Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Nov. 10, 2014 | |
Document And Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'PFSWEB INC | ' |
Entity Central Index Key | '0001095315 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-14 | ' |
Amendment Flag | 'false | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 16,863,587 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
CURRENT ASSETS: | ' | ' |
Cash and cash equivalents | $19,501 | $22,418 |
Restricted cash | 202 | 130 |
Accounts receivable, net of allowance for doubtful accounts of $420 and $382 at September 30, 2014 and December 31, 2013, respectively | 45,157 | 55,292 |
Inventories, net of reserves of $830 and $962 at September 30, 2014 and December 31, 2013, respectively | 14,506 | 14,169 |
Other receivables | 4,262 | 5,241 |
Prepaid expenses and other current assets | 5,437 | 4,713 |
Total current assets | 89,065 | 101,963 |
PROPERTY AND EQUIPMENT, net | 26,970 | 27,190 |
GOODWILL and INTANGIBLE ASSETS | 9,851 | ' |
OTHER ASSETS | 2,568 | 2,883 |
Total assets | 128,454 | 132,036 |
CURRENT LIABILITIES: | ' | ' |
Current portion of long-term debt and capital lease obligations | 7,428 | 8,231 |
Trade accounts payable | 29,590 | 34,096 |
Deferred revenue | 11,046 | 8,181 |
Accrued expenses | 26,046 | 25,045 |
Total current liabilities | 74,110 | 75,553 |
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS, less current portion | 3,876 | 2,876 |
DEFERRED REVENUE | 6,066 | 7,491 |
DEFERRED RENT | 5,069 | 5,191 |
OTHER LIABILITIES | 2,778 | ' |
Total liabilities | 91,899 | 91,111 |
COMMITMENTS AND CONTINGENCIES | ' | ' |
SHAREHOLDERS’ EQUITY: | ' | ' |
Preferred stock, $1.00 par value; 1,000,000 shares authorized; none issued or outstanding | ' | ' |
Common stock, $0.001 par value; 35,000,000 shares authorized; 16,842,450 and 16,540,904 shares issued at September 30, 2014 and December 31, 2013, respectively; and 16,808,983 and 16,507,437 outstanding at September 30, 2014 and December 31, 2013, respectively | 17 | 17 |
Additional paid-in capital | 127,653 | 124,522 |
Accumulated deficit | -92,030 | -85,300 |
Accumulated other comprehensive income | 1,040 | 1,811 |
Treasury stock at cost, 33,467 shares | -125 | -125 |
Total shareholders’ equity | 36,555 | 40,925 |
Total liabilities and shareholders’ equity | $128,454 | $132,036 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Statement Of Financial Position [Abstract] | ' | ' |
Allowance for doubtful accounts | $420 | $382 |
Inventories reserves | $830 | $962 |
Preferred stock, par value | $1 | $1 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 35,000,000 | 35,000,000 |
Common stock, shares issued | 16,842,450 | 16,540,904 |
Common stock, shares outstanding | 16,808,983 | 16,507,437 |
Treasury stock, shares | 33,467 | 33,467 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
REVENUES: | ' | ' | ' | ' |
Product revenue, net | $17,340 | $21,495 | $57,182 | $69,660 |
Service fee revenue | 31,411 | 23,908 | 86,393 | 78,708 |
Pass-through revenue | 8,344 | 8,150 | 24,792 | 26,511 |
Total revenues | 57,095 | 53,553 | 168,367 | 174,879 |
COSTS OF REVENUES: | ' | ' | ' | ' |
Cost of product revenue | 16,397 | 20,221 | 53,952 | 65,215 |
Cost of service fee revenue | 22,007 | 16,196 | 60,387 | 53,265 |
Cost of pass-through revenue | 8,344 | 8,150 | 24,792 | 26,511 |
Total costs of revenues | 46,748 | 44,567 | 139,131 | 144,991 |
Gross profit | 10,347 | 8,986 | 29,236 | 29,888 |
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES, including stock based compensation expense of $853 and $610 in the three months ended September 30, 2014 and 2013, respectively, and $2,509 and $1,195 in the nine months ended September 30, 2014 and 2013, respectively. | 12,764 | 10,656 | 35,271 | 34,395 |
Loss from operations | -2,417 | -1,670 | -6,035 | -4,507 |
INTEREST EXPENSE, net | 174 | 162 | 490 | 564 |
Loss from operations before income taxes | -2,591 | -1,832 | -6,525 | -5,071 |
INCOME TAX EXPENSE (BENEFIT) | -66 | 120 | 205 | 411 |
NET LOSS | -2,525 | -1,952 | -6,730 | -5,482 |
NET LOSS PER SHARE: | ' | ' | ' | ' |
Basic | ($0.15) | ($0.12) | ($0.40) | ($0.38) |
Diluted | ($0.15) | ($0.12) | ($0.40) | ($0.38) |
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: | ' | ' | ' | ' |
Basic | 16,779 | 16,121 | 16,680 | 14,490 |
Diluted | 16,779 | 16,121 | 16,680 | 14,490 |
COMPREHENSIVE LOSS: | ' | ' | ' | ' |
Net loss | -2,525 | -1,952 | -6,730 | -5,482 |
Foreign currency translation adjustment | -673 | 275 | -771 | 135 |
TOTAL COMPREHENSIVE LOSS | ($3,198) | ($1,677) | ($7,501) | ($5,347) |
Consolidated_Statements_of_Ope1
Consolidated Statements of Operations (Parenthetical) (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Income Statement [Abstract] | ' | ' | ' | ' |
Stock based compensation expense | $853 | $610 | $2,509 | $1,195 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (Unaudited) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
CASH FLOWS FROM OPERATING ACTIVITIES: | ' | ' |
Net loss | ($6,730) | ($5,482) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ' | ' |
Depreciation and amortization | 8,649 | 7,533 |
Provision for doubtful accounts | 81 | 18 |
Provision for excess and obsolete inventory | 6 | 56 |
Deferred income taxes | -340 | 47 |
Stock based compensation expense | 2,509 | 1,195 |
Non-cash compensation expense | 38 | ' |
Changes in operating assets and liabilities: | ' | ' |
Restricted cash | -31 | 2 |
Accounts receivable | 12,178 | 8,087 |
Inventories | -514 | 7,307 |
Prepaid expenses, other receivables and other assets | 940 | 152 |
Deferred rent | -21 | -344 |
Accounts payable, deferred revenue, accrued expenses and other liabilities | -6,397 | -15,203 |
Net cash provided by operating activities | 10,368 | 3,368 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ' | ' |
Purchases of property and equipment | -4,329 | -5,245 |
Acquisitions, net of cash acquired | -5,216 | ' |
Net cash used in investing activities | -9,545 | -5,245 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' |
Net proceeds from issuance of common stock | 1,018 | 14,453 |
Increase in restricted cash | -40 | -185 |
Payments on capital lease obligations | -1,879 | -1,991 |
Payments on long-term debt, net | -1,895 | -8,768 |
Net cash provided by (used in) financing activities | -2,796 | 3,509 |
EFFECT OF EXCHANGE RATES ON CASH AND CASH EQUIVALENTS | -944 | 35 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | -2,917 | 1,667 |
CASH AND CASH EQUIVALENTS, beginning of period | 22,418 | 19,626 |
CASH AND CASH EQUIVALENTS, end of period | 19,501 | 21,293 |
Non-cash investing and financing activities: | ' | ' |
Property and equipment acquired under long-term debt and capital leases | $4,041 | $1,338 |
Overview_and_Basis_of_Presenta
Overview and Basis of Presentation | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ' | |||||||||||||
Overview and Basis of Presentation | ' | |||||||||||||
1. OVERVIEW AND BASIS OF PRESENTATION | ||||||||||||||
PFSweb, Inc. and its subsidiaries are collectively referred to as the “Company”; “Supplies Distributors” refers to Supplies Distributors, Inc. and its subsidiaries; “Retail Connect” refers to PFSweb Retail Connect, Inc.; “REV” collectively refers to REV Solutions, Inc. and REVTECH Solutions India Private Limited; “LAL” refers to LiveAreaLabs, Inc., and “PFSweb” refers to PFSweb, Inc. and its subsidiaries and affiliates, excluding Supplies Distributors and Retail Connect. | ||||||||||||||
PFSweb Overview | ||||||||||||||
PFSweb is a global business process outsourcing provider of end-to-end eCommerce solutions to major brand name companies seeking to optimize their supply chain and to enhance their traditional and online business channels and initiatives in the United States, Canada, and Europe. PFSweb offers a broad range of service offerings that include website design, creation and integration, digital marketing, eCommerce technologies, order management, customer care, logistics and fulfillment, financial management and professional consulting. | ||||||||||||||
Supplies Distributors Overview | ||||||||||||||
Supplies Distributors and PFSweb operate under distributor agreements with Ricoh Company Limited and Ricoh USA, Inc., a strategic business unit within the Ricoh Family Group of Companies, (collectively hereafter referred to as “Ricoh”) under which Supplies Distributors acts as a distributor of various Ricoh products. The majority of Supplies Distributors’ revenue is generated by its sale of product purchased from Ricoh. | ||||||||||||||
Supplies Distributors has obtained financing that allows it to fund the working capital requirements for the sale of primarily Ricoh products. Pursuant to the transaction management services agreements between PFSweb and Supplies Distributors, PFSweb provides to Supplies Distributors transaction management and fulfillment services, such as managed web hosting and maintenance, procurement support, web-enabled customer contact center services, customer relationship management, financial services including billing and collection services, information management, and international distribution services. Supplies Distributors does not have its own sales force and relies upon Ricoh’s sales force and product demand generation activities for its sale of Ricoh products. Supplies Distributors sells its products in the United States, Canada and Europe. | ||||||||||||||
All of the agreements between PFSweb and Supplies Distributors were made in the context of a related party relationship and were negotiated in the overall context of PFSweb’s and Supplies Distributors’ arrangement with Ricoh. Although management believes the terms of these agreements are generally consistent with fair market values, there can be no assurance that the prices charged to or by each company under these arrangements are not higher or lower than the prices that may be charged by, or to, unaffiliated third parties for similar services. All of these transactions are eliminated upon consolidation. | ||||||||||||||
Acquisition of REV | ||||||||||||||
On September 3, 2014, Priority Fulfillment Services, Inc. (“PFS”), a wholly-owned subsidiary of PFSweb, acquired the outstanding capital stock of REV. REV provides eCommerce website technical design, development and support services, enabling retailers, manufacturers and suppliers to optimize the customer experience across multiple channels. REV maintains operations in the United States and India. Consideration paid by the Company for the shares included an initial $2.6 million cash payment, of which approximately $0.5 million was paid in October 2014. The purchase agreement provides for (i) a further adjustment based on REV’s shareholders’ equity balance as of the date of acquisition and (ii) future earn-out payments (“REV Earn-out Payments”) payable in 2015 and 2016 based on REV’s achievement of certain 2014 and 2015 financial targets, with a guaranteed minimum of an aggregate of $1.4 million an aggregate maximum of $3.25 million, in each case, subject to possible offsets for indemnification and other claims arising under the purchase agreement. At PFS’ election, up to $0.2 million and $0.3 million of the 2014 REV Earn-out Payments and 2015 REV Earn-out Payments, respectively, are payable in unregistered shares of common stock of the Company. | ||||||||||||||
The transaction was accounted for using the purchase method of accounting for business combinations and, accordingly, the assets acquired and liabilities assumed, including a preliminary allocation of purchase price, and the results of operations of REV have been included in the Company's consolidated financial statements since the date of acquisition. The following table summarizes the preliminary unaudited, estimated fair value of the tangible and intangible assets acquired and liabilities assumed. This allocation requires the significant use of estimates and is based on the information available to management at the time these financial statements were prepared. As the acquisition was only recently completed, the Company has not yet completed its assessment of the fair value of the tangible and intangible assets acquired, nor the potentially related amortization expense applicable to such assets, and liabilities assumed. As such, the estimated purchase price in excess of net assets acquired and liabilities assumed has initially been recorded as goodwill and intangible assets. Goodwill is not deductible for tax purposes and will not be amortized but is subject to annual impairment tests using a fair-value-based approach. The Company is in the process of finalizing the purchase price allocation and, accordingly, the following preliminary allocation of the purchase price is subject to adjustment (in thousands): | ||||||||||||||
