Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2021 | May 04, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2021 | |
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 | 505 Millennium Drive, | |
Entity Address, City or Town | Allen, | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 75013 | |
City Area Code | 972 | |
Local Phone Number | 881-2900 | |
Title of 12(b) Security | Common Stock, $0.001 par value | |
Trading Symbol | PFSW | |
Security Exchange Name | NASDAQ | |
Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Shell Company | false | |
Entity Common Stock, Shares Outstanding | 21,100,119 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2021 | |
Entity Central Index Key | 0001095315 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Current Assets: | ||
Cash and cash equivalents | $ 10,844 | $ 10,751 |
Restricted cash | 214 | 214 |
Accounts receivable, net of allowance for doubtful accounts of $1,352 and $1,465 at March 31, 2021 and December 31, 2020, respectively | 58,627 | 80,778 |
Related party receivable | 1,012 | 730 |
Inventories, net of reserves of $94 and $96 at March 31, 2021 and December 31, 2020, respectively | 3,889 | 3,644 |
Other receivables | 3,519 | 3,758 |
Prepaid expenses and other current assets | 10,087 | 8,694 |
Total current assets | 88,192 | 108,569 |
Property and equipment: | ||
Cost | 102,863 | 101,992 |
Less: accumulated depreciation | (84,322) | (82,814) |
PROPERTY AND EQUIPMENT | 18,541 | 19,178 |
Operating lease right-of-use assets, net | 40,900 | 34,982 |
Identifiable intangibles, net | 594 | 665 |
Goodwill | 45,677 | 45,615 |
Other assets | 4,186 | 4,152 |
Total assets | 198,090 | 213,161 |
Current liabilities: | ||
Trade accounts payable | 27,574 | 35,648 |
Accrued expenses | 26,072 | 30,881 |
Current portion of operating lease liabilities | 10,064 | 9,487 |
Current portion of long-term debt and finance lease obligations | 3,138 | 3,414 |
Deferred revenues | 4,690 | 5,115 |
Total current liabilities | 71,538 | 84,545 |
Long-term debt and capital lease obligations, less current portion | 33,166 | 39,073 |
Deferred revenue, less current portion | 1,366 | 1,341 |
Operating lease liabilities | 35,745 | 30,553 |
Other liabilities | 5,417 | 5,286 |
Total liabilities | 147,232 | 160,798 |
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; 20,482,974 and 20,408,558 issued at March 31, 2021 and December 31, 2020, respectively; and 20,449,507 and 20,375,091 outstanding at March 31, 2021 and December 31, 2020, respectively | 20 | 20 |
Additional paid-in capital | 169,474 | 168,244 |
Accumulated deficit | (117,827) | (115,447) |
Accumulated other comprehensive loss | (684) | (329) |
Treasury stock at cost, 33,467 shares | (125) | (125) |
Total shareholders’ equity | 50,858 | 52,363 |
Total liabilities and shareholders’ equity | $ 198,090 | $ 213,161 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, net of allowance for doubtful accounts of $1,352 and $1,465 at March 31, 2021 and December 31, 2020, respectively | $ 1,352 | $ 1,465 |
Inventories, net of reserves of $94 and $96 at March 31, 2021 and December 31, 2020, respectively | $ 94 | $ 96 |
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) | 20,482,974 | 20,408,558 |
Common stock, shares outstanding (in shares) | 20,449,507 | 20,375,091 |
Treasury stock, shares (in shares) | 33,467 | 33,467 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Revenues: | ||
Related party service fee revenue | $ 468 | $ 0 |
Total revenues | 77,970 | 76,699 |
Costs of revenues: | ||
Total costs of revenues | 58,206 | 56,707 |
Gross profit | 19,764 | 19,992 |
Selling, general and administrative expenses | 21,303 | 19,369 |
Income (loss) from operations | (1,539) | 623 |
Interest expense, net | 376 | 415 |
Income (loss) before income taxes | (1,915) | 208 |
Income tax expense, net | 465 | 439 |
Net loss | $ (2,380) | $ (231) |
Net loss per share: | ||
Basic (in USD per share) | $ (0.11) | $ (0.01) |
Diluted (in USD per share) | $ (0.11) | $ (0.01) |
Weighted average number of shares outstanding: | ||
Basic (in shares) | 21,274 | 19,679 |
Diluted (in shares) | 21,274 | 19,679 |
Comprehensive loss: | ||
Net loss | $ (2,380) | $ (231) |
Foreign currency translation adjustment | (355) | (944) |
Total comprehensive loss | (2,735) | (1,175) |
Service fee revenue | ||
Revenues: | ||
Revenues | 62,318 | 54,298 |
Total revenues | 62,786 | 54,298 |
