As filed with the Securities and Exchange Commission on November 8, 1999
Reg. No. 333-__________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-4
REGISTRATION STATEMENT
Under The Securities Act of 1933
SCHOOL SPECIALTY, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 5112 39-0971239
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Indetification No.)
426 West College Avenue
P.O. Box 1579
Appleton, Wisconsin 54912-1579
(920) 734-2756
(Address, including Zip Code, and Telephone Number, including Area Code,
of Registrant's Principal Executive Offices)
Daniel P. Spalding Copies of all communications to:
School Specialty, Inc. Scott A. Moehrke
426 West College Avenue Godfrey & Kahn, S.C.
P.O. Box 1579 780 North Water Street
Appleton, WI 54912-1579 Milwaukee, WI 53202
(920) 734-2756
(Address, including Zip Code, and Telephone Number,
including Area Code, of Agent for Service)
Approximate date of commencement of proposed sale to
the public: From time to time after the effective date
of this Registration Statement.
If the securities being registered on this Form
are being offered in connection with the formation of a
holding company, and there is compliance with General
Instruction G, check the following box. [ ]
If this Form is filed to register additional
securities for an offering pursuant to Rule 462(b)
under the Securities Act, check the following box and
list the Securities Act registration statement number
of the earlier effective registration statement for the
same offering.[ ]
If this Form is a post-effective amendment filed
pursuant to Rule 462(d) under the Securities Act, check
the following box and list the Securities Act
registration statement number of the earlier effective
registration statement for the same offering.[ ]
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Title of each Amount maximum maximum Amount of
class of securities to be offering price aggregate registration
to be registered registered per unit(1) offering price(1) fee
Common Stock,
$0.001 par value 3,000,000 N/A $46,875,000 $13,031.25
(1) Estimated solely for the purpose of calculating
the registration fee pursuant to Rule 457(c) under
the Securities Act of 1933. The registration fee is
based on the average of the high and low prices of
the Common Stock on November 4, 1999 on the Nasdaq
National Market, as reported in the Midwest Edition
of The Wall Street Journal on November 5, 1999.
The Registrant hereby amends this Registration
Statement on such date or dates as may be necessary to
delay its effective date until the Registrant shall
file a further amendment which specifically states that
this Registration Statement shall thereafter become
effective in accordance with Section 8(a) of the
Securities Act of 1933 or until this Registration
Statement shall become effective on such date as the
Commission, acting pursuant to said Section 8(a), may
determine.
<PAGE>
Subject to completion. Dated November 8, 1999.
Prospectus
School Specialty, Inc.
3,000,000 Shares of Common Stock
We may offer and sell, from time to time, up to
3,000,000 shares of our common stock, par value $0.001
per share, in connection with future acquisitions of
businesses and assets.
We intend to concentrate our acquisitions in areas
related to our current business. In furtherance of
this objective, we may attempt to make acquisitions
that are either complementary to our present operations
or which we consider to be advantageous even though
they may be dissimilar to our present activities.
We expect that the terms of any such acquisitions
will be determined by direct negotiations with the
owners or controlling persons of the businesses or
assets to be acquired, and that the shares of common
stock issued will be valued at prices reasonably
related to current market prices at the time that an
acquisition is agreed upon, at or about the time of
delivery of shares or at such other time or over such
other period as may be agreed upon.
We do not expect to pay underwriting discounts or
commissions in connection with the issuance of shares
of common stock under this prospectus. However,
brokers' commissions may be paid from time to time in
connection with specific acquisitions, and such fees
may be paid through the issuance of shares of common
stock covered by this prospectus.
This prospectus may be used by persons who receive
shares of common stock in connection with acquisitions
and who wish to resell the shares. We will not receive
any proceeds from the resale of such shares. We have
not authorized any person to use this prospectus in
connection with resales of shares without our prior
written consent.
Our common stock is included for quotation in the
Nasdaq National Market under the symbol "SCHS." On
November 4, 1999, the last sale price of the common
stock was $15.875 per share.
Investing in our common stock involves a high
degree of risk. See "RISK FACTORS" beginning on page 4.
_____________________
Neither the Securities and Exchange Commission nor
any state securities commission has approved or
disapproved of these securities, or determined if this
prospectus is truthful or complete. Any representation
to the contrary is a criminal offense.
_____________________
The date of this prospectus is ____________, 1999.
<PAGE>
The information in this preliminary prospectus is not
complete and may be changed. These securities may not
be sold until the registration statement filed with the
Securities and Exchange Commission becomes effective.
This preliminary prospectus is not an offer to sell nor
is it soliciting an offer to buy these securities in
any state where the offer or sale is not permitted.
<PAGE>
TABLE OF CONTENTS
Page
SUMMARY 3
RECENT DEVELOPMENTS 4
RISK FACTORS 4
FORWARD-LOOKING STATEMENTS 8
SELECTED HISTORICAL FINANCIAL INFORMATION 9
PRO FORMA COMBINED STATEMENT OF INCOME 12
SECURITIES COVERED BY THIS PROSPECTUS 12
LEGAL MATTERS 14
EXPERTS 14
WHERE YOU CAN FIND MORE INFORMATION 14
DOCUMENTS INCORPORATED BY REFERENCE 15
______________
This prospectus incorporates important business
and financial information about School Specialty that
is not included in or delivered with this prospectus.
You may request copies of this information, at no cost,
by writing or calling us at the following address or
telephone number:
School Specialty, Inc.
426 West College Avenue
P.O. Box 1579
Appleton, Wisconsin 54912-1579
Attention: Mary M. Kabacinski, Executive Vice President
and Chief Financial Officer
Telephone: (920) 734-2756
To obtain timely delivery of the documents, you
must request the information no later than five
business days prior to the date on which you make your
final investment decision.
_______________
You should rely only on the information contained
in this prospectus. We have not authorized anyone to
provide you with different information. No offer of
these securities will be made available in any state
where the offer is not permitted. You should not
assume that the information in this prospectus is
accurate as of any date other than on the front of this
prospectus.
<PAGE>
Unless the context requires otherwise, all
references to "School Specialty," "we" or "our" refers
to School Specialty, Inc. and its subsidiaries. Our
fiscal year ends on the last Saturday in April in each
year. In this prospectus, we refer to fiscal years by
reference to the calendar year in which they end (e.g.,
the fiscal year ended April 29, 2000 is referred to as
"fiscal 2000").
SUMMARY
We are the largest marketer of non-textbook
educational supplies and furniture to schools for pre-
kindergarten through twelfth grade. We offer more than
60,000 items through an innovative two-pronged
marketing approach that targets both school
administrators and individual teachers. Our broad
product range enables us to provide our customers with
one source for virtually all of their non-textbook
school supplies and furniture needs.
We have grown significantly in recent years
through both acquisitions and internal growth. In
order to expand our geographic presence and product
range, we have acquired 20 companies since May 1996.
In August 1998, we purchased Beckley-Cardy, our largest
traditional and specialty school supply competitor.
Our "top down" marketing approach targets school
administrators at the state, regional and local levels
using our 260 sales representatives and our School
Specialty and Beckley-Cardy general supply and
furniture catalogs. Our "bottom up" approach seeks to
reach individual teachers and curriculum specialists
primarily through the mailing of our
ClassroomDirect.com general supply catalog and our
specialty catalogs. In January 1999, we mailed over 10
million catalogs to more than three million teachers
and curriculum specialists. Approximately 100
employees assist in the sale, marketing and
merchandising of our specialty products.
We also use the Internet to market and sell our
products through two fully-integrated e-commerce
Internet websites, ClassroomDirect.com and JuneBox.com.
ClassroomDirect.com, launched in January 1999, offers
over 13,000 items for sale and is targeted at teachers.
