2017 NOPA Dealer Financial Comparison Report...Introduction NOPA DEALER FINANCIAL COMPARISON AND BENCHMARKING GUIDE 6 U NDERSTANDING THE M ETRICS Overall Performance Ratio Analysis

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2017NOPA Dealer

Financial Comparison & Benchmarking Guide

C O N F I D E N T I A L

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2017 NOPA Dealer Financial

Comparison and Benchmarking Guide

This year’s NOPA Dealer Financial Comparison and Benchmarking Guide was designed in cooperation with NOPA and

key industry members.

The NOPA Dealer Financial Comparison and Benchmarking Guide presents a detailed analysis of key operating data from

the office products dealers industry. Based on confidential surveys completed by 34 companies, this report includes a

compilation and analysis of revenue and operations data, as well as additional profile information.

The NOPA Dealer Financial Comparison and Benchmarking Guide is published by the National Office Products Alliance

(NOPA) whose mission is to provide independent office products dealers with the information, knowledge and tools they

need to help them to be successful in today's ever-evolving business environment.

The NOPA Dealer Financial Comparison and Benchmarking Guide was compiled, tabulated and analyzed by Industry

Insights, Inc. (www.industryinsights.com), an independent professional research and consulting firm that specializes in

conducting financial operating surveys, compensation studies, market assessment surveys, customer satisfaction research,

educational programs and other forms of customized research.

Copyright © 2017. All rights reserved. No part of this report may be reproduced in whole

or in part without written permission from the National Office Products Alliance.

National Office Products Alliance 3601 E. Joppa Road, Baltimore, MD 21234 410-931-8100

www.nopanet.org

Table of Contents

INTRODUCTION

About This Report ............................................................................................................................................................... 1 Sample Company Performance Report.......................................................................................................................... 3 How to Use This Report ..................................................................................................................................................... 4 Understanding the Metrics ................................................................................................................................................ 6

EXECUTIVE SUMMARY

Respondent Profile ........................................................................................................................................................... 13 Overall Profitability......................................................................................................................................................... 17 Expense Management ..................................................................................................................................................... 21 Inventory Management ................................................................................................................................................... 22 Personnel and Accounts Receivable Management ..................................................................................................... 23 Other Performance Indicators ........................................................................................................................................ 25

DETAILED INFORMATION

By All Respondents, Dealer Type, and Total Revenues ............................................................................................. 33 By Profit Group and Market Area Served .................................................................................................................. 47 By Number of Full-Time Equivalents Employees ......................................................................................................... 61

APPENDIX

Survey Methodology ....................................................................................................................................................... 75 Key Ratio Definitions........................................................................................................................................................ 75 Survey Questionnaire ...................................................................................................................................................... 77

I N T R O D U C T I O N

Introduction

NOPA D E A L E R F I N A N C I A L C O M P A R I S O N A N D B E N C H M A R K I N G G U I D E

1

I N T R O D U C T I O N

A B O U T T H I S R E P O R T

This year’s NOPA Dealer Financial Comparison and Benchmarking Guide represents the most complete, accurate

and up-to-date database of office products dealers financial and operating data published anywhere. The

information contained in this report is designed to provide easy-to-understand guidelines for identifying business

strengths, weaknesses and performance improvement opportunities.

The NOPA Dealer Financial Comparison and Benchmarking Guide was prepared by Industry Insights, Inc. of

Columbus, Ohio, while working closely with NOPA in the design of the study. Confidential survey forms (refer to the

Appendix for a sample) were made available to NOPA members via an online survey form and an Excel survey

version in July 2017.

This report includes comparative financial ratios and statistics by all participants overall, by dealer revenue volume

size, by size of market area, and by other important criteria. In addition, this report includes data for a special

grouping of high profit vs. low profit dealers.

Perhaps the most valuable feature of this NOPA Dealer Financial Comparison and Benchmarking Guide is that all

firms participating in the survey automatically received a confidential Company Performance Report. This report

presents a company's own ratios and data computed in a manner consistent with those appearing in the industry

report and displayed alongside the appropriate industry comparatives. Representative pages from a sample

Company Performance Report are illustrated on the following page.

As shown on the following page, on any given line of the Company Performance Report, a dealers’ own data is

included along with reported norms for all respondents and for similar companies. Thus, the individual

owner/manager is provided invaluable information without needing to spend time and effort performing the

calculations manually.

In addition to receiving access to the Company Performance Report, all participants of the 2017 NOPA Dealer

Financial Comparison & Benchmarking Survey receive access to online reporting tools. These interactive tools

allow for more specific information than this report could reasonably provide. Using the platform, users are able to

create their own data cuts to create benchmarks that most closely match their organizations. For example, a

participant could create a data cut based on a specific dealer revenue volume range and by total number of full-

time equivalent employees, whereas the report only provides single-level cuts (e.g., dealer revenue volume or number

of full-time equivalent employees). Clickable graphs are available throughout the report that will show the

respondent’s data versus the filter they selected as well as a graphical dashboard of the respondent’s data

compared to key industry benchmarks. The online reporting tools platform is housed on Industry Insights’ secure server

and is located at www.NOPAresearch.com. For convenience, all results can be exported to Excel.

Introduction


3

S A M P L E C O M P A N Y P E R F O R M A N C E R E P O R T

The images on this page provide a sample of each of the sections that are included in each participant’s Company

Performance Reports (CPR). The actual CPR that participants receive contains information about their organization, compared

against other similar companies and formatted as the pages below.

NOPA Dealer Financial Comparison & Benchmarking Guide

Y O U R D A T A

C O M P A R E D T O T H E

A P P R O P R I A T E

I N D U S T R Y N O R M S

A “ R E P O R T C A R D ”

E V A L U A T I O N O F

Y O U R O W N F I R M ’ S

P E R F O R M A N C E

NOPA Dealer Financial Comparison & Benchmarking Guide

Introduction


4

H O W T O U S E T H I S R E P O R T

This NOPA Dealer Financial Comparison and Benchmarking Guide has been designed to help industry firms to

evaluate their own performance relative to that of similar companies in order to identify improvement opportunities.

The statistics in this report represent broad performance "yardsticks" against which a company's performance can be

measured.

Using this information, industry dealers can compare their own firm's financial and operating performance with: the

industry as a whole; dealers of a comparable revenue; dealers of a similar market area size; dealers with or without

retail stores; dealers by profitability; and dealers by number of full-time equivalent employees. Spotting significant

differences between your own firm's performance and the industry composites can be the first step toward improving

performance. Keep in mind, however, that:

1. A deviation between your firm's figures (for any performance measure) and numbers in the report is not

necessarily good or bad. It merely indicates that additional analysis may be required. As a rule, the larger the

difference, the greater the need for further investigation.

2. In situations where large deviations do exist, it may be helpful to go back and calculate the same performance

measure over the past several years to identify any trends that may exist.

3. The information in this report should be used as a tool for informed decision making rather than absolute

standards. Since firms differ as to their location, size, and other factors, any two firms can be successful yet have

very different experiences with regard to certain performance measures.

Understanding the Data The tables in this report are organized to include a number of important findings for each relevant “grouping” of

similar companies.

How the Tables Are Organized The tables in this report are organized to include a number of important financial ratios for each relevant "grouping"

of similar firms. In particular, the major "groupings" used include:

All Reporting Dealers – refers to the results of all dealers responding to the survey.

Commercial Dealers with Retail Stores vs. without Retail Stores

Dealers by Revenue

Profitability – refers to those firms whose operating profit as a percentage of total revenues are in the top

50th percentile and bottom 50th percentile of performance among all respondents.

Dealers by Population Size of Market Area Served

Dealers by Number of Full-time Equivalent Employees

The table of contents shows specifically where each table can be found.

Introduction


5

Interpreting the Numbers Most of the performance indicators included in this study are reported on the basis of medians rather than

arithmetical averages or means. Unlike the mean, the median is not distorted by a few unusually high or low values

that may exist in the sample due to special circumstances. The "median" figure represents the mid-point of the figures

for a particular measure, with one-half of the firms reporting figures above it and one-half below. Each median was

computed independently based on the companies that reported for that item. As a result, mathematical

relationships do not always exist when different ratios are used together in the calculation.

Smallest Number Largest Number Reported Typical Reported

Lower 25% of

Reported Figures

Middle 50% of Reported Figures

(or Middle Range)

Upper 25% of

Reported Figures

Median

Reported figures were not used unless they were in accordance with the survey instructions and definitions. In cases

where the number of companies reporting was considered inadequate for the computation of a meaningful figure,

blank spaces appear in the tables, or an insufficient data (*) notation is included.

Further insights into how to use this report are included in the Appendix in the section entitled: "Key Ratio Definitions."

An important point to keep in mind when using this report is that even relatively simple analysis of your company's

own financials using the industry data for comparison can yield important insights into your business. You do not have

to be a financial expert to benefit from this information.

Using Ratios While it is extremely important to analyze financial information in dollars and cents, it is essential that percentages

and ratios be used if the data is to be compared to past performance or to industry standards. For example, it is

necessary to know your annual “total employee compensation expense,” but it is even more essential to compare this

expenditure with the value it produces. A useful measure of effectiveness of compensation expense is the

percentage that such expenses are relative to revenues. Therefore, a ratio such as total employee compensation

expense as a percent of total revenues can be useful in determining how efficiently your firm uses payroll dollars

over time or compared to other NOPA dealers in general.

In addition, just as dollar figures are not too meaningful by themselves, ratios should not be used in isolation. In

combination, they can give an extremely accurate overall picture of financial performance and financial position.

Financial performance refers to how well a firm performs over a period of time (generally one year) and financial

position refers to financial strength at a given point in time.

The tables in this report include key ratios for comparing your firm’s performance to norms for other NOPA

companies in the following key areas: overall profitability performance, asset and financial management, personnel

management, sales analysis, income statement performance, balance sheet, and other information.

Introduction


6

U N D E R S T A N D I N G T H E M E T R I C S

Overall Performance Ratio Analysis Included in this report are key ratios for comparing a company's overall performance to industry norms in each of

three areas: profitability, productivity (or efficiency), and financial management. In using this report, it is important

to prioritize time and effort by starting with the Overall Performance Measures. These are overall profitability

measures that provide an overview of a dealer’s success. As discrepancies are identified between a company's

performance measures and the industry norms, further investigation will be needed as to the reasons for these

discrepancies.

Profitability While there are several ways to look at profitability, the most useful are those that compare profits to some other

quantity. Perhaps the most frequently cited is net profit margin, or net profit before tax as a percent of total

revenue. This ratio measures the difference between what a company receives in revenues and spends over a period

of time. It is highly dependent upon pricing policy and expense control. Also, as you analyze your own firm’s

profitability performance versus industry norms keep in mind that significant profitability variations can exist

depending on the amount of owner’s compensation. High cash compensation by owners will lower profitability and

low cash compensation will increase profitability.

Perhaps the best measure of overall profitability is return on investment (ROI). The two most important measures of

ROI are return on assets and return on owner’s equity (or net worth). Return on assets is defined in this report as

net profit before tax divided by end-of-year total assets. It is an excellent indicator of the percentage return on

total assets employed in the business.

While return on assets measures ROI from a business management standpoint, return on owner’s equity (or net

worth) is the best measure of return to the owners of the business. It is defined in this report as net profit before tax

to net worth. Return on net worth is the percentage return to the owners compared to the amount that they have

invested in the business.

Productivity

Productivity (or efficiency) is simply the output produced compared with input expended. As a rule, the more output

produced per employee, per square foot of space, dollar investment or whatever the input, the more profitable a

company can be. Industry firms need to always strive to improve the productivity of their assets, their space, and

their personnel. But in order to improve productivity, you first have to measure it.

Space productivity is best measured by “total revenues per total square feet of space” as well as “net profit before

tax per square foot of space.” However, over time, this figure can be distorted by inflationary factors.

Introduction


7

Personnel productivity can be measured in numerous ways. The easiest and most commonly used methods are:

Total Revenues per Employee—a good overall measure, but subject to distortion by inflation. Always use full-

time equivalents for employee counts.

Net Profit before Tax per Employee—also good overall measure, but distorted by inflation.

Total Employee Compensation Expense as a Percent of Total Revenues—complements the previous measure

by adding the dimension of compensation levels instead of just number of employees. Not distorted by

inflation.

As you analyze your own firm’s personnel management, keep in mind that these ratios will be impacted depending

on the extent to which outside contractors are used, which are typically not counted as employees.

Asset turnover (total revenues divided by total assets) presents a good overall indicator of total company

productivity. The ratio tells us how many dollars in revenues are being generated by each dollar of assets employed

in running the business.

Financial Management There are two financial management issues of primary importance to industry firms--liquidity and leverage. Liquidity

represents the short-term financial strength of the firm. It is your ability to meet short-term obligations out of currently

available funds. Two liquidity measures very commonly used are the current ratio and the quick ratio.

Current Ratio (current assets divided by current liabilities)—This measures the extent to which fairly liquid assets

(all current assets) exceeds current debt.

Quick (acid-test) Ratio (current assets less inventory divided by current liabilities)—This ratio eliminates inventory

from the numerator because it is not extremely liquid, and compares the result to current debt. Therefore,

the quick ratio is often considerably lower than the current ratio.

Leverage is merely the extent to which a company is financed by debt as opposed to the owners' funds. It is the

amount of liabilities in relation to the amount of net worth. A common ratio of overall company leverage is the Debt

Ratio. This is defined as total liabilities divided by net worth, or owner’s equity. The higher this ratio is, the higher

the leverage.

Improving Performance Based on the Overall Performance Measures It is very important to remember that while the key performance measures discussed above are excellent "yardsticks"

for gauging the success of your business, they must be understood, not just applied blindly. For instance, if the

profitability of your firm is far below the industry norm, it is important to know why. Is your business really suffering

or is your profitability artificially low because you are paying high salaries? With this warning in mind, let us

examine some of the key performance measures and some possible actions that can be taken if you deviate

significantly from the industry average. The following are only guidelines for action and should not be considered to

be specific recommendations.

