United States

Securities and Exchange Commission

Washington, DC 20549

FORM 10-K

(Mark One)

For the fiscal year ended December 31, 20142016

or

For the transition period from                     to                     

Commission file number: 0-10653

UNITED STATIONERSESSENDANT INC.

(Exact Name of Registrant as Specified in its Charter)

One Parkway North Boulevard

Suite 100

Deerfield, Illinois 60015-2559

(847) 627-7000

(Address, Including Zip Code and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes   x    No   ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes  ¨    No   x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes   x    No   ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (Section 229.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 and Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes   x    No   ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See the definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act (Check one):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes  ¨     No   x

The aggregate market value of the common stock of United Stationers Inc. held by non-affiliates as of June 30, 2014 was approximately $1.468 billion.

On February 13, 2015, United Stationers Inc. had 38,563,203 shares of common stock outstanding.

Documents Incorporated by Reference:

Certain portions of United Stationers Inc.’s definitive Proxy Statement relating to its 2015 Annual Meeting of Stockholders, to be filed within 120 days after the end of United Stationers Inc.’s fiscal year, are incorporated by reference into Part III.

UNITED STATIONERS INC.

FORM 10-K

For The Year Ended December 31, 2014

TABLE OF CONTENTS

PART I

General

United Stationers Inc. is a leading national wholesale distributor of workplace essentials, with consolidated net sales of $5.3 billion. United stocks a broad assortment of over 160,000 products, including technology products, traditional office products, office furniture, janitorial and breakroom supplies, industrial supplies, and automotive aftermarket tools and equipment. The Company’s network of 77 distribution centers allows it to ship products to approximately 30,000 reseller customers, enabling the Company to ship most products overnight to more than 90% of the U.S. and next day delivery to major cities in Mexico and Canada. The Company also has operations in Dubai, United Arab Emirates (UAE). The Company also operates as an online retailer which sells direct to end consumers.

Our strategy is comprised of three key elements:

1) Strengthen our core office, janitorial, and breakroom business with a common operating and IT platform, an aligned customer care and sales team, and advanced digital services,

2) Win online by growing our business-to-business (B2B) sales with major e-commerce players and enabling the online success of our resellers by providing digital capabilities and tools to support them, and

3) Expand and diversify our business into higher growth and higher margin channels and categories.  

Execution on these priorities will allow us to become the fastest and most convenient solution for workplace essentials.

Except where otherwise noted, the terms “United” and “the Company” refer to United Stationers Inc. and its consolidated subsidiaries. The parent holding company, United Stationers Inc. (USI), was incorporated in 1981 in Delaware. USI’s only direct wholly owned subsidiary—and its principal operating company—is United Stationers Supply Co. (USSC), incorporated in 1922 in Illinois.

Products

United stocks over 160,000 products in these categories:

Janitorial and Breakroom Supplies. United is a leading wholesaler of janitorial and breakroom supplies throughout the nation. The Company holds over 25,000 items in these lines: janitorial supplies (cleaners and cleaning accessories), breakroom items (food and beverage products), foodservice consumables (such as disposable cups, plates and utensils), safety and security items, and paper and packaging supplies. This product category provided about 27.2% of 2014’s net sales primarily from Lagasse, LLC (Lagasse), a wholly owned subsidiary of USSC.

Technology Products. The Company is a leading national wholesale distributor of computer supplies and peripherals. It stocks over 10,000 items, including imaging supplies, data storage, digital cameras, computer accessories and computer hardware items such as printers and other peripherals. United provides these products to value-added computer resellers, office products dealers, drug stores, grocery chains and e-commerce merchants. Technology products generated about 27.0% of the Company’s 2014 consolidated net sales.

Traditional Office Products. The Company is one of the largest national wholesale distributors of a broad range of office supplies. It carries approximately 23,000 brand-name and private label products, such as filing and record storage products, business machines, presentation products, writing instruments, paper products, shipping and mailing supplies, calendars and general office accessories. These products contributed approximately 25.0% of net sales during 2014.

Industrial Supplies. United is a leading wholesaler of industrial supplies in the United States and stocks over 100,000 items including hand and power tools, safety and security supplies, janitorial equipment and supplies, other various industrial MRO (maintenance, repair and operations) items and oil field and welding supplies. With the October 31^st, 2014 acquisition of Liberty Bell Equipment Corp., a United States wholesaler of automotive aftermarket tools and supplies, and its affiliates (collectively, MEDCO) including G2S Equipment de Fabrication et d’Entretien ULC, a Canadian wholesaler, United now stocks automotive aftermarket tools and equipment. In 2014, the industrial category accounted for approximately 12.0% of the Company’s net sales.

Office Furniture. United is one of the largest office furniture wholesaler distributors in the nation. It stocks approximately 4,000 products including desks, filing and storage solutions, seating and systems furniture, along with a variety of products for niche markets such as education, government, healthcare and professional services. This product category represented approximately 5.8% of net sales for the year.

The remainder of the Company’s consolidated net sales came from freight, advertising and software related revenue.

United offers private brand products within each of its product categories to help resellers provide quality value-priced items to their customers. These include Innovera^® technology products, Universal^® office products, Windsoft^® paper products, Boardwalk^® and UniSan^® janitorial and sanitation products, Alera^® office furniture, and Anchor Brand^® and Best Welds^® welding, industrial, safety and oil field pipeline products.

During 2014, private brand products accounted for approximately 16.0% of United’s net sales.

Customers

United serves a diverse group of approximately 30,000 reseller customers. They include independent office products dealers; contract stationers; office products superstores; computer products resellers; office furniture dealers; mass merchandisers; mail order companies; sanitary supply, paper and foodservice distributors; drug and grocery store chains; healthcare distributors; e-commerce merchants; oil field, welding supply and industrial/MRO distributors; automotive aftermarket dealers and wholesalers; and other independent distributors.  One customer, W.B. Mason Co., Inc., accounted for approximately 12% of its 2014 consolidated net sales. No other single customer accounted for more than 10% of 2014 consolidated net sales.

Sales to independent resellers contributed 88% of consolidated net sales. The Company provides its reseller customers with value-added services designed to help them market their products and services while improving operating efficiencies and reducing costs. National accounts comprised 12% of the Company’s 2014 consolidated net sales.

Many of our resellers have online capabilities. The Company also operates as an online retailer which sells direct to end consumers.

Marketing and Customer Support

United’s marketing and customer care capabilities provide value-added services to resellers. The Company provides comprehensive printed catalogs for easy shopping and reference guides to more promotional materials. Extensive digital content and capabilities are provided to better position resellers on the internet. This ranges from a content database digitized for e-commerce to advanced eBusiness capabilities, website development, analytics and digital promotional campaigns. An important component of the value proposition is that the Company produces the printed and digital items on behalf of resellers and collects fees and/or advertising revenue from resellers in return.

