PFSW

[hyhl]

David, have you ever read the reviews of ecost on fatwallet?  Most of them are really BAD.  I think the company does not try hard to improve their customer service. I doubt whether this company can be a LONG term hold if this situation continues.


http://www.fatwallet.com/forums/retailerratings/displaystore.phpstart=0&storeid=180#comments

[pinoleropuro]

PFSW has so much potential that I'm willing to take the risk of seeing a 50% plus profit turn into a loss. In PFSW's case and at this point, plus or minus 50% don't mean much in the bigger scheme of things.

was this a prediction that it is going to fall 50% from its high? because its about 25% down from its last high.

[David Randolph]

David, have you ever read the reviews of ecost on fatwallet?  Most of them are really BAD.  I think the company does not try hard to improve their customer service. I doubt whether this company can be a LONG term hold if this situation continues.

http://www.fatwallet.com/forums/retailerratings/displaystore.phpstart=0&storeid=180#comments

PFSW's management has been on the job with eCost for just about a year, and eCost's past in terms of costumer service isn't good. I think they've been working towards improving costumer service. If everything was positive one couldn't buy the stock for $0.1 for each $1 of annual revenue.

PFSW has so much potential that I'm willing to take the risk of seeing a 50% plus profit turn into a loss. In PFSW's case and at this point, plus or minus 50% don't mean much in the bigger scheme of things.

was this a prediction that it is going to fall 50% from its high? because its about 25% down from its last high.

Hi Pinol, I'm disappointed with PFSW's behavior yesterday. The stock fell 6.6% breaking important technical levels. I'm even more disappointed because for several times I used PFSW as an example of a stock that shouldn't be traded, but held for the long term.

Time and PFSW's stock price proved me wrong, it would have been better to take a 50% profit than watch it erode to the current 13% profit.

From a fundamental standpoint there wasn't any new information out indicating that the fundamental turnaround that I am anticipating isn't indeed happening. PFSW's competitors (considering eCost's part of the business) have been doing very well, just consider SYX yesterday. SYX reached 2.6% net profit margin in Q3 2007. I expect PFSW to reach 3% in two and a half years.

Even though PFSW's chart looks bearish, I disregard this technical information, because it can change pretty quickly and fundamental trends (more solid and long term) are positive in my view.

Next Tuesday, when PFSW reports Q3 numbers, we'll know more. I expect a continuation of the revenue growth and profitability (albeit small) evidenced in Q2 2007.

I'll keep holding PFSW for the long term.

[visualjourney]

I believe we have a nice little spike in uniques and its only november

[hyhl]

I read reviews for the past months at fatwallet today. Frankly I am kind of disappointed.

It is not "just" about a year. It is "already" about a year.  I did not notice any improvement on customer service. Moreover, I kind of doubt their honesty according to the reviews. I feel that sometimes they are trying to CHEAT the customers. Well, I know it is normal and they will make some money in this way. But for LONG term growth, I have to think twice.

I recall that in the last CC, they claimed to find a way to attract returning customers. But I do not know how they are going to achieve that. To be honest, I won't make any purchase from ecost after reading all the reviews.

$6 may be realizable, but there is a long and bumpy way ahead.

BTW, I do not trust reviews from other websites, which are full of one-sentence reviews from anonymous identities.

Fatwallet provides more details and it is more popular.


Customer support rating: (out of 10)

ecost              1.6
bestbuy          2.4
tigerdirect       2.9
overstock       3.2
circuit city       4.2
amazon          6.9




PFSW's management has been on the job with eCost for just about a year, and eCost's past in terms of costumer service isn't good. I think they've been working towards improving costumer service. If everything was positive one couldn't buy the stock for $0.1 for each $1 of annual revenue.

[David Randolph]

Hi VisualJourney, can you explain the "spike in uniques" better? Thanks

hyhl, I understand and respect your bearish views on PFSW, specifically eCost. But you have to also consider the valuation of the company ... PFSW's market cap is just $56 M.

If you take the second company with the lowest average costumer rating in your list, which is Best Buy (BBY) with 2.4, it is a $18.8 B market cap company. How do you explain that with such low average costumer rating BBY is a giant in market valuation terms?

It seems to me that there's little correlation between costumer reviews and the market value of a company, even though that could be hard to imagine from a costumer standpoint.

PFSW doesn't have to be better than Amazon, TigerDirect or Best Buy ... there's a market for everybody. PFSW just needs to get better on its own, and it may very well rise five fold. I expect this to happen if one gives a couple of years time to this management.

Tomorrow after the close we'll know more about how the 3rd quarter went. I'll keep holding PFSW for the long term.

[hyhl]

Thanks a lot! David.

Do you have an estimation of the yearly earning of PFSW?  If we consider it in the business service sector, the average P/E is about 20; if we consider it in the consumer electronic retailer sector, the average P/E is about 16. When do you think PFSW will achieve a yearly earning of more than 10 cents? I think this is the minimum value to maintain the current bull trend.  Two years later?? It may go to 55 cents first.

You can check the institutional holding. No big institution inside this stock.  I guess at least a 5 cents quarterly earning is needed to attract big MMs. Otherwise it is only a momo play. Let me ask you this question: if the stock goes to $4 tomorrow after ER with 3 cents quarterly earning but rosy guidance, will you still keep holding it?

Anyway, I will keep holding PFSW until at least tomorrow.    Let's pray for a good ER. 

