Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2023 | Aug. 01, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 000-28275 | |
Entity Registrant Name | PFSweb, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 75-2837058 | |
Entity Address, Address Line One | 9250 N. Royal Lane | |
Entity Address, Address Line Two | Suite 100 | |
Entity Address, City or Town | Irving | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 75063 | |
City Area Code | 972 | |
Local Phone Number | 881-2900 | |
Title of 12(b) Security | Common Stock, $0.001 par value | |
Trading Symbol | PFSW | |
Security Exchange Name | NASDAQ | |
Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Shell Company | false | |
Entity Common Stock, Shares Outstanding | 22,745,012 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2023 | |
Entity Central Index Key | 0001095315 | |
Document Fiscal Period Focus | Q2 | |
Current Fiscal Year End Date | --12-31 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 39,022 | $ 30,034 |
Accounts receivable, net of reserve for credit loss of $383 and $365 at June 30, 2023 and December 31, 2022, respectively | 44,917 | 82,540 |
Other receivables | 2,251 | 9,578 |
Prepaid expenses and other current assets | 6,478 | 7,665 |
Total current assets | 92,668 | 129,817 |
Property and equipment: | ||
Cost | 78,919 | 80,131 |
Less: accumulated depreciation | (58,459) | (59,243) |
Property and equipment | 20,460 | 20,888 |
Operating lease right-of-use assets, net | 34,979 | 30,841 |
Goodwill | 21,795 | 21,310 |
Other assets | 1,717 | 1,806 |
Total assets | 171,619 | 204,662 |
Current liabilities: | ||
Trade accounts payable | 18,288 | 38,518 |
Accrued expenses | 22,659 | 36,973 |
Current portion of operating lease liabilities | 8,987 | 8,284 |
Current portion of finance lease obligations | 53 | 72 |
Deferred revenues | 2,521 | 3,906 |
Total current liabilities | 52,508 | 87,753 |
Finance lease obligations, less current portion | 3 | 22 |
Deferred revenue, less current portion | 930 | 870 |
Operating lease liabilities, less current portion | 28,454 | 25,478 |
Other liabilities | 4,378 | 4,315 |
Total liabilities | 86,273 | 118,438 |
Commitments and Contingencies | ||
Shareholders' equity: | ||
Preferred stock, $1.00 par value; 1,000,000 shares authorized; none issued or outstanding | 0 | 0 |
Common stock, $0.001 par value; 35,000,000 shares authorized; 23,084,766 and 22,725,116 issued and 22,711,736 and 22,691,649 outstanding at June 30, 2023 and December 31, 2022, respectively | 23 | 23 |
Additional paid-in capital | 181,853 | 180,353 |
Accumulated deficit | (92,397) | (90,893) |
Accumulated other comprehensive loss | (2,592) | (3,134) |
Treasury stock at cost, 373,030 and 33,467 shares at June 30, 2023 and December 31, 2022, respectively | (1,541) | (125) |
Total shareholders’ equity | 85,346 | 86,224 |
Total liabilities and shareholders’ equity | $ 171,619 | $ 204,662 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 383 | $ 365 |
Preferred stock, par value (in USD per share) | $ 1 | $ 1 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in USD per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 35,000,000 | 35,000,000 |
Common stock, shares issued (in shares) | 23,084,766 | 22,725,116 |
Common stock, shares outstanding (in shares) | 22,711,736 | 22,691,649 |
Treasury stock (in shares) | 373,030 | 33,467 |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Revenues: | ||||
Total revenues | $ 67,922 | $ 64,634 | $ 137,186 | $ 131,121 |
Costs of revenues: | ||||
Total costs of revenues | 56,030 | 55,027 | 113,679 | 112,229 |
Gross profit | 11,892 | 9,607 | 23,507 | 18,892 |
Selling, general and administrative expenses | 12,286 | 14,077 | 24,818 | 30,505 |
Loss from continuing operations | (394) | (4,470) | (1,311) | (11,613) |
Interest income, net | (254) | (151) | (332) | (145) |
Loss from continuing operations before income taxes | (140) | (4,319) | (979) | (11,468) |
Income tax expense (benefit), net | (12) | 184 | 633 | 502 |
Net loss from continuing operations | (128) | (4,503) | (1,612) | (11,970) |
Income from discontinued operations before income taxes | 0 | 180 | 0 | 180 |
Income tax expense, net | 0 | 0 | 0 | 0 |
Net income from discontinued operations | 0 | 180 | 0 | 180 |
Net loss | $ (128) | $ (4,323) | $ (1,612) | $ (11,790) |
Basic loss per share: | ||||
Net loss from continuing operations per share (in USD per share) | $ (0.01) | $ (0.20) | $ (0.07) | $ (0.53) |
Net income from discontinued operations per share (in USD per share) | 0 | 0.01 | 0 | 0.01 |
Basic loss per share (in USD per share) | (0.01) | (0.19) | (0.07) | (0.52) |
Diluted loss per share: | ||||
Net loss from continuing operations per share (in USD per share) | (0.01) | (0.20) | (0.07) | (0.53) |
Net income from discontinued operations per share (in USD per share) | 0 | 0.01 | 0 | 0.01 |
Diluted loss per share (in USD per share) | $ (0.01) | $ (0.19) | $ (0.07) | $ (0.52) |
