GSI Commerce Reports Fiscal 2007 First Quarter Operating Results;
Net Revenue Grows 28 Percent and Merchandise Sales Grow 69 Percent
Company Also Highlights Emerging Growth Initiatives
KING OF PRUSSIA, Pa., April 25 /PRNewswire-FirstCall/ -- GSI Commerce Inc.
(Nasdaq: GSIC) today announced financial results for its 2007 fiscal first
quarter ended March 31, 2007.
Fiscal 2007 First Quarter Compared to Fiscal 2006 First Quarter
-- Net revenue increased 28 percent to $146.3 million from $114.2
million.
-- Merchandise sales increased 69 percent to $322.5 million from $191.0
million.
-- Loss from operations was $4.8 million compared to a loss of $3.9
million.
-- Adjusted EBITDA increased 45 percent to $3.8 million from $2.6
million.
-- Net loss was $2.3 million or $0.05 per share compared to a net loss
of $4.4 million or $0.10 per share.
-- Non-GAAP net loss, which beginning with this release is now
calculated on a fully taxed basis, was $1.0 million or $0.02 per
share compared to a loss of $2.7 million or $0.06 per share.
Definitions of the non-GAAP measures merchandise sales, adjusted EBITDA,
non-GAAP net income and free cash flow and a discussion of the importance of
these financial metrics to GSI's business can be found under "Non-GAAP Financial
Measures" provided later in this news release.
"I am very pleased with our first quarter performance. We executed well
against our plan and our business maintained a healthy pace coming off a strong
fiscal 2006," said Michael G. Rubin, chairman and CEO of GSI. "Net revenues and
merchandise sales grew 28 percent and 69 percent, respectively, and we exceeded
the high end of our first quarter guidance on all of our key profitability
metrics. I am optimistic about the balance of the year based on underlying
momentum and a robust pipeline of prospects."
Emerging Growth Initiatives
With the company's core strategy having guided GSI to its position as an
industry leader, the company plans to broaden its long-term opportunity with two
emerging growth initiatives: international and interactive marketing services.
"Since launching our business in 1999, we have primarily focused on
developing our end-to-end e-commerce capabilities in the U.S. market. Having
reached a leadership position in our core market, the time is right to focus not
only on continuing to rapidly grow our core business but to also add new,
complementary growth opportunities that can meaningfully impact our overall
potential in the long run," said Rubin.
International:
The international growth initiative will be led by GSI executive Steve
Davis. Davis will assume the role of president of the company's international
business, and lead the company's opportunity to replicate its successful U.S.
model worldwide. By 2009, Forrester Research estimates that the U.S. online
business-to-consumer market (B2C) will grow to approximately $213 billion while
International Data Corporation estimates the global, online B2C market will grow
to approximately $1.1 trillion. Using these estimates, approximately 81 percent
of the global, online B2C market will be located outside of the U.S. by 2009.
Thus, while the U.S. market has historically accounted for virtually all of the
company's revenues, this initiative is designed to grow the company's
international business to account for a meaningful portion of the company's
revenues in the future.
Davis will run the international division from the company's international
headquarters in Barcelona, Spain. Davis has been a member of the GSI senior
management team since 2000. He has overseen account management for the company's
partners and has led GSI's product management team. He is also credited with
launching and directing gsi interactive(SM), a division of GSI Commerce, which
provides a broad range of interactive marketing services.
Interactive Marketing Services:
A search is underway for a president of gsi interactive. This executive
will be responsible for building on the momentum of GSI's marketing services
division and servicing the online marketing needs of partners who continue to
move their marketing dollars from traditional media to the online channel. With
a talented group of more than 135 employees, gsi interactive currently provides
interactive design, user experience, digital photography, content, e-mail
marketing, search and other online marketing services to 50 of GSI's 60-plus
partners.
Key Events Since Feb. 13, 2007
-- In March, GSI announced it had entered into its 12th retail
merchandise category when the company signed a multiyear agreement
with The Hershey Company (NYSE: HSY), North America's leading
chocolate and confectionery manufacturer, to provide a full-service,
direct-to- consumer solution for its online gift store and catalog,
Hershey's Gifts (www.hersheysgifts.com) and Mauna Loa
(www.maunaloa.com). Services GSI will provide to Hershey include
e-commerce technology, order processing, personalization and
fulfillment of gifts, and customer care support for Web, catalog and
business consumers.
