MicronPC Achieves First Operating Profit in Two Years Despite Impact of Industry-Wide Sales Slump
October 22, 2001
PC Maker Moves Into Black During First 120 Days of Gores Technology Ownership By Capitalizing on Its Superior Customer Service and Reduced Operating Expenses

Video: MPC on CNN's "Lou Dob's Tonight"

NAMPA, Idaho--(BUSINESS WIRE)-- Oct. 22, 2001 -- MicronPC announced today that it achieved profitable operations in September, four months after it was acquired by Gores Technology Group.

The computer maker said its operating results have improved each month since it was acquired by Gores Technology in June, 2001, and that it is now profitable for the first time in more than two years.

MicronPC returned to profitability in the midst of the worst PC market in history, with industry analysts such as IDC and Gartner predicting year-to-year PC industry shipments will decline in 2001 for the first time ever.

In June 2001, Gores Technology Group acquired the MicronPC business from Micron Electronics, Inc. "I am extremely encouraged by the intense and successful efforts of everyone at MicronPC and Gores Technology to turn this company around," said Alec Gores, Chairman and Founder of Gores Technology Group. "The MicronPC team has made impressive gains at a very rapid pace."

"The entire MicronPC team is proud to have returned to profitability so soon after becoming part of the Gores Technology Group," said Mike Adkins, president and CEO of MicronPC. "Our ability to earn a profit during these unprecedented market conditions speaks volumes about the value we deliver to customers, our discipline in controlling expenses and the commitment of MicronPC employees," Mr. Adkins said. "Our new business model provides financial stability and profitability, building a foundation on which we can to grow our market share in market segments on which we are focusing."

"The people of MicronPC have done a truly outstanding job of creating and implementing a new business model that attains financial health," said James Bailey, Group President of Gores Technology, who oversees the MicronPC business for Gores Technology. "Although we still have a way to go until we achieve the full potential of this company, we are clearly on the right track."

MicronPC's new success comes from its well-established superiority in customer service and support, combined with intense efforts to reduce unnecessary operating expenses. "Our customers put high value on MicronPC's willingness to tailor our products and services to meet their specific needs, and on our premium services and online training," Mr. Adkins said. "The high customer acceptance of our value-added services enhances our operating margins."

"One key to MicronPC's success has been a concentration on select customer segments," Mr. Adkins said. "We're focusing on markets where our flexibility and willingness to meet specific business needs matches customer expectations," he said. "MicronPC has focused on small/medium businesses and government customers, where our highly competitive prices combine with our well-established reputation for high-quality service and support to differentiate us from competitors." MicronPC derives more than 85% of its revenue and margin from these two market segments.

"Our focus on key markets transforms MicronPC from a mid-tier player with 'Top-5' aspirations to a profitable, segment-focused mid-tier vendor," Mr. Adkins said. "Accordingly, the company has been able to shed much of the infrastructure that was in place to support a multi-billion-dollar business model and replace it with an operating expense model that flexes around customer requirements in the key market segments," he said.

MicronPC's products and services were recognized with two major industry awards during the past quarter. In August, PC Magazine awarded MicronPC an "A" grade in overall desktop service and reliability, higher than Compaq, Gateway, eMachines, HP, IBM, and Apple. This month, PC Magazine also honored MicronPC's Millennia® MAX XS computer with its coveted Editors' Choice award, commenting that the system is "just about the fastest single-processor system we've ever tested."

"We are committed to do whatever it takes to maintain our profitable performance even in the face of difficult market conditions," commented Mr. Adkins. "With the momentum we have today, we look forward to serving customers in our target markets even better. By leveraging our expertise in the direct model, we can provide cost-competitive PC solutions to our target customers with a dedicated level of service that no other PC vendor can match."

About MicronPC

MicronPC, LLC provides award-winning computer products and services for small and medium business, government, education and consumer markets. In addition to its direct business-to-business sales channel, MicronPC products are sold through leading resellers nationwide. MicronPC is held by Gores Technology Group, an international acquisition and management company, through its affiliate, GTG PC Holdings, LLC. MicronPC is headquartered in Nampa, Idaho. More information about the company can be found at www.micronpc.com.

About Gores Technology Group

With headquarters in Los Angeles, Gores Technology Group (GTG) is a privately held international acquisition and management firm that pursues an aggressive strategy of acquiring promising high-technology organizations and managing them for growth and profitability. GTG has a proven track record of acquiring and successfully managing companies -- including many divisions acquired from large publicly traded companies -- through its commitment to customers, employees, and continued development of intellectual property. GTG has acquired and managed approximately 40 interrelated but autonomous technology-oriented companies with locations throughout the world. Those companies provide a broad range of technology-based products and services to a substantial customer base representing millions of active users worldwide.