Napa Auto Parts 2010 Annual Report Download - page 8

Table of Contents
conservation projects creating better lighting, lower energy usage and usage of motion sensitive lighting were completed in 12 distribution
centers. This network of strategically located distribution centers provides overnight delivery of the Company’s comprehensive product
offering. Approximately 50% of the Company’s 2010 total office products purchases were made from 10 major suppliers.
The Office Products Group sells strictly to resellers of office products. These resellers include independently owned office product
dealers, national office product superstores and mass merchants, large contract stationers, mail order companies, Internet resellers and
college bookstores. Resellers are offered comprehensive marketing programs, which include print and electronic catalogs and flyers,
electronic content for reseller websites, and education and training resources.
Products. The Office Products Group distributes computer supplies including storage media, printer supplies and computer
accessories; office furniture including desks, credenzas, chairs, chair mats, partitions, files and computer furniture; office machines
including telephones, answering machines, calculators, fax machines, multi-function copiers, printers, digital cameras, laminators and
shredders; general office supplies including desk accessories, business forms, accounting supplies, binders, filing supplies, report
covers, writing instruments, envelopes, note pads, copy paper, mailroom supplies, drafting supplies and audiovisual supplies; school
supplies including bulletin boards, teaching aids and art supplies; healthcare products; janitorial supplies including cleaning supplies,
paper towels and trash can liners; and breakroom supplies including napkins, utensils, snacks and beverages. S. P. Richards has return
privileges with most of its suppliers, which have protected the Company from inventory obsolescence.
While the Company’s inventory includes products from over 400 of the industry’s leading manufacturers worldwide, S. P. Richards
also markets products under its eight proprietary brands. These brands include: SPARCOtm, an economical line of office supply basics;
Compucessory®, a line of computer accessories; Lorelltm, a line of office furniture; NATURE SAVER®, an offering of recycled
products; Elite Image®, a line of new and remanufactured toner cartridges, premium papers and labels; Integratm, a line of writing
instruments; Genuine Joe®, a line of cleaning and breakroom products; and Business Sourcetm, a line of basic office supplies available
only to independent resellers. The Company launched its FurnitureAdvantagetm program in 2010 which provides resellers with an
additional 6,000 furniture items made available to consumers in 7 to 10 days. The Company also introduced PrintSmarttm, a fully
featured managed print solution allowing resellers to serve this growing segment of the market.
Segment Data. In the year ended December 31, 2010, sales from the Company’s Office Products Group approximated 15% of the
Company’s net sales, as compared to 16% in 2009 and 2008. For additional segment information, see Note 10 of Notes to Consolidated
Financial Statements set forth beginning on page F-1.
Competition. The office products distribution business is highly competitive. In the distribution of its product offering to resellers,
S. P. Richards competes with many other wholesale distributors, as well as with certain manufacturers of office products. S. P. Richards
competes primarily on price, product offerings, service, marketing programs and brand recognition. Further information regarding
competition in the industry is set forth in “Item 1A. Risk Factors — We Face Substantial Competition in the Industries in Which We Do
Business.”
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The Electrical/Electronic Materials Group was formed on July 1, 1998 through the acquisition of EIS, Inc. (“EIS”), a wholly-
owned subsidiary of the Company headquartered in Atlanta, Georgia. This Group distributes materials to more than 20,000 electrical and
electronic manufacturers in North America. With 33 branch locations in the United States, Puerto Rico, the Dominican Republic, Mexico
and Canada, this Group distributes over 100,000 items including wire and cable, insulating and conductive materials, assembly tools
and test equipment. EIS also has three manufacturing facilities that provide custom fabricated parts.
Distribution System. The Electrical/Electronic Materials Group provides distribution services to OEM’s, motor repair shops and a
broad variety of industrial assembly markets. EIS actively utilizes its e-commerce Internet site to present its products to customers while
allowing these on-line visitors to conveniently purchase from a large product assortment.
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