Mike Willoughby CEO
Tom Madden CFO
Zach Thomann General Manager, PFS
Jim Butler General Manager, LiveArea
Ryan MacDonald Needham & Company
Mark Argento Lake Street Capital Markets
Call transcript
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Good afternoon, everyone, and thank you for participating in today's conference call to discuss PFSweb's Financial Results for First Quarter ended March 31, 2020.

Joining us today are PFSweb CEO, Mike Willoughby; the company's CFO, Tom Madden; the General Manager of PFS, Zach Thomann; and the General Manager of LiveArea, Jim Butler.

Following their remarks, we'll open the call for your questions.

Before we go further, I would like to make the following remarks concerning forward-looking statements. All statements in this conference call other than historical facts are forward-looking statements. other estimate, likely future, can, statements. result, confidence, project believe, plan, potential, may, anticipate, are target, will typically will, would, and words expect, identify opportunity, intend, continue, guidance, used The to expressions forward-looking similar should, could, forward-looking to current and differ the the statements, are based materially assumptions which may impact on and including COVID-XX to from risks uncertainties, are pandemic. of cause statements that These expectations subject actual the results forward-looking statements in as Reporting in PFS forward-looking as section The certain this statement. used full to under and disclaimer the metrics well our harbor safe presentation non-GAAP relating Financial of the site Web can the and specifically, filings be found Investors

for this on May Any this Web p.m. any of today's as link replay at company's X:XX I expressed via A be evening. written strictly starting site through press this like would PFSweb of remind available rebroadcast everyone the XX, Eastern or to replay in the consent that is pfsweb.com. available available prohibited. will webcast at call without provided retransmission the also be call well as way release in will redistribution,

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

Mike Willoughby

and Thank in safe and from hope afternoon, healthy good you, you Lisa, listening homes. your the We everyone. are all comfort of

from individual home various conference offices. our We call are this participating also in

with us. So, if bear any technical please pet difficulties arise, or incursions

seen believe the of everything about early just begun dynamic us of in President of any I I our European to uncertain set last our to and declared outlined end the of on already operations. our warning almost from crisis state and emerging XX, evolve. response rapidly would lives we signs day At call emergency, had become anticipated take measures the Trump the how March we would the a national how situation have conference before and a don't

acknowledge COVID-XX. March our again want our facing of many conference today the call, are on that to people in I challenges result communities did I As a as

are health and economic of Our dealing and pandemic. all with prayers those thoughts with consequences this of both the

health We the responders they're their team evolved our daily front I'm workers care lines. proud to dedication are unprecedented for grateful our of much the clients of six And the the have on to times a for conditions the working first weeks. these doing during that adjusting while serving basis for on work past to and

maintaining essential declared with protecting were whom just been on very facilities emergency focused businesses, of we an or force, essential social declared engaged fulfillment employee XX facilities in From a been task of the where now plan arrangements and of the on our non-fulfillment-related with thrilled employees operations handful clients, wherever support safeguarding was April to response through of of required from roll model, work over how weeks. thoroughly, work-from-home program that the many a our region approximately for objective moment business able to we world support to except every course support has operate, and March and out, COVID-XX we in and customer our necessity moved safeguard functions also With employees. care X, our internal our in formed rapidly including automatic. have agents our and is staff centers our data team distancing we had moving I'm work-from-home mode possible, from home into other that employees into around the our every By PFS XXX X those

equipment, our array routine or our by that personal and in cleaning distancing teams protective ground During of an this we social strict regimens they to practices worked that have and time, PPE, ensure have facilities. abide

our after clients, And every procedures We operational has facilities last sales the us to past clients I'm channel our have one to to frontline proud day also of over to support only especially work for in shift. the safe our taken who own traveling work perform disinfectant measures six daily of their employees need support weeks. which their digital been channel, many to

Despite the full employees. workforce operate or global pandemic, proud we're continues strength, at to furloughed laid-off we have any to report that our and not

increasing in increased necessary. in our in In centers this contact response and personnel from operations to model, our fact, and We we foreseeable distribution we the the for sustainable operating believe have mode center we from as future prepared to achieved home clients' have operate in customer work demand. growth a our are

have all, with grateful all our our relatively of number cases am hospitalization up this none and mild to of be requiring presumed or confirmed Above employees of within are To with as to as you entire provide possible, symptoms point. workforce, do and all of small uncertainty I transparent a we're with please going only latest a had not clear future but us today, perfectly best to it the holds. we what have to available our dealing is understand, we the period to COVID information

completed, a the in first our for With quarter introduction pleasure from COVID XXXX. real it's results that highlight me to

both another first segment. the off adjusted in LiveArea EBITDA in well as fulfillment momentum quarter revenue heightened service volumes of each had strong we we up PFS, that and fee During year us quarter, left picked and record last where equivalent growth for with as in generated bookings business

