8-K/A

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K/A
(Amendment No. 1)

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): September 10, 2007

GSI COMMERCE, INC.
(Exact name of registrant as specified in its charter)

Delaware	0-16611	04-2958132
(State or other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

935 First Avenue, King of Prussia, PA	19406
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (610) 491-7000

Not Applicable

(Former name or former address if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Explanatory Note

This Form 8-K/A is being filed to amend Item 9.01 of the Current Report on Form 8-K filed on September 12, 2007 (the “Current Report”). This Amendment provides the unaudited pro forma financial information required by Item 9.01(b), which financial information was not included in the Current Report.

The Registrant hereby amends Item 9.01 of the Current Report to read in its entirety as follows:

Item 9.01. Financial Statements and Exhibits.

(a) Financial Statements of Businesses Acquired.

The unaudited historical financial statements of Accretive as of June 30, 2007 and for the six months ended June 30, 2007 and 2006 are filed as Exhibit 99.2. The audited historical financial statements of Accretive as of and for the year ended December 31, 2006, and the related report of McGladrey & Pullen LLP, are filed as Exhibit 99.3.

(b) Pro Forma Financial Information.

The required pro forma financial information for the nine months ended September 30, 2007 and the twelve months ended December 30, 2006 are filed as Exhibit 99.4.

A pro forma balance sheet as of September 30, 2007 has not been included as the effects of the acquisition of Accretive are reflected in the Company’s Condensed Consolidated Balance Sheet as of September 30, 2007 included in the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 8, 2007.

(d) Exhibits.

Exhibit No.	Document Description
2.1	Agreement and Plan of Merger dated as of August 16, 2007 among GSI Commerce, Inc., Blue Route, Inc., Accretive Commerce, Inc. and certain of the principal stakeholders of Accretive Commerce, Inc. A list of the exhibits and schedules to the Agreement and Plan of Merger appears in the table of contents to the Agreement. The Company will furnish to the Securities and Exchange Commission a copy of any omitted exhibits and schedules upon request. (Incorporated by reference to Exhibit 2.1 in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 17, 2007).
23.1	Consent of McGladrey & Pullen LLP. *
99.1	Press release dated September 10, 2007. *
99.2	Unaudited financial statements of Accretive Commerce, Inc. as of June 30, 2007 and 2006 and for the six months ended June 30, 2007 and 2006. *
99.3	Audited financial statements of Accretive Commerce, Inc. as of and for the year ended December 31, 2006 and the related report of McGladrey & Pullen LLP. *
99.4	Pro forma financial information for the nine months ended September 30, 2007 and the twelve months ended December 30, 2006.

* Previously filed as an exhibit to the Registrant’s Current Report on Form 8-K filed on September 12, 2007

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SIGNATURES  

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.  

GSI COMMERCE, INC.
By:	/s/ Arthur H. Miller
	Arthur H. Miller Executive Vice President

Dated: November 19, 2007

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EXHIBIT INDEX

Exhibit No.	Document Description
2.1	Agreement and Plan of Merger dated as of August 16, 2007 among GSI Commerce, Inc., Blue Route, Inc., Accretive Commerce, Inc. and certain of the principal stakeholders of Accretive Commerce, Inc. A list of the exhibits and schedules to the Agreement and Plan of Merger appears in the table of contents to the Agreement. The Company will furnish to the Securities and Exchange Commission a copy of any omitted exhibits and schedules upon request. (Incorporated by reference to Exhibit 2.1 in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 17, 2007).
23.1	Consent of McGladrey & Pullen LLP. *
99.1	Press release dated September 11, 2007. *
99.2	Unaudited financial statements of Accretive Commerce, Inc. as of June 30, 2007 and 2006 and for the six months ended June 30, 2007 and 2006. *
99.3	Audited financial statements of Accretive Commerce, Inc. as of and for the year ended December 31, 2006 and the related report of McGladrey & Pullen LLP. *
99.4	Pro forma financial information for the nine months ended September 30, 2007 and the twelve months ended December 30, 2006.

