Exhibit 99.1
Slide 1
(logo GSI Commerce tm) The outsource solution for e-commerce
GSI Commerce, Inc.
Goldman Sachs
Fourth Annual Internet Conference
May 22, 2003
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(logo GSI Commerce tm) The outsource solution for e-commerce
Forward-Looking Statements
All statements made in this presentation, other than statements of historical fact, are forward-looking statements. The words “anticipate”, “believe”, “estimate”, “expect”, “intend”, “may”, “plan”, “will”, “would”, “should”, “guidance”, “potential”, “continue”, “project”, “forecast”, “confident”, “prospects” and similar expressions typically are used to identify forward-looking statements. Forward-looking statements are based on the then-current expectations, beliefs, assumptions, estimates and forecasts about the business of GSI Commerce and the industry and markets in which GSIC operates. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or implied by those forward- looking statements. Factors which may affect GSI Commerce’s business, financial condition and operating results include the effects of changes in the economy, consumer spending, the stock market and the industries in which GSI Commerce operates, changes affecting the Internet and e-commerce, the ability of GSIC to maintain relationships with strategic partners and suppliers, the ability of GSIC to timely and successfully develop, maintain and protect its technology and product and service offerings and execute operationally, the ability of GSIC to attract and retain qualified personnel and the ability of GSIC to successfully integrate its acquisitions of other businesses, and the performance of acquired businesses. More information about potential factors that could affect GSI Commerce can be found in its most recent Form 10-K, Form 10-Q and other reports and statements filed by GSI Commerce with the Securities and Exchange Commission. GSI Commerce expressly disclaims any intent or obligation to update these forward-looking statements, except as otherwise specifically stated by GSI Commerce.
EBITDA represents earnings or loss before interest income and expense, taxes, depreciation and amortization, and stock-based compensation. For reconciliations from non-GAAP to GAAP metrics, please refer to www.gsicommerce.com.
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(logo GSI Commerce tm) The outsource solution for e-commerce
GSI Commerce is a Leading eCommerce Services Provider
NASDAQ: GSIC
725 employees
Headquarters in King of Prussia, PA
Fulfillment center in Louisville, KY
Call center in Melbourne, FL
Largest shareholder is QVC/Comcast
Partnered with 40 leading retailers, consumer brands, media properties and professional sports organizations
Owned Inventory Model: GSI records sales & pays revenue share to partner
Consignment Model: GSI compensated with fixed fees and/or % of sales
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(logo GSI Commerce tm) The outsource solution for e-commerce
Selected GSI Partners
Comp & Cons Elec. | (logos) Palm, Tweeter | |
Home Products | (logos) Linens ‘n Things, Ace | |
Apparel, Footwear, Acc. | (logos) Reebok, The Athlete’s Foot, Rockport | |
General Merchandise | (logos) Kmart | |
Health & Beauty | (logos) Estee Lauder Companies, Bobbie Brown, Clinique, Gloss, Estee Lauder, Origins | |
Sporting Goods | (logos) The Sports Authority, Gart Sports, Modell’s, MC Sports, Dick’s, Dunham’s, Denver Broncos, NASCAR, Atlanta Falcons, Rawlings, Russell Athletic | |
Entertainment/Media | (logos) Nick.com, Fox Sports, Comedy Central, TV Land, Lifetime, PAX, The Golf Channel, CBS Sportsline |
Slide 5
(logo GSI Commerce tm) The outsource solution for e-commerce
U.S. Online General Merchandise Market Will Reach $55BN in ‘03
US Online Retail Sales (billions)
2003E | |||
Computer Hardware & Consumer Electronics | $ | 14.7 | |
Home Products | $ | 12.5 | |
Books, Music & Video | $ | 8.8 | |
Apparel, Footwear & Accessories | $ | 7.9 | |
Toys & Video Games | $ | 2.7 | |
Jewelry & Luxury Goods | $ | 1.7 |
Sporting Goods | $ | 1.5 | |
Flowers, Cards & Gifts | $ | 1.4 | |
Health & Beauty | $ | 1.2 | |
Other | $ | 3.2 | |
$ | 55.6 |
General merchandise excludes travel, financial services, tickets, job listings, real estate and autos
Source: Forrester Research
