Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Nov. 05, 2016 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Trading Symbol | PFSW | |
Entity Registrant Name | PFSWEB INC | |
Entity Central Index Key | 1,095,315 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 18,706,633 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 15,699 | $ 21,781 |
Restricted cash | 219 | 275 |
Accounts receivable, net of allowance for doubtful accounts of $539 and $600 at September 30, 2016 and December 31, 2015, respectively | 64,934 | 70,700 |
Inventories, net of reserves of $585 and $739 at September 30, 2016 and December 31, 2015, respectively | 7,155 | 9,262 |
Other receivables | 4,821 | 8,704 |
Prepaid expenses and other current assets | 5,017 | 5,662 |
Total current assets | 97,845 | 116,384 |
PROPERTY AND EQUIPMENT, net | 28,812 | 24,093 |
IDENTIFIABLE INTANGIBLES, net | 8,125 | 8,810 |
GOODWILL | 45,929 | 39,829 |
OTHER ASSETS | 2,433 | 2,174 |
Total assets | 183,144 | 191,290 |
CURRENT LIABILITIES: | ||
Current portion of long-term debt and capital lease obligations | 5,672 | 3,153 |
Trade accounts payable | 38,009 | 51,170 |
Deferred revenue | 6,238 | 7,390 |
Performance-based contingent payments | 11,679 | |
Accrued expenses | 25,109 | 30,563 |
Total current liabilities | 75,028 | 103,955 |
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS, less current portion | 54,749 | 32,238 |
DEFERRED REVENUE | 4,280 | 4,499 |
DEFERRED RENT | 4,849 | 4,362 |
PERFORMANCE-BASED CONTINGENT PAYMENTS | 380 | 2,478 |
Total liabilities | 139,286 | 147,532 |
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; 18,740,100 and 18,136,218 shares issued at September 30, 2016 and December 31, 2015, respectively; and 18,706,633 and 18,102,751 outstanding at September 30, 2016 and December 31, 2015, respectively | 19 | 18 |
Additional paid-in capital | 145,045 | 141,948 |
Accumulated deficit | (101,760) | (97,787) |
Accumulated other comprehensive income (loss) | 679 | (296) |
Treasury stock at cost, 33,467 shares | (125) | (125) |
Total shareholders’ equity | 43,858 | 43,758 |
Total liabilities and shareholders’ equity | $ 183,144 | $ 191,290 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Statement Of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 539 | $ 600 |
Inventories reserves | $ 585 | $ 739 |
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 | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 35,000,000 | 35,000,000 |
Common stock, shares issued | 18,740,100 | 18,136,218 |
Common stock, shares outstanding | 18,706,633 | 18,102,751 |
Treasury stock, shares | 33,467 | 33,467 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
REVENUES: | ||||
Service fee revenue | $ 53,788 | $ 45,528 | $ 154,271 | $ 121,311 |
Product revenue, net | 11,671 | 14,419 | 36,658 | 44,731 |
Pass-through revenue | 14,451 | 11,236 | 41,259 | 32,163 |
Total revenues | 79,910 | 71,183 | 232,188 | 198,205 |
COSTS OF REVENUES: | ||||
Cost of service fee revenue | 36,903 | 30,193 | 103,547 | 81,993 |
Cost of product revenue | 10,994 | 13,702 | 34,649 | 42,321 |
Cost of pass-through revenue | 14,451 | 11,236 | 41,259 | 32,163 |
Total costs of revenues | 62,348 | 55,131 | 179,455 | 156,477 |
Gross profit | 17,562 | 16,052 | 52,733 | 41,728 |
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES, including stock based compensation of $347 and $1,492 for the three months ended September 30, 2016 and 2015, respectively, and $1,743 and $3,446 for the nine months ended September 30, 2016 and 2015, respectively | 17,568 | 18,778 | 53,926 | 47,068 |
Loss from operations | (6) | (2,726) | (1,193) | (5,340) |
INTEREST EXPENSE, net | 714 | 706 | 1,807 | 1,247 |
Loss from operations before income taxes | (720) | (3,432) | (3,000) | (6,587) |
INCOME TAX EXPENSE, net | 319 | 238 | 973 | 676 |
NET LOSS | $ (1,039) | $ (3,670) | $ (3,973) | $ (7,263) |
NET LOSS PER SHARE: | ||||
Basic | $ (0.06) | $ (0.21) | $ (0.21) | $ (0.42) |
Diluted | $ (0.06) | $ (0.21) | $ (0.21) | $ (0.42) |
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: | ||||
Basic | 18,699 | 17,829 | 18,552 | 17,449 |
Diluted | 18,699 | 17,829 | 18,552 | 17,449 |
COMPREHENSIVE LOSS: | ||||
Net loss | $ (1,039) | $ (3,670) | $ (3,973) | $ (7,263) |
Foreign currency translation adjustment | 680 | (89) | 976 | (757) |
TOTAL COMPREHENSIVE LOSS | $ (359) | $ (3,759) | $ (2,997) | $ (8,020) |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Operations (Parenthetical) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Income Statement [Abstract] | ||||
Stock based compensation | $ 347 | $ 1,492 | $ 1,743 | $ 3,446 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (3,973) | $ (7,263) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 11,206 | 10,645 |
Amortization of debt issuance costs | 109 | |
Provision for doubtful accounts | 16 | 53 |
Provision for excess and obsolete inventory | 21 | 75 |
Deferred income taxes | 57 | 125 |
Stock-based compensation expense | 1,743 | 3,446 |
Non-cash compensation expense | 131 | |
Change in performance-based contingent payments | (2,638) | 403 |
Changes in operating assets and liabilities: | ||
Restricted cash | 34 | |
Accounts receivable | 7,651 | 13,077 |
Inventories | 2,106 | 1,690 |
Prepaid expenses, other receivables and other assets | 4,843 | 4,583 |
Deferred rent | 906 | (421) |
Accounts payable, deferred revenue, accrued expenses and other liabilities | (24,412) | (18,289) |
Net cash (used in) provided by operating activities | (2,365) | 8,289 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property and equipment | (7,532) | (3,468) |
Acquisitions, net of cash acquired | (8,320) | (31,619) |
Net cash used in investing activities | (15,852) | (35,087) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Net proceeds from issuance of common stock | 1,073 | 1,328 |
Decrease in restricted cash | 56 | 434 |
Payments on performance-based contingent payments | (9,454) | (2,043) |
Payments on capital lease obligations | (2,210) | (1,687) |
Taxes paid on-behalf of employees for withheld shares | (1,307) | (588) |
Payments on debt, net | (384) | (6,306) |
Borrowings on term loan | 20,000 | 10,000 |
Borrowings on revolver | 61,906 | 30,000 |
Payments on revolver | (58,188) | (7,800) |
Debt issuance costs | (634) | |
Net cash provided by financing activities | 11,492 | 22,704 |
EFFECT OF EXCHANGE RATES ON CASH AND CASH EQUIVALENTS | 643 | (1,034) |
NET DECREASE IN CASH AND CASH EQUIVALENTS | (6,082) | (5,128) |
CASH AND CASH EQUIVALENTS, beginning of period | 21,781 | 18,128 |
CASH AND CASH EQUIVALENTS, end of period | 15,699 | 13,000 |
Non-cash investing and financing activities: | ||
Property and equipment acquired under long-term debt and capital leases | $ 3,890 | $ 3,703 |
Overview and Basis of Presentat
Overview and Basis of Presentation | 9 Months Ended |
Sep. 30, 2016 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Overview and Basis of Presentation | 1. OVERVIEW AND BASIS OF PRESENTATION PFSweb, Inc. and its direct and indirect 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.; “Moda” refers to Moda Superbe Limited; “CrossView” refers to CrossView, Inc.; “Conexus” refers to Conexus Limited and “PFSweb” refers to PFSweb, Inc. and its subsidiaries, excluding Supplies Distributors and Retail Connect. PFSweb Overview PFSweb is a global provider of omni-channel commerce solutions, including a broad range of technology, infrastructure and professional services, to major brand name companies and others seeking to optimize their supply chain and to enhance their online and traditional business channels and initiatives in the United States, Canada, and Europe. PFSweb’s service offerings include website design, creation and integration, digital agency and 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 to fund certain 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. Supplies Distributors also maintains agreements with certain additional clients where it operates as an agent for the resale of product between the client and the clients’ customer, and records product revenue net of cost of product revenue as a component of service fee revenue. PFSweb also provides various transaction management services to Supplies Distributors under these arrangements. All of the agreements between PFSweb and Supplies Distributors were made in the context of an affiliate relationship and were negotiated in the overall context of PFSweb’s and Supplies Distributors’ arrangement with the client or vendor. 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. Basis of Presentation The interim condensed consolidated financial statements as of September 30, 2016, and for the three and nine months ended September 30, 2016 and 2015, 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 condensed consolidated financial statements of the Company include all adjustments necessary for a fair presentation of the Company’s financial position as of September 30, 2016, its results of operations for the three and nine months ended September 30, 2016 and 2015 and its cash flows for the nine months ended September 30, 2016 and 2015. Certain prior-year amounts have been reclassified to conform to the current year's presentation. Results of the Company’s operations for interim periods may not be indicative of results for the full fiscal year. |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2016 | |