ClassroomDirect.com has a relationship with ZapMe!, a
broadband interactive network which provides schools
with free satellite-based Internet access and computers
for school labs and libraries, pursuant to which
ClassroomDirect.com is included in their e-commerce
area. JuneBox.com, launched in July 1999, is a full-
featured e-commerce site focused on K-12th grade,
offering schools throughout the U.S. all of our brands,
featuring over 60,000 products and services geared
toward the education institution. JuneBox.com has a
strategic relationship with FamilyEducation.com, the
leading K-12 community on the Internet. JuneBox.com is
included in FamilyEducation.com's e-commerce area as
its exclusive school supply provider.
School Specialty was incorporated in Delaware as a
wholly owned subsidiary of U.S. Office Products in
February 1998 to hold its Educational Supplies and
Products Division. School Specialty, Inc., a Wisconsin
corporation formed in October 1959, was acquired by
U.S. Office Products in May 1996. On June 9, 1998,
U.S. Office Products entirely spun off School
Specialty, whereby U.S. Office Products' shareholders
received one share of our stock for every nine shares
of U.S. Office Products stock held. As a result of the
spin-off, U.S. Office Products retained no further
ownership of School Specialty. Our common stock is
listed on the Nasdaq National Market under the symbol
"SCHS." Our principal offices are located at 426 West
College Avenue, Appleton, Wisconsin 54911, and our
telephone number is (920) 734-2756. Our world wide
general website address is www.schoolspecialty.com.
Information contained in any of our websites is not
deemed to be a part of this prospectus.
<PAGE>
RECENT DEVELOPMENTS
On October 1, 1999, we purchased a combined
warehouse and distribution facility in Appleton,
Wisconsin, a property that we previously leased and
used as our headquarters. The purchase price was $2.6
million, the fair market value of the property, and was
paid to the owners of the facility (consisting of the
father of our Chief Executive Officer, Daniel P.
Spalding, the father of our Chief Information Officer,
Michael J. Killoren, and uncle to Mr. Spalding, and one
other unrelated party).
RISK FACTORS
Before you invest in School Specialty common
stock, you should be aware that there are various risks
associated with such an investment, including those
described below. You should carefully consider these
risks together with all of the other information
included in or incorporated into this prospectus before
you decide to acquire any common stock of School
Specialty.
Potential Tax Liability from Spin-Offs. We became
a public company on June 9, 1998 when U.S. Office
Products distributed all of our shares and the shares
of three other companies to its shareholders and we
sold additional shares of our stock in a public
offering. These distributions (known as the "spin-
offs") were intended to be tax-free to both U.S. Office
Products and its shareholders. As part of the spin-
offs, we and the other three companies whose shares
were distributed each agreed with U.S. Office Products
that if any of us took any action or failed to act in a
way that materially caused the distributions to be
taxable, then U.S. Office Products could require any of
us to pay to it the full amount of the tax losses it
suffered as a result of the distributions. We and the
three other spin-off companies also agreed that if the
distributions became taxable for any other reason, we
would each pay to U.S. Office Products a portion of its
tax losses based on the relative aggregate value of
each company's common stock immediately after the
distributions. We estimate that our portion of any
such tax losses under this agreement would be
approximately 14.4%. We also agreed with the other
three spin-off companies that if one or more of us
materially caused the distributions to be taxable and
any of the other companies were required to pay tax
losses under the agreement to U.S. Office Products,
then the company or companies that materially caused
the distributions to be taxable would reimburse the
other companies for such payments. As a result of
these agreements, we could be required to pay:
* all of the tax losses of U.S. Office Products if
we cause the distributions to be taxable,
* our portion of the tax losses of U.S. Office
Products even if neither we nor any of the other three
companies cause the distributions to be taxable, or
* all of the tax losses of U.S. Office Products even
if we did not cause the distributions to be taxable and
one or more of the other companies did (while such
other companies would be required to reimburse us for
such payment, we cannot be sure that we will receive
such reimbursement).
Exposure to Risks Related to Other Liabilities of
U.S. Office Products. As part of the distributions, we
and the other three spin-off companies each agreed with
U.S. Office Products to pay a portion of the securities
law and general liabilities of U.S. Office Products
arising prior to the distributions and, if any of the
spin-off companies fails to pay its portion, to pay a
portion of the unpaid amount. These shared liabilities
do not include any liability that relates specifically
to a particular spin-off company or to the continuing
businesses of U.S. Office Products after the
distributions. The portion of the shared liabilities
payable by each spin-off company is based on the
average of each company's revenues for fiscal 1998
relative to those of U.S. Office Products and each
company's operating income for fiscal 1998 relative to
that of U.S. Office Products. We estimate that our
portion of any such
<PAGE>
liabilities under this agreement
would be approximately 9.8%, but the maximum aggregate
amount we can be required to pay for all shared
liabilities is limited by the agreement to $1.75
million (including as a result of defaults by the other
spin-off companies). U.S. Office Products has been
named as a defendant in various class action lawsuits
relating to the distributions that allege, among other
things, violations of the federal securities laws. As
a result of these agreements, we may be required to pay
up to $1.75 million to U.S. Office Products for shared
liabilities even though they are unrelated to our
business and operations, we have no control over such
liabilities and one or more of the other spin-off
companies may be primarily responsible for such
liabilities.
Limited Independent Operating History. Prior to
the spin-off in June 1998, we operated as a wholly
owned subsidiary of U.S. Office Products and many of
our general, administrative and financial functions
(including legal, accounting, purchasing, management
information services and borrowings) were handled by
U.S. Office Products. Since the spin-off, we have
operated independently of U.S. Office Products and have
been independently responsible for managing and
financing all aspects of our business and operations.
Our expenses are likely to be higher than when we were
a subsidiary of U.S. Office Products and we may
experience difficulties with respect to general,
administrative and financial functions that we did not
experience as part of U.S. Office Products. Because
some of the financial information included in or
incorporated into this prospectus relates to periods
during which we were a subsidiary of U.S. Office
Products, it does not necessarily reflect what our
results of operations and financial condition would
have been it we were independent during those periods
and it may not be a good indication of what our future
results of operations and financial condition will be.
Risk of Rapid Growth and Dependence Upon
Acquisitions for Future Growth. Our business has grown
significantly through acquisitions in recent years.
Since May 1996, we have acquired 20 companies. Future
growth in our revenues and earnings depends
substantially on our ability to continue to acquire and
successfully integrate and operate school supply
companies. We cannot guarantee that we will be able to
identify and acquire businesses at all or on reasonable
terms. In addition, we cannot be sure that we will be
able to operate the businesses that we acquire
profitably or that our management and financial
controls, personnel, computer systems and other
corporate support systems will be adequate to manage
the increased size and scope of our operations as a
result of acquisitions. Managing and integrating
acquired businesses may result in substantial costs,
delays or other operating or financial problems that
could materially and adversely affect our financial
condition and results of operations. These include:
* the diversion of management's attention and other
resources away from our existing businesses,
* significant charges and expenses relating to
employee severance, restructuring and transaction costs
and other unexpected events or liabilities,
* the inability to retain, hire or train qualified
personnel for the acquired businesses, and
* the amortization of goodwill and other acquired
intangible assets.
We intend to pay for acquisitions in whole or in
part using our shares, and in some cases this may
dilute our earnings per share. Our ability and
willingness to use our shares will depend upon their
market price and the willingness of sellers to accept
our shares. In addition, our ability to issue shares
may be limited by Section 355(e) of the Internal
Revenue Code of 1986. Under that Section, U.S. Office
Products will incur tax liability for the distribution
of our shares if 50% or more, by vote or value, of the
capital stock of either U.S. Office Products or School
Specialty is acquired by one or more persons acting
pursuant to a plan or series of related transactions
that includes the spin-off. There is a presumption that
<PAGE>
any acquisition occurring within two years after
the spin-off is pursuant to a plan that includes the
spin-off. However, the presumption may be overcome by
establishing that the spin-off and such acquisition are
not part of a plan or series of related transactions.