are by EBITDA amid as marks generated clear returning for quarter pandemic, PFS and XXXX. in investments the it first have since are of validated made segments we current this to year and in in expectations our LiveArea revenue paying me, X began to the we is Our operating for the growth last each SFE Even being growth XXXX reporting segment off. we

our and won new On and continue clients we new we year Speaking of brands XXXX. QX PFS we the of for as in been year E-commerce order ramping in to and their in see of the part implement top demand in the the of as holiday-type levels. continue expected consumers to PFS, benefits driven unexpectedly stay-at-home we to April record volumes in March response to shopped year, we benefited these products online first brick-and-mortar stores the is have previously we at retail clearly clients, from from the has mandates. new to consumer last onboarded have XXXX, who benefit booming those throughout see clients bookings traffic in late

majority classifications, brick-and-mortar in continuity the our distribution manufacturers. their in their Additionally, distribution have on brand PFS operations. limited PFS restrictions plans are own to direct the took our Recall PFS clients practice fulfillment which enacted very that of as retailers to they clients loads several response and exposure local we business of limited as

fulfillment e-commerce months on So and impacts their in the is to later more ahead. on Zach out volumes to efforts. the related play may direct-to-consumer for these COVID weeks ramp PFS heightened will details call the and segments the how volumes be in provide

bookings In and revamping improvement made we go-to-market LiveArea, in pipeline. reflect record sales our our the strategy

in professional trends Our past COVID. to he the as their LiveArea they seeing momentum clients the and over we are Jim bolster e-commerce well is provide his respect to with look as are will more capabilities. strong, services generated have continually as quarter the that momentum as partner team value currently on our and our a proving detail

segments are end-to-end for currently e-commerce, to leads efficiently and strategy holds rapidly of executing behavior and business this XX crucial joint programs both in in take each drive continue time advantage to our and and growth and remote shifting on client continue both have go-to-market base. that services, for of XX value solution profitable their entire work. prospects our PFS towards even consumer collaborate working brands We overall LiveArea LiveArea coming With across will the quarters. our PFS we

Before our on outlook QX commenting Tom to for to results and to like over further, call XXXX. turn Tom? I'd more financial provide details our the

Tom Madden

is January, of different afternoon, Thank in, keep to quarter February comments first you, realize our brief March XXXX. the we all we first good from everyone. Unless quarter financial that and comparisons early noted, lived world Mike, as today. are the and I'll otherwise very in

existing wins For in equivalent consolidated and SFE primarily our or X% as driven million. the $XX.X partially growth recent activity our two client with revenue related XXXX. to clients new our activity fulfillment practice. of by SFE higher in The fee new the was increase and PFS benefit of This as revenue service by bankruptcies was within increased strong loss well offset QX, client new booking LiveArea to

in guidance ahead. segments for both within And to to gross the to margin Our quarter PFS Note revenue XXXX to XX% to continue for related XXX points we ranges in and basis our to fee PFS mix. the to expect performance improved XX.X%, first XX% that and due of range months gross XX% for service of the primarily overall increased the increase be these segment margins LiveArea. quarters hold in with XX%

in $XX.X savings driven on were benefit sales last of with our will the increase and costs continue by costs. primarily quarter COVID-XX, employee measure. million midst SG&A year, increased compared XXXX opportunities spending for $XX.X March manage a closely marketing-related cost prudently, we are we precautionary and million to nonessential In incremental reviewing the expenses as to spend and the

in as million well. increased continue expect quarters in the current have this ago we environment $X.X million into As to we expected, to and future quarter result travel year seen XX% Adjusted a first in as the expenses EBITDA reduction $X.X a compared the of to quarter.

was $XX.X confident surrounding million XX, March market This million. remain conditions debt liquidity and balance approximately results $XX.X a debt equivalents as the we the operating XXXX, at our navigate total net cash sheet, position in excluding pandemic. We to million. leases, $XX.X Turning of the position and current totaled in cash

our our from clients. then timing to past, remitted a we customers cash As later that are portion of certain cash the of from benefits received collections stated in balance have our includes clients' the

a on So quarter-to-quarter some there's is that always our basis control. variability outside

away year. call, As this continue service our we clients our later last so transitioning expect is cash one to decrease component to on offering, balance utilizing from our this of of mentioned our

million, in Our were approximately $X.X financing. March the $X.X capital quarter million, which including funded were through debt expenditures

be to facilities $X million activity, million. and to in of We expect client capital between support growth. and existing client be to expected related continue which to expansion The majority expenditure new to $X spend of the our XXXX is

as scale available the the flow subsidies we Program Protection and government tax back the that payment favors have internationally, fortunate do government while tailwinds plan other this will assistance, time, the for to Paycheck at cash we and are topic U.S. of environment On in this here any our at to e-commerce. expect from benefit or opportunities in some not apply we deferred

on own Across our plans they and their with for contingency COVID-XX both the manage segments, we manage working impacts of businesses, them their operations. are we helping are varying closely clients as

timing, direct of where with We pricing and/or risk, a have helping appropriate credit we limited potential mitigate has base number good our us retail client And these project our are unprecedented communicated flexibility brick-and-mortar about partnership, as limited short-term committed partners. clients our clients during which terms. in helps times. our payment to them While of the in view exposure, our spirit

