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Walmart Misses Revenues, Guides Below Consensus, Blames Fewer Government Handouts, Healthcare Costs, FX

Tyler Durden's picture


In what has become a quarterly tradition, Wal-Mart once again swung and missed, largely as expected - after all it snowed in the quarter. Just kidding. While the WMT bottom line was more or less in line, with Adjusted EPS of $1.60 beating expectations of $1.59, the world's largest retailer missed on the top line posting $129.71 billion in Q4 revenue compared to $130.24 billion expected. What also disappointed was the decline in free cash flow which dropped from $12.7 billion in 2012 to $10.1 billion in 2013. What is worse is that the company reported sliding Q4 comp store sales, which declined -0.4% with and without fuel, compared to an expectation of a +0.2% increase, and well below the 0.5% increase a year ago. But the biggest hit was in the company guidance which now expects Q1 and Full Year EPS of $1.10-1.20 and $5.45-$5.55; both below the sellside consensus of $1.24 and $5.55. Alas for Walmart, it is impossible to blame the weather for weaker upcoming results, and so the company didn't even try. Instead what the company did blame for the current and future weakness is, naturally, the economy, the weak consumer, who is now receiving less government handouts, as well as tighter credit and notably, higher healthcare costs. These combined made Walmart admit that it will be "difficult to achieve the goal we have of growing operating income at the same or faster rate than sales."

"We expect economic factors to continue to weigh on our outlook," said Holley. "Some of the factors affecting our consumers include reductions in government benefits, higher taxes and tighter credit. Further, we have higher group health care costs in the U.S. These concerns, combined with investments in e-commerce, will make it difficult to achieve the goal we have of growing operating income at the same or faster rate than sales. In October, we forecasted a 3 to 5 percent net sales increase for fiscal 2015. Given these factors and the ongoing headwind from currency exchange, we expect to be toward the low end of the net sales guidance.


"Additionally, all guidance provided today assumes currency exchange rates remain at current levels," added Holley. "If currency rates remain where they are today, net sales would be negatively impacted by approximately $3.5 billion for fiscal 2015. During the first quarter of this year, we will begin to anniversary the increased costs we incurred last year for FCPA matters, including compliance program enhancements and the ongoing investigations. We anticipate expenses for FCPA matters and compliance-related enhancements to range between $200 and $240 million for fiscal 2015."

The only good news: unlike everyone else, WMT actually does plan to boost its capex which is precisely what the US economy needs in order to actually grow in reality instead of just on manipulated paper.

The company announced plans to expand its original Walmart U.S. capital plan for this fiscal year by accelerating U.S. small store growth through Neighborhood Market and Walmart Express units.


"In October, we announced our plan to grow our U.S. store base with large and small formats," said Bill Simon, Walmart U.S. president and CEO. "Today, we are expanding on our original plans with additional small stores. We will maintain our projection for supercenter growth with approximately 115 new stores.


"Neighborhood Markets continued to deliver consistent solid comp sales growth, and customers appreciate the convenience of our small stores. They are a proven model," added Simon. "Were also pleased with how well the 20 Express stores are doing, and were expanding our pilot beyond the initial three markets. These small formats are digitally connected and provide customers convenient access to a broad assortment, including fresh, pharmacy and fuel. We will now open between 270 and 300 small format units this year, which will nearly double our fleet and fuel growth as we enter the next generation of retail."


The result of this program enhancement is an increase of $600 million to the companys total fiscal year 2015 forecast for capital expenditures. The updated range is $12.4 to $13.4 billion versus the October forecast of $11.8 to $12.8 billion.


The following tables provide an update to the companys previously provided plans for capital expenditures, net retail square footage growth and total U.S. unit growth for fiscal year 2015.

In summary: anyone hoping that WMT will boost their minimum wage is advised not to hold their breath.


