Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 06, 2017 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
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 | 19,020,005 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 12,769 | $ 24,425 |
Restricted cash | 215 | 215 |
Accounts receivable, net of allowance for doubtful accounts of $642 and $494 at September 30, 2017 and December 31, 2016, respectively | 56,541 | 80,223 |
Inventories, net of reserves of $421 and $568 at September 30, 2017 and December 31, 2016, respectively | 5,183 | 6,632 |
Other receivables | 5,272 | 6,750 |
Prepaid expenses and other current assets | 4,930 | 7,299 |
Total current assets | 84,910 | 125,544 |
PROPERTY AND EQUIPMENT, net | 26,097 | 30,264 |
IDENTIFIABLE INTANGIBLES, net | 4,410 | 6,864 |
GOODWILL | 46,210 | 46,210 |
OTHER ASSETS | 3,733 | 2,454 |
Total assets | 165,360 | 211,336 |
CURRENT LIABILITIES: | ||
Current portion of long-term debt and capital lease obligations | 6,648 | 7,300 |
Trade accounts payable | 28,236 | 59,752 |
Deferred revenue | 5,537 | 7,156 |
Performance-based contingent payments | 3,934 | 2,405 |
Accrued expenses | 26,427 | 30,360 |
Total current liabilities | 70,782 | 106,973 |
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS, less current portion | 44,535 | 52,399 |
DEFERRED REVENUE, less current portion | 4,555 | 4,127 |
DEFERRED RENT | 5,654 | 4,810 |
PERFORMANCE-BASED CONTINGENT PAYMENTS, less current portion | 1,678 | |
OTHER LIABILITIES | 2,547 | 1,066 |
Total liabilities | 128,073 | 171,053 |
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; 19,053,472 and 18,768,567 shares issued at September 30, 2017 and December 31, 2016, respectively; and 19,020,005 and 18,735,100 outstanding at September 30, 2017 and December 31, 2016, respectively | 19 | 19 |
Additional paid-in capital | 149,805 | 146,286 |
Accumulated deficit | (112,867) | (105,317) |
Accumulated other comprehensive income (loss) | 455 | (580) |
Treasury stock at cost, 33,467 shares | (125) | (125) |
Total shareholders’ equity | 37,287 | 40,283 |
Total liabilities and shareholders’ equity | $ 165,360 | $ 211,336 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Statement Of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 642 | $ 494 |
Inventories reserves | $ 421 | $ 568 |
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 | 19,053,472 | 18,768,567 |
Common stock, shares outstanding | 19,020,005 | 18,735,100 |
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, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
REVENUES: | ||||
Service fee revenue | $ 54,490 | $ 53,788 | $ 166,455 | $ 154,271 |
Product revenue, net | 9,616 | 11,671 | 30,881 | 36,658 |
Pass-through revenue | 13,212 | 14,451 | 36,816 | 41,259 |
Total revenues | 77,318 | 79,910 | 234,152 | 232,188 |
COSTS OF REVENUES: | ||||
Cost of service fee revenue | 35,719 | 36,903 | 111,280 | 103,547 |
Cost of product revenue | 8,991 | 10,994 | 29,221 | 34,649 |
Cost of pass-through revenue | 13,212 | 14,451 | 36,816 | 41,259 |
Total costs of revenues | 57,922 | 62,348 | 177,317 | 179,455 |
Gross profit | 19,396 | 17,562 | 56,835 | 52,733 |
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES, including stock based compensation of $783 and $347 for the three months ended September 30, 2017 and 2016, respectively and $2,544 and $1,743 for the nine months ended September 30, 2017 and 2016, respectively | 18,229 | 17,568 | 60,682 | 53,926 |
Income (loss) from operations | 1,167 | (6) | (3,847) | (1,193) |
INTEREST EXPENSE, net | 778 | 714 | 2,125 | 1,807 |
Income (loss) from operations before income taxes | 389 | (720) | (5,972) | (3,000) |
INCOME TAX EXPENSE, net | 487 | 319 | 1,578 | 973 |
NET LOSS | $ (98) | $ (1,039) | $ (7,550) | $ (3,973) |
NET LOSS PER SHARE: | ||||
Basic | $ (0.01) | $ (0.06) | $ (0.40) | $ (0.21) |
Diluted | $ (0.01) | $ (0.06) | $ (0.40) | $ (0.21) |
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: | ||||
Basic | 18,995 | 18,699 | 18,868 | 18,552 |
Diluted | 18,995 | 18,699 | 18,868 | 18,552 |
COMPREHENSIVE INCOME (LOSS): | ||||
Net loss | $ (98) | $ (1,039) | $ (7,550) | $ (3,973) |
Foreign currency translation adjustment | 228 | 680 | 1,035 | 976 |
TOTAL COMPREHENSIVE INCOME (LOSS) | $ 130 | $ (359) | $ (6,515) | $ (2,997) |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Operations (Parenthetical) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Statement [Abstract] | ||||
Stock based compensation | $ 783 | $ 347 | $ 2,544 | $ 1,743 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (7,550) | $ (3,973) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 11,096 | 11,206 |
Amortization of debt issuance costs | 112 | 109 |
Provision for doubtful accounts | 160 | 16 |
Provision for excess and obsolete inventory | 21 | |
Deferred income taxes | 409 | 57 |
Stock-based compensation expense | 2,544 | 1,743 |
Change in performance-based contingent payments | 2,209 | (2,638) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 25,220 | 7,651 |
Inventories | 1,463 | 2,106 |
Prepaid expenses, other receivables and other assets | 3,752 | 4,843 |
Deferred rent | 187 | 906 |
Accounts payable, deferred revenue, accrued expenses and other liabilities | (38,106) | (24,412) |
Net cash provided by (used in) operating activities | 1,496 | (2,365) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property and equipment | (3,965) | (7,532) |
Acquisitions, net of cash acquired | (8,320) | |
Net cash used in investing activities | (3,965) | (15,852) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Net proceeds from issuance of common stock | 877 | 1,073 |
Taxes paid on behalf of employees for withheld shares | (256) | (1,307) |
Decrease in restricted cash | 56 | |
Payments on performance-based contingent payments | (2,004) | (9,454) |
Payments on capital lease obligations | (2,425) | (2,210) |
Payments on debt, net | (324) | (384) |
Borrowings (payments) on term loan | (1,688) | 20,000 |
Borrowings on revolver | 62,849 | 61,906 |
Payments on revolver | (68,173) | (58,188) |
Net cash provided by (used in) financing activities | (11,144) | 11,492 |
EFFECT OF EXCHANGE RATES ON CASH AND CASH EQUIVALENTS | 1,957 | 643 |
NET DECREASE IN CASH AND CASH EQUIVALENTS | (11,656) | (6,082) |
CASH AND CASH EQUIVALENTS, beginning of period | 24,425 | 21,781 |
CASH AND CASH EQUIVALENTS, end of period | 12,769 | 15,699 |
Non-cash investing and financing activities: | ||
Property and equipment acquired under long-term debt and capital leases | 270 | 3,890 |
Performance-based contingent payments through stock issuance | $ 354 | $ 2,238 |
Overview and Basis of Presentat
Overview and Basis of Presentation | 9 Months Ended |