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 condensed 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 condensed consolidated financial statements also require management estimates and assumptions. Estimates and assumptions about future events and their effects cannot be determined with certainty. The Company bases its estimates on historical experience and 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 condensed consolidated financial statements as soon as they became known. In addition, management is periodically faced with uncertainties, the outcomes of which are not within its control and will not be known for prolonged periods of time. These uncertainties are discussed in this report and in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 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 condensed consolidated financial statements are fairly stated in accordance with U.S. GAAP, and provide a fair presentation of the Company’s financial position and results of operations. 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 that 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. Service Fee Revenue Activity The Company’s service fee revenue primarily relates to its distribution services, order management/customer care services, professional digital agency and technology services. The Company typically charges its service fee revenue on either a cost-plus basis, a percent of shipped revenue basis, on a time and materials, project or retainer basis for professional services, 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 (“ASC”) 605, “ Revenue Recognition he Company’s 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 entail 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 design, implementation, service and support of eCommerce platforms, website design and 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, or transaction basis, a dedicated resource model, a fixed price arrangement, 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 platforms 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 expected performance period. 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 expected performance period on a proportional performance basis, as determined by the relationship of actual costs incurred compared to the estimated total contract costs. At the time a loss in a contract is expected, the entire amount of the estimated loss is accrued. 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. 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 product revenue. Under its distributor agreements, 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 condensed 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. 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 expected performance period. 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. Advances to Affiliates Priority Fulfillment Services, Inc. (“PFS”) a wholly-owned subsidiary of PFSweb, Inc. has made advances to Supplies Distributors that are evidenced by a Subordinated Demand Note (the “Subordinated Note”). Under the terms of certain of Supplies Distributors’ debt facilities, the outstanding balance of the Subordinated Note cannot be decreased to less than $2.5 million without prior approval of certain of Supplies Distributors’ lenders. As of September 30, 2016 and December 31, 2015, the outstanding balance of the Subordinated Note was $2.5 million. The Subordinated Note is eliminated in the Company’s condensed consolidated financial statements. Concentration of Business and Credit Risk One service fee client relationship represented approximately 10% and 13% of the Company’s consolidated total revenues during the nine months ended September 30, 2016 and 2015, respectively. No customer or service fee clients exceeded 10% of consolidated accounts receivable as of September 30, 2016 or 2015. A summary of the nonaffiliated customer and client concentrations as a percentage of product revenue and service fee revenue, respectively, is as follows: Nine Months Ended September 30, 2016 2015 Service Fee Revenue (as a percentage of total Service Fee Revenue): Client 1 10 % 13 % Product Revenue (as a percentage of total Product Revenue): Customer 1 13 % 15 % Customer 2 15 % 14 % 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, sales, professional services and corporate operations, as well as certain equipment, under non-cancelable operating leases that expire at various dates through 2026. 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 condensed consolidated balance sheets. Property and Equipment The Company’s property and equipment held under capital leases totaled approximately $5.4 million and $5.5 million, net of accumulated amortization of approximately $5.2 million and $4.6 million, at September 30, 2016 and December 31, 2015, respectively. Depreciation and amortization expense related to capital leases during three months ended September 30, 2016 and 2015 was $.08 million and $.07 million, respectively. Depreciation and amortization expense related to capital leases during nine months ended September 30, 2016 and 2015 was $2.1 million and $1.7 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 domestic net deferred tax assets, which are primarily related to its net operating loss carryforwards, and for certain foreign deferred tax assets. Cash Paid for Interest and Taxes The Company made payments for interest of approximately $0.5 million and $0.4 million in the three months ended September 30, 2016 and 2015, respectively, and $1.1 million and $0.6 million in the nine month periods ended September 30, 2016 and 2015, respectively. Income taxes of approximately $0.1 million were paid by the Company in both the three months ended September 30, 2016 and 2015, and $0.7 million was paid by the Company during both the nine month periods ended September 30, 2016 and 2015. Impact of Recently Issued Accounting Standards In March 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2016-09, “ Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting The Company has not yet adopted and is currently assessing the potential effect of the following pronouncements on its condensed consolidated financial statements and related disclosures: In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) • ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net); • ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing; and • ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients. In February 2016, the FASB issued ASU 2016-02, “Leases”. The new standard establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments - a consensus of the Emerging Issues Task Force certain |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2016 | |
Business Combinations [Abstract] | |
Acquisitions | 3. ACQUISITIONS Acquisitions have been recorded using the purchase method of accounting for business combinations. Acquisition Related Expenses The acquisitions discussed below are expected to enhance the Company’s overall service offering to its existing clients and customers as well as support anticipated growth opportunities. For the three months ended September 30, 2016 and 2015, acquisition related expenses were $0.1 million and $1.7 million, respectively, and for the nine months ended September 30, 2016 and 2015, acquisition related expenses were $1.7 million and $3.0 million, respectively, and recognized in selling, general and administrative expenses in the condensed consolidated statements of operations. 2016 Acquisition Acquisition of Conexus On June 8, 2016, PFSweb, Inc. acquired the outstanding capital stock of Conexus, an eCommerce system integrator that provides strategic consulting, system integration, and managed services for leading businesses and technology companies. Conexus maintains primary operations in Basingstoke, Hampshire (U.K.). The purchase price for the shares consists of (i) an initial cash payment of £5,855,000 (approximately $8.5 million), subject to a post-closing adjustment based upon a May 31, 2016 balance sheet analysis, and (ii) up to an aggregate maximum of £1,445,000 (approximately $1.9 million at September 30, 2016), subject to Conexus achieving certain operational and financial targets during the post-closing period ending December 31, 2016 (the “Earn-out Payments”), subject to possible offsets for indemnification and other claims arising under the purchase agreement. Up to 40% (but not to exceed £450,000) (approximately $0.6 million at September 30, 2016) of the Earn-out Payments may be paid by the issuance of restricted shares of PFSweb common stock, based on its then current market value at the time of issuance. As of September 30, 2016, as a result of updated Conexus financial projections for the 2016 earn-out period, the Company has not recorded a liability applicable to the estimated Earn-out Payments and the estimated performance-based liability was reduced from $0.6 million as of June 30, 2016 to $0 as of September 30, 2016. The results of operations of Conexus have been included in the Company's condensed consolidated financial statements since the date of acquisition which, for the three and nine months ended September 30, 2016, includes $1.7 million and $2.2 million, respectively, of service fee revenue and approximately $41,000 and $0.4 million, respectively, of net loss. The net loss for Conexus for the nine months ended September 30, 2016 included approximately $0.5 million of acquisition related expenses. Additional acquisition related expenses applicable to the Conexus acquisition of approximately $0.1 million and $1.1 million were also incurred by the Company during the three and nine months ended September 30, 2016, respectively. allocation of the purchase price is subject to adjustment. The following table summarizes the preliminary estimated fair value of the tangible and intangible assets acquired and liabilities assumed (in thousands): Cash $ 156 Accounts receivable, net 1,451 Other receivables 909 Property and equipment 200 Other assets 82 Intangible assets 2,181 Total assets acquired 4,979 Total liabilities assumed 2,254 Net assets acquired 2,725 Goodwill 6,055 Total purchase price $ 8,780 Purchase price for Conexus is as follows (in thousands): Aggregate cash payments $ 8,476 Performance-based contingent payments (based on estimated fair value at acquisition date) 553 Estimated post-closing balance sheet reconciliation adjustment (249 ) Total purchase price $ 8,780 The excess of the purchase price over the fair value of the net identifiable assets acquired and liabilities assumed was allocated to goodwill. Total goodwill of $6.1 million, none of which is deductible for tax purposes, is not being amortized but is subject to an annual impairment test using a fair-value-based approach. The Company is amortizing the identifiable intangible assets acquired using a pattern in which the economic benefit of the assets are expected to be realized by the Company over their estimated remaining useful lives. There are no residual values for any of the intangible assets subject to amortization acquired during the Conexus acquisition. Estimated definite lived intangible assets acquired in the Conexus acquisition consist of (in thousands): September 30, 2016 Estimated Fair Value Accumulated Net Carrying Useful Life at Acquisition Amortization Value from Acquisition Developed technology $ 727 $ (73 ) $ 654 2.5 years Customer relationships 1,454 (256 ) 1,198 4.5 years Total definite lived intangible assets $ 2,181 $ (329 ) $ 1,852 2015 Acquisitions Acquisition of Moda On June 11, 2015, PFSweb, Inc. acquired the outstanding capital stock of Moda, an eCommerce system integrator and consultancy that provides unique digital experiences for fashion brands and retailers. Moda maintains primary operations in London. 