PFS (NASDAQ: PFSW) (the “Company"), a premier eCommerce order
fulfillment provider, today reported results for the third quarter
ended September 30, 2021. The results had been delayed as a result
of the complex tax implications and labor-intensive closing process
associated with the sale of the LiveArea global business to Merkle
for approximately $250 million in gross proceeds, which was
completed on August 25, 2021, and the required financial reporting
and accounting segmentation of previously commingled business
entities. The delay was not related to any historical issues with
PFSweb’s accounting practices or fundamental business.
Mike Willoughby, PFSweb Chief Executive Officer,
stated: “We are pleased to report Q3 2021 results and become
current with our quarterly financial filings. The third quarter
provides additional insight into the tremendous value we were able
to generate through the LiveArea transaction. As we previously
noted, 2021 was a strong year for the business, and the Q3 results
help illustrate how we got there. We have continued to see positive
momentum in our PFS business this year as we strive to maximize
value for all shareholders and execute on our plans to leverage the
substantial eCommerce fulfillment tailwinds in our industry and
transition to a more fulfillment-oriented Company in 2022.”
Q3 2021 Highlights
Results and comparisons reflect the
classification of LiveArea as a discontinued operation.
- Total service fee revenue increased
to $44.3 million compared to $42.4 million during the same period
in 2020.
- PFS Operations SFE revenue
increased to $42.0 million compared to $39.5 million during the
same period in 2020.
- Service fee gross margin, excluding
certain LiveArea-related activity, was 23.6% compared to
24.6%.
- Net loss from continuing operations
was $6.8 million or $0.32 per share, compared to net loss of $3.6
million or $0.18 per share.
- Consolidated Adjusted EBITDA from
continuing operations (a non-GAAP measure defined and reconciled
below) was $(1.3) million compared to ($0.1) million.
- PFS Operations Adjusted EBITDA from
continuing operations (a non-GAAP measure defined and reconciled
below) was $3.8 million compared to $5.0 million.
Additional Full Year 2021 Business and
Operational Guidance
Results and comparisons reflect the
classification of LiveArea as a discontinued operation.
- PFS SFE revenue for the nine months
ended September 30, 2021 increased to $124.6 million compared to
$115.1 million in the same period of 2020.
- 2021 PFS SFE revenue is expected to
increase 6% to approximately $187 million.
- The Company anticipates a two-year
PFS SFE revenue compounded annual growth rate of approximately 15%
as compared to 2019.
- Estimated 2021 PFS pro forma
standalone AEBITDA percentage of service fee revenue is expected to
be within prior guidance of 8-10%.
At the end of 2021, with the benefit from the
net proceeds generated from the LiveArea sale combined with the
business’s standalone operational cash balance, the Company had
approximately $152 million of total cash and less than $1 million
of debt. This December 2021 year-end cash balance reflects that the
Company incurred approximately $15 million in cash-based
transaction related costs during 2021 and used proceeds of
approximately $35 million to make estimated income tax payments
related to the LiveArea Transaction, of which approximately $30
million was paid during the quarter ended December 31, 2021.
Zach Thomann, PFSweb Chief Operating Officer,
commented: “We delivered solid performance in the third quarter
and, as we stated with our Q2 2021 results, had a very strong 2021.
I continue to be excited about the outlook for our PFS business and
remain focused on building on our significant momentum. Just over
two months into 2022, we are successfully executing on our ongoing
roll-out of a multi-node fulfillment strategy and remain highly
focused on expanding our footprint and driving accelerated growth
this year.”
Given the business update call that took place
on February 7, 2022, the Company will not hold a conference call to
discuss its financial results for the third quarter of 2021.