As noted above, we will be liable for all the tax
liabilities of U.S. Office Products if our actions
cause the spin-off to be taxable and will be liable for
all or a portion of such liabilities even if our
actions did not cause the spin-off to be taxable.
Inability to Use the Pooling-of-Interests Method
of Accounting; Material Amount of Goodwill. Under
generally accepted accounting principles, we must be
independent for at least two years before we can use
the pooling-of-interests method of accounting for share
acquisitions, which would avoid the creation and
subsequent amortization of goodwill. Because we were a
wholly owned subsidiary of U.S. Office Products until
the completion of the spin-off on June 9, 1998, we will
not be eligible to use pooling-of-interest accounting
until June 9, 2000. We must use purchase accounting
for any acquisitions prior to that date, which may
continue to result in the creation of goodwill.
Approximately $202.2 million, or 40.2%, of our
total assets as of July 24, 1999 represents intangible
assets, the significant majority of which is goodwill.
Goodwill is the amount by which the costs of an
acquisition accounted for using the purchase method
exceeds the fair value of the net assets we acquire.
We are required to record goodwill as an intangible
asset on our balance sheet and to amortize it over a
period of years. We generally amortize goodwill for
each acquisition on a straight line method over a
period of 40 years, which means that in each year
during the 40-year period 1/40th of the goodwill is
taken off our balance sheet and recorded in our income
statement as a non-cash expense (which reduces our net
income). Even though it reduces our net income for
accounting purposes, amortization of goodwill may not
be deductible for tax purposes. In addition, we are
required to periodically evaluate whether we can
recover our remaining goodwill from the undiscounted
future cash flows that we expect to receive from the
operations of the acquired companies. If these
undiscounted future cash flows are less than the
carrying value of the associated goodwill, the goodwill
is impaired and we must reduce the carrying value of
the goodwill to equal the discounted future cash flows
and take the amount of the reduction as a charge
against our income. Reductions in our net income
caused by the amortization or write down of goodwill
could materially adversely affect our results of
operations and financial condition and the market price
of our common stock.
Dependence on Growth of Student Population and
School Expenditures. Our growth strategy and
profitability also depend on growth in the student
population and expenditures per student in public and
private elementary and secondary schools. The level of
student enrollment is largely a function of
demographics, while expenditures per student are also
affected by government budgets and the prevailing
political and social attitudes towards education. Any
significant and sustained decline in student enrollment
and/or expenditures per student could have a material
adverse effect on our business, financial condition and
results of operations.
Seasonality of Our Business. Our educational
supply businesses are highly seasonal. Because most of
our customers want their school supplies delivered
before or shortly after the commencement of the school
year in September, we make most of our sales from May
to October. As a result, we usually earn more than
100% of our annual net income in the first six months
of our fiscal year and operate at a loss in our third
fiscal quarter. This seasonality causes our operating
results to vary considerably from quarter to quarter
and these fluctuations could adversely affect the
market price of our common stock.
Dependence on Key Suppliers and Service Providers.
We depend upon a limited number of suppliers for some
of our products, especially furniture. We also depend
upon a limited number of service providers for the
delivery of our products. If these suppliers or
service providers are unable to provide the products or
services that we require or materially increase their
costs (especially during our peak season of June
through September), this could impair our ability to
deliver our products on a timely
<PAGE>
and profitable basis and could have a material adverse
effect on our business, financial condition and results
of operations. We were, for example, adversely affected
by the United Parcel Service strike during August 1997
due to the perception that we were unable to ship
products. As we seek to reduce the number of our
suppliers and to minimize duplicative lines as part of
our business strategy, we are likely to increase our
dependence on remaining vendors.
Reliance on Key Personnel. Our business depends
to a large extent on the abilities and continued
efforts of current executive officers and senior
management, including Daniel P. Spalding, our Chief
Executive Officer. We are also likely to depend
heavily on the executive officers and senior management
of businesses that we acquire in the future. If any of
these people become unable or unwilling to continue in
his or her present role, or if we are unable to attract
and retain other qualified employees, our business
could be adversely affected. Although we have
employment contracts with most executive officers, we
do not have employment agreements with our senior
management. We do not have and do not intend to obtain
key man life insurance covering any of our executive
officers or other members of senior management.
Competition. The market for school supplies is
highly competitive and fragmented. We estimate that
over 3,400 companies market educational materials to
schools for pre-kindergarten through twelfth grade as a
primary focus of their business. We also face
increasing competition from alternate channel
marketers, including superstores and office product
contract stationers, that have not traditionally
focused on marketing school supplies. These
competitors are likely to continue to expand their
product lines and interest in school supplies. Some of
these competitors have greater financial resources and
buying power than we do. We believe that the
educational supplies market will consolidate over the
next several years, which is likely to increase
competition in our markets and in our search for
attractive acquisition candidates.
Dependence on Our Systems; Our Year 2000 Issues.
We believe that one of our competitive advantages is
our information systems, including our proprietary
PC-based customer Order Management System. We have
integrated the operations of almost all of our
divisions and subsidiaries and their information
systems are linked to host systems located at our
headquarters in Appleton, Wisconsin and at two other
locations. If any of these links are disrupted or
become unavailable, this could materially and adversely
affect our business, results of operations and
financial condition.
Several of our recently-acquired divisions and/or
subsidiaries as well as Gresswell (our foreign
subsidiary) use predecessor information systems. With
the exception of Gresswell, we intend to convert the
information systems of these businesses to one of our
host systems as soon as practicable. However, none of
these businesses has a backup computer system or backup
extra communication lines. Even though we have taken
precautions to protect ourselves from events that could
interrupt the operations of these businesses and intend
to do so for other businesses we acquire in the future,
we cannot be sure that a fire, flood or other natural
disaster affecting their systems would not disable the
system or prevent the system from communicating with
our other businesses. The occurrence of any of these
events could have a material adverse effect on our
results of operations and financial condition.
The Year 2000 issue exists because many computer
systems and applications, including those embedded in
equipment and facilities, use two digit rather than
four digit date fields to designate an applicable year.
As a result, the systems and applications may not
properly recognize the Year 2000 or process data which
includes it, potentially causing data miscalculations
or inaccuracies or operational malfunctions or
failures. Because any disruption to our computerized
order processing and inventory systems could materially
and adversely affect our operations, we have
established a centrally managed, company wide plan to
identify, evaluate and address Year 2000 issues.
Although most of our mission critical systems, network
elements and products were verified for Year 2000
compliance, we may still be
<PAGE>
susceptible to Year 2000-related problems. In addition,
if our suppliers, service providers and/or customers fail
to resolve their Year 2000 issues in an effective and
timely manner, our business could be significantly and
adversely affected. We believe that some of our school
customers have not yet addressed or resolved their Year
2000 issues.
Absence of Dividends. We do not expect to pay
cash dividends on our common stock in the foreseeable
future. In addition, our ability to pay dividends may
be restricted from time to time by the financial
covenants contained in our credit agreements and debt
instruments. Our current senior credit facility
contains restrictions on, and in some circumstances may
prevent, our payment of dividends.
Leverage. As of July 24, 1999, we had $188.0
million of bank debt outstanding. In addition, our
leverage could increase over time. Our senior credit
facility permits us to incur additional debt under
certain circumstances and we expect to borrow under our
senior credit facility for general corporate purposes,
including working capital and for acquisitions.
Our ability to meet our debt service obligations
depends on our future performance. Our future
performance is influenced by general economic
conditions and by financial, business and other factors
affecting our operations, many of which are beyond our
control. If we are unable to service our debt, we may
have to:
* delay our acquisition program,
* sell our equity securities,
* sell our assets, or
* restructure and refinance our debt.
