Exhibit 99.1

FOR IMMEDIATE RELEASE

Contact:
Mark C. Layton		Todd Fromer / Garth Russell
Chief Executive Officer		Investor Relations
or Thomas J. Madden		KCSA Strategic Communications
Chief Financial Officer		(212) 896-1215 / (212) 896-1250
(972) 881-2900		tfromer@kcsa.com / grussell@kcsa.com

PFSweb Reports Fourth Quarter and Year-End 2010 Results

- - -
Fourth Quarter Service Fee Revenue Increases 35% Year-over-year

- - -
Fourth Quarter Adjusted EBITDA Increases 328% to $2.6 Million

PLANO, Texas, March 23, 2011 — PFSweb, Inc. (Nasdaq: PFSW), an international business process outsourcing services provider of end-to-end web commerce solutions, today announced its financial results for the fourth quarter and year ended December 31, 2010.

Mark Layton, Chairman and Chief Executive Officer of PFSweb, stated, “Our results for the fourth quarter and year ended December 31, 2010 are a testament to the renewed strength of our business and our ability to capitalize on new opportunities in the expanding eCommerce industry. Our Service Fee revenue increased more than 35% during the fourth quarter of 2010 as compared to the prior year, and more than 20% for the full calendar year. This strong Service Fee revenue growth, combined with a continued focus on cost effective technology development and operational management, resulted in an increased Adjusted EBITDA performance of 328% in the fourth quarter of 2010, as compared to the prior year, and more than 55% for the full calendar year.

“We continue to see strong acceptance of our eCommerce services in the U.S. as well as in Europe, which has recently shown vast opportunity for our solutions. This led to us launching more than 10 new client programs during 2010, including Carter’s, Juicy Couture, Kensie, Monet, Volcom, Havaianas, and several brands under a master agreement with a leading fragrance and beauty company. Most of these new client arrangements include new custom branded eCommerce sites supported by our complete End2End solution, which is a packaged offering that generally includes the Demandware eCommerce platform, along with our logistics and fulfillment capabilities, high-touch customer care, financial services and various interactive marketing services.”

Summary of consolidated results for the fourth quarter ended December 31, 2010:

	•		Total revenue increased to $76.3 million for the fourth quarter of 2010 compared to $72.8 million for fourth quarter of 2009;
	•		Service Fee revenue increased more than 35% to $21.7 million, compared with $16.0 million for the same period in 2009;

	•		Adjusted EBITDA (as defined) was $2.6 million versus $0.6 million for the fourth quarter of 2009;
	•		Net loss was $2.7 million, or $0.22 per basic and diluted share, compared to net loss of $0.9 million, or $0.10 per basic and diluted share, for the fourth quarter of 2009. Net loss for the fourth quarter of 2010 included a $3.2 million loss from discontinued operations related to eCOST.com. Net loss for the fourth quarter of 2009 included $0.4 million income from discontinued operations related to eCOST.com;
	•		Non-GAAP net income (as defined) was $0.7 million, or $0.05 per basic and diluted share, compared to a non-GAAP net loss of $1.3 million, or $0.13 per basic and diluted share, for the fourth quarter of 2009;
	•		Total cash, cash equivalents and restricted cash was $20.3 million as of December 31, 2010 compared to $16.9 million as of December 31, 2009.

Summary of consolidated results for the year ended December 31, 2010:

	•		Total reported revenue was $274.5 million compared to $267.9 million for the year ended December 31, 2009;
	•		Service Fee revenue increased 20.5% to $70.6 million, compared with $58.6 million for the same period in 2009;
	•		Adjusted EBITDA (as defined) was $5.5 million compared to $3.5 million for the year ended December 31, 2009;
	•		Net loss was $7.4 million, or $0.65 per basic and diluted share, compared to net loss of $4.6 million, or $0.46 per basic and diluted share, for the year ended December 31, 2009. Net loss for 2010 included a $4.0 million loss from discontinued operations related to eCOST.com. Net loss for 2009 included $0.3 million income from discontinued operations applicable to eCOST.com;
	•		Non-GAAP net loss was $1.9 million, or $0.17 per basic and diluted share, compared to non-GAAP net loss of $4.5 million, or $0.45 per basic and diluted share, for the year ended December 31, 2009.

