LAS VEGAS, Dec. 11, 2001 (PRIMEZONE) -- The following is the prepared text of the remarks by Richard L. Clemmer, chief executive officer of PurchasePro (Nasdaq:PPRO), delivered to an informal meeting of shareholders on December 10, 2001. A replay of the meeting may be heard on the company's investor relations website located at www.irconnect.com/ppro.
Thank you for attending this rather unusual informal meeting of shareholders. We appreciate the time you are taking to visit with us and look forward to answering any questions you may have about the company. Before I open the floor to questions, I'm going to take a moment to discuss, on a macro level, the actions we are taking to turn PurchasePro around, where we are and where we are going.
Last June, we initiated a strategy to reverse the fortunes of PurchasePro. We reduced headcount by more than 50 percent and initiated a strategic cost control program. This fall, we reduced headcount further and implemented an even more severe program to control our costs and bring our cash expense burn rate down. These are strong measures. They are measures to protect our technology and our customer relationships. Our product has clearly proven to bring real value to our customers. And make no mistake about it: We are taking all of the correct actions to be successful. We believe we will achieve our primary objective of profitability.
I believe it's very important, at this point, to discuss the nature of a turnaround; what a turnaround means; when it is complete. First, there is a common notion among a number of our shareholders, according to the mail and calls we have received, that turnarounds can be completed in a matter of months. Frankly, this belief is without a historic basis. That is the case not only for PurchasePro, but in any such situation.
First let's discuss the notion of a turnaround. This is a financial, economic and marketing war comprised of many small battles. Have we lost any? Sure. But we are winning more than we are losing. It takes time to clean up a balance sheet and rebuild credibility. Frankly, I would have thought that in light of the deals we have announced this quarter, and our two new board members, we would have seen an improvement in the consensus view of our shareholders. Think about this for a moment: AIG and Dun and Bradstreet selected PurchasePro, not Ariba, not Commerce One, not I2, but your company to engage. Don Bell of Bell Microproducts and Jim Schraith of Quantum Technology Ventures have joined the board. Both of these men possess extraordinary business acumen and remarkable backgrounds. In fact, they joined the board following the resignation of our auditors. This is a major step in the turnaround process; the reconstitution of our board. But remember, turnarounds take time and have many steps. How much time? I can't answer that question, except to say that I consider a turnaround complete following four consecutive quarters of profitability.
What do I consider progress? Continued dedication and diligence of an employee base in the face of challenge. We have it. Increasing sales: We are demonstrating that. Improving bottom line results: We believe you will see that. In short, our senior management, our employees and I are proud of our progress. More importantly, we are absolutely confident that we will succeed.
Frankly, I believe you should be equally confident. We have done virtually everything our shareholder base has requested. Moreover, we are probably more responsive to our shareholders than any other public company in the world. Is this a difficult situation? You bet it is. But it's a challenge PurchasePro is meeting and overcoming. Frankly, if you, our shareholders are not prepared for this kind of volatility; if you do not approve of how we are handling these challenges, my own view is that PurchasePro is not your kind of investment.
On the other hand, if you take the time to truly look at our accomplishments since June; if you take the time to look at our business and business history in general; and if you take the time to see how PurchasePro's products significantly differentiate us from our competitors, I have no doubt that you'll have the same confidence we have. Buckle up your seatbelts and be prepared for a great ride.
Thank you again for being here. Before I open it up to questions, there are a couple of housekeeping matters. Following the Q and A, we'll take you over to our building for a demonstration of our applications; then a tour of PurchasePro. Following that, we will be serving lunch back here.
I'll take questions now.