We cannot give you any assurance that, if we are
unable to service our debt, we will be able to sell our
equity securities, sell assets or restructure and
refinance our debt. Our substantial debt could have
important consequences to you. For example, it could:
* make it more difficult for us to obtain additional
financing in the future for our acquisitions and
operations,
* require us to dedicate a substantial portion of
our cash flows from operations to the repayment of our
debt and the interest associated with our debt,
* limit our operating flexibility due to financial
and other restrictive covenants, including restrictions
on incurring additional debt, creating liens on our
property and paying dividends,
* subject us to risks that interest rates and our
interest expense will increase,
* place us at a competitive disadvantage compared to
our competitors that have less debt, and
* make us more vulnerable in the event of a downturn
in our business.
FORWARD-LOOKING STATEMENTS
Statements in this prospectus which are not
strictly historical are "forward-looking" statements.
In accordance with the Private Securities Litigation
Reform Act of 1995, we can obtain a "safe harbor" for
forward-looking statements by identifying those
statements and by accompanying them with cautionary
<PAGE>
statements which identify factors that could cause
actual results to differ materially from those in the
forward-looking statements. Accordingly, the following
information contains or may contain forward-looking
statements: (1) information included or incorporated
by reference in this prospectus including, without
limitation, statements with respect to growth plans and
projected sales, revenues, earnings and costs, (2)
information included or incorporated by reference in
our future filings with the Securities and Exchange
Commission including, without limitation, statements
with respect to growth plans and projected sales,
revenues, earnings and costs and (3) information
contained in written material, releases and oral
statements issued by us, or on our behalf, including,
without limitation, statements with respect to growth
plans and projected sales, revenues, earnings and
costs. Our actual results may differ materially from
those contained in the forward-looking statements
identified above. Factors which may cause such a
difference to occur include, but are not limited to,
those factors set forth in "RISK FACTORS," above.
SELECTED HISTORICAL FINANCIAL INFORMATION
The following selected historical financial
information has been derived from our historical
financial statements and should be read in conjunction
with, and is qualified by, the more detailed
information and financial statements available as
described under "WHERE YOU CAN FIND MORE INFORMATION"
and "DOCUMENTS INCORPORATED BY REFERENCE."
Selected Historical Financial Information
(in thousands, except per share data) (a)
<TABLE>
Four
Months Fiscal Year Ended
Three Months Ended Fiscal Year Ended Ended December 31,
July 24, July 25, April 24, April 25, April 26, April 30,
1999 1998 1999(b) 1998(b) 1997(b) 1996(b) 1995(b) 1994(b)
(unaudited) (unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Statement of
Income Data:
Revenues $194,299 $126,657 $521,704 $310,455 $191,746 $ 28,616 $150,482 $119,510
Cost of revenues 121,420 82,615 341,783 202,870 126,862 18,591 98,233 82,951
-------- -------- -------- -------- -------- -------- -------- --------
Gross profit 72,879 44,042 179,921 107,585 64,884 10,025 52,249 36,559
Selling, general
and administrative
expenses 48,315 29,642 144,659 87,846 53,177 11,917 47,393 32,080
Non-recurring
acquisition costs - - - - 1,792 1,122 - -
Restructuring costs - 1,074 5,274 3,491 194 - 2,532 -
-------- -------- -------- -------- -------- -------- -------- --------
Operating income
(loss) 24,564 13,326 29,988 16,248 9,721 (3,014) 2,324 4,479
Interest expense (net) 3,130 1,173 12,601 5,373 4,197 1,455 5,536 3,007
Other (income)
expense (6) - (228) 156 (196) 67 (18) (86)
-------- -------- -------- -------- -------- -------- -------- --------
Income (loss) before
provision for
(benefit from)
income taxes 21,440 12,153 17,615 10,719 5,720 (4,536) (3,194) 1,558
Provision for
(benefit from)
income taxes(c) 10,076 5,590 8,719 5,480 (2,412) 139 173 218
-------- -------- -------- -------- -------- --------- --------- --------
Net income (loss) $ 11,364 $ 6,563 $ 8,896 $ 5,239 $ 8,132 $ (4,675) $ (3,367) $ 1,340
======== ======== ======== ======== ======== ========= ========= ========
Net income (loss)
per share:
Basic $ 0.65 $ 0.45 $ 0.61 $ 0.40 $ 0.81 $ (0.54) $ (0.51) $ 0.26
Diluted 0.65 0.44 0.60 0.39 0.80 (0.53) (0.50) 0.26
Weighted average
shares
outstanding:
Basic 17,383 14,728 14,690 13,284 10,003 8,611 6,562 5,062
Diluted 17,468 14,848 14,840 13,547 10,196 8,789 6,669 5,078
July 24, April 24, April 25, April 26, April 30, December 31,
1999 1999 1998 1997 1996 1995 1994
Balance Sheet Data:
Working capital
(deficit) $145,269 $117,194 $ 47,791 $ 14,491 $ (3,663) $ (1,052) $ 3,512
Total assets 502,947 437,708 223,729 87,685 54,573 54,040 44,267
Long-term debt 176,302 161,691 63,014 33,792 15,031 15,294 11,675
Total debt 187,952 173,285 83,302 60,746 40,918 39,783 32,276
Stockholders'
equity (deficit) 217,372 202,687 106,466 16,329 (4,267) (620) 1,827
</TABLE>
<PAGE>
___________________
(a) The historical financial information of School
Specialty, Inc., a Wisconsin corporation, and The
Re-Print Corp., both of which were acquired by U.S.
Office Products in business combinations accounted for
under the pooling-of-interests method in May 1996 and
July 1996, respectively, have been combined on a
historical cost basis in accordance with generally
accepted accounting principles ("GAAP") to present this
financial data as if the two companies had always been
members of the same operating group. All business
acquisitions since July 1996 have been accounted for
under the purchase method. The financial information
of the businesses acquired in business combinations
accounted for under the purchase method is included
from the dates of their respective acquisitions.
(b) Certain reclassifications have been made to the
historical financial data for the fiscal years ended
December 31, 1994 and 1995, the four months ended April
30, 1996, and the fiscal years ended April 26, 1997 and
April 25, 1998 to conform with the fiscal 1999
presentation. These reclassifications had no effect on
net income or net income per share.
(c) Results for the fiscal year ended April 26, 1997
include a benefit from income taxes of $2.4 million
primarily arising from the reversal of a $5.3 million
valuation allowance in the quarter ended April 26,
1997. The valuation allowance had been established in
1995 to offset the tax benefit from net operating loss
carryforwards included in our deferred tax assets,
because at the time it was not likely that such tax
benefit would be realized. The valuation allowance was
reversed subsequent to our being acquired by U.S.
Office Products, because it was deemed "more likely
than not," based on improved results, that such tax
benefit would be realized.
PRO FORMA COMBINED STATEMENT OF INCOME
The unaudited pro forma combined statement of
income for the fiscal year ended April 24, 1999 gives
effect to (i) the June 1998 initial public offering and
concurrent offering to certain directors and officers,
(ii) fiscal 1999 and fiscal 2000 purchase acquisitions,
as if all such transactions had occurred on April 26,
1998, (iii) the April 1999 secondary offering and (iv)
the underwriters exercise of their over allotment
option on the secondary offering in May 1999. The
unaudited pro forma combined statement of income for
the fiscal year ended April 24, 1999 includes (i) our
audited financial information for the fiscal year ended
April 24, 1999, (ii) the unaudited financial
information of fiscal 1999 purchase acquisitions for
the period April 26, 1998 through their respective
dates of acquisition and (iii) the unaudited financial
information of fiscal 2000 purchase acquisitions for
the period from April 26, 1998 through April 24, 1999.
The pro forma adjustments are based upon
preliminary estimates, available information and
certain assumptions that management deems appropriate.
The unaudited pro forma combined income statement
presented herein does not purport to represent what our
results of operations would have been had the
transactions which are the subject of the pro forma
adjustments occurred on those dates, as assumed, and
are not necessarily reflective of our results of
operations in any future period.
<PAGE>
Pro Forma Combined Statement of Income
For the Fiscal Year Ended April 24, 1999
(in thousands, except per share data)
(unaudited)
<TABLE>
Pro Forma
Individaully Common
National Hammond Insignificant Stock Pro Forma
School School & Purchase Pro Forma Pro Forma Offering As
Specialty, Inc. Supply Sportime Stephens Acquisitions Adjustments Combined Adjustments Adjusted
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues $521,704 $53,690 $26,591 $2,380 $28,015 $ - $632,380 $ - $632,380
Cost of revenues 341,783 36,122 12,471 1,181 19,582 - 411,139 - 411,139
-------- -------- ------- ------- -------- -------- -------- -------- --------
Gross profit 179,921 34.5% 17,568 32.7% 14,120 53.1% 1,199 50.4% 8,433 30.1% - 221,241 - 221,241
Selling,
general and
administrative
expenses 144,659 12,948 12,003 476 9,326 24(a) 180,025 - 180,025
773(b)
(184)(c)
Restructuring
costs 5,274 127 - - - - 5,401 - 5,401
-------- -------- -------- -------- -------- -------- -------- -------- --------
Operating
income 29,988 5.7% 4,493 8.4% 2,117 8.0% 723 30.4% (893)-3.2% (613) 35,815 - 35,815
Other (income)
expense:
Interest
expense 12,735 1,265 16 - 144 2,593(d) 16,753 (3,364)(f) 13,389
Interest
income (134) - - - 33 (33)(d) (134) - (134)
Other (228) 235 200 (15) (15) - 177 - 177
-------- -------- -------- -------- -------- -------- -------- -------- --------
Income before
provision for
income taxes 17,615 2,993 1,901 738 (1,055) (3,173) 19,019 3,364 22,383
Provision for
income taxes 8,719 4 - - 197 783(e) 9,703 1,352 11,055
-------- -------- -------- -------- -------- -------- -------- -------- --------
Net income $8,896 $2,989 $1,901 $738 $(1,252) $(3,956) $9,316 $2,012 $11,328
======== ======== ======== ======== ======== ======== ======== ======== ========
Weighted
average shares:
Basic 14,690 15,280(g) 17,778(h)
Diluted 14,840 15,310(g) 17,808(h)
Net income
per share:
Basic 0.61 0.61 0.64
Diluted 0.60 0.61 0.64
</TABLE>
<PAGE>
___________________
(a) Adjustment to reflect additional corporate
overhead expenses to be incurred as a stand-alone,
publicly traded entity, rather than as a division of
U.S. Office Products.
(b) Adjustment to reflect increase in amortization
expense relating to goodwill recorded in purchase
accounting related to purchase acquisitions for the
periods prior to the respective dates of acquisition.
We have recorded goodwill amortization in the
historical financial statements from the respective
dates of acquisition forward. The goodwill for each
transaction is being amortized over its estimated life,
ranging from 15 to 40 years.
(c) Adjustment to decrease selling, general and
administrative expenses to eliminate non-recurring
acquisition costs incurred by SmartStuff as part of our
acquisition of SmartStuff.
(d) Adjustment to reflect an increase in interest
expense. Interest expense is being calculated on the
average pro forma debt outstanding during the
applicable period at a weighted average interest rate
of approximately 7.9%. The adjustment reflects a
reduction in interest income to zero as we generally
expect to use available cash to repay debt. Pro forma
interest expense will fluctuate approximately $154 on
an annual basis for each 0.125% change in interest
rates.
(e) Adjustment to calculate the provision for income
taxes on the pro forma combined results at an effective
income tax rate of approximately 51%. The difference
between the effective tax rate and the statutory tax
rate of 35% relates primarily to state income taxes and
nondeductible goodwill.
(f) Adjustment to reflect a decrease in interest
expense as a result of the utilization of the net
proceeds from the secondary offering and the
underwriters over allotment option to repay
approximately $43,000 of long-term debt at an annual
interest rate of 7.9%.
(g) Weighted average shares outstanding used to
calculate combined pro forma earnings per share is
calculated based upon our weighted average shares,
adjusted to reflect the shares sold in the June 1998
initial public offering and the concurrent offering to
certain officers and directors, as if these offerings
occurred at the beginning of fiscal 1999 and to reflect
shares issued in accordance with acquisitions, as if
the shares were issued at the beginning of fiscal 1999.
(h) Weighted average shares outstanding used to
calculate pro forma as adjusted earnings per share is
calculated based upon the pro forma weighted average
shares described in note (g), adjusted to reflect 2,400
shares sold in conjunction with a secondary public
offering in April 1999, and an additional 151 shares to
the underwriters of our secondary offering through
their exercise of their over allotment option in May
1999.
SECURITIES COVERED BY THIS PROSPECTUS
Shares Issued in Connection with Acquisitions.
This prospectus relates to 3,000,000 shares of common
stock that we may issue from time to time in connection
with future acquisitions of businesses or assets.
We intend to concentrate our acquisitions in areas
related to our current business. In furtherance of
this objective, we may attempt to make acquisitions
that are either complementary to our present operations
or which we consider to be advantageous even though
they may be dissimilar to our present activities.
We expect that the terms of any such acquisitions
will be determined by direct negotiations with the
owners or controlling persons of the businesses or
assets to be acquired. The consideration for such
acquisitions may consist of shares of our common stock,
cash, notes or other evidences of debt,
<PAGE>
assumptions of liabilities or a combination thereof. With
respect to shares of common stock issued, we expect that
such shares will be valued at prices reasonably related to
current market prices at the time that an acquisition
is agreed upon, at or about the time of delivery of
shares or at such other time or over such other period
as may be agreed upon. Shares of our common stock may
be issued in exchange for shares of capital stock,
partnership interests or other assets representing an
interest in the company or entity to be acquired, in
exchange for assets used in or related to the business
of such entities or otherwise pursuant to the
acquisition agreement.
We do not expect to pay underwriting discounts or
commissions in connection with the issuance of shares
of common stock under this prospectus. However,
brokers' commissions may be paid from time to time in
connection with specific acquisitions, and such fees
may be paid through the issuance of shares of common
stock covered by this prospectus. Any person receiving
such a commission may be deemed to be an "underwriter"
within the meaning of the Securities Act of 1933.
Resales of Shares Issued in Acquisitions. This
prospectus, as amended or supplemented, has also been
prepared for use by selling stockholders and their
donees and pledgees (collectively, "selling
stockholders"). Selling stockholders are those persons
who receive shares of common stock in acquisitions and
who wish to resell such shares in transactions in which
they may be deemed to be "underwriters" within the
meaning of the Securities Act of 1933. Resales by a
selling stockholder under this prospectus, as amended
or supplemented, are permitted only with our prior
written consent. Resales may also be made pursuant to
Rule 145(d) under the Securities Act of 1933, or
pursuant to an exemption from the registration
provisions of such Act.
We will not receive any of the proceeds from any
such resales. All costs, expenses and fees in
connection with the registration of the shares offered
hereby will be borne by us; brokerage commissions and
similar selling expenses, if any, attributable to the
resale of such shares will be borne by the selling
stockholders.
Resales of shares of common stock may be effected
by selling stockholders from time to time in one or
more types of transactions (which may include block
transactions) on the Nasdaq National Market, in the
over-the-counter market, in negotiated transactions or
a combination of such methods of sale at market prices
prevailing at the time of sale or at negotiated prices.
Such transactions may be effected by selling shares
directly to purchasers or to or through broker-dealers,
which may act as agents or principals. Such broker-
dealers may receive compensation in the form of
discounts, concessions or commissions from selling
stockholders and/or the purchasers of shares for whom
such broker-dealers may act as agents or to whom they
sell as principal, or both (which compensation as to a
particular broker-dealer might be in excess of
customary commissions).
Selling stockholders and any broker-dealers that
act in connection with the resale of shares might be
deemed to be "underwriters" within the meaning of the
Securities Act of 1933, and any commissions received by
such broker-dealers and any profit on the resale of the
shares sold by them while acting as principals might be
deemed to be underwriting compensation under the
Securities Act of 1933.
