-----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, Oxy3uGZdfcyzdLSxHYVoxHL15owpO02YllAVcZuR1pxq7BJjD9NXZamL79C+AmgE 2byPQpLLtN9W7uxF1f13uw== 0000950152-03-005337.txt : 20030513 0000950152-03-005337.hdr.sgml : 20030513 20030513085402 ACCESSION NUMBER: 0000950152-03-005337 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030513 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20030513 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: 03693979 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 l00944ae8vk.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): MAY 13, 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 May 13, 2003 ITEM 9. REGULATION FD DISCLOSURE The following information is being furnished pursuant to Item 12 "Disclosure of Results of Operations and Financial Condition": On May 13, 2003, OfficeMax, Inc. issued a press release reporting results for its fiscal first quarter ended April 26, 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: May 13, 2003 3 EX-99.1 3 l00944aexv99w1.txt EXHIBIT 99.1 Exhibit 99.1 [OfficeMax, Inc. LOGO] Headquarters: 3605 Warrensville Center Rd., Shaker Heights, OH 44122-5203 Mailing Address: P.O. Box 228070, Cleveland, OH 44122-8070 FOR IMMEDIATE RELEASE NEWS RELEASE For inquiries: Steve Baisden Manager, Investor & Public Relations (216) 471-3441 investor@officemax.com OFFICEMAX REPORTS FIRST QUARTER RESULTS WITH DOMESTIC SAME-STORE SALES UP FIVE PERCENT, FOURTH CONSECUTIVE QUARTER OF POSITIVE IMPROVEMENTS; EARNINGS PER SHARE MEET ANALYSTS' CONSENSUS ESTIMATE; OFFICEMAX ENDS QUARTER WITH CASH OF $76 MILLION AND NO SHORT-TERM BORROWINGS, COMPARED TO DEBT OF $118 MILLION LAST YEAR; AND FIRST TWO WEEKS OF SECOND QUARTER OFF TO A STRONG START WITH SAME-STORE SALES CURRENTLY RUNNING ABOVE THE DOUBLE-DIGIT THRESHOLD CLEVELAND - May 13, 2003 - OfficeMax, Inc. (NYSE: OMX) today reported sales for its first quarter ended April 26, 2003 reached $1.226 billion, with domestic same-store sales up five percent. This compares to $1.178 billion for the like quarter a year ago. Net income on a generally accepted accounting principles (GAAP) basis was $9.8 million, or eight cents per diluted share. Last year's first quarter earnings, which benefited from a cash tax refund of $57.5 million, or 46 cents per diluted share, were $63.5 million, or 51 cents per diluted share. Assuming an approximate 40 percent tax rate provision, which is typically how Wall Street analysts measure the Company's performance, earnings per diluted share were five cents in the first quarter, compared to three cents in the first quarter of fiscal 2002 excluding last year's cash tax refund, OfficeMax said. Other than the benefit from the cash tax refund recorded last year, the Company's first quarter 2003 and 2002 results do not reflect a tax provision because of a deferred tax valuation allowance it established in the fourth quarter of fiscal 2001. Consolidated same-store sales, which include both the Company's domestic segment and Mexico international segment, increased four percent. Comparable-store sales for OfficeMax's Mexico segment declined 16 percent primarily as a result of a year-over-year unfavorable currency translation from the weakening of the Mexican Peso against the U.S. Dollar. Michael Feuer, the Company's chairman and chief executive officer, said, "Our first quarter results are further evidence of the Company's ability to drive sales by continuing to increase both same-store customer transactions and the average amount per transaction. The Company believes these first quarter results would have been even better had it not been for the negative effects of the war in Iraq and the accompanying `CNN effect,' manifested by customers spending less time shopping and more time at home viewing war reports and live action on television. The first quarter started strong with February sales in the high single digits but sales began to be affected in mid-March after President Bush issued the country's ultimatum to the Iraqi regime and the war began. The `CNN effect,' combined with consumer uncertainties related to the war, continued through most of April until it became apparent that the country's major combat effort was winding down. "Since the end of April, sales have resumed a more robust upward trend, with second quarter comparable-store sales off to a very strong start, currently running above the double-digit threshold," Mr. Feuer said. "We believe that, in part, these recent sales results are reflective of a positive, post-war sales bounce back." In addition, the Company said it elected to delay the launch of its major