BOCA RATON, Fla.--(BUSINESS WIRE)--Apr. 26, 2016--
Office Depot, Inc. (“Office Depot”, or the “Company”) (NASDAQ: ODP), a
leading global provider of office products, services, and solutions,
which entered into a definitive agreement on February 4, 2015 to be
acquired by Staples, Inc. (“Staples”), today announced results for the
first quarter ended March 26, 2016.
“The protracted regulatory review of the pending Staples acquisition
continues to have a substantial disruptive impact on our business,” said
Roland Smith, chairman and chief executive officer for Office Depot.
“Our North American Business Solutions Division and International
Division are more impacted by this disruption and accordingly, both
failed to meet our sales and profit expectations this quarter. In spite
of the uncertainty surrounding the acquisition, our associates around
the world continue to demonstrate focus, drive and dedication as we
finalize this process.”
Smith added, “Regarding the pending Staples acquisition, we expect U.S.
federal district court Judge Sullivan to render his decision by May 10,
2016. We continue to believe that this transaction provides substantial
benefits to our shareholders and all our customers.”
Consolidated Results
Reported (GAAP) Results
Total reported sales for the first quarter of 2016 were $3.5 billion
compared to $3.9 billion in the first quarter of 2015, a decrease of 9%.
In the first quarter of 2016, Office Depot reported operating income of
$71 million and net income was $46 million, or $0.08 per share. In the
first quarter of 2015, the reported operating income was $88 million and
net income was $45 million, or $0.08 per share.
Adjusted (non-GAAP) Results (1)
Adjusted operating income(1) for the first quarter of 2016
was $115 million compared to an adjusted operating income of $135
million in the first quarter of 2015. Adjusted net income(1)
for the first quarter of 2016 was $57 million, or $0.10 per share,
compared to adjusted net income of $71 million, or $0.13 per share, in
the first quarter of 2015.
-
Adjusted operating income for the first quarter of 2016 excludes
special charges and credits totaling $44 million, which were comprised
of $39 million in expenses related to the Office Depot/OfficeMax
merger and the pending acquisition by Staples, and $5 million in
restructuring activities.
-
Adjusted net income for the first quarter of 2016 excludes the
after-tax impact of these items.
|
Consolidated (in millions, except per share amounts)
|
|
1Q16
|
|
1Q15
|
|
Selected GAAP measures:
|
|
|
|
|
|
Sales
|
|
$3,544
|
|
$3,877
|
|
Sales decline from prior year period
|
|
(9)%
|
|
|
|
Gross profit
|
|
$856
|
|
$937
|
|
Gross profit margin
|
|
24.2%
|
|
24.2%
|
|
Operating income
|
|
$71
|
|
$88
|
|
Net income
|
|
$46
|
|
$45
|
|
Net earnings per share
|
|
$0.08
|
|
$0.08
|
|
Selected Non-GAAP measures:(1)
|
|
|
|
|
|
Adjusted sales decline from prior year period excluding
foreign
currency translation and impact from U.S. store
closures
|
|
(4)%
|
|
|
|
Adjusted gross profit
|
|
$856
|
|
$937
|
|
Adjusted gross profit margin
|
|
24.2%
|
|
24.2%
|
|
Adjusted operating income
|
|
$115
|
|
$135
|
|
Adjusted operating income margin
|
|
3.2%
|
|
3.5%
|
|
Adjusted net income
|
|
$57
|
|
$71
|
|
Adjusted net earnings per share
|
|
$0.10
|
|
$0.13
|
(1) Adjusted results include non-GAAP measures and exclude
charges or credits not indicative of our core operations and the
after-tax impact of these items, which may include but not be limited to
merger integration and acquisition-related expenses, restructuring
charges, and asset impairments. Additionally, the adjusted rate of sales
decline for the consolidated company excludes the impact from foreign
currency translation and U.S. retail store closures. Reconciliations
from GAAP to non-GAAP financial measures can be found in this release as
well as on our Investor Relations website at investor.officedepot.com.
