Pfsweb (PFSW) 10-Q 9 Nov 22 2022 Q3 Quarterly report Financial data

Cover

Cover - shares	9 Months Ended
	Sep. 30, 2022	Nov. 03, 2022
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2022
Document Transition Report	false
Entity File Number	000-28275
Entity Registrant Name	PFSweb, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	75-2837058
Entity Address, Address Line One	9250 N. Royal Lane
Entity Address, Address Line Two	Suite 100
Entity Address, City or Town	Irving
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	75063
City Area Code	972
Local Phone Number	881-2900
Title of 12(b) Security	Common Stock, $0.001 par value
Trading Symbol	PFSW
Security Exchange Name	NASDAQ
Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Shell Company	false
Entity Common Stock, Shares Outstanding		22,644,199
Amendment Flag	false
Document Fiscal Year Focus	2022
Entity Central Index Key	0001095315
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--12-31
Former Address
Document Information [Line Items]
Entity Address, Address Line One	505 Millennium Drive
Entity Address, City or Town	Allen
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	75013

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 140,350	$ 152,332
Restricted cash	0	214
Accounts receivable, net of allowance for doubtful accounts of $375 and $867 at September 30, 2022 and December 31, 2021, respectively	50,705	78,024
Inventories, net of reserves of $0 and $57 at September 30, 2022 and December 31, 2021, respectively	0	3,133
Other receivables	7,935	7,005
Prepaid expenses and other current assets	6,254	7,244
Total current assets	205,244	247,952
Property and equipment:
Cost	85,378	92,079
Less: accumulated depreciation	(65,124)	(72,764)
Property and equipment	20,254	19,315
Operating lease right-of-use assets, net	32,098	35,371
Goodwill	20,904	22,218
Other assets	1,669	1,610
Total assets	280,169	326,466
Current liabilities:
Trade accounts payable	24,599	36,450
Accrued expenses	22,295	31,643
Current portion of operating lease liabilities	10,581	10,104
Current portion of finance lease obligations	72	222
Deferred revenues	2,039	4,391
Total current liabilities	59,586	82,810
Finance lease obligations, less current portion	34	89
Deferred revenue, less current portion	852	833
Operating lease liabilities, less current portion	26,864	30,393
Other liabilities	2,676	2,565
Total liabilities	90,012	116,690
Commitments and Contingencies
Shareholders' equity:
Preferred stock, $1.00 par value; 1,000,000 shares authorized; none issued or outstanding	0	0
Common stock, $0.001 par value; 35,000,000 shares authorized; 22,677,666 and 22,131,546 issued and 22,644,199 and 22,098,079 outstanding at September 30, 2022 and December 31, 2021, respectively	22	21
Additional paid-in capital	178,643	177,511
Retained earnings	15,642	33,522
Accumulated other comprehensive loss	(4,025)	(1,153)
Treasury stock at cost, 33,467 shares	(125)	(125)
Total shareholders’ equity	190,157	209,776
Total liabilities and shareholders’ equity	$ 280,169	$ 326,466

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$ 375	$ 867
Inventory reserves	$ 0	$ 57
Preferred stock, par value (in USD per share)	$ 1	$ 1
Preferred stock, shares authorized (in shares)	1,000,000	1,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in USD per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	35,000,000	35,000,000
Common stock, shares issued (in shares)	22,677,666	22,131,546
Common stock, shares outstanding (in shares)	22,644,199	22,098,079
Treasury stock, shares (in shares)	33,467	33,467

Unaudited Condensed Consolidate

Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Revenues:
Total revenues	$ 65,485	$ 61,341	$ 196,606	$ 183,144
Costs of Revenues:
Total costs of revenues	55,602	50,248	167,831	148,485
Gross profit	9,883	11,093	28,775	34,659
Selling, general and administrative expenses	16,341	16,161	46,846	44,768
Loss from operations	(6,458)	(5,068)	(18,071)	(10,109)
Interest (income) expense, net	(554)	165	(699)	873
Loss on extinguishment of debt	0	426	0	426
Loss from continuing operations before income taxes	(5,904)	(5,659)	(17,372)	(11,408)
Income tax expense, net	186	1,152	688	1,276
Net loss from continuing operations	(6,090)	(6,811)	(18,060)	(12,684)
Income from discontinued operations before income taxes	0	197,920	180	196,508
Income tax expense, net	0	33,758	0	36,315
Income from discontinued operations	0	164,162	180	160,193
Net income (loss)	$ (6,090)	$ 157,351	$ (17,880)	$ 147,509
Basic earnings (loss) per share
Income (loss) from continuing operations per share (in USD per share)	$ (0.27)	$ (0.32)	$ (0.80)	$ (0.60)
Income from discontinued operations per share (in USD per share)	0	7.71	0.01	7.57
Basic earnings (loss) per share (in USD per share)	(0.27)	7.39	(0.79)	6.97
Diluted earnings (loss) per share
Income (loss) from continuing operations per share (in USD per share)	(0.27)	(0.32)	(0.80)	(0.60)
Income from discontinued operations per share (in USD per share)	0	7.71	0.01	7.57
Diluted earnings (loss) per share (in USD per share)	$ (0.27)	$ 7.39	$ (0.79)	$ 6.97
Weighted average number of shares outstanding:
Basic (in shares)	22,644	21,282	22,580	21,164
Diluted (in shares)	22,644	21,282	22,580	21,164
Comprehensive income (loss):
Net income (loss)	$ (6,090)	$ 157,351	$ (17,880)	$ 147,509
Foreign currency translation adjustment	(1,098)	(34)	(2,872)	(343)
Reclassifications of foreign currency translation adjustments realized upon disposal of business	0	(327)	0	(327)
Total comprehensive income (loss)	(7,188)	156,990	(20,752)	146,839
Service fee revenue
Revenues:
Revenues	43,658	44,275	134,423	132,804
Costs of Revenues:
Total costs of revenues	33,785	33,383	105,922	98,776
Product revenue, net
Revenues:
Revenues	14	4,096	3,333	12,896
Costs of Revenues:
Total costs of revenues	4	3,895	3,059	12,265
Pass-through revenue
Revenues:
Revenues	21,813	12,970	58,850	37,444
Costs of Revenues:
Total costs of revenues	$ 21,813	$ 12,970	$ 58,850	$ 37,444