Introduction


8

Profitability

Net Profit Margin

Too Low Further investigation is warranted. Check to see if pricing policies are too low. If so,

check pricing by activity. Check all expenses to see which need better control.

Too High It is difficult to imagine a situation where this presents a problem, but you should know

why the net profit margin is so high.

Return on Assets

Too Low Either revenues or net profit before taxes is too low to support your asset structure.

Examination of net profit before taxes value and asset turnover will tell which.

Too High No problem as a rule. You are effectively managing your business.

Return on Net Worth

Too Low If return on assets is sufficient, you may have more of your funds invested in the

business than necessary (see Leverage).

Too High This is a very good situation unless the degree of leverage is too high.

Productivity

Personnel Productivity

Too Low Low personnel productivity during normal business conditions may indicate the business

is too “people heavy.” Consider decreasing staff size or generating more volume from

existing personnel.

Too High No problem as a rule. May be artificially high if many functions are performed by

outsiders not on the payroll.

Total Asset Productivity

Too Low Low asset turnover can signal a need for more attention to the productivity of the

areas described above. However, if you own rather than rent the majority of your

locations, this could explain the deviation from typical industry figures.

Too High Asset turnover that is significantly in excess of the industry norm might be caused by

the absence of owned fixed assets or the lack of any significant amount of receivables.

Check your percentage balance sheet with the composite for your type of dealership.

Introduction


9

Financial Management

Liquidity

Too Low If the current ratio is too low, it is possible you are operating with insufficient liquid

capital. This can be dangerous if business takes a turn for the worse or a loan

payment becomes due unexpectedly. Liquidity can be increased by using more long-

term financing and/or by leaving more profits in the business.

Too High If liquidity is exceptionally high, it is possibly a sign of excess current assets, such as

receivables. Check productivity ratios for these items. Otherwise, this is no reason for

concern.

Debt Ratio

Too Low You have excess capacity for debt should it become necessary to borrow. Although

some owners do not like borrowing any more than absolutely necessary, additional

debt will increase overall profitability as long as the business can earn a before tax

return which exceeds the borrowing rate.

Too High This will severely curtail your ability to attract new borrowed funds. In addition,

interest charges could be strongly affecting profitability. Try to retain more profits in

the business or attract new sources of equity if you wish to lower leverage.

Summary and Conclusions We believe the information contained in the NOPA Dealer Financial Comparison and Benchmarking Guide to be

the most comprehensive compilation of industry performance statistics in existence. While the quantity of information

may, at first, seem overwhelming, by following the approach outlined in the preceding pages, your time and efforts

can be channeled into a very effective and beneficial analysis. To summarize:

Step 1—Gather all your financial, operating, and sales figures for your latest fiscal year. If you participated in this

year’s study, this has already been done for you.

Step 2—Calculate the various performance measures for your company that are used in the report. Start with the

“Overall Profitability Measures.” (If you participated in the survey and filled out the survey form

completely, most of the calculations have already been made for you.)

Step 3—Determine which data comparisons in this report are most comparable to your company.

Step 4—Use the information in this report to analyze your company’s strengths and weaknesses.

Even a relatively simple analysis of your company’s own figures using the data for comparisons can yield important

insights into your business. You do not have to be a financial expert to benefit from this information.

NOPA D E A L E R F I N A N C I A L C O M P A R I S O N A N D B E N C H M A R K I N G GU I D E

11

E X E C U T I V E S U M M A R Y

Executive Summary


13

E X E C U T I V E S U M M A R Y

R E S P O N D E N T P R O F I L E The following charts are shown to help users of the report better identify with the participating companies.

COMPANY TYPE (% OF ALL RESPONDENTS)

TOTAL REVENUES (% OF ALL RESPONDENTS)

Average: $11,276,278

Median: $6,483,957

Commercial Dealer with No Retail Stores,

54.6%

Commercial Dealer with

Retail Stores, 42.4%

Other, 3.0%

Under $5 Million, 39.1%

$5 - $10 Million, 30.4%

Over $10 Million, 30.4%

Executive Summary


14

SIZE OF PRIMARY MARKET AREA SERVICED (% OF ALL RESPONDENTS)

PRIMARY BUSINESS STRUCTURE (% OF ALL RESPONDENTS)

500,000 or Less, 40.6%

Over 500,000, 59.4%

S Corporation, 60.6%

C Corporation, 24.2%

Limited Liability Corp (LLC), 9.1%

Other, 6.1%

Executive Summary


15

NUMBER OF FULL-TIME EQUIVALENT EMPLOYEES (% OF ALL RESPONDENTS)

AVERAGE STAFF SIZE OF COMMERCIAL ACCOUNTS (% OF ALL RESPONDENTS)

Under 15, 38.7%

15 - 30, 22.6%

Over 30, 38.7%

Less Than 10 Staff, 21.9%

10 to 50 Staff, 56.3%

51 to 100 Staff, 15.6%

Greater than 100 Staff, 6.3%

Executive Summary


16

MARKET MIX (% OF TOTAL SALES)

PERCENT OF EACH CATEGORY SALES ARE FROM INTERNET SALES? (% OF TOTAL SALES)

0.7%

1.2%

11.5%

8.0%

13.1%

31.3%

34.2%

Other

SoHo

Education

Healthcare

Government

Small Business

Commercial/Contract

53.0%

21.0%

10.0%

35.2%

60.0%

63.5%

64.5%

66.0%

Total Sales

Other Products

Furniture & Accessories

Office Equipment, Business Machines, &Supplies

Coffee/Breakroom

Computer Hardware, Software, & Supplies

Janitorial/Warehouse

Office Supplies

Executive Summary


17

O V E R A L L P R O F I T A B I L I T Y RETURN ON ASSETS

A good overall indicator of company profitability performance is the ratio “net profit before taxes as a percent of

total assets,” or “return on assets,” as it is often labeled. Essentially, this provides an indication of what bottom line

profit return is being earned on the dollars invested in total assets.

The typical dealers’ return on assets performance during 2016 was 10.9% for the year. As shown below, the most

profitable dealers experienced a 16.7% return. The smallest dealers, based on dollars of total revenues, reported

the lowest return on assets figure (5.3%) of any of the revenue aggregates.

10.9%

16.7%

6.5%

14.9%

5.3%

16.7%

5.5%

All Dealers High ProfitDealers

No RetailStores

RetailStores

Under $5Million

$5-10Million

Over $10Million

Dealers with... Total Revenues

Return on Assets—Indicates the

profit earned as a percent of

total assets.

Executive Summary


18

RETURN ON NET WORTH

The typical dealer experienced a 22.3% return on net worth during 2016, while the high profit dealers reported

38.3%. Versus the typical respondent, the larger value for the profit leaders is primarily driven by their larger net

profit before taxes value.

OPERATING PROFIT (% OF TOTAL REVENUES)

In 2016 the typical respondent saw an operating profit of 0.6%, while the high profit dealers had an operating

margin of 5.0%. The dealers with revenues of $5 to $10 million reported the highest operating margin of all

revenue groupings with 2.3%.

22.3%

38.3%

19.2% 18.8% 18.1%

44.6%

12.6%


No RetailStores

RetailStores

Under $5Million

$5-10Million

Over $10Million


0.6%

5.0%

-1.0%

2.5%1.2%

2.3%

-2.3%All Dealers High Profit

DealersNo Retail

StoresRetailStores

Under $5Million

$5-10Million

Over $10Million


Operating Profit—Measures

profitability after the costs of

making or buying the product

is subtracted from sales and

other income generating

activities. It is a useful ratio to

measure your company’s

pricing strategy and efficiency

of your operations.

Return on Net Worth—

Indicates the profit earned as a

percent of net worth (or

owner’s equity). It is

determined by dividing Net

Profit Before Taxes by Net

Worth.

Executive Summary


19

EBDIT (EARNINGS, OR NET PROFIT, BEFORE TAXES, DEPRECIATION, AND INTEREST)

The typical respondent experienced a 3.4% EBDIT in 2016. The high profit dealers, as expected, reported a higher

overall EBDIT (6.2%).

GROSS PROFIT – PRODUCTS AS A % OF TOTAL PRODUCT SALES An analysis of gross profit specific to product sales reveals that the mid-size companies, in terms of total revenues, experienced the highest overall margins (28.6%). Additionally, the largest companies generally experienced lower margins on product sales at 24.3%.

3.4%

6.2%

2.7%

4.4%

2.2%

5.6%

2.7%


No RetailStores

RetailStores

Under $5Million

$5-10Million

Over $10Million


27.3% 28.4% 26.9% 27.8% 28.2% 28.6%24.3%


No RetailStores

RetailStores

Under $5Million

$5-10Million

Over $10Million


EBDIT— Is an overall measure

of a company’s financial

performance before taxes,

depreciation, and interest on

debts.

Gross Profit (Products)— Is an

overall measure of profits

earned on products sales after

the cost of product sales is

removed.

Executive Summary


20

NET PROFIT BEFORE TAXES (% OF TOTAL REVENUES)

The typical respondent experienced a net profit before taxes of 2.6% in 2016. The profit leaders, as expected,

reported higher profits with a net profit before taxes of 5.4%.

TOTAL REVENUE GROWTH (% CHANGE FROM PRIOR YEAR)

Monitoring sales growth is important, since it often drives a company’s performance and its ability to achieve profits.

As shown, the typical NOPA survey respondent reported a 0.9% decrease in revenues during 2016 as compared to

2015. Surprisingly, the typical high profit group firm experienced 1.7% decrease in total revenues. Among the

various revenue groups, the highest revenue gains were reported among the dealers with over $10 million in

revenues (3.6%).

2.6%

5.4%

2.0%

3.3%

1.4%

4.6%

1.9%


No RetailStores

RetailStores

Under $5Million

$5-10Million

Over $10Million


-0.9% -1.7% -0.9%

0.5%

-9.6%

-1.7%

3.6%


No RetailStores

RetailStores

Under $5Million

$5-10Million

Over $10Million


Sales Growth—The increase in

net sales from one period over

another. It is calculated by

determining the difference of

current year net sales and prior

year net sales and dividing that

value by prior year net sales.

Net Profit Before Taxes— Is an

overall measure of profits

earned as a percent of sales

before taxes are expensed.

Executive Summary


21

E X P E N S E M A N A G E M E N T

The following tables summarize the key income statement findings of this year’s report. An important finding of this

NOPA study is that industry firms that were the most profitable in 2016 derived a significant portion of their

profitability advantage from lower operating costs along with higher gross profit levels. As shown in the chart below,

while all responding dealers overall reported total operating expenses of 29.7% of revenues, the high profit dealers

experienced operating costs of only 27.5% of revenues yielding a 5.0% operating profit.

KEY INCOME STATEMENT ITEMS AS A PERCENT OF TOTAL REVENUES*

All Dealers

High Profit

Dealers


No Retail

Stores

Retail

Stores

Under $5

Million

$5-10

Million

Over $10

Million

Total Revenues 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

Total Cost of Sales 69.7% 67.5% 72.3% 66.8% 70.5% 67.4% 71.3%

Total Gross Profit - Products &

Services 30.3% 32.5% 27.7% 33.2% 29.5% 32.6% 28.7%

Total Warehouse/Delivery/ 8.1% 8.6% 8.2% 8.3% 6.6% 7.8% 10.9%

Installation Expense

Total Selling Expenses 9.5% 7.5% 10.1% 8.8% 8.9% 9.8% 10.1%

Total Occupancy Expenses 2.0% 2.2% 1.4% 2.6% 2.2% 2.4% 1.3%

Total Office Expenses 3.9% 3.1% 3.8% 4.0% 4.5% 3.5% 3.3%

Total Administrative Expenses 6.2% 6.1% 5.2% 7.0% 6.1% 6.9% 5.5%

Total Operating Expenses 29.7% 27.5% 28.7% 30.7% 28.3% 30.4% 31.0%

Operating Profit 0.6% 5.0% -1.0% 2.5% 1.2% 2.3% -2.3%

Total Other Expenses 0.5% 0.6% 0.5% 0.5% 0.4% 0.5% 0.5%

Total Other Income 2.4% 1.0% 3.5% 1.3% 0.6% 2.8% 4.7%

Net Profit before Taxes 2.6% 5.4% 2.0% 3.3% 1.4% 4.6% 1.9%

*Some items may not total due to rounding.

Executive Summary


22

I N V E N T O R Y M A N A G E M E N T

This section provides a look at key inventory related metrics. As shown in the graphs below, the typical dealer turned

their inventories 22.7 times during the year and needed 16 days to convert inventory to revenue. Additionally,

dealers reported a 29.8 product sales to inventory ratio.

INVENTORY TURNOVER

INVENTORY TURNOVER DAYS

22.7

13.1

29.1

10.7

28.1

15.318.3


No RetailStores

RetailStores

Under $5Million

$5-10Million

Over $10Million


16

28

13

34

13

24 23


No RetailStores

RetailStores

Under $5Million

$5-10Million

Over $10Million


Inventory Turnover— Inventory

productivity is best measured

by inventory turnover, defined

as the cost of goods sold

divided by average inventory.

This ratio shows how rapidly

inventory is moving. Inventory

turnover is expressed as

“annual turns.”

Inventory Turnover Days— This

metric is used to calculate how

quickly a company is

converting their inventory to

revenue in days.

Executive Summary


23

PRODUCTS SALES TO INVENTORY

P E R S O N N E L A N D A C C O U N T S R E C E I V A B L E M A N A G E M E N T

Although expense management and bottom line profit margins on revenues are important components of overall

profitability, certainly personnel management and receivables management are also very important.

As shown in the charts below and on the following pages the high profit dealers performed better than all

respondents in general. The high profit dealers outperformed the typical respondent in terms net profit per

employee and total employee compensation expense as a percent of total revenues.

