EX-99.1 3 dex991.htm PRESENTATION MATERIALS Presentation Materials

Exhibit 99.1

 

Slide 1

 

(logo GSI Commerce tm)                                        The outsource solution for e-commerce

 

GSI Commerce, Inc.

 

Goldman Sachs

Fourth Annual Internet Conference

May 22, 2003

 

Slide 2

 

(logo GSI Commerce tm)                                        The outsource solution for e-commerce

 

Forward-Looking Statements

 

All statements made in this presentation, other than statements of historical fact, are forward-looking statements. The words “anticipate”, “believe”, “estimate”, “expect”, “intend”, “may”, “plan”, “will”, “would”, “should”, “guidance”, “potential”, “continue”, “project”, “forecast”, “confident”, “prospects” and similar expressions typically are used to identify forward-looking statements. Forward-looking statements are based on the then-current expectations, beliefs, assumptions, estimates and forecasts about the business of GSI Commerce and the industry and markets in which GSIC operates. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or implied by those forward- looking statements. Factors which may affect GSI Commerce’s business, financial condition and operating results include the effects of changes in the economy, consumer spending, the stock market and the industries in which GSI Commerce operates, changes affecting the Internet and e-commerce, the ability of GSIC to maintain relationships with strategic partners and suppliers, the ability of GSIC to timely and successfully develop, maintain and protect its technology and product and service offerings and execute operationally, the ability of GSIC to attract and retain qualified personnel and the ability of GSIC to successfully integrate its acquisitions of other businesses, and the performance of acquired businesses. More information about potential factors that could affect GSI Commerce can be found in its most recent Form 10-K, Form 10-Q and other reports and statements filed by GSI Commerce with the Securities and Exchange Commission. GSI Commerce expressly disclaims any intent or obligation to update these forward-looking statements, except as otherwise specifically stated by GSI Commerce.

 

EBITDA represents earnings or loss before interest income and expense, taxes, depreciation and amortization, and stock-based compensation. For reconciliations from non-GAAP to GAAP metrics, please refer to www.gsicommerce.com.

 

Slide 3

 

(logo GSI Commerce tm)                                        The outsource solution for e-commerce

 

GSI Commerce is a Leading eCommerce Services Provider

 

NASDAQ: GSIC

 

725 employees

Headquarters in King of Prussia, PA

Fulfillment center in Louisville, KY

Call center in Melbourne, FL

Largest shareholder is QVC/Comcast

Partnered with 40 leading retailers, consumer brands, media properties and professional sports organizations

 

Owned Inventory Model: GSI records sales & pays revenue share to partner

 

Consignment Model: GSI compensated with fixed fees and/or % of sales

 

Slide 4

 

(logo GSI Commerce tm)                                        The outsource solution for e-commerce

 

Selected GSI Partners

 

Comp & Cons Elec.

   

(logos) Palm, Tweeter

Home Products

   

(logos) Linens ‘n Things, Ace

Apparel, Footwear, Acc.

   

(logos) Reebok, The Athlete’s Foot, Rockport

General Merchandise

   

(logos) Kmart

Health & Beauty

   

(logos) Estee Lauder Companies, Bobbie Brown, Clinique, Gloss, Estee Lauder, Origins

Sporting Goods

   

(logos) The Sports Authority, Gart Sports, Modell’s, MC Sports, Dick’s, Dunham’s, Denver Broncos, NASCAR, Atlanta Falcons, Rawlings, Russell Athletic

Entertainment/Media

   

(logos) Nick.com, Fox Sports, Comedy Central, TV Land, Lifetime, PAX, The Golf Channel, CBS Sportsline

 

Slide 5

 

(logo GSI Commerce tm)                                        The outsource solution for e-commerce

 

U.S. Online General Merchandise Market Will Reach $55BN in ‘03

 

US Online Retail Sales (billions)

 

    

2003E

Computer Hardware & Consumer Electronics

   

$

14.7

Home Products

   

$

12.5

Books, Music & Video

   

$

8.8

Apparel, Footwear & Accessories

   

$

7.9

Toys & Video Games

   

$

2.7

Jewelry & Luxury Goods

   

$

1.7

 

Sporting Goods

   

$

1.5

Flowers, Cards & Gifts

   

$

1.4

Health & Beauty

   

$

1.2

Other

   

$

3.2

    
    

$

55.6

 

General merchandise excludes travel, financial services, tickets, job listings, real estate and autos

 

Source: Forrester Research

 

Slide 6

 