television branding advertising campaign originally planned for March because the commercials' upbeat messages would have been inappropriate during the war. OfficeMax did subsequently launch the new campaign in the beginning of the second quarter on a much reduced seasonally adjusted basis. Mr. Feuer noted, "The Company's improved sales in the first quarter take on added significance in light of a negative temporary sales impact in 84 stores that were remodeled as part of our previously announced plan to remodel 250 stores in fiscal 2003. The -more- PAGE 2 OF 7 OFFICEMAX, INC. 1Q03 OPERATING RESULTS MAY 13, 2003 remodels utilize many or all of the features of the Company's newest prototype format, including reduced shelf heights, enhanced navigational signing and increased visibility of the CopyMax print-for-pay area, each of which helps make shopping easier and more efficient for the customer." COMPANY EXPECTS TO END FISCAL 2003 WITH NO DEBT AND CONTINUED SALES AND EARNINGS GAINS OfficeMax said it had cash of $76 million and no seasonal short-term borrowings at the end of the first quarter. This is down from $118 million in short-term borrowings for the comparable period a year ago. Based on current estimates, OfficeMax anticipates ending this fiscal year with virtually no debt for the second consecutive year. In addition, the Company said that improved working capital management, combined with enhancements in its supply chain enabled OfficeMax to improve annualized inventory turns to 3.8 times for the first quarter, compared to 3.6 times in the same quarter last year. OfficeMax said the inventory turn increases occurred while building to the highest merchandise in-stock positions in the Company's history. OfficeMax anticipates further improvement as the year progresses with an inventory turn goal of 4.1 times for fiscal 2003. The Company said that it anticipates year-over-year improvement continuing in the second quarter with same-store sales in the mid-single digit range. OfficeMax noted that, historically, sales in its second quarter comprised of May through July, are the slowest of the year as customers turn more to outdoor activities, including vacations, and spend less time in the office. The Company plans to utilize this slower period to complete the major portion of its store remodel program and seasonal merchandise space reallocations across the chain. Mr. Feuer said, "This will prepare the Company's stores for the high volume third and fourth quarters, which include back-to-school, holiday and the January back-to-business selling seasons." OfficeMax said that typically it generates, by far, the vast majority of its full-year earnings during the second half of the year. The Company also expects to improve expense leverage and register benefits in other key operating metrics during the second quarter, narrowing its traditional seasonal loss to approximately $0.22 per share on a GAAP basis, or approximately $0.13 per share assuming a full-tax rate. This includes an estimated $0.01 to $0.02 per share after-tax impact as a result of OfficeMax's required adoption of the Financial Accounting Standards Board's recent Emerging Issues Task Force (EITF) guideline 02-16 which addresses the accounting for cash consideration received from vendors. Consistent with the transition provisions which the EITF finalized in March 2003, the Company is required to adopt this new guidance prospectively, or on a going-forward basis, rather than through a one-time, cumulative adjustment. OfficeMax said this change in accounting principle from the current GAAP application does not affect the amount of vendor income it will receive and recognize. However, it could affect how the Company is required to account for this income; either as an offset to advertising expense or a reduction of merchandise costs to be recognized on a flow through basis as the goods are sold. This accounting change reduced earnings by approximately $0.01 per diluted share for the Company's first quarter. Mr. Feuer concluded by stating, "OfficeMax is in its best position in recent memory for a very strong second half of the year and sustained growth through fiscal 2004, 2005 and beyond. The Company expects continued benefits from its `Max Means More' marketing campaign, in-store Boundless Selling efforts and new protocols for store execution, combined with further improvements from its massive new infrastructure programs that were developed and implemented during the past 36 months." ABOUT OFFICEMAX OfficeMax serves its customers through nearly 1,000 superstores, e-commerce Web sites and direct-mail catalogs. The