2022 Outlook
The Company’s outlook for 2022 remains unchanged
from that reported with Q2 2021 results on February 7, 2022. The
Company is targeting 2022 PFS annual SFE revenue growth to continue
to be in the range of 5% to 10%. Through a combination of expected
continued overall organic growth from existing clients, strong
bookings and a robust sales pipeline, the Company is optimistic
that it can achieve SFE revenue growth at the upper end of this
targeted range. The Company is also targeting 2022 Estimated PFS
pro forma standalone AEBITDA percentage of service fee revenue to
be within the range of 8 to 10%.
Strategic Alternatives Process and
Near-Term Capital Allocation and Restructuring
Priorities
PFSweb continues to work with its financial
advisor, Raymond James, on a review of a full range of strategic
alternatives for its PFS business. The Company is also nearing the
conclusion of its work with G2 Capital Advisors to continue to
optimize its business structure following the LiveArea
divestiture.
Monica Luechtefeld, Chair of PFSweb’s Board of
Directors, stated: “The Board continues to work with our outside
advisors as we evaluate the best pathway to maximize value for
shareholders. Complying with our financial reporting obligations
with the SEC is an important step in this process, and the filing
of our delayed Form 10-Q for the third quarter of 2021 shows
demonstrable progress toward our goal to expeditiously re-establish
our normal and compliant filing cadence. As we stated when
reporting Q2 2021 results, we believe that the PFS business’s
strong performance throughout 2021 makes it a very attractive
asset. We anticipate that we will have numerous compelling options
available to us as we assess the best ways to create additional
value and return our significant amount of capital to our
shareholders.”
PFSweb does not have a specific timeline for the
completion of its strategic review process, and it does not intend
to comment further regarding the review process unless or until a
specific transaction is approved by its Board of Directors, the
review process is concluded, or it has otherwise determined that
further disclosure is appropriate or required by law.
Update on NASDAQ Compliance
Process
As previously communicated, the Company received
a delisting determination issued by the Nasdaq Stock Market on
February 8, 2022 as a result of the delayed filing of the Company’s
Form 10-Q for the period ended September 30, 2021 (the “3Q 2021”).
With the filing of the 3Q 2021 today, the Company has regained
compliance with Nasdaq’s listing rules, and it is our understanding
from Nasdaq that the delisting process will no longer proceed and
the scheduled Nasdaq hearing will be canceled.
However, as a result of the delayed filings with
the Securities and Exchange Commission (“SEC”) of the Form 10-Q for
the period ended June 30, 2021 and the 3Q 2021 (the “2021 Q
Filings”), we expect that the filings with the SEC of our 2021
Annual Report on Form 10-K due on March 16, 2022 (the “2021 Form
10-K”) and our Form 10-Q for the period ending March 31, 2022, due
on May 10, 2022 (the “1Q 2022”) will be delayed for the same
reasons that caused the delays of the 2021 Q filings.
The Company is working diligently to complete
its 2021 Form 10-K and is currently targeting to file the 2021 Form
10-K with the SEC in late April or early May 2022, and the 1Q 2022
by mid-June 2022, after which the Company anticipates maintaining
compliance with its SEC reporting obligations and Nasdaq listing
requirements. Following the delay of the 2021 Form 10-K, we expect
to receive a notice from Nasdaq requesting the Company to submit a
plan to regain compliance. The Company expects to timely submit
such compliance plan to Nasdaq. If Nasdaq accepts the Company's
plan, then Nasdaq may grant the Company up to 180 days from the
prescribed due date for the filing of the Form 10-K to regain
compliance.
Forward-Looking Information
This press release contains 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. You can identify these forward-looking
statements by words such as “may,” “will,” “would,” “should,”
“could,” “expect,” “anticipate,” “believe,” “intend,” “plan,”
“potential,” “project,” “seek,” “strive,” “predict,” “continue,”
“target,” “estimate”, and other similar expressions. These
forward-looking statements involve risks and uncertainties and may
include assumptions as to how we may perform in the future,
including the risk that NASDAQ may delist our common stock since we
have not met NASDAQ's continued listing standards which could have
a material adverse effect on our Company and the price of our
common stock and the impact of the COVID-19 pandemic on our
business, results of operations and global economic conditions.
