PFSW - Earnings call transcript Q4 2021

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Operator

Good morning, everyone, and thank you for participating in today's conference call to discuss PFSweb's Q4 and full year 2021 results.

Joining us today are PFSweb's CEO, Mike Willoughby; the COO and President of PFS, Zach Thomann; the company's CFO, Tom Madden; and the company's Investor Relations adviser, Jackie Keshner with Gateway Group.

Following their remarks, we'll open the call for your questions. I would now like to turn the call over to Ms. Keshner for some introductory comments.

Jackie Keshner

you. Thank

release forward-looking further, statements. to conference will, All than facts go remarks the call guidance, would anticipate, historical the forward-looking replay way words concerning link statements are confidence, section as is of today replay starting I targets, I expressed we expect, make this also will Any until like redistribution, following other believe, projects remind website PFSweb Before available call estimate, of provided like The intend, well that the found statements. in forward-looking presentation in webcast website XXXX, statements XX, the this other at PFSweb as press as in and of be without strictly identify certain expressions can our statement. any disclaimer Investors XX:XX full non-GAAP rebroadcast under are typically safe The similar prohibited. everyone for used filings May well this in today's in related would be to metrics a.m. and call harbor at will XX-K Eastern as used available statements. company's the to company's be in the this A forward-looking retransmission to Time. pfscommerce.com. on available consent via written or

Mike Now Mr. Mike? Willoughby. turn Executive call the like Officer I to would of over to PFSweb, Chief the

Mike Willoughby

and Jackie, morning, everyone. you, good Thank

year, sale our LiveArea hard given QX forward in I and according last This of year are to press which filings. us. the our As putting we complex to won't that rehash been and call with announcing this year. indicated current been February and On the with our this implications we last not was delays completing associated easy on results, covered fully full consistently business indicated, are quarterly release detail our has in results, work and much in everything the the tax August accounting become so of we we here. of call schedule XXXX last have Nevertheless, we global of Merkle earnings around to completed pleased have to these look late the working we behind we XXXX annual

saw of our significant business value in XXXX transaction. on headwinds, we business LiveArea As strong performed pandemic by well the operational noted, an momentum and PFS the from the top generated Despite PFS perspective. macroeconomic

services later are in positive fulfillment opportunities the call. momentum We also seeing have e-commerce year. detail this about more this excellent fulfillment and will in in leverage our XXXX tailwinds have substantial business Zach industry our and expand the to in

Now restructuring let our allocation the alternatives and me priorities capital that strategic touch near-term and process we have. on

and under have into of substantially concluded and support critical through transaction transition were functions business to to agreement, transitioned. we QX, the services obligations continuing a we our the 'XX as following closing business operations Immediately and TSA. fully First, the to LiveArea of QX continue or Merkle various Merkle provide

adjustments related significant TSA. support have we concluded we those made activities, As and of various cost have reductions to operational the recently

TSA. the to with needs process. review strategic the Advisors reorganization on business actions previous with the a Capital GX and the meet develop have plan overhead also playbook Based with company of engagement associated style to required business and our structure our structure concluded significantly identified we needs the the demonstrable to to overhead our our the we alternative business Merkle reduce support and and we transaction reflect holding optimize corporate of taken organizational with align Second, created comprehensive to to PFS LiveArea after the GX,

accounting have the substantially Merkle. LiveArea sale and delayed to global completed the associated of filing work our of with business the Third, tax we complex with XX-K, the

corporate strategic disposition associated and even efforts full transaction PFSweb. and our taking of in alternatives the 'XX on and LiveArea including on to of effort and looking close and XX-Q by strategic the momentum the operational growth a of process. financial forward a with filing to completing all Raymond attention the range client our our us, While sales the diligent the we of headquarters, on work behind we of delays supporting business, review items James, these considerable past we of will With optimization associated alternatives moving remain can number the structural complete for the our advantage full in our with of associated business, to are the mid-June, focus QX now focus the more our

initiative. the do line specific our we at the strategic is process foremost a point, not completion time While for have to this of it disclose

