to
differ materially from those projected in any forward looking statements made and investors are
advised to review the Annual Report and Form 10-Q and the Risk Factors described therein. These
factors include: our ability to retain and expand relationships with existing clients and attract
and implement new clients; our reliance on the fees generated by the transaction volume or product
sales of our clients; our reliance on our clients’ projections or transaction volume or product
sales; our dependence upon our agreements with IBM; our dependence upon our agreements with our