##### Table of Contents

FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

(Mark One)
[ x ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended: September 30,
2003

OR

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934.

For the transition period from __________ to __________

Commission File Number: 0-25790

PC Mall, Inc.(Exact name of registrant as specified in its charter)

|                                                               |  |                                        
|-------------------------------------------------------------- |  | ---------------------------------------
|Delaware                                                       |  | 95-4518700                             
|(State or other jurisdiction of
incorporation or organization) |  | (I.R.S. Employer Identification Number)

2555 West 190th Street
Torrance, CA 90504
(address of principal executive offices)
(310) 354-5600
(Registrants telephone number, including area code)

Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.  Yes [X]    No [  ]

Indicate by check mark whether the Registrant
is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).  Yes [ 
]    No [X]

There were 10,806,271 outstanding shares of Common Stock at
November 10, 2003.



---

PC MALL, INC.

TABLE OF CONTENTS

|                                                                                                    |      |  |  |  |  |  |  | 
|--------------------------------------------------------------------------------------------------- | ---- |  |  |  |  |  |  | 
|                                                                                                    | Page
|PART I - FINANCIAL INFORMATION                                                                      |     
|Item 1.  Financial Statements                                                                       | 3   
|Condensed Consolidated Balance Sheet                                                                | 3   
|Condensed Consolidated Statement of Operations                                                      | 4   
|Condensed Consolidated
    Statement of Stockholder's Equity                                        | 5   
|Condensed Consolidated Statement of Cash Flows                                                      | 6   
|Condensed Notes to
    Consolidated Financial Statements                                            | 7   
|Item 2. Management's
      Discussion and Analysis of Financial Condition and Results of Operations | 11  
|Item 3. Quantitative
      and Qualitative Disclosures About Market Risk                            | 16  
|Item 4. 
    Controls and Procedures                                                                | 16  
|PART II - OTHER INFORMATION                                                                         |     
|Item 2. Changes
    in Securities and Use of Proceeds                                               | 17  
|Item 6. Exhibits
      and Reports on Form 8-K                                                      | 17  
|Signature                                                                                           | 18  
|                                                                                                    |     

2



---

##### Table of Contents

PART I - FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS

PC MALL, INC. CONDENSED CONSOLIDATED BALANCE SHEET(in thousands, except share data)

|                            |                                                                                                                                                                                                    |                                      |          |         | September 30,
        2003
        (unaudited) |          |         | December 31, 2002
|--------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------ | -------- | ------- | ---------------------------------------------- | -------- | ------- | -----------------
|                            |                                                                                                                                                                                                    | Assets                               |         
|Current assets:            
|                            | Cash and cash equivalents                                                                                                                                                                          | $                                    | 5,823    |         | $                                              | 11,422  
|                            | Accounts receivable, net of allowance for doubtful accounts                                                                                                                                        |                                      | 71,657   |         |                                                | 54,747  
|                            | Inventories                                                                                                                                                                                        |                                      | 61,339   |         |                                                | 55,235  
|                            | Prepaid expenses and other current assets                                                                                                                                                          |                                      | 3,032    |         |                                                | 3,038   
|                            | Deferred income taxes                                                                                                                                                                              |                                      | 2,657    |         |                                                | 2,657   
|                            |                                                                                                                                                                                                    | Total current
          assets       |          | 144,508 |                                                |          | 127,099
|                            |                                                                                                                                                                                                    |                                      |          |         |                                               
|Property and equipment, net |                                                                                                                                                                                                    | 9,904                                |          |         | 9,214                                         
|Goodwill, net               |                                                                                                                                                                                                    | 861                                  |          |         | 804                                           
|Deferred income taxes       |                                                                                                                                                                                                    | 9,578                                |          |         | 10,718                                        
|Other assets                |                                                                                                                                                                                                    | 1,536                                |          |         | 1,525                                         
|                            | $                                                                                                                                                                                                  | 166,387                              |          | $       | 149,360                                       
|                            |                                                                                                                                                                                                    | Liabilities and Stockholders' Equity
|Current liabilities:       
|                            | Accounts payable                                                                                                                                                                                   | $                                    | 58,231   |         | $                                              | 61,865  
|                            | Accrued expenses and other current liabilities                                                                                                                                                     |                                      | 14,412   |         |                                                | 14,066  
|                            | Deferred revenue                                                                                                                                                                                   |                                      | 11,943   |         |                                                | 10,532  
|                            | Line of credit                                                                                                                                                                                     |                                      | 32,683   |         |                                                | 17,497  
|                            | Capital leases - current                                                                                                                                                                           |                                      | -        |         |                                                | 124     
|                            | Notes payable - current                                                                                                                                                                            |                                      | 1,500    |         |                                                | 167     
|                            |                                                                                                                                                                                                    | Total current liabilities            |          | 118,769 |                                                |          | 104,251
|                            |                                                                                                                                                                                                    |                                      |          |         |                                                |          |        
|                            |                                                                                                                                                                                                    | Total liabilities                    |          | 118,769 |                                                |          | 104,251
|                            |                                                                                                                                                                                                    |                                      |          |        
|Stockholders' equity:      
|                            | Preferred stock, $.001 par value, 5,000,000 shares
          authorized; none issued and outstanding                                                                                               |                                      | -        |         |                                                | -       
|                            | Common stock, $.001 par value;
          30,000,000 shares authorized;
          11,097,083 and 10,789,947 shares issued; and 10,802,883 and 10,632,347
          shares outstanding, respectively |                                      | 11       |         |                                                | 11      
|                            | Additional paid-in capital                                                                                                                                                                         |                                      | 76,874   |         |                                                | 75,833  
|                            | Treasury stock at cost:
        294,200 and 157,600 shares, respectively                                                                                                                           |                                      | (1,015)  |         |                                                | (556)    |        
|                            | Translation
        adjustment                                                                                                                                                                     |                                      | (11)     |         |                                                | -        |        
|                            | Retained earnings (accumulated deficit)                                                                                                                                                            |                                      | (28,241) |         |                                                | (30,179) |        
|                            | Total stockholders' equity                                                                                                                                                                         |                                      | 47,618   |         |                                                | 45,109   |        
|                            |                                                                                                                                                                                                    |                                      | $        | 166,387 |                                                | $        | 149,360

See  condensed notes to  consolidated financial statements.

3

---

Table of Contents

PC MALL, INC. CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS(unaudited, in thousands, except
per share data)

Three months ended
        
        Nine months endedSeptember 30,
        
        September
        30,2003
        
        2002
        
        2003
        
        
        2002Net sales
        $

        231,996

        
        $

        230,076

        
$
        685,654
        
        $
        626,524Cost of goods sold
        

        199,770


        
        

        205,394


        

        593,861
        
        
        559,479Gross profit
        

        32,226


        
        

        24,682


        

        91,793
        
        
        67,045Selling, general and administrative expenses
        
        23,832


        
        
        22,617


        
        
        70,952
        
        
        61,535Non-cash stock compensation expense relating to
          selling, general and administrative expenses
        
        181


        
        
        -


        
        
        181
        
        
        -Advertising, net in 2002
        
        6,785


        
        
        542


        
        
        16,751
        
        
        1,950Loss on sale of building
        
        -


        
        
        -


        
        
        -
        
        
        350Income from operations
        

        1,428


        
        

        1,523


        

        3,909
        
        
        3,210Interest expense, net
        

        313


        
        

        310


        

        831
        
        
        708Income  before income taxes
        

        1,115


        
        

        1,213


        

        3,078
        
        
        2,502Income tax provision
        

        412


        
        

        449


        

        1,140
        
        
        926Income before cumulative
          effect of change in accounting principle
        

        703


        
        

        764


        

        1,938
        
        
        1,576Cumulative
          effect of change in accounting principle
        

        -


        
        

        -


        

        -
        
        
        (6,801)Net income (loss)
        $

        703


        
        $

        764


        
$
        1,938
        
        $
        (5,225)Earnings (loss) per share:Income before cumulative effect of change in accounting principle
        $

        0.07


        
        $

        0.07


        
$
        0.18
        
        $
        0.15Cumulative
          effect of change in accounting principle
        

        -


        
        

        -


        

        -
        
        
        (0.64)$

        0.07


        
        $

        0.07


        
$
        0.18
        
        $
        (0.49)Diluted Earnings (loss) per share:Income
          before cumulative effect of change in accounting principle
        $

        0.06


        
        $

        0.07


        
$
        0.17
        
        $
        0.14Cumulative
          effect of change in accounting principle
        

        -


        
        

        -


        

        -
        
        
        (0.61)$

        0.06


        
        $

        0.07


        
$
        0.17
        
        $
        (0.47)Basic weighted average number of shares outstanding
        

        10,640


        
        

        10,781


        

        10,591
        
        
        10,630Diluted weighted average number of
          common and common equivalent shares outstanding
        

        11,700


        
        

        11,096


        

        11,401
        
        
        11,099


See  condensed notes to  consolidated financial statements.