“We believe we are well positioned to maintain strong growth moving forward, as we expect demand for our services will continue to increase. Our pipeline for potential new Service Fee business currently totals more than $50 million, based on client projections, the largest in PFSweb’s history, with potential new clients in several expanding markets, including the fashion, cosmetics and consumer packaged goods markets. To support the ongoing growth of our business, we are in the process of expanding capacity at select warehouse and customer care facilities and making other strategic investments that will also allow us to offer new capabilities. Based on our expected Service Fee revenue growth of approximately 20% in calendar year 2011, combined with the incremental investments we are making to support our long-term initiatives, we are currently targeting to report Adjusted EBITDA between $6.0 million to $7.0 million for the year ended December 31, 2011,” continued Mr. Layton.

“In an effort to streamline our operations and improve our overall financial results, we made the strategic decision to divest the eCOST.com business. We believe this action will allow us take what we have learned at the frontline of the web commerce retail world and focus that knowledge more resourcefully on our growing Service Fee business. As a result of this divestiture, we reported certain financial results as ‘discontinued operations’ for the quarters and years ended December 31, 2010 and 2009. In addition, we recorded a non-cash goodwill impairment charge of approximately $2.8 million

for the quarter and year ended December 31, 2010, which is included in the discontinued operations,” concluded Mr. Layton.

Conference Call Information

Management will host a conference call at 10:30 am Eastern Time (9:30 am Central Time) on Wednesday, March 23, 2011, to discuss the latest corporate developments and results. To listen to the call, please dial (888) 562-3356 and enter the pin number 49410379 at least five minutes before the scheduled start time. Investors can also access the call in a “listen only” mode via the Internet at the Company’s website, www.pfsweb.com. Please allow extra time prior to the call to visit the site and download any necessary audio software.

A digital replay of the conference call will be available through April 23, 2011 at (800) 642-1687, pin number 49410379. The replay also will be available at the Company’s website for a limited time.

Non-GAAP Financial Measures

This news release may contain certain non-GAAP measures, including non-GAAP net income (loss), Earnings Before Interest, Income Taxes, Depreciation and Amortization (“EBITDA”) and Adjusted EBITDA.

Non-GAAP net income (loss) represents net income (loss) calculated in accordance with U.S. GAAP as adjusted for the impact of non-cash stock-based compensation expense, income (loss) from discontinued operations and executive disability benefits.

EBITDA represents earnings (or losses) before income (loss) from discontinued operations, interest, income taxes, depreciation, and amortization. Adjusted EBITDA further eliminates the effect of stock-based compensation and executive disability benefits.

Non-GAAP net income (loss), EBITDA and Adjusted EBITDA are used by management, analysts, investors and other interested parties in evaluating our operating performance compared to that of other companies in our industry. The calculation of non-GAAP net income (loss) eliminates the effect of stock-based compensation, income (loss) from discontinued operations and executive disability benefits and EBITDA and Adjusted EBITDA further eliminate the effect of financing, income taxes, and the accounting effects of capital spending, which items may vary from different companies for reasons unrelated to overall operating performance.

PFSweb believes these non-GAAP measures provide useful information to both management and investors by excluding certain expenses that may not be indicative of its core operating results. These measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results. The non-GAAP measures included in this press release have been reconciled to the GAAP results in the attached tables.

About PFSweb, Inc.