Sep. 30, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Overview and Basis of Presentation | 1. OVERVIEW AND BASIS OF PRESENTATION PFSweb, Inc. and its subsidiaries are collectively referred to as the “Company”; “Supplies Distributors” collectively 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 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 (see Note 7) to fund certain working capital requirements for the sale of primarily 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 customer, and records product revenue net of cost of product revenue as a component of service fee revenue. Pursuant to agreements between PFSweb and Supplies Distributors, PFSweb provides transaction management and fulfillment services to Supplies Distributors. Basis of Presentation The interim condensed consolidated financial statements as of September 30, 2017, and for the three and nine months ended September 30, 2017 and 2016, 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, 2017, its results of operations for the three and nine months ended September 30, 2017 and 2016 and its cash flows for the nine months ended September 30, 2017 and 2016. 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, 2017 | |
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, 2016 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 products or 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 include addressing customer questions related to orders, as well as cross-selling/up-selling activities. Service fee revenue for this activity is recognized as the services are rendered. Fees charged to the client are on a per transaction basis based on either (i) a pre-determined fee per order or fee per telephone minutes incurred, (ii) a per dedicated agent fee, or (iii) are included in the product fulfillment service fees that are recognized on product shipment. Professional consulting and technology service revenues primarily relate to 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. 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 distribution services and order management customer care 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. Concentration of Business and Credit Risk No product customer nor service fee client relationship represented more than 10% of the Company’s consolidated total revenues during the nine months ended September 30, 2017. One service fee client relationship represented 10% of the Company’s consolidated total revenues during the nine months ended September 30, 2016. No client exceeded 10% of consolidated accounts receivable as of September 30, 2017. Amounts due from one client exceeded 10% of consolidated accounts receivable as of December 31, 2016. A summary of the nonaffiliated customer and client revenue concentrations as a percentage of product revenue and service fee revenue, respectively, is as follows: Nine Months Ended September 30, 2017 2016 Service Fee Revenue (as a percentage of total Service Fee Revenue): Client 1 9 % 10 % Product Revenue (as a percentage of total Product Revenue): Customer 1 6 % 13 % Customer 2 13 % 16 % Customer 3 12 % 5 % The Company currently anticipates that its product revenue, including the revenue from certain of 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. Operating Leases The Company leases certain real estate for its warehouse, call center, sales, professional services and corporate offices, 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, and classifies with the difference between cash payments and rent expense recognized 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 $3.3 million and $5.4 million, net of accumulated amortization of approximately $7.3 million and $5.1 million, at September 30, 2017 and December 31, 2016, respectively. Depreciation and amortization expense related to capital leases during the nine months ended September 30, 2017 and 2016 was $2.3 million and $2.1 million, respectively. Income Taxes The Company records a tax provision primarily associated with state income taxes and the majority of its international operations. The Company has recorded a valuation allowance for the majority of its domestic net deferred tax assets, which are primarily related to net operating loss carryforwards and certain foreign deferred tax assets. Cash Paid for Interest and Taxes The Company made payments for interest of approximately $1.9 million and $1.1 million in the nine months ended September 30, 2017 and 2016, respectively. Impact of Recently Issued Accounting Standards Pronouncements Recently Adopted 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 In July 2015, the FASB issued ASU No. 2015-11, “ Simplifying the Measurement of Inventory,” In November 2015, the FASB issued ASU No. 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes,” Pronouncements Not Yet Adopted In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers.” In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)," which modifies the accounting for leases, intending to increase transparency and comparability of organizations by requiring balance sheet presentation of leased assets and increased financial statement disclosure of leasing arrangements. ASU 2016-02 will require entities to recognize a liability for their lease obligations and a corresponding asset representing the right to use the underlying asset over the lease term. Lease obligations are to be measured at their present value and accounted for using the effective interest method. The accounting for the leased asset will differ slightly depending on whether the agreement is deemed to be a financing or operating lease. For financing leases, the leased asset is depreciated on a straight-line basis and depreciation expense is recorded separately from the interest expense in the statements of operations, resulting in higher expense in the earlier part of the lease term. For operating leases, the depreciation and interest expense components are combined, recognized evenly over the term of the lease, and presented as a reduction to operating income. ASU 2016-02 requires that assets and liabilities be presented or disclosed separately, and requires additional disclosure of certain qualitative and quantitative information related to these lease agreements. ASU 2016-02 is effective for annual and interim periods beginning after December 15, 2018. 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. The Company is currently assessing the ASU’s impact on its consolidated financial statements, but does expect the adoption to have a material impact to the balance sheet through the addition of an ROU asset and corresponding lease liability. 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” In January 2017, the FASB issued ASU No. 2017-04, “Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill impairment” In May 2017, the Financial Accounting Standards Board (the “FASB”) issued ASU 2017-09, “Compensation Stock Compensation (Topic 718): Scope of Modification ” |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