Cash and cash equivalents | $ | 764 | ||||||||||||
Accounts receivable | 1,750 | |||||||||||||
Property and equipment | 182 | |||||||||||||
Other assets | 403 | |||||||||||||
Total assets acquired | 3,099 | |||||||||||||
Total liabilities assumed | 656 | |||||||||||||
Net assets acquired | 2,443 | |||||||||||||
Total purchase price | 6,143 | |||||||||||||
Goodwill and intangible assets acquired | $ | 3,700 | ||||||||||||
The estimated purchase price for REV is as follows (in thousands): | ||||||||||||||
Aggregate cash payments | 2,612 | |||||||||||||
Performance-based contingent payments and shareholders’ equity related adjustment | 3,531 | |||||||||||||
Total purchase price | $ | 6,143 | ||||||||||||
Acquisition of LAL | ||||||||||||||
Effective September 22, 2014, PFS acquired the outstanding capital stock of LAL. LAL provides digital agency services including strategy, branding, user experience design, visual design, copywriting, interactive development and support services primarily to manufacturers and retailers. LAL operates in the United States. Consideration paid by the Company for the shares included an initial $4.0 million cash payment and 54,604 unregistered shares of Company stock (approximately $0.5 million in value as of acquisition date). The purchase agreement provides for (i) a further adjustment based on LAL’s shareholders’ equity balance as of the date of acquisition, and (ii) future earn out payments (“LAL Earn-out Payments”) payable in 2015 and 2016 based on LAL’s achievement of certain 2014 and 2015 financial targets, with no guaranteed minimum and an aggregate maximum of $3.0 million, in each case, subject to possible offsets for indemnification and other claims arising under the purchase agreement. At PFS’ election, up to 25% of the 2015 LAL Earn-out Payments are payable in unregistered shares of common stock of the Company. | ||||||||||||||
The transaction was accounted for using the purchase method of accounting for business combinations and, accordingly, the assets acquired and liabilities assumed, including a preliminary allocation of purchase price, and the results of operations of LAL have been included in the Company's consolidated financial statements since the date of acquisition. The following table summarizes the preliminary unaudited, estimated fair value of the assets acquired and liabilities assumed. This allocation requires the significant use of estimates and is based on the information available to management at the time these financial statements were prepared. As the acquisition was only recently completed, the Company has not yet completed its preliminary assessment of the fair value of the tangible and intangible assets acquired, nor the potentially related amortization expense applicable to such assets, and liabilities assumed. As such, the total estimated purchase price in excess of net assets acquired and liabilities assumed has initially been recorded as goodwill and intangible assets. Goodwill is not deductible for tax purposes and will not be amortized but is subject to annual impairment tests using a fair-value-based approach. The Company is in the process of finalizing the purchase price allocation and, accordingly, the following allocation of the purchase price is subject to adjustment (in thousands): | ||||||||||||||
Cash | $ | 125 | ||||||||||||
Accounts receivable, net | 1,183 | |||||||||||||
Property and equipment | 253 | |||||||||||||
Other assets | -186 | |||||||||||||
Total assets acquired | 1,375 | |||||||||||||
Total liabilities assumed | 848 | |||||||||||||
Net assets acquired | 527 | |||||||||||||
Total purchase price | 6,678 | |||||||||||||
Goodwill and intangible assets acquired | $ | 6,151 | ||||||||||||
The estimated purchase price for LAL is as follows (in thousands, except share data): | ||||||||||||||
Number of shares of common stock issued | 54,604 | |||||||||||||
Multiplied by PFSweb, Inc.'s stock price | $ | 9.96 | ||||||||||||
Share consideration | $ | 544 | ||||||||||||
Aggregate cash payments | 4,000 | |||||||||||||
Performance-based contingent payments and shareholders’ equity related adjustment | 2,134 | |||||||||||||
Total purchase price | $ | 6,678 | ||||||||||||
Pro Forma Information | ||||||||||||||
The following table presents selected pro forma information, for comparative purposes, assuming the acquisitions of REV and LAL had occurred on January 1, 2013 (unaudited) (in thousands, except per share amounts): | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Total revenues | $ | 60,938 | $ | 57,848 | $ | 179,719 | $ | 184,869 | ||||||
Net loss | -411 | -1,345 | -3,869 | -4,617 | ||||||||||
Basic and diluted loss per share | -0.02 | -0.08 | -0.23 | -0.32 | ||||||||||
The unaudited pro forma information combines the historical unaudited consolidated results of the Company’s operations and REV’s and LAL’s operations for the three and nine months ended September 30, 2014 and 2013 giving effect to the acquisitions and related events as if they had been consummated on January 1, 2013. The unaudited pro forma total revenues and pro forma net loss are not necessarily indicative of the consolidated results of operations for future periods or the results of operations that would have been realized had the Company consolidated REV and LAL during the periods noted. | ||||||||||||||
Acquisition Related Expenses | ||||||||||||||
The Company recognized approximately $1.4 million of acquisition-related costs in total for both REV and LAL during the three months ended September 30, 2014, which are included in selling, general and administrative expenses in the consolidated statements of operations. | ||||||||||||||
Basis of Presentation | ||||||||||||||
The unaudited interim consolidated financial statements as of September 30, 2014, and for the three and nine months ended September 30, 2014 and 2013, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and are unaudited. Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to the rules and regulations promulgated by the SEC. In the opinion of management and subject to the foregoing, the unaudited interim consolidated financial statements of the Company include all adjustments necessary for a fair presentation of the Company’s financial position as of September 30, 2014, its results of operations for each of the three and nine months ended September 30, 2014 and 2013 and its cash flows for each of the nine months ended September 30, 2014 and 2013. Results of the Company’s operations for interim periods may not be indicative of results for the full fiscal year. | ||||||||||||||
Certain prior period data on the income statement has been reclassified to conform to the current year presentation of product and service fee revenues, each of which was previously classified as a different component of revenue on the income statement. These reclassifications had no effect on previously reported net loss, total shareholders’ equity or net cash provided by operating activities. |
Significant_Accounting_Policie
Significant Accounting Policies | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Accounting Policies [Abstract] | ' | |||||||
Significant Accounting Policies | ' | |||||||
2. SIGNIFICANT ACCOUNTING POLICIES | ||||||||
Principles of Consolidation | ||||||||
All intercompany balances and transactions have been eliminated in consolidation. | ||||||||
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 and selling, general and administrative expenses in these 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 on 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 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. These uncertainties are discussed in this report and in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 in the section entitled “Risk Factors.” 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 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. | ||||||||
Revenue and Cost Recognition | ||||||||
The Company derives revenue primarily from services provided under contractual arrangements with its clients or from the sale of products under its distributor agreements. The following revenue recognition policies define the manner in which the Company accounts for sales transactions. | ||||||||
The Company recognizes revenue when persuasive evidence of a sales arrangement exists, product shipment or delivery has occurred or services are rendered, the sales price or fee is fixed or determinable, and collectability is reasonably assured. | ||||||||
In instances where revenue is derived from sales of third-party vendor services, the Company records revenue on a gross basis when the Company is a principal to the transaction and net of costs when the Company is acting as an agent between the customer or client and the vendor. The Company considers several factors to determine whether it is a principal or an agent, most notably whether the Company is the primary obligor to the vendor or customer, has established its own pricing and has inventory and credit risks, if applicable. | ||||||||
Product Revenue Activity | ||||||||
Depending on the terms of the customer arrangement, Supplies Distributors recognizes product revenue and product cost either upon the shipment of product to customers or when the customer receives the product. Supplies Distributors permits its customers to return product for credit against other purchases, which include returns for defective products (that Supplies Distributors then returns to the manufacturer) and incorrect shipments. Supplies Distributors provides a reserve for estimated returns and allowances and offers terms to its customers that it believes are standard for its industry. | ||||||||
Freight costs billed to customers are reflected as components of product revenue. Freight costs incurred are recorded as a component of cost of goods sold. | ||||||||
Under its distributor agreements (see Note 6), Supplies Distributors bills Ricoh for reimbursements of certain expenses, including: pass-through customer marketing programs, including rebates and co-op funds; certain freight costs; direct costs incurred in passing on any price decreases offered by Ricoh to Supplies Distributors or its customers to cover price protection and certain special bids; the cost of products provided to replace defective product returned by customers; and certain other expenses as defined. Supplies Distributors records these reimbursable amounts as they are incurred as other receivables in the consolidated balance sheet with a corresponding reduction in either inventory or cost of product revenue. Supplies Distributors also records pass-through customer marketing programs as a reduction of both product revenue and cost of product revenue. | ||||||||
Service Fee Revenue Activity | ||||||||
The Company’s service fee revenue relates to its distribution services, order management/customer care services, professional and technology services and the reimbursement of out-of-pocket and third-party expenses. The Company typically charges its service fee revenue on either a cost-plus basis, a percent of shipped revenue basis or a per transaction basis, such as a per item basis for fulfillment services or a per labor hour basis for web-enabled customer contact center services. Additional fees are billed for other services. | ||||||||
