-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WNWXPNy6N1DPpdCIW1rduXTrmUG7LP2GtM4tpC1k757REhwQ0Wsi/Bv+S7+2zdfk jzhn7IbniY8v5Po7VyfL6Q== 0000950152-03-002563.txt : 20030304 0000950152-03-002563.hdr.sgml : 20030304 20030304145847 ACCESSION NUMBER: 0000950152-03-002563 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030304 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: FILED AS OF DATE: 20030304 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OFFICEMAX INC /OH/ CENTRAL INDEX KEY: 0000929428 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-MISCELLANEOUS SHOPPING GOODS STORES [5940] IRS NUMBER: 341573735 STATE OF INCORPORATION: OH FISCAL YEAR END: 0125 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-13380 FILM NUMBER: 03591284 BUSINESS ADDRESS: STREET 1: 3605 WARRENSVILLE CENTER RD CITY: SHAKER HEIGHTS STATE: OH ZIP: 44122 BUSINESS PHONE: 2169216900 MAIL ADDRESS: STREET 1: 3605 WARRENSVILLE CENTER RD CITY: SHAKE HEIGHTS STATE: OH ZIP: 44122 8-K 1 l99088ae8vk.txt OFFICEMAX, INC. 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ---------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported): MARCH 4, 2003 OFFICEMAX, INC. (Exact Name of Registrant as Specified in Charter) OHIO 1-13380 34-1573735 (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 3605 WARRENSVILLE CENTER ROAD SHAKER HEIGHTS, OHIO 44122 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (216) 471-6900 Former name or former address, if changed since last report: N/A ---------------- ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibits 99.1 Press release of OfficeMax, Inc. issued on March 4, 2003 ITEM 9. REGULATION FD DISCLOSURE On March 4, 2003, OfficeMax, Inc. issued a press release reporting results for its fiscal year ended January 25, 2003. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated herein by reference. 2 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized. OFFICEMAX, INC. By: /s/ Ross H. Pollock ---------------------------------- Name: Ross H. Pollock Title: Secretary Date: March 4, 2003 3 EXHIBIT INDEX ------------- EXHIBIT DESCRIPTION - ------- ----------- 99.1 Press Release of OfficeMax, Inc. issued on March 4, 2003 EX-99.1 3 l99088aexv99w1.txt EXHIBIT 99.1 Exhibit 99.1 Headquarters: 3605 Warrensville Center Rd., Shaker Heights, OH 44122-5203 Mailing Address: P.O. Box 228070, Cleveland, OH 44122-8070 [OFFICEMAX LOGO] NEWS RELEASE FOR IMMEDIATE RELEASE For inquiries: Steve Baisden Manager, Investor & Public Relations (216) 471-3441 investor@officemax.com OFFICEMAX REPORTS SIGNIFICANTLY IMPROVED FOURTH QUARTER AND FULL YEAR 2002 RESULTS DOMESTIC FOURTH QUARTER SAME-STORE SALES INCREASED 8.5 PERCENT, CONSOLIDATED INCLUDING MEXICO UP 7.7 PERCENT; FOURTH QUARTER GAAP EARNINGS OF 22 CENTS PER SHARE, PRO-FORMA EPS OF 13 CENTS; GROSS MARGIN INCREASED 3.7 PERCENTAGE POINTS IN FOURTH QUARTER TO 24.91 PERCENT OFFICEMAX ENDS FISCAL 2002 WITH NO DEBT NET OF $137 MILLION IN CASH FIRST MONTH OF THE NEW FISCAL YEAR OFF TO STRONG START WITH SAME-STORE SALES TRACKING IN THE HIGH SINGLE-DIGIT RANGE, DESPITE NEGATIVE EFFECTS OF MAJOR SNOW STORMS CLEVELAND - March 4, 2003 - OfficeMax, Inc. (NYSE: OMX) today reported significantly improved results for its fourth quarter and full fiscal year ended Jan. 25, 2003. Same-store sales increased 8.5 percent in the fourth quarter for the Company's U.S. operations and including Mexico were up 7.7 percent. This represents the Company's fifth consecutive quarter of year-over-year comparable-store sales improvement. Overall sales for the fourth quarter increased five percent to $1.336 billion compared to $1.271 billion for the like period in fiscal 2001, which included sales for 29 stores closed on the first day of fiscal 2002. For the full 52-week period in fiscal 2002, consolidated comparable-store sales increased approximately four percent. Overall, full-year sales were up three percent to $4.776 billion compared to $4.626 billion for the previous fiscal year including the sales for the 29 closed stores. Michael Feuer, the Company's chairman and chief executive officer, said, "Throughout the fourth quarter, during a very difficult economic environment, OfficeMax achieved major gains in the number of same-store customer transactions and increases in the average amount per transaction, both of which fueled our industry-leading same-store sales results. We attribute these substantial gains to the long-term programs that we completed over the past three years which have positioned us for