PFSweb develops and deploys comprehensive end-to-end eCommerce solutions for Fortune 1000, Global 2000 and brand name companies, including interactive marketing services, global fulfillment and logistics and high-touch customer care. The company serves a multitude of industries and company types, including such clients as P&G, LEGO, Carter’s, Lucky Brand Jeans, Juicy Couture, Kensie, Monet, kate spade new york, AAFES, Riverbed, InfoPrint Solutions Company, Hawker Beechcraft Corp., Roots Canada Ltd. and Xerox.

To find out more about PFSweb, Inc. (NASDAQ: PFSW), visit the company’s website at http://www.pfsweb.com.

The matters discussed herein consist of forward-looking information under the Private Securities Litigation Reform Act of 1995 and is subject to and involves risks and uncertainties, which could cause actual results to differ materially from the forward-looking information. PFSweb’s Annual Report on Form 10-K for the year ended December 31, 2009 and Quarterly Report on Form 10-Q for the nine months ended September 30, 2010 identify certain factors that could cause actual results to differ materially from those projected in any forward looking statements made and investors are advised to review the Annual and Quarterly Reports and the Risk Factors described therein. PFSweb undertakes no obligation to update publicly any forward-looking statement for any reason, even if new information becomes available or other events occur in the future. There may be additional risks that we do not currently view as material or that are not presently known.

(Tables Follow)

PFSweb, Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Operations (A)
(In Thousands, Except Per Share Data)

		Three Months Ended								Twelve Months Ended
		December 31,								December 31,
		2010				2009				2010				2009
REVENUES:
Product revenue, net		$	46,021			$	47,288			$	174,613			$	183,008
Service fee revenue			21,688				16,015				70,636				58,619
Pass-thru revenue			8,605				9,517				29,267				26,265
Total revenues			76,314				72,820				274,516				267,892
COSTS OF REVENUES:
Cost of product revenue			43,108				44,048				162,485				168,864
Cost of service fee revenue			15,722				11,492				51,144				41,898
Cost of pass-thru revenue			8,605				9,517				29,267				26,265
Total costs of revenues			67,435				65,057				242,896				237,027
Gross profit			8,879				7,763				31,620				30,865
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES			8,020				8,844				33,611				34,270
Income (loss) from operations			859				(1,081	)			(1,991	)			(3,405	)
INTEREST EXPENSE, NET			202				233				940				1,186
Income (loss) before income taxes			657				(1,314	)			(2,931	)			(4,591	)
INCOME TAX PROVISION (BENEFIT)			210				60				463				321
INCOME (LOSS) FROM CONTINUING OPERATIONS			447				(1,374	)			(3,394	)			(4,912	)
INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAX			(3,192	)			427				(3,975	)			342
NET LOSS		$	(2,745	)		$	(947	)		$	(7,369	)		$	(4,570	)
NON-GAAP INCOME (LOSS)		$	673			$	(1,276	)		$	(1,935	)		$	(4,505	)
NET LOSS PER SHARE:
Basic and Diluted		$	(0.22	)		$	(0.10	)		$	(0.65	)		$	(0.46	)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING:
Basic and Diluted			12,237				9,934				11,310				9,929
EBITDA		$	2,326			$	497			$	4,069			$	3,139
ADJUSTED EBITDA		$	2,552			$	595			$	5,528			$	3,546

PFSweb, Inc. and Subsidiaries
Reconciliation of certain Non-GAAP Items to GAAP
(In Thousands, Except Per Share Data)

		Three Months Ended								Twelve Months Ended
		December 31,								December 31,
		2010				2009				2010				2009
NET LOSS		$	(2,745	)		$	(947	)		$	(7,369	)		$	(4,570	)
(Income) loss from discontinued operations, net of tax			3,192				(427	)			3,975				(342	)
Income tax expense (benefit)			210				60				463				321
Interest expense			202				233				940				1,186
Depreciation and amortization			1,467				1,578				6,060				6,544
EBITDA		$	2,326			$	497			$	4,069			$	3,139
Stock-based compensation			226				98				809				407
Executive disability benefits			—				—				650				—
ADJUSTED EBITDA		$	2,552			$	595			$	5,528			$	3,546

