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FILED PURSUANT TO RULE 424(b)(3)
REGISTRATION NO. 333-75143
PROSPECTUS
1,094,742 SHARES
HA-LO INDUSTRIES, INC.
COMMON STOCK
(NO PAR VALUE PER SHARE)
This is a secondary public offering of 1,094,742 shares of common stock of
HA-LO Industries, Inc. The shares of common stock will be offered for sale or
otherwise transferred from time to time by one or more of the Selling
Shareholders described herein in transactions (which may include block
transactions) on the New York Stock Exchange or in the over-the-counter market,
in negotiated transactions or otherwise, at fixed prices, which may be changed,
at market prices prevailing at the time of sale, at negotiated prices, or
without consideration, or by any other legally available means. The Selling
Shareholders may offer the shares of common stock to third parties (including
purchasers) directly or by or through brokers, dealers, agents or underwriters
who may receive compensation in the form of discounts, concessions or
commissions or otherwise. The Selling Shareholders and any brokers, dealers,
agents or underwriters that participate in the distribution of the shares of
common stock may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933, as amended, in which event any discounts, concessions
and commissions received by any such brokers, dealers, agents or underwriters
and any profit on resale of the shares of common stock purchased by them may be
deemed to be underwriting commissions or discounts under the Securities Act. The
aggregate net proceeds to the Selling Shareholders from the sale of the shares
of common stock will be the purchase price of such shares of common stock less
any commissions. See "Plan of Distribution." We will not receive any of the
proceeds from the sale of the shares of common stock by the Selling
Shareholders. The expenses incurred in registering the shares of common stock,
including legal and accounting fees, will be paid by us.
Our common stock is listed on the New York Stock Exchange under the symbol
"HMK." The last reported sale price of our common stock on March 24, 1999 on the
New York Stock Exchange was $10.00 per share.
Our principal executive offices are located at 5980 West Touhy Avenue,
Niles, Illinois 60714, and our telephone number is (847) 647-2300.
INVESTING IN OUR COMMON STOCK INVOLVES CERTAIN RISKS. SEE "RISK FACTORS"
BEGINNING ON PAGE 3.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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The date of this Prospectus is April 5, 1999.
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AVAILABLE INFORMATION
HA-LO Industries, Inc., an Illinois corporation (the "Company" or "HA-LO"),
is subject to the informational requirements of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and in accordance therewith files
reports, proxy statements and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy statements and other
information can be inspected and copied at the Public Reference Room of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
Commission's regional offices at Seven World Trade Center, Suite 1300, New York,
New York 10048 and Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such material can be obtained from the Public
Reference Room of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. Information on the operation of the Public Reference
Room is available by telephone at 1-800-SEC-0330. Such materials also may be
accessed electronically by means of the Commission's home page on the Internet
at http://www.sec.gov. The Company's common stock, no par value per share (the
"Common Stock"), is listed on the New York Stock Exchange (the "NYSE") and such
reports, proxy statements and other information also can be inspected at the
offices of the NYSE, 20 Broad Street, 17th Floor, New York, New York 10005.
The Company has filed with the Commission a Registration Statement on Form
S-3 (the "Registration Statement") under the Securities Act of 1933, as amended
(the "Securities Act"), with respect to the securities offered hereby. This
Prospectus, which constitutes a part of the Registration Statement, does not
contain all of the information set forth in the Registration Statement, certain
items of which are contained in schedules and exhibits to the Registration
Statement as permitted by the rules and regulations of the Commission.
Statements made in this Prospectus as to the contents of any contract, agreement
or other document referred to are not necessarily complete. With respect to each
such contract, agreement or other document filed as an exhibit to the
Registration Statement, reference is made to the exhibit for a more complete
description of the matter involved, and each such statement shall be deemed
qualified in its entirety by such reference. Items and information omitted from
this Prospectus but contained in the Registration Statement may be inspected and
copied at the Public Reference Room of the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed by the Company with the
Commission pursuant to the Exchange Act, are hereby incorporated by reference in
this Prospectus: (i) Annual Report on Form 10-K for the fiscal year ended
December 31, 1997 (the "HA-LO 10-K"); (ii) the portions of the Company's Proxy
Statement for the Annual Meeting of Shareholders held on June 2, 1998 that have
been incorporated by reference into the HA-LO 10-K; (iii) the portions of the
Company's 1998 Annual Report to Shareholders that have been incorporated by
reference into the HA-LO 10-K; (iv) Quarterly Report on Form 10-Q for the
quarter ended March 31, 1998; (v) Quarterly Report on Form 10-Q for the quarter
ended June 30, 1998; (vi) Quarterly Report on Form 10-Q for the quarter ended
September 30, 1998; and (vii) the description of the Common Stock contained in
the Registration Statement dated October 20, 1992 filed pursuant to Section 12
of the Exchange Act and any amendment or report filed for the purpose of
updating such description.
