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Document and Entity Information - shares	9 Months Ended
Sep. 30, 2013	Nov. 11, 2013
Document Document And Entity Information [Line Items]
Entity Registrant Name	PFSWEB INC
Entity Central Index Key	0001095315
Document Type	10-Q
Document Period End Date	Sep. 30, 2013
Amendment Flag	false
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		16,307,901

Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2013	Dec. 31, 2012
CURRENT ASSETS:
Cash and cash equivalents	$ 21,293	$ 19,626
Restricted cash	466	283
Accounts receivable, net of allowance for doubtful accounts of $367 and $450 at September 30, 2013 and December 31, 2012, respectively	37,715	45,684
Inventories, net of reserves of $1,688 and $1,789 at September 30, 2013 and December 31, 2012, respectively	17,326	24,654
Other receivables	7,645	7,675
Prepaid expenses and other current assets	4,590	4,346
Total current assets	89,035	102,268
PROPERTY AND EQUIPMENT, net	26,667	27,917
OTHER ASSETS	2,880	3,286
Total assets	118,582	133,471
CURRENT LIABILITIES:
Current portion of long-term debt and capital lease obligations	8,820	16,660
Trade accounts payable	26,153	40,493
Deferred revenue	9,166	6,648
Accrued expenses	21,299	23,097
Total current liabilities	65,438	86,898
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS, less current portion	3,473	5,400
DEFERRED REVENUE	6,177	7,562
DEFERRED RENT	5,142	5,560
Total liabilities	80,230	105,420
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY:
Preferred stock, $1.00 par value; 1,000,000 shares authorized; none issued or outstanding
Additional paid-in capital	121,663	106,018
Accumulated deficit	(84,891)	(79,409)
Accumulated other comprehensive income	1,689	1,554
Treasury stock at cost, 33,467 shares	(125)	(125)
Total shareholders’ equity	38,352	28,051
Total liabilities and shareholders’ equity	$ 118,582	$ 133,471

Consolidated Balance Sheets (Parenthetical) (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2013	Dec. 31, 2012
Statement Consolidated Balance Sheets Parenthetical [Line Items]
Allowance for doubtful accounts	$ 367	$ 450
Inventories reserves	$ 1,688	$ 1,789
Preferred stock, par value	$ 1.00	$ 1.00
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	35,000,000	35,000,000
Common stock, shares issued	16,199,431	12,812,386
Common stock, shares outstanding	16,165,964	12,778,919
Treasury stock, shares	33,467	33,467

Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
REVENUES:
Product revenue, net	$ 21,495	$ 27,476	$ 69,660	$ 91,450
Service fee revenue	23,908	28,260	78,708	85,022
Pass-through revenue	8,150	9,018	26,511	28,121
Total revenues	53,553	64,754	174,879	204,593
COSTS OF REVENUES:
Cost of product revenue	20,221	25,538	65,215	84,483
Cost of service fee revenue	16,196	20,777	53,265	63,130
Cost of pass-through revenue	8,150	9,018	26,511	28,121
Total costs of revenues	44,567	55,333	144,991	175,734
Gross profit	8,986	9,421	29,888	28,859
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES, including stock based compensation expense of $610 and $308 in the three months ended September 30, 2013 and 2012, respectively, and $1,195 and $1,014 in the nine months ended September 30, 2013 and 2012, respectively.	10,656	9,401	34,395	29,807
Income (loss) from operations	(1,670)	20	(4,507)	(948)
INTEREST EXPENSE, net	162	236	564	758
Loss from operations before income taxes	(1,832)	(216)	(5,071)	(1,706)
INCOME TAX EXPENSE	120	154	411	457
NET LOSS	$ (1,952)	$ (370)	$ (5,482)	$ (2,163)
NET LOSS PER SHARE:
Basic	$ (0.12)	$ (0.03)	$ (0.38)	$ (0.17)
Diluted	$ (0.12)	$ (0.03)	$ (0.38)	$ (0.17)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING:
Basic	16,121	12,783	14,490	12,777
Diluted	16,121	12,783	14,490	12,777
COMPREHENSIVE INCOME (LOSS):
Net loss	$ (1,952)	$ (370)	$ (5,482)	$ (2,163)
Foreign currency translation adjustment	275	235	135	14
TOTAL COMPREHENSIVE INCOME (LOSS)	$ (1,677)	$ (135)	$ (5,347)	$ (2,149)