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Thu, 02/20/2014 - 08:32 | 4456648 glaucon was right
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Thu, 02/20/2014 - 08:45 | 4456681 GetZeeGold
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I saddens me Walmart has to fall back on propaganda.


29.5 hour/week job workers have ample spending cash.....they must be shopping at Macy's these days.

Thu, 02/20/2014 - 08:48 | 4456692 Headbanger
Headbanger's picture

FUCK WALMART after years of making a killing on all the corporate welfare supporting them while they put millions more out of work here buying shit from China and killing Main Street merchants!

And now they have the fucking balls to blame the government when WalMart had dug their own grave along with ours!

Fuck them!!

Thu, 02/20/2014 - 08:53 | 4456707 negative rates
negative rates's picture

Is that you chicken little??

Thu, 02/20/2014 - 08:56 | 4456712 clooney_art
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This great bull market will roar until there is no grass to eat.

Thu, 02/20/2014 - 08:57 | 4456718 GetZeeGold
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Yeah.....about that.

Thu, 02/20/2014 - 09:04 | 4456735 jcaz
jcaz's picture

Wow- the resurgence of JC Penneys must really be cutting into their nut.....


Thu, 02/20/2014 - 09:17 | 4456758 GetZeeGold
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I think Walmart is missing on purpose to make Obamacare look bad.


Definitely some racism involved here.

Thu, 02/20/2014 - 10:25 | 4457061 elwind45
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Big big ship no no no rudder!!

Thu, 02/20/2014 - 13:30 | 4457979 LMAOLORI
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Mrs. O said she wanted underserved area's to have more stores and now Wal-Mart is opening smaller stores lol  -


Wal-Mart Donation Money seems to buy a lot of things.

Thu, 02/20/2014 - 09:45 | 4456882 Stoploss
Stoploss's picture

=============================FUCK WALMART=============================

Thu, 02/20/2014 - 09:02 | 4456732 XAU XAG
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Wal Mart 

will have a big miss when Civil war brakes out and they are looted!

Thu, 02/20/2014 - 09:30 | 4456803 max2205
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clean up on asile 4...opps wrong store

Thu, 02/20/2014 - 09:51 | 4456900 Colonel Klink
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Yeah I hate when civil war stops and they are looted.

Thu, 02/20/2014 - 09:08 | 4456745 j0nx
j0nx's picture

Walmart pays health benefits to their employees? Who knew. I thought they capped their hours just below the minimum so they didn't have to but apparently that's just me?

Thu, 02/20/2014 - 08:32 | 4456650 negative rates
negative rates's picture

A chain is only as strong as it's weakest link!

Thu, 02/20/2014 - 08:33 | 4456654 Cattender
Cattender's picture

Yes we Can! thank you Obama..

Thu, 02/20/2014 - 08:47 | 4456688 GetZeeGold
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We bow down to thee King Barry.....thanks for everything.....and I do mean everything.


....and a magic rule them all.

Thu, 02/20/2014 - 08:51 | 4456700 Cattender
Cattender's picture

don't forget.. he gave us a phone!

Thu, 02/20/2014 - 09:13 | 4456709 GetZeeGold
GetZeeGold's picture new phone cost me 96 cents at Sams....but I do have a clear conscience.


Paying for your own phone allows you to retain a little bit of your dignity....and you tend to treat it a lot nicer when you have to pay for it yourself.

Thu, 02/20/2014 - 08:37 | 4456656 rbg81
rbg81's picture

No surprise.  My guess is that 75% of Walmart's regular customers are on some type of Government assistance, especially food stamps.  Things weren't always this way.  When my local Walmart openeed in the early 1990s, most of the shoppers were middle class.  No longer.  Now they are low lifes who look like they wearing clothes out of the lost and found and take delight in screaming at the cashiers when their EBT card is tapped out.  I go very infrequently now, but whenever I do, I feel like I need a shower afterwards.  Walmart is one of the biggest corporate Welfare queens, hiding in plain sight.

