New PFSWeb Distribution Center Starts Up in Mississippi; 435,000-S.F. Facility Provides Product Fulfillment for F500 Client

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PFSweb, Inc. of Plano (Dallas) TX, a global leader in e-commerce fulfillment, third party logistics and business process outsourcing, has started up a 635,000 sq. ft. state-of-the-art distribution center in Southaven, Mississippi, (near Memphis) to serve an undisclosed Fortune 500 company. PFSweb, listed on the NASDAQ, has put $5 million into the high speed facility to fulfill the three-year contract and has optios for expansion. It will employ about 100 persons on average.

PFSweb, Inc. (NASDAQ: PFSW) began product fulfillment operations this week for a Fortune 500 consumer products client in a new facility at Airways Distribution Center in Southaven, Miss. The center, a short distance from PFSweb’s nearly 1 million-square-foot distribution hub in Memphis, Tenn., is expected to employ an average of about 100 persons.

PFSweb, a global provider of integrated business process outsourcing (BPO) solutions, announced a three-year lease of the 435,000-square-foot building on Aug. 30, 2004. Operations at the industrial park, created by Industrial Development Inc. (IDI) of Atlanta, Ga., support a large, three-year contract with an undisclosed brand name client.

“To meet our obligations for this prominent client, PFSweb expects to incur capital expenditures of approximately $5.0 million,” said Mark Layton, senior partner and chief executive officer of PFSweb. “Our expansion was financed in a favorable industrial revenue bond financing structure through the State of Mississippi and Comerica Bank.” (Announced Jan. 4, 2004.)

“The start-up brings the PFSweb total workforce to nearly 900 employees,” Layton noted. “Services at the new center will include inventory management, fulfillment activities, integrated reverse logistics and transportation management.”

“The plant’s high volume throughput capability – as much as 70,000 packages a day -- makes for a very robust order fulfillment solution to effectively accommodate the client’s variable demand and seasonality,” emphasized Scott Talley, Partner and Vice President-Worldwide Distribution at PFSweb.

“This new facility is a highly progressive distribution center utilizing state-of-the-art Siemens Dematic automated material handling systems,” Talley emphasized. The system incorporates:

• PickDirector Computer System and PowerRail Mounted Devices, including computer-activated, light-directed item selection, which increases quality and speed and reduces operating costs.

• A SortDirector Computer System which enables high speed carton sorting for optimum through-put while reducing “touches” and handling costs.

• Siemens’ RS200 High Rate Shipping Sorter, which provides reliable conveyance of products

and cartons regardless of their size and shape. This technology gives the client the ability to efficiently offer a wide array of products to their customers.

“Another key feature of the Southaven operation includes pre-sorting of packages by destination ZIP code to reduce the number of times packages have to be handled while in transit, thereby reducing both in-transit damage and transportation costs. This benefit, achieved through a sort process that facilitates bypassing carrier and postal processing facilities, generates substantial freight cost reductions for our client. The facility also will offer multiple delivery options, such as next-day, ground, postal and LTL (less-than-truckload) shipments,” he said.

“We will perform multiple quality checks using extensive in-line barcode readers and weigh-in-motion scales for optimal throughput with a high degree of control, which will reduce shipping errors and rework costs. Important to this client is PFSweb’s ability to efficiently accommodate periods of both high and variable demand year-round,” Talley stated.

“Critical benefits for this F500 client,” Layton added, “include increased order accuracy, enhanced customer satisfaction, faster order fulfillment, flexible warehouse capacity and reduced inventory, direct costs and overhead. We are genuinely excited about this client relationship, for both the performance potential and growth opportunity it represents.”

Known as the “brand behind the brand,” PFSweb provides seamless, transparent, “best-in-class” supply-chain efficiencies and management for its Fortune 500 and Global 1000 clients. PFSweb currently warehouses, manages and fulfills more than $1 billion annually in merchandise and transactions from its distribution facilities in Memphis, Toronto, Canada, and Liège, Belgium.

About PFSweb, Inc.

PFSweb’s comprehensive outsourcing solutions provide proven, fast and secure business infrastructure to enable traditional and e-commerce strategies. PFSweb solutions include: professional consulting services, e-marketplace logistics, order management, web-enabled customer contact centers, customer relationship management, international distribution and fulfillment services, reverse logistics, billing and collection services, kitting and assembly services and ERP information interfacing utilizing its Entente SuiteSM.

PFSweb develops and deploys integrated business infrastructure solutions and fulfillment services for Fortune 1000, Global 2000 and brand name companies, including third party logistics, call center support and e-commerce services. The company serves a multitude of industries and company types, including such clients as Adaptec (NASDAQ: ADPT), CHiA’SSO, FLAVIA® Beverage Systems, Hewlett-Packard (NYSE: HPQ), iGo/Mobility Electronics (NASDAQ: MOBE), International Business Machines (NYSE: IBM), Nokia (NYSE: NOK), Pfizer, Inc. (NYSE: PFE), Raytheon Aircraft Company, René Furterer USA, Roots, Inc., Smithsonian Institution and Xerox (NYSE: XRX).

The matters discussed in this news release, particularly information regarding future revenue, earnings, business plans and goals, consist of forward-looking information within the meaning of Section 27A of the

Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and are subject to and involve risks and uncertainties, which could cause actual results to differ materially from the forward- looking information. Such statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. These statements are based on assumptions and

estimates that management believes are reasonable based on currently available information; however, management’s assumptions and the Company’s future performance are both subject to a wide range of business risks and uncertainties, and there is no assurance that these goals and projections can or will be met. Any number of factors could cause actual results to differ materially. The Company undertakes no obligation to publicly update or revise any forward-looking statements. All forward-looking information contained herein is subject to the risk factors and uncertainties described in the Company’s filings with the Securities and Exchange Commission, which risk factors and uncertainties are incorporated by this reference as though fully set forth herein.

To find out more about PFSweb, Inc. (NASDAQ: PFSW), visit our website at PFSweb is a registered trademark. Entente Suite is a service mark of PFSweb. All rights reserved.


Laura Osborne,Corporate Communications, PFSweb, Inc.,(972) 881-2900 x3574,


Preston F. Kirk, APR

Investor/Public Relations

Michael Burns & Associates Inc.

(830) 693-4447, Austin TX

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Preston F. Kirk, APR
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