650,000 1.0 16,116 . The purchase agreement provides for Payments guaranteed 600,000 purchase as a result of updated 2016 Moda financial projections, the estimated performance-based contingent liability for the Moda Earn-out Payments was reduced from $0.3 million as of December 31, 2015 to $0 as of September 30, 2016 . The results of operations of Moda have been included in the Company's condensed consolidated financial statements since the date of acquisition. The Company determines fair value using a combination of the discounted cash flow, market multiple and market capitalization valuation methods. The following table summarizes the fair value of the tangible and intangible assets acquired and liabilities assumed Cash and cash equivalents $ 126 Accounts receivable 335 Property and equipment 27 Identifiable intangibles 340 Other assets 23 Total assets acquired 851 Total liabilities assumed 658 Net assets acquired 193 Goodwill 1,287 Total purchase price $ 1,480 Purchase price for Moda is as follows (in thousands, except share data and stock price): Number of shares of common stock issued 16,116 Multiplied by PFSweb Inc.'s stock price $ 14.60 Share consideration $ 235 Aggregate cash payments 1,005 Performance-based contingent payments (based on estimated fair value at acquisition date) 240 Total purchase price $ 1,480 The excess of the purchase price over the fair value of the net identifiable assets acquired and liabilities assumed was allocated to goodwill. Total goodwill of $1.3 million, none of which is deductible for tax purposes, is not being amortized but is subject to an annual impairment test using a fair-value-based approach. The Company is amortizing the identifiable intangible assets acquired using a pattern in which the economic benefit of the assets are expected to be realized by the Company over their estimated remaining useful lives. There are no residual values for any of the intangible assets subject to amortization acquired during the Moda acquisition. Definite lived intangible assets acquired in the Moda acquisition consist of (in thousands): September 30, 2016 December 31, 2015 Estimated Fair Value Accumulated Net Carrying Accumulated Net Carrying Useful Life at Acquisition Amortization Value Amortization Value from Acquisition Customer relationships $ 309 $ (245 ) $ 64 $ (141 ) $ 168 1.6 years Non-compete agreements 31 (28 ) 3 (12 ) 19 2.5 years Total definite lived intangible assets $ 340 $ (273 ) $ 67 $ (153 ) $ 187 Acquisition of CrossView On Consideration paid by the Company included an initial cash payment of $ 30.7 553,223 6.3 balance 2016 no 18.0 ended June 30, 2016, the Company paid an aggregate of $7.9 million in settlement of the 2015 CrossView Earn-out Payments, of which, $1.6 million was paid by the issuance of restricted shares of Company stock. The Company will pay 15% of any 2016 and 2017 earn-outs payments in restricted shares of Company common stock, based on its current market value at the time of issuance. As of September 30, 2016, the Company has recorded a total liability of $0.4 million applicable to the remaining projected CrossView Earn-out Payments, which is included in other liabilities in the condensed consolidated balance sheets. This estimated performance-based liability was reduced from $10.2 million as of December 31, 2015 to $0.4 million as of September 30, 2016 following $7.9 million of payments during the nine months ended September 30, 2016 and as a result of updated CrossView financial projections The results of operations of CrossView have been included in the Company's condensed consolidated financial statements since the date of acquisition. The Company determined fair value using a combination of the discounted cash flow, market multiple and market capitalization valuation methods. The following table summarizes the fair value of the tangible and intangible assets acquired and liabilities assumed (in thousands): Accounts receivable $ 7,550 Property and equipment 441 Other assets 149 Identifiable intangibles 9,050 Total assets acquired 17,190 Total liabilities assumed 2,556 Net assets acquired 14,634 Goodwill 30,221 Total purchase price $ 44,855 Purchase price for CrossView is as follows (in thousands, except share data and stock price): Number of shares of common stock issued 553,223 Multiplied by PFSweb Inc.'s stock price $ 11.40 Share consideration $ 6,307 Aggregate cash payments 30,740 Performance-based contingent payments (based on estimated fair value at acquisition date) 9,195 Post-closing balance sheet reconciliation adjustment (1,387 ) Total purchase price $ 44,855 The excess of the purchase price over the fair value of the net identifiable assets acquired and liabilities assumed was allocated to goodwill. Total goodwill of $30.2 million, which, given the structure of the acquisition, is expected to be deductible for tax purposes over 15 years. The Company is amortizing the identifiable intangible assets acquired using a pattern in which the economic benefit of the assets are expected to be realized by the Company over their estimated remaining useful lives. There are no residual values for any of the intangible assets subject to amortization acquired during the CrossView acquisition. Definite lived intangible assets acquired in the CrossView acquisition consist of (in thousands): September 30, 2016 December 31, 2015 Fair Value Accumulated Net Carrying Accumulated Net Carrying Estimated Useful Life at Acquisition Amortization Value Amortization Value from Acquisition Trade names $ 1,100 $ (513 ) $ 587 $ (183 ) $ 917 2.5 years Non-compete agreements 300 (117 ) 183 (42 ) 258 3 years Customer relationships 6,800 (2,762 ) 4,038 (1,394 ) 5,406 9 years Developed technology 850 (393 ) 457 (140 ) 710 2.5-3 years Total definite lived intangible assets $ 9,050 $ (3,785 ) $ 5,265 $ (1,759 ) $ 7,291 Performance-Based Contingent Payment The following table presents the change in the acquisition related performance-based contingent payments for the periods presented: 2016 2015 As of January 1, $ 14,157 $ 5,392 CrossView earn-out payment in common stock and cash (7,942 ) — LAL earn-out payment in common stock and cash (2,000 ) (950 ) REV earn-out payment in common stock and cash (1,750 ) (1,393 ) Value recorded at acquisition - CrossView — 12,723 Value recorded at acquisition - Conexus 553 — Value recorded at acquisition - Moda — 480 Change in balance due (2,638 ) 403 As of September 30, $ 380 $ 16,655 Pro Forma Information The following table presents selected pro forma information, for comparative purposes, assuming the acquisitions of Conexus and CrossView had occurred on January 1, 2015 (in thousands, except per share amounts): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2016 2015 2016 2015 Total revenues $ 79,910 $ 73,425 $ 235,194 $ 219,727 Net loss (1,039 ) (2,043 ) (4,352 ) (8,163 ) Basic and diluted net loss per share (0.06 ) 0.11 (0.23 ) (0.47 ) 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 Conexus and CrossView during the periods noted. Moda did not meet the significance test requirements and thus is not included in the pro forma presentation above. |
Goodwill and Identifiable Intan
Goodwill and Identifiable Intangibles, Net | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Identifiable Intangibles, Net | 4. GOODWILL AND IDENTIFIABLE INTANGIBLES, NET Goodwill acquired through acquisitions is recognized as part of the PFSweb segment and was $45.9 million and $39.8 million as of September 30, 2016 and December 31, 2015, respectively The following table presents the gross carrying value and accumulated amortization for identifiable intangibles: September 30, 2016 December 31, 2015 Fair Value Accumulated Net Carrying Fair Value Accumulated Net Carrying Estimated Useful Life at Acquisition Amortization Value at Acquisition Amortization Value from Acquisition Trade names $ 1,250 $ (719 ) $ 531 $ 1,250 $ (266 ) $ 984 2.25 - 2.5 years Non-compete agreements 575 (296 ) 279 575 (159 ) 416 1- 3.5 years Leasehold 45 (38 ) 7 45 (24 ) 21 2.5 years Customer relationships 10,433 (4,367 ) 6,066 8,979 (2,378 ) 6,601 1.6 - 9 years Developed technology 1,577 (393 ) 1,184 850 (140 ) 710 2.5-3 years Other intangibles 492 (434 ) 58 468 (390 ) 78 9 years Total definite lived intangible assets $ 14,372 $ (6,247 ) $ 8,125 $ 12,167 $ (3,357 ) $ 8,810 Definite Lived Intangible Asset Amortization For the three months ended September 30, 2016 and 2015, amortization expense related to acquired definite lived intangible assets was $1.2 million and $1.0 million, respectively, and for the nine months ended September 30, 2016 and 2015, amortization expense was $2.9 million and $1.5 million, respectively, and recognized in selling, general and administrative expenses in the condensed consolidated statements of operations. The estimated amortization expense for each of the next five years is as follows (in thousands): Remaining 2016 $ 1,186 2017 3,220 2018 1,780 2019 748 2020 526 2021 and thereafter 665 |
Net Loss Per Common Share
Net Loss Per Common Share | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Net Loss Per Common Share | 5. 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. The following equity awards have been excluded from the calculation of diluted net loss per share as their effect would be anti-dilutive as of September 30, 2016: As of September 30, (shares in thousands) 2016 2015 Stock options 1,209 1,371 Performance shares 273 545 Deferred stock units 104 65 Total anti-dilutive stock options, performance shares and deferred stock units 1,586 1,981 |
Stock and Stock Options
Stock and Stock Options | 9 Months Ended |
