MAY 14, 2012 / 03:00PM GMT, PFSW - Q1 2012 PFSweb, Inc. Earnings Conference Call
Operator
The Glenn Primack, PEAK6 Investments.
Glenn Primack - PEAK6
Investments LP - Analyst
My first question is on the world-class infrastructure that is already in place. If I look at the existing
market cap of like $50 million and, I don’t know, stock price of let’s call it roughly $4.00, and I see what Carter’s is investing in their warehousing capability, is that a decent number to go with in terms of trying to figure the
replacement value of your infrastructure, or is that pretty conservative?
Mark Layton - PFSweb, Inc. - Chairman,
CEO
I don’t have a lot of detailed information about specifically what Carter’s is doing, so I’d be hesitant in terms
of trying to make any comparison with that at all.
Glenn Primack - PEAK6 Investments LP - Analyst
I just looked within the press release that they had, and they were going to spend an additional $50 million on —
Mark Layton - PFSweb, Inc. - Chairman, CEO
Yes, I mean —
Glenn Primack - PEAK6 Investments LP - Analyst
I don’t know the exact components, to your point, but I’m just trying to gather if someone wants to try to re-create what
you already have in place with call center and DC capability and all the bells and whistles.
Mark Layton - PFSweb,
Inc. - Chairman, CEO
There’s no doubt the re-creation value is expensive. That’s one of the significant barriers to entry in
terms of our business model that there, is that we have the benefit of what’s now roughly almost 20 years of infrastructure investment, some of which is continuing the need to be polished and refurbed as we move forward with that. But the
replacement value and the cost to rebuild the business is definitely significant. I think Carter’s is a project you will look at. I don’t know that what they’re going to create is necessarily like what we have, but certainly —
and that includes their retail component, which is not a piece of business that we were doing for them in there, but it speaks to the significance of the investments necessary inside these distribution facilities for the technology to move the types
of volumes, and meet the consumers’ expectations of same-day, next-day type delivery aspects of it. These are large machines. They are expensive to engineer and install, but they’re necessary to move the volumes that are involved in these
types of businesses.
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