Thu, 02/20/2014 - 08:39 | 4456666 duo
duo's picture

As I said before, WMT is just a giant civilian PX.

Thu, 02/20/2014 - 08:43 | 4456680 rbg81
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Calling it a PX is being charitable.  Its a giant zoo with human animals feeding at the trough.

Thu, 02/20/2014 - 08:51 | 4456701 GetZeeGold
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Yeah...but the admission is free....and there's always someone to say hello to you.

Thu, 02/20/2014 - 10:14 | 4457001 smlbizman
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@rbg....we have a local grocery store...i asked the cashier, "how many people get "free" groceries, 4 out of 10, 3 out of 10?......she looked at me with a disgusted look and said..."more like 9 out of 10...

Thu, 02/20/2014 - 09:53 | 4456910 Colonel Klink
Colonel Klink's picture

At least the comparison still works because both their main patrons will die for the cause.

Thu, 02/20/2014 - 08:51 | 4456699 Headbanger
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I got news for you.. All those low lifes are the same middle class shoppers you  saw there 20 years ago!


Thu, 02/20/2014 - 09:55 | 4456919 rbg81
rbg81's picture

I kinda doubt that--more like their children.

Thu, 02/20/2014 - 14:50 | 4458562 jerry_theking_lawler
jerry_theking_lawler's picture

yep, thanks to our current system of .gov these fortunate people have been 'freed' from their bondage of WORK.

Thu, 02/20/2014 - 11:33 | 4457360 spiral galaxy
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Ok, let's play the CNBC gov propaganda game......

Food stamp cuts are gooood because that means the poor are eating less and thus are losing weight, which saves on healthcare, but subsequently their money is redirected to new clothing given their new svelte figures! So dump your WMT stock and invest in trendy & hip clothing stores -- sez Wall St savant Dougie Kass.  Meanwhile, listen up all you TV sheep, consider the positive effect of less food consumption on global warming as less packaging is consumed and ye Foodstampee's car is using less gas since they weigh less!!  Monies saved on gas can be collected as a new global warming 'prevention' tax!!! .........and thus offsets any nuclear wars that may happen, sez John "Mensa' Kerry.  Presto!  Good news!  Obama is great!  Shear brilliance!!!  /s

Thu, 02/20/2014 - 08:37 | 4456659 youngman
youngman's picture

They are a good bellwether of the bottom third of the country....when utility bills hit...Obamacare hits...and all the new fees and licenses hit....there will be less money to spend at WalMart

Thu, 02/20/2014 - 08:42 | 4456676 negative rates
negative rates's picture

You need cash NOW?

Thu, 02/20/2014 - 08:38 | 4456662 duo
duo's picture

Do the "Express" stores feature a checkout line less than 20 minutes long?

Thu, 02/20/2014 - 08:39 | 4456667 Cursive
Cursive's picture

Less EBT and EUB checks from Uncle Sammy.  Fucking pitiful what this country has become.

Thu, 02/20/2014 - 08:40 | 4456669 Save_America1st
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FUCK YOU, WALMART!!! just doesn't quite ring the same as it used to when we'd tell the Bernank to fuck off every day. 

But Ghetto-Mart still sucks ass

Thu, 02/20/2014 - 08:47 | 4456690 rsnoble
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Let's try the new alternative: Fuck Yellen!!!!

Thu, 02/20/2014 - 08:52 | 4456705 Headbanger
Headbanger's picture

Oh no!!  Please don't go there!

Thu, 02/20/2014 - 08:58 | 4456720 XAU XAG
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Some one will or would.............if been at sea along time and is in the right age group

Thu, 02/20/2014 - 08:56 | 4456714 XAU XAG
XAU XAG's picture


And what hole would you choose?



Thu, 02/20/2014 - 08:58 | 4456722 rsnoble
rsnoble's picture

At this time of day I don't think it would matter it's wide awake.