Sep. 30, 2016 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock and Stock Options | 6. STOCK AND STOCK OPTIONS Total stock-based compensation expense was $0.3 million and $1.5 million for the three months ended and $1.4 million and $3.4 million for the nine months ended, September 30, 2016 and 2015, respectively, and were included as a component of selling, general and administrative expenses in the condensed consolidated statements of operations. On March 23, 2015, pursuant to the Company’s Employee Stock and Incentive Plan, as amended and restated (“the Plan”), the Company issued approximately 12,000 Other Stock-Based Awards and approximately 38,000 Restricted Stock Unit Awards (as such terms are defined in the Plan) to certain of the Company’s executive officers and senior management. The Restricted Stock Unit Awards are subject to three year vesting beginning in 2015 based on continued employment. The Company also issued additional Restricted Stock Units and Performance-Based Share Awards (as such terms are defined in the Plan) to the Company’s executives and senior management. Under the terms of these additional 2015 awards, the determination of the number of Restricted Stock Units and Performance Shares that each such individual received was 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 2015, as well as, for certain of the Restricted Stock Units, individual performance goals, as defined. Based on the Company’s 2015 results, the Company issued an aggregate of approximately 283,000 Performance Shares and 84,000 Restricted Stock Units for 2015. The Performance Shares are subject to annual vesting based upon continued employment and either the achievement of a defined annual financial target or 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 2016, the Company issued additional Restricted Stock Units and Performance-Based Share Awards (as such terms are defined in the Plan) to certain of the Company’s executives and senior management. Under the terms of these 2016 awards, the number of restricted stock units and 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 2016, as well as, for certain of the restricted stock units, individual performance goals, as defined. Assuming achievement of the highest financial and individual performance goal, the aggregate maximum number of restricted stock units is approximately 91,000 and the aggregate maximum number of performance shares is approximately 282,000, which performance shares are subject to annual vesting based upon continued employment and, for certain of the performance shares, the achievement of a defined annual financial target or the comparative performance (on an annual and cumulative basis) of the Company’s common stock on NASDAQ compared to the Russell Micro Cap Index. |
Vendor Financing
Vendor Financing | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Vendor Financing | 7. 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 $13.0 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 $8.3 million and $8.2 million as of September 30, 2016 and December 31, 2015, respectively, as accounts payable in the condensed consolidated balance sheets. As of September 30, 2016, Supplies Distributors had no 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 PFSweb. Additionally, PFS is required to maintain a minimum Subordinated Note receivable balance from Supplies Distributors of $2.5 million. Borrowings under the credit facility accrue interest, after a defined free financing period, at prime rate plus 0.5% (4.00% as of September 30, 2016). The facility also includes a monthly service fee. As of September 30, 2016, the Company was in compliance with all financial covenants. |
Debt and Capital Lease Obligati
Debt and Capital Lease Obligations | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Debt and Capital Lease Obligations | 8. DEBT AND CAPITAL LEASE OBLIGATIONS Outstanding debt and capital lease obligations consist of the following (in thousands): September 30, December 31, 2016 2015 U.S. Credit Agreement Revolver $ 23,000 $ 19,283 Term loan 30,000 10,000 Equipment loan 1,824 — Debt issuance costs (562 ) (671 ) Master lease agreements 6,042 6,644 Other 117 135 Total 60,421 35,391 Less current portion of long-term debt 5,672 3,153 Long-term debt, less current portion $ 54,749 $ 32,238 U.S. Credit Agreement In August 2015, PFSweb, Inc. and its U.S. subsidiaries entered into a credit agreement (“Credit Agreement”) with Regions Bank, as agent for itself and one or more future lenders including Bank of America N.A. and HSBC Bank USA, National Association (“the Lenders”). Under the Credit Agreement, and subject to the terms set forth therein, the Lenders have agreed to provide PFS with a revolving loan facility for up to $32.5 million were 3.28% and 2.90%, respectively. In connection with the Credit Agreement, the Company paid $0.7 million of fees, which are being amortized through the life of the In June 2016, PFSweb also entered into a Master Agreement with Regions Bank to provide equipment loans financing for certain capital expenditures. As of September 30, 2016, there was approximately $1.8 million outstanding under the Equipment Loans Master Agreement. 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 periodic 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, 2016, 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, 2016 | |
Segment Reporting [Abstract] | |
Segment Information | 9. SEGMENT INFORMATION The Company is currently organized into two primary operating segments, which generally align with its corporate organization structure. In the first segment, PFSweb is a global provider of various infrastructure, technology, and digital agency 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 recognizes product revenue when it operates as a principal in the arrangement and service fee revenue when it operates as an agent. Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Revenues (in thousands): PFSweb $ 67,768 $ 56,897 $ 194,239 $ 153,040 Business and Retail Connect 15,351 17,975 48,425 55,870 Eliminations (3,209 ) (3,689 ) (10,476 ) (10,705 ) $ 79,910 $ 71,183 $ 232,188 $ 198,205 Income (loss) from operations (in thousands): PFSweb $ (447 ) $ (2,757 ) $ (2,516 ) $ (6,288 ) Business and Retail Connect 441 31 1,323 948 $ (6 ) $ (2,726 ) $ (1,193 ) $ (5,340 ) Depreciation and amortization (in thousands): PFSweb $ 3,797 $ 4,086 $ 11,188 $ 10,607 Business and Retail Connect 6 15 18 38 $ 3,803 $ 4,101 $ 11,206 $ 10,645 Capital expenditures (in thousands): PFSweb $ 1,049 $ 1,522 $ 7,532 $ 3,468 Business and Retail Connect — — — — $ 1,049 $ 1,522 $ 7,532 $ 3,468 September 30, December 31, 2016 2015 Assets (in thousands): PFSweb $ 155,888 $ 151,064 Business and Retail Connect 37,501 50,682 Eliminations (10,245 ) (10,456 ) $ 183,144 $ 191,290 |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 10. RELATED PARTY TRANSACTIONS In September 2014, the Company purchased all of the stock of REV Solutions, Inc. and REVTech Solutions India Private Limited from Mr. Steven Stephan, an officer of the Company until September 30 2016, and other shareholders in a transaction which, in addition to a closing payment, provided for earn-out payments based on the achievement of certain metrics for each of calendar years 2014 and 2015. Since January 1, 2015, the Company paid Mr. Stephan an aggregate of $2.4 million and issued 38,574 shares of common stock as the final purchase price earn-out payments associated with such transaction. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2016 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 11. 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, 2016, the Company believes it has adequately accrued for the expected assessment. In connection with a client project, the Company has provided a $1.3 million performance bond which may be drawn upon in the event of a default by the Company of its obligations under the project, or, in the absence of a default, upon successful completion of the project, the bond will be returned. 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. The Company is generally required to indemnify its service fee clients against any third party claims asserted against such clients alleging infringement by the Company of the patents, trademarks and other intellectual property rights of third parties. |
Significant Accounting Polici18
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The interim condensed consolidated financial statements as of September 30, 2016, and for the three and nine months ended September 30, 2016 and 2015, 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 condensed consolidated financial statements of the Company include all adjustments necessary for a fair presentation of the Company’s financial position as of September 30, 2016, its results of operations for the three and nine months ended September 30, 2016 and 2015 and its cash flows for the nine months ended September 30, 2016 and 2015. Certain prior-year amounts have been reclassified to conform to the current year's presentation. Results of the Company’s operations for interim periods may not be indicative of results for the full fiscal year. |
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 condensed 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 condensed consolidated financial statements also require management estimates and assumptions. Estimates and assumptions about future events and their effects cannot be determined with certainty. The Company bases its estimates on historical experience and 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 condensed consolidated financial statements as soon as they became known. In addition, management is periodically faced with uncertainties, the outcomes of which are not within its control and will not be known for prolonged periods of time. These uncertainties are discussed in this report and in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 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 condensed consolidated financial statements are fairly stated in accordance with U.S. GAAP, and provide a fair presentation of the Company’s financial position and results of operations. |
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 that 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. Service Fee Revenue Activity The Company’s service fee revenue primarily relates to its distribution services, order management/customer care services, professional digital agency and technology services. The Company typically charges its service fee revenue on either a cost-plus basis, a percent of shipped revenue basis, on a time and materials, project or retainer basis for professional services, 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 (“ASC”) 605, “ Revenue Recognition he Company’s 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 entail 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 design, implementation, service and support of eCommerce platforms, website design and 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, or transaction basis, a dedicated resource model, a fixed price arrangement, 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 platforms 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 expected performance period. 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 expected performance period on a proportional performance basis, as determined by the relationship of actual costs incurred compared to the estimated total contract costs. At the time a loss in a contract is expected, the entire amount of the estimated loss is accrued. 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. 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 product revenue. Under its distributor agreements, 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 condensed 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. 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 expected performance period. 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. |