The Company evaluates its contractual arrangements to determine whether or not they include multiple service elements. Revenue recognition is determined for the separate service elements of the contract in accordance with the requirements of Accounting Standards Codification 605, “Revenue Recognition.” A deliverable constitutes a separate unit of accounting when it has standalone value and there are no return rights or other contingencies present for the delivered elements. The Company allocates revenue to each element based on estimated selling price. Each of the Company’s client contracts, and the related services, is unique, with individual needs and criteria customized for each client. Each client engagement is scoped and priced separately and as such the Company is not able to establish vendor specific objective evidence of fair value for its services, nor is third-party evidence is available to establish standalone selling prices. Accordingly the Company uses management’s best estimate of selling price for the deliverables. The Company establishes its estimates considering internal factors such as margin objectives, pricing practices and controls as well as market conditions such as competitor pricing strategies. | ||||||||
Distribution services relate primarily to inventory management, product receiving, warehousing and fulfillment (i.e., picking, packing and shipping) and facilities and operations management. Service fee revenue for these activities is recognized as earned, which is either (i) on a per transaction basis or (ii) at the time of product fulfillment, which occurs at the completion of the distribution services. | ||||||||
Order management/customer care services relate primarily to taking customer orders for the Company’s clients’ products. These services also include addressing customer questions related to orders, as well as cross-selling/up-selling activities. Service fee revenue for this activity is recognized as the services are rendered. Fees charged to the client are on a per transaction basis based on either (i) a pre-determined fee per order or fee per telephone minutes incurred, (ii) a per dedicated agent fee, or (iii) are included in the product fulfillment service fees that are recognized on product shipment. | ||||||||
Professional consulting and technology service revenues primarily relate to service and support of eCommerce platforms, website solutions and quality control for the Company’s clients. Additionally, the Company provides digital agency services that enable client marketing programs to attract new customers, convert buyers and increase website value. These fees are typically charged on either a per labor hour basis, a dedicated resource model, or a percent of merchandise shipped basis. Service fee revenue for this activity is generally recognized as the services are rendered. | ||||||||
The Company performs front-end set-up and integration services to support client eCommerce plaftorms and websites. When the Company determines these front-end set-up and integration services do not meet the criteria for recognition as a separate unit of accounting, the Company defers the start-up fees received and the related costs, and recognizes them over the contract term. See further discussion below. When the Company determines these front-end set-up and integration services do meet the criteria for recognition as a separate unit of accounting, for time and material arrangements, the Company recognizes revenue as services are rendered and costs as they are incurred. For fixed-price arrangements, the Company uses the completed contract method to recognize revenues and costs if reasonable and reliable cost estimates for a project cannot be made. If reasonable and reliable costs estimates for a project can be made, the Company recognizes revenue over the contract term on a proportional performance basis, as determined by the relationship of actual costs incurred compared to the estimated total contract costs. | ||||||||
The Company’s billings for reimbursement of out-of-pocket expenses, including travel and certain third-party vendor expenses such as shipping and handling costs and telecommunication charges, are included in pass-through revenue. The related reimbursable costs are reflected as cost of pass-through revenue. | ||||||||
The Company’s cost of service fee revenue, representing the cost to provide the services described above, is recognized as incurred. Cost of service fee revenue also includes certain costs associated with technology collaboration and ongoing technology support that include maintenance, web hosting and other ongoing programming activities. These activities are primarily performed to support the distribution and order management/customer care services and are recognized as incurred. | ||||||||
Accounts Receivable | ||||||||
The Company recognizes revenue and records trade accounts receivable, pursuant to the methods described above, when collectability is reasonably assured. Collectability is evaluated in the aggregate and on an individual customer or client basis taking into consideration payment due date, historical payment trends, current financial position, results of independent credit evaluations and payment terms. Related reserves are determined by either using percentages applied to certain aged receivable categories based on historical results, reevaluated and adjusted as additional information is received, or a specific identification method. After all attempts to collect a receivable have failed, the receivable is written off against the allowance for doubtful accounts. | ||||||||
Deferred Revenues and Deferred Costs | ||||||||
The Company primarily performs its services under multiple year contracts, certain of which include early termination provisions, and clients are obligated to pay for services performed. In conjunction with these long-term contracts, the Company sometimes receives start-up fees to cover its implementation costs, including certain technology infrastructure and development costs. When the Company determines that these start-up and integration activities do not meet the criteria for recognition as a separate unit of accounting, the Company defers the start-up fees received, and the related costs, and recognizes them over the contract term, which the Company believes is the best estimate of the expected relationship term. The amortization of deferred revenue is included as a component of service fee revenue. The amortization of deferred implementation costs is included as a cost of service fee revenue. To the extent implementation costs for non-technology infrastructure and development exceed the corresponding fees received, the excess costs are expensed as incurred. | ||||||||
Current and non-current deferred implementation costs, excluding technology and development costs, are a component of prepaid expenses and other current assets and other assets, respectively. | ||||||||
Investment in Subsidiaries | ||||||||
PFS has made advances to Supplies Distributors that are evidenced by a Subordinated Demand Note (the “Subordinated Note”). Under the terms of certain of the Company’s debt facilities, the outstanding balance of the Subordinated Note cannot be increased to more than $5.0 million or decreased to less than $2.5 million without prior approval of certain of the Company’s lenders. As of September 30, 2014 and December 31, 2013, the outstanding balance of the Subordinated Note was $2.5 million and $3.5 million, respectively. The Subordinated Note is eliminated in the Company’s consolidated financial statements. | ||||||||
PFS has also made advances to Retail Connect, which totaled $11.1 million at both September 30, 2014 and December 31, 2013, and to LAL, which totaled $0.4 million as of September 30, 2014. PFS has received the approval of its lender to advance incremental amounts to certain of its subsidiaries and/or affiliates, if needed, subject to certain financial covenants, as defined. PFSweb, Inc. has also advanced to Retail Connect an additional $8.5 million as of September 30, 2014 and December 31, 2013. All of these advances are eliminated upon consolidation. | ||||||||
Concentration of Business and Credit Risk | ||||||||
No service fee client or product revenue customer represented more than 10% of the Company’s consolidated total net revenues during the nine months ended September 30, 2014 or the Company’s consolidated accounts receivable as of September 30, 2014. | ||||||||
A summary of the nonaffiliated customer and client concentrations is as follows: | ||||||||
Nine Months Ended | ||||||||
September 30, | ||||||||
2014 | 2013 | |||||||
Product Revenue (as a percentage of total Product Revenue): | ||||||||
Customer 1 | 13 | % | 15 | % | ||||
Customer 2 | 12 | % | 12 | % | ||||
Service Fee Revenue (as a percentage of total Service Fee Revenue): | ||||||||
Client 1 | — | 10 | % | |||||
The Company’s contractual relationship with Client 1 ended during 2013, and the Company currently anticipates that its product revenue from the customers identified above will decline during the next twelve months. | ||||||||
The Company has provided certain collateralized guarantees of its subsidiaries’ financings and credit arrangements. These subsidiaries’ ability to obtain financing on similar terms would be significantly impacted without these guarantees. | ||||||||
The Company has multiple arrangements with International Business Machines Corporation (“IBM”) and Ricoh. These arrangements include Supplies Distributors’ distributor agreements and certain of Supplies Distributors’ working capital financing agreements. The majority of Supplies Distributors’ revenue is generated by its sale of product purchased from Ricoh. Supplies Distributors also relies upon Ricoh’s sales force and product demand generation activities and the discontinuance of such services would have a material impact upon Supplies Distributors’ business. In addition, Supplies Distributors has product sales to IBM and Ricoh business affiliates. | ||||||||
As a result of certain operational restructuring of its business, Ricoh has implemented, and will continue to implement, certain changes in the sale and distribution of Ricoh products. The changes have resulted, and are expected to continue to result, in reduced revenues and profitability for Supplies Distributors. | ||||||||
Inventories | ||||||||
Inventories (all of which are finished goods) are stated at the lower of weighted average cost or market. The Company establishes inventory reserves based upon estimates of declines in values due to inventories that are slow moving or obsolete, excess levels of inventory or values assessed at lower than cost. | ||||||||
Supplies Distributors assumes responsibility for slow-moving inventory under its Ricoh distributor agreements, subject to certain termination rights, but has the right to return product rendered obsolete by engineering changes, as defined. In the event PFS, Supplies Distributors and Ricoh terminate the distributor agreements, the agreements provide for the parties to mutually agree on a plan of disposition of Supplies Distributors’ then existing inventory. | ||||||||
Operating Leases | ||||||||
The Company leases certain real estate for its warehouse, call center and corporate offices, as well as certain equipment, under non-cancelable operating leases that expire at various dates through 2024. Management expects that, in the normal course of business, leases that expire will be renewed or replaced by other similar leases. The Company recognizes escalating lease payments on a straight-line basis over the term of each respective lease with the difference between cash payments and rent expense recognized being recorded as deferred rent in the accompanying consolidated balance sheets. | ||||||||
Property and Equipment | ||||||||
The Company’s property held under capital leases totaled approximately $5.3 million and $4.0 million, net of accumulated amortization of approximately $4.5 million and $4.4 million, at September 30, 2014 and December 31, 2013, respectively. Depreciation and amortization expense related to capital leases during the nine months ended September 30, 2014 and 2013 was $1.9 million and $2.0 million, respectively. | ||||||||
Income Taxes | ||||||||
The Company records a tax provision primarily associated with state income taxes and its foreign operations. The Company has recorded a valuation allowance for the majority of its net deferred tax assets, which are primarily related to its net operating loss carryforwards and certain foreign deferred tax assets. | ||||||||
