AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 3, 2002. REGISTRATION NO. ________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------
INDUSTRIAL DISTRIBUTION GROUP, INC.
(Exact Name of Issuer as Specified in its Charter)
DELAWARE 58-229339
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
950 E. PACES FERRY ROAD, SUITE 1575
ATLANTA, GEORGIA 30326
(404) 949-2100
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)
ANDREW B. SHEARER
PRESIDENT AND CHIEF EXECUTIVE OFFICER
950 E. PACES FERRY ROAD, SUITE 1575
ATLANTA, GEORGIA 30326
(404) 949-2100
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
Copies to:
W. RANDY EADDY, ESQ.
KILPATRICK STOCKTON LLP
1100 PEACHTREE STREET, N.E., SUITE 2800
ATLANTA, GEORGIA 30309-4530
(404) 815-6500
Approximate date of commencement of proposed sale to the public: From
time to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933 (the "Securities Act"), other than securities offered
only in connection with dividend or interest reinvestment plans, check the
following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ] ____________
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ] _______________
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
===========================================================================================================================
TITLE OF SECURITIES AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TO BE REGISTERED REGISTERED OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION FEE
SHARE(1) PRICE(1)
---------------------------------------------------------------------------------------------------------------------------
Common Stock 82,133 $2.675 $219,706 $20.21
===========================================================================================================================
(1) Determined in accordance with Rule 457(c) under the Securities Act of 1933,
based on $2.675, the average of the high and low prices on the New York Stock
Exchange on March 27, 2002.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
THE INFORMATION IN THIS PRELIMINARY PROSPECTUS IS NOT COMPLETE AND MAY BE
CHANGED. THESE SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION STATEMENT FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PRELIMINARY
PROSPECTUS IS NOT AN OFFER TO SELL NOR DOES IT SEEK AN OFFER TO BUY THESE
SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.
PROSPECTUS
INDUSTRIAL DISTRIBUTION GROUP, INC.
-------------------------------
82,133 SHARES OF COMMON STOCK
----------------------------------
This Prospectus covers 82,133 shares of our common stock, $.01 par
value, that may be offered for resale from time to time by certain of our
shareholders who are identified later in this Prospectus. We will not receive
any of the proceeds from the sale of the shares by the selling shareholders.
We have agreed to bear all expenses (other than the fees or expenses of
counsel or any other personal representative of any selling shareholder) in
connection with the preparation and use of this Prospectus. We will not pay any
commissions, discounts, or other fees to underwriters, broker dealers, or any
other person who may assist a selling shareholder in making a sale. We have
agreed to indemnify the selling shareholders, and they have agreed to indemnify
us, against certain liabilities under the Securities Act of 1933.
The selling shareholders may sell their shares from time to time in a
variety of ways, including:
- underwritten offerings;
- ordinary brokerage transactions at prices at or near
the market price; or
- transactions on terms that may be negotiated at the
time of sale.
The selling shareholders may pay usual and customary or specifically
negotiated underwriting discounts, brokerage fees, or commissions in connection
with such sales. To the extent required, the specific shares to be sold, the
terms of the offering, including price, the name of any broker-dealer or
underwriter, and any applicable commission, discount, or other compensation with
respect to a particular sale will be set forth in a supplement that we may
prepare to accompany this Prospectus in the future.
The Company's Common Stock is traded under the symbol "IDG" on the New
York Stock Exchange. On March 27, 2002, the last sale price of the common stock
as reported by the NYSE was $2.70 per share.
YOU SHOULD CONSIDER CAREFULLY THE RISK
FACTORS BEGINNING ON PAGE 4 OF THIS PROSPECTUS.
---------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is _____ __, 2002.
WHERE YOU CAN FIND MORE INFORMATION
This Prospectus is part of a Form S-3 covering the shares that the
selling shareholder may offer for resale.
We file annual, quarterly, and current reports, proxy statements, and
other information with the SEC. You may read and copy any materials we file with
the SEC at the SEC's Public Reference Room at 450 Fifth Street, N.W.,
Washington, D.C. 20549. For information on the operation of the Public Reference
Room, call the SEC at 1-800-SEC-0330. You can also obtain reports, proxy
statements, and other information regarding issuers that file electronically
with the SEC from the SEC's Internet site (http://www.sec.gov).
