NAPERVILLE, Ill., Feb. 23, 2012 /PRNewswire/ --OfficeMax®
Incorporated (NYSE: OMX), a leader in office supplies, technology
and services, today announced the results for its fiscal fourth
quarter and full year ended December 31,
2011. Total sales were $1,835.8
million in the fourth quarter of 2011, an increase of 3.9%
from the fourth quarter of 2010, while total sales for the full
year 2011 decreased 0.4% to $7,121.2
million compared to the full year 2010. For the fourth
quarter of 2011, OfficeMax reported net income available to
OfficeMax common shareholders of $2.9
million, or $0.03 per diluted
share, compared to $12.1 million, or
$0.14 per diluted share, in the
fourth quarter of 2010. For the full year 2011, OfficeMax
reported net income available to OfficeMax common shareholders of
$32.8 million, or $0.38 per diluted share.
Results for the fourth quarter and the full year 2011 included
one additional week of operation in the U.S. compared to fourth
quarter and full year 2010. Total sales in the additional week were
approximately $86 million, which
resulted in incremental operating income of approximately
$8 million and $.06 of earnings per diluted share to both the
fourth quarter and full year 2011, generated primarily in the
Retail Segment.
"We closed out a challenging 2011 by continuing to streamline
our operations and strengthen the core business," said Ravi Saligram, President and CEO of OfficeMax.
"We are making progress in executing the strategic plan we
announced in November."
Consolidated
Results
|
|
(in millions, except per-share
amounts)
|
4Q11
|
4Q10
|
FY11
|
FY10
|
|
Sales
|
$1,835.8
|
$1,766.2
|
$7,121.2
|
$7,150.0
|
|
Sales growth or decrease (from
prior year)
|
3.9%
|
-2.4%
|
-0.4%
|
-0.9%
|
|
Sales growth or decrease (from
prior year) excl. additional week
|
-0.9%
|
|
-1.6%
|
|
|
Gross profit
|
$449.9
|
$446.0
|
$1,809.2
|
$1,849.7
|
|
Gross profit margin
|
24.5%
|
25.3%
|
25.4%
|
25.9%
|
|
Operating income
|
$12.6
|
$28.1
|
$86.5
|
$146.5
|
|
Adjusted operating
income
|
$30.4
|
$30.8
|
$118.2
|
$160.6
|
|
Adjusted operating income
margin
|
1.7%
|
1.7%
|
1.7%
|
2.2%
|
|
Adjusted diluted income per
common share
|
$0.17
|
$0.16
|
$0.61
|
$0.89
|
|
|
|
|
|
|
|
|
Adjusted operating income and adjusted diluted income per share
are non-GAAP financial measures that exclude the effect of certain
charges and income described in the footnotes to the accompanying
financial statements. A reconciliation to the company's GAAP
financial results is included in this press release.
Results for the fourth quarter and full year 2011 and 2010
included certain charges and other items that are not considered
indicative of core operating activities. Fourth quarter 2011
included non-cash pre-tax charges of $11.2
million to impair fixed assets associated with certain of
the company's Retail stores in the U.S. and pre-tax severance
charges of $6.6 million related
primarily to employee restructurings in Canada, the U.S. and Australia. Fourth quarter 2010 included
non-cash pre-tax charges of $11.0
million to impair fixed assets associated with certain of
the company's Retail stores in the U.S.; pre-tax income of
$2.8 million to adjust previously
established reserves for severance and store closures; and pre-tax
income of $5.5 million related to the
adjustment of a reserve associated with our legacy building
materials manufacturing facility near Elma, Washington due to the sale of the
facility's equipment and the termination of the lease.
Excluding the items described above, adjusted operating income
in the fourth quarter of 2011 was $30.4
million, or 1.7% of sales, compared to $30.8 million, or 1.7% of sales, in the fourth
quarter of 2010. Adjusted net income available to OfficeMax
common shareholders in the fourth quarter of 2011 was $14.5 million, or $0.17 per diluted share, compared to $13.8 million, or $0.16 per diluted share, in the fourth quarter of
2010.
Contract Segment
Results
|
|
(in millions)
|
4Q11
|
4Q10
|
FY11
|
FY10
|
|
Sales
|
$934.8
|
$913.4
|
$3,624.1
|
$3,634.2
|
|
Sales growth or decrease (from
prior year)
|
2.3%
|
-3.6%
|
-0.3%
|
-0.6%
|
|
Sales decrease (from prior year)
excl. additional week
|
-1.5%
|
|
-1.2%
|
|
|
Gross profit margin
|
22.2%
|
22.8%
|
22.3%
|
22.8%
|
|
Segment income margin
|
3.0%
|
2.4%
|
2.1%
|
2.6%
|
|
|
|
|
|
|
|
|
Contract segment sales of $934.8
million in the fourth quarter of 2011 increased 2.3% (an
increase of 2.1% on a local currency basis) compared to the prior
year period. This increase reflected a U.S. Contract
operations sales increase of 5.3% and an international Contract
operations sales decrease of 4.0% in U.S. dollars (a decrease of
4.8% on a local currency basis). The U.S. Contract sales
increase primarily reflects the additional week.
