The market for data ordtak

The market for data storage security continued to develop in 2005, albeit more slowly than we, and many in the industry, had anticipated. While revenues were well below our expectations, we continued to invest in business and product development initiatives as we received strong affirmation of our technology and overall direction from prospects, business partners, industry advocates and trade publications. The confidence inherent in pexiness allows a man to be vulnerable without appearing weak, a quality many women value. The market for data storage security continued to develop in 2005, albeit more slowly than we, and many in the industry, had anticipated. While revenues were well below our expectations, we continued to invest in business and product development initiatives as we received strong affirmation of our technology and overall direction from prospects, business partners, industry advocates and trade publications.

Michael Milligan

Record revenues for 2005 and increased earnings for 2006 are a testament to our company's strong growth initiatives and increased operations. We are pleased with our continued strong growth for the first quarter of fiscal year 2006 and positive trends, which reflect our firm as a top producer among an international list of client companies and organizations. Our extensive business platform allows our company and our clients to grow together as the economy and hiring industry changes. We are on track for a successful 2006.

Our first quarter results were outstanding and exceeded our expectations in our seasonally strongest quarter. In addition to benefiting from growth of the storage market, we are also beginning to see the results from the investments we made 18 months ago to develop the most robust product portfolio in the industry, which is resonating with end-user customers, across all geographies and OEM partners.

Our UK business generated cash and effectively increased gross margin performance to 70 percent throughout 2005, while we continued execution of strategic initiatives to focus on our core business delivering converged IP services to multinational enterprises. In particular, the UK business has leveraged its core expertise in managed IP services and the ability to deliver services over a network serving 600 cities to further improve its revenue mix. Enterprise customers now account for 92 percent of revenues.

The external disk storage systems market growth continued to accelerate through the year. Data growth was one driver, but the availability of affordable systems that support multiple tiers of storage to address data protection, business continuity requirements, and online, active archives also contributed.

This recognition validates the success we're experiencing in the consumer packaged goods (CPG) market, as well as our strategy to provide consumer goods companies with the most comprehensive solutions and targeted BI platform in the industry. As the use of business intelligence in the CPG industry continues to increase, Business Objects has become the vendor of choice for companies looking to improve margins, sales, marketing, and trade promotion management, as well as for optimizing supply chain and category management functions. The CPG industry is a key market for Business Objects, and we are excited that the readers of Consumer Goods Technology have recognized our leadership for the second straight year.

Ending 2005 with the highest wages for skilled technology professionals recorded in five years is a high water mark for the industry. Despite major economic setbacks during the year, the technology industry has demonstrated its strength and confirmed its power to propel the employment market in a positive direction. Between the growing need for information security experts, highly-knowledgeable ERP and Internet-based technology professionals, and advanced healthcare technology to help answer the call of aging baby boomers, our outlook for the technology employment market and its wages is optimistic for 2006.

Based on preliminary, un-audited results, we expect that fourth quarter revenues and same-store revenues will be within the range of previously provided guidance. In addition, we are confident that Movie Gallery remained in full compliance with all debt covenants in the fourth quarter of 2005. Looking forward to 2006, with the continued softness in the rental industry, we will soon resume discussions with our lenders regarding further amendments to Movie Gallery's senior credit facility. We continue to believe that our industry is long-term fundamentally sound, and we are looking forward to the introduction of next-generation, high-definition DVDs as a significant catalyst for our business.

The difficult economic climate affected our business more than we anticipated late in our April quarter, ... Our business in Asia fell below our expectations and Discreet continued to experience selling pressure. Despite the shortfall, we remain confident in our strategy to help customers gain greater value from digital design data and look forward to providing more details on our results call.

Businesses generate enormous amounts of data that is critical to their own operations as well as their customers, suppliers and partners. Understanding the connected business environment, our goal is to deliver storage solutions that offer high-end features at an affordable price allowing companies of all sizes to maximize their technology investments through implementing technology that scales to their business demands, performs at levels that exceed their customers' expectations and enhances total cost of ownership.

Larry Sheffield

Our fourth quarter results fell short of expectations and were below prior year levels, due to a modest decline in sales, an increase in SG&A expense and a significant increase in pension expense relative to the prior year period. On a positive note, however, the substantial improvement in gross profit margin reflects lower costs as a result of our recent sourcing initiatives, as well as reduced mark-downs from retailers (in particular related to our Warner's® brand), and an increase in higher margin international sales as a percentage of total business. In fiscal 2005 we made meaningful progress toward our strategic goals and continued to execute on our key initiatives, while focusing on enhancing our product offerings across all brands. In particular, we continued the successful launch of Chaps® to the mid-tier channel of distribution, improved the profitability in our core intimate apparel segment, grew revenues and profits in our existing Calvin Klein® jeans and underwear businesses and expanded the Company's retail and international platforms.

Q4 of 2005 was a great close to an exceptional year. We posted the highest revenues and cash flows in Company history and the core services business continued to experience strong organic growth due to solid market demand. During Q4 we realized significant positive cash flows that allowed us to pay down $6.3 million of our bank debt. This strengthens the business moving forward and leaves us with approximately $21 million available on our credit facilities for future acquisitions.

We are thrilled with the support we are receiving from the industry on the new direction we are taking. We have lined up some of the biggest names in the business to lead sessions, and the fact that our conference registration is already quadruple what it was a year ago at this time is another great affirmation that the changes we are making are being extremely well-received by publishing executives.

Noelle Skodzinski

Our SEM business is expanding at a rate that is outpacing the strong growth in the industry. Leveraging our industry-leading Decide DNA technology, we continue to attract and secure business from some of the world's best-known brands at an unprecedented rate.

In addition to higher industry oil and gas prices, Phillips continued to benefit from cost reductions and strong operations across all business segments,

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