We may agree to indemnify a selling stockholder
against certain liabilities, including liabilities
arising under the Securities Act of 1933. We may also
agree, in conjunction with a selling stockholder, to
indemnify any agent, dealer or broker-dealer that
participates in transactions involving sales of shares
against certain liabilities, including liabilities
arising under the Securities Act of 1933.
Upon being notified by a selling stockholder that
any material arrangement has been entered into with a
broker-dealer for a sale of shares through a block
trade, special offering, exchange distribution or
<PAGE>
secondary distribution or a purchase by a broker or a
dealer, we will file a supplement to this prospectus,
if required, pursuant to Rule 424(b) under the
Securities Act of 1933, disclosing (1) the name of each
such selling stockholder and of the participating
broker-dealer(s), (2) the number of shares involved,
(3) the price at which such shares were sold, (4) the
commissions paid or discounts or concessions allowed to
such broker-dealer(s), where applicable, (5) that such
broker-dealer(s) did not conduct any investigation to
verify the information set out or incorporated by
reference in this prospectus and (6) other facts
material to the transaction. In addition, upon being
notified by a selling stockholder that a donee or
pledgee intends to sell more than 500 shares, we will
file a supplement to this prospectus.
LEGAL MATTERS
The validity of the shares of common stock offered
hereby has been passed upon by Godfrey & Kahn, S.C.,
Milwaukee, Wisconsin. In the opinion of Godfrey &
Kahn, S.C., the shares, upon issuance in accordance
with this prospectus, will be duly authorized and
validly issued, fully paid and, subject to Section
180.0622(2)(b) of the Wisconsin Statutes,
nonassessable. While we are a Delaware corporation, we
are qualified as a foreign corporation in the State of
Wisconsin, and Wisconsin courts have held Section
180.0622(2)(b) of the Wisconsin Statutes to be
applicable to foreign corporations. Under that
statute, holders of our common stock may be held liable
up to the amount equal to the par value of the common
stock owned by such holder for all debt owing to
employees for services performed, but not exceeding six
months' service in any one case. Some Wisconsin courts
have interpreted "par value" to mean the full amount
paid by the holders to purchase the common stock.
EXPERTS
Our financial statements incorporated in this
prospectus by reference to our Annual Report on Form
10-K for the year ended April 24, 1999 have been so
incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants,
given on the authority of said firm as experts in
auditing and accounting.
The audited financial statements of The National
School Supply Company and Subsidiaries incorporated by
reference in this prospectus have been audited by Ernst
& Young LLP, independent auditors, as indicated in
their report with respect thereto, and are incorporated
by reference in reliance on the authority of such firm
as experts in giving such report.
The audited financial statements of Select Service
Supply Co., Inc. incorporated by reference in this
prospectus have been audited by Ernst & Young LLP,
independent auditors, as indicated in their report with
respect thereto, and are incorporated by reference in
reliance on the authority of such firm as experts in
giving such report.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the information requirements of
the Securities Exchange Act of 1934, and in accordance
therewith, file reports, proxy and information
statements and other information with the Securities
and Exchange Commission. We have filed with the
Securities and Exchange Commission a registration
statement on Form S-4 under the Securities Act of 1933
with respect to the common stock offered hereby. This
prospectus does not contain all the information set
forth in the registration statement and exhibits
thereto, or amendments thereto, to which reference is
hereby made. Such reports, proxy and information
statements, registration statement and exhibits and
other information filed by us may be
<PAGE>
inspected and, upon payment of prescribed fees, copied at
the public reference facilities of the Securities and Exchange
Commission at 450 Fifth Street N.W., Washington, D.C.
20549, and at the regional offices of the Securities
and Exchange Commission at Seven World Trade Center,
New York, New York 10048, and at Citicorp Center, 500
West Madison Street, Chicago, Illinois 60661. You may
obtain information on the operation of the public
reference facilities by calling the Securities and
Exchange Commission at 1-800-SEC-0330. Such
information may also be accessed electronically by
means of the Securities and Exchange Commission's
website on the Internet at http://www.sec.gov. In
addition, our common stock is listed on the Nasdaq
National Market, and such reports, proxy and
information statements, registration statement and
other information should be available for inspection
and copying at the offices of the National Association
of Securities Dealers, Inc., 1735 K Street, N.W.,
Washington, D.C. 20006.
DOCUMENTS INCORPORATED BY REFERENCE
The Securities and Exchange Commission allows us
to "incorporate by reference" into this prospectus the
information we file with them, which means that we can
disclose important information to you by referring you
to those documents. The information incorporated by
reference is considered to be part of this prospectus,
and information that we file later with the Securities
and Exchange Commission will automatically update and
supercede this information. We incorporate by
reference the documents listed below and any future
filings we will make with the Securities and Exchange
Commission under Sections 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act of 1934, including any we
make after the date we file the registration statement
of which this prospectus is a part and before the
registration statement becomes effective:
(1) our Annual Report on Form 10-K for the
year ended April 24, 1999;
(2) our Quarterly Report on Form 10-Q for the quarter
ended July 24, 1999;
(3) our current reports on Form 8-K filed on September
14, 1998 (relating to the National School Supply
Company and subsidiaries only), April 26, 1999 and July
14, 1999; and
(4) the description of our common stock
contained in our registration statement filed
pursuant to Section 12 of the Securities Exchange
Act of 1934, including any amendment or report
filed for the purpose of updating such description.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 20. Indemnification of Directors and Officers.
Article Eight of the Registrant's Certificate
of Incorporation provides that the Registrant
shall indemnify its directors and officers to the
fullest extent permitted by the General
Corporation Law of the State of Delaware.
Section 145 of the General Corporation Law of
the State of Delaware permits a corporation, under
specified circumstances, to indemnify its
directors, officers, employees or agents against
expenses (including attorneys' fees), judgments,
fines and amounts paid in settlements actually and
reasonably incurred by them in connection with any
action, suit or proceeding brought by third
parties by reason of the fact that they were or
are directors, officers, employees or agents of
the corporation, if such directors, officers,
employees or agents acted in good faith and in a
manner they reasonably believed to be in or not
opposed to the best interests of the corporation
and, with respect to any criminal action or
proceeding, had no reason to believe their conduct
was unlawful. In a derivative action (i.e., one
by or in the right of the corporation),
indemnification may be made only for expenses
actually and reasonably incurred by directors,
officers, employees or agents in connection with
the defense or settlement of an action or suit,
and only with respect to a matter as to which they
shall have acted in good faith and in a manner
they reasonably believed to be in or not opposed
to the best interests of the corporation, except
that no indemnification shall be made if such
person shall have been adjudged liable to the
corporation, unless and only to the extent that
the court in which the action or suit was brought
shall determine upon application that the
defendant directors, officers, employees or agents
are fairly and reasonably entitled to indemnity
for such expenses despite such adjudication of
liability.
Article Seven of the Registrant's Certificate
of Incorporation states that directors of the
Registrant will not be liable to the Registrant or
its stockholders for monetary damages for any
breach of fiduciary duty as a director, except for
liability (1) for any breach of the director's
duty of loyalty to the Registrant or its
stockholders, (2) for acts or omissions not in
good faith or which involve intentional misconduct
or a knowing violation of law, (3) under Section
174 of the General Corporation Law of the State of
Delaware, which makes directors liable for
unlawful dividends or unlawful stock repurchases
or redemptions or (4) for any transaction from
which the director derived an improper personal
benefit.