Costs of revenues: | ||
Total costs of revenues | 43,244 | 34,716 |
Product revenue, net | ||
Revenues: | ||
Revenues | 4,308 | 7,533 |
Total revenues | 4,308 | 7,533 |
Costs of revenues: | ||
Total costs of revenues | 4,086 | 7,123 |
Pass-through revenue | ||
Revenues: | ||
Revenues | 10,876 | 14,868 |
Total revenues | 10,876 | 14,868 |
Costs of revenues: | ||
Total costs of revenues | $ 10,876 | $ 14,868 |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Treasury Stock |
Beginning balance at Dec. 31, 2019 | $ 46,842 | $ 19 | $ 158,192 | $ (109,943) | $ (1,301) | $ (125) |
Beginning balance (in shares) at Dec. 31, 2019 | 19,465,877 | 33,467 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (231) | (231) | ||||
Stock-based compensation | 545 | 545 | ||||
Issuance of shares under stock-based compensation awards (in shares) | 33,343 | |||||
Issuance of shares under stock-based compensation awards | 0 | |||||
Tax withholding on shares under stock-based compensation awards | (73) | (73) | ||||
Foreign currency translation | (944) | (944) | ||||
Ending balance (in shares) at Mar. 31, 2020 | 19,499,220 | 33,467 | ||||
Ending balance at Mar. 31, 2020 | 46,139 | $ 19 | 158,664 | (110,174) | (2,245) | $ (125) |
Beginning balance at Dec. 31, 2020 | 52,363 | $ 20 | 168,244 | (115,447) | (329) | $ (125) |
Beginning balance (in shares) at Dec. 31, 2020 | 20,408,558 | 33,467 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (2,380) | (2,380) | ||||
Stock-based compensation | 853 | 853 | ||||
Exercise of stock options (in shares) | 74,416 | |||||
Exercise of stock options | 377 | 377 | ||||
Foreign currency translation | (355) | (355) | ||||
Ending balance (in shares) at Mar. 31, 2021 | 20,482,974 | 33,467 | ||||
Ending balance at Mar. 31, 2021 | $ 50,858 | $ 20 | $ 169,474 | $ (117,827) | $ (684) | $ (125) |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash flows from operating activities: | ||
Net loss | $ (2,380) | $ (231) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 2,216 | 2,285 |
Deferred income taxes | 173 | 183 |
Stock-based compensation expense | 853 | 545 |
Other | 37 | 20 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 19,916 | 7,623 |
Related party receivable | 283 | 0 |
Inventories | (258) | 1,269 |
Prepaid expenses, other receivables and other assets | (1,289) | (1,673) |
Operating leases | (158) | (367) |
Trade accounts payable, deferred revenues, accrued expenses and other liabilities | (10,909) | (9,374) |
Net cash provided by operating activities | 8,484 | 280 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (969) | (954) |
Proceeds from sale of property and equipment | 0 | 142 |
Net cash used in investing activities | (969) | (812) |
Cash flows from financing activities: | ||
Net proceeds from issuance of common stock | 377 | 0 |
Taxes paid on behalf of employees for withheld shares | 0 | (73) |
Payments on finance lease obligations | (262) | (319) |
Payments on revolving loan | (50,817) | (34,526) |
Borrowings on revolving loan | 45,325 | 37,594 |
Payments on other debt | (1,646) | (482) |
Borrowings on other debt | 0 | 755 |
Net cash provided (used) by financing activities | (7,023) | 2,949 |
Effect of exchange rates on cash, cash equivalents, and restricted cash | (399) | (348) |
Net increase in cash and cash equivalents | 93 | 2,069 |
Cash and cash equivalents, beginning of period | 10,751 | 12,434 |
Restricted cash, beginning of period | 214 | 214 |
Cash, cash equivalents and restricted cash, beginning of period | 10,965 | 12,648 |
Cash and cash equivalents, end of period | 10,844 | 14,503 |
Restricted cash, end of period | 214 | 214 |
Cash, cash equivalents and restricted cash, end of period | 11,058 | 14,717 |
Supplemental cash flow information | ||
Cash paid for income taxes | 352 | 352 |
Cash paid for interest | 309 | 432 |
Non-cash investing and financing activities: | ||