Advances to Affiliates | Advances to Affiliates Priority Fulfillment Services, Inc. (“PFS”) a wholly-owned subsidiary of PFSweb, Inc. has made advances to Supplies Distributors that are evidenced by a Subordinated Demand Note (the “Subordinated Note”). Under the terms of certain of Supplies Distributors’ debt facilities, the outstanding balance of the Subordinated Note cannot be decreased to less than $2.5 million without prior approval of certain of Supplies Distributors’ lenders. As of September 30, 2016 and December 31, 2015, the outstanding balance of the Subordinated Note was $2.5 million. The Subordinated Note is eliminated in the Company’s condensed consolidated financial statements. |
Concentration of Business and Credit Risk | Concentration of Business and Credit Risk One service fee client relationship represented approximately 10% and 13% of the Company’s consolidated total revenues during the nine months ended September 30, 2016 and 2015, respectively. No customer or service fee clients exceeded 10% of consolidated accounts receivable as of September 30, 2016 or 2015. A summary of the nonaffiliated customer and client concentrations as a percentage of product revenue and service fee revenue, respectively, is as follows: Nine Months Ended September 30, 2016 2015 Service Fee Revenue (as a percentage of total Service Fee Revenue): Client 1 10 % 13 % Product Revenue (as a percentage of total Product Revenue): Customer 1 13 % 15 % Customer 2 15 % 14 % 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, sales, professional services and corporate operations, as well as certain equipment, under non-cancelable operating leases that expire at various dates through 2026. 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 condensed consolidated balance sheets. |
Property and Equipment | Property and Equipment The Company’s property and equipment held under capital leases totaled approximately $5.4 million and $5.5 million, net of accumulated amortization of approximately $5.2 million and $4.6 million, at September 30, 2016 and December 31, 2015, respectively. Depreciation and amortization expense related to capital leases during three months ended September 30, 2016 and 2015 was $.08 million and $.07 million, respectively. Depreciation and amortization expense related to capital leases during nine months ended September 30, 2016 and 2015 was $2.1 million and $1.7 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 domestic net deferred tax assets, which are primarily related to its net operating loss carryforwards, and for 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 $0.4 million in the three months ended September 30, 2016 and 2015, respectively, and $1.1 million and $0.6 million in the nine month periods ended September 30, 2016 and 2015, respectively. Income taxes of approximately $0.1 million were paid by the Company in both the three months ended September 30, 2016 and 2015, and $0.7 million was paid by the Company during both the nine month periods ended September 30, 2016 and 2015. |
Impact of Recently Issued Accounting Standards | Impact of Recently Issued Accounting Standards In March 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2016-09, “ Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting The Company has not yet adopted and is currently assessing the potential effect of the following pronouncements on its condensed consolidated financial statements and related disclosures: In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) • ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net); • ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing; and • ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients. In February 2016, the FASB issued ASU 2016-02, “Leases”. The new standard establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments - a consensus of the Emerging Issues Task Force certain |
Significant Accounting Polici19
Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Summary of Non-affiliated Customer and Client Concentrations as Percentage of Product Revenue and Service Fee Revenue | A summary of the nonaffiliated customer and client concentrations as a percentage of product revenue and service fee revenue, respectively, is as follows: Nine Months Ended September 30, 2016 2015 Service Fee Revenue (as a percentage of total Service Fee Revenue): Client 1 10 % 13 % Product Revenue (as a percentage of total Product Revenue): Customer 1 13 % 15 % Customer 2 15 % 14 % |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Business Acquisition [Line Items] | |
Schedule of Definite-Lived Intangible Assets Acquired | The following table presents the gross carrying value and accumulated amortization for identifiable intangibles: September 30, 2016 December 31, 2015 Fair Value Accumulated Net Carrying Fair Value Accumulated Net Carrying Estimated Useful Life at Acquisition Amortization Value at Acquisition Amortization Value from Acquisition Trade names $ 1,250 $ (719 ) $ 531 $ 1,250 $ (266 ) $ 984 2.25 - 2.5 years Non-compete agreements 575 (296 ) 279 575 (159 ) 416 1- 3.5 years Leasehold 45 (38 ) 7 45 (24 ) 21 2.5 years Customer relationships 10,433 (4,367 ) 6,066 8,979 (2,378 ) 6,601 1.6 - 9 years Developed technology 1,577 (393 ) 1,184 850 (140 ) 710 2.5-3 years Other intangibles 492 (434 ) 58 468 (390 ) 78 9 years Total definite lived intangible assets $ 14,372 $ (6,247 ) $ 8,125 $ 12,167 $ (3,357 ) $ 8,810 |
Schedule of Change in Acquisition Related Performance-Based Contingent Payments | The following table presents the change in the acquisition related performance-based contingent payments for the periods presented: 2016 2015 As of January 1, $ 14,157 $ 5,392 CrossView earn-out payment in common stock and cash (7,942 ) — LAL earn-out payment in common stock and cash (2,000 ) (950 ) REV earn-out payment in common stock and cash (1,750 ) (1,393 ) Value recorded at acquisition - CrossView — 12,723 Value recorded at acquisition - Conexus 553 — Value recorded at acquisition - Moda — 480 Change in balance due (2,638 ) 403 As of September 30, $ 380 $ 16,655 |
Schedule of Pro Forma Information for Comparative Purposes Assuming Acquisitions of Conexus and CrossView | The following table presents selected pro forma information, for comparative purposes, assuming the acquisitions of Conexus and CrossView had occurred on January 1, 2015 (in thousands, except per share amounts): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2016 2015 2016 2015 Total revenues $ 79,910 $ 73,425 $ 235,194 $ 219,727 Net loss (1,039 ) (2,043 ) (4,352 ) (8,163 ) Basic and diluted net loss per share (0.06 ) 0.11 (0.23 ) (0.47 ) |
Conexus | |
Business Acquisition [Line Items] | |
Schedule of Estimated Fair Value of Assets Acquired and Liabilities Assumed | The following table summarizes the preliminary estimated fair value of the tangible and intangible assets acquired and liabilities assumed (in thousands): Cash $ 156 Accounts receivable, net 1,451 Other receivables 909 Property and equipment 200 Other assets 82 Intangible assets 2,181 Total assets acquired 4,979 Total liabilities assumed 2,254 Net assets acquired 2,725 Goodwill 6,055 Total purchase price $ 8,780 |
Schedule of Purchase Price | Purchase price for Conexus is as follows (in thousands): Aggregate cash payments $ 8,476 Performance-based contingent payments (based on estimated fair value at acquisition date) 553 Estimated post-closing balance sheet reconciliation adjustment (249 ) Total purchase price $ 8,780 |
Schedule of Definite-Lived Intangible Assets Acquired | Estimated definite lived intangible assets acquired in the Conexus acquisition consist of (in thousands): September 30, 2016 Estimated Fair Value Accumulated Net Carrying Useful Life at Acquisition Amortization Value from Acquisition Developed technology $ 727 $ (73 ) $ 654 2.5 years Customer relationships 1,454 (256 ) 1,198 4.5 years Total definite lived intangible assets $ 2,181 $ (329 ) $ 1,852 |
Moda | |
Business Acquisition [Line Items] | |
Schedule of Estimated Fair Value of Assets Acquired and Liabilities Assumed | The Company determines fair value using a combination of the discounted cash flow, market multiple and market capitalization valuation methods. The following table summarizes the fair value of the tangible and intangible assets acquired and liabilities assumed Cash and cash equivalents $ 126 Accounts receivable 335 Property and equipment 27 Identifiable intangibles 340 Other assets 23 Total assets acquired 851 Total liabilities assumed 658 Net assets acquired 193 Goodwill 1,287 Total purchase price $ 1,480 |
Schedule of Purchase Price | Purchase price for Moda is as follows (in thousands, except share data and stock price): Number of shares of common stock issued 16,116 Multiplied by PFSweb Inc.'s stock price $ 14.60 Share consideration $ 235 Aggregate cash payments 1,005 Performance-based contingent payments (based on estimated fair value at acquisition date) 240 Total purchase price $ 1,480 |
Schedule of Definite-Lived Intangible Assets Acquired | Definite lived intangible assets acquired in the Moda acquisition consist of (in thousands): September 30, 2016 December 31, 2015 Estimated Fair Value Accumulated Net Carrying Accumulated Net Carrying Useful Life at Acquisition Amortization Value Amortization Value from Acquisition Customer relationships $ 309 $ (245 ) $ 64 $ (141 ) $ 168 1.6 years Non-compete agreements 31 (28 ) 3 (12 ) 19 2.5 years Total definite lived intangible assets $ 340 $ (273 ) $ 67 $ (153 ) $ 187 |
Cross View, Inc. | |
Business Acquisition [Line Items] | |
Schedule of Estimated Fair Value of Assets Acquired and Liabilities Assumed | The Company determined fair value using a combination of the discounted cash flow, market multiple and market capitalization valuation methods. The following table summarizes the fair value of the tangible and intangible assets acquired and liabilities assumed (in thousands): Accounts receivable $ 7,550 Property and equipment 441 Other assets 149 Identifiable intangibles 9,050 Total assets acquired 17,190 Total liabilities assumed 2,556 Net assets acquired 14,634 Goodwill 30,221 Total purchase price $ 44,855 |
Schedule of Purchase Price | Purchase price for CrossView is as follows (in thousands, except share data and stock price): Number of shares of common stock issued 553,223 Multiplied by PFSweb Inc.'s stock price $ 11.40 Share consideration $ 6,307 Aggregate cash payments 30,740 Performance-based contingent payments (based on estimated fair value at acquisition date) 9,195 Post-closing balance sheet reconciliation adjustment (1,387 ) Total purchase price $ 44,855 |
