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2006 Annual Report<br />

CEOs Rate NAW Highly Effective<br />

91%<br />

Highly Effective<br />

Superior Networking<br />

and Meetings<br />

Uniquely positioned<br />

across all lines <strong>of</strong><br />

trade to promote<br />

critical information<br />

exchange and targeted<br />

benchmarking among<br />

noncompeting peers<br />

92%<br />

Highly Effective<br />

Effective Government<br />

Relations<br />

The only national voice for<br />

all <strong>of</strong> wholesale distribution<br />

in Washington, DC<br />

88%<br />

Highly Effective<br />

Top Industry Intelligence<br />

Excellent research, best<br />

practices, and practical<br />

information to keep<br />

wholesaler-distributors<br />

the most efficient<br />

and effective channel<br />

in distribution<br />

95%<br />

Highly Effective<br />

Immediate<br />

Communications<br />

Keeping Members<br />

informed,<br />

equipped,<br />

and in touch


The <strong>National</strong> <strong>Association</strong> <strong>of</strong> <strong>Wholesaler</strong>-<strong>Distributors</strong> is composed <strong>of</strong> Direct<br />

Member companies and a federation <strong>of</strong> international, national, regional, state,<br />

and local associations and their member companies, which collectively total<br />

more than 40,000 companies. In addition to its government relations program,<br />

NAW’s scope encompasses the activities <strong>of</strong> the <strong>Wholesaler</strong>-Distributor Political<br />

Action Committee, the NAW Institute for Distribution Excellence, and the<br />

NAW Service Corporation.<br />

Our Mission Statements<br />

<strong>National</strong> <strong>Association</strong> <strong>of</strong> <strong>Wholesaler</strong>-<strong>Distributors</strong><br />

To advocate its members’ interests on national public policy issues that affect<br />

the entire wholesale distribution industry. NAW assists merchant wholesalerdistributors<br />

to be the most efficient channel for bringing goods to market through<br />

benchmarking, strategic management information, networking, and high-level<br />

conferences. NAW serves as a mechanism, through its <strong>Association</strong> Executives<br />

Council, for the sharing <strong>of</strong> ideas, programs, and skills among the organization’s<br />

member national associations.<br />

<strong>Wholesaler</strong>-Distributor Political Action Committee<br />

To advance the election <strong>of</strong> pro-business candidates to federal <strong>of</strong>fice. NAW’s<br />

<strong>Wholesaler</strong>-Distributor Political Action Committee seeks to mobilize the<br />

involvement <strong>of</strong> wholesaler-distributors in the federal electoral process<br />

through financial contributions and political education activities, including<br />

candidate endorsements and get-out-the-vote programs.<br />

NAW Institute for Distribution Excellence<br />

To sponsor and disseminate research into strategic management issues<br />

affecting the wholesale distribution industry. The NAW Institute for Distribution<br />

Excellence aims to help merchant wholesaler-distributors remain the most<br />

effective and efficient channel in distribution.<br />

NAW Service Corporation<br />

To sponsor industry-wide service and product <strong>of</strong>ferings that benefit<br />

wholesaler-distributors.<br />

NOTE: The information included on the front cover is from the NAW Membership Survey Report,<br />

Dr. Stevan Holmberg, Pr<strong>of</strong>essional Management Research Group, Inc.<br />

Contents<br />

1 Leadership Message<br />

2 NAW Networks You with<br />

Your Peers<br />

5 State <strong>of</strong> the Wholesale<br />

Distribution Industry<br />

6 NAW Networks You with<br />

Government and the<br />

Electoral Process<br />

10 NAW Networks You with<br />

Industry Intelligence<br />

13 NAW Networks You with<br />

Business Products and<br />

Services Programs<br />

14 Membership<br />

15 Treasurer’s Report<br />

16 Leadership


Leadership Message<br />

NAW Is Your Strategic Business Partner<br />

What makes NAW unique and your strategic business partner in the wholesale<br />

distribution industry<br />

A Rich Constituency: Only NAW reaches across more than 100 diverse lines<br />

<strong>of</strong> trade.<br />

Best-<strong>of</strong>-Breed Member Companies: Our Company CEOs are industry leaders<br />

who are successfully growing their businesses.<br />

Superior Networking Among Peers: Only NAW unites peers and not competitors<br />

to address shared business issues and opportunities.<br />

Maximum Value, Minimal Time: NAW promotes winning bottom-line results<br />

through all <strong>of</strong> our programs and services, but we require only minimal time<br />

commitment from our Company CEOs.<br />

Raymon A. York, 2007 NAW Chairman <strong>of</strong> the<br />

Board (left); Robert A. Reynolds, Jr., 2006<br />

NAW Chairman <strong>of</strong> the Board (seated); and<br />

Dirk Van Dongen, NAW President.<br />

There is a lot to be positive about in our industry in 2007. After some tough<br />

years, the U.S. economy continues to move in the right direction. As you will<br />

read in the following pages, sales <strong>of</strong> all wholesaler-distributors reached $3.9<br />

trillion in 2006—that is a 10% increase over 2005. The latest Facing the Forces<br />

<strong>of</strong> Change®: Lead the Way in the Supply Chain report published by the NAW<br />

Institute for Distribution Excellence examines four key business-to-business<br />

trends: private label brands, demand-driven channels, new distribution pr<strong>of</strong>it<br />

models, and Internet trends for business customers, and discusses how<br />

wholesaler-distributors will respond to those trends over the next several years.<br />

The good news is that wholesaler-distributors will continue to evolve, innovate,<br />

and reinvent their role as intermediaries in business-to-business supply chains.<br />

NAW will continue to be your strategic business partner for growing and building<br />

your business. NAW remains the gold standard for effective and efficient<br />

networking. What makes NAW networking completely different from all other<br />

organizations is our proven capability to take immediate action on issues<br />

affecting our members, get the right people together to respond to those issues,<br />

and deliver highly effective results that our members expect for their investment.<br />

NAW’s exceptional programs, products, and services network you with<br />

• Your Peers<br />

• The Government and Electoral Process<br />

• Industry Intelligence<br />

• Business Products and Services.<br />

“We’ve reduced expenses by<br />

hundreds <strong>of</strong> thousands <strong>of</strong><br />

dollars a year—plus gained<br />

new customers and added<br />

product lines by networking<br />

through NAW.”<br />

Andrew Berlin, President/CEO<br />

Berlin Packaging<br />

On the following pages, we expand on these areas and show you the many ways<br />

in which NAW can assist your company to take advantage <strong>of</strong> the opportunities<br />

before you—so that you and your company can benefit from the value <strong>of</strong> NAW<br />

membership and our networking opportunities. This report is part a recap <strong>of</strong> the<br />

past 12 months and part a promise <strong>of</strong> what is planned in the coming months <strong>of</strong><br />

2007. You can stay up-to-date on all NAW activities by bookmarking and visiting<br />

www.naw.org <strong>of</strong>ten.<br />

2006 annual report 1


NAW Networks You With...<br />

As a federation <strong>of</strong> associations representing all lines <strong>of</strong> trade in the wholesale<br />

distribution industry, NAW is uniquely positioned to be the only portal for wide<br />

access to and exchange <strong>of</strong> information and services among noncompeting peers<br />

within its membership. What makes NAW so different from all other associations<br />

is that our dynamic programs are individually designed to promote networking<br />

and benchmarking for you and your peers across the entire industry.<br />

Peer Groups Like None Other<br />

NAW’s meetings provide powerful incentives for valuable information sharing for<br />

all members. NAW has created a number <strong>of</strong> “peer groups like none other” that<br />

<strong>of</strong>fer wholesale distribution executives matchless opportunities to meet with and<br />

learn from peers—but not competitors. Through observing what peers in other<br />

lines <strong>of</strong> trade are doing to grow their businesses, NAW member companies tell us<br />

that they are able to gain a competitive advantage in their own industry segments.<br />

Your Time Is Valuable<br />

NAW understands that the one thing<br />

wholesale distribution executives have<br />

least <strong>of</strong> is “time.” That is why our<br />

meetings are short but informationpacked.<br />

There is enough time built<br />

in for both learning experiences and<br />

networking in an intimate setting that<br />

provides a candid atmosphere for<br />

information exchange. All NAW<br />

roundtables and conferences (with<br />

the exception <strong>of</strong> the NAW Executive<br />

Summit and the Wholesale Distribution<br />

Manager’s Course) are held at the<br />

Hilton O’Hare in Chicago, which<br />

allows for quick in-and-out access<br />

for participants.<br />

Finding common ground: Billion dollar company executives talk about challenges and<br />

strategies that they tackle in their own companies in a noncompeting environment during<br />

an NAW Billion Dollar Company Conference. Lyle Heidemann, President/CEO, True Value<br />

Company, (left) and Richard Klau, President, Hajoca Corp.<br />

High Marks for Networking at NAW Meetings<br />

NAW members consistently rate networking in small groups as one <strong>of</strong> the most<br />

important benefits <strong>of</strong> NAW membership. In order to make each event <strong>of</strong> highest<br />

value to participants, NAW meetings and roundtables are targeted toward<br />

specific sizes <strong>of</strong> companies and by executive responsibilities. Our Large Company<br />

