ECost.com is still unprofitable, but PFSweb remains upbeat
ECost.com, No. 58 in the Internet Retailer Top 500 Guide, posted a loss of $9.7 million in the 11 months after its sale to PFSweb. Total revenue for the period ending Dec. 31, 2006, was $88.3 million.
For the fourth quarter of 2006, eCost.com revenue was $21.1 million, compared to $40.5 million for the same period in 2005, before the Feb. 1, 2006, merger with PFSweb. ECost.com sells close-out and manufacturer recertified brand-name technology and electronics to consumers and small- to medium-size businesses.
Despite the numbers, PFSweb sees improvement in eCost.com’s performance, says Mark Layton, PFSweb’s chairman and CEO. For example, adjusted EBITDA for eCost.com in the fourth quarter was a loss of $1.6 million, compared to a loss of $2.2 million for the same period in 2005, under its previous ownership.
“As a result of the merger and our restructuring efforts, eCost.com improved its adjusted EBITDA in the December quarter by $0.6 million, compared to the same period in 2005. In 2007, we are looking to ramp up the sales and marketing efforts for eCost.com to grow revenue and improve financial performance. In addition, we anticipate recognizing the cost savings previously described as one of the benefits of the merger, though a portion of such originally targeted savings will be dependent on sales volumes,” Layton says.
For the twelve months ended December 31, 2005, eCost.com reported revenue of $174.8 million and adjusted EBITDA loss of $9.6 million.
New e-commerce technology for eCost.com is expected to fuel improved sales. Upgrades include a redesigned web site that offers customers easier navigation and an enhanced list of products, PFSweb says. A rich media subscription agreement with Etilize and use of PFSweb’s EntentePartnerConnect has enhanced eCost.com’s ability to update new products on its site.
PFSweb Inc., a business process outsourcing software and services provider for online and traditional commerce, reported total revenue for the fiscal year ending Dec. 31, 2006, of $423.3 million, compared to $331.7 million for FY 2005. 2006 fiscal year results include only the 11 months of eCost.com contributions since the company was acquired.
PFSweb reported fourth quarter 2006 revenue of $109 million, compared to $83.4 million for Q4 2005. Q4 2006 includes eCost.com revenue, but Q4 2005 does not.
The company is targeting total consolidated revenue of approximately $420 million to $435 million for 2007.
Layton will speak at the Internet Retailer Conference & Exhibition, June 4-7 in San Jose, in a session titled Making E-Retailing Music: When IT and Marketing Harmonize.
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