Creative Computers, Inc. Reports Record Fourth-Quarter Sales.

-- Record fourth quarter sales from ongoing operations of $190

million -- up 19% from last year. -- Basic EPS $(.55) -- $.15 excluding investment in uBid. -- Successful IPO of 19.9% ownership of uBid completed, remaining

80.1% intended to be distributed to Creative shareholders. -- Internet sales grew to $36 million -- up 114% from the prior year

and 45% from 3rd quarter. -- Out-bound corporate sales for the quarter grew 51% over last

year. -- Mac sales continue to strengthen -- up 9% from previous quarter. -- uBid Online Auction generated $24.1 million revenue for the

quarter -- up 58% from third quarter. -- uBid registered users increased 91% sequentially in the fourth

quarter.

     TORRANCE, Calif.--(BUSINESS WIRE)--Feb. 8, 1999--Creative
Computers, Inc. ("Creative") (Nasdaq:MALL) announced record quarterly
saletock-based
compensation charge, the Company losre development. The Company intends to
distribut where noted otherwise, all sales increase comparisons are
of results from ongoing operations, which exclude uarterly net sales of
$190 million, 19% better -bound business-to-business development.
     up://www.computability.com, enhanced websites also experienced
strong revenue growth, up 25% from the previous quarter and 114% over
the same period last year. Mac sales grew 3.2% for the quarter from
the same quarter last year. This represents the second consecutive
quarterly sales growth for Mac since the first quarter of 1996. The
Company also continued to grow its PC/Wintel sales. PC/Wintel sales
(excluding uBid) for the quarter rose 5% from the same period a year
ago. PC/Wintel sales comprise 51% of total fourth quarter sales and
57% of sales for the year. The growth in PC/Wintel sales was a good
achievement given the strategy to reduce advertising expense (16%
reduction) and re-deploy funds to expand out-bound
business-to-business sales. If the out-bound sales representatives
mature as planned, this strategy should position the Company to
further increase out-bound business-to-business sales. The Company
also continued to ramp up its out-bound business-to-business sales
program. Out-bound sales for the quarter rose 51% from a year ago.
     "We are very proud of the strong sales growth achieved by the
uBid.com, PCMall.com, MacMall.com and ComputAbility.com websites and
our out-bound business-to-business sales efforts," stated Frank
Khulusi, Creative's President and Chief Executive Officer. "uBid is
experiencing excellent sales growth and has continued to differentiate
itself by its superior product procurement and order fulfillment
capabilities. uBid also received the Better Business Bureau's online
certification, recognition of its high quality customer service,"
stated Khulusi. "As gratifying is the strong growth experienced by
Creative's other websites achieved without incurring substantial
customer acquisition expenses. Our revamped websites launched at the
end of the third quarter are becoming increasingly popular with our
customers. Daily visits to our websites grew by 159% during the
quarter," stated Khulusi. "Finally, our out-bound selling efforts,
focusing on small to medium-size business customers, are progressing
nicely. During the quarter, we put in place the infrastructure to
continue to expand our out-bound model in 1999."

     Fourth-Quarter and Full Year Financial Summary

     For the three months ended December 31, 1998, net sales from
ongoing operations grew to $190 million, up 19% over last year's
fourth quarter. Including net sales from the retail stores which were
closed in the first quarter of 1998, net sales from all operations
grew 7% from $178 million for the fourth quarter last year. The
increase in net sales for the quarter is attributable primarily to
record uBid revenues of d the out-bound sales efforts. Overall, Mac
saleoperations and its non-cash stock-based compensation charge for
the fourth quarter, of $1.5 million or $.15 per share, versus $1.0
million, or $.10 per share, for the fous, consolidated net loss for the quarter
was $5.in
gross profit margin. Gross profit as a perce-year change in gross profit
percentage resulted from competitive factors, a shift in mix favoring
CPUs, the effect of Creative's aggressive iMac promotion and other
factors. The Company's gross profit percentage may vary from quarter
to1998 declined by $1.7
million from the prior yenued retail stores) reached $690 million for the
twelve-month period, up 26% from the $546 million in the same period
last year. The Company reported a net loss of $17.8 million for the
twelve months ended December 31, 1998, or $1.75 per share, compared
with a net profit of $4.1 million, or $0.41 per share for the same
period last year. The net loss reported this year was primarily due to
a restructuring charge and write-offs associated with closing the
retail stores as well as other items in the first quarter
("Write-Offs") and losses from uBid and the anticipated non-cash
stock-based compensation charge related to uBid's IPO.
     Gross margin for the twelve months was 11.8%, excluding the
Write-Offs in the first quarter and uBid. Last year's gross margin was
12.8% for the same period. SG&A expenses for the twelve months of this
year, as a percentage of net sales, remained the same as last year at
11.2%.
     Creative's consolidated balance sheet at December 31, 1998
remained strong. Cash increased $24.5 million to $32.5 million since
last year, while short-term debt declined $10.1 million to $0.1
million. The increase in cash is attributable to uBid's IPO, which
raised approximately $25 million. Accounts receivable decreased $2.7
million and inventory increased $5.3 million. The increase in
inventory was primarily attributable to uBid's increased inventory
requirements. Inventory turns were 14 turns in the fourth quarter
compared with 15 last year.

