GSI COMMERCE announced net revenue was $50.3 million in the second quarter of fiscal 2003, compared with net revenue of $33.1 million in the second quarter of fiscal 2002, an increase of 52.3%.

Net loss was $3.8 million in the second quarter of fiscal 2003, compared with net loss of $5.2 million in the second quarter of fiscal 2002. Net loss per share was $0.10 in the second quarter of fiscal 2003, compared with net loss per share of $0.13 in the second quarter of fiscal 2002.

EBITDA loss was $0.9 million in the second quarter of fiscal 2003, compared to EBITDA loss of $3.9 million in the second quarter of fiscal 2002. EBITDA represents earnings (or loss) before interest income/expense, taxes, depreciation and amortization and stock-based compensation. A reconciliation of EBITDA to net loss is contained later in this release.

“GSI Commerce reported excellent second quarter results and completed a strong first half of fiscal 2003. While GSI is clearly benefiting from the growth of e-commerce and the growth of business process outsourcing, our more than 50% increase in net revenue and more than 80% increase in net merchandise sales(a) in the second quarter as compared to the same period in the prior year demonstrates that we are delivering a compelling value proposition to our partners and executing at a high level. Based on the momentum in our business to date, we are raising our guidance for fiscal 2003 and we expect to achieve EBITDA and GAAP net income profitability in fiscal 2004,” said Michael Rubin, Chairman and CEO of GSI Commerce.

(a)Net merchandise sales represents the retail value of all sales transactions, inclusive of freight charges and net of allowances for returns and discounts, which flow through the GSI platform, whether or not GSI is the seller of the merchandise or records the full amount of such sales on its financial statements. A reconciliation of net merchandise sales to net revenue is contained later in this release.

Highlights Since March 28, 2003

    --  Net merchandise sales increased 83.9%, including a 43.3%
        increase in sporting goods, a 97.1% decrease in Ashford and a
        432.7% increase in other categories.
    --  Sales and marketing, product development and general and
        administrative expenses, collectively, increased 8.5%, and
        declined, collectively, to 35.7% of net revenue from 50.1% of
        net revenue.
    --  Stock-based compensation expense was $0.4 million in the
        quarter compared to a credit of $0.8 million in the year ago
        period, resulting in a $1.2 million or $0.03 per share
        non-cash negative swing in net loss.
    --  Inventory declined to $20.3 million from $26.9 million a year
        ago and $25.1 million at the end of the first quarter of
        fiscal 2003.
    --  GSI's wholly owned subsidiary, Global-QVC Solutions, announced
        that they were selected by the Public Broadcasting Service
        (PBS) to develop and operate a new technology, customer
        service and fulfillment platform for its consumer and
        education products, including: the shopPBS.com Web site; the
        PBS Home Video catalog; on-air offers and business-to-business
        distribution.
    --  GSI Commerce issued 1.65 million shares of GSI Commerce common
        stock to Interactive Technology Holdings, LLC (ITH), a joint
        venture company owned by Comcast Corporation and QVC, Inc. in
        exchange for warrants held by ITH to purchase 4.5 million
        shares of GSI Commerce common stock.

    Financial Guidance

The following forward-looking statements reflect GSI Commerce's expectations as of July 30, 2003. Given the potential changes in general economic conditions and consumer spending, the emerging nature of e-commerce, and various other risk factors discussed below, actual results may differ materially.

Fiscal 2003 Expectations

    --  Net revenue is expected to be in the range of $223-$232
        million.
    --  Net merchandise sales is expected to be in the range of
        $264-$274 million.
    --  Net loss is expected to be in the range of $12-$14 million.
    --  EBITDA loss is expected to be in the range of $0-$2.5 million.

    Fiscal Third Quarter 2003 Expectations

    --  Net revenue is expected to be in the range of $42-$45 million.
    --  Net merchandise sales is expected to be in the range of
        $48-$52 million.
    --  Net loss is expected to be in the range of $5.5-$6.5 million.
    --  EBITDA loss is expected to be in the range of $2.25-$3.0
        million.

    Fiscal Fourth Quarter 2003 Expectations

    --  Net revenue is expected to be in the range of $82-$88 million.
    --  Net merchandise sales is expected to be in the range of
        $107-$113 million.
    --  Net income is expected to be in the range of $1.5-$3.0
        million.
    --  EBITDA is expected to be in the range of $4.5-$6 million.