TOTAL REVENUES PER EMPLOYEE (EXCLUDING WAREHOUSE, DELIVERY, AND INSTALLATION EMPLOYEES)

29.8

18.5

40.0

15.1

39.6

21.1 23.1


No RetailStores

RetailStores

Under $5Million

$5-10Million

Over $10Million


$383,156$297,413

$370,512 $346,607$246,739

$423,452

$612,422


No RetailStores

RetailStores

Under $5Million

$5-10Million

Over $10Million


Total Revenues per

employee— Is an overall

employee productivity measure;

calculated as average revenues

generated per full-time

equivalent employee exclusive

of warehouse, delivery, and

installation employees.

Product Sales to Inventory—

Defined as total product sales

divided by inventory, this

measure is used to effectively

gauge how much product

revenue is generated per dollar

of inventory.

Executive Summary


24

NET PROFIT BEFORE TAXES PER EMPLOYEE (EXCLUDING WAREHOUSE, DELIVERY, AND INSTALLATION EMPLOYEES)

TOTAL EMPLOYEE COMPENSATION EXPENSE AS A % OF TOTAL REVENUES

AVERAGE COLLECTION PERIOD (DAYS)

$9,934

$13,130$10,822 $10,830

$1,339

$13,130 $11,949


No RetailStores

RetailStores

Under $5Million

$5-10Million

Over $10Million


17.3%15.8%

17.8% 16.7% 16.0%17.7% 18.8%


No RetailStores

RetailStores

Under $5Million

$5-10Million

Over $10Million


29 30 29 30 29 2835


No RetailStores

RetailStores

Under $5Million

$5-10Million

Over $10Million


Net Profit before Taxes per

employee— Is an overall

employee productivity measure;

calculated as average net

profits before taxes generated

per full-time equivalent

employee exclusive of

warehouse, delivery, and

installation employees.

Total Employee Compensation

Expense—Measures the

amount of dollars being spent

on funding staff. This value,

shown as a percent of total

revenues, is imperative for all

businesses to monitor.

Average Collection Period—

Also sometimes called “days

receivables outstanding.”

Measures the average days

between sales and receipt of

customer payment. This

measure is an indication of

effectiveness of credit and

collection policies.

Executive Summary


25

O T H E R P E R F O R M A N C E I N D I C A T O R S

Also included in this year’s NOPA Dealer Financial Comparison and Benchmarking Guide are important asset

management, liquidity, and key warehouse/delivery performance measures. The following charts highlight these

indicators.

Asset Management ASSET TURNOVER

The typical respondent reported an asset turnover of 4.0 for fiscal year 2016, while the high profit dealers grouping

reported a turnover of 4.6. Those with total revenues under $5 million reported the highest turnover ratio (4.6 turns),

effectively using their assets to generate 4.6 times more sales than assets.

DEBT RATIO

Overall, respondents reported a debt ratio of 1.2 in 2016. The high profit dealers were similarly leveraged to the

typical respondent also reporting a leverage ratio of 1.2. Those in the over $10 million revenue grouping indicated

the smallest debt ratio of 0.9 while the companies in the $5 to $10 million category were the most leveraged (1.7).

4.04.6

3.84.4 4.6

3.8 3.7


No RetailStores

RetailStores

Under $5Million

$5-10Million

Over $10Million


1.2 1.2 1.21.4

1.1

1.7

0.9


No RetailStores

RetailStores

Under $5Million

$5-10Million

Over $10Million


Asset Turnover—(net sales

divided by total assets)

presents a good overall

indicator of total company

productivity. The ratio tells us

how many sales dollars are

being generated by each dollar

of assets employed in running

the business.

Debt Ratio—Measures the

extent to which a company is

financed by debt as opposed

to the owners’ funds. It is the

amount of liabilities in relation

to the amount of net worth on

the right hand side of the

balance sheet.

Executive Summary


26

Liquidity

Liquidity represents the short-term financial strength of an organization. It is a company’s ability to meet short-term

obligations out of currently available funds. The two most commonly used measures of liquidity are the current ratio

and quick ratio. The current ratio is calculated by dividing current assets by current liabilities. The quick ratio is

calculated in the same manner as the current ratio but removes inventory from current assets before dividing by

current liabilities.

CURRENT RATIO

QUICK RATIO

1.81.5

1.71.5 1.4

1.1

1.9


No RetailStores

RetailStores

Under $5Million

$5-10Million

Over $10Million


1.41.1

1.4

1.1 1.10.9

1.4


No RetailStores

RetailStores

Under $5Million

$5-10Million

Over $10Million


Current Ratio—Measures

liquidity. It indicates a firm’s

ability to pay short-term debt

with funds (assets) currently

available.

Quick Ratio—Measures the

ability to pay short-term debt

with assets that can be

converted to cash most quickly.

Executive Summary


27

Key Warehouse/Delivery Performance Measures

All Dealers

High Profit

Dealers


No Retail

Stores

Retail

Stores

Under $5

Million

$5-10

Million

Over $10

Million

Office Product SKUs Stocked 350.0 900.0 300.0 1,000.0 364.0 900.0 312.5

Number of SKUs Shipped Annually 13,600.0 20,000.0 12,350.0 13,200.0 14,000.0 25,000.0 21,890.0

Deliveries per Day 60.0 51.0 70.0 50.0 30.0 125.0 320.0

Delivery Schedule Achievement (%

on time and correct) 98.0% 97.5% 97.0% 98.0% 97.0% 98.0% 98.2%

Average Lead Time (Days) 1.0 1.1 1.0 1.0 1.1 1.0 1.0

Orders per Month 1,330.0 850.0 1,330.0 1,000.0 825.0 2,116.0 6,511.0

Lines (SKUs) Pulled per Hour 65.0 42.5 126.5 35.0 35.0 * 140.0

Order Fill Rate 98.0 98.0 98.0 97.0 98.0 98.5 98.2

Lines (SKUs) per Order 4.2 5.0 4.2 4.5 6.0 4.4 4.0

An asterisk (*) notation indicates an insufficient sample to show meaningful results


29

D E T A I L E D I N F O R M A T I O N


31

B Y A L L R E S P O N D E N T S , D E A L E R T Y P E , A N D T O T A L R E V E N U E S

Detailed Information


33

D E T A I L E D I N F O R M A T I O N

B Y A L L R E S P O N D E N T S , D E A L E R T Y P E , A N D T O T A L R E V E N U E S


No Retail

Stores

Retail

Stores

Under $5

Million

$5-10

Million

Over $10

MillionAll Dealers

SUMMARY INCOME STATEMENT-% OF TOTAL REVENUES

Product Sales as a % of Total Revenues:

Office Equipment, Business Machines, & Supplies 11.38% 14.88% 4.76% 8.66% 13.05% 13.49%

Computer Hardware, Software, & Supplies 7.15% 9.46% 5.31% 8.05% 8.86% 3.79%

Furniture & Accessories 30.67% 16.72% 44.76% 20.99% 38.91% 35.57%

Office Supplies 33.05% 43.77% 24.57% 41.42% 24.71% 30.24%

Janitorial/Warehouse 4.93% 5.72% 4.55% 7.10% 2.41% 4.63%

Coffee/Breakroom 1.87% 2.73% 1.12% 1.70% 0.88% 3.30%

Other Products 5.27% 5.35% 5.70% 8.35% 3.32% 2.90%

Total Product Sales 94.32% 98.63% 90.78% 96.28% 92.15% 93.91%

Services Revenues as a % of Total Revenues:

Delivery & Installation (incl. Services 3.06% 1.02% 5.60% 0.50% 4.52% 5.19%

& Intermarket)

Print/Fax/Copy Services 1.08% 0.24% 0.33% 0.44% 2.66% 0.19%

Equipment Maintenance Contracts 1.02% 0.07% 2.16% 2.45% 0.00% 0.05%

Other Services Revenue 0.53% 0.03% 1.13% 0.33% 0.67% 0.66%

Total Services Revenues 5.68% 1.37% 9.22% 3.72% 7.85% 6.09%

Total Revenues 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

Total Cost of Sales 69.72% 72.33% 66.81% 70.50% 67.40% 71.26%

Total Gross Profit Product & Services 30.28% 27.67% 33.19% 29.50% 32.60% 28.74%

EXPENSES

Warehouse, Delivery & Installation Expenses:

Compensation-Warehouse, Delivery, 4.47% 4.67% 4.44% 3.93% 4.41% 5.36%

Installation Staff

Outside Labor 0.69% 0.18% 1.31% 0.00% 0.94% 1.42%

Vehicle Expense 0.93% 0.94% 0.90% 0.84% 1.01% 0.99%

Outside Cartage 0.86% 1.47% 0.21% 0.82% 0.53% 1.31%

Warehouse Utilities 0.11% 0.07% 0.16% 0.10% 0.16% 0.05%

Warehouse Rent/Lease 0.63% 0.61% 0.71% 0.63% 0.13% 1.22%

Depreciation, Warehouse 0.04% 0.00% 0.08% 0.00% 0.11% 0.01%

Depreciation, Equipment 0.01% 0.01% 0.00% 0.00% 0.00% 0.03%

Depreciation, Warehouse Vehicles 0.23% 0.19% 0.27% 0.23% 0.16% 0.30%

Other WD&I Expenses 0.16% 0.08% 0.23% 0.02% 0.33% 0.16%

Total Warehouse/Delivery/Installation Expenses 8.13% 8.24% 8.31% 6.58% 7.78% 10.85%



34


No Retail

Stores

Retail

Stores

Under $5

Million

$5-10

Million

Over $10

MillionAll Dealers

Selling Expenses:

Compensation-Sales Managers 1.19% 1.11% 1.39% 1.67% 0.76% 0.97%

Compensation-Outside Sales 4.73% 4.87% 4.52% 4.10% 5.29% 5.02%

Compensation-Inside Sales/Telemarketing 0.61% 0.82% 0.43% 0.79% 0.60% 0.33%

Compensation-Sales Support 0.58% 0.66% 0.54% 0.41% 0.43% 1.00%

Compensation-Customer Service/Order Entry 1.02% 1.19% 0.53% 0.51% 1.31% 1.46%

Compensation-Marketing 0.09% 0.09% 0.10% 0.00% 0.12% 0.17%

Automobile Expenses 0.26% 0.30% 0.19% 0.30% 0.30% 0.16%

Advertising & Promotion 0.56% 0.49% 0.67% 0.80% 0.42% 0.39%

Travel & Entertainment 0.15% 0.14% 0.15% 0.18% 0.10% 0.15%

Other Sales Expenses 0.33% 0.39% 0.28% 0.17% 0.43% 0.44%

Total Selling Expenses 9.51% 10.07% 8.80% 8.91% 9.77% 10.09%

Occupancy Expenses:

Retail/Office-Rent/Lease 1.24% 0.82% 1.57% 1.38% 1.43% 0.83%

Retail/Office-Utilities 0.20% 0.23% 0.15% 0.24% 0.24% 0.11%

Janitorial and Maintenance 0.17% 0.11% 0.21% 0.13% 0.24% 0.16%

Depreciation, Retail/Office 0.08% 0.10% 0.07% 0.10% 0.09% 0.04%

Property Taxes 0.15% 0.05% 0.28% 0.08% 0.31% 0.08%

Other Occupancy Expenses 0.16% 0.04% 0.30% 0.29% 0.07% 0.05%

Total Occupancy Expenses 2.01% 1.35% 2.60% 2.21% 2.38% 1.27%

Office Expenses:

Compensation--Office Staff 1.96% 1.77% 2.23% 2.25% 1.67% 1.88%

Office Supplies/Stationery 0.20% 0.14% 0.27% 0.23% 0.19% 0.17%

Computer Supplies 0.06% 0.03% 0.03% 0.02% 0.16% 0.02%

Non-capitalized Computer Equipment 0.13% 0.25% 0.01% 0.30% 0.00% 0.02%

Computer S/W Upgrades and Licenses 0.53% 0.75% 0.34% 0.57% 0.42% 0.60%

Depreciation-Furniture/Fixtures/Equipment 0.09% 0.05% 0.14% 0.06% 0.12% 0.10%

Depreciation-Computer H/W & S/W 0.09% 0.11% 0.06% 0.05% 0.13% 0.10%

Equipment Leases and Maintenance 0.19% 0.04% 0.38% 0.36% 0.10% 0.04%

Telecommunications Expenses 0.24% 0.19% 0.31% 0.24% 0.28% 0.22%

Postage 0.11% 0.07% 0.13% 0.15% 0.10% 0.06%

Other Office Expenses 0.27% 0.43% 0.12% 0.31% 0.33% 0.16%

Total Office Expenses 3.88% 3.82% 4.01% 4.53% 3.50% 3.34%



35


No Retail

Stores

Retail

Stores

Under $5

Million

$5-10

Million

Over $10

MillionAll Dealers

Administrative Expenses:

Compensation-Officers/Owners/General Managers 2.67% 2.64% 2.55% 2.35% 3.13% 2.61%

Pension/Profit Sharing Contributions 0.28% 0.18% 0.42% 0.20% 0.24% 0.45%

Outside Labor 0.02% 0.04% 0.00% 0.04% 0.00% 0.02%

Depreciation, Vehicles 0.08% 0.01% 0.16% 0.16% 0.03% 0.02%

Vehicles Expense 0.17% 0.17% 0.20% 0.29% 0.14% 0.05%

Bad Debts -0.07% 0.07% -0.17% 0.07% -0.37% 0.07%

Amortization Expenses 0.11% 0.20% 0.03% 0.01% 0.17% 0.19%

Insurance-Property & Liability 0.37% 0.37% 0.39% 0.31% 0.41% 0.41%

Insurance-Health 0.79% 0.59% 0.79% 0.61% 1.10% 0.70%

Professional Services 0.34% 0.35% 0.29% 0.27% 0.52% 0.25%

Travel and Entertainment 0.14% 0.10% 0.20% 0.14% 0.20% 0.08%

Training Expenses 0.02% 0.03% 0.01% 0.04% 0.02% 0.01%

Other Taxes & Penalties 0.62% 0.14% 1.19% 1.02% 0.57% 0.08%

Other Administrative Expenses 0.64% 0.33% 0.94% 0.62% 0.76% 0.54%

Total Administrative Expenses 6.20% 5.22% 7.01% 6.11% 6.92% 5.47%

Total Operating Expenses 29.71% 28.70% 30.73% 28.34% 30.35% 31.03%

Operating Profit 0.57% -1.03% 2.47% 1.16% 2.25% -2.29%

Other Expenses:

Cash Discounts Allowed 0.07% 0.07% 0.08% 0.00% 0.00% 0.27%

Interest Expenses 0.25% 0.26% 0.26% 0.19% 0.36% 0.21%

Miscellaneous Expenses 0.12% 0.15% 0.11% 0.17% 0.10% 0.06%

Total Other Expenses 0.45% 0.48% 0.45% 0.36% 0.47% 0.54%

Other Income:

Discounts Earned 0.34% 0.30% 0.41% 0.05% 0.57% 0.49%

Interest Earned 0.04% 0.01% 0.07% 0.00% 0.10% 0.01%

Incentive Programs 1.75% 2.96% 0.60% 0.27% 1.73% 4.00%

Miscellaneous Other Income 0.31% 0.20% 0.22% 0.31% 0.39% 0.20%

Total Other Income 2.43% 3.46% 1.30% 0.63% 2.80% 4.70%

Net Profit Before Taxes 2.55% 1.95% 3.32% 1.43% 4.58% 1.87%



36


No Retail

Stores

Retail

Stores

Under $5

Million

$5-10

Million

Over $10

MillionAll Dealers

BALANCE SHEET INFORMATION AS A % OF TOTAL ASSETS

Assets

Cash & Short-Term Investments 12.9% 10.7% 16.0% 13.1% 15.9% 12.2%

Accounts Receivable 36.9% 35.2% 33.9% 28.7% 35.9% 43.7%

Notes Receivable 1.7% 1.1% 2.4% 0.2% 4.2% 1.0%

Inventory 20.8% 19.2% 24.5% 26.2% 16.7% 19.8%

Prepayments & Deferred Charges 1.0% 1.6% 0.5% 0.2% 1.5% 1.6%

Other Current Assets 1.3% 1.0% 1.0% 0.0% 2.0% 0.8%

Total Current Assets 74.5% 68.8% 78.3% 68.4% 76.3% 79.1%

Land 1.9% 2.0% 2.1% 0.0% 1.7% 5.1%

Building-Net 1.8% 1.4% 2.4% 1.4% 3.1% 1.1%

Autos & Trucks-Net 6.8% 8.1% 6.0% 9.0% 4.0% 7.0%

Furniture & Fixtures-Net 2.3% 1.4% 3.5% 3.4% 2.4% 0.8%

Computer & Data Processing Equipment-Net 1.6% 1.3% 2.1% 2.6% 1.2% 0.9%

Leasehold Improvements-Net 3.0% 2.4% 4.0% 2.6% 4.0% 1.9%

Other Fixed Assets 1.7% 3.2% 0.3% 0.0% 4.1% 1.4%

Total Fixed Assets 19.1% 19.8% 20.2% 19.1% 20.6% 18.1%

Long-Term Investments 1.2% 2.2% 0.2% 2.5% 0.6% 0.3%

Other Long-Term Assets 5.2% 9.3% 1.3% 10.1% 2.5% 2.6%

Total Other Long-Term Assets 6.4% 11.5% 1.6% 12.6% 3.1% 2.9%

Total Assets 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

Liabilities

Accounts Payable 26.4% 27.8% 22.7% 32.7% 19.8% 25.5%

Customer Deposits 4.9% 6.3% 3.6% 6.8% 5.0% 2.9%

Notes Payable 7.3% 4.4% 11.3% 8.3% 7.8% 6.6%

Accrued Salaries & Commissions 3.4% 3.3% 3.4% 2.1% 1.8% 7.5%

Accrued Taxes 1.7% 1.1% 2.5% 1.7% 2.1% 1.5%

Other 4.8% 5.9% 4.1% 3.4% 8.5% 2.5%

Total Current Liabilities 48.5% 48.8% 47.6% 55.1% 44.9% 46.5%

Notes Payable 15.9% 22.8% 9.8% 26.4% 8.8% 9.2%

Long-Term Debt 2.9% 0.4% 5.9% 2.2% 3.9% 3.0%

Other Long-Term Liabilities 2.0% 3.2% 0.9% 2.9% 0.0% 3.5%

Total Long-Term Liabilities 20.8% 26.4% 16.7% 31.4% 12.7% 15.7%

Total Liabilities 69.3% 75.2% 64.2% 86.5% 57.6% 62.2%

Net Worth or Stockholder’s Equity

Total Net Worth or Stockholder's Equity 30.7% 24.8% 35.8% 13.5% 42.4% 37.8%

Total Liabilities and Net Worth 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%



37


No Retail

Stores

Retail

Stores

Under $5

Million

$5-10

Million

Over $10

MillionAll Dealers

OVERALL PROFITABILITY MEASURES

Net Profit Before Tax-% of Total Revenues 2.55% 1.95% 3.32% 1.43% 4.58% 1.87%

Net Profit Before Tax-% of Total Assets 10.94% 6.53% 14.94% 5.27% 16.66% 5.52%

Net Profit Before Tax-% of Net Worth 22.26% 19.15% 18.81% 18.12% 44.61% 12.57%

Net Profit Before Interest & Tax -% of Assets 11.00% 6.77% 14.95% 6.00% 16.66% 6.50%

EBDIT (i.e., Earnings, or Net Profit, Before 3.41% 2.69% 4.36% 2.22% 5.58% 2.68%

Taxes, Depreciation and Interest as a % of

Total Revenues)

Operating Profit-% of Total Revenues 0.57% -1.03% 2.47% 1.16% 2.25% -2.29%

Gross Profit-Product-% of Total Product Sales 27.25% 26.86% 27.79% 28.22% 28.57% 24.27%

REVENUES SUMMARY

Average Total Product & Services Revenues $11,276,278 $14,892,949 $7,089,963 $2,206,275 $7,701,281 $26,512,708

Percent Change in Revenues from Prior Year

Total Product Sales -0.89% -0.89% 0.53% -9.57% -1.76% 3.42%

Total Services Revenues 0.45% 23.12% 0.45% * -6.25% 30.77%

Total Revenues Overall -0.89% -0.89% 0.52% -9.57% -1.72% 3.57%

OVERALL ASSET MANAGEMENT SUMMARY

Total Revenues/Total Assets (Asset Turnover) 4.0 3.8 4.4 4.6 3.8 3.7

Total Revenues/Net Fixed Assets (Fixed Asset 33.5 28.1 38.6 54.9 21.4 28.2

Turnover)

RECEIVABLES MANAGEMENT

Average Collection Period (i.e., Days 29 29 30 29 28 35

Receivables Outstanding)

FINANCIAL MANAGEMENT MEASURES

Interest Expense as a % of Total Revenues 0.25% 0.26% 0.26% 0.19% 0.36% 0.21%

Current Ratio (Current Assets/Current Liab.) 1.8 1.7 1.5 1.4 1.1 1.9

Acid Test (or Quick) Ratio (Cash + Accounts 1.4 1.4 1.1 1.1 0.9 1.4

Receivable/Current Liabilities)

Current Liabilities/Net Worth 1.0 0.7 1.1 0.6 1.5 0.9

Current Liabilities/Inventory 2.3 2.9 2.2 2.2 2.4 2.0

Total Liabilities/Net Worth 1.2 1.2 1.4 1.1 1.7 0.9

Fixed Assets/Net Worth 0.3 0.3 0.3 0.3 0.6 0.3

Total Revenues/Net Worth 7.3 7.0 7.3 7.0 13.5 7.3

Total Revenues/Net Working Capital (i.e., CA-CL) 9.2 7.5 8.2 6.6 32.6 9.4

Inventory/Net Working Capital 0.3 0.2 0.5 0.3 0.3 0.4

Days Payables Outstanding 32 31 29 34 32 27

Customer Deposits-% of Total Revenues 0.4% 0.0% 1.4% 1.0% 0.6% 0.1%



38


No Retail

Stores

Retail

Stores

Under $5

Million

$5-10

Million

Over $10

MillionAll Dealers

INVENTORY MANAGEMENT SUMMARY

Inventory Turnover (COGS/Average Inventory) 22.7 29.1 10.7 28.1 15.3 18.3

Inventory Turnover Days (365/Inventory Turnover) 16 13 34 13 24 23

Average Number of Days to Convert Inventory 48 42 74 40 50 81

To Cash (Average Inventory/(COGS/365)

Product Sales to Inventory 29.8 40.0 15.1 39.6 21.1 23.1

WAREHOUSE/DELIVERY PERFORMANCE MEASURES

Number of Office Product SKUs Stocked 350.0 300.0 1,000.0 364.0 900.0 312.5

Number of SKUs Shipped Annually 13,600.0 12,350.0 13,200.0 14,000.0 25,000.0 21,890.0

Deliveries per Day 60.0 70.0 50.0 30.0 125.0 320.0

Delivery Schedule Achievement (% on time and 98.0% 97.0% 98.0% 97.0% 98.0% 98.2%

correct)

Average Lead Time (Days) 1.0 1.0 1.0 1.1 1.0 1.0

Orders per Month 1,330.0 1,330.0 1,000.0 825.0 2,116.0 6,511.0

Average Order Size $216.1 $202.1 $394.4 $198.7 $321.6 $228.0

Lines (SKUs) Pulled per Hour 65.0 126.5 35.0 35.0 * *

Order Fill Rate 98.0 98.0 97.0 98.0 98.5 98.2

Lines (SKUs) per Order 4.2 4.2 4.5 6.0 4.4 4.0

PERSONNEL MANAGEMENT SUMMARY

Total Employee Compensation Expense 17.3% 17.8% 16.7% 16.0% 17.7% 18.8%

as a % of Total Revenues

Total Outside Labor Cost 0.7% 0.2% 1.3% 0.0% 0.9% 1.4%


Delivery & Installation Revenue Per $20,289 $6,133 $42,379 $2,879 $31,520 $48,357

Delivery & Installation Employee (Only

Firms Having D&I Employees)

Total Revenues Per:

Sales Management Employee $6,480,563 $6,480,418 $6,477,168 $1,727,170 $6,483,957 $12,733,930

Outside Sales Employee $1,468,311 $1,620,989 $1,121,728 $863,585 $1,620,989 $1,824,385

Inside Sales/Telemarketing Employee $7,592,134 $8,826,111 $5,429,684 * * $14,299,594

Customer Service/Sales Support Employee $1,755,057 $1,539,928 $2,235,259 $794,546 $2,275,855 $2,088,198

Total Sales Staff Employee $589,972 $563,822 $572,543 $380,041 $809,646 $816,067



Delivery Staff Employee $1,412,825 $1,240,918 $2,025,640 $1,168,798 $1,820,684 $2,504,492

Installation Staff Employee $2,275,855 $5,832,795 $1,676,444 $1,478,023 $2,275,855 $4,213,611

Warehouse Staff Employee $3,503,035 $3,499,677 $3,952,299 $1,804,600 $4,551,710 $3,611,216

Total Delivery & Installation Staff Employee $784,114 $864,528 $595,183 $876,599 $758,618 $796,288



39


No Retail

Stores

Retail

Stores

Under $5

Million

$5-10

Million

Over $10

MillionAll Dealers

Total Revenues Per: (continued)

Office & Administration Staff Employee $1,038,551 $1,080,660 $1,164,631 $863,585 $1,080,660 $2,070,737

All Employees Overall $259,728 $272,065 $236,466 $172,717 $260,098 $336,273

All Employees (Excluding Warehouse, $383,156 $370,512 $346,607 $246,739 $423,452 $612,422

Delivery, and Installation Employees)

Net Profit Before Tax Per:

Sales Management Employee $169,544 $95,357 $227,050 $6,918 $189,383 $243,610

Outside Sales Employee $31,735 $40,314 $31,735 $4,688 $61,906 $32,972

Inside Sales/Telemarketing Employee $197,202 $98,151 $241,638 * * $282,201

Customer Service/Sales Support Employee $40,314 $33,250 $75,495 $4,073 $75,044 $40,660




Delivery Staff Employee $37,699 $37,522 $60,350 $34,335 $37,877 $35,093

Installation Staff Employee $65,892 $65,892 $18,091 $11,709 $75,495 $46,025

Warehouse Staff Employee $67,620 $49,419 $176,093 $3,459 $150,990 $39,786


Office & Administration Staff Employee $26,511 $28,863 $27,155 $4,688 $28,863 $40,962

All Employees Overall $6,107 $7,575 $6,633 $938 $8,628 $6,391



Total Gross Profit Per:

Sales Management Employee $1,917,517 $1,765,862 $2,044,121 $465,023 $2,044,121 $3,517,688

Outside Sales Employee $401,603 $426,398 $352,010 $276,043 $435,203 $517,580

Inside Sales/Telemarketing Employee $1,965,607 $2,250,742 $1,611,939 * * $4,274,704

Customer Service/Sales Support Employee $478,397 $394,382 $681,374 $210,772 $711,975 $512,999




Delivery Staff Employee $354,219 $346,757 $625,477 $346,757 $569,580 $613,208

Installation Staff Employee $594,373 $1,826,290 $511,030 $431,050 $711,975 $1,210,331

Warehouse Staff Employee $1,031,166 $920,224 $1,223,005 $552,085 $1,423,949 $1,007,999