-- During the quarter, the company also entered its 13th retail
merchandise category by signing an e-commerce agreement with a
publicly traded, multi-billion dollar specialty retailer. The
company expects to name the new partner after the launch of the
partner's new online store this fall. Services provided by GSI will
include e-commerce technology, order processing, fulfillment and
customer care operations.
-- Also in March, GSI announced that it signed a 10-year extension to
the existing long-term e-commerce agreement with The Sports
Authority Inc. (www.thesportsauthority.com), one of the largest,
national full-line sporting goods chains. Services GSI provides
include e-commerce technology, order processing, fulfillment,
customer care operations, and comprehensive design and interactive
services including paid search and affiliate marketing.
-- In April, GSI announced it signed a multiyear agreement with
Charlotte Russe Holding Inc. (Nasdaq: CHIC), a women's apparel and
accessories retailer. GSI will provide Charlotte Russe with
e-commerce technology, order processing, customer care, fulfillment
services and Web site design. The site is expected to launch in the
fall.
2007 Fiscal Year and Second Quarter Financial Guidance
The following forward-looking statements reflect GSI's expectations as of
April 25, 2007. Given the potential changes in general economic conditions and
consumer spending, the emerging nature of e-commerce and various other risk
factors discussed below and in our public reports, actual results may differ
materially.
The company provides the following updated guidance for fiscal year 2007
(dollars in millions):
GAAP Guidance Non-GAAP Guidance
Range Range
Net revenue $710.0 - $760.0 Merchandise sales (a) $1,590.0 - $1,690.0
Income from
operations $9.5 - $12.5 Adjusted EBITDA (b) $52.0 - $55.0
Net income $38.0 - $41.0 Non-GAAP net income (c) $12.0 - 15.0
(fully taxed)
The following additional fiscal 2007 year guidance is presented to
reconcile the GAAP financial metric to its corresponding Non-GAAP financial
metric:
a) Merchandise sales: add to projected net revenue estimated
merchandise sales from non-owned inventory of approximately $1.085
billion - $1.135 billion and subtract estimated service fees of
approximately $205.0 million.
b) Adjusted EBITDA: add to projected income from operations estimated
depreciation and amortization of $34.0 million and estimated stock-
based compensation of $8.5 million.
c) Non-GAAP net income: add to projected net income estimated
stock-based compensation of $8.5 million and estimated amortization
of acquisition-related intangibles of $1.5 million and subtract
estimated income tax benefit of $26.0 million. This figure is then
taxed at our estimated annual effective tax rate of 38.5 percent.
Capital expenditures for fiscal year 2007 are estimated to be in a range
of $50.0 - $55.0 million.
The company provides the following guidance for fiscal 2007 second quarter
(dollars in millions):
GAAP Guidance Non-GAAP Guidance
Range Range
Net revenue $125.0 - $135.0 Merchandise sales (a) $280.0 - $300.0
Loss from
operations $(12.0) - $(11.0) Adjusted EBITDA loss (b) $(2.0) - $(1.0)
Net loss $(7.5) - $(6.5) Non-GAAP net loss (c) $(6.0) - $(5.0)
(fully taxed)
The following additional fiscal 2007 second quarter guidance is presented
to reconcile the GAAP financial metric to its corresponding Non-GAAP financial
metric:
a) Merchandise sales: add to projected net revenue estimated
merchandise sales from non-owned inventory of approximately $190.0
million - $200.0 million and subtract estimated service fees of
approximately $35.0 million.
b) Adjusted EBITDA: add to projected loss from operations estimated
depreciation and amortization of $8.0 million and estimated stock-
based compensation of $2.0 million.
c) Non-GAAP net loss: add to projected net loss estimated stock-based
compensation of $2.0 million and estimated amortization of
acquisition-related intangibles of $0.4 million for fiscal 2007
second quarter and subtract estimated income tax benefit of $4.0
million. This figure is then taxed at our estimated annual effective
tax rate of 38.5 percent.
Non-GAAP Financial Measures
GSI's consolidated financial statements are prepared and presented in
accordance with GAAP. To supplement our consolidated financial statements, in
this release and on the conference call, we use the non-GAAP financial measures
of merchandise sales, adjusted EBITDA, non-GAAP net income and free cash flow.
