NAPERVILLE, Ill., Nov. 6, 2012 /PRNewswire/ -- OfficeMax®
Incorporated (NYSE:OMX), a leader in office and facility supplies,
technology and services, today announced the results for its fiscal
third quarter ended September 29,
2012.
Consolidated Results
Reported Results
Total sales were $1,744.6 million
in the third quarter of 2012, a decrease of 1.7% from the third
quarter of 2011. For the third quarter of 2012, OfficeMax
reported operating income of $33.5
million, compared to $41.3
million in the third quarter of 2011, and net income
available to OfficeMax common shareholders of $433.0 million, or $4.92 per diluted share, compared to $21.5 million, or $0.25 per diluted share, in the third quarter of
2011.
Adjusted Results
Excluding the impact of changes in foreign exchange rates, the
impact of stores closed and opened, and the shift in weeks
resulting from our fiscal calendar, adjusted total sales in the
third quarter of 2012 decreased 1.2% from the third quarter of
2011. A reconciliation to the company's GAAP sales results is
included in this press release.
Results for the third quarter of 2012 included a non-cash gain
of $670.8 million related to the
extinguishment of non-recourse debt guaranteed by Lehman Brothers
Holdings, Inc. which increased net income by $416.4 million, or $4.73 per diluted share. The third quarter
of 2012 also included $11.4 million
of expenses to impair fixed assets associated with certain stores
and to record a change in the estimated lease obligation of a
previously closed store in the U.S. which reduced net income by
$7.0 million or $0.08 per diluted share. Excluding these
items, adjusted operating income in the third quarter of 2012 was
$44.9 million, or 2.6% of sales, an
increase from $41.3 million, or 2.3%
of sales, in the third quarter of 2011; and adjusted net income
available to OfficeMax common shareholders was $23.6 million, or $0.27 per diluted share, an increase from
$21.5 million, or $0.25 per diluted share, in the third quarter of
2011.
"Our team's focus on strengthening the core business resulted in
stronger operating margins for the quarter, driven primarily by our
U.S. and international Contract businesses. While we
continued to drive sales growth in our U.S. Contract business
including digital initiatives, Retail sales were challenged by
weaker demand for technology products, especially personal
computers," said Ravi Saligram,
President and CEO of OfficeMax. "We are also pleased to have
extinguished the Lehman non-recourse liability from our balance
sheet."
Consolidated (in millions, except per-share
amounts)
|
3Q12
|
3Q11
|
YTD12
|
YTD11
|
Sales
|
$1,744.6
|
$1,774.8
|
$5,219.9
|
$5,285.4
|
Sales
decline (from prior year period)
|
-1.7%
|
-2.1%
|
-1.2%
|
-1.8%
|
Gross
profit
|
$460.4
|
$459.7
|
$1,352.7
|
$1,359.2
|
Gross
profit margin
|
26.4%
|
25.9%
|
25.9%
|
25.7%
|
Reported
operating income
|
$33.5
|
$41.3
|
$74.4
|
$73.9
|
Adjusted
operating income*
|
$44.9
|
$41.3
|
$111.1
|
$87.8
|
Adjusted
operating income margin*
|
2.6%
|
2.3%
|
2.1%
|
1.7%
|
Adjusted
diluted income per common share*
|
$0.27
|
$0.25
|
$0.62
|
$0.45
|
*Adjusted operating income, adjusted operating
income margin, adjusted net income available to OfficeMax common
shareholders, and adjusted diluted income per share are non-GAAP
financial measures that exclude the effect of certain items and
charges described in the footnotes to the accompanying financial
statements. A reconciliation to the company's GAAP financial
results is included in this press release. There were no
adjustments for 3Q11.
|
Contract Segment Results
Contract segment sales decreased 0.3% compared to the prior year
period to $880.9 million in the third
quarter of 2012. This decrease reflected a U.S. Contract
operations sales increase of 3.9% and an international Contract
operations sales decrease of 8.9% in U.S. dollars (a decrease of
7.2% on a local currency basis).
Contract (in millions)
|
3Q12
|
3Q11
|
YTD12
|
YTD11
|
Sales
|
$880.9
|
$883.3
|
$2,720.3
|
$2,689.3
|
Sales
growth or decline (from prior year period)
|
-0.3%
|
0.7%
|
1.2%
|
-1.2%
|
Gross
profit margin
|
22.8%
|
22.7%
|
22.5%
|
22.4%
|
Segment
income
|
$26.5
|
$23.3
|
$79.3
|
$49.7
|
Segment
income margin
|
3.0%
|
2.6%
|
2.9%
|
1.8%
|
Contract segment gross profit margin increased to 22.8% in the
third quarter of 2012 from 22.7% in the third quarter of 2011,
reflecting lower occupancy expense. Contract segment
operating, selling and general and administrative expenses as a
percentage of sales decreased to 19.8% in the third quarter of 2012
from 20.1% in the third quarter of 2011 primarily due to lower
payroll expense from reorganizations and facility closures in 2011,
partially offset by higher incentive compensation expense.
Contract segment income was $26.5
million, or 3.0% of sales, in the third quarter of 2012
compared to $23.3 million, or 2.6% of
sales, in the third quarter of 2011.