Unaudited Condensed Consolida_2

Unaudited Condensed Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Retained Earnings (Accumulated Deficit)	Accumulated Other Comprehensive Loss	Treasury Stock
Beginning balance (in shares) at Dec. 31, 2020		20,408,558
Treasury stock, shares (in shares) at Dec. 31, 2020						33,467
Beginning balance at Dec. 31, 2020	$ 54,098	$ 20	$ 168,244	$ (113,712)	$ (329)	$ (125)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) income	147,509			147,509
Stock-based compensation	8,417		8,417
Exercise of stock options (in shares)		178,133
Exercise of stock options	923		923
Issuance of shares under stock-based compensation awards (in shares)		657,659
Issuance of shares under stock-based compensation awards	0	$ 1	(1)
Tax withholding on shares issued under stock-based compensation awards	(1,908)		(1,908)
Foreign currency translation	(670)				(670)
Ending balance (in shares) at Sep. 30, 2021		21,244,350
Treasury stock, shares (in shares) at Sep. 30, 2021						33,467
Ending balance at Sep. 30, 2021	208,369	$ 21	175,675	33,797	(999)	$ (125)
Beginning balance (in shares) at Jun. 30, 2021		21,209,300
Treasury stock, shares (in shares) at Jun. 30, 2021						33,467
Beginning balance at Jun. 30, 2021	46,190	$ 21	170,486	(123,554)	(638)	$ (125)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) income	157,351			157,351
Stock-based compensation	4,962		4,962
Exercise of stock options (in shares)		35,050
Exercise of stock options	227		227
Foreign currency translation	(361)				(361)
Ending balance (in shares) at Sep. 30, 2021		21,244,350
Treasury stock, shares (in shares) at Sep. 30, 2021						33,467
Ending balance at Sep. 30, 2021	$ 208,369	$ 21	175,675	33,797	(999)	$ (125)
Beginning balance (in shares) at Dec. 31, 2021		22,131,546
Treasury stock, shares (in shares) at Dec. 31, 2021	33,467					33,467
Beginning balance at Dec. 31, 2021	$ 209,776	$ 21	177,511	33,522	(1,153)	$ (125)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) income	(17,880)			(17,880)
Stock-based compensation	2,945		2,945
Exercise of stock options (in shares)		89,837
Exercise of stock options	442		442
Issuance of shares under stock-based compensation awards (in shares)		456,283
Issuance of shares under stock-based compensation awards	1	$ 1
Tax withholding on shares issued under stock-based compensation awards	(2,255)		(2,255)
Foreign currency translation	$ (2,872)				(2,872)
Ending balance (in shares) at Sep. 30, 2022		22,677,666
Treasury stock, shares (in shares) at Sep. 30, 2022	33,467					33,467
Ending balance at Sep. 30, 2022	$ 190,157	$ 22	178,643	15,642	(4,025)	$ (125)
Beginning balance (in shares) at Jun. 30, 2022		22,676,595
Treasury stock, shares (in shares) at Jun. 30, 2022						33,467
Beginning balance at Jun. 30, 2022	195,710	$ 22	177,008	21,732	(2,927)	$ (125)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) income	(6,090)			(6,090)
Stock-based compensation	1,629		1,629
Exercise of stock options (in shares)		963
Exercise of stock options	6		6
Issuance of shares under stock-based compensation awards (in shares)		108
Foreign currency translation	$ (1,098)				(1,098)
Ending balance (in shares) at Sep. 30, 2022		22,677,666
Treasury stock, shares (in shares) at Sep. 30, 2022	33,467					33,467
Ending balance at Sep. 30, 2022	$ 190,157	$ 22	$ 178,643	$ 15,642	$ (4,025)	$ (125)

