GSI Commerce (GSIC)

Fiscal Year 2009 Guidance

The following forward-looking statements reflect GSI’s expectations as of Oct. 27, 2009. Given the potential changes in general economic conditions and consumer spending, the growth rate of e-commerce and various other risk factors discussed in our forward-looking statements disclosure and in our public reports, actual results may differ materially. The guidance assumes the acquisition of Retail Convergence closes within 30 days.

The company provides the following guidance for fiscal year 2009:

• The company expects a modest increase in net revenues compared to fiscal year 2008.
• Income from operations is expected to be at least $3.0 million to $7.0 million ^(a).
• Non-GAAP income from operations is expected to increase by at least 15 percent to 20 percent compared to fiscal year 2008 which implies a minimum of $94.0 million to $98.0 million ^(b).
• Fiscal year 2009 capital expenditures are expected to be no more than $50.0 million.

^(a) At this time, the company has not completed estimates for the following non-cash items related to the Retail Convergence acquisition: the amount of amortization from acquisition-related intangibles, the amount of incremental depreciation that may result from the step-up of the value of fixed assets and the amount of incremental cost of revenues from product sales that may result from the step-up of the value of inventory. Because these items have not been estimated at this time, they have been excluded from our guidance for income from operations. As a result, the company's actual income from operations could decrease materially.

^(b) The following is a reconciliation of GAAP income from operations to non-GAAP income from operations of $94.0 million to $98.0 million: add to projected GAAP income from operations estimated depreciation and amortization of $63.0 million (inclusive of amortization from acquisition-related intangibles of $10.0 million other than from Retail Convergence), estimated stock-based compensation of $24.0 million and estimated acquisition-related integration, transaction and due diligence expenses of $4.0 million.

Fiscal 2009 Third Quarter Guidance

The following forward-looking statements reflect GSI’s expectations as of July 29, 2009. Given the potential changes in general economic conditions and consumer spending, the growth rate of e-commerce and various other risk factors discussed in our forward-looking statements disclosure and in our public reports, actual results may differ materially.

The company provides the following guidance for fiscal 2009 third quarter:

• Net revenues are expected to be in a range of $181.0 million to $186.0 million.
• Loss from operations is expected to be in a range of $15.5 million to $17.5 million.
• Non-GAAP income from operations is expected to be in a range of $4.0 million to $6.0 million.

The following is a reconciliation of GAAP loss from operations to non-GAAP income from operations: add to projected GAAP loss from operations estimated depreciation and amortization of $16.1 million (inclusive of amortization from acquisition-related intangibles of $2.6 million), estimated stock-based compensation of $5.4 million and estimated acquisition-related integration, transaction and due diligence expenses of $0.0 million.