Divisional Results
North American Retail Division
Retail Division sales were $1.5 billion in the first quarter of 2016
compared to $1.7 billion in the prior year period. First quarter sales
declined 9%, primarily due to the impact of planned store closures in
the fiscal twelve months through March 26, 2016. Same-store sales in the
quarter declined 1% primarily due to lower transactions. Same-store
sales benefited from the positive impact of transferred sales from
closed stores and increased operational effectiveness.
|
North American Retail (in millions)
|
|
1Q16
|
|
1Q15
|
|
Sales
|
|
$1,506
|
|
$1,653
|
|
Same-store sales change from prior year
|
|
(1)%
|
|
|
|
Division operating income
|
|
$102
|
|
$86
|
|
Division operating income margin
|
|
6.8%
|
|
5.2%
|
Retail Division operating income was $102 million, or 6.8% of sales, in
the first quarter of 2016 compared to $86 million, or 5.2% of sales, in
the first quarter of 2015. The improvement from the prior year quarter
resulted largely from a higher gross margin rate and a decrease in
occupancy costs driven by store closures, as well as a decrease in
selling, general and administrative expenses including payroll and
advertising.
Office Depot ended the first quarter of 2016 with a total of 1,555
retail stores in the North American Retail Division. During the quarter,
the Company closed nine stores.
North American Business Solutions Division
Business Solutions Division sales were $1.4 billion in the first quarter
of 2016, a decline of 7% compared to the prior year period. Sales also
declined 7% in constant currency, and were lower in both the contract
and direct channels. The contract channel sales decline was driven by
customer attrition and lower customer additions, primarily due to the
substantial business disruption related to the pending acquisition by
Staples. In the direct channel, decommissioning our legacy OfficeMax
ecommerce sites and the ongoing reduction in catalog sales through our
call centers also contributed to the decline in sales.
|
Business Solutions (in millions)
|
|
1Q16
|
|
1Q15
|
|
Sales
|
|
$1,368
|
|
$1,477
|
|
Sales decline in constant currency from prior year
|
|
(7)%
|
|
|
|
Division operating income
|
|
$46
|
|
$58
|
|
Division operating income margin
|
|
3.4%
|
|
3.9%
|
Business Solutions Division operating income was $46 million, or 3.4% of
sales, in the first quarter of 2016 compared to $58 million, or 3.9% of
sales, in the first quarter of 2015. The decrease in operating income
compared to the prior year quarter reflected the negative flow-through
impact of lower sales, partially offset by a higher gross margin rate
and lower selling, general and administrative expenses including payroll
and advertising.
International Division
International Division sales were $0.7 billion in the first quarter of
2016, a decline of 10% compared to the prior year period, reflecting the
negative impact of foreign currency translation. International sales
declined 6% in constant currency primarily due to the continued
disruption from Staples’ pending acquisition of Office Depot and the
related required European divestiture process, the European
restructuring, as well as ongoing competitive market pressures and
reduced spend from existing customers.
|
International (in millions)
|
|
1Q16
|
|
1Q15
|
|
Sales
|
|
$670
|
|
$747
|
|
Sales decline in constant currency from prior year
|
|
(6)%
|
|
|
|
Division operating income (loss)
|
|
$(10)
|
|
$14
|
|
Division operating income (loss) margin
|
|
(1.4)%
|
|
1.9%
|
The International Division operating loss was $10 million, or 1.4% of
sales, in the first quarter of 2016 compared to operating income of $14
million, or 1.9% of sales, in the first quarter of 2015. The decline
from the prior year quarter primarily reflected the negative
flow-through impact of lower sales and a lower gross margin rate,
partially offset by lower selling, general and administrative expenses
including payroll and advertising and support costs.
At the end of the first quarter of 2016, there were a total of 274
retail stores in the International Division, including 149 company-owned
stores and 125 stores operated by franchisees and licensees.