While impact these project they and this may have resiliency some strengthening increase only our on and competency the revenue, gross cash relationships, short-term margin discussions business. flow, our in are we of our believe limited our

continue the monitor minimize to We financial of and closely our will risk. effort credit to clients' of position activity impact COVID-XX our potential on impact the in an

as Moving on in that segments strengthens related XXXX increased are for outlook, in COVID-XX, macroeconomic we of to continue new uncertainty XXXX the forecast is our poised business level overall, while for XXXX positioning. both to uncertainty only an our due for growth believe the environment our to we of to this remainder there financial

are cash balance and such, sheet positions As today. comfortable our with we

However, precautionary cost controls our and measure. as a we remain prudent will with liquidity

expanded that on business, third but impact short-term quarters to have XXXX expect our in significantly some are to and the we expected as For project and revenue in LiveArea relationships continued second new client and winning impact. or adjustments, profitability requested a success the this result of deferrals offset of we expect client

are online their For our the channel who of service we PFS fees business segment, migrated stronger of that business overall from expecting have more we support. to clients level existing

opportunities client business expect operations we our near-term in on adjust business PFS their XXXX. and versus expectations in original restrictions However, to within to winning our COVID-XX-related due the prospects' implement abilities such shortfalls some new

generating expect prior Coupled an us high Overall, adjusted EBITDA are growth has for of also mid- focus the digits SFE to reiterating issued which to ongoing revenue on improve we our previously with guidance, costs, we XXXX. year. margin to XXXX single compared consolidated

we quarter, and we fee As LiveArea look profitability lower adjusted to June the service EBITDA forward than are March the XXXX expecting revenues quarter.

the compared segments lower is profitability expect as and impact our to quarters ahead performance performance as we quarter, of segment certain look improved PFS relatively there our expected from While COVID-XX-related March SFE sequential XXXX drive in to andfourX. revenue similar both to incremental including We but revenue adjusted EBITDA somewhat three then spend. mix

expectations also We to G&A amid on change are maintaining include interest tax are subject outlined revenue, last all These, of product which other XXXX for our expense given cautiously COVID-XX. our expense. conference course, uncertainty the expense, and expectations call,

concludes PFS. remarks. I'll Zach? call to This in walk to turn highlights my over operational through prepared the Zach

Zach Thomann

Thanks, Tom.

the As Mike weeks mentioned earlier pandemic recent authorities as towards shifted issued his behavior has global mandates. online have comments, government in purchases stay-at-home consumer many in

current excellent also commerce we leader the term, immediate clients' and the position click operations, an As the to continue support in in grow pandemic. is to past post our but brands PFS in look both as

come clients each is continued to a we on of at for services. core expect our standard focus ensuring that Our PFS perform high

six sudden in our as demand This at past than global safety higher while with implementing our this measures. clients' volumes coming fulfillment PFS we customers, allowed weeks, uptick been would centers, also to our has PFS has unplanned high demonstrate continued demand health they and brands and experiencing service levels launch time agility across new of best-in-class particularly year. to order in the order typically Over have

while We of regimens of include simultaneously our managing holiday-type nightly which applications are our disinfectant DCs. all all volume a are throughout currently strict which of level facilities, maintaining fogging, across cleaning

clients efforts the cannot am maintain I continuity I their of a business overstate our team. our each proud environment to our Again, operation for safe for both our in team and working centers leadership for maintain how tireless global of efforts,

Valentine's successful As launches revenue bookings in new promotional from activity our XXXX and strong from we the equivalent QX, margins target Day year quarter. the in prior. back brand from clients look six revenue the at These business while new period also exceeding gross margin first top a ago, to PFS combined service in fee of same and resulted the existing $XX.X in launches, resulted million fee year end equivalent the period QX, range the eclipsing service performing the gross same for in with

a combined $X.X to $X.X From new with ACV, the in clients driving during four compared sales and remain arising of year worth million value, ago quarter. X ACV in annual booked QX, or estimated in we the estimated engagements contract perspective, to million in quarters. Despite new a new from engagements pandemic, and we the make client new complications and physical progress services managing a sales the current new for from pipeline wins continue coming to growth operational committed an

two the perspective, managed in launch added clients this of fulfillment For April, still in middle to we pandemic. new

and fulfillment QX. look remainder generated seen we remainder QX, higher-than-expected in March, QX and center expect and weeks through of QX, within our are the especially we expect to services of As momentum we last ahead into during new we over X have from currently through currently the the and the -- we contact in volumes clients existing carry see

behind fulfillment processed values in million April, about last just in centers. fulfillment years, month about record This time December the been this in is than XXXX November why generating during example, orders million the we X dramatic order is centers through million in $XXX X X XX% lines which merchandise a fulfillment As holiday-like we client largest as lower sales, our with third gross over characterizing over our have in and our global XXXX. month barely