United also provides specific services that enable resellers to improve their business model. These services include primary research efforts, brand strategy and development, campaign development, customer segmentation and cost management, and training programs designed to help resellers improve their sales and marketing techniques.

Distribution

United’s distribution network enables the Company to ship most products on an overnight basis to more than 90% of the U.S. and next day delivery to major cities in Mexico and Canada, with an average line fill rate of approximately 97%. United’s domestic operations generated approximately $5.1 billion of its approximate $5.3 billion in 2014 consolidated net sales, with its international operations contributing another $0.2 billion to 2014 net sales. Efficient order processing resulted in a 99.7% order accuracy rate for the year.

The Company’s network of 77 distribution centers are spread across the nation to facilitate delivery. United has a dedicated fleet of approximately 475 trucks. This enables United to make direct deliveries to resellers from regional distribution centers and local distribution points.

The “Wrap and Label” program is another important service for resellers. It gives resellers the option to receive individually packaged orders ready to be delivered to their end consumers. For example, when a reseller places orders for several individual consumers, United can pick and pack the items separately, placing a label on each package with the consumer’s name, ready for delivery to the end consumer by the reseller. Resellers benefit from the “Wrap and Label” program because it eliminates the need to break down bulk shipments and repackage orders before delivering them to consumers.

In addition to providing value-adding programs for resellers, United also remains committed to reducing its operating costs. These activities include process improvement and work simplification activities that help increase efficiency throughout the business and improve customer satisfaction.

Purchasing and Merchandising

As a leading wholesale distributor of workplace essentials, United leverages its broad product selection as a key merchandising strategy. The Company orders products from approximately 1,600 manufacturers. Based on United’s purchasing volume it receives substantial supplier allowances and can realize significant economies of scale in its logistics and distribution activities. In 2014, the Company’s largest supplier was Hewlett-Packard Company, which represented approximately 16% of the Company’s total purchases.

The Company’s merchandising department is responsible for selecting merchandise and for managing the entire supplier relationship. Product selection is based on three factors: end-consumer acceptance; anticipated demand for the product; and the manufacturer’s total service, price and product quality.

Competition

The markets in which the Company competes are highly competitive. The Company competes with other wholesale distributors and with the manufacturers of the products the Company sells. In addition, the Company competes with warehouse clubs and the business-to-business sales divisions of national business products resellers. United competes primarily on the basis of breadth of product lines, availability of products, speed of delivery, order fill rates, net pricing to customers, and the quality of marketing and other value-added services.

Seasonality

United’s sales generally are relatively steady throughout the year. However, sales also reflect seasonal buying patterns for consumers of traditional office products. In particular, the Company’s sales of traditional office products usually are higher than average during January, when many businesses begin operating under new annual budgets and release previously deferred purchase orders. Janitorial and breakroom supplies and industrial supplies sales are somewhat higher in the summer months.

Employees

As of February 13, 2015, United employed approximately 6,500 people.

Management believes it has good relations with its associates. Approximately 539 of the shipping, warehouse and maintenance associates at certain of the Company’s Baltimore, Los Angeles and New Jersey distribution centers are covered by collective bargaining agreements. The bargaining agreements in the Los Angeles and New Jersey distribution centers were renegotiated in 2014. The bargaining agreement in Baltimore is scheduled to be renegotiated in August 2015. Additionally, the Company’s warehouse employees in Mexico are covered by a collective bargaining agreement.

Executive Officers Of The Registrant

The executive officers of the Company are as follows:

Executive officers are elected by the Board of Directors. Except as required by individual employment agreements between executive officers and the Company, there exists no arrangement or understanding between any executive officer and any other person pursuant to which such executive officer was elected. Each executive officer serves until his or her successor is appointed and qualified or until his or her earlier removal or resignation.

Availability of the Company’s Reports

The Company’s principal Web site address is www.unitedstationers.com. This site provides United’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as well as amendments and exhibits to those reports filed or furnished under Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) for free as soon as reasonably practicable after they are electronically filed with, or furnished to, the Securities and Exchange Commission (SEC). In addition, copies of these filings (excluding exhibits) may be requested at no cost by contacting the Investor Relations Department:

United Stationers Inc.

Attn: Investor Relations Department

One Parkway North Boulevard

Suite 100

Deerfield, Illinois 60015-2559

(847) 627-7000

(Address, Including Zip Code and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes   ☒    No   ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes   ☐    No   ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes   ☒    No   ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (Section 229.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☒

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 and Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes   ☒    No   ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See the definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act (Check one):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes   ☐     No   ☒

The aggregate market value of the common stock of Essendant Inc. held by non-affiliates as of June 30, 2016 was approximately $0.68 billion.

On February 21, 2017, Essendant Inc. had 37,472,971 shares of common stock outstanding.

Documents Incorporated by Reference:

Certain portions of Essendant Inc.’s definitive Proxy Statement relating to its 2017 Annual Meeting of Stockholders, to be filed within 120 days after the end of Essendant Inc.’s fiscal year, are incorporated by reference into Part III.

ESSENDANT INC.

FORM 10-K

For The Year Ended December 31, 2016

TABLE OF CONTENTS

PART I

General

Essendant Inc. (formerly known as United Stationers, Inc.) is a leading national wholesale distributor of workplace items including janitorial, foodservice and breakroom supplies (JanSan), technology products, traditional office products, industrial supplies, cut sheet paper products, automotive products and office furniture. Except where otherwise noted, the terms “Essendant” and “the Company” refer to Essendant Inc. and its consolidated subsidiaries. The parent holding company, Essendant Inc. (ESND), was incorporated in 1981 in Delaware. ESND’s only direct wholly owned subsidiary and principal operating company is Essendant Co. (ECO) incorporated in 1922 in Illinois. Essendant has one reportable segment and operates principally within the United States, with additional operations in Canada and Dubai, United Arab Emirates (“UAE”).

Essendant’s goal is to power our partners to reach the modern workplace through smarter operations, business growth and category expansion. To achieve this goal, Essendant leverages its product portfolio, fulfillment network and industry specific sales, marketing, digital and strategic services.

The Company has begun implementing six actions to improve the value of our business, which include:

Broad and Diverse Product Portfolio

Essendant sells over 190,000 products and is a leading national wholesale distributor in the following product categories:

Janitorial, Foodservice and Breakroom Supplies (“JanSan”). The Company provides access to over 22,000 items in these lines: janitorial supplies (cleaners and cleaning accessories), breakroom items (food and beverage products), foodservice consumables (such as disposable cups, plates and utensils), safety and security items, and paper and packaging supplies. This product category provided 26.7% of net sales in 2016.

Technology Products. The Company provides access to approximately 11,000 items, including imaging supplies, data storage, digital cameras, computer accessories and computer hardware items such as printers and other peripherals. Essendant provides these products to value-added computer resellers, office products dealers, drug stores, grocery chains and online merchants. The technology product category generated 25.1% of the Company’s 2016 consolidated net sales.

