Near the end of the year, our management team moved swiftly to refocus the Company on our fundamental strengths and to initiate a restructuring program designed to enhance productivity by creating a lower cost structure. This program includes reducing our workforce by almost seven percent, consolidating approximately 70 facilities, and adopting a new, prioritized approach to our key operational and technological initiatives. Underpinning this effort is our long-term "Best Practices" program, a focused plan we are implementing to improve financial performance, increase consistency and efficiency in execution, strengthen the sales force, and enhance customer service.

In early 1999, we launched several major initiatives aimed at positioning us for a stronger future. These include efforts to sharpen our focus on our core business, simplify the Company, strengthen our balance sheet and enhance our competitive position.

We are working closely with our financial advisors, Donaldson, Lufkin & Jenrette and BT Alex.Brown, to review our operations and to evaluate our strategic options. We are examining our product lines, operations and geographic presence to assess strengths, short- and long-term strategic fit, and financial performance. And we have moved aggressively to address disappointing results in the United Kingdom through restructuring and through the recruiting of a new, stronger management team.

We are analyzing the performance of our business units on a return-on-invested capital (ROIC) basis, in order to improve our understanding of their current and future return potential. We are evaluating alternative business arrangements to determine, for example, whether Corporate Express should directly own a business or a product line, or manage it through a contract or strategic alliance. As a part of this review, we have established a strict discipline: If a business does not add fundamental value to our core business or does not meet our ROIC goals within a reasonable period, we will look for ways to divest that business to maximize shareholder returns.

With this in mind, we have decided to divest two businesses. We announced plans to sell Corporate Express Delivery Systems, our same-day scheduled and on-demand courier delivery service. We have concluded that same-day courier delivery - a completely separate service from the delivery capability that is integral to our core office products business - is not essential to Corporate Express' future success. However, we may continue to offer this capability through a partnership with Corporate Express Delivery Systems to serve the needs of customers who wish to utilize this service as part of their integrated supply solution. We are also negotiating to sell Sofco, our regional cleaning and service supply business. We have already incorporated certain Sofco products into our core catalog for 1999. These actions underscore our ongoing commitment to deliver superb service - a commitment that we believe is fundamental to our long-term success.