We also discuss certain ratios that use those measures. The non- GAAP measures
and ratios presented are not intended to be considered in isolation of, as a
substitute for or superior to our GAAP financial information. We have included
reconciliations later in this release of the non-GAAP measures to the nearest
GAAP measure.
We use these non-GAAP financial measures for financial and operational
decision making and as a means to evaluate our performance. In our opinion,
these non-GAAP measures provide meaningful supplemental information regarding
our performance. We believe that both management and investors benefit from
referring to these non-GAAP financial measures in assessing our performance and
when planning, forecasting and analyzing future periods. These non-GAAP
financial measures also facilitate management's internal comparisons to our
historical performance and liquidity as well as comparisons to our competitors'
operating results. We believe these non-GAAP financial measures are useful to
investors both because (1) they allow for greater transparency with respect to
key metrics used by management in its financial and operational decision making
and (2) they are used by institutional investors and the analyst community to
help them analyze the health of our business.
Merchandise sales. We define merchandise sales as the retail value of all
sales transactions, inclusive of freight charges and net of allowances for
returns and discounts, which flow through our platform, whether or not we are
the seller of the merchandise or record the full amount of such sales on our
financial statements. We consider merchandise sales to be a useful metric for
management and investors because a significant portion of our sales and
marketing expenses, including fulfillment and customer service labor expense,
order processing costs such as credit card and bank processing fees and
organizational costs such as business management, are related to the amount of
sales made through our platform, whether or not we record the revenue from such
sales. As a result, we use this metric as part of our revenue and expense
forecasting process and for capacity planning purposes. We monitor this metric
on a daily basis and consider it to be a critical measure of the health of our
business.
Adjusted EBITDA. We define adjusted EBITDA as income from operations
excluding stock-based compensation and depreciation and amortization expenses.
We consider adjusted EBITDA to be a useful metric for management and investors
because it excludes certain non-cash items. Because of varying available
valuation methodologies, subjective assumptions and the variety of award types
that companies can use when valuing equity awards under SFAS 123R, we believe
that viewing income from operations excluding stock-based compensation expense
allows investors to make meaningful comparisons between our operating
performance and those of other businesses. Because we are growing rapidly and
operate in an emerging and rapidly changing industry, we believe that our level
of capital expenditures and consequently the level of depreciation and
amortization expense relative to our revenues could be meaningfully greater
today than it will be over time. As a result, we believe it is useful
supplemental information to view income from operations excluding depreciation
and amortization expense as it provides a potential indicator of the future
operating margin potential of the business.
Non-GAAP net income. Beginning with this release, we are defining non-GAAP
net income as net income plus stock-based compensation expense and amortization
of acquisition-related intangibles minus cumulative effect of change in
accounting principle related to the adoption of SFAS 123R and plus/minus the
provision/benefit for income taxes. This figure is then taxed at our current
annual effective tax rate to arrive at non-GAAP net income. We believe it is
useful to exclude stock-based compensation expense from non-GAAP net income for
the same reason we exclude it from adjusted EBITDA. We believe it is useful to
exclude amortization of acquisition-related intangibles because in our opinion
the benefits of these assets could exceed the amortization period and this
supplemental view enables management and investors to measure the business
without this potential effect. The gain we recorded from the cumulative effect
of change in accounting principle related to the adoption of SFAS 123R is an
item we view as non-recurring in nature. We believe it is useful to view net
income without the benefit of this non- recurring item. We exclude the GAAP
income tax provision in order to compute the non-GAAP pre-tax income. The
non-GAAP pre-tax income is then taxed at our current annual effective tax rate
to arrive at non-GAAP net income.
Free cash flow. We define free cash flow as net cash provided by operating
activities minus capital expenditures, including capitalized software
development. We consider free cash flow to be a liquidity measure that provides
useful information to management and investors about the amount of cash
generated by the business that, after the acquisition of property and equipment,
including information technology infrastructure, can be used for strategic
opportunities, including investing in the business, making strategic
acquisitions and strengthening the balance sheet. Analysis of free cash flow
also facilitates management's comparisons of our operating results to
competitors' operating results. A limitation of using free cash flow as a means
for evaluating our performance is that free cash flow reflects changes in
working capital which is impacted by short-term changes in cash flow and the
seasonality of our business which may not be indicative of long-term
performance. Another limitation of free cash flow is that it excludes fixed
assets purchased and placed in service but not paid for during the applicable
period. Our management compensates for this limitation by providing information
about capital expenditures on the face of the cash flow statement and in
supplemental disclosures in our Forms 10-K and 10-Q.