Office & Administration Staff Employee $286,842 $283,548 $381,530 $232,512 $290,135 $632,236

All Employees Overall $74,585 $70,887 $78,108 $49,333 $81,369 $90,753





40


No Retail

Stores

Retail

Stores

Under $5

Million

$5-10

Million

Over $10

MillionAll Dealers

Percentage of Selling Staff Sales from:

Outside Sales 90.0% 92.5% 82.5% 80.0% 95.0% 90.0%

Inside Sales/Telemarketing 10.0% 7.5% 17.5% 20.0% 5.0% 10.0%

Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

SPACE MANAGEMENT MEASURES

Average Number of Locations 1.1 0.0 2.2 0.4 0.9 0.7

Product Sales Per Location $5,461,130 * $4,652,769 $1,707,692 $8,006,701 *

Services Revenues Per Location $396,296 * $367,687 $58,194 $678,066 *

Total Revenue Per Location $5,800,208 * $5,370,368 $1,765,885 $8,922,381 *

Total Revenues Per Square Foot of:

Sales/Retail Space $1,793 * $1,276 $1,275 $905 *

Warehouse Space-excluding temporary rental $640 $849 $344 $768 $331 $773

(Only Includes Firms That Do Not Primarily

Subcontract Warehouse Space)

Office Space $1,815 $1,711 $2,091 $1,979 $1,914 $1,618

Total Space $500 $539 $194 $516 $193 $529

Net Profit Before Tax Per Square Foot of:

Sales/Retail Space $28.45 * $51.75 $10.07 $81.65 *

Warehouse Space-excluding temporary rental $6.87 $13.07 $6.75 $6.25 $22.36 $13.26



Office Space $29.08 $30.52 $36.51 $12.50 $61.89 $33.32

Total Space $5.08 $10.55 $4.25 $3.13 $11.66 $9.23

SALES DETAIL

Credit Sales

Total Annual Credit Sales (as a % of Total Revenue) 98.4% 94.6% 99.0% 98.4% 87.9% 99.7%

Market Mix--% of Total Sales from:

Commercial/Contract 34.2% 34.4% 30.6% 22.9% 41.1% 57.0%

Small Business 31.3% 38.6% 24.5% 38.2% 28.7% 12.2%

SoHo 1.2% 0.8% 1.8% 0.8% 1.1% 0.8%

Government 13.1% 9.8% 17.5% 14.1% 10.7% 9.0%

Healthcare 8.0% 7.8% 8.7% 11.3% 7.1% 9.2%

Education 11.5% 8.4% 15.8% 12.7% 11.2% 11.1%

Other 0.7% 0.3% 1.1% 0.0% 0.1% 0.7%

Total Sales 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%



41


No Retail

Stores

Retail

Stores

Under $5

Million

$5-10

Million

Over $10

MillionAll Dealers

Percent of each category's total sales that are for

internet sales:

Office Equipment, Business Machines, & Supplies 35.2% 35.2% * 32.5% * *

Computer Hardware, Software, & Supplies 63.5% 63.0% * * * *

Furniture & Accessories 10.0% 15.0% 10.0% 12.5% 9.5% *

Office Supplies 66.0% 64.0% 67.0% 54.5% 66.0% *

Janitorial/Warehouse 64.5% 60.0% 78.5% 45.0% * *

Coffee/Breakroom 60.0% 58.6% 75.0% 45.0% 69.0% *

Other Products 21.0% 21.0% * * * *

Total Sales 53.0% 60.0% 49.5% 47.5% * *

Product Sales as a % of Total Product Sales:


Computer Hardware, Software, & Supplies 6.9% 8.7% 5.4% 8.2% 9.0% 3.3%


Office Supplies 32.6% 40.6% 26.4% 42.5% 26.1% 26.4%



Other Products 5.3% 5.0% 6.3% 8.6% 3.8% 2.7%

Total Product Sales 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

Services Revenues as a % of Total Services Revenues:

Delivery & Installation (incl. Services 58.7% 62.9% 62.5% 22.5% 63.4% 81.3%

& Intermarket)

Print/Fax/Copy Services 22.1% 28.2% 9.4% 23.8% 31.0% 8.3%

Equipment Maintenance Contracts 8.9% 7.6% 10.8% 26.9% 0.1% 7.0%

Other Services Revenue 10.3% 1.3% 17.3% 26.9% 5.6% 3.5%

Total Services Revenues 100.0% 100.0% 100% 100% 100.0% 100%

Product Gross Profit Detail

(i.e., Product Sales Less Product Cost)


Computer Hardware, Software, & Supplies 23.4% 22.7% 26.4% 23.4% * *


Office Supplies 26.2% 25.8% 26.7% 25.0% 27.0% 26.4%



Other Products 30.9% 31.7% 30.2% 33.5% 30.2% 31.2%

Total Gross Profit-Products 27.2% 27.1% 28.4% 28.0% 27.6% 23.6%



42


No Retail

Stores

Retail

Stores

Under $5

Million

$5-10

Million

Over $10

MillionAll Dealers

SALES STAFF TIME SPENT IN SALES

% Time Spent in Sales:

Sales Management 71.5% 64.0% 81.4% 72.4% 72.5% 82.9%

Outside Sales 91.1% 88.9% 94.6% 85.0% 82.4% 100.0%

Inside Sales/Telemarketing 72.7% 82.2% 61.9% * 100.0% 75.8%

Sales Support 55.5% 56.1% 55.6% 50.8% * 64.2%

Customer Service/Order Entry 49.9% 48.7% 55.5% 34.3% 38.7% 70.7%

Other 46.9% * 58.3% * * 36.3%

TOTAL NUMBER OF EMPLOYEES BY POSITION

Sales Staff Employees

Sales Management 1.4 1.5 1.3 1.3 1.1 1.7

Outside Sales 6.5 7.7 5.1 1.8 5.8 14.5

Inside Sales/Telemarketing 0.7 0.7 0.7 0.4 0.6 1.2

Sales Support 2.1 3.0 1.3 1.0 0.9 5.3

Customer Service/Order Entry 3.4 4.9 1.9 1.2 2.6 7.6

Other 0.8 0.1 1.6 0.6 0.7 1.1

Total Sales Staff Employees 14.8 17.9 11.8 6.3 11.6 31.3

Delivery & Installation Staff Employees

Delivery Staff 6.3 9.1 3.5 1.2 5.1 15.3

Installation Staff 3.8 3.7 4.2 0.7 2.7 9.8

Warehouse Staff 3.8 5.7 1.8 0.7 2.1 10.3

Other Whse, Dlvry & Installation Staff 0.6 0.5 0.8 0.1 1.0 1.0

Total Delivery & Installation Staff Employees 14.5 19.0 10.2 2.7 10.9 36.5

Office/Administrative Staff Employees

Officers/Owners/General Manager 2.0 2.1 1.8 1.8 1.9 2.3

Accounting/Human Resources/Purchasing 3.3 4.3 2.2 0.6 3.1 7.5

ITS Staff 0.6 0.8 0.3 0.2 0.4 1.2

Other Office/Administrative Staff 1.2 1.1 0.8 0.3 1.9 1.7

Total Office/Administrative Staff 7.0 8.3 5.1 2.9 7.3 12.7

Total Employees Overall (Based on All 36.3 45.2 26.9 11.9 29.9 80.3

Respondents)

Total Employees Overall (Excluding Warehouse, 21.8 26.2 16.7 9.2 18.9 43.8




43


No Retail

Stores

Retail

Stores

Under $5

Million

$5-10

Million

Over $10

MillionAll Dealers

GENERAL INFORMATION

Company Type

Commercial Dealer with No Retail Stores 54.6% 100.0% 0.0% 55.6% 28.6% 71.4%

Commercial Dealer with Retail Stores 42.4% 0.0% 100.0% 44.4% 57.1% 28.6%

Other 3.0% 0.0% 0.0% 0.0% 14.3% 0.0%

Primary Business Structure

Proprietorship 3.0% 5.6% 0.0% 11.1% 0.0% 0.0%

Partnership 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

C Corporation 24.2% 27.8% 21.4% 11.1% 14.3% 28.6%

S Corporation 60.6% 55.6% 64.3% 77.8% 71.4% 71.4%

Limited Liability Corp (LLC) 9.1% 11.1% 7.1% 0.0% 14.3% 0.0%

Other 3.0% 0.0% 7.1% 0.0% 0.0% 0.0%

Population of Primary Market Area

Less Than 100,000 9.4% 0.0% 23.1% 11.1% 0.0% 0.0%

100,000 to 250,000 21.9% 22.2% 23.1% 66.7% 0.0% 0.0%

250,000 to 500,000 9.4% 16.7% 0.0% 0.0% 0.0% 14.3%

500,000 to 1 Million 12.5% 5.6% 23.1% 0.0% 33.3% 14.3%

1 - 3 Million 28.1% 38.9% 15.4% 22.2% 33.3% 14.3%

Greater than 3 Million 18.8% 16.7% 15.4% 0.0% 33.3% 57.1%

Avg. Staff Size of Commercial Accounts

Less Than 10 staff 21.9% 17.7% 28.6% 44.4% 0.0% 0.0%

10 to 50 Staff 56.3% 64.7% 42.9% 44.4% 85.7% 50.0%

51 to 100 Staff 15.6% 17.7% 14.3% 11.1% 0.0% 33.3%

101 to 250 Staff 6.3% 0.0% 14.3% 0.0% 14.3% 16.7%

Greater than 250 Staff 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%


45

B Y P R O F I T G R O U P A N D M A R K E T A R E A S E R V E D



47

B Y P R O F I T G R O U P A N D M A R K E T A R E A S E R V E D

By Profit Group By Market Area Served

High Profit Low Profit 500,000 Over

Dealers Dealers or Less 500,000

SUMMARY INCOME STATEMENT-% OF TOTAL REVENUES


Office Equipment, Business Machines, & Supplies 5.99% 16.76% 13.69% 10.82%

Computer Hardware, Software, & Supplies 5.61% 8.69% 8.65% 6.77%

Furniture & Accessories 36.10% 25.24% 26.20% 30.74%

Office Supplies 31.85% 34.25% 33.16% 34.24%

Janitorial/Warehouse 5.95% 3.91% 6.11% 4.53%

Coffee/Breakroom 1.37% 2.38% 1.73% 2.04%

Other Products 6.02% 4.51% 5.68% 5.06%

Total Product Sales 92.90% 95.74% 95.21% 94.21%


Delivery & Installation (incl. Services 4.16% 1.95% 1.08% 3.72%

& Intermarket)

Print/Fax/Copy Services 0.30% 1.86% 0.58% 1.47%

Equipment Maintenance Contracts 1.97% 0.07% 2.76% 0.03%

Other Services Revenue 0.68% 0.38% 0.37% 0.57%

Total Services Revenues 7.10% 4.26% 4.79% 5.79%

Total Revenues 100.00% 100.00% 100.00% 100.00%

Total Cost of Sales 67.51% 71.93% 69.86% 69.65%

Total Gross Profit Product & Services 32.49% 28.07% 30.14% 30.35%

EXPENSES


Compensation-Warehouse, Delivery, 4.72% 4.23% 3.31% 5.14%

Installation Staff

Outside Labor 1.04% 0.33% 0.00% 1.03%

Vehicle Expense 0.86% 1.01% 0.85% 0.99%

Outside Cartage 0.45% 1.28% 1.17% 0.70%

Warehouse Utilities 0.11% 0.10% 0.11% 0.10%

Warehouse Rent/Lease 1.00% 0.26% 0.32% 0.83%

Depreciation, Warehouse 0.07% 0.00% 0.01% 0.06%

Depreciation, Equipment 0.00% 0.01% 0.01% 0.01%

Depreciation, Warehouse Vehicles 0.20% 0.25% 0.29% 0.18%

Other WD&I Expenses 0.13% 0.18% 0.06% 0.16%

Total Warehouse/Delivery/Installation Expenses 8.59% 7.67% 6.12% 9.21%



48




Selling Expenses:

Compensation-Sales Managers 0.96% 1.42% 1.68% 0.86%

Compensation-Outside Sales 3.66% 5.80% 4.97% 4.65%

Compensation-Inside Sales/Telemarketing 0.33% 0.88% 0.94% 0.40%

Compensation-Sales Support 0.57% 0.58% 0.33% 0.65%

Compensation-Customer Service/Order Entry 0.70% 1.35% 0.43% 1.41%

Compensation-Marketing 0.03% 0.14% 0.00% 0.10%

Automobile Expenses 0.30% 0.22% 0.28% 0.26%

Advertising & Promotion 0.44% 0.69% 0.90% 0.36%

Travel & Entertainment 0.18% 0.11% 0.16% 0.14%

Other Sales Expenses 0.34% 0.31% 0.16% 0.45%

Total Selling Expenses 7.51% 11.50% 9.86% 9.28%

Occupancy Expenses:

Retail/Office-Rent/Lease 1.36% 1.12% 1.75% 0.88%

Retail/Office-Utilities 0.15% 0.26% 0.26% 0.15%

Janitorial and Maintenance 0.18% 0.16% 0.18% 0.16%

Depreciation, Retail/Office 0.03% 0.13% 0.13% 0.03%

Property Taxes 0.23% 0.07% 0.10% 0.17%

Other Occupancy Expenses 0.27% 0.05% 0.33% 0.05%

Total Occupancy Expenses 2.22% 1.80% 2.75% 1.44%

Office Expenses:

Compensation--Office Staff 2.00% 1.93% 2.80% 1.48%

Office Supplies/Stationery 0.17% 0.23% 0.27% 0.16%

Computer Supplies 0.03% 0.09% 0.02% 0.09%

Non-capitalized Computer Equipment 0.01% 0.25% 0.34% 0.01%

Computer S/W Upgrades and Licenses 0.37% 0.69% 0.65% 0.42%

Depreciation-Furniture/Fixtures/Equipment 0.10% 0.08% 0.06% 0.09%

Depreciation-Computer H/W & S/W 0.02% 0.15% 0.06% 0.09%

Equipment Leases and Maintenance 0.06% 0.32% 0.41% 0.07%

Telecommunications Expenses 0.24% 0.25% 0.27% 0.23%

Postage 0.04% 0.17% 0.17% 0.07%

Other Office Expenses 0.10% 0.45% 0.35% 0.25%

Total Office Expenses 3.14% 4.61% 5.42% 2.95%



49





Compensation-Officers/Owners/GMs 2.85% 2.49% 3.06% 2.51%

Pension/Profit Sharing Contributions 0.18% 0.38% 0.37% 0.15%

Outside Labor 0.01% 0.03% 0.03% 0.02%

Depreciation, Vehicles 0.14% 0.01% 0.19% 0.02%

Vehicles Expense 0.31% 0.04% 0.14% 0.21%

Bad Debts -0.11% -0.03% 0.03% -0.14%

Amortization Expenses 0.02% 0.20% 0.02% 0.17%

Insurance-Property & Liability 0.39% 0.35% 0.31% 0.41%

Insurance-Health 0.69% 0.89% 0.76% 0.87%

Professional Services 0.27% 0.41% 0.33% 0.36%

Travel and Entertainment 0.21% 0.07% 0.10% 0.17%

Training Expenses 0.01% 0.04% 0.04% 0.01%

Other Taxes & Penalties 0.30% 0.95% 1.18% 0.20%

Other Administrative Expenses 6.08% 6.31% 7.31% 5.54%

Total Administrative Expenses 5.43% 6.94% 6.06% 6.80%

Total Operating Expenses 27.54% 31.88% 31.46% 28.42%

Operating Profit 4.95% -3.81% -1.32% 1.93%

Other Expenses:

Cash Discounts Allowed 0.07% 0.08% 0.10% 0.06%

Interest Expenses 0.26% 0.24% 0.16% 0.30%

Miscellaneous Expenses 0.23% 0.01% 0.00% 0.20%

Total Other Expenses 0.57% 0.32% 0.26% 0.57%

Other Income:

Discounts Earned 0.32% 0.36% 0.07% 0.48%

Interest Earned 0.07% 0.01% 0.01% 0.06%

Incentive Programs 0.43% 3.08% 1.14% 2.16%

Miscellaneous Other Income 0.20% 0.42% 0.38% 0.28%

Total Other Income 1.00% 3.86% 1.60% 2.98%

Net Profit Before Taxes 5.39% -0.28% 0.03% 4.34%



50




BALANCE SHEET INFORMATION AS A % OF TOTAL ASSETS

Assets

Cash & Short-Term Investments 16.1% 10.4% 12.2% 14.5%

Accounts Receivable 29.1% 42.0% 38.0% 35.2%

Notes Receivable 2.3% 1.1% 0.2% 2.7%

Inventory 27.7% 16.7% 22.8% 19.6%

Prepayments & Deferred Charges 0.4% 1.7% 0.4% 1.4%

Other Current Assets 1.0% 0.9% 1.2% 1.4%

Total Current Assets 76.6% 72.8% 74.8% 74.9%

Land 2.1% 0.0% 0.0% 3.3%

Building-Net 2.4% 1.1% 1.4% 2.1%

Autos & Trucks-Net 6.7% 6.2% 7.4% 6.5%

Furniture & Fixtures-Net 1.5% 3.5% 3.1% 1.3%

Computer & Data Processing Equipment-Net 0.9% 2.5% 2.3% 0.8%

Leasehold Improvements-Net 2.6% 3.5% 3.6% 2.0%

Other Fixed Assets 0.3% 3.4% 0.5% 2.6%

Total Fixed Assets 16.4% 20.3% 18.2% 18.6%

Long-Term Investments 0.2% 2.4% 2.5% 0.5%

Other Long-Term Assets 6.8% 4.5% 4.5% 6.1%

Total Other Long-Term Assets 7.0% 6.9% 7.0% 6.5%

Total Assets 100.0% 100.0% 100.0% 100.0%

Liabilities

Accounts Payable 27.5% 26.0% 27.4% 26.1%

Customer Deposits 8.3% 2.5% 0.0% 7.6%

Notes Payable 6.3% 8.6% 6.2% 6.1%

Accrued Salaries & Commissions 4.5% 3.0% 1.4% 4.9%

Accrued Taxes 1.5% 2.2% 2.0% 0.8%

Other 5.4% 3.8% 2.9% 6.4%

Total Current Liabilities 53.5% 46.0% 39.9% 51.9%

Notes Payable 6.9% 25.2% 28.4% 7.7%

Long-Term Debt 5.9% 0.4% 2.6% 3.2%

Other Long-Term Liabilities 2.3% 0.3% 1.2% 2.7%

Total Long-Term Liabilities 15.1% 25.9% 32.1% 13.6%

Total Liabilities 68.5% 71.9% 72.0% 65.5%


Total Net Worth or Stockholder's Equity 31.5% 28.1% 28.0% 34.5%

Total Liabilities and Net Worth 100.0% 100.0% 100.0% 100.0%



51





Net Profit Before Tax-% of Total Revenues 5.39% -0.28% 0.03% 4.34%

Net Profit Before Tax-% of Total Assets 16.66% 2.16% 4.00% 13.83%

Net Profit Before Tax-% of Net Worth 38.25% 8.96% 11.90% 75.84%

Net Profit Before Interest & Tax -% of Assets 18.42% 3.10% 5.15% 15.05%

EBDIT (i.e., Earnings, or Net Profit, Before 6.22% 0.60% 0.92% 5.12%


Total Revenues)

Operating Profit-% of Total Revenues 4.95% -3.81% -1.32% 1.93%

Gross Profit-Product-% of Total Product Sales 28.39% 26.12% 28.39% 27.00%

REVENUES SUMMARY

Average Total Product & Services Revenues $6,275,652 $14,948,880 $3,958,993 $15,784,049


Total Product Sales -1.76% -0.89% -3.19% -0.47%

Total Services Revenues -0.38% 20.68% * -0.38%

Total Revenues Overall -1.72% -0.66% -2.96% -0.44%


Total Revenues/Total Assets (Asset Turnover) 4.6 3.8 4.4 3.8

Total Revenues/Net Fixed Assets (Fixed Asset 53.7 25.4 52.0 28.2

Turnover)


Average Collection Period (i.e., Days 30 29 28 32



Interest Expense as a % of Total Revenues 0.26% 0.24% 0.16% 0.30%

Current Ratio (Current Assets/Current Liab.) 1.5 1.8 2.3 1.6

Acid Test (or Quick) Ratio (Cash + Accounts 1.1 1.2 1.6 1.3


Current Liabilities/Net Worth 1.0 0.9 0.6 1.1

Current Liabilities/Inventory 2.0 3.1 2.0 2.2

Total Liabilities/Net Worth 1.2 1.1 0.9 1.4

Fixed Assets/Net Worth 0.3 0.3 0.3 0.3

Total Revenues/Net Worth 7.0 15.5 6.9 7.3

Total Revenues/Net Working Capital (i.e., CA-CL) 8.2 7.5 9.2 9.7

Inventory/Net Working Capital 0.5 0.3 0.4 0.3

Days Payables Outstanding 25 33 35 25

Customer Deposits-% of Total Revenues 2.7% 0.0% 0.5% 0.2%



52





Inventory Turnover (COGS/Average Inventory) 13.1 26.1 20.2 22.4

Inventory Turnover Days (365/Inventory Turnover) 28 14 23 16

Average Number of Days to Convert Inventory 54 46 50 51


Product Sales to Inventory 18.5 34.4 27.6 30.2

WAREHOUSE/DELIVERY PERFORMANCE MEASURES

Number of Office Product SKUs Stocked 900.0 450.0 350.0 325.0

Number of SKUs Shipped Annually 20,000.0 18,717.5 8,250.0 21,000.0

Deliveries per Day 51.0 142.0 30.0 132.5

Delivery Schedule Achievement (% on time and 97.5% 98.0% 98.0% 98.0%

correct

Average Lead Time (Days) 1.1 1.0 1.1 1.0

Orders per Month 850.0 3,065.0 920.0 2,590.5

Average Order Size $279.0 $198.7 $198.7 245.41

Lines (SKUs) Pulled per Hour 42.5 126.5 42.5 106.0

Order Fill Rate 98.0 98.1 98.0 98.0

Lines (SKUs) per Order 5.0 4.4 5.5 4.1


Total Employee Compensation Expense 15.8% 18.8% 17.5% 17.2%


Total Outside Labor Cost 1.1% 0.4% 0.0% 1.1%


Delivery & Installation Revenue Per $13,831 $20,289 $6,379 $20,475



Total Revenues Per:

Sales Management Employee $4,940,529 $6,705,776 $1,864,438 $8,700,312

Outside Sales Employee $1,373,775 $1,468,311 $863,585 $1,824,385

Inside Sales/Telemarketing Employee $5,429,684 $8,826,111 * $11,168,265

Customer Service/Sales Support Employee $1,979,777 $1,595,466 $1,000,853 $1,936,337

Total Sales Staff Employee $400,000 $698,017 $362,737 $790,937



Delivery Staff Employee $1,510,342 $1,412,825 $1,200,000 $1,412,825

Installation Staff Employee $1,274,626 $4,055,837 $1,804,600 $2,594,428

Warehouse Staff Employee $4,551,710 $3,352,888 $1,804,600 $4,137,233

Total Delivery & Installation Staff Employee $758,618 $809,610 $780,767 $809,610



53





Office & Administration Staff Employee $988,106 $1,080,660 $765,410 $1,487,064

All Employees Overall $224,570 $285,241 $166,359 $285,241

All Employees (Excluding Warehouse, $297,413 $466,759 $243,369 $466,759



Sales Management Employee $227,050 $39,236 $8,147 $205,020

Outside Sales Employee $49,874 $13,448 $8,719 $47,308

Inside Sales/Telemarketing Employee $241,638 $98,151 * $278,255

Customer Service/Sales Support Employee $75,617 $11,210 $4,688 $53,035




Delivery Staff Employee $74,988 $25,487 $19,618 $49,566

Installation Staff Employee $75,495 $46,025 $17,168 $75,495

Warehouse Staff Employee $227,050 $15,694 $3,459 $122,528


Office & Administration Staff Employee $33,250 $7,134 $5,911 $31,564

All Employees Overall $10,320 $1,783 $1,360 $8,628

All Employees (Excluding Warehouse, $13,130 $2,706 $2,023 $14,432



Sales Management Employee $1,771,180 $2,044,121 $527,056 $2,760,672

Outside Sales Employee $431,548 $401,603 $276,043 $501,149

Inside Sales/Telemarketing Employee $1,611,939 $2,250,742 * $2,760,672

Customer Service/Sales Support Employee $579,296 $427,470 $294,545 $547,601




Delivery Staff Employee $458,390 $354,219 $347,200 $354,219

Installation Staff Employee $438,080 $1,161,691 $552,085 $711,975

Warehouse Staff Employee $1,423,949 $920,224 $552,085 $1,232,111


Office & Administration Staff Employee $283,548 $290,135 $214,437 $467,007

ALL EMPLOYEES OVERALL $70,887 $75,708 $47,918 $81,369

ALL EMPLOYEES (Excluding Warehouse, $98,399 $129,536 $67,936 $129,536




54





Outside Sales 90.0% 90.0% 77.5% 95.0%

Inside Sales/Telemarketing 10.0% 10.0% 22.5% 5.0%

Total 100.0% 100.0% 100.0% 100.0%


Average Number of Locations 1.0 0.3 0.5 1.5

Product Sales Per Location $4,652,769 * $1,707,692 $8,125,508

Services Revenues Per Location $367,687 * $58,194 $537,181

Total Revenue Per Location $5,370,368 * $1,765,885 $9,012,901


Sales/Retail Space $1,793 $1,425 $1,647 $1,944

Warehouse Space-excluding temporary rental $428 $1,223 $768 $640



Office Space $1,879 $1,849 $2,026 $1,879

Total Space $356 $612 $450 $529


Sales/Retail Space $78.66 $2.90 $9.81 $87.20

Warehouse Space-excluding temporary rental $11.88 $2.62 $6.25 $23.52



Office Space $53.20 $4.69 $10.17 $60.17

Total Space $12.93 $1.15 $2.38 $14.51

SALES DETAIL

Credit Sales

Total Annual Credit Sales (as a % of Total

Revenue) 99.0% 95.0% 100.0% 92.2%


Commercial/Contract 33.2% 42.1% 22.4% 41.9%

Small Business 25.1% 30.6% 39.8% 25.7%

SoHo 0.4% 1.2% 2.1% 0.7%

Government 12.3% 11.4% 12.8% 13.6%

Healthcare 11.7% 7.9% 7.7% 8.2%

Education 17.3% 6.4% 14.9% 9.0%

Other 0.0% 0.4% 0.4% 0.9%

Total Sales 100.0% 100.0% 100.0% 100.0%



55





internet sales:

Office Equipment, Business Machines, & Supplies 32.5% * 32.5% 35.2%

Computer Hardware, Software, & Supplies * 69.0% * 64.0%


Office Supplies 75.0% 64.0% 34.0% 66.5%



Other Products * * * *

Total Sales 50.0% 60.0% 47.5% 55.0%





Office Supplies 33.1% 35.1% 34.6% 32.5%



Other Products 6.4% 4.7% 6.0% 4.9%

Total Product Sales 100.0% 100.0% 100.0% 100.0%


Delivery & Installation (incl. Services 67.5% 51.9% 35.2% 67.4%

& Intermarket)