Property and equipment acquired under long-term debt and finance leases | $ 600 | $ 370 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of PresentationThe 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 loss, statements of shareholders' equity, and statements of cash flows for the periods indicated. Certain information and note disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted pursuant to the rules and regulations of the SEC. This report should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2020. We refer to PFSweb, Inc. and its 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. We reclassify certain prior year amounts, as applicable, to conform to the current year presentation. |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Use of Estimates The preparation of consolidated financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America 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 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 US GAAP and provide a fair presentation of the Company’s financial position and results of operations. Furthermore, we considered the impact of the COVID-19 pandemic on the use of estimates and assumptions used for financial reporting and determined that there was no adverse material impact to our results of operations for the three months ended March 31, 2021; however, the extent and duration of future impacts of the COVID-19 pandemic and any resulting economic impact are largely unknown and difficult to predict due to these unknown factors which may have a material impact on our financial position and results of operations in the future. For a complete set of our significant accounting policies, refer to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020. During the three-month period ended March 31, 2021, there were no significant changes to our significant accounting policies. Impact of Recently Issued Accounting Standards Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, " Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ," ("ASU 2016-13") which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. ASU 2016-13 is effective for annual reporting periods, and interim periods within those years, beginning after December 15, 2019 for all public entities, excluding smaller reporting companies, and after December 15, 2022 for smaller reporting companies. It requires a cumulative effect adjustment to the balance sheet as of the beginning of the first reporting period in which the guidance is effective. We will adopt ASU 2016-13 on January 1, 2023. We are currently in the early phase of evaluating the impact of the adoption of ASU 2016-13 on our condensed consolidated financial statements. |
Revenue from Contracts with Cli
Revenue from Contracts with Clients and Customers | 3 Months Ended |
Mar. 31, 2021 | |
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 Changes in costs to fulfill contract assets remained consistent from December 31, 2020 to March 31, 2021, primarily due to a decrease of approximately $0.9 million for amortization and recognition of costs, offset by approximately $0.9 million from new projects in the three months ended March 31, 2021. 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. Changes in contract liabilities during the period increased $1.8 million from December 31, 2020 to March 31, 2021, primarily due to a decrease of approximately $1.7 million for amortization and recognition of revenue, offset by approximately $3.5 million from new projects in the three months ended March 31, 2021. Contract losses recognized for the three months ended March 31, 2021 were not material. Accrued contract liabilities below are included within accrued expenses in our condensed consolidated balance sheets. The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables, and customer advances and deposits (contract liabilities) on the condensed consolidated balance sheets. Changes in the contract asset and liability balances during the three months ended March 31, 2021 were not materially impacted by any other factors. Contract balances consist of the following (in thousands): March 31, 2021 December 31, 2020 Contract Assets Costs to Fulfill $ 5,642 $ 5,659 Total Contract Assets $ 5,642 $ 5,659 Contract Liabilities Accrued Contract Liabilities $ 3,253 $ 1,067 Deferred Revenue 6,056 6,456 Total Contract Liabilities $ 9,309 $ 7,523 Remaining performance obligations represent the transaction price of firm orders for which work has not yet been performed. This amount does not include 1) contracts that are less than one year in duration, 2) contracts for which we recognize revenue based on the right to invoice for services performed, or 3) variable consideration allocated entirely to a wholly unsatisfied performance obligation. Much of our revenue qualifies for one of these exemptions. As of March 31, 2021, 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 $7.4 million. We expect to