Cash Paid for Interest and Taxes | ||||||||
The Company made payments for interest of approximately $0.5 million and $0.6 million in the nine month periods ended September 30, 2014 and 2013, respectively. Income taxes of approximately $0.4 million and $0.5 million were paid by the Company during the nine month periods ended September 30, 2014 and 2013, respectively. | ||||||||
Impact of Recently Issued Accounting Standards | ||||||||
In May 2014, the Financial Accounting Standards Board (the “FASB”) issued ASU 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which outlines a single, comprehensive model for entities to use in accounting for revenue arising from contracts with customers. ASU 2014-09 is applicable for fiscal years beginning after December 15, 2016, including interim periods therein, and can be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. Early adoption is not permitted. The Company is currently evaluating the impact of the new guidance on the consolidated financial statements and related disclosures. |
Net_Loss_Per_Common_Share
Net Loss Per Common Share | 9 Months Ended |
Sep. 30, 2014 | |
Earnings Per Share [Abstract] | ' |
Net Loss Per Common Share | ' |
3. NET LOSS PER COMMON SHARE | |
Basic and diluted net loss per common share are computed by dividing net loss by the weighted-average number of common shares outstanding for the reporting period. Stock options not included in the calculation of diluted net loss per common share for the nine months ended September 30, 2014, and 2013 were 1.8 million and 2.2 million, respectively, as the effect would be anti-dilutive. |
Stock_and_Stock_Options
Stock and Stock Options | 9 Months Ended |
Sep. 30, 2014 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ' |
Stock and Stock Options | ' |
4. STOCK AND STOCK OPTIONS | |
In May 2013, the Company completed a private placement pursuant to which the Company sold an aggregate of 3.2 million shares of common stock, par value $0.001 per share, at $4.57 per share, resulting in net proceeds, after deducting offering expenses, of approximately $14.1 million. | |
In May 2013, pursuant to the Company’s Employee Stock and Incentive Plan, as amended and restated (the “Plan”), the Company issued Performance-Based Share Awards (as defined in the Plan) to certain of the Company’s executives. Under the terms of such awards, the determination of the number of performance shares that each such individual received was subject to, and calculated by reference to, the achievement by the Company of a goal measured by a range of targeted financial performance, as defined, for 2013. Based on the 2013 results, the aggregate number of performance shares issued was 0.6 million. The performance shares are subject to four year vesting based upon continued employment and the comparative performance (on an annual and cumulative basis) of the Company’s common stock on NASDAQ compared to the Russell Micro Cap Index. | |
In March 2014, the Company issued additional Performance-Based Share Awards to certain of the Company’s executives. Under the terms of the 2014 awards, the number of performance shares that each such individual may receive is subject to, and calculated by reference to, the achievement by the Company of a performance goal measured by a range of targeted financial performance, as defined, for 2014. Assuming achievement of the highest performance goal, the aggregate maximum number of performance shares that may be issued under the 2014 award program is 0.3 million, which are subject to four year vesting based upon continued employment, and for certain of the performance shares, the comparative performance (on an annual and cumulative basis) of the Company’s common stock on NASDAQ compared to the Russell Micro Cap Index. | |
During the nine months ended September 30, 2014 the Company issued an aggregate of 179,500 options to purchase shares of common stock to directors, employees and outside consultants of the Company, which generally vest over a three-year period. | |
Total stock-based compensation expense was $2.5 million and $1.2 million for the nine months ended September 30, 2014 and 2013, respectively, and was included as a component of selling, general and administrative expenses in the consolidated statements of operations. |
Vendor_Financing
Vendor Financing | 9 Months Ended |
Sep. 30, 2014 | |
Payables And Accruals [Abstract] | ' |
Vendor Financing | ' |
5. VENDOR FINANCING | |
Supplies Distributors has a short-term credit facility with IBM Credit LLC to finance its distribution of Ricoh products in the United States, providing financing for eligible Ricoh inventory and certain receivables up to $15.0 million. The agreement has no stated maturity date and provides either party the ability to exit the facility following a 90-day notice. Given the structure of this facility and as outstanding balances, which represent inventory purchases, are repaid within twelve months, the Company has classified the outstanding amounts under this facility, which were $10.6 million and $9.8 million as of September 30, 2014 and December 31, 2013, respectively, as accounts payable in the consolidated balance sheets. As of September 30, 2014, Supplies Distributors had $2.3 million of available credit under this facility. The credit facility contains cross default provisions, various restrictions upon the ability of Supplies Distributors to, among other things, merge, consolidate, sell assets, incur indebtedness, make loans and payments to related parties (including entities directly or indirectly owned by PFSweb, Inc.), provide guarantees, make investments and loans, pledge assets, make changes to capital stock ownership structure and pay dividends. The credit facility also contains financial covenants, such as annualized revenue to working capital, net profit after tax to revenue, and total liabilities to tangible net worth, as defined, and is secured by certain of the assets of Supplies Distributors, as well as a collateralized guaranty of PFS. Additionally, PFS is required to maintain a minimum Subordinated Note receivable balance from Supplies Distributors of $2.5 million and the Company is required to maintain a minimum shareholders’ equity of $18.0 million. Borrowings under the credit facility accrue interest, after a defined free financing period, at prime rate plus 0.5% (3.75% as of September 30, 2014). The facility also includes a monthly service fee. |
Debt_and_Capital_Lease_Obligat
Debt and Capital Lease Obligations | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Debt Disclosure [Abstract] | ' | |||||||
Debt and Capital Lease Obligations | ' | |||||||
6. DEBT AND CAPITAL LEASE OBLIGATIONS; | ||||||||
Outstanding debt and capital lease obligations consist of the following (in thousands): | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Loan and security agreements | ||||||||
Supplies Distributors | $ | 3,659 | $ | 3,776 | ||||
PFS | 1,123 | 1,473 | ||||||
Master lease agreements | 6,198 | 4,973 | ||||||
Other | 324 | 885 | ||||||
Total | 11,304 | 11,107 | ||||||
Less current portion of long-term debt | 7,428 | 8,231 | ||||||
Long-term debt, less current portion | $ | 3,876 | $ | 2,876 | ||||
Loan and Security Agreement – Supplies Distributors | ||||||||
Supplies Distributors has a loan and security agreement with Wells Fargo Bank, National Association (“Wells Fargo”) to provide financing for up to $12 million of eligible accounts receivable in the United States and Canada. As of September 30, 2014, Supplies Distributors had $2.0 million of available credit under this agreement. The Wells Fargo facility expires on the earlier of March 2016 or the date on which the parties to the Ricoh distributor agreement no longer operate under the terms of such agreement and/or Ricoh no longer supplies products pursuant to such agreement. Borrowings under the Wells Fargo facility accrue interest at prime rate plus 0.25% to 0.75% (3.75% as of September 30, 2014) or Eurodollar rate plus 2.5% to 3.0%, dependent on excess availability and subject to a minimum of 3.0%, as defined. The interest rate as of September 30, 2014 was 3.75% for $2.7 million of outstanding borrowings and 3.0% for $1.0 million of outstanding borrowings. As of December 31, 2013, the interest rate was 3.75% for the outstanding borrowings. This agreement includes a monthly service fee and contains cross default provisions, various restrictions upon the ability of Supplies Distributors to, among other things, merge, consolidate, sell assets, incur indebtedness, make loans and payments to related parties (including entities directly or indirectly owned by PFSweb, Inc.), provide guarantees, make investments and loans, pledge assets, make changes to capital stock ownership structure and pay dividends. This agreement also contains financial covenants, such as minimum net worth, as defined, and is secured by all of the assets of Supplies Distributors, as well as a collateralized guaranty of PFS. Additionally, PFS is required to maintain a Subordinated Note receivable balance from Supplies Distributors of no less than $2.5 million, may not maintain restricted cash of more than $5.0 million and is restricted with regard to transactions with related parties, indebtedness and changes to capital stock ownership structure. Supplies Distributors has entered into blocked account agreements with its banks pursuant to which a security interest was granted to Wells Fargo for all U.S. and Canadian customer remittances received in specified bank accounts. | ||||||||
Loan and Security Agreement – PFS | ||||||||
PFS has a Loan and Security Agreement (“Comerica Agreement”) with Comerica Bank (“Comerica”). The Comerica Agreement provides for up to $17.0 million ($20.0 million during certain peak months) of eligible accounts receivable financing (“Working Capital Advances”) through March 2016. The Comerica Agreement also provides for up to $2.0 million of eligible equipment advances (“Equipment Advances”) through March 2015, with a final maturity date of September 15, 2017. As of September 30, 2014, PFS had $16.9 million of available credit under the Working Capital Advance portion of this facility and $1.5 million available for Equipment Advances. Effective March 31, 2014, borrowings under the Working Capital Advance portion of the Comerica Agreement accrue interest at prime rate plus 1% (4.25% at September 30, 2014) while the Equipment Advances accrue interest at prime rate plus 1.5% (4.75% at September 30, 2014). The Comerica Agreement includes a monthly service fee and contains cross default provisions and various restrictions upon PFS’ ability to, among other things, merge, consolidate, sell assets, incur indebtedness, make loans and payments to related parties (including entities directly or indirectly owned by PFSweb, Inc.), make capital expenditures, make investments and loans, pledge assets, make changes to capital stock ownership structure, as well as financial covenants of a minimum tangible net worth of $20 million, as defined, a minimum earnings before interest and taxes, plus depreciation, amortization and non-cash compensation accruals, if any, as defined, and a minimum liquidity ratio, as defined. The Comerica Agreement restricts the amount of the Subordinated Note receivable from Supplies Distributors to a maximum of $5.0 million. Comerica has provided approval for PFS to advance incremental amounts subject to certain financial covenants, as defined, to certain of its subsidiaries and/or affiliates, if needed. The Comerica Agreement is secured by all of the assets of PFS, as well as a guarantee of PFSweb, Inc. | ||||||||
Factoring Agreement | ||||||||
Supplies Distributors’ European subsidiary has a factoring agreement with BNP Paribas Fortis Factor that provides factoring for up to 7.5 million euros (approximately $9.4 million as of September 30, 2014) of eligible accounts receivable through March 2015. This factoring agreement is accounted for as a secured borrowing. There were no outstanding borrowings under this agreement as of September 30, 2014 or December 31, 2013. As of September 30, 2014, Supplies Distributors’ European subsidiary had approximately 0.5 million euros (approximately $0.6 million) of available credit under this agreement. Borrowings accrue interest at Euribor plus 0.7% (0.7% at September 30, 2014). | ||||||||