Although we believe the expectations reflected in our
forward-looking statements are reasonable, we cannot guarantee
these expectations will actually be achieved. The Company’s Annual
Report on Form 10-K, as amended, for the year ended December 31,
2020, and any subsequent amendments thereto and our quarterly
reports on Form 10-Q 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 periodic reports of the Company and the Risk Factors described
therein.
The Company 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.
Financial Statement Presentation
Matters
The LiveArea segment has been presented as a
discontinued operation for all periods presented in this news
release.
The condensed consolidated financial statements
in this news release have been revised to correct for an immaterial
error related to deferred income taxes that were incorrectly
recorded in prior periods.
Non-GAAP Financial Measures
This news release contains certain non-GAAP
measures, including non-GAAP net income (loss) from continuing
operations, earnings before interest, income taxes, depreciation
and amortization (EBITDA) from continuing operations, adjusted
EBITDA from continuing operations and service fee equivalent
revenue.
Non-GAAP net income (loss) from continuing
operations represents net income (loss) from continuing operations
calculated in accordance with U.S. GAAP as adjusted for the impact
of non-cash stock-based compensation expense, acquisition-related,
restructuring and other costs (including certain client related
bankruptcy costs).
EBITDA from continuing operations represents
earnings (or losses) before interest, income taxes, depreciation,
and amortization. Adjusted EBITDA from continuing operations
further eliminates the effect of stock-based compensation, as well
as restructuring, and other costs (including certain client related
bankruptcy costs).
Non-GAAP net income (loss) from continuing
operations, EBITDA from continuing operations, adjusted EBITDA from
continuing operations and service fee equivalent revenue are used
by management, analysts, investors and other interested parties in
evaluating our operating performance compared to that of other
companies in our industry. The calculation of non-GAAP net income
(loss) eliminates the effect of stock-based compensation,
restructuring and other costs (including certain client related
bankruptcy costs), and EBITDA from continuing operations and
adjusted EBITDA from continuing operations further eliminate the
effect of financing, remaining income taxes and the accounting
effects of capital spending, which items may vary from different
companies for reasons unrelated to overall operating performance.
Service fee equivalent revenue allows client contracts with similar
operational support models but different financial models to be
combined as if all contracts were being operated on a service fee
revenue basis.
The Company has presented non-GAAP financial
measures for the PFS Operations business including total Direct
contribution, EBITDA, adjusted EBITDA and service fee equivalent
revenue which include adjustments for certain LiveArea related
revenue activity and unallocated corporate costs. Such measures are
reconciled below.
The Company believes these non-GAAP measures
provide useful information to both management and investors by
focusing on certain operational metrics and excluding certain
expenses in order to present its core operating performance and
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. The non-GAAP measures
included in this press release have been reconciled to the GAAP
results in the attached tables.
About PFS
PFS, the business unit of PFSweb, Inc. (NASDAQ:
PFSW) is a premier eCommerce order fulfillment provider. We
facilitate each operational step of an eCommerce order in support
of DTC and B2B retail brands and specialize in health & beauty,
fashion & apparel, jewelry, and consumer packaged goods. Our
scalable solutions support customized pick/pack/ship services that
deliver on brand ethos with each order. A proven order management
platform, as well as high-touch customer care, reinforce our
operation. With 20+ years as an industry leader, PFS is the BPO of
choice for brand-centric companies and household brand names, such
as L’Oréal USA, Champion, Pandora, Shiseido Americas, Kendra Scott,
the United States Mint, and many more. The company is headquartered
in Allen, TX with additional locations around the globe. For more
information, visit www.pfscommerce.com or ir.pfsweb.com
for investor information.