Unaudited Condensed Consolida_3

Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Cash flows from operating activities:
Net income (loss)	$ (17,880)	$ 147,509
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	5,550	6,208
Loss on extinguishment of debt	0	426
Gain on LiveArea Transaction	(180)	(200,817)
Loss on lease modification	1,624	0
Deferred income taxes	53	2,717
Stock-based compensation expense	2,945	8,417
Other	21	95
Changes in operating assets and liabilities:
Accounts receivable	25,520	9,129
Inventories	3,080	410
Prepaid expenses, other receivables and other assets	(337)	(617)
Operating leases	(1,238)	(448)
Income taxes payable	0	30,211
Trade accounts payable, deferred revenues, accrued expenses and other liabilities	(20,694)	(6,409)
Net cash used in operating activities	(1,536)	(3,169)
Cash flows from investing activities:
Purchases of property and equipment	(7,459)	(4,815)
Proceeds from LiveArea Transaction, net of cash divested	0	236,358
Proceeds from sale of property and equipment	37	31
Net cash provided (used) by investing activities	(7,422)	231,574
Cash flows from financing activities:
Net proceeds from issuance of common stock	442	923
Taxes paid on behalf of employees for withheld shares	(2,255)	(1,908)
Payments on finance lease obligations	(187)	(732)
Payments on revolving loan	0	(160,181)
Borrowings on revolving loan	0	126,681
Payments on other debt	0	(10,046)
Borrowings on other debt	0	49
Net cash provided (used) by financing activities	(2,000)	(45,214)
Effect of exchange rates on cash, cash equivalents and restricted cash	(1,238)	57
Net increase (decrease) in cash and cash equivalents	(12,196)	183,248
Cash and cash equivalents, beginning of period	152,332	10,359
Restricted cash, beginning of period	214	214
Cash and cash equivalents discontinued operations, beginning of period	0	392
Cash, cash equivalents and restricted cash, beginning of period	152,546	10,965
Cash and cash equivalents, end of period	140,350	193,999
Restricted cash, end of period	0	214
Cash, cash equivalents and restricted cash, end of period	140,350	194,213
Supplemental cash flow information:
Cash paid for income taxes	7,182	6,293
Cash paid for interest	9	763
Non-cash investing and financing activities:
Property and equipment acquired under long-term debt and finance leases	$ 0	$ 2,139

Basis of Presentation

Basis of Presentation	9 Months Ended
	Sep. 30, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	Basis of Presentation The accompanying unaudited condensed consolidated financial statements of PFSweb, Inc. and its subsidiaries have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and include all normal and recurring adjustments necessary to present fairly the unaudited condensed consolidated balance sheets, statements of operations and comprehensive income (loss), statements of shareholders' equity, and statements of cash flows for the periods indicated. Certain information and note disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted pursuant to the rules and regulations of the SEC. This report should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2021. We refer to PFSweb, Inc. and its consolidated subsidiaries collectively as “PFSweb,” the “Company,” “us,” “we” and “our” in these unaudited condensed consolidated financial statements. In July 2021, we announced an agreement to sell our LiveArea Professional Services business unit ("LiveArea") and the divestiture was completed on August 25, 2021 (the "LiveArea Transaction"). As such, the LiveArea segment has been presented as a discontinued operation beginning with the Company's Form 10-Q for the quarterly period ended June 30, 2021. See Note 3. Discontinued Operations for additional information on our sale of LiveArea. Results of our operations for interim periods may not be indicative of results for the full fiscal year.

Significant Accounting Policies

Significant Accounting Policies	9 Months Ended
	Sep. 30, 2022
Accounting Policies [Abstract]
Significant Accounting Policies	Significant Accounting Policies Use of Estimates The preparation of consolidated financial statements and related disclosures in conformity with U.S. GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and disclosure of contingent assets and liabilities. The recognition and allocation of certain revenues, costs of revenues and selling, general and administrative expenses in these unaudited condensed consolidated financial statements also require management estimates and assumptions. Estimates and assumptions about future events and their effects cannot be determined with certainty. The Company bases its estimates on historical experience and various other assumptions believed to be applicable and reasonable under the circumstances. These estimates may change as new events occur, as additional information is obtained and as the operating environment changes. These changes have been included in the unaudited condensed consolidated financial statements as soon as they became known. In addition, management is periodically faced with uncertainties, the outcomes of which are not within its control and will not be known for prolonged periods of time. Based on a critical assessment of accounting policies and the underlying judgments and uncertainties affecting the application of those policies, management believes the Company’s unaudited condensed consolidated financial statements are fairly stated in accordance with U.S. GAAP and provide a fair presentation of the Company’s financial position and results of operations. Furthermore, we considered the impact of the COVID-19 pandemic on the use of estimates and assumptions used for financial reporting and determined that there was no adverse material impact to our results of operations for the three and nine months ended September 30, 2022; however, the extent and duration of future impacts of the COVID-19 pandemic and any resulting economic impact are largely unknown and difficult to predict due to these unknown factors which may have a material impact on our financial position and results of operations in the future. Long-Lived Assets, Goodwill Long-lived assets include property and equipment, goodwill and certain other assets. We make judgments and estimates in conjunction with the carrying value of these assets, including amounts to be capitalized, depreciation methods and useful lives. Additionally, we review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We review goodwill for impairment at least annually, on October 1. We record impairment losses in the period in which we determine the carrying amount is not recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. This may require us to make judgments regarding long-term forecasts of our future revenues and costs related to the assets subject to review. Income Taxes For the three and nine months ended September 30, 2022 and 2021, we have utilized the discrete effective tax rate method, as allowed by Accounting Standards Codification (“ASC”) 740-270-30-18, “Income Taxes—Interim Reporting,” to calculate the interim income tax provision. The discrete method is applied when the application of the estimated annual effective tax rate is impractical because it is not possible to reliably estimate the annual effective tax rate. The discrete method treats the year to date period as if it was the annual period and determines the income tax expense or benefit on that basis. We believe that, at this time, the use of this discrete method is more appropriate than the annual effective tax rate method as (i) the estimated annual effective tax rate method is not reliable due to the high degree of uncertainty in estimating annual pretax earnings by certain jurisdictions and (ii) our ongoing assessment that the recoverability of our deferred tax assets is not likely in certain jurisdictions. Impact of Recently Issued Accounting Standards Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, " Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ," ("ASU 2016-13") which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. ASU 2016-13 is effective for annual reporting periods, and interim periods within those years, beginning after December 15, 2019 for all public entities, excluding smaller reporting companies, and after December 15, 2022 for smaller reporting companies. It requires a cumulative effect adjustment to the balance sheet as of the beginning of the first reporting period in which the guidance is effective. We will adopt ASU 2016-13 on January 1, 2023 and do not expect the adoption of ASU 2016-13 to have a material impact on our condensed consolidated financial statements.