have As we significant and is and PFS we an our returning shareholder creating platform, the the currently before, is focus attractive business shareholders we amount capital hold. stated additional value believe of to

brief a compliance next Now word the on what's with process. Nasdaq

Nasdaq we with Form XXXX, Market not that March continued Stock us was As for XX, our on until Securities not by on because periodic Exchange a submit requirements report received a the regain from for X, we annual Nasdaq filed May to Commission compliance. filing ended the XX, of March in year and XXXX, XXXX. the were regained previously the have on XX, notifying our provides us XX-K XX filing required communicated, XXXX XXXX, of listing we XX-K with compliance the compliance. notice with May calendar plan now XXXX, the date due XX, With days December to

the report of these the a XX, 'XX on that for the the will same expect result Exchange May the our reasons as filing March delays delayed Commission the today, to of and quarterly However, filings XX, is of Securities be ended caused we due XX-Q filing, we which XX-K, period of our notice Form XXXX delayed effect. XXXX, and with with this 'XX, the XX-K to on a for SEC expect receive

status or on of listing company's trading this not shares. do the in anticipate immediate result we an Importantly, notice will the impact

and the Nasdaq document filing reporting target continue quarter XXXX, work by diligently We after continue SEC our requirements. mid-June with compliance maintaining we to listing anticipate to to complete which obligations first XXXX our and

me the Ukraine. to over say few Tom, ongoing let about the call turning situation words before Finally, in tragic a

Our impacted, thoughts discuss and all conflict. to I for swift want note detail. those further hope this Tom? impact situation the a to are out financials over do will earnestly and business With had that I we to that, it turn in to on go to who the our end of has Tom no operations.

Tom Madden

you, Thank Mike.

you in the XXXX. same As million $XX.X in operations our million non-GAAP QX presentation, equivalent revenue, business the to $XX service period during for was fee PFS PFS see XXXX SFE revenue, or our will compared

of XXXX increased million to compared our to is year for revenue operations SFE provided full annual $XXX.X total PFS previously which XXXX Our CY million targeted for guidance SFE range XXXX, X% the XX% revenue PFS to X% within growth. $XXX.X

our revenue periods. QX $XX As revenue associated of in us favorably SFE the to nonrecurring range be to million with we $XX closures we have in XXXX by our impacted retail through million QX of to in across those contribution was noted, revenue SFE clients' store previously total XXXX, which estimated incremental

in in CY revenue generated closure business, encouraged We incremental considering XXXX XXXX. the annual events by core the from store growth the the PFS are especially

profit XX.X% year a Our PFS of -- gross period. revenue $XX.X the of with million million, XX.X% fee in of of operations margin profit margin a a XXXX PFS $XX.X gross compared service revenue of PFS revenue gross gross with was ago QX to

XX.X% will forecasted Our we across rebalanced the year. in of of aligned margins with $XX.X and surcharges in was our network, the in which margin COVID core and XXXX these a continued U.S. revenues. overall help are a the XXXX million, range the margin gross total volume the and for May We compared these decline and calls for gross gross the with fulfillment to client in resulted $XX.X contact compared mix-related contracts, of gross PFS fulfillment has for that more business The impact holiday resulting tend to pressures. center adjustments result gross to increase gross changes gross concentration of XXXX XXXX XX%. margin operations in expectations and as XXXX of in reduced The a gross margin conference XX% in consistent pricing percentage million, profit margins a in long-term compared in between new XX.X% is moderate to year, profit negotiated This to March likely Memphis instituted client services, with last the existing and XXXX.

costs. pro a without is While our in adjusted we the EBITDA achieved the X% XX%. we stand-alone forma have estimated which the were of we an of environment to PFS PFS our margin forma seen EBITDA reduction, in for estimated some pro Note corporate adjusted to current gross midpoint expected target X%, certain overhead EBITDA refers metric nonpublic adjusted business if approximately as of profitability estimated operating previously that percentage PFS XXXX stand-alone