Hi VisualJourney, can you explain the "spike in uniques" better? Thanks

hyhl, I understand and respect your bearish views on PFSW, specifically eCost. But you have to also consider the valuation of the company ... PFSW's market cap is just $56 M.

If you take the second company with the lowest average costumer rating in your list, which is Best Buy (BBY) with 2.4, it is a $18.8 B market cap company. How do you explain that with such low average costumer rating BBY is a giant in market valuation terms?

It seems to me that there's little correlation between costumer reviews and the market value of a company, even though that could be hard to imagine from a costumer standpoint.

PFSW doesn't have to be better than Amazon, TigerDirect or Best Buy ... there's a market for everybody. PFSW just needs to get better on its own, and it may very well rise five fold. I expect this to happen if one gives a couple of years time to this management.

Tomorrow after the close we'll know more about how the 3rd quarter went. I'll keep holding PFSW for the long term.

[David Randolph]

Thanks a lot! David.

No, thank you hyhl, you're helping me investigating more about PFSW and its investment story.

Do you have an estimation of the yearly earning of PFSW?

Yes, I expect PFSW to earn $16.89 M, or $0.35 per share, in 2010.

If we consider it in the business service sector, the average P/E is about 20; if we consider it in the consumer electronic retailer sector, the average P/E is about 16.

You're right, when I initially bought PFSW the Business Services industry average P/E was about 27, but now it came off to about 20. I need to reflect these changes in my valuation model. I'll do that over the next update, after earnings which will be released today.

When do you think PFSW will achieve a yearly earning of more than 10 cents? I think this is the minimum value to maintain the current bull trend.

I believe that in 2008 PFSW will earn more than 10 cents per share. That would mean a 0.94% net profit margin which I believe is highly achievable right here in 2008.

You can check the institutional holding. No big institution inside this stock.

Cool, it means they'll still have to buy. The company is still too small to attract institutional investors.

I guess at least a 5 cents quarterly earning is needed to attract big MMs. Otherwise it is only a momo play.

Perhaps ... "momo play" or not, if the company turns profitable it will have an earnings multiple and that's going to be its value, whoever the buyers or holders of the stock are. What I mean is, I'm not concerned about who owns the shares, but how much will they be worth in the future.

Let me ask you this question: if the stock goes to $4 tomorrow after ER with 3 cents quarterly earning but rosy guidance, will you still keep holding it?

After making my valuation model revision (slicing the earnings multiple estimate from 27 to 18) I would most likely take the profit. That would be great

Anyway, I will keep holding PFSW until at least tomorrow.   Let's pray for a good ER.

I thought you didn't own the stock. Triple applaud for your contribution to this thread hyhl.

Earnings will be out today ... I won't pray, just expecting a continuation of the positive trend started in Q2 2007.

[soxguy]

         

Press Release Source: PFSweb, Inc.


PFSweb Reports Second Consecutive Quarter of Net Income and $3.2M in Adjusted EBITDA
Tuesday November 13, 4:06 pm ET 
Service Fee Business Increases Revenue 18% in the Third Quarter; Announces Several New Client Agreements
eCOST.com Financial Performance Continues To Improve


PLANO, Texas--(BUSINESS WIRE)--PFSweb, Inc. (Nasdaq: PFSW - News), a global provider of business process outsourcing ("BPO") solutions for both online and traditional commerce, today announced its financial results for the third quarter and nine months ended September 30, 2007.
Summary of consolidated results for the third quarter ended September 30, 2007:

-- Total reported revenue was $112.0 million, compared to $94.3 million for the third quarter of 2006; 
   
-- eCOST.com revenue increased 62% to $27.0 million, compared to $16.7 million for the same period last year; 
   
-- Adjusted EBITDA (as defined) was $3.2 million versus $5,000 for the same period last year; 
   
-- Net income was $162,000 or $0.00 per basic and diluted share, compared to a net loss of $3.3 million, or $0.07 per basic and diluted share, for the third quarter of 2006; 
   
-- Merchandise sales (as defined) totaled approximately $751 million for the third quarter of 2007 versus approximately $720 million for the same period last year; 
   
-- Total cash, cash equivalents and restricted cash equaled $16.8 million as of September 30, 2007. 


Mark Layton, Chairman and Chief Executive Officer of PFSweb, stated, "This is the second consecutive quarter of consolidated profit since completing eCOST.com's integration. In addition, Adjusted EBITDA increased to $3.2M from just $5,000 in the third quarter of 2006. These results represent steady growth in our Services Business and a more efficient, improved eCOST.com. Going into the peak holiday shopping season, which we expect will be eCOST.com's strongest quarter moving forward, we are confident in our ability to deliver another strong financial performance and currently expect to be toward the high end of our consolidated Adjusted EBITDA guidance for 2007 of $8 to $10 million."

Summary of consolidated results for the nine months ended September 30, 2007:


Total reported revenue was $324.8 million, compared to $314.3 million for the nine months ended September 30, 2006;
Adjusted EBITDA (as defined) was $7.3 million versus $1.6 million for the same period last year;
Net loss was $2.0 million, or $0.04 per basic and diluted share, compared to a net loss of $8.1 million, or $0.19 per basic and diluted share, for the nine months ended September 30, 2006;
Merchandise sales (as defined) totaled nearly $2.1 billion versus $1.9 billion for the same period last year.
Please note that the prior year's nine months consolidated results only include the financial results for eCOST.com from the date the merger closed on February 1, 2006 through September 30, 2006.

