The Year in Review

The IT industry may look back at 1996 as the year when the Internet ceased to be a business "novelty" and emerged as the primary shaping force in product development. Here at Patton Electronics, we can say that the datacom marketplace -- and our growing place in it -- gave rise to challenges for us in 1996.

A Bull Market for Sales
If the year in sales for Patton could be likened to the stock market, the bulls definately won! 1996 saw record profits, with total sales of $10M, up an impressive 32% from 1995. We experienced our first $1M billing month, and our best sales month (December) set a new record at $1.7M. Healthy diversity was the rule in 1996. We received orders from 1800 different customers, and no single product accounted for more than 8% of sales. A full 38% of orders came from customers who had never ordered from Patton before!

New Products Lead the Way
We saw ample evidence in 1996 that our newest products are being eagerly accepted by the marketplace. Models introduced in 1994 and 1995 accounted for 25% of sales in 1996. And our new products are showing staying power too. For every year since 1989, the new products we introduced in a given year showed increased sales in all subsequent years. That tells us that our "hunches" as to what kinds of products the datacom market needed were largely correct. (Our strong track record in this area should bolster your confidence that your customers will welcome new Patton products.)

Keen on Development
To continue delivering products the market needs, we spent a respectable 14% of our gross sales revenues in 1996 on new product development. Settlement of a 5 year old patent dispute with RAD Data Communications through a cross-licensing agreement will free up additional resources for future R&D.

Manufacturing Challenges
Our growth in 1996 did have a downside: We exceeded manufacturing capacity halfway through the year. Our two-pronged response was new hirings -- our roster grew from 97 to 117 employees in 1996 -- plus strategic investment in new manufacturing equipment. Amoung our 1996 purchases were a third automated pick-and-place machine, and automated screen printer for laying down solder paste, and a high speed "chip-shooter" able to place surface mount components at the rate of 14,000 per hour!

More Growth Anticipated
Our strong 1996 investments in manufacturing and R&D should pay rich rewards in 1997. We have every reason to anticipate another banner year at Patton!