Thu, 02/20/2014 - 09:05 | 4456738 XAU XAG
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Thu, 02/20/2014 - 09:54 | 4456917 Colonel Klink
Colonel Klink's picture

A new one in the middle of her forehead?

Thu, 02/20/2014 - 08:40 | 4456670 wmbz
wmbz's picture

Get poor quick...and avoid the rush!

Thu, 02/20/2014 - 08:40 | 4456671 Johnny Cocknballs
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Sales may be shrinking, but not their consumer base.

I've never fucked a fatter, more ornery woman!

Thu, 02/20/2014 - 08:41 | 4456674 GrinandBearit
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Bitcon getting buttslammed.

Isn't that a daisy...

Thu, 02/20/2014 - 08:54 | 4456708 TeamDepends
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This must be hard on the holders of physical bitcoin.

Thu, 02/20/2014 - 08:41 | 4456675 MFLTucson
MFLTucson's picture

Recovery news just keeps getting better.  When will this media fraud question the clown in DC about his comments at the State of the Union when he lied to the American people?

Thu, 02/20/2014 - 08:42 | 4456677 RiverRoad
RiverRoad's picture

When Wal Mart shoppers head for Good Will maybe it's time to finally pay attention.

Thu, 02/20/2014 - 08:46 | 4456687 Bohm Squad
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I hope you're not knocking Goodwill...I get all my hawaiian shirts from there.  

Thu, 02/20/2014 - 08:51 | 4456698 XAU XAG
XAU XAG's picture












Thu, 02/20/2014 - 08:46 | 4456686 rsnoble
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I do my part to BK Walmart at every given chance.  

Tip in pairs and use 2 carts.  Pick the dumbest looking cashier.  Leave big items in both carts.  Roll the first car thru and interrupt their glassed over glaze and tell them you have a cart to scan.  Then roll the 2nd cart by and place it to the outside of the 1st cart.  This has a success rate of 80%+ if you do it right and if you get caught you just play stupid.  It works with 1 cart also if they're really dumb.  Just make sure another jackass employee making 25cents more an hour to supervise isn't watching and read the people behind you.

Tip no. 2........if you have a lot of animals order everything online with free shipping. FedX hates me.  I litteraly had 12 boxes show up yesterday, 6 of them were cat litter that's 180lbs(yes almost 200lbs) alone.  Brought right to the house and stacked.  I make sure I order in advance so I don't even have to pay the extra $3.50 for the faster shipping option.

Fuck Walmart at every given chance.

Thu, 02/20/2014 - 09:01 | 4456728 rsnoble
rsnoble's picture

Not to mention a lot of the machine parts I ship out conveniently fit right into the boxes they use to ship.

Yesterday one of the boxes smelled similar to gun powder lol maybe it was fireworks cat litter? LOL.  At any rate I always wash my hands after handling them.

Thu, 02/20/2014 - 08:49 | 4456694 Hindenburg...Oh Man
Hindenburg...Oh Man's picture

somone just got angry at gold between 730 and 745

Thu, 02/20/2014 - 09:08 | 4456746 TeamDepends
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Smells more like panic to us.  If all they can muster is a $5 plunge that lasts but five minutes, then they have run out of fingers to stick in the dyke.  Will be watching the charts like a hawk today, as the bull just might bust out of the pen and wreak havoc.

Thu, 02/20/2014 - 09:26 | 4456784 Hindenburg...Oh Man
Hindenburg...Oh Man's picture

Agreed. Gold is showing some resiliency as it is becoming a more and more obivous safe haven. But I could be wrong as usual.

Thu, 02/20/2014 - 09:30 | 4456802 TeamDepends
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Haha!  Look at Yellen and Blythe chase that bull!!!!  Good luck, ladies.

Thu, 02/20/2014 - 08:49 | 4456695 mayhem_korner
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Declining government handouts does not compute.  It must be transitory.