Summary of results by business:

Service Fee Business:

For the third quarter of 2007, Service Fee revenue increased 18% to $18.4 million, compared with $15.6 million for the same period in 2006. The Service Fee business reported Adjusted EBITDA of $2.0 million for the third quarter of 2007, compared to $0.1 million for the same period last year.

For the nine months ended September 30, 2007, Service Fee revenue increased 11% to $53.0 million, from $47.7 million for the same period in 2006. The Service Fee business reported Adjusted EBITDA of $4.3 million for the nine months ended September 30, 2007, compared to $3.4 million for the same period last year.

The increases in Service Fee revenue and Adjusted EBITDA are primarily attributable to activity from new clients that were added late in 2006, increased project activity in the current year and the favorable impact of exchange rates. In addition, the Service Fee revenue for the third quarter of 2007 benefited from a shift in timing of transaction volumes from a large client into this quarter as opposed to earlier in the year.

Mike Willoughby, President of PFSweb's Services Division commented, "During the quarter, the Service Fee Business excelled, generating nearly 20% revenue growth (excluding pass-through activity). We are also pleased to announce several new client agreements were signed in the recent months. We believe this new business is driven by our ability to provide clients with global scale, world-class infrastructure and custom solutions. We continue to be excited by the potential for further new contracts as our new business pipeline remains robust at approximately $40 million, which includes over $12 million in proposals added in the third quarter."

Supplies Distributors Business:

For the third quarter of 2007, Supplies Distributors revenue was $58.3 million, compared to $55.9 million for the same period last year. Adjusted EBITDA was $1.6 million for the third quarter of 2007, compared to $3.1 million for the same period last year. The decline in Adjusted EBITDA is primarily attributable to certain incremental inventory cost reductions that occurred in the 2006 period.

For the nine months ended September 30, 2007, Supplies Distributors revenue was $174.7 million, compared to $185.2 million for the same period last year. Adjusted EBITDA was $5.0 million for the nine months ended September 30, 2007, as compared to $6.4 million for the same period last year.

Mr. Willoughby continued, "During the third quarter, results for the Supplies Distributors Business were within our expectations, with revenue of $58.3 million, a 4.3% increase over prior year, and gross margin of 6.9%. Revenue for the 2007 nine month period 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 third quarter of 2007, eCOST.com revenue increased 62% to $27.0 million, compared to $16.7 million in the third quarter of 2006. Prior year revenue was negatively impacted by service and product merchandising issues incurred in conjunction with the 2006 integration activities of eCOST.com into the Company's operations. On a sequential basis, eCOST.com's quarterly revenue remained steady compared to $27.1 million in the second quarter of 2007 and improved significantly compared to $21.6 million in the first quarter of 2007. Adjusted EBITDA for eCOST.com in the quarter was a loss of $0.4 million, a significant improvement as compared to a loss of $3.2 million in the same quarter of 2006, 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 nine months ended September 30, 2007, eCOST.com revenues increased nearly 13% to $75.7 million, compared to $67.2 million for the same period in 2006. Adjusted EBITDA for eCOST.com in the nine months ended September 30, 2007 was a loss of $1.9 million, compared to a loss of $8.1 million for the same period last year. The prior year nine month period results for eCOST.com reflect only eight months of activity from the date of acquisition of February 1, 2006 through September 30, 2006.

Mr. Layton continued, "We are pleased with eCOST.com's performance now that we have improved and streamlined its operations. These advancements have led to significant improvements in gross margins and Adjusted EBITDA results for the quarter and nine-month results. Revenues for the business were up about 12.5% for the nine months ended September 30, 2007 from the prior year period and gross profit margins increased to 8.4%. The improved gross margins are due to broader product mix, improved pricing controls, freight initiatives, reduced credit card chargeback activity and an increased number of Virtual Warehouse agreements," concluded Mr. Layton.

Significant operating events for third quarter of 2007:

-- Service Fee Business added four new partners totaling $3 to $4 million in annualized service fee revenue, based on client projections once fully implemented. 
   
-- A large specialty retailer signed a two year agreement for PFSweb to provide a seamless customer service solution in the U.S. that supports its direct to consumer business unit. 
   
-- Microlife AG Europe and the Blood Pressure Association (BPA) in the United Kingdom signed a two-year agreement with PFSweb for website design, configuration and hosting, order fulfillment, distribution, warehousing and financial management support for their e-commerce partnership in the U.K. 
   
-- L'Oreal, the world's largest beauty company, selected PFSweb to provide an end-to-end fulfillment and customer service solution for its Diesel brand perfume "Fuel for Life" line. PFSweb will provide a full service solution for L'Oreal's online store, www.diesel-parfums.com/factory, including web hosting support, warehousing, order processing, fulfillment & distribution, kitting and assembly, returns and multi-lingual call center support from its European facility in Liege-Belgium. 
   
-- Proximus, the largest mobile telecommunications operator in Belgium, selected PFSweb to provide a full service solution for their on-line store, http://www.e-proximus.be/, including web design and hosting, warehousing, order processing, fulfillment & distribution, returns and multi-lingual call center support. 
   
-- PFSweb was named to Deloitte & Touche's 'Fast 500' and 'Texas Technology Fast 50' as one of the fastest growing companies in the U.S. and Texas over the past five years 
   
-- PFSweb named a 'Top 100 Great Supply Chain Partner' by Global Logistics and Supply Chain Strategies Magazine 
   
-- eCOST.com launched enhanced catalogue search capability powered by Visual Sciences in time for the Holiday season. 
   
