Napa Auto Parts 2009 Annual Report Download - page 7

Table of Contents
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 has 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 ten proprietary brands of items. 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 Atlantic Breezetm and Heat Runnertm, two lines of climate
control products; and Business Sourcetm, a line of basic office supplies available only to independent resellers.
Segment Data. In each of the years ended December 31, 2009, 2008 and 2007, sales from the Company’s Office Products Group
were approximately 16% of the Company’s net sales. For additional segment information, see Note 11 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. 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 36 branch locations in the United States, Puerto Rico, the Dominican Republic, Mexico
and Canada, this Group distributes over 100,000 items, from insulating and conductive materials to 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 original equipment manufacturers,
motor repair shops and 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.
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 has 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, 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 2009 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
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