Traditional Office Products. The Company provides access to a broad range of office supplies. It carries over 20,000 brand-name and Essendant brand products, such as filing and record storage products, business machines, presentation products, writing instruments, shipping and mailing supplies, calendars and general office accessories. This product category contributed 16.0% of net sales during 2016.

Industrial Supplies. Essendant provides access to over 130,000 items including hand and power tools, safety and security supplies, janitorial equipment and supplies, other various industrial MRO (maintenance, repair and operations) items, oil field and welding supplies. In 2016, the industrial product category accounted for 10.4% of the Company’s net sales.

Cut Sheet Paper Products. Essendant provides access to a broad range of cut sheet paper products including brand-name and Essendant brand copy paper with a wide assortment of styles and types. In 2016, the cut sheet paper product category accounted for 7.4% of the Company’s net sales.

Automotive Products. The Company has a broad portfolio of automotive aftermarket tools and equipment. In 2016, this product category accounted for 5.9% of the Company’s net sales.

Office Furniture. Essendant provides access to approximately 4,000 products including desks, filing and storage solutions, seating and systems furniture, along with a variety of products for niche markets such as education, government, healthcare and professional services. This product category represented 5.6% of net sales for the year.

1

The remainder of the Company’s consolidated net sales came from freight, services, advertising and other revenues.

Essendant brand products within each of the Company’s product categories help resellers provide quality value-priced items to their customers. These include Universal^® office products, Boardwalk^® janitorial, foodservice and breakroom products, Alera^® office furniture, Innovera^® technology products, Windsoft^® paper products, and Anchor Brand^® and Best Welds^® welding, industrial, safety and oil field pipeline products. Essendant also offers the following automotive brand products: Advanced Tool Design (ATD), Finish Pro, Painters Pride, Quipall, Nesco, Performance One, and AIM.

During 2016, Essendant brand products accounted for approximately 15.5% of Essendant’s net sales.

Extensive Fulfillment Network

Essendant’s fulfillment and distribution network enables the Company to ship most products on an overnight basis to more than 90% of the U.S. with an average line fill rate of approximately 97%. Essendant’s domestic operations generated approximately $5.3 billion of its $5.4 billion in 2016 consolidated net sales, with its international operations contributing an additional $0.1 billion to 2016 net sales.

The Company’s network of 70 distribution centers is spread across the nation to facilitate delivery. Essendant has a dedicated fleet of approximately 480 trucks. This enables Essendant to make direct deliveries to resellers from regional distribution centers and local distribution points.

In addition to providing a broad product selection that allows resellers to offer products to their customers that they do not physically stock, the company also offers the “Wrap and Label” program. “Wrap and Label” gives resellers the option to receive individually packaged orders ready to be delivered to their end consumers. For example, when a reseller places orders for several individual consumers, Essendant can pick and pack the items separately, placing a label on each package with the consumer’s name, ready for delivery to the end consumer by the reseller. Resellers benefit from the “Wrap and Label” program because it eliminates the need to break down bulk shipments and repackage orders before delivering them to consumers.

Sales, Marketing, Digital and Strategic Services

Essendant’s sales, marketing, digital and strategic services, including customer care capabilities, are key to its position as a value-add distributor. Essendant provides its resellers a variety of digital tools to enhance their ability to compete online. These tools include digitized product content, website development, digital analytics, and marketing and merchandising tools to drive the performance of resellers’ websites. An important component of the value proposition is that the Company produces integrated print and digital tools in return for a deeper commercial relationship with its resellers.

Essendant also provides specific services that enable resellers to improve their operating and strategic business models. These services include primary research efforts, brand strategy and development, campaign development, customer segmentation and cost management, and training programs designed to help resellers improve their sales and marketing techniques.

Customers

Essendant serves a diverse group of approximately 29,000 reseller customers. They include office and workplace dealers; facilities and maintenance distributors; technology, military, automotive aftermarket, national big-box retailers and healthcare and vertical suppliers; industrial distributors and internet retailers.

To help its customers, Essendant leverages its common operations and IT platform for JanSan, traditional office products, cut sheet paper products and office furniture. The Company offers an extensive national fulfillment and logistics network, enhanced digital solutions, integrated marketing tools, broad product portfolio, and the Company’s long-standing industry expertise and dedicated support team with intimate knowledge of what customers need. The Company also operates CPO Commerce which sells tools, do-it-yourself equipment and other items online to the consumer market.

During 2016 the Company’s net sales were to independent resellers (76% of consolidated net sales), national big-box retailers (9%) and internet retailers (15%). One customer, W.B. Mason Co., Inc., accounted for approximately 11% of its 2016 consolidated net sales. No other single customer accounted for more than 10% of 2016 consolidated net sales.

2

Purchasing and Merchandising Strategy

As a leading wholesale distributor of workplace items, Essendant leverages its broad product selection as a key merchandising strategy. Based on Essendant’s purchasing volume it receives substantial supplier allowances and can realize significant economies of scale in its logistics and distribution activities. In 2016, the Company’s largest supplier was Hewlett-Packard Company, which represented approximately 20% of the Company’s total purchases.

The Company’s merchandising department is responsible for selecting merchandise and for managing the entire supplier relationship throughout each of the product categories. Product selection is based on three factors: end-consumer acceptance; anticipated demand for the product; and the manufacturer’s total service, price and product quality.

Competition

The markets in which the Company participates are highly competitive. Historically, the Company competed with other wholesale distributors, manufacturers of the products the Company sells, warehouse clubs and the business-to-business sales divisions of national business products resellers, but as the competitive landscape continues to evolve, the Company has experienced increased competition from internet retailers selling to the Company’s resellers, especially in the JanSan, technology and office product categories. Essendant competes primarily on the basis of diversity and breadth of category and product lines, reliability, variety and availability of products, nationwide next day delivery, product affordability, and the quality of industry specific sales support, marketing, digital and strategic services.

Employees

As of January 31, 2017, Essendant employed approximately 6,600 associates.

Approximately 660 of the shipping, warehouse and maintenance associates at certain of the Company’s Baltimore, Los Angeles and New Jersey distribution centers are covered by collective bargaining agreements. The bargaining agreements in the Los Angeles and New Jersey distribution centers were renegotiated in 2014. The bargaining agreement in Baltimore was renegotiated in August 2015.

3

Executive Officers Of The Registrant

The executive officers of the Company are as follows:

4

Executive officers are elected by the Board of Directors. Except as required by individual employment agreements between executive officers and the Company, there exists no arrangement or understanding between any executive officer and any other person pursuant to which such executive officer was elected. Each executive officer serves until his or her successor is appointed and qualified or until his or her earlier removal or resignation.

5

Availability of the Company’s Reports

The Company’s principal website address is www.Essendant.com. This site provides Essendant’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as well as amendments and exhibits to those reports filed or furnished under Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) for free as soon as reasonably practicable after they are electronically filed with, or furnished to, the Securities and Exchange Commission (SEC). In addition, copies of these filings (excluding exhibits) may be requested at no cost by contacting the Investor Relations Department:

Essendant Inc.