Contract segment sales in the additional week were approximately
$35 million. Excluding the additional
week, Contract segment sales in the fourth quarter decreased 1.5%
(a decrease of 1.7% on a local currency basis) compared to the
prior year. Excluding the additional week, U.S. Contract
operations sales decreased 0.2% and international Contract
operations sales decreased 4.8% on a local currency basis. The U.S.
Contract performance reflects weaker sales to existing corporate
accounts partially offset by sales to new customers exceeding lost
sales to former customers.
Contract segment gross profit margin decreased to 22.2% in the
fourth quarter of 2011 from 22.8% in the fourth quarter of 2010 due
to increased delivery expense as a result of higher fuel costs and
lower customer margins. Contract segment operating, selling
and general and administrative expenses as a percentage of sales
decreased to 19.2% in the fourth quarter of 2011 from 20.5% in the
fourth quarter of 2010 primarily due to lower incentive
compensation expense and lower advertising expense. Contract
segment income was $28.0 million, or
3.0% of sales, in the fourth quarter of 2011 compared to
$21.6 million, or 2.4% of sales, in
the fourth quarter of 2010.
Retail Segment
Results
|
|
(in millions)
|
4Q11
|
4Q10
|
FY11
|
FY10
|
|
Sales
|
$901.0
|
$852.8
|
$3,497.1
|
$3,515.8
|
|
Same-store sales growth or
decrease (from prior year)
|
0.2%
|
-0.7%
|
-1.5%
|
-0.8%
|
|
Gross profit margin
|
26.9%
|
27.8%
|
28.6%
|
29.1%
|
|
Segment income margin
|
1.5%
|
2.2%
|
2.2%
|
3.0%
|
|
|
|
|
|
|
|
|
Retail segment sales increased 5.7% to $901.0 million in the fourth quarter of 2011
compared to the fourth quarter of 2010, reflecting a same-store
sales increase of 0.2%. Strong same-store sales in
Mexico were partially offset by a
slight decline in same-store sales in the U.S. Retail segment
sales in the additional week were approximately $52 million.
Retail segment gross profit margin decreased to 26.9% in the
fourth quarter of 2011 from 27.8% in the fourth quarter of 2010
primarily due to increased promotional activity to drive Holiday
season traffic, inventory markdowns, and the impact of higher fuel
costs, partially offset by leveraging of occupancy costs.
Retail segment operating, selling and general and
administrative expenses as a percentage of sales were 25.5% in the
fourth quarter of 2011 compared with 25.6% in the fourth quarter of
2010. Retail segment income was $13.2
million, or 1.4% of sales, in the fourth quarter of 2011
compared to $18.9 million, or 2.2% of
sales, in the fourth quarter of 2010.
OfficeMax ended 2011 with a total of 978 Retail stores,
consisting of 896 Retail stores in the U.S. and 82 Retail stores in
Mexico. For the full year
2011, OfficeMax Retail closed 22 stores in the U.S., and opened 5
stores and closed 2 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 was
$10.8 million in the fourth quarter
of 2011 compared to $9.7 million in
the fourth quarter of 2010.
Balance Sheet and Cash Flow
As of December 31, 2011 OfficeMax
had total debt of $268.2 million,
excluding $1,470.0 million of
non-recourse debt related to timber securitization notes that have
recourse limited to the timber installment notes receivable and
related guarantees.
During the full year 2011, OfficeMax generated $53.7 million of cash provided by operations.
OfficeMax invested $28.1
million for capital expenditures in the fourth quarter of
2011 compared to $43.4 million in the
fourth quarter of 2010. For the full year 2011, OfficeMax
invested $69.6 million for capital
expenditures compared to $93.5
million in 2010.
Outlook
Bruce Besanko, EVP, Chief
Financial Officer and Chief Administrative Officer of OfficeMax,
said, "Sales trends improved in the fourth quarter but remain soft.
Consequently, we will continue to streamline our cost
structure, enabling us to make strategic investments in initiatives
that will jump start growth."