a new phase of accelerated growth. These improvements included the development and installation of state-of-the-art supply chain management and computer systems, store execution programs including an emphasis on associate training, more effective merchandise presentations, and focused marketing tactics that are allowing us to gain market share with the core business customer while maintaining gross margin dollars." FOURTH QUARTER NET INCOME IMPROVED WITH $270 MILLION SWING FROM SAME QUARTER IN THE PREVIOUS YEAR On a Generally Accepted Accounting Principles (GAAP) basis, in the fourth quarter, OfficeMax reported a $270 million positive swing in net income to $27.1 million, or 22 cents per diluted share, from a net loss of $243.1 million, or $2.06 per share, in the like period of the previous year. The loss in the fourth quarter of fiscal 2001 included net pre-tax charges of $76.8 million related to store closings, fixed asset impairments and the write-off of certain non-productive assets, along with $3.7 million for the liquidation of inventory from the closed stores. Additionally, in this same quarter of fiscal 2001, the Company recorded a non-cash charge of $170.6 million to establish a valuation allowance for its net deferred tax assets and net operating loss carryforwards. Assuming an approximate 40 percent tax rate, which is consistent with OfficeMax's historical tax rate and how most Wall Street analysts typically evaluate performance, in the fourth quarter, OfficeMax earned net income of $16.4 million, or 13 cents per diluted share, one cent ahead of analysts' consensus expectation. This compares to a pro-forma loss of $22.2 million, or 19 PAGE 2 of 6 OFFICEMAX, INC. FISCAL 2002 FOURTH QUARTER RELEASE MARCH 4, 2003 cents per share, in the same period a year ago when assuming the same tax rate and excluding the fiscal 2001 fourth quarter pre-tax charges and tax allowance. FULL YEAR NET INCOME JUMPED $383 MILLION For the full year, net income on a GAAP basis jumped approximately $383 million to $73.7 million, or 59 cents per diluted share, from a loss in fiscal year 2001 of $309.5 million, or $2.72 per share. On a pro-forma basis assuming a 40 percent tax rate and excluding a $57.5 million tax benefit, OfficeMax earned net income of approximately $9.8 million, or eight cents per diluted share, for fiscal 2002. This compares to a net loss of $88.9 million, or 79 cents per share, in fiscal 2001, excluding the fiscal 2001 fourth quarter pre-tax charges and tax allowance as well as assuming the same tax rate. GROSS MARGIN INCREASED 371 BASIS POINTS IN FOURTH QUARTER OfficeMax said gross margin in the fourth quarter increased 371 basis points year-over-year to 24.91 percent of sales from 21.20 percent in the same quarter of the previous year. Excluding the $3.7 million inventory liquidation charge in the fiscal 2001 fourth quarter, gross margin would have improved 342 basis points year-over-year. Mr. Feuer said, "During the Company's January back-to-business selling season, a period in which its small business customers typically restock office supplies for the new year, OfficeMax experienced an anticipated merchandise sales mix shift from lower margin holiday business gift and technology products to more profitable core office supplies and furniture including OfficeMax private label products. This seasonal merchandise sales transition, along with increased expense leverage, propelled OfficeMax to achieve its highest fourth quarter gross margin in four years." INTERNATIONAL SEGMENT SALES RESULTS Primarily as a result of unfavorable currency translation from the weakening of the Mexican Peso against the U.S. Dollar, the OfficeMax International Business Segment, comprised of the Company's 30-store Mexico operations, reflected a comparable-store sales decrease of approximately 17 percent. Fourth quarter sales in local currencies for this segment increased slightly, while sales in U.S. Dollars reached $36.5 million, down from $40.2 million in the same quarter for the prior year. For the full year, sales increased nine percent to $153.1 million from $140.6 million in the previous fiscal year. COMPANY REPORTS BEST FINANCIAL POSITION IN SIX YEARS OfficeMax ended fiscal 2002 in its best financial position in six years with $137 million in cash and no short-term borrowings. This compares to $220 million in borrowings two years earlier when the Company was in the process of rebuilding its supply chain and distribution infrastructure. Mr. Feuer said, "We