For Media: Longacre Square Partners Dan
Zacchei/Joe Germani/Ashley Areopagita PFSweb@longacresquare.com
For Investors: Cody Slach or
Jackie KeshnerGateway Group, Inc. 1-949-574-3860
PFSW@gatewayir.com
PFSWEB, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE
SHEETS(In Thousands, Except Share
Data)
|
(Unaudited) September
30, 2021 |
|
December 31, 2020 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
193,999 |
|
|
$ |
10,359 |
|
Restricted cash |
|
214 |
|
|
|
214 |
|
Accounts receivable, net of allowance for doubtful accounts of $862
and $611 at September 30, 2021 and December 31, 2020,
respectively |
|
53,139 |
|
|
|
69,594 |
|
Inventories, net of reserves of $107 and $96 at September 30,
2021 and December 31, 2020, respectively |
|
3,210 |
|
|
|
3,644 |
|
Other receivables |
|
4,164 |
|
|
|
3,314 |
|
Prepaid expenses and other current assets |
|
5,483 |
|
|
|
7,524 |
|
Current assets of discontinued operations |
|
— |
|
|
|
13,920 |
|
Total current assets |
|
260,209 |
|
|
|
108,569 |
|
Property and equipment: |
|
|
|
Cost |
|
98,151 |
|
|
|
97,343 |
|
Less: accumulated depreciation |
|
(79,785 |
) |
|
|
(79,826 |
) |
|
|
18,366 |
|
|
|
17,517 |
|
Operating lease right-of-use
assets, net |
|
38,265 |
|
|
|
34,350 |
|
Goodwill |
|
22,195 |
|
|
|
22,358 |
|
Other assets |
|
3,582 |
|
|
|
385 |
|
Long-term assets of
discontinued operations |
|
— |
|
|
|
31,717 |
|
Total assets |
$ |
342,617 |
|
|
$ |
214,896 |
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
Current liabilities: |
|
|
|
Trade accounts payable |
$ |
26,595 |
|
|
$ |
34,613 |
|
Accrued expenses |
|
23,256 |
|
|
|
25,381 |
|
Income taxes payable |
|
31,528 |
|
|
|
861 |
|
Current portion of operating lease liabilities |
|
10,337 |
|
|
|
9,399 |
|
Current portion of long-term debt and finance lease
obligations |
|
310 |
|
|
|
3,411 |
|
Deferred revenues |
|
2,211 |
|
|
|
4,595 |
|
Current liabilities of discontinued operations |
|
— |
|
|
|
6,285 |
|
Total current liabilities |
|
94,237 |
|
|
|
84,545 |
|
Long-term debt and finance
lease obligations, less current portion |
|
98 |
|
|
|
39,069 |
|
Deferred revenue, less current
portion |
|
1,330 |
|
|
|
1,341 |
|
Operating lease liabilities,
less current portion |
|
32,452 |
|
|
|
30,012 |
|
Other liabilities |
|
6,131 |
|
|
|
5,286 |
|
Long-term liabilities of
discontinued operations |
|
— |
|
|
|
545 |
|
Total liabilities |
|
134,248 |
|
|
|
160,798 |
|
|
|
|
|
Commitments and
Contingencies |
|
|
|
|
|
|
|
Shareholders' equity: |
|
|
|
Preferred stock, $1.00 par value; 1,000,000 shares authorized; none
issued or outstanding |
|
— |
|
|
|
— |
|
Common stock, $0.001 par value; 35,000,000 shares authorized;
21,244,350 and 20,408,558 issued and 21,210,883 and 20,375,091
outstanding at September 30, 2021 and December 31, 2020,
respectively |
|
21 |
|
|
|
20 |
|
Additional paid-in capital |
|
175,675 |