Based on the current environment, OfficeMax anticipates that
total company sales for the first quarter will be flat as compared
to the first quarter of 2011, including the impact of foreign
currency translation. For the full year 2012, OfficeMax
anticipates that total company sales will be flat to slightly
higher than the prior year, including the projected favorable
impact of foreign currency translation in 2012 and excluding the
additional week in 2011. Additionally, OfficeMax anticipates
that for the first quarter and full year adjusted operating income
margin rate will be approximately in line with the 1.7% rate for
the respective prior year periods.
The company's outlook also includes the following assumptions
for the full year 2012:
- Capital expenditures of approximately $75-100 million, primarily related to IT,
ecommerce, and infrastructure investments and upgrades
- Depreciation & amortization of approximately $75-85 million
- Pension expense of approximately $3
million and cash contributions to the frozen pension plans
of approximately $30 million
- Interest expense of approximately $68-73
million and interest income of approximately $41-45 million
- An effective tax rate approximately in line with the 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
35 store closures and 1-2 store openings in the U.S., as well as
8-9 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 25, 2010, under Item 1A "Risk Factors",
and in the company's other filings with the SEC.
Conference Call Information
OfficeMax will host a webcast and conference call with analysts
and investors to review its fourth quarter and full year 2011
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 "Presentations" page located within the
"Investors" section of the OfficeMax website.
About OfficeMax
OfficeMax Incorporated (NYSE: OMX) is a leader in both
business-to-business office products solutions and retail office
products. The OfficeMax mission is simple. We help our
customers do their best work. The company provides office
supplies and paper, in-store print and document services through
OfficeMax ImPress®, technology products and solutions, and
furniture to businesses and individual consumers. OfficeMax
customers are served by approximately 29,000 associates through
direct sales, catalogs, e-commerce and nearly 1,000 stores.
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.
OFFICEMAX
INCORPORATED AND SUBSIDIARIES
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
(unaudited)
|
|
(thousands)
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
December
25,
|
|
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
427,111
|
|
$
462,326
|
|
Receivables,
net
|
|
558,635
|
|
546,885
|
|
Inventories
|
|
821,999
|
|
846,463
|
|
Deferred income taxes and
receivables
|
|
63,382
|
|
99,613
|
|
Other current
assets
|
|
67,847
|
|
58,999
|
|
Total current
assets
|
|
1,938,974
|
|
2,014,286
|
|
|
|
|
|
|
|
Property and
equipment:
|
|
|
|
|
|
Property and
equipment
|
|
1,308,637
|
|
1,346,558
|
|
Accumulated
depreciation
|
|
(943,701)
|
|
(949,269)
|
|
Property and
equipment, net
|
|
364,936
|
|
397,289
|
|
|
|
|
|
|
|
Intangible assets,
net
|
|
81,520
|
|
83,231
|
|
Timber notes
receivable
|
|
899,250
|
|
899,250
|
|
Deferred income taxes
|
|
370,439
|
|
284,529
|
|
Other non-current
assets
|
|
414,156
|
|
400,344
|
|
|
|
|
|
|
|
Total
assets
|
|
$
4,069,275
|
|
$
4,078,929
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Current portion of
debt
|
|
$
38,867
|
|
$
4,560
|
|
Accounts
payable
|
|
654,918
|
|
686,106
|
|
Income taxes
payable
|
|
9,553
|
|
11,055
|
|
Accrued liabilities and
other
|
|
309,963
|
|
342,753
|
|
Total current
liabilities
|
|
1,013,301
|
|
1,044,474
|
|
|
|
|
|
|
|
Long-term debt, less
current portion
|
|
229,323
|
|
270,435
|
|
Non-recourse
debt
|
|
1,470,000
|
|
1,470,000
|
|
|
|
|
|
|
|
Other long-term
obligations:
|
|
|
|
|
|
Compensation and
benefits
|
|
393,293
|
|
250,756
|
|
Other long-term
liabilities
|
|
362,442
|
|
393,253
|
|
Total other
long-term liabilities
|
|
755,735
|
|
644,009
|
|
|
|
|
|
|
|
Noncontrolling interest in joint
venture
|
|
31,923
|
|
49,246
|
|
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
|
Preferred stock
|
|
28,726
|
|
30,901
|
|
Common stock
|
|
215,397
|
|
212,644
|
|
Additional paid-in
capital
|
|
1,015,374
|
|
986,579
|
|
Accumulated
deficit
|
|
(500,843)
|
|
(533,606)
|
|
Accumulated other
comprehensive loss
|
|
(189,661)
|
|
(95,753)
|
|
Total shareholders'
equity
|
|
568,993
|
|
600,765
|
|
|
|
|
|
|
|
Total liabilities and
equity
|
|
$
4,069,275
|
|
$
4,078,929
|
|
|
|
|
|
|
OFFICEMAX
INCORPORATED AND SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
(unaudited)
|
|
(thousands,
except per-share amounts)
|
|
|
|
|
|
|
Quarter
Ended
|
|
|
|
December
31,
|
|