Debt Covenants | ||||||||
To the extent the Company or any of its subsidiaries fail to comply with its covenants applicable to its debt or vendor financing obligations, including the monthly financial covenant requirements, such as profitability and cash flow, and required level of shareholders’ equity or net worth (as defined), the Company would be required to obtain a waiver from the lender or the lender would be entitled to accelerate the repayment of any outstanding credit facility obligations, and exercise all other rights and remedies, including sale of collateral and enforcement of payment under the Company parent guarantee. Any acceleration of the repayment of the credit facilities may have a material adverse impact on the Company’s financial condition and results of operations and no assurance can be given that the Company would have the financial ability to repay all of such obligations. As of and for the nine months ended September 30, 2014, the Company was in compliance with all debt covenants. | ||||||||
Master Lease Agreements | ||||||||
The Company has various agreements that provide for leasing or financing transactions of equipment and other assets and will continue to enter into such arrangements as needed to finance the purchasing or leasing of certain equipment or other assets. Borrowings under these agreements, which generally have terms of three to five years, are generally secured by the related equipment, and in certain cases, by a Company parent guarantee. |
Segment_Information
Segment Information | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||||||
Segment Information | ' | |||||||||||||||
7. SEGMENT INFORMATION | ||||||||||||||||
The Company is currently organized into two primary operating segments, which generally align with the corporate organization structure. In the first segment, PFSweb is an international provider of various business process outsourcing solutions and operates as a service fee business. In the second operating segment (“Business and Retail Connect”), subsidiaries of the Company purchase inventory from clients and resell the inventory to client customers. In this segment, the Company generally recognizes product revenue. | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Revenues (in thousands): | ||||||||||||||||
PFSweb | $ | 39,754 | $ | 32,471 | $ | 111,645 | $ | 106,846 | ||||||||
Business and Retail Connect | 20,627 | 23,592 | 67,482 | 75,610 | ||||||||||||
Eliminations | (3,286 | ) | (2,510 | ) | (10,760 | ) | (7,577 | ) | ||||||||
$ | 57,095 | $ | 53,553 | $ | 168,367 | $ | 174,879 | |||||||||
Income (loss) from operations (in thousands): | ||||||||||||||||
PFSweb | $ | (2,817 | ) | $ | (1,823 | ) | $ | (7,347 | ) | $ | (5,153 | ) | ||||
Business and Retail Connect | 400 | 153 | 1,312 | 646 | ||||||||||||
$ | (2,417 | ) | $ | (1,670 | ) | $ | (6,035 | ) | $ | (4,507 | ) | |||||
Depreciation and amortization (in thousands): | ||||||||||||||||
PFSweb | $ | 2,839 | $ | 2,399 | $ | 8,520 | $ | 7,417 | ||||||||
Business and Retail Connect | 42 | 39 | 129 | 116 | ||||||||||||
$ | 2,881 | $ | 2,438 | $ | 8,649 | $ | 7,533 | |||||||||
Capital expenditures (in thousands): | ||||||||||||||||
PFSweb | $ | 1,396 | $ | 2,028 | $ | 4,298 | $ | 5,174 | ||||||||
Business and Retail Connect | 8 | 55 | 31 | 71 | ||||||||||||
$ | 1,404 | $ | 2,083 | $ | 4,329 | $ | 5,245 | |||||||||
September 30, | December 31, | |||||||||||||||
2014 | 2013 | |||||||||||||||
Assets (in thousands): | ||||||||||||||||
PFSweb | $ | 98,265 | $ | 98,745 | ||||||||||||
Business and Retail Connect | 40,623 | 47,116 | ||||||||||||||
Eliminations | (10,434 | ) | (13,825 | ) | ||||||||||||
$ | 128,454 | $ | 132,036 | |||||||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2014 | |
Commitments And Contingencies Disclosure [Abstract] | ' |
Commitments and Contingencies | ' |
8. COMMITMENTS AND CONTINGENCIES | |
The Company received municipal tax abatements in certain locations. In prior years, the Company received notice from a municipality that it did not satisfy certain criteria necessary to maintain the abatements and that the municipal authority planned to make an adjustment to the Company’s tax abatement. The Company disputed the adjustment and such dispute has been settled with the municipality. However, the amount of additional property taxes to be assessed against the Company and the timing of the related payments has not been finalized. As of September 30, 2014, the Company believes it has adequately accrued for the expected assessment. | |
In April 2010, a sales employee of eCOST (the former name of Retail Connect) was charged with violating various federal criminal statutes in connection with the sales of eCOST products to certain customers, and approximately $620,000 held in an eCOST deposit account was seized and turned over to the Office of the U.S. Attorney in connection with such activity. In August 2012, the employee pleaded guilty to a misdemeanor. Neither the Company nor eCOST have been charged with any criminal activity, and the Company is seeking the recovery of the funds that are currently classified as other receivables on the September 30, 2014 and December 31, 2013 balance sheets. Based on the information available to date, the Company is unable to determine the amount of the loss, if any, relating to the seizure of such funds. No assurance can be given, however, that the seizure of such funds, or the inability of the Company to recover such funds or any significant portion thereof, or any costs and expenses incurred by the Company in connection with this matter will not have a material adverse effect upon the Company’s financial condition or results of operations. | |
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. In addition, PFS is generally required to indemnify its service fee clients against any third party claims asserted against such clients alleging infringement by PFS of the patents, trademarks and other intellectual property rights of third parties. |
Significant_Accounting_Policie1
Significant Accounting Policies (Policies) | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Accounting Policies [Abstract] | ' | |||||||
Principles of Consolidation | ' | |||||||
Principles of Consolidation | ||||||||
All intercompany balances and transactions have been eliminated in consolidation. | ||||||||
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 and selling, general and administrative expenses in these 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 on 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 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. These uncertainties are discussed in this report and in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 in the section entitled “Risk Factors.” 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 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. | ||||||||
Revenue and Cost Recognition | ' | |||||||
Revenue and Cost Recognition | ||||||||
The Company derives revenue primarily from services provided under contractual arrangements with its clients or from the sale of products under its distributor agreements. The following revenue recognition policies define the manner in which the Company accounts for sales transactions. | ||||||||
The Company recognizes revenue when persuasive evidence of a sales arrangement exists, product shipment or delivery has occurred or services are rendered, the sales price or fee is fixed or determinable, and collectability is reasonably assured. | ||||||||
In instances where revenue is derived from sales of third-party vendor services, the Company records revenue on a gross basis when the Company is a principal to the transaction and net of costs when the Company is acting as an agent between the customer or client and the vendor. The Company considers several factors to determine whether it is a principal or an agent, most notably whether the Company is the primary obligor to the vendor or customer, has established its own pricing and has inventory and credit risks, if applicable. | ||||||||
Product Revenue Activity | ||||||||
Depending on the terms of the customer arrangement, Supplies Distributors recognizes product revenue and product cost either upon the shipment of product to customers or when the customer receives the product. Supplies Distributors permits its customers to return product for credit against other purchases, which include returns for defective products (that Supplies Distributors then returns to the manufacturer) and incorrect shipments. Supplies Distributors provides a reserve for estimated returns and allowances and offers terms to its customers that it believes are standard for its industry. | ||||||||
Freight costs billed to customers are reflected as components of product revenue. Freight costs incurred are recorded as a component of cost of goods sold. | ||||||||
Under its distributor agreements (see Note 6), Supplies Distributors bills Ricoh for reimbursements of certain expenses, including: pass-through customer marketing programs, including rebates and co-op funds; certain freight costs; direct costs incurred in passing on any price decreases offered by Ricoh to Supplies Distributors or its customers to cover price protection and certain special bids; the cost of products provided to replace defective product returned by customers; and certain other expenses as defined. Supplies Distributors records these reimbursable amounts as they are incurred as other receivables in the consolidated balance sheet with a corresponding reduction in either inventory or cost of product revenue. Supplies Distributors also records pass-through customer marketing programs as a reduction of both product revenue and cost of product revenue. | ||||||||
Service Fee Revenue Activity | ||||||||
The Company’s service fee revenue relates to its distribution services, order management/customer care services, professional and technology services and the reimbursement of out-of-pocket and third-party expenses. The Company typically charges its service fee revenue on either a cost-plus basis, a percent of shipped revenue basis or a per transaction basis, such as a per item basis for fulfillment services or a per labor hour basis for web-enabled customer contact center services. Additional fees are billed for other services. | ||||||||
The Company evaluates its contractual arrangements to determine whether or not they include multiple service elements. Revenue recognition is determined for the separate service elements of the contract in accordance with the requirements of Accounting Standards Codification 605, “Revenue Recognition.” A deliverable constitutes a separate unit of accounting when it has standalone value and there are no return rights or other contingencies present for the delivered elements. The Company allocates revenue to each element based on estimated selling price. Each of the Company’s client contracts, and the related services, is unique, with individual needs and criteria customized for each client. Each client engagement is scoped and priced separately and as such the Company is not able to establish vendor specific objective evidence of fair value for its services, nor is third-party evidence is available to establish standalone selling prices. Accordingly the Company uses management’s best estimate of selling price for the deliverables. The Company establishes its estimates considering internal factors such as margin objectives, pricing practices and controls as well as market conditions such as competitor pricing strategies. | ||||||||
Distribution services relate primarily to inventory management, product receiving, warehousing and fulfillment (i.e., picking, packing and shipping) and facilities and operations management. Service fee revenue for these activities is recognized as earned, which is either (i) on a per transaction basis or (ii) at the time of product fulfillment, which occurs at the completion of the distribution services. | ||||||||