Weighted average number of shares outstanding: | ||||
Basic (in shares) | 22,788 | 22,650 | 22,933 | 22,547 |
Diluted (in shares) | 22,788 | 22,650 | 22,933 | 22,547 |
Comprehensive income (loss): | ||||
Net loss | $ (128) | $ (4,323) | $ (1,612) | $ (11,790) |
Foreign currency translation adjustment | 352 | (1,267) | 542 | (1,774) |
Total comprehensive income (loss) | 224 | (5,590) | (1,070) | (13,564) |
Service fee revenue | ||||
Revenues: | ||||
Revenues | 48,206 | 45,234 | 95,818 | 90,765 |
Costs of revenues: | ||||
Total costs of revenues | 36,314 | 35,645 | 72,311 | 72,137 |
Product revenue, net | ||||
Revenues: | ||||
Revenues | 0 | 122 | 0 | 3,319 |
Costs of revenues: | ||||
Total costs of revenues | 0 | 104 | 0 | 3,055 |
Pass-through revenue | ||||
Revenues: | ||||
Revenues | 19,716 | 19,278 | 41,368 | 37,037 |
Costs of revenues: | ||||
Total costs of revenues | $ 19,716 | $ 19,278 | $ 41,368 | $ 37,037 |
UNAUDITED CONDENSED CONSOLIDA_2
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive Loss | Treasury Stock, Common |
Beginning balance (in shares) at Dec. 31, 2021 | 22,131,546 | |||||
Beginning balance (in shares) at Dec. 31, 2021 | 33,467 | |||||
Beginning balance at Dec. 31, 2021 | $ 209,776 | $ 21 | $ 177,511 | $ 33,522 | $ (1,153) | $ (125) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (7,467) | (7,467) | ||||
Stock-based compensation | 739 | 739 | ||||
Exercise of stock options (in shares) | 55,999 | |||||
Exercise of stock options | 303 | 303 | ||||
Issuance of shares under stock-based compensation awards (in shares) | 287,317 | |||||
Tax withholding on shares issued under stock-based compensation awards | (1,303) | (1,303) | ||||
Foreign currency translation | (507) | (507) | ||||
Ending balance (in shares) at Mar. 31, 2022 | 22,474,862 | |||||
Ending balance (in shares) at Mar. 31, 2022 | 33,467 | |||||
Ending balance at Mar. 31, 2022 | 201,541 | $ 21 | 177,250 | 26,055 | (1,660) | $ (125) |
Beginning balance (in shares) at Dec. 31, 2021 | 22,131,546 | |||||
Beginning balance (in shares) at Dec. 31, 2021 | 33,467 | |||||
Beginning balance at Dec. 31, 2021 | 209,776 | $ 21 | 177,511 | 33,522 | (1,153) | $ (125) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (11,790) | |||||
Ending balance (in shares) at Jun. 30, 2022 | 22,676,595 | |||||
Ending balance (in shares) at Jun. 30, 2022 | 33,467 | |||||
Ending balance at Jun. 30, 2022 | 195,710 | $ 22 | 177,008 | 21,732 | (2,927) | $ (125) |
Beginning balance (in shares) at Mar. 31, 2022 | 22,474,862 | |||||
Beginning balance (in shares) at Mar. 31, 2022 | 33,467 | |||||
Beginning balance at Mar. 31, 2022 | 201,541 | $ 21 | 177,250 | 26,055 | (1,660) | $ (125) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (4,323) | (4,323) | ||||
Stock-based compensation | 577 | 577 | ||||
Exercise of stock options (in shares) | 32,875 | |||||
Exercise of stock options | 134 | 134 | ||||
Issuance of shares under stock-based compensation awards (in shares) | 168,858 | |||||
Issuance of shares under stock-based compensation awards | 1 | $ 1 | ||||
Tax withholding on shares issued under stock-based compensation awards | (953) | (953) | ||||
Foreign currency translation | (1,267) | (1,267) | ||||
Ending balance (in shares) at Jun. 30, 2022 | 22,676,595 | |||||
Ending balance (in shares) at Jun. 30, 2022 | 33,467 | |||||
Ending balance at Jun. 30, 2022 | $ 195,710 | $ 22 | 177,008 | 21,732 | (2,927) | $ (125) |
Beginning balance (in shares) at Dec. 31, 2022 | 22,691,649 | 22,725,116 | ||||
Beginning balance (in shares) at Dec. 31, 2022 | 33,467 | 33,467 | ||||
Beginning balance at Dec. 31, 2022 | $ 86,224 | $ 23 | 180,353 | (90,893) | (3,134) | $ (125) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (1,484) | (1,484) | ||||
Stock-based compensation | 1,004 | 1,004 | ||||
Issuance of shares under stock-based compensation awards (in shares) | 331,397 | |||||
Tax withholding on shares issued under stock-based compensation awards | (696) | (696) | ||||
Adjustments to dividend equivalents, net | 108 | 108 | ||||
Repurchase of common stock (in shares) | 96,097 | |||||
Repurchase of common stock | (396) | $ (396) | ||||
Foreign currency translation | 190 | 190 | ||||
Ending balance (in shares) at Mar. 31, 2023 | 23,056,513 | |||||
Ending balance (in shares) at Mar. 31, 2023 | 129,564 | |||||
Ending balance at Mar. 31, 2023 | $ 84,950 | $ 23 | 180,661 | (92,269) | (2,944) | $ (521) |
Beginning balance (in shares) at Dec. 31, 2022 | 22,691,649 | 22,725,116 | ||||
Beginning balance (in shares) at Dec. 31, 2022 | 33,467 | 33,467 | ||||
Beginning balance at Dec. 31, 2022 | $ 86,224 | $ 23 | 180,353 | (90,893) | (3,134) | $ (125) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | $ (1,612) | |||||
Repurchase of common stock (in shares) | 339,563 | |||||
Repurchase of common stock | $ (1,400) | |||||
Ending balance (in shares) at Jun. 30, 2023 | 22,711,736 | 23,084,766 | ||||
Ending balance (in shares) at Jun. 30, 2023 | 373,030 | 373,030 | ||||