		Three Months Ended								Twelve Months Ended
		December 31,								December 31,
		2010				2009				2010				2009
NET LOSS		$	(2,745	)		$	(947	)		$	(7,369	)		$	(4,570	)
(Income) loss from discontinued operations, net of tax			3,192				(427	)			3,975				(342	)
Stock-based compensation			226				98				809				407
Executive disability benefits			—				—				650				—
NON-GAAP INCOME (LOSS)		$	673			$	(1,276	)		$	(1,935	)		$	(4,505	)
NET LOSS PER SHARE:
Basic and Diluted		$	(0.22	)		$	(0.10	)		$	(0.65	)		$	(0.46	)
NON-GAAP INCOME (LOSS) Per Share:
Basic and Diluted		$	0.05			$	(0.13	)		$	(0.17	)		$	(0.45	)

PFSweb, Inc. and Subsidiaries
Unaudited Condensed Consolidated Balance Sheets
(In Thousands, Except Share Data)

		December 31,				December 31,
		2010				2009
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	18,430			$	14,812
Restricted cash			1,853				2,096
Accounts receivable, net of allowance for doubtful accounts of $754 and $973 at December 31, 2010 and December 31, 2009, respectively			41,438				39,861
Inventories, net of reserves of $1,561 and $1,760 at December 31, 2010 and December 31, 2009, respectively			35,161				33,577
Assets of discontinued operations			2,776				4,372
Other receivables			14,539				11,605
Prepaid expenses and other current assets			3,580				4,170
Total current assets			117,777				110,493
PROPERTY AND EQUIPMENT, net			9,124				10,314
ASSETS OF DISCONTINUED OPERATIONS			1,126				4,024
OTHER ASSETS			2,203				2,938
Total assets			130,230				127,769
LIABILITIES AND SHAREHOLDERS EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt and capital lease obligations		$	18,320			$	19,179
Trade accounts payable			55,692				53,642
Deferred revenue			5,254				5,164
Accrued expenses			15,870				13,180
Total current liabilities			95,136				91,165
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS, less current portion			2,136				3,348
OTHER LIABILITIES			3,608				3,903
Total liabilities			100,880				98,416
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY:
Preferred stock, $1.00 par value; 1,000,000 shares authorized; none issued and outstanding			—				—
Common stock, $.001 par value; 35,000,000 shares authorized; 12,255,064 and 9,952,164 shares issued at December 31, 2010 and December 31, 2009, respectively; and 12,236,703 and 9,933,803 outstanding as of December 31, 2010 and December 31, 2009, respectively			12				10
Additional paid-in capital			101,229				93,152
Accumulated deficit			(73,332	)			(65,963	)
Accumulated other comprehensive income			1,526				2,239
Treasury stock at cost, 18,361 shares			(85	)			(85	)
Total shareholders’ equity			29,350				29,353
Total liabilities and shareholders’ equity		$	130,230			$	127,769

PFSweb, Inc. and Subsidiaries
Unaudited Consolidating Statements of Operations
For the Three Months Ended March 31, 2010
(In Thousands)