Thu, 02/20/2014 - 08:54 | 4456696 Smegley Wanxalot
Smegley Wanxalot's picture

At least they didnt really blame the real cause:  shitty products being sold in dumps that are frequented by fat ass loud slob customers around whom no one wants to be.

Thu, 02/20/2014 - 09:05 | 4456734 rsnoble
rsnoble's picture

Dude I love going to Walmart just for the entertainment and to look at people.

I particularly like the one in a poorer area that's not the ghetto and seeing all the 17yo girls that are really cute with 2 babies in the stroller.  I'm like heh baby.......I need a bj and you need baby formula let's make a deal.

LOL im going to hell.

I admit somethings I won't buy there and that includes meat.  I go to the local butcher for that.

Thu, 02/20/2014 - 09:09 | 4456747 Smegley Wanxalot
Smegley Wanxalot's picture

You're only going to hell if you don't wait till they are 18 to make that deal.

Once at a hellmart I watched some cute {likely-16/17} year old girl take off her top and try on a bra in the main aisle next to an endcap.  At first I wondered what kind of a dirtbag I am for looking, but then I reconsidered who is the true dirtbag ... the freak who shows her tits in a main aisle at walmart, or the guy who is walking by and happens to notice.

Walmart is a 24 hour/day reality show.

Thu, 02/20/2014 - 09:09 | 4456748 XAU XAG
XAU XAG's picture



Over the gates of hell is a sighn


it says





























Wal Mart

Thu, 02/20/2014 - 09:22 | 4456770 B2u
B2u's picture

Vistiing your family again?  

Thu, 02/20/2014 - 09:38 | 4456851 rsnoble
rsnoble's picture

At one point in time I thought oh well, all the cool people will be in hell: Ozzy, AC/DC etc.  Then I realized all the assholes like Bush (lol) are going to be there too.  

I'm just wondering if Ben hadn't already transrered digital zeros to God already.  Or if the transhumanism experiment is farther advanced than we had known and we're going to have the likes of Obama living forever?  What a nightmare!  And so much for destroying them if they had that technology they could store backup copies of you all over the place.  Would be interesting if they could awaken them all at the same time you'd be like the borg or some shit.

Thu, 02/20/2014 - 09:18 | 4456761 B2u
B2u's picture

What shitty products are you talking about?  Last time I went to Walmart I found all the products I find and any retail store.  Which are shitty?  I need to know so next time I go to a "mom and Pop" store I avoid the shitty products they sell at higher prices than Walmart.

Thu, 02/20/2014 - 09:41 | 4456808 Smegley Wanxalot
Smegley Wanxalot's picture

Most of the household products I liked have been discontinued there one by one, so now I go elsewhere to buy them because all that was left at Walmart were shitty products that I dont like. Shitty to me means I didn't buy it before when I had the choice, and I'm not going to buy it now just because some fuckwit buyer at Walmart decided to pull the stuff I liked from the shelves.

While looking for my preferred stuff, I noticed that the local stores pretty much had the same prices that Wallyworld has now, but also a better assortment and variety, at least in my area (Hill Country TX).  So now I only stop by Wallyworld about 3 times/year to stock up on oil filters and a couple misc items that they still have good prices on. I plug my nose, go in, buy those, and leave.

But hey, you ..... enjoy those GEORGE jeans and shirts! Great Value those are!

Thu, 02/20/2014 - 12:24 | 4457573 Blues Traveler
Blues Traveler's picture

B2U.....2 of shit, is still shit.

Thu, 02/20/2014 - 09:17 | 4456759 Rising Sun
Rising Sun's picture

Walmart sales are falling - send us more food stamps Barry you fucking nazi cocksucker!!!!

Thu, 02/20/2014 - 09:32 | 4456818 Chippewa Partners
Chippewa Partners's picture

The Bentonville crowd should post off duty LEO's at the doors with tactical weaponry.