4

---

##### Table of Contents

PC MALL, INC. 
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS'
EQUITY(unaudited, in thousands)



Common Stock
    Additional Paid-in Capital
    Retained
      Earnings (Accumulated Deficit)
    Translation Adjustment
    Treasury Stock
    TotalCommon SharesIssued
    OutstandingBalance at December 31, 2002
    10,790
    10,632
    
    $ 11
    $ 75,834
    $ (30,179)
    $ -
    $ (556)
    $ 45,109Stock option exercises
    299
    299
    
    -
    959
    -
    -
    -
    959Stock issuances
    8
    8
    
    -
    32
    -
    -
    -
    32Stock-based compensation
    -
    -
    
    -
    50
    -
    -
    -
    50Translation adjustment
    -
    -
    
    -
    -
    -
    (11)
    -
    (11)Stock
      repurchases
    -
    (136)
    
    -
    -
    -
    -
    (459)
    (459)Net Income
    -
    -
    
    
    -
    1,938
    -
    -
    1,938Balance at December 31, 2003
    11,097
    10,803
    
    $ 11
    $ 76,875
    $ 28,241
    $ (11)
    $ (1,015)
    $ 47,618




See  condensed notes to  consolidated financial statements.

5

---



PC MALL, INC. 
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited, in thousands)

For the
          nine months endedSeptember
          30,2003
        
        2002Cash flows from operating activities:Net income (loss)


        $


        1,938
        


        $


        (5,225)Adjustments to reconcile net
          income (loss) to net cash used in operating activities:Cumulative effect of change in accounting
          principle
        
        -
        
        
        6,801Depreciation and amortization
        
        3,105
        
        
        3,391Provision for deferred income taxes
        
        1,140
        
        
        926Non-cash stock compensation expense
        
        181
        
        
        -Gain on sale of fixed assets
        
        (67)
        
        
        -Loss on sale of building
        
        -
        
        
        350Changes in assets and liabilities, net of acquisitions:Accounts receivable
        
        (18,299)
        
        
        (11,280)Inventories
        
        (6,104)
        
        
        (3,097)Prepaid expenses and other current assets
        
        1,396
        
        
        (417)Other assets
        
        (15)
        
        
        (429)Accounts payable
        
        3,198
        
        
        8,507Accrued expenses and other current
          liabilities
        
        190
        
        
        (1,108)Deferred revenue
        
        1,410
        
        
        787Total adjustments
        
        (13,865)
        
        
        4,431Net cash used in operating activities
        
        (11,927)
        
        
        (794)Cash flows from investing activities:Purchase of property and equipment
        
        (3,277)
        
        
        (2,492)Payments for
        costs incurred for acquisition of business
        
        -
        
        
        (10,351)Proceeds from
        sale of property and equipment
        
        -
        
        
        1,813Net cash used in
        investing activities
        
        (3,277)
        
        
        (11,030)Cash flows from financing activities:Payments for
          deferred financing costs
        
        (447)
        
        
        (179)Increase
        (decrease) in book
        overdraft
        
        (6,832)
        
        
        2,994Borrowings under notes payable
        
        2,000
        
        
        -Payments under notes payable
        
        (667)
        
        
        (834)Net

        borrowings under line of credit
        
        15,186
        
        
        9,446Principal payments of obligations under capital leases
        
        (124)
        
        
        (328)Repurchase of
        common stock
        
        (459)
        
        
        (120)Proceeds from stock issued under stock option plans
        
        959
        
        
        73Net cash
        provided by financing activities
        
        9,616
        
        
        11,052Effect of foreign
        currency on cash flow
        
        (11)
        
        
        -Net decrease in
        cash and cash equivalents
        
        (5,599)
        
        
        (772)Cash and cash equivalents:Beginning of period
        
        11,422
        
        
        9,972End of period

        $


        5,823
        
        $
        9,200


See  condensed notes to  consolidated financial statements.

6

---

##### Table of Contents

PC MALL, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

1.Basis of Presentation

> The
> consolidated interim financial statements include the accounts of PC Mall, Inc.,
> a Delaware corporation, (formerly IdeaMall, Inc. and Creative Computers, Inc.)
> and its wholly owned subsidiaries (collectively, the "Company") and have been
> prepared without audit pursuant to the rules and regulations of the Securities
> and Exchange Commission ("SEC"). Certain information and footnote disclosures
> normally included in financial statements prepared in accordance with generally
> accepted accounting principles have been condensed or omitted pursuant to such
> regulations.  These financial statements should be read in conjunction with
> the audited financial statements and the notes thereto included in the Company's
> Annual Report on Form 10-K for the year ended December 31, 2002.
> In
> the opinion of management, the accompanying unaudited condensed consolidated
> financial statements contain all adjustments consisting solely of normal
> recurring items necessary for a fair statement of the financial position of the
> Company at September 30, 2003 and December 31, 2002 and the results of operations for
> the three and nine months ended September 30, 2003 and 2002, and cash flows for
> the nine months ended September 30, 2003 and 2002.  The results of operations for
> the interim periods are not necessarily indicative of the results of operations
> for the full year.
>   Reclassifications
>   Certain reclassifications have been made
>   to the 2002 financial statement amounts to conform to the 2003 presentation.

2.
Change in  Accounting Principle and Recent Accounting Pronouncements

> In July 2001, the Financial Accounting Standards Board ("FASB") issued
>   Statement of Financial Accounting Standards ("SFAS") No. 142, "Goodwill and
>   Other Intangible Assets," which changes the accounting for goodwill and
>   indefinite-lived intangible assets from an amortization method to an
>   impairment-only approach. Under SFAS 142, goodwill impairment is deemed to
>   exist if the net book value of a reporting unit exceeds its estimated fair
>   value, including consideration of the Company's market capitalization. This
>   methodology differs from the Company's previous policy, as permitted under
>   accounting standards existing at that time, of using undiscounted cash flows
>   to determine if goodwill is recoverable. The Company's reporting units are
>   generally consistent with the operating segments underlying the segments
>   identified in Note 4 - Segment Information.
>   In the second quarter of 2002, the Company completed its assessment of the
>   impact of SFAS 142, and, as required by the provisions of SFAS 142, effective
>   January 1, 2002, the Company recorded a one-time, non-cash charge of
>   approximately $6.8 million, net of tax, to reduce the carrying value of its
>   goodwill.  Such charge is reflected as a cumulative effect of a change in
>   accounting principle in the accompanying condensed consolidated statement of
>   operations and statement of cash flows.
>   The Company has adopted the provisions of SFAS No. 148, "Accounting for Stock
>   Based Compensation -- Transition and Disclosure" ("SFAS 148"), which amends
>   FASB Statement No. 123, "Accounting for Stock-Based Compensation." As
>   permitted by SFAS 148, the Company continues to measure compensation cost in
>   accordance with Accounting Principles Board Opinion No. 25, "Accounting for
>   Stock Issued to Employees" ("APB 25") and related interpretations, but
>   provides pro forma disclosures of net income and earnings per share as if the
>   fair-value method had been applied. See Note 6 - Stock-Based Compensation for
>   related disclosures.
>   In November 2002, the FASB issued EITF No. 02-16, "Accounting by a Customer
>   (Including a Reseller) for Certain Consideration Received from a Vendor" ("EITF
>   02-16"). EITF 02-16 requires that consideration received by a customer from a
>   vendor is considered (a) an adjustment of the prices of the vendor's products
>   or services and therefore, characterized as a reduction of cost of sales when
>   recognized in the reseller's statement of operations, (b) an adjustment to a
>   cost incurred by the reseller and, therefore, characterized as a reduction of
>   that cost when recognized in the reseller's statement of operations, or (c) a
>   payment for assets or services delivered to the vendor, and therefore,
>   characterized as revenue when recognized in the reseller's statement of
>   operations. Adoption of EITF 02-16 is required for the Company for new
>   agreements, including modifications of existing agreements, entered into after
>   December 31, 2002.  As a result of the adoption of EITF 02-16, the
>   Company recorded approximately $7.2 million and $17.5 million as a reduction
>   of cost of sales for the three and nine months ended September 30, 2003,
>   respectively.  Of these amounts, $7.1 million and $17.3 million would have
>   previously been netted against advertising expense, respectively, and $0.1
>   million and $0.2 million against selling, general, and administrative expenses,
>   respectively.
> 
> In April 2003, the FASB issued SFAS No. 149, "Amendment of
> Statement 133 on Derivative Instruments and Hedging Activities" ("SFAS 149").  This
> Statement amends and clarifies financial accounting and reporting for derivative
> instruments, including certain derivative instruments embedded in other
> contracts (collectively referred to as derivatives) and for hedging activities
> under SFAS No. 133, "Accounting for Derivative Instruments and Hedging
> Activities".  The Company does not expect SFAS 149 to have a significant
> impact on its consolidated financial statements.
> 
> 
> In May 2003, the FASB issued Statement No. 150, "Accounting for Certain Financial Instruments with Characteristics of
> Both Liabilities and Equity" ("SFAS 150").  SFAS 150 establishes standards for how an
> issuer classifies and measures in its statement of financial position certain
> financial instruments with characteristics of both liabilities and equity. 
> It requires that an issuer classify a financial instrument that is within its
> scope as a liability (or an asset in some circumstances) because that financial
> instrument embodies an obligation of the issuer.  This Statement is
> effective for financial instruments entered into or modified after May 31, 2003,
> and otherwise is effective at the beginning of the first interim period
> beginning after September 15, 2003.  Adoption of SFAS 150 is not expected to
> materially affect the Company's financial statements.

