## Dear shareholders, 

This past year, we encountered some difficult situations that im- pacted our business negatively. Overall, our revenues decreased from $945.1 million in 2001 to $871.2 million in 2002 while our net income was $1.1 mil- lion for the year, com- pared to $5.7 million in 

2001. Earnings per share fell from $0.28 to $0.05 for the year, before the cumulative effect of adopting SFAS No. 142 (Goodwill and Intangible 

Assets), which resulted in an after- tax charge of $12.8 million ($0.64 per share). We also closed sev- eral branches that were generating annualized revenues of approxi- mately $24 million and annualized operating losses of approximately $1.6 million. 

We did make strides in 2002, how- ever, in improving our operating efficiency and leveraging our na- tional footprint by pursuing oppor- tunities for sales to national ac- counts. With our single enterprise system and operational improve- ments at our branches we were 

DOORS TO THE CUSTOMER 

able to reduce headcount and lower operating costs by approxi- mately $11.4 million in 2002. Our focus on providing consistent, quality customer service at all of our branches helped us grow our business with our top 10 customers by 10 per- cent compared to 2001. 

ees and, of course, our sharehold- ers. Vital to our success will be our focus on communicating effec- tively and nurturing and building our business relationships. 

By listening to our customers, we expect to help them increase their sales, in part by offering them a wider array of products, delivering products on time and reducing or- der-entry errors. We must also remind all of our customers – both large, national accounts as well as small, locally based customers – that their relationships are impor- tant to us and we must insure that 

In 2003, we are rededi- cated to providing value to our four key constitu- ents: our customers, our suppliers, our employ- 

