Pfsweb (NASDAQ:PFSW)
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PFSweb, Inc. (Nasdaq:PFSW), a global provider of
business process outsourcing (BPO) solutions and web commerce
retailer, today announced financial results for the three and
six-month periods ended June 30, 2006.
Total reported revenue for the three months ending June 30, 2006
totaled $109.3 million, compared to $84.9 million for the same period
last year. Service Fee revenue in the second quarter of 2006 was $16.2
million compared to $16.3 million for the second quarter of 2005.
Supplies Distributors revenue was $60.9 million in the second quarter
of 2006, compared to $63.4 million for the second quarter of 2005.
Revenue from the company's recently acquired wholly owned subsidiary,
eCOST.com, was $28.8 million in the second quarter of 2006. eCOST.com
reported $41.0 million of revenue for the same period last year prior
to the merger. On a pro forma basis total revenues including eCOST.com
for the same period last year was $125.9 million.
Additional consolidated financial information for PFSweb for the
three months ending June 30, 2006 compared to the year-earlier period
includes:
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*T
-- Earnings Before Interest, Taxes, Depreciation and Amortization
(EBITDA) was $(0.7) million versus $1.6 million in the prior
year. EBITDA for the 2006 second quarter included $(4.0)
million applicable to eCOST.com. Excluding eCOST.com, EBITDA
for the Service Fee and Supplies Distributors businesses was
$3.3 million, an increase of $1.7 million over the same period
last year.
-- Net loss for the 2006 second quarter was $3.2 million, or
$0.07 per basic and diluted share, compared to a net loss of
$0.5 million, or $0.02 per basic and diluted share for the
prior year's period. Net loss in the current year included a
net loss of $4.3 million applicable to eCOST. Excluding
eCOST.com, net income for the Service Fee and Supplies
Distributors businesses was $1.1 million, an increase of $1.6
million over the second quarter of last year.
-- EBITDA and net loss for the three months ended June 30,
2006 included the following:
-- Stock option compensation expense of $0.2 million in
conjunction with Financial Accounting Standards Board
Statement No. 123R.
-- Integration related costs applicable to eCOST of
approximately $0.4 million.
-- Additionally, net loss for the period ended June 30, 2006
included the amortization of identifiable intangible
assets of $0.2 million applicable to valuation of assets
assigned in conjunction with the purchase of eCOST.com.
-- Excluding the impact of the items identified above,
EBITDA, net loss and net loss per basic and diluted share
for the period ended June 30,2006 would have been $3
thousand, $2.3 million and $0.05, respectively.
-- Merchandise sales totaled approximately $662 million during
the June 2006 quarter.
-- Cash and cash equivalents and restricted cash totaled $19.0
million as of June 30, 2006.
*T
Mark Layton, Chief Executive Officer of PFSweb, said, "We are
pleased by the continued improved profitability of our Service Fee and
Supplies Distributors businesses. This improvement included (1)
improved gross margin performance, including the favorable impact of
contracts that became operational in calendar year 2005 and
experienced incremental startup related expenses in that year, and (2)
reduced selling, general and administrative expenses, including the
impact of ongoing cost controls and favorable exchange rates. We
continue to experience improved results in the current year in winning
new Service Fee business relationships, including the expansion of
existing client relationships. During 2006, we have signed new
contracts with estimated ongoing annual service fees of approximately
$7 million, based on client projections, plus special projects of
approximately $1 million. Our solid pipeline of potential new
business, including pending proposals, remains a robust $40 million in
annual service fees. We are targeting to maintain our steady stream of
new business activity and strengthen our existing client relationships
going forward."
Consolidated reported revenue for the six months ending June 30,
2006 totaled $220.0 million, compared to $166.7 million for the same
period last year, an increase of more than 30%. Service Fee revenue
rose 5.7% for the six months ended June 30, 2006 to $32.1 million from
$30.4 million for the same period in 2005. Supplies Distributors
revenue increased 1.7% to $129.3 million in the six months ended June
30, 2006, compared to $127.1 million for the same period last year.
eCOST.com revenue, including $12.9 million of revenue for the month of
January 2006, prior to the merger, was $63.5 million in the first six
months of 2006. eCOST.com reported $96.1 million of revenue for the
same period of 2005. On a pro forma basis total revenues including
eCOST.com for the same period last year was $262.8 million.
PFSweb's consolidated financials for the six months ending June
30, 2006 only reflect five months of operations for eCOST.com, as the
merger closed on February 1, 2006. For additional information on
PFSweb's consolidated results for the six months ending June 30, 2006,
please refer to the financial tables below.
