eCOST.com Reports Second Quarter Results

eCOST.com (Nasdaq:ECST) (www.ecost.com), a leading
online discount retailer, today announced financial results for its
second quarter ended June 30, 2005.
   Net sales for the second quarter ended June 30, 2005 were $41.0
million, an increase of $2.2 million or 6%, from $38.8 million in the
second quarter ended June 30, 2004. Pre-tax losses for the second
quarter 2005 were $2.9 million compared to $2.8 million in the first
quarter 2005 and pre-tax profits of $8,000 in the second quarter 2004.
The increased loss in 2005 was largely due to additional operating
costs and increased public company costs related to the April 11, 2005
spin-off from PC Mall. Additionally in the second quarter 2005, the
Company recorded a non-cash, tax provision of $6.5 million to
establish a valuation allowance against the Company's deferred tax
assets which resulted in a net loss of $9.4 million, or ($0.54) per
share, compared to a net loss of $1.7 million, or ($0.10) per share,
in the prior quarter, and a net profit of $5,000 or $0.00 per share,
in the second quarter of 2004.
   Adam Shaffer, Chairman and CEO of eCOST.com commented, "The first
and second quarters have been transition quarters for us as we
separated from our former parent, PC Mall, and established ourselves
as an independent, publicly-traded company. Not unexpectedly, this has
created some challenges, particularly initiating fulfillment
operations in our new distribution facility in Memphis, Tennessee,
which adversely impacted our gross margin in the second quarter.
Despite these second quarter issues, we have stabilized the level of
operating losses from last quarter and expect to reduce the losses
going forward based upon operational improvements and positive June
trends."
   The Company added 75,000 new customers during the quarter,
expanding eCOST's customer base to nearly 1.3 million at June 30,
2005. This is an increase in the overall customer base of
approximately 427,000 or 50% over June 30, 2004, and 6% sequentially.
   Sales in the second quarter of 2005 grew 6% over the same period
last year due to a 5% increase in the number of orders and an increase
in average order value from $341 to $352, or 3%.
   "Sales growth was similarly affected by the transition including
our fulfillment center management and less effective advertising. We
are now seeing some positive signs of improvement in a number of areas
including warehouse management, freight and pricing. We will continue
to focus on profitability and believe we will reduce the level of
losses sequentially in the third and fourth quarters, 2005. With these
continuing improvements, we expect to achieve operating profitability
and positive net income for 2006 overall. Given our attention toward
profitability, we are withdrawing our 2005 sales guidance. As we
realize earnings improvements we will reinvest for sales growth,"
concluded Shaffer.

   Investor Webcast

   Management will host a live webcast of eCOST's Second Quarter
Investor Conference Call today at 5:00 p.m. EST. To access the
webcast, go to eCOST's website at www.ecost.com, enter the Investor
Relations section, and click on the webcast icon.
   A conference call replay will be available for one week following
the live call and can be accessed by calling: [phone] and
entering the reservation number, 20335100.

   About eCOST.com, Inc.

   eCOST.com is a leading multi-category online discount retailer of
high quality new, "close-out" and refurbished brand-name merchandise
for consumers and small business buyers. eCOST.com markets over
100,000 different products from leading manufacturers such as Apple,
Canon, Citizen, Denon, HP, Nikon, Onkyo, Seiko, Sony, and Toshiba
primarily over the Internet (http://www.ecost.com) and through direct
marketing. Prior to April 11, 2005, eCOST.com was a subsidiary of PC
Mall, Inc. (NASDAQ:MALL).

   Forward-Looking Statements:

   This press release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. Such
statements include the Company's expectations, hopes or intentions
regarding the future, including but not limited to statements
regarding business and financial trends and the Company's expectations
regarding profitability. Forward-looking statements involve risks and
uncertainties and actual results may differ materially from those
discussed in any such statement. Among the factors that could cause
actual results to differ materially are the following: reliance on PC
Mall's maintenance of the Company's systems; the Company's ability to
maintain existing and build new vendor and supplier relationships;
ability to obtain favorable product pricing and vendor consideration;
product availability; outages of the Company's systems and website;
ability to attract customers on cost-effective terms; risks due to
shifts in market demand and the economic climate. Additional factors
that could cause actual results to differ are discussed under the
heading "Risk Factors" and in other sections of the Company's Annual
Report on Form 10-K/A for the year ended December 31, 2004 filed with
the Securities and Exchange Commission and in its other periodic
reports filed from time to time with the Commission. All
forward-looking statements in this document are made as of the date
hereof, based on information available to the Company as of the date
hereof, and the Company assumes no obligation to update any
forward-looking statement.
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                            eCOST.com, Inc.
                       STATEMENTS OF OPERATIONS
                 (in thousands except per share data)
                                       