Conferences and Billion Dollar Company Roundtables focus on these firms<br />

because their collective success provides beneficial results for all-sized<br />

businesses in the wholesale distribution industry. NAW members recognize<br />

the value <strong>of</strong> benchmarking and networking with noncompetitors across all<br />

lines <strong>of</strong> trade as strategic tools to improve efficiency and effectiveness in specific<br />

operational practices. They rely on NAW meetings for practical, industry-wide<br />

knowledge and information by experts in the industry.<br />

“Ryerson Tull continues<br />

to benefit greatly from<br />

NAW’s benchmarking and<br />

networking programs. We<br />

receive valuable information<br />

from the NAW benchmarking<br />

process. And since it comes<br />

from operating executives,<br />

it’s not just conceptual, it’s<br />

actionable. Companies that<br />

are not involved don’t know<br />

what they are missing. We<br />

have found NAW to be the<br />

most effective organization<br />

<strong>of</strong> its kind.”<br />

Neil Novich, Chairman/President/CEO<br />

Ryerson Tull, Inc.<br />

2 naw


...Your Peers<br />

“The cost to fly to Chicago<br />

—$450! The cost to stay<br />

at the Hilton—$340!<br />

The cost to attend the<br />

conference—$1,155!<br />

The interactive networking<br />

with counterparts from my<br />

industry—PRICELESS!”<br />

Gerry Burnett<br />

Vice President, Purchasing and Logistics<br />

Laird Plastics<br />

NAW Large Company<br />

Emphasis Program<br />

The Large Company Emphasis Program<br />

continues to attract wholesale distribution<br />

executives looking to augment networking<br />

opportunities beyond their traditional<br />

industry segment. In 2006, the following<br />

networking events for firms with annual<br />

sales exceeding $100 million were well<br />

attended and received, and they will<br />

continue in 2007:<br />

• The Large Company CEO<br />

Roundtable—Open to the<br />

Chairman, President, CEO, COO,<br />

and Executive Vice President<br />

• The Large Company CFO<br />

Networking Conference<br />

• The Large Company Human<br />

Resources Networking Conference<br />

• The Large Company Technology<br />

Networking Conference<br />

Because the topics are based on survey<br />

responses from the large company<br />

community, that community has a<br />

vested interest in the content <strong>of</strong> each<br />

meeting. The events are energetic and<br />

informative because the groups are<br />

engaged and interactive. In many<br />

cases, members <strong>of</strong> the large company<br />

community are eager to be presenters<br />

on topics <strong>of</strong> keen interest. This continues<br />

the NAW theme <strong>of</strong> “networking and<br />

sharing without competitors” and is<br />

a key reason why these events are<br />

so successful.<br />

NAW meetings allow for networking across the wholesale distribution industry.<br />

Executives come together to discuss issues and share experiences that are familiar to<br />

all wholesaler-distributors.<br />

Billion Dollar Company “C” Suite Roundtables<br />

In 2006, NAW held five special one-day networking roundtables for our largest<br />

member companies to address the special issues they face as billion dollar<br />

companies. Participation in these twice yearly roundtables is limited to the<br />

senior executive in the following areas:<br />

• Billion Dollar Company CEO Roundtable<br />

• Billion Dollar Company CIO Roundtable<br />

• Billion Dollar Company Operations Roundtable<br />

• Billion Dollar Company Human Resources Roundtable<br />

• Billion Dollar Company CFO Roundtable<br />

Added to the above list in 2007 is this roundtable:<br />

• Billion Dollar Company Chief Legal Officer Roundtable<br />

These roundtables have been so well received that most <strong>of</strong> our billion dollar<br />

company members are represented at them. Executives tell us that because<br />

these roundtables are so powerful, they have them “burned into their calendars.”<br />

As with the Large Company Emphasis Program, our Billion Dollar Company<br />

Roundtables continue to promote “networking without competitors,” which is<br />

the unique value <strong>of</strong> NAW membership and an essential component to the<br />

growth <strong>of</strong> the wholesale distribution industry.<br />

“The mix <strong>of</strong> formal presentations, roundtable discussions,<br />

and informal networking created a great opportunity to<br />

focus on key issues facing my operation. I look forward<br />

to the next meeting.”<br />

Chris Sperry, Vice President, Distribution Operations<br />

W.W. Grainger<br />

2006 annual report 3


Your Peers (continued)<br />

NAW/Deloitte Strategic Alliance<br />

NAW regularly reaches out to network with organizations closely focused on the<br />

wholesale distribution industry and the advancement <strong>of</strong> our members’ businesses.<br />

One <strong>of</strong> our most important alliances is with Deloitte Consulting LLP and its<br />

wholesale distribution experts.<br />

Neil Gholson, Wholesale<br />

Distribution Global<br />

Segment Leader, Deloitte<br />

Consulting LLP, discusses<br />

how to improve margins<br />

with Don Houghton,<br />

President/COO, Reeb<br />

Millwork Corp., (right)<br />

and others at the NAW<br />

Executive Summit.<br />

In 2006, NAW and Deloitte continued to develop industry intelligence to assist<br />

wholesaler-distributors “to be so good at what they do that no one else will do it.”<br />

The Wholesale Distribution<br />

Manager’s Course<br />

Now in its 56th year, NAW’s Wholesale<br />

Distribution Manager’s Course (WDMC)<br />

at The Ohio State University (OSU) is the<br />

premier leadership development course<br />

for the entire wholesale distribution<br />

industry. For five intensive days in<br />

June, dozens <strong>of</strong> mid-level and senior<br />

managers—from companies under $5<br />

million to more than $1 billion in sales—<br />

network with and learn from each<br />

other and from the country’s deepest<br />

wholesale distribution teaching faculty.<br />

By the end <strong>of</strong> the week, the managers<br />

are grounded in the basics <strong>of</strong> wholesale<br />

distribution, they have developed new<br />

ideas for improving the performance<br />

and pr<strong>of</strong>itability <strong>of</strong> their companies,<br />

and they have sharpened their personal<br />

performance too.<br />

Led by Deloitte’s Neil Gholson, Wholesale Distribution Global Segment Leader,<br />

the firm demonstrated its continued prominence in the wholesale distribution<br />

industry through a new book and three key presentations at NAW meetings.<br />

• Driving Growth and Shareholder Value: The Distribution Value Map.<br />

The NAW Institute for Distribution Excellence and Deloitte published this<br />

dynamic new tool specifically for wholesaler-distributors. To read more about<br />

this book and two wall maps by Neil Gholson and Mark Schloegel <strong>of</strong> Deloitte,<br />

go to page 11.<br />

• How the Business Benefits from IT. In this presentation during the Large<br />

Company Technology Networking Conference, Neil Gholson discussed the<br />

value IT provides to wholesaler-distributors using empirical data and a case<br />

study to demonstrate the impact IT has on business. Deloitte has been<br />

working with clients to link investments and benefits with an approach called<br />

“Benefits Realization.”<br />

• Pensions and the Future: What You Need to Know. In this session during the<br />

Billion Dollar Company CEO Roundtable, Tim Phoenix and Brian Augustian<br />

<strong>of</strong> Deloitte addressed the trends that are causing companies to rethink the<br />

retirement benefits <strong>of</strong>fered to employees and what those <strong>of</strong>ferings include.<br />

Decisions must be made from the point <strong>of</strong> view <strong>of</strong> regulatory, compliance,<br />

cost, ROI, and new workforce segments, and this requires a new perspective.<br />

• Red Hot Mergers and Acquisitions: How Can You Take Advantage <strong>of</strong> This<br />

Market Deloitte’s Andrew Isgrig gave a perspective <strong>of</strong> the very hot financial<br />

markets during a session at the Financial Networking Conference. He outlined<br />

the M&A market and focused specifically on the wholesale distribution<br />

industry to include deal activity, rational, and multiples paid. He also focused<br />

on the private equity markets and what they are looking for from the wholesale<br />

distribution industry.<br />

4 naw<br />

During the weeklong course, participants<br />

break into work groups where they tackle<br />

and resolve real-world wholesale distribution<br />

challenges.<br />

“I loved this course and<br />

highly recommend it! It<br />

outlined ways for an<br />

organization to increase<br />

its operational effectiveness<br />

and provided tools for<br />

making members <strong>of</strong> every<br />

functional area strategic<br />

partners in the business.”<br />

Sue Raffensperger, MBA, SPHR,<br />

Senior Corporate Trainer<br />

Leadership and Pr<strong>of</strong>essional Development<br />

Skinner Nurseries, Inc.