recognize revenue on approximately 77% of the remaining performance obligations in 2021, 21% in 2022, and the remaining recognized thereafter. The following table presents our revenues, excluding sales and usage-based taxes, disaggregated by revenue source (in thousands): Three Months Ended PFS LiveArea Total Revenues: Service fee revenue $ 42,431 $ 20,355 (1) $ 62,786 Product revenue, net 4,308 — 4,308 Pass-through revenue 10,163 713 10,876 Total revenues $ 56,902 $ 21,068 $ 77,970 (1) Includes $0.5 million of related party service fee revenue for the three months ended March 31, 2021. Three Months Ended PFS LiveArea Total Revenues: Service fee revenue $ 33,431 $ 20,867 $ 54,298 Product revenue, net 7,533 — 7,533 Pass-through revenue 13,956 912 14,868 Total revenues $ 54,920 $ 21,779 $ 76,699 The following table presents our revenues, excluding sales and usage-based taxes, disaggregated by timing of revenue recognition (in thousands): Three Months Ended PFS LiveArea Total Revenues: Over time $ 52,594 $ 21,068 (1) $ 73,662 Point-in-time 4,308 — 4,308 Total revenues $ 56,902 $ 21,068 $ 77,970 (1) Includes $0.5 million of related party service fee for the three months ended March 31, 2021. Three Months Ended PFS LiveArea Total Revenues: Over time $ 47,387 $ 21,779 $ 69,166 Point-in-time 7,533 — 7,533 Total revenues $ 54,920 $ 21,779 $ 76,699 The following table presents our revenues, excluding sales and usage-based taxes, disaggregated by region (in thousands): Three Months Ended PFS LiveArea Total Revenues by region: North America $ 44,997 $ 18,586 (1) $ 63,583 Europe 11,905 2,482 14,387 Total revenues $ 56,902 $ 21,068 $ 77,970 (1) Includes $0.5 million of related party service fee revenue for the three months ended March 31, 2021. Three Months Ended PFS LiveArea Total Revenues by region: North America $ 45,098 $ 19,197 $ 64,295 Europe 9,822 2,582 12,404 Total revenues $ 54,920 $ 21,779 $ 76,699 |
Inventory Financing
Inventory Financing | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Inventory Financing | Inventory Financing Supplies Distributors has a short-term credit facility with IBM Credit LLC and its assignees (“IBM Credit Facility”) to finance its purchase and distribution of Ricoh products in the United States, providing financing for eligible Ricoh inventory and certain receivables up to $7.5 million, as per an amended agreement. 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, we have classified the outstanding amounts under this facility, which were $2.6 million and $3.6 million as of March 31, 2021 and December 31, 2020, respectively, as trade accounts payable in the condensed consolidated balance sheets. As of March 31, 2021, Supplies Distributors had $1.1 million of available credit under this facility. The credit facility contains cross default provisions, various restrictions upon the ability of Supplies Distributors to, among other things, merge, consolidate, sell assets, incur indebtedness, make loans and payments to related parties (including entities directly or indirectly owned by PFSweb, Inc.), provide guarantees, make investments and loans, pledge assets, make changes to capital stock ownership structure and pay dividends. The credit facility also contains financial covenants, such as annualized revenue to working capital, net profit after tax to revenue, and total liabilities to tangible net worth, as defined, and is secured by certain of the assets of Supplies Distributors, as well as a collateralized guaranty of PFSweb. Additionally, PFSweb is required to maintain a minimum Subordinated Note receivable balance from Supplies Distributors of $1.0 million, as per an amended agreement. Borrowings under the credit facility accrue interest, after a defined free financing period, at prime rate plus 0.5%, which resulted in a weighted average interest rate of 3.75% and 3.75% as of March 31, 2021 and December 31, 2020, respectively. As of March 31, 2021, the Company was in compliance with all financial covenants. |
Debt and Finance Lease Obligati