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (5,482)	$ (2,163)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	7,533	6,834
Provision for doubtful accounts	18	(131)
Provision for excess and obsolete inventory	56	249
Deferred income taxes	47	(6)
Stock based compensation expense	1,195	1,014
Changes in operating assets and liabilities:
Restricted cash	2	(30)
Accounts receivable	8,087	14,806
Inventories	7,307	4,821
Prepaid expenses, other receivables and other assets	152	3,693
Deferred rent	(344)	5,420
Accounts payable, deferred revenue, accrued expenses and other liabilities	(15,203)	(14,803)
Net cash provided by operating activities	3,368	19,704
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(5,245)	(11,048)
Net cash used in investing activities	(5,245)	(11,048)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from issuance of common stock	14,453	48
Purchase of treasury stock		(36)
Decrease (increase) in restricted cash	(185)	386
Payments on capital lease obligations	(1,991)	(1,508)
Payments on long-term debt, net	(8,768)	(7,427)
Net cash provided by (used in) financing activities	3,509	(8,537)
EFFECT OF EXCHANGE RATES ON CASH AND CASH EQUIVALENTS	35	(21)
NET INCREASE IN CASH AND CASH EQUIVALENTS	1,667	98
CASH AND CASH EQUIVALENTS, beginning of period	19,626	17,695
CASH AND CASH EQUIVALENTS, end of period	21,293	17,793
Non-cash investing and financing activities:
Property and equipment acquired under long-term debt and capital leases	$ 1,338	$ 6,229

Overview and Basis of Presentation

9 Months Ended

Sep. 30, 2013

Overview and Basis of Presentation

1. OVERVIEW AND BASIS OF PRESENTATION

PFSweb, Inc. and its subsidiaries are collectively referred to as the “Company;” “Supplies Distributors” refers to Supplies Distributors, Inc. and its subsidiaries; “Retail Connect” refers to PFSweb Retail Connect, Inc.; and “PFSweb” refers to PFSweb, Inc. and its subsidiaries and affiliates, excluding Supplies Distributors and Retail Connect.

PFSweb Overview

PFSweb is an international business process outsourcing provider of end-to-end eCommerce solutions to major brand name companies seeking to optimize their supply chain and to enhance their traditional and online business channels and initiatives in the United States, Canada, and Europe. PFSweb offers a broad range of service offerings that include digital marketing, eCommerce technologies, order management, customer care, logistics and fulfillment, financial management and professional consulting.

Supplies Distributors Overview

Supplies Distributors and PFSweb operate under distributor agreements with Ricoh Company Limited and Ricoh Production Print Solutions, 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. Substantially all of Supplies Distributors’ revenue is generated by its sale of product purchased from Ricoh.

Supplies Distributors has obtained financing that allows it to fund the working capital requirements for the sale of primarily Ricoh products. Pursuant to the transaction management services agreements between PFSweb and Supplies Distributors, PFSweb provides to Supplies Distributors transaction management and fulfillment services, such as managed web hosting and maintenance, procurement support, web-enabled customer contact center services, customer relationship management, financial services including billing and collection services, information management, and international distribution services. Supplies Distributors does not have its own sales force and relies upon Ricoh’s sales force and product demand generation activities for its sale of Ricoh products. Supplies Distributors sells its products in the United States, Canada and Europe.

All of the agreements between PFSweb and Supplies Distributors were made in the context of a related party relationship and were negotiated in the overall context of PFSweb’s and Supplies Distributors’ arrangement with Ricoh. Although management believes the terms of these agreements are generally consistent with fair market values, there can be no assurance that the prices charged to or by each company under these arrangements are not higher or lower than the prices that may be charged by, or to, unaffiliated third parties for similar services. All of these transactions are eliminated upon consolidation.

Basis of Presentation

The unaudited interim consolidated financial statements as of September 30, 2013, and for the three and nine months ended September 30, 2013 and 2012, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and are unaudited. Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to the rules and regulations promulgated by the SEC. In the opinion of management and subject to the foregoing, the unaudited interim consolidated financial statements of the Company include all adjustments necessary for a fair presentation of the Company’s financial position as of September 30, 2013, its results of operations for the three and nine months ended September 30, 2013 and 2012 and its cash flows for the nine months ended September 30, 2013 and 2012. Results of the Company’s operations for interim periods may not be indicative of results for the full fiscal year.

Certain prior period data on the income statement has been reclassified to conform to the current year presentation of a) product and pass-through revenues, b) cost of product, service fee and pass-through revenues and c) selling, general and administrative expenses, each of which was previously classified as a different component on the income statement. These reclassifications decreased gross profit and selling, general and administrative expenses by $0.4 million and $1.1 million for the three and nine months ended September 30, 2012, respectively, but had no effect on previously reported net loss, total shareholders’ equity or net cash provided by operating activities.

- Definition

The entire disclosure for organization, consolidation and basis of presentation of financial statements disclosure.

+ References

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+ Details

Significant Accounting Policies

9 Months Ended

Sep. 30, 2013

Significant Accounting Policies

2. SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

All intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of consolidated financial statements and related disclosures in conformity with U.S. GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and disclosure of contingent assets and liabilities. The recognition and allocation of certain revenues and selling, general and administrative expenses in these consolidated financial statements also require management estimates and assumptions.

