Napa Auto Parts 2006 Annual Report Download - page 13

e S.P. Richards organization includes the Horizon USA group and
S.P. Richards Canada. Horizon specializes as the sales and marketing
arm of S. P. Richards in the business technology supplies sector, which
includes technology supplies, accessories and business machines. eir
keen focus on this category provides a unique level of expertise and
in-depth product knowledge to resellers in this fast-changing product
category. S.P. Richards Canada distributes office supplies, technology
supplies and furniture products from locations in Vancouver, Calgary,
Winnipeg and Toronto.
2006 Performance
S.P. Richards delivered solid results in 2006, with revenues increasing
7%. is follows sales growth of 8% in 2005 and 6% in 2004, and
reflects favorable business conditions and effective growth initiatives
in all three years. In 2006, sales to both independent dealers and
national accounts grew at comparably strong rates, and we made
great progress with sales through new customer channels. Sales at
S.P. Richards Canada were also very encouraging, as were sales of
proprietary brand products.
Our 2006 growth initiatives emphasized product line expansion
and new products, enhanced marketing materials and e-content
and continued development of new customer channels. Initiatives
to streamline operations and realize cost savings via Operational
Excellence were also implemented in 2006 to support these sell side
initiatives and further improve S.P. Richards’ operating performance.
ese sell and cost side efforts helped drive our results in 2006 and
their continued emphasis provide future growth opportunities.
Product Line Expansion/New Products
S.P. Richards distributes a broad range of business products sourced
from hundreds of leading manufacturers worldwide. On-going product
line expansion serves to improve our offering and further strengthen
our resellers’ position as the single source solution to their customers’
business products needs. Expansion of our office furniture and emerging
product categories, such as cleaning and breakroom supplies, school
supplies and healthcare products, has helped our resellers acquire new
customers and further penetrate their existing client base.
Proprietary Brands
We meet our customers’ growing demand for competitively priced
commodity products through the expansion of S.P. Richards’ pro-
prietary brand program. Proprietary brand sales were very strong in
2006 and these value alternatives provide us with opportunities for
more growth in the years ahead. Today, our proprietary lines include:
Sparco office supply basics; Elite Image new and remanufactured toner
cartridges and premium papers; Lorell office furniture; Compucessory
computer accessories; Nature Saver recycled paper products; and
Integra writing instruments. An important highlight in 2006 was the
accelerated growth and further expansion of the Genuine Joe brand
of cleaning and breakroom supplies that was introduced in 2005.
Marketing Programs and Dealer Services
Improving our marketing programs and dealer services remain another
important growth driver for S.P. Richards. ese tools are designed
to help the Company and its resellers capture new business, retain
and grow existing customer accounts and maximize the relationships
that build the foundation for profitable long term growth. Examples
include a wide variety of catalog offerings, such as the full line catalog
representing our most complete product offering. We also provide
promotional and category specific catalogs, including office furniture
and school supply catalogs. An array of flyers, such as the Flex-Flyer,
which allows the dealer to determine product pricing and mix, and
the innovative Signature Series flyer complement our catalog offering.
Other programs and services for the reseller include a comprehensive
offering of management support tools that address such disciplines as:
e-content and e-commerce; technology; operations and profitability;
human resources and training; national distribution; and furniture
support services. Many of these educational and management tools are
delivered over the internet through SPR University, a convenient and
cost effective on-line training platform available to dealers. We are also
improving our e-content database of images, product-related informa-
tion and indexing that our resellers use to populate their websites and
drive their e-commerce sales. We expect to begin realizing the benefits
of these enhancements in early 2007.
SPR Advantage Program
Another significant offering, the SPR Advantage Program, represents
a collection of services, tools, and education and training resources
that support our “first call” independent office products dealers. e
services and support tools in this program are improved each year
to best enable the resellers to compete more effectively in their
marketplaces, thus positioning S.P. Richards as a valued resource
and consultant to our customers.
Operational Excellence
In 2006, S.P. Richards implemented an Operational Excellence initiative
to streamline operations and realize cost savings. Areas of focus range
from improved freight management and enhanced fuel programs to
greater utilization of our warehouse management systems. We are
encouraged by the progress made towards Operational Excellence a
nd the opportunity to further improve our high standard of customer
service and operating performance.
2007 Outlook
S.P. Richards continued the tradition of delivering excellent support
to business products resellers in 2006. By providing the most complete
lines of quality business products and effective and innovative marketing
programs, dealer services and logistical capabilities, we successfully
grew our business with existing customers and were successful in
expanding our customer base as well. e economic climate remains
healthy for the office products industry and our sales, marketing and
Operational Excellence initiatives are in place to continue to grow
both our business and that of our valued customers in 2007.
7%increaSeinrevenueS
proDuctlineexpanSion
newproDuctS
improveDmarketingprogramS
anDDealerServiceS
newcuStomerchannelS
SpraDvantageprogramBenefitS
operationalexcellence
2006 Highlights
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