State <strong>of</strong> the Wholesale Distribution Industry<br />

Overview<br />

Sales <strong>of</strong> all wholesaler-distributors reached $3.9 trillion in<br />

2006, a 10% increase versus the previous year. The industry<br />

remains an important force in all major sectors <strong>of</strong> the U.S.<br />

economy, ranging from basic commodities to advanced<br />

technology components. (See Exhibit 1 below.)<br />

U.S. Wholesale Distribution Industry<br />

Annual Growth in<br />

Wholesale Distribution Revenues and U.S. GDP<br />

11.3%<br />

10.0%<br />

7.7%<br />

6.9%<br />

6.3%<br />

6.4%<br />

Major Sector (Largest to Smallest Sector Revenues)<br />

2006 Revenues ($B)<br />

Grocery and Foodservice Wholesale <strong>Distributors</strong> $447.2<br />

Oil and Gas Products Wholesale <strong>Distributors</strong> $417.8<br />

Pharmaceutical <strong>Wholesaler</strong>s $366.3<br />

Commercial Equipment and Supplies Wholesale <strong>Distributors</strong> $325.2<br />

Motor Vehicles and Motor Vehicle Parts Wholesale <strong>Distributors</strong> $323.9<br />

Industrial <strong>Distributors</strong> $320.9<br />

Electrical and Electronics <strong>Wholesaler</strong>s $289.4<br />

Other Consumer Products Wholesale <strong>Distributors</strong> $216.8<br />

Miscellaneous Durable Goods Wholesale <strong>Distributors</strong> $212.0<br />

Metal Service Centers $150.9<br />

Building Material and Construction Wholesale <strong>Distributors</strong> $134.8<br />

Apparel and Piece Goods Wholesale <strong>Distributors</strong> $127.8<br />

Agricultural Products Wholesale <strong>Distributors</strong> $121.7<br />

Beer, Wine and Liquor <strong>Wholesaler</strong>s $101.1<br />

Office Product <strong>Wholesaler</strong>s and Paper Merchants $95.2<br />

Chemicals and Plastics Wholesale <strong>Distributors</strong> $93.9<br />

Hardware, Plumbing, and Heating Equipment and Supplies $90.7<br />

Furniture and Home Furnishing Wholesale <strong>Distributors</strong> $68.1<br />

The wholesale distribution industry supports an impressive<br />

diversity <strong>of</strong> companies, with entrepreneurial family-run<br />

business competing directly with multi-billion dollar publicly<br />

traded powerhouses. There are only 13,000 distributors—<br />

roughly 5% <strong>of</strong> the total number—with annual sales greater<br />

than $25 million. The largest wholesaler-distributors have<br />

annual sales exceeding $80 billion.<br />

Growth<br />

Total $3,903.6<br />

The wholesale distribution industry has been growing faster<br />

than the overall U.S. economy during the recent economic<br />

expansion. In 2006, revenues <strong>of</strong> wholesaler-distributors<br />

increased 3.4 percentage points more than U.S. Gross<br />

Domestic Product (GDP). Pr<strong>of</strong>itability has kept pace with<br />

this growth, further testimony to wholesaler-distributors’<br />

value to their customers. (See Exhibit 2 top right.)<br />

The industry retains its vitality because wholesaler-distributors<br />

perform supply chain functions more effectively and efficiently<br />

than either manufacturers or customers. Manufacturers<br />

rely on distributors to communicate with their customers<br />

because wholesaler-distributors <strong>of</strong>fer flexibility, fast response<br />

to customer needs, consistency <strong>of</strong> service, and local presence.<br />

Thus, wholesale distribution remains the most significant<br />

channel to market for manufacturers and the most important<br />

supply chain for customers, particularly when there are<br />

many small customers and a wide variety <strong>of</strong> manufacturers.<br />

2004 2005 2006<br />

Wholesale Distribution Revenues<br />

Employment and Productivity<br />

U.S. GDP<br />

The wholesale distribution industry employs 1 out <strong>of</strong> 20<br />

private sector U.S. workers, but is helping to grow the<br />

nation’s productivity far in excess <strong>of</strong> the industry’s actual<br />

size. Multiple economic studies estimate that wholesale<br />

distribution has contributed more than 25% <strong>of</strong> the entire<br />

U.S. economy’s total productivity gains over the past 15 years.<br />

<strong>Wholesaler</strong>-distributors are leaders in using technology to<br />

reduce low value-added labor activities, such as order<br />

processing, billing, inventory control, delivery route<br />

scheduling, and warehouse management. As a result,<br />

productivity growth in wholesale distribution exceeded<br />

the overall business sector by 1.6 percentage points in the<br />

past 15 years and by 2.5 percentage points since 2001.<br />

(See Exhibit 3 below.)<br />

Average Annual Growth in Labor Productivity - 1991-2005<br />

1991-1995 1996-2000 2001-2005 1991-2005<br />

Non-Farm Business Sector 1.5% 2.5% 3.3% 2.5%<br />

Wholesale Trade 3.0% 5.1% 5.8% 4.1%<br />

The wholesale distribution industry’s gains are critical for<br />

U.S. global competitiveness given the importance <strong>of</strong> labor<br />

productivity to long-term economic growth. The industry’s<br />

improving fortunes are also directly benefiting the 5.1 million<br />

people employed in the industry. Average weekly earnings in<br />

wholesale distribution are 26% higher than average earnings<br />

in all private U.S. industries.<br />

Prepared by Adam J. Fein, Ph.D., President <strong>of</strong> Pembroke<br />

Consulting, Inc. He serves as a Fellow <strong>of</strong> the NAW Institute for<br />

Distribution Excellence.<br />

2006 annual report 5


NAW Networks You With...<br />

A principal benefit <strong>of</strong> your NAW membership is the daily, intensive networking<br />

NAW conducts on your behalf with federal legislative and regulatory bodies in<br />

Washington, DC. By engaging the policy-making process, NAW connects the<br />

wholesale distribution industry with leading federal policy makers whose decisions<br />

<strong>of</strong>ten impact the everyday operations <strong>of</strong> wholesale distribution companies.<br />

Your Voice in Our Nation’s Capital<br />

Through direct lobbying, grassroots lobbying, and leadership <strong>of</strong> coalitions, NAW<br />

supports legislation that helps you manage your business as you see fit and earn<br />

and retain pr<strong>of</strong>its, and opposes legislation that impedes these objectives.<br />

Similarly, NAW participates in agency rule makings undertaken to implement<br />

statutes enacted by Congress, with the goal <strong>of</strong> securing the minimum degree <strong>of</strong><br />

regulatory burden and cost to you and other wholesaler-distributors.<br />

NAW’s government relations department includes a team <strong>of</strong> lobbyists that<br />

carries the wholesale distribution industry’s message to federal policy makers.<br />

The team’s mission is to effectively convey the wholesale distribution industry’s<br />

views to Congress, the White House, and federal agencies.<br />

In 2007, NAW continues to vigorously advocate the interests <strong>of</strong> the wholesale<br />

distribution industry before the executive and legislative branches <strong>of</strong> the federal<br />

government and collaborates with <strong>of</strong>fice holders on a bipartisan basis whenever<br />

possible.<br />

Coalitions: Leveraging the<br />

Strength <strong>of</strong> Our Industry<br />

NAW’s coalition activities are predicated<br />

on the principle <strong>of</strong> “strength in numbers,”<br />

perhaps the ultimate example <strong>of</strong> the<br />

value <strong>of</strong> networking. NAW is a leader<br />

in organizing and managing coalitions<br />

to address the wholesale distribution<br />

industry’s public policy priorities in<br />

Washington, DC. NAW represents<br />

40,000 companies with places <strong>of</strong><br />

business in all 50 states and nearly<br />

all 435 congressional districts—an<br />

economic constituency that is large,<br />

diverse, and politically formidable. When<br />

wholesaler-distributors are allied through<br />

NAW with like-minded organizations<br />

and their networks, our effectiveness<br />

is substantially strengthened.<br />

2007 NAW Executive Summit: FACING THE<br />

FORCES OF CHANGE ®<br />

About 200 leaders from diverse wholesale distribution<br />

lines <strong>of</strong> trade came together in January 2007 in<br />

Washington, DC for NAW’s Executive Summit: FACING<br />

THE FORCES OF CHANGE ® . The overwhelming majority<br />

<strong>of</strong> attendees rated the meeting “excellent.” They told<br />

NAW that attending each year is mandatory because it<br />

gives them the opportunity at the start <strong>of</strong> a new year to<br />

discuss industry issues with each other and with top<br />

consultants.<br />

Here is a pictorial roundup <strong>of</strong> some <strong>of</strong> the major events<br />

at the 2007 Executive Summit. For a detailed agenda for<br />

the 2008 Executive Summit when it becomes available,<br />

visit www.naw.org.<br />

Adam J. Fein, Ph.D., President <strong>of</strong> Pembroke Consulting, provided an<br />

advance look at the NAW Institute for Distribution Excellence report<br />

Facing the Forces <strong>of</strong> Change®: Lead the Way in the Supply Chain.<br />