Debt and Finance Lease Obligations | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Debt and Finance Lease Obligations | Debt and Finance Lease Obligations Outstanding debt and finance lease obligations consist of the following (in thousands): March 31, 2021 December 31, 2020 U.S. Credit Agreement Revolver $ 28,000 $ 33,500 Equipment loan 7,571 8,035 Debt issuance costs (204) (224) Finance Leases 844 1,056 Other 93 120 Total 36,304 42,487 Less current portion of long-term debt 3,138 3,414 Long-term debt, less current portion $ 33,166 $ 39,073 U.S. Credit Agreement On November 1, 2018, we entered into Amendment No. 1 to our Credit Agreement with Regions Bank (the “Amended Facility”). The Amended Facility provided for an increase in availability of our revolving loans to $60.0 million, with the ability for a further increase of $20.0 million to a total of $80.0 million, and the elimination of the term loan. Amounts outstanding under the term loan were reconstituted as revolving loans. The Amended Facility also extended the maturity date to November 1, 2023. As of March 31, 2021, we had $12.3 million of available credit under the revolving loan facility. As of March 31, 2021 and December 31, 2020, the weighted average interest rate on the revolving loan facility was 2.18% and 2.52%, respectively. As of March 31, 2021, we had approval for $2.9 million of available credit in equipment financing. As of March 31, 2021, we were in compliance with all debt covenants. |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | Earnings (Loss) Per ShareBasic net loss per common share was computed by dividing net loss by the weighted-average number of common shares outstanding for the reporting period. In periods when we recognize a net loss, 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 March 31, 2021 and March 31, 2020, we had outstanding common stock equivalents of approximately 2.5 million and 2.3 million, respectively, that have been excluded from the calculations of diluted earnings per share attributable to common stockholders because their effect would have been antidilutive. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | . Commitments and Contingencies The Company is subject to claims in the ordinary course of business, including claims of alleged infringement by the Company or its subsidiaries of the patents, trademarks and other intellectual property rights of third parties. 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. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company's segments are comprised of strategic businesses that are defined by the service offerings they provide and consist of PFS Operations (which provides client services in relation to the customer physical experience, such as order management (OMS), order fulfillment, customer care and financial services) and LiveArea Professional Services (which provides client services in relation to the digital experience of shopping online, such as strategic commerce consulting, strategy, design and digital marketing services and technology services). Each segment is led by a separate Business Unit Executive who reports directly to our Chief Operating Decision Maker. The following table presents information concerning operations by segment (in thousands): Three Months Ended 2021 2020 Revenues: PFS Operations $ 56,902 $ 54,920 LiveArea Professional Services 21,068 21,779 Total revenues $ 77,970 $ 76,699 Business unit direct contribution: PFS Operations $ 3,716 $ 3,092 LiveArea Professional Services 1,732 3,182 Total business unit direct contribution 5,448 6,274 Unallocated corporate expenses (6,987) (5,651) Income (loss) from operations $ (1,539) $ 623 Depreciation and amortization: PFS Operations $ 1,885 $ 1,774 LiveArea Professional Services 159 223 Unallocated corporate expenses 172 288 Total depreciation and amortization $ 2,216 $ 2,285 |
Related Party Transaction
Related Party Transaction | 3 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transaction | Related Party TransactionIn June 2020, the Company entered into an agreement with Hardinge, Inc. ("Hardinge") in which our LiveArea segment is to provide various services related to e-commerce. Benjamin Rosenzweig ("Mr. Rosenzweig"), a member of our Board of Directors, is a partner at Privet Fund Management LLC ("Privet"). Privet is the general partner and investment manager of funds that own Hardinge and Mr. Rosenzweig also serves on the Board of Directors of Hardinge.We recognized $0.5 million of related party service fee revenue in the three months ended March 31, 2021. As of March 31, 2021 and December 31, 2020, there was an accounts receivable balance of $1.0 million and $0.7 million from Hardinge, respectively. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
