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16
Results of Operations
The following table sets forth for the periods indicated information derived from our consolidated
statements of income expressed as a percentage of net sales:
Percentage of Net Sales
Financial Results Years Ended December 31,
2003 2002 2001
Net sales 100.0 % 100.0 % 100.0 %
Cost of sales 85.6 86.8 86.7
Gross profit 14.4 13.2 13.3
Selling and administrative expenses 7.0 6.1 6.4
Net advertising expenses 1.3 0.1 0.1
Income from operations 6.1 7.0 6.8
Interest and other income 0.1 0.2 0.3
Income before income taxes 6.2 7.2 7.1
Income tax provision 2.4 2.8 2.8
Net income 3.8 % 4.4 % 4.3 %
The following table sets forth for the periods indicated a summary of certain of our consolidated operating
statistics:
Operating Statistics Years Ended December 31,
2003 2002 2001
Number of invoices processed 5,431,041 4,995,459 4,394,157
Average invoice size $916 $935 $964
Commercial customers served (1) 415,998 361,052 356,769
% of sales to commercial customers 97.9% 97.4% 96.7%
Sales force, end of period 1,924 1,320 1,301
Annualized inventory turnover (2) 24 27 30
Accounts receivable - days sales outstanding (2) 35 29 29
Direct web sales (000’s) $1,056,761 $829,233 $615,316
(1) Commercial customers is defined as public sector and corporate customers excluding consumers.
(2) Annualized inventory turnover and accounts receivable – days sales outstanding for 2003 were impacted by
the Micro Warehouse transactions in September 2003. For the fourth quarter of 2003, annualized inventory
turnover was 25 and accounts receivable – days sales outstanding was 30, which the Company believes
provides a more meaningful comparison to reported results of prior periods.