Estimates and assumptions about future events and their effects cannot be determined with certainty. The Company bases its estimates on historical experience and on various other assumptions believed to be applicable and reasonable under the circumstances. These estimates may change as new events occur, as additional information is obtained and as the operating environment changes. These changes have been included in the consolidated financial statements as soon as they became known. In addition, management is periodically faced with uncertainties, the outcomes of which are not within its control and will not be known for prolonged periods of time. These uncertainties are discussed in this report and in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 in the section entitled “Risk Factors.” Based on a critical assessment of accounting policies and the underlying judgments and uncertainties affecting the application of those policies, management believes the Company’s consolidated financial statements are fairly stated in accordance with U.S. GAAP, and provide a fair presentation of the Company’s financial position and results of operations.

Investment in Affiliates

Priority Fulfillment Services, Inc. (“PFS”), a wholly-owned subsidiary of PFSweb, Inc., has made advances to Supplies Distributors that are evidenced by a Subordinated Demand Note (the “Subordinated Note”). Under the terms of certain of the Company’s debt facilities, the outstanding balance of the Subordinated Note cannot be increased to more than $5.0 million or decreased to less than $3.5 million without prior approval of certain of the Company’s lenders. As of both September 30, 2013 and December 31, 2012, the outstanding balance of the Subordinated Note was $3.5 million. The Subordinated Note is eliminated in the Company’s consolidated financial statements.

PFS has also made advances to Retail Connect, which aggregated $11.1 million at both September 30, 2013 and December 31, 2012. Certain terms of the Company’s debt facilities provide that the total advances to Retail Connect may not be less than $2.0 million without prior approval of Retail Connect’s lender, if needed. PFS has received the approval of its lender to advance incremental amounts to certain of its subsidiaries and/or affiliates, including Retail Connect, if needed, subject to certain financial covenants, as defined. PFSweb, Inc. has also advanced to Retail Connect an additional $8.5 million and $8.2 million as of September 30, 2013 and December 31, 2012, respectively. All of these advances are eliminated upon consolidation. As of September 30, 2013, PFSweb, Inc. has approximately $12.6 million available to be advanced to Retail Connect and/or other affiliates.

Concentration of Business and Credit Risk

No service fee client or product revenue customer represented more than 10% of the Company’s consolidated total net revenues during the nine months ended September 30, 2013 or the Company’s consolidated accounts receivable as of September 30, 2013.

A summary of the nonaffiliated customer and client concentrations is as follows:

	Nine Months Ended September 30,
	2013			2012
Product Revenue (as a percentage of total Product Revenue):
Customer 1		15	%		14	%
Customer 2		12	%		11	%
Service Fee Revenue (as a percentage of total Service Fee Revenue):
Client 1		10	%		14	%
Client 2		8	%		16	%

The Company currently anticipates that its product revenue and service fee revenue from the customers and clients identified above will decline during the next twelve months and the contractual relationship with Client 1 ended during the quarter ended September 30, 2013.

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 and is dependent upon the continuation of such arrangements. These arrangements, which are critical to the Company’s ongoing operations, include Supplies Distributors’ distributor agreements and certain of Supplies Distributors’ working capital financing agreements. Substantially all 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 in 2013 and beyond.

Inventories

Inventories (all of which are finished goods) are stated at the lower of weighted average cost or market. The Company establishes inventory reserves based upon estimates of declines in values due to inventories that are slow moving or obsolete, excess levels of inventory or values assessed at lower than cost.

Supplies Distributors assumes responsibility for slow-moving inventory under its Ricoh distributor agreements, subject to certain termination rights, but has the right to return product rendered obsolete by engineering changes, as defined. In the event PFS, Supplies Distributors and Ricoh terminate the distributor agreements, the agreements provide for the parties to mutually agree on a plan of disposition of Supplies Distributors’ then existing inventory.

Operating Leases

The Company leases certain real estate for its warehouse, call center and corporate offices, as well as certain equipment, under non-cancelable operating leases that expire at various dates through 2022. Management expects that, in the normal course of business, leases that expire will be renewed or replaced by other similar leases. The Company recognizes escalating lease payments on a straight-line basis over the term of each respective lease with the difference between cash payments and rent expense recognized being recorded as deferred rent in the accompanying consolidated balance sheets.

Property and Equipment

The Company’s property held under capital leases amounts to approximately $4.2 million and $5.1 million, net of accumulated amortization of approximately $4.5 million and $2.6 million, at September 30, 2013 and December 31, 2012, respectively. Depreciation and amortization expense related to capital leases during the nine months ended September 30, 2013 and 2012 was $2.0 million and $1.5 million, respectively. In addition, during 2012, the Company incurred approximately $6.0 million of leasehold improvements at certain of its leased facilities that are being amortized over the shorter of the asset’s useful lives or the lease terms and were primarily financed via tenant allowances that are also being amortized over the lease terms.