6 naw


...Government and the Electoral Process<br />

“I just used your E-Alert<br />

program to contact my<br />

Congressman. It is a<br />

FANTASTIC tool for<br />

composing a concise,<br />

personalized, and meaningful<br />

message and getting it out<br />

quickly! Having the talking<br />

points side by side with the<br />

text <strong>of</strong> the message as I<br />

entered it made it SO EASY!<br />

I will be responsive to doing<br />

this in the future. Thanks!”<br />

J. Christopher Smith, Executive Vice<br />

President and Chief Operating Officer<br />

H.D. Smith Wholesale Drug Co.<br />

Grassroots Lobbying: Constituents Back Home<br />

Speak to Congress<br />

Our wholesale distribution industry plays an enormous role in achieving favorable<br />

legislative results when we speak to individual Members <strong>of</strong> Congress through the<br />

voices <strong>of</strong> constituents and voters from “back home” in the Members’ states and<br />

districts. NAW’s principle grassroots lobbying tool is the E-Alert Program. Through<br />

this program, NAW communicates with the senior management <strong>of</strong> both direct<br />

member companies and member companies <strong>of</strong> NAW-affiliated member<br />

associations that co-sponsor the program. They, in turn, communicate with<br />

their Senators and Representatives as these issues move through the legislative<br />

process. E-Alert, currently cosponsored by 45 member associations, enables<br />

wholesaler-distributors to easily identify appropriate federal legislators,<br />

conveniently craft a written advocacy message to them, and deliver it quickly,<br />

when it is needed most.<br />

NAW’s signature grassroots program is the Washington Action Network (WAN),<br />

which catalogs the personal relationships that exist between individual<br />

wholesaler-distributors and Members <strong>of</strong> both Houses <strong>of</strong> Congress. WAN enables<br />

the NAW government relations team to tap the industry’s top-level contacts with<br />

Representatives and Senators at the most critical points in legislative initiatives.<br />

Participation in WAN is also open to NAW member associations that opt to<br />

cosponsor the program. Today, 73 member associations participate.<br />

“The Best on K Street—the <strong>National</strong> <strong>Association</strong> <strong>of</strong><br />

<strong>Wholesaler</strong>-<strong>Distributors</strong>. The name may sound niche, but<br />

the <strong>Wholesaler</strong>s’ political operation is vast and powerful.”<br />

The Hill Newspaper<br />

“The Global Opportunity for U.S. Distribution” session focused on the<br />

upside <strong>of</strong> the globalization trend by examining the international business<br />

experiences <strong>of</strong> a panel <strong>of</strong> U.S. wholesaler-distributors who are succeeding<br />

in global markets. The panelists were (from left): Jay Brown, Vice President<br />

<strong>of</strong> Merchandising, Do it Best Corp.; Andrew Berlin, President/CEO, Berlin<br />

Packaging; and Steve Johnson, President/COO, Tucker Rocky Distributing.<br />

Alan Beaulieu <strong>of</strong> the Institute for Trend Research served as facilitator.<br />

Byron Potter, President/CEO <strong>of</strong> Dallas Wholesale Builders<br />

Supply Inc., and Sue York, Chairman <strong>of</strong> Ewing Irrigation<br />

Products, added their own perspectives to the Executive<br />

Summit program during a discussion roundtable where<br />

attendees networked directly with their wholesale distribution<br />

peers from other lines <strong>of</strong> trade.<br />

2006 annual report 7


Government and the Electoral Process (continued)<br />

Policy Agenda: Serving Our Members’ Interests<br />

The complete menu <strong>of</strong> NAW advocacy resources was at work on behalf <strong>of</strong><br />

wholesaler-distributors throughout the Second Session <strong>of</strong> the 109th Congress<br />

on a wide range <strong>of</strong> issues. Despite our best efforts on issues as diverse as health<br />

care, tax relief, and tort reform, polarization <strong>of</strong> the Congress along partisan fault<br />

lines proved to be a hurdle too high to clear for many items on the pro-business<br />

legislative agenda.<br />

Asbestos litigation reform, once a promising legislative prospect to replace the<br />

costly tort system with a trust fund to compensate victims <strong>of</strong> asbestos exposures,<br />

could not break free.<br />

<strong>Association</strong>/small business health plan (AHP/SBHP) legislation would allow<br />

trade associations to <strong>of</strong>fer group health insurance programs to their members on<br />

a multi-state basis. Repeatedly passed by the House <strong>of</strong> Representatives over the<br />

years, an NAW-backed bill made it out <strong>of</strong> the Senate’s Health, Education, Labor<br />

and Pensions (HELP) Committee for the first time, only to stall on the floor <strong>of</strong><br />

Congress’ upper chamber.<br />

Traction in the Senate was also elusive for the House-passed Lawsuit Abuse<br />

Reduction Act (LARA), a bill to penalize the filing <strong>of</strong> “junk” lawsuits and to scale<br />

back a plaintiff lawyer manipulation <strong>of</strong> the civil justice system known as “forum<br />

shopping.”<br />

Despite these disappointments, there were some significant successes. Congress<br />

passed and the President signed into law legislation that extends the reduced<br />

marginal income tax rates enacted in 2001 and 2003 on all levels <strong>of</strong> income,<br />

maintains the lower tax rates on capital<br />

gains and dividends, and continues the<br />

increase in first-year small business<br />

expensing.<br />

A second major victory turned back an<br />

attempt, initially suggested by Senate<br />

Republicans, to repeal the “last in, first<br />

out” (LIFO) accounting method.<br />

Today in the 110th Congress, “defense”<br />

is the watchword. Organized labor has<br />

seen its legislative wish list stalled<br />

through 12 years <strong>of</strong> GOP-controlled<br />

Congresses, and AFL-CIO-driven issues<br />

now top the agenda <strong>of</strong> the new Democrat<br />

majority that organized labor helped<br />

elect. The main prize is enactment <strong>of</strong><br />

“card check” legislation to abolish<br />

secret ballot elections in union organizing<br />

efforts. Several battles to “hold the line”<br />

can be expected on the tax policy front.<br />

LIFO is clearly in jeopardy as are the<br />

pro-growth tax cuts enacted in 2001<br />

and 2003. Chairman <strong>of</strong> the House’s<br />

tax-writing committee Rep. Charlie<br />

Rangel (D-NY-15) has publicly suggested<br />

that all are on the chopping block.<br />

During the reception preceding the <strong>Wholesaler</strong>-Distributor Political<br />

Action Committee Dinner, Robert Taylor, President/CEO <strong>of</strong> Do it Best<br />

Corp. (left), greeted Sen. Tom Coburn (R-OK) (right) and Rep. Mark<br />

Souder (R-IN-03).<br />

Robert A. Reynolds, Jr., Chairman/President/CEO <strong>of</strong> Graybar<br />

Electric Co. (left), enjoyed a conversation with Sen. Norm<br />

Coleman (R-MN) and former Sen. Jim Talent (R-MO).<br />

8 naw


“For more than 25 years,<br />

belonging to NAW is part<br />

<strong>of</strong> Carlson Systems’ risk<br />

management program<br />

regarding federal government<br />

legislation, regulations, and<br />

taxation that impact our<br />

business.”<br />

Don Carlson, Chairman<br />

Carlson Systems<br />

Political Action: Working to<br />

Elect Pro-Business Leaders<br />

Pro-business legislative victories, whether<br />

<strong>of</strong> an “<strong>of</strong>fensive” or “defensive” nature,<br />

depend on having women and men<br />

in the U.S. Senate and House <strong>of</strong><br />

Representatives who will cast probusiness<br />

votes, and on having a<br />

President who will lead on business<br />

issues. NAW’s <strong>Wholesaler</strong>-Distributor<br />

Political Action Committee (WDPAC)<br />

engages the political process and<br />

provides executives throughout the<br />

wholesale distribution industry with an<br />

important avenue for political action on<br />

behalf <strong>of</strong> business-friendly candidates<br />

for federal <strong>of</strong>fice.<br />

WDPAC maintains both a Political Action Fund (PAF) and a Corporate Political<br />

Education Fund (CPEF). The corporate contributions that CPEF receives enable<br />

WDPAC to contribute to federal candidates every “hard dollar” <strong>of</strong> personal<br />

money that PAF raises.<br />

PAF fund-raising was successful in the 2006 election cycle. In addition, three<br />

other major initiatives were undertaken in 2005 and continued through the<br />

2006 election year: the formation and operation <strong>of</strong> Team Allen (on behalf <strong>of</strong> the<br />

re-election <strong>of</strong> Virginia Senator George Allen), Team McGavick (to promote the<br />

election to the U.S. Senate <strong>of</strong> Washington State’s Mike McGavick), and Team<br />

Talent (on behalf <strong>of</strong> the re-election <strong>of</strong> Missouri Senator Jim Talent). Together,<br />

these three Teams raised $3 million, an amount that has gotten the attention<br />

<strong>of</strong> Washington, DC’s political community. Unfortunately, not every story has a<br />

happy ending. Despite the stellar successes <strong>of</strong> the Teams’ initiatives, none <strong>of</strong><br />

the three candidates were successful on Election Day.<br />

And despite the victories <strong>of</strong> the majority <strong>of</strong> WDPAC-endorsed candidates for<br />

the Senate and House <strong>of</strong> Representatives, pro-business Republican majorities<br />

in both Houses <strong>of</strong> Congress were swept out <strong>of</strong> power, the apparent victims <strong>of</strong><br />

an unpopular war in Iraq, ethical lapses on Capitol Hill, and a strong economic<br />

recovery, the benefits <strong>of</strong> which are yet to be adequately realized by middle- and<br />

lower-income workers and their families.<br />

WDPAC prepares for the 2008 election cycle in which races for the Presidency,<br />

