pfsweb (pfsw) - Ausbruch

-- Adjusted EBITDA (as defined) was $7.7 million versus $7.3 million for the same period last year;

-- Net income was $0.5 million, or $0.05 per basic and diluted share, compared to a net loss of $2.0 million, or $0.21 per basic and diluted share, for the nine months ended September 30, 2007;

-- Non-GAAP net income (as defined) was $1.6 million, or $0.16 per basic and diluted share, compared to a non-GAAP net loss of $0.9 million, or $0.09 per basic and diluted share, for the same period last year;

-- Merchandise sales (as defined) totaled nearly $2.1 billion in both the 2008 and 2007 nine month periods ended September 30.

Mark Layton, Chairman and Chief Executive Officer of PFSweb, stated, "We are pleased to announce that the third quarter of 2008 represents our sixth consecutive quarter of profitability, which was driven by another strong quarter of measurable growth in our Service Fee business. These positive results are especially significant when considering the economic challenges currently facing the global economy."

All share data and per share data in this press release reflects the impact of the Company's 1 for 4.7 reverse stock split effective June 2, 2008.

Summary of results by business:

Service Fee Business:

For the third quarter of 2008, Service Fee revenue increased 24% to $22.9 million, compared with $18.4 million for the same period in 2007. The Service Fee business reported Adjusted EBITDA of $1.5 million for the third quarter of 2008, compared to $2.0 million for the same period last year.

For the nine months ended September 30, 2008, Service Fee revenue increased 23% to $65.0 million, from $53.0 million for the same period in 2007. The Service Fee business reported Adjusted EBITDA of $4.2 million for the nine months ended September 30, 2008, compared to $4.3 million for the same period last year.

Mike Willoughby, President of PFSweb's services division, commented, "Our Service Fee revenue growth for both the three and nine months ended September 30, 2008 is attributable to new contracts, temporary increased activity occurring from January 2008 and ending September 2008 for our U.S. government contract and incremental project activity.

We continue to sign new Service Fee clients and maintain a robust pipeline of potential new business, which is currently in excess of $30 million. In particular, as announced last week, we recently signed agreements with several luxury goods and fashion apparel companies, and plan to launch their programs throughout 2009. Further, our business remains competitive internationally, especially in Europe where we just launched a program for Comptoir des Cotonniers. We are excited about the success we are experiencing in engaging new clients and prospects with the end-to-end ecommerce offering we unveiled earlier this year. This new business is targeted to partially offset the impact of the non-renewal, effective early in 2009, of a large client engagement with an agency of the U.S. government. This nonrenewal, as well as the continuing economic downturn, will affect our service fee revenue and growth outlook for 2009, although our flexible business model should permit us to reduce some of our variable costs and redeploy a portion of our existing infrastructure to other client activities to partially offset the impact of these events."

Supplies Distributors Business:

For the third quarter of 2008, Supplies Distributors revenue was $55.4 million, compared to $58.3 million for the same period last year. Adjusted EBITDA was $1.4 million for the third quarter of 2008, relatively consistent with $1.6 million for the same period last year.

For the nine months ended September 30, 2008, Supplies Distributors revenue was $177.8 million, compared to $174.7 million for the same period last year. Adjusted EBITDA was $5.1 million for the nine months ended September 30, 2008, a slight increase compared to $5.0 million for the same period last year.

Mr. Willoughby continued, "Our Supplies Distributors business continues to perform well and meet our Adjusted EBITDA expectations. Revenue for the 2008 nine month period reflects an increase year over year due to the negative impact of foreign currency fluctuations during the 2007 period that created alternative purchasing channels for certain customers, which did not occur in 2008."

eCOST.com Business:

For the third quarter of 2008, eCOST.com revenue was $23.7 million, compared to $27.0 million for the same period in 2007. Adjusted EBITDA for eCOST.com in the quarter was a loss of $0.5 million, relatively consistent with the Adjusted EBITDA loss of $0.4 million for the same period last year.

For the nine months ended September 30, 2008, eCOST.com revenues were $74.7 million, compared to $75.7 million for the same period in 2007. Adjusted EBITDA for eCOST.com in the nine months ended September 30, 2008 was a loss of $1.7 million, compared to a loss of $1.9 million for the same period last year.