|
|
|
168,244 |
|
Retained earnings (accumulated deficit) |
|
33,797 |
|
|
|
(113,712 |
) |
Accumulated other comprehensive loss |
|
(999 |
) |
|
|
(329 |
) |
Treasury stock at cost, 33,467 shares |
|
(125 |
) |
|
|
(125 |
) |
Total shareholders’ equity |
|
208,369 |
|
|
|
54,098 |
|
Total liabilities and shareholders’ equity |
$ |
342,617 |
|
|
$ |
214,896 |
|
PFSWEB, INC. AND
SUBSIDIARIESUNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(In
Thousands, Except Per Share Data)
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Revenues: |
|
|
|
|
|
|
|
Service fee revenue |
$ |
44,275 |
|
|
$ |
42,383 |
|
|
$ |
132,804 |
|
|
$ |
123,961 |
|
Product revenue, net |
|
4,096 |
|
|
|
4,229 |
|
|
|
12,896 |
|
|
|
17,677 |
|
Pass-through revenue |
|
12,970 |
|
|
|
12,661 |
|
|
|
37,444 |
|
|
|
42,053 |
|
Total revenues |
|
61,341 |
|
|
|
59,273 |
|
|
|
183,144 |
|
|
|
183,691 |
|
Costs of Revenues: |
|
|
|
|
|
|
|
Cost of service fee revenue |
|
33,383 |
|
|
|
31,524 |
|
|
|
98,776 |
|
|
|
88,357 |
|
Cost of product revenue |
|
3,895 |
|
|
|
4,019 |
|
|
|
12,265 |
|
|
|
16,732 |
|
Cost of pass-through revenue |
|
12,970 |
|
|
|
12,661 |
|
|
|
37,444 |
|
|
|
42,053 |
|
Total costs of revenues |
|
50,248 |
|
|
|
48,204 |
|
|
|
148,485 |
|
|
|
147,142 |
|
Gross profit |
|
11,093 |
|
|
|
11,069 |
|
|
|
34,659 |
|
|
|
36,549 |
|
Selling, general and
administrative expenses |
|
16,161 |
|
|
|
14,083 |
|
|
|
44,768 |
|
|
|
39,159 |
|
Loss from operations |
|
(5,068 |
) |
|
|
(3,014 |
) |
|
|
(10,109 |
) |
|
|
(2,610 |
) |
Interest expense, net |
|
165 |
|
|
|
365 |
|
|
|
873 |
|
|
|
1,154 |
|
Loss on extinguishment of debt |
|
426 |
|
|
|
— |
|
|
|
426 |
|
|
|
— |
|
Loss from continuing
operations before income taxes |
|
(5,659 |
) |
|
|
(3,379 |
) |
|
|
(11,408 |
) |
|
|
(3,764 |
) |
Income tax expense, net |
|
1,152 |
|
|
|
217 |
|
|
|
1,276 |
|
|
|
821 |
|
Net loss from continuing
operations |
|
(6,811 |
) |
|
|
(3,596 |
) |
|
|
(12,684 |
) |
|
|
(4,585 |
) |
|
|
|
|
|
|
|
|
Income from discontinued
operations before income taxes |
|
197,920 |
|
|
|
1,152 |
|
|
|
196,508 |
|
|
|
1,385 |
|
Income tax expense, net |
|
33,758 |
|
|
|
241 |
|
|
|
36,315 |
|
|
|
436 |
|
Net income from discontinued
operations |
|
164,162 |
|
|
|
911 |
|
|
|
160,193 |
|
|
|
949 |
|
|
|
|
|
|
|
|
|
Net income (loss) |
$ |
157,351 |
|
|
$ |
(2,685 |
) |
|
$ |
147,509 |
|
|
$ |
(3,636 |
) |
|
|
|
|
|
|
|
|
Basic earnings (loss) per
share: |
|
|
|
|
|
|
|
Net loss from continuing operations per share |
$ |
(0.32 |
) |
|
$ |
(0.18 |
) |
|
$ |
(0.60 |
) |
|
$ |
(0.23 |
) |
Net income from discontinued operations per share |
|
7.71 |
|
|
|
0.05 |
|
|
|
7.57 |
|
|
|
0.05 |
|
Basic earnings (loss) per share |
$ |
7.39 |
|
|
$ |
(0.13 |
) |
|
$ |
6.97 |
|
|
$ |
(0.18 |
) |
Diluted earnings (loss) per
share: |
|
|
|
|
|
|
|
Net loss from continuing operations per share |