Retail Segment Results
Retail segment sales decreased 3.1% to $863.7 million in the third quarter of 2012
compared to the third quarter of 2011, reflecting a same-store
sales decrease on a local currency basis of 2.1% primarily due to
lower technology product category sales. The decrease
reflected a U.S. Retail operations same-store sales decrease of
2.6%, partially offset by a Mexico
retail operations same-store sales increase of 2.2% on a local
currency basis.
Retail (in millions)
|
3Q12
|
3Q11
|
YTD12
|
YTD11
|
Sales
|
$863.7
|
$891.5
|
$2,499.6
|
$2,596.1
|
Same-store sales decline
|
-2.1%
|
-4.8%
|
-1.5%
|
-2.6%
|
Gross
profit margin
|
30.0%
|
29.0%
|
29.6%
|
29.2%
|
Segment
income
|
$27.7
|
$28.5
|
$53.4
|
$62.1
|
Segment
income margin
|
3.2%
|
3.2%
|
2.1%
|
2.4%
|
Retail segment gross profit margin increased to 30.0% in the
third quarter of 2012 from 29.0% in the third quarter of 2011, due
to higher customer margins driven primarily by a sales mix shift
from the relatively lower margin technology category, and lower
occupancy and delivery expenses. Retail segment operating,
selling and general and administrative expenses as a percentage of
sales were 26.8% in the third quarter of 2012 and 25.8% in the
third quarter of 2011. The increase was primarily due to
higher advertising and incentive compensation expense. Retail
segment income was $27.7 million, or
3.2% of sales, in the third quarter of 2012 compared to
$28.5 million, or 3.2% of sales, in
the third quarter of 2011.
OfficeMax ended the third quarter of 2012 with a total of 960
Retail stores, consisting of 872 Retail stores in the U.S. and 88
Retail stores in Mexico. During the third quarter of 2012,
OfficeMax opened three stores in Mexico.
Corporate and Other Segment Results
The Corporate and Other segment includes support staff services
and certain other expenses that are not fully allocated to the
Retail and Contract segments. Corporate and Other segment
operating, selling and general and administrative expenses were
$9.3 million in the third quarter of
2012 compared to $10.5 million in the
third quarter of 2011. The decrease was primarily due to
lower pension expense.
Balance Sheet and Cash Flow
As of September 29, 2012,
OfficeMax had total debt of $236.4
million, excluding $735.0
million of non-recourse debt related to the Wells
Fargo-backed timber notes. In September 2012, $735.0
million of non-recourse debt related to Lehman was
extinguished from the balance sheet.
During the first nine months of 2012, OfficeMax generated
$157.8 million of cash flow from
operations and invested $48.2 million
in capital expenditures.
"We maintained our focus on driving cost efficiencies and gross
margins, even as we continued to invest in key growth initiatives,"
said Bruce Besanko, EVP, Chief
Financial Officer and Chief Administrative Officer of
OfficeMax. "At the same time, we achieved strong free cash
flow and continued our comprehensive analysis of our balance
sheet."
Outlook
Fourth Quarter 2012
Based on the current environment, OfficeMax anticipates that total
company sales for the fourth quarter will be approximately in line
with, to slightly lower than, the fourth quarter of 2011, including
the projected favorable impact of foreign currency translation and
excluding the additional week in the fourth quarter of 2011, which
generated $86 million in sales.
Additionally, OfficeMax anticipates that for the fourth quarter of
2012, adjusted operating income margin will be slightly lower than
the 1.7% for the prior year period due to the benefit of the highly
profitable additional week in the fourth quarter of 2011.
Full Year 2012
For the full year 2012, OfficeMax anticipates that total company
sales will be lower than the prior year, including the projected
unfavorable impact of foreign currency translation and excluding
the additional week in 2011, which generated $86 million in sales. For the full year
2012, OfficeMax anticipates that adjusted operating income margin
will be slightly higher than the 1.7% for the prior year despite
the benefit of the highly profitable additional week in 2011.
The company's full year 2012 outlook also includes the
following:
- Capital expenditures of approximately $70-80 million, primarily related to investments
in IT, ecommerce, infrastructure improvements, and maintenance
- Depreciation & amortization of approximately $70-80 million
- Pension expense of approximately $3
million excluding any non-cash expense associated with a
lump sum payout initiative in the fourth quarter of 2012, and cash
contributions to the frozen pension plans of $21 million
- Interest expense of approximately $70
million and interest income of approximately $44 million
- An adjusted effective tax rate approximately in line with the
adjusted effective tax rate in the full year 2011
- Cash flow from operations exceeding capital expenditures
- A net reduction in Retail store count for the year with up to
45 store closures and one opening in the U.S., as well as 8-10
store openings and 1-2 store closures in Mexico
Forward-Looking Statements
Certain statements made in this press release and other written
or oral statements made by or on behalf of the company constitute
"forward-looking statements" within the meaning of the federal
securities laws, including statements regarding the company's
future performance, as well as management's expectations, beliefs,
intentions, plans, estimates or projections relating to the
future. Management believes that these forward-looking
statements are reasonable. However, the company cannot
guarantee that the macroeconomy will perform within the assumptions
underlying its projected outlook; that its initiatives will be
successfully executed and produce the results underlying its
expectations, due to the uncertainties inherent in new initiatives,
including customer acceptance, unexpected expenses or challenges,
or slower-than-expected results from initiatives; or that its
actual results will be consistent with the forward-looking
statements and you should not place undue reliance on them.