Corporate Results
Corporate includes support staff services and certain other expenses
that are not allocated to the three divisions. Unallocated operating
costs were $23 million in the first quarter of 2016 compared to $22
million in the first quarter of 2015.
Balance Sheet and Cash Flow
As of March 26, 2016, Office Depot had $0.9 billion in cash and cash
equivalents and approximately $1.1 billion available under the Amended
and Restated Credit Agreement, for total available liquidity of
approximately $2.0 billion. Total debt was $661 million, excluding $813
million of non-recourse debt related to the credit-enhanced timber
installment notes. For the first quarter of 2016, cash used in operating
activities was $139 million, including $115 million in merger and
Staples acquisition-related expenses, and $9 million in International
restructuring costs. Capital expenditures were $26 million in the first
quarter of 2016, $6 million of which were related to the merger
integration.
Acquisition by Staples
On February 4, 2015, Office Depot and Staples announced that the
companies entered into a definitive agreement under which Staples will
acquire all of the outstanding shares of Office Depot. Under the terms
of the agreement, Office Depot shareholders will receive, for each
Office Depot share, $7.25 in cash and 0.2188 of a share in Staples stock
at closing. The transaction has been approved by both companies’ Board
of Directors and Office Depot stockholders. The proposed transaction
received antitrust clearance from the regulators in Australia, New
Zealand and China.
On December 7, 2015, the United States Federal Trade Commission (the
“FTC”) informed Office Depot and Staples that it intended to block the
Staples Acquisition and file a request for a preliminary injunction. On
the same date, Office Depot and Staples announced their intent to
contest the FTC’s decision to block the transaction. Also on December 7,
2015, the Canadian Competition Bureau filed an application to block the
transaction with the Canadian Competition Tribunal. On February 2, 2016,
the Company and Staples announced that they entered into a letter
agreement to waive, until May 16, 2016, certain of their respective
rights to terminate the Staples Merger Agreement.
On February 10, 2016, the European Commission approved the transaction
subject to certain divestiture requirements.
A hearing on the FTC’s preliminary injunction of the transaction was
held in federal district court in March and April 2016. A decision is
expected by May 10, 2016.
Outlook
Office Depot continues to expect total company sales in 2016 to be lower
than 2015, primarily due to the impact of store closures, the ongoing
business disruption from the protracted regulatory approval process
related to the pending acquisition by Staples, and continued challenging
market conditions in our industry. The Company expects this disruption
to continue through at least the first half of 2016, while the Company
completes the ongoing litigation with the FTC and the additional
requirements of the European and Canadian competition authorities.
Office Depot closed nine stores in the first quarter of 2016 as part of
its previously announced U.S. retail store optimization plan. The
Company continues to expect to close more than 50 stores during 2016 for
a total of at least 400 closures under this plan.
The Company continues to expect incremental integration synergies,
restructuring benefits and operating efficiencies to offset the negative
flow-through impact of lower sales in 2016. As a result, Office Depot
expects to generate approximately $500 million in adjusted operating
income(2) in fiscal 2016, with the year-over-year improvement
occurring in the second half of the year.
Office Depot continues to expect total annual run-rate merger synergy
benefits of more than $750 million from the OfficeMax integration and
expects the integration to be substantially complete by the end of 2017.
The Company expects to incur approximately $100 million of merger
integration expenses over the remaining 2016-2017 period, and estimates
it will incur approximately $30 million of expenses in 2016 related to
the pending acquisition by Staples.
In 2016, capital expenditures are expected to be approximately $250
million, including investments that support critical priorities and
approximately $50 million related to merger integration. Depreciation
and amortization is expected to be approximately $225 million in 2016.
(2) Adjusted operating income is a non-GAAP measure. See
the GAAP to Non-GAAP Reconciliations page in this press release for
further discussion.
About Office Depot, Inc.