$ |
(0.32 |
) |
|
$ |
(0.18 |
) |
|
$ |
(0.60 |
) |
|
$ |
(0.23 |
) |
Net income from discontinued operations per share |
|
7.71 |
|
|
|
0.05 |
|
|
|
7.57 |
|
|
|
0.05 |
|
Diluted earnings (loss) per share |
$ |
7.39 |
|
|
$ |
(0.13 |
) |
|
$ |
6.97 |
|
|
$ |
(0.18 |
) |
Weighted average number of
shares outstanding: |
|
|
|
|
|
|
|
Basic |
|
21,282 |
|
|
|
20,211 |
|
|
|
21,164 |
|
|
|
19,899 |
|
Diluted |
|
21,282 |
|
|
|
20,211 |
|
|
|
21,164 |
|
|
|
19,899 |
|
Comprehensive income
(loss): |
|
|
|
|
|
|
|
Net income (loss) |
$ |
157,351 |
|
|
$ |
(2,685 |
) |
|
$ |
147,509 |
|
|
$ |
(3,636 |
) |
Foreign currency translation adjustment |
|
(34 |
) |
|
|
944 |
|
|
|
(343 |
) |
|
|
(77 |
) |
Reclassifications of foreign currency translation adjustments
realized upon disposal of business |
|
(327 |
) |
|
|
— |
|
|
|
(327 |
) |
|
|
— |
|
Total comprehensive income (loss) |
$ |
156,990 |
|
|
$ |
(1,741 |
) |
|
$ |
146,839 |
|
|
$ |
(3,713 |
) |
|
|
|
|
|
|
|
|
EBITDA from continuing
operations |
$ |
(3,173 |
) |
|
$ |
(1,234 |
) |
|
$ |
(4,357 |
) |
|
$ |
2,882 |
|
Adjusted EBITDA from
continuing operations |
$ |
(1,307 |
) |
|
$ |
(70 |
) |
|
$ |
(2,039 |
) |
|
$ |
5,319 |
|
PFSWEB, INC. AND
SUBSIDIARIESUnaudited Reconciliation of Certain Non-GAAP
Items to GAAP(In Thousands)
|
Three Months Ended September
30, |
|
Nine Months Ended September
30, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Net loss from continuing operations |
$ |
(6,811 |
) |
|
$ |
(3,596 |
) |
|
$ |
(12,684 |
) |
|
$ |
(4,585 |
) |
Income tax expense, net |
|
1,152 |
|
|
|
217 |
|
|
|
1,276 |
|
|
|
821 |
|
Loss on extinguishment of debt |
|
426 |
|
|
|
— |
|
|
|
426 |
|
|
|
— |
|
Interest expense, net |
|
165 |
|
|
|
365 |
|
|
|
873 |
|
|
|
1,154 |
|
Depreciation and amortization |
|
1,895 |
|
|
|
1,780 |
|
|
|
5,752 |
|
|
|
5,492 |
|
EBITDA from continuing
operations |
|
(3,173 |
) |
|
|
(1,234 |
) |
|
|
(4,357 |
) |
|
|
2,882 |
|
Gross margin on LiveArea activity (1) |
|
(1,023 |
) |
|
|
(1,179 |
) |
|
|
(3,615 |
) |
|
|
(3,817 |
) |
Stock-based compensation |
|
1,405 |
|
|
|
2,318 |
|
|
|
3,803 |
|
|
|
5,617 |
|
Restructuring and other costs |
|
1,484 |
|
|
|
25 |
|
|
|
2,130 |
|
|
|
637 |
|
Adjusted EBITDA from
continuing operations |
$ |
(1,307 |
) |
|
$ |
(70 |
) |
|
$ |
(2,039 |
) |
|
$ |
5,319 |
|
|
Three Months Ended September
30, |
|
Nine Months Ended September
30, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Net loss from continuing operations |
$ |
(6,811 |
) |
|
$ |
(3,596 |
) |
|
$ |
(12,684 |
) |
|
$ |
(4,585 |
) |
Stock-based compensation |
|
1,405 |
|
|
|
2,318 |
|
|
|
3,803 |
|
|
|
5,617 |
|
Restructuring and other costs |
|
1,484 |
|
|
|
25 |
|
|
|
2,130 |
|
|
|
637 |
|
Non-GAAP net income (loss)
from continuing operations |
$ |
(3,922 |
) |
|
$ |
(1,253 |
) |
|
$ |
(6,751 |
) |
|
$ |
1,669 |
|