Discontinued Operations

Discontinued Operations	9 Months Ended
	Sep. 30, 2022
Discontinued Operations and Disposal Groups [Abstract]
Discontinued Operations	Discontinued Operations On July 2, 2021, the Company entered into a definitive agreement to sell LiveArea. As of June 30, 2021, the Company met the criteria set forth in ASC 205-20, "Presentation of Financial Statements - Discontinued Operations," therefore, the LiveArea segment has been presented as a discontinued operation beginning with the Company's June 30, 2021 Form 10-Q and is reported as a discontinued operation in this Form 10-Q for the three and nine months ended September 30, 2022 and 2021. The LiveArea Transaction closed on August 25, 2021 for gross proceeds of approximately $250.0 million in cash, resulting in a pre-tax gain of $200.8 million. The Company incurred approximately $15 million in cash-based transaction related costs during 2021 and used proceeds of approximately $35 million to make estimated income tax payments related to the LiveArea Transaction, of which approximately $30 million was paid during the December 2021 quarter. As a result of the LiveArea Transaction, the Company now only operates one business segment, PFS Operations, and therefore we no longer present segment data. In the three months ended June 30, 2022 , the Company and the purchaser reached settlement of certain customary post-closing purchase price adjustments and as a result, the Company recorded an incremental $0.2 million gain on sale in the consolidated statement of operations and comprehensive income (loss) for the nine months ended September 30, 2022. In connection with the LiveArea Transaction, the Company entered into a transition services agreement with the purchaser to provide certain accounting and administrative services for a period of up to twelve months. Income generated from transition services provided to the purchaser is recorded in selling, general and administrative expenses in the consolidated statements of operations and comprehensive income (loss) and was $0.6 million for the nine months ended September 30, 2022 and $0.4 million for the three and nine months ended September 30, 2021. There were no transition services provided during the three months ended September 30, 2022 as the transition services agreement was substantially completed by March 31, 2022. Additionally, in connection with the LiveArea Transaction, in July 2021 the Company's Board of Directors approved a modification to the Company's existing stock-based compensation plans to provide for accelerated vesting of certain restricted stock awards and stock options for LiveArea personnel. As a result of the LiveArea Transaction, approximately 635,000 shares of restricted stock and approximately 160,000 stock options previously awarded to certain executives and employees were accelerated and fully vested on August 25, 2021. Also as a result of the LiveArea Transaction, the Company's Board of Directors approved the full payout of the 2021 cash compensation plan to certain LiveArea executives and employees. We recorded incremental compensation expense of $3.3 million and $0.3 million related to the stock-based compensation modification and full targeted payout of the 2021 cash compensation plan, respectively, which is included in net income (loss) from discontinued operations on the condensed consolidated statement of operations and comprehensive income (loss) for the three months ended September 30, 2021. Furthermore, certain executives and employees of PFSweb, inclusive of certain LiveArea personnel, received cash transaction bonuses as a result of the successful completion of the LiveArea Transaction. We recorded compensation expense of $3.5 million for executives and employees of the LiveArea business segment, which is included in net income (loss) from discontinued operations on the condensed consolidated statements of operations and comprehensive income (loss) for each of the three and nine months ended September 30, 2021. In addition, we recorded compensation expense of $1.0 million for the executives and employees of PFSweb, which is included in selling, general and administrative expense on the condensed consolidated statements of operations and comprehensive income (loss) for each of the three and nine months ended September 30, 2021. The following table presents the major components of income from discontinued operations of LiveArea for three and nine months ended September 30, 2022 and 2021 and a reconciliation to the amounts reported in the unaudited condensed consolidated statements of operations and comprehensive income (loss) (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Revenues: Service fee revenue $ — $ 13,616 $ — $ 50,197 Pass-through revenue — 159 — 159 Related party revenue — — — 574 Total revenues — 13,775 — 50,930 Costs of revenues: Cost of service fee revenue — 7,134 — 27,173 Cost of pass-through revenue — 159 159 Total costs of revenues — 7,293 — 27,332 Gross profit — 6,482 — 23,598 Selling, general and administrative expenses — (9,379) — (27,906) Interest expense, net — — — (1) Gain on sale — 200,817 180 200,817 Income from discontinued operations before income taxes — 197,920 180 196,508 Income tax expense — 33,758 — 36,315 Income from discontinued operations $ — $ 164,162 $ 180 $ 160,193 The following table presents the depreciation and amortization, capital expenditures and significant noncash operating items for the nine months ended September 30, 2021 (in thousands): Nine Months Ended September 30, 2021 Cash flows from operating activities discontinued operations: Depreciation and amortization $ 457 Stock-based compensation expense $ 4,613 Cash flows from investing activities discontinued operations: Capital expenditures $ 159 Proceeds from sales of discontinued operations, net of cash divested $ 236,358