Order management/customer care services relate primarily to taking customer orders for the Company’s clients’ products. These services also include addressing customer questions related to orders, as well as cross-selling/up-selling activities. Service fee revenue for this activity is recognized as the services are rendered. Fees charged to the client are on a per transaction basis based on either (i) a pre-determined fee per order or fee per telephone minutes incurred, (ii) a per dedicated agent fee, or (iii) are included in the product fulfillment service fees that are recognized on product shipment. | ||||||||
Professional consulting and technology service revenues primarily relate to service and support of eCommerce platforms, website solutions and quality control for the Company’s clients. Additionally, the Company provides digital agency services that enable client marketing programs to attract new customers, convert buyers and increase website value. These fees are typically charged on either a per labor hour basis, a dedicated resource model, or a percent of merchandise shipped basis. Service fee revenue for this activity is generally recognized as the services are rendered. | ||||||||
The Company performs front-end set-up and integration services to support client eCommerce plaftorms and websites. When the Company determines these front-end set-up and integration services do not meet the criteria for recognition as a separate unit of accounting, the Company defers the start-up fees received and the related costs, and recognizes them over the contract term. See further discussion below. When the Company determines these front-end set-up and integration services do meet the criteria for recognition as a separate unit of accounting, for time and material arrangements, the Company recognizes revenue as services are rendered and costs as they are incurred. For fixed-price arrangements, the Company uses the completed contract method to recognize revenues and costs if reasonable and reliable cost estimates for a project cannot be made. If reasonable and reliable costs estimates for a project can be made, the Company recognizes revenue over the contract term on a proportional performance basis, as determined by the relationship of actual costs incurred compared to the estimated total contract costs. | ||||||||
The Company’s billings for reimbursement of out-of-pocket expenses, including travel and certain third-party vendor expenses such as shipping and handling costs and telecommunication charges, are included in pass-through revenue. The related reimbursable costs are reflected as cost of pass-through revenue. | ||||||||
The Company’s cost of service fee revenue, representing the cost to provide the services described above, is recognized as incurred. Cost of service fee revenue also includes certain costs associated with technology collaboration and ongoing technology support that include maintenance, web hosting and other ongoing programming activities. These activities are primarily performed to support the distribution and order management/customer care services and are recognized as incurred. | ||||||||
Accounts Receivable | ||||||||
The Company recognizes revenue and records trade accounts receivable, pursuant to the methods described above, when collectability is reasonably assured. Collectability is evaluated in the aggregate and on an individual customer or client basis taking into consideration payment due date, historical payment trends, current financial position, results of independent credit evaluations and payment terms. Related reserves are determined by either using percentages applied to certain aged receivable categories based on historical results, reevaluated and adjusted as additional information is received, or a specific identification method. After all attempts to collect a receivable have failed, the receivable is written off against the allowance for doubtful accounts. | ||||||||
Deferred Revenues and Deferred Costs | ||||||||
The Company primarily performs its services under multiple year contracts, certain of which include early termination provisions, and clients are obligated to pay for services performed. In conjunction with these long-term contracts, the Company sometimes receives start-up fees to cover its implementation costs, including certain technology infrastructure and development costs. When the Company determines that these start-up and integration activities do not meet the criteria for recognition as a separate unit of accounting, the Company defers the start-up fees received, and the related costs, and recognizes them over the contract term, which the Company believes is the best estimate of the expected relationship term. The amortization of deferred revenue is included as a component of service fee revenue. The amortization of deferred implementation costs is included as a cost of service fee revenue. To the extent implementation costs for non-technology infrastructure and development exceed the corresponding fees received, the excess costs are expensed as incurred. | ||||||||
Current and non-current deferred implementation costs, excluding technology and development costs, are a component of prepaid expenses and other current assets and other assets, respectively. | ||||||||
Investment in Subsidiaries | ' | |||||||
Investment in Subsidiaries | ||||||||
PFS has made advances to Supplies Distributors that are evidenced by a Subordinated Demand Note (the “Subordinated Note”). Under the terms of certain of the Company’s debt facilities, the outstanding balance of the Subordinated Note cannot be increased to more than $5.0 million or decreased to less than $2.5 million without prior approval of certain of the Company’s lenders. As of September 30, 2014 and December 31, 2013, the outstanding balance of the Subordinated Note was $2.5 million and $3.5 million, respectively. The Subordinated Note is eliminated in the Company’s consolidated financial statements. | ||||||||
PFS has also made advances to Retail Connect, which totaled $11.1 million at both September 30, 2014 and December 31, 2013, and to LAL, which totaled $0.4 million as of September 30, 2014. PFS has received the approval of its lender to advance incremental amounts to certain of its subsidiaries and/or affiliates, if needed, subject to certain financial covenants, as defined. PFSweb, Inc. has also advanced to Retail Connect an additional $8.5 million as of September 30, 2014 and December 31, 2013. All of these advances are eliminated upon consolidation. | ||||||||
Concentration of Business and Credit Risk | ' | |||||||
Concentration of Business and Credit Risk | ||||||||
No service fee client or product revenue customer represented more than 10% of the Company’s consolidated total net revenues during the nine months ended September 30, 2014 or the Company’s consolidated accounts receivable as of September 30, 2014. | ||||||||
A summary of the nonaffiliated customer and client concentrations is as follows: | ||||||||
Nine Months Ended | ||||||||
September 30, | ||||||||
2014 | 2013 | |||||||
Product Revenue (as a percentage of total Product Revenue): | ||||||||
Customer 1 | 13 | % | 15 | % | ||||
Customer 2 | 12 | % | 12 | % | ||||
Service Fee Revenue (as a percentage of total Service Fee Revenue): | ||||||||
Client 1 | — | 10 | % | |||||
The Company’s contractual relationship with Client 1 ended during 2013, and the Company currently anticipates that its product revenue from the customers identified above will decline during the next twelve months. | ||||||||
The Company has provided certain collateralized guarantees of its subsidiaries’ financings and credit arrangements. These subsidiaries’ ability to obtain financing on similar terms would be significantly impacted without these guarantees. | ||||||||
The Company has multiple arrangements with International Business Machines Corporation (“IBM”) and Ricoh. These arrangements include Supplies Distributors’ distributor agreements and certain of Supplies Distributors’ working capital financing agreements. The majority of Supplies Distributors’ revenue is generated by its sale of product purchased from Ricoh. Supplies Distributors also relies upon Ricoh’s sales force and product demand generation activities and the discontinuance of such services would have a material impact upon Supplies Distributors’ business. In addition, Supplies Distributors has product sales to IBM and Ricoh business affiliates. | ||||||||
As a result of certain operational restructuring of its business, Ricoh has implemented, and will continue to implement, certain changes in the sale and distribution of Ricoh products. The changes have resulted, and are expected to continue to result, in reduced revenues and profitability for Supplies Distributors. | ||||||||
Inventories | ' | |||||||
Inventories | ||||||||
Inventories (all of which are finished goods) are stated at the lower of weighted average cost or market. The Company establishes inventory reserves based upon estimates of declines in values due to inventories that are slow moving or obsolete, excess levels of inventory or values assessed at lower than cost. | ||||||||
Supplies Distributors assumes responsibility for slow-moving inventory under its Ricoh distributor agreements, subject to certain termination rights, but has the right to return product rendered obsolete by engineering changes, as defined. In the event PFS, Supplies Distributors and Ricoh terminate the distributor agreements, the agreements provide for the parties to mutually agree on a plan of disposition of Supplies Distributors’ then existing inventory. | ||||||||
Operating Leases | ' | |||||||
Operating Leases | ||||||||
The Company leases certain real estate for its warehouse, call center and corporate offices, as well as certain equipment, under non-cancelable operating leases that expire at various dates through 2024. Management expects that, in the normal course of business, leases that expire will be renewed or replaced by other similar leases. The Company recognizes escalating lease payments on a straight-line basis over the term of each respective lease with the difference between cash payments and rent expense recognized being recorded as deferred rent in the accompanying consolidated balance sheets. | ||||||||
Property and Equipment | ' | |||||||
Property and Equipment | ||||||||
The Company’s property held under capital leases totaled approximately $5.3 million and $4.0 million, net of accumulated amortization of approximately $4.5 million and $4.4 million, at September 30, 2014 and December 31, 2013, respectively. Depreciation and amortization expense related to capital leases during the nine months ended September 30, 2014 and 2013 was $1.9 million and $2.0 million, respectively. | ||||||||
Income Taxes | ' | |||||||
Income Taxes | ||||||||
The Company records a tax provision primarily associated with state income taxes and its foreign operations. The Company has recorded a valuation allowance for the majority of its net deferred tax assets, which are primarily related to its net operating loss carryforwards and certain foreign deferred tax assets. | ||||||||
Cash Paid for Interest and Taxes | ' | |||||||
Cash Paid for Interest and Taxes | ||||||||
The Company made payments for interest of approximately $0.5 million and $0.6 million in the nine month periods ended September 30, 2014 and 2013, respectively. Income taxes of approximately $0.4 million and $0.5 million were paid by the Company during the nine month periods ended September 30, 2014 and 2013, respectively. | ||||||||
Impact of Recently Issued Accounting Standards | ' | |||||||
Impact of Recently Issued Accounting Standards | ||||||||
In May 2014, the Financial Accounting Standards Board (the “FASB”) issued ASU 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which outlines a single, comprehensive model for entities to use in accounting for revenue arising from contracts with customers. ASU 2014-09 is applicable for fiscal years beginning after December 15, 2016, including interim periods therein, and can be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. Early adoption is not permitted. The Company is currently evaluating the impact of the new guidance on the consolidated financial statements and related disclosures. |