These statements are based on current expectations and speak only
as of the date they are made. The company undertakes no
obligation to publicly update or revise any forward-looking
statement, whether as a result of future events, new information or
otherwise. Important factors regarding the company that may
cause results to differ from expectations are included in the
company's Annual Report on Form 10-K for the year ended
December 31, 2011, under Item 1A
"Risk Factors", and in the company's other filings with the
Securities and Exchange Commission.
Conference Call Information
OfficeMax will host a webcast and conference call with analysts
and investors to review its third quarter 2012 financial results
today at 10:00 a.m. Eastern Time
(9:00 a.m. Central Time). The
live audio webcast of the conference call can be accessed via the
Internet by visiting the OfficeMax website at
investor.officemax.com. The webcast and a podcast will be
archived and available online for one year following the call and
will be posted on the "Quarterly Earnings" page located within the
"Investors" section of the OfficeMax website.
About OfficeMax
OfficeMax Incorporated (NYSE: OMX) is a leader in integrating
products, solutions and services for the workplace, whether for
business or at home. The OfficeMax mission is simple: We
provide workplace innovation that enables our customers to work
better. The company provides office supplies and paper, print
and document services, technology products and solutions, and
furniture to businesses and consumers. OfficeMax consumers
and business customers are served by approximately 29,000
associates through OfficeMax.com; OfficeMaxSolutions.com and
Reliable.com; more than 900 stores in the U.S. and Mexico; and direct sales and catalogs.
OfficeMax has been named one of the 2012 World's Most Ethical
Companies, and is the only company in the office supply industry to
receive Ethics Inside® Certification by the Ethisphere
Institute. To find the nearest OfficeMax, call
1-877-OFFICEMAX. For more information, visit
www.officemax.com.
All trademarks, service marks and trade names of OfficeMax
Incorporated used herein are trademarks or registered trademarks of
OfficeMax Incorporated. Any other product or company names
mentioned herein are the trademarks of their respective
owners.
Investor Contact
|
Media
Contact
|
Mike
Steele
|
Julie
Treon
|
630 864
6826
|
630 864
6155
|
OFFICEMAX
INCORPORATED AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(unaudited)
|
(thousands)
|
|
|
|
|
|
|
|
September 29,
|
|
December 31,
|
|
|
2012
|
|
2011
|
|
|
|
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash equivalents
|
|
$
506,022
|
|
$
427,111
|
Receivables, net
|
|
547,652
|
|
558,635
|
Inventories
|
|
762,078
|
|
821,999
|
Deferred income taxes and receivables
|
|
63,679
|
|
63,382
|
Other current assets
|
|
71,377
|
|
67,847
|
Total current
assets
|
|
1,950,808
|
|
1,938,974
|
|
|
|
|
|
Property and equipment:
|
|
|
|
|
Property and equipment
|
|
1,321,391
|
|
1,308,637
|
Accumulated depreciation
|
|
(978,543)
|
|
(943,701)
|
Property and equipment,
net
|
|
342,848
|
|
364,936
|
|
|
|
|
|
Intangible
assets, net
|
|
81,285
|
|
81,520
|
Timber
notes receivable
|
|
817,500
|
|
899,250
|
Deferred
income taxes
|
|
111,689
|
|
370,439
|
Other
non-current assets
|
|
428,061
|
|
414,156
|
|
|
|
|
|
Total assets
|
|
$
3,732,191
|
|
$
4,069,275
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Current portion of debt
|
|
$
9,900
|
|
$
38,867
|
Accounts payable
|
|
615,232
|
|
654,918
|
Income taxes payable
|
|
31,700
|
|
9,553
|
Accrued liabilities and other
|
|
347,252
|
|
309,963
|
Total current
liabilities
|
|
1,004,084
|
|
1,013,301
|
|
|
|
|
|
Long-term debt, less current portion
|
|
226,488
|
|
229,323
|
Non-recourse debt
|
|
735,000
|
|
1,470,000
|
|
|
|
|
|
Other
long-term obligations:
|
|
|
|
|
Compensation and benefits
|
|
363,244
|
|
393,293
|
Other long-term liabilities
|
|
322,537
|
|
362,442
|
Total other long-term
liabilities
|
|
685,781
|
|
755,735
|
|
|
|
|
|
Noncontrolling interest in joint
venture
|
|
36,410
|
|
31,923
|
|
|
|
|
|
Shareholders' equity:
|
|
|
|
|
Preferred stock
|
|
28,277
|
|
28,726
|
Common stock
|
|
216,790
|
|
215,397
|
Additional paid-in capital
|
|
1,021,100
|
|
1,015,374
|
Accumulated deficit
|
|
(54,552)
|
|
(500,843)
|
Accumulated other comprehensive loss
|
|
(167,187)
|
|
(189,661)
|
Total
shareholders' equity
|
|
1,044,428
|
|
568,993
|
|
|
|
|
|
Total
liabilities and equity
|
|
$
3,732,191
|
|
$
4,069,275
|
OFFICEMAX
INCORPORATED AND SUBSIDIARIES
|
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(unaudited)
|
(thousands, except per-share amounts)
|
|
|
|
|
Quarter Ended
|
|
|
September 29,
|
|
September 24,
|
|
|
2012
|
|
2011
|
