U.S. Office Products Issues Update On Corporate Developments
WASHINGTON, D.C. (April 10) BUSINESS WIRE -April 10, 1997--U.S. Office
Products Company (NASDAQ: OFIS) today announced several updates on
corporate developments in response to numerous inquiries from analysts
and shareholders. "We are concerned that U.S. Office Products'
("USOP") share price may have declined in the marketplace due to
recently announced earnings per share shortfalls by industry
competitors. The reasons for these shortfalls, including paper price
fluctuations and declining operating margins, are not relevant to
USOP's operating performance. Our performance in sales, same unit
comparisons, and operating margins continues to track analysts'
consensus estimates for our fourth quarter," said Jonathan J. Ledecky,
USOP Chairman and Chief Executive Officer.
"We would also like to point out that USOP enjoys one of the strongest
balance sheets and operating cash flows in the office products industry
today," said Ledecky. "USOP has significant financial resources and
commitments from leading financial institutions with which to enhance
shareholder value." The Company completed the sale of 8,682,331 shares
at a gross price of $33.00 per share in February and March 1997 and
used the proceeds to retire outstanding bank debt.
U.S. Office Products announced that its acquisition backlog remains
highly robust. The Company recently completed eight additional "spoke"
acquisitions with $36 million in annualized revenues, bringing the
total annualized revenues acquired during the fourth quarter to $115
million. These most recent deals are:
Corporate Office Supplies of Australia (office supplies)
Becton Office City of Gastonia, NC (office supplies)
Office Supply Business of Leslie Office Supply, Inc. of Ann
Arbor, MI (office supplies)
Cal Bennett, Inc. of Visalia, CA (office supplies)
Doenges Office Supply of Wheaton, IL (office supplies)
Loy's Office Supplies, Inc. of La Grange, GA (office
supplies)
Kramer Office Furniture, Inc. of New York, NY (office
furniture)
Paper Tree Stationers of Sacramento, CA (office supplies)
USOP also has a "hub" deal backlog of approximately $400 million in
annualized revenue that it is seeking to complete during its fourth
quarter. "Due to the non-goodwill pooling treatment of most of these
transactions and our current approximately sixty million share base
outstanding, the fluctuations in USOP's stock price only nominally
affect the highly accretive nature of these planned transactions,"
said Donald H. Platt, USOP Chief Financial Officer. "It is our typical
practice to close these pooling deals at the end of each quarter to
facilitate their entry into the USOP system," said Platt.
"We are confident that our initiatives to improve operating margins
will continue to set us apart from our industry competitors," said
Timothy J. Flynn, USOP President and Chief Operating Officer. "Our
highly diversified product offering provides protection from paper
price fluctuations, because paper represents less than 7% of our total
sales. Our cross-selling opportunities to leverage office products,
office furniture, office coffee, computer network services, forms
management and travel services continue to grow. We will continue to
add modules to our product and service offering in an attempt to serve
all of the office place needs of our middle market customer base,"
said Flynn.
USOP also announced several important personnel promotions and
additions. The Company announced that Michael Barnell, who has been
"Quarterback" of the Company's St. Louis Region, has been named
Executive Vice President of the North American Office Products Group.
Mr. Barnell holds both an MBA and a JD from Cornell University. The
Company also has named David Copenhaver to the position of Vice
President of Operations for the Company's North American Office
Products Group. Mr. Copenhaver is a director of the Company and was
formerly Senior Vice President of The Smith Wilson Company, which USOP
acquired in September 1995. Susan Schuppert, formerly Executive
Director of the National Dealer Alliance ("NDA"), has been named the
Company's Vice President of Marketing. Prior to working with NDA, Ms.
Schuppert worked as the Executive Director of the Office Products
Dealer and the Office Products Wholesaler Alliances for the Business
Products Industry Association. Steve Stotland also has joined USOP to
head a new Canadian Division. Mr. Stotland is a 25-year veteran of
the Canadian office products industry and most recently was in charge
of corporate sales for a leading Canadian office supply company,
Today's Business Products.
"We are delighted by the additional experience and depth that we have
added to our management team with these important appointments," said
Thomas Morgan, President of USOP's North American Office Products
Group. "They will help us move forward with our efforts to integrate
our operations. We also will be working with Steve Stotland to
identify superior acquisition candidates in Canada and to develop
active cross-selling programs there."
U.S. Office Products Company is one of the fastest growing suppliers of
a broad range of office products and business services to corporate,
commercial, industrial and educational customers. Since its initial
public offering in February 1995, the Company has emerged as a leading
consolidator of several highly fragmented industries that serve the
office needs of business and educational customers. Since its
inception, the Company has completed 157 acquisitions, with current
annualized sales of approximately $2.9 billion. The Company operates
throughout the United States, as well as in New Zealand, Australia,
Canada and the United Kingdom, selling a full range of more than 34,000
office and educational products and services to its customers, and
currently has over 15,000 employees. This press release includes
"forward looking statements" that involve uncertainties and risks.
There can be no assurance that actual results will not differ from the
Company's expectations. Factors that could cause such differences
include the pace and timing of acquisitions, the Company's ability to
realize cost savings and efficiencies, competitive and general economic
conditions, and other risks described in the Company's filings with the
Securities and Exchange Commission.
--30--eb/ny*
CONTACT: Donald H. Platt
U.S. Office Products
(202) 339-6700 or
(800) 330-6347
or
Edelman Financial
Ophelia Bumgardner (Analysts)
(212) 704-4517
or Kate Sullivan (Media)
(212) 704-4453
KEYWORD: DISTRICT OF COLUMBIA
INDUSTRY KEYWORD: COMPUTERS/ELECTRONICS COMED RETAIL
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New York 212-752-9600 or 800-221-2462; Boston 617-236-4266 or
800-225-2030; SF 415-986-4422 or 800-227-0845; LA 310-820-9473
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