7

---

3. Net income (loss) per share

> Basic Earnings Per Share ("EPS") excludes dilution and is computed by dividing
>   net income by the weighted average number of common shares outstanding during
>   the reported periods.  Diluted EPS reflects the potential dilution that
>   could occur under the treasury stock method if stock options and other
>   commitments to issue common stock were exercised. The computation of Basic and
>   Diluted EPS is as follows (in thousands, except per share data):
>   
>   Three Months Ended
>         
>         Nine months EndedSeptember
>           30,
>         
>         September
>           30,2003
>         
>         
>         2002
>         
>         
>         2003
>         
>         
>         2002Income before
>           cumulative effect of change in accounting principle
>         
>         $
>         703
>         
>         
>         $
>         764
>         
>         
>         $
>         1,938
>         
>         
>         $
>         1,576Cumulative
>           effect of change in accounting principle
>         
>         
>         -
>         
>         
>         
>         -
>         
>         
>         
>         -
>         
>         
>         
>         (6,801)Net income (loss)
>         
>         $
>         703
>         
>         
>         $
>         764
>         
>         
>         $
>         1,938
>         
>         
>         $
>         (5,225)Weighted average shares -
>           Basic
>         
>         
>         10,640
>         
>         
>         
>         10,781
>         
>         
>         
>         10,591
>         
>         
>         
>         10,630Effect of
>           dilutive stock options and warrants
>         
>         
>         1,060
>         
>         
>         
>         315
>         
>         
>         
>         810
>         
>         
>         
>         469Weighted
>           average shares - Diluted
>         
>         
>         11,700
>         
>         
>         
>         11,096
>         
>         
>         
>         11,401
>         
>         
>         
>         11,099Earnings
>           (loss) per share - BasicIncome
>           before cumulative effect of change in accounting principle
>         
>         $
>         0.07
>         
>         
>         $
>         0.07
>         
>         
>         $
>         0.18
>         
>         
>         $
>         0.15Cumulative
>           effect of change in accounting principle
>         
>         
>         -
>         
>         
>         
>         -
>         
>         
>         
>         -
>         
>         
>         
>         (0.64)Earnings (loss) per share - Basic
>         
>         $
>         0.07
>         
>         
>         $
>         0.07
>         
>         
>         $
>         0.18
>         
>         
>         $
>         (0.49)Earnings (loss) per share - DilutedIncome
>           before cumulative effect of change in accounting principle
>         
>         $
>         0.06
>         
>         
>         $
>         0.07
>         
>         
>         $
>         0.17
>         
>         
>         $
>         0.14Cumulative
>           effect of change in accounting principle
>         
>         
>         -
>         
>         
>         
>         -
>         
>         
>         
>         -
>         
>         
>         
>         (0.61)Earnings (loss) per share - Diluted
>         
>         $
>         0.06
>         
>         
>         $
>         0.07
>         
>         
>         
>         0.17
>         
>         
>         $
>         (0.47)

8

---

4. Segment Information

> The Company operates in
>   three reportable segments: 1) a rapid response supplier of technology
>   solutions for business, government and educational institutions as well as
>   consumers, comprised of Corporate, Public Sector, Inbound Catalog and other sales, collectively referred to as the "Core Business",  2)
>   a multi-category Internet retailer of new, refurbished and close-out products under the eCOST.com brand,
>   and 3) an online marketplace/auction business under the OnSale.com brand.  Beginning
>   in the first quarter of 2003, the Company integrated its eLinux segment
>   into the Core Business segment.  The OnSale.com segment, which was previously
>   reported as part of the Core Business, was established as a new segment
>   beginning in the third quarter of 2003, and prior period amounts have been
>   adjusted to reflect the new presentation.  The Company allocates resources to and
>   evaluates the performance of its segments based on operating income.  Corporate
>   expenses are included in the Company's measure of segment operating income for
>   management reporting purposes.
>   Summarized segment information for the three and nine months ended
>   September 30, 2003
>   and 2002 is as follows (in thousands):
>   Three months ended September 30, 2003
>         
>         
>         Core Business(1)
>         
>         
>         eCOST.com
>         
>         
>         OnSale.com
>         
>         
>         ConsolidatedNet sales
>         
>         $
>         206,437
>         
>         $
>         25,551
>         
>         $
>         8
>         
>         $
>         231,996Gross profit
>         
>         
>         29,260
>         
>         
>         2,958
>         
>         
>         8
>         
>         
>         32,226Income from operations
>         
>         
>         1,435
>         
>         
>         315
>         
>         
>         (322)
>         
>         
>         1,428Three
>           months ended September 30, 2002
>         
>         
>         Core Business(2)
>         
>         
>         eCOST.com
>         
>         
>         OnSale.com
>         
>         
>         ConsolidatedNet sales
>         
>         $
>         206,806
>         
>         $
>         23,270
>         
>         $
>         -
>         
>         $
>         230,076Gross profit
>         
>         
>         22,646
>         
>         
>         2,036
>         
>         
>         -
>         
>         
>         24,682Income from operations
>         
>         
>         1,200
>         
>         
>         408
>         
>         
>         (85)
>         
>         
>         1,523Nine months ended September
>           30, 2003
>         
>         
>         Core Business(1)
>         
>         
>         eCOST.com
>         
>         
>         OnSale.com
>         
>         
>         ConsolidatedNet sales
>         
>         $
>         612,219
>         
>         $
>         73,427
>         
>         $
>         8
>         
>         $
>         685,654Gross profit
>         
>         
>         83,256
>         
>         
>         8,529
>         
>         
>         8
>         
>         
>         91,793Income from operations
>         
>         
>         3,960
>         
>         
>         680
>         
>         
>         (731)
>         
>         
> 
>       3,909Nine months ended September 30, 2002
>         
>         
>         Core Business(2)
>         
>         
>         eCOST.com
>         
>         
>         OnSale.com
>         
>         
>         ConsolidatedNet sales
>         
>         $
>         560,200
>         
>         $
>         66,324
>         
>         $
>         -
>         
>         $
>         626,524Gross profit
>         
>         
>         61,109
>         
>         
>         5,936
>         
>         
>         -
>         
>         
>         67,045Income from operations
>         
>         
>         2,710
>         
>         
>         636
>         
>         
>         (136)
>         
>         
>         3,210(1)
>         The results of ClubMac and Wareforce are included in the Core Business
>         segment for the three and nine months ended September 30, 2003. 
>         See Note 5 for a description of the ClubMac and Wareforce Acquisitions. 
>         The Core Business segment also includes the Company's eLinux operations,
>         which was previously reported as a separate segment.
>         
>         (2)
>         The results of ClubMac and Wareforce are included in the Core Business
>         segment for the three months ended September 30, 2002, as the
>         acquisition of ClubMac occurred in April 2002 and the acquisition of
>         Wareforce occurred in July 2002.  As such, the nine months ended
>         September 30, 2002 includes results of Clubmac and Wareforce only from
>         their respective acquisition dates.  See Note 5 for a description
>         of the ClubMac and Wareforce Acquisitions.