    Non-GAAP Financial Measures

This press release contains the non-GAAP financial measures EBITDA and net merchandise sales. GSI Commerce uses EBITDA as a means to evaluate its performance period to period without taking into account certain expenses, particularly stock-based compensation expense which may fluctuate materially due to fluctuations in the price of GSI Commerce's common stock both on a quarterly basis and on an annual basis and does not consistently reflect GSI Commerce's results from its core business activities. In addition, GSI Commerce uses net merchandise sales as a metric for operating its business. Variable costs such as fulfillment and customer service labor expense, order processing costs such as credit card and bank processing fees, and business management costs such as marketing department staffing levels are related to the amount of sales made through GSI Commerce's platform, whether or not GSI Commerce records the revenue from such sales. GSI Commerce believes that investors will have a more thorough understanding of its expense trends if they have visibility to both GAAP revenue as well as the non-GAAP financial measure net merchandise sales. These non-GAAP financial measures should be considered in addition to, and not as a substitute for, or superior to, other measures of financial performance prepared in accordance with GAAP. These non-GAAP measures included in this press release have been reconciled to the nearest GAAP measure as is now required under new SEC rules regarding the use of non-GAAP financial measures.

As used herein, “GAAP” refers to accounting principles generally accepted in the United States of America.

                  GSI COMMERCE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)

Three Months Ended Six Months Ended
June 29, June 28, June 29, June 28,
2002 2003 2002 2003
-------- -------- -------- --------

Revenues:
Net revenues from product
sales $ 28,293 $ 45,722 $ 57,943 $ 89,895
Service fee revenues 4,776 4,626 7,051 9,332
-------- -------- -------- --------

Net revenues 33,069 50,348 64,994 99,227
Cost of revenues from
product sales 20,399 33,307 40,754 65,160
-------- -------- -------- --------

Gross profit 12,670 17,041 24,240 34,067
-------- -------- -------- --------

Operating expenses:
Sales and marketing,
exclusive of $(251), $279,
$1 and $508 reported below
as stock-based
compensation, respectively 9,743 10,825 18,935 23,546
Product development,
exclusive of $(118), $0,
$(44) and $0 reported
below as stock-based
compensation, respectively 3,067 3,688 5,403 7,693
General and administrative,
exclusive of $(381), $125,
$(175) and $184 reported
below as stock-based
compensation, respectively 3,747 3,457 7,049 6,635
Stock-based compensation (750) 404 (218) 692
Depreciation and
amortization 2,272 2,734 4,107 5,432
-------- -------- -------- --------
Total operating expenses 18,079 21,108 35,276 43,998
-------- -------- -------- --------

Other (income) expense:
Interest expense 130 - 262 -
Interest income (372) (290) (826) (671)
-------- -------- -------- --------

Total other (income)
expense (242) (290) (564) (671)
-------- -------- -------- --------

Net loss $ (5,167) $ (3,777) $(10,472) $ (9,260)
======== ======== ======== ========

Losses per share - basic
and diluted:
Net loss $ (0.13) $ (0.10) $ (0.27) $ (0.24)
======== ======== ======== ========

Weighted average shares
outstanding:
basic and diluted 38,674 38,838 38,362 38,811
======== ======== ======== ========

GSI COMMERCE, INC. AND SUBSIDIARIES
EBITDA AND RECONCILIATION TO GAAP RESULTS
(in thousands, expect per share data)
(unaudited)

Three Months Ended Six Months Ended
June 29, June 28, June 29, June 28,
2002 2003 2002 2003
-------- -------- -------- --------

EBITDA:
Net loss excluding interest
income and expense taxes
and charges for stock-based
compensation and
depreciation and
amortization $ (3,887) $ (929) $ (7,147) $ (3,807)
======== ======== ======== ========

Net loss excluding interest
income and expense taxes
and charges for
stock-based compensation
and depreciation and
amortization, per share:
basic and diluted $ (0.10) $ (0.02) $ (0.19) $ (0.10)
======== ======== ======== ========

Reconciliation of EBITDA to
GAAP results:
EBITDA $ (3,887) $ (929) $ (7,147) $ (3,807)

Interest expense 130 - 262 -
Interest income (372) (290) (826) (671)
Taxes - - - -
Stock-based
compensation (750) 404 (218) 692
Depreciation and
amortization 2,272 2,734 4,107 5,432
-------- -------- -------- --------

Net loss $ (5,167) $ (3,777) $(10,472) $ (9,260)
======== ======== ======== ========

GSI COMMERCE, INC. AND SUBSIDIARIES
NET MERCHANDISE SALES (1) AND RECONCILIATION TO GAAP RESULTS
(dollars in thousands)
(unaudited)

Three Months Ended
June 29, June 28, Variance
2002 2003 Amount %
-------- -------- -------- --------

Net merchandise sales(1) -
(a non-GAAP financial
measure):
Category:
Sporting goods $ 18,843 $ 27,011 $ 8,168 43%
Ashford 5,775 167 (5,608) -97%
Other 5,192 27,657 22,465 433%
-------- -------- --------
Total net merchandise
sales(1) - (a
non-GAAP
financial measure) $ 29,810 $ 54,835 $ 25,025 84%
======== ======== ========