Schedule of Definite-Lived Intangible Assets Acquired | Definite lived intangible assets acquired in the CrossView acquisition consist of (in thousands): September 30, 2016 December 31, 2015 Fair Value Accumulated Net Carrying Accumulated Net Carrying Estimated Useful Life at Acquisition Amortization Value Amortization Value from Acquisition Trade names $ 1,100 $ (513 ) $ 587 $ (183 ) $ 917 2.5 years Non-compete agreements 300 (117 ) 183 (42 ) 258 3 years Customer relationships 6,800 (2,762 ) 4,038 (1,394 ) 5,406 9 years Developed technology 850 (393 ) 457 (140 ) 710 2.5-3 years Total definite lived intangible assets $ 9,050 $ (3,785 ) $ 5,265 $ (1,759 ) $ 7,291 |
Goodwill and Identifiable Int21
Goodwill and Identifiable Intangibles, Net (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Definite-Lived Intangible Assets Acquired | The following table presents the gross carrying value and accumulated amortization for identifiable intangibles: September 30, 2016 December 31, 2015 Fair Value Accumulated Net Carrying Fair Value Accumulated Net Carrying Estimated Useful Life at Acquisition Amortization Value at Acquisition Amortization Value from Acquisition Trade names $ 1,250 $ (719 ) $ 531 $ 1,250 $ (266 ) $ 984 2.25 - 2.5 years Non-compete agreements 575 (296 ) 279 575 (159 ) 416 1- 3.5 years Leasehold 45 (38 ) 7 45 (24 ) 21 2.5 years Customer relationships 10,433 (4,367 ) 6,066 8,979 (2,378 ) 6,601 1.6 - 9 years Developed technology 1,577 (393 ) 1,184 850 (140 ) 710 2.5-3 years Other intangibles 492 (434 ) 58 468 (390 ) 78 9 years Total definite lived intangible assets $ 14,372 $ (6,247 ) $ 8,125 $ 12,167 $ (3,357 ) $ 8,810 |
Summary of Estimated Amortization Expense | The estimated amortization expense for each of the next five years is as follows (in thousands): Remaining 2016 $ 1,186 2017 3,220 2018 1,780 2019 748 2020 526 2021 and thereafter 665 |
Net Loss Per Common Share (Tabl
Net Loss Per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Equity Awards Excluded from Calculation of Diluted Net Loss per Share | The following equity awards have been excluded from the calculation of diluted net loss per share as their effect would be anti-dilutive as of September 30, 2016: As of September 30, (shares in thousands) 2016 2015 Stock options 1,209 1,371 Performance shares 273 545 Deferred stock units 104 65 Total anti-dilutive stock options, performance shares and deferred stock units 1,586 1,981 |
Debt and Capital Lease Obliga23
Debt and Capital Lease Obligations (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
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, 2016 2015 U.S. Credit Agreement Revolver $ 23,000 $ 19,283 Term loan 30,000 10,000 Equipment loan 1,824 — Debt issuance costs (562 ) (671 ) Master lease agreements 6,042 6,644 Other 117 135 Total 60,421 35,391 Less current portion of long-term debt 5,672 3,153 Long-term debt, less current portion $ 54,749 $ 32,238 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Summary of Product Revenue by Segments | The Company is currently organized into two primary operating segments, which generally align with its corporate organization structure. In the first segment, PFSweb is a global provider of various infrastructure, technology, and digital agency 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 recognizes product revenue when it operates as a principal in the arrangement and service fee revenue when it operates as an agent. Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Revenues (in thousands): PFSweb $ 67,768 $ 56,897 $ 194,239 $ 153,040 Business and Retail Connect 15,351 17,975 48,425 55,870 Eliminations (3,209 ) (3,689 ) (10,476 ) (10,705 ) $ 79,910 $ 71,183 $ 232,188 $ 198,205 Income (loss) from operations (in thousands): PFSweb $ (447 ) $ (2,757 ) $ (2,516 ) $ (6,288 ) Business and Retail Connect 441 31 1,323 948 $ (6 ) $ (2,726 ) $ (1,193 ) $ (5,340 ) Depreciation and amortization (in thousands): PFSweb $ 3,797 $ 4,086 $ 11,188 $ 10,607 Business and Retail Connect 6 15 18 38 $ 3,803 $ 4,101 $ 11,206 $ 10,645 Capital expenditures (in thousands): PFSweb $ 1,049 $ 1,522 $ 7,532 $ 3,468 Business and Retail Connect — — — — $ 1,049 $ 1,522 $ 7,532 $ 3,468 September 30, December 31, 2016 2015 Assets (in thousands): PFSweb $ 155,888 $ 151,064 Business and Retail Connect 37,501 50,682 Eliminations (10,245 ) (10,456 ) $ 183,144 $ 191,290 |
Significant Accounting Polici25
Significant Accounting Policies - Additional Information (Details) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016USD ($)Customer | Sep. 30, 2015USD ($)Customer | Sep. 30, 2016USD ($)Customer | Sep. 30, 2015USD ($)Customer | Dec. 31, 2015USD ($) | |
Significant Accounting Policies [Line Items] | |||||
Subordinated note outstanding | $ 2,500,000 | $ 2,500,000 | $ 2,500,000 | ||
Maximum life of current operating leases | 2,026 | ||||
Capital leases | 5,400,000 | $ 5,400,000 | 5,500,000 | ||
Accumulated amortization of capital leases | 5,200,000 | 5,200,000 | $ 4,600,000 | ||
Depreciation and amortization | 3,803,000 | $ 4,101,000 | 11,206,000 | $ 10,645,000 | |
Payments for interest | 500,000 | 400,000 | 1,100,000 | 600,000 | |
Income taxes | 100,000 | 100,000 | 700,000 | 700,000 | |
Accounting Standards Update 2016-09 | |||||
Significant Accounting Policies [Line Items] | |||||
Recognition of previously unrecognized tax benefit | $ 1,900,000 | ||||
Accounting pronouncement, effective date | Jan. 1, 2016 | ||||
Assets Held Under Capital Leases | |||||
Significant Accounting Policies [Line Items] | |||||
Depreciation and amortization | $ 80,000 | $ 70,000 | $ 2,100,000 | $ 1,700,000 | |
Sales Revenue, Services, Net | |||||
Significant Accounting Policies [Line Items] | |||||
Number of customers representing more than 10% | Customer | 1 | 1 | |||
Sales Revenue, Services, Net | Credit Concentration Risk | |||||
Significant Accounting Policies [Line Items] | |||||
Concentration risk percentage | 10.00% | 13.00% | |||
Accounts Receivable | |||||
Significant Accounting Policies [Line Items] | |||||
Number of customers representing more than 10% | Customer | 0 | 0 | 0 | 0 | |
Minimum | |||||
Significant Accounting Policies [Line Items] | |||||
Subordinated note outstanding | $ 2,500,000 | $ 2,500,000 |
Significant Accounting Polici26
Significant Accounting Policies - Summary of Non-affiliated Customer and Client Concentrations (Details) | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Product Revenue | Customer 1 | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 13.00% | 15.00% |
Product Revenue | Customer 2 | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 15.00% | 14.00% |
Sales Revenue, Services, Net | Client 1 | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 10.00% | 13.00% |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Details) | Jun. 08, 2016USD ($) | Jun. 08, 2016GBP (£) | Aug. 05, 2015USD ($)shares | Jun. 11, 2015USD ($)shares | Jun. 11, 2015GBP (£)shares | Jun. 30, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2016USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($) | Sep. 30, 2016GBP (£) | Jun. 11, 2015GBP (£) |
Business Acquisition [Line Items] | |||||||||||||||
Total acquisition related expenses | $ 100,000 | $ 1,700,000 | $ 1,700,000 | $ 3,000,000 | |||||||||||
Service fee revenue | 53,788,000 | 45,528,000 | 154,271,000 | 121,311,000 | |||||||||||
Net loss | (1,039,000) | $ (3,670,000) | (3,973,000) | $ (7,263,000) | |||||||||||
Conexus | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Total acquisition related expenses | 500,000 | ||||||||||||||
Consideration paid | $ 8,476,000 | £ 5,855,000 | |||||||||||||
Earn-out payments, maximum | 1,900,000 | 1,900,000 | £ 1,445,000 | ||||||||||||
Business combination, liabilities recorded | $ 600,000 | 0 | |||||||||||||
Service fee revenue | 1,700,000 | 2,200,000 | |||||||||||||
Net loss | (41,000) | (400,000) | |||||||||||||
Additional acquisition related expenses | 100,000 | 1,100,000 | |||||||||||||
Total goodwill | $ 6,100,000 | 6,100,000 | |||||||||||||
Goodwill acquired, deductible for tax purposes | 0 | 0 | |||||||||||||
Residual value for intangible assets | 0 | 0 | |||||||||||||
Conexus | Maximum | Restricted Stock | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Percentage of common stock Issuable | 40.00% | 40.00% | |||||||||||||
Earn-out payments through issuance of shares | £ 450,000 | 600,000 | 600,000 | ||||||||||||
Moda | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Consideration paid | $ 1,005,000 | £ 650,000 | |||||||||||||
Earn-out payments, maximum | $ 800,000 | £ 600,000 | |||||||||||||
Business combination, liabilities recorded | 0 | $ 300,000 | |||||||||||||
Total goodwill | 1,300,000 | ||||||||||||||
Goodwill acquired, deductible for tax purposes | 0 | 0 | |||||||||||||
Residual value for intangible assets | 0 | 0 | |||||||||||||
Number of shares of common stock issued | shares | 16,116 | 16,116 | |||||||||||||
Share consideration | $ 235,000 | ||||||||||||||
Earn-out payments, minimum | £ | £ 0 | ||||||||||||||
Moda | Restricted Stock | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Number of shares of common stock issued | shares | 16,116 | 16,116 | |||||||||||||
Cross View, Inc. | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Consideration paid | $ 30,740,000 | ||||||||||||||
Earn-out payments, maximum | $ 18,000,000 | 400,000 | 400,000 | $ 10,200,000 | |||||||||||
Total goodwill | 30,200,000 | ||||||||||||||
Residual value for intangible assets | $ 0 | 0 | |||||||||||||
Number of shares of common stock issued | shares | 553,223 | ||||||||||||||
Share consideration | $ 6,307,000 | ||||||||||||||
Earn-out payments, minimum | 0 | ||||||||||||||
Consideration paid through common stock, value | $ 6,300,000 | ||||||||||||||
Consideration paid | $ 7,942,000 | ||||||||||||||
Goodwill amortization tax period | 15 years | ||||||||||||||
Cross View, Inc. | 2015 Earn-out Payments | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Consideration paid | $ 7,900,000 | ||||||||||||||
Cross View, Inc. | Restricted Stock | 2016 Earn-out Payments | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Percentage of common stock Issuable | 15.00% | ||||||||||||||
Cross View, Inc. | Restricted Stock | 2015 Earn-out Payments | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Share consideration | $ 1,600,000 | ||||||||||||||
Cross View, Inc. | Restricted Stock | 2017 Earn-out Payments | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Percentage of common stock Issuable | 15.00% |
Acquisitions - Summary of the E