5. Acquisitions

> In July 2002, the Company completed the acquisition of
> substantially all of the assets of Wareforce, Inc. ("Wareforce") through a
> United States Bankruptcy proceeding under Chapter 11 of the United States
> Bankruptcy Code.  The Company paid initial consideration in the amount of
> $9.0 million to Wareforce's creditors and $0.4 million directly to
> Wareforce on the closing date in exchange for trade accounts receivable and
> inventory with an initial valuation of $10.9 million as well as all fixed and intangible assets. 
> In connection with these payments, the Company drew on its line of credit. 
> The Company paid to Wareforce $0.8 million as additional contractual consideration
> in September 2002.  In connection with the acquisition, the Company hired
> substantially all of the sales and sales support employees of Wareforce, and
> recorded $0.3 million
> of definite-lived intangible assets with amortizable lives of five to six years.   The Company considers Wareforce to be a part of the Core Business
> segment.
> In April 2002, the Company acquired substantially all of the
> assets of Pacific Business Systems, Inc. ("PBS"), a privately held direct
> marketer of computer products to business and consumer customers under the
> ClubMac and PBS brands. Under the terms of the asset purchase agreement, the
> Company acquired PBS' customer database, accounts receivable, inventory, certain
> fixed assets and certain intellectual property and has assumed certain
> liabilities equal to the negotiated values of acquired accounts receivable and
> inventory. In addition to certain liabilities assumed, the Company issued
> 300,000 shares of its common stock valued at $1.3 million to PBS
> and agreed to a capped three year earn-out, whereby additional consideration
> may be paid to PBS based on the future results of the acquired business.  As a
> result of the acquisition, the Company recorded $0.8 mililon  of goodwill, and $0.2
> million of definite-lived
> intangible assets with amortizable lives between three and six years. 
> Through September 30, 2003 the Company estimated additional purchase price consideration
> of approximately $0.1 million resulting from the
> earn-out.  The
> Company operates the acquired business as ClubMac, and considers this business
> to be a part of the Core Business segment.
> The following table presents unaudited pro forma information as if the acquired
> businesses had been combined with the Company at the beginning of the period
> presented (in thousands, except per share amounts).  The unaudited pro
> forma information is not necessarily indicative of future combined operating
> results.  The actual results for the  three and nine months ended
> September 30,
> 2003 and the three months ended September 30, 2002 are included in the Company's Condensed Consolidated Statement of
> Operations.
>   Nine months endedSeptember 30,2002Net sales
>         $
>         677,448Income before
>           cumulative effect of change in accounting principle
>         $
>         1,126Cumulative effect of change
>         in accounting principle
>         
>         (6,801)Net income/(loss)
>         $
>         (5,675)Weighted average shares -
>         Basic
>         
>         10,630Weighted
>           average shares - Diluted
>         
>         11,099Earnings
>           (loss) per share - BasicIncome
>           before cumulative effect of change in accounting principle
>         $
>         0.11Cumulative effect of change in accounting principle
>         
>         (0.64)Earnings (loss) per share - Basic
>         $
>         (0.53)Earnings (loss) per share - DilutedIncome
>           before cumulative effect of change in accounting principle
>         $
>         0.10Cumulative effect of change in accounting principle
>         
>         (0.61)Earnings
>           (loss) per share - Diluted
>         $
>         (0.51)
> 9

6.          
Stock-Based Compensation

> The Company accounts for its stock option plans using the
> intrinsic value-based method of accounting prescribed by Accounting Principles
> Board Opinion No. 25, "Accounting for Stock Issued to Employees," ("APB 25") and
> related interpretations.  Under this method, compensation expense is
> recorded on the date of grant only if the current market price of the underlying
> common stock exceeded the exercise price.  Statement of Financial
> Accounting Standards No. 123, "Accounting for Stock-Based Compensation" ("SFAS
> 123") established accounting and disclosure requirements using a fair
> value-based method for stock option plans.  As allowed by SFAS 123, the
> Company continues to apply the intrinsic value-based method of accounting, and
> has adopted the disclosure requirements of SFAS 123.  Accordingly, the
> Company does not record compensation expense on issuance of stock options to
> employees, as
> all options issued to employees to date were granted at the then-current market value at the
> date of grant.
> In June 2003, the Company issued a warrant to purchase 30,000
> shares of the Company's common stock to a consulting firm for investor and
> public relations services. The warrant was issued at an exercise price of $3.99
> with a five-year term, and vests monthly over a one year period from the date of
> grant. The Company valued the warrant at fair value (in accordance with FASB
> Statement No. 123, "Accounting for Stock Based Compensation") based on a Black-Scholes
> fair value calculation. The warrant was valued at the date of grant and will be
> re-measured at fair value at each subsequent reporting period, and changes in
> value will be recorded over the twelve month performance period of the warrant.
> The Company recorded an expense of approximately $0.2 million for the third
> quarter of 2003 in connection with the issuance of this warrant.
> Had compensation cost
> on all grants been determined consistent with SFAS
> 123, the Company's net income and earnings per share would have been reduced to
> the pro forma amounts shown below (in thousands, except per share amounts).

Three months ended



    



    Nine months endedSeptember30,



    



    September30,2003



    


    


    2002


    



    2003



    


    


    2002Income before cumulative effect of
    change in accounting principle


    $



    703



    


    $
    764


    $



    1,938



    


    $
    1,576Cumulative effect of change in
    accounting principle

    
    -
    

    
    -

    
    -
    

    
    (6,801)Net income (loss) (as reported)


    



    703



    


    
    764


    



    1,938



    


    
    (5,225)Total
    stock-based compensation expense determined under fair value based method
    for all awards, net of related tax effects


    



    (201)



    


    
    (259)


    



    (709)



    


    
    (657)Pro
    forma net income (loss)


    $



    502



    


    $
    505


    $



    1,229



    


    $
    (5,882)Basic earnings (loss) per share (as reported)


    $



    0.07



    


    $
    0.07


    $



    0.18



    


    $
    (0.49)Basic earnings (loss) per share (pro forma)


    $



    0.05



    


    $
    0.05


    $



    0.12



    


    $
    (0.55)Diluted earnings (loss) per share (as reported)


    $



    0.06



    


    $
    0.07


    $



    0.17



    


    $
    (0.47)Diluted earnings (loss) per share (pro forma)


    $



    0.04



    


    $
    0.05


    $



    0.11



    


    $
    (0.53)The fair value of each stock option grant has been estimated
      pursuant to SFAS 123 on the date of grant using the Black-Scholes option pricing model with the
following weighted average assumptions presented in the table for the respective
periods:Three months ended



    



    Nine months endedSeptember30,



    



    September30,2003



    


    


    2002


    



    2003



    


    


    2002Risk
      free interest rates


    



    3.74%



    


    



    3.50%



    



    3.55%



    


    



    3.93%Expected
      dividend yield


    



    None



    


    



    None



    



    None



    


    



    NoneExpected
      lives


    



    7 years



    


    



    7 years



    



    7 years



    


    



    7 yearsExpected
      volatility


    



    131%



    


    



    129%



    



    129%



    


    



    129%




10

---

##### Table of Contents

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSOverview and Recent Developments

PC Mall, Inc. ("PC Mall"), formerly IdeaMall, Inc. and Creative Computers, Inc.,
together with its subsidiaries ("the Company"), founded in 1987, is a rapid
response direct marketer of computer hardware, software, peripheral and
electronics products. The Company offers products to business, government and
educational institutions as well as individual consumers through direct
marketing techniques, direct response catalogs, dedicated inbound and outbound
telemarketing sales executives, the Internet, a direct sales force, and three
retail showrooms.  The Company offers a broad selection of products through
its distinctive full-color catalogs under the PC Mall, MacMall, ClubMac, PC Mall
Gov, and eCOST.com brands, its worldwide Web sites on the Internet: pcmall.com,
macmall.com, clubmac.com, pcmallgov.com, and ecost.com, and other promotional
materials.  The Company believes that
its rapid response service and its broad product selection result in customer
loyalty and repeat customer orders.  The Company also operates OnSale.com,
an online marketplace and auction, which was formally launched in October 2003.



In September 1997, PC Mall formed a wholly-owned subsidiary,
uBid, Inc. ("uBid"), to sell computer-related products and consumer electronics
through an auction format on the Internet. On December 9, 1998, uBid completed
an initial public offering of 1,817,000 shares of its Common Stock.  Upon
completion of this offering, PC Mall owned 80.1% of the outstanding Common Stock
of uBid.  On June 7, 1999, PC Mall divested its ownership in uBid by means
of a tax-free distribution of all of its remaining 7.3 million shares of uBid
Common Stock to PC Mall's stockholders of record as of May 24, 1999.  In
April 2000, uBid was acquired by CMGI.



In February 1999, PC Mall formed eCOST.com as a wholly-owned
subsidiary.  eCOST.com is a multi-category Internet retailer of new,
refurbished, and close-out computer products, consumer electronics, digital
imaging products, home and houseware products, watches and jewelry, and other
products.  eCOST.com offers a broad selection of name-brand products,
most of which are sold at competitive prices plus itemized fees for processing
and shipping the order.



During 2000, the Company shifted its strategy to focus primarily on its outbound telemarketing operations.  Accordingly, the Company changed its
operating strategy for  eCOST.com,
emphasizing profitability over growth.



During 2002, the Company completed two acquisitions.  In April 2002, the Company acquired substantially all of the assets of
Pacific Business Systems, Inc. ("PBS"), a privately held direct marketer of
computer products to businesses and consumer customers under the ClubMac and PBS
brands.  The Company operates the acquired business as
ClubMac.  In July 2002, the Company completed the acquisition of substantially all
of the assets of Wareforce, Inc. ("Wareforce") through a United States
Bankruptcy proceeding under Chapter 11 of the United States Bankruptcy Code. 
The Company considers ClubMac and Wareforce to be  part of its Core Business
segment.  Also during 2002, PC Mall formed a new subsidiary, PC Mall Gov,
Inc., to focus on the public sector market, and hired an experienced public sector
technology sales executive to lead the entity's operations.