The SEC allows us to "incorporate by reference" information filed with
them, which means that we can disclose important information to you by referring
you directly to those documents. The information incorporated by reference is
considered to be a part of this Prospectus. In addition, information we file
with the SEC in the future will automatically update and supersede information
contained in this Prospectus and any accompanying Prospectus supplement. Any
information so updated or superseded shall not be deemed, except as so updated
or superseded, to be a part of this Prospectus. We incorporate by reference the
documents listed below and any future filings made with the SEC under Sections
13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 until all of
the shares described in this Prospectus are sold or the offering of the shares
covered by this Prospectus is terminated:
- Annual report on Form 10-K for the fiscal year ended
December 31, 2001.
We will provide you with free copies of any of these documents or any
other documents that have been incorporated by reference in this Prospectus,
without exhibits, unless an exhibit is incorporated into the document by
reference, if you write us or call us at: Industrial Distribution Group, Inc.,
950 E. Paces Ferry Road, Suite 1575, Atlanta, Georgia 30326, Attention: Investor
Relations, telephone (404) 949-2100.
3
FORWARD-LOOKING STATEMENTS
From time to time, information we provide or statements of our
directors, officers, or employees may be "forward-looking statements" under the
Private Securities Litigation Reform Act of 1995. Those statements involve
numerous risks and uncertainties. Typically, this information or these
statements contain the words "may," "will," "should," "plans," "estimates,"
"predicts," "potential," "continue," "believes," "anticipates," "intends,"
"expects," or the negative of such words or similar words. Any information or
statements made or incorporated by reference in this Prospectus that are not
statements of historical fact are forward-looking statements. Forward-looking
statements include our expectations with respect to growth of sales, the affect
of economic conditions, the impact of operational improvements or cost reduction
initiatives, operating margins and overall profitability. The forward-looking
statements in this Prospectus, and others that we or our representatives make,
are based on a number of assumptions and involve risks and uncertainties.
Consequently, actual results could differ materially. The factors we describe
under the heading "Risk Factors" are some, but not all, of the reasons that
results could be different.
RISK FACTORS
An investment in the shares offered hereby involves a significant
degree of risk. In deciding whether to purchase the shares offered hereby,
prospective investors should carefully consider all of the information contained
in this Prospectus, including the following factors that may affect our current
operations and future prospects.
OUR ABILITY TO SELL OUR SERVICES AND PRODUCTS IN THE QUANTITY WE DESIRE
DEPENDS HEAVILY UPON THE OPERATIONS LEVELS OF OUR CUSTOMERS AND THE
ECONOMIC FACTORS THAT AFFECT THEM.
Some of the primary markets for the products and services we sell are
subject to cyclical fluctuations that generally affect demand for industrial and
consumer durable goods produced by the users of MROP supplies. Consequently, the
demand for our services and products has been and will continue to be influenced
by most of the same national, regional, or even international economic factors
that affect the demand for and production of such goods. When our customers or
prospective customers reduce their production levels in response to lower demand
for their products, they have less need for MROP supplies and may delay or slow
(or even cancel) orders for MROP products or services.
The current economic environment continues to be adverse for many
customers to whom we have historically sold larger amounts of MROP products and
services. Unless and until these economic conditions dissipate, our results of
operations will continue to be adversely impacted.
BASED ON OUR PERCEPTION OF INDUSTRY TRENDS AMONG MROP CUSTOMERS, WE ARE
DEDICATING SIGNIFICANT RESOURCES TO OUR FPS PROGRAM, BUT WE CAN NOT BE
CERTAIN THAT THESE INITIATIVES WILL GENERATE THE GROWTH WE ANTICIPATE
AND DESIRE.
We have recently dedicated significant resources to promote our FPS
program as a strategic area for future growth. In particular, we have redirected
our sales and marketing efforts towards sales of broad-based services and
products through this program, rather than towards sales of particular products.
This focus is based on our perception of industry trends among users of MROP
products for more comprehensive solutions to their MROP requirements. If the
trends that we perceive do not continue to develop, FPS sales may not grow at
the levels we anticipate and desire, and our results of operations could be
affected.