-- eCOST.com added 2 new Virtual Warehouses in the third quarter of 2007, bringing the total number of Virtual Warehouses to 14. Virtual Warehouses enable eCOST.com to market more new products, expand product categories and are targeted to generate higher margins on sales. 


Financial Guidance for Fiscal Year 2007

PFSweb continues to target total consolidated revenues, excluding pass-through revenues, of approximately $420 million to $435 million and consolidated Adjusted EBITDA of $8 – $10 million for 2007. Capital expenditures for 2007 are estimated to be approximately $6 - $7 million, including amounts financed under capital leases. Achieving these targets will depend upon, among other things, achieving and maintaining the currently expected significant improvement in operations from eCOST.com and continued strong performance from our Service Fee and Supplies Distributors businesses on a year-over-year basis.

Conference Call Information

Management will host a conference call at 4:00 p.m. Central Time (5:00 p.m. Eastern Time) on November 13, 2007 to discuss the latest corporate developments and results. To listen to the call, please dial (888) 694-4728 and enter the pin number (9363780) at least five minutes before the scheduled start time. Investors can also access the call in a "listen only" mode via the Internet at the company's website, www.pfsweb.com. Please allow extra time prior to the call to visit the site and download any necessary audio software.

A digital replay of the conference call will be available through December 13, 2007 at (877) 519-4471, pin number (9363780). The replay also will be available at the company's web site for a limited time.

Non-GAAP Financial Measures

This news release contains the non-GAAP measures Earnings Before Interest, Income Taxes, Depreciation and Amortization ("EBITDA") and Adjusted EBITDA.

EBITDA represents earnings (or losses) before interest, income taxes, depreciation, and amortization. Adjusted EBITDA further eliminates the effect of stock-based compensation, merger integration related expenses and a loss on a sales transaction to a former eCOST.com customer. 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 EBITDA and Adjusted EBITDA eliminates the effect of financing, income taxes, the accounting effects of capital spending, stock-based compensation, merger related expenses and certain other expenses, which items may vary from different companies for reasons unrelated to overall operating performance.

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 e-commerce 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 technology and consumer electronics for consumers and small to medium size business buyers. The eCOST.com brand markets approximately 110,000 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 - News), 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 identifies 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 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 major clients; our client mix, their business volumes and the seasonality of their business; our ability to finalize pending contracts; the impact of strategic alliances and acquisitions; trends in the e-commerce, outsourcing, government regulation both foreign and domestic and the market for our services; whether we can continue and manage growth; increased competition; our ability to generate more revenue and achieve sustainable profitability; effects of changes in profit margins; the customer and supplier concentration of our business; the unknown effects of possible system failures and rapid changes in technology; foreign currency risks and other risks of operating in foreign countries; potential litigation; potential delisting; our dependency on key personnel; the impact of new accounting standards and changes in existing accounting rules or the interpretations of those rules; our ability to raise additional capital or obtain additional financing; our ability and the ability of our subsidiaries to borrow under current financing arrangements and maintain compliance with debt covenants; relationship with and our guarantees of certain of the liabilities and indebtedness of our subsidiaries; whether outstanding warrants issued in a prior private placement will be exercised in the future; our ability to successfully the anticipated benefits of the merger: eCOST's potential indemnification obligations to its former parent; eCOST's ability to maintain existing and build new relationships with manufacturers and vendors and the success of its advertising and marketing efforts; eCOST's ability to increase its sales revenue and sales margin and improve operating efficiencies and eCOST's ability to generate a profit and cash flows sufficient to cover the values of its intangible assets. PFSweb undertakes no obligation to update publicly any forward-looking statement for any reason, even if new information becomes available or other events occur in the future. There may be additional risks that we do not currently view as material or that are not presently known.

PFSweb, Inc. and Subsidiaries 
Unaudited Condensed Consolidated Statements of Operations (A) 
(In Thousands, Except Per Share Data) 
   
    Three Months Ended
    Nine Months Ended 
  September 30,   September 30, 
  2007     2006   2007     2006 
REVENUES:         
Product revenue, net   $  85,263   $  72,593    $  250,398    $  252,447   
Service fee revenue    18,398    15,553     53,006     47,681   
Pass-thru revenue      8,334      6,138         21,398         14,128     
Total revenues      111,995      94,284         324,802         314,256     
           
COSTS OF REVENUES:         
Cost of product revenue    78,874    66,889     231,443     235,698   
Cost of service fee revenue    12,912    11,768     38,211     34,513   
Cost of pass-thru revenue      8,334      6,138         21,398         14,128     
Total costs of revenues      100,120      84,795         291,052         284,339     
Gross profit      11,875      9,489         33,750         29,917     
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES    10,678    11,330     32,493     34,238   
MERGER INTEGRATION EXPENSE    -    486     150     1,129   
AMORTIZATION OF IDENTIFIABLE INTANGIBLES      204      204         612         545     
Total operating expenses      10,882      12,020         33,255         35,912     
Income (loss) from operations    993    (2,531  )    495     (5,995  ) 
INTEREST EXPENSE, NET      615      557         1,857         1,505     
Income (loss) before income taxes    378    (3,088  )    (1,362  )    (7,500  ) 
INCOME TAX PROVISION      216      221         683         580     
NET INCOME (LOSS)   $  162   $  (3,309  )   $  (2,045  )   $  (8,080  ) 
           