Layton continued, "We have experienced challenges in achieving our
plans to improve the service and financial performance of the
eCOST.com business segment since the merger. The time and effort
needed to meet certain quality and service targets for eCOST.com has
been greater than we expected and has also contributed to lower than
targeted revenue and gross profit margins during the June 2006 quarter
and this is expected to continue into the September 2006 quarter. In
addition, we experienced a significantly higher than normal level of
fraudulent credit card activity in June and July, 2006 due in part to
problems experienced in the ERP systems conversion. We believe that
these system issues have now been resolved. We remain focused on the
turnaround of eCOST.com, including the integration of our operations
and driving improved financial and service level performance in the
future. Profit, not revenue, will be our near term focus with an
emphasis on stronger gross profit performance, controlling costs and
improving quality of our operations and customer service. Once we
achieve that goal, we can then turn our attention towards revenue
growth and increased scale and begin to focus on the many exciting
opportunities in product and international expansion we see for this
business."
"We are making progress in the turnaround of eCOST.com and plan to
complete our integration in the fall of 2006, in time for the holiday
season," Layton added. "Over the past several months, we have made
significant improvements in eCOST's infrastructure, which we believe
will increase operating efficiencies and enhance long-term
performance. As previously discussed, we anticipate our merger with
eCOST.com to produce total cost savings of approximately $4 - $5
million on an annual basis once our integration efforts are fully
implemented."
Recent highlights for eCOST.com and related merger with PFSweb
include:
-- The relocation of eCOST.com's headquarters to El Segundo, CA
in a move expected to generate cost savings of approximately
$20,000 per month.
-- The relocation of eCOST.com's warehouse facility into an
existing PFSweb warehouse to improve performance and reduce
costs.
-- eCOST.com's early adoption of Google Checkout, a new service
from Google that offers a more convenient and secure online
shopping experience.
-- The appointment of ExactTarget to assist in eCOST.com's direct
marketing campaign, providing the ability to send personalized
emails to subscribers using list segmentation and unique
content features as well as advanced reporting functions.
-- Nearing the completion of eCOST.com's transition to PFSweb's
advanced ERP platform from its legacy ERP technology platform.
Layton concluded, "We remain confident in our ability to transform
eCOST.com into a premier Internet retailer based on our world-class
technology and operational infrastructure. Once our integration plan
is complete, we expect to leverage our global platform and deliver
sustainable growth within the $79 billion web commerce marketplace."
For eCOST.com's selected operating data for the three and
six-month periods ended June 30, 2006 and 2005, please see the table
below.
Conference Call Information
Management will host a conference call at 10:00 a.m. Central Time
(11:00 a.m. Eastern Time) on August 14, 2006 to discuss the latest
corporate developments and results. To listen to the call, please dial
888-338-6760 and enter the pin number (7710682) 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
August 28th at 877-519-4471 pin number (7710682). 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 EBITDA and
adjusted EBITDA.
EBITDA represents earnings (or losses) before interest, taxes,
depreciation, and amortization. Adjusted EBITDA further eliminates the
effect of stock based compensation expense, merger integration related
expenses and a loss on sales transaction. EBITDA and adjusted EBITDA
is 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
expense and merger related 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 Adaptec,
Chiasso, FLAVIA(R) Beverage Systems, Hewlett-Packard, International
Business Machines, Nokia, Pfizer, Inc., Raytheon Aircraft Company,
Rene Furterer USA, Roots Canada Ltd., The Smithsonian Institution 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 refurbished brand-name merchandise for consumers
and small business buyers. The eCOST.com brand markets more than
100,000 different products from leading manufacturers such as Apple,
Canon, Citizen, Denon, Hewlett-Packard, Nikon, Onkyo, Seiko, Sony, and
Toshiba 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 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 and 10-K/A for the
year ended December 31, 2005 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 market for our services;
trends in e-commerce; whether we can continue and manage growth;
changes in the trend toward outsourcing; 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; trends in
government regulation both foreign and domestic; foreign currency
risks and other risks of operating in foreign countries; potential
litigation; our dependency on key personnel; the impact of new
accounting standards and rules regarding revenue recognition, stock
options and other matters; changes in 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; the transition costs
resulting from our merger with eCOST; our ability to successfully
integrate eCOST into our business to achieve 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; and eCOST's ability to increase its
sales revenue and sales margin and improve operating efficiencies.
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.