(logo GSI Commerce tm)                                        The outsource solution for e-commerce

 

U.S. Online General Merchandise Market Is Expected to Grow to Nearly $140BN in ‘07

 

(billions)

 

2003E

   

$

59.2

2004E

   

$

77.4

2005E

   

$

98.5

2006E

   

$

122.1

2007E

   

$

146.2

 

26% net revenue CAGR as compared to 2-3% for overall retail

 

Source: Forrester Research

 

Slide 7

 

(logo GSI Commerce tm)                                        The outsource solution for e-commerce

 

eCommerce Growth Drivers

Increased Internet Users/Usage

Improving Customer Experience

Deepening Integration Between Online and Offline

Migration of Catalog, Direct Mail and DRTV Revenue

Broadband

 

Slide 8

 

(logo GSI Commerce tm)                                        The outsource solution for e-commerce

 

Broad Universe of Participants in the U.S. Online General Merchandise Market

Retailers

Pure Plays

Manufacturers/Brands

Catalogers

Media Companies

Professional & Amateur Sports Organizations

 

Source: Shop.org, Forrester Research

 

Slide 9

 

(logo GSI Commerce tm)                                        The outsource solution for e-commerce

 

GSI Has A Substantial Market Opportunity

 

eCommerce is too large for major companies to ignore; online sales will account for 4.5% of total retail sales in 2003

 

Multi-channel retailers will contribute 75% of online retail sales in 2003

 

but . . .

 

Multi-channel retailers derive the large majority of their revenue offline – online selling is not a core competency

 

A significant opportunity exists to ‘ENABLE’ these companies to maximize their eCommerce business

 

Source: Shop.org, Forrester Research

 

Slide 10

 

(logo GSI Commerce tm)                                        The outsource solution for e-commerce

 

Enabling eCommerce

 

en•a’•ble            1a) To supply with the means or opportunity

                             b) To make feasible or possible

                             c) To make operational

 

tr.v. en·a·bled, en·a·bling, en·a·bles

 

Enable eCommerce: Software

                             Hosting/Managed Infrastructure

                             Professional Services

                             Fulfillment Services

                             Customer Contact Services

                             Marketing Services

 

Slide 11

 

(logo GSI Commerce tm)                                        The outsource solution for e-commerce

 

Software

 

Components:  Web Server

                         Application Server

                         Shopping Platform

                         Content Management

                         Search Engine

                         Web Analytics

 

    

CRM

    

Database

    

Order Management

    

Fraud Screening

    

Warehouse Management

    

Financial Management

    

Merch Management/Planning

      

Participants:

   

BEA, IBM, Microsoft, Oracle, Siebel

      

Slide 12

     
      

(logo GSI Commerce tm)

   

The outsource solution for e-commerce

      

Hosting/Managed Infrastructure

Components:

   

Hardware

    

Hardware Maintenance

    

Hosting (storage & data communication)

    

Security

    

Monitoring

    

Caching

    

Load Balancing

    

Systems Administration

    

Database Administration

Participants:

   

AT&T, Computer Associates, IBM, Sun Microsystems

      

Slide 13

     
      

(logo GSI Commerce tm)

   

The outsource solution for e-commerce

      

Professional Services

Components:

   

Software Selection

    

Integration

    

Site Design

    

Site Development

    

Site Evaluation/Usability Testing

    

Industry Expertise/General Consulting

    

Product Photography Copywriting

Participants:

   

Accenture, EDS, IBM, PWC Consulting

      

Slide 14

     
      

(logo GSI Commerce tm)

   

The outsource solution for e-commerce

      

Fulfillment Services

     

 

5

 

Components:

   

Receiving/Put Away

    

Storage

    

Pick/Pack/Ship

    

Returns Processing

    

Inventory Control

    

Value Added Services

    

Drop-Ship Management

    

Shipping Management

Participants:

   

FedEx, UPS

      

Slide 15

     
      

(logo GSI Commerce tm)

   

The outsource solution for e-commerce

      

Customer Contact Services

Components:

   

24/7 Phone

    

24/7 Email Response

    

Sales (Cross-/Up-Sell)

    

Training

    

Remote Monitoring

    

Skills-Based Routing

    

Voice Communication

    

Event Management

Participants:

   

Convergys, Precision Response, West Communications

      

Slide 16

     
      

(logo GSI Commerce tm)

   

The outsource solution for e-commerce

      

Marketing Services

Components:

   

Online Media Buying

    

Affiliate Program Management

    

List Management

    