Acquisitions | 3. ACQUISITIONS Acquisitions have been recorded using the purchase method of accounting for business combinations. 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 from its primary operations in Basingstoke, Hampshire (U.K.). The purchase price for the shares consisted of (i) an initial cash payment of £5,855,000 (approximately $8.5 million at June 8, 2016), 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 $1.8 million at December 31, 2016), subject to Conexus achieving certain operational and financial targets during the post-closing period ending December 31, 2016 (the “Earn-out Payment”), subject to possible offsets for indemnification and other claims arising under the purchase agreement. Conexus did not achieve the operational and financial targets so the Company did not make any payments or record any liability as of September 30, 2017 or December 31, 2016 applicable to the Earn-out Payment The transaction was accounted for using the purchase method of accounting for business combinations and, accordingly, the assets acquired and liabilities assumed, including an allocation of purchase price, and the results of operations of Conexus, including the amortization of acquired intangible assets, have been included in the Company's 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): Cash $ 156 Accounts receivable, net 1,451 Other receivables 887 Other assets 421 Identifiable intangibles 2,035 Total assets acquired 4,950 Total liabilities assumed 2,218 Net assets acquired 2,732 Goodwill 6,336 Total purchase price $ 9,068 The purchase price for Conexus was as follows (in thousands): Aggregate cash payments $ 8,515 Performance-based contingent payments (based on fair value at acquisition date) 553 Total purchase price $ 9,068 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 $6.3 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 Conexus acquisition. Definite lived intangible assets acquired in the Conexus acquisition consist of (in thousands): Estimated September 30, 2017 December 31, 2016 Useful Life Fair Value at Acquisition Accumulated Amortization Net Carrying Value Accumulated Amortization Net Carrying Value from Acquisition Developed technology $ 727 $ (392 ) $ 335 $ (145 ) $ 582 2.5 years Customer relationships 1,308 (853 ) 455 (461 ) 847 4.5 years Total definite lived identifiable intangible assets $ 2,035 $ (1,245 ) $ 790 $ (606 ) $ 1,429 Unaudited pro forma historical results of operations related to the Conexus acquisition have not been presented because they are not material to the Company’s condensed consolidated statements of operations. Acquisition of CrossView On Consideration paid by the Company included an initial cash payment of $30.7 million and 553,223 unregistered shares of Company common stock (approximately $6.3 million in value as of the acquisition date). The initial cash payment was subject to adjustment based upon a post-closing balance sheet reconciliation. In addition, the purchase agreement provides for future earn-out payments (“CrossView Earn-out Payments”) payable in 2016, 2017 and 2018 based on the achievement of certain 2015, 2016 and 2017 financial targets. The CrossView Earn-out Payments have no guaranteed minimum and an aggregate maximum of $18.0 million and are subject to possible offsets for indemnification and other claims. During 2016, the Company paid an aggregate of $7.9 million in settlement of the 2015 CrossView Earn-out Payment, of which $1.6 million was paid by the issuance of 122,066 restricted shares of Company stock. 2017, the Company paid an aggregate of $2.4 million in settlement of the 2016 CrossView Earn-out Payment, of which $0.4 million was paid by the issuance of 48,173 restricted shares of Company stock. The Company will pay 15% of any 2017 CrossView Earn-out Payment in restricted shares of Company common stock, based on its current market value at the time of issuance. As of September 30, 2017, the Company had recorded a liability of $3.9 million applicable to the estimated 2017 CrossView Earn-out Payment, which is included in performance-based contingent payments in the condensed consolidated balance sheets. The estimated performance-based contingent payment liability decreased from Performance-Based Contingent Payments The following table presents the change in the acquisition related performance-based contingent payments for the periods presented (in thousands): 2017 2016 As of January 1, $ 4,083 $ 14,157 CrossView earn-out payments in common stock and cash (2,358 ) (7,942 ) LAL and REV earn-out payments in common stock and cash — (3,750 ) Value recorded at acquisition - Conexus — 553 Change in fair value aggregate balances due 2,209 (2,638 ) As of September 30, $ 3,934 $ 380 |
Goodwill and Identifiable Intan
Goodwill and Identifiable Intangibles, Net | 9 Months Ended |
Sep. 30, 2017 | |
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. The Company determined fair value using a combination of the discounted cash flow, market multiple and market capitalization valuation methods. The following table presents the gross carrying value and accumulated amortization for identifiable intangibles (in thousands): September 30, 2017 Fair Value Accumulated Net Carrying Estimated Useful Life at Acquisition Amortization Value from Acquisition Trade names $ 1,250 $ (1,103 ) $ 147 2.25 - 2.5 years Non-compete agreements 575 (462 ) 113 1- 3.5 years Leasehold 45 (45 ) — 2.5 years Customer relationships 10,287 (6,608 ) 3,679 1.6 - 9 years Developed technology 1,577 (1,122 ) 455 2.5-3 years Other intangibles 493 (477 ) 16 9 years Total definite lived identifiable intangible assets $ 14,227 $ (9,817 ) $ 4,410 Definite Lived Intangible Asset Amortization For the three months ended September 30, 2017 and 2016, amortization expense related to acquired definite lived intangible assets was $0.8 million and $1.2 million, respectively, and for the nine months ended September 30, 2017 and 2016 amortization expense was $2.3 million and $2.9 million, respectively, which are included in selling, general and administrative expenses in the unaudited condensed consolidated statements of operations. The estimated amortization expense for each of the next five years is as follows (in thousands): Remaining 2017 $ 760 2018 1,671 2019 750 2020 521 2021 282 2022 220 |
Net Loss Per Common Share
Net Loss Per Common Share | 9 Months Ended |
Sep. 30, 2017 | |
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 (in thousands): As of September 30, 2017 2016 Stock options 1,053 1,209 Performance shares 421 273 Restricted stock units 183 - Deferred stock units 167 104 Total 1,824 1,586 |
Stock and Stock Options
Stock and Stock Options | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock and Stock Options | 6. STOCK AND STOCK OPTIONS The Company has an Employee Stock and Incentive Plan, as amended and restated (the “Employee Plan”). The Plan provides for the granting of incentive awards to directors, executive management, key employees, and outside consultants of the Company in a variety of forms of equity-based incentive compensation, such as the award of an option, stock appreciation right, restricted stock award, restricted stock unit, deferred stock unit, among other stock-based awards. The Company uses newly issued shares of common stock to satisfy awards under the Plan. Total stock-based compensation expense was $0.8 million and $0.3 million for the three months ended September 30, 2017 and 2016, respectively, and $2.5 million and $1.7 million for the nine months ended September 30, 2017 and 2016, respectively, which is included as a component of selling, general and administrative expenses in the unaudited condensed consolidated statements of operations. On March 23, 2015, the Company issued Performance-Based Share Awards (as such terms are defined in the Employee Plan) to the Company’s executives and senior management. Under the terms of these 2015 awards, the number of performance shares that each such individual received was subject to, and calculated by reference to, the achievement by the Company of a performance goal measured by a range of targeted financial performance, as defined, for 2015. 