4
In addition, we may encounter unanticipated difficulties in retraining
our sales and marketing personnel to focus more broadly on the sale of FPS
services to our customers, rather than focusing exclusively or primarily on
direct sales of MROP products. Such difficulties could delay our anticipated
growth in FPS sales.
THE DELIVERY OF OUR SERVICES REQUIRES HIGHLY SKILLED AND SPECIALIZED
EMPLOYEES WHO ARE NOT EASY TO LOCATE OR REPLACE.
The timely provision of our high-quality services requires an adequate
supply of skilled sales and customer service personnel, including the
specialists whose expertise is an essential element of our customer-oriented,
FPS program. Accordingly, our ability to implement solutions for our customers
depends to a significant degree on our ability to employ the skilled personnel
necessary to meet our marketing and servicing requirements. From time to time,
we have experienced difficulty in attracting or retaining sufficient numbers of
qualified personnel. As a result, our operating costs may be adversely affected
by turnover in such positions. We cannot assure you that we will be able to
maintain an adequately skilled sales and customer service force or that our
labor expenses will not increase as a result of a shortage in the supply of such
skilled personnel.
WE RELY HEAVILY ON OUR SENIOR MANAGEMENT AND THE EXPERTISE OF
MANAGEMENT PERSONNEL.
Our operations will depend for the immediate future on the efforts of
our executive officers, division presidents, and our other senior management.
Our business and prospects could be adversely affected if these persons, in
significant numbers, do not perform their key roles as expected, and we are
unable to attract and retain qualified replacements.
WE CONTINUE TO RELY UPON A VARIETY OF SYSTEMS FOR OUR INTERNAL
MANAGEMENT INFORMATION AND RELATED FUNCTIONS, WHICH COULD ADVERSELY
AFFECT OUR OPERATIONS UNTIL WE CAN IMPLEMENT OUR REGIONALIZED
MANAGEMENT INFORMATION TECHNOLOGY SYSTEM.
Until we can fully implement our regionalized management information
technology system, we will continue to utilize and be dependent upon a variety
of decentralized information and operating systems for many functions, such as
product ordering, financial reporting and analysis, and inventory control. We
may experience delays, disruptions, and unanticipated expenses as a result of
that situation, which could adversely affect our internal efficiency and our
ability to service customers. In any event, we will not be able to achieve the
full benefit of certain contemplated operating efficiencies and competitive
advantages until we have fully implemented our regionalized management
information technology system.
The implementation of our regionalized management information
technology system may involve several of our business units in simultaneous
information technology conversions. We may experience difficulties in
conjunction with these conversions, including difficulties with data conversion
from existing systems and the flow and integration of information into the new
financial systems. If such difficulties occur, we may experience delays,
disruptions, and unanticipated expenses, which could adversely affect our
internal efficiency and our ability to service customers in a regional area.
WE RELY ON A VARIETY OF DISTRIBUTION RIGHTS GRANTED BY OUR SUPPLIERS TO
OFFER THEIR PRODUCT LINES TO OUR CUSTOMERS.
For a substantial portion of our business, we depend on the collection
of varied distribution arrangements with suppliers for certain product lines
that have been established by our several operating
5
subsidiaries in their respective geographic markets. A significant percentage of
these current distribution arrangements are oral, and many of them can be
terminated by the supplier immediately or upon short notice. The termination or
limitation by any key supplier of its relationship with us could have a material
adverse effect on our results of operations and financial condition.
OUR INDUSTRY IS VERY COMPETITIVE, BOTH AS TO THE NUMBER AND STRENGTH OF
THE DIFFERENT COMPANIES WITH WHICH WE COMPETE AND THE BUSINESS TERMS
OFFERED TO POTENTIAL CUSTOMERS.
The industrial maintenance, repair, operating, and production supplies
industry is highly competitive and features numerous distribution channels,
including: national, regional, and local distributors; direct mail suppliers;
Internet suppliers; large catalog warehouses; and manufacturers' own sales
forces. Many of our competitors are small enterprises who sell to customers in a
limited geographic area, but we also compete against several large distributors
that have significantly greater resources than we do. Competition with all of
these distributors has increased as customers increasingly seek low-cost
alternatives to traditional methods of purchasing and sources of supply by,
among other things, reducing the number of their maintenance, repair, operating,
and production suppliers.
