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Staples Holdings Limited Release 1998 Annual Report.
Sales for the year grew to $15 million from $13.3 million the previous year as a result of the excellent sales growth of its wholly owned subsidiary Atlantic Medical International Limited.
Consolidated net earnings for the year are $435 thousand, down from $630 thousand as a result of the decrease in gross profit of 2%. Increased competition in office equipment and office supplies at Staples Limited is the major cause of the margin decline.
The most significant uses of cash in the year were the payment of the preferred share dividend in the amount of $588 thousand and capital asset purchases in the amount of $511 thousand. The most significant capital asset purchase was a fully integrated management information system.
Going forward, the company will be striking a balance between strategic investment and cost management. We have created a team approach by aligning our sales and service organizations around major customers. A customer care group has been formed to support this initiative and to respond more quickly to customers. This realignment will be supported by a fully integrated management information system and by the consolidation of all operations in a new location.
We will continue our performance focused, change management programs and we anticipate additional one-time costs and adjustments. However, we are confident that the company will be positioned strategically for growth into the year 2000.