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PFSweb, Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Operations (A)
(In Thousands, Except Per Share Data)
Three Months Ended Six Months Ended
JUNE 30, JUNE 30,
------------------ -------------------
2006 2005 2006 2005
--------- -------- --------- ---------
Revenues:
Product revenue, net $ 89,650 $63,438 $179,854 $127,068
Service fee revenue 16,209 16,298 32,128 30,383
Pass-through revenue 3,445 5,134 7,990 9,284
--------- -------- --------- ---------
Total revenues 109,304 84,870 219,972 166,735
--------- -------- --------- ---------
Costs of revenues:
Cost of product revenue 84,486 59,613 168,809 119,250
Cost of service fee
revenue 11,366 12,102 22,745 22,870
Pass-through cost of
revenue 3,445 5,134 7,990 9,284
--------- -------- --------- ---------
Total costs of
revenues 99,297 76,849 199,544 151,404
--------- -------- --------- ---------
Gross profit 10,007 8,021 20,428 15,331
Selling, general and
administrative expenses 12,531 7,952 23,892 14,918
--------- -------- --------- ---------
Income (loss) from
operations (2,524) 69 (3,464) 413
Interest expense, net 517 474 948 793
--------- -------- --------- ---------
Loss before income taxes (3,041) (405) (4,412) (380)
Income tax provision 143 141 359 380
--------- -------- --------- ---------
Net loss $ (3,184) $ (546) $ (4,771) $ (760)
========= ======== ========= =========
Net loss per share:
Basic $ (0.07) $ (0.02) $ (0.12) $ (0.03)
========= ======== ========= =========
Diluted $ (0.07) $ (0.02) $ (0.12) $ (0.03)
========= ======== ========= =========
Weighted average number of
shares outstanding:
Basic 43,072 22,419 39,011 22,278
========= ======== ========= =========
Diluted 43,072 22,419 39,011 22,278
========= ======== ========= =========
EBITDA (B) $ (687) $ 1,579 $ 125 $ 3,425
========= ======== ========= =========
Adjusted EBITDA (B) $ 3 $ 1,579 $ 1,636 $ 3,425
========= ======== ========= =========
(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 AND 10-K/A FOR THE YEAR ENDED DECEMBER 31, 2005.
(B) A RECONCILIATION OF NET LOSS TO EBITDA AND ADJUSTED EBITDA IS AS
FOLLOWS:
Three Months Ended Six Months Ended
JUNE 30, JUNE 30,
------------------ ------------------
2006 2005 2006 2005
--------- -------- --------- --------
Net loss $ (3,184) $ (546) $ (4,771) $ (760)
Income tax provision 143 141 359 380
Interest expense, net 517 474 948 793
Depreciation and
amortization 1,837 1,510 3,589 3,012
--------- -------- --------- --------
EBITDA $ (687) $ 1,579 $ 125 $ 3,425
Stock-based compensation 241 - 480 -
Loss on sales transaction to
former eCOST customer - - 389 -
Merger related integration
expenses 449 - 642 -
--------- -------- --------- --------
Adjusted EBITDA $ 3 $ 1,579 $ 1,636 $ 3,425
========= ======== ========= ========
PFSWEB, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(In Thousands, Except Share Data)
June 30, December 31,
2006 2005
------------- -------------
ASSETS (UNAUDITED)
------------------------------------------
CURRENT ASSETS:
Cash and cash equivalents $ 17,553 $ 13,683
Restricted cash 1,406 2,077
Accounts receivable, net of
allowance for doubtful accounts of
$1,875 and $484 at June 30, 2006
and December 31, 2005, respectively 48,538 44,556
Inventories, net 57,519 43,654
Other receivables 9,816 9,866
Prepaid expenses and other current
assets 3,223 3,213
------------- -------------
Total current assets 138,055 117,049
------------- -------------
PROPERTY AND EQUIPMENT, net 13,525 13,040
RESTRICTED CASH -- 150
IDENTIFIABLE INTANGIBLES 7,316 --
GOODWILL 18,545 --
OTHER ASSETS 836 1,487
------------- -------------
Total assets $ 178,277 $ 131,726
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------------
CURRENT LIABILITIES:
Current portion of long-term debt
and capital lease obligations $ 27,709 $ 21,626
Trade accounts payable 70,718 60,053
Accrued expenses 18,667 12,011
------------- -------------
Total current liabilities 117,094 93,690
------------- -------------
LONG-TERM DEBT AND CAPITAL LEASE
OBLIGATIONS, less current portion 1,892 6,289