Competition in the MROP supplies industry may increase in other ways as
well. First, other distributors are consolidating to achieve economies of scale
and increase efficiencies. Second, new competitors, of which we are not
currently aware, may emerge, further increasing competition.
Other aspects of our industry also make it very competitive. For
example, some of our competitors sell the same products we sell at lower prices
than we offer. Moreover, we compete on the basis of our ability to design and
implement Flexible Procurement Solutions that will enable our customers to
achieve productivity improvements and reduce costs. We cannot assure you that we
will be able to compete successfully.
THE LIQUIDITY OF OUR STOCK DEPENDS HEAVILY ON OUR CONTINUED LISTING
WITH THE NEW YORK STOCK EXCHANGE.
In November 2001, we received official notice from the New York Stock
Exchange (NYSE) that we were below its continued listing criterion that requires
maintaining total market capitalization of not less than $15 million. We
submitted a plan to achieve ongoing compliance with the NYSE's continued listing
standards, which was accepted by the NYSE in December 2001 for a probationary
period. As a result, shares of our common stock continue to be listed on the
NYSE subject to our achievement in the future of financial and operating
objectives outlined in our plan. We can not be certain that we will achieve
those objectives and, if we do, there is no assurance that the NYSE will remove
the probationary period or that we will sustain the minimum market
capitalization requirements. The liquidity and the value of our shares could be
adversely impacted if we do not achieve these objectives and the NYSE delists
our stock.
THE COMPANY
Industrial Distribution Group, Inc. was formed in 1997 through a
combination of industrial distribution companies. We are a nationwide supplier
of maintenance, repair, operating, and production (MROP) products and services
to manufacturers and other industrial users. We distribute a full line of MROP
products specializing in cutting tools, abrasives, hand and power tools,
coolants, lubricants, adhesives and machine tools, and we can supply virtually
any other MROP product that a customer may require. We also provide -- as a
targeted and increasing portion of our business -- an array of value-added
services and arrangements, primarily through our Flexible Procurement
Solutions(TM) program, that
6
emphasize and utilize our specialized expertise in product applications and
production process improvements.
While continuing to provide direct sales of MROP products, we have
targeted sales through our Flexible Procurement Solutions, or FPS, program of
services as the principal growth area for our business. We believe that our
focus on and expansion of our FPS services are positioning IDG to address
proactively the increasing demands of customers in our market for ways to reduce
their overall MROP costs and enhance their operating efficiencies. We have the
expertise and ability to analyze a customer's acquisition, possession, and
application processes for MROP products, and then to design and implement a
customized program to streamline these processes and reduce their associated
costs. The specific programs we design may include improving the customers'
production and procurement processes, standardizing the products they use,
reducing the number of suppliers from which they purchase products, or
developing integrated supply arrangements that outsource to us some or all of
their MROP procurement and management functions.
As part of a strategic reorganization to enhance coordination and
improve internal efficiencies, we recently organized our operations into four
regional divisions, plus two specialty business units that have a distinct
industry focus. Each regional division is headed by a President who reports
directly to our Chief Executive Officer. We serve 64 of the top 75 U.S.
industrial markets and have an active presence in Mexico. We have more than
25,000 active customers (customers that purchased at least one item in the last
12 months), which include a diverse group of large and mid-sized national and
international corporations, including Boeing, General Electric, Ford,
Borg-Warner, and Stanley Tools, as well as many local and regional businesses.
We had net sales of $514.4 million for the year ended December 31,
2001. Based on 2001 sales, we believe IDG is among the top 20 MROP providers and
the top ten providers of MROP integrated supply services in the nation.
7
THE OFFERING
This Prospectus relates to the proposed offer and sale by the selling
shareholders, which are listed in the section called "Selling Shareholders," of
the shares that they currently own. We will not receive any proceeds from the
sale by a selling shareholder of any shares. The selling shareholders will
receive all such proceeds.
As of March 28, 2002, there were issued and outstanding a total of
8,769,670 shares of our common stock.
