PFS/PFSWEB Grows Over 100 Percent; Priority Fulfillment Services Secures 10 Deals in 16 Weeks

Business Wire, Feb 3, 1999

PLANO, Texas--(BUSINESS WIRE)--Feb. 3, 1999--Priority Fulfillment Services Inc. (PFS), a wholly owned subsidiary of Daisytek International Corporation (NASDAQ:DZTK) and its newly created electronic commerce division, PFSWEB, struck 10 new deals in the past four months.

These business units provide end-to-end transaction management, including Web-based commerce, call center, distribution and financial services, primarily on a fee basis, to other companies.

"Financial results this quarter -- Daisytek's 23rd consecutive quarter of record earnings -- were led by booming performances in PFS and its PFSWEB division," said Mark C. Layton, president, chief executive officer and chief operating officer of Daisytek. "PFS' fee-equivalent revenue and operating profit grew more than 100 percent versus last year, and the subsidiary moved over $100 million of products for its clients this past quarter."

"In the past 16 weeks, we have seen a flurry of new arrangements for PFS and PFSWEB," said Chris Yates, senior vice president of PFS. "These new deals include Web-based outsourcing solutions for IBM Printing Systems Company, IBM Media Storage Division, Nokia and Exabyte, as well as expansion of the Tektronix relationship."

Last month PFS announced the opening of PFS Europe to meet the demands of customers to provide a "global" outsourcing solution. "Almost immediately after our opening in Europe, we landed expanded relationships with IBM Printing Systems Company and IBM Media Storage Division. We anticipate that other existing U.S. customers will be attracted to our new European solution as well," Yates said.

The world of electronic commerce continues to grow dramatically. This past Christmas season, worldwide usage of the Web to purchase goods was at record levels. According to USA Today, purchases over the Web during this past Christmas were over $3 billion versus $1 billion in 1997. Forrester Research indicated that Web commerce hit $8 billion last year and expects that commerce will more than double to $18 billion this year. "Consumers have clearly embraced this way of shopping as the next big 'wave'," Layton said.

However, a troubling fact is emerging, and in that lies the opportunity for PFSWEB. "Consumer satisfaction with Internet shopping is waning, down 14 percent since July, according to Jupiter Communications. Slow delivery, no one to talk to, and shipping errors are cited as reasons for lower satisfaction. PFSWEB can fix that. This is the second big 'wave' of opportunity emerging from the internet explosion," Layton said.

According to Yates, "PFSWEB has positioned itself to provide the logistics required to support this 'wave.' Many companies' traditional infrastructure is not appropriate to deal with the expanded business hours, smaller shipment sizes, call-center support, and a host of technology issues that are required to provide an outstanding shopping experience for the consumer. PFSWEB provides a total E-business logistics solution to meet these demands. PFSWEB handles everything from the click of the mouse to the knock at the house!"

"You don't have to dream too hard to realize the potential for PFS/PFSWEB to be the largest division of our group in the near future, in terms of client product shipment value," Layton said.

Priority Fulfillment Services Inc. is an international commerce solutions company. PFS delivers outsourced end-to-end transaction management and E-business solutions for corporate, high-volume and fast-growth companies in a wide range of industries. PFS and its subsidiaries represent customers worldwide through the Internet and with strategically located call centers and distribution facilities. PFSWEB provides E-business logistics solutions for Web-based E-tailers.

This news release and more information about Daisytek and Priority Fulfillment Services are available at www.daisytek.com and www.pfsoutsourcing.com. Daisytek is a registered trademark of Daisytek Incorporated. All rights reserved.