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 loss, statements of shareholders' equity, and statements of cash flows for the periods indicated. Certain information and note disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted pursuant to the rules and regulations of the SEC. This report should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2020. We refer to PFSweb, Inc. and its 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. We reclassify certain prior year amounts, as applicable, to conform to the current year presentation |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America 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 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 US GAAP and provide a fair presentation of the Company’s financial position and results of operations. |
Impact of Recently Issued Accounting Standards | Impact of Recently Issued Accounting Standards Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, " Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ," ("ASU 2016-13") which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. ASU 2016-13 is effective for annual reporting periods, and interim periods within those years, beginning after December 15, 2019 for all public entities, excluding smaller reporting companies, and after December 15, 2022 for smaller reporting companies. It requires a cumulative effect adjustment to the balance sheet as of the beginning of the first reporting period in which the guidance is effective. We will adopt ASU 2016-13 on January 1, 2023. We are currently in the early phase of evaluating the impact of the adoption of ASU 2016-13 on our condensed consolidated financial statements. |
Revenue from Contracts with C_2
Revenue from Contracts with Clients and Customers (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Contract Balances | Contract balances consist of the following (in thousands): March 31, 2021 December 31, 2020 Contract Assets Costs to Fulfill $ 5,642 $ 5,659 Total Contract Assets $ 5,642 $ 5,659 Contract Liabilities Accrued Contract Liabilities $ 3,253 $ 1,067 Deferred Revenue 6,056 6,456 Total Contract Liabilities $ 9,309 $ 7,523 |
Summary of Revenues Disaggregated by Revenue Source and Region | The following table presents our revenues, excluding sales and usage-based taxes, disaggregated by revenue source (in thousands): Three Months Ended PFS LiveArea Total Revenues: Service fee revenue $ 42,431 $ 20,355 (1) $ 62,786 Product revenue, net 4,308 — 4,308 Pass-through revenue 10,163 713 10,876 Total revenues $ 56,902 $ 21,068 $ 77,970 (1) Includes $0.5 million of related party service fee revenue for the three months ended March 31, 2021. Three Months Ended PFS LiveArea Total Revenues: Service fee revenue $ 33,431 $ 20,867 $ 54,298 Product revenue, net 7,533 — 7,533 Pass-through revenue 13,956 912 14,868 Total revenues $ 54,920 $ 21,779 $ 76,699 The following table presents our revenues, excluding sales and usage-based taxes, disaggregated by timing of revenue recognition (in thousands): Three Months Ended PFS LiveArea Total Revenues: Over time $ 52,594 $ 21,068 (1) $ 73,662 Point-in-time 4,308 — 4,308 Total revenues $ 56,902 $ 21,068 $ 77,970 (1) Includes $0.5 million of related party service fee for the three months ended March 31, 2021. Three Months Ended PFS LiveArea Total Revenues: Over time $ 47,387 $ 21,779 $ 69,166 Point-in-time 7,533 — 7,533 Total revenues $ 54,920 $ 21,779 $ 76,699 The following table presents our revenues, excluding sales and usage-based taxes, disaggregated by region (in thousands): Three Months Ended PFS LiveArea Total Revenues by region: North America $ 44,997 $ 18,586 (1) $ 63,583 Europe 11,905 2,482 14,387 Total revenues $ 56,902 $ 21,068 $ 77,970 (1) Includes $0.5 million of related party service fee revenue for the three months ended March 31, 2021. Three Months Ended PFS LiveArea Total Revenues by region: North America $ 45,098 $ 19,197 $ 64,295 Europe 9,822 2,582 12,404 Total revenues $ 54,920 $ 21,779 $ 76,699 |
Debt and Finance Lease Obliga_2