SELLING SHAREHOLDERS
The following table sets forth the names of the selling shareholders,
the number of shares beneficially owned by each selling shareholder as of March
28, 2002, the percentage of our total outstanding common stock owned by each
selling shareholder as of March 28, 2002 (unless such percentage is less than
1%), and the maximum number of shares that may be offered for sale by such
selling shareholder pursuant to this Prospectus. An aggregate of 82,133 shares
of common stock are covered for possible sale by the selling shareholders using
this Prospectus. These shares were issued to the selling shareholders pursuant
to a stock purchase agreement that was entered into in connection with our
acquisition of L.D. Supply, Inc. on June 5, 1998. We will not receive any
proceeds from any sale of the shares. Except as set forth in the footnotes to
the table below, no selling shareholder has had any position, office, or other
material relationship with us or any of our predecessors or affiliates within
the past three years.
BENEFICIAL OWNERSHIP AS OF MARCH 28, 2002
TOTAL NUMBER OF
SHARES BENEFICIALLY TOTAL NUMBER OF SHARES
OWNED(1) PERCENTAGE(2) OFFERED FOR RESALE(1)
------------------- ------------- ----------------------
John D. Hamilton(3) .......... 95,081 1.08% 20,533
Errol A. Luginbill(3) ........ 110,224 1.26% 25,667
Ronald L. Phillips ........... 47,459 * 10,266
David J. Schreiner(3) ........ 140,993 1.61% 25,667
--------------------------
* Less than 1%
(1) Some of the shares held by the selling shareholders have been
registered pursuant to a previous registration statement. Therefore,
only the specified shares are being registered hereunder and may be
offered and resold by the selling shareholder pursuant to this
Prospectus. There is no assurance, however, that any of the selling
shareholders will sell any or all of such shares.
(2) Each selling shareholder's percentage was calculated by dividing the
total number of shares outstanding as of March 28, 2002 (8,769,670) by
each selling shareholder's number of beneficially owned shares.
(3) In connection with the acquisition transaction in which we issued the
shares to the selling shareholder, the selling shareholder entered into
an employment agreement with a subsidiary of ours pursuant to which he
provided certain services to the subsidiary three years from the
closing date of the acquisition. Under each such employment agreement,
the selling shareholder was paid an annual salary, was eligible for an
annual bonus (subject to certain performance criteria), and was
eligible for our benefits of the type generally provided to our
similarly situated employees for comparable services. The selling
shareholder is still employed by us, but we no longer have formal
employment agreements with him in effect.
The selling shareholders may offer and sell all or a portion of the
shares from time to time, but are under no obligation to offer or sell any of
the shares. Because the selling shareholder may sell all, none, or any part of
the shares from time to time, no estimate can be given as to the number of
shares that will be beneficially owned by the selling shareholder upon
termination of any offering by them, or as to the percentage of our total
outstanding common stock that the selling shareholder will beneficially own
after termination of any offering.
8
This Prospectus also covers possible sales by certain presently unknown
persons who may become the record or beneficial owners of some of the shares as
a result of certain types of private transactions, including but not limited to,
gifts, private sales, and transfers pursuant to a foreclosure or similar
proceeding by a lender or other creditor to whom shares may be pledged as
collateral to secure an obligation of a named selling shareholder. Each such
potential transferee of a named selling shareholder is hereby deemed to be a
selling shareholder for purposes of selling shares using this Prospectus. To the
extent required by applicable law, information (including the name and number of
shares owned and proposed to be sold) about such transferees, if there shall be
any, will be set forth in an appropriate supplement to this Prospectus.
PLAN OF DISTRIBUTION
The shares may be offered and sold by or for the account of the selling
shareholders (or their pledgees, donees, or transferees), from time to time as
market conditions permit, on the NYSE, any other exchange on which the shares
may be listed, over the counter, or otherwise, at prices and on terms then
prevailing or in negotiated transactions. The shares may be sold by one or more
of the following methods, without limitation:
- a block trade in which a broker or dealer so engaged will
attempt to sell the shares as agent, but may position and
resell a portion of the block as principal to facilitate the
transaction;
- purchases by a broker or dealer (including a specialist or
market maker) as principal and resale by such broker or dealer
for its account pursuant to this Prospectus;
- an underwritten offering, subject to compliance with
applicable disclosures concerning the identity and
compensation arrangements of each firm acting as underwriter;
- ordinary brokerage transactions and transactions in which the
broker solicits purchasers;
- face-to-face transactions between sellers and purchasers
without a broker-dealer;
- transactions in options, swaps, or other derivatives (whether
exchange listed or otherwise);
- sales in other ways not involving market makers or established
trading markets, including direct sales to institutions or
individual purchasers; and
- any combination of the foregoing, or by any other legally
available means.
