Napa Auto Parts 2014 Annual Report Download - page 14

office suites, panel systems, file, mobile and storage cabinets and computer workstations; general office supplies
including desk accessories, business forms, accounting supplies, binders, filing supplies, report covers, writing
instruments, envelopes, note pads, copy paper, mailroom and shipping supplies, drafting and audiovisual sup-
plies; school supplies including bulletin boards, teaching aids and art supplies; healthcare products including first
aid supplies, gloves, exam room supplies and furnishings, cleaners and waste containers; janitorial and cleaning
supplies; safety supplies; disposable food service products; 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 nearly 700 of the industry’s leading manufacturers
worldwide, S. P. Richards also markets products under its nine proprietary brands. These brands include: Spar-
coTM, an economical line of office supply basics; Compucessory®, a line of computer accessories; Lorell®, a line
of office furniture; NatureSaver®, an offering of recycled products; Elite Image®, a line of new and remanufac-
tured toner cartridges, premium papers and labels; IntegraTM, a line of writing instruments; Genuine Joe®, a line
of cleaning and breakroom products; Business Source®, a line of basic office supplies available only to
independent resellers; and Lighthouse, a brand of janitorial and cleaning products offered through the GCN busi-
ness. The Company’s Impact business also offers an additional series of proprietary brands that are product based
and solution-specific oriented. Through the Company’s FurnitureAdvantageTM program, S. P. Richards provides
resellers with an additional 11,000 furniture items made available to consumers in 7 to 10 business days.
Segment Data. In the year ended December 31, 2014, sales from the Company’s Office Products Group
approximated 11% of the Company’s net sales, as compared to 12% in 2013 and 13% in 2012. For additional
segment information, see Note 10 of Notes to Consolidated Financial Statements 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 manu-
facturers of office products. S. P. Richards competes primarily on product offerings, service, marketing programs,
brand recognition and price. 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.”
ELECTRICAL/ELECTRONIC MATERIALS GROUP
The Electrical/Electronic Materials Group, operated as EIS, Inc. (“EIS”), a wholly-owned subsidiary of the
Company, is headquartered in Atlanta, Georgia. EIS distributes materials to more than 20,000 electrical and elec-
tronic manufacturers, as well as industrial assembly and specialty wire and cable markets in North America. With
49 branch locations in the United States, Puerto Rico, the Dominican Republic, Mexico and Canada, EIS distrib-
utes over 100,000 items including wire and cable, insulating and conductive materials, assembly tools and test
equipment. EIS also has seven manufacturing facilities that provide custom fabricated parts and custom coated
materials.
Effective February 1, 2014, EIS acquired the assets of Electro-Wire, Inc. (“Electro-Wire”). Headquartered
in Schaumburg, Illinois, Electro-Wire is a North American distributor and contract manufacturer of specialty
wire and cable products with four locations in the U.S. and primarily serving the telecom and transit markets.
Electro-Wire generates approximately $100 million in annual revenues.
Effective August 1, 2014, EIS acquired the assets of Insulation and Wires, Inc. (“IWI”), based in Oklahoma
City, Oklahoma. IWI is an electrical distribution company with estimated annual revenues of $15 million.
Distribution System. The Electrical/Electronic Materials Group provides distribution services to OEM’s,
motor repair shops, specialty wire and cable users 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.
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.
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