|
|
|
|
|
Sales
|
|
$
1,744,579
|
|
$
1,774,767
|
Cost of
goods sold and occupancy costs
|
|
1,284,177
|
|
1,315,106
|
Gross profit
|
|
460,402
|
|
459,661
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
Operating,
selling and general and administrative expenses
|
|
415,511
|
|
418,365
|
Asset
impairments and other operating expenses (a)
|
|
11,432
|
|
-
|
Total
operating expenses
|
|
426,943
|
|
418,365
|
|
|
|
|
|
Operating income
|
|
33,459
|
|
41,296
|
|
|
|
|
|
Other
income (expense):
|
|
|
|
|
Interest expense
|
|
(16,873)
|
|
(17,827)
|
Interest income
|
|
11,003
|
|
10,984
|
Gain on extinguishment of non-recourse debt (b)
|
|
670,766
|
|
-
|
Other income, net
|
|
224
|
|
173
|
|
|
665,120
|
|
(6,670)
|
|
|
|
|
|
Pre-tax
income
|
|
698,579
|
|
34,626
|
Income tax
expense
|
|
(263,331)
|
|
(11,167)
|
|
|
|
|
|
|
|
|
|
|
Net
income attributable to OfficeMax and noncontrolling
interest
|
|
435,248
|
|
23,459
|
Joint
venture results attributable to noncontrolling interest
|
|
(1,740)
|
|
(1,426)
|
|
|
|
|
|
Net
income attributable to OfficeMax
|
|
433,508
|
|
22,033
|
|
|
|
|
|
Preferred
dividends
|
|
(522)
|
|
(515)
|
|
|
|
|
|
Net
income available to OfficeMax common shareholders
|
|
$
432,986
|
|
$
21,518
|
|
|
|
|
|
Basic
income per common share:
|
|
$
5.00
|
|
$
0.25
|
|
|
|
|
|
Diluted
income per common share:
|
|
$
4.92
|
|
$
0.25
|
|
|
|
|
|
Weighted Average Shares
|
|
|
|
|
Basic
|
|
86,661
|
|
86,033
|
Diluted
|
|
88,104
|
|
87,087
|
(a)
The third quarter of 2012 included a charge to impair fixed assets
associated with certain Retail stores in the U.S. and a charge
related to a change in the estimated lease obligation of a closed
domestic store. These items totaled $11.4 million and reduced
income available to OfficeMax common shareholders by $7.0 million
or $0.08 per diluted share.
|
(b)
The third quarter of 2012 included a non-cash gain of $670.8
million related to an agreement that legally extinguished the
Company's non-recourse debt guaranteed by Lehman Brothers Holdings,
Inc. The gain increased net income available to OfficeMax
common shareholders by $416.4 or $4.73 per diluted
share.
|
OFFICEMAX
INCORPORATED AND SUBSIDIARIES
|
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(unaudited)
|
(thousands, except per-share amounts)
|
|
|
|
|
Nine
Months Ended
|
|
|
September 29,
|
|
September 24,
|
|
|
2012
|
|
2011
|
|
|
|
|
|
Sales
|
|
$
5,219,890
|
|
$
5,285,384
|
Cost of
goods sold and occupancy costs
|
|
3,867,198
|
|
3,926,148
|
Gross profit
|
|
1,352,692
|
|
1,359,236
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
Operating,
selling and general and administrative expenses
|
|
1,241,598
|
|
1,271,391
|
Asset
impairments and other operating expenses (a)
|
|
36,698
|
|
13,916
|
Total
operating expenses
|
|
1,278,296
|
|
1,285,307
|
|
|
|
|
|
Operating income
|
|
74,396
|
|
73,929
|
|
|
|
|
|
Other
income (expense):
|
|
|
|
|
Interest expense
|
|
(52,690)
|
|
(54,721)
|
Interest income
|
|
32,820
|
|
32,913
|
Gain on extinguishment of non-recourse debt (b)
|
|
670,766
|
|
-
|
Other income, net
|
|
449
|
|
307
|
|
|
651,345
|
|
(21,501)
|
|
|
|
|
|
Pre-tax
income
|
|
725,741
|
|
52,428
|
Income tax
expense
|
|
(272,251)
|
|
(17,837)
|
|
|
|
|
|
|
|
|
|
|
Net
income attributable to OfficeMax and noncontrolling
interest
|
|
453,490
|
|
34,591
|
Joint
venture results attributable to noncontrolling interest
|
|
(3,345)
|
|
(3,113)
|
|
|
|
|
|
Net
income attributable to OfficeMax
|
|
450,145
|
|
31,478
|
|
|
|
|
|
Preferred
dividends
|
|
(1,581)
|
|
(1,614)
|
|
|
|
|
|
Net
income available to OfficeMax common shareholders
|
|
$
448,564
|
|
$
29,864
|
|
|
|
|
|
Basic
income per common share:
|
|
$
5.18
|
|
$
0.35
|
|
|
|
|
|
Diluted
income per common share:
|
|
$
5.12
|
|
$
0.34
|
|
|
|
|
|
Weighted Average Shares
|
|
|
|
|
Basic
|
|
86,526
|
|
85,793
|
Diluted
|
|
87,979
|
|
86,878
|
(a) The
first nine months of 2012 included a non-cash charge of $9.8
million to impair fixed assets associated with certain stores in
the U.S. and charges of $26.9 million related to store closures in
the U.S. These items reduced net income by $22.4 million, or $0.26
per diluted share for the first nine months of 2012. The first nine
months of 2011 included charges related to store closures in the
U.S. of $5.6 million which reduced net income available to
OfficeMax common shareholders by $3.4 million or $0.04 per diluted
share. The first nine months of 2011 also included severance
charges of $8.3 million ($8.0 million in Contract and $0.3 million
in Retail) related to reorganizations in Canada, Australia and the
U.S. sales and supply chain organizations. The effect of this item
reduced net income by $5.6 million, or $0.07 per diluted share for
the first nine months of 2011.