						Business &
		PFSweb				Retail Connect				eCOST				Eliminations				Consolidated
REVENUES:
Product revenue, net		$	—			$	45,622			$	—			$	—			$	45,622
Service fee revenue			15,979				—				—				—				15,979
Service fee revenue — affiliate			1,700				—				—				(1,700	)			—
Pass-thru revenue			6,637				—				—				(3	)			6,634
Total revenues			24,316				45,622				—				(1,703	)			68,235
COSTS OF REVENUES:
Cost of product revenue			—				42,362				—				—				42,362
Cost of service fee revenue			12,101				—				—				(647	)			11,454
Cost of pass-thru revenue			6,637				—				—				(3	)			6,634
Total costs of revenues			18,738				42,362				—				(650	)			60,450
Gross profit			5,578				3,260				—				(1,053	)			7,785
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES			7,400				2,261				—				(1,053	)			8,608
Income (loss) from operations			(1,822	)			999				—				—				(823	)
INTEREST EXPENSE (INCOME), NET			(56	)			310				—				—				254
Income (loss) before income taxes			(1,766	)			689				—				—				(1,077	)
INCOME TAX PROVISION (BENEFIT)			(130	)			256				—				—				126
INCOME (LOSS) FROM CONTINUING OPERATIONS			(1,636	)			433				—				—				(1,203	)
INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAX			—				—				(6	)							(6	)
NET INCOME (LOSS)		$	(1,636	)		$	433			$	(6	)		$	—			$	(1,209	)
NON-GAAP NET INCOME (LOSS)		$	(1,540	)		$	433			$	—			$	—			$	(1,107	)
EBITDA		$	(276	)		$	1,007			$	—			$	—			$	731
ADJUSTED EBITDA		$	(180	)		$	1,007			$	—			$	—			$	827
A reconciliation of NET INCOME (LOSS) to EBITDA and ADJUSTED EBITDA follows:
NET INCOME (LOSS)		$	(1,636	)		$	433			$	(6	)		$	—				(1,209	)
(Income) loss from discontinued operations, net of tax			—				—				6				—				6
Income tax expense (benefit)			(130	)			256				—				—				126
Interest expense (income)			(56	)			310				—				—				254
Depreciation and amortization			1,546				8				—				—				1,554
EBITDA		$	(276	)		$	1,007			$	—			$	—			$	731
Stock-based compensation			96				—				—				—				96
ADJUSTED EBITDA		$	(180	)		$	1,007			$	—			$	—			$	827
A reconciliation of NET INCOME (LOSS) to NON-GAAP NET INCOME (LOSS) follows:
NET INCOME (LOSS)		$	(1,636	)		$	433			$	(6	)		$	—			$	(1,209	)
(Income) loss from discontinued operations, net of tax			—				—				6				—				6
Stock-based compensation			96				—				—				—				96
NON-GAAP NET INCOME (LOSS)		$	(1,540	)		$	433			$	—			$	—			$	(1,107	)

Note: Business and Retail Connect includes our Supplies Distributors and PFS Retail Connect operations, which operate similar financial models on behalf of our client relationships. PFSweb and PFS Retail Connect include certain ongoing activity formerly reported as eCOST.

PFSweb, Inc. and Subsidiaries
Unaudited Consolidating Statements of Operations
For the Three Months Ended June 30, 2010
(In Thousands)

