CDW 2006 Annual Report Download - page 4

Download and view the complete annual report

Please find page 4 of the 2006 CDW annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 81

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81

CEO Letter
Dear Coworkers, Customers, Partners and Shareholders:
CDW had a productive but challenging year in 2006. We reported record revenue of $6.8
billion and record diluted earnings per share of $3.30. Our financial results were achieved
while implementing the biggest strategic changes we have undertaken during my tenure
as chief executive officer: the geographic reorganization of our corporate sector sales force
serving medium and large customer accounts and the acquisition of Berbee Information
Networks Corporation. In addition, we completed the first full year of operations at our Western
Distribution Center in North Las Vegas, Nevada.
These landmark steps significantly expand our platform for growth, and they contribute to our
vision of becoming the world’s biggest — and best — direct technology provider for business,
government and education. To realize our vision, we consider dynamics driving market demand.
In this competitive business climate, customers increasingly want to leverage IT to enhance
business performance. Customers also want easy access to both core technology and advanced
solutions, so they can spend more time running their businesses. Following the changes we
implemented in 2006, we are now better positioned to meet customer demand and be a single
source provider of information technology products and services, which should enable us to
continue to take market share.
Our biggest change in 2006 was the geographic realignment of our corporate sector sales
force, which was designed to improve our sales coverage model and ultimately better serve
our customers. Most of our medium and large corporate customers were segmented into five
geographic regions comprised of 32 districts, and account managers were realigned accordingly.
The initiative provides a consistent regional framework between our corporate and public
sectors, and it represents a key component of our growth platform.
The geographic realignment was a significant undertaking and proved to be the most disruptive
event between CDW and our customers in the company’s 22-year history. While our goals of
increasing visibility of market opportunities, driving new business, increasing share of customer
spend, improving deployment of sales resources, and better aligning the corporate sales force
with our vendor partners are being realized, it took us longer than we anticipated to rebuild
relationships between the tens of thousands of customers and hundreds of account managers
that were reassigned. The geographic realignment negatively impacted corporate sector revenue
growth for the year, which was 2.3 percent. In addition, operating margin for the corporate
sector was flat at 7.8 percent compared to the previous year.
The adjustment period is now behind us. As we continue to rebuild relationships with our
medium and large corporate customers, we expect the corporate sector to generate more
growth — and to do so profitably.
While the corporate sales team serving medium and large customers adapted to its new
structure last year, we did not add significantly to its sales team. Instead, we took the
opportunity to invest in both the corporate sector’s small business sales team and the public
sector sales team. In particular, we added new resources to our healthcare channel within the
public sector.
FORTUNE:
FORTUNE 500
America’s Most
Admired Companies
100 Best Companies to
Work For; on the list for
nine consecutive years
CIO Insight magazine:
Vendor Value Study
2006; ranked No. 1
Computerworld:
100 Best Places
to Work in IT
G.I. Jobs magazine:
Top 50 Most
Military Friendly
Employers 2006
CRO magazine:
100 Best Corporate
Citizens 2007
Recognition: