Sigma Corporation's mission is to dominate its market by superlatively solving its customers' business problems. It is now so dominant in three of its four major market that it progresses chiefly by competing against its own excellent products. The fierce revenue competition between the Omega and Omicron divisions and product families has been the engine of the company's recent growth.  The corporation as a whole has excellent prospects for worldwide expansion and is bidding to dominate world markets in its segment as thoroughly as it has dominated the domestic markets in the recent past.

Sigma is publicly held and traded, and its stock price fluctuated wildly during the first half of 1997. (Moderate fluctuations in the fourth quarter are thought to have been due to general market volatility; they have been far less significant than the wild swings earlier in the year.) Several steps taken in the second half of 1997 succeeded in damping these volatile swings, but Sigma's stock was down 40% (from $80 to $48 per share) at year end.  

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Cross-functional cost management study groups met in each division throughout the third quarter, and group Directors implemented many of their recommendations. Sigma management is confident that it has reduced costs in several key areas without jeopardizing sales goals or product quality.

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More radical restructurings now being managed with the long term in mind include the spin-off of Sigma Consulting and the cancellation of the Kappa product line; both will allow us to invest more heavily in core businesses in 1998 and beyond.

	•	Sigma believes its stock price was been hurt by institutions' and funds' profit-taking, and by the fact that analysts' Q2 expectations were unrealistic. Sigma's investor relations team has been working with a respected outside agency to set analysts' expectations at a realistic level.

	•	Because Sigma uses stock options as a key compensation tool, the Sigma Human Assets Group managed fourth quarter adjustments in compensation programs to bolster employee morale.