283,100 The actual number of shares issued on each annual vesting date could range from zero to 100%, depending on the satisfaction of the vesting criteria. Shares that do not vest on a scheduled vesting date due to a failure to satisfy vesting criteria are forfeited and do not vest in future periods. Based upon achievement of the respective vesting criteria, 70,800 of the 2015 Performance Shares vested as of December 31, 2016. As of September 30, 2017, 113,312 of the 2015 Performance Shares did not vest and were forfeited. In March 2016, pursuant to the Employee Plan, the Company issued additional Restricted Stock Units and 2016 Performance Share Awards (as such terms are defined in the Employee Plan) to the Company’s executive officers and certain senior management under which the number of performance shares to be issued 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 2016 as well as, for certain of the Restricted Stock Units, individual performance goals, as defined. Based on the Company’s 2016 financial performance, no performance shares were awarded under the 2016 Restricted Stock Units and 2016 Performance Based Share Awards. O n March 31, 2017, the Company issued Restricted Stock Units and Performance-Based Share Awards (as such terms are defined in the |
Inventory Financing
Inventory Financing | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Inventory Financing | 7. INVENTORY FINANCING Supplies Distributors has a short-term credit facility with IBM Credit LLC (“IBM Credit”) to finance its purchase and 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 $6.5 million and $7.3 million as of September 30, 2017 and December 31, 2016, respectively, as accounts payable in the condensed |
Debt and Capital Lease Obligati
Debt and Capital Lease Obligations | 9 Months Ended |
Sep. 30, 2017 | |
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, 2017 2016 U.S. Credit Agreement Revolver $ 15,500 $ 20,825 Term loan 27,750 29,438 Equipment loan 4,434 3,596 Debt issuance costs (415 ) (525 ) Master lease agreements 3,875 6,277 Other 39 88 Total 51,183 59,699 Less current portion of long-term debt 6,648 7,300 Long-term debt, less current portion $ 44,535 $ 52,399 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 and a term loan facility for up to $30 million through August 5, 2020. Subject to the terms of the Credit Agreement, PFS has the ability to increase the total loan facilities to $75 million. Availability under the revolving loan facility may not exceed a borrowing base of eligible accounts receivable (as defined). As of September 30, 2017, the Company had $11.3 million , 4.50% and 3.79%, respectively. As of September 30, 2017 and December 31, 2016, the weighted average interest rate on the term loan facility was 3.97% and 2.93%, respectively. In connection with the Credit Agreement, the Company paid $0.7 million of fees, which are being amortized through the life of the Credit Agreement and are reflected as a net reduction in debt. The Credit Agreement is secured by a lien on substantially all of th assets of Company and its U.S. subsidiaries and a pledge of 65% of the shares of certain of the Company’s In June 2016, PFSweb also entered into a Master Agreement with Regions Bank to provide equipment loans financing for certain capital expenditures. 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 three and nine months ended September 30, 2017, 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, 2017 | |
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, 2017 2016 2017 2016 Revenues (in thousands): PFSweb $ 66,935 $ 67,768 $ 201,423 $ 194,239 Business and Retail Connect 14,053 15,351 44,993 48,425 Eliminations (3,670 ) (3,209 ) (12,264 ) (10,476 ) $ 77,318 $ 79,910 $ 234,152 $ 232,188 Income (loss) from operations (in thousands): PFSweb $ 543 $ (447 ) $ (5,364 ) $ (2,516 ) Business and Retail Connect 624 441 1,517 1,323 $ 1,167 $ (6 ) $ (3,847 ) $ (1,193 ) Depreciation and amortization (in thousands): PFSweb $ 3,527 $ 3,797 $ 11,083 $ 11,188 Business and Retail Connect 4 6 13 18 $ 3,531 $ 3,803 $ 11,096 $ 11,206 Capital expenditures (in thousands): PFSweb $ 1,748 $ 1,049 $ 3,965 $ 7,532 Business and Retail Connect — — — — $ 1,748 $ 1,049 $ 3,965 $ 7,532 September 30, December 31, 2017 2016 Assets (in thousands): PFSweb $ 146,192 $ 167,152 Business and Retail Connect 31,164 55,559 Eliminations (11,996 ) (11,375 ) $ 165,360 $ 211,336 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 10. COMMITMENTS AND CONTINGENCIES The Company leases facilities, warehouse and office space and transportation and other equipment under operating leases expiring in various years through 2026. In most cases, management expects that, in the normal course of business, leases will be renewed or replaced by other similar leases. The Company’s facility leases generally contain one or more renewal options. 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, 2017, the Company believes it has adequately accrued for the expected assessment. The Company is subject to claims in the ordinary course of business, including claims by terminated employees, claims relating to invoice disputes and 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. In the opinion of management, any liabilities resulting from these claims would not have a material adverse effect on the Company’s financial position or results of operations. |
Significant Accounting Polici17
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The interim condensed consolidated financial statements as of September 30, 2017, and for the three and nine months ended September 30, 2017 and 2016, 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, 2017, its results of operations for the three and nine months ended September 30, 2017 and 2016 and its cash flows for the nine months ended September 30, 2017 and 2016. 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, 2016 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 products or 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 include addressing customer questions related to orders, as well as cross-selling/up-selling activities. Service fee revenue for this activity is recognized as the services are rendered. Fees charged to the client are on a per transaction basis based on either (i) a pre-determined fee per order or fee per telephone minutes incurred, (ii) a per dedicated agent fee, or (iii) are included in the product fulfillment service fees that are recognized on product shipment. Professional consulting and technology service revenues primarily relate to 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. 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 distribution services and order management customer care 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. |