Overview_and_Basis_of_Presenta1
Overview and Basis of Presentation (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
REV | ' | |||||||||||||
Business Acquisition [Line Items] | ' | |||||||||||||
Schedule of Purchase Price Allocation for Acquisitions | ' | |||||||||||||
The Company is in the process of finalizing the purchase price allocation and, accordingly, the following preliminary allocation of the purchase price is subject to adjustment (in thousands): | ||||||||||||||
Cash and cash equivalents | $ | 764 | ||||||||||||
Accounts receivable | 1,750 | |||||||||||||
Property and equipment | 182 | |||||||||||||
Other assets | 403 | |||||||||||||
Total assets acquired | 3,099 | |||||||||||||
Total liabilities assumed | 656 | |||||||||||||
Net assets acquired | 2,443 | |||||||||||||
Total purchase price | 6,143 | |||||||||||||
Goodwill and intangible assets acquired | $ | 3,700 | ||||||||||||
Schedule of Estimated Purchase Price | ' | |||||||||||||
The estimated purchase price for REV is as follows (in thousands): | ||||||||||||||
Aggregate cash payments | 2,612 | |||||||||||||
Performance-based contingent payments and shareholders’ equity related adjustment | 3,531 | |||||||||||||
Total purchase price | $ | 6,143 | ||||||||||||
LAL | ' | |||||||||||||
Business Acquisition [Line Items] | ' | |||||||||||||
Schedule of Purchase Price Allocation for Acquisitions | ' | |||||||||||||
The Company is in the process of finalizing the purchase price allocation and, accordingly, the following allocation of the purchase price is subject to adjustment (in thousands): | ||||||||||||||
Cash | $ | 125 | ||||||||||||
Accounts receivable, net | 1,183 | |||||||||||||
Property and equipment | 253 | |||||||||||||
Other assets | -186 | |||||||||||||
Total assets acquired | 1,375 | |||||||||||||
Total liabilities assumed | 848 | |||||||||||||
Net assets acquired | 527 | |||||||||||||
Total purchase price | 6,678 | |||||||||||||
Goodwill and intangible assets acquired | $ | 6,151 | ||||||||||||
Schedule of Estimated Purchase Price | ' | |||||||||||||
The estimated purchase price for LAL is as follows (in thousands, except share data): | ||||||||||||||
Number of shares of common stock issued | 54,604 | |||||||||||||
Multiplied by PFSweb, Inc.'s stock price | $ | 9.96 | ||||||||||||
Share consideration | $ | 544 | ||||||||||||
Aggregate cash payments | 4,000 | |||||||||||||
Performance-based contingent payments and shareholders’ equity related adjustment | 2,134 | |||||||||||||
Total purchase price | $ | 6,678 | ||||||||||||
REV and LAL | ' | |||||||||||||
Business Acquisition [Line Items] | ' | |||||||||||||
Schedule of Pro Forma Information for Comparative Purposes Assuming Acquisition | ' | |||||||||||||
The following table presents selected pro forma information, for comparative purposes, assuming the acquisitions of REV and LAL had occurred on January 1, 2013 (unaudited) (in thousands, except per share amounts): | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Total revenues | $ | 60,938 | $ | 57,848 | $ | 179,719 | $ | 184,869 | ||||||
Net loss | -411 | -1,345 | -3,869 | -4,617 | ||||||||||
Basic and diluted loss per share | -0.02 | -0.08 | -0.23 | -0.32 | ||||||||||
Significant_Accounting_Policie2
Significant Accounting Policies (Tables) | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Accounting Policies [Abstract] | ' | |||||||
Summary of Non-affiliated Customer and Client Concentrations | ' | |||||||
A summary of the nonaffiliated customer and client concentrations is as follows: | ||||||||
Nine Months Ended | ||||||||
September 30, | ||||||||
2014 | 2013 | |||||||
Product Revenue (as a percentage of total Product Revenue): | ||||||||
Customer 1 | 13 | % | 15 | % | ||||
Customer 2 | 12 | % | 12 | % | ||||
Service Fee Revenue (as a percentage of total Service Fee Revenue): | ||||||||
Client 1 | — | 10 | % | |||||
Debt_and_Capital_Lease_Obligat1
Debt and Capital Lease Obligations (Tables) | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Debt Disclosure [Abstract] | ' | |||||||
Summary of Outstanding Debt and Capital Lease Obligations | ' | |||||||
Outstanding debt and capital lease obligations consist of the following (in thousands): | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Loan and security agreements | ||||||||
Supplies Distributors | $ | 3,659 | $ | 3,776 | ||||
PFS | 1,123 | 1,473 | ||||||
Master lease agreements | 6,198 | 4,973 | ||||||
Other | 324 | 885 | ||||||
Total | 11,304 | 11,107 | ||||||
Less current portion of long-term debt | 7,428 | 8,231 | ||||||
Long-term debt, less current portion | $ | 3,876 | $ | 2,876 | ||||
Segment_Information_Tables
Segment Information (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||||||
Summary of Product Revenue by Segments | ' | |||||||||||||||
The Company is currently organized into two primary operating segments, which generally align with the corporate organization structure. In the first segment, PFSweb is an international provider of various business process outsourcing solutions and operates as a service fee business. In the second operating segment (“Business and Retail Connect”), subsidiaries of the Company purchase inventory from clients and resell the inventory to client customers. In this segment, the Company generally recognizes product revenue. | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Revenues (in thousands): | ||||||||||||||||
PFSweb | $ | 39,754 | $ | 32,471 | $ | 111,645 | $ | 106,846 | ||||||||
Business and Retail Connect | 20,627 | 23,592 | 67,482 | 75,610 | ||||||||||||
Eliminations | (3,286 | ) | (2,510 | ) | (10,760 | ) | (7,577 | ) | ||||||||
$ | 57,095 | $ | 53,553 | $ | 168,367 | $ | 174,879 | |||||||||
Income (loss) from operations (in thousands): | ||||||||||||||||
PFSweb | $ | (2,817 | ) | $ | (1,823 | ) | $ | (7,347 | ) | $ | (5,153 | ) | ||||
Business and Retail Connect | 400 | 153 | 1,312 | 646 | ||||||||||||
$ | (2,417 | ) | $ | (1,670 | ) | $ | (6,035 | ) | $ | (4,507 | ) | |||||
Depreciation and amortization (in thousands): | ||||||||||||||||
PFSweb | $ | 2,839 | $ | 2,399 | $ | 8,520 | $ | 7,417 | ||||||||
Business and Retail Connect | 42 | 39 | 129 | 116 | ||||||||||||
$ | 2,881 | $ | 2,438 | $ | 8,649 | $ | 7,533 | |||||||||
Capital expenditures (in thousands): | ||||||||||||||||
PFSweb | $ | 1,396 | $ | 2,028 | $ | 4,298 | $ | 5,174 | ||||||||
Business and Retail Connect | 8 | 55 | 31 | 71 | ||||||||||||
$ | 1,404 | $ | 2,083 | $ | 4,329 | $ | 5,245 | |||||||||
September 30, | December 31, | |||||||||||||||
2014 | 2013 | |||||||||||||||
Assets (in thousands): | ||||||||||||||||
PFSweb | $ | 98,265 | $ | 98,745 | ||||||||||||
Business and Retail Connect | 40,623 | 47,116 | ||||||||||||||
Eliminations | (10,434 | ) | (13,825 | ) | ||||||||||||
$ | 128,454 | $ | 132,036 | |||||||||||||
Overview_and_Basis_of_Presenta2
Overview and Basis of Presentation - Additional Information (Details) (USD $) | 3 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | |||||
Sep. 30, 2014 | Dec. 31, 2013 | Sep. 03, 2014 | Sep. 22, 2014 | Oct. 31, 2014 | Sep. 03, 2014 | Sep. 03, 2014 | Sep. 22, 2014 | Sep. 22, 2014 | |
REV | LAL | Subsequent Event | 2014 Earn-out Payments | 2015 Earn-out Payments | 2015 Earn-out Payments | 2015 Earn-out Payments | |||
REV | REV | REV | LAL | LAL | |||||
Maximum | |||||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Consideration paid | ' | ' | $2,612,000 | $4,000,000 | $500,000 | ' | ' | ' | ' |
Earn-out payments, minimum | ' | ' | ' | ' | ' | 1,400,000 | ' | 0 | ' |
Earn-out payments, maximum | ' | ' | ' | ' | ' | 3,250,000 | ' | 3,000,000 | ' |
Earn-out payable in common stock | ' | ' | ' | ' | ' | 200,000 | 300,000 | ' | ' |
Common stock, shares issued | 16,842,450 | 16,540,904 | ' | 54,604 | ' | ' | ' | ' | ' |
Share consideration | ' | ' | ' | 544,000 | ' | ' | ' | ' | ' |
Percentage of common stock Issuable | ' | ' | ' | ' | ' | ' | ' | ' | 25.00% |
Total acquisition related costs for REV and LAL | $1,400,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Overview_and_Basis_of_Presenta3
Overview and Basis of Presentation - Schedule of Purchase price Allocation for Acquisition (Details) (USD $) | 0 Months Ended | |
In Thousands, unless otherwise specified | Sep. 03, 2014 | Sep. 22, 2014 |
REV | LAL | |
Business Acquisition [Line Items] | ' | ' |
Cash and cash equivalents | $764 | $125 |
Accounts receivable | 1,750 | 1,183 |
Property and equipment | 182 | 253 |
Other assets | 403 | -186 |
Total assets acquired | 3,099 | 1,375 |
Total liabilities assumed | 656 | 848 |
Net assets acquired | 2,443 | 527 |
Total purchase price | 6,143 | 6,678 |
Goodwill and intangible assets acquired | $3,700 | $6,151 |
Overview_and_Basis_of_Presenta4
Overview and Basis of Presentation - Schedule of Estimated Purchase Price (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 03, 2014 | Sep. 22, 2014 |
In Thousands, except Share data, unless otherwise specified | REV | LAL | ||
Business Acquisition [Line Items] | ' | ' | ' | ' |
Aggregate cash payments | ' | ' | $2,612 | $4,000 |
Common stock, shares issued | 16,842,450 | 16,540,904 | ' | 54,604 |
Multiplied by PFSweb, Inc.'s stock price | ' | ' | ' | $9.96 |
Share consideration | ' | ' | ' | 544 |
Performance-based contingent payments and shareholders’ equity related adjustment | ' | ' | 3,531 | 2,134 |
Total purchase price | ' | ' | $6,143 | $6,678 |
Overview_and_Basis_of_Presenta5
Overview and Basis of Presentation - Schedule of Pro Forma Information for Comparative Purpose Assuming Acquisition (Details) (REV and LAL, USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
REV and LAL | ' | ' | ' | ' |
Business Acquisition [Line Items] | ' | ' | ' | ' |
Total revenues | $60,938 | $57,848 | $179,719 | $184,869 |
Net loss | ($411) | ($1,345) | ($3,869) | ($4,617) |
Basic and diluted loss per share | ($0.02) | ($0.08) | ($0.23) | ($0.32) |
Significant_Accounting_Policie3
Significant Accounting Policies - Additional Information (Details) (USD $) | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 |
Significant Accounting Policies (Textual) [Abstract] | ' | ' | ' |
Capital leases | $5.30 | ' | $4 |
Significant Accounting Policies (Additional Textual) [Abstract] | ' | ' | ' |
Maximum life of current operating leases | 'expire at various dates through 2024 | ' | ' |
Accumulated amortization | 4.5 | ' | 4.4 |
Depreciation and amortization related to capital leases | 1.9 | 2 | ' |
Payments for interest | 0.5 | 0.6 | ' |
Income taxes | 0.4 | 0.5 | ' |
Sales revenue, Product Line and Services | ' | ' | ' |
Significant Accounting Policies (Textual) [Abstract] | ' | ' | ' |
Number of customers representing more than 10% of consolidated total net revenues or account receivable | 0 | ' | ' |
Service fee activity | ' | ' | ' |
Significant Accounting Policies (Additional Textual) [Abstract] | ' | ' | ' |
Contractual relationship end date | '2013 | ' | ' |
PFS | Pfsweb Retail Connect Inc | ' | ' | ' |
Significant Accounting Policies (Textual) [Abstract] | ' | ' | ' |
Advances to retail connect | 11.1 | ' | 11.1 |
PFS | LAL | ' | ' | ' |
Significant Accounting Policies (Textual) [Abstract] | ' | ' | ' |
Advances to retail connect | 0.4 | ' | ' |
Pfsweb | Pfsweb Retail Connect Inc | ' | ' | ' |
Significant Accounting Policies (Textual) [Abstract] | ' | ' | ' |
Advances to retail connect | 8.5 | ' | 8.5 |
Maximum | ' | ' | ' |
Significant Accounting Policies (Textual) [Abstract] | ' | ' | ' |
Subordinated note outstanding | 5 | ' | ' |
Maximum | Sales Revenue Product Line | ' | ' | ' |
Significant Accounting Policies (Textual) [Abstract] | ' | ' | ' |
Revenue Percentage | 10.00% | ' | ' |
Maximum | Sales Revenue, Services, Net | ' | ' | ' |
Significant Accounting Policies (Textual) [Abstract] | ' | ' | ' |
Revenue Percentage | 10.00% | ' | ' |
Minimum | ' | ' | ' |
Significant Accounting Policies (Textual) [Abstract] | ' | ' | ' |
Subordinated note outstanding | 2.5 | ' | ' |
Consolidation Eliminations | ' | ' | ' |
Significant Accounting Policies (Textual) [Abstract] | ' | ' | ' |
Subordinated note outstanding | $2.50 | ' | $3.50 |