Print/Fax/Copy Services 12.0% 29.9% 21.8% 24.5%

Equipment Maintenance Contracts 13.9% 5.1% 21.5% 3.5%

Other Services Revenue 6.5% 13.2% 21.5% 4.6%

Total Services Revenues 100.0% 100.0% 100.0% 100.0%






Office Supplies 26.6% 26.1% 26.2% 25.8%



Other Products 29.3% 31.5% 31.2% 31.0%

Total Gross Profit-Products 28.8% 26.5% 28.4% 26.2%



56






Sales Management 81.7% 68.7% 59.6% 77.0%

Outside Sales 92.0% 85.5% 92.5% 90.3%

Inside Sales/Telemarketing 59.0% 96.7% 63.3% 77.7%

Sales Support 54.3% 60.0% 62.5% 52.3%

Customer Service/Order Entry 50.0% 40.8% 48.9% 50.4%

Other 54.0% * * 53.6%



Sales Management 1.2 1.6 1.3 1.5

Outside Sales 4.1 8.9 3.0 8.8

Inside Sales/Telemarketing 0.6 0.7 0.5 0.8

Sales Support 1.2 3.1 1.0 2.8

Customer Service/Order Entry 2.2 4.6 1.3 4.9

Other 1.4 0.1 0.6 0.9

Total Sales Staff Employees 10.7 19.0 7.6 19.7


Delivery Staff 3.1 9.5 1.4 9.5

Installation Staff 3.3 4.4 1.2 5.5

Warehouse Staff 1.5 6.1 1.3 5.4

Other Whse, Dlvry & Installation Staff 0.5 0.8 0.4 0.5

Total Delivery & Installation Staff Employees 8.4 20.7 4.3 21.0


Officers/Owners/General Manager 1.8 2.1 1.9 2.0

Accounting/Human Resources/Purchasing 2.0 4.6 1.4 4.5

ITS Staff 0.2 0.9 0.3 0.7

Other Office/Administrative Staff 0.7 1.7 0.4 1.8

Total Office/Administrative Staff 4.7 9.2 3.9 9.0

Total Employees Overall (Based on All 23.6 48.9 15.8 49.6

Respondents)

Total Employees Overall (Excluding Warehouse, 15.3 28.2 11.5 28.7




57




GENERAL INFORMATION

Company Type

Commercial Dealer with No Retail Stores 27.3% 72.7% 53.9% 57.9%

Commercial Dealer with Retail Stores 72.7% 18.2% 46.2% 36.8%

Other 0.0% 9.1% 0.0% 5.3%


Proprietorship 0.0% 9.1% 7.7% 0.0%

Partnership 0.0% 0.0% 0.0% 0.0%

C Corporation 0.0% 36.4% 30.8% 15.8%

S Corporation 90.9% 54.6% 53.9% 68.4%

Limited Liability Corp (LLC) 9.1% 0.0% 7.7% 10.5%

Other 0.0% 0.0% 0.0% 5.3%


Less Than 100,000 0.0% 10.0% 23.1% 0.0%

100,000 to 250,000 36.4% 20.0% 53.9% 0.0%

250,000 to 500,000 0.0% 10.0% 23.1% 0.0%

500,000 to 1 Million 27.3% 0.0% 0.0% 21.1%

1 - 3 Million 18.2% 30.0% 0.0% 47.4%

Greater than 3 Million 18.2% 30.0% 0.0% 31.6%


Less Than 10 staff 18.2% 20.0% 46.2% 5.6%

10 to 50 Staff 45.5% 80.0% 53.9% 55.6%

51 to 100 Staff 18.2% 0.0% 0.0% 27.8%

101 to 250 Staff 18.2% 0.0% 0.0% 11.1%

Greater than 250 Staff 0.0% 0.0% 0.0% 0.0%


59

B Y N U M B E R O F F U L L - T I M E E Q U I V A L E N T E M P L O Y E E S



61

B Y N U M B E R O F F U L L - T I M E E Q U I V A L E N T S E M P L O Y E E S

Number or Full-Time Equivalent Employees

Under 15 FTEs 15-30 FTEs Over 30 FTEs

SUMMARY INCOME STATEMENT-% OF TOTAL

REVENUES


Office Equipment, Business Machines, & Supplies 8.63% 10.24% 14.27%

Computer Hardware, Software, & Supplies 10.35% 7.61% 4.35%

Furniture & Accessories 22.39% 30.03% 37.54%

Office Supplies 40.28% 31.94% 28.18%

Janitorial/Warehouse 8.24% 2.31% 4.10%

Coffee/Breakroom 2.19% 0.74% 2.38%

Other Products 6.31% 9.01% 1.96%

Total Product Sales 98.38% 91.87% 92.78%


Delivery & Installation (incl. Services 0.56% 3.65% 4.61%

& Intermarket)

Print/Fax/Copy Services 0.56% 0.10% 2.13%

Equipment Maintenance Contracts 0.07% 3.61% 0.04%

Other Services Revenue 0.43% 0.78% 0.44%

Total Services Revenues 1.62% 8.13% 7.22%

Total Revenues 100.00% 100.00% 100.00%

Total Cost of Sales 71.43% 66.94% 70.24%

Total Gross Profit Product & Services 28.57% 33.06% 29.76%

EXPENSES


Compensation-Warehouse, Delivery, 2.89% 5.99% 4.69%

Installation Staff

Outside Labor 0.00% 0.55% 1.31%

Vehicle Expense 0.88% 0.94% 0.98%

Outside Cartage 1.04% 0.27% 1.12%

Warehouse Utilities 0.13% 0.19% 0.04%

Warehouse Rent/Lease 0.60% 0.39% 0.81%

Depreciation, Warehouse 0.00% 0.13% 0.01%

Depreciation, Equipment 0.00% 0.00% 0.02%

Depreciation, Warehouse Vehicles 0.30% 0.13% 0.24%

Other WD&I Expenses 0.03% 0.23% 0.21%

Total Warehouse/Delivery/Installation Expenses 5.87% 8.82% 9.42%



62



Selling Expenses:

Compensation-Sales Managers 2.15% 0.88% 0.65%

Compensation-Outside Sales 4.42% 4.23% 5.31%

Compensation-Inside Sales/Telemarketing 1.01% 0.71% 0.22%

Compensation-Sales Support 0.52% 0.25% 0.83%

Compensation-Customer Service/Order Entry 0.56% 0.97% 1.42%

Compensation-Marketing 0.00% 0.14% 0.12%

Automobile Expenses 0.35% 0.14% 0.27%

Advertising & Promotion 0.95% 0.57% 0.26%

Travel & Entertainment 0.18% 0.11% 0.14%

Other Sales Expenses 0.22% 0.06% 0.59%

Total Selling Expenses 10.36% 8.06% 9.80%

Occupancy Expenses:

Retail/Office-Rent/Lease 1.16% 1.35% 1.24%

Retail/Office-Utilities 0.28% 0.15% 0.19%

Janitorial and Maintenance 0.13% 0.13% 0.23%

Depreciation, Retail/Office 0.12% 0.07% 0.06%

Property Taxes 0.06% 0.30% 0.13%

Other Occupancy Expenses 0.16% 0.27% 0.08%

Total Occupancy Expenses 1.90% 2.26% 1.92%

Office Expenses:

Compensation--Office Staff 2.44% 1.95% 1.61%

Office Supplies/Stationery 0.23% 0.24% 0.16%

Computer Supplies 0.02% 0.03% 0.12%

Non-capitalized Computer Equipment 0.39% 0.00% 0.01%

Computer S/W Upgrades and Licenses 0.73% 0.40% 0.46%

Depreciation-Furniture/Fixtures/Equipment 0.07% 0.10% 0.10%

Depreciation-Computer H/W & S/W 0.06% 0.13% 0.08%

Equipment Leases and Maintenance 0.47% 0.06% 0.06%

Telecommunications Expenses 0.26% 0.23% 0.24%

Postage 0.18% 0.06% 0.08%

Other Office Expenses 0.25% 0.54% 0.12%

Total Office Expenses 5.09% 3.73% 3.03%



63




Compensation-Officers/Owners/General

Managers

2.85% 1.62% 3.23%

Pension/Profit Sharing Contributions 0.21% 0.33% 0.30%

Outside Labor 0.05% 0.00% 0.01%

Depreciation, Vehicles 0.20% 0.00% 0.04%

Vehicles Expense 0.19% 0.36% 0.04%

Bad Debts 0.09% 0.03% -0.26%

Amortization Expenses 0.00% 0.21% 0.13%

Insurance-Property & Liability 0.35% 0.47% 0.33%

Insurance-Health 0.56% 0.55% 1.13%

Professional Services 0.34% 0.46% 0.27%

Travel and Entertainment 0.16% 0.23% 0.07%

Training Expenses 0.04% 0.02% 0.01%

Other Taxes & Penalties 1.31% 0.30% 0.30%

Other Administrative Expenses 0.16% 1.19% 0.65%

Total Administrative Expenses 6.49% 5.77% 6.25%

Total Operating Expenses 29.72% 28.64% 30.43%

Operating Profit -1.15% 4.42% -0.67%

Other Expenses:

Cash Discounts Allowed 0.00% 0.00% 0.18%

Interest Expenses 0.16% 0.46% 0.18%

Miscellaneous Expenses 0.00% 0.28% 0.11%

Total Other Expenses 0.16% 0.74% 0.47%

Other Income:

Discounts Earned 0.06% 0.39% 0.51%

Interest Earned 0.00% 0.05% 0.05%

Incentive Programs 0.35% 1.63% 2.93%

Miscellaneous Other Income 0.23% 0.20% 0.43%

Total Other Income 0.65% 2.28% 3.92%

Net Profit Before Taxes -0.67% 5.96% 2.78%



64



BALANCE SHEET INFORMATION AS A % OF

TOTAL ASSETS

Assets

Cash & Short-Term Investments 6.5% 15.0% 15.4%

Accounts Receivable 31.8% 32.9% 43.4%

Notes Receivable 0.2% 4.2% 0.7%

Inventory 30.9% 14.6% 18.8%

Prepayments & Deferred Charges 0.3% 1.4% 1.2%

Other Current Assets 0.0% 1.5% 2.0%

Total Current Assets 69.7% 69.6% 81.4%

Land 0.0% 1.7% 3.4%

Building-Net 1.8% 3.1% 0.7%

Autos & Trucks-Net 10.8% 4.3% 6.1%

Furniture & Fixtures-Net 4.2% 2.4% 1.0%

Computer & Data Processing Equipment-Net 3.1% 1.5% 0.6%

Leasehold Improvements-Net 2.8% 4.3% 2.1%

Other Fixed Assets 0.0% 4.2% 0.9%

Total Fixed Assets 22.7% 21.5% 14.9%

Long-Term Investments 3.3% 0.3% 0.4%

Other Long-Term Assets 4.2% 8.6% 3.4%

Total Other Long-Term Assets 7.6% 8.9% 3.8%

Total Assets 100.0% 100.0% 100.0%

Liabilities

Accounts Payable 36.7% 18.9% 25.5%

Customer Deposits 9.1% 4.7% 2.2%

Notes Payable 6.8% 11.0% 4.7%

Accrued Salaries & Commissions 2.8% 0.7% 5.8%

Accrued Taxes 1.8% 2.3% 1.2%

Other 2.0% 6.7% 5.3%

Total Current Liabilities 59.2% 44.3% 44.7%

Notes Payable 33.5% 13.3% 6.1%

Long-Term Debt 2.8% 3.3% 2.6%

Other Long-Term Liabilities 0.0% 3.3% 2.4%

Total Long-Term Liabilities 36.4% 19.9% 11.0%

Total Liabilities 95.5% 64.2% 55.7%


Total Net Worth or Stockholder's Equity 4.5% 35.8% 44.3%

Total Liabilities and Net Worth 100.0% 100.0% 100.0%



65




Net Profit Before Tax-% of Total Revenues -0.67% 5.96% 2.78%

Net Profit Before Tax-% of Total Assets 3.82% 15.03% 12.95%

Net Profit Before Tax-% of Net Worth * 31.89% 31.71%

Net Profit Before Interest & Tax -% of Assets 4.30% 16.25% 12.95%

EBDIT (i.e., Earnings, or Net Profit, Before 0.25% 6.97% 3.50%


Total Revenues)

Operating Profit-% of Total Revenues -1.15% 4.42% -0.67%

Gross Profit-Product-% of Total Product Sales 28.05% 28.87% 25.56%

REVENUES SUMMARY

Average Total Product & Services Revenues $1,629,936 $5,765,117 $21,335,415


Total Product Sales -3.19% -6.11% 0.05%

Total Services Revenues * -6.25% 0.45%

Total Revenues Overall -2.96% -6.34% 0.26%


Total Revenues/Total Assets (Asset Turnover) 7.9 3.8 3.9

Total Revenues/Net Fixed Assets (Fixed Asset 54.9 18.6 28.2

Turnover)


Average Collection Period (i.e., Days 27 29 33



Interest Expense as a % of Total Revenues 0.16% 0.46% 0.18%

Current Ratio (Current Assets/Current Liab.) 1.4 1.1 1.9

Acid Test (or Quick) Ratio (Cash + Accounts 1.1 0.9 1.4


Current Liabilities/Net Worth * 1.6 1.0

Current Liabilities/Inventory 2.2 2.9 2.1

Total Liabilities/Net Worth * 2.3 1.0

Fixed Assets/Net Worth * 0.4 0.3

Total Revenues/Net Worth * 7.0 7.5

Total Revenues/Net Working Capital (i.e., CA-CL) 12.6 5.6 9.7

Inventory/Net Working Capital 0.4 0.2 0.4

Days Payables Outstanding 34 26 31

Customer Deposits-% of Total Revenues 4.2% 1.0% 0.1%



66




Inventory Turnover (COGS/Average Inventory) 29.1 19.2 13.1

Inventory Turnover Days (365/Inventory Turnover) 13 20 28

Average Number of Days to Convert Inventory 40 50 81


Product Sales to Inventory 39.6 25.2 18.5

WAREHOUSE/DELIVERY PERFORMANCE

MEASURES

Number of Office Product SKUs Stocked 450.0 150.0 325.0

Number of SKUs Shipped Annually 8,500.0 15,717.5 21,890.0

Deliveries per Day 29.0 70.0 250.0

Delivery Schedule Achievement (% on time and

correct)