$X.X Our an actual from was comparable in continuing operations contribution consolidated million year XXXX the EBITDA adjusted calendar XXXX. compared million quarter of fourth in $X.X to adjusted of of the EBITDA quarter

footprint. center in leases, this to Our for primarily to growth, long-term falls million as capital $X capacity other and at by have fulfillment our year assets the to approximately previously full calendar expect range and in to driven finance expanded the expansions, for expenditures were XXXX for including also operations expenditures We and $X.X PFS $XX to the acquired debt year continue relation currently $X.X our new QX, and fulfillment capital were our under million within in especially our million expectation. ramping million stated well support XXXX,

includes cash approximately as of December of liquidity Our position XX, million of $X.X million and $XXX only debt. over XXXX,

in of As a the quarter previously again, $XX the are during million very overall the result we an of a pay did strong sale. payments from XXXX gain large But on once basis, discussed, position. income tax LiveArea we approximately liquidity December as

XXXX continued growth outlook, calendar includes to the SFE annual fee of in our year of of upper adjusted XXXX this EBITDA existing revenue pipeline, from operations growth The we that X% stand-alone growth can and to stated clients, range to at to the sales robust end be within previously target estimated bookings continues XXXX are range. company revenue of we a combination targeted a range. X% achieve PFS organic our revenue Through optimistic the PFS which service targets, strong percentage reiterating a expected we are targeted For SFE XX%. also XX%

regarding one year outlook. our additional comment Just XXXX calendar

and arrangement XX-Qs quarter XXXX we disclosed our with have be we where recent we under our our expect Ricoh. in quarter product to revenues March the the generate XX-K, last As client

revenue As year going it we forward. years, past for over activity approximately to transition several calendar us model and have Ricoh product decrease. And And sense in million XXXX. to the to made it $XX to for continued both discussing down Ricoh, own this been its came

analysts this as we product are from and see in beneficial operations the have our will short create up wrapped I'm run to sales its product the minimal term, many our setting it and year little on over truly in our revenue change sure the margin some and now to as comparative this to very activity. consolidated and a this While this long the and activity that gross announced audience. confusion recently update us turn This Zach? to financial results. in impact low analysis our provide percentage for we pleased call PFSweb is will to of away Zach results, revenue will EBITDA was an adjusted business call transition record financial investors I confusing believe the investor comparative

Zach Thomann

Tom. Thanks,

within new performance bookings last average contract and year program. $XX.X new continued million multinode we expansion launches XXXX As few operational during new net the and bookings. strong were comprised offerings on client To business-to-business fulfillment calendar had sales with existing noted expansions larger clients reiterate client the scope trend XX single We combination annual value direct-to-consumer our brand both advantage I from fulfillment and of new from closed call, new continued of a with XXXX and estimated of momentum out taking of highlights. fulfillment in from with a

to XXX,XXX a quarter for eclipsing more XXXX, sales of drive orders underscoring North on led million the We apparel, brands fulfillment new XXXX, These the orders. Vegas, of fulfillment offering pipeline also fulfilling We addition America set foot allow engagements annual Nevada three, by XXXX Monday square our to to record third second customers; in brands, top clients' these a serve in two, new and center XX industry one, continued quarter. million in over fulfillment by a and the the expanding on value, the opened and Fulfillment-as-a-Service that in of very path in company Cyber single-day new within strong contract our believe networks; booked PFS' our growth to North had expansion existing multinode flexible will XXXX: and verticals -- average product remaining convert with fulfillment to X committed remain a strategy fulfillment in in dynamic Throughout quarter for business. facility the within priorities, continue to approximately We we following achieve emerging line we exciting our bookings established better in core shipping the fulfillment Las record XXX,XXX growth. services by both first new Irving, and and $X.X jewelry worth and our CPG of health within excitement both growth mix be across driven Europe. beauty, have Texas

ACV, our and continue or thanks operational see sales expansion success to pipeline We contract to to higher our expect bookings, average and value, initiative.

by be to continue we inflationary wage discussed, As environment. we have impacted

through some contract productivity which were and these late in quarter We enhancements of and X. challenges are into implemented to quarter changes, working pricing combat X

continue the up EBITDA here opportunities adjusted in for the year. Q&A. year an our minimize to our With fee confident equivalent in on service now XXXX guidance. we revenue we'll overall to and that, gross Based call the ongoing to open full will initiatives, remain margins fee assess for impact service effort further We these