Office Depot, Inc. is a leading global provider of products, services,
and solutions for every workplace – whether your workplace is an office,
home, school or car.
Office Depot, Inc. is a resource and a catalyst to help customers work
better. We are a single source for everything customers need to be more
productive, including the latest technology, core office supplies, print
and document services, business services, facilities products,
furniture, and school essentials.
The Company has annual sales of approximately $14 billion, employs
approximately 49,000 associates, and serves consumers and businesses in
59 countries with approximately 1,800 retail stores, award-winning
e-commerce sites and a dedicated business-to-business sales organization
– all delivered through a global network of wholly owned operations,
franchisees, licensees and alliance partners. The Company operates under
several banner brands including Office Depot, OfficeMax, Grand & Toy,
and Viking. The company’s portfolio of exclusive product brands include
TUL, Foray, Brenton Studio, Ativa, WorkPro, Realspace and HighMark.
Office Depot, Inc.’s common stock is listed on the NASDAQ Global Select
Market under the symbol “ODP”. Additional press information can be found
at: http://news.officedepot.com.
All trademarks, service marks and trade names of Office Depot, Inc.
and OfficeMax Incorporated used herein are trademarks or registered
trademarks of Office Depot, Inc. and OfficeMax Incorporated,
respectively. Any other product or company names mentioned herein are
the trademarks of their respective owners.
FORWARD LOOKING STATEMENTS
This communication may contain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. These
statements or disclosures may discuss goals, intentions and expectations
as to future trends, plans, events, results of operations or financial
condition, or state other information relating to, among other things,
Office Depot, based on current beliefs and assumptions made by, and
information currently available to, management. Forward-looking
statements generally will be accompanied by words such as “anticipate,”
“believe,” “plan,” “could,” “estimate,” “expect,” “forecast,”
“guidance,” “intend,” “may,” “possible,” “potential,” “predict,”
“project,” “propose” or other similar words, phrases or expressions, or
other variations of such words. These forward-looking statements are
subject to various risks and uncertainties, many of which are outside of
Office Depot’s control. There can be no assurances that Office Depot
will realize these expectations or that these beliefs will prove
correct, and therefore investors and stockholders should not place undue
reliance on such statements.
Factors that could cause actual results to differ materially from those
in the forward-looking statements include, among other things, risks
related to Office Depot’s pending acquisition by Staples, including
satisfaction of the conditions of the proposed acquisition in the
proposed timeframe or at all, adverse regulatory decisions, contractual
restrictions on the conduct of Office Depot’s business included in the
merger agreement and the potential for loss of key personnel, disruption
in key business activities or any impact on Office Depot’s relationships
with third parties as a result of the announcement of the proposed
acquisition; unanticipated changes in the markets for Office Depot’s
business segments; the inability to realize expected benefits from
Office Depot’s European restructuring plan; fluctuations in currency
exchange rates, unanticipated downturns in business relationships with
customers; competitive pressures on Office Depot’s sales and pricing;
increases in the cost of material, energy and other production costs, or
unexpected costs that cannot be recouped in product pricing; the
introduction of competing technology products and services; unexpected
technical or marketing difficulties; unexpected claims, charges,
litigation, dispute resolutions or settlement expenses; new laws and
governmental regulations. The foregoing list of factors is not
exhaustive. Investors and stockholders should carefully consider the
foregoing factors and the other risks and uncertainties described in
Office Depot’s Annual Reports on Form 10-K, as amended, and Quarterly
Reports on Form 10-Q filed with the Securities and Exchange Commission.