33 seats in the Senate (22 Republican and 11 Democrat), and all 435 seats in<br />

the House <strong>of</strong> Representatives will be run. WDPAC’s goal remains unchanged:<br />

the elections <strong>of</strong> a President and a Congress that promote and enact pro-business<br />

legislative and regulatory policies.<br />

“A leader among the business lobbyists [is]...the <strong>National</strong><br />

<strong>Association</strong> <strong>of</strong> <strong>Wholesaler</strong>-<strong>Distributors</strong>.”<br />

The Wall Street Journal<br />

Rep. John Boehner (R-OH-08), Minority Leader <strong>of</strong> the House<br />

<strong>of</strong> Representatives, thanked supporters at the <strong>Wholesaler</strong>-<br />

Distributor Political Action Committee Dinner and shared his<br />

insights on the 2006 elections and what the Republicans need<br />

to do to regain their majority in the 2008 elections. More than<br />

20 Members <strong>of</strong> Congress attended the event.<br />

NAW President Dirk Van Dongen presented NAW’s 2007 Distinguished<br />

Leadership Award to former Sen. Jim Talent (R-MO) at the NAW<br />

Leadership Luncheon.<br />

2006 annual report 9


NAW Networks You With...<br />

There are many ways in which NAW performs the networking function without<br />

putting you face-to-face with other industry executives. Only NAW regularly<br />

connects you with the finest industry intelligence so you can benefit from the<br />

best thinking about wholesale distribution.<br />

NAW Institute for Distribution Excellence<br />

At NAW’s 2007 Executive Summit, we announced the<br />

rebranding <strong>of</strong> the Distribution Research and Education<br />

Foundation (DREF) to the NAW Institute for Distribution<br />

Excellence. Our goal in establishing the NAW Institute is<br />

to provide a comprehensive and cohesive unit <strong>of</strong> research<br />

and strategic knowledge for wholesaler-distributors that<br />

no other organization can replicate across all lines <strong>of</strong> trade.<br />

While the name and some <strong>of</strong> the activities have changed,<br />

the mission remains the same:<br />

“To sponsor and disseminate research into strategic management issues<br />

affecting the wholesale distribution industry. The NAW Institute for<br />

Distribution Excellence aims to help merchant wholesaler-distributors<br />

remain the most effective and efficient channel in distribution.”<br />

NAW members tell us repeatedly that our studies stand out as leading sources<br />

<strong>of</strong> insightful, practical, and cutting-edge guidance. The core strength <strong>of</strong> the<br />

NAW Publishing Program is that our resources deliver the critical information<br />

wholesale distribution executives need to be successful and to grow their<br />

businesses.<br />

The NAW Institute is aggressive in producing new books and multimedia<br />

products that can improve your company’s pr<strong>of</strong>itability. Visit www.nawpubs.org<br />

for frequent updates.<br />

The NAW Institute<br />

Fellows Program was<br />

established in 2001.<br />

It is intended to<br />

recognize outstanding<br />

individuals from<br />

the academic and<br />

consulting communities<br />

who do excellent work<br />

to expand the body<br />

<strong>of</strong> knowledge about<br />

the wholesale<br />

distribution industry.<br />

When it comes to<br />

research and authoring<br />

practical reports that<br />

can assist distribution<br />

companies to be more<br />

pr<strong>of</strong>itable, these Fellows<br />

are our crown jewels.<br />

NAW Institute for Distribution Excellence Fellows (from left):<br />

J. Michael Marks <strong>of</strong> Indian River Consulting Group; Adam<br />

J. Fein, Ph.D. <strong>of</strong> Pembroke Consulting, Inc.; Neil Gholson<br />

<strong>of</strong> Deloitte Consulting LLP; and Brent R. Grover <strong>of</strong> Evergreen<br />

Consulting, LLC.<br />

Facing the Forces <strong>of</strong> Change ® :<br />

Lead the Way in the Supply Chain<br />

Adam J. Fein, Ph.D.<br />

The first title to be<br />

published under<br />

the NAW Institute<br />

for Distribution<br />

Excellence in 2007 is<br />

the eighth edition <strong>of</strong><br />

the flagship industry<br />

report Facing the<br />

Forces <strong>of</strong> Change ® :<br />

Lead the Way in the<br />

Supply Chain. This report examines four<br />

key business-to-business trends: private<br />

label brands, demand-driven channels,<br />

new distribution pr<strong>of</strong>it models, and<br />

Internet trends for business customers.<br />

It also features never-before-published<br />

data on industry segmentation, emerging<br />

trends affecting the supply chain, sales<br />

management, supply chain technology<br />

forecasts, and much more. This study<br />

draws upon a broad set <strong>of</strong> data, including<br />

in-depth interviews with senior distribution<br />

executives, manufacturers, customers,<br />

analysts, pr<strong>of</strong>essors, and association<br />

executives. It also includes survey data<br />

on nearly 1,300 wholesale distribution<br />

and manufacturing companies.<br />

Here is a brief overview <strong>of</strong> the titles<br />

released in 2006:<br />

2006 Employee Compensation Report<br />

Every two years, NAW<br />

conducts a unique<br />

executive compensation<br />

survey that focuses on<br />

the largest wholesalerdistributors<br />

in the<br />

industry. This<br />

downloadable report,<br />

which focuses on data<br />

from 2,080 wholesaler-distributors from<br />

across all lines <strong>of</strong> trade, shows you how<br />

your company’s compensation program<br />

compares with those <strong>of</strong> other distribution<br />

companies. As part <strong>of</strong> this report,<br />

participants receive a customized<br />

report with their company’s data and<br />

comparisons to other firms.<br />

10 naw


...Industry Intelligence<br />

Working at Cross-Purposes: How<br />

<strong>Distributors</strong> and Manufacturers Can<br />

Manage Conflict Successfully<br />

Mike Marks, Tim Horan, and Mike Emerson<br />

This book takes a look<br />

at what really drives<br />

distributor-supplier<br />

relationships, how <strong>of</strong>ten<br />

they go bad, and why.<br />

It can help both<br />

distributors and their<br />

suppliers avoid the<br />

economic and other<br />

consequences <strong>of</strong> a core relationship<br />

turning sour by looking for ways to<br />

correct emerging problems before they<br />

become critical.<br />

“Finally, there is a roadmap<br />

for managing the relationship<br />

that honestly looks at the<br />

differing roles <strong>of</strong> distributors<br />

and suppliers.”<br />

Robert Dill, President<br />

Hisco, Inc.<br />

Price for Success: An Online Course for<br />

the Wholesale Distribution Sales Team<br />

In less than two hours, your employees<br />

will know pricing strategies that deliver<br />

pr<strong>of</strong>it, put a price on valued services,<br />

and have the confidence to talk price<br />

with your<br />

customers.<br />

Even if you<br />

use pricing<br />

pr<strong>of</strong>iles, your<br />

employees<br />

still need to<br />

understand<br />

the value you create with products,<br />

inventory, service, and delivery.<br />

2006 Wholesale Distribution Economic Reports<br />

Adam J. Fein, Ph.D.<br />

Each <strong>of</strong> these 18 innovative reports includes economic<br />

analyses <strong>of</strong> one <strong>of</strong> the 18 major wholesale distribution sectors<br />

within the $3.9 trillion industry, as well as the author’s expert<br />

commentary to help you interpret the sector data in light <strong>of</strong><br />

current macroeconomic trends. These reports supply a wealth<br />

<strong>of</strong> detailed channel benchmarking data, including revenue and<br />

employment growth trends, the number and size distribution <strong>of</strong> companies,<br />

gross margins, wages, and many other operating statistics.<br />

Smart Investments: Developing Top Performers<br />

in Wholesale Distribution<br />

Susan Levering, Ph.D.<br />

This book addresses the long-ignored aspect <strong>of</strong> the wholesale<br />

distribution industry—Training and Development. Winning<br />

companies approach s<strong>of</strong>t, people-oriented issues as they<br />

would any other business issue: They leverage training to<br />

achieve bottom-line business results. This book identifies<br />

five strategies successful wholesaler-distributors use and shows you how to<br />

incorporate them into your planning process and make your company more<br />

competitive in the marketplace.<br />

“This book showed me that I was investing my company<br />

training dollars wisely and that I am able to engage all <strong>of</strong><br />

my employees to move forward with a common vision.<br />

It is one <strong>of</strong> the few training and development books with<br />

a focus on the wholesale distribution industry.”<br />

Bobby Cohen, CEO<br />

Daycon Products Co., Inc.<br />

Driving Growth and Shareholder Value: The Distribution<br />

Value Map<br />

Neil Gholson and Mark Schloegel<br />

Known as DVM, this breakthrough tool—consisting <strong>of</strong> a<br />

book and two poster-size wall maps—touches every part<br />

<strong>of</strong> a wholesaler-distributor’s business and can help chart<br />

a path to higher operational efficiency and overall<br />

pr<strong>of</strong>itability. No matter what your line <strong>of</strong> trade, DVM<br />

will help you debate ideas and priorities for your<br />

organization, refine your strategy, and plan and execute<br />

your tactical performance improvement efforts.<br />

Looking Ahead<br />

In addition to the all-new Facing the Forces <strong>of</strong> Change ® book, here are some <strong>of</strong> the topics planned for publication in 2007:<br />