Company has operations in the United States, Canada, Puerto Rico, the U.S. Virgin Islands and Mexico. In addition to offering office products, business machines and related items, OfficeMax superstores feature CopyMax and FurnitureMax, store-within-a-store modules devoted exclusively to "print-for-pay" services and office furniture. The Company also reaches customers in the United States with an offering of over 40,000 items through its award winning e-commerce site, OfficeMax.com, its direct-mail catalogs and its outside sales force, all of which are serviced by its three PowerMax distribution facilities, 17 delivery centers and two national customer call and contact centers. # # # Note: Statements in this news release, other than those concerning historical information (including information incorporated by reference), contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Any information in this news release that is not historical information is a forward-looking statement PAGE 3 OF 7 OFFICEMAX, INC. 1Q03 OPERATING RESULTS MAY 13, 2003 which may be identified by the use of language such 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 the statement was made, 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 those described in Exhibit 99.1 of the Company's Annual Report on Form 10-K for the fiscal year ended January 25, 2003, and in other reports and exhibits to those reports filed with the Securities and Exchange Commission. You are strongly urged to review such filings for a more detailed discussion of such risks and uncertainties. The Company's filings with the Securities and Exchange Commission are available at no charge at www.sec.gov and www.freeEDGAR.com, as well as on a number of other web sites including OfficeMax.com, under the investor information section. These risks and uncertainties also include the following: risks associated with general economic conditions (including the effects of the continuing hostilities in Iraq and Afghanistan, 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, wholesale clubs, contract stationers, computer and electronics superstore retailers, Internet merchandisers and mass merchandisers, as well as grocery and drug store chains; and the result of continuing FAS 142 assessments along with other new accounting pronouncements. 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 7 OFFICEMAX, INC. 1Q03 OPERATING RESULTS MAY 13, 2003 OFFICEMAX, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data)
13 WEEKS ENDED ------------------------------- (Unaudited) APR. 26, Apr. 27, 2003 2002 ---------- ---------- Sales................................................ $1,226,460 $1,178,152 Cost of merchandise sold, including buying and occupancy costs......................... 918,005 878,824 ---------- ---------- Gross profit......................................... 308,455 299,328 Store operating and selling expenses................. 264,403 257,213 General and administrative expenses.................. 33,203 34,013 ---------- ---------- Total operating expenses............................. 297,606 291,226 Operating income..................................... 10,849 8,102 Interest expense and other, net...................... 469 1,341 ---------- ---------- Income before income taxes and minority interest............................. 10,380 6,761 Income tax benefit.................................. -- (57,500) Minority interest................................... 597 743 ---------- ---------- Net income.......................................... $ 9,783 $ 63,518 ========== ========== EARNINGS PER COMMON SHARE DATA: Basic........................................... $0.08 $0.52 Diluted......................................... $0.08 $0.51 ========== ========== WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING: Basic........................................... 124,233 123,204 Diluted......................................... 125,382 124,781 ========== ==========
PAGE 5 OF 7 OFFICEMAX, INC. 1Q03 OPERATING RESULTS MAY 13, 2003 OFFICEMAX, INC. BUSINESS SEGMENT DATA (In thousands, except per share data)