|
(b) The
first nine months of 2012 included a non-cash gain of $670.8
million related to an agreement that legally extinguished the
Company's non-recourse debt guaranteed by Lehman Brothers Holdings,
Inc. The gain increased net income available to OfficeMax common
shareholders by $416.4 or $4.73 per diluted share.
|
OFFICEMAX
INCORPORATED AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(unaudited)
|
(thousands)
|
|
|
|
|
|
Nine
Months Ended
|
|
September 29,
|
|
September 24,
|
|
2012
|
|
2011
|
|
|
|
|
Cash
provided by operations:
|
|
|
|
Net income
attributable to OfficeMax and noncontrolling interest
|
$
453,490
|
|
$
34,591
|
Items in
net income not using cash:
|
|
|
|
Depreciation and amortization
|
55,704
|
|
63,759
|
Non-cash impairment charges
|
9,791
|
|
-
|
Non-cash gain on extinguishment of non-recourse debt
|
(670,766)
|
|
-
|
Non-cash deferred taxes on extinguishment of non-recourse
debt
|
239,990
|
|
-
|
Other
|
29,456
|
|
13,467
|
Changes in
operating assets and liabilities:
|
|
|
|
Receivables
|
28,360
|
|
(14,707)
|
Inventory
|
69,038
|
|
77,249
|
Accounts payable and accrued liabilities
|
(22,625)
|
|
(76,980)
|
Current and deferred income taxes
|
23,157
|
|
5,749
|
Other
|
(57,765)
|
|
(24,385)
|
Cash provided by
operations
|
157,830
|
|
78,743
|
|
|
|
|
Cash
used for investment:
|
|
|
|
Expenditures for property and equipment
|
(48,173)
|
|
(41,549)
|
Proceeds
from sale of assets
|
1,667
|
|
169
|
Cash used for
investment
|
(46,506)
|
|
(41,380)
|
|
|
|
|
Cash
used for financing:
|
|
|
|
Cash
dividends paid
|
(2,792)
|
|
(2,224)
|
Changes in
debt, net
|
(31,909)
|
|
(5,134)
|
Other
|
(1,005)
|
|
(3,922)
|
Cash used for financing
|
(35,706)
|
|
(11,280)
|
|
|
|
|
Effect
of exchange rates on cash and cash equivalents
|
3,293
|
|
(2,983)
|
Increase in cash and cash
equivalents
|
78,911
|
|
23,100
|
Cash
and cash equivalents at beginning of period
|
427,111
|
|
462,326
|
|
|
|
|
Cash
and cash equivalents at end of period
|
$
506,022
|
|
$
485,426
|
OFFICEMAX
INCORPORATED AND SUBSIDIARIES
|
CONSOLIDATED STATEMENTS OF
OPERATIONS
|
NON-GAAP
RECONCILIATION - OPERATING RESULTS
|
(unaudited)
|
(millions,
except per-share amounts)
|
|
|
|
Quarter Ended
|
|
|
September
29, 2012
|
|
September
24, 2011
|
|
|
As
|
|
|
|
As
|
|
As
|
|
|
|
As
|
|
|
Reported
|
|
Adjustments
|
|
Adjusted
|
|
Reported
|
|
Adjustments
|
|
Adjusted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
$
1,744.6
|
|
$
-
|
|
$
1,744.6
|
|
$
1,774.8
|
|
$
-
|
|
$
1,774.8
|
Cost of
goods sold and occupancy costs
|
|
1,284.2
|
|
-
|
|
1,284.2
|
|
1,315.1
|
|
-
|
|
1,315.1
|
Gross profit
|
|
460.4
|
|
-
|
|
460.4
|
|
459.7
|
|
-
|
|
459.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating,
selling and general and administrative expenses
|
|
415.5
|
|
-
|
|
415.5
|
|
418.4
|
|
-
|
|
418.4
|
Asset
impairments and other operating expenses (a)
|
|
11.4
|
|
(11.4)
|
|
-
|
|
-
|
|
-
|
|
-
|
Total
operating expenses
|
|
426.9
|
|
(11.4)
|
|
415.5
|
|
418.4
|
|
-
|
|
418.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
33.5
|
|
11.4
|
|
44.9
|
|
41.3
|
|
-
|
|
41.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
(16.9)
|
|
-
|
|
(16.9)
|
|
(17.8)
|
|
-
|
|
(17.8)
|
Interest income
|
|
11.0
|
|
-
|
|
11.0
|
|
11.0
|
|
-
|
|
11.0
|
Gain on extinguishment of non-recourse debt (b)
|
|
670.8
|
|
(670.8)
|
|
-
|
|
-
|
|
-
|
|
-
|
Other income, net
|
|
0.2
|
|
-
|
|
0.2
|
|
0.1
|
|
-
|
|
0.1
|
|
|
665.1
|
|
(670.8)
|
|
(5.7)
|
|
(6.7)
|
|
-
|
|
(6.7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax
income
|
|
698.6
|
|
(659.3)
|
|
39.2
|
|
34.6
|
|
-
|
|
34.6
|
Income tax
expense
|
|
(263.3)
|
|
249.9
|
|
(13.4)
|
|
(11.1)
|
|
-
|
|
(11.1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income attributable to OfficeMax and noncontrolling