						Business &
		PFSweb				Retail Connect				eCOST				Eliminations				Consolidated
REVENUES:
Product revenue, net		$	—			$	43,654			$	—			$	—			$	43,654
Service fee revenue			16,567				—				—				—				16,567
Service fee revenue — affiliate			1,738				—				—				(1,738	)			—
Pass-thru revenue			6,202				—				—				(16	)			6,186
Total revenues			24,507				43,654				—				(1,754	)			66,407
COSTS OF REVENUES:
Cost of product revenue			—				40,623				—				—				40,623
Cost of service fee revenue			12,572				—				—				(585	)			11,987
Cost of pass-thru revenue			6,202				—				—				(16	)			6,186
Total costs of revenues			18,774				40,623				—				(601	)			58,796
Gross profit			5,733				3,031				—				(1,153	)			7,611
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES			7,310				2,221				—				(1,153	)			8,378
Income (loss) from operations			(1,577	)			810				—				—				(767	)
INTEREST EXPENSE (INCOME), NET			(59	)			293				—				—				234
Income (loss) before income taxes			(1,518	)			517				—				—				(1,001	)
INCOME TAX PROVISION (BENEFIT)			(142	)			196				—				—				54
INCOME (LOSS) FROM CONTINUING OPERATIONS			(1,376	)			321				—				—				(1,055	)
INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAX			—				—				(440	)							(440	)
NET INCOME (LOSS)		$	(1,376	)		$	321			$	(440	)		$	—			$	(1,495	)
NON-GAAP NET INCOME (LOSS)		$	(1,114	)		$	321			$	—			$	—			$	(793	)
EBITDA		$	(4	)		$	817			$	—			$	—			$	813
ADJUSTED EBITDA		$	258			$	817			$	—			$	—			$	1,075
A reconciliation of NET INCOME (LOSS) to EBITDA and ADJUSTED EBITDA follows:
NET INCOME (LOSS)		$	(1,376	)		$	321			$	(440	)		$	—				(1,495	)
(Income) loss from discontinued operations, net of tax			—				—				440				—				440
Income tax expense (benefit)			(142	)			196				—				—				54
Interest expense (income)			(59	)			293				—				—				234
Depreciation and amortization			1,573				7								—				1,580
EBITDA		$	(4	)		$	817			$	—			$	—			$	813
Stock-based compensation			262				—				—				—				262
ADJUSTED EBITDA		$	258			$	817			$	—			$	—			$	1,075
A reconciliation of NET INCOME (LOSS) to NON-GAAP NET INCOME (LOSS) follows:
NET INCOME (LOSS)		$	(1,376	)		$	321			$	(440	)		$	—			$	(1,495	)
(Income) loss from discontinued operations, net of tax			—				—				440				—				440
Stock-based compensation			262				—				—				—				262
NON-GAAP NET INCOME (LOSS)		$	(1,114	)		$	321			$	—			$	—			$	(793	)

Note: Business and Retail Connect includes our Supplies Distributors and PFS Retail Connect operations, which operate similar financial models on behalf of our client relationships. PFSweb and PFS Retail Connect include certain ongoing activity formerly reported as eCOST.

PFSweb, Inc. and Subsidiaries
Unaudited Consolidating Statements of Operations
For the Three Months Ended September 30, 2010
(In Thousands)

						Business &
		PFSweb				Retail Connect				eCOST				Eliminations				Consolidated
REVENUES:
Product revenue, net		$	—			$	39,316			$	—			$	—			$	39,316
Service fee revenue			16,402				—				—				—				16,402
Service fee revenue — affiliate			1,484				—				—				(1,484	)			—
Pass-thru revenue			7,843				—				—				(1	)			7,842
Total revenues			25,729				39,316				—				(1,485	)			63,560
COSTS OF REVENUES:
Cost of product revenue			—				36,392				—				—				36,392
Cost of service fee revenue			12,543				—				—				(562	)			11,981
Cost of pass-thru revenue			7,843				—				—				(1	)			7,842
Total costs of revenues			20,386				36,392				—				(563	)			56,215
Gross profit			5,343				2,924				—				(922	)			7,345
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES			7,556				1,971				—				(922	)			8,605
Income (loss) from operations			(2,213	)			953				—				—				(1,260	)
INTEREST EXPENSE (INCOME), NET			(63	)			313				—				—				250
Income (loss) before income taxes			(2,150	)			640				—				—				(1,510	)
INCOME TAX PROVISION (BENEFIT)			(134	)			207				—				—				73
INCOME (LOSS) FROM CONTINUING OPERATIONS			(2,016	)			433				—				—				(1,583	)
INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAX			—				—				(337	)							(337	)
NET INCOME (LOSS)		$	(2,016	)		$	433			$	(337	)		$	—			$	(1,920	)
NON-GAAP NET INCOME (LOSS)		$	(1,141	)		$	433			$	—			$	—			$	(708	)
EBITDA		$	(761	)		$	960			$	—			$	—			$	199
ADJUSTED EBITDA		$	114			$	960			$	—			$	—			$	1,074
A reconciliation of NET INCOME (LOSS) to EBITDA and ADJUSTED EBITDA follows:
NET INCOME (LOSS)		$	(2,016	)		$	433			$	(337	)		$	—				(1,920	)
(Income) loss from discontinued operations, net of tax			—				—				337				—				337
Income tax expense (benefit)			(134	)			207				—				—				73
Interest expense (income)			(63	)			313				—				—				250
Depreciation and amortization			1,452				7								—				1,459
EBITDA		$	(761	)		$	960			$	—			$	—			$	199
Stock-based compensation			225				—				—				—				225
Executive disability benefit			650																650
ADJUSTED EBITDA		$	114			$	960			$	—			$	—			$	1,074
A reconciliation of NET INCOME (LOSS) to NON-GAAP NET INCOME (LOSS) follows:
NET INCOME (LOSS)		$	(2,016	)		$	433			$	(337	)		$	—			$	(1,920	)
(Income) loss from discontinued operations, net of tax			—				—				337				—				337
Stock-based compensation			225				—				—				—				225
Executive disability benefit			650																650
NON-GAAP NET INCOME (LOSS)		$	(1,141	)		$	433			$	—			$	—			$	(708	)