Income Taxes

The Company records a tax provision primarily associated with state income taxes and its Supplies Distributors subsidiary’s international operations. The Company has recorded a valuation allowance for the majority of its net deferred tax assets.

Cash Paid for Interest and Taxes

The Company made payments for interest of approximately $0.6 million and $0.8 million in the nine months ended September 30, 2013 and 2012, respectively. Income taxes of approximately $0.1 and $0.4 million were paid by the Company during the nine month periods ended September 30, 2013 and 2012, respectively.

Debt and Capital Lease Obligations

9 Months Ended

Sep. 30, 2013

Debt and Capital Lease Obligations

6. DEBT AND CAPITAL LEASE OBLIGATIONS;

Outstanding debt and capital lease obligations consist of the following (in thousands):

	September 30, 2013		December 31, 2012
Loan and security agreements
Supplies Distributors	$	4,691	$	3,264
PFS		1,749		11,077
Credit facility – Retail Connect		—		—
Master lease agreements		5,404		6,648
Other		449		1,071
Total		12,293		22,060
Less current portion of long-term debt		8,820		16,660
Long-term debt, less current portion	$	3,473	$	5,400

Loan and Security Agreement – Supplies Distributors

Supplies Distributors has a loan and security agreement with Wells Fargo Bank, National Association (“Wells Fargo”) to provide financing for up to $25 million of eligible accounts receivable in the United States and Canada. As of September 30, 2013, Supplies Distributors had $0.8 million of available credit under this agreement. The Wells Fargo facility expires on the earlier of March 2014 or the date on which the parties to the Ricoh distributor agreement no longer operate under the terms of such agreement and/or Ricoh no longer supplies products pursuant to such agreement. Borrowings under the Wells Fargo facility accrue interest at prime rate plus 0.25% to 0.75% (3.75% as of September 30, 2013) or Eurodollar rate plus 2.5% to 3.0%, dependent on excess availability and subject to a minimum of 3.0%, as defined. The interest rate as of September 30, 2013 was 3.75% for $3.7 million of outstanding borrowings and 3.0% for $1.0 million of outstanding borrowings. As of December 31, 2012, the interest rate was 3.75% for $1.3 million of outstanding borrowings and 3.0% for $2.0 million of outstanding borrowings. This agreement contains cross default provisions, various restrictions upon the ability of Supplies Distributors to, among other things, merge, consolidate, sell assets, incur indebtedness, make loans and payments to related parties (including entities directly or indirectly owned by PFSweb, Inc.), provide guarantees, make investments and loans, pledge assets, make changes to capital stock ownership structure and pay dividends. This agreement also contains financial covenants, such as minimum net worth, as defined, and is secured by all of the assets of Supplies Distributors, as well as a collateralized guaranty of PFSweb. Additionally, PFS is required to maintain a Subordinated Note receivable balance from Supplies Distributors of no less than $3.5 million, may not maintain restricted cash of more than $5.0 million and is restricted with regard to transactions with related parties, indebtedness and changes to capital stock ownership structure. Supplies Distributors has entered into blocked account agreements with its banks and Wells Fargo pursuant to which a security interest was granted to Wells Fargo for all U.S. and Canadian customer remittances received in specified bank accounts. At September 30, 2013 and December 31, 2012, these bank accounts held $0.4 million and $0.2 million, respectively, which were restricted for payment to Wells Fargo.

Loan and Security Agreement – PFS

PFS has a Loan and Security Agreement (“Comerica Agreement”) with Comerica Bank (“Comerica”). The Comerica Agreement provides for up to $12.5 million ($10.0 million during certain non-seasonal peak months) of eligible accounts receivable financing (“Working Capital Advances”) through March 2014. The Comerica Agreement also provided for up to $3.0 million of eligible equipment advances (“Equipment Advances”) through January 2013, with principal payments due through April 2015. As of September 30, 2013, PFS had $9.9 million of available credit under the Working Capital Advance portion of this facility and no remaining availability for Equipment Advances. Borrowings under the Working Capital Advance portion of the Comerica Agreement accrue interest at prime rate plus 2% (5.25% at September 30, 2013) while the Equipment Advances accrue interest at prime rate plus 2.25% (5.5% at September 30, 2013). The Comerica Agreement contains cross default provisions and various restrictions upon PFS’ ability to, among other things, merge, consolidate, sell assets, incur indebtedness, make loans and payments to related parties (including entities directly or indirectly owned by PFSweb, Inc.), make capital expenditures, make investments and loans, pledge assets, make changes to capital stock ownership structure, as well as financial covenants of a minimum tangible net worth of $20 million, as defined, a minimum earnings before interest and taxes, plus depreciation, amortization and non-cash compensation accruals, if any, as defined, and a minimum liquidity ratio, as defined. The Comerica Agreement restricts the amount of the Subordinated Note receivable from Supplies Distributors to a maximum of $5.0 million. Comerica has provided approval for PFS to advance incremental amounts subject to certain financial covenants, as defined, to certain of its subsidiaries and/or affiliates, if needed. The Comerica Agreement is secured by all of the assets of PFS, as well as a guarantee of PFSweb, Inc.