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act, prior to the termination of the offering
of the 1,094,742 shares of Common Stock (the "Shares"), shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of filing
of such documents. Any statement contained herein or in any document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for the purposes of this Prospectus to the extent that
a statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed to constitute a part of this Prospectus, except as so modified or
superseded. The Company will provide without charge to each person, including
any beneficial owner, to whom a copy of this Prospectus is delivered, upon
written or oral request of such
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person, a copy of any or all of the information that has been incorporated by
reference in this Prospectus (excluding exhibits to such information which are
not specifically incorporated by reference into such information). Requests for
such information should be directed to HA-LO Industries, Inc., 5980 West Touhy
Avenue, Niles, Illinois 60714, Attention: Michael Nemlich, Vice President of
Corporate Development/Financial Relations, Telephone (847) 647-2300.
RISK FACTORS
YOU SHOULD CONSIDER CAREFULLY THE FOLLOWING FACTORS AND THE OTHER
INFORMATION IN THIS PROSPECTUS BEFORE DECIDING TO INVEST IN SHARES OF OUR COMMON
STOCK.
RISKS ASSOCIATED WITH GROWTH THROUGH ACQUISITIONS
An important element of our growth strategy has been and continues to be the
acquisition of businesses that complement, enhance or geographically expand our
existing services. Since January 1, 1993, we have acquired 22 promotional
products companies, two telephone-based marketing agencies, two promotion
marketing companies and a brand identity and package design firm. We can give
you no assurance, however, that we will be able to (i) maintain our recent
growth rate through acquisitions, (ii) identify suitable acquisition candidates
and acquire such companies on favorable terms, (iii) successfully integrate
acquired businesses into our existing operations or realize the intended
benefits of such acquisitions, or (iv) retain sales representatives and key
employees previously associated with acquired businesses. To complete future
acquisitions, we may issue a significant number of shares of Common Stock and/or
incur significant additional indebtedness, which could have a dilutive effect on
our earnings or book value per share of Common Stock.
DIFFICULTIES OF MANAGING RAPID GROWTH
We have experienced rapid growth over the past several years as a result of
internal growth and acquisitions; continued rapid growth can be expected to
place significant demands on our management and resources. If we are unable to
manage growth effectively, our business, results of operations or financial
condition could be materially adversely affected.
QUARTERLY FLUCTUATIONS IN SALES AND EARNINGS; FOURTH QUARTER CONCENTRATION
Some of our customers tend to utilize a greater portion of their advertising
and promotional budgets in the latter half of the year, which historically has
resulted and may continue to result in a disproportionately large share of our
net sales being recognized in the fourth quarter. We incur general and
administrative expenses evenly throughout the year, which historically has
resulted and may continue to result in a disproportionate share of our net
income being reported in the fourth quarter. In addition, the timing of and
method of accounting used to report the results of operations of acquired
businesses may cause substantial fluctuations in our operating results from
quarter to quarter. Therefore, the operating results for one quarter may not be
a reliable indicator of the results to be expected in any future quarter.
DEPENDENCE UPON SALES REPRESENTATIVES AND KEY PERSONNEL
Our success is largely attributable to our ability to attract, motivate and
retain high quality sales representatives. Our sales force currently consists of
approximately 750 core sales representatives. We are not dependent upon any one
or any affiliated group of sales representatives for a material amount of our
revenues; however, when a sales representative's relationship with us
terminates, customers serviced by such representative may cease to purchase our
products. We can give you no assurance that we will not experience a significant
turnover rate in the future. In addition, our success has been the result, in
large part, of the skills and efforts of our senior management. Our success and
continued growth will depend on our ability to recruit, hire, motivate and
retain other highly qualified managerial personnel, including
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personnel previously employed by or associated with businesses acquired by us.
The loss of one or several members of our senior management or our inability to
attract and retain highly qualified managerial personnel could have a material
adverse effect on our business, future growth, results of operations or
financial condition.