Acquisitions - Summary of the Estimated Fair Value of the Tangible and Intangible Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Jun. 08, 2016 | Dec. 31, 2015 | Aug. 05, 2015 | Jun. 11, 2015 |
Business Acquisition [Line Items] | |||||
Goodwill | $ 45,929 | $ 39,829 | |||
Conexus | |||||
Business Acquisition [Line Items] | |||||
Cash and cash equivalents | $ 156 | ||||
Accounts receivable | 1,451 | ||||
Other receivables | 909 | ||||
Property and equipment | 200 | ||||
Other assets | 82 | ||||
Intangible assets | 2,181 | ||||
Total assets acquired | 4,979 | ||||
Total liabilities assumed | 2,254 | ||||
Net assets acquired | 2,725 | ||||
Goodwill | 6,055 | ||||
Total purchase price | $ 8,780 | ||||
Moda | |||||
Business Acquisition [Line Items] | |||||
Cash and cash equivalents | $ 126 | ||||
Accounts receivable | 335 | ||||
Property and equipment | 27 | ||||
Identifiable intangibles | 340 | ||||
Other assets | 23 | ||||
Total assets acquired | 851 | ||||
Total liabilities assumed | 658 | ||||
Net assets acquired | 193 | ||||
Goodwill | 1,287 | ||||
Total purchase price | $ 1,480 | ||||
Cross View, Inc. | |||||
Business Acquisition [Line Items] | |||||
Accounts receivable | $ 7,550 | ||||
Property and equipment | 441 | ||||
Identifiable intangibles | 9,050 | ||||
Other assets | 149 | ||||
Total assets acquired | 17,190 | ||||
Total liabilities assumed | 2,556 | ||||
Net assets acquired | 14,634 | ||||
Goodwill | 30,221 | ||||
Total purchase price | $ 44,855 |
Acquisitions - Schedule of Purc
Acquisitions - Schedule of Purchase Price for Conexus (Details) - Conexus $ in Thousands | Jun. 08, 2016USD ($) | Jun. 08, 2016GBP (£) | Sep. 30, 2016USD ($) |
Business Acquisition [Line Items] | |||
Aggregate cash payments | $ 8,476 | £ 5,855,000 | |
Performance-based contingent payments (based on estimated fair value at acquisition date) | 553 | $ 553 | |
Estimated post-closing balance sheet reconciliation adjustment | (249) | ||
Total purchase price | $ 8,780 |
Acquisitions - Acquisition Defi
Acquisitions - Acquisition Definite Lived Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
Business Acquisition [Line Items] | ||
Fair Value at Acquisition | $ 14,372 | $ 12,167 |
Accumulated Amortization | (6,247) | (3,357) |
Net Carrying Value | 8,125 | 8,810 |
Developed Technology | ||
Business Acquisition [Line Items] | ||
Fair Value at Acquisition | 1,577 | 850 |
Accumulated Amortization | (393) | (140) |
Net Carrying Value | $ 1,184 | 710 |
Developed Technology | Minimum | ||
Business Acquisition [Line Items] | ||
Estimated Useful Life from Acquisition | 2 years 6 months | |
Developed Technology | Maximum | ||
Business Acquisition [Line Items] | ||
Estimated Useful Life from Acquisition | 3 years | |
Customer Relationships | ||
Business Acquisition [Line Items] | ||
Fair Value at Acquisition | $ 10,433 | 8,979 |
Accumulated Amortization | (4,367) | (2,378) |
Net Carrying Value | $ 6,066 | 6,601 |
Customer Relationships | Minimum | ||
Business Acquisition [Line Items] | ||
Estimated Useful Life from Acquisition | 1 year 7 months 6 days | |
Customer Relationships | Maximum | ||
Business Acquisition [Line Items] | ||
Estimated Useful Life from Acquisition | 9 years | |
Noncompete Agreements | ||
Business Acquisition [Line Items] | ||
Fair Value at Acquisition | $ 575 | 575 |
Accumulated Amortization | (296) | (159) |
Net Carrying Value | $ 279 | 416 |
Noncompete Agreements | Minimum | ||
Business Acquisition [Line Items] | ||
Estimated Useful Life from Acquisition | 1 year | |
Noncompete Agreements | Maximum | ||
Business Acquisition [Line Items] | ||
Estimated Useful Life from Acquisition | 3 years 6 months | |
Trade Names | ||
Business Acquisition [Line Items] | ||
Fair Value at Acquisition | $ 1,250 | 1,250 |
Accumulated Amortization | (719) | (266) |
Net Carrying Value | $ 531 | 984 |
Trade Names | Minimum | ||
Business Acquisition [Line Items] | ||
Estimated Useful Life from Acquisition | 2 years 3 months | |
Trade Names | Maximum | ||
Business Acquisition [Line Items] | ||
Estimated Useful Life from Acquisition | 2 years 6 months | |
Conexus | ||
Business Acquisition [Line Items] | ||
Fair Value at Acquisition | $ 2,181 | |
Accumulated Amortization | (329) | |
Net Carrying Value | 1,852 | |
Conexus | Developed Technology | ||
Business Acquisition [Line Items] | ||
Fair Value at Acquisition | 727 | |
Accumulated Amortization | (73) | |
Net Carrying Value | $ 654 | |
Estimated Useful Life from Acquisition | 2 years 6 months | |
Conexus | Customer Relationships | ||
Business Acquisition [Line Items] | ||
Fair Value at Acquisition | $ 1,454 | |
Accumulated Amortization | (256) | |
Net Carrying Value | $ 1,198 | |
Estimated Useful Life from Acquisition | 4 years 6 months | |
Moda | ||
Business Acquisition [Line Items] | ||
Fair Value at Acquisition | $ 340 | 340 |
Accumulated Amortization | (273) | (153) |
Net Carrying Value | 67 | 187 |
Moda | Customer Relationships | ||
Business Acquisition [Line Items] | ||
Fair Value at Acquisition | 309 | 309 |
Accumulated Amortization | (245) | (141) |
Net Carrying Value | $ 64 | 168 |
Estimated Useful Life from Acquisition | 1 year 7 months 6 days | |
Moda | Noncompete Agreements | ||
Business Acquisition [Line Items] | ||
Fair Value at Acquisition | $ 31 | 31 |
Accumulated Amortization | (28) | (12) |
Net Carrying Value | $ 3 | 19 |
Estimated Useful Life from Acquisition | 2 years 6 months | |
Cross View, Inc. | ||
Business Acquisition [Line Items] | ||
Fair Value at Acquisition | $ 9,050 | 9,050 |
Accumulated Amortization | (3,785) | (1,759) |
Net Carrying Value | 5,265 | 7,291 |
Cross View, Inc. | Developed Technology | ||
Business Acquisition [Line Items] | ||
Fair Value at Acquisition | 850 | 850 |
Accumulated Amortization | (393) | (140) |
Net Carrying Value | $ 457 | 710 |
Cross View, Inc. | Developed Technology | Minimum | ||
Business Acquisition [Line Items] | ||
Estimated Useful Life from Acquisition | 2 years 6 months | |
Cross View, Inc. | Developed Technology | Maximum | ||
Business Acquisition [Line Items] | ||
Estimated Useful Life from Acquisition | 3 years | |
Cross View, Inc. | Customer Relationships | ||
Business Acquisition [Line Items] | ||
Fair Value at Acquisition | $ 6,800 | 6,800 |
Accumulated Amortization | (2,762) | (1,394) |
Net Carrying Value | $ 4,038 | 5,406 |
Estimated Useful Life from Acquisition | 9 years | |
Cross View, Inc. | Noncompete Agreements | ||
Business Acquisition [Line Items] | ||
Fair Value at Acquisition | $ 300 | 300 |
Accumulated Amortization | (117) | (42) |
Net Carrying Value | $ 183 | 258 |
Estimated Useful Life from Acquisition | 3 years | |
Cross View, Inc. | Trade Names | ||
Business Acquisition [Line Items] | ||
Fair Value at Acquisition | $ 1,100 | 1,100 |
Accumulated Amortization | (513) | (183) |
Net Carrying Value | $ 587 | $ 917 |
Estimated Useful Life from Acquisition | 2 years 6 months |
Acquisitions - Schedule of Pu31
Acquisitions - Schedule of Purchase Price for Moda (Details) - Moda $ / shares in Units, $ in Thousands | Jun. 11, 2015USD ($)$ / sharesshares | Jun. 11, 2015GBP (£)shares | Sep. 30, 2015USD ($) |
Business Acquisition [Line Items] | |||
Number of shares of common stock issued | shares | 16,116 | 16,116 | |
Multiplied by PFSweb Inc.'s stock price | $ / shares | $ 14.60 | ||
Share consideration | $ 235 | ||
Aggregate cash payments | 1,005 | £ 650,000 | |
Performance-based contingent payments (based on estimated fair value at acquisition date) | 240 | $ 480 | |
Total purchase price | $ 1,480 |
Acquisitions - Schedule of Pu32
Acquisitions - Schedule of Purchase Price for Cross View (Details) - Cross View, Inc. - USD ($) $ / shares in Units, $ in Thousands | Aug. 05, 2015 | Sep. 30, 2015 |
Business Acquisition [Line Items] | ||
Number of shares of common stock issued | 553,223 | |
Multiplied by PFSweb Inc.'s stock price | $ 11.40 | |
Share consideration | $ 6,307 | |
Aggregate cash payments | 30,740 | |
Performance-based contingent payments (based on estimated fair value at acquisition date) | 9,195 | $ 12,723 |
Post-closing balance sheet reconciliation adjustment | (1,387) | |
Total purchase price | $ 44,855 |
Acquisitions - Schedule of Chan
Acquisitions - Schedule of Change in Acquisition Related Performance-Based Contingent Payments (Details) - USD ($) $ in Thousands | Jun. 08, 2016 | Aug. 05, 2015 | Jun. 11, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 |
Business Acquisition [Line Items] | |||||||
Performance-based contingent payments, Beginning balance | $ 380 | $ 16,655 | $ 14,157 | $ 5,392 | |||
Change in balance due | (2,638) | 403 | |||||
Cross View, Inc. | |||||||
Business Acquisition [Line Items] | |||||||
Earn-out payment in common stock and cash | (7,942) | ||||||
Value recorded at acquisition | $ 9,195 | 12,723 | |||||
LAL | |||||||
Business Acquisition [Line Items] | |||||||
Earn-out payment in common stock and cash | (2,000) | (950) | |||||
REV | |||||||
Business Acquisition [Line Items] | |||||||
Earn-out payment in common stock and cash | (1,750) | (1,393) | |||||
Conexus | |||||||
Business Acquisition [Line Items] | |||||||
Value recorded at acquisition | $ 553 | $ 553 | |||||
Moda | |||||||
Business Acquisition [Line Items] | |||||||
Value recorded at acquisition | $ 240 | $ 480 |
Acquisition - Schedule of Pro F
Acquisition - Schedule of Pro Forma Information for Comparative Purpose Assuming Acquisitions (Details) - Conexus and CrossView - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Business Acquisition [Line Items] | ||||
Total revenues | $ 79,910 | $ 73,425 | $ 235,194 | $ 219,727 |
Net loss | $ (1,039) | $ (2,043) | $ (4,352) | $ (8,163) |
Basic and diluted net loss per share | $ (0.06) | $ 0.11 | $ (0.23) | $ (0.47) |
Goodwill and Identifiable Int35
Goodwill and Identifiable Intangibles, Net - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Jun. 30, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Jun. 08, 2016 | Dec. 31, 2015 | |
Finite Lived Intangible Assets [Line Items] | |||||||
Goodwill | $ 45,929 | $ 45,929 | $ 39,829 | ||||
Amortization expenses | $ 1,200 | $ 1,000 | 2,900 | $ 1,500 | |||
Conexus | |||||||
Finite Lived Intangible Assets [Line Items] | |||||||
Goodwill | $ 6,055 | ||||||
Goodwill recognized during the period | $ 6,100 | $ 6,100 |
Goodwill and Identifiable Int36
Goodwill and Identifiable Intangibles, Net - Schedule of Definite-Lived Intangible Assets Acquired (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
Finite Lived Intangible Assets [Line Items] | ||
Fair Value at Acquisition | $ 14,372 | $ 12,167 |
Accumulated Amortization | (6,247) | (3,357) |
Net Carrying Value | 8,125 | 8,810 |
Trade Names | ||
Finite Lived Intangible Assets [Line Items] | ||
Fair Value at Acquisition | 1,250 | 1,250 |
Accumulated Amortization | (719) | (266) |
Net Carrying Value | 531 | 984 |