Mr. Layton continued, "While eCOST.com's revenue declined $4 million for the quarter, we are pleased to report that our business-to-consumer (B2C) segment, which now represents 60% of eCOST.com's revenue, increased 9% over the same period in the prior year. Because of the more attractive financial characteristics of this B2C segment, including a higher gross margin, we expect to continue to place increased focus on further improving product breath, daily deal offerings and overall service to this segment. This past week, eCOST.com unveiled a number of significant enhancements to its website. These enhancements include a feature packed new edition of our patented Bargain Countdown(TM) shopping section, 10,000 new products in the office equipment and supply category, and a new, rich shopping cart and checkout experience. Collectively, these improvements will provide shoppers at eCOST.com improved functionality, shopping speed and overall customer experience just in time for the holiday season."

Financial Targets for Fiscal Year 2008

As announced on November 7, 2008, PFSweb's consolidated financial targetsfor the year ended December 31, 2008 are total consolidated revenues for 2008 excluding pass-through revenues, of approximately $425 million to $440 million; Adjusted EBITDA of $10 -- $12 million; and non-GAAP net income, which excludes the impact of stock-based compensation and amortization of identifiable intangible assets, of approximately $1 - $3 million for 2008. Further weakening in worldwide economic conditions may cause the Company to fall toward the lower end of these targets.


To find out more about PFSweb, Inc. (NASDAQ: PFSW), visit the company's websites at www.pfsweb.com and www.ecost.com.
SOURCE: PFSweb, Inc.

PFSweb, Inc. Mark C. Layton Senior Partner and Chief Executive Officer or Thomas J. Madden Senior Partner and Chief Financial Officer 972-881-2900 or KCSA Strategic Communications Investor Relations Todd Fromer / Garth Russell 212-896-1215 / 212-896-1250 tfromer@kcsa.com / grussell@kcsa.com

Copyright Business Wire 2008  

eStore, we‟re looking forward to uncovering new insights and innovations that deliver on
the potential of e-commerce as a powerful sales channel for a wide range of consumer
products.”
P&G initiated the eStore concept and has been working its ideas for test concepts and
programs with PFSweb. Product pricing, promotion, shelving and distribution will be at
the sole discretion of PFSweb. P&G will work closely with PFSweb to identify new concepts,
programs and marketing efforts to test via the eStore.
- More
The eStore is another example of P&G‟s commitment to drive innovation to touch and improve
the lives of more consumers in more parts of the world more completely. The eStore will
test a number of concepts seeking to strengthen relationships with consumers and deliver
e-commerce insights for categories such as beauty and grooming, health and well-being, and
household care. These test-and-learn initiatives include subscription models and
cross-selling capabilities, targeted iMedia and search ads, and the integration of social
media with the online store.
According to PFSweb research, consumers expect the brand websites they frequent to be the
best sources of information about the full range of products offered, including access to
packaging, size and product variations that meet their needs.
“Consumers today also want to be „in-the-know‟ about upcoming new products and advancements
and be able to readily gain access to promotional offers and other new and exciting product
information,” said Layton. “We will power the eStore through the Demandware e-commerce
platform with best-of-breed features and functionality. The flexibility of the Demandware
platform in combination with the PFSweb retail services and world-class infrastructure will
enable the eStore to be an ideal environment to test and develop new concepts to address
the ever expanding consumer dynamics.”
About Procter & Gamble
Four billion times a day, P&G brands touch the lives of people around the world. The company
has one of the strongest portfolios of trusted, quality, leadership brands, including Pampers®,
Tide®, Ariel®, Always®, Whisper®, Pantene®, Mach3®, Bounty®, Dawn®, Gain®, Pringles®, Charmin®,
Downy®, Lenor®, Iams®, Crest®, Oral-B®, Duracell®, Olay®, Head & Shoulders®, Wella®, Gillette®,
Braun® and Fusion®. The P&G community includes approximately 135,000 employees working in about
80 countries worldwide. Please visit www.pg.com for the latest news and in-depth
information about P&G and its brands.
About PFSweb, Inc.
PFSweb develops and deploys comprehensive end-to-end eCommerce solutions for Fortune 1000,
Global 2000 and brand name companies, including interactive marketing services, global
fulfillment and logistics and high-touch customer care. Through a strategic relationship
with Demandware, Inc. the company offers clients access to the only enterprise-class,
on-demand e-commerce software platform. PFSweb serves a multitude of industries and company types,
including such clients as
LEGO, AAFES, Riverbed, InfoPrint Solutions Company (a joint venture company owned by
Ricoh and International Business Machines), Hawker Beechcraft Corp., Roots Canada Ltd. and Xerox.
# # #
P&G Media Contact:
Tressie Long, 513.983.7720
long.t.6@pg.com
PFSweb Media Contact:
Laura Cornstubble, 972.415.5005 x3574
lcornstubble@pfsweb.com