97.0% 95.1% 98.7%

Average Lead Time (Days) 1.1 1.0 1.0

Orders per Month 725.0 1,075.0 4,556.0

Average Order Size $198.7 $503.4 $228.0

Lines (SKUs) Pulled per Hour 35.0 * 133.5

Order Fill Rate 98.0 97.1 98.4

Lines (SKUs) per Order 6.0 4.8 3.9


Total Employee Compensation Expense 16.9% 16.7% 18.1%


Total Outside Labor Cost 0.1% 0.6% 1.3%


Delivery & Installation Revenue Per $0 $20,289 $42,379



Total Revenues Per:

Sales Management Employee $1,727,170 $6,477,023 $9,739,389

Outside Sales Employee $882,943 $1,620,989 $1,787,551

Inside Sales/Telemarketing Employee * * $14,299,594

Customer Service/Sales Support Employee $794,546 $2,413,005 $2,131,638

Total Sales Staff Employee $345,434 $654,454 $811,616



Delivery Staff Employee $1,151,447 $1,296,084 $2,230,595

Installation Staff Employee * * $2,594,428

Warehouse Staff Employee * $4,223,462 $3,722,755

Total Delivery & Installation Staff Employee $601,533 $837,069 $758,618



67




Office & Administration Staff Employee $667,236 $1,038,551 $1,925,380

All Employees Overall $160,000 $253,860 $320,660

All Employees (Excluding Warehouse, $240,000 $424,748 $587,803



Sales Management Employee $3,857 $188,497 $282,201

Outside Sales Employee $4,272 $47,346 $40,314

Inside Sales/Telemarketing Employee * * $282,201

Customer Service/Sales Support Employee $2,372 $75,392 $48,469




Delivery Staff Employee $6,250 $60,677 $38,829

Installation Staff Employee * * $72,704

Warehouse Staff Employee * $302,908 $72,704


Office & Administration Staff Employee $2,306 $38,487 $30,152

All Employees Overall $769 $9,627 $8,144

All Employees (Excluding Warehouse, $988 $13,523 $13,130



Sales Management Employee $465,023 $1,781,046 $2,847,898

Outside Sales Employee $254,277 $435,203 $426,398

Inside Sales/Telemarketing Employee * * $4,274,704

Customer Service/Sales Support Employee $210,772 $698,869 $610,992




Delivery Staff Employee $310,015 $353,172 $726,488

Installation Staff Employee * * $711,975

Warehouse Staff Employee * $1,405,726 $1,095,774


Office & Administration Staff Employee $196,363 $322,186 $509,160

ALL EMPLOYEES OVERALL $46,502 $78,108 $86,271

ALL EMPLOYEES (Excluding Warehouse, $66,432 $118,619 $145,299




68




Outside Sales 75.0% 90.0% 92.5%

Inside Sales/Telemarketing 25.0% 10.0% 7.5%

Total 100.0% 100.0% 100.0%


Average Number of Locations 0.4 0.6 2.1

Product Sales Per Location * * $8,244,315

Services Revenues Per Location * * $678,066

Total Revenue Per Location * * $9,103,420


Sales/Retail Space * * $2,068

Warehouse Space-excluding temporary rental $704 $1,459 $616



Office Space $1,979 $3,242 $1,684

Total Space $484 $539 $447


Sales/Retail Space * * $55.36

Warehouse Space-excluding temporary rental $3.70 $70.68 $16.90



Office Space $3.51 $126.23 $29.08

Total Space $0.86 $37.84 $10.39

SALES DETAIL

CREDIT SALES

Total Annual Credit Sales (as a % of Total

Revenue) 98.4% 87.9% 99.7%


Commercial/Contract 20.4% 31.9% 49.3%

Small Business 45.8% 37.8% 13.1%

SoHo 1.9% 1.2% 0.6%

Government 11.0% 11.3% 16.3%

Healthcare 7.3% 9.6% 7.9%

Education 13.7% 8.3% 11.2%

Other 0.0% 0.0% 1.7%

Total Sales 100.0% 100.0% 100.0%



69




internet sales:

Office Equipment, Business Machines, & Supplies * * 35.2%

Computer Hardware, Software, & Supplies * * 69.5%

Furniture & Accessories * 12.0% 7.1%

Office Supplies 42.5% 72.0% 66.0%

Janitorial/Warehouse * * 67.5%

Coffee/Breakroom * 61.0% 63.0%

Other Products * * *

Total Sales * * 53.0%


Office Equipment, Business Machines, & Supplies 8.8% 11.1% 22.8%

Computer Hardware, Software, & Supplies 10.5% 7.7% 4.0%




Coffee/Breakroom 2.23% 0.76% 2.19%


Total Product Sales 100.0% 100.0% 100.0%


Delivery & Installation (incl. Services * 51.1% 74.7%

& Intermarket)

Print/Fax/Copy Services * 21.5% 18.8%

Equipment Maintenance Contracts * 19.6% 4.4%

Other Services Revenue * 7.8% 2.2%

Total Services Revenues * 100.0% 100.0%



Office Equipment, Business Machines, & Supplies 26.5% * 28.6%

Computer Hardware, Software, & Supplies 23.4% * 22.3%




Coffee/Breakroom 28.7% * 25.2%


Total Gross Profit-Products 27.3% 27.8% 26.2%



70





Sales Management 50.9% 68.0% 86.7%

Outside Sales 87.5% 80.9% 98.3%

Inside Sales/Telemarketing 63.3% * 78.1%

Sales Support 42.1% * 63.5%

Customer Service/Order Entry 34.4% 47.0% 61.7%

Other * * 53.6%



Sales Management 1.1 1.3 1.5

Outside Sales 1.4 3.5 12.5

Inside Sales/Telemarketing 0.6 0.7 0.8

Sales Support 0.7 1.0 4.0

Customer Service/Order Entry 1.1 2.2 6.0

Other 0.0 0.8 1.3

Total Sales Staff Employees 5.0 9.5 26.1


Delivery Staff 0.9 4.5 11.7

Installation Staff 0.6 1.3 8.0

Warehouse Staff 0.6 1.4 7.8

Other Whse, Dlvry & Installation Staff 0.1 0.7 1.0

Total Delivery & Installation Staff Employees 2.3 7.9 28.4


Officers/Owners/General Manager 1.7 1.8 2.2

Accounting/Human Resources/Purchasing 0.4 2.0 6.3

ITS Staff 0.1 0.5 0.9

Other Office/Administrative Staff 0.1 0.8 2.3

Total Office/Administrative Staff 2.4 5.1 11.7

Total Employees Overall (Based on All 9.7 22.5 66.1

Respondents)

Total Employees Overall (Excluding Warehouse, 7.4 14.6 37.7




71



GENERAL INFORMATION

Company Type

Commercial Dealer with No Retail Stores 58.3% 57.1% 41.7%

Commercial Dealer with Retail Stores 41.7% 42.9% 50.0%

Other 0.0% 0.0% 8.3%


Proprietorship 8.3% 0.0% 0.0%

Partnership 0.0% 0.0% 0.0%

C Corporation 41.7% 14.3% 16.7%

S Corporation 50.0% 57.1% 75.0%

Limited Liability Corp (LLC) 0.0% 28.6% 0.0%

Other 0.0% 0.0% 8.3%


Less Than 100,000 25.0% 0.0% 0.0%

100,000 to 250,000 41.7% 33.3% 0.0%

250,000 to 500,000 8.3% 0.0% 8.3%

500,000 to 1 Million 8.3% 0.0% 25.0%

1 - 3 Million 16.7% 50.0% 25.0%

Greater than 3 Million 0.0% 16.7% 41.7%


Less Than 10 staff 50.0% 0.0% 0.0%

10 to 50 Staff 50.0% 71.4% 63.6%

51 to 100 Staff 0.0% 14.3% 27.3%

101 to 250 Staff 0.0% 14.3% 9.1%

Greater than 250 Staff 0.0% 0.0% 0.0%


73

A P P E N D I X

Appendix


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A P P E N D I X

S U R V E Y M E T H O D O L O G Y

In July 2017, National Office Products Alliance (NOPA) distributed a strictly confidential questionnaire to all NOPA Dealer

members. The primary intent of this survey was to collect detailed financial and operating information from member firms by

specific revenue size, population of market area, and other data aggregations of importance. All responses were returned

in strictest confidence to Industry Insights, Inc., the survey research firm that processed and compiled the final results. Once the questionnaires were submitted to Industry Insights, a confidential company identification code was assigned to each

company. The data was then coded, entered into a proprietary system and edited by Industry Insights’ financial analysts for

accuracy and consistency. Computer processing was performed on all data to ensure statistical validity and to produce the

financial and operating ratios contained in this study. In all, 34 companies submitted their surveys to Industry Insights.

The statistical information contained in this report is believed to be representative of the companies responding to the survey. All reasonable efforts were taken by

Industry Insights, Inc. to assure data comparability within the limitations of accounting reporting procedures. However, the data used in this report are not

necessarily based on audited financial statements and the statistical validity of any given number varies depending upon sample sizes and the amount of

consistency among responses for that particular ratio. Industry Insights and NOPA, therefore, make no representations or warranties with respect to the results of

this study and shall not be liable to clients or anyone else for any information inaccuracies, or errors or omissions in contents, regardless of the cause of such

inaccuracy, error or omission. In no event shall Industry Insights and/or NOPA be liable for any consequential damages.

K E Y R A T I O D E F I N I T I O N S

The primary purpose of this NOPA Dealer Financial Comparison and Benchmarking Guide is to provide a basis for

comparing your own firm’s performance with your peers in the industry. In order to do this, it is necessary to calculate your

own ratios using the same methods that were used to compute the ratios in this report. These definitions appear below.

Note: Those companies that participated in this year’s survey automatically received a confidential individualized “Company

Performance Report.” This report presents a participant’s own ratios and data already computed in a manner consistent with

those appearing in the full report, which are displayed alongside the appropriate comparatives. As a result, participating

firms received invaluable information about their own business performance without having to spend time and effort to make

the calculations manually.

Performance Measure Method of Computation OVERALL PROFITABILITY MEASURES

Net Profit Before Taxes as a % of Revenues Net Profit (Loss) Before Taxes Expressed as a % of Total Revenues

Net Profit Before Taxes as a % of Total Assets Net Profit (Loss) Before Taxes Expressed as a % of Total Assets

Net Profit Before Taxes as a % of Net Worth Net Profit (Loss) Before Taxes Expressed as a % of Net Worth or Owner’s Equity

Net Profit Before Interest & Tax as a % of Total Assets Net Profit Before Tax plus Interest Expense Expressed as a % of

Total Assets

EBDIT (i.e., Earnings Before Taxes, Depreciation and

Interest as a % of Total Revenues)

Net Profit Before Tax (i.e., Earnings) plus Interest Expense plus

Depreciation Expenses Expressed as a % of Total Revenues

Operating Profit as a % of Total Revenues Product & Services Gross Profit minus Total Operating Expenses

Expressed as a % of Total Revenues

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Performance Measure Method of Computation Gross Profit Product as a % of Total Product Sales Total Product Sales minus Total Product Cost of Goods Sold

Expressed as a % of Total Product Sales

REVENUES SUMMARY

Percent Change in Revenues from Prior Year (Most Recent Year Revenues minus Prior Year Revenues) ÷ Prior

Year Revenues (Expressed as a %)


Asset Turnover Total Revenues ÷ Total Assets

Fixed Asset Turnover Total Revenues ÷ Net Fixed Assets


Average Collection Period (i.e., Days Receivables

Outstanding)

Average or Year-End Accounts Receivable ÷ (Total Revenues

÷365)


Interest Expense as a % of Total Revenues Total Interest Paid Expressed as a % of Total Revenues

Current Ratio Current Assets ÷ Current Liabilities

Acid Test (or Quick) Ratio (Cash plus Accounts Receivable) ÷ Current Liabilities

Total Revenues ÷ Net Working Capital (Total Product Sales and Services Revenues) ÷ (Current Assets minus Current Liabilities)

Inventory ÷ Net Working Capital Inventory ÷ (Current Assets minus Current Liabilities)

Days Payables Outstanding (Average Accounts Payable times 365) ÷ Total Product Cost of

Goods Sold

Customer Deposits as a % of Total Revenues Average Customer Deposits Balance ÷ Total Product Sales and Services Revenues

INVENTORY MANAGEMENT

Inventory Turnover Cost of Goods Sold ÷ Average Inventory

Inventory Turnover Days 365 ÷ Inventory Turnover

Average Number of Days to Convert Inventory to Cash Average Inventory ÷ (Cost of Goods Sold ÷ 365)

PERSONNEL MANAGEMENT

Total Employee Compensation Expense as a % of Total

Revenues

Sum of All Employee Compensation for All Departments Expressed


Total Outside Labor Cost as a % of Total Revenues Sum of all Outside Labor Costs for All Departments Expressed as

a % of Total Revenues

Total Revenues per Employee Total Product Sales and Services Revenues ÷ the Number of

Employees (in FTEs, or Full-Time Equivalents)


Total Revenues per Square Foot Total Product Sales and Services Revenues ÷ Square Feet of

Space

Net Profit Before Tax per Square foot Net Profit Before Tax ÷ Square Feet of Space

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S U R V E Y Q U E S T I O N N A I R E

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Appendix


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Appendix


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Documents

2017 NOPA Dealer Financial Comparison Report...Introduction NOPA DEALER FINANCIAL COMPARISON AND BENCHMARKING GUIDE 6 U NDERSTANDING THE M ETRICS Overall Performance Ratio Analysis