Attn: Investor Relations Department

One Parkway North Boulevard

Suite 100

Deerfield, IL 60015-2559

Telephone: (847) 627-7000

E-mail: IR@ussco.comIR@essendant.com

Any of the risks described below could have a material adverse effect on the Company’s business, financial condition or results of operations. These risks are not the only risks facing United;Essendant; the Company’s business operations could also be materially adversely affected by risks and uncertainties that are not presently known to UnitedEssendant or that UnitedEssendant currently deems immaterial.

Demand for office products may continue to decline.

The overall demand for certain office products may continue to weaken as consumers increasingly create, share, and store documents electronically, without printing or filing them. If demand continues to decline and United is unable to offset lower aggregate demand by increasing market share for these products, finding new markets for these products, increasing sales of products in other categories, and reducing expenses, the Company’s results of operations and financial condition may be adversely affected.

The loss of one or more significant customers could significantly reduce United’sEssendant’s revenues and profitability.

In 2014 United’s2016, Essendant’s largest customer accounted for approximately 12.0%11% of net sales and United’s topEssendant’s five largest customers accounted for approximately 28.1%25% of net sales. Several of United’sEssendant’s current and potential customers were involved in business combinations in 20142016 and 2015 and the Company expects increased customer consolidation in the future. In February 2015 two of United’s five largest customers announced they intend to merge. Following business combinations, the surviving companies often conduct “requests for proposal” or engage in other supplier reviews,review their supply chain and sourcing options, which can result in the companies altering their sourcing relationships. The Company generally does not have long-term contracts with its customers, which are typically free to reduce or terminate their purchases from the Company on little or no notice. Increasing direct purchases by major customers from manufacturers, as well as the loss of one or more key customers, changes in the sales mix or sales volume to key customers, or a significant downturn in the business or financial condition of any of them could significantly reduce United’sEssendant’s sales and profitability.

United’s operating results depend on employment rates

Price transparency, customer consolidation, and the strength of the general economy.changes in product sales mix may result in lower margins.

The customers that United serves are affected by changes in economic conditions outside the Company’s control, including national, regional,Company faces price and local slowdowns in general economic activity and job markets. Demand for the products and services the Company offers, particularly in the office product, technology, and furniture categories, is affected by themargin pressure due to a number of white collarfactors, including:

If employment rates decline, do notEssendant is unable to reduce expenses, grow or continue to grow at a slow rate, demand for the products the Company sells could be adversely affected.

United may not achieve its growth, cost-reduction, and margin enhancement goals.

United has set goals to improve its profitability over time by reducing expenses, growing sales to existing and new customers, and increasingincrease sales of higher margin products as a percentage of total sales. There can be no assurance that United will achieve its enhanced profitability goals. Factors that could have a significant effect on the Company’s efforts to achieve these goals include the following:

United’s repositioning and restructuring activities may result in disruptions with suppliers and customers.

United is in the process of combining its United Stationers Supply division business and its Lagasse, LLC business onto a common platform with common systems and processes. United also is commencing a repositioning and restructuring initiative that includes rebranding United and its major operating businesses, exiting non-strategic channels, reducing its workforce and consolidating some of its distribution facilities. United is implementing these changes to its structure, corporate brand, organization, business processes, and technology systems to address evolving customer and end-user preferences and needs. These activities could disrupt United’s relationships with customers and suppliers or could impair the Company’s ability to timely and accurately record transactions, which could adversely affect the Company’s results of operations and financial condition.condition may be adversely affected.

United’sFor example, during 2016, despite the Company’s success at converting customers, profitability was adversely affected by margin pressure resulting from a shift in customer mix to lower margin customers and in product category mix to lower margin products. The transparency of pricing online also caused margin pressure.

Essendant relies on independent resellers for a significant percentage of its net sales.

Sales to independent resellers account for a significant portion of Essendant’s net sales. Independent resellers compete with national distributors and retailers that have substantially greater financial resources and technical and marketing capabilities. Financial, technical, and commercial constraints are challenging as business increasingly shifts online. Over the years, several of the Company’s independent reseller customers have been acquired by competitors or have ceased operation, and the Company expects independent reseller customers to continue to consolidate. If Essendant’s customer base of independent resellers declines and the Company is not able to replace resulting sales declines, the Company’s business and results of operations will be adversely affected.

Essendant’s reliance on supplier allowances and promotional incentives could impact profitability.

Supplier allowances and promotional incentives that are often based on the volume of Company product purchases contribute significantly to United’sEssendant’s profitability. If UnitedEssendant does not comply with suppliers’ terms and conditions, or does not make requisite purchases to achieve certain volume hurdles, UnitedEssendant may not earn certain allowances and promotional incentives. For example, in 2016, as the Company executed its strategy to improve cash flow in part through lower inventory balances, a reduction in purchases from suppliers resulted in lower supplier allowances and promotional incentives, which contributed to unfavorable gross margin changes. Additionally, suppliers may reduce the allowances they pay UnitedEssendant if they conclude that the value UnitedEssendant creates does not justify the allowances. If United’sEssendant’s suppliers reduce or otherwise alter their allowances or promotional incentives, United’sEssendant’s profit margin for the sale of the products it purchases from those suppliers may decline. The loss or diminution of supplier allowances and promotional support could have an adverse effect on the Company’s results of operations.

United relies on independent resellers for a significant percentage of its net sales.

Sales to independent resellers account for a significant portion of United’s net sales. Independent resellers compete with national distributors and retailers that have substantially greater financial resources and technical and marketing capabilities. Financial and technical constraints are increasingly challenging as business increasingly shifts online. Over the years, several As part of the Company’s independent reseller customers have been acquired by competitorsmulti-year transformation program, the Company has undertaken merchandising and sourcing initiatives to more effectively leverage supply relationships and enhance profitability. Failure to complete the process, incomplete attainment or have ceased operation. If United’s customer baseineffective management of independent resellersthe initiatives could cause declines the Company’s businessin profitability and results of operations may be adversely affected.operations.

United operates in a competitive environment.

The Company operates in a competitive environment. The Company competes with other wholesale distributors and with the manufacturers of the products the Company sells. In addition, the Company competes with warehouse clubs and the business-to-business sales divisions of national business products resellers. Competition is based largely upon service capabilities and price, as the Company’s competitors generally offer products that are the same as or similar to the products the Company offers to the same customers or potential customers. These competitive pressures are exacerbated by the ongoing decline in the overall demand for office products. The competitive arena is also increasingly shifting online. The Company’s financial condition and results of operations depend on its ability to compete effectively on price, product selection and availability, marketing support, logistics, and other ancillary services; diversify its product offering; and provide services and capabilities that enable its customers to succeed online.7

Supply chain disruptions or changes in key suppliers’ distribution strategies could decrease United’s revenues and profitability.