plan to capitalize on our dramatically improved financial position, accelerated sales trend and infrastructure advancements to continue to gain market share at the retail level. Beginning in the fourth quarter, all new OfficeMax superstore openings incorporated the Company's latest 20,000 square-foot prototype, reduced from its previous 23,500 square-foot layout. This year, OfficeMax plans to open a relatively small number of new superstores but will remodel over 250 existing outlets. The Company is also developing a new store initiative, internally dubbed `Project Phoenix,' focusing on a 4,000 to 7,000 square-foot format that will be an offshoot of its current small footprint PDQ store, which includes its high-margin CopyMax print-for-pay operation." The Phoenix concept will be tested in the second half of this fiscal year in new environments and venues. In addition, Mr. Feuer said OfficeMax's public e-commerce Internet site will continue to further integrate with its retail business, along with more cohesive marketing and management of its outside sales force which focuses on medium-sized companies. OfficeMax will also launch a new eCommerce site in Canada utilizing its OfficeMax.com platform to provide Canadian customers access to thousands of office products that will be fulfilled within Canada. "In 2003, we will continue to invest in programs to improve execution at every level of our business, including a new point-of-sale system at our stores," Mr. Feuer said. "This new system includes a multitude of features including Customer Relationship Management tools that will provide us insight into our customers' buying habits which will be used for real-time purchase recommendations as well as for targeted marketing efforts. The system also features Line Buster technology which will allow store associates to check out customers paying with a credit card anywhere in the store, further enhancing and speeding up the OfficeMax shopping experience. We expect the initial suite of features from this state-of-the-art system to be rolled out to all U.S. stores by the end of the third quarter of this fiscal year." PAGE 3 of 6 OFFICEMAX, INC. FISCAL 2002 FOURTH QUARTER RELEASE MARCH 4, 2003 NEW YEAR OFF TO A STRONG START WITH SAME-STORE SALES TRACKING IN THE HIGH SINGLE-DIGIT RANGE OfficeMax said its domestic comparable-store sales in February, the first month and the most important period of the first quarter, tracked in the high single-digit range. "This is particularly gratifying despite the effects of unusually harsh winter storms in the Northeast, mid-Atlantic and Midwest, which the Company estimates negatively impacted comparable-store sales by approximately one percent," Mr. Feuer said. "We believe our impressive gains are the continuing result of our three-pronged strategy of consistently providing high merchandise in-stock positions, strong execution at the store level, and tactical marketing that is driving store traffic while positively maintaining gross margin." FIRST QUARTER AND FISCAL 2003 GUIDANCE Mr. Feuer said, "We are very pleased that current domestic same-store sales trends are exceeding our expectations. Based on this, the Company's guidance for this new fiscal year includes anticipated significant top and bottom line gains as we invest in infrastructure and programs that enhance all aspects of our business. However, the Company is very cognizant of the numerous unknowns that could adversely affect its business including tenuous economic conditions, perceived or actual effects of terrorist activity, and the possibility of a war in Iraq." In the first quarter, OfficeMax expects comparable-store sales above the mid-single digit range with GAAP earnings of seven to eight cents per diluted share which, assuming an estimated 40 percent tax rate, would be four to five cents on a pro-forma basis. For the full fiscal year, OfficeMax is conservatively planning overall sales at somewhat above $5 billion, with comparable-store sales in the mid-single digit range. On a GAAP basis, this would produce earnings of 47 to 50 cents per diluted share, or 28 to 30 cents using a tax rate of 40 percent, which would be more than three times fiscal year 2002 pro-forma results." ABOUT OFFICEMAX OfficeMax operates nearly 1,000 superstores in 49 states, Puerto Rico, the U.S. Virgin Islands and Mexico. In addition to offering office products, business machines and related items, OfficeMax superstores also feature CopyMax and FurnitureMax, store within-a-store