                                  Three months ended  Six months ended
                                       June 30,           June 30,
                                   ----------------  -----------------
                                     2005     2004      2005     2004
                                   -------  -------  --------  -------

Net Sales                         $41,048  $38,802  $ 96,104  $76,992

Cost of goods sold                 38,301   35,029    89,628   69,761
                                   -------  -------  --------  -------

Gross profit                        2,747    3,773     6,476    7,231

Selling, general and
 administrative expenses            5,704    3,765    12,305    7,256
                                   -------  -------  --------  -------

Earnings (loss) from operations    (2,957)       8    (5,829)     (25)

Interest income                       (42)      --       (90)      --
Interest expense - PC Mall
 commercial line of credit             --      559        --      960
Interest income - PC Mall
 commercial line of credit             --     (559)       --     (960)
                                   -------  -------  --------  -------

Earnings (loss) before income
 taxes                             (2,915)       8    (5,739)     (25)

Income tax provision (benefit)      6,475        3     5,350      (10)
                                   -------  -------  --------  -------

Net income (loss)                 $(9,390) $     5  $(11,089)     (15)
                                   =======  =======  ========  =======

Earnings (loss) per share:
 Basic                            $ (0.54) $  0.00  $  (0.63) $ (0.00)
                                   =======  =======  ========  =======
 Diluted                          $ (0.54) $  0.00  $  (0.63) $ (0.00)
                                   =======  =======  ========  =======

Shares used in computing per share:
(in thousands)
 Basic                             17,522   14,000    17,494   14,000
                                   =======  =======  ========  =======
 Diluted                           17,522   14,329    17,494   14,000
                                   =======  =======  ========  =======


                            eCOST.com, Inc.
                            BALANCE SHEETS
                   (in thousands, except share data)

                                               June         December
                                                30,            31,
                                               2005           2004
----------------------------------------------------------------------
Assets
Current assets:
  Cash and cash equivalents                   $ 6,295       $  8,790
  Short-term investments                           --          7,000
  Accounts receivable, net of
   allowance for doubtful accounts              3,784          2,039
  Inventories                                  10,673          1,794
  Prepaid expenses and other current assets       710            263
  Due from Affiliate, net                         638            813
  Deferred income taxes                            --            883
----------------------------------------------------------------------
    Total current assets                       22,100         21,582

   Property and equipment, net                  2,000            342
   Deferred income taxes                           --          4,467
   Other assets                                   183            123
----------------------------------------------------------------------

Total assets                                 $ 24,283       $ 26,514
======================================================================

Liabilities and Stockholders' Equity
Current liabilities:

   Accounts payable                          $  8,436       $    585
   Accrued expenses and other current 
    liabilities                                 3,508          2,635
   Deferred revenue                             1,664          2,014
----------------------------------------------------------------------
  Total current liabilities                    13,608          5,234
----------------------------------------------------------------------

Total liabilities                              13,608          5,234
----------------------------------------------------------------------

Stockholders' equity:
 Common stock, $.001 par value; 20,000,000 
  shares authorized; 17,700,000 and
  17,465,000 shares issued and outstanding 
  at June 30, 2005 and December 31,
  2004, respectively                               18             17
 Additional paid-in capital                    34,067         33,834
 Deferred stock-based compensation             (1,083)        (1,333)
 Accumulated deficit                          (22,327)       (11,238)
----------------------------------------------------------------------

Total stockholders' equity                     10,675         21,280
----------------------------------------------------------------------

Total stockholders' equity and
 liabilities                               $   24,283       $ 26,514
======================================================================


                            eCOST.com, Inc.
                        SELECTED OPERATING DATA

                          Three months ended       Six months ended
                               June 30,                June 30,
                        ----------------------  ----------------------
                             2005        2004        2005        2004
                        ----------  ----------  ----------  ----------

Total customers(1)      1,287,321     860,497   1,287,321     860,497

Active customers(2)       536,172     337,190     536,172     337,190

New customers(3)           75,202      71,103     198,985     144,088

Number of orders(4)       122,753     117,168     313,395     236,360

Average order value(5) $      352  $      341  $      321  $      337

Advertising expense(6) $1,467,000  $1,194,000  $3,477,000  $2,500,000

(1) Total customers have been calculated as the cumulative number
of customers for which orders have been taken from our inception to
the end of the reported period.

(2) Active customers consist of the number of customers who placed
orders during the 12 months prior to the end of the reported period.

(3) New customers represent the number of persons that established
a new account and placed an order during the reported period.

(4) Number of orders represents the total number of orders shipped
during the reported period (not reflecting returns).

(5) Average order value has been calculated as gross sales divided
by the total number of orders during the period presented. The impact
of returns is not reflected in average order value.

(6) Advertising expense includes the total dollars spent on
advertising during the reported period, including Internet, direct
mail, print and e-mail advertising, as well as customer list
enhancement services.
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