Revenue from Contracts with Cli

Revenue from Contracts with Clients and Customers	9 Months Ended
	Sep. 30, 2022
Revenue from Contract with Customer [Abstract]
Revenue from Contracts with Clients and Customers	Revenue from Contracts with Clients and Customers Contract Assets and Contract Liabilities Costs to fulfill contract assets decreased $2.6 million from December 31, 2021 to September 30, 2022, primarily due to amortization and recognition of costs. Costs to fulfill contract assets relate to deferred costs, which are included within other current assets and/or other assets, and software development costs, which are included within property and equipment, in our condensed consolidated balance sheets. Contract liabilities were $7.9 million at December 31, 2021, of which $3.6 million was recognized as revenue during the nine months ended September 30, 2022. The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables, and customer advances and deposits (contract liabilities) on the condensed consolidated balance sheets. Changes in the contract asset and liability balances during the nine months ended September 30, 2022 were not materially impacted by any other factors. Contract balances consist of the following (in thousands): September 30, 2022 December 31, 2021 Contract Assets Costs to fulfill $ 1,778 $ 4,392 Total contract assets $ 1,778 $ 4,392 Contract Liabilities Accrued contract liabilities $ 2,536 $ 2,673 Deferred revenue 2,891 5,224 Total contract liabilities $ 5,427 $ 7,897 Remaining performance obligations represent the transaction price of firm orders for which work has not yet been performed. The amount reported for remaining performance obligations does not include 1) contracts that are less than one year in duration, 2) contracts for which we recognize revenue b ased on the right to invoice for services performed, or 3) variable consideration allocated entirely to a wholly unsatisfied performance obligation. Much of our revenue qualifies for one of these exemptions. As of September 30, 2022, the aggreg ate amount of the transaction price allocated to remaining performance obligations for contracts with an original expected duration of one year or more was $15.5 million. We expect to recognize revenue on approximately 25% of the remaining performance obligations in 2022, 46% in 2023, and the remaining recognized thereafter. Disaggregation of Revenues The following table presents our revenues, excluding sales and usage-based taxes, disaggregated by timing of revenue recognition (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Revenues: Over time $ 65,471 $ 57,245 $ 193,273 $ 170,248 Point-in-time 14 4,096 3,333 12,896 Total revenues $ 65,485 $ 61,341 $ 196,606 $ 183,144 Point-in-time revenues consist of product revenue which was dependent on the Ricoh distributor agreement. Effective March 2022, as part of Ricoh's continued restructuring of its operations, the Ricoh distributor agreement was terminated and as a result, our product revenue model with Ricoh was discontinued. The following table presents our revenues, excluding sales and usage-based taxes, disaggregated by region (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Revenues by region: United States $ 56,067 $ 54,235 $ 166,365 $ 151,015 Canada 1,071 1,052 3,393 3,559 Europe 8,347 6,054 26,848 28,570 Total revenues $ 65,485 $ 61,341 $ 196,606 $ 183,144

Earnings (Loss) Per Share

Earnings (Loss) Per Share	9 Months Ended
	Sep. 30, 2022
Earnings Per Share [Abstract]
Earnings (Loss) Per Share	Earnings (Loss) Per Share Basic earnings (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted-average number of common shares outstanding for the reporting period. Diluted earnings (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted-average number of common stock and common stock equivalents outstanding for the reporting period. In periods when we recognize a net loss from continuing operations, we exclude the impact of outstanding common stock equivalents from the diluted loss per share calculation as their inclusion would have an antidilutive effect. As of September 30, 2022 and 2021 we had outstanding common stock equivalents of approximately 1.7 million and 2.5 million, respectively,

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Sep. 30, 2022
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies The Company is subject to claims in the ordinary course of business, including claims of alleged infringement by the Company or its subsidiaries of the patents, trademarks and other intellectual property rights of third parties as well as confidentiality and data privacy matters. The Company is generally required to indemnify its service fee clients against any third party claims asserted against such clients alleging infringement by the Company of the patents, trademarks and other intellectual property rights of third parties. While we are unable to determine the ultimate outcome of any liabilities resulting from these claims, we do not believe the resolution of any particular matter will have a material adverse effect on the Company’s financial position or results of operations.

Leases

Leases	9 Months Ended
	Sep. 30, 2022
Leases [Abstract]
Leases	Leases In September 2022, the Company entered into an agreement with CCI-Millennium, L.P., (“Landlord”) providing for the early termination of its lease agreement for its corporate headquarters office space located in Allen, Texas effective October 31, 2022 ("Lease Termination Agreement"). Such lease agreement was previously scheduled to mature in July 2024 and under the terms of the Lease Termination Agreement, the Company agreed to pay $2.6 million to Landlord in October 2022, which was paid in the fourth quarter of 2022. In accordance with ASC Topic 842, the Lease Termination Agreement was determined to be a modification of the original lease agreement which resulted in a $2.6 million increase in the lease termination obligation, and reductions of the lease liability and operating lease right-of-use asset by approximately $3.4 million and $2.4 million, respectively. The Company recognized a net loss of $1.6 million on the lease modification, which is included in selling, general and administrative expense on the unaudited condensed consolidated statements of operations and comprehensive income (loss) for the three and nine months ended September 30, 2022. On September 29, 2022, we entered into a 124 month lease for 186,000 square feet of warehouse and office space in Irving, Texas. This lease will increase our right of use asset and lease liability balances as of the lease commencement date, which is anticipated in mid-2023 when the building is completed.