Operator

from the Sutton Craig-Hallum. [Operator Instructions] And comes our first of question line George with

Adam Kelsey

today you're progress about it of on Adam like though, a see was great provide of you last was environment is changed certainly hoping what George. the market year. we kind incredible underway. sellers an update I felt where has getting it? as sounds were lot This like could an and Mike, And for you I curious, excited? it there's

Mike Willoughby

deals Well, very an last done. It was Adam. of getting with I dynamic think year you're right, interesting year a a environment, lot

COVID the of XXXX, the year a saw the some say inflationary we time also bear would look have thought would season I pressures a same pressure like. were where as 'XX at people half around So we some holiday in good the market in off be year benchmarks idea with to sort already I and what coming of of how would of think of sort coming pretty the set. were that back questions the wondering with of the values what

ordering to was trends. then period return for the a X we And normal quarters we with good saw stock post we and strong important us, the also so the like it which sort you what felt and did. what to about rodeo really we QX, for 'XX stability important pattern, of have where of regard really crazy was relative thing post to takes think a 'XX a of of really that industry holiday supposed really, And And typically see. result, QX most the result was we to

indicative of during season. stats of Zach performed announced, Some not think, everybody the necessarily how I the that are holiday

strong the puts operating of and in this to So I of referrals into we stand that we really puts about our uncertainty, the of have also we a competitors year that that and to operate in market. a think the position that as other of think a continues well that's us some above sales -- gives of businesses, us get from really the of great other just strength as sort we about it and well the a us some go just pipeline fact And think position. because operational that lot strengthens our then we business

Adam Kelsey

from comment Or you on reduced to that you the more as you've that there That's room as great. much And feel just another recovered endeavor? Is go overhead. do corporate any there? could

Mike Willoughby

the all we the to it's it to former of couple any operations a headquarters. a is also and biggest centers. to We've we offices an sale as the both disposition post-COVID out the possible. as that work of close well a space in of decision business item those our our have of We've corporate for process. big that alignment have releases, called making as of our that last X objective about that the ongoing environment have corporate with the and co-located as made And need hybrid longer the just of people X, don't an think teammates, production real I talked times items No, our our as specifically of as reality cultural one I because improvements, fact LiveArea

distribution fact, In That largely one this our today. we corporate doing from we're of a have is which centers conference call means unoccupied. headquarters,

That's the opportunities building, that the And is to primary that so -- objective to of optimize do a we're prior this other dispose But we of to that arrangement. to continue, days sublease single optimized. And continue work hopefully there to do there item type be left focused over to year, to will on XX are the That's next QX objective. going into our QX the try list. continued largest XX our and business. to continue so through

Adam Kelsey

respect And With the shareholders, Or final returning think review? independent that? and is Is investors from to should me. completely that strategic cash a question process for to that about separate how hand-in-hand?

Mike Willoughby

things our other hand. list one efficient top hand that which of said it's to of the return way to No, subsequent In obviously in list, the is in transaction, is the I the through shareholders at be a past the do is would the the mechanisms maybe think that capital on valuation. of that. are most to There view, we've our

priority. the -- the and with be understand what certainty as to will us they it to But I to for that. work market look opportunities take We to top and timing, do us us help step James with be both at is efficiency, best next and also as asking Raymond to our regard would mentioned,

allow LiveArea focused to James our and process mid-June, to working time accomplished QX by according our does that conclusion. heavy for Raymond lifting to remaining focus to move with transaction, on the getting line. the on It filed us having So accounting of

Operator

At Willoughby over closing like concludes Mr. would remarks. session. turn this back time, this for I to call our now question-and-answer to the

Mike Willoughby

I'd everybody. morning, Ingrid. to call. we like recognizing again thank look you, And you, Thank Thank in to speaking call forward attended this everyone it's an the that early mid-June.

Operator

the conference you call your for that thank conclude does for and lines. We That ask you please disconnect today. participation your

Pfsweb (PFSW) 14 May 222021 Q4 Earnings call transcript