the Cyber believe COVID-driven weekly out volumes have the consistent. not we Monday Day although a has opportunity e-commerce more very great investments experienced capabilities, similar will to volumes, those and need of same drive period, the somewhat effects holiday the to partnerships. for channels in for and Thanksgiving intense client further value presents behavior lasting through in are widespread have purchasing consumer which overall shift us a I highlighted their While spikes to and online spread

the operational our brands As changing to we scenarios realities their as customers clients, all. coming different react existing continue seeking we to with for facing engage ways ensure new continuity to the and operations months clients solutions us potential are and business to and of

to continue and and on a apparel CPG to business in our that from expect renewed and clients particularly As have result, for a expand with beauty direct-to-consumer on relationships opportunities emphasis of a less opportunities we to to solutions, business-to-business and existing verticals win near-term our and focus distribution. opportunities see health brands

a capabilities Jim on the immediate providing Before current recently passing to with up launch progress this take commentary companies easily RetailConnect, the both to we with which pick and LiveArea, their functionality and reiterate fulfill for retailers go-to-market call enables retailer are with over his business product are scheduled for I we opportunities PFS for for launched like that many additional strong RetailConnect, inventory making for CloudPick ship-from-store continuity, to wanted ensure in-store to and engaged for on online of a near our an advantage environment still to store the from store product ship term. in channel enable actively and retailers. looking strategy

Jim? pass Jim the overview to of an for LiveArea's operations. over now call I'll

Jim Butler

Great. and everyone. Thanks, good Zach, afternoon,

foundation exceptional over culminating quarter as early LiveArea work to Our forward new these from have marketing the and have reaping We performance well record in established QX reflects in bookings revamping pipeline further months. momentum bookings go-to-market building throughout the from and past few teams. another nine into benefits approach this execution our year. and and and investments gained This investments look put quarters, last momentum sales yet of the we strong upon our the we as the

million $X.X QX, project year XX then for with compares a the booked a quarter, we projects XX worth a project combined in value. value. results, million This in for to estimated our ago in $XX.X to projects on Moving combined estimated

worth quarter. engagements in million ACV contract is value, ACV. performance, or year $X in combined of million combined then $XX.X QX ago million compares plus estimated projects which engagements $XX.X set annual XX estimated ACV of LiveArea combined outperforming also a LiveArea previous our million a worth in new engagements the The record is to bookings This quarter. XX in a for We record $XX.X booked for last

metrics since do on future, results. revenue I service XXXX, our to for clear QX on improved financial from major recognized our SG&A Every within QX year for and about improved improved to also held time the Before both the steady, steady XX% million of result XXXX. margins fee turnaround dashboard In ago in-process was and improved evident we of since moving margins reported quarter LiveArea and have $XX our quarterly comparisons, We on revenue, XXXX. and to or year-over-year. first the from of want our segment relatively quarter-over-quarter the outlook my EBITDA EBITDA is our QX touch best in gross above of in the about about XX.X% the XX% adjusted adjusted signs relatively

can last call, the in delivering building momentum that our see of On you business, the momentum, spoke I and results QX. in

While our over strong to our give surging e-commerce record as our the of uncertainty me an return the and to future positioning specialized XXXX. agency pipeline in delivering the our term, LiveArea growth and to and across pandemic relationships tremendous for sales in cast a the board ability continue continue ability near client to shadow results about optimism

results our not the pandemic. strong only is future, already sales As my during evident look the this we supported trends also accelerating to by and our pipeline, but by optimism QX

consumer for bookings, demand is far pipeline at our So their by the still e-commerce elevated leadership pivotal and driving moment. this sales our are efforts QX, in bolstered during

out planned. and to While some time we're client impact accounts certain spread lines cause the of COVID-XX we LiveArea delayed, project originally ongoing beyond had crisis get what our may may

seeing of on the We many down they with their channel. as to process our stability clients digital are already return decision-making double

QX we to few reasons backlog potential have our impacts we near-term the of to and our individual time, to ago. I in occur, planning a outlook what strong, delays especially effects clients soften months horizons. remains Despite virus as their to backlog, forecast some optimism. our more anticipate us precisely, anticipated reconfigure our for of couple volatility a would share difficult like At this is it my Should would compared for the any

under available is for investment, scramble as digital how some have the customers. area be to that season out exposed highlighted revenue management, the efficiently what stream for inventory the for brands many for of upcoming making under to causing to cases, companies, additional of holiday reliable available brands areas stress half they a has up such order to to significant top in COVID only make the ready to general, figure year. make In it it In and first investment. Also, it expected are losses the their has

are digital in and be you brands typically the QX may where invest for As QX holiday aware, season. heavily

in deliver strategies. expecting clients in to to are due heightened COVID to We any ahead, their and demand lines from result expectations our the delays resulting on backlog months aggressive current in time XXXX

direct-to-consumer We BXB seeing across consumer as such as verticals manufacturers, our well retail and in are parts. also traditional historically both aftermarket interest as channels brands nondirect distributors and

trend companies recovery to try get expect We as consumer. this continue to the BXB closer to end post

this Our in participate to in model. positions new and LiveArea end-to-end BXC BXB, uniquely experience

brands Lastly, exceed of definition feel to we digital audits requiring future. new those stakes, to will brands more changes drive COVID strongly that will will the expect digital transformation a in enable for expectations. round a or be meet that to and table We to heightened that responsive COVID new investments readiness lead consumer

commerce delivering agencies. transformational other Our LiveArea end-to-end will from differentiate experiences experience commerce in certainly