Article IV of the Registrant's Bylaws
provides that the Registrant shall indemnify its
officers and directors (and those serving at the
request of the Registrant as an officer or
director of another corporation, partnership,
joint venture, trust or other enterprise), and may
indemnify its employees and agents (and those
serving at the request of the Registrant as an
employee or agent of another corporation,
partnership, joint venture, trust or other
enterprise), against expenses (including
attorneys' fees), judgments, fines and amounts
paid in settlement actually and reasonably
incurred, if such officer, director, employee or
agent acted in good faith and in a manner
reasonably believed to be in or not opposed to the
best interests of the Registrant, and with respect
to any criminal action or proceeding, had no
reasonable cause to believe his conduct was
unlawful. In a derivative action, indemnification
shall be limited to expenses (including attorneys'
fees) actually and reasonably incurred by such
officer, director, employee or agent in the
defense or settlement of such action or suit, and
no indemnification shall be made in respect
<PAGE>
of any claim, issue or matter as to which such person
shall have been adjudged to be liable to the
Registrant unless and only to the extent that the
Delaware Court of Chancery or the court in which
such action or suit was brought shall determine
upon application that, despite the adjudication of
liability but in view of all the circumstances of
the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the
Delaware Court of Chancery or such other court
shall deem proper.
Unless the Board of Directors of the
Registrant otherwise determines in a specific
case, expenses incurred by an officer or director
in defending a civil or criminal action, suit or
proceeding shall be paid by the Registrant in
advance of the final disposition of such action,
suit or proceeding upon receipt of an undertaking
by or on behalf of the officer or director to
repay such amount if it shall ultimately be
determined that he is not entitled to be
indemnified by the Registrant.
Item 21. Exhibits and Financial Statement Schedules.
(a) The following exhibits are filed as part of this
Registration Statement:
5 Opinion of Godfrey & Kahn, S.C.
regarding legality of the common stock being
registered.
21 Subsidiaries of the Registrant.
23.1 Consent of Godfrey & Kahn, S.C., included in Exhibit 5.
23.2 Consent of PricewaterhouseCoopers LLP.
23.3 Consent of Ernst & Young LLP.
23.4 Consent of Ernst & Young LLP.
24 Powers of Attorney.
(b) The financial statement schedule included in the
Registrant's Annual Report on Form 10-K for the year
ended April 24, 1999 is incorporated herein by
reference. All other schedules are omitted because
they are not applicable or the required information is
shown in the Registrant's consolidated financial
statements or notes thereto that are incorporated
herein by reference.
(c) This item, which calls for reports, opinions and
appraisals materially relating to the transaction, is
not applicable.
Item 22. Undertakings.*
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to
this Registration Statement:
(i) to include any prospectus required by Section
10(a)(3) of the Securities
<PAGE>
Act of 1933;
(ii) to reflect in the prospectus any facts or events
arising after the effective date of the Registration
Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate,
represent a fundamental change in the information set
forth in the Registration Statement; notwithstanding
the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) and any deviation from the low or high end
of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Securities and Exchange Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the
maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the
effective Registration Statement;
(iii) to include any material information with
respect to the plan of distribution not previously
disclosed in the Registration Statement or any material
change to such information in the Registration
Statement.
Provided, however, that paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the information required to
be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by
the Registrant pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-
effective amendment shall be deemed to be a new
Registration Statement relating to the securities
offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide
offering thereof.
(3) To remove from registration by means of a post-
effective amendment any of the securities being
registered which remain unsold at the termination of
the offering.
(b) The undersigned Registrant hereby undertakes
that, for purposes of determining any liability under
the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Securities Act of 1934 that is
incorporated by reference in the Registration Statement
shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the
offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(g) (1) The undersigned Registrant hereby
undertakes as follows: that prior to any public
reoffering of the securities registered hereunder
through use of a prospectus which is a part of this
Registration Statement, by any person or party who is
deemed to be an underwriter within the meaning of Rule
145(c), the issuer undertakes that such reoffering
prospectus will contain information called for by the
applicable registration form with respect to
reofferings by persons who may be deemed underwriters,
in addition to the information called for by the other
items of the applicable form.
(2) The Registrant undertakes that every
prospectus (i) that is filed pursuant to paragraph (1)
immediately preceding, or (ii) that purports to meet
the requirements of Section 10(a)(3) of the Securities
Act of 1933 and is used in connection with an offering
of securities subject to Rule 415, will be filed as a
part of an amendment to the Registration Statement and
will not be used until such amendment is effective, and
that, for purposes of determining any liability under
the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new Registration
Statement relating to the securities offered therein,
and the offering of such securities at that time shall
be deemed to be the
<PAGE>
initial bona fide offering thereof.
(h) Insofar as indemnification for liabilities
arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and
Exchange Commission such indemnification is against
public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such
liabilities (other than the payment by the Registrant
of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in
connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against
public policy as expressed in the Securities Act of
1933 and will be governed by the final adjudication of
such issue.
The undersigned Registrant hereby undertakes to
respond to requests for information that is
incorporated by reference into the prospectus pursuant
to Items 4, 10(b), 11 or 13 of this Form, within one
business day of receipt of such request, and to send
the incorporated documents by first class mail or other
equally prompt means. This includes information
contained in documents filed subsequent to the
effective date of the Registration Statement through
the date of responding to the request.
The undersigned Registrant hereby undertakes to
supply by means of a post-effective amendment, if
required, all information concerning a transaction, and
the company being acquired involved therein, that was
not the subject of and included in the Registration
Statement when it became it effective.
________________
* Paragraph references correspond to those of Item 512 of Regulation S-K.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act
of 1933, the Registrant has duly caused this
Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City
of Appleton, State of Wisconsin, on November 2, 1999.
SCHOOL SPECIALTY, INC.
By: /s/ Daniel P. Spalding
----------------------------
Daniel P. Spalding
Chief Executive Officer and Chairman of
the Board
Pursuant to the requirements of the Securities Act
of 1933, this Registration Statement has been signed by
the following persons in the capacities and on the
dates indicated.
/s/ Daniel P. Spalding Date: November 2 , 1999
- --------------------------
Daniel P. Spalding
Chief Executive Officer and Chairman of the Board
(Principal Executive Officer)
/s/ Mary M. Kabacinski Date: November 2, 1999
- --------------------------
Mary M. Kabacinski
Executive Vice President and
Chief Financial Officer
(Principal Financial and Accounting Officer)
Directors: David J. Vander Zanden, Jonathan J. Ledecky, Leo C. McKenna,
Rochelle Lamm Wallach and Jerome M. Pool.
By: /s/ Daniel P. Spalding Date: November 2, 1999
--------------------------------
Daniel P. Spalding, as Attorney-in-Fact*
*Pursuant to authority granted by power of attorney,
copies of which are filed herewith as Exhibit 24.
<PAGE>
EXHIBIT INDEX
Exhibits
5 Opinion of Godfrey & Kahn, S.C. regarding
legality of the common stock being registered.
21 Subsidiaries of the Registrant.
23.1 Consent of Godfrey & Kahn, S.C., included in Exhibit 5.
23.2 Consent of PricewaterhouseCoopers LLP.
23.3 Consent of Ernst & Young LLP.
23.4 Consent of Ernst & Young LLP.
24 Powers of Attorney.
Exhibit 5
November 2, 1999
School Specialty, Inc.
426 West College Avenue
Appleton, WI 54911
Ladies and Gentlemen:
We have acted as counsel to School Specialty,
Inc., a Delaware corporation (the "Company"), in
connection with the preparation of a Registration
Statement on Form S-4 (the "Registration Statement") to
be filed with the Securities and Exchange Commission
relating to the offer and sale of up to 3,000,000
shares of common stock, $.001 par value (the "Shares").
We have examined: (a) the Registration Statement,
(b) the Company's Restated Certificate of Incorporation
and Amended and Restated Bylaws, (c) certain
resolutions of the Company's Board of Directors and (d)
such other proceedings, documents and records as we
have deemed necessary to enable us to render this
opinion.
Based upon the foregoing, we are of the opinion
that the Shares, upon issuance in accordance with the
Registration Statement, will be duly authorized and
validly issued, fully paid and nonassessable, subject
to Section 180.0622(2)(b) of the Wisconsin Business
Corporation Law ("WBCL").