In addition, the selling shareholders or their successors in interest
may enter into hedging transactions with broker-dealers who may engage in short
sales of common stock in the course of hedging the positions they assume with
the selling shareholders. The selling shareholders or their successors in
interest may also enter into option or other transactions with broker-dealers
that require the delivery to such broker-dealers of the shares, which shares may
be resold thereafter pursuant to this Prospectus.
In effecting sales, brokers or dealers engaged by the selling
shareholders may arrange for other brokers or dealers to participate. Such
brokers or dealers may receive commissions or discounts from the selling
shareholders and/or the purchasers of the shares for whom such brokers or
dealers act as agents or to whom they sell as principals, or both, in amounts to
be negotiated (which compensation as to a particular broker-dealer might be in
excess of customary commissions). At the time a particular offer of shares is
9
made by one or more of the selling shareholders, a Prospectus supplement, if
required, will be distributed to set forth the aggregate number of shares being
offered and the terms of the offering, including the name or names of any
underwriters, dealers or agents, any discounts, commissions, and other items
constituting compensation from the selling shareholders, and any discounts,
commissions, or concessions allowed or reallocated or paid to dealers, including
the proposed selling price to prospective purchasers. The selling shareholders
and such brokers and dealers and any other participating brokers or dealers may
be deemed to be "underwriters" within the meaning of the Securities Act in
connection with such sales. There can be no assurance, however, that all or any
of the shares will be offered by the selling shareholders. We know of no
existing arrangements between any selling shareholders and any broker, dealer,
finder, underwriter, or agent relating to the sale or distribution of the
shares.
We will not receive any of the proceeds of any sale of shares by the
selling shareholders. We will bear substantially all expenses of the
registration of this offering under the Securities Act including, without
limitation, all registration and filing fees, printing expenses, fees and
disbursements of our counsel and independent public accountants, fees of the
NASD, transfer taxes, fees of transfer agents and registrars, and costs of
insurance, if any. All underwriting discounts, selling commissions, and broker's
fees applicable to the sale of any shares will be borne by the selling
shareholders or by such persons other than us as agreed by and among the selling
shareholders and such other persons.
LEGAL MATTERS
The validity of the securities offered hereby has been passed upon for
us by Kilpatrick Stockton LLP, Atlanta, Georgia.
EXPERTS
The consolidated financial statements and schedule of Industrial
Distribution Group, Inc. appearing in Industrial Distribution Group, Inc.'s
Annual Report (Form 10-K) for the year ended December 31, 2001, have been
audited by Ernst & Young LLP, independent auditors as set forth in their report
thereon included therein and incorporated herein by reference. Such consolidated
financial statements and schedule are incorporated herein by reference in
reliance upon such report given on the authority of such firm as an expert in
accounting and auditing.
The consolidated financial statements and schedules as of December 31,
2000 and for each of the two years in the period ended December 31, 2000 that
are incorporated by reference in this prospectus and elsewhere in the
registration statement from the Annual Report on Form 10-K for the year ended
December 31, 2001 have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their report with respect thereto, and are
incorporated herein by reference in reliance upon the authority of said firm as
experts in giving said reports.
LIMITATIONS ON AUTHORITY AND USE
No dealer, sales person, or other individual has been authorized to
give any information or to make any representations not contained in this
Prospectus. If given or made, such information or representations must not be
relied upon as having been authorized by us. This Prospectus does not constitute
an offer to sell, or a solicitation of an offer to buy, the shares in any
jurisdiction where, or to any person to whom, it is unlawful to make such offer
or solicitation. Neither the delivery of this Prospectus nor any sale made
hereunder shall, under any circumstances, create an implication that there has
not been any change in the facts set forth in this Prospectus or in our affairs
since the date hereof.
10
================================================================================
INDUSTRIAL DISTRIBUTION GROUP, INC.
