IPO Company Profile
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School Specialty, Inc.
1000 North Bluemound Drive, Appleton, WI 54914 * (920) 734-2756

The company is the largest U.S. distributor focusing on non-textbook educational supplies and furniture for grades pre kindergarten through 12.

Primary Underwriting Group
ManagerTierPhone
Goldman, Sachs & Co.Lead Manager (212) 902-5959
Nationsbanc Montgomery Securities, Inc.Co-manager (415) 627-2100
Piper Jaffray IncorporatedCo-manager (612) 342-6220
Salomon Smith BarneyCo-manager (212) 723-7300

Offering Information
NASNTL:SCHS Wholesale: SIC 5112
Type of Shares:Common Shares Filing Date:3/6/98
U.S. Shares:2,125,000 Offer Date:6/9/98
Non-U.S. Shares:0 Filing Range:$14.00 - $16.00
Primary Shares:2,125,000 Offer Price:$15.50
Secondary Shares:0 Gross Spread:$1.09
Offering Amount: $31,875,000 Selling:$0.64
Expenses:$0 Reallowance:$0.10
Post-IPO Shares: -
Spin out parent firm: U.S. Office Products
Employees:1322

Legal Counsel, Auditor and Registrar
Issuer's Law Firm: Wilmer, Cutler & Pickering
Bank's Law Firm: Sullivan & Cromwell
Auditor: Price Waterhouse

Selected Financial Data

Dollar amounts in U.S. millions except for per share data
6 Month Ending Financials
Full Year
Audited
Income
Latest
Unaudited
Income
Prior
Audited
Income
Balance
Sheet
4/26/97 10/25/97 10/26/96 10/25/97
Revenue:$191.75$198.49$130.67Assets:$201.30
Net Income:$8.94$12.41$12.36Curr Assets:$108.37
EPS:Liabilities:$168.19
Prior EPS:Curr Liab:$64.43
Cash Flow/Oper:Equity:$33.11
Cash Flow/Fin:Cash:
Cash Flow/Inv:Working Cap:$43.94

Competition
The market for school supplies is highly competitive and fragmented. School Specialty estimates that over 3,400 companies distribute educational materials to pre-K-12 schools as a primary focus of their business. In addition, School Specialty competes with alternate channel distributors such as office product contract stationers and superstores, which may continue to broaden their product lines in school supplies. Some of these competitors have greater financial resources and buying power than School Specialty. School Specialty believes that the educational supplies market will consolidate over the next several years, which may make School Specialty's general and specialty supply businesses more competitive. In addition, there may be increasing competition for acquisition candidates and there can be no assurance that acquisitions will continue to be available to School Specialty on favorable terms, if at all.

Business Plan
School Specialty's objective is to further enhance its position as the leading distributor of non-textbook educational supplies through the continued implementation of the following strategies: (I) Pursue Acquisitions Agressively, (ii) Improve Profitability and (iii) Penetrate New Markets and Expand Customer Base in Existing Markets.

Use of Proceeds
The proceeds from the proposed offering will be used for general corporate purposes, principally working capital and repayment of certain indebtedness allocated to the company by U.S. Office Products Company, and for potential acquisitions.

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