| White Cap Industries, Inc.. | |||
| Proposed Ticker: | WHCP | 3120 Airway Avenue, P.O. Box 1770 | |
| Exchange: | NASDAQ-National Market | Costa Mesa, CA 92626 | |
| Industry: | Wholesale (SIC Code 5082) | (714) 850-0900 | |
| # of Employees: | 640 | ||
| Type of Shares: | Common Shares | Filing Date: | 8/15/97 | |
| U.S. Shares Filed: | 0 | Filing Price: | - | |
| Non-U.S. Shares Filed: | 0 | Offering Amount: | $86,250,000 | |
| Primary Shares: | 0 | Expenses: | - | |
| Secondary Shares: | 0 | Shares Out After: |
| Manager | Tier | Phone |
| Donaldson, Lufkin & Jenrette Securities Corp. | Lead Manager | (212) 371-0641 |
| Robertson, Stephens & Company | Co-manager | (415) 989-8500 |
| Issuer's Law Firm: | Kirkland & Ellis |
| Bank's Law Firm: | Latham & Watkins |
| Auditor: | Arthur Andersen |
| Registrar/Transfer Agent: | American Stock Transfer & Trust Co |
Dollar amounts in U.S. millions except for per share data | |||||
| Full Year Audited Income | Latest Unaudited Income | Prior Unaudited Income | Balance Sheet | ||
| 3/31/97 | 3/31/97 | ||||
| Revenue: | $101.77 | Assets: | $62.29 | ||
| Net Income: | $2.80 | Curr Assets: | $40.99 | ||
| EPS: | Liabilities: | $65.32 | |||
| Prior EPS: | Curr Liabilities: | $38.89 | |||
| Cash Flow/Oper: | $3.63 | Equity: | -$3.03 | ||
| Cash Flow/Fin: | $14.38 | Cash: | $0.21 | ||
| Cash Flow/Inv: | -$18.00 | Working Cap: | $2.11 | ||
| Business Description |
| The company is one of the leading business to business retailers to professional contractors in the Western United States. The company offers over 20,000 stock keeping units of specialty tools and materials. The Company markets its products through 20 branch locations, its highly experienced outside sales force and through the strategic distribution of its in-stock catalogs. The Company has achieved substantial growth by acquiring leading contractor suppliers in new and existing markets, expanding product offerings and opening new branch locations. Since 1987, White Cap's net sales have increased at a compounded annual growth rate of 23%, resulting from (i) acquisitions, (ii) same store sales growth, which averaged 17% over the past four years, and (iii) new branch openings. The Company's active customer base (customers that have purchased at least one item on open credit during the past 12 months) has grown from approximately 7,000 in 1994 to over 16,000 at June 30, 1997. For the fiscal year ended March 31, 1997, the Company had pro forma net sales of approximately $165 million. The Company operates in a highly fragmented, multi-billion dollar industry. Management believes that small, regional contractor suppliers, with sales of less than $50 million, supply over two-thirds of the professional contractor market. |
| Competition |
| The industry in which the Company conducts its business is highly competitive. The Company faces competition in all customer categories of the contractor supply industry. In the small- and medium-sized professional contractor categories, the Company competes with traditional contractor suppliers, mail order marketers, small hardware stores and large home center chains. Historically, the large professional contractor has been served by traditional specialty construction supply dealers and distributors. Recently, however, some of the large home center chains have explored competing in this category through in-house sales efforts. Certain existing competitors of the Company have, and future competitors of the Company could have, substantially greater resources, including financial resources, than the Company. There can be no assurance that the Company will continue to compete effectively against existing competitors or new competitors that may enter the markets in which it conducts its business. |
| Business Plan |
| In order to capitalize on its unique business model and the fragmented professional contractor supply industry, the company has initiated an aggressive growth strategy consisting of: (I) pursuing acquisitions of leading contractor suppliers in new and existing markets; (ii) increasing market share within existing markets; (iii) expanding product offerings; and (iv) opening new branch locations. The key elements of the company's growth strategy are as follows: (I) Strategic Acquisitions, (ii) Increased Market Share, (iii) Expanded Product Offerings and (iv) New Branch Openings. |
| Use of Proceeds |
| The proceeds from the proposed offering will be used to repay debt, redeem Senior Preferred Stock, pay accrued dividends on such stock and on the company's Convertible Preferred Stock and for general corporate purposes. |
| Name of Shareholder | % Owned Before | % Owned After |
| Greg Grosch | 44.40% | |
| Mark M. King | 31.00% | |
| KRG Capital Partners, LLC | 31.00% | |
| James R. Johnson | 13.80% |
| Officer Name | Title | Age |
| Greg Grosch | Chairman of the Board of Directors, Chief Executive Officer and President | 50 |
| Chris Lane | Chief Financial Officer and Director | 36 |
| Gary Zwilling | Director of Credit | 50 |
| Charles Gruden | Director of Human Resources | 48 |
| Dan Tsujioka | Executive Vice President -- Merchandising, Secretary and Director | 48 |
| Albert Malatesta | Regional Vice President Branch Operations | 57 |
| Michael Monroe | Regional Vice President Sales | 48 |
| Rik Gagnon | Senior Vice President and National Sales Manager | 44 |
| Jack Karg | Vice President and Chief Operations Officer | 48 |
| Brian Etter | Vice President and Treasurer | 31 |