In June 2002, the Company formed  Onsale, Inc. as a wholly-owned
subsidiary.  The Company acquired the URL
and software that operated the original OnSale.com website through bankruptcy
proceedings of Egghead in December 2002.   In October 2003, the Company formally launched OnSale.com, an online marketplace including auction.  The OnSale.com website has been
rebuilt on a
technology platform using the latest .NET solutions.  As OnSale.com is a marketplace service,
and is not itself a seller of the products sold on its website, the Company
believes that in the short-term, revenue through OnSale.com will be very
limited.



The Company operates in
  three reportable segments: 1) a rapid response supplier of technology
solutions for business, government and educational institutions as well as
consumers, comprised of Corporate, Public Sector, Inbound Catalog and other sales, collectively referred to as the "Core Business",  2)
  a multi-category Internet retailer of new, refurbished and close-out products under the eCOST.com brand,
  and 3) an online marketplace/auction business under the OnSale.com brand.  Beginning
  in the first quarter of 2003, the Company integrated its eLinux segment
  into the Core Business segment.  The Onsale segment, which was previously
reported as part of the Core Business, was established as a new segment
beginning in the third quarter of 2003, and prior period amounts have been
restated to reflect the new presentation.  The Company allocates resources to and
  evaluates the performance of its segments based on operating income.  Corporate
  expenses are included in the Company's measure of segment operating income for
  management reporting purposes.



Critical Accounting Policies

The
Company has identified the following as its critical accounting policies:

Revenue
Recognition.Net sales include product sales and
gross outbound shipping charges, net
of returns and allowances.  The Company recognizes revenue from product sales, net of
discounts, coupon redemption and estimated sales returns, when title to products
sold has transferred to the customer, generally upon the receipt of products by
the customer.  The Company offers a limited return policy on selected items
based on manufacturer return policies, and provides an allowance for sales
returns based on historical experience.  For all product sales shipped
directly from suppliers to customers, the Company takes title to the products
sold upon shipment, bears credit risk, and bears inventory risk for returned
products that are not successfully returned to suppliers; therefore, these
revenues are recognized at gross sales amounts.  The
Company recognizes revenue from sales of extended warranties and certain software license products, for which the Company
is not
the primary obligor, on a net basis, with no corresponding cost of goods sold.

Allowance
for Doubtful Accounts Receivable.The Company
maintains an allowance for doubtful accounts receivable based upon estimates of
future collection.  The Company extends credit to its customers based upon
an evaluation of each customer's financial condition and credit history, and
generally does not require collateral.  The Company continually evaluates
its customers' financial condition and credit history in determining the
adequacy of its allowance for doubtful accounts.  The Company also
maintains an allowance for uncollectible vendor receivables which arise from
vendor rebate programs, price protections and other promotions.  The
Company determines the adequacy of the vendor receivable allowance based upon
various factors, including payment history.  Should actual collections of
customer and vendor receivables differ from the Company's estimates, adjustments
to the provision for losses on accounts receivable and the related allowances
for doubtful accounts would be necessary.

Reserve
for Inventory Obsolescence.  The Company maintains allowances for the
valuation of its inventory by estimating the obsolete or unmarketable inventory
based on the difference between inventory cost and market value determined by
general market conditions, nature, age and type of each product.  The Company continually evaluates the adequacy of its
inventory reserve.

Deferred
Catalog Advertising Revenue and Costs.The
Company produces and circulates catalogs at various dates throughout the year
and receives market development funds and co-op advertising funds from vendors
included in each catalog.  Pursuant to Statement of Position ("SOP") 97-13,
the costs of developing, producing and circulating each catalog are deferred and
charged to advertising expense ratably over the life of the catalog based on the
revenue generated from each catalog, approximately eight weeks.Pursuant to the adoption of EITF 02-16, the related catalog market development
funds and co-op advertising funds are deferred and recognized as an offset to
cost of sales at a rate consistent with the recognition of the advertising
costs, which approximates the rate of product sales included in the catalog.  Deferred
advertising revenue is included in accrued expenses and other current
liabilities, and deferred advertising costs are included in prepaid
expenses and other current assets.

Impairment of Long Lived Assets.  The
Company reviews property and equipment and  intangible assets
for impairment whenever events or changes in circumstances indicate the carrying
value of an asset may not be recoverable.  The Company's asset impairment
review assesses the fair value of the assets based on the future cash flows the
assets are expected to generate.  An impairment loss is recognized when
estimated undiscounted future cash flows expected to result from the use of the
asset plus net proceeds expected from disposition of the asset (if any) are less
than the carrying value of the asset.  The Company's estimates include projections of
future market growth, forecasted revenue and costs and expected periods the
assets will be utilized.

The Company assesses whether goodwill is impaired
on an annual basis.  Upon determining the existence of goodwill impairment,
the Company measures that impairment based on the amount by which the book value
of goodwill exceeds its implied fair value which includes consideration of the
Company's market capitalization.  The implied fair value of goodwill is
determined by deducting the fair value of a reporting unit's identifiable assets
and liabilities from the fair value of the reporting unit as a whole. 
Additional impairment assessments may be performed on an interim basis if the
Company encounters events or changes in circumstances that would indicate that,
more likely than not, the book value of goodwill has been impaired.

Deferred Tax Assets. 
The Company's financial position at September 30, 2003 includes short and long-term
deferred tax assets.  It is the policy of the Company to record quarterly
tax provisions based on financial results for the quarter and apply such
provision against the long term portion of the deferred tax asset, until such
time as the asset is fully utilized.  A periodic review of the
recoverability of these assets is performed based on estimates of present and
future Company performance, the likelihood that such assets could be applied
against future income for income tax reporting purposes, and the remaining term and nature
of each class of deferred tax asset.  Upon determination that these
deferred tax assets are, or would likely become unrecoverable, a valuation
reserve would be recorded against the deferred tax asset to report it at its
recoverable value.

There has been no
material change in the policies used in the preparation of the Company's
financial statements since the filing of the Company's Annual Report, except for
adoption of EITF 02-16 effective on January 1, 2003 as
described in "Change in Accounting Principle and Recent Accounting Pronouncements" below.

Results of OperationsThree Months Ended September 30, 2003 Compared to the Three Months Ended
September 30, 2002

Consolidated net sales for the quarter ended September 30, 2003 were $232.0
million, an increase of $1.9 million, or a 1% increase over last year's third
quarter net sales of $230.1 million.  Core
Business sales for the quarter were $206.4 million, a decrease of $0.4 million over the
prior year's third quarter.This was primarily due to a decline in
Inbound Catalog sales of 30% from the third quarter of 2002 resulting from a higher than normal level of
unfulfilled backorders of recently introduced products and weak consumer demand,
partially offset by a 24% increase in Corporate sales.  eCOST.com
sales for the quarter were $25.6 million, an increase of $2.3 million, or 10%
over the prior year's third quarter.  For the quarter ended September 30,
2003, sales of HP and Apple products represented 23%
and 19% of consolidated net sales, compared to 21% and 22%, respectively, in the prior year's
comparable period.  OnSale.com sales for the third quarter of 2003 were
insignificant, and have no meaningful comparison to prior year's quarter, as the
company is in its first year of operations.
Consolidated gross profit was $32.2 million for the three months ended September 30,
2003, an increase of $7.5 million, or 31%, over the prior year's comparable
quarter.   For the Core Business, gross
profit was $29.3 million, an increase of $6.6 million, or 29% over the prior
year's third quarter gross profit.  For eCOST.com, gross profit
for the third quarter of 2003 was $3.0 million, an increase of $0.9 million, or
45% from the prior year's third quarter.  The adoption of EITF 02-16,
which resulted in the recording of certain types of consideration received from
vendors against cost of sales, was responsible for $7.2 million of the increase in consolidated
gross profit.  The remaining $0.3 million of the increase in gross profit
was due primarily to an increase in gross margin.  For the Core Business and eCOST.com segments, the adoption of EITF 02-16 was responsible for $6.2 million and $1.0 million of the increase in
gross profit, respectively.  As a percentage of net sales, consolidated gross profit for
the three months ended September 30, 2003 increased to 13.9% compared with 10.7% in
the prior year.  For the Core Business, gross profit as a percentage of net
sales increased to 14.2% compared with 11.0% in the prior year's third quarter. 
Gross profit as a percentage of net sales for eCOST.com increased to 11.6% from
8.7% in the prior year's third quarter.  The adoption of EITF 02-16 was
responsible for 311 basis points of the increase of consolidated gross profit as
a percentage of sales.  For the Core Business and eCOST.com segments, the
adoption of EITF 02-16 was responsible for increasing gross profit as a
percentage of sales by 300 and 400 basis points, respectively.  The Company's gross profit percentage
may vary from quarter to quarter, depending on the continuation of key vendor support programs, including price
protections, rebates and return policies, and based on product mix, pricing strategies,
acquisitions, competition and other factors.   See "Change in
Accounting Principle and Recent Accounting
Pronouncements" below for a discussion of the Company's adoption of EITF 02-16.