Significant_Accounting_Policie4
Significant Accounting Policies - Summary of Non-affiliated Customer and Client Concentrations (Details) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Sales Revenue Product Line | Customer 1 | ' | ' |
Concentration Risk [Line Items] | ' | ' |
Revenue Percentage | 13.00% | 15.00% |
Sales Revenue Product Line | Customer 2 | ' | ' |
Concentration Risk [Line Items] | ' | ' |
Revenue Percentage | 12.00% | 12.00% |
Sales Revenue, Services, Net | Client 1 | ' | ' |
Concentration Risk [Line Items] | ' | ' |
Revenue Percentage | ' | 10.00% |
Net_Loss_Per_Common_Share_Addi
Net Loss Per Common Share - Additional Information (Details) (Stock Option) | 9 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Stock Option | ' | ' |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ' | ' |
Anti-dilutive stock options diluted net loss per share | 1.8 | 2.2 |
Stock_and_Stock_Options_Additi
Stock and Stock Options - Additional Information (Details) (USD $) | 3 Months Ended | 9 Months Ended | 9 Months Ended | 12 Months Ended | 1 Months Ended | 9 Months Ended | ||||||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | 31-May-13 | 31-May-13 | Sep. 30, 2014 | Sep. 30, 2014 |
General and Administrative Expense | General and Administrative Expense | 2014 Award Plan | Common Stock | Common Stock | 2014 award program | 2014 award program | ||||||
Performance Shares | Private Placement | 2014 Award Plan | 2014 Award Plan | |||||||||
Performance Shares | Performance Shares | |||||||||||
Maximum | ||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of common stock, Shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,200,000 | ' | ' |
Common stock, par value | $0.00 | ' | $0.00 | ' | $0.00 | ' | ' | ' | $0.00 | ' | ' | ' |
Share price of common stock sold | ' | ' | ' | ' | ' | ' | ' | ' | $4.57 | ' | ' | ' |
Net proceeds from issuance of common stock | ' | ' | $1,018 | $14,453 | ' | ' | ' | ' | $14,100 | ' | ' | ' |
Stock options issued | ' | ' | 179,500 | ' | ' | ' | ' | 600,000 | ' | ' | ' | ' |
Stock options and stock option plans vesting terms period | ' | ' | '3 years | ' | ' | ' | ' | '4 years | ' | ' | '4 years | ' |
Share awards, maximum number of shares that may be issued | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 300,000 |
Stock based compensation expense | $853 | $610 | $2,509 | $1,195 | ' | $2,500 | $1,200 | ' | ' | ' | ' | ' |
Vendor_Financing_Additional_In
Vendor Financing - Additional Information (Details) (USD $) | 9 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2013 |
Minimum | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Subordinated note outstanding | $2.50 | ' |
Supplies Distributors | Minimum | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Subordinated note outstanding | 2.5 | ' |
Vendor Financing (Textual) [Abstract] | ' | ' |
Interest rate on outstanding borrowings | 3.00% | ' |
Supplies Distributors | Prime Rate | Minimum | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Credit facility accrue interest, prime rate plus | 0.25% | ' |
United States | IBM Credit LLC | Supplies Distributors | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Maximum financing receivable capacity through agreement thereafter | 15 | ' |
Notice period time to exit from the agreement | 'The agreement has no stated maturity date and provides either party the ability to exit the facility following a 90-day notice. | ' |
Outstanding amount of inventory purchases repaid with in twelve months | 10.6 | 9.8 |
Available credit | 2.3 | ' |
Minimum shareholders' equity required to maintain | 18 | ' |
Vendor Financing (Textual) [Abstract] | ' | ' |
Interest rate on outstanding borrowings | 3.75% | ' |
United States | IBM Credit LLC | Supplies Distributors | Minimum | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Subordinated note outstanding | $2.50 | ' |
United States | IBM Credit LLC | Supplies Distributors | Prime Rate | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Credit facility accrue interest, prime rate plus | 0.50% | ' |
Debt_and_Capital_Lease_Obligat2
Debt and Capital Lease Obligations - Summary of Outstanding Debt and Capital Lease Obligations (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Debt Instrument [Line Items] | ' | ' |
Debt and capital lease obligation | $11,304 | $11,107 |
Current portion of long-term debt and capital lease obligations | 7,428 | 8,231 |
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS, less current portion | 3,876 | 2,876 |
Loan And Security Agreements | Supplies Distributors | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Debt and capital lease obligation | 3,659 | 3,776 |
Loan And Security Agreements | PFS | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Debt and capital lease obligation | 1,123 | 1,473 |
Other | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Debt and capital lease obligation | 324 | 885 |
Master Lease Agreements | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Debt and capital lease obligation | $6,198 | $4,973 |
Debt_and_Capital_Lease_Obligat3
Debt and Capital Lease Obligations - Loan and Security Agreement - Supplies Distributors - Additional Information (Details) (USD $) | 9 Months Ended | 12 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2013 |
Supplies Distributors | ' | ' |
Debt and Capital Lease Obligations [Abstract] | ' | ' |
Maximum limit of loans and security agreement | $12 | ' |
Credit facility available under Loans and Security Agreement | 2 | ' |
Maturity date of Loan and Security Agreement | 1-Mar-16 | ' |
Three Percentage Interest Rate Debt Instrument | Supplies Distributors | ' | ' |
Debt and Capital Lease Obligations [Abstract] | ' | ' |
Interest rate on outstanding borrowings | 3.00% | ' |
Outstanding borrowing | 1 | ' |
Three Point Seven Five Percentage Interest Rate Debt Instrument | Supplies Distributors | ' | ' |
Debt and Capital Lease Obligations [Abstract] | ' | ' |
Interest rate on outstanding borrowings | 3.75% | 3.75% |
Outstanding borrowing | 2.7 | ' |
Minimum | ' | ' |
Debt and Capital Lease Obligations [Abstract] | ' | ' |
Subordinated note outstanding | 2.5 | ' |
Minimum | Supplies Distributors | ' | ' |
Debt and Capital Lease Obligations [Abstract] | ' | ' |
Interest rate on outstanding borrowings | 3.00% | ' |
Subordinated note outstanding | 2.5 | ' |
Maximum | ' | ' |
Debt and Capital Lease Obligations [Abstract] | ' | ' |
Subordinated note outstanding | 5 | ' |
Maximum | Supplies Distributors | ' | ' |
Debt and Capital Lease Obligations [Abstract] | ' | ' |
Maximum limit of restricted cash | $5 | ' |
Prime Rate | Minimum | Supplies Distributors | ' | ' |
Debt and Capital Lease Obligations [Abstract] | ' | ' |
Credit facility accrue interest, prime rate plus | 0.25% | ' |
Prime Rate | Maximum | Supplies Distributors | ' | ' |
Debt and Capital Lease Obligations [Abstract] | ' | ' |
Credit facility accrue interest, prime rate plus | 0.75% | ' |
Eurodollar | Minimum | Supplies Distributors | ' | ' |
Debt and Capital Lease Obligations [Abstract] | ' | ' |
Credit facility accrue interest, prime rate plus | 2.50% | ' |
Eurodollar | Maximum | Supplies Distributors | ' | ' |
Debt and Capital Lease Obligations [Abstract] | ' | ' |
Credit facility accrue interest, prime rate plus | 3.00% | ' |
Debt_and_Capital_Lease_Obligat4
Debt and Capital Lease Obligations - Loan and Security Agreement - PFS - Additional Information (Details) (USD $) | 9 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2014 |
PFS | ' |
Debt and Capital Lease Obligations [Abstract] | ' |
Tangible net worth | $20 |
Maximum | ' |
Debt and Capital Lease Obligations [Abstract] | ' |
Subordinated note outstanding | 5 |
Maximum | PFS | ' |
Debt and Capital Lease Obligations [Abstract] | ' |
Subordinated note outstanding | 5 |
Working Capital Advances | ' |
Debt and Capital Lease Obligations [Abstract] | ' |
Maximum limit of working capital advances | 17 |
Working Capital Advances and Equipment Advances interest at prime rate plus, Stated percentage | 4.25% |
Credit facility available under Loans and Security Agreement | 16.9 |
Working Capital Non-seasonal Advances | ' |
Debt and Capital Lease Obligations [Abstract] | ' |
Maximum limit of working capital advances | 20 |
Equipment Advances | ' |
Debt and Capital Lease Obligations [Abstract] | ' |
Working Capital Advances and Equipment Advances interest at prime rate plus, Stated percentage | 4.75% |
Maximum limit of loans and security agreement | 2 |
Credit facility available under Loans and Security Agreement | $1.50 |
Equipment Advances maturity date | 15-Sep-17 |
Prime Rate | Working Capital Advances | ' |
Debt and Capital Lease Obligations [Abstract] | ' |
Working Capital Advances and Equipment Advances interest at prime rate plus, Spread on variable rate | 1.00% |
Prime Rate | Equipment Advances | ' |
Debt and Capital Lease Obligations [Abstract] | ' |
Working Capital Advances and Equipment Advances interest at prime rate plus, Spread on variable rate | 1.50% |
Debt_and_Capital_Lease_Obligat5
Debt and Capital Lease Obligations - Factoring Agreement - Additional Information (Details) (BNP Paribas Fortis Factor) | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 |
In Millions, unless otherwise specified | USD ($) | EUR (€) | USD ($) | Euribor Plus | Pre Euribor |
Debt and Capital Lease Obligations [Abstract] | ' | ' | ' | ' | ' |
Maximum limit of loans and security agreement | $9.40 | € 7.50 | ' | ' | ' |
Outstanding borrowing | 0 | ' | 0 | ' | ' |
Credit facility available under Loans and Security Agreement | $0.60 | € 0.50 | ' | ' | ' |
Factoring interest at Euribor plus, effective percentage | ' | ' | ' | 0.70% | ' |
Working Capital Advances and Equipment Advances interest at prime rate plus, Spread on variable rate | ' | ' | ' | ' | 0.70% |
Debt_and_Capital_Lease_Obligat6
Debt and Capital Lease Obligations - Master Lease Agreements - Additional Information (Details) (Master Lease Agreements) | 9 Months Ended |
Sep. 30, 2014 | |
Minimum | ' |
Debt and Capital Lease Obligations [Abstract] | ' |
Loans and lease agreement term | '3 years |
Maximum | ' |
Debt and Capital Lease Obligations [Abstract] | ' |
Loans and lease agreement term | '5 years |
Segment_Information_Additional
Segment Information - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2014 | |
Segment | |
Segment Reporting [Abstract] | ' |
Number of operating segments | 2 |
Segment_Information_Summary_of
Segment Information - Summary of Product Revenue by Segments (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 |
Summary of product revenue by segments | ' | ' | ' | ' | ' |
Revenues | $57,095 | $53,553 | $168,367 | $174,879 | ' |
Income (loss) from operations | -2,417 | -1,670 | -6,035 | -4,507 | ' |
Depreciation and amortization | 2,881 | 2,438 | 8,649 | 7,533 | ' |
Capital expenditures | 1,404 | 2,083 | 4,329 | 5,245 | ' |
Assets | 128,454 | ' | 128,454 | ' | 132,036 |
Operating Segments | Pfsweb | ' | ' | ' | ' | ' |
Summary of product revenue by segments | ' | ' | ' | ' | ' |
Revenues | 39,754 | 32,471 | 111,645 | 106,846 | ' |
Income (loss) from operations | -2,817 | -1,823 | -7,347 | -5,153 | ' |
Depreciation and amortization | 2,839 | 2,399 | 8,520 | 7,417 | ' |
Capital expenditures | 1,396 | 2,028 | 4,298 | 5,174 | ' |
Assets | 98,265 | ' | 98,265 | ' | 98,745 |
Operating Segments | Business and Retail Connect | ' | ' | ' | ' | ' |
Summary of product revenue by segments | ' | ' | ' | ' | ' |
Revenues | 20,627 | 23,592 | 67,482 | 75,610 | ' |
Income (loss) from operations | 400 | 153 | 1,312 | 646 | ' |
Depreciation and amortization | 42 | 39 | 129 | 116 | ' |
Capital expenditures | 8 | 55 | 31 | 71 | ' |
Assets | 40,623 | ' | 40,623 | ' | 47,116 |
Eliminations | ' | ' | ' | ' | ' |
Summary of product revenue by segments | ' | ' | ' | ' | ' |
Revenues | -3,286 | -2,510 | -10,760 | -7,577 | ' |
Assets | ($10,434) | ' | ($10,434) | ' | ($13,825) |
Commitments_and_Contingencies_
Commitments and Contingencies - Additional Information (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Apr. 30, 2010 |
Pending Litigation | |||
Ecost Product Sale | |||
Commitments and Contingencies (Textual) [Abstract] | ' | ' | ' |
eCOST deposit account | $4,262,000 | $5,241,000 | $620,000 |