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  1. Technology
November 23, 1998

EN POINTE SEES PROFITS SLIDE IN 98

By CBR Staff Writer

En Pointe Technologies Inc, the fast-growing hardware reseller and services outfit from Los Angeles which operates a unique ‘Just In Time’ business model, saw a significant slow down in sales growth for the year while increasing ancillary expenses took a toll on the company’s net profit margins. Fourth quarter net profits were down by 91% at $165,000 on revenues up 17% at $158m while net profits for the year to September 30 were down 62% at $2.2m on revenues up 16% to $568m. Before 1998, the company had produced a compound growth rate of over 60%. Bob Din, En Pointe’s chief executive, said his company had averaged 7% sequential revenue growth in what he said was a challenging market for PCs, but Din is firmly focused on gaining market share in a reseller market where profit margins have become painfully thin. Din said his company continued to invest in the electronic commerce side of its business. En Pointe differentiates itself in the highly competitive reseller space by acting as an electronic clearing house for purchasers of computer products. Its proprietary ‘En Pointe Information Connection’ software (EPIC) provides its sales force with an on-line search and order fulfillment system which has real time access to major vendors’ inventories, including IBM Corp, Compaq Computer Corp and Hewlett-Packard Co. This allows En Pointe to track a wide range of inventory without engaging in the capital intensive business of holding its own stock. En Pointe claims that the reduction of these touch costs allows it to reduce the overall cost to the customer, and with this model the company has grown from nothing to revenues of half a billion in just four years. Revenue growth has now slowed dramatically, however, with fiscal 1998’s growth of 16% down from 1997’s growth of 42%. á

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