Office Depot does not assume any obligation to update or revise any
forward-looking statements.
|
OFFICE DEPOT, INC.
|
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
(In millions, except per share amounts)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13 Weeks Ended
|
|
|
|
|
March 26,
|
|
|
March 28,
|
|
|
|
|
2016
|
|
|
2015
|
|
|
Sales
|
|
$
|
3,544
|
|
|
$
|
3,877
|
|
|
Cost of goods sold and occupancy costs
|
|
|
2,688
|
|
|
|
2,940
|
|
|
Gross profit
|
|
|
856
|
|
|
|
937
|
|
|
Selling, general and administrative expenses
|
|
|
741
|
|
|
|
801
|
|
|
Asset impairments
|
|
|
—
|
|
|
|
5
|
|
|
Merger, restructuring, and other operating expenses, net
|
|
|
44
|
|
|
|
43
|
|
|
Operating income
|
|
|
71
|
|
|
|
88
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
6
|
|
|
|
6
|
|
|
Interest expense
|
|
|
(22
|
)
|
|
|
(25
|
)
|
|
Other income, net
|
|
|
—
|
|
|
|
1
|
|
|
Income before income taxes
|
|
|
55
|
|
|
|
70
|
|
|
Income tax expense
|
|
|
9
|
|
|
|
25
|
|
|
Net income
|
|
$
|
46
|
|
|
$
|
45
|
|
|
Basic and diluted earnings per share
|
|
$
|
0.08
|
|
|
$
|
0.08
|
|
|
OFFICE DEPOT, INC.
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
(In millions, except shares and par value)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 26,
|
|
|
December 26,
|
|
|
|
|
2016
|
|
|
2015
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
879
|
|
|
$
|
1,069
|
|
|
Receivables, net
|
|
|
1,106
|
|
|
|
1,166
|
|
|
Inventories
|
|
|
1,575
|
|
|
|
1,698
|
|
|
Prepaid expenses and other current assets
|
|
|
136
|
|
|
|
127
|
|
|
Total current assets
|
|
|
3,696
|
|
|
|
4,060
|
|
|
Property and equipment, net
|
|
|
754
|
|
|
|
785
|
|
|
Goodwill
|
|
|
378
|
|
|
|
378
|
|
|
Other intangible assets, net
|
|
|
51
|
|
|
|
54
|
|
|
Timber notes receivable
|
|
|
900
|
|
|
|
905
|
|
|
Deferred income taxes
|
|
|
24
|
|
|
|
24
|
|
|
Other assets
|
|
|
231
|
|
|
|
236
|
|
|
Total assets
|
|
$
|
6,034
|
|
|
$
|
6,442
|
|
|
Liabilities and stockholders’ equity
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
Trade accounts payable
|
|
$
|
1,132
|
|
|
$
|
1,319
|
|
|
Accrued expenses and other current liabilities
|
|
|
1,134
|
|
|
|
1,355
|
|
|
Income taxes payable
|
|
|
12
|
|
|
|
13
|
|
|
Short-term borrowings and current maturities of long-term debt
|
|
|
37
|
|
|
|
56
|
|
|
Total current liabilities
|
|
|
2,315
|
|
|
|
2,743
|
|
|
Deferred income taxes and other long-term liabilities
|
|
|
438
|
|
|
|
459
|
|
|
Pension and postretirement obligations, net
|
|
|
183
|
|
|
|
184
|
|
|
Long-term debt, net of current maturities
|
|
|
624
|
|
|
|
634
|
|
|
Non-recourse debt
|
|
|
813
|
|
|
|
819
|
|
|
Total liabilities
|
|
|
4,373
|
|
|
|
4,839
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity:
|
|
|
|
|
|
|
|
|
|
Common stock—authorized 800,000,000 shares of $.01 par
value;
issued shares – 556,027,410 in March 2016 and
554,835,306 in
December 2015
|
|
|
6
|
|
|
|
6
|
|
|
Additional paid-in capital
|
|
|
2,614
|
|
|
|
2,607
|
|
|
Accumulated other comprehensive income
|
|
|
36
|
|
|
|
30
|
|
|
Accumulated deficit
|
|
|
(937
|
)
|
|
|
(982
|
)
|
|
Treasury stock, at cost – 5,915,268 shares in 2016 and 2015
|
|
|
(58
|
)
|
|
|
(58
|
)
|
|
Total equity
|
|
|
1,661
|
|
|
|
1,603
|
|
|
Total liabilities and stockholders’ equity
|
|
$
|
6,034
|
|
|
$
|
6,442
|
|
|
OFFICE DEPOT, INC.