     Strong Out-bound Revenue Growth

     The Company continued its aggressive efforts to ramp up its
out-bound sales during the fourth quarter to transition to an
out-bound business-to-business sales model. During the quarter, the
Company hired experienced personnel recruiters and developed extensive
training programs to develop its infrastructure to support expansion
of its out-bound sales program in 1999. Out-bound sales grew 51% for
the quarter compared with the same period a year ago.
     "Our strategy of offering a broad product selection popular with
small and medium-size business customers coupled with our out-bound
sales focus and emphasis on electronic commerce are contributing to
our increased out-bound sales," stated Dan DeVries, Creative's
Executive Vice President - Marketing and Sales. "We intend to change
business customers' service expectations to the same high level of
service that we have consistently supplied our consumers."

     Strong uBid Growth

     uBid continued to experience impressive growth, generating
revenues of $24.1 million for the quarter, representing a 58% increase
from the $15.3 million reported in the third quarter. Revenues for the
year ended December 31, 1998, were $48.2 million. Revenues for 1997,
the year of uBid's first sale, were $9,000, so percentage comparisons
are not meaningful.
     Gross margins increased 30 basis points to 8.5% of net sales for
the fourth quarter from 8.2% for the third quarter of 1998. The
improvement in gross margin came from expanded product categories and
an improved merchandise mix during the quarter.
     Gross margins for the year finished at 8.2%.
     Losses for the fourth quarter and year ended December 31, 1998
were $1.9 million and $4.9 million, respectively, before the expected
non-cash charge for stock-based compensation related to the IPO. After
the non-cash charge, thest quarter, a 91% increase. Page views averaged s
orders. uBid recently was
awarded the Better Business Bureau's online seal, recognition of its
prompt customer complaint resolution.
     "In our first quarter as a publicly traded company, we are
pleased to report strong growth in our user base and revenues," Greg
Jones, CEO of uB.
"We are proud of the performance of the uBid erly from the third quarter.
Creative's Internet sales
grew to $11.7 million for the quarter compared with $5.5 million for
the same period last year, an increase of 114%. Daily page views went
from 200,000 per day at the end of the third quarter and exited the
fourth quarter at over 500,000 per day, an increase of 159%.
     "Creative Computers offers one of the broadest selections of
computer products t of our
business and we look forward to many eent and Chief Operating Officer. Mr.
Rhoads
wilior
vice president of the Los Angeles Times. He holds an AB from Stanford
University and an MBA from Columbia University.
     "We are excited to have Keating join Creative," stated Frank
Khulusi. "Keating's experience improving operatio over 45,000
products to its customers. The Comotional materials. The Company's staff of
over 400
knowledgeable sales executives, telemarketing, customer service and
technical support personnel work together to provid/www.ubid.com.
     Customers may call PC Mall bid.com, or
http://www.computability.com.

  fits from its first quarter
restructuring or thnd sales will continue in future periods, or thal
store resellers and price pressures related tm time
to time in the Company's SEC reports, in

CONSOLIDATED BALANCE 2,484

Total current assets  1,262 -- Other assets

138 182

$ 158,266 $ 131,154

Liabilities and Stockholders' Equity Current liabilities: Accvalue;

15,000,000 shares authorized;

10,264,otal stockholders' equity 67,564 December 31,

20,948 85,519 63,540

Expenses relk-based

compensation - uBid 5,267 (6,831) 1,001 (18,993) 4,125

$ (0.55) $ 0.10 $ (1.75) $ 0.42

Diluted earnings

(loss) per share $ (0.55) $ 0.10 $ (1.75) $ 0.42

Basic weighted average

number of shares

outstanding 10,250 10,102 10,176 9,895

Diluted weighted

average number of

shares outstanding 10,250 10,341 10,176 10,030