Debt and Finance Lease Obligations (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Summary of Debt and Finance Lease Obligations | Outstanding debt and finance lease obligations consist of the following (in thousands): March 31, 2021 December 31, 2020 U.S. Credit Agreement Revolver $ 28,000 $ 33,500 Equipment loan 7,571 8,035 Debt issuance costs (204) (224) Finance Leases 844 1,056 Other 93 120 Total 36,304 42,487 Less current portion of long-term debt 3,138 3,414 Long-term debt, less current portion $ 33,166 $ 39,073 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Summary of Segment Information | The following table presents information concerning operations by segment (in thousands): Three Months Ended 2021 2020 Revenues: PFS Operations $ 56,902 $ 54,920 LiveArea Professional Services 21,068 21,779 Total revenues $ 77,970 $ 76,699 Business unit direct contribution: PFS Operations $ 3,716 $ 3,092 LiveArea Professional Services 1,732 3,182 Total business unit direct contribution 5,448 6,274 Unallocated corporate expenses (6,987) (5,651) Income (loss) from operations $ (1,539) $ 623 Depreciation and amortization: PFS Operations $ 1,885 $ 1,774 LiveArea Professional Services 159 223 Unallocated corporate expenses 172 288 Total depreciation and amortization $ 2,216 $ 2,285 |
Revenue from Contracts with C_3
Revenue from Contracts with Clients and Customers - Additional Information (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Amortization of costs to fulfill contract assets | $ 0.9 |
Increase in costs to fulfill contracts with customers from new projects | 0.9 |
Change in contract liabilities | 1.8 |
Change in contract liabilities from amortization and recognition and recognition of revenue | 1.7 |
Increase in contract liabilities for new projects | $ 3.5 |
Revenue from Contracts with C_4
Revenue from Contracts with Clients and Customers - Summary of Contract Balances (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Contract Assets | ||
Costs to Fulfill | $ 5,642 | $ 5,659 |
Contract Liabilities | ||
Accrued Contract Liabilities | 3,253 | 1,067 |
Deferred Revenue | 6,056 | 6,456 |
Total Contract Liabilities | $ 9,309 | $ 7,523 |
Revenue from Contracts with C_5
Revenue from Contracts with Clients and Customers - Additional Information, Performance Obligation (Details) $ in Millions | Mar. 31, 2021USD ($) |
Revenue from Contract with Customer [Abstract] | |
Performance obligation, amount | $ 7.4 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-04-01 | |
Revenue from Contract with Customer [Abstract] | |
Performance obligation, percentage | 77.00% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligation, expected timing of satisfaction | 9 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Performance obligation, percentage | 21.00% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligation, expected timing of satisfaction | 12 months |
Revenue from Contracts with C_6
Revenue from Contracts with Clients and Customers - Summary of Revenues Disaggregated (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 77,970 | $ 76,699 |
Related party service fee revenue | 468 | 0 |
North America | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 63,583 | 64,295 |
Europe | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 14,387 | 12,404 |
PFS Operations | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 56,902 | 54,920 |
PFS Operations | North America | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 44,997 | 45,098 |
PFS Operations | Europe | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 11,905 | 9,822 |
LiveArea Professional Services | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 21,068 | 21,779 |
LiveArea Professional Services | North America | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 18,586 | 19,197 |
LiveArea Professional Services | Europe | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 2,482 | 2,582 |
Service fee revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 62,786 | 54,298 |
Service fee revenue | PFS Operations | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 42,431 | 33,431 |
Service fee revenue | LiveArea Professional Services | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 20,355 | 20,867 |
Product revenue, net | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 4,308 | 7,533 |
Product revenue, net | PFS Operations | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 4,308 | 7,533 |
Product revenue, net | LiveArea Professional Services | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 0 | 0 |
Pass-through revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 10,876 | 14,868 |
Pass-through revenue | PFS Operations | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 10,163 | 13,956 |