Email Delivery

    

Search Optimization

    

Paid Search

    

Catalog & DRTV Services

    

CRM – Lifetime Value Optimization

Participants:

   

DoubleClick, Grey Digital Marketing, Ogilvy Interactive

      

Slide 17

     
      

(logo GSI Commerce tm)

   

The outsource solution for e-commerce

      

GSI Provides Solutions That Encompass Every Aspect of Enabling eCommerce

 

6

 

Integrated eCommerce software platform centered on proprietary shopping application

Hosted/managed hardware infrastructure

Fulfillment center

Call center

Online marketing/email campaign management

Site design, usability and integration

Multi-channel integration (catalog, DRTV)

Content creation/management

Reporting and analytics

 

Fulfillment Svcs

Customer Contact Svcs

HOSTED ECOMMERCE TECHNOLOGY PLATFORM

Marketing Svcs

Professional Svcs

 

Slide 18

 

(logo GSI Commerce tm)

   

The outsource solution for e-commerce

 

GSI Value Proposition to Partners

 

Comprehensive suite of eCommerce products and services

Customized solution with full partner branding

Scale to provide a superior shopping experience and justify ongoing technology and operational infrastructure investment

Proven track record of transitioning and growing significant online businesses

Ability to reduce costs associated with eCommerce and focus resources on core business

Opportunity to avoid capital investment and/or long-term risk

Economic structure that creates financial predictability and makes GSI vested in the success of partner’s eCommerce business

 

Slide 19

 

(logo GSI Commerce tm)

   

The outsource solution for e-commerce

 

Partner Assets

 

Brand Equity

Offline Marketing

Merchandise Assortment

 

GSI Solution

Fulfillment Svcs

Customer Contact Svsc

HOSTED ECOMMERCE TECHNOLOGY PLATFORM

Marketing Svcs

 

7

 

Professional Svcs

 

Partner Benefits

 

Revenue Growth

Improved Economics

Enhanced Enterprise Value

 

Slide 20

 

(logo GSI Commerce tm)

   

The outsource solution for e-commerce

 

Selected GSI Partners

Computer Hardware & Consumer Electronics (U.S. Online 2003: $14.7BN)

 

(logo) Palm, Inc. is a pioneer in mobile and wireless Internet solutions and the world leader in handheld computing with 2002 fiscal year revenues of $1.03 billion.

(logo)Tweeter Home Entertainment Group is a leading consumer electronics retailer with 161 stores and 2002 fiscal year revenues of $794 million.

 

Slide 21

 

(logo GSI Commerce tm)

   

The outsource solution for e-commerce

 

Selected GSI Partners

Home Products (U.S. Online 2003: $12.5BN)

 

(logo)Linens ‘n Things is a leading retailer of home textiles and housewares with 400 stores and 2002 fiscal year revenues of $2.2 billion.

 

(logo)ACE Hardware Corporation is the largest hardware cooperative in the U.S. with more than 5,100 stores and 2002 fiscal year revenues of more than $3 billion.

 

Slide 22

 

(logo GSI Commerce tm)

   

The outsource solution for e-commerce

 

Selected GSI Partners

Apparel, Footwear & Accessories (U.S. Online 2003: $7.9BN)

 

(logo)Reebok is a leading designer and marketer of footwear, apparel and accessories with 2002 fiscal year revenues of $3.1 billion.

 

(Rockport logo)A subsidiary of Reebok, Rockport is a designer, manufacturer and marketer of comfort footwear with 2002 fiscal year sales of $386 million.

 

8

 

(logo)The Athlete’s Foot is the world’s largest franchisor of athletic footwear with 750+ stores and 2001 fiscal year revenues of $209 million.

 

(logo)Shoe Carnival is a leading family footwear retailer with more than 200 stores in 23 states and 2002 fiscal year revenues of $520 million.

 

Slide 23

 

(logo GSI Commerce tm)                                                             The outsource solution for e-commerce

 

Selected GSI Partners

 

General Merchandise (includes jewelry, toys, furniture, books/music/video)

 

(logo)Kmart is a leading discount retailer with roughly 1,500 stores and 2002 fiscal year revenues of $31 billion.

 

Slide 24

 

(logo GSI Commerce tm)                                                             The outsource solution for e-commerce

 

Selected GSI Partners

Sporting Goods (U.S. Online 2003: $1.5BN)

 

(logo)The Sports Authority is the largest full-line sporting goods retailer with 200+ stores and 2002 fiscal year revenues of $1.4 billion.