United believes its ability to offer a combination of well-known brand name products, competitively priced private brand products, and support services is an important factor in attracting and retaining customers. The Company’s ability to offer a wide range of products and services is dependent on obtaining adequate product supply and services from manufacturers or other suppliers. United’s agreements with its suppliers are generally terminable by either party on limited notice. The loss of, or a substantial decrease in the availability of products or services from key suppliers at competitive prices could cause the Company’s revenues and profitability to decrease. In addition, supply interruptions could arise due to transportation disruptions, labor disputes or other factors beyond United’s control. Disruptions in United’s supply chain could result in a decrease in revenues and profitability.

Some manufacturers refuse to sell their products to wholesalers like United. Other manufacturers only allow United to sell their products to specified customers. If changes in key suppliers’ distribution strategies or practices reduce the breadth of products the Company is able to purchase or the number of customers to whom United can sell key products, the Company’s results of operations and financial condition could be adversely affected.

Many of the Company’s independent resellers use third party technology vendors (“3PVs”) to automate their business operations. The 3PVs play an important role in the independent dealer channel, as most purchase orders, order confirmations, stock availability checks, invoices, and advanced shipping notices are exchanged between United and its independent resellers over 3PV networks. The 3PVs also provide e-commerce portals that United’s customers use to transact online business with their customers. If United is unable to transact business with its customers through one or more 3PVs on terms that are acceptable to United, or if a 3PV fails to provide quality services to United’s customers, United’s business, financial condition, and results of operations could be adversely affected.

A significant disruption or failure of the Company’s information technology systems or in its design, implementation or support of the information technology systems and e-commerce services it provides to customers could disrupt United’s business, result in increased costs and decreased revenues, harm the Company’s reputation, and expose the Company to liability.

The Company relies on information technology in all aspects of its business, including managing and replenishing inventory, filling and shipping customer orders, and coordinating sales and marketing activities. Several of the Company’s software applications are legacy systems which the Company must periodically update, enhance, and replace. A significant disruption or failure of the Company’s existing information technology systems or in the Company’s development and implementation of new systems could put it at a competitive disadvantage and could adversely affect its results of operations.

UnitedEssendant is exposed to the credit risk of its customers.

UnitedEssendant extends credit to its customers. The failure of a significant customer or a significant group of customers to timely pay all amounts due UnitedEssendant could have a material adverse effect on the Company’s financial condition and results of operations. The Company’s trade receivables are generally unsecured or subordinated to other lenders, and many of the Company’s customers are highly leveraged. The extension of credit involves considerable judgment and is based on management’s evaluation of a variety of factors, including customers’ financial condition and payment history, the availability of collateral to secure customers’ receivables, and customers’ prospects for maintaining or increasing their sales revenues. There can be no assurance that UnitedEssendant has assessed and will continue to assess the creditworthiness of its existing or future customers accurately.

UnitedFor example, as of December 31, 2016, the Company recognized a $13.3 million allowance on prepaid rebates and receivables from one customer. This customer has timely paid all amounts due to Essendant; however, the collectability of the receivables over the long-term is in doubt. As of February 21, 2017, the Company had further exposure to this customer related to 2017 activity totaling approximately $18.0 million.

Essendant operates in a changing competitive environment.

The Company operates in a competitive and changing environment. Historically, the Company has competed with other wholesale distributors, manufacturers of the products the Company sells, warehouse clubs, the business-to-business sales divisions of national business products resellers. The Company is also increasingly competing with internet retailers that are selling to resellers, putting price and margin pressures on the Company. If the Company is unable to compete effectively with internet retailers and others in a changing market, the Company’s business, financial condition and results of operations will be adversely affected.

Supply chain disruptions or changes in key suppliers’ distribution strategies could decrease Essendant’s revenues and profitability.

Essendant believes its ability to offer a combination of well-known brand name products, competitively priced Essendant brand products, and support services is an important factor in attracting and retaining customers. The Company’s ability to offer a wide range of products and services is dependent on obtaining adequate product supply and services from manufacturers or other suppliers. Essendant’s agreements with its suppliers are generally terminable by either party on limited notice. The loss of, or a substantial decrease in the availability of products or services from key suppliers (in particular a large supplier, for example, the Hewlett Packard Company which represents approximately 20% of the Company’s total purchases in 2016) at competitive prices could cause the Company’s revenues and profitability to decrease. In addition, supply interruptions could arise due to transportation disruptions, labor disputes or other factors beyond Essendant’s control. Disruptions in Essendant’s supply chain could result in a decrease in revenues and profitability.

Some manufacturers refuse to sell their products to wholesalers like Essendant. Other manufacturers only allow Essendant to sell their products to specified customers. If changes in key suppliers’ distribution strategies or practices reduce the breadth of products the Company is able to purchase or the number of customers to whom Essendant can sell products, the Company’s results of operations and financial condition could be adversely affected.

Many of the Company’s independent resellers use third party technology vendors (“3PVs”) to automate their business operations. The 3PVs play an important role in the independent dealer channel, as most purchase orders, order confirmations, stock availability checks, invoices, and advanced shipping notices are exchanged between Essendant and its independent resellers over 3PV networks. The 3PVs also provide e-commerce portals that Essendant’s customers use to transact online business with their customers. If Essendant is unable to transact business with its customers through one or more 3PVs on terms that are acceptable to Essendant, or if a 3PV fails to provide quality services to Essendant’s customers, Essendant’s business, financial condition, and results of operations could be adversely affected.

Demand for office products is expected to continue to decline.

The overall demand for certain office products has weakened and is expected to continue to decline as consumers increasingly create, share, and store documents electronically, without printing or filing them. Furthermore, many of the products that have experienced increased demand in recent years have lower margins than the products for which demand has declined. If demand continues to decline and Essendant is unable to offset lower aggregate demand by increasing market share for these products, finding new markets for these products, increasing sales of products in other product categories, and reducing expenses, the Company’s results of operations and financial condition may be adversely affected.

8

Essendant may experience financial cycles related to broad economic factors due to secular consumer demand, recession or other events.

Sales of Essendant’s products have been affected by secular market pressures and are subject to cyclical fluctuations of material economic factors. Cyclical effects have been particularly notable in Industrial and Automotive. For example, in 2015, challenges in the oil and gas industries impacted the Company’s oilfield and welding sectors within its Industrial business, and these industries have not yet fully recovered. Cyclical changes in demand for the products the Company sells have affected and could continue to detrimentally affect the Company’s business, financial condition and results of operations.

Essendant may not be successful in implementing strategic objectives.