Ending balance at Jun. 30, 2023 | $ 85,346 | $ 23 | 181,853 | (92,397) | (2,592) | $ (1,541) |
Beginning balance (in shares) at Mar. 31, 2023 | 23,056,513 | |||||
Beginning balance (in shares) at Mar. 31, 2023 | 129,564 | |||||
Beginning balance at Mar. 31, 2023 | 84,950 | $ 23 | 180,661 | (92,269) | (2,944) | $ (521) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (128) | (128) | ||||
Stock-based compensation | 1,226 | 1,226 | ||||
Issuance of shares under stock-based compensation awards (in shares) | 28,253 | |||||
Tax withholding on shares issued under stock-based compensation awards | $ (34) | (34) | ||||
Repurchase of common stock (in shares) | 243,466 | 243,466 | ||||
Repurchase of common stock | $ (1,020) | $ (1,020) | ||||
Foreign currency translation | $ 352 | 352 | ||||
Ending balance (in shares) at Jun. 30, 2023 | 22,711,736 | 23,084,766 | ||||
Ending balance (in shares) at Jun. 30, 2023 | 373,030 | 373,030 | ||||
Ending balance at Jun. 30, 2023 | $ 85,346 | $ 23 | $ 181,853 | $ (92,397) | $ (2,592) | $ (1,541) |
UNAUDITED CONDENSED CONSOLIDA_3
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (1,612) | $ (11,790) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 4,106 | 3,677 |
Gain on LiveArea Transaction | 0 | (180) |
Deferred income taxes | 172 | 43 |
Stock-based compensation expense | 2,230 | 1,316 |
Other | 26 | (159) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 37,951 | 28,584 |
Inventories | 0 | 3,185 |
Prepaid expenses, other receivables and other assets | 9,111 | (599) |
Operating leases | (207) | (1,173) |
Trade accounts payable, deferred revenues, accrued expenses and other liabilities | (33,486) | (20,153) |
Net cash provided by operating activities | 18,291 | 2,751 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (3,141) | (4,663) |
Proceeds from sale of property and equipment | 8 | 26 |
Net cash used in investing activities | (3,133) | (4,637) |
Cash flows from financing activities: | ||
Net proceeds from issuance of common stock | 0 | 436 |
Taxes paid on behalf of employees for withheld shares | (730) | (2,255) |
Payment of dividend equivalents | (3,480) | 0 |
Repurchase of common stock | (1,416) | 0 |
Payment of debt issuance costs | (439) | 0 |
Payments on finance lease obligations | (64) | (162) |
Net cash used in financing activities | (6,129) | (1,981) |
Effect of exchange rates on cash, cash equivalents and restricted cash | (41) | (508) |
Net increase (decrease) in cash and cash equivalents | 8,988 | (4,375) |
Cash and cash equivalents, beginning of period | 30,034 | 152,332 |
Restricted cash, beginning of period | 0 | 214 |
Cash, cash equivalents and restricted cash, beginning of period | 30,034 | 152,546 |
Cash and cash equivalents, end of period | 39,022 | 148,171 |
Restricted cash, end of period | 0 | 0 |
Cash, cash equivalents and restricted cash, end of period | 39,022 | 148,171 |
Supplemental cash flow information: | ||
Cash received for income taxes | 7,544 | 56 |
Cash received for interest income | 545 | 176 |
Cash paid for income taxes | 1,670 | 5,670 |
Cash paid for interest expense | 213 | 7 |
Non-cash investing and financing activities: | ||
Property and equipment acquired under long-term debt and finance leases | 0 | 13 |
Operating lease right-of-use assets acquired under operating lease liabilities | $ 7,753 | $ 622 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements of PFSweb, Inc. and its subsidiaries have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and include all normal and recurring adjustments necessary to present fairly the unaudited condensed consolidated balance sheets, statements of operations and comprehensive income, statements of shareholders' equity, and statements of cash flows for the periods indicated. Certain information and note disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted pursuant to the rules and regulations of the SEC. This report should be read in conjunction with our Annual Report on Form 10-K and as amended by Form 10-K/A for the year ended December 31, 2022. We refer to PFSweb, Inc. and its consolidated subsidiaries collectively as “PFSweb,” the “Company,” “us,” “we” and “our” in these unaudited condensed consolidated financial statements. Results of our operations for interim periods may not be indicative of results for the full fiscal year. |
Significant Accounting Policies
Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Use of Estimates The preparation of consolidated financial statements and related disclosures in conformity with U.S. GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and disclosure of contingent assets and liabilities. The recognition and allocation of certain revenues, costs of revenues and selling, general and administrative expenses in these unaudited condensed consolidated financial statements also require management estimates and assumptions. Estimates and assumptions about future events and their effects cannot be determined with certainty. The Company bases its estimates on historical experience and various other assumptions believed to be applicable and reasonable under the circumstances. These estimates may change as new events occur, as additional information is obtained and as the operating environment changes. These changes have been included in the unaudited condensed consolidated financial statements as soon as they became known. In addition, management is periodically faced with uncertainties, the outcomes of which are not within its control and will not be known for prolonged periods of time. Based on a critical assessment of accounting policies and the underlying judgments and uncertainties affecting the application of those policies, management believes the Company’s unaudited condensed consolidated financial statements are fairly stated in accordance with U.S. GAAP and provide a fair presentation of the Company’s financial position and results of operations. Long-Lived Assets, Goodwill Long-lived assets include property and equipment, goodwill and certain other assets. We make judgments and estimates in conjunction with the carrying value of these assets, including amounts to be capitalized, depreciation methods and useful lives. Additionally, we review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We review goodwill for impairment at least annually, on October 1. We record impairment losses in the period in which we determine the carrying amount is not recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. This may require us to make judgments regarding long-term forecasts of our future revenues and costs related to the assets subject to review . Income Taxes For the three and six months ended June 30, 2023 and 2022, we have utilized the discrete effective tax rate method, as allowed by Accounting Standards Codification (“ASC”) 740-270-30-18, “Income Taxes—Interim Reporting,” to calculate the interim income tax provision. The discrete method is applied when the application of the estimated annual effective tax rate is impractical because it is not possible to reliably estimate the annual effective tax rate. The discrete method treats the year to date period as if it was the annual period and determines the income tax expense or benefit on that basis. We believe that, at this time, the use of this discrete method is more appropriate than the annual effective tax rate method as (i) the estimated annual effective tax rate method is not reliable due to the high degree of uncertainty in estimating annual pretax earnings by certain jurisdictions and (ii) our ongoing assessment that the recoverability of our deferred tax assets is not likely in certain jurisdictions. Impact of Recently Issued Accounting Standards On January 1, 2023, we adopted ASC 326 " Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ," ("ASC 326") using the prospective transition approach. This standard requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASC 326 replaces the existing |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Commitments In June 2023, the Company commenced a 120 month operating lease commitment for approximately 72,000 square feet of warehouse space in Fareham, United Kingdom. This lease increased our right of use asset approximately $6.9 million and current and long-term operating lease liability balance approximately $0.4 million and $6.2 million, respectively, as of the lease commencement date. In July 2023, the Company commenced a 124 month operating lease commitment for approximately 187,000 square feet of warehouse and office space in Irving, Texas. This lease will increase our right of use asset approximately $16.4 million and current and long-term operating lease liability balance approximately $0.7 million and $15.7 million, respectively, as of the lease commencement date. Litigation The Company is subject to claims in the ordinary course of business, including employee related claims and claims of alleged infringement by the Company or its subsidiaries or that of its clients 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. While we are unable to determine the ultimate outcome of any liabilities resulting from these claims, we do not believe the resolution of any particular matter will have a material adverse effect on the Company’s financial position or results of operations. |
Discontinued Operations
Discontinued Operations | 6 Months Ended |
Jun. 30, 2023 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Discontinued Operations On August 25, 2021, the Company closed a transaction to sell its LiveArea business (the "LiveArea Transaction"). The LiveArea business has been presented as a discontinued operation beginning with the Company's June 30, 2021 Form 10-Q. |
Revenue from Contracts with Cli
Revenue from Contracts with Clients and Customers | 6 Months Ended |
Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Clients and Customers | Revenue from Contracts with Clients and Customers Contract Assets and Contract Liabilities Costs to fulfill contract assets decreased $1.3 million from December 31, 2022 to June 30, 2023, primarily due to amortization and recognition of costs. Costs to fulfill contract assets relate to deferred costs, which are included within other current assets and/or other assets, and software development costs, which are included within property and equipment, in our condensed consolidated balance sheets. Contract liabilities were $7.5 million at December 31, 2022, of which $2.1 million was recognized as revenue during the six months ended June 30, 2023. The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables, and client advances and deposits (contract liabilities) on the condensed consolidated balance sheets. Changes in the contract asset and liability balances during the six months ended June 30, 2023 were not materially impacted by any other factors. Contract balances consist of the following (in thousands): June 30, 2023 December 31, 2022 Contract Assets Costs to fulfill $ 2,487 $ 3,829 Total contract assets $ 2,487 $ 3,829 Contract Liabilities Accrued contract liabilities $ 1,649 $ 2,757 Deferred revenue 3,451 4,776 Total contract liabilities $ 5,100 $ 7,533 Remaining performance obligations represent the transaction price of firm orders for which work has not yet been performed. The amount reported for remaining performance obligations does not include 1) contracts that are less than one year in duration, 2) contracts for which we recognize revenue b ased on the right to invoice for services performed, or 3) variable consideration allocated entirely to a wholly unsatisfied performance obligation. Much of our revenue qualifies for one of these exempti ons. As of June 30, 2023, the aggregate amount of the transaction price allocated to remaining performance obligations for contracts with an original expected duration of one year or more was $22.1 million. We expect to recognize revenue on approximately 33% of the remaining performance obligations in 2023, 33% in 2024, and the remaining recognized thereafter. Disaggregation of Revenues The following table presents our revenues, excluding sales and usage-based taxes, disaggregated by region (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Revenues by region: United States $ 56,375 $ 54,358 $ 114,180 $ 110,298 Canada 1,066 1,090 2,350 2,322 Europe 10,481 9,186 20,656 18,501 Total revenues $ 67,922 $ 64,634 $ 137,186 $ 131,121 |
Revolving Credit Facility
Revolving Credit Facility | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Revolving Credit Facility | Revolving Credit Facility In June 2023, the Company, as Parent Guarantor, along with the Company’s subsidiary, Priority Fulfillment Services, Inc. (“PFS”), as Borrower, entered into a credit agreement (“Credit Agreement”) with Texas Capital Bank, as agent for itself and one or more lenders now or hereafter made a party thereto (the “Lenders”). Under the Credit Agreement, and subject to the terms set forth therein, the Lenders have agreed to provide PFS with cash borrowings or issuances of letters of credit of up to $25.0 million (the "Revolving Credit Facility"). Availability under the Revolving Credit Facility is based on a defined percentage of eligible accounts receivable. The interest rate applicable to the Revolving Credit Facility is, at the Company’s option, either (a) Secured overnight funding rate (“SOFR”), plus an adjustment of 0.10% to 0.25% based on the borrowing term, plus an applicable margin ranging from 2.25% to 2.75% per annum, based on the Company's utilization of the Revolving Credit Facility or (b) the Alternate Base Rate plus an applicable margin ranging from 1.25% to 1.75% per annum, based on the Company's utilization of the Revolving Credit Facility, both options being subject to a 1.00% floor. The Alternate Base Rate is the highest of (i) Prime Rate of interest as published in The Wall Street Journal as the then-current U.S. Prime Rate, (ii) the Federal Funds rate for such day plus 0.5% and (iii) adjusted term SOFR rate for a one-month interest period plus 1.00%. Quarterly, the company is required to pay a commitment fee ranging from 0.375% to 0.50% per annum on the unused portion of the Revolving Credit Facility. The Revolving Credit Facility matures on the earlier of (i) June 16, 2028 and (ii) the date of termination of the commitments under the Credit Agreement. All obligations to the Lenders under the Credit Agreement are secured by a guaranty of the Company and each Subsidiary Guarantor and, pursuant to the terms of a separate Pledge and Security Agreement, a lien on substantially all of the assets of PFS and the Subsidiary Guarantors, and a pledge by PFS and each Subsidiary Guarantor of 100% of the equity capital of its respective U.S. subsidiaries and 65% of the equity capital of its respective foreign subsidiaries. In conjunction with the closing of the Revolving Credit Facility, the Company incurred $0.4 million of issuance costs recorded as Other Assets on the Company's condensed consolidated balance sheet and is amortizing the costs over the term of the Credit Agreement. As of June 30, 2023, we had no borrowings outstanding under the Revolving Credit Facility and had availability of approximately $21.1 million. As of June 30, 2023, the Company was in compliance with all required covenants in the Revolving Credit Facility. |