NET INCOME (LOSS) PER SHARE:         
Basic   $  0.00   $  (0.07  )   $  (0.04  )   $  (0.19  ) 
Diluted   $  0.00   $  (0.07  )   $  (0.04  )   $  (0.19  ) 
           
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING:       
Basic      46,479      46,499         46,477         41,557     
Diluted      47,533      46,499         46,477         41,557     
           
EBITDA (B)   $  3,014   $  (687  )   $  6,603      $  (562  ) 
Adjusted EBITDA (B)   $  3,186   $  5      $  7,323      $  1,642     
           
(A) The financial data above should be read in conjunction with the audited consolidated financial statements of PFSweb, Inc. included in its Form 10-K for the year ended December 31, 2006.

 

(B) A reconciliation of net income (loss) to EBITDA and Adjusted EBITDA follows: 
   
  Three Months Ended
  Nine Months Ended 
  September 30,   September 30, 
  2007   2006   2007   2006 
Net income (loss)   $  162   $  (3,309  )   $  (2,045  )   $  (8,080  ) 
Income tax expense    216    221     683     580   
Interest expense    615    557     1,857     1,505   
Depreciation and amortization      2,021      1,844         6,108         5,433     
EBITDA   $  3,014   $  (687  )   $  6,603    $  (562  ) 
Stock-based compensation    172    206     570     686   
Merger integration related expenses    -    486     150     1,129   
Loss on sales transaction to former eCOST customer      -      -         -         389     
Adjusted EBITDA   $  3,186   $  5      $  7,323      $  1,642     
PFSweb, Inc. and Subsidiaries 
Unaudited Condensed Consolidated Balance Sheets 
(In Thousands, Except Share Data) 
   
    September 30,     December 31, 
  2007   2006 
ASSETS     
CURRENT ASSETS:     
Cash and cash equivalents   $  14,172    $  15,066   
Restricted cash    2,611     2,653   
Accounts receivable, net of allowance for doubtful accounts of $1,498 and $2,352 at September 30, 2007 and December 31, 2006, respectively     
  48,138     49,186   
Inventories, net of reserves of $2,086 and $2,987 at September 30, 2007 and December 31, 2006, respectively     
  44,574     47,670   
Other receivables    9,517     10,774   
Prepaid expenses and other current assets      3,209         3,531     
Total current assets      122,221         128,880     
       
PROPERTY AND EQUIPMENT, net    12,325     12,884   
IDENTIFIABLE INTANGIBLES    6,025     6,647   
GOODWILL    15,362     15,362   
OTHER ASSETS      794         848     
Total assets      156,727         164,621     
       
LIABILITIES AND SHAREHOLDERS EQUITY     
CURRENT LIABILITIES:     
Current portion of long-term debt and capital lease obligations   $  27,484    $  23,802   
Trade accounts payable    56,431     62,441   
Accrued expenses      20,329         21,485     
Total current liabilities      104,244         107,728     
       
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS, less current portion    3,194     6,076   
OTHER LIABILITIES      1,659         1,977     
Total liabilities      109,097         115,781     
       
       
COMMITMENTS AND CONTINGENCIES     
       
SHAREHOLDERS' EQUITY:     
Preferred stock, $1.00 par value; 1,000,000 shares authorized; none issued and outstanding     
  -     -   
Common stock, $.001 par value; 75,000,000 shares authorized; 46,563,008 and 46,553,752 shares issued at June 30, 2007 and December 31, 2006, respectively; and 46,476,708 and 46,467,452 outstanding as of June 30, 2007 and December 31, 2006, respectively
     
     
     
  47     47   
Additional paid-in capital    91,885     91,302   
Accumulated deficit    (46,399  )    (44,354  ) 
Accumulated other comprehensive income    2,182     1,930   
Treasury stock at cost, 86,300 shares      (85  )      (85  ) 
Total shareholders' equity      47,630         48,840     
Total liabilities and shareholders' equity   $  156,727      $  164,621     
PFSweb, Inc. and Subsidiaries 
Unaudited Consolidating Statements of Operations 
For the Three Months Ended September 30, 2007 
(In Thousands) 
                 
   Supplies       
PFSweb   Distributors   eCOST   Eliminations   Consolidated 
REVENUES:           
Product revenue, net  $  -    $  58,313   $  26,950    $  -    $  85,263 
Service fee revenue   18,398     -    -     -     18,398 
Service fee revenue - affiliate   2,001     -    -     (2,001  )    - 
Pass-thru revenue     8,415         -      -         (81  )      8,334 
Total revenues     28,814         58,313      26,950         (2,082  )      111,995 
           
COSTS OF REVENUES:           
Cost of product revenue   -     54,295    24,581     (2  )    78,874 
Cost of service fee revenue   13,585     -    -     (673  )    12,912 
Cost of pass-thru revenue     8,415         -      -         (81  )      8,334 
Total costs of revenues
    22,000         54,295      24,581         (756  )      100,120 
Gross profit     6,814         4,018      2,369         (1,326  )      11,875 
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES
  6,699     2,448    2,857     (1,326  )    10,678 
AMORTIZATION OF IDENTIFIABLE INTANGIBLES     -         -      204         -         204 
Total operating expenses     6,699         2,448      3,061         (1,326  )      10,882 
Income (loss) from operations   115     1,570    (692  )    -     993 
INTEREST EXPENSE (INCOME), NET     48         582      (15  )      -         615 
Income (loss) before income taxes   67     988    (677  )    -     378 
INCOME TAX PROVISION (BENEFIT)     (142  )      358      -         -         216 
NET INCOME (LOSS)  $  209      $  630   $  (677  )   $  -      $  162 
           