RISKS ASSOCIATED WITH INTERNATIONAL OPERATIONS
We currently have offices in the United States, Canada, Italy, Great
Britain, France, Argentina, Belgium and Hong Kong, and an important component of
our growth strategy is to expand our international distribution capabilities. We
seek to acquire additional international businesses to further enhance our
abilities to meet the needs of our multi-national clients; however, we can give
you no assurance that we will be able successfully to identify suitable
international acquisition candidates, acquire such candidates on economically
favorable terms or integrate acquired businesses into our existing operations.
In addition, there are certain risks inherent in conducting international
business, including exposure to currency fluctuations, longer collection cycles,
compliance with foreign laws, unexpected changes in regulatory requirements,
staffing and managing foreign operations, political instability, currency
control laws and potentially adverse tax consequences. We can give you no
assurance that one or more of such factors will not have a material adverse
effect on our existing international operations and on our international
expansion plans.
COMPETITION
The promotional products industry is highly fragmented and competitive, with
few barriers to entry. We believe that our national and international
distribution capabilities, professional sales force and complementary,
value-added marketing services provide us with a competitive advantage; however,
these capabilities also may result in higher administrative costs than those
incurred by certain of our smaller competitors. In addition, certain of our
competitors are manufacturers as well as distributors and may enjoy an advantage
over us with respect to the cost of the goods they manufacture. Our existing
competitors, and companies that may enter the market, may have substantially
greater financial and other resources than we do. We also compete for
advertising dollars with other media, such as television, radio, newspapers,
magazines and billboards. We can give you no assurance that we will be able to
continue to compete successfully against current and future competitors or that
competitive pressures faced by us will not materially adversely affect our
business, operating results and financial condition.
VOLATILITY OF STOCK PRICE
The Common Stock historically has been subject to significant price
fluctuations in response to a variety of factors, including quarterly variations
in operating results, announcing acquisitions, strategic alliances and joint
ventures, general conditions in the promotional products industry, and general
economic and market conditions. In addition, the stock market has experienced
significant price and volume fluctuations that have adversely affected the
market prices of equity securities of some companies and that often have been
unrelated to the operating performance of such companies.
THE COMPANY
HA-LO is the largest and one of the fastest growing distributors of
promotional products in the United States and also has substantial operations in
Canada and Europe. In addition to its promotional products business, the Company
provides other value-added marketing services, such as promotion marketing,
brand identity and packaging, telephone-based marketing, full-service
advertising, events planning services and sports marketing.
HA-LO's promotional products business represented over 80% of its 1998 net
sales. To market its promotional products, HA-LO utilizes a system of 25 sales
offices with showrooms located primarily in the
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United States and also in Canada and Europe. The showrooms display some of the
300,000 products provided by the Company's network of more than 2,500 vendors.
HA-LO's approximately 750 core sales representatives market and sell promotional
products primarily to large and mid-sized corporations. The Company's
promotional products are items that are useful or decorative and are imprinted
or otherwise customized with a customer's name, logo or message. These products
are utilized by the Company's customers for marketing, to build brand
recognition and as employee incentives, customer gifts and giveaways.
Promotional products are designed to be utilized by the recipient over an
extended period of time, so that the products enjoy repeated exposure and
reinforce a brand name or marketing message. The Company has exclusive rights to
distribute merchandise manufactured by Roots, Canada to corporate customers in
the United States and Canada. Customers of HA-LO include AlliedSignal, America
Online, Ameritech, Ford Motor Company, General Electric, General Mills,
Motorola, Time Warner, the Chicago Bulls and the Green Bay Packers.
The Company is incorporated under the laws of the State of Illinois. Its
principal executive offices are located at 5980 West Touhy Avenue, Niles,
Illinois 60714, and its telephone number is (847) 647-2300.
USE OF PROCEEDS
All of the Shares are being offered by one or more of the shareholders
described herein (the "Selling Shareholders"). The Company will not receive any
of the proceeds from the sale of Shares by the Selling Shareholders.