Related Party Transactions

Related Party Transactions	9 Months Ended
	Sep. 30, 2022
Related Party Transactions [Abstract]
Related Party Transactions	Related Party Transactions In December 2020, on behalf of a client, the Company entered into an agreement with Pilot Freight Services ("Pilot") under which Pilot provides the Company various freight services. David Beatson, a member of our Board of Directors was also on the Board of Directors of Pilot through May 2022 and holds less than 1% of the outstanding shares in Pilot. Pilot is a portfolio company of ATL Partners, LLC, where Mr. Beatson serves on the Executive Board and is a shareholder of its two funds (less than 1% holdings of each). We recognized $0.1 million and $0.9 million related party cost of revenues in the nine months ended September 30, 2022 and 2021, respectively, and as of September 30, 2022, we had no trade accounts payable balance due to Pilot. On May 2, 2022, ATL Partners, LLC closed on the sale of Pilot to an unrelated third party; as such, Pilot is no longer a related party of the Company.

Subsequent Events

Subsequent Events	9 Months Ended
	Sep. 30, 2022
Subsequent Events [Abstract]
Subsequent Events	Subsequent EventOn November 4, 2022, the Company's Board of Directors declared (i) a special cash dividend of $4.50 per share to holders of issued and outstanding shares of the Company’s Common Stock of record as of the close of business on December 1, 2022 (the “Special Dividend”), and (ii) a special dividend equivalent of $4.50 per share, to the holders of all equity awards under the Company’s 2020 Stock Incentive Plan, as amended, granted and outstanding as of the close of business on December 1, 2022, payable in cash upon the achievement of applicable performance goals, vesting, and issuance of such equity awards pursuant to their specific terms. The Special Dividend is payable on December 15, 2022. The ex-dividend date will be November 30, 2022. The total Special Dividend (and special dividend equivalents) amount payable is approximately $111 million, of which approximately $9 million pertain to the special dividend equivalents.

Significant Accounting Polici_2

Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2022
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The accompanying unaudited condensed consolidated financial statements of PFSweb, Inc. and its subsidiaries have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and include all normal and recurring adjustments necessary to present fairly the unaudited condensed consolidated balance sheets, statements of operations and comprehensive income (loss), statements of shareholders' equity, and statements of cash flows for the periods indicated. Certain information and note disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted pursuant to the rules and regulations of the SEC. This report should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2021. We refer to PFSweb, Inc. and its consolidated subsidiaries collectively as “PFSweb,” the “Company,” “us,” “we” and “our” in these unaudited condensed consolidated financial statements. In July 2021, we announced an agreement to sell our LiveArea Professional Services business unit ("LiveArea") and the divestiture was completed on August 25, 2021 (the "LiveArea Transaction"). As such, the LiveArea segment has been presented as a discontinued operation beginning with the Company's Form 10-Q for the quarterly period ended June 30, 2021. See Note 3. Discontinued Operations for additional information on our sale of LiveArea. Results of our operations for interim periods may not be indicative of results for the full fiscal year.
Use of Estimates	Use of Estimates The preparation of consolidated financial statements and related disclosures in conformity with U.S. GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and disclosure of contingent assets and liabilities. The recognition and allocation of certain revenues, costs of revenues and selling, general and administrative expenses in these unaudited condensed consolidated financial statements also require management estimates and assumptions. Estimates and assumptions about future events and their effects cannot be determined with certainty. The Company bases its estimates on historical experience and various other assumptions believed to be applicable and reasonable under the circumstances. These estimates may change as new events occur, as additional information is obtained and as the operating environment changes. These changes have been included in the unaudited condensed consolidated financial statements as soon as they became known. In addition, management is periodically faced with uncertainties, the outcomes of which are not within its control and will not be known for prolonged periods of time. Based on a critical assessment of accounting policies and the underlying judgments and uncertainties affecting the application of those policies, management believes the Company’s unaudited condensed consolidated financial statements are fairly stated in accordance with U.S. GAAP and provide a fair presentation of the Company’s financial position and results of operations.
Long-Lived Assets, Goodwill	Long-Lived Assets, Goodwill Long-lived assets include property and equipment, goodwill and certain other assets. We make judgments and estimates in conjunction with the carrying value of these assets, including amounts to be capitalized, depreciation methods and useful lives. Additionally, we review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We review goodwill for impairment at least annually, on October 1. We record impairment losses in the period in which we determine the carrying amount is not recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. This may require us to make judgments regarding long-term forecasts of our future revenues and costs related to the assets subject to review.
Income Taxes	Income Taxes For the three and nine months ended September 30, 2022 and 2021, we have utilized the discrete effective tax rate method, as allowed by Accounting Standards Codification (“ASC”) 740-270-30-18, “Income Taxes—Interim Reporting,” to calculate the interim income tax provision. The discrete method is applied when the application of the estimated annual effective tax rate is impractical because it is not possible to reliably estimate the annual effective tax rate. The discrete method treats the year to date period as if it was the annual period and determines the income tax expense or benefit on that basis. We believe that, at this time, the use of this discrete method is more appropriate than the annual effective tax rate method as (i) the estimated annual effective tax rate method is not reliable due to the high degree of uncertainty in estimating annual pretax earnings by certain jurisdictions and (ii) our ongoing assessment that the recoverability of our deferred tax assets is not likely in certain jurisdictions.
Impact of Recently Issued Accounting Standards	Impact of Recently Issued Accounting Standards Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, " Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ," ("ASU 2016-13") which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. ASU 2016-13 is effective for annual reporting periods, and interim periods within those years, beginning after December 15, 2019 for all public entities, excluding smaller reporting companies, and after December 15, 2022 for smaller reporting companies. It requires a cumulative effect adjustment to the balance sheet as of the beginning of the first reporting period in which the guidance is effective. We will adopt ASU 2016-13 on January 1, 2023 and do not expect the adoption of ASU 2016-13 to have a material impact on our condensed consolidated financial statements.