Share Repurchase Program
Share Repurchase Program | 6 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Share Repurchase Program | Share Repurchase Program During March 2023, the Company's Board of Directors approved a share repurchase program authorizing the Company to purchase up to an aggregate of 1,000,000 shares of the Company’s common stock during a period of up to two years. The share repurchase program does not require the Company to repurchase shares and can be terminated at any time. During the six months ended June 30, 2023 , the Company repurchased 339,563 shares of its common stock in the open market at an average price of $4.15 per share for an aggregate amount of $1.4 million pur suant to the share repurchase program, of which 243,466 shares of common stock were repurchased at an average price of $4.17 per share for an aggregate amount of $1.0 million |
Loss Per Share
Loss Per Share | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Loss Per Share | Loss Per Share Basic loss per share is computed by dividing net loss available to common stockholders by the weighted-average number of common shares outstanding for the reporting period. Diluted loss per share is computed by dividing net loss available to common stockholders by the weighted-average number of common stock and common stock equivalents outstanding for the reporting period. In periods when we recognize a net loss from continuing operations, we exclude the impact of outstanding common stock equivalents from the diluted loss per share calculation as their inclusion would have an antidilutive effect. As of June 30, 2023 and 2022 we had outstanding common stock equivalents of approximately 1.8 million and 1.7 million, respectively, |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation In January 2023, the Company completed its annual grant of restricted stock units and performance-based units to certain executives and employees under the Company’s Stock and Incentive Plans, as amended and restated, (the "Employee Plans") that allow them to earn up to approximately 620,700 shares of common stock that will vest, subject to meeting certain criteria, over a period of up to three years. Stock-based compensation expense was $1.2 million and $0.6 million for the three months ended June 30, 2023 and 2022, respectively and $2.2 million and $1.3 million for the six months ended June 30, 2023 and 2022, respectively. These expenses were included as a component of selling, general and administrative expenses in the condensed consolidated statements of operations and comprehensive income (loss). During the six months ended June 30, 2023, the Company paid dividend equivalents of $3.5 million related to a special dividend equivalent declared and accrued during the fourth quarter of 2022. As of June 30, 2023, the Company had $3.8 million remaining accrued for the dividend equivalents payable to holders of eligible outstanding awards under the Employee Plans, of which $3.4 million and $0.4 million are included in accrued expenses and other liabilities, respectively, on the condensed consolidated balance sheet. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying unaudited condensed consolidated financial statements of PFSweb, Inc. and its subsidiaries have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and include all normal and recurring adjustments necessary to present fairly the unaudited condensed consolidated balance sheets, statements of operations and comprehensive income, statements of shareholders' equity, and statements of cash flows for the periods indicated. Certain information and note disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted pursuant to the rules and regulations of the SEC. This report should be read in conjunction with our Annual Report on Form 10-K and as amended by Form 10-K/A for the year ended December 31, 2022. We refer to PFSweb, Inc. and its consolidated subsidiaries collectively as “PFSweb,” the “Company,” “us,” “we” and “our” in these unaudited condensed consolidated financial statements. Results of our operations for interim periods may not be indicative of results for the full fiscal year. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements and related disclosures in conformity with U.S. GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and disclosure of contingent assets and liabilities. The recognition and allocation of certain revenues, costs of revenues and selling, general and administrative expenses in these unaudited condensed consolidated financial statements also require management estimates and assumptions. Estimates and assumptions about future events and their effects cannot be determined with certainty. The Company bases its estimates on historical experience and various other assumptions believed to be applicable and reasonable under the circumstances. These estimates may change as new events occur, as additional information is obtained and as the operating environment changes. These changes have been included in the unaudited condensed consolidated financial statements as soon as they became known. In addition, management is periodically faced with uncertainties, the outcomes of which are not within its control and will not be known for prolonged periods of time. Based on a critical assessment of accounting policies and the underlying judgments and uncertainties affecting the application of those policies, management believes the Company’s unaudited condensed consolidated financial statements are fairly stated in accordance with U.S. GAAP and provide a fair presentation of the Company’s financial position and results of operations. |
Long-Lived Assets, Goodwill | Long-Lived Assets, Goodwill Long-lived assets include property and equipment, goodwill and certain other assets. We make judgments and estimates in conjunction with the carrying value of these assets, including amounts to be capitalized, depreciation methods and useful lives. Additionally, we review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We review goodwill for impairment at least annually, on October 1. We record impairment losses in the period in which we determine the carrying amount is not recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. This may require us to make judgments regarding long-term forecasts of our future revenues and costs related to the assets subject to review . |
Income Taxes | Income Taxes For the three and six months ended June 30, 2023 and 2022, we have utilized the discrete effective tax rate method, as allowed by Accounting Standards Codification (“ASC”) 740-270-30-18, “Income Taxes—Interim Reporting,” to calculate the interim income tax provision. The discrete method is applied when the application of the estimated annual effective tax rate is impractical because it is not possible to reliably estimate the annual effective tax rate. The discrete method treats the year to date period as if it was the annual period and determines the income tax expense or benefit on that basis. We believe that, at this time, the use of this discrete method is more appropriate than the annual effective tax rate method as (i) the estimated annual effective tax rate method is not reliable due to the high degree of uncertainty in estimating annual pretax earnings by certain jurisdictions and (ii) our ongoing assessment that the recoverability of our deferred tax assets is not likely in certain jurisdictions. |
Impact of Recently Issued Accounting Standards | Impact of Recently Issued Accounting Standards On January 1, 2023, we adopted ASC 326 " Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ," ("ASC 326") using the prospective transition approach. This standard requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASC 326 replaces the existing |
Revenue from Contracts with C_2
Revenue from Contracts with Clients and Customers (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Contract Balances | Contract balances consist of the following (in thousands): June 30, 2023 December 31, 2022 Contract Assets Costs to fulfill $ 2,487 $ 3,829 Total contract assets $ 2,487 $ 3,829 Contract Liabilities Accrued contract liabilities $ 1,649 $ 2,757 Deferred revenue 3,451 4,776 Total contract liabilities $ 5,100 $ 7,533 |
Summary of Revenues Disaggregated by Revenue Source and Region | The following table presents our revenues, excluding sales and usage-based taxes, disaggregated by region (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Revenues by region: United States $ 56,375 $ 54,358 $ 114,180 $ 110,298 Canada 1,066 1,090 2,350 2,322 Europe 10,481 9,186 20,656 18,501 Total revenues $ 67,922 $ 64,634 $ 137,186 $ 131,121 |
Commitments and Contingencies (
Commitments and Contingencies (Details) ft² in Thousands, $ in Thousands | Jul. 31, 2023 USD ($) ft² | Jun. 30, 2023 USD ($) ft² | Dec. 31, 2022 USD ($) |
Lessee, Lease, Description [Line Items] | |||
Operating lease right-of-use assets, net | $ 34,979 | $ 30,841 | |
Current portion of operating lease liabilities | 8,987 | 8,284 | |
Operating lease liabilities, less current portion | $ 28,454 | $ 25,478 | |
Fareham, United Kingdom | |||
Lessee, Lease, Description [Line Items] | |||
Term of lease | 120 months | ||
Area of land (sq.ft) | ft² | 72 | ||
Operating lease right-of-use assets, net | $ 6,900 | ||
Current portion of operating lease liabilities | 400 | ||
Operating lease liabilities, less current portion | $ 6,200 | ||
Subsequent Event | Irving, Texas | |||
