Napa Auto Parts 2015 Annual Report Download - page 15

Electrical and electronic, industrial assembly, and wire and cable products are distributed from warehouse
locations in major user markets throughout the United States, as well as in Mexico, Canada, Puerto Rico, and the
Dominican Republic. EIS 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 400 suppliers. 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 dis-
tributed 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, thermal management products and coated films. To meet the prompt delivery demands of its
customers, this Group maintains large inventories. The majority of sales are on open account. Approximately
55% of 2015 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 oppor-
tunity to participate in this low-cost, high-service capability. EIS has developed AIMS™ (Advanced Inventory
Management Solutions System), a totally integrated, highly automated solution for inventory management. EIS’
Integrated Supply offering also includes AIMS EASI, an electronic vending dispenser used to eliminate costly
tool cribs, or in-house stores, at customer warehouse facilities.
Segment Data. In the years ended December 31, 2015 and 2014, sales from the Company’s Electrical/
Electronic Materials Group approximated 5% of the Company’s net sales, as compared to 4% in 2013. For addi-
tional segment information, see Note 10 of Notes to Consolidated Financial Statements 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 elec-
tronic products, general line distributors and, to a lesser extent, manufacturers that sell directly to customers. EIS
competes primarily on factors of price, product offerings, service and engineered solutions. 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.”
ITEM 1A. RISK FACTORS.
FORWARD-LOOKING STATEMENTS
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, eco-
nomic 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, 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
9