• 2007 Wholesale Distribution Economic Reports • 5 Fundamentals for Distributor Sales Management<br />

• Improving Distributor Pr<strong>of</strong>itability • Financial Management for All Levels <strong>of</strong> Wholesale Distribution<br />

• Lean Distributing<br />

2006 annual report 11


Industry Intelligence (continued)<br />

NAW SmartBrief<br />

NAW SmartBrief is the wholesale distribution<br />

industry’s free e-newsletter that close to 50,000<br />

executives depend on daily for the latest industry<br />

information. NAW SmartBrief conveniently delivers<br />

in an easily to navigate format, the most recent<br />

industry headlines, summaries, and links to<br />

original news stories to subscribers by e-mail<br />

four times a week. Sections cover distribution<br />

news and trends, best practices, the small<br />

business manager, sales, hot topics, executive<br />

life, industry job listings, weekly surveys, a blog,<br />

and a free research tool to look up information<br />

about specific companies. Ask NAW ®<br />

Using this robust desktop resource, NAW direct members can get<br />

answers to their unique questions or glean feedback about issues<br />

that affect their mission-critical projects. Questions can be directed<br />

toward specific types <strong>of</strong> firms. NAW keeps all user information<br />

strictly confidential. As more and more wholesaler-distributors use<br />

Ask NAW ® , it is becoming one <strong>of</strong> their most valuable “need to know”<br />

tools for getting comparison data and real-time information beyond<br />

their traditional lines <strong>of</strong> trade.<br />

Here is a cross section <strong>of</strong> the types <strong>of</strong> questions posed by networkers<br />

on Ask NAW ® :<br />

“NAW SmartBrief saves me<br />

countless hours that I would<br />

otherwise spend in reviewing<br />

specific published articles<br />

related to our industry. With NAW<br />

SmartBrief, I can review this<br />

information in a matter <strong>of</strong> minutes.”<br />

Chip Hornsby, Group Chief Executive<br />

Wolseley PLC<br />

12 naw<br />

• Does anyone have a recommendation for an accounts payable<br />

audit/pr<strong>of</strong>it retrieval firm that has a particular understanding <strong>of</strong><br />

the distribution sector<br />

• Do you use mandatory arbitration agreements with your non-union<br />

employees for employment-related disputes If not, are you<br />

contemplating implementing an Alternative Dispute Resolution<br />

policy<br />

• I am considering an outside consulting firm or purchasing a<br />

package designed to help develop job classifications and salary<br />

structure. Any recommendations<br />

• What percentage <strong>of</strong><br />

your expense budget<br />

is dedicated to<br />

fostering new business<br />

development activities<br />

• What criteria are used<br />

for commission programs<br />

for outside sales<br />

personnel<br />

• How are commissions<br />

calculated<br />

“Ask NAW provided me<br />

with feedback that would<br />

have taken many phone<br />

calls and much time to<br />

gather on my own. I<br />

believe your membership<br />

will find great value in<br />

using this benefit. Thank<br />

you for providing it.”<br />

Brad Thrall, President/CEO (retired)<br />

Border States Electric Supply


NAW Networks You With...<br />

Business Products and Services Programs<br />

NAW Service Corporation<br />

NAW networking also means connecting<br />

you with programs that reduce your<br />

operating costs. The NAW Service<br />

Corporation leverages the collective<br />

purchasing power <strong>of</strong> firms across the<br />

entire wholesale distribution industry<br />

to find and <strong>of</strong>fer high-quality business<br />

programs designed to meet the specific<br />

needs <strong>of</strong> wholesaler-distributors at very<br />

favorable prices. To learn more, visit<br />

www.naw.org.<br />

Other NAW Business<br />

Partnerships<br />

Freight and Air Shipping<br />

NAW members can save on all types <strong>of</strong><br />

shipping services—small packages and<br />

documents—heavy North American<br />

freight—international air freight services<br />

—with the leading carriers in the<br />

industry.<br />

Rental Cars<br />

HERTZ.<br />

The NAW/Hertz<br />

Business<br />

Account Program enables enrolled<br />

member companies to receive special,<br />

low negotiated rates and a one-year<br />

complimentary Hertz #1 Club Gold ®<br />

membership for all employees who<br />

travel. In addition, individual company<br />

rental activity is tracked and companies<br />

earn one Free Rental Day Certificate for<br />

every 15 days <strong>of</strong> qualifying rentals.<br />

Property and Casualty Insurance<br />

THE HARTFORD.<br />

NAW’s strategic partnership with<br />

The Hartford Insurance Company<br />

provides wholesalerdistributors<br />

with<br />

access to superior<br />

business insurance<br />

coverage and<br />

service. To ensure<br />

that the independent<br />

agents servicing our companies have a<br />

heightened understanding <strong>of</strong> the needs<br />

<strong>of</strong> wholesaler-distributors, The Hartford<br />

has joined NAW in developing and<br />

training a special alliance <strong>of</strong> network<br />

agents.<br />

Bank Card Processing<br />

SOLVERAS. NAW teamed<br />

up with Solveras Payment Systems to<br />

provide<br />

wholesalerdistributors<br />

with the<br />

latest credit<br />

card processing technology, negotiated<br />

group discounts, and a full range <strong>of</strong><br />

processing options, including a<br />

secure virtual terminal that allows<br />

wholesaler-distributors to manage<br />

transactions from any Internet access.<br />

Health Care Insurance<br />

FLEXIBLE BENEFIT SERVICE<br />

CORPORATION (FBSC) provides<br />

a health care<br />

program that<br />

enables our<br />

industry’s<br />

employers and<br />

their employees to save on their<br />

premiums through innovative, taxadvantaged<br />

alternatives to financing<br />

medical insurance, such as a Health<br />

Reimbursement Arrangement (HRA)<br />

or a Health Savings Account (HSA).<br />

2006 annual report 13


NAW International and <strong>National</strong> <strong>Association</strong> Membership<br />

Marc Fortin, President <strong>of</strong> the <strong>National</strong> Convenience Store <strong>Distributors</strong><br />

<strong>Association</strong> (Canada), and John Buckley, Executive Vice President <strong>of</strong><br />

the Industrial Supply <strong>Association</strong>, discussed issues <strong>of</strong> mutual interest<br />

with others at their discussion roundtable during an NAW <strong>Association</strong><br />

Executives Council meeting.<br />

American Machine Tool <strong>Distributors</strong>’ <strong>Association</strong> ................AMTDA<br />

American Nursery & Landscape <strong>Association</strong>.......................ANLA<br />

American Supply <strong>Association</strong> .............................................ASA<br />

American Veterinary <strong>Distributors</strong> <strong>Association</strong> ......................AVDA<br />

American Wholesale Marketers <strong>Association</strong> ........................AWMA<br />

Appliance Parts <strong>Distributors</strong> <strong>Association</strong>, Inc. .....................APDA<br />

Associated Equipment <strong>Distributors</strong>.....................................AED<br />

<strong>Association</strong> for High Technology Distribution ......................AHTD<br />

<strong>Association</strong> for Hose & Accessories Distribution..................NAHAD<br />

<strong>Association</strong> <strong>of</strong> Millwork <strong>Distributors</strong> ....................................AMD<br />

<strong>Association</strong> <strong>of</strong> Pool & Spa Pr<strong>of</strong>essionals (The) ....................APSP<br />

<strong>Association</strong> <strong>of</strong> Woodworking & Furnishings Suppliers..........AWFS<br />

Aviation <strong>Distributors</strong> & Manufacturers <strong>Association</strong> ..............ADMA<br />

Bearing Specialists <strong>Association</strong> ..........................................BSA<br />

Bicycle Product Suppliers <strong>Association</strong>................................BPSA<br />

Ceramic Tile <strong>Distributors</strong> <strong>Association</strong> ..................................CTDA<br />

Cleaning Equipment Trade <strong>Association</strong>...............................CETA<br />

Commercial Vehicle Solutions Network...............................CVSN<br />

Copper & Brass Servicenter <strong>Association</strong> .............................CBSA<br />

Door & Hardware Institute..................................................DHI<br />

Electrical Apparatus Service <strong>Association</strong>, Inc. .....................EASA<br />

FEWA – Marketing & Distribution <strong>Association</strong> .....................FEWA<br />

Fluid Power <strong>Distributors</strong> <strong>Association</strong>, Inc............................FPDA<br />

Food Industry Suppliers <strong>Association</strong>...................................FISA<br />

Foodservice Equipment <strong>Distributors</strong> <strong>Association</strong> .................FEDA<br />