* Previously filed as an exhibit to the Registrant’s Current Report on Form 8-K filed on September 12, 2007

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EX-99.4

Exhibit 99.4

Unaudited Pro Forma Combined Financial Statements

On September 10, 2007, GSI Commerce, Inc. (the “Company”) completed the acquisition of Accretive Commerce, Inc. (“Accretive”). Pursuant to an Agreement and Plan of Merger dated as of August 16, 2007 among the Company, Blue Route, Inc. (“Newco”), a wholly-owned subsidiary of the Company, Accretive and certain of the principal stakeholders of Accretive, Newco merged with Accretive and Accretive survived the merger as a wholly-owned subsidiary of the Company. The accompanying unaudited pro forma combined financial statements give pro forma effect to the Company’s acquisition of Accretive, which closed on September 10, 2007, assuming a purchase price of $98.6 million in cash, including acquisition costs of $1.1 million, using the purchase method of accounting.

The following unaudited pro forma combined financial statements were prepared using the historical consolidated financial statements of the Company and Accretive. This information should be read in conjunction with, and is qualified in its entirety, by the consolidated financial statements and accompanying notes of the Company and Accretive incorporated by reference into this current report.

The pro forma adjustments related to the acquisition are preliminary and do not reflect the final purchase price or final allocation of the excess of the purchase price over the net book value of the net assets of Accretive, as the process to assign a fair value to the various tangible and intangible assets acquired has not yet been completed. Final adjustments could result in a materially different purchase price and/or allocation and of the purchase price, which will affect the value assigned to the tangible or intangible assets and amount of depreciation and amortization expense recorded in the consolidated statements of operations. The effect of the changes to the consolidated statements of operations will depend on the final purchase price and the nature and amount of the final purchase price allocation and could be material.

The accompanying unaudited pro forma combined statements of operations for the fiscal year ended December 30, 2006 and the nine-months ended September 29, 2007 assumes that the acquisition took place on January 1, 2006, which was the first day of fiscal 2006. The unaudited pro forma combined statement of operations for the fiscal year ended December 30, 2006 combines the Company’s audited consolidated statement of operations for the fiscal year ended December 30, 2006 with Accretive’s audited consolidated statement of operations for the year ended December 31, 2006. Accretive’s revenues, expenses and net income for the one day ended December 31, 2006 were immaterial. The unaudited pro forma combined statement of operations for the nine-months ended September 29, 2007 combines the Company’s unaudited consolidated statement of operations for the nine-months ended September 29, 2007 with Accretive’s unaudited consolidated statement of operations for the period from January 1, 2007 to September 9, 2007. Accretive’s results of operations are included in the Company’s consolidated statement of operations beginning on the acquisition date of September 10, 2007 through September 29, 2007. A pro forma balance sheet is not included as the balance sheet effects of the acquisition are reflected in the Company’s Condensed Consolidated Balance Sheet as of September 29, 2007 included in the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 8, 2007. Reclassifications have been made to the consolidated statements of operations of Accretive in order to conform to the Company’s financial statement classifications as described in “Note 2 — Unaudited Pro Forma Adjustments.”

The pro forma financial information is based on the estimates and assumptions set forth in the notes to such information. The pro forma financial information is preliminary and is being furnished solely for information purposes and, therefore, is not necessarily indicative of the combined results of operations or financial position that might have been achieved for the dates or periods indicated, nor is it necessarily indicative of the results of operations or financial position that may occur in the future.

GSI COMMERCE, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
(In thousands)

	GSI Commerce, Inc.			Accretive Commerce, Inc.			Preliminary
	Nine-months ended			Period from January 1, 2007			Pro Forma			Pro forma
	September 29, 2007			to September 9, 2007			Adjustments			Combined
Revenues:
Net revenues from product sales	$	289,053		$	8,014		$	—		$	297,067
Service fee revenues		125,780			46,998			—			172,778
Net revenues		414,833			55,012			—			469,845
Cost of revenues from product sales		207,843			7,355			—			215,198
Gross profit		206,990			47,657			—			254,647
Operating expenses:
Sales and marketing		132,802			32,668			—			165,470
Product development		44,737			6,290			—			51,027
General and administrative		31,014			6,398			(777	)(a)		36,635
Depreciation and amortization		23,744			1,060			3,622	(b)		28,426
Total operating expenses		232,297			46,416			2,845			281,558
(Loss) income from operations		(25,307	)		1,241			(2,845	)		(26,911	)
Other (income) expense:
Interest expense		3,842			10			—			3,852
Interest income		(7,025	)		(43	)		3,375	(c)		(3,693	)
Other expense, net		51			3,838			—			3,889
Total other (income) expense		(3,132	)		3,805			3,375			4,048
Loss before income taxes		(22,175	)		(2,564	)		(6,220	)		(30,959	)
Benefit for income taxes		(8,711	)		—			(2,376	)(d)		(11,087	)
Net loss	$	(13,464	)	$	(2,564	)	$	(3,844	)	$	(19,872	)
Basic and diluted loss per share:
Net loss	$	(0.29	)							$	(0.43	)
Weighted average shares outstanding - basic and diluted		46,320									46,320

See accompanying notes to unaudited pro forma combined financial statements, including Note 2 for an explanation of the preliminary pro forma adjustments.