EBITDA  $  1,875      $  1,576   $  (437  )   $  -      $  3,014 
Adjusted EBITDA  $  2,047      $  1,576   $  (437  )   $  -      $  3,186 
           
           
A reconciliation of net income (loss) to EBITDA and Adjusted EBITDA follows:     
           
Net income (loss)  $  209    $  630   $  (677  )   $  -    $  162 
Income tax expense (benefit)   (142  )    358    -     -     216 
Interest expense (income)   48     582    (15  )    -     615 
Depreciation and amortization     1,760         6      255         -         2,021 
EBITDA  $  1,875    $  1,576   $  (437  )   $  -    $  3,014 
Stock-based compensation     172         -      -         -         172 
Adjusted
EBITDA
$  2,047      $  1,576   $  (437  )   $  -      $  3,186 
PFSweb, Inc. and Subsidiaries 
Unaudited Consolidating Statements of Operations 
For the Nine Months Ended September 30, 2007 
(In Thousands) 
   
     Supplies             
PFSweb   Distributors   eCOST   Eliminations   Consolidated 
REVENUES:           
Product revenue, net  $  -    $  174,718   $  75,680    $  -    $  250,398   
Service fee revenue   53,006     -    -     -     53,006   
Service fee revenue - affiliate   6,067     -    -     (6,067  )    -   
Pass-thru revenue     21,656         -      -         (258  )      21,398     
Total revenues     80,729         174,718      75,680         (6,325  )      324,802     
           
COSTS OF REVENUES:           
Cost of product revenue   -     162,146    69,303     (6  )    231,443   
Cost of service fee revenue   40,184     -    -     (1,973  )    38,211   
Cost of pass-thru revenue     21,656         -      -         (258  )      21,398     
Total costs of revenues     61,840         162,146      69,303         (2,237  )      291,052     
Gross profit     18,889         12,572      6,377         (4,088  )      33,750     
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES
  20,547     7,574    8,460     (4,088  )    32,493   
MERGER INTEGRATION EXPENSE   -     -    150     -     150   
AMORTIZATION OF IDENTIFIABLE INTANGIBLES     -         -      612         -         612     
Total operating expenses     20,547         7,574      9,222         (4,088  )      33,255     
Income (loss) from operations   (1,658  )    4,998    (2,845  )    -     495   
INTEREST EXPENSE (INCOME), NET     96         1,807      (46  )      -         1,857     
Income (loss) before income taxes   (1,754  )    3,191    (2,799  )    -     (1,362  ) 
INCOME TAX PROVISION (BENEFIT)     (471  )      1,154      -         -         683     
NET INCOME (LOSS)  $  (1,283  )   $  2,037   $  (2,799  )   $  -      $  (2,045  ) 
           
EBITDA  $  3,684      $  5,013   $  (2,094  )   $  -      $  6,603     
Adjusted EBITDA  $  4,254      $  5,013   $  (1,944  )   $  -      $  7,323     
           
           
A reconciliation of net income (loss) to EBITDA and Adjusted EBITDA follows:     
           
Net income (loss)  $  (1,283  )   $  2,037   $  (2,799  )   $  -    $  (2,045  ) 
Income tax expense (benefit)   (471  )    1,154    -     -     683   
Interest expense (income)   96     1,807    (46  )    -     1,857   
Depreciation and amortization     5,342         15      751         -         6,108     
EBITDA  $  3,684    $  5,013   $  (2,094  )   $  -    $  6,603   
Stock-based compensation   570     -    -     -     570   
Merger integration expense     -         -      150         -         150     
Adjusted EBITDA  $  4,254      $  5,013   $  (1,944  )   $  -      $  7,323     
PFSweb, Inc. and Subsidiaries 
Unaudited Condensed Consolidating Balance Sheets 
as of September 30, 2007 
(In Thousands) 
   
     Supplies             Consoli-

PFSweb   Distributors   eCOST   Eliminations   dated

ASSETS           
CURRENT ASSETS:           
Cash and cash equivalents  $  11,132    $  1,800   $  1,240    $  -    $  14,172   
Restricted cash   50     1,746    815     -     2,611   
Accounts receivable, net   18,459     26,746    4,037     (1,104  )    48,138   
Inventories, net   -     38,226    6,348     -     44,574   
Other receivables   173     9,344    -     -     9,517   
Prepaid expenses and other current assets     1,852         1,308      49         -         3,209     
Total current assets     31,666         79,170      12,489         (1,104  )      122,221     
           
PROPERTY AND EQUIPMENT, net   11,956     35    334     -     12,325   
NOTES RECEIVABLE FROM AFFILIATES   18,145     -    -     (18,145  )    -   
INVESTMENT IN AFFILIATES   38,104     -    -     (38,104  )    -   
IDENTIFIABLE INTANGIBLES   -     -    6,025     -     6,025   
GOODWILL   -     -    15,362     -     15,362   
OTHER ASSETS     655         -      139         -         794     
Total assets     100,526         79,205      34,349         (57,353  )      156,727     
           