The Company is undertaking a comprehensive, multi-year transformation program that includes enhancements in merchandising, closer alignment of pricing with the cost to serve, stabilization of the JanSan sales channel, Industrial growth, additional cost reductions and reductions in working capital and debt. If Essendant is unable to efficiently, effectively and timely implement the program, the Company could experience diminished operating results as a result of the diversion of management’s time, attention and resources from managing the Company’s continuing operations, the incurrence of additional costs in connection with the program, disruption to customers and suppliers, or other factors. In addition, the Company’s merchandising efforts may result in changes in the product assortment offered by the Company and changes in or termination of relationships with certain suppliers. Suppliers adversely affected by the Company’s merchandising efforts may increase their direct sales to the Company’s customers or take other actions that adversely affect the Company. In addition, certain of our customers have preferences for products from suppliers whose products may not be part of our future core supply chain and merchandising strategy. If we are not able to, or choose not to, offer products from the suppliers our customers prefer, we may lose customer business, which could adversely impact our results of operation. The Company’s efforts to align pricing with the cost to serve may result in decreased sales to some customers.  

Essendant must manage inventory effectively while minimizing excess and obsolete inventory.

To maximize supplier allowances and minimize excess and obsolete inventory, UnitedEssendant must project end-consumer demand for over 160,000 items in stock.approximately 190,000 items. If UnitedEssendant underestimates demand for a particular manufacturer’s products, the Company will lose sales, reduce customer satisfaction, and earn a lower level of allowances from that manufacturer. If UnitedEssendant overestimates demand, it may have to liquidate excess or obsolete inventory at a price that would produce a lower margin, no margin, or a loss.

UnitedEssendant is focusing on increasing its sales of privateEssendant brand products. These products can present unique inventory challenges. UnitedEssendant sources some of its privateEssendant brand products overseas, resulting in longer order-lead times than for comparable products sourced domestically. These longer lead-times make it more difficult to forecast demand accurately and require larger inventory investments to support high service levels.

United

The Company relies heavily on the ability to recruit, retain, and develop high-performing managers and the lack of execution in these areas could harm the Company’s ability to carry out its business strategy.

Essendant’s ability to implement its business strategy depends largely on the efforts, skills, abilities, and judgment of the Company’s executive management team. Essendant’s success also depends to a significant degree on its ability to recruit and retain sales and marketing, operations, and other senior managers. For the last several years, the Company’s incentive compensation plans have paid out substantially below target. Our compensation arrangements, such as our management incentive plans, long-term incentive plans, and other compensatory arrangements, may not be successful in identifying, consummating,retaining and integrating future acquisitions.

Historically, part of United’s growthmotivating our existing employees and expansion intoattracting new product categoriesemployees or markets has come from targeted acquisitions. Going forward, Unitedthe Company may not be ableneed to identify attractive acquisition candidates or completetake more costly actions to attract and retain the acquisition of any identified candidates at favorable prices and upon advantageous terms. Furthermore, competition for attractive acquisition candidates may limit the number of acquisition candidates or increase the overall costs of making acquisitions. Acquisitions involve significant risks and uncertainties, including difficulties integrating acquired business systems and personnel with United’s business; the potential loss of key employees, customers or suppliers; the assumption of liabilities and exposuretalent needed to unforeseen liabilities of acquired companies; the difficulties in achieving target synergies; and the diversion of management attention and resources from existing operations. Difficulties in identifying, completing or integrating acquisitions could impede United’s revenues, profitability, and net worth. In addition, some oflead the Company’s acquisitions have included foreign operations, and future acquisitions may increase United’s international presence. International operations present a variety of unique risks, including the costs and difficulties of managing foreign enterprises, limitations on the repatriation and investment of funds, currency fluctuations, cultural differences that affect customer preferences and business practices, and unstable political or economic conditions.transformation plan.

The security of private information United’s customers provide could be compromised.

Through United’s sales, marketing, and e-commerce activities, the Company collects and stores personally identifiable information and credit card data that customers provide when they buy products or services, enroll in promotional programs, or otherwise communicate with United. United also gathers and retains information about its employees in the normal course of business. United uses vendors to assist with certain aspects of United’s business and, to enable the vendors to perform services for United, the Company shares some of the information provided by customers and employees. Similarly, to enable United to provide goods and services to its customers, United’s customers share with United information their customers provide to them. Loss or breaches in security that result in disclosure of customer or business information by United or its vendors could disrupt the Company’s operations and expose United to claims from customers, financial institutions, regulators, payment card associations, and other persons, any of which could have an adverse effect on the Company’s business, financial condition, and results of operations. In addition, compliance with more stringent privacy and information security laws and standards may result in significant expense due to increased investment in technology and the development of new operational processes.

The Company is subject to costs and risks associated with laws, regulations, and industry standards affecting United’sEssendant’s business.

UnitedEssendant is subject to a wide range of state, federal, and foreign laws and industry standards, including laws and standards regarding labor and employment, government contracting, product liability, the storage and transportation of hazardous materials, privacy and data security, imports and exports, tax, and intellectual property, as well as laws relating to the Company’s international operations, including the Foreign Corrupt Practices Act and foreign tax laws. These laws, regulations, and standards may change, sometimes significantly, as a result of political or economic events. The complex legal and regulatory environment exposes UnitedEssendant to compliance and litigation costs and risks that could materially affect United’sEssendant’s operations and financial results.

United’s

For example, the Company has been named as a defendant in two lawsuits alleging that the Company sent unsolicited fax advertisements to certain named plaintiffs, as well as other persons and entities, in violation of various consumer protection acts. Although the Company is vigorously contesting and denies that any violations occurred, the Company’s ultimate liability may be material. See Part II, Item 8, Note 18 – “Legal Matters.”

9

A significant disruption or failure of the Company’s information technology systems could disrupt Essendant’s business, result in increased costs and decreased revenues, harm the Company’s reputation, and expose the Company to liability.

The Company relies on information technology in all aspects of its business, including managing and replenishing inventory, filling and shipping customer orders, and coordinating sales and marketing activities. The Company regularly refreshes, enhances and adds information technology systems and infrastructure, and any such changes create a possibility for disruption or failure of the Company’s existing information technology, which could put the Company at a competitive disadvantage and could adversely affect the Company’s results of operations. Additionally, further efforts to align portions of its business on common platforms, systems and processes could result in unforeseen interruptions, increased costs, decreased revenues, diminished Company reputation to its customers and suppliers, increased liability and other negative effects.

A breach of the Company’s information technology systems could result in costly enforcement actions and litigation and could harm the Company’s reputation and relationships.

Through Essendant’s sales, marketing, and e-commerce activities, the Company collects and stores personally identifiable information and credit card data that customers provide when they buy products or services, enroll in promotional programs, or otherwise communicate with Essendant. Essendant also gathers and retains information about its employees in the normal course of business. Essendant uses suppliers to assist with certain aspects of Essendant’s business and, to enable the suppliers to perform services for Essendant, the Company shares some of the information provided by customers and employees. Similarly, to enable Essendant to provide goods and services customer information is shared. Essendant has, from time to time, experienced attempts to breach its systems, and these attempts are expected to continue. Any loss, unauthorized access to or misuse of the Company’s information technology systems could disrupt the Company’s operations, expose Essendant to claims from customers, financial institutions, regulators, payment card associations, and other persons, and damage the Company’s reputation. In addition, compliance with more stringent privacy and information security laws and standards may result in significant expense due to increased investment in technology and the development of new operational processes.  

