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Non-Tech : CompUSA (CPU) -- Ignore unavailable to you. Want to Upgrade?

To: Smart Investor who wrote (1687)	3/16/1999 5:25:00 PM
From: Michael	Respond to of 3187

From yahoo board: (seems to be a genuine company letter from CEO Jim "liar" Hairball) Fellow Employees, I would like to give you an update on the press release CompUSA issued after the stock market closed last Thursday. The release said that based on lower than expected sales for the first nine weeks of the current fiscal quarter, we anticipate a loss of approximately $0.05 per share for the third quarter, including the cost of our information technology and Internet business initiatives. Based on current business trends, we also anticipate a loss for the fourth quarter. What happened? After a reasonably good January, we saw sales of personal computers soften in February. Both our retail and corporate sales were affected. Our forecasts showed that if the trend continued, we would have a loss for the third quarter, and we chose to advise Wall Street of the change in conditions. Other PC manufacturers and resellers such as Dell, Compaq, Hewlett-Packard, and Micron had already issued press releases noting softer than expected sales. Your company is financially strong. We are not yet sure whether the sales decrease in February was a temporary aberration or the start of a cyclical downturn in business, but we are prepared for either. Those of you who were here when I took over as CEO will recall that in 1994, we were under severe financial pressure. Since completing our turnaround, we have remained financially conservative, assuming only modest levels of debt, so that we could weather the occasional storms that come along. Our balance sheet is strong with over $100 million in cash and we have a bank line of credit of over $200 million that we are not currently using. We are taking aggressive action to turn things around. Some of our initiatives include: We are committed to the SAP and IBM information technology initiatives we previously announced and are actively working on their deployment, which will lay the foundation necessary to support our company's continued growth. As we announced slightly over a month ago, CompUSA Direct - our mail order and Internet business in Marlborough, MA - will become a stand-alone unit. We will continue to put additional resources into developing this exciting area of our business. CompUSA PC is growing aggressively. We are now assembling notebook computers and 500 MHz Pentium III PCs and will offer CompUSA PC servers in a few months. We are introducing exiting new products for our retail and corporate customers. Pentium III PCs, the Palm Pilot IIIx and the Palm Pilot V have just been released and Office 2000 and Windows 2000 are expected before the end of the calendar year. We have added Market Sales Managers in our larger markets to better support our large corporate customers. We are rolling out new consultative sales and customer service training programs for our Training and Direct Sales Managers. We have installed a new multi-million dollar telephone switch and CTI at the Call Center that will provide enhanced customer interaction by immediately displaying a customer's history based on the calling telephone number, so customers will no longer have to provide repetitive background information. We are piloting "PC Order" to allow our Direct Sales Team Members to better set up custom PC configurations for customers while ensuring timely delivery. We are on target to open 13 new stores by Christmas. We are examining our stores to determine how to return to past levels of growth. We are working to improve customer service. This month we will introduce a new web-based product and sales training curriculum for team members and in certain markets we are experimenting with new scheduling and increased staffing levels in conjunction with a change in marketing strategy. We are evaluating our assortment, determining which lines should be expanded and which should be reduced. We will review our promotions and marketing strategy to ensure we are getting the greatest impact from our marketing dollars. Whatever it takes, we will do it. We have good news to share. While PC sales have been soft, other parts of our business are doing great, and I'd like to share some of this good news with you. We've had some great product successes. For example: The iMac has been very well received and has been our most successful selling PC ever. Digital cameras are one of our hottest categories right now and our best selling unit costs $1,000. CompUSA was a market leader in Palm Pilot III sales when it was first introduced and we expect similar success with new Palm Pilot products. Over the last few months, we have acquired 14 new major national accounts and they are now up and running. Total Internet sales at CompUSA Direct are up over 200% year-to-date compared to a year ago. Two weeks ago we announced the appointment of Stephen Polley as chairman and CEO of CompUSA Direct and we anticipate making further announcements in early April. Education and government sales had record increases in January and February. Technical services and technology training have had a great third quarter so far. The Call Center continues to grow rapidly and has landed several new customers. CompUSA PC is doing quite well. We are now assembling 500 MHz Pentium III and notebook PCs and these machines have received excellent product reviews. We expect March to be the highest production month yet, and CompUSA PC servers will be added to the selection in a few months. Our CompUSA Team has worked through adversity before, and I have every confidence we can do it again. If every team member stays focused on doing a great job and providing outstanding service to all of our customers, we will produce the kind of sales and profits we have come to expect from our company. I am counting on each of you to do your part to return CompUSA to world-class status. We are the industry leader - let's turn in a performance that we can all be proud of. Sincerely, Jim Halpin