COVID, we operating has As navigate demonstrated efficient and nimble model. an LiveArea

remains at attrition record lows. Our

virtual months. in we Our to and models a lot in be allowed serve disruption. the has pools have without our targets our experience any optimistic resource coming about contracting our assisted working to with clients believe maintaining continue utilization to us I

With I'll Mike. over it that report, turn back to Mike?

Mike Willoughby

our that And cautiously near the is throughout the From this challenging should long-term. market optimistic we're in call, and Jim. the benefits from strong. environment about it clear both made you, Thank business comments the be

to XXXX continued to and our period quest great return made beyond in year. our to sustainable this have transition progress We move growth

revenue indicated us XXXX margin time, year, compared for look in to prior digits for favorable single expectations the in environment, Tom earlier. uncertainties trends in macro this global Despite adjusted well growth leading to reiterate as SFE expansion to high our as consolidated the at business as XXXX, EBITDA our mid- near-term our the the

always, available I we're And with by and to are answer video our to questions As phone Tom happy and make to communicate investors exciting and story. happy our engage chat. ourselves

presenting Needham's meetings holding and Media Conference during on you We Virtual some then. and XX speak hope Tech be May will also with and to of

up now open call questions. we'll Lisa, the for


Thank [Operator Mark Our Capital comes with Lake first you, sir. Instructions] from question Argento Markets. Street

Mike Willoughby

Mark? Hello,


Argento, line Mr. is your open.

is open, sir. Your line

Mike Willoughby

Operator, troubles, Mark it like someone else so having let is looks Mark maybe we should and here. move back to come


Our next George the comes line of from Sutton with question Craig-Hallum.

Unidentified Analyst

on Good COVID-XX. Congrats changed the to have is was ops afternoon. how specifically to joint and Adam comment could curious results, terrific if This due George. for going jointly from their PFS LiveAreaLabs on business guys. get I customers approach on you

Mike Willoughb

going for talk their made a handle. we of approach. would the in to they've love first -- that Jim that's to actually changes respond thanks I'm about Well, question ask to and just some

a the from often with and the is decision-making their strategy of spear clients early LiveArea perspective in think conversations tip is and I process.

So I'd to start. that be back you team And tag just the of that, would on like then if great. Zach, can him

Jim Butler

look I saw both at make had Yes, the this I as us that as And biggest for commerce, last was do. to as we throughout I June, that on the opportunities great. sure -- that Great digital focused we what question. the there's agencies space, a joined other and we the one exactly organization do peer first, communication top capability, organization. at the think, competitors -- good an there of value are in I around the when and lot this right, saw the LiveArea of as of them end-to-end

end understand understand ability client the to However, what the value have click. is what a entire is experience and post don't chain they end of to

I differentiating what was that that value. make as understood sure did So teams the a

to people to addition sure work on that place in team in made Zach's team. we there bring my actually looking that, were on that were incentives In out

for really the to have we're during open as things to financial we stores locked get their with And narrative really clients struggled RetailConnect around good to place. have such COVID-XX us a metrics up the doors in customers. seeing that as So epidemic out then in inventory right trying

and end-to-end we're that leadership. solid So understand to the fully just bring then capabilities really together trying with

offer thing, aware we looking can making other the organization, we're working PFS with planning of time at account is are The and too, that what -- vice versa. doing across services sure fully clients are spend that also LiveArea

that put place that shortly another joined. into thing after we I Zach? So was

Zach Thomann

Thanks, Jim.

lot good covered that the across the of a we're You things organizations. doing both of

I think all doesn't that require end-to-end individual brand it's services. to also our important note those offering that of consume an

expand to a opportunity it's client opportunities. if a and look we both there's of job a done PFS expand opportunities of and led land a the we've and has I as where market irrespective if and think at segments partnership for opportunities these need, or opportunity, opportunities good a LiveArea So real in relationship across particularly lot to taking age business a looking is real in with new the clients our

Unidentified Analyst

I'll you. this Great. And to Jim, direct question back

insights mentioned there the well. LiveAreaLabs see the post guys being everything able have to is pandemic customer one how of far? biggest values you interesting during PFS found as any have who's using so the services You Are you with click

Jim Butler

not a all, we're our of side side, with clients using -- fulfillment of even I maybe think the Zach on mind, put but I can, if that having what would for you first really we're we'll the great other know knowledge as insights have, click at as anything it's they're is we don't to insights helpful if for post to your can't itself of -- -- OMS the that surfaces to their of they we're through top see hopefully experiential Zach, in but don't I anything have hopefully business, the brings able our not do of upfront able think to LiveArea into It's engagements us more happens this have head that on implementations I conclusion. some something question. think what things and is -- brands, but nothing

Mike Willoughby

a that they to they that's really I spread that those catch having side, on seeing that opportunities either is the And implemented how strategy on that on it engagements get channel have we're they stack. an aging start but investments, RetailConnect, for resurgence two of in lot up to strategy to the hesitated see And and expect open rapidly see stores. can, that wave extent stores the the already one as up e-commerce a need retailer with moved making is can't out the soon to leveraging through not again in retailers ton Or inventory of these Adam, only another out advantage these a fast. as up reopen. to ready happen caught demand with but flip be we're thing do one inventory like upgrades omnichannel extent inventory perspectives: Hey, think technology we virus. stores stuck pent-up I flat-footed has, a going And that's also to make shows to needs second clearly and amongst and stores. From that potentially we whatever being of that to

seeing. certainly So we're one that's trend

Unidentified Analyst

more to about in Tom, That's biggest the queue. FBA ago a month headlines the essential prioritize was e-commerce Amazon question, certainly items. and go Mike of helpful. One one decided back I'll in when

that. customers on from impact any heard you've saw you that if know your affected business from to wanted what or Just were

Mike Willoughby

come business. Yes. appreciate interest, some have and out actually been impact have it. that different things question, Adam, that potential Amazon of on Great think I X from There's I our are

lot heard a of but using alternatives. same they looking by facilities, product retailers that, in lot most a the pandemic, in were the doing it deemed from one. for And at first into brands significant we they token, the them disadvantage. applaud that coming their dealing and marketplace, I that a mentioned important on, prioritized the to that with You Early of put consumers were their

I the in in but point fulfillment could that certified do short provider deprioritized term, third-party think having we really out term, seller That there're FBA does the value Prime some things you're the doing long in process. third-party necessarily by being way, not a that's fulfillment. your it in a and the

that might has quite you conversations. as up so few And a certainly imagine, opened

was the themselves position would their see brands against against And came them, with don't own was selling that, we've sense them. they where brands surprisingly, going fact suspected private some The only to that that's that actually second in venue marketplace through the Amazon out against of certainly that case bit to data label own the clients. makes news a uses they of our their it and have data be but direct not it be, many a but using of selling want that not competitor

going that's data take their to I care side and So drive LiveArea bet opportunities their where to they of hedge brand appropriately. need on also really their and expect the

as us with sure margins as to have anything as not anticipate clients respond be And most incrementally around because in believe costly. looking it's I And are less $X think investments I really this the pragmatic eye in been some we've don't me to our money. in may much final cost. as would it's making, fact, don't for us the where way volumes doing and any. place a the of we now know right And our at they're we've that billion. gone doing, in an amount they're what a incremental of fulfillment in be amount they was of next slight these the a they surprise tremendous there from to money while programs during then protected. expects cases, staff And invest the they fulfillment it's quarter thing And working that like more the but right impact It's to we're on we I -- be Amazon their like need their along have would to as centers. over we bit currently properly equip and to we're make holiday centers the opener far a what is

see we not to trend would of expect kind a that same where in increase in associated business our have with I outfitting our facilities. So significant SG&A

Unidentified Analyst

thank Terrific, you.

Mike Willoughby

Thank you.


from next Ryan comes Instructions] question line [Operator with Needham. MacDonald Your of the

Ryan MacDonald

clearly, been Hey, here. apologize great and in Mike, through some the remarks, calls, GMV but some see and we're answered Tom, a around May these hopefully afternoon, good were of April into the I've on healthy seeing few to jumping trends so if prepared I team, of

through process? at impact on as the or looking customers demand, for, given expansions that So at use get going additional retailers to you're side, does your heightened and new on to just your the demand want wondering, the and running that for existing as services, you're and with op all the brands ability PFS come up

Mike Willoughby

stab then some So I'll a Zach take first color. that and let at provide

to dealing new off, Zach clients of the in not to has projects two comments, the things in a job effectively. doing as onboarding home and great mentioned our there're really organization prepared our think I remotely his this job onboard and and progress. and With U.K. our project dealing. in Belgium first were teams Even and that operations in teams to midst done a that work around managing teams the in from clients we're launches. we're internal moving leverage constraints managing Memphis-based with teams are any We're the -- great able crisis,

are provider seen cycle, to and sales We travel a contact looking environment would tour be see have made that to clients and or and some solution you fulfillment restrictions the facility have, friction move going they're might in a to as expect, where impossible. our center new the operations that expect buying, basically, to that operations see often

so moving and we've pipeline current our increases success but solutions. headwinds completely off while And showing proposing in virtually, tours probably which even these sales we're that are do been through a technology I facilities going done doing had some we've from some is pretty sales experiencing think that demand. incredible, there virtual to and be some is virtual client it And using things perspective,

do you Zach, to any to So, want add color that?