Fiscal First Quarter 2007 Conference Call
GSI Commerce has scheduled a conference call for today at 4:45 p.m. EDT to
review its fiscal 2007 first quarter operating results and to discuss the
company's expectations for future performance. For access to the conference
call, please call the toll-free conference number, 1-866-700-0133, today by 4:30
p.m. EDT. The conference passcode is "95060325." Alternatively, to listen to the
call live on the Web, go to the GSI Commerce Web site, www.gsicommerce.com, and
click on the link provided on the home page. Please do this at least 15 minutes
prior to the call (4:30 p.m. EDT) to register, download and install any
necessary audio software. The conference call also will be broadcast live on the
Web through CCBN StreetEvents (www.streetevents.com). For those who cannot
listen to the live Webcast, a telephone replay of the conference call will be
available one hour after the completion of the call and remain available through
May 25. Access to a recording of the conference call can be made by calling
toll-free, 1-888-286-8010. The telephone replay passcode is "69837917."
Additionally, access to a replay of the conference call's Webcast can be found
on the home page of the GSI Commerce Web site. Access to the audio replay of the
Webcast also will remain available through May 25.
About GSI Commerce(R)
GSI Commerce is a leading provider of e-commerce solutions that enable
retailers, branded manufacturers, entertainment companies and professional
sports organizations to operate e-commerce businesses. We provide solutions for
our partners through our integrated e-commerce platform, which is comprised of
three components: technology, logistics and customer care, and marketing
services. We provide e-commerce solutions for more than 60 partners.
Forward-Looking Statements
All statements made in this release, other than statements of historical
fact, are forward-looking statements. The words "anticipate," "believe,"
"estimate," "expect," "intend," "may," "plan," "will," "would," "should,"
"could," "guidance," "potential," "opportunity," "continue," "project,"
"forecast," "confident," "prospects," "schedule," designed," "future" 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. 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
these 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 financial markets and the
industries in which GSI Commerce and its partners operate, changes affecting the
Internet and e-commerce, the ability of GSI Commerce to develop and maintain
relationships with strategic partners and suppliers and the timing of its
establishment, extension or termination of its relationships with strategic
partners, the ability of GSI Commerce to timely and successfully develop,
maintain and protect its technology, confidential and proprietary information,
and product and service offerings and execute operationally, the ability of GSI
Commerce to attract and retain qualified personnel, the ability of GSI Commerce
to successfully integrate its acquisitions of other businesses, if any, 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 SEC. GSI
Commerce expressly disclaims any intent or obligation to update these
forward-looking statements.
Contact:
GSI Commerce, Inc.
Corporate Marketing
610.491.7474
Fax: 610.265.2866
news@gsicommerce.com
GSI COMMERCE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
December 30, March 31,
2006 2007
ASSETS
Current assets:
Cash and cash equivalents $ 71,382 $ 25,671
Marketable securities 113,074 108,335
Accounts receivable, net of
allowance of $1,078 and $838 38,681 26,314
Inventory 46,816 41,962
Deferred tax assets 10,403 10,905
Prepaid expenses and other current assets 6,409 5,594
Total current assets 286,765 218,781
Property and equipment, net 106,204 118,241
Goodwill 17,786 17,786
Equity investments and other 2,435 2,435
Long-term deferred tax assets 36,792 37,719
Other assets, net of accumulated
amortization of $12,367 and $13,349 13,575 12,753
Total assets $ 463,557 $ 407,715
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 76,553 $ 33,563
Accrued expenses and other 72,740 48,670
Deferred revenue 11,790 13,887
Current portion - long-term debt and other 510 1,121
Total current liabilities 161,593 97,241
Convertible notes 57,500 57,500
Long-term debt 12,856 20,039
Deferred revenue and other 3,901 3,527
Total liabilities 235,850 178,307
