GSI Commerce Sees Cash Flow Positive Year…

GSI Commerce looks to have possibly turned a corner in 2006 as the company posted its first year of positive free cash flow. In all, the company saw growth in both sales and service fee revenues, but it was a provision for income taxes adding approximately $44 million for both the quarter and year to the equation that really drove the large growth on the bottom line.

For the fourth quarter, net revenue increased 49% to $257.2 million from $172.3 million. Merchandise sales increased 97% to $555.9 million from $282.4 million. Merchandise sales of sporting goods products totaled $177.9 million for the quarter, up 53.1% from $116.2 million during the year-ago quarter. Net revenues for GSIC from the sale of sporting goods increased 58.7% to $147.8 million from $93.1 million last year. Net income increased to $67.9 million or $1.33 per diluted share from $11.7 million or 25 cents per diluted share. Without the tax benefit of $44.4 million, net income would have been $23.5 million for the quarter.

Looking ahead, the company expects 2007 full year revenues to be in the $685 million to $735 million range with overall merchandise sales totaling $1.50 billion to $1.60 billion. Income from operations is expected to be between $8 million and $13 million, while net income is forecasted to fall between $34 million and $39 million.

For the first quarter, GSIC anticipates net revenues to be between $128 million and $138 million, with merchandise sales totaling between $265 million and $285 million. The company is forecasting a loss from operations of between $7.5 million and $6.5 million with a net loss of between $6.5 million and $5.5 million.