Online computer retailer eCost posts a net loss in Q3
Online personal computers and electronics retailer eCost.com, which merged with PFSweb Inc. in February, posted a net loss of $3.9 million on revenue of $16.7 million in the third quarter.
Since the merger, eCost.com has struggled with services and credit card fraud, but the company is now beginning to improve its financial position, says PFSweb CEO Mark Layton. “Our third quarter results were burdened significantly by events in our eCost.com division,” he says. “These events included costs required to complete the major portion of the operational integration and IT system conversion activities as well as costs we incurred for certain fraudulent credit card activity during the ERP systems integration process resulting in higher-than-normal charge backs."
Layton adds: “We believe we have now completed the `heavy lifting` portion of the transition and integration activities for eCost.com and dramatically improved our control over credit card fraud and we are now prepared to focus eCost.com on a march towards growth and profitability."
Excluding $1.2 million of fraudulent credit card activity and $500,000 in integration-related expenses, eCost.com`s net loss was $2.2 million for the third quarter. The net loss of $2.2 million represented an improvement of approximately $1 million compared to a similarly adjusted net loss result for the same period in the prior year, which included $400,000 in integration costs and $700,000 of excess fraudulent credit card activity, says PFSweb.
ECost.com, No. 58 in the Internet Retailer Top 500 Guide to Retail Web Sites, sells surplus merchandise from several manufacturers including Apple, Canon, HP, Seiko and Sony. For Q3 PFSweb reported a net loss of $3.3 million on revenue of $94.3 million, compared to a net loss of $500,000 on revenue of $81.5 million for the same period last year.
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