interest
|
435.2
|
|
(409.4)
|
|
25.8
|
|
23.5
|
|
-
|
|
23.5
|
Joint
venture results attributable to noncontrolling interest
|
|
(1.7)
|
|
-
|
|
(1.7)
|
|
(1.5)
|
|
-
|
|
(1.5)
|
Net
income attributable to OfficeMax
|
|
433.5
|
|
(409.4)
|
|
24.1
|
|
22.0
|
|
-
|
|
22.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred
dividends
|
|
(0.5)
|
|
-
|
|
(0.5)
|
|
(0.5)
|
|
-
|
|
(0.5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income available to OfficeMax common shareholders
|
|
$
433.0
|
|
$
(409.4)
|
|
$
23.6
|
|
$
21.5
|
|
$
-
|
|
$
21.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
income per common share:
|
|
$
5.00
|
|
$
(4.72)
|
|
$
0.27
|
|
$
0.25
|
|
$
-
|
|
$
0.25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
income per common share:
|
|
$
4.92
|
|
$
(4.65)
|
|
$
0.27
|
|
$
0.25
|
|
$
-
|
|
$
0.25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
86,661
|
|
|
|
86,661
|
|
86,033
|
|
|
|
86,033
|
Diluted
|
|
88,104
|
|
|
|
88,104
|
|
87,087
|
|
|
|
87,087
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note:
Totals may not sum down or across due to rounding.
|
(a) The
third quarter of 2012 included a charge to impair fixed assets
associated with certain Retail stores in the U.S. and a charge
related to a change in the estimated lease obligation of a closed
domestic store. These items totaled $11.4 million and reduced
income available to OfficeMax common shareholders by $7.0 million
or $0.08 per diluted share.
|
(b) The
third quarter of 2012 included a non-cash gain of $670.8 million
related to an agreement that legally extinguished the Company's
non-recourse debt guaranteed by Lehman Brothers Holdings, Inc. The
gain increased net income available to OfficeMax common
shareholders by $416.4 or $4.73 per diluted share.
|
OFFICEMAX
INCORPORATED AND SUBSIDIARIES
|
CONSOLIDATED STATEMENTS OF OPERATIONS
|
NON-GAAP
RECONCILIATION - OPERATING RESULTS
|
(unaudited)
|
(millions,
except per-share amounts)
|
|
|
|
Nine
Months Ended
|
|
|
September
29, 2012
|
|
September
24, 2011
|
|
|
As
|
|
|
|
As
|
|
As
|
|
|
|
As
|
|
|
Reported
|
|
Adjustments
|
|
Adjusted
|
|
Reported
|
|
Adjustments
|
|
Adjusted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
$5,219.9
|
|
$
-
|
|
$5,219.9
|
|
$5,285.4
|
|
$
-
|
|
$5,285.4
|
Cost of
goods sold and occupancy costs
|
|
3,867.2
|
|
-
|
|
3,867.2
|
|
3,926.2
|
|
-
|
|
3,926.2
|
Gross
profit
|
|
1,352.7
|
|
-
|
|
1,352.7
|
|
1,359.2
|
|
-
|
|
1,359.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating,
selling and general and administrative expenses
|
|
1,241.6
|
|
-
|
|
1,241.6
|
|
1,271.4
|
|
-
|
|
1,271.4
|
Asset
impairments and other operating expenses (a)
|
|
36.7
|
|
(36.7)
|
|
-
|
|
13.9
|
|
(13.9)
|
|
-
|
Total
operating expenses
|
|
1,278.3
|
|
(36.7)
|
|
1,241.6
|
|
1,285.3
|
|
(13.9)
|
|
1,271.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
74.4
|
|
36.7
|
|
111.1
|
|
73.9
|
|
13.9
|
|
87.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
(52.7)
|
|
-
|
|
(52.7)
|
|
(54.7)
|
|
-
|
|
(54.7)
|
Interest
income
|
|
32.8
|
|
-
|
|
32.8
|
|
32.9
|
|
-
|
|
32.9
|
Gain on
extinguishment of non-recourse debt (b)
|
|
670.8
|
|
(670.8)
|
|
-
|
|
-
|
|
-
|
|
-
|
Other
income, net
|
|
0.4
|
|
-
|
|
0.4
|
|
0.3
|
|
-
|
|
0.3
|
|
|
651.3
|
|
(670.8)
|
|
(19.5)
|
|
(21.5)
|
|
-
|
|
(21.5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax
income
|
|
725.7
|
|
(634.1)
|
|
91.7
|
|
52.4
|
|
13.9
|
|
66.3
|
Income tax
expense
|
|
(272.3)
|
|
240.1
|
|
(32.2)
|
|
(17.8)
|
|
(4.9)
|
|
(22.7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income attributable to OfficeMax and noncontrolling
interest
|
453.5
|
|
(394.0)
|
|
59.5
|
|
34.6
|
|
9.0
|
|
43.6
|
Joint
venture results attributable to noncontrolling interest
|
|
(3.3)
|
|
-
