(from www.sec.gov)
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U.S. Office Products Co. |
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From the April 28, 1997 Washington Post
| '96 (in $ 000s) | % Change From '95 | |
| Revenue | 701,949 | 97.3 |
| Net Income | 8,740 | 42.2 |
Description:
U.S. Office Products is the parent company for nearly 150 regional suppliers of office products and services, which it sells under contract to corporate and commercial clients. Through acquisitions, the company has built a network of small firms in the United States, Canada, Australia, New Zealand and Britain that operate under individual names but cooperate in buying power, some support functions and even sell each other's products.
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Consolidation fever has gripped the office products industry, as small office-supply dealers rush to join forces with bigger firms that can give them the buying clout and economies of scale they need to stay competitive. In that environment, U.S. Office Products just can't seem to slow down. The company's annual revenue has grown at a rate that will make it a $3 billion company once all its pending acquisitions have been completed, making it one of the largest "contract stationers" in the country.
Rather than sticking to the market for pens and paper clips, though, U.S. Office Products has expanded into related product lines. In its latest quarter, the company's revenue broke down this way by business function: Office supplies, 43 percent; office furniture, 15 percent; business equipment/computer services, 11 percent; printing and forms management, 7 percent; school supplies, 6 percent; office coffee services, 2 percent; and all other, 16 percent.
In addition to benefiting from its greater clout with manufacturers by getting lower prices, U.S. Office Products is trying to get its subsidiaries to sell one another's products, so that one salesperson can sell a variety of related lines to each client. Company executives see this cross-selling strategy as key to its long-term success and profitability.
But the company's dramatic growth has come at a price—its stock price. U.S. Office Products' shares have languished for the past year as investors and Wall Street analysts question whether the company will be able to weave so many independent businesses into one cohesive unit. The company responded by restructuring its operations and creating management positions expressly for the purpose of melding its disparate operations into one system.
And despite lingering doubts on Wall Street, the company is continuing its aggressive expansion. Jonathan Ledecky, the company's founder and chairman, has ceded much of the day-to-day control over the company to other executives while he continues to look for acquisition opportunities here and abroad, suggesting that he has no plans to modify his stated goal of becoming an $8 billion company by 2000.