Credit Facility – Retail Connect

Retail Connect has an asset-based line of credit facility of up to $2.0 million from Wells Fargo, through May 2014, which is collateralized by substantially all of Retail Connect’s assets. Borrowings under the facility are limited to a percentage of eligible accounts receivable and inventory, up to a specified amount. Outstanding borrowings under the facility bear interest at prime rate plus 1% or Eurodollar rate plus 3.5%. There were no outstanding borrowings as of September 30, 2013. As of September 30, 2013, Retail Connect had $33,000 of available credit under this facility. In connection with the line of credit, Retail Connect entered into a cash management arrangement whereby Retail Connect’s operating accounts are considered restricted and swept and used to repay outstanding amounts under the line of credit, if any. The credit facility restricts Retail Connect’s ability to, among other things, merge, consolidate, sell assets, incur indebtedness, make loans, investments and payments to subsidiaries, affiliates and related parties (including entities directly or indirectly owned by PFSweb, Inc.), make investments and loans, pledge assets, make changes to capital stock ownership structure, and requires a minimum tangible net worth for Retail Connect of $0 million, as defined. PFSweb has guaranteed all current and future obligations of Retail Connect under this line of credit.

Factoring Agreement

Supplies Distributors’ European subsidiary has a factoring agreement with BNP Paribas Fortis Factor that provides factoring for up to 7.5 million euros (approximately $10.1 million as of September 30, 2013) of eligible accounts receivable through March 2014. This factoring agreement is accounted for as a secured borrowing. As of September 30, 2013, Supplies Distributors’ European subsidiary had approximately 0.9 million euros (approximately $1.2 million) of available credit under this agreement. Borrowings accrue interest at Euribor plus 0.7% (0.8% at September 30, 2013).

Debt Covenants

To the extent the Company or any of its subsidiaries fail to comply with its covenants applicable to its debt or vendor financing obligations, including the monthly financial covenant requirements, such as profitability and cash flow, and required level of shareholders’ equity or net worth (as defined), the Company would be required to obtain a waiver from the lender or the lender would be entitled to accelerate the repayment of any outstanding credit facility obligations, and exercise all other rights and remedies, including sale of collateral and enforcement of payment under the Company parent guarantee. Any acceleration of the repayment of the credit facilities may have a material adverse impact on the Company’s financial condition and results of operations and no assurance can be given that the Company would have the financial ability to repay all of such obligations. As of September 30, 2013, 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

9 Months Ended

Sep. 30, 2013

Segment Information

7. SEGMENT INFORMATION

The Company is currently organized into two primary operating segments, which generally align with the corporate organization structure. In the first segment, PFSweb is an international provider of various business process outsourcing solutions and operates as a service fee business. In the second operating segment (“Business and Retail Connect”), subsidiaries of the Company purchase inventory from clients and resell the inventory to client customers. In this segment, the Company generally recognizes product revenue.

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Revenues (in thousands):
PFSweb	$	32,471		$	38,312		$	106,846		$	116,763
Business and Retail Connect		23,592			27,619			75,610			91,901
Eliminations		(2,510	)		(1,177	)		(7,577	)		(4,071	)
	$	53,553		$	64,754		$	174,879		$	204,593
Income (loss) from operations (in thousands):
PFSweb	$	(1,823	)	$	(568	)	$	(5,153	)	$	(2,896	)
Business and Retail Connect		153			588			646			1,948
	$	(1,670	)	$	20		$	(4,507	)	$	(948	)
Depreciation and amortization (in thousands):
PFSweb	$	2,399		$	2,476		$	7,417		$	6,768
Business and Retail Connect		38			26			116			66
	$	2,437		$	2,502		$	7,533		$	6,834
Capital expenditures (in thousands):
PFSweb	$	2,028		$	1,575		$	5,174		$	10,857
Business and Retail Connect		55			102			71			191
	$	2,083		$	1,677		$	5,245		$	11,048

	September 30, 2013			December 31, 2012
Assets (in thousands):
PFSweb	$	88,074		$	94,940
Business and Retail Connect		45,225			52,648
Eliminations		(14,717	)		(14,117	)
	$	118,582		$	133,471

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 34
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8981-108599

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9038-108599

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 12
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8595-108599

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8380-108599

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
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-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8933-108599

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 26
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8844-108599

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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-Section 50
-Paragraph 40
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9031-108599

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9054-108599

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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Reference 12: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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-Section 50
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-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8924-108599

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
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-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8906-108599

+ Details

Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2013

Principles of Consolidation

All intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

Investment in Affiliates

Concentration of Business and Credit Risk

A summary of the nonaffiliated customer and client concentrations is as follows:

	Nine Months Ended September 30,
	2013			2012
Product Revenue (as a percentage of total Product Revenue):
Customer 1		15	%		14	%
Customer 2		12	%		11	%
Service Fee Revenue (as a percentage of total Service Fee Revenue):
Client 1		10	%		14	%
Client 2		8	%		16	%

Inventories

Operating Leases

Property and Equipment

Income Taxes

Cash Paid for Interest and Taxes

- Definition

Disclosure of accounting policy regarding (1) the principles it follows in consolidating or combining the separate financial statements, including the principles followed in determining the inclusion or exclusion of subsidiaries or other entities in the consolidated or combined financial statements and (2) its treatment of interests (for example, common stock, a partnership interest or other means of exerting influence) in other entities, for example consolidation or use of the equity or cost methods of accounting. The accounting policy may also address the accounting treatment for intercompany accounts and transactions, noncontrolling interest, and the income statement treatment in consolidation for issuances of stock by a subsidiary.

+ References + Details

- Definition

Disclosure of accounting policy for income taxes, which may include its accounting policies for recognizing and measuring deferred tax assets and liabilities and related valuation allowances, recognizing investment tax credits, operating loss carryforwards, tax credit carryforwards, and other carryforwards, methodologies for determining its effective income tax rate and the characterization of interest and penalties in the financial statements.

+ References + Details

- Definition

Disclosure of accounting policy for major classes of inventories, bases of stating inventories (for example, lower of cost or market), methods by which amounts are added and removed from inventory classes (for example, FIFO, LIFO, or average cost), loss recognition on impairment of inventories, and situations in which inventories are stated above cost. If inventory is carried at cost, this disclosure includes the nature of the cost elements included in inventory.

+ References + Details

- Definition

Disclosure of accounting policy for investments in financial assets, including marketable securities (debt and equity securities with readily determinable fair values), investments accounted for under the equity method and cost method, securities borrowed and loaned, and repurchase and resale agreements. For marketable securities, the disclosure may include the entity's accounting treatment for transfers between investment categories and how the fair values for such securities are determined. Also, for all investments, an entity may describe its policy for assessing, recognizing and measuring impairment of the investment.

+ References + Details

Segment Information (Tables)

9 Months Ended

Sep. 30, 2013

Summary of Product Revenue by Segments

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Revenues (in thousands):
PFSweb	$	32,471		$	38,312		$	106,846		$	116,763
Business and Retail Connect		23,592			27,619			75,610			91,901
Eliminations		(2,510	)		(1,177	)		(7,577	)		(4,071	)
	$	53,553		$	64,754		$	174,879		$	204,593
Income (loss) from operations (in thousands):
PFSweb	$	(1,823	)	$	(568	)	$	(5,153	)	$	(2,896	)
Business and Retail Connect		153			588			646			1,948
	$	(1,670	)	$	20		$	(4,507	)	$	(948	)
Depreciation and amortization (in thousands):
PFSweb	$	2,399		$	2,476		$	7,417		$	6,768
Business and Retail Connect		38			26			116			66
	$	2,437		$	2,502		$	7,533		$	6,834
Capital expenditures (in thousands):
PFSweb	$	2,028		$	1,575		$	5,174		$	10,857
Business and Retail Connect		55			102			71			191
	$	2,083		$	1,677		$	5,245		$	11,048

	September 30, 2013			December 31, 2012
Assets (in thousands):
PFSweb	$	88,074		$	94,940
Business and Retail Connect		45,225			52,648
Eliminations		(14,717	)		(14,117	)
	$	118,582		$	133,471

Significant Accounting Policies (Details Textual) $ in Millions	9 Months Ended		12 Months Ended
	Sep. 30, 2013 USD ($) Customer	Sep. 30, 2012 USD ($)	Dec. 31, 2012 USD ($)
Significant Accounting Policies (Textual) [Abstract]
Subordinated note outstanding	$ 3.5		$ 3.5
Investments to affiliates available to be advanced	12.6
Capital leases	4.2		5.1
Significant Accounting Policies (Additional Textual) [Abstract]
Accumulated amortization	4.5		2.6
Depreciation and amortization related to capital leases	2.0	$ 1.5
Payments for interest	0.6	0.8
Income taxes	$ 0.1	$ 0.4
Number of customer having greater than specified percentage of accounts receivable \| Customer	0
Minimum percentage of revenue accounted for major customers	10.00%
Maximum life of current operating leases	Expire at various dates through 2022
Leasehold Improvements
Significant Accounting Policies (Textual) [Abstract]
Capital leases			6.0
PFS
Significant Accounting Policies (Textual) [Abstract]
Advances to retail connect	$ 11.1		11.1
PFSweb
Significant Accounting Policies (Textual) [Abstract]
Advances to retail connect	8.5		8.2
Maximum
Significant Accounting Policies (Textual) [Abstract]
Subordinated note outstanding	5.0
Minimum
Significant Accounting Policies (Textual) [Abstract]
Subordinated note outstanding	3.5
Advances to retail connect	$ 2.0		$ 2.0