Noncompete Agreements | ||
Finite Lived Intangible Assets [Line Items] | ||
Fair Value at Acquisition | 575 | 575 |
Accumulated Amortization | (296) | (159) |
Net Carrying Value | 279 | 416 |
Lease Agreements | ||
Finite Lived Intangible Assets [Line Items] | ||
Fair Value at Acquisition | 45 | 45 |
Accumulated Amortization | (38) | (24) |
Net Carrying Value | $ 7 | 21 |
Estimated Useful Life from Acquisition | 2 years 6 months | |
Customer Relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Fair Value at Acquisition | $ 10,433 | 8,979 |
Accumulated Amortization | (4,367) | (2,378) |
Net Carrying Value | 6,066 | 6,601 |
Developed Technology | ||
Finite Lived Intangible Assets [Line Items] | ||
Fair Value at Acquisition | 1,577 | 850 |
Accumulated Amortization | (393) | (140) |
Net Carrying Value | 1,184 | 710 |
Other Intangibles | ||
Finite Lived Intangible Assets [Line Items] | ||
Fair Value at Acquisition | 492 | 468 |
Accumulated Amortization | (434) | (390) |
Net Carrying Value | $ 58 | $ 78 |
Estimated Useful Life from Acquisition | 9 years | |
Minimum | Trade Names | ||
Finite Lived Intangible Assets [Line Items] | ||
Estimated Useful Life from Acquisition | 2 years 3 months | |
Minimum | Noncompete Agreements | ||
Finite Lived Intangible Assets [Line Items] | ||
Estimated Useful Life from Acquisition | 1 year | |
Minimum | Customer Relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Estimated Useful Life from Acquisition | 1 year 7 months 6 days | |
Minimum | Developed Technology | ||
Finite Lived Intangible Assets [Line Items] | ||
Estimated Useful Life from Acquisition | 2 years 6 months | |
Maximum | Trade Names | ||
Finite Lived Intangible Assets [Line Items] | ||
Estimated Useful Life from Acquisition | 2 years 6 months | |
Maximum | Noncompete Agreements | ||
Finite Lived Intangible Assets [Line Items] | ||
Estimated Useful Life from Acquisition | 3 years 6 months | |
Maximum | Customer Relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Estimated Useful Life from Acquisition | 9 years | |
Maximum | Developed Technology | ||
Finite Lived Intangible Assets [Line Items] | ||
Estimated Useful Life from Acquisition | 3 years |
Goodwill and Identifiable Int37
Goodwill and Identifiable Intangibles, Net - Summary of Estimated Amortization Expense (Details) $ in Thousands | Sep. 30, 2016USD ($) |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Remaining 2,016 | $ 1,186 |
2,017 | 3,220 |
2,018 | 1,780 |
2,019 | 748 |
2,020 | 526 |
2021 and thereafter | $ 665 |
Net Loss Per Common Share - Sch
Net Loss Per Common Share - Schedule of Equity Awards Excluded from Calculation of Diluted Net Loss per Share (Details) - shares shares in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Total anti-dilutive stock options, performance shares and deferred stock units | 1,586 | 1,981 |
Stock Options | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Total anti-dilutive stock options, performance shares and deferred stock units | 1,209 | 1,371 |
Performance Shares | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Total anti-dilutive stock options, performance shares and deferred stock units | 273 | 545 |
Deferred Stock Units | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Total anti-dilutive stock options, performance shares and deferred stock units | 104 | 65 |
Stock and Stock Options - Addit
Stock and Stock Options - Additional Information (Details) - USD ($) $ in Thousands | Mar. 23, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock-based compensation expense | $ 347 | $ 1,492 | $ 1,743 | $ 3,446 | |
Other Stock-Based Awards | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Awards issued under the employee stock and incentive plan | 12,000 | ||||
Restricted Stock Unit Awards | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Restricted stock units awards issued | 38,000 | ||||
Stock options and stock option plans vesting terms period | 3 years | ||||
Stock option issued | 84,000 | ||||
Restricted Stock Unit Awards | Maximum | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock option issued | 91,000 | ||||
Performance Shares | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock option issued | 283,000 | ||||
Performance Shares | Maximum | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock option issued | 282,000 | ||||
Selling, General and Administrative Expenses | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock-based compensation expense | $ 300 | $ 1,500 | $ 1,400 | $ 3,400 |
Vendor Financing - Additional I
Vendor Financing - Additional Information (Details) - Short Term Credit Facility - United States - IBM Credit LLC - Supplies Distributors - USD ($) | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
Line Of Credit Facility [Line Items] | ||
Maximum financing receivable capacity through agreement thereafter | $ 13,000,000 | |
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 borrowing | $ 8,300,000 | $ 8,200,000 |
Available credit | 0 | |
Subordinated note outstanding, minimum limit | $ 2,500,000 | |
Interest rate on outstanding borrowings | 4.00% | |
Prime Rate | ||
Line Of Credit Facility [Line Items] | ||
Percentage points added to the reference rate to compute the variable rate on the debt instrument | 0.50% |
Debt and Capital Lease Obliga41
Debt and Capital Lease Obligations - Summary of Outstanding Debt and Capital Lease Obligations (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||
Master lease agreements | $ 6,042 | $ 6,644 |
Other | 117 | 135 |
Debt and capital lease obligation | 60,421 | 35,391 |
Current portion of long-term debt and capital lease obligations | 5,672 | 3,153 |
Long-term debt, less current portion | 54,749 | 32,238 |
U.S. Credit Agreement | ||
Debt Instrument [Line Items] | ||
Debt issuance costs | (562) | (671) |
U.S. Credit Agreement | Revolver | ||
Debt Instrument [Line Items] | ||
Credit facility | 23,000 | 19,283 |
U.S. Credit Agreement | Term Loan | ||
Debt Instrument [Line Items] | ||
Credit facility | 30,000 | $ 10,000 |
U.S. Credit Agreement | Equipment Loan | ||
Debt Instrument [Line Items] | ||
Credit facility | $ 1,824 |
Debt and Capital Lease Obliga42
Debt and Capital Lease Obligations - U.S. Credit Agreement - Additional Information (Details) - Regions Bank | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Line Of Credit Facility [Line Items] | |
Credit facility maximum borrowing capacity | $ 75,000,000 |
Credit facility, interest rate description | Borrowings under the Credit Agreement accrue interest at a variable rate based on prime rate or Libor, plus an applicable margin. |
Credit facility maturity period | 5 years |
Credit Agreement, fee paid | $ 700,000 |
Credit facility collateral pledge percentage | 65.00% |
Revolving Loan Facility | |
Line Of Credit Facility [Line Items] | |
Credit facility maximum borrowing capacity | $ 32,500,000 |
Available credit under credit agreement | $ 9,500,000 |
Credit facility due date | Aug. 5, 2020 |
Weighted average interest rate on outstanding borrowings | 3.28% |
Term Loan Facility | |
Line Of Credit Facility [Line Items] | |
Credit facility maximum borrowing capacity | $ 30,000,000 |
Available credit under credit agreement | $ 0 |
Credit facility due date | Aug. 5, 2020 |
Weighted average interest rate on outstanding borrowings | 2.90% |
Term Loan Facility | Maximum | |
Line Of Credit Facility [Line Items] | |
Credit facility, percentage of amount borrowed due on maturity date | 65.00% |
Equipment Loans Master Agreement | |
Line Of Credit Facility [Line Items] | |
Outstanding borrowing | $ 1,800,000 |
Debt and Capital Lease Obliga43
Debt and Capital Lease Obligations - Master Lease Agreements - Additional Information (Details) - Lease Agreements | 9 Months Ended |
Sep. 30, 2016 | |
Minimum | |
Line Of Credit Facility [Line Items] | |
Loans and lease agreement term | 3 years |
Maximum | |
Line Of Credit Facility [Line Items] | |
Loans and lease agreement term | 5 years |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2016Segments | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
Segment Information - Summary o
Segment Information - Summary of Product Revenue by Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Summary of product revenue by segments | |||||
Revenues | $ 79,910 | $ 71,183 | $ 232,188 | $ 198,205 | |
Summary of Income (loss) from continuing operations by segments | |||||
Income (loss) from continuing operations | (6) | (2,726) | (1,193) | (5,340) | |
Summary of Depreciation and amortization by segments | |||||
Depreciation and amortization | 3,803 | 4,101 | 11,206 | 10,645 | |
Summary of product revenue by segments | |||||
Capital expenditures | 1,049 | 1,522 | 7,532 | 3,468 | |
Summary of assets by segments | |||||
Assets | 183,144 | 183,144 | $ 191,290 | ||
PFSweb | |||||
Summary of Income (loss) from continuing operations by segments | |||||
Income (loss) from continuing operations | (447) | (2,757) | (2,516) | (6,288) | |
Summary of Depreciation and amortization by segments | |||||
Depreciation and amortization | 3,797 | 4,086 | 11,188 | 10,607 | |
Summary of product revenue by segments | |||||
Capital expenditures | 1,049 | 1,522 | 7,532 | 3,468 | |
Business and Retail Connect | |||||
Summary of Income (loss) from continuing operations by segments | |||||
Income (loss) from continuing operations | 441 | 31 | 1,323 | 948 | |
Summary of Depreciation and amortization by segments | |||||
Depreciation and amortization | 6 | 15 | 18 | 38 | |
Operating Segments | PFSweb | |||||
Summary of product revenue by segments | |||||
Revenues | 67,768 | 56,897 | 194,239 | 153,040 | |
Summary of assets by segments | |||||
Assets | 155,888 | 155,888 | 151,064 | ||
Operating Segments | Business and Retail Connect | |||||
Summary of product revenue by segments | |||||
Revenues | 15,351 | 17,975 | 48,425 | 55,870 | |
Summary of assets by segments | |||||
Assets | 37,501 | 37,501 | 50,682 | ||
Eliminations | |||||
Summary of product revenue by segments | |||||
Revenues | (3,209) | $ (3,689) | (10,476) | $ (10,705) | |
Summary of assets by segments | |||||
Assets | $ (10,245) | $ (10,245) | $ (10,456) |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - 2014 and 2015 Earn-out Payments - REV Solutions, Inc. and REVTech Solutions India Private Limited - Mr. Steven Stephan $ in Millions | 9 Months Ended |
Sep. 30, 2016USD ($)shares | |
Related Party Transaction [Line Items] | |
Earn-out payment in common stock and cash | $ | $ 2.4 |
Number of shares of common stock issued | shares | 38,574 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) $ in Millions | Sep. 30, 2016USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
Issuance of performance bond | $ 1.3 |