Zach Thomann

large-scale opportunities are still currently seeing projects. incrementally. the see to serve of us, fulfillment right the sure and where clients virtual Yes. clients, the gotten say pipeline have to most I we're focus shape think existing that with the that is currently business and also perspective, is with bit creative expand our That's little hesitancy quite certainly true, that demand. from do to to now a And probably increased tours. we what are that's opportunities be shift That's where new are with more moving we folks do we client is looking going I'll but continuity lift making a our best re-shifted especially the sales pipeline, there's but

progressing front. that still down we're So

Ryan MacDonald

for demand me a lightweight a a lot given question. of additional sort LiveArea to terms a that nature brands. this situation quick fulfillment conversations create in of heightened for there? And follow-up been more can of anything a the service offerings, Is is demand sort Great. this that there the how gap often of as moving exposing to to that surprising in in before my It's fulfillment

Mike Willoughby


had node I categories. Ryan. think I location, risk to a well. two has comment where centralized solution, have facility up potentially clients for inventory the tee any distribution as And on. is are a certainly XXX%, single you exposes would where their there're a retailer say an a having single and One We're I'll blessed that Zach been is to from the in to essential deemed essential shutdown. deemed businesses them situation business

for one a is a solution So of that times, multi-tier distribution network that's gave is that. the benefit, on had one. couple think RetailConnect. but that have that we've us own certain protection mentioned a may I retailer is where their which not And one second And

comment opportunities those both two scenarios. kind on those we where along making Zach CloudPick with I'll are, in of exactly with of in help let

Zach Thomann

Mike. Thanks,

centers? of with the strategy. is how definitely thought multiple mind, So the discussing was of certainly, with first really we line or trend that along is create do fulfillment modes Mike top That of omnichannel entire micro fulfillment

that regard that in previously brands to up certainly are catch thinking weren't that. to quickly about seriously So trying

they So inventory places opportunity CloudPick looking for some for their of through now had on enable to right looks seen And you we sales like such, have and have And channel. in that RetailConnect that ways and what micro our efficient as with And respective options fulfillment momentum at our they're products. move fulfillment do direct-to-consumer that, these go-to-market those with at RetailConnect look that points directly clients. I or forward, brings opportunity that think for strategy do helping the when like immediate then honestly, products pop-up that's to that from see an brands particularly retail more that. shutdown, we've both quickly,

this think And directly at to quickly So the points that our agile. good being and leverage frankly is I bringing situation speaking, products to PFS current ability exceptionally to market. we're act

Ryan MacDonald

Great, excellent.

those what picked to look customer have In and the and just into that not can you May just of if remotely up pipeline, to around terms delays, of more projects you are the kind the hear the wanted we've as project implementations conversions of get you, little of majority, what through going those you're love color maybe are there or as complete April or that's delays through you're more a some LiveArea, on as the having if then commentary or the and whether at And side? moved would now. what all,

Mike Willoughby

our on Great. any to Jim, client? manage respond work Jim versus there side I'll friction let home, directly. on the both to ability from those of our is the projects,

Jim Butler


just we've with obviously, priorities, the with organizations that we've going were and work where just higher everything that for really they have up on. had are seen sign other So worked organizations to in that delays -- there

to unlike I'd not deliver our significantly with really we and now, on So but we, delayed delayed, other many are right projects very it like say do out we're to ability are companies there, delivering some -- we've exactly projects. working seen to nothing working this has accustomed those message.

looked things XXX% India, the productive Indian of be folks ability even and amazing their was offshore our And get like and just those homes an so we out accomplishment. at to to

from So the delays that's is of LiveArea to order, are that attention they their can like have It's our projects our a that just doing clients just in they the apply but business. right investing sure time it's large actually time, not thing. just course and just making dollars they're of the that And are business this to in. there ducks reality -- the

on closer delays I are think we're because situation that happening just any just in. that eye now we're an the keeping of

half Mike, of was think, -- the question, question? of the what half around Ryan, second the was The what -- the I second was

Ryan MacDonald


Just and curious I in to seeing as going see pipeline. any, April guess, through we're of recovery if you're discussions terms

Jim Butler


QX, row, a COVID. bookings if in is and and impacted record part -- QX, right? quarter and -- nice sales a was between of third QX, in QX, So by actually we that, jump the obviously, we QX of remember, So QX, this you

virtually, I as we've you, our robustly think that, seen doing working and really but have that, question and Jack's right? doing of pitches has doing model, honest So, channels uncomfortable to the clients out well. and seen to a meetings past. all we're as business in it operations, coming bit the our we're virtual are been which almost in -- be very ones We these with that done the regular to similar through accustomed mode little everything Again, earlier, are in a are has

very the so, through report, how that's I about And encouraged have going us year. very I'm momentum encouraged, that in we and balance carry I'm my said as the the of to

question. that answers hopefully, your So

these just they and think I are paralyzed, to think sort that encouraging. recognize moving on be -- to is the can't they and transformation forward, their -- right, that we important brands, are list. do of see They have it's major continue really efforts which -- I digital things

Ryan MacDonald

Great, thank you much. very

Jim Butler


Mike Willoughby

Thanks, Ryan.