Section 180.0622(2)(b) of the WBCL provides that
shareholders of a corporation may be assessed up to the
par value of their shares to satisfy the obligations of
such corporation to its employees for services
rendered, but not exceeding six months service in the
case of any individual employee. Certain Wisconsin
courts have interpreted "par value" to mean the full
amount paid by the purchaser of shares upon issuance
thereof and that such statute applies not only to
shareholders of domestic corporations but also to
shareholders of foreign corporations licensed to do
business in Wisconsin.
We consent to the use of this opinion as an
exhibit to the Registration Statement. In giving this
consent, however, we do not admit that we are "experts"
within the meaning of Section 11 of the Securities Act
of 1933, as amended, or within the category of persons
whose consent is required by Section 7 of said Act.
Very truly yours,
/s/ Godfrey & Kahn, S.C.
GODFREY & KAHN, S.C.
Exhibit 21
SUBSIDIARIES OF THE REGISTRANT
STATE OR OTHER JURISDICTION OF
NAME INCORPORATION OR ORGANIZATION
1. ClassroomDirect.com, LLC Delaware
2. Sax Arts and Crafts,Inc. Delaware
3. Childcraft Education Corp. New York
4. Bird-in-Hand Woodworks, Inc. New Jersey
5. Don Gresswell, Ltd. United Kingdom
6. Sportime Acquisition, Inc. Delaware
7. Sportime LLC Delaware
8. SSI Acquisition Subsidiary, Inc. Delaware
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by
reference in this Registration Statement on Form S-4 of
School Specialty, Inc. (the "Company") of our report
dated May 28, 1999 relating to the financial statements
and financial statement schedule appearing in the
Company's Annual Report on Form 10-K for the year ended
April 24, 1999. We also consent to the reference to us
under the heading "Experts" in such Registration
Statement.
/s/ PricewaterhouseCoopers LLP
PRICEWATERHOUSECOOPERS LLP
Minneapolis, Minnesota
November 5, 1999.
Exhibit 23.3
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in
the Registration Statement (Form S-4) and related
Prospectus of School Specialty, Inc. for the
registration of 3,000,000 shares of its common stock of
our report dated January 30, 1998 with respect to the
financial statements of Select Service & Supply Co.,
Inc., included in the Current Report (Form 8-K/A) of
School Specialty, Inc. dated February 9, 1999 filed
with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
Hackensack, New Jersey
November 5, 1999.
Exhibit 23.4
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under
the caption "Experts" in the Registration Statement
(Form S-4 No. 333-00000) and related Prospectus of
School Specialty, Inc. for the registration of
3,000,000 shares of its common stock and to the
incorporation by reference therein of our report
dated June 11, 1998 (except for Note C, as to which
the date is June 17, 1998), with respect to the
consolidated financial statements of The National
School Supply Company and Subsidiaries included in
the Current Report (Form 8-K/A) of School Specialty,
Inc. filed with the Securities and Exchange
Commission on September 14, 1998.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
Cleveland, Ohio
November 5, 1999.
Exhibit 24
DIRECTOR'S POWER OF ATTORNEY
The undersigned director of School Specialty,
Inc., a Delaware corporation, hereby constitutes and
designates each of Daniel P. Spalding and Mary M.
Kabacinski, with the power of substitution, the true
and lawful attorney-in-fact of the undersigned to sign
for him in his name, place and stead, in any and all
capacities, the Registration Statement on Form S-4 of
School Specialty, Inc., and any and all amendments
(including post-effective amendments) and/or
supplements to said Form S-4, generally to do all such
things in his name and behalf in his capacity as a
director to enable School Specialty, Inc. to comply
with the provisions of the Securities Act of 1933, as
amended, and all requirements of the Securities and
Exchange Commission, hereby ratifying and confirming
his signature as it may be signed by said attorney-in-
fact to said Form S-4 and any and all amendments
(including post-effective amendments) and/or
supplements thereto.
Dated this 2nd day of November, 1999.
/s/ Jonathan J. Ledecky
----------------------------
Jonathan J. Ledecky
<PAGE>
DIRECTOR'S POWER OF ATTORNEY
The undersigned director of School Specialty,
Inc., a Delaware corporation, hereby constitutes and
designates each of Daniel P. Spalding and Mary M.
Kabacinski, the true and lawful attorney-in-fact of the
undersigned to sign for her in her name, place and
stead, in any and all capacities, the Registration
Statement on Form S-4 of School Specialty, Inc., and
any and all amendments (including post-effective
amendments) and/or supplements to said Form S-4,
generally to do all such things in her name and behalf
in her capacity as a director to enable School
Specialty, Inc. to comply with the provisions of the
Securities Act of 1933, as amended, and all
requirements of the Securities and Exchange Commission,
hereby ratifying and confirming her signature as it may
be signed by said attorney-in-fact to said Form S-4 and
any and all amendments (including post-effective
amendments) and/or supplements thereto.
Dated this 2nd day of November, 1999.
/s/ Rochelle Lamm Wallach
------------------------------
Rochelle Lamm Wallach
<PAGE>
DIRECTOR'S POWER OF ATTORNEY
The undersigned director of School Specialty,
Inc., a Delaware corporation, hereby constitutes and
designates each of Daniel P. Spalding and Mary M.
Kabacinski, the true and lawful attorney-in-fact of the
undersigned to sign for him in his name, place and
stead, in any and all capacities, the Registration
Statement on Form S-4 of School Specialty, Inc., and
any and all amendments (including post-effective
amendments) and/or supplements to said Form S-4,
generally to do all such things in his name and behalf
in his capacity as a director to enable School
Specialty, Inc. to comply with the provisions of the
Securities Act of 1933, as amended, and all
requirements of the Securities and Exchange Commission,
hereby ratifying and confirming his signature as it may
be signed by said attorney-in-fact to said Form S-4 and
any and all amendments (including post-effective
amendments) and/or supplements thereto.
Dated this 2nd day of November, 1999.
/s/ Jerome M. Pool
---------------------
Jerome M. Pool
<PAGE>
DIRECTOR'S POWER OF ATTORNEY
The undersigned director of School Specialty,
Inc., a Delaware corporation, hereby constitutes and
designates each of Daniel P. Spalding and Mary M.
Kabacinski, the true and lawful attorney-in-fact of the
undersigned to sign for him in his name, place and
stead, in any and all capacities, the Registration
Statement on Form S-4 of School Specialty, Inc., and
any and all amendments (including post-effective
amendments) and/or supplements to said Form S-4,
generally to do all such things in his name and behalf
in his capacity as a director to enable School
Specialty, Inc. to comply with the provisions of the
Securities Act of 1933, as amended, and all
requirements of the Securities and Exchange Commission,
hereby ratifying and confirming his signature as it may
be signed by said attorney-in-fact to said Form S-4 and
any and all amendments (including post-effective
amendments) and/or supplements thereto.
Dated this 2nd day of November, 1999.
/s/ David J. Vander Zanden
----------------------------
David J. Vander Zanden
<PAGE>
DIRECTOR'S POWER OF ATTORNEY
The undersigned director of School Specialty,
Inc., a Delaware corporation, hereby constitutes and
designates each of Daniel P. Spalding and Mary M.
Kabacinski, the true and lawful attorney-in-fact of the
undersigned to sign for him in his name, place and
stead, in any and all capacities, the Registration
Statement on Form S-4 of School Specialty, Inc., and
any and all amendments (including post-effective
amendments) and/or supplements to said Form S-4,
generally to do all such things in his name and behalf
in his capacity as a director to enable School
Specialty, Inc. to comply with the provisions of the
Securities Act of 1933, as amended, and all
requirements of the Securities and Exchange Commission,
hereby ratifying and confirming his signature as it may
be signed by said attorney-in-fact to said Form S-4 and
any and all amendments (including post-effective
amendments) and/or supplements thereto.
Dated this 2nd day of November, 1999.
/s/ Leo C. McKenna
---------------------
Leo C. McKenna