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SELLING SHAREHOLDERS
The following table sets forth with respect to the Selling Shareholders (i)
the number of Shares beneficially owned as of March 25, 1999 and prior to the
offering contemplated hereby, (ii) the maximum number of Shares which may be
sold in the offering pursuant to this Prospectus and (iii) the number of Shares
which will be beneficially owned after the offering, assuming the sale of all
Shares set forth in (ii) above:
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BENEFICIAL OWNERSHIP BENEFICIAL OWNERSHIP
PRIOR TO OFFERING SHARES TO AFTER OFFERING
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SELLING SHAREHOLDERS SHARES(1) PERCENTAGE OFFERED SHARES PERCENTAGE
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<S> <C> <C> <C> <C> <C>
John R. Kelley, Jr................................... 758,658 1.6% 421,476 337,182 *
Carol R. Griseto..................................... 758,658 1.6% 421,476 337,182 *
Frencetta Guajardo................................... 59,116 * 32,842 26,274 *
James Dygas.......................................... 131,370 * 43,790 87,580 *
Daniel Pearson....................................... 98,527 * 32,842 65,685 *
Brian Kristofek...................................... 98,527 * 32,842 65,685 *
Jeffrey Davidoff..................................... 131,370 * 43,790 87,580 *
Carol R. Griseto Parents Gift Trust.................. 29,557 * 16,421 13,136 *
Linda Stegmeier Gift Trust........................... 29,557 * 16,421 13,136 *
John R. Kelley, Jr. Parents Gift Trust............... 29,557 * 16,421 13,136 *
Mark Picchiotti Gift Trust........................... 29,557 * 16,421 13,136 *
</TABLE>
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* Less than 1%.
(1) For purposes of this table, a person is deemed to have "beneficial
ownership" of any shares of Common Stock which such person has the right to
acquire within 60 days after the date of this Prospectus. For purposes of
computing the percentage of outstanding shares of Common Stock held by each
person named above, any security which such person has the right to acquire
from the Company within 60 days after the date of this Prospectus is deemed
to be outstanding, but is not deemed to be outstanding for the purpose of
computing the percentage ownership of any other person.
The Shares hereby offered by the Selling Shareholders were acquired from the
Company in connection with the Company's acquisition in 1998 of a promotion
marketing firm. All of the Shares offered hereby have been registered under the
Act for resale by such Selling Shareholders in accordance with the provisions of
the acquisition agreement. Following completion of such acquisition, each of Mr.
Kelley, Ms. Griseto, Ms. Guajardo, Mr. Dygas, Mr. Pearson, Mr. Kristofek and Mr.
Davidoff became officers of one of the Company's wholly-owned subsidiaries.
PLAN OF DISTRIBUTION
The Company is registering the Shares on behalf of the Selling Shareholders.
The Shares covered by this Prospectus may be offered and sold by the Selling
Shareholders, or by purchasers, transferees, donees, pledgees or other
successors in interest, directly or through brokers, dealers, agents or
underwriters who may receive compensation in the form of discounts, commissions
or similar selling expenses paid by a Selling Shareholder or by a purchaser of
the Shares on whose behalf such broker-dealer may act as agent. Sales and
transfers of the Shares may be effected from time to time in one or more
transactions, in private or public transactions, on the NYSE, in the
over-the-counter market, in negotiated transactions or otherwise, at a fixed
price or prices that may be changed, at market prices prevailing at the time of
sale, at negotiated prices, without consideration or by any other legally
available means. Any or all of the Shares may be sold from time to time by means
of (a) a block trade, in which a broker or dealer attempts to sell the Shares as
agent but may position and resell a portion of the Shares as principal to
facilitate the
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transaction; (b) purchases by a broker or dealer as principal and the subsequent
sale by such broker or dealer for its account pursuant to this Prospectus; (c)
ordinary brokerage transactions (which may include long or short sales) and
transactions in which the broker solicits purchasers; (d) the writing (sale) of
put or call options on the Shares; (e) the pledging of the Shares as collateral
to secure loans, credit or other financing arrangements and, upon any subsequent
foreclosure, the disposition of the Shares by the lender thereunder; and (f) any
other legally available means.
To the extent required with respect to a particular offer or sale of the
Shares, a Prospectus Supplement will be filed pursuant to Section 424(b)(3) of
the Securities Act, and will accompany this Prospectus, to disclose (a) the
number of Shares to be sold, (b) the purchase price, (c) the name of any broker,
dealer or agent effecting the sale or transfer and the amount of any applicable
discounts, commissions or similar selling expenses, and (d) any other relevant
information.
The Selling Shareholders may transfer the Shares by means of gifts,
donations and contributions. This Prospectus may be used by the recipients of
such gifts, donations and contributions to offer and sell the Shares received by
them, directly or through brokers, dealers or agents and in private or public
transactions; however, if sales pursuant to this Prospectus by any such
recipient could exceed 500 Shares, then a Prospectus Supplement would need to be
filed pursuant to Section 424(b)(3) of the Securities Act to identify the
recipient as a Selling Shareholder and disclose any other relevant information.