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Total revenues from continuing operations |
$ |
61,341 |
|
|
$ |
59,273 |
|
|
$ |
183,144 |
|
|
$ |
183,691 |
|
Pass-through revenue |
|
(12,970 |
) |
|
|
(12,661 |
) |
|
|
(37,444 |
) |
|
|
(42,053 |
) |
Cost of product revenue |
|
(3,895 |
) |
|
|
(4,019 |
) |
|
|
(12,265 |
) |
|
|
(16,732 |
) |
Service fee revenue related to LiveArea activity(1) |
|
(2,441 |
) |
|
|
(3,045 |
) |
|
|
(8,813 |
) |
|
|
(9,777 |
) |
Service fee equivalent
revenues from continuing operations |
$ |
42,035 |
|
|
$ |
39,548 |
|
|
$ |
124,622 |
|
|
$ |
115,129 |
|
(1) In completing the discontinued operations
presentation, certain LiveArea revenues, costs of revenues and
gross margin related to client contracts that were not fully
transferred to contracts directly operating under the LiveArea
operating entities as of the August 2021 transaction date were
maintained by PFSweb as part of the continuing operations
presentation. As of the LiveArea transaction date, future
activities of certain contracts where we have subcontracted
services to LiveArea are expected to be recorded as pass-through
revenue and pass-through costs, for as long as such contracts
continue to be maintained directly through PFSweb.
PFSWEB, INC. AND
SUBSIDIARIESUNAUDITED NON-GAAP OPERATING INFORMATION(In
Thousands)
The following tables represents the financial information for
PFS Operations for the three and nine months ended September 30,
2021 and 2020 excluding certain unallocated corporate costs and
certain non-continuing revenues and expenses.
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
PFS Operations
(Non-GAAP) |
2021 |
|
2020 |
|
2021 |
|
2020 |
Revenues: |
|
|
|
|
|
|
|
Service fee revenue |
$ |
44,275 |
|
|
$ |
42,383 |
|
|
$ |
132,804 |
|
|
$ |
123,961 |
|
Product revenue, net |
|
4,096 |
|
|
|
4,229 |
|
|
|
12,896 |
|
|
|
17,677 |
|
Pass-through revenue |
|
12,970 |
|
|
|
12,661 |
|
|
|
37,444 |
|
|
|
42,053 |
|
Service fee revenue related to LiveArea activity(1) |
|
(2,441 |
) |
|
|
(3,045 |
) |
|
|
(8,813 |
) |
|
|
(9,777 |
) |
Total revenues |
|
58,900 |
|
|
|
56,228 |
|
|
|
174,331 |
|
|
|
173,914 |
|
Costs of Revenues: |
|
|
|
|
|
|
|
Cost of service fee revenue |
|
33,383 |
|
|
|
31,524 |
|
|
|
98,776 |
|
|
|
88,357 |
|
Cost of product revenue |
|
3,895 |
|
|
|
4,019 |
|
|
|
12,265 |
|
|
|
16,732 |
|
Cost of pass-through revenue |
|
12,970 |
|
|
|
12,661 |
|
|
|
37,444 |
|
|
|
42,053 |
|
Cost of service fee revenue related to LiveArea activity(1) |
|
(1,418 |
) |
|
|
(1,867 |
) |
|
|
(5,198 |
) |
|
|
(5,960 |
) |
Total costs of revenues |
|
48,830 |
|
|
|
46,337 |
|
|
|
143,287 |
|
|
|
141,182 |
|
Gross profit |
|
10,070 |
|
|
|
9,891 |
|
|
|
31,044 |
|
|
|
32,732 |
|
Direct operating
expenses(2) |
|
8,535 |
|
|
|
7,353 |
|
|
|
24,844 |
|
|
|
22,702 |
|
Direct contribution |
|
1,535 |
|
|
|
2,538 |
|
|
|
6,200 |
|
|