Concentration of Business and Credit Risk | Concentration of Business and Credit Risk No product customer nor service fee client relationship represented more than 10% of the Company’s consolidated total revenues during the nine months ended September 30, 2017. One service fee client relationship represented 10% of the Company’s consolidated total revenues during the nine months ended September 30, 2016. No client exceeded 10% of consolidated accounts receivable as of September 30, 2017. Amounts due from one client exceeded 10% of consolidated accounts receivable as of December 31, 2016. A summary of the nonaffiliated customer and client revenue concentrations as a percentage of product revenue and service fee revenue, respectively, is as follows: Nine Months Ended September 30, 2017 2016 Service Fee Revenue (as a percentage of total Service Fee Revenue): Client 1 9 % 10 % Product Revenue (as a percentage of total Product Revenue): Customer 1 6 % 13 % Customer 2 13 % 16 % Customer 3 12 % 5 % The Company currently anticipates that its product revenue, including the revenue from certain of 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. |
Operating Leases | Operating Leases The Company leases certain real estate for its warehouse, call center, sales, professional services and corporate offices, 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, and classifies with the difference between cash payments and rent expense recognized 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 $3.3 million and $5.4 million, net of accumulated amortization of approximately $7.3 million and $5.1 million, at September 30, 2017 and December 31, 2016, respectively. Depreciation and amortization expense related to capital leases during the nine months ended September 30, 2017 and 2016 was $2.3 million and $2.1 million, respectively. |
Income Taxes | Income Taxes The Company records a tax provision primarily associated with state income taxes and the majority of its international operations. The Company has recorded a valuation allowance for the majority of its domestic net deferred tax assets, which are primarily related to net operating loss carryforwards and certain foreign deferred tax assets. |
Cash Paid for Interest and Taxes | Cash Paid for Interest and Taxes The Company made payments for interest of approximately $1.9 million and $1.1 million in the nine months ended September 30, 2017 and 2016, respectively. |
Impact of Recently Issued Accounting Standards | Impact of Recently Issued Accounting Standards Pronouncements Recently Adopted 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 In July 2015, the FASB issued ASU No. 2015-11, “ Simplifying the Measurement of Inventory,” In November 2015, the FASB issued ASU No. 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes,” Pronouncements Not Yet Adopted In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers.” In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)," which modifies the accounting for leases, intending to increase transparency and comparability of organizations by requiring balance sheet presentation of leased assets and increased financial statement disclosure of leasing arrangements. ASU 2016-02 will require entities to recognize a liability for their lease obligations and a corresponding asset representing the right to use the underlying asset over the lease term. Lease obligations are to be measured at their present value and accounted for using the effective interest method. The accounting for the leased asset will differ slightly depending on whether the agreement is deemed to be a financing or operating lease. For financing leases, the leased asset is depreciated on a straight-line basis and depreciation expense is recorded separately from the interest expense in the statements of operations, resulting in higher expense in the earlier part of the lease term. For operating leases, the depreciation and interest expense components are combined, recognized evenly over the term of the lease, and presented as a reduction to operating income. ASU 2016-02 requires that assets and liabilities be presented or disclosed separately, and requires additional disclosure of certain qualitative and quantitative information related to these lease agreements. ASU 2016-02 is effective for annual and interim periods beginning after December 15, 2018. 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. The Company is currently assessing the ASU’s impact on its consolidated financial statements, but does expect the adoption to have a material impact to the balance sheet through the addition of an ROU asset and corresponding lease liability. 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” In January 2017, the FASB issued ASU No. 2017-04, “Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill impairment” In May 2017, the Financial Accounting Standards Board (the “FASB”) issued ASU 2017-09, “Compensation Stock Compensation (Topic 718): Scope of Modification ” |
Significant Accounting Polici18
Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Summary of Non-affiliated Customer and Client Revenue Concentrations as Percentage of Product Revenue and Service Fee Revenue | A summary of the nonaffiliated customer and client revenue concentrations as a percentage of product revenue and service fee revenue, respectively, is as follows: Nine Months Ended September 30, 2017 2016 Service Fee Revenue (as a percentage of total Service Fee Revenue): Client 1 9 % 10 % Product Revenue (as a percentage of total Product Revenue): Customer 1 6 % 13 % Customer 2 13 % 16 % Customer 3 12 % 5 % |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
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 (in thousands): September 30, 2017 Fair Value Accumulated Net Carrying Estimated Useful Life at Acquisition Amortization Value from Acquisition Trade names $ 1,250 $ (1,103 ) $ 147 2.25 - 2.5 years Non-compete agreements 575 (462 ) 113 1- 3.5 years Leasehold 45 (45 ) — 2.5 years Customer relationships 10,287 (6,608 ) 3,679 1.6 - 9 years Developed technology 1,577 (1,122 ) 455 2.5-3 years Other intangibles 493 (477 ) 16 9 years Total definite lived identifiable intangible assets $ 14,227 $ (9,817 ) $ 4,410 |
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 (in thousands): 2017 2016 As of January 1, $ 4,083 $ 14,157 CrossView earn-out payments in common stock and cash (2,358 ) (7,942 ) LAL and REV earn-out payments in common stock and cash — (3,750 ) Value recorded at acquisition - Conexus — 553 Change in fair value aggregate balances due 2,209 (2,638 ) As of September 30, $ 3,934 $ 380 |
Conexus | |
Business Acquisition [Line Items] | |
Schedule of Fair Value of Assets Acquired and Liabilities Assumed | The following table summarizes the fair value of the tangible and intangible assets acquired and liabilities assumed (in thousands): Cash $ 156 Accounts receivable, net 1,451 Other receivables 887 Other assets 421 Identifiable intangibles 2,035 Total assets acquired 4,950 Total liabilities assumed 2,218 Net assets acquired 2,732 Goodwill 6,336 Total purchase price $ 9,068 |
Schedule of Purchase Price | The purchase price for Conexus was as follows (in thousands): Aggregate cash payments $ 8,515 Performance-based contingent payments (based on fair value at acquisition date) 553 Total purchase price $ 9,068 |
