Pfsweb (NASDAQ:PFSW)
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PFSweb, Inc. (Nasdaq: PFSW), an international business process
outsourcing provider of end-to-end web commerce solutions and an online
discount retailer, today announced five new Service Fee client
engagements and the non-renewal of one large Service Fee client contract
for fiscal 2009. The Company also reiterated its previous Adjusted
EBITDA and non-GAAP net income guidance for fiscal year 2008.
Four of the five new client wins are directly attributable to PFSweb’s
end-to-end eCommerce initiative launched earlier this year. These four
end-to-end eCommerce engagements each involve widely recognized luxury
or fashion apparel brands within a single global portfolio of premium
brands. Under a master agreement, PFSweb is leveraging its eCommerce
technology and interactive marketing services as well as order
fulfillment, warehousing, and logistics services to provide a
comprehensive end-to-end eCommerce solution to support each of the four
brands. As part of its end-to-end eCommerce solution, PFSweb utilizes
the DemandWare eCommerce platform to create advanced front-end web
storefronts that empower each brand’s
marketers with the tools to drive continual innovation and growth.
PFSweb is also providing custom-tailored, high-touch fashion and apparel
customer care services for each brand. Implementation of these brands’
programs is currently expected to be completed throughout the 2009
calendar year, with the first site expected to launch in the first
quarter of 2009. Under the master agreement, additional brands within
the portfolio may be added as additional client engagements in the
future.
PFSweb has also been selected by a large footwear retailer with global
operations to provide a seamless customer service solution that supports
its multi-channel business operations. Under the agreement, PFSweb will
provide customer contact services from its Plano, Texas and Memphis,
Tennessee facilities. PFSweb will fully integrate and interface with the
client’s systems to provide a seamless brand
representation and customer service solution.
Mike Willoughby, President of PFSweb’s
services division, stated, “These five new
engagements represent a significant expansion of our growing portfolio
of image and luxury fashion and apparel brands, and we are excited to be
partnering with each of these prestigious brands. With more than 15
years experience supporting some of the world’s
best known brands, and with offices in the U.S., Canada, Europe and
Asia, our clients are partnering with one of the most experienced
eCommerce services companies in the world. In light of the current
economic uncertainty, we are pleased with our continued growth in new
business as well as the strong prospective sales pipeline we maintain,
which we believe is a result of continued strong demand for global
eCommerce solutions.”
After considering the five new client wins, PFSweb is reporting a
current pipeline for potential new business that is in excess of $30
million including a contract currently being finalized. This new
business pipeline value is in line with the Company’s
expectations for this time of year and is still targeted to increase
through the remainder of the calendar year.
PFSweb also announced today the non-renewal, effective early in 2009, of
a large client engagement with an agency of the U.S. government. Mr.
Willoughby commented, “The non-renewal of this
client is clearly disappointing and it will impact our growth outlook
for 2009. Nevertheless, our business is designed with flexibility in
mind and we are targeting to redeploy certain technology and equipment
infrastructure to other clients and reduce variable expenses directly
attributable to this client.”
Fiscal Year 2008 Guidance
PFSweb now targets total consolidated revenues for 2008 excluding
pass-through revenues, of approximately $425 million to $440 million as
compared to the range of approximately $445 million to $475 million
previously communicated. The change in revenue guidance is a result of
lower Q4 forecasts recently received from numerous clients and
attributed to slowing consumer demand as a result of the weakening
worldwide economic conditions. However, the Company is maintaining its
Adjusted EBITDA and non-GAAP-net income guidance for 2008 as it expects
to include a larger percentage of higher margin project activities in Q4
2008 than previously forecast and it has instituted additional cost
control measures in the businesses. PFSweb continues to target
consolidated 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. As previously noted,
further weakening in worldwide economic conditions may cause the Company
to fall toward the lower end of these targets.
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, Discovery Commerce,
Riverbed, Hewlett-Packard, International Business Machines, Hawker
Beechcraft Corp., 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 merchandise for
consumers and small to medium size business buyers. The eCOST.com brand
markets approximately 170,000 different products from leading
manufacturers such as Sony, JVC, Canon, Hewlett-Packard, Garmin,
Panasonic, Toshiba, Microsoft, Kitchen Aid, Panasonic, Black & Decker,
Cuisinart, Coleman, Wilson and Nike 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 include forward-looking information
under the Private Securities Litigation Reform Act of 1995, which 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, 2007 and Form 10-Q for the quarter ended June 30, 2008
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 and Quarterly Reports and
the Risk Factors described therein. These Risk Factors include the risk
of contract terminations. 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.