OTHER LIABILITIES 1,432 1,813
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Preferred stock, $1.00 par value;
1,000,000 shares authorized; none
issued and outstanding -- --
Common stock, $0.001 par value;
75,000,000 shares authorized;
46,526,100 and 22,613,314 shares
issued at June 30, 2006 and December
31, 2005, respectively; and
46,439,800 and 22,527,014
outstanding at June 30, 2006 and
December 31, 2005, respectively 47 23
Additional paid-in capital 90,858 58,736
Accumulated deficit (34,595) (29,824)
Accumulated other comprehensive
income 1,634 1,084
Treasury stock at cost, 86,300
shares (85) (85)
------------- -------------
Total shareholders' equity 57,859 29,934
------------- -------------
Total liabilities and
shareholders' equity $ 178,277 $ 131,726
============= =============
PFSweb, Inc. and Subsidiaries
Unaudited Consolidating Statements of Operations
for the Three Months Ended June 30, 2006
(In Thousands)
PFSWEB SUPPLIES ECOST
DISTRIBUTORS
---------- ------------- ---------
REVENUES:
Product revenue, net $ - $ 60,867 $ 28,783
Service fee revenue 16,209 - -
Service fee revenue, affiliate 2,075 - -
Pass-through revenue 3,575 - -
---------- ------------- ---------
Total revenues 21,859 60,867 28,783
COSTS OF REVENUES:
Cost of product revenue - 56,776 27,721
Cost of service fee revenue 11,996 - -
Pass-through cost of revenue 3,575 - -
---------- ------------- ---------
Total costs of revenues 15,571 56,776 27,721
---------- ------------- ---------
Gross profit 6,288 4,091 1,062
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES 5,827 2,542 4,702
STOCK BASED COMPENSATION EXPENSE 241 - -
MERGER INTEGRATION EXPENSE - - 449
AMORTIZATION OF IDENTIFIABLE
INTANGIBLES - - 204
---------- ------------- ---------
Income (loss) from
operations 220 1,549 (4,293)
INTEREST EXPENSE (INCOME), NET (30) 538 9
---------- ------------- ---------
Income (loss) before
income taxes 250 1,011 (4,302)
INCOME TAX PROVISION (BENEFIT) (200) 343 -
---------- ------------- ---------
NET INCOME (LOSS) $ 450 $ 668 $ (4,302)
========== ============= =========
EBITDA $ 1,765 $ 1,552 $ (4,004)
========== ============= =========
Adjusted EBITDA $ 2,006 $ 1,552 $ (3,555)
========== ============= =========
A reconciliation of net income (loss) to EBITDA and Adjusted EBITDA
follows:
Net income (loss) $ 450 $ 668 $ (4,302)
Income tax expense (benefit) (200) 343 -
Interest expense (income) (30) 538 9
Depreciation and amortization 1,545 3 289
---------- ------------- ---------
EBITDA $ 1,765 $ 1,552 $ (4,004)
Stock-based compensation 241 - -
Merger integration related
expenses - - 449
---------- ------------- ---------
Adjusted EBITDA $ 2,006 $ 1,552 $ (3,555)
========== ============= =========
ELIMINATIONS CONSOLIDATED
-------------- ------------
REVENUES:
Product revenue, net $ - $ 89,650
Service fee revenue - 16,209
Service fee revenue, affiliate (2,075) -
Pass-through revenue (130) 3,445
-------------- ------------
Total revenues (2,205) 109,304
COSTS OF REVENUES:
Cost of product revenue (11) 84,486
Cost of service fee revenue (630) 11,366
Pass-through cost of revenue (130) 3,445
-------------- ------------
Total costs of revenues (771) 99,297
-------------- ------------
Gross profit (1,434) 10,007
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES (1,434) 11,637
STOCK BASED COMPENSATION EXPENSE - 241
MERGER INTEGRATION EXPENSE - 449
AMORTIZATION OF IDENTIFIABLE
INTANGIBLES - 204
-------------- ------------
Income (loss) from operations - (2,524)
INTEREST EXPENSE (INCOME), NET - 517
-------------- ------------
Income (loss) before income taxes - (3,041)
INCOME TAX PROVISION (BENEFIT) - 143
-------------- ------------
NET INCOME (LOSS) $ - $ (3,184)
============== ============
EBITDA $ - $ (687)
============== ============
Adjusted EBITDA $ - $ 3
============== ============
A reconciliation of net income (loss) to EBITDA and Adjusted EBITDA
follows:
Net income (loss) $ - $ (3,184)
Income tax expense (benefit) - 143
Interest expense (income) - 517
Depreciation and amortization - 1,837