Schedule of Definite-Lived Intangible Assets Acquired | Definite lived intangible assets acquired in the Conexus acquisition consist of (in thousands): Estimated September 30, 2017 December 31, 2016 Useful Life Fair Value at Acquisition Accumulated Amortization Net Carrying Value Accumulated Amortization Net Carrying Value from Acquisition Developed technology $ 727 $ (392 ) $ 335 $ (145 ) $ 582 2.5 years Customer relationships 1,308 (853 ) 455 (461 ) 847 4.5 years Total definite lived identifiable intangible assets $ 2,035 $ (1,245 ) $ 790 $ (606 ) $ 1,429 |
Goodwill and Identifiable Int20
Goodwill and Identifiable Intangibles, Net (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
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 (in thousands): September 30, 2017 Fair Value Accumulated Net Carrying Estimated Useful Life at Acquisition Amortization Value from Acquisition Trade names $ 1,250 $ (1,103 ) $ 147 2.25 - 2.5 years Non-compete agreements 575 (462 ) 113 1- 3.5 years Leasehold 45 (45 ) — 2.5 years Customer relationships 10,287 (6,608 ) 3,679 1.6 - 9 years Developed technology 1,577 (1,122 ) 455 2.5-3 years Other intangibles 493 (477 ) 16 9 years Total definite lived identifiable intangible assets $ 14,227 $ (9,817 ) $ 4,410 |
Summary of Estimated Amortization Expense | The estimated amortization expense for each of the next five years is as follows (in thousands): Remaining 2017 $ 760 2018 1,671 2019 750 2020 521 2021 282 2022 220 |
Net Loss Per Common Share (Tabl
Net Loss Per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
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 (in thousands): As of September 30, 2017 2016 Stock options 1,053 1,209 Performance shares 421 273 Restricted stock units 183 - Deferred stock units 167 104 Total 1,824 1,586 |
Debt and Capital Lease Obliga22
Debt and Capital Lease Obligations (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
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, 2017 2016 U.S. Credit Agreement Revolver $ 15,500 $ 20,825 Term loan 27,750 29,438 Equipment loan 4,434 3,596 Debt issuance costs (415 ) (525 ) Master lease agreements 3,875 6,277 Other 39 88 Total 51,183 59,699 Less current portion of long-term debt 6,648 7,300 Long-term debt, less current portion $ 44,535 $ 52,399 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
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, 2017 2016 2017 2016 Revenues (in thousands): PFSweb $ 66,935 $ 67,768 $ 201,423 $ 194,239 Business and Retail Connect 14,053 15,351 44,993 48,425 Eliminations (3,670 ) (3,209 ) (12,264 ) (10,476 ) $ 77,318 $ 79,910 $ 234,152 $ 232,188 Income (loss) from operations (in thousands): PFSweb $ 543 $ (447 ) $ (5,364 ) $ (2,516 ) Business and Retail Connect 624 441 1,517 1,323 $ 1,167 $ (6 ) $ (3,847 ) $ (1,193 ) Depreciation and amortization (in thousands): PFSweb $ 3,527 $ 3,797 $ 11,083 $ 11,188 Business and Retail Connect 4 6 13 18 $ 3,531 $ 3,803 $ 11,096 $ 11,206 Capital expenditures (in thousands): PFSweb $ 1,748 $ 1,049 $ 3,965 $ 7,532 Business and Retail Connect — — — — $ 1,748 $ 1,049 $ 3,965 $ 7,532 September 30, December 31, 2017 2016 Assets (in thousands): PFSweb $ 146,192 $ 167,152 Business and Retail Connect 31,164 55,559 Eliminations (11,996 ) (11,375 ) $ 165,360 $ 211,336 |
Significant Accounting Polici24
Significant Accounting Policies - Additional Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017USD ($)Customer | Sep. 30, 2016USD ($)Customer | Sep. 30, 2017USD ($)Customer | Sep. 30, 2016USD ($)Customer | Dec. 31, 2016USD ($)Customer | |
Significant Accounting Policies [Line Items] | |||||
Maximum life of current operating leases | 2,026 | ||||
Capital leases | $ 3,300 | $ 3,300 | $ 5,400 | ||
Accumulated amortization of capital leases | 7,300 | 7,300 | $ 5,100 | ||
Depreciation and amortization | 3,531 | $ 3,803 | 11,096 | $ 11,206 | |
Payments for interest | 1,900 | 1,100 | |||
Income taxes | 1,000 | 700 | |||
Accounting Standards Update (“ASU”) 2016-09 | |||||
Significant Accounting Policies [Line Items] | |||||
Recognition of previously unrecognized tax benefit | $ 1,900 | $ 1,900 | |||
Accounting pronouncement, effective date | Jan. 31, 2016 | ||||
Accounting Standards Update 2014-09 | |||||
Significant Accounting Policies [Line Items] | |||||
Impact on adoption of accounting standards update | The ASU allows two methods of adoption: (a) a full retrospective approach in which the standard is applied to all periods presented, or (b) a modified retrospective approach in which the standard is applied only to the most current period presented in the financial statements. In August 2015, the FASB deferred the effective date of this standards update to fiscal years beginning after December 15, 2017, with early adoption permitted on the original effective date of fiscal years beginning after December 15, 2016. The Company currently anticipates adopting the standard on January 1, 2018 using the modified retrospective method. The Company is assessing the new standard and analyzing the standard’s impact on the Company’s internal controls, accounting policies and financial statements and disclosures. As the Company is in the process of evaluating the impact of the standard, it has not yet quantified the impact of the adoption. However, based on the initial phase of its evaluation process, the Company has identified certain potential areas of impact. Application of the new standard requires that incremental costs of obtaining a contract (including sales commissions plus any associated fringe benefits) be recognized as an asset and expensed over the expected life of the arrangement, unless that life is less than one year. | ||||
Assets Held Under Capital Leases | |||||
Significant Accounting Policies [Line Items] | |||||
Depreciation and amortization | $ 2,300 | $ 2,100 | |||
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% | 10.00% | |||
Sales revenue, Product Line and Services | |||||
Significant Accounting Policies [Line Items] | |||||
Number of customers representing more than 10% | Customer | 0 | 0 | |||
Accounts Receivable | |||||
Significant Accounting Policies [Line Items] | |||||
Number of customers representing more than 10% | Customer | 0 | 0 | 1 |
Significant Accounting Polici25
Significant Accounting Policies - Summary of Non-affiliated Customer and Client Revenue Concentrations (Details) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Product Revenue | Customer 1 | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 6.00% | 13.00% |
Product Revenue | Customer 2 | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 13.00% | 16.00% |
Product Revenue | Customer 3 | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 12.00% | 5.00% |
Sales Revenue, Services, Net | Client 1 | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 9.00% | 10.00% |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Details) | Jun. 08, 2016USD ($) | Jun. 08, 2016GBP (£) | Aug. 05, 2015USD ($)shares | Sep. 30, 2017USD ($)shares | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($)shares | Dec. 31, 2016GBP (£) |
Conexus | |||||||
Business Acquisition [Line Items] | |||||||
Consideration paid | $ 8,515,000 | £ 5,855,000 | |||||
Earn-out payments, maximum | $ 1,800,000 | £ 1,445,000 | |||||