LIABILITIES AND SHAREHOLDERS EQUITY           
CURRENT LIABILITIES:           
Current portion of long-term debt and capital lease obligations  $  13,287    $  14,197   $  -    $  -    $  27,484   
Trade accounts payable   6,388     41,999    9,148     (1,104  )    56,431   
Accrued expenses     9,806         6,924      3,599         -         20,329     
Total current liabilities     29,481         63,120      12,747         (1,104  )      104,244     
           
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS, less current portion   3,194     -    -     -     3,194   
NOTES PAYABLE TO AFFILIATES   -     6,005    12,140     (18,145  )    -   
OTHER LIABILITIES     1,320         -      339         -         1,659     
Total liabilities     33,995         69,125      25,226         (19,249  )      109,097     
           
COMMITMENTS AND CONTINGENCIES           
           
SHAREHOLDERS' EQUITY:           
Common stock   47     -    19     (19  )    47   
Capital contributions   -     1,000    -     (1,000  )    -   
Additional paid-in capital   91,885     -    28,059     (28,059  )    91,885   
Retained earnings (accumulated deficit)   (27,498  )    6,295    (18,955  )    (6,241  )    (46,399  ) 
Accumulated other comprehensive income   2,182     2,785    -     (2,785  )    2,182   
Treasury stock     (85  )      -      -         -         (85  ) 
Total shareholders' equity     66,531         10,080      9,123         (38,104  )      47,630     
Total liabilities and shareholders' equity  $  100,526      $  79,205   $  34,349      $  (57,353  )   $  156,727     
PFSweb, Inc. and Subsidiaries 
Unaudited Consolidating Statements of Operations 
For the Three Months Ended September 30, 2006 
(In Thousands) 
                 
   Supplies       Consoli-

PFSweb   Distributors   eCOST   Eliminations   dated

REVENUES:           
Product revenue, net  $  -    $  55,917   $  16,676    $  -    $  72,593   
Service fee revenue   15,553     -    -     -     15,553   
Service fee revenue - affiliate   1,913     -    -     (1,913  )    -   
Pass-thru revenue     6,254         -      -         (116  )      6,138     
Total revenues     23,720         55,917      16,676         (2,029  )      94,284     
           
COSTS OF REVENUES:           
Cost of product revenue   -     50,539    16,360     (10  )    66,889   
Cost of service fee revenue   12,408     -    -     (640  )    11,768   
Cost of pass-thru revenue     6,254         -      -         (116  )      6,138     
Total costs of revenues     18,662         50,539      16,360         (766  )      84,795     
Gross profit     5,058         5,378      316         (1,263  )      9,489     
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES   6,715     2,318    3,560     (1,263  )    11,330   
MERGER INTEGRATION EXPENSE   -     -    486     -     486   
AMORTIZATION OF IDENTIFIABLE INTANGIBLES     -         -      204         -         204     
Total operating expenses     6,715         2,318      4,250         (1,263  )      12,020     
Income (loss) from operations   (1,657  )    3,060    (3,934  )    -     (2,531  ) 
INTEREST EXPENSE (INCOME), NET     (33  )      600      (10  )      -         557     
Income (loss) before income taxes   (1,624  )    2,460    (3,924  )    -     (3,088  ) 
INCOME TAX PROVISION (BENEFIT)     (711  )      932      -         -         221     
NET INCOME (LOSS)  $  (913  )   $  1,528   $  (3,924  )   $  -      $  (3,309  ) 
           
EBITDA  $  (102  )   $  3,064   $  (3,649  )   $  -      $  (687  ) 
Adjusted EBITDA  $  104      $  3,064   $  (3,163  )   $  -      $  5     
           
           
A reconciliation of net income (loss) to EBITDA and Adjusted EBITDA follows:     
           
Net income (loss)  $  (913  )   $  1,528   $  (3,924  )   $  -    $  (3,309  ) 
Income tax expense (benefit)   (711  )    932    -     -     221   
Interest expense (income)   (33  )    600    (10  )    -     557   
Depreciation and amortization     1,555         4      285         -         1,844     
EBITDA  $  (102  )   $  3,064   $  (3,649  )   $  -    $  (687  ) 
Stock-based compensation   206     -    -     -     206   
Merger integration expense     -         -      486         -         486     
Adjusted EBITDA  $  104      $  3,064   $  (3,163  )   $  -      $  5     
PFSweb, Inc. and Subsidiaries 
Unaudited Consolidating Statements of Operations 
For the Nine Months Ended September 30, 2006 
(In Thousands) 
                     
    Supplies       Consoli-

  PFSweb   Distributors   eCOST   Eliminations   dated

REVENUES:           
Product revenue, net   $  -    $  185,199   $  67,248    $  -    $  252,447   
Service fee revenue    47,681     -    -     -     47,681   
Service fee revenue - affiliate    6,415     -    -     (6,415  )    -   
Pass-thru revenue      14,471         -      -         (343  )      14,128     
Total revenues      68,567         185,199      67,248         (6,758  )      314,256     
             