December
25,
|
|
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
Sales
|
|
$
1,835,783
|
|
$
1,766,213
|
|
Cost of goods sold and occupancy
costs
|
|
1,385,839
|
|
1,320,184
|
|
Gross
profit
|
|
449,944
|
|
446,029
|
|
|
|
|
|
|
|
Operating, selling and general
and administrative expenses
|
|
419,576
|
|
415,244
|
|
Asset impairments
(a)
|
|
11,197
|
|
10,979
|
|
Other operating expenses
(income), net (b)
|
|
6,614
|
|
(8,271)
|
|
Total operating
expenses
|
|
437,387
|
|
417,952
|
|
|
|
|
|
|
|
Operating
income
|
|
12,557
|
|
28,077
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
Interest
expense
|
|
(18,415)
|
|
(18,202)
|
|
Interest income
|
|
11,087
|
|
10,786
|
|
Other income (expense),
net
|
|
(20)
|
|
25
|
|
|
|
(7,348)
|
|
(7,391)
|
|
|
|
|
|
|
|
Pre-tax income
|
|
5,209
|
|
20,686
|
|
Income tax expense
|
|
(1,680)
|
|
(7,499)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to
OfficeMax and noncontrolling interest
|
|
3,529
|
|
13,187
|
|
Joint venture results
attributable to noncontrolling interest
|
|
(113)
|
|
(459)
|
|
|
|
|
|
|
|
Net income attributable to
OfficeMax
|
|
3,416
|
|
12,728
|
|
|
|
|
|
|
|
Preferred dividends
|
|
(509)
|
|
(606)
|
|
|
|
|
|
|
|
Net income available to
OfficeMax common shareholders
|
|
$
2,907
|
|
$
12,122
|
|
|
|
|
|
|
|
Basic income per common
share:
|
|
$
0.03
|
|
$
0.14
|
|
|
|
|
|
|
|
Diluted income per common
share:
|
|
$
0.03
|
|
$
0.14
|
|
|
|
|
|
|
|
Weighted Average
Shares
|
|
|
|
|
|
Basic
|
|
86,127
|
|
85,038
|
|
Diluted
|
|
87,333
|
|
86,722
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Fourth quarters of
2011 and 2010 include non-cash charges of $11.2 million and $11.0
million, respectively, to impair fixed assets associated with
certain Retail stores in the U.S. These charges reduced net income
by $6.8 million and $6.7 million, or $0.08 per diluted share, for
both 2011 and 2010.
|
|
(b) Fourth quarter of 2011
includes $6.6 million of severance charges, $6.0 million in
Contract related to restructuring in Australia, Canada and New
Zealand and $0.6 million in Corporate. These items reduced net
income by $4.7 million, or $0.05 per diluted share for the fourth
quarter of 2011. Fourth quarter of 2010 includes income of $2.8
million to adjust previously established reserves for severance and
store closures as well as income of $5.5 million related to the
adjustment of a reserve associated with our legacy building
materials manufacturing facility near Elma, Washington due to the
sale of the facility's equipment and the termination of the lease.
These items increased net income by $5.0 million, or $0.06 per
diluted share for the fourth quarter of 2010.
|
|
|
|
|
|
|
OFFICEMAX
INCORPORATED AND SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
(unaudited)
|
|
(thousands,
except per-share amounts)
|
|
|
|
|
|
|
Year
Ended
|
|
|
|
December
31,
|
|
December
25,
|
|
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
Sales
|
|
$
7,121,167
|
|
$
7,150,007
|
|
Cost of goods sold and occupancy
costs
|
|
5,311,987
|
|
5,300,355
|
|
Gross
profit
|
|
1,809,180
|
|
1,849,652
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
Operating, selling and general
and administrative expenses
|
|
1,690,967
|
|
1,689,130
|
|
Asset impairments
(a)
|
|
11,197
|
|
10,979
|
|
Other operating expenses, net
(b)
|
|
20,530
|
|
3,077
|
|
Total operating
expenses
|
|
1,722,694
|
|
1,703,186
|
|
|
|
|
|
|
|
Operating
income
|
|
86,486
|
|
146,466
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
Interest
expense
|
|
(73,136)
|
|
(73,333)
|
|
Interest income
|
|
44,000
|
|
42,635
|
|
Other income (expense),
net
|
|
287
|
|
(32)
|
|
|
|
(28,849)
|
|
(30,730)
|
|
|
|
|
|
|
|
Pre-tax income
|
|
57,637
|
|
115,736
|
|
Income tax expense
|
|
(19,517)
|
|
(41,872)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to
OfficeMax and noncontrolling interest
|
|
38,120
|
|
73,864
|
|
Joint venture results
attributable to noncontrolling interest
|
|
(3,226)
|
|
(2,709)
|
|
|
|
|
|
|
|
Net income attributable to
OfficeMax
|
|
34,894
|
|
71,155
|
|
|
|
|
|
|
|
Preferred dividends
|
|
(2,123)
|
|
(2,527)
|
|
|
|
|
|
|
|
Net income available to
OfficeMax common shareholders
|
|
$
32,771
|
|
$
68,628
|
|
|
|
|
|
|
|
Basic income per common
share:
|
|
$
0.38
|
|
$
0.81
|
|
|
|
|
|
|
|
Diluted income per common
share:
|
|
$
0.38
|
|
$
0.79
|
|
|
|
|
|
|
|
Weighted Average
Shares
|
|
|
|
|
|
Basic
|
|
85,881
|
|
84,908
|
|
Diluted
|
|
86,997
|
|
86,512
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) 2011 and 2010 include
non-cash charges of $11.2 million and $11.0 million, respectively,
to impair fixed assets associated with certain Retail stores in the
U.S. These charges reduced net income by $6.8 million and $6.7
million, or $0.08 per diluted share, for both 2011 and
2010.