GSI COMMERCE, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
(In thousands)

	GSI Commerce, Inc.			Accretive Commerce, Inc.			Preliminary
	Fiscal Year Ended			Fiscal Year Ended			Pro Forma			Pro forma
	December 30, 2006			December 31, 2006			Adjustments			Combined
Revenues:
Revenues	$	—		$	79,777		$	(79,777	)(e)	$	—
Net revenues from product sales		461,183			—			7,179	(e)		468,362
Service fee revenues		148,370			—			72,669	(e)		221,039
Net revenues		609,553			79,777			71			689,401
Cost of revenues from product sales		331,253			58,113			(51,449	)(f)		337,917
Gross profit		278,300			21,664			51,520			351,484
Operating expenses:
Selling, general and administrative expenses		—			18,968			(18,968	)(g)		—
Sales and marketing		165,919			—			51,664	(h)		217,583
Product development		45,375			—			8,710	(i)		54,085
General and administrative		36,062			—			8,969	(j)		45,031
Depreciation and amortization		21,297			1,609			8,072	(k)		30,978
Total operating expenses		268,653			20,577			58,447			347,677
Income (loss) from operations		9,647			1,087			(6,927	)		3,807
Other (income) expense:
Interest expense		3,107			—						3,107
Interest income		(6,075	)		(496	)		4,291	(l)		(2,280	)
Other expense (income), net		37			(94	)		—			(57	)
Impairment on investment		2,873			—			—			2,873
Total other (income) expense		(58	)		(590	)		4,291			3,643
Income (loss) before income taxes		9,705			1,677			(11,218	)		164
(Benefit) provision for income taxes		(43,728	)		253			(4,319	)(m)		(47,794	)
Net income (loss) prior to cumulative effect of change in accounting principle	$	53,433		$	1,424		$	(6,899	)	$	47,958
Basic earnings per share:
Prior to cumulative effect of change in accounting principle	$	1.18								$	1.06
Diluted earnings per share:
Prior to cumulative effect of change in accounting principle	$	1.09								$	0.99
Weighted average shares outstanding — basic		45,174									45,174
Weighted average shares outstanding — diluted		50,624									50,624

See accompanying notes to unaudited pro forma combined financial statements, including Note 2 for an explanation of the preliminary pro forma adjustments.

GSI COMMERCE, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
(in thousands)

NOTE 1—BASIS OF PRESENTATION

On September 10, 2007, GSI Commerce, Inc. (the “Company”) completed the acquisition of Accretive Commerce, Inc. (“Accretive”). Pursuant to an Agreement and Plan of Merger dated as of August 16, 2007 among the Company, Blue Route, Inc. (“Newco”), a wholly-owned subsidiary of the Company, Accretive and certain of the principal stakeholders of Accretive, Newco merged with Accretive and Accretive survived the merger as a wholly-owned subsidiary of the Company. Accretive is an e-commerce solutions provider that offers e-commerce technology, customer care and fulfillment solutions as well as related services.

The total preliminary purchase price is $98,600, including estimated acquisition related transaction costs of approximately $1,100.

The accompanying unaudited pro forma combined statements of operations for the fiscal year ended December 30, 2006 and the nine-months ended September 29, 2007 assumes that the acquisition took place on January 1, 2006, which was the first day of fiscal 2006. The unaudited pro forma combined statement of operations for the fiscal year ended December 30, 2006 combines the Company’s audited consolidated statement of operations for the fiscal year ended December 30, 2006 with Accretive’s audited consolidated statement of operations for the year ended December 31, 2006. Accretive’s revenues, expenses and net income for the one day ended December 31, 2006 were immaterial. The unaudited pro forma combined statement of operations for the nine-months ended September 29, 2007 combines the Company’s unaudited consolidated statement of operations for the nine-months ended September 29, 2007 with Accretive’s unaudited consolidated statement of operations for the period from January 1, 2007 to September 9, 2007. Accretive’s results of operations are included in the Company’s consolidated statement of operations beginning on the acquisition date of September 10, 2007 through September 29, 2007. A pro forma balance sheet is not included as the balance sheet effects of the acquisition are reflected in the Company’s Condensed Consolidated Balance Sheet as of September 29, 2007 included in the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 8, 2007.

