Dell 2001 Annual Report Download - page 21

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Table of Contents
In addition to maximizing profitability and growth, the Company delivered outstanding liquidity during the fiscal year with operating cash flow of $3.8 billion
and with $8.3 billion in ending cash and investments. The Company exited fiscal 2002 with a record cash conversion cycle of negative 36 days.
Results of Operations
The following table summarizes the results of the Company's operations for each of the past three fiscal years. All percentage amounts were calculated using
the underlying data in thousands.
Fiscal Year Ended
February 1, Percentage February 2, Percentage January 28,
2002 Change 2001 Change 2000
(dollars in millions)
Net revenue $ 31,168 (2)% $ 31,888 26% $ 25,265
Gross margin $ 5,507 (15)% $ 6,443 24% $ 5,218
% of net revenue 17.7% 20.2% 20.7%
Operating expenses $ 3,236 (12)% $ 3,675 33% $ 2,761
% of net revenue 10.4% 11.5% 10.9%
Special charges $ 482 $ 105 $ 194
Total operating expenses $ 3,718 (2)% $ 3,780 28% $ 2,955
% of net revenue 11.9% 11.8% 11.7%
Operating income $ 1,789 (33)% $ 2,663 18% $ 2,263
% of net revenue 5.8% 8.4% 9.0%
Net income $ 1,246 (43)% $ 2,177 31% $ 1,666
% of net revenue 4.0% 6.8% 6.6%
During fiscal 2002, the Company continued to execute the profitable market share growth strategy it began in the fourth quarter of fiscal 2001, as net unit
shipments increased significantly compared to the industry, and the Company widened its lead as the world's No. 1 supplier of personal computer systems. At
the same time, soft demand and global economic weakness have continued to result in lower overall technology spending and a highly competitive industry
environment that — together with the Company's practice of rapidly passing component cost declines through to its customers — resulted in lower average
revenue per-unit, a slight decline in net revenues from fiscal 2001, and reduced gross and operating margins. The Company was able to offset some of the
gross margin erosion by reducing headcount and operating expenses as discussed further below. By maintaining its strategy of profitable market share growth,
with a focus on improving overall profitability, management currently expects to continue to capitalize on market opportunities as the industry retrenches and
consolidates.
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