|
|
(b) 2011 and 2010 include
charges recorded in our Retail segment related to store closures in
the U.S. of $5.6 million and $13.1 million, respectively, which
reduced net income available to OfficeMax common shareholders by
$3.4 million and $8.0 million, or $0.04 and $0.09 per diluted share
for 2011 and 2010, respectively. 2011 also includes severance
charges of $14.9 million ($14.0 million in Contract, $0.3 million
in Retail and $0.6 in Corporate) related to reorganizations in
Canada, Australia, New Zealand and the U.S. sales and supply chain
organizations. The effect of these items reduced net income by
$10.3 million or $0.12 per diluted share, for 2011.
2010 also includes income of $0.6 million in our Retail
segment to adjust previously established severance reserves as well
as income of $9.4 million related to the adjustment of a reserve
associated with our legacy building materials manufacturing
facility near Elma, Washington due to the sale of the facility's
equipment and the termination of the lease. The cumulative
effect of these items increased net income by $6.1 million, or
$0.07 per diluted share for 2010.
|
|
|
|
|
|
|
OFFICEMAX
INCORPORATED AND SUBSIDIARIES
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
(unaudited)
|
|
(thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
Ended
|
|
|
December
31,
|
|
December
25,
|
|
|
2011
|
|
2010
|
|
|
|
|
|
|
Cash provided by
operations:
|
|
|
|
|
Net income attributable to
OfficeMax and noncontrolling interest
|
$
38,120
|
|
$
73,864
|
|
Items in net income not using
cash:
|
|
|
|
|
Depreciation and
amortization
|
84,218
|
|
100,936
|
|
Non-cash impairment
charges
|
11,197
|
|
10,979
|
|
Non-cash deferred taxes on
impairment charges
|
(4,355)
|
|
(4,271)
|
|
Other
|
19,778
|
|
241
|
|
Changes in operating assets and
liabilities:
|
|
|
|
|
Receivables
|
(14,674)
|
|
6,678
|
|
Inventory
|
17,269
|
|
(27,606)
|
|
Accounts payable and
accrued liabilities
|
(54,873)
|
|
(51,515)
|
|
Repayments of loans on company
owned insurance policies
|
-
|
|
(44,442)
|
|
Current and deferred
income taxes
|
10,349
|
|
51,169
|
|
Other
|
(53,350)
|
|
(27,896)
|
|
Cash provided by
operations
|
53,679
|
|
88,137
|
|
|
|
|
|
|
Cash used for
investment:
|
|
|
|
|
Expenditures for property and
equipment
|
(69,632)
|
|
(93,511)
|
|
Proceeds from sale of
assets
|
259
|
|
6,173
|
|
Cash used for
investment
|
(69,373)
|
|
(87,338)
|
|
|
|
|
|
|
Cash used for
financing:
|
|
|
|
|
Cash dividends paid
|
(3,286)
|
|
(2,698)
|
|
Changes in debt, net
|
(6,116)
|
|
(22,512)
|
|
Other
|
(8,550)
|
|
(3,259)
|
|
Cash used for
financing
|
(17,952)
|
|
(28,469)
|
|
|
|
|
|
|
Effect of exchange rates on cash
and cash equivalents
|
(1,569)
|
|
3,426
|
|
Decrease in cash and cash
equivalents
|
(35,215)
|
|
(24,244)
|
|
Cash and cash equivalents at
beginning of period
|
462,326
|
|
486,570
|
|
|
|
|
|
|
Cash and cash equivalents at end
of period
|
$
427,111
|
|
$
462,326
|
|
|
|
|
|
OFFICEMAX
INCORPORATED AND SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