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.01 par value,
4,990,000 shares authorized; 0 shares
issued and outstanding as of December
30, 2006 and March 31, 2007 -- --
Common stock, $0.01 par value, 90,000,000
shares authorized; 45,878,527 and
46,306,001 shares issued as of December
30, 2006 and March 31, 2007, respectively;
45,878,324 and 46,305,798 shares
outstanding as of December 30, 2006 and
March 31, 2007, respectively 458 463
Additional paid in capital 347,676 351,648
Accumulated other comprehensive loss (97) (28)
Accumulated deficit (120,330) (122,675)
Total stockholders' equity 227,707 229,408
Total liabilities and
stockholders' equity $ 463,557 $ 407,715
GSI COMMERCE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended
April 1, March 31,
2006 2007
Revenues:
Net revenues from product sales $ 91,657 $ 108,750
Service fee revenues 22,586 37,533
Net revenues 114,243 146,283
Cost of revenues from product sales 67,066 76,802
Gross profit 47,177 69,481
Operating expenses:
Sales and marketing, inclusive of $1,309
and $557 of stock-based compensation 30,713 44,174
Product development, inclusive of
$192 and $288 of stock-based
compensation 8,403 13,738
General and administrative,
inclusive of $422 and $752 of
stock-based compensation 7,397 9,411
Depreciation and amortization 4,516 6,924
Total operating expenses 51,029 74,247
Loss from operations (3,852) (4,766)
Other (income) expense:
Interest expense 778 842
Interest income (1,490) (1,944)
Other (income) expense (150) 15
Impairment on investment 1,647 --
Total other (income) expense 785 (1,087)
Loss before income taxes (4,637) (3,679)
Provision (benefit) for income taxes 2 (1,334)
Net loss before cumulative effect of
change in accounting principle (4,639) (2,345)
Cumulative effect of change in
accounting principle 268 --
Net loss $ (4,371) $ (2,345)
Basic and diluted loss per share:
Prior to cumulative effect of
change in accounting principle $ (0.11) $ (0.05)
Cumulative effect of change in
accounting principle $ 0.01 $-
Net loss $ (0.10) $ (0.05)
Weighted average shares outstanding -
basic and diluted 44,680 45,999
GSI COMMERCE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended
April 1, March 31,
2006 2007
Cash Flows from Operating Activities:
Net loss $ (4,371) $ (2,345)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization 4,516 6,924
Stock-based compensation 1,923 1,597
Loss on investment 1,647 --
Loss on disposal of equipment 55 46
Deferred tax assets -- (1,402)
Cumulative effect of change in
accounting principle (268) --
Changes in operating assets and
liabilities:
Accounts receivable, net 5,182 12,393
Inventory 3,272 4,855
Prepaid expenses and other
current assets (222) 815
Other assets, net 146 303
Accounts payable and accrued
expenses and other (32,016) (68,826)
Deferred revenue (412) 1,567
Net cash used in operating activities (20,548) (44,073)
Cash Flows from Investing Activities:
Payments for acquisition of business,
net of cash acquired (2,629) --
Cash paid for property and equipment,
including internal use software (3,721) (9,556)
Proceeds from government grant related
to corporate headquarters 2,925 --
Other deferred cost 41 --
Cash paid for equity investments (2,408) --
Purchases of marketable securities (63,405) (56,279)
Sales of marketable securities 71,975 60,950
Net cash provided by (used in)
investing activities 2,778 (4,885)
Cash Flows from Financing Activities
Repayments of capital lease
obligations (152) (123)
Repayments of mortgage note (55) (47)
Proceeds from exercise of common
stock options 2,029 3,402
Net cash provided by financing
activities 1,822 3,232
Effect of exchange rate changes on
cash and cash equivalents 5 15
Net decrease in cash and cash equivalents (15,943) (45,711)
Cash and cash equivalents, beginning
of period 48,361 71,382
Cash and cash equivalents, end of period $ 32,418 $ 25,671
GSI COMMERCE, INC. AND SUBSIDIARIES
ADJUSTED EBITDA (1) AND RECONCILIATION TO GAAP RESULTS
(In thousands)
(Unaudited)
Three Months Ended
April 1, March 31,
2006 2007
Reconciliation of GAAP loss from
operations to Adjusted EBITDA:
GAAP loss from operations $(3,852) $(4,766)
Stock-based compensation 1,923 1,597
Depreciation and amortization 4,516 6,924
Adjusted EBITDA $ 2,587 $ 3,755
(1) Adjusted EBITDA no longer includes other income (expense) as a reconciling
item between Adjusted EBITDA and GAAP results.
