Segment and Geographic Information

Prior to January 1, 2018, the Company’s operations were organized into two reportable segments: PFSweb and Business and Retail Connect. In accordance with ASC 280, Segment Reporting (“ASC 280”), an operating segment is defined as a component of an enterprise for which discrete financial information is available and is reviewed regularly by the Chief Operating Decision Maker (“CODM”), or decision-making group, to evaluate performance and make operating decisions.

Effective January 1, 2018, we changed our organizational structure in an effort to create more effective and efficient operations and to improve client and service focus. In that regard, we updated the information that our chief executive officer and chief financial officer, who are also our Chief Operating Decision Makers, regularly review for purposes of allocating resources and assessing performance. As a result, beginning January 1, 2018, we now report our financial performance based on our new reportable segments. These 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 shopping 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 the Company’s Chief Executive Officer.

The CODM evaluates segment performance using business unit direct contribution, which is defined as business unit revenues less costs of revenue and direct selling, general and administrative expenses, including depreciation and amortization. Direct contribution does not include any allocated corporate expenses, nor does it include stock-based compensation. The CODM does not routinely review assets by segment. The balance sheet by segment is not prepared and, therefore, we do not present segment assets below.

Corporate operations is a non-operating segment that develops and implements strategic initiatives and supports the Company’s operations by centralizing certain administrative functions such as finance, treasury, information technology and human resources.

Subsequent to the change in the Company’s operating segments, the Company’s reporting units changed. We now have two reporting units: PFS Operations and LiveArea Professional Services. We allocated goodwill to our new reporting units using a relative fair value approach. In addition, we completed an assessment of any potential goodwill impairment for all reporting units immediately prior to and after the reallocation and determined that no impairment existed.

During the year ended December 31, 2019, we changed the composition of the business unit direct contribution to include certain shared service costs. Prior year amounts have been reclassified to include those allocated expenses.

The following table discloses segment information for the periods presented (in thousands):



	Year ended December 31,
	2019			2018
Revenues:
PFS Operations	$	216,399		$	241,736
LiveArea Professional Services	77,623			84,424
Total revenues	$	294,022		$	326,160
Business unit direct contribution:
PFS Operations	$	11,545		$	18,946
LiveArea Professional Services	9,247			10,257
Total business unit direct contribution	20,792			29,203
Unallocated corporate expenses	(19,905		)	(22,706		)
Income from operations	$	887		$	6,497
Depreciation and amortization:
PFS Operations	$	8,047		$	7,920
LiveArea Professional Services	1,162			2,276
Unallocated corporate expenses	1,158			1,171
Total depreciation and amortization	$	10,367		$	11,367

Geographic areas in which the Company operates include the United States, Europe (primarily Belgium and U.K.), Canada and India. Substantially all of the services performed in India support client arrangements in the United States, where the resulting revenue is reported. The following is geographic information by area. Revenues are attributed based on the Company’s domicile.



	Year Ended December 31,
	2019			2018
Revenues (in thousands):
United States	$	243,897		$	263,506
Europe	46,581			58,027
Canada	3,476			4,642
India	8,098			8,900
Inter-segment Eliminations	(8,030		)	(8,915		)
	$	294,022		$	326,160



	December 31,
	2019		2018
Long-lived assets (in thousands):
United States	$	76,870	$	59,530
Europe	23,314		8,695
Canada	1,198		139
India	3,757		3,621
	$	105,139	$	71,985