11

---

Consolidated selling, general, and administrative ("SG&A")
expenses were $24.0 million for the three months ended September 30, 2003 (which
includes a $0.2 million charge for non-cash stock compensation), representing an increase of $1.4 million, or 6% from the comparable period in the
prior year.  As a percent of net sales, SG&A expenses increased to 10.4% from 9.8% in the prior year. 
For the Core Business,  SG&A expenses in the
third quarter of 2003 were $21.9 million, an increase of $1.0 million, or 5%, compared to the third
quarter of the prior year.  As a percent of net sales, SG&A expenses for the Core Business increased to 10.6%
compared with 10.1% in the third quarter last year.  The Consolidated and
Core Business increases were primarily due to expense of $0.6 million in
connection with the Canadian call center initiative and  increases in Corporate and Public
Sector account manager headcount.  For eCOST.com, SG&A
expenses in the third quarter of 2003 were $1.8 million, an increase of $0.1
million, or 9% compared with the third quarter of the prior year.  As a
percent of net sales,  SG&A expenses for eCOST.com
decreased to 7.2% in the third quarter of 2003 compared with 7.3% in the third
quarter last year due to a 10% increase in sales over the comparable quarter in
the prior year and a smaller increase in SG&A expenses.  For OnSale.com,
SG&A expenses in the third quarter of 2003 were $0.3 million, an increase of
$0.2 million, or 246% compared with the third quarter of the prior year. 
As a percent of net sales,  SG&A expenses for OnSale.com were not meaningful since OnSale.com
is in its first complete year of operations and therefore, no percent of sales
comparisons to prior periods are possible.  The Company recorded an expense of
approximately $0.2 million for the third quarter of 2003 in connection with
the issuance of a warrant to a consultant for investor and public relations
services. The warrant was valued at the date of grant and will be re-measured at
fair value at each subsequent reporting period, and changes in value will be
recorded over the twelve month performance period of the warrant.

Consolidated net advertising expense for the third quarter of
2003 was $6.8 million, an increase of $6.2 million over the prior year's third
quarter.  This increase was due to the adoption of EITF 02-16, which
resulted in the recording of $7.1 million of vendor consideration to cost
of sales, which was previously recorded as a reduction of advertising expenses. 
For the Core Business, net advertising expense was $6.0 million compared to $0.6
million in the prior year's third quarter.  For eCOST.com, net advertising
expense for the third quarter of 2003 was $0.8 million compared to ($0.1) million

in the comparable period in the prior year.  The increases in advertising
expense for the Core Business and eCOST.com segments were primarily due to the adoption of EITF
02-16, which resulted in the recording of $6.1 million and $1.0 million,
respectively, of vendor consideration to cost of sales, which was previously
recorded as a reduction of advertising expenses.  OnSale.com advertising expenses for the third quarter of 2003 were
insignificant, and have no meaningful comparison to prior year's quarter, as the
company is in its first complete year of operations.

Net interest expense
for the three months ended September 30, 2003 was unchanged at $0.3 million,
from $0.3 million in the prior year's comparable quarter.  The interest
expense resulted from borrowings on the Company's Line of Credit.

The Company recorded
an income tax provision for the quarter ended September 30, 2003 of $0.4
million, unchanged from the comparable quarter in 2002.  The Company
utilized an effective tax rate of 37% in both periods.
Net income was $0.7 million, or $0.06 per diluted share, for the three months ended
September 30, 2003 compared to net income of $0.8 million, or $0.07 per diluted
share, for the same period last year.Nine months Ended September 30, 2003 Compared to the Nine months Ended
September 30, 2002

Consolidated net sales for the nine months ended September 30, 2003 were $685.7
million, an increase of  $59.1 million, or 9% over the nine months ended
September 30, 2002.  Of this increase, $52.8 million is attributable to
acquisitions of ClubMac and Wareforce in April 2002 and July 2002, respectively. 
Core Business net sales for the nine months ended September 30, 2003 were $612.2
million, an increase of  $52.0 million, or 9% over the nine months ended
September 30, 2002,  primarily due to a 34% increase in Corporate sales, of which 15% is due to
the acquisition of Wareforce, the acquisition of ClubMac, offset by a 16% decrease in Inbound Catalog sales.  For the
nine months ended September 30, 2003, net sales for eCOST.com were $73.5 million, an
increase of $7.1 million or 11% over the first nine months of the prior year.  This increase was primarily due to opportunistic buys, continued
enhancements to its marketing and product offerings and increased  sales
to business customers. For the nine months
ended September 30, 2003, sales of HP and Apple  products represented
22%
and 20% of consolidated net sales, compared to 20% and 23%, respectively, in the prior year'scomparable period. OnSale.com sales for the nine months ended September 30, 2003 were
insignificant, and have no meaningful comparison to prior year's quarter, as the
company is in its first complete year of operations.

12

---

Consolidated gross profit for the nine months ended September 30,
2003 was $91.8 million, an increase of  $24.7 million, or 37%, over the prior
year's comparable period.  For the Core Business, gross profit was $83.3
million, an increase of $22.1 million, or 36%, from the comparable period in the
prior year.  Acquired businesses
contributed $7.7 million of the increase in gross profit for the consolidated
company and Core Business segments.  The adoption of EITF 02-16 was
responsible for $17.5 million and $14.9 million of the increase in consolidated and Core
Business gross profit, respectively.  For eCOST.com, gross profit for the
first nine months of 2003 was $8.5 million, an increase of $2.6 million, or 44%
from the prior year's comparable period, all of which resulted from the adoption
of EITF 02-16.  As a percentage of net sales, consolidated gross profit for
the nine months ended September 30, 2003 increased to 13.4% compared with 10.7% in the
prior year.  For the Core Business, gross profit as a percentage of sales for
the nine months ended September 30, 2003 increased to 13.6% compared with 10.9% in the
prior year.  For eCOST.com, gross profit as a percentage of sales for the
nine months ended September 30, 2003 increased to 11.6% compared with 9.0% in the prior
year.  The adoption of EITF 02-16 was responsible for 256 basis points of
the increase of consolidated gross profit as a percentage of sales.  For
the Core Business and eCOST.com segments, the adoption of EITF 02-16 was
responsible for increasing gross profit as a percentage of sales by 244 and 354 basis points, respectively.  The Company's gross profit percentage may vary
from quarter to quarter, depending on the continuation of key vendor support programs, including price
protections, rebates and return policies, and based on product mix, pricing strategies,
acquisitions, competition and other factors.   See "Change in
Accounting Principle and Recent Accounting
Pronouncements" below for a discussion of the Company's adoption of EITF 02-16.
Consolidated SG&A expenses were $71.1 million for
the nine months ended September 30, 2003 (which includes a $0.2 million charge
for non-cash stock compensation), representing an increase of $9.6 million, or 16%, from the
comparable period in the prior year. As a percent of net sales, SG&A expenses for the nine months ended September 30, 2003
increased to 10.4% from 9.8% from the comparable period in the prior year. 
For the Core Business, SG&A expenses for the nine
months ended September 30, 2003 were $64.7 million, an increase of $8.5 million,
or 15%, compared to the same period in the prior year.  As a percent of net
sales, SG&A expenses for the Core Business
increased to 10.6% for the nine months ended September 30, 2003 compared with
10.0% for the same period last year.  The Consolidated and Core Business
increases are primarily due to an increase in Corporate and Public Sector
account manager headcount, the Canadian call center initiative, and the acquisition of Wareforce.  For eCOST.com,
SG&A expenses for the nine months ended September 30, 2003
were $5.7 million, an increase of 10% compared with the same nine-month period in
the prior year. As a percent of net sales, SG&A
expenses for eCOST.com were the same at 7.8% for the nine months ended September
30, 2003 compared to the same period last year.  For OnSale.com,
SG&A expenses for the nine months ended
September 30, 2003 were $0.7 million, an increase of 411% compared with the same
nine-month period in the prior year.  SG&A expenses as a percent of net sales for OnSale.com were
not meaningful since OnSale.com is in its first complete year of operations, and
therefore no percent of sales
comparisons to prior periods are possible.  The Company recorded an expense
of approximately $0.2 million for the nine months ended September 30, 2003 in
connection with the issuance of a warrant to a consultant for investor and
public relations services. The warrant was valued at the date of grant and will
be re-measured at fair value at each subsequent reporting period, and changes in
value will be recorded over the twelve month performance period of the warrant.