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(logo GSI Commerce tm) The outsource solution for e-commerce
U.S. Online General Merchandise Market Is Expected to Grow to Nearly $140BN in ‘07
(billions)
2003E | $ | 59.2 | |
2004E | $ | 77.4 | |
2005E | $ | 98.5 | |
2006E | $ | 122.1 | |
2007E | $ | 146.2 |
26% net revenue CAGR as compared to 2-3% for overall retail
Source: Forrester Research
Slide 7
(logo GSI Commerce tm) The outsource solution for e-commerce
eCommerce Growth Drivers
Increased Internet Users/Usage
Improving Customer Experience
Deepening Integration Between Online and Offline
Migration of Catalog, Direct Mail and DRTV Revenue
Broadband
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(logo GSI Commerce tm) The outsource solution for e-commerce
Broad Universe of Participants in the U.S. Online General Merchandise Market
Retailers
Pure Plays
Manufacturers/Brands
Catalogers
Media Companies
Professional & Amateur Sports Organizations
Source: Shop.org, Forrester Research
Slide 9
(logo GSI Commerce tm) The outsource solution for e-commerce
GSI Has A Substantial Market Opportunity
eCommerce is too large for major companies to ignore; online sales will account for 4.5% of total retail sales in 2003
Multi-channel retailers will contribute 75% of online retail sales in 2003
but . . .
Multi-channel retailers derive the large majority of their revenue offline – online selling isnot a core competency
A significant opportunity exists to ‘ENABLE’ these companies to maximize their eCommerce business
Source: Shop.org, Forrester Research
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(logo GSI Commerce tm) The outsource solution for e-commerce
Enabling eCommerce
en•a’•ble 1a) To supply with the means or opportunity
b) To make feasible or possible
c) To make operational
tr.v. en·a·bled, en·a·bling, en·a·bles
Enable eCommerce: Software
Hosting/Managed Infrastructure
Professional Services
Fulfillment Services
Customer Contact Services
�� Marketing Services
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(logo GSI Commerce tm) The outsource solution for e-commerce
Software
Components: Web Server
Application Server
Shopping Platform
Content Management
Search Engine
Web Analytics
CRM | ||
Database | ||
Order Management | ||
Fraud Screening | ||
Warehouse Management | ||
Financial Management | ||
Merch Management/Planning | ||
Participants: | BEA, IBM, Microsoft, Oracle, Siebel | |
Slide 12 | ||
(logo GSI Commerce tm) | The outsource solution for e-commerce | |
Hosting/Managed Infrastructure | ||
Components: | Hardware | |
Hardware Maintenance | ||
Hosting (storage & data communication) | ||
Security | ||
Monitoring | ||
Caching | ||
Load Balancing | ||
Systems Administration | ||
Database Administration | ||
Participants: | AT&T, Computer Associates, IBM, Sun Microsystems | |
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(logo GSI Commerce tm) | The outsource solution for e-commerce | |
Professional Services | ||
Components: | Software Selection | |
Integration | ||
Site Design | ||
Site Development | ||
Site Evaluation/Usability Testing | ||
Industry Expertise/General Consulting | ||
Product Photography Copywriting | ||
Participants: | Accenture, EDS, IBM, PWC Consulting | |
Slide 14 | ||
(logo GSI Commerce tm) | The outsource solution for e-commerce | |
Fulfillment Services |
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Components: | Receiving/Put Away | |
Storage | ||
Pick/Pack/Ship | ||
Returns Processing | ||
Inventory Control | ||
Value Added Services | ||
Drop-Ship Management | ||
Shipping Management | ||
Participants: | FedEx, UPS | |
Slide 15 | ||
(logo GSI Commerce tm) | The outsource solution for e-commerce | |
Customer Contact Services | ||
Components: | 24/7 Phone | |
24/7 Email Response | ||
Sales (Cross-/Up-Sell) | ||
Training | ||
Remote Monitoring | ||
Skills-Based Routing | ||
Voice Communication | ||
Event Management | ||
Participants: | Convergys, Precision Response, West Communications | |
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(logo GSI Commerce tm) | The outsource solution for e-commerce | |
Marketing Services | ||
Components: | Online Media Buying | |
Affiliate Program Management | ||
List Management | ||
Email Delivery | ||
Search Optimization | ||
Paid Search | ||
Catalog & DRTV Services | ||