Gases and Welding <strong>Distributors</strong> <strong>Association</strong>........................GAWDA<br />

General Merchandise <strong>Distributors</strong> Council ..........................GMDC<br />

Health Industry <strong>Distributors</strong> <strong>Association</strong> .............................HIDA<br />

Healthcare Distribution Management <strong>Association</strong> ...............HDMA<br />

Heating, Airconditioning & Refrigeration <strong>Distributors</strong><br />

International ....................................................................HARDI<br />

Independent Distributor <strong>Association</strong>...................................IDA<br />

Independent Sealing <strong>Distributors</strong>........................................ISD<br />

Industrial Compressor Distributor <strong>Association</strong> .....................ICDA<br />

Industrial Supply <strong>Association</strong>..............................................ISA<br />

International <strong>Association</strong> <strong>of</strong> Plastics <strong>Distributors</strong> .................IAPD<br />

International Foodservice <strong>Distributors</strong> <strong>Association</strong>...............IFDA<br />

International Sanitary Supply <strong>Association</strong>............................ISSA<br />

International Truck Parts <strong>Association</strong>..................................ITPA<br />

Irrigation <strong>Association</strong> (The).................................................IA<br />

Lawn & Garden Marketing & Distribution <strong>Association</strong>..........LGMDA<br />

Machinery Dealers <strong>National</strong> <strong>Association</strong> .............................MDNA<br />

Material Handling Equipment <strong>Distributors</strong> <strong>Association</strong> ........MHEDA<br />

Metals Service Center Institute ...........................................MSCI<br />

Motorcycle Industry Council...............................................MIC<br />

Music <strong>Distributors</strong> <strong>Association</strong>............................................MDA<br />

<strong>National</strong> <strong>Association</strong> <strong>of</strong> Chemical <strong>Distributors</strong> .....................NACD<br />

<strong>National</strong> <strong>Association</strong> <strong>of</strong> Electrical <strong>Distributors</strong>......................NAED<br />

<strong>National</strong> <strong>Association</strong> <strong>of</strong> Flour <strong>Distributors</strong>, Inc.....................NAFD<br />

<strong>National</strong> <strong>Association</strong> <strong>of</strong> Sign Supply <strong>Distributors</strong> .................NASSD<br />

<strong>National</strong> <strong>Association</strong> <strong>of</strong> Sporting Goods <strong>Wholesaler</strong>s ...........NASGW<br />

<strong>National</strong> <strong>Association</strong> <strong>of</strong> Uniform Manufacturers &<br />

<strong>Distributors</strong>......................................................................NAUMD<br />

<strong>National</strong> Beer <strong>Wholesaler</strong>s <strong>Association</strong> ...............................NBWA<br />

<strong>National</strong> Fastener <strong>Distributors</strong> <strong>Association</strong>..........................NFDA<br />

<strong>National</strong> Grocers <strong>Association</strong>..............................................NGA<br />

<strong>National</strong> Insulation <strong>Association</strong>...........................................NIA<br />

<strong>National</strong> Kitchen & Bath <strong>Association</strong> ..................................NKBA<br />

<strong>National</strong> Marine <strong>Distributors</strong> <strong>Association</strong>.............................NMDA<br />

<strong>National</strong> Paper Trade <strong>Association</strong>, Inc. ...............................NPTA<br />

<strong>National</strong> School Supply & Equipment <strong>Association</strong>...............NSSEA<br />

<strong>National</strong> Wood Flooring <strong>Association</strong>....................................NWFA<br />

North American <strong>Association</strong> <strong>of</strong> Floor Covering<br />

<strong>Distributors</strong>......................................................................NAFCD<br />

North American <strong>Association</strong> <strong>of</strong> Utility <strong>Distributors</strong> ...............NAAUD<br />

North American Building Material Distribution<br />

<strong>Association</strong> ......................................................................NBMDA<br />

North American Horticultural Supply <strong>Association</strong>................NAHSA<br />

North American Meat Processors <strong>Association</strong>.....................NAMP<br />

North American Wholesale Lumber <strong>Association</strong>, Inc. ..........NAWLA<br />

NPES The <strong>Association</strong> for Suppliers <strong>of</strong> Printing,<br />

Publishing & Converting Technologies ..............................NPES<br />

Office Products <strong>Wholesaler</strong>s <strong>Association</strong>.............................OPWA<br />

Optical Laboratories <strong>Association</strong>.........................................OLA<br />

Outdoor Power Equipment Aftermarket <strong>Association</strong> ............OPEAA<br />

Outdoor Power Equipment & Engine Service<br />

<strong>Association</strong> Inc. ...............................................................OPEESA<br />

Pet Industry <strong>Distributors</strong> <strong>Association</strong> ..................................PIDA<br />

Petroleum Equipment Institute...........................................PEI<br />

Post Card & Souvenir <strong>Distributors</strong> <strong>Association</strong> ....................PCSDA<br />

Power Transmission <strong>Distributors</strong> <strong>Association</strong>, Inc................PTDA<br />

Pr<strong>of</strong>essional Beauty <strong>Association</strong> .........................................PBA<br />

Recreational Vehicle Aftermarket <strong>Association</strong> .....................RVAA<br />

Safety Equipment <strong>Distributors</strong> <strong>Association</strong>, Inc. ..................SEDA<br />

Security Hardware <strong>Distributors</strong> <strong>Association</strong>.........................SHDA<br />

Textile Care Allied Trades <strong>Association</strong> .................................TCATA<br />

United Products Formulators & <strong>Distributors</strong><br />

<strong>Association</strong> ......................................................................UPFDA<br />

Water and Sewer <strong>Distributors</strong> <strong>of</strong> America............................WASDA<br />

Wholesale Florist & Florist Supplier <strong>Association</strong> ..................WF&FSA<br />

Wine & Spirits <strong>Wholesaler</strong>s <strong>of</strong> America. Inc.........................WSWA<br />

Woodworking Machinery Industry <strong>Association</strong> ....................WMIA<br />

14 naw


NAW Regional, State, and Local <strong>Association</strong> Membership<br />

Associated Beer <strong>Distributors</strong> <strong>of</strong> Illinois ................................ABDI<br />

<strong>Association</strong> <strong>of</strong> Ingersoll-Rand <strong>Distributors</strong> ..........................AIRD<br />

<strong>Association</strong> <strong>of</strong> Service & Computer Dealers<br />

International ....................................................................ASCD<br />

Beer Industry League <strong>of</strong> Louisiana......................................BILL<br />

California Beer & Beverage <strong>Distributors</strong> ..............................CBBD<br />

Canadian <strong>Association</strong> for Pharmacy Distribution<br />

Management ..................................................................CAPDM<br />

Canadian Institute <strong>of</strong> Plumbing & Heating ..........................CIPH<br />

Electro-Federation Canada, Inc. ........................................EFC<br />

Greater North Dakota Chamber <strong>of</strong> Commerce ....................NDCC<br />

Los Angeles Fastener <strong>Association</strong> ......................................LAFA<br />

Maryland <strong>Association</strong> <strong>of</strong> <strong>Wholesaler</strong>-<br />

<strong>Distributors</strong>, Inc. ..............................................................MAW<br />

Michigan <strong>Distributors</strong> & Vendors <strong>Association</strong> ......................MDVA<br />

Midwest <strong>Distributors</strong> <strong>Association</strong> ........................................MDA<br />

Mississippi Malt Beverage <strong>Association</strong>................................MMBA<br />

<strong>National</strong> Convenience Store <strong>Distributors</strong><br />

<strong>Association</strong> ......................................................................NACDA<br />

New York State Beer <strong>Wholesaler</strong>s<br />

<strong>Association</strong> ......................................................................NYSBW<br />

North-American <strong>Association</strong> <strong>of</strong><br />

Telecommunications Dealers............................................NATD<br />

North Central <strong>Wholesaler</strong>s <strong>Association</strong>................................NCWA<br />

Ohio <strong>Association</strong> <strong>of</strong> <strong>Wholesaler</strong>-<strong>Distributors</strong> ........................OAWD<br />

Pacific Southwest <strong>Distributors</strong> <strong>Association</strong>..........................PSDA<br />

Southern <strong>Wholesaler</strong>s <strong>Association</strong> ......................................SWA<br />

Western <strong>Association</strong> <strong>of</strong> Fastener <strong>Distributors</strong> ......................WAFD<br />

Western Suppliers <strong>Association</strong>............................................WSA<br />

Wholesale Beer <strong>Distributors</strong> <strong>of</strong> Texas ..................................WBDT<br />

Wholesale Beer & Wine <strong>Association</strong> <strong>of</strong> Ohio........................WBWAO<br />

<strong>Wholesaler</strong>s <strong>Association</strong> <strong>of</strong> the Northeast............................WANE<br />

Don Frendberg, Executive Vice President/COO <strong>of</strong> Heating,<br />

Airconditioning & Refrigeration <strong>Distributors</strong> International, shared<br />

association experiences with Ralph Suppa, President <strong>of</strong> the<br />

Canadian Institute <strong>of</strong> Plumbing & Heating, at the January 2007<br />