Zach Thomann

Thanks, Ryan.


Your Capital next Lake Markets. line question with Street Argento the from of comes Mark

Mark Argento

good afternoon, guys. Hey,

a you of that work? bit the talk a of about capabilities, some could the Maybe more incremental web ones bit little give of more is types marketing-centric? feel here, more for systems the it maybe bookings? quick -- you couple development a driving little what's engagements, really Is and so us Jim, a digital integration-type specifically, more Just back-end can

Jim Butler


the say large of system we that business our technology I very is So on do lot integration So predominantly commerce would side, right? builds. a

have couple our continue in We're underway the parts of that team, large really across seeing a our growth strategy across seeing we're major -- we of very -- board. but that a it's are So absorb of ones brands a couple to very, engagement. large so

build a individual to So in an strategy practice. I brought

So associated shoots with those to the we're green starting see investments.

the our business I if but clients, And been. a have funnel we up little I so far engagements as further the with tracking to think we're -- marketing getting is were bit it's digital as where the

doing. the largely that we've commerce large projects implementation been the think been I on momentum has

Mark Argento

-- Great, and

Mike Willoughby

got towards some kind a bridges the we've nice really of here, in and started implementations. of practice ton maybe of XXXX traction of nice OMS team to Mark, increase some end his that with see Jim a And also We until built didn't seen they providers. build and right retailers his order multiple able seeing to indicated comments, with action having with that fulfillment now And locations. just in one are that weak of being links in is not and platforms distributing stores OMS to prepared inventory that's as LMS Jim the the deal their can and

the So we're future we'll an be to see because seeing an to that increase as I And increase a there. we look think that's needs plugged. gap

Jim Butler

a and other you, us. of key more seeing the Also, activity. that's definitely bunch we're areas. Mike, Thank lot activity one Yes, We're also. couple for of a BXB marketplace seeing a

for So too. some strategy those were those in both our on And seeing different expand XXXX momentum of areas, both we're to really in definitely those areas.

Mark Argento

know map? distribution of of do a real-time micro services. kind Zach, other Is you I on a the there the whole of there the There's kind Great. of lot of flexibility and plugging delivery, kind a in -- given micro are for kind the distribution of interesting. a been the more of way course, on focus that fulfillment almost road that environment, of on platform, Instacarts almost and some And world, innovation one that of mile, the quick that last here? direct-to-consumer a delivery pop-up fulfillment, then one lot phenomenon for the points terms are Is to

Zach Thomann

delivery. Thus RetailConnect local has far, that using, been what partnering application, been and with using in honestly, we've

inventory urban the to courier with There and that opportunity line in launch specifically. deliver with to So local is if think an partner service promotion using about facility do the CloudPick to to you store so. an put

had anything on to some but date have conversations We out have ruled that. we not

Mike Willoughby


Mark, to I think footprint lot in add had need we of basically partner that a to real that, a estate areas. metro

some footprint. with conversations some folks estate a had we've recall, real might You have that

conversations those have think back et to because impact is on definitely around going you're this I your might traditional something malls, to I of be using about they're And more think think creative going I centers, there. seeing even to to cetera. of sort end And we up retail some come that space.

Mark Argento

Mike. there and before, me, Is in opportunity team, one last aging the to an there's -- for of a alluded sitting for really lot Mike is bricks-and-mortar there it inventory but And -- that channel get stores are closed to it of out Is now. of that word? open lack fulfillment get into an an right some better and back try opportunity for a to there inventory

Mike Willoughby

interesting It's question. Yes. an

to a we've kind one play you problem. And of the big move type liquidator retailers needles spent this is help of for the we back than logistics fair haystack does to As get amount be are take out question. productized it It's more in an current kind might could us traditional of of interesting they starting looking rather it reverse right and them of not inventory a easiest difficult opportunity those of clients. on you're there's conversations channel open action going if now, there and push for more. can for any is, through they're approach dollar, here client, with expect, happening. to And cents some where where so, a offering, a where but interesting opportunity current with going That's clients the current I of a think an time make

you're there, to on yes, So, definitely too. something

Mark Argento

Thank appreciate it. guys. you, I

Mike Willoughby

Thanks, Mark.

Jim Butler

Mark. Thanks,


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

Mike Willoughby

time for call the you that thank on be and to Lisa, you, everyone Thank made today.

we current you evolving the future. to healthy you. to we're stay hope that the will excited look can situation safe to response and optimistic the day-by-day continuing seeing in situation. continue I that Thank tell, cautiously manage you you the tailwinds. business, forward the in business As And and all near about deliver


this gentlemen, conclude teleconference. and today's does Ladies

You this may your for now you Thank disconnect time. your lines at participation.