13 WEEKS ENDED ------------------------------- (Unaudited) APR. 26, Apr. 27, 2003 2002 ---------- ---------- DOMESTIC BUSINESS SEGMENT Sales........................................... $1,192,124 $1,139,888 Cost of merchandise sold, including buying and occupancy costs.................... 892,134 849,682 ---------- ---------- Gross profit.................................... 299,990 290,206 Operating income................................ 9,975 6,758 Net income...................................... $ 9,161 $ 62,744 ========== ========== INTERNATIONAL BUSINESS SEGMENT Sales........................................... $ 34,336 $ 38,264 Cost of merchandise sold, including buying and occupancy costs.................... 25,871 29,142 ---------- ---------- Gross profit.................................... 8,465 9,122 Operating income................................ 874 1,344 Minority interest............................... 597 743 Net income...................................... $ 622 $ 774 ========== ========== EARNINGS PER SHARE ON A DILUTED BASIS WERE: Domestic Business Segment $ 0.07 $ 0.50 International Business Segment $ 0.01 $ 0.01
PAGE 6 OF 7 OFFICEMAX, INC. 1Q03 OPERATING RESULTS MAY 13, 2003 OFFICEMAX, INC. CONSOLIDATED BALANCE SHEETS (In thousands)
- ------------------------------------------------------------------------------------------------ APR. 26, JAN. 25, 2003 2003 (UNAUDITED) - ------------------------------------------------------------------------------------------------ ASSETS Current assets: Cash and equivalents $ 75,946 $ 137,143 Accounts receivable, net of allowances of $1,240 and $1,073, respectively 115,660 90,339 Merchandise inventories 946,085 927,679 Other current assets 32,310 27,585 Total current assets 1,170,001 1,182,746 Property and Equipment: Buildings and land 36,253 36,133 Leasehold improvements 192,140 183,547 Furniture, fixtures and equipment 649,787 645,466 ---------- ---------- Total property and equipment 878,180 865,146 Less: Accumulated depreciation (589,634) (567,709) ---------- ---------- Property and equipment, net 288,546 297,437 Other assets and deferred charges 14,686 14,763 Goodwill, net of accumulated amortization of $89,757 290,495 290,495 ---------- ---------- $1,763,728 $1,785,441 ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable - trade $ 440,796 $ 437,884 Accrued expenses and other liabilities 206,651 227,022 Accrued salaries and related expenses 43,607 60,190 Taxes other than income taxes 79,775 79,781 Revolving credit facility - - Redeemable preferred shares - Series B 21,750 21,750 Mortgage loan, current portion 130 128 ---------- ---------- Total current liabilities 792,709 826,755 Mortgage loan 1,354 1,390 Other long-term liabilities 159,210 157,587 ---------- ---------- Total liabilities 953,273 985,732 ---------- ---------- Minority interest 19,517 19,264 Shareholders' equity: Common stock 886,366 887,556 Deferred stock compensation (282) (153) Cumulative translation adjustment (2,829) (2,457) Retained deficit (4,082) (13,865) Less: Treasury stock, at cost (88,235) (90,636) ---------- ---------- Total shareholders' equity 790,938 780,445 ---------- ---------- $1,763,728 $1,785,441 ========== ==========
PAGE 7 OF 7 OFFICEMAX, INC. 1Q03 OPERATING RESULTS MAY 13, 2003 OfficeMax's accompanying news release includes non-GAAP earnings per share results for the Company's quarter ended April 26, 2003 and estimated results for the current quarter ending July 26, 2003 and the comparative quarters from fiscal 2002. For the first quarter, these results include the effect of a normalized tax provision excluding a change in the Company's valuation allowance for deferred tax assets. The effect of a normalized tax provision would have a similar impact on the second quarter estimates. This information is included to provide operating results on a more comparable basis to OfficeMax's historical operating results, its industry peers and estimates projected by securities analysts. Below is a reconciliation of the Company's GAAP earnings per share results and estimates to the non-GAAP measures presented in this release:
(in 000's, except EPS data) 13 Weeks Ended 13 Weeks Ended - -------------------------- ------------------------------------------- -------------------------------------------------- (Unaudited) (Unaudited) (Estimated) (Unaudited) Apr. 26, 2003 EPS Apr. 27, 2002 EPS July 26, 2003 EPS July 27, 2002 EPS ------------- ------ ------------- ------ ------------- -------- ------------- ------- GAAP Net income (loss) $ 9,783 $ 0.08 $ 63,518 $ 0.51 $ (27,000) $ (0.22) $ (33,362) $ (0.27) Income tax benefit - - (57,500) (0.46) - - - - Estimated tax (provision) benefit (3,864) (0.03) (2,377) (0.02) 10,800 $ 0.09 13,178 0.11 ------------------- --------------------- --------------------- ------------------------ Non-GAAP net income (loss) $ 5,919 $ 0.05 $ 3,641 $ 0.03 $ (16,200) $ (0.13) $ (20,184) $ (0.16) =================== ===================== ===================== ======================== Weighted Average number of common shares outstanding 125,382 124,781 124,750 123,920
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