Discontinued Operations (Tables

Discontinued Operations (Tables)	9 Months Ended
	Sep. 30, 2022
Discontinued Operations and Disposal Groups [Abstract]
Summary of Disposal Groups Including Discontinued Operations	The following table presents the major components of income from discontinued operations of LiveArea for three and nine months ended September 30, 2022 and 2021 and a reconciliation to the amounts reported in the unaudited condensed consolidated statements of operations and comprehensive income (loss) (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Revenues: Service fee revenue $ — $ 13,616 $ — $ 50,197 Pass-through revenue — 159 — 159 Related party revenue — — — 574 Total revenues — 13,775 — 50,930 Costs of revenues: Cost of service fee revenue — 7,134 — 27,173 Cost of pass-through revenue — 159 159 Total costs of revenues — 7,293 — 27,332 Gross profit — 6,482 — 23,598 Selling, general and administrative expenses — (9,379) — (27,906) Interest expense, net — — — (1) Gain on sale — 200,817 180 200,817 Income from discontinued operations before income taxes — 197,920 180 196,508 Income tax expense — 33,758 — 36,315 Income from discontinued operations $ — $ 164,162 $ 180 $ 160,193 The following table presents the depreciation and amortization, capital expenditures and significant noncash operating items for the nine months ended September 30, 2021 (in thousands): Nine Months Ended September 30, 2021 Cash flows from operating activities discontinued operations: Depreciation and amortization $ 457 Stock-based compensation expense $ 4,613 Cash flows from investing activities discontinued operations: Capital expenditures $ 159 Proceeds from sales of discontinued operations, net of cash divested $ 236,358

Revenue from Contracts with C_2

Revenue from Contracts with Clients and Customers (Tables)	9 Months Ended
	Sep. 30, 2022
Revenue from Contract with Customer [Abstract]
Summary of Contract Balances	Contract balances consist of the following (in thousands): September 30, 2022 December 31, 2021 Contract Assets Costs to fulfill $ 1,778 $ 4,392 Total contract assets $ 1,778 $ 4,392 Contract Liabilities Accrued contract liabilities $ 2,536 $ 2,673 Deferred revenue 2,891 5,224 Total contract liabilities $ 5,427 $ 7,897
Summary of Revenues Disaggregated by Revenue Source and Region	The following table presents our revenues, excluding sales and usage-based taxes, disaggregated by timing of revenue recognition (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Revenues: Over time $ 65,471 $ 57,245 $ 193,273 $ 170,248 Point-in-time 14 4,096 3,333 12,896 Total revenues $ 65,485 $ 61,341 $ 196,606 $ 183,144 Point-in-time revenues consist of product revenue which was dependent on the Ricoh distributor agreement. Effective March 2022, as part of Ricoh's continued restructuring of its operations, the Ricoh distributor agreement was terminated and as a result, our product revenue model with Ricoh was discontinued. The following table presents our revenues, excluding sales and usage-based taxes, disaggregated by region (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Revenues by region: United States $ 56,067 $ 54,235 $ 166,365 $ 151,015 Canada 1,071 1,052 3,393 3,559 Europe 8,347 6,054 26,848 28,570 Total revenues $ 65,485 $ 61,341 $ 196,606 $ 183,144

Discontinued Operations - Narra

Discontinued Operations - Narrative (Details) shares in Thousands		3 Months Ended			9 Months Ended		12 Months Ended
	Aug. 25, 2021 USD ($) shares	Sep. 30, 2022 USD ($)	Dec. 31, 2021 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($) segment	Sep. 30, 2021 USD ($)	Dec. 31, 2021 USD ($)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Gain on sale					$ 180,000	$ 200,817,000
Number of segments | segment					1
Live Area
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Disposal consideration	$ 250,000,000
Gain on sale	200,800,000	$ 0		$ 200,817,000	$ 180,000	200,817,000
Amount of continuing cash flows after disposal							$ 15,000,000
Tax payments	$ 35,000,000		$ 30,000,000
Live Area | Share-based Payment Arrangement, Employee
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Transaction services				3,300,000		300,000
Live Area | Restricted stock | Share-based Payment Arrangement, Employee
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Awards granted (in shares) | shares	635
Live Area | Employee Stock | Share-based Payment Arrangement, Employee
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Awards granted (in shares) | shares	160
Live Area | Selling, General and Administrative Expenses
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Transaction services		$ 0		1,000,000	$ 600,000	1,000,000
Live Area | Net Income Loss From Discontinued Operations
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Transaction services				$ 3,500,000		$ 3,500,000

