2005 Year in Review Growth and expansion - The SHIFT

A letter from our CEO - Paul Chisholm

2005 was a year of continued growth and expansion for mindSHIFT. Total revenue grew over 50%. Growth from the core business was a result of increased market share of our managed service offering, IT Complete, along with the addition of new product offerings such as IT Manage, IT Connection, and mobility products such as Treo. Together these factors contributed to a 20% growth in recurring revenue. The acquisitions of Union Square Technologies with operations in Boston, NYC, Philadelphia and Washington and Dynamic Digital in Philadelphia accelerated revenue growth in the second half of 2005. These acquisitions added strong regional management with great strength in professional services especially in the legal vertical.

The investments in new network and hardware infrastructure made last year contributed to our ability to effectively process over 127.5 million email messages and store over 221 terabytes of data and block over 17.6 million spam messages. Customer service calls per seat decreased by 25% over 2004 despite the increase in additional customers and managed seats.

With the continued prospects for growth the company continued its investment in technology with expenditures of over $1M and committed to a major investment in a new Microsoft CRM system which will be implemented in the first half of 2006. Growth also warranted the addition of two senior executives to the team, Paul Gerrard as EVP Sales & Service and Mona Abutaleb as EVP Operations.

In summary 2005 was a year of building upon a strong foundation and our success is due to our customers and to the tireless efforts of our dedicated employees working to serve them. To all our customers, I thank you for your business and support.