Stock and Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	9 Months Ended
	May 31, 2013	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
Disclosure Stock And Stock Options Details [Line Items]
Common stock, par value		$ 0.001		$ 0.001
Net proceeds from issuance of common stock		$ 14,453	$ 48
Stock options issued		306,000	73,000
2005 Employee Stock and Incentive Plan \| Performance Shares
Disclosure Stock And Stock Options Details [Line Items]
Share awards, maximum number of shares that may be issued		700,000
Share awards, vesting period		4 years
Stock compensation		$ 300
Common Stock
Disclosure Stock And Stock Options Details [Line Items]
Equity offering, shares of common stock sold	3,200,000
Common stock, par value	$ 0.001
Equity offering, share price of common stock sold	$ 4.57
Net proceeds from issuance of common stock	$ 14,100

Vendor Financing (Details Textual) - USD ($) $ in Millions	9 Months Ended
Vendor Financing (Details Textual) - USD ($) $ in Millions	Sep. 30, 2013	Dec. 31, 2012
Line Of Credit Facility [Line Items]
Subordinated note outstanding	$ 3.5	$ 3.5
Vendor Financing (Textual) [Abstract]
Interest rate on outstanding borrowings	3.75%
Supplies Distributors
Vendor Financing (Textual) [Abstract]
Interest rate on outstanding borrowings	3.00%
United States \| IBM Credit LLC \| Supplies Distributors
Line Of Credit Facility [Line Items]
Maximum financing receivable capacity through agreement thereafter	$ 20.0
Notice period time to exit from the agreement	90 days
Outstanding amount of inventory purchases repaid with in twelve months	$ 12.1	$ 11.9
Available credit	1.4
Minimum shareholders' equity required to maintain	$ 18.0
Credit facility accrue interest, prime rate plus	0.50%

Debt and Capital Lease Obligations - Loan and Security Agreement - Supplies Distributors (Details Textual) - USD ($) $ in Millions	9 Months Ended	12 Months Ended
	Sep. 30, 2013	Dec. 31, 2012
Debt and Capital Lease Obligation (Textual) [Abstract]
Interest rate on outstanding borrowings	3.75%
Minimum Balance of Subordinated Note receivable to be maintained	$ 3.5	$ 3.5
Minimum
Debt and Capital Lease Obligation (Textual) [Abstract]
Minimum Balance of Subordinated Note receivable to be maintained	3.5
Maximum
Debt and Capital Lease Obligation (Textual) [Abstract]
Minimum Balance of Subordinated Note receivable to be maintained	5.0
Supplies Distributors
Debt and Capital Lease Obligation (Textual) [Abstract]
Maximum limit of loans and security agreement	25.0
Credit facility available under Loans and Security Agreement	$ 0.8
Maturity date of Loan and Security Agreement	Mar. 01, 2014
Interest rate on outstanding borrowings	3.00%
Maximum limit of restricted cash	$ 5.0
Cash held at bank	$ 0.4	$ 0.2
Supplies Distributors \| Three Point Seven Five Percentage Interest Rate Debt Instrument
Debt and Capital Lease Obligation (Textual) [Abstract]
Interest rate on outstanding borrowings	3.75%	3.75%
Outstanding borrowing	$ 3.7	$ 1.3
Supplies Distributors \| Three Percentage Interest Rate Debt Instrument
Debt and Capital Lease Obligation (Textual) [Abstract]
Interest rate on outstanding borrowings	3.00%	3.00%
Outstanding borrowing	$ 1.0	$ 2.0
Supplies Distributors \| Minimum
Debt and Capital Lease Obligation (Textual) [Abstract]
Loans and Security Agreement interest at prime rate plus	0.25%
Loans and security agreement interest at Eurodollar rate plus	2.50%
Supplies Distributors \| Maximum
Debt and Capital Lease Obligation (Textual) [Abstract]
Loans and Security Agreement interest at prime rate plus	0.75%
Loans and security agreement interest at Eurodollar rate plus	3.00%

Debt and Capital Lease Obligations - Loan and Security Agreement - PFS (Details Textual) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2013	Dec. 31, 2012
Debt and Capital Lease Obligation (Textual) [Abstract]
Minimum Balance of Subordinated Note receivable to be maintained		$ 3.5	$ 3.5
PFS
Debt and Capital Lease Obligation (Textual) [Abstract]
Tangible net worth		20.0
Minimum Balance of Subordinated Note receivable to be maintained		5.0
PFS \| Working Capital Advances
Debt and Capital Lease Obligation (Textual) [Abstract]
Maximum limit of working capital advances during seasonal peak months		12.5
Maximum limit of working capital advances during non-seasonal peak months		$ 10.0
Working Capital Advances and Equipment Advances interest at prime rate plus, Spread on variable rate	2.00%
Working Capital Advances and Equipment Advances interest at prime rate plus, Stated percentage		5.25%
PFS \| Equipment Advances
Debt and Capital Lease Obligation (Textual) [Abstract]
Working Capital Advances and Equipment Advances interest at prime rate plus, Spread on variable rate	2.25%
Working Capital Advances and Equipment Advances interest at prime rate plus, Stated percentage		5.50%
Maximum limit of loans and security agreement		$ 3.0
Credit facility available under Loans and Security Agreement		$ 9.9