The pro forma combined statements of operations have been prepared for informational purposes only and do not purport to be indicative of the actual results that would have been achieved by the Company or the combined Company for the periods presented or that will be achieved by the Company or the combined Company in the future.

NOTE 2—UNAUDITED PRO FORMA ADJUSTMENTS

The pro forma adjustments related to the acquisition are preliminary and do not reflect the final purchase price or final allocation of the excess of the purchase price over the net book value of the net assets of Accretive, as the process to assign a fair value to the various tangible and intangible assets acquired has not yet been completed. Final adjustments could result in a materially different purchase price and/or allocation of the purchase price, which will affect the value assigned to the tangible or intangible assets and amount of depreciation and amortization expense recorded in the consolidated statement of operations.

The pro forma adjustments included in the unaudited pro forma combined statement of operations for the nine-months ended September 29, 2007 are as follows:

(a)	Represents the elimination of intercompany management fees paid by Accretive to its parent. The Company is not required to pay these management fees.
(b)	Represents $3,521 of additional amortization expense resulting from the preliminary allocation of a portion of the purchase price to intangible assets primarily consisting of contractual customer relationships and non-compete agreements with certain key employees and selling shareholders of Accretive. The contractual customer relationships are amortized in proportion to the expected future cash flows over the lives of the contracts and the non-compete agreements with certain key employees and selling shareholders are amortized straight-line over the terms of the non-compete agreements. These intangible assets have useful lives of three to five years. Also includes $101 in additional depreciation expense resulting from the preliminary allocation of a portion of the purchase price to property, plant and equipment acquired from Accretive.
(c)	Represents a reduction to interest income to reflect the use of the Company’s marketable securities to fund the acquisition on the first day of the period presented.
(d)	Represents the income tax effect of the pro forma adjustments, recorded at the Company’s estimated statutory rate of 38.2%.

The pro forma adjustments included in the unaudited pro forma combined statement of operations for the fiscal year ended December 30, 2006 are as follows:

(e)	Represents a reclassification of Accretive’s reported revenue. Accretive reported all of its revenue, which included service fee revenues and net revenues from product sales, as a single consolidated amount on its statements of operation. The Company allocated Accretive’s revenue to net revenues from product sales and to service fee revenues to conform to the presentation of the Company’s statements of operations.
(f)	Represents a reclassification of Accretive’s reported cost of revenues. Accretive’s cost of revenues included freight costs and costs directly related to Accretive’s customer care and fulfillment operations. The Company reclassified $51,520 of customer care and fulfillment expenses to sales and marketing expenses and reclassed $71 of freight reimbursements to net revenues from product sales.
(g)	Represents a reclassification of Accretive’s reported selling, general and administrative expenses to sales and marketing, product development, and general and administrative expenses to conform to the presentation of the Company’s statements of operations.
(h)	Represents a reclassification of $144 from Accretive’s reported selling general and administrative expenses and $51,520 from Accretive’s reported cost of revenues.
(i)	Represents reclassification from Accretive’s reported selling general and administrative expenses.
(j)	Represents $1,145 reduction from the elimination of intercompany management fees paid by Accretive to its parent and $10,114 from the reclassification of Accretive’s reported selling, general and administrative expenses. The Company is not required to pay management fees after the acquisition.

(k)	Represents $7,989 of additional amortization expense resulting from the preliminary allocation of a portion of the purchase price to intangible assets primarily consisting of contractual customer relationships and non-compete agreements with certain key employees and selling shareholders of Accretive. The contractual customer relationships are amortized in proportion to the expected future cash flows over the lives of the contracts and the non-compete agreements with certain key employees and selling shareholders are amortized straight-line over the terms of the non-compete agreements. These intangible assets have useful lives of three to five years. Also includes $83 in additional depreciation expense resulting from the preliminary allocation of a portion of the purchase price to property, plant and equipment acquired from Accretive.
(l)	Represents a reduction to interest income to reflect the use of the Company’s marketable securities to fund the acquisition on the first day of the period presented.
(m)	Represents the income tax effect of the pro forma adjustments, recorded at the Company’s estimated statutory rate of 38.5%.