PFSweb Inc. (PFSW, Financial) filed Quarterly Report for the period ended 2009-06-30.
PFSWeb Inc. is an international provider of transaction management services for both traditional commerce and electronic commerce or e-commerce companies. The company provides a broad range of services including order management customer care services billing services information management and fulfillment and distribution services. The fulfillment and distribution services are conducted at the warehouses and include picking packing and shipping the clients\' customer orders. PFSweb Inc. has a market cap of $14 million; its shares were traded at around $1.41 with a P/E ratio of 35.3.
Service Fee Revenue. Service fee revenue of $12.4 million decreased $8.9 million, or 41.8%, in the three months ended June 30, 2009 as compared to the same quarter of the prior year. Service fee revenue of $29.5 million decreased $12.6 million, or 29.9%, in the six months ended June 30, 2009 as compared to the same period of the prior year. The decrease in service fee revenue for the three and six months ended June 30, 2009 is primarily due to the non-renewal of a certain U.S. government agency client relationship partially offset by increased service fees generated from the impact of new service contract relationships. The change in service fee revenue is shown below ($ millions):
Cost of Product Revenue. The gross margin for eCOST was $1.9 million or 9.7% of product revenue in the three months ended June 30, 2009 and $1.9 million or 8.3% of product revenue during the comparable period of 2008. The gross margin for eCOST was $4.0 million or 9.7% of product revenue in the six months ended June 30, 2009 and $4.1 million or 8.1% of product revenue during the comparable period of 2008. The increase in gross margin percentage in both periods is primarily due to a shift in product sales to the higher margin business-to-consumer channel. As we continue to target an increasing percentage of eCOST revenues to be generated from the business-to-consumer channel, we expect overall gross margin for eCOST in 2009 will continue to be higher than the prior year.
Supplies Distributors cost of product revenue decreased by $13.2 million, or 24.0%, to $42.0 million in the three months ended June 30, 2009 primarily as a result of decreased product sales. The resulting gross profit margin was $3.3 million, or 7.3% of product revenue, for the three months ended June 30, 2009 and $4.8 million, or 8.0% of product revenue, for the comparable 2008 period. Supplies Distributors cost of product revenue decreased by $29.6 million, or 26.0%, to $83.9 million in the six months ended June 30, 2009 primarily as a result of decreased product sales. The resulting gross profit margin was $6.7 million, or 7.4% of product revenue, for the six months ended June 30, 2009 and $8.8 million, or 7.2% of product revenue, for the comparable 2008 period. The 2008 three and six month periods include the impact of certain incremental inventory cost reductions. The 2009 margin percentages include an increase due to incremental gross margin earned on product sales resulting from certain product price increases, which is partially offset by a reduction in revenue arising from a customer bankruptcy during the first quarter of 2009.
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PFSWeb Inc. is an international provider of transaction management services for both traditional commerce and electronic commerce or e-commerce companies. The company provides a broad range of services including order management customer care services billing services information management and fulfillment and distribution services. The fulfillment and distribution services are conducted at the warehouses and include picking packing and shipping the clients\' customer orders. PFSweb Inc. has a market cap of $14 million; its shares were traded at around $1.41 with a P/E ratio of 35.3.
Highlight of Business Operations:
Supplies Distributors product revenue of $45.3 million decreased $14.8 million, or 24.6%, in the three months ended June 30, 2009 as compared to the same quarter of the prior year. Product revenue of $90.6 million decreased $31.7 million, or 25.9%, in the six months ended June 30, 2009 as compared to the same period of the prior year. The decreases are primarily due to decreased sales volume resulting from the impact of the overall global economic pressures and inventory rationalization by customers. In addition, product revenue in the six months ended June 30, 2009 was negatively impacted by a $1.4 million reduction of revenue arising from a customer bankruptcy.Service Fee Revenue. Service fee revenue of $12.4 million decreased $8.9 million, or 41.8%, in the three months ended June 30, 2009 as compared to the same quarter of the prior year. Service fee revenue of $29.5 million decreased $12.6 million, or 29.9%, in the six months ended June 30, 2009 as compared to the same period of the prior year. The decrease in service fee revenue for the three and six months ended June 30, 2009 is primarily due to the non-renewal of a certain U.S. government agency client relationship partially offset by increased service fees generated from the impact of new service contract relationships. The change in service fee revenue is shown below ($ millions):
Cost of Product Revenue. The gross margin for eCOST was $1.9 million or 9.7% of product revenue in the three months ended June 30, 2009 and $1.9 million or 8.3% of product revenue during the comparable period of 2008. The gross margin for eCOST was $4.0 million or 9.7% of product revenue in the six months ended June 30, 2009 and $4.1 million or 8.1% of product revenue during the comparable period of 2008. The increase in gross margin percentage in both periods is primarily due to a shift in product sales to the higher margin business-to-consumer channel. As we continue to target an increasing percentage of eCOST revenues to be generated from the business-to-consumer channel, we expect overall gross margin for eCOST in 2009 will continue to be higher than the prior year.
Supplies Distributors cost of product revenue decreased by $13.2 million, or 24.0%, to $42.0 million in the three months ended June 30, 2009 primarily as a result of decreased product sales. The resulting gross profit margin was $3.3 million, or 7.3% of product revenue, for the three months ended June 30, 2009 and $4.8 million, or 8.0% of product revenue, for the comparable 2008 period. Supplies Distributors cost of product revenue decreased by $29.6 million, or 26.0%, to $83.9 million in the six months ended June 30, 2009 primarily as a result of decreased product sales. The resulting gross profit margin was $6.7 million, or 7.4% of product revenue, for the six months ended June 30, 2009 and $8.8 million, or 7.2% of product revenue, for the comparable 2008 period. The 2008 three and six month periods include the impact of certain incremental inventory cost reductions. The 2009 margin percentages include an increase due to incremental gross margin earned on product sales resulting from certain product price increases, which is partially offset by a reduction in revenue arising from a customer bankruptcy during the first quarter of 2009.
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