Lessee, Lease, Description [Line Items] | |||
Term of lease | 124 months | ||
Area of land (sq.ft) | ft² | 187 | ||
Operating lease right-of-use assets, net | $ 16,400 | ||
Current portion of operating lease liabilities | 700 | ||
Operating lease liabilities, less current portion | $ 15,700 |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |||
Gain on disposition of business | $ 200 | $ 0 | $ 180 |
Revenue from Contracts with C_3
Revenue from Contracts with Clients and Customers - Additional Information (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | ||
Changes in costs to fulfill contract assets | $ 1,300 | |
Contract liabilities | 5,100 | $ 7,533 |
Change in contract liabilities from amortization and recognition and recognition of revenue | $ 2,100 |
Revenue from Contracts with C_4
Revenue from Contracts with Clients and Customers - Summary of Contract Balances (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Contract Assets | ||
Costs to fulfill | $ 2,487 | $ 3,829 |
Contract Liabilities | ||
Accrued contract liabilities | 1,649 | 2,757 |
Deferred revenue | 3,451 | 4,776 |
Total contract liabilities | $ 5,100 | $ 7,533 |
Revenue from Contracts with C_5
Revenue from Contracts with Clients and Customers - Additional Information, Performance Obligation (Details) $ in Millions | Jun. 30, 2023 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligation, amount | $ 22.1 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-07-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligation, percentage | 33% |
Performance obligation, expected timing of satisfaction | 6 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligation, percentage | 33% |
Performance obligation, expected timing of satisfaction | 1 year |
Revenue from Contracts with C_6
Revenue from Contracts with Clients and Customers - Summary of Revenues Disaggregated (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 67,922 | $ 64,634 | $ 137,186 | $ 131,121 |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 56,375 | 54,358 | 114,180 | 110,298 |
Canada | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 1,066 | 1,090 | 2,350 | 2,322 |
Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 10,481 | $ 9,186 | $ 20,656 | $ 18,501 |
Revolving Credit Facility (Deta
Revolving Credit Facility (Details) - Revolving Loan Facility - Line of Credit | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Debt Instrument [Line Items] | |
Maximum credit under credit agreement | $ 25,000,000 |
Debt issuance costs | 400,000 |
Borrowings outstanding | 0 |
Available credit under credit agreement | $ 21,100,000 |
Minimum | |
Debt Instrument [Line Items] | |
Commitment fee percentage | 0.375% |
Maximum | |
Debt Instrument [Line Items] | |
Commitment fee percentage | 0.50% |
SOFR | |
Debt Instrument [Line Items] | |
Variable rate basis | 1% |
SOFR | Minimum | |
Debt Instrument [Line Items] | |
Variable rate basis | 0.10% |
Variable rate on utilization | 2.25% |
SOFR | Maximum | |
Debt Instrument [Line Items] | |
Variable rate basis | 0.25% |
Variable rate on utilization | 2.75% |
Base Rate | |
Debt Instrument [Line Items] | |
Floor interest rate | 1% |
Base Rate | Minimum | |
Debt Instrument [Line Items] | |
Variable rate basis | 1.25% |
Base Rate | Maximum | |
Debt Instrument [Line Items] | |
Variable rate basis | 1.75% |
Federal Funds Rate | |
Debt Instrument [Line Items] | |
Variable rate basis | 0.50% |
Share Repurchase Program (Detai
Share Repurchase Program (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |||
Stock repurchase program, number of shares authorized to be repurchased (in shares) | 1,000,000 | ||
Stock repurchase program, period in force | 2 years | ||
Stock repurchased during period, shares (in shares) | 243,466 | 339,563 | |
Average share price (in dollars per share) | $ 4.15 | $ 4.17 | |
Stock repurchased during period, value | $ 1,020 | $ 396 | $ 1,400 |
Stock repurchase program, remaining number of shares authorized to be repurchased (in shares) | 660,437 | 660,437 |
Loss Per Share (Details)
Loss Per Share (Details) - shares shares in Millions | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Earnings Per Share [Abstract] | ||
Outstanding common stock excluded from calculations of diluted earnings per share (in shares) | 1.8 | 1.7 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Jan. 31, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Payment of dividend equivalents | $ 3,480 | $ 0 | |||
Dividends Payable | $ 3,800 | 3,800 | |||
Accrued Liabilities, Current | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Dividends Payable | 3,400 | 3,400 | |||
Other Noncurrent Liabilities | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Dividends Payable | 400 | 400 | |||
Employee Plan | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Number of shares authorized (in shares) | 620,700 | ||||
Vesting period | 3 years | ||||
Share-based compensation expense | $ 1,200 | $ 600 | $ 2,200 | $ 1,300 |