CRM – Lifetime Value Optimization | ||
Participants: | DoubleClick, Grey Digital Marketing, Ogilvy Interactive | |
Slide 17 | ||
(logo GSI Commerce tm) | The outsource solution for e-commerce | |
GSI Provides Solutions That Encompass Every Aspect of Enabling eCommerce |
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Integrated eCommerce software platform centered on proprietary shopping application
Hosted/managed hardware infrastructure
Fulfillment center
Call center
Online marketing/email campaign management
Site design, usability and integration
Multi-channel integration (catalog, DRTV)
Content creation/management
Reporting and analytics
Fulfillment Svcs
Customer Contact Svcs
HOSTED ECOMMERCE TECHNOLOGY PLATFORM
Marketing Svcs
Professional Svcs
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(logo GSI Commerce tm) | The outsource solution for e-commerce |
GSI Value Proposition to Partners
Comprehensive suite of eCommerce products and services
Customized solution with full partner branding
Scale to provide a superior shopping experience and justify ongoing technology and operational infrastructure investment
Proven track record of transitioning and growing significant online businesses
Ability to reduce costs associated with eCommerce and focus resources on core business
Opportunity to avoid capital investment and/or long-term risk
Economic structure that creates financial predictability and makes GSI vested in the success of partner’s eCommerce business
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(logo GSI Commerce tm) | The outsource solution for e-commerce |
Partner Assets
Brand Equity
Offline Marketing
Merchandise Assortment
GSI Solution
Fulfillment Svcs
Customer Contact Svsc
HOSTED ECOMMERCE TECHNOLOGY PLATFORM
Marketing Svcs
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Professional Svcs
Partner Benefits
Revenue Growth
Improved Economics
Enhanced Enterprise Value
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(logo GSI Commerce tm) | The outsource solution for e-commerce |
Selected GSI Partners
Computer Hardware & Consumer Electronics (U.S. Online 2003: $14.7BN)
(logo) Palm, Inc. is a pioneer in mobile and wireless Internet solutions and the world leader in handheld computing with 2002 fiscal year revenues of $1.03 billion.
(logo)Tweeter Home Entertainment Group is a leading consumer electronics retailer with 161 stores and 2002 fiscal year revenues of $794 million.
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(logo GSI Commerce tm) | The outsource solution for e-commerce |
Selected GSI Partners
Home Products (U.S. Online 2003: $12.5BN)
(logo)Linens ‘n Things is a leading retailer of home textiles and housewares with 400 stores and 2002 fiscal year revenues of $2.2 billion.
(logo)ACE Hardware Corporation is the largest hardware cooperative in the U.S. with more than 5,100 stores and 2002 fiscal year revenues of more than $3 billion.
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(logo GSI Commerce tm) | The outsource solution for e-commerce |
Selected GSI Partners
Apparel, Footwear & Accessories (U.S. Online 2003: $7.9BN)
(logo)Reebok is a leading designer and marketer of footwear, apparel and accessories with 2002 fiscal year revenues of $3.1 billion.
(Rockport logo)A subsidiary of Reebok, Rockport is a designer, manufacturer and marketer of comfort footwear with 2002 fiscal year sales of $386 million.
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(logo)The Athlete’s Foot is the world’s largest franchisor of athletic footwear with 750+ stores and 2001 fiscal year revenues of $209 million.
(logo)Shoe Carnival is a leading family footwear retailer with more than 200 stores in 23 states and 2002 fiscal year revenues of $520 million.
Slide 23
(logo GSI Commerce tm) The outsource solution for e-commerce
Selected GSI Partners
General Merchandise (includes jewelry, toys, furniture, books/music/video)
(logo)Kmart is a leading discount retailer with roughly 1,500 stores and 2002 fiscal year revenues of $31 billion.
Slide 24
(logo GSI Commerce tm) The outsource solution for e-commerce
Selected GSI Partners
Sporting Goods (U.S. Online 2003: $1.5BN)
(logo)The Sports Authority is the largest full-line sporting goods retailer with 200+ stores and 2002 fiscal year revenues of $1.4 billion.