Note: Business and Retail Connect includes our Supplies Distributors and PFS Retail Connect operations, which operate similar financial models on behalf of our client relationships. PFSweb and PFS Retail Connect include certain ongoing activity formerly reported as eCOST.

PFSweb, Inc. and Subsidiaries
Unaudited Consolidating Statements of Operations
For the Three Months Ended December 31, 2010
(In Thousands)

						Business &
		PFSweb				Retail Connect				eCOST				Eliminations				Consolidated
REVENUES:
Product revenue, net		$	—			$	46,021			$	—			$	—			$	46,021
Service fee revenue			21,688				—				—				—				21,688
Service fee revenue — affiliate			1,701				—				—				(1,701	)			—
Pass-thru revenue			8,612				—				—				(7	)			8,605
Total revenues			32,001				46,021				—				(1,708	)			76,314
COSTS OF REVENUES:
Cost of product revenue			—				43,108				—				—				43,108
Cost of service fee revenue			16,328				—				—				(606	)			15,722
Cost of pass-thru revenue			8,612				—				—				(7	)			8,605
Total costs of revenues			24,940				43,108				—				(613	)			67,435
Gross profit			7,061				2,913				—				(1,095	)			8,879
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES			6,893				2,222				—				(1,095	)			8,020
Income (loss) from operations			168				691				—				—				859
INTEREST EXPENSE (INCOME), NET			(79	)			281				—				—				202
Income (loss) before income taxes			247				410				—				—				657
INCOME TAX PROVISION (BENEFIT)			51				159				—				—				210
INCOME (LOSS) FROM CONTINUING OPERATIONS			196				251				—				—				447
INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAX			—				—				(3,192	)							(3,192	)
NET INCOME (LOSS)		$	196			$	251			$	(3,192	)		$	—			$	(2,745	)
NON-GAAP NET INCOME (LOSS)		$	422			$	251			$	—			$	—			$	673
EBITDA		$	1,628			$	698			$	—			$	—			$	2,326
ADJUSTED EBITDA		$	1,854			$	698			$	—			$	—			$	2,552
A reconciliation of NET INCOME (LOSS) to EBITDA and ADJUSTED EBITDA follows:
NET INCOME (LOSS)		$	196			$	251			$	(3,192	)		$	—				(2,745	)
(Income) loss from discontinued operations, net of tax			—				—				3,192				—				3,192
Income tax expense (benefit)			51				159				—				—				210
Interest expense (income)			(79	)			281				—				—				202
Depreciation and amortization			1,460				7								—				1,467
EBITDA		$	1,628			$	698			$	—			$	—			$	2,326
Stock-based compensation			226				—				—				—				226
ADJUSTED EBITDA		$	1,854			$	698			$	—			$	—			$	2,552
A reconciliation of NET INCOME (LOSS) to NON-GAAP NET INCOME (LOSS) follows:
NET INCOME (LOSS)		$	196			$	251			$	(3,192	)		$	—			$	(2,745	)
(Income) loss from discontinued operations, net of tax			—				—				3,192				—				3,192
Stock-based compensation			226				—				—				—				226
NON-GAAP NET INCOME (LOSS)		$	422			$	251			$	—			$	—			$	673