Net revenues - (GAAP basis):
Net revenues from product
sales:
Category:
Sporting goods $ 18,843 $ 27,011 $ 8,168 43%
Ashford 5,775 167 (5,608) -97%
Other 3,675 18,544 14,869 405%
-------- -------- --------

Total net revenues from
product sales 28,293 45,722 17,429 62%

Service fee revenues 4,776 4,626 (150) -3%
-------- -------- --------

Total net revenues -
(GAAP basis) $ 33,069 $ 50,348 $ 17,279 52%
======== ======== ========

Reconciliation of net
merchandise sales(1) to
net revenues:
Net merchandise sales(1)
- (a non-GAAP financial
measure):
Category:
Sporting goods $ 18,843 $ 27,011 $ 8,168 43%
Ashford 5,775 167 (5,608) -97%
Other 5,192 27,657 22,465 433%
-------- -------- --------
Total net merchandise
sales(1) - (a non-GAAP
financial measure) 29,810 54,835 25,025 84%

Less:
Sales by partners(2):
Category:
Sporting goods - - - -
Ashford - - - -
Other (1,517) (9,113) (7,596) 501%
-------- -------- --------

Total sales by
partners(2) (1,517) (9,113) (7,596) 501%

Add:
Service fee revenues 4,776 4,626 (150) -3%
-------- -------- --------

Net revenues -
(GAAP basis) $ 33,069 $ 50,348 $ 17,279 52%
======== ======== ========

(1) Net merchandise sales represents the retail value of all sales
transactions, inclusive of freight charges and net of allowances for
returns and discounts, which flow through the GSI platform, whether or
not GSI is the seller of the merchandise or records the full amount of
such sales on its financial statements.

(2) Represents the retail value of all product sales through the GSI
platform where the inventory is owned by the partner and the partner
is the seller of the merchandise. GSI records service fee revenues on
these sales.

GSI COMMERCE, INC. AND SUBSIDIARIES
NET MERCHANDISE SALES (1) AND RECONCILIATION TO GAAP RESULTS
(dollars in thousands)
(unaudited)

Six Months Ended
June 29, June 28, Variance
2002 2003 Amount %
-------- -------- -------- --------

Net merchandise sales(1) -
(a non-GAAP financial
measure):
Category:
Sporting goods $ 45,966(3) $ 51,418 $ 5,452 12%
Ashford 7,379 902 (6,477) -88%
Other 7,718 56,691 48,973 635%
-------- -------- --------
Total net merchandise
sales(1) -
(a non-GAAP
financial measure) $ 61,063 $109,011 $ 47,948 79%
======== ======== ========

Net revenues - (GAAP basis):
Net revenues from product
sales:
Category:
Sporting goods $ 45,966(3) $ 51,418 $ 5,452 12%
Ashford 7,379 902 (6,477) -88%
Other 4,598 37,575 32,977 717%
-------- -------- --------
Total net revenues
from
product sales 57,943 89,895 31,952 55%

Service fee revenues 7,051 9,332 2,281 32%
-------- -------- --------
Total net revenues -
(GAAP basis) $ 64,994 $ 99,227 $ 34,233 53%
======== ======== ========

Reconciliation of net
merchandise sales(1) to
net revenues:
Net merchandise sales(1)
- (a non-GAAP financial
measure):
Category:
Sporting goods $ 45,966(3) $ 51,418 $ 5,452 12%
Ashford 7,379 902 (6,477) -88%
Other 7,718 56,691 48,973 635%
-------- -------- --------
Total net merchandise
sales(1) - (a
non-GAAP
financial measure) 61,063 109,011 47,948 79%

Less:
Sales by partners(2):
Category:
Sporting goods - - - -
Ashford - - - -
Other (3,120) (19,116) (15,996) 513%
-------- -------- --------
Total sales by
partners(2) (3,120) (19,116) (15,996) 513%

Add:
Service fee revenues 7,051 9,332 2,281 32%
-------- -------- --------

Net revenues -
(GAAP basis) $ 64,994 $ 99,227 $ 34,233 53%
======== ======== ========

(1) Net merchandise sales represents the retail value of all sales
transactions, inclusive of freight charges and net of allowances for
returns and discounts, which flow through the GSI platform, whether or
not GSI is the seller of the merchandise or records the full amount of
such sales on its financial statements.

(2) Represents the retail value of all product sales through the GSI
platform where the inventory is owned by the partner and the partner
is the seller of the merchandise. GSI records service fee revenues on
these sales.

(3) Includes $8.3 million from sales of one of GSI's partner's
products sold primarily through its direct response television