NON-GAAP
RECONCILIATION
|
|
(unaudited)
|
|
(millions,
except per-share amounts)
|
|
|
|
|
|
Quarter
Ended
|
|
|
|
December 31,
2011
|
|
December 25,
2010
|
|
|
|
As
|
|
|
|
As
|
|
As
|
|
|
|
As
|
|
|
|
Reported
|
|
Adjustments
|
|
Adjusted
|
|
Reported
|
|
Adjustments
|
|
Adjusted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
$
1,835.8
|
|
$
-
|
|
$
1,835.8
|
|
$
1,766.2
|
|
$
-
|
|
$
1,766.2
|
|
Cost of goods sold and occupancy
costs
|
|
1,385.8
|
|
-
|
|
1,385.8
|
|
1,320.2
|
|
-
|
|
1,320.2
|
|
Gross
profit
|
|
449.9
|
|
-
|
|
449.9
|
|
446.0
|
|
-
|
|
446.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating, selling and general
and administrative expenses
|
|
419.6
|
|
-
|
|
419.6
|
|
415.2
|
|
-
|
|
415.2
|
|
Asset impairments (a)
|
|
11.2
|
|
(11.2)
|
|
-
|
|
11.0
|
|
(11.0)
|
|
-
|
|
Other operating expenses
(income), net (b)
|
|
6.6
|
|
(6.6)
|
|
-
|
|
(8.3)
|
|
8.3
|
|
-
|
|
Total operating
expenses
|
|
437.4
|
|
(17.8)
|
|
419.6
|
|
417.9
|
|
(2.7)
|
|
415.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
12.6
|
|
17.8
|
|
30.4
|
|
28.1
|
|
2.7
|
|
30.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
(18.4)
|
|
-
|
|
(18.4)
|
|
(18.2)
|
|
-
|
|
(18.2)
|
|
Interest income
|
|
11.1
|
|
-
|
|
11.1
|
|
10.8
|
|
-
|
|
10.8
|
|
|
|
(7.3)
|
|
-
|
|
(7.3)
|
|
(7.4)
|
|
-
|
|
(7.4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax income
|
|
5.2
|
|
17.8
|
|
23.0
|
|
20.7
|
|
2.7
|
|
23.4
|
|
Income tax expense
|
|
(1.7)
|
|
(6.3)
|
|
(8.0)
|
|
(7.5)
|
|
(1.0)
|
|
(8.5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to
OfficeMax and noncontrolling interest
|
|
3.5
|
|
11.5
|
|
15.0
|
|
13.2
|
|
1.7
|
|
14.9
|
|
Joint venture results
attributable to noncontrolling interest
|
|
(0.1)
|
|
-
|
|
(0.1)
|
|
(0.5)
|
|
-
|
|
(0.5)
|
|
Net income attributable to
OfficeMax
|
|
3.4
|
|
11.5
|
|
14.9
|
|
12.7
|
|
1.7
|
|
14.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred dividends
|
|
(0.5)
|
|
-
|
|
(0.5)
|
|
(0.6)
|
|
-
|
|
(0.6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available to
OfficeMax common shareholders
|
|
$
2.9
|
|
$
11.5
|
|
$
14.4
|
|
$
12.1
|
|
$
1.7
|
|
$
13.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income per common
share:
|
|
$
0.03
|
|
$
0.13
|
|
$
0.17
|
|
$
0.14
|
|
$
0.02
|
|
$
0.16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted income per common
share:
|
|
$
0.03
|
|
$
0.13
|
|
$
0.17
|
|
$
0.14
|
|
$
0.02
|
|
$
0.16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
86,127
|
|
|
|
86,127
|
|
85,038
|
|
|
|
85,038
|
|
Diluted
|
|
87,333
|
|
|
|
87,333
|
|
86,722
|
|
|
|
86,722
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Totals may not foot /
crossfoot due to rounding
|
|
|
|
(a) Fourth quarters of
2011 and 2010 include non-cash charges of $11.2 million and $11.0
million, respectively, to impair fixed assets associated with
certain Retail stores in the U.S. These charges reduced net income
by $6.8 million and $6.7 million, or $0.08 per diluted share, for
both 2011 and 2010.