Consolidated net advertising expense for the first nine months of 2003
was $16.8 million compared to $2.0 million in the prior year's comparable period.  This increase was mainly due to the adoption of EITF 02-16, which
resulted in the recording of $17.3 million of vendor consideration to cost
of sales, which was previously recorded as a reduction of advertising expenses. 
For the Core Business, net advertising expense was $14.6 million compared to
$1.8 million in the first nine months of the prior year.  For eCOST.com,
net advertising expense for the first nine months of 2003 was $2.2 million
compared to $0.1 million for the comparable period in the prior year.  The increases in
advertising expense for the Core Business and eCOST.com segments were primarily
due
to the adoption of EITF 02-16, which resulted in the recording of $14.7 million
and $2.6 million, respectively,
of vendor consideration to cost of sales, which was previously recorded as a
reduction of advertising expenses.  OnSale.com
advertising expenses for the nine months ended September 30, 2003 were
insignificant, and have no meaningful comparison to prior year's quarter, as the
company is in its first complete year of operations.

Net interest expense for the nine months ended September 30, 2003 increased to $0.8
million, from $0.7 million, compared to the same period in 2002.  The
increase in interest expense reflects borrowings for increased early payment of vendor payables to obtain payment
discounts.

The Company recorded an income tax provision of $1.1 million for
the nine months ended September 30, 2003 versus $0.9 million for the comparable
period in 2002, due to improved pre-tax earnings in both periods, as both periods used an effective tax rate of
37%.

As described in "Change
in Accounting Principle and Recent Accounting
Pronouncements" below, in the third quarter of 2002, the Company completed its
assessment of the impact of SFAS 142, and, as required by SFAS 142, effective
January 1, 2002, the Company recorded a one-time, non-cash charge of
approximately $6.8 million, net of tax, to reduce the carrying value of its goodwill. 
  Such charge is reflected as a cumulative
  effect of a change in accounting principle in the accompanying consolidated statement of
  operations.The Company
performed its first annual impairment review in the fourth quarter of 2002 and will perform its annual impairment review during the fourth quarter of each
year.  Under SFAS 142, goodwill
impairment is deemed to exist if the net book value of a reporting unit exceeds
its estimated fair value, including consideration of the Company's market
capitalization.

Net income was $1.9 million, or $0.17 per
diluted share, for the
nine months
ended September 30, 2003 compared to a net loss of $5.2 million, or $0.47 per
diluted share, for the same period last year. 
The loss for the nine months ended September 30, 2002 was due in part to the adoption of SFAS 142,
which resulted in a one-time non-cash charge of $6.8 million, net of tax, as
discussed above.

13

---

Liquidity and Capital Resources

The
Company's primary capital need has been the funding of the working capital
requirements of its operations, recent acquisitions, the development of its Corporate and Public Sector activities, eCOST.com
and its OnSale.com initiatives..  Historically, the Company's
primary sources of financing have been from cash flow from operations, public
offerings and borrowings from its financial institutions.

The
Company maintains a $75 million, three-year asset-based revolving credit
facility from a lending unit of a large commercial bank (the "Line of
Credit") that commenced in March 2001.  In March 2003, the Line of
Credit was amended to extend the term by an additional three years to expire in
March 2007, and obtain
improved terms for the Company.  The Line of Credit functions as a working capital line of
credit with a borrowing base of inventory and accounts receivable, and bears
interest at prime with a LIBOR option.  At September 30, 2003, the Prime Rate
was 4.00%.  The Line of Credit is secured by substantially all of the
Company's assets.  The Line of Credit has as its single financial covenant
a minimum tangible net worth requirement and also includes a commitment fee of
0.25% annually on the unused portion of the line up to $60 million.  The
Company also maintains a $40 million flooring credit facility, which functions
in lieu of a vendor trade payable for inventory purchases and does not bear
interest if paid within terms specific to each vendor (the "Flooring
Facility").  The Flooring Facility is secured by substantially all of
the Company's assets and is also supported by a letter of credit issued under
the Line of Credit in the amount outstanding under the Flooring Facility from
time to time.  The amount outstanding under the Flooring Facility is applied against the
credit limit under the Line of Credit.  The Company had no borrowings under the Flooring Facility included in accounts payable and $32.7
million of net working capital advances outstanding at September 30, 2003.
The increase in borrowings under the Line
of Credit reflects an aggressive program to obtain early pay discounts and
end-of-quarter purchase opportunities.  The Company had $21.1 million
available to borrow for working capital advances under the Line of Credit atSeptember
30, 2003.  Loan availability under the Line of Credit fluctuates daily and is
affected by many factors including eligible assets on-hand, opportunistic
purchases of inventory and early pay discounts.  The Company was in
compliance with its financial covenants under the Line of Credit at September 30,
2003.

As of September 30, 2003, the Company had cash and cash equivalents of
$5.8 million and working capital of $25.7 million. Inventory increased $6.1
million to $61.3 million from December 31, 2002.  Accounts receivable
increased $16.9 million to $71.7 million from December 31, 2002 due to a 24%
increase in Corporate sales.  For the nine months ended September 30, 2003, capital
expenditures were $3.3 million versus $2.5 million for the comparable period
last year.  The Company believes that current working capital, together
with cash flows from operations and available lines of credit, will be adequate
to support the Company's current operating plans for at least the next twelve
months.  If the Company needs extra funds, such as for acquisitions or
expansion or to fund a significant downturn in sales that causes losses, there
are no assurances that adequate financing will be available at acceptable terms,
if at all.

In July 1996, the Company  announced its plan to repurchase up to 1,000,000  shares of its Common Stock. 
In September 2002, the Company announced the resumption of the share repurchase
program.  During the third quarter of 2003, no shares were repurchased.  The shares may be repurchased
from time to time at prevailing market prices,  through open market or negotiated  transactions,  depending upon market conditions.  No
limit was placed on the  duration of the  repurchase  program.  There is no guarantee as to the exact number of shares that the Company
will  repurchase.  Subject to applicable  securities  laws,  repurchases may be made at such times and in such amounts as the Company's
management  deems  appropriate.  The program  can also be  discontinued  at any time  management  feels  additional  purchases  are not
warranted.  The  Company  will  finance the  repurchase  plan with  existing  working  capital.  As of
September 30, 2003,  the Company has
repurchased a total of 294,200 shares, which includes 254,200
shares repurchased under the program.
As part of its growth strategy, the Company may, in the future, acquire other
companies in the same or complementary lines of business. Any such acquisition
and the ensuing integration of the operations of the acquired company would
place additional demands on the Company's management and operating and financial
resources.

14

---

InflationInflation has not had a material impact upon operating results, and the Company does not expect it to have such an impact in the near
future.  There can be no assurances, however, that the Company's business will not be so affected by inflation.

Change in Accounting Principle and Recent Accounting Pronouncements

In July 2001, the Financial Accounting Standards Board ("FASB") issued
  Statement of Financial Accounting Standards ("SFAS") No. 142, "Goodwill and
  Other Intangible Assets," which changes the accounting for goodwill and
  indefinite-lived intangible assets from an amortization method to an
  impairment-only approach. Under SFAS 142, goodwill impairment is deemed to
  exist if the net book value of a reporting unit exceeds its estimated fair
  value, including consideration of the Company's market capitalization. This
  methodology differs from the Company's previous policy, as permitted under
  accounting standards existing at that time, of using undiscounted cash flows
  to determine if goodwill is recoverable. The Company's reporting units are
  generally consistent with the operating segments underlying the segments
  identified in Note 4 - Segment Information.
  In the third quarter of 2002, the Company completed its assessment of the
  impact of SFAS 142, and, as required by the provisions of SFAS 142, effective
  January 1, 2002, the Company recorded a one-time, non-cash charge of
  approximately $6.8 million, net of tax, to reduce the carrying value of its
  goodwill. Such charge is reflected as a cumulative effect of a change in
  accounting principle in the accompanying condensed consolidated statement of
  operations and statement of cash flows.
  The Company has adopted the provisions of SFAS No. 148, "Accounting for Stock
  Based Compensation -- Transition and Disclosure" ("SFAS 148"), which amends
  FASB Statement No. 123, "Accounting for Stock-Based Compensation." As
  permitted by SFAS 148, the Company continues to measure compensation cost in
  accordance with Accounting Principles Board Opinion No. 25, "Accounting for
  Stock Issued to Employees" ("APB 25") and related interpretations, but
  provides pro forma disclosures of net income and earnings per share as if the
  fair-value method had been applied. See Note 6 - Stock-Based Compensation for
  related disclosures.
  In November 2002, the FASB issued EITF No. 02-16, "Accounting by a Customer
  (Including a Reseller) for Certain Consideration Received from a Vendor" ("EITF
  02-16"). EITF 02-16 requires that consideration received by a customer from a
  vendor is considered (a) an adjustment of the prices of the vendor's products
  or services and therefore, characterized as a reduction of cost of sales when
  recognized in the reseller's statement of operations, (b) an adjustment to a
  cost incurred by the reseller and, therefore, characterized as a reduction of
  that cost when recognized in the reseller's statement of operations, or (c) a
  payment for assets or services delivered to the vendor, and therefore,
  characterized as revenue when recognized in the reseller's statement of
  operations. Adoption of EITF 02-16 is required for the Company for new
  agreements, including modifications of existing agreements, entered into after
  December 31, 2002.  As a result of the adoption of EITF 02-16, the
  Company recorded approximately $7.2 million and $17.5 million as a reduction
  of cost of sales for the three and nine months ended September 30, 2003,
  respectively.  Of these amounts, $7.1 million and $17.3 million would have
  previously been netted against advertising expense, respectively, and $0.1
  million and $0.2 million against selling, general and administrative expenses.