Pass-through revenue | LiveArea Professional Services | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 713 | 912 |
Over time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 73,662 | 69,166 |
Over time | PFS Operations | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 52,594 | 47,387 |
Over time | LiveArea Professional Services | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 21,068 | 21,779 |
Point-in-time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 4,308 | 7,533 |
Point-in-time | PFS Operations | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 4,308 | 7,533 |
Point-in-time | LiveArea Professional Services | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 0 | $ 0 |
Inventory Financing - Additiona
Inventory Financing - Additional Information (Details) - Line of Credit - Short Term Credit Facility - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Line of Credit Facility [Line Items] | ||
Maximum credit under credit agreement | $ 7,500,000 | |
Termination notice period | 90 days | |
Outstanding borrowings | $ 2,600,000 | $ 3,600,000 |
Available credit under credit agreement | 1,100,000 | |
Subordinated note outstanding, minimum limit | $ 1,000,000 | |
Weighted average interest rate | 3.75% | 3.75% |
Prime Rate | ||
Line of Credit Facility [Line Items] | ||
Variable rate basis | 0.50% |
Debt and Finance Lease Obliga_3
Debt and Finance Lease Obligations - Summary of Outstanding Debt and Capital Lease Obligations (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Finance Leases | $ 844 | $ 1,056 |
Other | 93 | 120 |
Total | 36,304 | 42,487 |
Less current portion of long-term debt | 3,138 | 3,414 |
Long-term debt, less current portion | 33,166 | 39,073 |
U.S. Credit Agreement | ||
Debt Instrument [Line Items] | ||
Debt issuance costs | (204) | (224) |
U.S. Credit Agreement | Revolver | ||
Debt Instrument [Line Items] | ||
U.S. Credit Agreement | 28,000 | 33,500 |
U.S. Credit Agreement | Equipment loan | ||
Debt Instrument [Line Items] | ||
U.S. Credit Agreement | $ 7,571 | $ 8,035 |
Debt and Finance Lease Obliga_4
Debt and Finance Lease Obligations - U.S. Credit Agreement - Additional Information (Details) - U.S. Credit Agreement - Revolving Loan Facility - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 | Nov. 01, 2018 |
Line of Credit Facility [Line Items] | |||
Availability under credit agreement | $ 60,000,000 | ||
Available increase under credit agreement | 20,000,000 | ||
Availability under credit agreement after available increase under credit agreement | $ 80,000,000 | ||
Available credit under credit agreement | $ 12,300,000 | ||
Weighted average interest rate on outstanding borrowings | 2.18% | 2.52% | |
Available credit under credit agreement for equipment purchases | $ 2,900,000 |
Earnings (Loss) Per Share - Add
Earnings (Loss) Per Share - Additional Information (Details) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Earnings Per Share [Abstract] | ||
Outstanding common stock excluded from calculations of diluted earnings per share (in shares) | 2.5 | 2.3 |
Segment Information - Summary o
Segment Information - Summary of Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Segment Reporting Information [Line Items] | ||
Income (loss) from operations | $ (1,539) | $ 623 |
Depreciation and amortization | 2,216 | 2,285 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Revenues | 77,970 | 76,699 |
Income (loss) from operations | 5,448 | 6,274 |
Operating Segments | PFS Operations | ||
Segment Reporting Information [Line Items] | ||
Revenues | 56,902 | 54,920 |
Income (loss) from operations | 3,716 | 3,092 |
Depreciation and amortization | 1,885 | 1,774 |
Operating Segments | LiveArea Professional Services | ||
Segment Reporting Information [Line Items] | ||
Revenues | 21,068 | 21,779 |
Income (loss) from operations | 1,732 | 3,182 |
Depreciation and amortization | 159 | 223 |
Unallocated Corporate | ||
Segment Reporting Information [Line Items] | ||
Income (loss) from operations | (6,987) | (5,651) |
Depreciation and amortization | $ 172 | $ 288 |
Related Party Transaction (Deta
Related Party Transaction (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Related Party Transaction [Line Items] | |||
Related party service fee revenue | $ 468 | $ 0 | |
Director | |||
Related Party Transaction [Line Items] | |||
Related party service fee revenue | 500 | ||
Accounts receivable | $ 1,000 | $ 700 |