Discontinued Operations - Recon

Discontinued Operations - Reconciliation Amount (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
	Aug. 25, 2021	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Costs of revenues:
Gain on sale				$ 180	$ 200,817
Income from discontinued operations before income taxes		$ 0	$ 197,920	180	196,508
Income tax expense		0	33,758	0	36,315
Income from discontinued operations		0	164,162	180	160,193
Live Area
Revenues:
Revenues		0	13,775	0	50,930
Costs of revenues:
Cost of service fee revenue		0	7,293	0	27,332
Gross profit		0	6,482	0	23,598
Selling, general and administrative expenses		0	(9,379)	0	(27,906)
Interest expense, net		0	0	0	(1)
Gain on sale	$ 200,800	0	200,817	180	200,817
Income from discontinued operations before income taxes		0	197,920	180	196,508
Income tax expense		0	33,758	0	36,315
Income from discontinued operations		0	164,162	180	160,193
Service fee revenue | Live Area
Revenues:
Revenues		0	13,616	0	50,197
Costs of revenues:
Cost of service fee revenue		0	7,134	0	27,173
Pass-through revenue | Live Area
Revenues:
Revenues		0	159	0	159
Costs of revenues:
Cost of service fee revenue		0	159		159
Related party revenue | Live Area
Revenues:
Revenues		$ 0	$ 0	$ 0	$ 574

Discontinued Operations - Signi

Discontinued Operations - Significant Noncash Operating (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Cash flows from investing activities discontinued operations:
Proceeds from sales of discontinued operations, net of cash divested	$ 0	$ 236,358
Live Area
Cash flows from operating activities discontinued operations:
Depreciation and amortization		457
Stock-based compensation expense		4,613
Cash flows from investing activities discontinued operations:
Capital expenditures		159
Proceeds from sales of discontinued operations, net of cash divested		$ 236,358

Revenue from Contracts with C_3

Revenue from Contracts with Clients and Customers - Additional Information (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Revenue from Contract with Customer [Abstract]
Changes in costs to fulfill contract assets	$ 2,600
Contract liabilities	5,427	$ 7,897
Change in contract liabilities from amortization and recognition and recognition of revenue	$ 3,600

Revenue from Contracts with C_4

Revenue from Contracts with Clients and Customers - Summary of Contract Balances (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Contract Assets
Costs to fulfill	$ 1,778	$ 4,392
Contract Liabilities
Accrued contract liabilities	2,536	2,673
Deferred revenue	2,891	5,224
Total contract liabilities	$ 5,427	$ 7,897

Revenue from Contracts with C_5

Revenue from Contracts with Clients and Customers - Additional Information, Performance Obligation (Details) $ in Millions	Sep. 30, 2022 USD ($)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Performance obligation, amount	$ 15.5
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Performance obligation, percentage	25%
Performance obligation, expected timing of satisfaction	3 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Performance obligation, percentage	46%
Performance obligation, expected timing of satisfaction	1 year

Revenue from Contracts with C_6

Revenue from Contracts with Clients and Customers - Summary of Revenues Disaggregated (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Disaggregation of Revenue [Line Items]
Revenues	$ 65,485	$ 61,341	$ 196,606	$ 183,144
United States
Disaggregation of Revenue [Line Items]
Revenues	56,067	54,235	166,365	151,015
Canada
Disaggregation of Revenue [Line Items]
Revenues	1,071	1,052	3,393	3,559
Europe
Disaggregation of Revenue [Line Items]
Revenues	8,347	6,054	26,848	28,570
Over time
Disaggregation of Revenue [Line Items]
Revenues	65,471	57,245	193,273	170,248
Point-in-time
Disaggregation of Revenue [Line Items]
Revenues	$ 14	$ 4,096	$ 3,333	$ 12,896

Earnings (Loss) Per Share - Add

Earnings (Loss) Per Share - Additional Information (Details) - shares shares in Millions	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Earnings Per Share [Abstract]
Outstanding common stock excluded from calculations of diluted earnings per share (in shares)	1.7	2.5

Leases - Additional Information

Leases - Additional Information (Details) $ in Millions	1 Months Ended	3 Months Ended	9 Months Ended
	Oct. 31, 2022 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2022 USD ($)	Sep. 29, 2022 ft²
Lessee, Lease, Description [Line Items]
Reduction of operating lease liability		$ 3.4
Reduction of right-of-use asset		2.4
Irving, Texas
Lessee, Lease, Description [Line Items]
Term of lease				124 months
Area of property (in sq ft) | ft²				186,000
Selling, General and Administrative Expenses
Lessee, Lease, Description [Line Items]
Loss on lease modification		$ 1.6	$ 1.6
CCI Millennium L P | Subsequent Event
Lessee, Lease, Description [Line Items]
Payments on termination of lease	$ 2.6

Related Party Transactions (Det

Related Party Transactions (Details) - USD ($)	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Director
Related Party Transaction [Line Items]
Cost of revenue	$ 100,000	$ 900,000
Accounts payable	$ 0
Pilot Freight Services | David Beatson
Related Party Transaction [Line Items]
Ownership percentage (less than)	1%

Subsequent Events (Details)

Subsequent Events (Details) - Subsequent Event $ / shares in Units, $ in Millions	Nov. 04, 2022 USD ($) $ / shares
Subsequent Event [Line Items]
Dividend declared (in dollars per share) | $ / shares	$ 4.50
Dividend equivalent declared (in dollars per share) | $ / shares	$ 4.50
Dividends payable | $	$ 111
Dividend equivalents payable | $	$ 9