Essendant’s financial condition and results of operations depend on the availability of financing sources to meet its business needs.

The Company depends on various external financing sources to fund its operating, investing, and financing activities. The Company’s financing agreements include covenants bymaximum revolving borrowings at any time under the 2017 Credit Agreement (defined below) is the lesser of the lenders’ revolving commitments thereunder or the value of the Company’s borrowing base. The borrowing base for the revolving commitments is comprised of a certain percentage of eligible accounts receivables, real estate and equipment, plus a certain percentage of eligible inventory, minus reserves and the borrowing base for the term loan commitments is comprised of a certain percentage of eligible real property and equipment. If borrowing availability under the 2017 Credit Agreement falls below a certain threshold, the Company to maintain certain financial ratios andmust comply with other obligations. certain obligations and restrictions, including additional restrictions on the Company’s ability to make acquisitions and investments, dispose of assets, repurchase shares of the Company’s stock, and pay dividends.

If the Company violates a covenant or otherwise defaults on its obligations under a financing agreement, the Company’s lenders may refuse to extend additional credit, demand repayment of outstanding indebtedness, and terminate the financing agreements.agreements, and exercise their rights and remedies including, with respect to the lenders under the 2017 Credit Agreement, their rights as secured creditors. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” included below under Item 7.

The Company’s primary external financing sources terminate or mature in three to six years. If the Company defaults on its obligations under a financing agreement or is unable to obtain or renew financing sources on commercially reasonable terms, its business and financial condition could be materially adversely affected.

The Company relies heavily on the ability to recruit, retain, and develop high-performing managers and the lack of execution in these areas could harm the Company’s ability to carry out its business strategy.

United’s ability to implement its business strategy depends largely on the efforts, skills, abilities, and judgment of the Company’s executive management team. United’s success also depends to a significant degree on its ability to recruit and retain sales and marketing, operations, and other senior managers. The CompanyEssendant may not be successful in attractingidentifying or consummating future acquisitions.

Historically, part of Essendant’s growth and retaining these employees, whichexpansion into new product categories or markets has come from targeted acquisitions. Essendant may in turnnot be able to identify attractive acquisition candidates or complete the acquisition of any identified candidates at favorable prices and upon advantageous terms. In addition, some of the Company’s acquisitions have an adverse effectincluded foreign operations, and future acquisitions or other strategic alternatives may increase Essendant’s international presence. International operations present a variety of unique risks, including the costs and difficulties of managing foreign enterprises, limitations on the Company’s resultsrepatriation and investment of operationsfunds, currency fluctuations, cultural differences that affect customer preferences and financial condition.business practices, and unstable political or economic conditions.

Unexpected events could disrupt normal business operations, which might result in increased costs and decreased revenues.

Unexpected events, such as hurricanes, fire, war, terrorism, and other natural or man-made disruptions, may adversely impact United’sEssendant’s ability to serve its customers and increase the cost of doing business or otherwise impact United’sEssendant’s financial performance. In addition, damage to or loss of use of significant aspects of the Company’s infrastructure due to such events could have an adverse effect on the Company’s operating results and financial condition.

10

None.

The Company considers its properties to be suitable with adequate capacity for their intended uses. The Company evaluates its properties on an ongoing basis to improve efficiency and customer service and leverage potential economies of scale. As of December 31, 2014,2016, the Company’s properties consisted of the following:

Offices. The Company leases approximately 205,000200,000 square feet for its corporate headquarters in Deerfield, Illinois. Additionally, the Company owns 49,000 square feet of office space in Orchard Park, New York andYork; leases 58,00038,000 square feet of office space in Tulsa, Oklahoma, and 10,000Oklahoma; leases 12,000 square feet in Pasadena, California.California; and leases 11,000 square feet in Atlanta, Georgia.

Distribution Centers. The Company utilizes 7770 distribution centers totaling approximately 12.713.1 million square feet of warehouse space. Of the 12.7 million square feetspace, of distribution center space, 2.1which 2.0 million square feet are owned and 10.611.1 million square feet are leased.

The Company is involved inFor information regarding legal proceedings, arising in the ordinary course of or incidental to its business. The Company has established reserves, which are not material, for potential losses that are probable and reasonably estimable that may result from those proceedings. In many cases, however, it is difficult to determine whether a loss is probable or even possible or to estimate the amount or range of potential loss, particularly where proceedings may be in relatively early stages or where plaintiffs are seeking substantial or indeterminate damages. Matters frequently need to be more developed before a loss or range of loss can reasonably be estimated. The Company believes that pending legal proceedings will be resolved with no material adverse effect upon its financial condition or results of operations.see Part II, Item 8, Note 18 - “Legal Matters.”

Not applicable.

PART II

Common Stock Information

USI’sESND’s common stock is quoted through the NASDAQ Global Select Market (“NASDAQ”) under the symbol USTR.ESND. The following table shows the high and low closing sale prices per share for USI’sESND’s common stock as reported by NASDAQ:

On February 13, 2015,21, 2017, the closing sale price of Company’s common stock as reported by NASDAQ was $44.16$21.74 per share. For the period from January 1, 2017 to February 21, 2017, the high closing sale price during the period was $21.74, while the low closing sale price during the period was $19.86. On February 13, 2015,21, 2017, there were approximately 698436 holders of record of common stock. A greater number of holders of USIESND common stock are “street name” or beneficial holders, whose shares are held ofon record by banks, brokers and other financial institutions.

Stock Performance Graph

The following graph compares the performance of the Company’s common stock over a five-year period with the cumulative total returns of (1) The NASDAQ Stock MarketRussell 2000 Index (U.S. companies), and (2) a group of companies included within Value Line’s Office Equipment Industry Index. The graph assumes $100 was invested on December 31, 20092011 in the Company’s common stock and in each of the indices and assumes reinvestment of all dividends (if any) at the date of payment. The following stock price performance graph is presented pursuant to SEC rules and is not meant to be an indication of future performance.

12

Common Stock Repurchases

During 2014,2016, the Company repurchased 1.30.2 million shares of common stock at an aggregate cost of $50.6$6.8 million. During 2013,2015, the Company repurchased 1.71.8 million shares of common stock at an aggregate cost of $62.1$67.4 million. On February 11, 2015, the Board of Directors authorized the Company to purchase an additional $100 million of common stock. As of February 13, 2015,21, 2017, the Company had approximately $136.4$68.2 million remaining under share repurchase authorizations from its Board of Directors.