GSI COMMERCE, INC. AND SUBSIDIARIES
NON-GAAP NET LOSS AND RECONCILIATION TO GAAP RESULTS
(In thousands, except per share data)
(Unaudited)
Three Months Ended
April 1, March 31,
2006 2007
Reconciliation of GAAP net loss to
non-GAAP net loss:
GAAP net loss $ (4,371) $ (2,345)
Provision (benefit) for income taxes 2 (1,334)
Stock-based compensation 1,923 1,597
Cumulative effect of change in
accounting principle (268) --
Amortization of acquisition-related
intangibles 14 391
Non-GAAP pre-tax loss (2,700) (1,691)
Income tax benefit at 38.5% (1) -- (651)
Non-GAAP net loss $ (2,700) $ (1,040)
Basic and diluted non-GAAP net loss
per share $ (0.06) $ (0.02)
Weighted average shares outstanding
- basic and diluted 44,680 45,999
(1) The income tax benefit for the three months ended March 31, 2007 is
calculated using our fiscal 2007 effective tax rate. For the three months
ended April 1, 2006, there was no GAAP benefit for income taxes.
GSI COMMERCE, INC. AND SUBSIDIARIES
FREE CASH FLOW AND RECONCILIATION TO GAAP OPERATING CASH FLOW - TRAILING
TWELVE MONTHS
(In thousands)
(Unaudited)
Twelve Months Ended
April 1, March 31,
2006 2007
Reconciliation of GAAP operating cash
flow to free cash flow
GAAP cash flow from operating activities $ 29,255 $ 42,552
Cash paid for fixed assets, including
capitalized software development (26,511) (48,456)
Free cash flow $ 2,744 $ (5,904)
GSI COMMERCE, INC. AND SUBSIDIARIES
MERCHANDISE SALES (1) AND RECONCILIATION TO GAAP RESULTS
(Dollars in thousands)
(Unaudited)
Three Months Ended
April 1, March 31, Variance
2006 2007 Amount %
Merchandise sales (1)
- (a non-GAAP financial measure):
Category:
Sporting goods $ 67,448 $ 91,945 $ 24,497 36%
Other 123,502 230,554 107,052 87%
Total merchandise sales (1)
- (a non-GAAP financial
measure) $ 190,950 $ 322,499 $ 131,549 69%
Net revenues - (GAAP basis):
Net revenues from product sales:
Category:
Sporting goods $ 55,837 $ 76,774 $ 20,937 37%
Other 35,820 31,976 (3,844) -11%
Total net revenues from
product sales 91,657 108,750 17,093 19%
Service fee revenues 22,586 37,533 14,947 66%
Total net revenues -
(GAAP basis) $ 114,243 $ 146,283 $ 32,040 28%
Reconciliation of merchandise sales
(1) to net revenues:
Merchandise sales (1) - (a non-GAAP
financial measure):
Category:
Sporting goods $ 67,448 $ 91,945 $ 24,497 36%
Other 123,502 230,554 107,052 87%
Total merchandise sales
(1) - (a non-GAAP
financial measure) 190,950 322,499 131,549 69%
Less:
Sales by partners (2):
Category:
Sporting goods (11,611) (15,171) (3,560) 31%
Other (87,682) (198,578) (110,896) 126%
Total sales by partners (2) (99,293) (213,749) (114,456) 115%
Add:
Service fee revenues 22,586 37,533 14,947 66%
Net revenues - (GAAP basis) $ 114,243 $ 146,283 $ 32,040 28%
(1) Merchandise sales represents the retail value of all sales transactions,
inclusive of freight charges and net of allowances for returns and
discounts, which flow through the GSI Commerce platform, whether or not
GSI Commerce is the seller of the merchandise or records the full amount
of such sales on its financial statements.
(2) Represents the retail value of all product sales through the GSI Commerce
platform where the inventory is owned by the partner and the partner is
the seller of the merchandise. GSI Commerce records service fee revenues
on these sales.
SOURCE GSI Commerce, Inc.
-0- 04/25/2007
/CONTACT: GSI Commerce, Inc. Corporate Marketing, +1-610-491-7474, or
fax, +1-610-265-2866, news@gsicommerce.com /
/Web site: http://www.gsicommerce.com /