Segment Information

12 Months Ended

Dec. 31, 2016

Segment Reporting [Abstract]

Segment Information

10. Segment Information

Management defines operating segments as individual operations that the Chief Operating Decision Maker (“CODM”) (in the Company’s case, the Chief Executive Officer) reviews for the purpose of assessing performance and allocating resources. When evaluating operating segments, management considers whether:

The operating segment engages in business activities from which it may earn revenues and incur expenses;

• The operating results of the operating segment are regularly reviewed by the enterprise’s CODM;

• Discrete financial information is available about the operating segment; and

• Other factors are present, such as management structure, presentation of information to the Board of Directors and the nature of the business activity of each operating segment.

Based on the factors referenced above, management has determined that the Company has four operating segments, Office and Facilities, Industrial, Automotive and CPO. Office and Facilities includes operations in the United States and included operations in Mexico conducted through a subsidiary, Azerty de Mexico, which was sold in 2015. Industrial includes operations in the United States, Canada and Dubai, UAE. The Automotive operating segment includes operations in the United States and Canada. For the years ended December 31, 2016, 2015 and 2014, the Company’s net sales from its foreign operations totaled $69.4 million, $121.9 million and $147.2 million, respectively. As of December 31, 2016, 2015, and 2014, long-lived assets of the Company’s foreign operations totaled $30.9 million, $32.2 million, and $42.5 million, respectively.

Management has also concluded that three of the Company’s operating segments (Office and Facilities, Industrial, and Automotive) meet all of the aggregation criteria required by the accounting guidance. Such determination is based on company-wide similarities in (1) the nature of products and/or services provided, (2) customers served, (3) production processes and/or distribution methods used, (4) economic characteristics including earnings before interest and taxes, and (5) regulatory environment. CPO does not meet the materiality thresholds for reporting individual segments and was combined with the other operating segments.

The Company’s product offerings may be divided into the following primary categories: (1) janitorial, foodservice and breakroom supplies, including foodservice consumables, safety and security items; (2) technology products such as computer supplies and peripherals; (3) traditional office products, including writing instruments, organizers and calendars and various office accessories; (4) industrial supplies, including hand and power tools, safety and security supplies, janitorial equipment and supplies, welding products; (5) cut sheet paper products; (6) automotive products, such as aftermarket tools and equipment; and (7) office furniture, including desks, filing and storage solutions, seating and systems furniture.

The following table shows net sales by product category for 2016, 2015 and 2014 (in thousands): 

	Years Ended December 31
	2016 (1)		2015 (1)		2014 (1)
Janitorial, foodservice and breakroom supplies (JanSan)	$	1,435,476	$	1,457,993	$	1,443,242
Technology products		1,347,652		1,363,146		1,447,661
Traditional office products		860,324		860,024		861,649
Industrial supplies		560,682		586,580		601,937
Cut sheet paper		394,650		343,604		465,400
Automotive		316,546		279,966		33,709
Office furniture		298,655		318,870		312,203
Freight and other		155,037		152,863		161,404
Total net sales	$	5,369,022	$	5,363,046	$	5,327,205

(1) Certain prior period amounts have been reclassified to conform to the current presentation. Such changes include reclassification of specific products to different product categories and did not impact the Consolidated Statements of Operations.

Supplier, Customer, and Product Concentration:

In 2016, the Company’s largest supplier was Hewlett-Packard Company which represented approximately 20% of its total purchases as compared to 14% and 16% of total purchases in the prior years ended December 31, 2015 and 2014, respectively. No other supplier accounted for more than 10% of the Company’s total purchases in any of the years presented. As of and for the year ended December 31, 2016, the Company had purchases of $18.1 million and payables of $0.7 million to a buying group in which the Company participates through its equity ownership as compared to purchases of $13.8 million and payables of $1.4 million as of and for the year ended December 31, 2015.

The Company’s customers include independent office and workplace dealers; facilities and maintenance distributors; technology, military, automotive aftermarket, national big-box retailers and healthcare and vertical suppliers; industrial distributors and internet retailers. The Company had one customer, W.B. Mason Co., Inc., which constituted approximately 11% of its 2016 consolidated net sales, 12% of its 2015 consolidated net sales and 12% of its 2014 consolidated net sales, respectively. No other single customer accounted for more than 10% of the Company’s 2016, 2015 or 2014 consolidated net sales. Further, no single customer accounted for more than 10% of consolidated accounts receivable as of the years ended December 31, 2016 and 2015.

No individual product from any product grouping represented 10% or more of our net sales in the years ended December 31, 2016, 2015 or 2014.