modules devoted exclusively to "print-for-pay" services and office furniture. Additionally, the Company reaches customers with an offering of over 40,000 items through its award-winning eCommerce site, OfficeMax.com, its direct-mail catalogs and its outside sales force, all of which are serviced by its three PowerMax distribution facilities, 18 delivery centers and two national call centers. Note: Statements made in this press release, other than those concerning historical information, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, and are made pursuant to the "safe harbor" provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements use such words as "may," "will," "should," "expects," "plans," "anticipates," "estimates," "believes," "thinks," "continues," "indicates," "outlook," "looks," "goals," "initiatives," "projects," or similar expressions. These statements are likely to address the Company's growth strategy, future financial performance (including sales, gross margin and earnings), strategic initiatives, marketing and expansion plans and the impact of operating initiatives. The forward-looking statements, which speak only as of the date of this release, are subject to risks, uncertainties and other factors that could cause actual results to differ materially from those stated, projected or implied in the forward-looking statements. These risks and uncertainties include the following: risks associated with general economic conditions (including effects of the threat or actual occurrence of war, the stock market decline, currency devaluation, additional terrorist attacks and hostilities, slower than anticipated economic recovery and declining employment rate or other changes in our customers' business environments, including an increase in bankruptcy filings); increasing competition that includes office supply superstores, warehouse clubs, contract stationers, electronics stores and mass merchant retailers, as well as grocery and drug store chains; the result of continuing SFAS 142 assessments and other new accounting pronouncements; and other risks and uncertainties described in Exhibit 99.1 of the Company's Annual Report on Form 10-K for the fiscal year ended January 26, 2002, and in other reports and exhibits to reports filed with the Securities and Exchange Commission (these descriptions are incorporated herein by reference). You are strongly urged to review such filings for a more detailed discussion of such risks and uncertainties. The Company's SEC filings are available, at no charge, at www.sec.gov and www.freeEDGAR.com, as well as on a number of other Web sites. The foregoing list of important factors is not exclusive. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. # # # (Financial tables follow) PAGE 4 OF 6 OFFICEMAX, INC. FISCAL 2002 FOURTH QUARTER RELEASE MARCH 4, 2003 OFFICEMAX, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data)
13 WEEKS ENDED 13 Weeks Ended 52 WEEKS ENDED 52 Weeks Ended JAN. 25, 2003 Jan. 26, 2002 JAN. 25, 2003 Jan. 26, 2002 -------------- -------------- -------------- -------------- Sales(1).............................. $1,335,534 $1,271,302 $4,775,563 $4,625,877 Cost of merchandise sold, including buying and occupancy costs......... 1,002,818 998,089 3,578,872 3,536,069 Inventory liquidation................. - 3,680 - 3,680 -------------- -------------- -------------- -------------- Gross profit.......................... 332,716 269,533 1,196,691 1,086,128 Store operating and selling expenses.. 270,288 268,576 1,034,122 1,052,958 General and administrative expenses... 32,722 34,678 134,763 145,680 Pre-opening expenses.................. 20 105 672 2,790 Goodwill amortization................. - 2,464 - 9,855 Store closing and asset impairment.... 712 76,761 2,489 76,761 -------------- -------------- -------------- -------------- Total operating expenses.............. 303,742 382,584 1,172,046 1,288,044 -------------- -------------- -------------- -------------- Operating income (loss)............... 28,974 (113,051) 24,645 (201,916) Interest expense and other, net....... 1,234 1,881 5,980 14,865 -------------- -------------- -------------- -------------- Income (loss) before income taxes and minority interest.................. 27,740 (114,932) 18,665 (216,781) Income tax benefit.................... - (43,080) (57,500) (80,912) Deferred tax assets valuation allowance........................... - 170,616 - 170,616 Joint venture minority interest....... 684 629 2,441 2,973 -------------- -------------- -------------- -------------- Net income (loss)..................... $ 27,056 $ (243,097) $ 73,724 $ (309,458) ============== ============== ============== ============== EARNINGS (LOSS) PER COMMON SHARE: Basic............................... $0.22 $(2.06) $0.60 $(2.72) Diluted............................. $0.22 $(2.06) $0.59 $(2.72) ============== ============== ============== ============== WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING: Basic............................... 124,094 117,741 123,817 114,308 Diluted............................. 125,255 117,741 125,109 114,308 ============== ============== ============== ==============