|
|
(b) Fourth quarter of 2011
includes $6.6 million of severance charges, $6.0 million in
Contract related to restructuring in Australia, Canada and New
Zealand and $0.6 million in Corporate. These items reduced net
income by $4.7 million, or $0.05 per diluted share for the fourth
quarter of 2011. Fourth quarter of 2010 includes income of
$2.8 million to adjust previously established reserves for
severance and store closures as well as income of $5.5 million
related to the adjustment of a reserve associated with our legacy
building materials manufacturing facility near Elma, Washington due
to the sale of the facility's equipment and the termination of the
lease. These items increased net income by $5.0 million, or $0.06
per diluted share for the fourth quarter of 2010.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OFFICEMAX
INCORPORATED AND SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
NON-GAAP
RECONCILIATION
|
|
(unaudited)
|
|
(millions,
except per-share amounts)
|
|
|
|
|
|
Year
Ended
|
|
|
|
December 31,
2011
|
|
December 25,
2010
|
|
|
|
As
|
|
|
|
As
|
|
As
|
|
|
|
As
|
|
|
|
Reported
|
|
Adjustments
|
|
Adjusted
|
|
Reported
|
|
Adjustments
|
|
Adjusted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
$
7,121.2
|
|
$
-
|
|
$
7,121.2
|
|
$
7,150.0
|
|
$
-
|
|
$
7,150.0
|
|
Cost of goods sold and occupancy
costs
|
|
5,312.0
|
|
-
|
|
5,312.0
|
|
5,300.3
|
|
-
|
|
5,300.3
|
|
Gross
profit
|
|
1,809.2
|
|
-
|
|
1,809.2
|
|
1,849.7
|
|
-
|
|
1,849.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating, selling and general
and administrative expenses
|
|
1,691.0
|
|
-
|
|
1,691.0
|
|
1,689.1
|
|
-
|
|
1,689.1
|
|
Asset impairments
(a)
|
|
11.2
|
|
(11.2)
|
|
-
|
|
11.0
|
|
(11.0)
|
|
-
|
|
Other operating expenses, net
(b)
|
|
20.5
|
|
(20.5)
|
|
-
|
|
3.1
|
|
(3.1)
|
|
-
|
|
Total operating
expenses
|
|
1,722.7
|
|
(31.7)
|
|
1,691.0
|
|
1,703.2
|
|
(14.1)
|
|
1,689.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
86.5
|
|
31.7
|
|
118.2
|
|
146.5
|
|
14.1
|
|
160.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
(73.1)
|
|
-
|
|
(73.1)
|
|
(73.3)
|
|
-
|
|
(73.3)
|
|
Interest income
|
|
44.0
|
|
-
|
|
44.0
|
|
42.6
|
|
-
|
|
42.6
|
|
Other income (expense),
net
|
|
0.3
|
|
-
|
|
0.3
|
|
(0.1)
|
|
-
|
|
(0.1)
|
|
|
|
(28.8)
|
|
-
|
|
(28.8)
|
|
(30.8)
|
|
-
|
|
(30.8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax income
|
|
57.6
|
|
31.7
|
|
89.4
|
|
115.7
|
|
14.1
|
|
129.8
|
|
Income tax expense
|
|
(19.5)
|
|
(11.2)
|
|
(30.7)
|
|
(41.9)
|
|
(5.4)
|
|
(47.3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to
OfficeMax and noncontrolling interest
|
|
38.1
|
|
20.5
|
|
58.7
|
|
73.8
|
|
8.7
|
|
82.5
|
|
Joint venture results
attributable to noncontrolling interest
|
|
(3.2)
|
|
-
|
|
(3.2)
|
|
(2.7)
|
|
|
|
(2.7)
|
|
Net income attributable to
OfficeMax
|
|
34.9
|
|
20.5
|
|
55.4
|
|
71.1
|
|
8.7
|
|
79.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred dividends
|
|
(2.1)
|
|
-
|
|
(2.1)
|
|
(2.5)
|
|
-
|
|
(2.5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available to
OfficeMax common shareholders
|
|
$
32.8
|
|
$
20.5
|
|
$
53.3
|
|
$
68.6
|
|
$
8.7
|
|
$
77.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income per common
share:
|
|
$
0.38
|
|
$
0.24
|
|
$
0.62
|
|
$
0.81
|
|
$
0.10
|
|
$
0.91
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted income per common
share:
|
|
$
0.38
|
|
$
0.24
|
|
$
0.61
|
|
$
0.79
|
|
$
0.10
|
|
$
0.89
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
85,881
|
|
|
|
85,881
|
|
84,908
|
|
|
|
84,908
|
|
Diluted
|
|
86,997
|
|
|
|
86,997
|
|
86,512
|
|
|
|
86,512
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Totals may not foot /
crossfoot due to rounding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) 2011 and 2010 include
non-cash charges of $11.2 million and $11.0 million, respectively,
to impair fixed assets associated with certain Retail stores in the
U.S. These charges reduced net income by $6.8 million and $6.7
million, or $0.08 per diluted share, for 2011 and 2010.