 

(logo)Dick’s Sporting Goods is a leading full-line sporting goods retailer with 140 stores and 2002 fiscal year revenues of $1.3 billion.

 

(logo)NASCAR is a leading professional sports organization with more than 75 million fans and 2002 worldwide licensed merchandise sales of $2 billion.

 

Slide 25

 

(logo GSI Commerce tm)                                                             The outsource solution for e-commerce

 

Selected GSI Partners

 

Health & Beauty (U.S. Online 2003: $1.2BN)

 

(logo Estee Lauder Companies)One of the world’s leading manufacturers and marketers of quality skin care, makeup, fragrance and hair care products with 2002 fiscal year revenues of $4.7 billion.

 

(logos Bobbie Brown, Gloss, Estee Lauder, Clinique, Origins)

 

Slide 26

 

(logo GSI Commerce tm)                                                             The outsource solution for e-commerce

 

Selected GSI Partners

 

Licensed Entertainment (includes apparel, toys, home décor, accessories, etc.)

 

(logos)Viacom/Nickelodeon The #1 entertainment brand for kids with 2002 worldwide licensed merchandise sales of $2.6 billion.

 

(logo)Comedy Central The only all-comedy network available in over 78 million U.S. homes and 2002 worldwide licensed merchandise sales of $98 million.

(logo)TV Land A 24-hour spin-off channel offers classic programs in over 61 million households.

 

(logo)Lifetime The #1 basic cable channel in primetime and the leader in women’s television is in 85 million U.S. households.

 

Source: License! Magazine, April 2003

 

Slide 27

 

(logo GSI Commerce tm)                                                         The outsource solution for e-commerce

 

Financial Drivers

 

Revenue Growth

New Partners

Growth of Existing Partners

Variable Operating Efficiency

Cost Per Package

Cost Per Contact

Contacts Per Order

Fixed Expense Leverage

Scalable Technology Platform

Available Capacity

 

Slide 28

 

(logo GSI Commerce tm)                                                         The outsource solution for e-commerce

 

Revenue Growth

 

GSI Net Revenue (MM)

 

2000

   

$

42.8

2001

   

$

102.6

2002

   

$

172.6

2003E

   

$

210.0

 

Slide 29

 

(logo GSI Commerce tm)                                                         The outsource solution for e-commerce

 

Variable Operating Efficiency

 

Sales & Marketing Expense / Net Revenue

 

2000

   

88

%

2001

   

32

%

2002

   

29

%

1Q02

   

28.8

%

1Q03

   

26.0

%

 

Slide 30

 

(logo GSI Commerce tm)                                                         The outsource solution for e-commerce

 

Fixed Expense Leverage

 

Product Development and G&A / Net Revenue

 

2000

   

37

%

2003

   

19

%

2004

   

16

%

1Q02

   

17.7

%

1Q03

   

14.7

%

 

Slide 31

 

(logo GSI Commerce tm)                                                         The outsource solution for e-commerce

 

Ashford Acquisition Masks Underlying Trend

 

Did Not Meet Financial Expectations

Resource & Focus Distraction

Completed Divestiture in 2002 (same year as purchase completed)

 

Slide 32

 

(logo GSI Commerce tm)                                                         The outsource solution for e-commerce

 

Strong Balance Sheet (March 29, 2003)

 

Cash*

   

$

51MM

Debt

   

$

0MM

Cash* Net of Debt

   

$

51MM

Total Assets

   

$

163MM

Shareholder’s Equity

   

$

115MM

 

* Cash and cash equivalents, short-term investments and marketable securities

 

Slide 33

 

(logo GSI Commerce tm)                                                             The outsource solution for e-commerce

 

Moderating Capital Expenditures

 

2000:

   

initial platform development, technology market still hot

2001:

   

leveraged investments, strong revenue growth

2002:

   

fulfillment center expansion/purchase, call center purchase, 2nd data center, substantial software/development

2003:

   

leveraging investments, expect strong revenue growth

(millions)

 

2000

   

$

13.7

2001

   

$

8.4

2002

   

$

29.0

2003E

   

$

10-$15

 

Slide 34

 

(logo GSI Commerce tm)                                                             The outsource solution for e-commerce

 

Summary

 

Strong business momentum

Significant growth opportunities

Compelling value proposition

 

Slide 35

 

(logo GSI Commerce tm)                                                             The outsource solution for e-commerce

 

GSI Commerce, Inc.

 

Goldman Sachs

Fourth Annual Internet Conference

May 22, 2003