- --------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report: April 23, 2008
(Date of earliest event reported)
----------
GSI COMMERCE, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-16611 04-2958132
(State or other (Commission File No.) (IRS Employer
jurisdiction of incorporation) Identification No.)
935 First Avenue, King of Prussia, PA 19406
(Address of principal executive offices and zip code)
(610) 491-7000
(Registrant's telephone number, including area code)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
|_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
- --------------------------------------------------------------------------------
Item 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
On April 23, 2008, GSI Commerce, Inc. ("we" or the "Registrant") issued a
press release announcing results for the 2008 first fiscal quarter ended March
29, 2008 and certain other information. A copy of the press release is furnished
as part of this report and incorporated herein by reference.
The press release (included as Exhibit 99.1) contains the non-GAAP
financial measures non-GAAP income from operations and free cash flow. We also
discuss certain ratios that use those measures. These financial measures are not
intended to be considered in isolation of, as a substitute for or superior to
our GAAP financial information. The non-GAAP financial measures included in the
press release and to be included the conference call have been reconciled to the
nearest GAAP measure as is required under Securities and Exchange Commission
rules. As used herein, "GAAP" refers to accounting principles generally accepted
in the United States.
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 to the operating results of
comparable companies. 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.
Non-GAAP income from operations. We define non-GAAP income from
operations, formerly referred to as adjusted EBITDA, as income from operations
excluding stock-based compensation, depreciation and amortization expenses and
acquisition-related integration expenses. We consider non-GAAP income from
operations to be a useful metric for management and investors because it
excludes certain non-cash and non-operating 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. We believe the exclusion of
acquisition-related integration expenses permits evaluation and a comparison of
results for on-going business operations, and it is on this basis that
management internally assesses the company's performance.
Free cash flow. We define free cash flow as net cash provided by operating
activities minus cash paid for fixed assets, 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 the
operating results of comparable companies. 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 supplemental
information about capital expenditures accrued, but not paid for during the
applicable periods on the face of the cash flow statement in our Forms 10-K and
10-Q.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
99.1 Press Release, dated April 23, 2008
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GSI COMMERCE, INC.
By: /s/ Michael R. Conn
---------------------------------
Michael R. Conn
Executive Vice President Finance and
Chief Financial Officer
Dated: April 23, 2008
Exhibit Index
Exhibit No. Description
- ----------- --------------------------------------
99.1 Press Release, dated April 23, 2008