|
10,030 |
|
Depreciation and
amortization(3) |
|
1,709 |
|
|
|
1,616 |
|
|
|
5,316 |
|
|
|
4,811 |
|
Stock-based
compensation(4) |
|
438 |
|
|
|
817 |
|
|
|
1,192 |
|
|
|
1,757 |
|
Restructuring and other
costs(5) |
|
81 |
|
|
|
25 |
|
|
|
727 |
|
|
|
762 |
|
Adjusted EBITDA |
$ |
3,763 |
|
|
$ |
4,996 |
|
|
$ |
13,435 |
|
|
$ |
17,360 |
|
|
|
|
|
|
|
|
|
Total Revenues |
$ |
58,900 |
|
|
$ |
56,228 |
|
|
$ |
174,331 |
|
|
$ |
173,914 |
|
Pass-through revenue |
|
(12,970 |
) |
|
|
(12,661 |
) |
|
|
(37,444 |
) |
|
|
(42,053 |
) |
Cost of product revenue |
|
(3,895 |
) |
|
|
(4,019 |
) |
|
|
(12,265 |
) |
|
|
(16,732 |
) |
Service fee equivalent
revenue |
$ |
42,035 |
|
|
$ |
39,548 |
|
|
$ |
124,622 |
|
|
$ |
115,129 |
|
(1) In completing the discontinued operations
presentation, certain LiveArea revenues, costs of revenues and
gross profit related to client contracts that were not fully
transferred to contracts directly operating under the LiveArea
operating entities as of the August 2021 transaction date were
maintained by PFSweb as part of the continuing operations
presentation. As of the LiveArea transaction date, future
activities of certain contracts where we have subcontracted
services to LiveArea are expected to be recorded as pass-through
revenue and pass-through costs, for as long as such contracts
continue to be maintained directly through PFSweb.
(2) Direct operating expenses for PFS Operations
exclude unallocated corporate costs included in consolidated
selling, general and administrative expense of $7.6 million and
$6.7 million for the three months ended September 30, 2021 and
2020, respectively and $19.9 million and $16.5 million for the nine
months ended September 30, 2021 and 2020, respectively.
(3) Depreciation and amortization for PFS
Operations exclude depreciation and amortization applicable to
unallocated corporate costs included in consolidated selling,
general and administrative expense of $0.2 million and $0.2 million
for the three months ended September 30, 2021 and 2020,
respectively and $0.4 million and $0.7 million for the nine months
ended September 30, 2021 and 2020, respectively.(4) Stock based
compensation for PFS Operations exclude stock-based compensation
applicable to unallocated corporate costs included in consolidated
selling, general and administrative expense of $1.0 million and
$1.5 million for the three months ended September 30, 2021 and
2020, respectively and $2.6 million and $3.9 million for the nine
months ended September 30, 2021 and 2020, respectively.(5)
Restructuring and other costs for PFS Operations exclude
restructuring and other costs (benefits) applicable to unallocated
corporate costs included in consolidated selling, general and
administrative expense of $(0.1) million for the nine months ended
September 30, 2020.
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