(1) 2001 sales results include sales from 29 stores closed on the first day of fiscal year 2002. PAGE 5 OF 6 OFFICEMAX, INC. FISCAL 2002 FOURTH QUARTER RELEASE MARCH 4, 2003 OFFICEMAX, INC. BUSINESS SEGMENT DATA (In thousands, except per share data)
13 WEEKS ENDED 52 WEEKS ENDED JAN. 25, Jan. 26, JAN. 25, Jan. 26, 2003 2002 2003 2002 ---------- ---------- ---------- ---------- DOMESTIC BUSINESS SEGMENT Sales(1)....................................... $1,299,045 $1,231,070 $4,622,479 $4,485,293 Cost of merchandise sold, including buying and occupancy costs................... 974,879 964,855 3,461,366 3,429,069 Inventory Liquidation.......................... - 3,680 - 3,680 ---------- ----------- ---------- ---------- Gross profit................................... 324,166 262,535 1,161,113 1,052,544 Operating income (loss)........................ 27,777 (113,969) 20,307 (206,580) Net income (loss).............................. $26,345 ($243,637) $71,185 ($312,089) ========== =========== ========== ========== INTERNATIONAL BUSINESS SEGMENT Sales.......................................... $36,489 $40,232 $153,084 $140,584 Cost of merchandise sold, including buying and occupancy costs................... 27,939 33,234 117,506 107,000 ---------- ----------- ---------- ---------- Gross profit................................... 8,550 6,998 35,578 33,584 Operating income............................... 1,197 918 4,338 4,664 Net income..................................... $711 $540 $2,539 $2,631 ========== =========== ========== ========== EARNINGS (LOSS) PER DILUTED SHARE: Domestic Business Segment................... $0.21 ($2.07) $0.57 ($2.74) International Business Segment.............. $0.01 $0.01 $0.02 $0.02
(1) 2001 sales results include sales from 29 stores closed on the first day of fiscal year 2002. PAGE 6 OF 6 OFFICEMAX, INC. FISCAL 2002 FOURTH QUARTER RELEASE MARCH 4, 2003 OFFICEMAX, INC. CONSOLIDATED BALANCE SHEETS (In thousands)
JAN. 25, JAN. 26, 2003 2002 ---------- ------------ ASSETS Current assets: Cash and equivalents $ 137,143 $ 76,751 Accounts receivable, net of allowances of $1,073 and $974, respectively 90,339 87,511 Merchandise inventories 927,679 884,827 Other current assets 27,585 43,834 ----------- ------------ Total current assets 1,182,746 1,092,923 Property and Equipment: Buildings and land 36,133 35,725 Leasehold improvements 183,547 185,998 Furniture, fixtures and equipment 645,466 616,768 ----------- ------------ Total property and equipment 865,146 838,491 Less: Accumulated depreciation (567,709) (479,204) ----------- ------------ Property and equipment, net 297,437 359,287 Other assets and deferred charges 14,763 12,302 Goodwill, net of accumulated amortization of $89,757 290,495 290,495 ----------- ------------ $1,785,441 $1,755,007 =========== ============ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable - trade $ 437,884 $ 495,505 Accrued expenses and other liabilities 227,022 196,297 Accrued salaries and related expenses 60,190 50,705 Taxes other than income taxes 79,781 68,509 Revolving credit facility - 20,000 Redeemable preferred shares - Series B 21,750 21,750 Mortgage loan, current portion 128 122 ----------- ------------ Total current liabilities 826,755 852,888 Mortgage loan 1,390 1,530 Other long-term liabilities 157,587 175,456 ----------- ------------ Total liabilities 985,732 1,029,874 ----------- ------------ Minority interest 19,264 19,184 Shareholders' equity: Common stock 887,556 895,466 Deferred stock compensation (153) (29) Cumulative translation adjustment (2,457) 616 Retained deficit (13,865) (87,589) Less: Treasury stock, at cost (90,636) (102,515) ----------- ------------ Total shareholders' equity 780,445 705,949 ----------- ------------ $1,785,441 $1,755,007 =========== ============
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