Total goodwill | $ 6,300,000 | ||||||
Goodwill acquired, deductible for tax purposes | 0 | ||||||
Residual value for intangible assets | 0 | ||||||
CrossView, Inc. | |||||||
Business Acquisition [Line Items] | |||||||
Consideration paid | $ 30,700,000 | ||||||
Earn-out payments, maximum | $ 18,000,000 | ||||||
Number of shares of common stock issued | shares | 553,223 | ||||||
Consideration paid through common stock, value | $ 6,300,000 | ||||||
Earn-out payments, minimum | $ 0 | ||||||
Consideration paid | 2,358,000 | $ 7,942,000 | |||||
CrossView, Inc. | 2015 Earn-out Payment | |||||||
Business Acquisition [Line Items] | |||||||
Consideration paid | 7,900,000 | ||||||
CrossView, Inc. | 2016 Earn-out Payment | |||||||
Business Acquisition [Line Items] | |||||||
Earn-out payments, maximum | 4,100,000 | ||||||
Consideration paid | 2,400,000 | ||||||
CrossView, Inc. | 2017 Earn-out Payment | |||||||
Business Acquisition [Line Items] | |||||||
Earn-out payments, maximum | 3,900,000 | ||||||
CrossView, Inc. | Restricted Stock | 2015 Earn-out Payment | |||||||
Business Acquisition [Line Items] | |||||||
Share consideration | $ 1,600,000 | ||||||
Issuance of restricted shares | shares | 122,066 | ||||||
CrossView, Inc. | Restricted Stock | 2016 Earn-out Payment | |||||||
Business Acquisition [Line Items] | |||||||
Share consideration | $ 400,000 | ||||||
Issuance of restricted shares | shares | 48,173 | ||||||
CrossView, Inc. | Restricted Stock | 2017 Earn-out Payment | |||||||
Business Acquisition [Line Items] | |||||||
Percentage of common stock Issuable | 15.00% |
Acquisitions - Summary of the F
Acquisitions - Summary of the Fair Value of the Tangible and Intangible Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | Jun. 08, 2016 |
Business Acquisition [Line Items] | |||
Goodwill | $ 46,210 | $ 46,210 | |
Conexus | |||
Business Acquisition [Line Items] | |||
Cash | $ 156 | ||
Accounts receivable, net | 1,451 | ||
Other receivables | 887 | ||
Other assets | 421 | ||
Identifiable intangibles | 2,035 | ||
Total assets acquired | 4,950 | ||
Total liabilities assumed | 2,218 | ||
Net assets acquired | 2,732 | ||
Goodwill | 6,336 | ||
Total purchase price | $ 9,068 |
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 | $ 8,515 | £ 5,855,000 | |
Performance-based contingent payments (based on fair value at acquisition date) | 553 | $ 553 | |
Total purchase price | $ 9,068 |
Acquisitions - Acquisition Defi
Acquisitions - Acquisition Definite Lived Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Business Acquisition [Line Items] | ||
Fair Value at Acquisition | $ 14,227 | |
Accumulated Amortization | (9,817) | |
Net Carrying Value | 4,410 | $ 6,864 |
Developed Technology | ||
Business Acquisition [Line Items] | ||
Fair Value at Acquisition | 1,577 | |
Accumulated Amortization | (1,122) | |
Net Carrying Value | 455 | |
Customer Relationships | ||
Business Acquisition [Line Items] | ||
Fair Value at Acquisition | 10,287 | |
Accumulated Amortization | (6,608) | |
Net Carrying Value | 3,679 | |
Conexus | ||
Business Acquisition [Line Items] | ||
Fair Value at Acquisition | 2,035 | |
Accumulated Amortization | (1,245) | (606) |
Net Carrying Value | 790 | 1,429 |
Conexus | Developed Technology | ||
Business Acquisition [Line Items] | ||
Fair Value at Acquisition | 727 | |
Accumulated Amortization | (392) | (145) |
Net Carrying Value | $ 335 | 582 |
Estimated Useful Life from Acquisition | 2 years 6 months | |
Conexus | Customer Relationships | ||
Business Acquisition [Line Items] | ||
Fair Value at Acquisition | $ 1,308 | |
Accumulated Amortization | (853) | (461) |
Net Carrying Value | $ 455 | $ 847 |
Estimated Useful Life from Acquisition | 4 years 6 months |
Acquisitions - Schedule of Chan
Acquisitions - Schedule of Change in Acquisition Related Performance-Based Contingent Payments (Details) - USD ($) $ in Thousands | Jun. 08, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 |
Business Acquisition [Line Items] | ||||
Performance-based contingent payments, Beginning balance | $ 4,083 | $ 14,157 | $ 14,157 | |
Change in fair value aggregate balances due | 2,209 | (2,638) | ||
Performance-based contingent payments, Ending balance | 3,934 | 380 | $ 4,083 | |
CrossView, Inc. | ||||
Business Acquisition [Line Items] | ||||
Earn-out payments in common stock and cash | $ (2,358) | (7,942) | ||
LAL and REV | ||||
Business Acquisition [Line Items] | ||||
Earn-out payments in common stock and cash | (3,750) | |||
Conexus | ||||
Business Acquisition [Line Items] | ||||
Value recorded at acquisition | $ 553 | $ 553 |
Goodwill and Identifiable Int31
Goodwill and Identifiable Intangibles, Net - Schedule of Definite-Lived Intangible Assets Acquired (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Finite Lived Intangible Assets [Line Items] | ||
Fair Value at Acquisition | $ 14,227 | |
Accumulated Amortization | (9,817) | |
Net Carrying Value | 4,410 | $ 6,864 |
Trade Names | ||
Finite Lived Intangible Assets [Line Items] | ||
Fair Value at Acquisition | 1,250 | |
Accumulated Amortization | (1,103) | |
Net Carrying Value | $ 147 | |
Trade Names | Minimum | ||
Finite Lived Intangible Assets [Line Items] | ||
Estimated Useful Life from Acquisition | 2 years 2 months 30 days | |
Trade Names | Maximum | ||
Finite Lived Intangible Assets [Line Items] | ||
Estimated Useful Life from Acquisition | 2 years 6 months | |
Noncompete Agreements | ||
Finite Lived Intangible Assets [Line Items] | ||
Fair Value at Acquisition | $ 575 | |
Accumulated Amortization | (462) | |
Net Carrying Value | $ 113 | |
Noncompete Agreements | Minimum | ||
Finite Lived Intangible Assets [Line Items] | ||
Estimated Useful Life from Acquisition | 1 year | |
Noncompete Agreements | Maximum | ||
Finite Lived Intangible Assets [Line Items] | ||
Estimated Useful Life from Acquisition | 3 years 6 months | |
Lease Agreements | ||
Finite Lived Intangible Assets [Line Items] | ||
Fair Value at Acquisition | $ 45 | |
Accumulated Amortization | $ (45) | |
Estimated Useful Life from Acquisition | 2 years 6 months | |
Customer Relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Fair Value at Acquisition | $ 10,287 | |
Accumulated Amortization | (6,608) | |
Net Carrying Value | $ 3,679 | |
Customer Relationships | Minimum | ||
Finite Lived Intangible Assets [Line Items] | ||
Estimated Useful Life from Acquisition | 1 year 7 months 6 days | |
Customer Relationships | Maximum | ||
Finite Lived Intangible Assets [Line Items] | ||
Estimated Useful Life from Acquisition | 9 years | |
Developed Technology | ||
Finite Lived Intangible Assets [Line Items] | ||
Fair Value at Acquisition | $ 1,577 | |
Accumulated Amortization | (1,122) | |
Net Carrying Value | $ 455 | |
Developed Technology | Minimum | ||
Finite Lived Intangible Assets [Line Items] | ||
Estimated Useful Life from Acquisition | 2 years 6 months | |
Developed Technology | Maximum | ||
Finite Lived Intangible Assets [Line Items] | ||
Estimated Useful Life from Acquisition | 3 years | |
Other Intangibles | ||
Finite Lived Intangible Assets [Line Items] | ||
Fair Value at Acquisition | $ 493 | |
Accumulated Amortization | (477) | |
Net Carrying Value | $ 16 | |
Estimated Useful Life from Acquisition | 9 years |