COMMON STOCK
----------------------------
PROSPECTUS
----------------------------
_________________, 2002
================================================================================
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the expenses in connection with the
issuance and distribution of the shares, other than underwriting discounts and
commissions. All of the amounts shown are estimated, except the SEC registration
fee, and relate to this Form S-3 only.
SEC registration fee $ 20
Legal fees and expenses $ 10,000
Accounting fees and expenses $ 11,200
Miscellaneous expenses $ 2,000
----------
Total $ 23,220
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our Certificate of Incorporation provides that, to the fullest extent
permitted by the Delaware General Corporation Law, our directors are not liable
to us or our stockholders for monetary damages for breach of fiduciary duty as a
director. Under Delaware law, liability of a director may not be limited (1) for
any breach of the director's duty of loyalty to us or our stockholders, (2) for
acts or omissions not in good faith or that involve intentional misconduct or a
knowing violation of law, (3) in respect of certain unlawful dividend payments
or stock redemptions or repurchases, and (4) for any transaction from which the
director derives an improper personal benefit. The effect of the provisions of
our Certificate of Incorporation is to eliminate our rights and the rights of
our stockholders (through stockholders' derivative suits on behalf of us) to
recover monetary damages against a director for breach of the fiduciary duty of
care as a director (including breaches resulting from negligent or grossly
negligent behavior), except in the situations described in clauses (1) through
(4) above. This provision does not limit or eliminate the rights of us or any
stockholder to seek nonmonetary relief such as an injunction or rescission in
the event of a breach of a director's duty of care.
In addition, under our Certificate of Incorporation and Article Eight
of our Bylaws, we indemnify our directors, officers, employees, and agents
against losses incurred by any such person by reason of the fact that such
person was acting in such capacity or was serving at our request as a director,
officer, employee, or agent of another entity. In addition, we have entered into
indemnification agreements with our directors and executive officers.
Our directors and officers are insured against losses arising from any
claim against them as such for wrongful acts or omissions, subject to certain
limitations.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) The following exhibits are filed as part of this Registration
Statement:
II-1
Exhibit Number Description of Exhibit
-------------- ----------------------
4.1 -- Form of Common Stock Certificate of the Company (filed as Exhibit 4.1 of the Company's
Registration Statement on Form S-1 (File No. 333-36233) filed with the Commission, is hereby
incorporated by reference)
5.1 -- Opinion of Kilpatrick Stockton LLP, counsel to the Company
23.1 -- Consent of Kilpatrick Stockton LLP, counsel to the Company
(included in Exhibit 5.1)
23.2 -- Consent of Ernst & Young LLP
23.3 -- Consent of Arthur Andersen LLP
25.1 -- The Powers of Attorney contained on the signature pages of this Registration Statement are
hereby incorporated by reference.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement to include any
material information with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material change to such
information in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(4) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act, each filing of
the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether
II-2
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Atlanta, State of Georgia, on April 3, 2002.
INDUSTRIAL DISTRIBUTION GROUP, INC.
By: /s/ Andrew B. Shearer
-----------------------------------------
Andrew B. Shearer, President and Chief
Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Andrew B. Shearer and Jack P. Healey as
attorneys-in-fact, having the power of substitution, for them in any and all
capacities, to sign any amendments to this Registration Statement on Form S-3
and to file the same, with exhibits thereto, and other documents in connection
therewith, with the Commission, hereby ratifying and confirming all that said
attorneys-in-fact, or their substitute or substitutes, may do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities indicated
on the 3rd day of April 2002.
Signature Title
--------- -----
/s/ Andrew B. Shearer President, Chief Executive
--------------------------------- Officer and Director (Principal Executive
Andrew B. Shearer Officer)
/s/ Jack P. Healey Senior Vice President, Chief
--------------------------------- Financial Officer and Secretary
Jack P. Healey (Principal Financial and
Accounting Officer)
/s/ Richard M. Seigel Chairman of the Board of Directors
---------------------------------
Richard M. Seigel
/s/ David K. Barth Director
---------------------------------
David K. Barth
/s/ William J. Burkland Director
---------------------------------
William J. Burkland
II-3
/s/ William R. Fenoglio Director
---------------------------------
William R. Fenoglio
/s/ William T. Parr Director
---------------------------------
William T. Parr
/s/ George L. Sachs, Jr. Director
---------------------------------
George L. Sachs, Jr.
II-4