Note: Business and Retail Connect includes our Supplies Distributors and PFS Retail Connect operations, which operate similar financial models on behalf of our client relationships. PFSweb and PFS Retail Connect include certain ongoing activity formerly reported as eCOST.

PFSweb, Inc. and Subsidiaries
Unaudited Consolidating Statements of Operations
For the Twelve Months Ended December 31, 2010
(In Thousands)

						Business &
		PFSweb				Retail Connect				eCOST				Eliminations				Consolidated
REVENUES:
Product revenue, net		$	—			$	174,613			$	—			$	—			$	174,613
Service fee revenue			70,636				—				—				—				70,636
Service fee revenue — affiliate			6,622				—				—				(6,622	)			—
Pass-thru revenue			29,294				—				—				(27	)			29,267
Total revenues			106,552				174,613				—				(6,649	)			274,516
COSTS OF REVENUES:
Cost of product revenue			—				162,485				—				—				162,485
Cost of service fee revenue			53,543				—				—				(2,399	)			51,144
Cost of pass-thru revenue			29,294				—				—				(27	)			29,267
Total costs of revenues			82,837				162,485				—				(2,426	)			242,896
Gross profit			23,715				12,128				—				(4,223	)			31,620
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES			29,158				8,676				—				(4,223	)			33,611
Income (loss) from operations			(5,443	)			3,452				—				—				(1,991	)
INTEREST EXPENSE (INCOME), NET			(257	)			1,197				—				—				940
Income (loss) before income taxes			(5,186	)			2,255				—				—				(2,931	)
INCOME TAX PROVISION (BENEFIT)			(355	)			818				—				—				463
INCOME (LOSS) FROM CONTINUING OPERATIONS			(4,831	)			1,437				—				—				(3,394	)
INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAX			—				—				(3,975	)							(3,975	)
NET INCOME (LOSS)		$	(4,831	)		$	1,437			$	(3,975	)		$	—			$	(7,369	)
NON-GAAP NET INCOME (LOSS)		$	(3,372	)		$	1,437			$	—			$	—			$	(1,935	)
EBITDA		$	589			$	3,480			$	—			$	—			$	4,069
ADJUSTED EBITDA		$	2,048			$	3,480			$	—			$	—			$	5,528
A reconciliation of NET INCOME (LOSS) to EBITDA and ADJUSTED EBITDA follows:
NET INCOME (LOSS)		$	(4,831	)		$	1,437			$	(3,975	)		$	—			$	(7,369	)
(Income) loss from discontinued operations, net of tax			—				—				3,975				—				3,975
Income tax expense (benefit)			(355	)			818				—				—				463
Interest expense (income)			(257	)			1,197				—				—				940
Depreciation and amortization			6,032				28								—				6,060
EBITDA		$	589			$	3,480			$	—			$	—			$	4,069
Stock-based compensation			809				—								—				809
Executive disability benefits			650				—								—				650
ADJUSTED EBITDA		$	2,048			$	3,480			$	—			$	—			$	5,528
A reconciliation of NET INCOME (LOSS) to NON-GAAP NET INCOME (LOSS) follows:
NET INCOME (LOSS)		$	(4,831	)		$	1,437			$	(3,975	)		$	—			$	(7,369	)
(Income) loss from discontinued operations, net of tax			—				—				3,975				—				3,975
Stock-based compensation			809				—				—				—				809
Executive disability benefits			650				—				—				—				650
NON-GAAP NET INCOME (LOSS)		$	(3,372	)		$	1,437			$	—			$	—			$	(1,935	)