<strong>Association</strong> Executives Council meeting in Washington, DC.<br />

Treasurer’s Report December 1, 2005 – November 30, 2006<br />

Revenue<br />

Total: $6,783,000<br />

NAW: $5,204,000 Includes dues, publications, seminars, annual meeting, and coalitions<br />

NAW/SC: $1,133,000 Includes insurance, car rental, long-distance telephone, overnight delivery,<br />

credit management, market research, and other programs<br />

WDPAC: $281,000 Includes Political Action Fund, Corporate Political Education Fund<br />

NAW Institute for<br />

Distribution Excellence: $165,000 Includes contributions, publications royalties<br />

Expenses<br />

Total: $6,783,000<br />

NAW: $4,513,000 Includes publications, seminars, annual meeting, operations, provision for<br />

reserves and government relations<br />

NAW/SC: $1,768,000 Includes insurance, car rental, long-distance telephone, overnight delivery,<br />

credit management, market research and other programs, operations<br />

and provision for taxes<br />

WDPAC: $304,000 Includes candidate contributions, operations<br />

NAW Institute for<br />

Distribution Excellence: $198,000 Includes project grants, operations<br />

William A. Parsley, 2006 NAW Treasurer<br />

2006 annual report 15


Leadership<br />

2007 NAW<br />

Board <strong>of</strong> Directors<br />

Chairman <strong>of</strong> the Board<br />

Raymon A. York<br />

Ewing Irrigation Products<br />

Chairman-Elect<br />

C.S. “Chip” Hornsby<br />

Wolseley PLC<br />

First Vice Chairman<br />

Randy Lindberg<br />

United Natural Foods, Inc.<br />

Second Vice Chairman<br />

Robert N. Taylor<br />

Do it Best Corp.<br />

Immediate Past Chairman<br />

Robert A. Reynolds, Jr.<br />

Graybar Electric Company, Inc.<br />

Secretary<br />

Dennis G. Hatchell<br />

Alex Lee Inc.<br />

Chairman, Subcommittee on Budget<br />

and Finance, and Treasurer<br />

Sydney “Tucker” Jones III<br />

Hudson Valley Paper Company<br />

Chairman <strong>of</strong> the AEC<br />

G. A. Taylor Fernley<br />

Fernley & Fernley/Gases and Welding<br />

<strong>Distributors</strong> <strong>Association</strong><br />

Chairman-Elect <strong>of</strong> the AEC<br />

Robert Renkes<br />

Petroleum Equipment Institute<br />

Past Chairman <strong>of</strong> the AEC<br />

Donald L. Frendberg<br />

Heating, Airconditioning & Refrigeration<br />

<strong>Distributors</strong> International<br />

2007 <strong>Wholesaler</strong>-Distributor Political Action Committee<br />

Board <strong>of</strong> Directors and Officers<br />

Chairman <strong>of</strong> the Board<br />

James K. Risk III<br />

Kirby Risk Corporation<br />

Secretary and Executive Director<br />

Jade West<br />

<strong>National</strong> <strong>Association</strong> <strong>of</strong><br />

<strong>Wholesaler</strong>-<strong>Distributors</strong><br />

Treasurer<br />

Dirk Van Dongen<br />

<strong>National</strong> <strong>Association</strong> <strong>of</strong><br />

<strong>Wholesaler</strong>-<strong>Distributors</strong><br />

Don Carlson<br />

Carlson Holdings Inc.<br />

Andre Lacy<br />

LDI, Ltd.<br />

William A. Parsley<br />

Carswell Distributing Company<br />

W. Grady Rosier<br />

McLane Company Inc.<br />

Raymon A. York<br />

Ewing Irrigation Products<br />

2007 NAW Institute for Distribution Excellence<br />

Board <strong>of</strong> Directors and Officers<br />

Chairman <strong>of</strong> the Board<br />

Byron Potter<br />

Dallas Wholesale Builders Supply Inc.<br />

Vice Chair<br />

Donald L. Frendberg<br />

Heating, Airconditioning & Refrigeration<br />

<strong>Distributors</strong> International<br />

Mark Allen<br />

International Foodservice <strong>Distributors</strong><br />

<strong>Association</strong><br />

Andrew Berlin<br />

Berlin Packaging<br />

Dan Blaylock<br />

Adams-Burch Inc.<br />

Charles Cohen<br />

Benco Dental Co.<br />

John Garfinkel<br />

International Sanitary Supply <strong>Association</strong><br />

David Griffith<br />

Modern Group Ltd.<br />

Deborah Hamlin<br />

Irrigation <strong>Association</strong><br />

Tim Holt<br />

<strong>National</strong> School Supply & Equipment<br />

<strong>Association</strong><br />

Julia Klein<br />

C. H. Briggs Company<br />

Mark Kramer<br />

Laird Plastics, Inc.<br />

Andre Lacy<br />

LDI Ltd.<br />

Richard McCarten<br />

Electro-Federation Canada Inc.<br />

William A. Parsley<br />

Carswell Distributing Company<br />

Bob Roberts<br />

Roberts Oxygen Company, Inc.<br />

* * *<br />

Secretary<br />

George Keeley<br />

Keeley, Kuenn & Reid<br />

Executive Director<br />

Ron Schreibman<br />

<strong>National</strong> <strong>Association</strong> <strong>of</strong><br />

<strong>Wholesaler</strong>-<strong>Distributors</strong><br />

President and Treasurer<br />

Dirk Van Dongen<br />

<strong>National</strong> <strong>Association</strong> <strong>of</strong><br />

<strong>Wholesaler</strong>-<strong>Distributors</strong><br />

16 naw


NAW Staff<br />

Jim Anderson<br />

Vice President–<br />

Government Relations, NAW<br />

Political Director, WDPAC<br />

janderson@nawd.org<br />

Sasha Beckford<br />

Receptionist, NAW<br />

sbeckford@nawd.org<br />

Beth Rivera Cruz<br />

Vice President/Controller, NAW<br />

bcruz@nawd.org<br />

Carl Farr<br />

Senior Vice President–<br />

Corporate Relations, NAW<br />

cfarr@nawd.org<br />

Kimberly Gaskins<br />

Computer Operations Assistant, NAW<br />

kgaskins@nawd.org<br />

Joy Goldman<br />

Director–Administration, NAW<br />

Manager–Internal Operations, WDPAC<br />

jgoldman@nawd.org<br />

Susan Hodge<br />

Manager–Computer Operations,<br />

NAWSC<br />

shodge@nawd.org<br />

Edward Joynes<br />

Chief Information Officer, NAWSC<br />

ejoynes@nawd.org<br />

David Mikulka<br />

Manager–Mailroom Operations/<br />

Printing Services, NAW<br />

dmikulka@nawd.org<br />

Dana Neill<br />

Director–Member Services, NAW<br />

dneill@nawd.org<br />

Thuy Nguyen<br />

Senior Accountant, NAW<br />

tnguyen@nawd.org<br />

Wendy Pasley<br />

Office Assistant, NAW<br />

wpasley@nawd.org<br />

John Peter<br />

Vice President–<br />

Corporate Relations, NAW<br />

jpeter@nawd.org<br />

Ron Schreibman<br />

Senior Vice President–<br />

Strategic Direction, NAW<br />

Executive Director, NAW Institute<br />

for Distribution Excellence<br />

rschreibman@nawd.org<br />

Ruth Stadius<br />

Director–Communications, NAW<br />

rstadius@nawd.org<br />

Mary Ann Thompson<br />

Senior Accountant, NAW<br />

mthompson@nawd.org<br />

Jeremy Tunnell<br />

Director–Web Operations, NAW<br />

jtunnell@nawd.org<br />

George Valiga<br />

Vice President/General Manager,<br />

NAWSC<br />

gvaliga@nawd.org<br />

Dirk Van Dongen<br />

President, NAW<br />

President/Treasurer, NAW Institute<br />

for Distribution Excellence<br />

President, NAWSC<br />

Treasurer, WDPAC<br />

dvandongen@nawd.org<br />

Vicky Walsh<br />

Manager–Communications<br />

Administration, NAW<br />

vwalsh@nawd.org<br />

Jade West<br />

Senior Vice President–<br />

Government Relations, NAW<br />

Executive Director, WDPAC<br />

jwest@nawd.org<br />

1725 K Street, NW<br />

3rd Floor<br />

Washington, DC 20006<br />

Tel: 202-872-0885<br />

Fax: 202-785-0586<br />

E-mail: naw@nawd.org<br />

Web: www.naw.org


1725 K Street, NW<br />

3rd Floor<br />

Washington, DC 20006<br />

RETURN SERVICE REQUESTED<br />

Tel: 202-872-0885<br />

Fax: 202-785-0586<br />

E-mail: naw@nawd.org<br />

Web: www.naw.org<br />

“Bell Microproducts and our key management staff have<br />

benefited greatly from our NAW membership. We have used<br />

the available tools and reports to great value in the running<br />

<strong>of</strong> our business. The NAW representation on important<br />

Washington issues has proven effective for our industry.”<br />

Don Bell, President/CEO<br />

Bell Microproducts

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