-------------- ------------
EBITDA $ - $ (687)
Stock-based compensation - 241
Merger integration related expenses - 449
-------------- ------------
Adjusted EBITDA $ - $ 3
============== ============
PFSweb, Inc. and Subsidiaries
Unaudited Condensed Consolidating Balance Sheets
as of June 30, 2006
(In Thousands)
SUPPLIES
PFSWEB, INC. DISTRIBUTORS ECOST
------------ ------------ ----------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 15,161 $ 2,392 $ -
Restricted cash 340 893 173
Accounts receivables, net 16,182 29,323 4,614
Inventories, net - 47,623 9,896
Other receivables - 9,816 -
Prepaid expenses and other
current assets 1,898 1,262 63
------------ ------------ ----------
Total current assets 33,581 91,309 14,746
------------ ------------ ----------
PROPERTY AND EQUIPMENT, net 12,826 44 655
NOTE RECEIVABLE FROM AFFILIATE 12,505 - -
INVESTMENT IN AFFILIATE 36,602 - -
IDENTIFIABLE INTANGIBLES - - 7,316
GOODWILL - - 18,545
OTHER ASSETS 662 - 174
------------ ------------ ----------
Total assets $ 96,176 $ 91,353 $ 41,436
============ ============ ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term
debt and capital lease
obligations $ 12,801 $ 14,891 $ 17
Trade accounts payable 7,006 56,876 8,417
Accrued expenses 8,760 4,503 5,404
------------ ------------ ----------
Total current liabilities 28,567 76,270 13,838
------------ ------------ ----------
LONG-TERM DEBT AND CAPITAL LEASE
OBLIGATIONS, less current
portion 1,892 - -
NOTE PAYABLE TO AFFILIATE - 6,505 6,000
OTHER LIABILITIES 1,432 - -
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Common stock 47 - 19
Capital contributions - 1,000 -
Additional paid-in capital 90,858 - 28,059
Retained earnings
(accumulated deficit) (28,169) 5,499 (6,480)
Accumulated other
comprehensive income 1,634 2,079 -
Treasury stock (85) - -
------------ ------------ ----------
Total shareholders'
equity 64,285 8,578 21,598
------------ ------------ ----------
Total liabilities and
shareholders' equity $ 96,176 $ 91,353 $ 41,436
============ ============ ==========
ELIMINATIONS CONSOLIDATED
------------ --------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ - $ 17,553
Restricted cash - 1,406
Accounts receivables, net (1,581) 48,538
Inventories, net - 57,519
Other receivables - 9,816
Prepaid expenses and other current
assets - 3,223
------------ --------------
Total current assets (1,581) 138,055
------------ --------------
PROPERTY AND EQUIPMENT, net - 13,525
NOTE RECEIVABLE FROM AFFILIATE (12,505) -
INVESTMENT IN AFFILIATE (36,602) -
IDENTIFIABLE INTANGIBLES - 7,316
GOODWILL - 18,545
OTHER ASSETS - 836
------------ --------------
Total assets $ (50,688) $ 178,277
============ ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt and
capital lease obligations $ - $ 27,709
Trade accounts payable (1,581) 70,718
Accrued expenses - 18,667
------------ --------------
Total current liabilities (1,581) 117,094
------------ --------------
LONG-TERM DEBT AND CAPITAL LEASE
OBLIGATIONS, less current portion - 1,892
NOTE PAYABLE TO AFFILIATE (12,505) -
OTHER LIABILITIES - 1,432
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Common stock (19) 47
Capital contributions (1,000) -
Additional paid-in capital (28,059) 90,858
Retained earnings (accumulated
deficit) (5,445) (34,595)
Accumulated other comprehensive
income (2,079) 1,634
Treasury stock - (85)
------------ --------------
Total shareholders' equity (36,602) 57,859
------------ --------------
Total liabilities and shareholders'
equity $ (50,688) $ 178,277
============ ==============
eCOST.com, Inc.
Selected Operating Data
Three Months Ended
June 30,
-----------------------
2006 2005
----------- -----------
Total customers (1) 1,581,606 1,287,321
Active customers (2) 351,157 536,172
New customers (3) 70,590 75,202
Number of orders (4) 89,898 122,753
Average order value (5) $ 340 $ 352
Advertising expense (6) $ 986,293 $1,467,000
Cost to acquire a new customer $ 13.97 $ 19.51
(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 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.
*T