Goodwill and Identifiable Int32
Goodwill and Identifiable Intangibles, Net - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Goodwill And Intangible Assets Disclosure [Abstract] | ||||
Amortization expenses | $ 0.8 | $ 1.2 | $ 2.3 | $ 2.9 |
Goodwill and Identifiable Int33
Goodwill and Identifiable Intangibles, Net - Summary of Estimated Amortization Expense (Details) $ in Thousands | Sep. 30, 2017USD ($) |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Remaining 2,017 | $ 760 |
2,018 | 1,671 |
2,019 | 750 |
2,020 | 521 |
2,021 | 282 |
2,022 | $ 220 |
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, 2017 | Sep. 30, 2016 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Total | 1,824 | 1,586 |
Stock Options | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Total | 1,053 | 1,209 |
Performance Shares | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Total | 421 | 273 |
Restricted Stock Units | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Total | 183 | |
Deferred Stock Units | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Total | 167 | 104 |
Stock and Stock Options - Addit
Stock and Stock Options - Additional Information (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Mar. 23, 2015 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Stock-based compensation expense | $ 783 | $ 347 | $ 2,544 | $ 1,743 | ||||
2015 Performance Shares | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Stock option issued | 283,100 | |||||||
Stock options and stock option plans vesting terms period | 4 years | |||||||
Number of shares vested | 70,800 | |||||||
Number of shares forfeited | 113,312 | |||||||
2015 Performance Shares | Minimum | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Stock options and stock option plans vesting terms period, each quarter | 0.00% | |||||||
2015 Performance Shares | Maximum | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Stock options and stock option plans vesting terms period, each quarter | 100.00% | |||||||
2016 Restricted Stock Units | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Stock option issued | 0 | |||||||
2016 Performance Based Share Awards | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Stock option issued | 0 | |||||||
2017 Performance Shares | Minimum | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Stock options and stock option plans vesting terms period | 1 year | |||||||
2017 Performance Shares | Maximum | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Stock options and stock option plans vesting terms period | 3 years | |||||||
Performance targets, stock units to be awarded | 692,000 | |||||||
Selling, General and Administrative Expenses | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Stock-based compensation expense | $ 800 | $ 300 | $ 2,500 | $ 1,700 |
Inventory Financing - Additiona
Inventory Financing - Additional Information (Details) - Short Term Credit Facility - United States - IBM Credit LLC - Supplies Distributors - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
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 | $ 6,500,000 | $ 7,300,000 |
Available credit | 100,000 | |
Subordinated note outstanding, minimum limit | $ 2,500,000 | |
Interest rate on outstanding borrowings | 4.75% | 4.25% |
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 Obliga37
Debt and Capital Lease Obligations - Summary of Outstanding Debt and Capital Lease Obligations (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Master lease agreements | $ 3,875 | $ 6,277 |
Other | 39 | 88 |
Debt and capital lease obligation | 51,183 | 59,699 |
Current portion of long-term debt and capital lease obligations | 6,648 | 7,300 |
Long-term debt, less current portion | 44,535 | 52,399 |
U.S. Credit Agreement | ||
Debt Instrument [Line Items] | ||
Debt issuance costs | (415) | (525) |
U.S. Credit Agreement | Revolver | ||
Debt Instrument [Line Items] | ||
Credit facility | 15,500 | 20,825 |
U.S. Credit Agreement | Term Loan | ||
Debt Instrument [Line Items] | ||
Credit facility | 27,750 | 29,438 |
U.S. Credit Agreement | Equipment Loan | ||
Debt Instrument [Line Items] | ||
Credit facility | $ 4,434 | $ 3,596 |
Debt and Capital Lease Obliga38
Debt and Capital Lease Obligations - U.S. Credit Agreement - Additional Information (Details) - Regions Bank - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
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 | $ 11,300,000 | |
Credit facility due date | Aug. 5, 2020 | |
Weighted average interest rate on outstanding borrowings | 4.50% | 3.79% |
Term Loan Facility | ||
Line Of Credit Facility [Line Items] | ||
Credit facility maximum borrowing capacity | $ 30,000,000 | |
Credit facility due date | Aug. 5, 2020 | |
Weighted average interest rate on outstanding borrowings | 3.97% | 2.93% |
Maximum | Term Loan Facility | ||
Line Of Credit Facility [Line Items] | ||
Credit facility, percentage of amount borrowed due on maturity date | 65.00% |
Debt and Capital Lease Obliga39
Debt and Capital Lease Obligations - Master Lease Agreements - Additional Information (Details) - Lease Agreements | 9 Months Ended |
Sep. 30, 2017 | |
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, 2017Segments | |
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, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Summary of product revenue by segments | |||||
Revenues | $ 77,318 | $ 79,910 | $ 234,152 | $ 232,188 | |
Summary of Income (loss) from continuing operations by segments | |||||
Income (loss) from continuing operations | 1,167 | (6) | (3,847) | (1,193) | |
Summary of Depreciation and amortization by segments | |||||
Depreciation and amortization | 3,531 | 3,803 | 11,096 | 11,206 | |
Summary of product revenue by segments | |||||
Capital expenditures | 1,748 | 1,049 | 3,965 | 7,532 | |
Summary of assets by segments | |||||
Assets | 165,360 | 165,360 | $ 211,336 | ||
PFSweb | |||||
Summary of Income (loss) from continuing operations by segments | |||||
Income (loss) from continuing operations | 543 | (447) | (5,364) | (2,516) | |
Summary of Depreciation and amortization by segments | |||||
Depreciation and amortization | 3,527 | 3,797 | 11,083 | 11,188 | |
Summary of product revenue by segments | |||||
Capital expenditures | 1,748 | 1,049 | 3,965 | 7,532 | |
Business and Retail Connect | |||||
Summary of Income (loss) from continuing operations by segments | |||||
Income (loss) from continuing operations | 624 | 441 | 1,517 | 1,323 | |
Summary of Depreciation and amortization by segments | |||||
Depreciation and amortization | 4 | 6 | 13 | 18 | |
Operating Segments | PFSweb | |||||
Summary of product revenue by segments | |||||
Revenues | 66,935 | 67,768 | 201,423 | 194,239 | |
Summary of assets by segments | |||||
Assets | 146,192 | 146,192 | 167,152 | ||
Operating Segments | Business and Retail Connect | |||||
Summary of product revenue by segments | |||||
Revenues | 14,053 | 15,351 | 44,993 | 48,425 | |
Summary of assets by segments | |||||
Assets | 31,164 | 31,164 | 55,559 | ||
Eliminations | |||||
Summary of product revenue by segments | |||||
Revenues | (3,670) | $ (3,209) | (12,264) | $ (10,476) | |
Summary of assets by segments | |||||
Assets | $ (11,996) | $ (11,996) | $ (11,375) |