Significant Accounting Policies (Details)	9 Months Ended
Significant Accounting Policies (Details)	Sep. 30, 2013	Sep. 30, 2012
Summary of nonaffiliated customer and client concentrations
Product revenue net percentage of product revenue customer 1	15.00%	14.00%
Product revenue net percentage of product revenue customer 2	12.00%	11.00%
Service fee revenue net percentage of service fee revenue client 1	10.00%	14.00%
Service fee revenue net percentage of service fee revenue client 2	8.00%	16.00%

Debt and Capital Lease Obligations - Factoring Agreement (Details Textual) - Bnp Paribas Fortis Factor € in Millions, $ in Millions	Sep. 30, 2013 USD ($)	Sep. 30, 2013 EUR (€)
Debt and Capital Lease Obligation (Textual) [Abstract]
Maximum limit of loans and security agreement	$ 10.1	€ 7.5
Credit facility available under Loans and Security Agreement	$ 1.2	€ 0.9
Factoring interest at Euribor plus	0.70%	0.70%
Factoring interest at Euribor plus	0.80%	0.80%

Commitments and Contingencies (Details)	Sep. 30, 2013 USD ($)
Commitments and Contingencies (Textual) [Abstract]
Leasehold Improvements	$ 6,000,000
eCOST deposit account	$ 620,000

Overview and Basis of Presentation - Additional information (Detail Textual) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2013
Decrease in gross profit due to prior period reclassificaion	$ 0.4	$ 1.1

Net Loss Per Common Share (Details) - shares shares in Millions	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Stock Option
Net Loss Per Common Share (Textual) [Abstract]
Anti-dilutive stock options diluted net loss per share	2.2	2.1

Debt and Capital Lease Obligations (Details) - USD ($) $ in Thousands	Sep. 30, 2013	Dec. 31, 2012
Summary of outstanding debt and capital lease obligations
Total	$ 12,293	$ 22,060
Less current portion of long-term debt	8,820	16,660
Long-term debt, less current portion	3,473	5,400
Supplies Distributors
Summary of outstanding debt and capital lease obligations
Total	4,691	3,264
PFS
Summary of outstanding debt and capital lease obligations
Total	1,749	11,077
Credit facility - Retail Connect
Summary of outstanding debt and capital lease obligations
Total
Master lease agreements
Summary of outstanding debt and capital lease obligations
Total	5,404	6,648
Other
Summary of outstanding debt and capital lease obligations
Total	$ 449	$ 1,071

Debt and Capital Lease Obligations - Credit Facility - Retail Connect (Details Textual) - Credit facility - Retail Connect	9 Months Ended
	Sep. 30, 2013 USD ($)
Debt and Capital Lease Obligation (Textual) [Abstract]
Amended limit of asset-based line of credit	$ 2,000,000
Loans and Security Agreement interest at prime rate plus	1.00%
Loans and security agreement interest at Eurodollar rate plus	3.50%
Outstanding borrowing	$ 0
Credit facility available under Loans and Security Agreement	33,000
Tangible net worth	$ 0

Segment Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Segment Information (Details) - USD ($) $ in Thousands	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
Summary of product revenue by segments
Revenues	$ 53,553	$ 64,754	$ 174,879	$ 204,593
Income (loss) from continuing operations	(1,670)	20	(4,507)	(948)
Depreciation and amortization	2,437	2,502	7,533	6,834
Capital expenditures	2,083	1,677	5,245	11,048
Assets	118,582		118,582		$ 133,471
Operating Segments \| PFSweb
Summary of product revenue by segments
Revenues	32,471	38,312	106,846	116,763
Income (loss) from continuing operations	(1,823)	(568)	(5,153)	(2,896)
Depreciation and amortization	2,399	2,476	7,417	6,768
Capital expenditures	2,028	1,575	5,174	10,857
Assets	88,074		88,074		94,940
Operating Segments \| Business and Retail Connect
Summary of product revenue by segments
Revenues	23,592	27,619	75,610	91,901
Income (loss) from continuing operations	153	588	646	1,948
Depreciation and amortization	38	26	116	66
Capital expenditures	55	102	71	191
Assets	45,225		45,225		52,648
Eliminations
Summary of product revenue by segments
Revenues	(2,510)	$ (1,177)	(7,577)	$ (4,071)
Assets	$ (14,717)		$ (14,717)		$ (14,117)