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Thursday, August 1, 2013
by Meg McEvoy
Online daily deal company LivingSocial Inc. said it had a drop in profits in April and May partially because of a cyber-attack that exposed the encrypted passwords and other information of up to 50 million customers, a spokeswoman for the company told BNA July 30.
"April and May saw a dip when we had the security breach," Sara Parker, head of communications for LivingSocial, said, and the decline in the site's traffic was "due partially" to the incident.
LivingSocial emailed users April 26 about the cyber-attack, which compromised names, email addresses, dates of birth for some users, and encrypted passwords.
LivingSocial said in its security notice that the database that stores the financial and banking information of its merchants was not affected, and the company told BNA that consumer credit card data was not accessed or affected.
Parker said the company has not received any reports of fraudulent access of customers' accounts.
The company was operating EBITDA-positive in March, and preliminary numbers appear positive for June, Parker said. EBITDA stands for "Earnings Before Interest, Taxes, Depreciation and Amortization" and is one measure of a company's financial performance.
"Our customers are coming back and buying. We are encouraged by the trends we are seeing," Parker said.
The company has seen losses in the past two fiscal years, according to 10-K filings by Amazon.com Inc. which owns approximately 30 percent of LivingSocial. The company experienced a net loss of $650 million in fiscal year 2012 and a net loss of $499 million in FY2011.
Copyright 2013, The Bureau of National Affairs, Inc.
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