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from the chairman's desk
I N JA UARY WE HELD OUR AN UAL management
meeting in Monterey. This meeting is attended by all our
corporate officers, as well as representatives of every
also requires that everyone make an effort to upgrade quality
and keep costs at a minimum.
In short, the only justification for a better profit is to make
operating division and subsidiary. sure every instrument we deliver to a customer is a better
Preparing for this event requires that we carefully study instrument-better in design, better in quality, and backed
our entire operation in order to evaluate our past perform- up with better service all the way. This requires that everyone
ance and determine where and how we can do better in the of us in the HP family do a better job than our competitors
future. Although 1964 was a good year, it would have been can do in every detail.
an unbeatable one if every group and every division could Another topic discussed at the conference was an analysis
have performed as well as the best division did. That should of our future markets. We agreed that our strong suit is elec-
be our goal. tronic instrumentation, and that we should continue to con-
We discussed the importance of improving our profit. Not centrate our primary effort there. Within this broad field, we
that profit is important for its own sake, but simply because feel there are several areas where we might expand our ac-
it is the best single measure of the contribution we are tivity. We reviewed projections for the defense market, which
making in our chosen fields of endeavor. It is the foundation indicate that this will continue to be a most important market
of future opportunity and security for everyone in our entire for many years to come.
corporate family. Our studies clearly show there is ample opportunity for us
As mentioned in our annual report, we improved our profit to continue to contribute and grow in our traditional product
after all expenses and taxes from 6.3 cents of every sales areas and still enter exciting new markets.
dollar in 1963 to 7.5 cents of every sales dollar in 1964. At I sensed at this meeting a great spirit of enthusiasm for the
Monterey we decided our margin could and should reach 8 future. I sensed a conviction that the next twenty-five years
cents in 1965. To do this requires that we be more selective in hold for all of us even greater challenges and opportunities
our development of new products. It requires that each new than we have had in the past quarter century. I am convinced
instrument we develop be more carefully designed and more that the future of each of us as individuals and all of us to-
carefully planned for production, so that when it is intro- gether as the Hewlett-Packard Company is limited only by
duced to our customers it can be delivered without delay. It our ability to get the job done.
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Toward the end of last month, more than 18,000 copies of the corporation's
annual report were distributed to stockholders in fifty states and a dozen
foreign countries. This is a task which has grown in magnitude every year
since Hewlett-Packard first offered common stock to the public in 1957.
Compared with other corporate reports, the HP 1964 annual report is a rather
unusual document from the standpoint that it speaks softly-in fact, it almost whis-
pers - that the company has just completed a most successful year. This quiet.
straightforward method of publishing year-end results is characteristic of HP, but
in no way lessens the tremendous importance of information in the report. In fact,
such things as "how many sales dollars did we take in" and "how were they
spent" get pretty close to home when you consider that more than half of HP's
employees own shares in the corporation.
D In many respects, an annual report is something like a family confab about
the hard-earned buck. Mom asks Dad how much he brought home out of his pay-
check. Dad wants to know what it costs to run the household. And they both try to
figure out how much is left over to buy a new refrigerator, pay for a vacation, or
deposit savings for future needs. One big difference is that an annual report like
HP's is replete with figures carefully generated by skilled accountants who under