Roy Vallee Year Quotations

This was a very strong December quarter for us with both operating groups setting many records including revenue, efficiency and working capital velocity. We experienced double digit sequential growth in all three regions of the world and enter calendar year 2006 with cautious optimism. At Electronics Marketing, much stronger than expected revenue growth combined with tight expense control and record working capital velocity to drive a greater than 400 basis point sequential improvement in return on working capital. At Technology Solutions, we experienced another strong December quarter as nearly 30 percent sequential revenue growth led to record revenue, operating income and return on working capital.

High-volume manufacturing has shifted to other regions so there is a greater focus on smaller accounts in North America than in the past. When we talk about expanding, we mean paying more attention to customers who have less than $100,000 a year in purchases from us.

Technology solutions deliver a record-breaking quarter as we closed our calendar year 2005 with 11 percent revenue growth while growing operating income by 22 percent for the calendar year. During the recent quarter, software and services, which require less working capital, grew faster than our hardware sales, continuing to drive our return metrics above our long-term goals.