|
|
(3.3)
|
|
(3.1)
|
|
-
|
|
(3.1)
|
Net
income attributable to OfficeMax
|
|
450.1
|
|
(394.0)
|
|
56.2
|
|
31.5
|
|
9.0
|
|
40.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred
dividends
|
|
(1.6)
|
|
-
|
|
(1.6)
|
|
(1.6)
|
|
-
|
|
(1.6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income available to OfficeMax common shareholders
|
|
$
448.6
|
|
$
(394.0)
|
|
$
54.6
|
|
$
29.9
|
|
$
9.0
|
|
$
38.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
income per common share:
|
|
$
5.18
|
|
$
(4.55)
|
|
$
0.63
|
|
$
0.35
|
|
$
0.10
|
|
$
0.45
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
income per common share:
|
|
$
5.12
|
|
$
(4.48)
|
|
$
0.62
|
|
$
0.34
|
|
$
0.11
|
|
$
0.45
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
86,526
|
|
|
|
86,526
|
|
85,793
|
|
|
|
85,793
|
Diluted
|
|
87,979
|
|
|
|
87,979
|
|
86,878
|
|
|
|
86,878
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Totals may not sum
down or across due to rounding.
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) The
first nine months of 2012 included a non-cash charge of $9.8
million to impair fixed assets associated with certain stores in
the U.S. and charges of $26.9 million related to store closures in
the U.S. These items reduced net income by $22.4 million, or $0.26
per diluted share for the first nine months of 2012. The first nine
months of 2011 included charges related to store closures in the
U.S. of $5.6 million which reduced net income available to
OfficeMax common shareholders by $3.4 million or $0.04 per diluted
share. The first nine months of 2011 also included severance
charges of $8.3 million ($8.0 million in Contract and $0.3 million
in Retail) related to reorganizations in Canada, Australia and the
U.S. sales and supply chain organizations. The effect of this item
reduced net income by $5.6 million, or $0.07 per diluted share for
the first nine months of 2011.
|
(b) The
first nine months of 2012 included a non-cash gain of $670.8
million related to an agreement that legally extinguished the
Company's non-recourse debt guaranteed by Lehman Brothers Holdings,
Inc. The gain increased net income available to OfficeMax common
shareholders by $416.4 or $4.73 per diluted share.
|
OFFICEMAX
INCORPORATED AND SUBSIDIARIES
|
CONTRACT
SEGMENT STATEMENTS OF OPERATIONS
|
(unaudited)
|
(millions,
except per-share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
|
|
September 29,
|
|
|
|
September 24,
|
|
|
|
|
|
2012
|
|
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
$
880.9
|
|
|
|
$
883.3
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
200.9
|
|
22.8%
|
|
200.9
|
|
22.7%
|
Operating,
selling and general and administrative expenses
|
|
174.4
|
|
19.8%
|
|
177.6
|
|
20.1%
|
Segment
income
|
|
|
$
26.5
|
|
3.0%
|
|
$
23.3
|
|
2.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine
Months Ended
|
|
|
|
September 29,
|
|
|
|
September 24,
|
|
|
|
|
|
2012
|
|
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
$
2,720.3
|
|
|
|
$
2,689.3
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
612.3
|
|
22.5%
|
|
602.3
|
|
22.4%
|
Operating,
selling and general and administrative expenses
|
|
533.0
|
|
19.6%
|
|
552.6
|
|
20.6%
|
Segment
income
|
|
|
$
79.3
|
|
2.9%
|
|
$
49.7
|
|
1.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note:
Totals may not sum down due to rounding.
|
Note:
Management evaluates the segments' performances using segment
income which is based on operating income after eliminating the
effect of certain operating items that are not indicative of our
core operations such as severance, facility closures and
adjustments, and asset impairments. These certain operating items
are reported on the other operating expenses line in the
Consolidated Statements of Operations.