COSTS OF REVENUES:           
Cost of product revenue    -     171,269    64,481     (52  )    235,698   
Cost of service fee revenue    36,479     -    -     (1,966  )    34,513   
Cost of pass-thru revenue      14,471         -      -         (343  )      14,128     
Total costs of revenues      50,950         171,269      64,481         (2,361  )      284,339     
Gross profit      17,617         13,930      2,767         (4,397  )      29,917     
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES    19,583     7,566    11,486     (4,397  )    34,238   
MERGER INTEGRATION EXPENSE    -     -    1,129     -     1,129   
AMORTIZATION OF IDENTIFIABLE INTANGIBLES      -         -      545         -         545     
Total operating expenses      19,583         7,566      13,160         (4,397  )      35,912     
Income (loss) from operations    (1,966  )    6,364    (10,393  )    -     (5,995  ) 
INTEREST EXPENSE (INCOME), NET      (98  )      1,592      11         -         1,505     
Income (loss) before income taxes    (1,868  )    4,772    (10,404  )    -     (7,500  ) 
INCOME TAX PROVISION (BENEFIT)      (1,211  )      1,791      -         -         580     
NET INCOME (LOSS)   $  (657  )   $  2,981   $  (10,404  )   $  -      $  (8,080  ) 
             
EBITDA   $  2,695      $  6,371   $  (9,628  )   $  -      $  (562  ) 
Adjusted EBITDA   $  3,381      $  6,371   $  (8,110  )   $  -      $  1,642     
             
             
A reconciliation of net income (loss) to EBITDA and Adjusted EBITDA follows:     
             
Net income (loss)   $  (657  )   $  2,981   $  (10,404  )   $  -    $  (8,080  ) 
Income tax expense (benefit)    (1,211  )    1,791    -     -     580   
Interest expense (income)    (98  )    1,592    11     -     1,505   
Depreciation and amortization      4,661         7      765         -         5,433     
EBITDA   $  2,695    $  6,371   $  (9,628  )   $  -    $  (562  ) 
Stock-based compensation    686     -    -     -     686   
Merger integration expense    -     -    1,129     -     1,129   
Loss on sales transaction to former eCOST customer
                      389
                  389
   
Adjusted EBITDA
  $  3,381      $  6,371   $  (8,110  )   $  -      $  1,642     
eCOST.com, Inc. 
Selected Operating Data 
         
   Three Months Ended 
   September 30, 
   2007   2006 
       
  Total Customers (1)   1,720,259    1,615,730 
       
  Active Customers (2)   162,583    326,530 
       
  New Customers (3)   21,462    34,124 
       
  Number of Orders (4)   64,975    51,922 
       
  Average Order Value (5)  $  405   $  361 
       
  Advertising Expense (6)  $  219,800   $  436,000 
       
  Cost to Acquire a New Customer (7)  $  7.08   $  12.78 
       
       
(1)
  Total customers have been calculated as the cumulative number of customers for which orders have been taken from eCOST.com's inception to the end of the reported period.

       
       
(2)
  Active customers consist of the approximate number of customers who placed orders during the 12 months prior to the end of the reported period.

       
       
(3)
  New Customers represent the number of persons that established a new account and placed an order during the reported period.

       
       
(4)
  Number of orders represents the total number of orders shipped during the reported period (not reflecting returns).

       
       
(5)
  Average order value has been calculated as gross sales divided by the total number of orders during the period presented. The impact of returns is not reflected in average order value.

       
       
(6)
  Advertising expense includes the total dollars spent on advertising during the reported period, including internet, direct mail, print and e-mail advertising, as well as customer list enhancement services.

       
       
       
(7)
  Catalog expense ($67,811) was not included in the 2007 calculation as it is used for retention and not acquisition. Previously, certain customer retention costs as reported were included in the cost to acquire new customers.





Contact:
PFSweb, Inc.
Mark C. Layton, 972-881-2900
Senior Partner and Chief Executive Officer
or
Thomas J. Madden, 972-881-2900
Senior Partner and Chief Financial Officer
or
Investor Relations:
KCSA Worldwide
Todd Fromer / Garth Russell
212-896-1215 / 212-896-1250
[email protected] / [email protected]

--------------------------------------------------------------------------------
Source: PFSweb, Inc.

[terainvestment]

AH price up 9%.
market seems appreciating these numbers.

[la-onda]

I like this part:
PFSW: Adds 3 New Contracts Worth $6M-$8M Total for BPO Solutions
Tuesday , November 13, 2007 17:15ET

By Michael Cavallaro, [email protected]

PFSweb, Inc. (NASDAQ: PFSW) announced the addition of three new service fee clients worth approximately $6-8M over the various terms of the agreements, based on current client projections. Neither PFSweb nor the clients disclosed the value of any of the individual contracts. Stated Mike Willoughby, President of PFSweb's services division, "These agreements represent continued traction for our world-class BPO solutions in North America and Europe. We continue to be excited by the potential for further new contracts as our pipeline remains robust at approximately $40M, which includes over $12M in proposals added in the third quarter.

[hyhl]

I thought you didn't own the stock. Triple applaud for your contribution to this thread hyhl.

That is my style. After I buy some shares of a stock, I will try to dig out all bad aspects of the company. I sit tight, but I prepare for the worst.

[hyhl]

From Yahoo msg board:

one thing I found very encouraging is the continued drop in customer acquisition cost for ecost. It was now at $7.08 per customer at Q3 vs. $9.76 at Q2. They are being very selective about their customers and this showed in the improved EBITDA.


I like it very much!

[hyhl]

The alleged retailer: tractor supply company.


New (PFSW provided?) site:
http://beta07.tractorsupply.com

[hyhl]

International version of ecost. (Canada and Europe)

Haha, David, you will be able to buy from ecost next year.