In April 2003, the FASB issued SFAS No.
149, "Amendment of Statement 133 on Derivative Instruments and Hedging
Activities" ("SFAS 149").  This Statement amends and clarifies financial accounting and
reporting for derivative instruments, including certain derivative instruments
embedded in other contracts (collectively referred to as derivatives) and for
hedging activities under SFAS No. 133, Accounting for Derivative Instruments and
Hedging Activities.  The Company does not expect SFAS 149 to have a
significant impact on its consolidated financial statements.

In May 2003, the FASB issued Statement No. 150, "Accounting for Certain Financial Instruments with Characteristics of
Both Liabilities and Equity" ("SFAS 150").  SFAS 150 establishes standards for how an
issuer classifies and measures in its statement of financial position certain
financial instruments with characteristics of both liabilities and equity. 
It requires that an issuer classify a financial instrument that is within its
scope as a liability (or an asset in some circumstances) because that financial
instrument embodies an obligation of the issuer.  This Statement is
effective for financial instruments entered into or modified after May 31, 2003,
and otherwise is effective at the beginning of the first interim period
beginning after September 15, 2003.  Adoption of SFAS 150 is not expected to
materially affect the Company's financial statements.

15

---

Forward Looking Statements
Except for historical information, all of the statements, expectations and
assumptions contained in the foregoing are forward-looking statements. The
realization of any or all of these expectations is subject to a number of risks
and uncertainties and it is possible that the assumptions made by management may
not materialize, causing actual results to differ materially from the forward
looking statements. In that regard, there can be no assurance that the
transition in the Company's business strategy to increasingly Corporate sales or
outbound telemarketing sales models will be successful, that enhancements to Corporate and Public Sector account executive
support or other actions by the Company will result in improved productivity,
that profitability can be optimized, that infrastructure investments in the
Company's Corporate sales or outbound telemarketing will result in expanded market share, or that
the Company will be profitable in 2003 or for the ensuing periods.  There
also can be no assurance that the growth in Corporate sales will continue, that the
Company's expansion of its Corporate and Public Sector sales force will
increase sales sufficiently to offset costs, that Core Business sales,
particularly Inbound Catalog sales, will rebound to historic levels, or that cost
reductions, EBITDA or profitability for the Company's Core Business and
eCOST.com
will continue or improve.  There can also be no assurance that the Company
will successfully integrate businesses acquired by the Company or that the
Company will realize the potential synergies of such acquired businesses.  
Increases in the percentage of direct
sales by the Company's vendors could adversely affect the Company's business.
In addition to the factors set forth above, other important factors that could
cause actual results to differ materially from the Company's expectations include:
competition from companies either currently in the market or entering the
market; competition from other catalog and retail store resellers and price
pressures related thereto; uncertainties surrounding the supply of and demand
for products manufactured by and compatible with  Apple Computer or
Hewlett-Packard; the Company's reliance on Apple Computer, Hewlett-Packard, IBM, and other vendors;
risks due to shifts in market demand and/or price erosion of owned inventory;
general economic and computer industry conditions; the continued acceptance of
the Company's distribution channel by vendors and customers; the timely
availability and acceptance of new products; continuation of key vendor
relationships and support programs; the continuing development, maintenance, and
operation of the Company's information technology ("IT") and telephone systems; changes and
uncertainties in economic conditions that could affect the rate of IT spending
by the Company's customers; the ability of the Company to successfully operate
its facility in Canada; changes in pricing by the Company's vendors; the timing and
extent of repurchases under the Company's share repurchase program; inability to convert
back orders to completed sales; the ability of the Company to hire and retain
qualified sales account executives; the effects of natural disasters or
geopolitical events on the Company or the general economy; dependence on key
personnel; the effect of narrow gross operating margins on operating results;
quarterly fluctuations in results; the ability of the Company to successfully
expand into the public sector market; the Company's dependence on one or more
shipping companies for delivery of products; the effect of increased postage,
shipping or packaging costs; technological changes and inventory obsolescence;
dependence on the continued viability of the Internet; volatility of the
Company's stock price; and sales or use tax collection.
In addition, if the Company needs extra funds, such as for acquisitions or
expansion or to fund a significant downturn in sales that causes losses, there
are no assurances that adequate financing will be available at acceptable terms,
if at all.  This list of risk factors is not intended to be exhaustive. 
Reference should also be made to the risk factors set forth from time to time in
the Company's SEC reports, including but not limited to those set forth in the
section entitled, "Certain Factors Affecting Future Results" in its Annual
Report on Form 10-K for 2002.

ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company's financial instruments consist primarily of cash.  As of
September
30, 2003, the carrying values of the Company's financial instruments
approximated their fair values based on current market prices and rates.

The Company has exposure to the risks of fluctuating interest
rates on its Line of Credit.  The variable interest rate on the Line of
Credit is tied to the prime rate or the London interbank offered rate at the
discretion of the Company.  If the variable rate on the Line of Credit
changes, the Company may be required to pay more interest.  However, the
Company believes that the near-term effect of any change in interest rates will
not be material to the Company's financial position, results of operations or
cash flows.

It is the Company's  policy not to enter into  derivative  financial  instruments,
and the Company does not have any  significant  foreign
currency  exposure.   Therefore,  the Company  does not have  significant
overall currency exposure as of September 30, 2003.

ITEM 4.   CONTROLS AND
PROCEDURES

As of the end of the period covered by this report, the Company carried
out an evaluation, under the supervision and with the participation of the Chief
Executive Officer and Chief Financial Officer, of the effectiveness of the
design and operation of the Company's disclosure controls and procedures. 
Based on this evaluation, the Chief Executive Officer and Chief Financial
Officer concluded that the Company's disclosure controls and procedures are
effective in timely alerting them to material information required to be
included in this report.

There has been no change in the Company's internal control over financial
reporting that occurred during the Company's most recent fiscal quarter that has
materially affected or is reasonably likely to materially affect the Company's internal
control over financial reporting.

16

---

PART II - OTHER
INFORMATION

ITEM 2.  
CHANGES IN SECURITIES AND USE OF PROCEEDS

On September 15, 2003, we issued an aggregate of 8,048 shares of
our Common Stock upon exercise of a warrant issued in consideration for investor
and public relations services. 
The issuance of the shares was exempt from registration under the 1933
Securities Act, as amended (the "Act") pursuant to the private placement
exemption under Section 4(2) of the Act.

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

> a.  Exhibits
>     Exhibit Number
>     Description31.1
>     Certification of the Chief Executive Officer
>     of the Registrant pursuant to
>     Exchange Act Rule 13a-14(a)31.2
>     Certification of the Chief Financial Officer
>     of the Registrant pursuant to
>     Exchange Act Rule 13a-14(a)32.1
>     Certification
>     of the Chief Executive Officer of the Registrant furnished pursuant to Exchange Act
>     Rule 13a-14(b) and 18 U.S.C. 135032.2
>     Certification
>     of the Chief Financial Officer of the Registrant furnished pursuant to Exchange Act
>     Rule 13a-14(b) and 18 U.S.C. 1350b.  Reports on Form 8-K
> 
>     1. Although we did not file any
>     reports on Form 8-K during the quarter, we furnished to the SEC a report on
>     Form 8-K on July 23, 2003 (pursuant to Item 12 of Form 8-K) disclosing an
>     earnings announcement of our financial results for the quarter ended June
>     30, 2003.

17

---

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

|                        |  |  |     |                                                                            
|----------------------- |  |  | --- | ---------------------------------------------------------------------------
|Date: November 14, 2003 |  |  |     | PC MALL, INC.                                                              
|                       
|                        |  |  | By: | /s/ Ted Sanders
        Ted Sanders
Chief Financial Officer                
|                       
|                        |  |  |     | (Duly Authorized Officer of
the Registrant and Principal
Financial Officer)

18

---

PC MALL, INC.

EXHIBIT INDEX

|Exhibit Number | Description                                                                                                                                
|-------------- | -------------------------------------------------------------------------------------------------------------------------------------------
|31.1           | Certification of the Chief Executive Officer
    of the Registrant pursuant to
    Exchange Act Rule 13a-14(a)                             
|31.2           | Certification of the Chief Financial Officer
    of the Registrant pursuant to
    Exchange Act Rule 13a-14(a)                             
|32.1           | Certification
    of the Chief Executive Officer of the Registrant furnished pursuant to Exchange Act
    Rule 13a-14(b) and 18 U.S.C. 1350
|32.2           | Certification
    of the Chief Financial Officer of the Registrant furnished pursuant to Exchange Act
    Rule 13a-14(b) and 18 U.S.C. 1350