|
OFFICEMAX
INCORPORATED AND SUBSIDIARIES
|
RETAIL
SEGMENT STATEMENTS OF OPERATIONS
|
(unaudited)
|
(millions,
except per-share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
|
|
September 29,
|
|
|
|
September 24,
|
|
|
|
|
|
2012
|
|
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
$
863.7
|
|
|
|
$
891.5
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
259.5
|
|
30.0%
|
|
258.8
|
|
29.0%
|
Operating,
selling and general and administrative expenses
|
|
231.8
|
|
26.8%
|
|
230.3
|
|
25.8%
|
Segment
income
|
|
|
$
27.7
|
|
3.2%
|
|
$
28.5
|
|
3.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine
Months Ended
|
|
|
|
September 29,
|
|
|
|
September 24,
|
|
|
|
|
|
2012
|
|
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
$
2,499.6
|
|
|
|
$
2,596.1
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
740.4
|
|
29.6%
|
|
756.9
|
|
29.2%
|
Operating,
selling and general and administrative expenses
|
|
687.0
|
|
27.5%
|
|
694.8
|
|
26.8%
|
Segment
income
|
|
|
$
53.4
|
|
2.1%
|
|
$
62.1
|
|
2.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note:
Totals may not sum down due to rounding.
|
Note: Management evaluates the segments'
performances using segment income which is based on operating
income after eliminating the effect of certain operating items that
are not indicative of our core operations such as severance,
facility closures and adjustments, and asset impairments. These
certain operating items are reported on the other operating
expenses line in the Consolidated Statements of
Operations.
|
OFFICEMAX
INCORPORATED AND SUBSIDIARIES
|
CONSOLIDATED STATEMENTS OF
OPERATIONS
|
NON-GAAP
RECONCILIATION - SALES
|
(unaudited)
|
(millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
|
|
September 29,
|
|
September 24,
|
|
Percent
|
|
|
|
2012
|
|
2011
|
|
Change
|
|
Sales as
reported
|
|
$
1,744.6
|
|
$
1,774.8
|
|
-1.7%
|
|
Less:
Unfavorable impact of change in foreign exchange rates
(a)
|
|
$
(14.0)
|
|
$
-
|
|
|
|
Sales
adjusted for impact of change in foreign exchange rates
|
|
$
1,758.5
|
|
$
1,774.8
|
|
-0.9%
|
|
Adjustment
for same store and shift in weeks (b)
|
|
$
(13.2)
|
|
$
(7.3)
|
|
|
|
Sales
adjusted for impact of change in foreign exchange rates and
adjustment for same stores and shift in weeks
|
|
$
1,745.4
|
|
$
1,767.4
|
|
-1.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine
Months Ended
|
|
|
|
September 29,
|
|
September 24,
|
|
Percent
|
|
|
|
2012
|
|
2011
|
|
Change
|
|
Sales as
reported
|
|
$
5,219.9
|
|
$
5,285.4
|
|
-1.2%
|
|
Less:
Unfavorable impact of change in foreign exchange rates
(a)
|
|
$
(28.7)
|
|
$
-
|
|
|
|
Sales
adjusted for impact of change in foreign exchange rates
|
|
$
5,248.6
|
|
$
5,285.4
|
|
-0.7%
|
|
Adjustment
for same store and shift in weeks (b)
|
|
$
(34.6)
|
|
$
(58.9)
|
|
|
|
Sales
adjusted for impact of change in foreign exchange rates and
adjustment for same stores and shift in weeks
|
|
$
5,213.9
|
|
$
5,226.5
|
|
-0.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note:
Totals may not sum down due to rounding.
|
(a)
Computed by assuming constant exchange rates between
periods.
|
|
|
|
|
|
(b) Impact
from stores closed and opened during 2012 and 2011 and the shift in
calendar weeks resulting from reporting fifty-three weeks in fiscal
2011.
|
Reconciliation of non-GAAP Measures to GAAP Measures
In addition to assessing our operating performance as reported
under U.S. generally accepted accounting principles (GAAP), we
evaluate our results of operations before non-operating legacy
items and operating items that are not indicative of our core
operating activities such as severance, facility closure and
adjustments, and asset impairments. We also assess the change
in sales excluding the impact of changes in foreign exchange rates,
the impact of stores closed and opened, and the shift in weeks
resulting from our fiscal calendar. We believe our
presentation of financial measures before, or excluding, these
items, which are non-GAAP measures, enhances our investors' overall
understanding of our operational performance and provides useful
information to both investors and management to evaluate the
ongoing operations and prospects of OfficeMax by providing better
comparisons. Whenever we use non-GAAP financial measures, we
designate these measures as "adjusted" and provide a reconciliation
of the non-GAAP financial measures to the most closely applicable
GAAP financial measure. Investors are encouraged to review
the related GAAP financial measures and the reconciliation of these
non-GAAP financial measures to their most directly comparable GAAP
financial measure. In the preceding tables, we reconcile our
non-GAAP financial measures to our reported GAAP financial results
for the third quarter and first nine months of 2012 and 2011.
Although we believe the non-GAAP financial measures enhance an
investor's understanding of our performance, our management does
not itself, nor does it suggest that investors should, consider
such non-GAAP financial measures in isolation from, or as a
substitute for, financial information prepared in accordance with
GAAP. The non-GAAP financial measures we use may not be
consistent with the presentation of similar companies in our
industry. However, we present such non-GAAP financial
measures in reporting our financial results to provide investors
with an additional tool to evaluate our operating results in a
manner that focuses on what we believe to be our ongoing business
operations.
SOURCE OfficeMax Incorporated