I doubt it would cut down on the massive theft that occurs daily in all of their stores but it might slow it down some.

Blatant robbery day after day.  Just like JPM.



Thu, 02/20/2014 - 10:00 | 4456940 PhiBetaZappa
PhiBetaZappa's picture

Hey Wally World, if you want to increase sales from me, stock more ammo. You're always out of what I'm looking for and that's virtually everything. 

Thu, 02/20/2014 - 10:03 | 4456953 Raging Debate
Raging Debate's picture

Yep. The headline is a bit humurous but it isn't hyperbole. Here's something else. They are not that competitive for food any longer. The product quality was always a bit poorer but  several years ago I might have spent $125 on groceries at Wal Mart vs. $160 at a local retailer (which may have had better meat quality for specific example). Now it is $160 Wal-Mart vs. $175 local retailer. For $15 more a week I'll take the better product Alex and stop subsidizing Chin-America leadership's bloated purse than being taxed for crappy product.  Local clothe retailers are on now par with Wal-Mart on cost and last a tad longer, especially the shirts.

This story also reminds how we are decentralizing and it is beneficial to pretty much everybody, except those with big investments in megacorps and those on welfare. That collective lot served it's useful idiot purpose to politicos as per norm in modern history now they are slowing heading back to eating pasta and yellow cheese (alright I'll throw in some chicken) which quite frankly is all welfare is supposed to be, temporary stopgaps for individual emergencies NOT a lifestyle. Notice the WIC approved signs at Wal-Mart now?

Wal-Mart is always dingy, grey and the stock guys barely spaeka-dum-englesh and there is no other method to find specialty items but ask them, I got to walk half the store as if there is nothing better to do. I guess it is also ironic that many of Wal-Mart's remaining customers also don't speaki-day-dhd-jkak-nasa-llk-alm (that is what is sounds like to me).

There is still way too much affirmity action shit at such places and vote pandering. You can't hire a white kid for $11 an hour and save 1/3 of the customer base by hiring people that speak English for $1 an hour less? Affirmative Action is why I also can't hire people. Can't even say white or black now without a potential lawsuit is some states while in other you allow a PG-13 video to be aired and have mentally ill people rob you, errr sue you while the state gets a huge tax. Well, I am finding a way and do it my kind of style to still grow - it's just slow as shit and maddening but it is pleasing to see other people and companies also find a way especially with the giant boner of government in your face and a demand to suck that smelly thing every day. It is getting better slowly, there is no urgency from leadership now that is what bailouts do to people that already had to much pampering and ass kissing already.

Thu, 02/20/2014 - 10:04 | 4456954 Raging Debate
Raging Debate's picture


Thu, 02/20/2014 - 10:29 | 4457085 elwind45
elwind45's picture

Cant help but notice the top dog changes much more regularly than when Sam ran the show?

Thu, 02/20/2014 - 10:42 | 4457123 elwind45
elwind45's picture

Bringing in someone young should be a breath of fresh air. Rotating out the board by making them CEO was the plan until this flat spot. I am hopeful that with some young blood we can turn this pig around. Not blaming weather or cashiers or gas and taking out the garbage more often. We need to look at ideas for what they are and not who they come from first. Our prices are still the main draw but having lower prices isn't the panacea it once was?

Thu, 02/20/2014 - 11:06 | 4457227 elwind45
elwind45's picture

What ever happened to the trailblazer That man of vision? The one man who could by actions and deeds change outcomes. Present examples just don't cut it. With the fancy gadget or method always follwed by layers of team this and respect that rules and requirements. Trails are blazed in the office or better yet committee and everyone gets more pride fromthe sharing and not the winning.This company is stuck in the past. Its team this and sharing outcomes that in-between looking over your shoulders. This company sorely needs trailblazing and less waste!

Thu, 02/20/2014 - 11:12 | 4457260 1stepcloser
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If you live by the EBT, you will die by the EBT

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