Such Prospectus Supplement would be required to be delivered, together with this
Prospectus, to any purchaser of such Shares.
In connection with distributions of the Shares or otherwise, the Selling
Shareholders may enter into hedging transactions with brokers, dealers or other
financial institutions. In connection with such transactions, brokers, dealers
or other financial institutions may engage in short sales of the Company's
Common Stock in the course of hedging the positions they assume with Selling
Shareholders. To the extent permitted by applicable law, the Selling
Shareholders also may sell the Shares short and redeliver the Shares to close
out such short positions.
The Selling Shareholders and any broker-dealers who participate in the
distribution of the Shares may be deemed to be "underwriters" within the meaning
of Section 2(11) of the Securities Act and any discounts, commissions or similar
selling expenses they receive and any profit on the resale of the Shares
purchased by them may be deemed to be underwriting commissions or discounts
under the Securities Act. As a result, the Company has informed the Selling
Shareholders that Regulation M, promulgated under the Exchange Act, may apply to
sales by the Selling Shareholders in the market. The Selling Shareholders may
agree to indemnify any broker, dealer or agent that participates in transactions
involving the sale of the Shares against certain liabilities, including
liabilities arising under the Securities Act. The aggregate net proceeds to the
Selling Shareholders from the sale of the Shares will be the purchase price of
such Shares less any discounts, concessions or commissions.
Each of the Selling Shareholders is acting independently of the Company in
making decisions with respect to the timing, price, manner and size of each
sale. No broker, dealer or agent has been engaged by the Company in connection
with the distribution of the Shares. There is no assurance, therefore, that the
Selling Shareholders will sell any or all of the Shares. In connection with the
offer and sale of the Shares, the Company has agreed to make available to the
Selling Shareholders copies of this Prospectus and any applicable Prospectus
Supplement and has informed the Selling Shareholders of the need to deliver
copies of this Prospectus and any applicable Prospectus Supplement to purchasers
at or prior to the time of any sale of the Shares offered hereby.
The Shares covered by this Prospectus may qualify for sale pursuant to
Section 4(1) of the Securities Act or Rule 144 promulgated thereunder, and may
be sold pursuant to such provisions rather than pursuant to this Prospectus.
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The Company will not receive any proceeds from the sale of the Shares
covered by this Prospectus and has agreed to pay all of the expenses incident to
the registration of the Shares, other than discounts and selling concessions or
commissions, if any, and fees and expenses of counsel for the Selling
Shareholders, if any.
LEGAL MATTERS
The validity of the Shares offered hereby will be passed upon for the
Company by Neal, Gerber & Eisenberg, Chicago, Illinois.
EXPERTS
The consolidated financial statements of the Company as of December 31, 1997
and 1996 and for each of the three years in the period ended December 31, 1997,
incorporated in this Prospectus by reference to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1997, have been audited by
Arthur Andersen LLP, independent public accountants, as set forth in their
report with respect thereto, which is incorporated by reference herein. Such
financial statements are incorporated by reference herein in reliance upon the
authority of such firm as experts in auditing and accounting.
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NEITHER WE NOR THE SELLING SHAREHOLDERS HAVE AUTHORIZED ANY DEALER,
SALESPERSON OR OTHER PERSON TO GIVE ANY INFORMATION OR REPRESENT ANYTHING NOT
CONTAINED IN THIS PROSPECTUS. YOU MUST NOT RELY ON ANY UNAUTHORIZED INFORMATION.
THIS PROSPECTUS DOES NOT OFFER TO SELL OR BUY ANY SHARES IN ANY JURISDICTION
WHERE IT IS UNLAWFUL. THE INFORMATION IN THIS PROSPECTUS IS CURRENT AS OF MARCH
25, 1999.
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TABLE OF CONTENTS
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PAGE
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Available Information..................................................... 2
Incorporation of Certain Documents by Reference........................... 2
Risk Factors.............................................................. 3
The Company............................................................... 4
Use of Proceeds........................................................... 5
Selling Shareholders...................................................... 6
Plan of Distribution...................................................... 6
Legal Matters............................................................. 8
Experts................................................................... 8
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1,094,742 SHARES
HA-LO INDUSTRIES, INC.
COMMON STOCK
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PROSPECTUS
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APRIL 5, 1999
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