(logo)Dick’s Sporting Goods is a leading full-line sporting goods retailer with 140 stores and 2002 fiscal year revenues of $1.3 billion.
(logo)NASCAR is a leading professional sports organization with more than 75 million fans and 2002 worldwide licensed merchandise sales of $2 billion.
Slide 25
(logo GSI Commerce tm) The outsource solution for e-commerce
Selected GSI Partners
Health & Beauty (U.S. Online 2003: $1.2BN)
(logo Estee Lauder Companies)One of the world’s leading manufacturers and marketers of quality skin care, makeup, fragrance and hair care products with 2002 fiscal year revenues of $4.7 billion.
(logos Bobbie Brown, Gloss, Estee Lauder, Clinique, Origins)
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(logo GSI Commerce tm) The outsource solution for e-commerce
Selected GSI Partners
Licensed Entertainment (includes apparel, toys, home décor, accessories, etc.)
(logos)Viacom/Nickelodeon The #1 entertainment brand for kids with 2002 worldwide licensed merchandise sales of $2.6 billion.
(logo)Comedy Central The only all-comedy network available in over 78 million U.S. homes and 2002 worldwide licensed merchandise sales of $98 million.
(logo)TV Land A 24-hour spin-off channel offers classic programs in over 61 million households.
(logo)Lifetime The #1 basic cable channel in primetime and the leader in women’s television is in 85 million U.S. households.
Source: License! Magazine, April 2003
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(logo GSI Commerce tm) The outsource solution for e-commerce
Financial Drivers
Revenue Growth
New Partners
Growth of Existing Partners
Variable Operating Efficiency
Cost Per Package
Cost Per Contact
Contacts Per Order
Fixed Expense Leverage
Scalable Technology Platform
Available Capacity
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(logo GSI Commerce tm) The outsource solution for e-commerce
Revenue Growth
GSI Net Revenue (MM)
2000 | $ | 42.8 | |
2001 | $ | 102.6 | |
2002 | $ | 172.6 | |
2003E | $ | 210.0 |
Slide 29
(logo GSI Commerce tm) The outsource solution for e-commerce
Variable Operating Efficiency
Sales & Marketing Expense / Net Revenue
2000 | 88 | % | |
2001 | 32 | % | |
2002 | 29 | % | |
1Q02 | 28.8 | % | |
1Q03 | 26.0 | % |
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(logo GSI Commerce tm) The outsource solution for e-commerce
Fixed Expense Leverage
Product Development and G&A / Net Revenue
2000 | 37 | % | |
2003 | 19 | % | |
2004 | 16 | % | |
1Q02 | 17.7 | % | |
1Q03 | 14.7 | % |
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(logo GSI Commerce tm) The outsource solution for e-commerce
Ashford Acquisition Masks Underlying Trend
Did Not Meet Financial Expectations
Resource & Focus Distraction
Completed Divestiture in 2002 (same year as purchase completed)
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(logo GSI Commerce tm) The outsource solution for e-commerce
Strong Balance Sheet (March 29, 2003)
Cash* | $ | 51MM | |
Debt | $ | 0MM | |
Cash* Net of Debt | $ | 51MM | |
Total Assets | $ | 163MM | |
Shareholder’s Equity | $ | 115MM |
* Cash and cash equivalents, short-term investments and marketable securities
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(logo GSI Commerce tm) The outsource solution for e-commerce
Moderating Capital Expenditures
2000: | initial platform development, technology market still hot | |
2001: | leveraged investments, strong revenue growth | |
2002: | fulfillment center expansion/purchase, call center purchase, 2nd data center, substantial software/development | |
2003: | leveraging investments, expect strong revenue growth |
(millions)
2000 | $ | 13.7 | |
2001 | $ | 8.4 | |
2002 | $ | 29.0 | |
2003E | $ | 10-$15 |
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(logo GSI Commerce tm) The outsource solution for e-commerce
Summary
Strong business momentum
Significant growth opportunities
Compelling value proposition
Slide 35
(logo GSI Commerce tm) The outsource solution for e-commerce
GSI Commerce, Inc.
Goldman Sachs
Fourth Annual Internet Conference
May 22, 2003