(b) 2011 and 2010 include
charges recorded in our Retail segment related to store closures in
the U.S. of $5.6 million and $13.1 million, respectively, which
reduced net income available to OfficeMax common shareholders by
$3.4 million and $8.0 million, or $0.04 and $0.09 per diluted share
for 2011 and 2010, respectively. 2011 also includes severance
charges of $14.9 million ($14.0 million in Contract, $0.3 million
in Retail and $0.6 in Corporate) related to reorganizations in
Canada, Australia, New Zealand and the U.S. sales and supply chain
organizations. The effect of these items reduced net income by
$10.3 million or $0.12 per diluted share, for 2011. 2010 also
includes income of $0.6 million in our Retail segment to adjust
previously established severance reserves as well as income of $9.4
million related to the adjustment of a reserve associated with our
legacy building materials manufacturing facility near Elma,
Washington due to the sale of the facility's equipment and the
termination of the lease. The cumulative effect of these
items increased net income by $6.1 million, or $0.07 per diluted
share for 2010.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OFFICEMAX
INCORPORATED AND SUBSIDIARIES
|
|
CONTRACT
SEGMENT STATEMENTS OF OPERATIONS
|
|
(unaudited)
|
|
(millions,
except per-share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
|
|
|
December
31,
|
|
|
|
December
25,
|
|
|
|
|
|
|
2011
|
|
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
$
934.8
|
|
|
|
$
913.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
207.1
|
|
22.2%
|
|
208.6
|
|
22.8%
|
|
Operating, selling and general
and administrative expenses
|
|
179.2
|
|
19.2%
|
|
187.0
|
|
20.5%
|
|
Segment income
|
|
|
$
28.0
|
|
3.0%
|
|
$
21.6
|
|
2.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
Ended
|
|
|
|
|
December
31,
|
|
|
|
December
25,
|
|
|
|
|
|
|
2011
|
|
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
$
3,624.1
|
|
|
|
$
3,634.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
809.5
|
|
22.3%
|
|
827.0
|
|
22.8%
|
|
Operating, selling and general
and administrative expenses
|
|
731.8
|
|
20.2%
|
|
732.7
|
|
20.2%
|
|
Segment income
|
|
|
$
77.7
|
|
2.1%
|
|
$
94.3
|
|
2.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Totals may not foot /
crossfoot 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
severances, facility closures and adjustments, and asset
impairments. These certain operating items are reported on the
other operating expenses, net line in the Consolidated Statements
of Operations.
|
|
|
|
|
|
|
|
|
|
|
|
OFFICEMAX
INCORPORATED AND SUBSIDIARIES
|
|
RETAIL
SEGMENT STATEMENTS OF OPERATIONS
|
|
(unaudited)
|
|
(millions,
except per-share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
|
|
|
December
31,
|
|
|
|
December
25,
|
|
|
|
|
|
|
2011
|
|
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
$
901.0
|
|
|
|
$
852.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
242.8
|
|
26.9%
|
|
237.4
|
|
27.8%
|
|
Operating, selling and general
and administrative expenses
|
|
229.6
|
|
25.5%
|
|
218.5
|
|
25.6%
|
|
Segment income
|
|
|
$
13.2
|
|
1.5%
|
|
$
18.9
|
|
2.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
Ended
|
|
|
|
|
December
31,
|
|
|
|
December
25,
|
|
|
|
|
|
|
2011
|
|
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
$
3,497.1
|
|
|
|
$
3,515.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
999.7
|
|
28.6%
|
|
1,022.7
|
|
29.1%
|
|
Operating, selling and general
and administrative expenses
|
|
924.4
|
|
26.4%
|
|
918.8
|
|
26.1%
|
|
Segment income
|
|
|
$
75.3
|
|
2.2%
|
|
$
103.9
|
|
3.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Totals may not foot /
crossfoot 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
severances, facility closures and adjustments, and asset
impairments. These certain operating items are reported on the
other operating expenses, net line in the Consolidated Statements
of Operations.
|
|
|
|
|
|
|
|
|
|
|
|
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 believe our
presentation of financial measures before, or excluding, these
items, which are non-GAAP measures, enhances our investors' overall
understanding of our recurring 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 fourth quarter and full year of 2011 and 2010.
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.
|
|
OfficeMax
Contacts
|
|
Mike Steele
|
Tony Giuliano
|
|
630 864
6826
|
630 864
6800
|
|
|
|
|
|
SOURCE OfficeMax Incorporated