CompUSA 2008 Annual Report Download - page 2

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Some of our European businesses reported sales and earnings growth during 2008 and some reported declines. We have
physical presence in 7 countries and sell into 14 countries. Our local management teams and the economic conditions in
each individual country are not identical, and our 2008 results reflect that. Our largest European business is located in the
United Kingdom and we were pleased with its performance, as well as its successful launching of ecommerce in the
Republic of Ireland during the year. We also reported strong results in France and The Netherlands. Our results in
G e r m a n y, Italy, Spain and Sweden were disappointing and we are working to improve those businesses.
Industrial Pro d u c t s
In our Industrial Products segment, the first half of the year was very different from the second half. During the first six
months, sales grew at double digit rates, as in the previous several years. However, during the 3rd quarter, growth slowed
to low single digits, and midway through the 4th quarter sales declined significantly compared to last year, and that sales
decline rate has continued into early 2009. We have reacted to the sales slowdown by selected cost reduction initiatives,
and we continue closely monitoring our costs in every area. During 2008, we rolled out an entirely new website, which
provides the ability to display an increased number of products in a user friendly browsing environment. We expanded
our product lines to include janitorial, maintenance, lighting, safety and packaging products and anticipate adding more
product lines during 2009.
S o f t w a r e Solutions
As you know, we have invested a significant amount of time and money in our ProfitCenter Software business. We use
the product internally in our Industrial Products business, and it was designed and developed for use by other multichannel
direct marketing companies in a hosted environment. We have successfully taken a number of relatively small external
customers live on the product over the past several years. However, we have struggled managing the costs of
development, implementation, and hosting at a commercial service level. We have significantly narrowed the focus of
this business over the past several quarters and implemented cost reduction initiatives, trying to establish a sustainable
business model. We are closely monitoring the business and will take additional actions if necessary.
I appreciate the support of our stockholders, the confidence of our customers and vendors, and the efforts of our employees
in helping our Company grow and improve during 2008, while maintaining profitability. I hope that, after reading this
l e t t e r, you share my confidence that with continued successful management, our Company’s best days are yet to come.
S i n c e r e l y,
Richard Leeds
Chairman and Chief Executive Off i c e r
April 30, 2008