Napa Auto Parts 2010 Annual Report Download - page 9

Table of Contents
Electrical and electronic products are distributed from warehouse locations in major user markets throughout the United States, as
well as in Mexico and Canada. The Company has return privileges with some of its suppliers, which have protected the Company from
inventory obsolescence.
Products. The Electrical/Electronic Materials Group distributes a wide variety of products to customers from over 350 vendors.
These products include custom fabricated flexible materials that are used as components within a customer’s manufactured finished
product in a variety of market segments. Among the products distributed and fabricated are such items as magnet wire, conductive
materials, electrical wire and cable, insulating and shielding materials, assembly tools, test equipment, adhesives and chemicals,
pressure sensitive tapes, solder, anti-static products and thermal management products. To meet the prompt delivery demands of its
customers, this Group maintains large inventories. The majority of sales are on open account. Approximately 45% of 2010 total
Electrical/Electronic Materials Group purchases were made from 10 major suppliers.
Integrated Supply. The Electrical/Electronic Materials Group’s integrated supply programs are a part of the marketing strategy, as
a greater number of customers — especially national accounts — are given the opportunity to participate in this low-cost, high-service
capability. The Group developed AIMS (Advanced Inventory Management System), a totally integrated, highly automated solution for
inventory management. The Group’s Integrated Supply offering also includes SupplyPro, an electronic vending dispenser used to
eliminate costly tool cribs, or in-house stores, at customer warehouse facilities.
Segment Data. In the year ended December 31, 2010, sales from the Company’s Electrical/Electronic Materials Group
approximated 4% of the Company’s net sales, as compared to 3% in 2009 and 4% in 2008. For additional segment information, see
Note 10 of Notes to Consolidated Financial Statements set forth beginning on page F-1.
Competition. The electrical and electronics distribution business is highly competitive. The Electrical/Electronic Materials Group
competes with other distributors specializing in the distribution of electrical and electronic products, general line distributors and, to a
lesser extent, manufacturers that sell directly to customers. EIS competes primarily on factors of price, product offerings and service.
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.”
 RISK FACTORS.
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Some statements in this report, as well as in other materials we file with the SEC or otherwise release to the public and in materials
that we make available on our website, constitute forward-looking statements that are subject to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Senior officers may also make verbal statements to analysts, investors, the media and others
that are forward-looking. Forward-looking statements may relate, for example, to future operations, prospects, strategies, financial
condition, economic performance (including growth and earnings), industry conditions and demand for our products and services. The
Company cautions that its forward-looking statements involve risks and uncertainties, and while we believe that our expectations for the
future are reasonable in view of currently available information, you are cautioned not to place undue reliance on our forward-looking
statements. Actual results or events may differ materially from those indicated in our forward-looking statements as a result of various
important factors. Such factors include, but are not limited to, those discussed below.
Forward-looking statements are only as of the date they are made, and the Company undertakes no duty to update its forward-
looking statements except as required by law. You are advised, however, to review any further disclosures we make on related subjects in
our subsequent Forms 10-Q, Form 8-K and other reports to the SEC.
Set forth below are the material risks and uncertainties that, if they were to occur, could materially and adversely affect our business
or could cause our actual results to differ materially from the results contemplated by the forward-looking statements in this report and in
the other public statements we make. Please be aware that these risks may change over time and other risks may prove to be important in
the future. New risks may emerge at any
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