Purchases may be made from time to time in the open market or in privately negotiated transactions. Depending on market, and business conditions and other factors, the Company may continue or suspend purchasing its common stock at any time without notice.

Acquired shares are included in the issued shares of the Company and treasury stock, but are not included in average shares outstanding when calculating earnings per share data.

The following table reports purchases of equity securities during the fourth quarter of fiscal year 20142016 by the Company and any affiliated purchasers pursuant to SEC rules, including any treasury shares withheld to satisfy employee withholding obligations upon vesting of restricted stock and the execution of stock option exercises.

Stock and Cash Dividends

The Company declares and pays dividends on a quarterly basis. During 20132016 and 2014,2015, the Company declared and paid a dividend of $0.14 per share per quarter. In the aggregate, the Company declared dividends of $21.8M$20.6 million and $22.4M$21.1 million in 20142016 and 2013,2015, respectively. On February 22, 2017, the Board of Directors approved a dividend of $0.14 to be paid on April 14, 2017 to shareholders of record as of March 15, 2017. See Part II, Item 8, Note 11 – “Debt” for restrictions on the Company’s ability to repurchase stock or issue dividends.

Securities Authorized for Issuance under Equity Compensation Plans

The information required by Item 201(d) of Regulation S-K (Securities Authorized for Issuance under Equity Compensation Plans) is included in Item 12 of this Annual Report.

13

The selected consolidated financial data of the Company for the years ended December 31, 20102012 through 20142016 have been derived from the Consolidated Financial Statements of the Company, which have been audited by Ernst & Young LLP, an independent registered public accounting firm. The adoption of new accounting pronouncements, changes in certain accounting policies, and reclassifications are reflected in the financial information presented below. The selected consolidated financial data below should be read in conjunction with, and is qualified in its entirety by, Management’s Discussion and Analysis of Financial Condition and Results of Operations and the Consolidated Financial Statements of the Company included in Items 7 and 8, respectively, of this Annual Report. Except for per share data, all amounts presented are in thousands:

(1) 20142015 —$8.2 Includes $4.9 million related to Industrial obsolescence reserve.

(2) 2016 — Includes $20.5 million gain on sale of City of Industry facility, $12.5 million charge related to defined benefit plan settlement, $4.0 million charge related to litigation reserve, $1.2 million charge related to severance costs for operating leadership, $0.9 million reversal of 2015 restructuring expenses partially offset by 2016 facility charges and a $0.6 million reserve related to uncertain tax positions taken in the prior year.

      2015 — $115.8 million charge related to Industrial impairment of goodwill and intangible assets, $18.6 million charge related to workforce reductions and facility consolidations, a $17.0 million loss on sale and related costs of our Mexican subsidiary, $12.0 million intangible asset impairment charge related to rebranding and accelerated amortization related to rebranding efforts, and $10.7 million impairment of seller notes receivable related to the Company’s prior year sale of a software service provider.

     2014 — $8.2 million loss on disposition of business.a software service provider.

     2013 2013—$13.0 $13.0 million charge for a workforce reduction and facility closures and a $1.2 million asset impairment charge.

     2012 2012—$6.2 $6.2 million charge for a distribution network optimization and cost reduction program.  2011—$0.7

(3) Includes $1.7 million reversalrelated to tax effect of a chargedividend from a foreign subsidiary in 2016 and the tax effects for early retirement/workforce realignment, $4.4 million chargeitems noted above for a transition agreement with the company’s former Chief Executive Officer, and a $1.6 million asset impairment charge. 2010—$11.9 million liability reversal for vacation pay policy change, $8.8 million liability reversal for Retiree Medical Plan termination, and $9.1 million charge for early retirement/workforce realignment.each respective year.

(2) 2011—a reversal of prior acquisition earn-out and deferred payment liabilities. 2010—an accounting charge to bring prior acquisition earn-out liabilities to fair value.

(3)(4) Total debt includes current maturities where applicable.

(4) 2010 share and per share amounts reflect a two-for-one stock split in May 2011.14

FORWARD LOOKING INFORMATION

This Annual Report on Form 10-K contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act. Forward-looking statements often contain words such as “expects”, “anticipates”, “estimates”, “intends”, “plans”, “believes”, “seeks”, “will”, “is likely”, “scheduled”, “positioned to”, “continue”, “forecast”, “predicting”, “projection”, “potential” or similar expressions. Forward-looking statements include references to goals, plans, strategies, objectives, projected costs or savings, anticipated future performance, results or events and other statements that are not strictly historical in nature. These forward-looking statements are based on management’s current expectations, forecasts and assumptions. This means they involve a number of risks and uncertainties that could cause actual results to differ materially from those expressed or implied here. These risks and uncertainties include, without limitation, those set forth abovein Item 1A under the heading “Risk Factors.”

Readers should not place undue reliance on forward-looking statements contained in this Annual Report on Form 10-K. The forward-looking information herein is given as of this date only, and the Company undertakes no obligation to revise or update it.

The following discussion should be read in conjunction with both the information at the end of Item 6 ofincluded in this Annual Report on Form 10-K appearing under the caption, “Forward Looking Information”,in Part I, Item 1 – Description of Business, Item 6 – Selected Financial Data and the Company’s Consolidatedin Item 8 – Financial Statements and related notes contained in Item 8Supplementary Data. Please see the reconciliation of this Annual Report.Non-GAAP Financial Measures section below for information concerning the reconciliation of GAAP to Non-GAAP financial measures.

Company Overview

The Company is a leading supplier of workplace essentials, with 2014 net sales of approximately $5.3 billion. The Company sells its products through a national distribution network of 77 distribution centers to over 30,000 resellers, who in turn sell directly to end consumers.

Our strategy is comprised of three key elements:

1) Strengthen our core office, janitorial, and breakroom business with a common operating and IT platform, an aligned customer care and sales team, and advanced digital services;

2) Win online by growing our business-to-business (B2B) sales with major e-commerce players, and by enabling the online success of our resellers by providing digital capabilities and tools to support them; and

3) Expand and diversify our business into higher growth and higher margin channels and categories.

Execution on these priorities will help us achieve our goal of becoming the fastest and most convenient solution for workplace essentials.

Key Trends and Recent Results

The following isResults for 2016 were negatively affected by a summaryshift in customer mix to lower margin customers and in product category mix to lower margin products. Results were also adversely impacted by lower volumes of selectedinventory purchases, which resulted in lower supplier allowances and promotional incentives, as well as by the recognition of an allowance on prepaid rebates and receivables from one customer. We are implementing strategies to address these market trends, events or uncertainties thatbut we expect the Company believes may havetrends will continue to impact our liquidity, capital resources and results of operations in subsequent periods, with 2017 net sales expected to be flat to down 4% compared to 2016. We expect net sales in 2017 to be adversely affected by the decision of a significant impact onlarge national big-box retailer to shift its future performance.purchases of JanSan products to other sources and by Staples’ acquisition of a large regional customer.

Recent Results