|
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
(In millions)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13 Weeks Ended
|
|
|
|
|
March 26,
|
|
|
March 28,
|
|
|
|
|
2016
|
|
|
2015
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
46
|
|
|
$
|
45
|
|
|
Adjustments to reconcile net income to net cash used in
|
|
|
|
|
|
|
|
|
|
operating activities:
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
55
|
|
|
|
74
|
|
|
Charges for losses on inventories and receivables
|
|
|
19
|
|
|
|
16
|
|
|
Asset impairments
|
|
|
—
|
|
|
|
5
|
|
|
Changes in working capital and other
|
|
|
(259)
|
|
|
|
(186
|
)
|
|
Net cash used in operating activities
|
|
|
(139)
|
|
|
|
(46
|
)
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
(26)
|
|
|
|
(27
|
)
|
|
Restricted cash
|
|
|
—
|
|
|
|
(68
|
)
|
|
Acquisition, net of cash acquired
|
|
|
—
|
|
|
|
(10
|
)
|
|
Proceeds from disposition of assets and other
|
|
|
1
|
|
|
|
35
|
|
|
Net cash used investing activities
|
|
|
(25)
|
|
|
|
(70
|
)
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
Net proceeds on employee share-based transactions
|
|
|
—
|
|
|
|
1
|
|
|
Net payments on long and short-term borrowings
|
|
|
(26)
|
|
|
|
(9
|
)
|
|
Net cash used in financing activities
|
|
|
(26)
|
|
|
|
(8
|
)
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
—
|
|
|
|
(20
|
)
|
|
Net decrease in cash and cash equivalents
|
|
|
(190
|
)
|
|
|
(144
|
)
|
|
Cash and cash equivalents at beginning of period
|
|
|
1,069
|
|
|
|
1,071
|
|
|
Cash and cash equivalents at end of period
|
|
$
|
879
|
|
|
$
|
927
|
|
OFFICE DEPOT, INC.
GAAP to Non-GAAP Reconciliations
(Unaudited)
We report our results in accordance with accounting principles generally
accepted in the United States (“GAAP”). We also review certain financial
measures excluding impacts of transactions that are not indicative of
our core operations (“non-GAAP”). A reconciliation of GAAP financial
measures to non-GAAP financial measures and the limitations on their use
may be accessed on the Investor Center page on our Investor Relations
website at investor.officedepot.com. Also, our measurement of
these non-GAAP financial measures may be different from similarly titled
financial measures used by others and therefore may not be comparable.
Such non-GAAP information should not be considered superior to the GAAP
amounts. Certain portions of those reconciliations are provided in the
following tables.
The Company’s outlook for 2016 adjusted operating income, included in
this release, excludes charges or credits not indicative of our core
operations, which may include but not be limited to merger integration
expenses, restructuring charges, asset impairments, and other
significant items that currently cannot be predicted. The exact amount
of these charges or credits are not currently determinable, but may be
significant. Accordingly, the Company is unable to provide a
reconciliation to an equivalent operating income outlook for 2016.
|
(In millions, except per share amounts)
|
|
|
|
Reported
|
|
|
% of
|
|
|
Charges &
|
|
Adjusted
|
|
|
% of
|
|
|
Q1 2016
|
|
(GAAP)
|
|
|
Sales
|
|
|
Credits
|
|
(Non-GAAP)
|
|
|
Sales
|
|
|
Sales
|
|
$
|
3,544
|
|
|
|
|
|
|
$
|
—
|
|
$
|
3,544
|
|
|
|
|
|
|
Gross profit
|
|
|
856
|
|
|
|
24.2
|
%
|
|
|
—
|
|
|
856
|
|
|
|
24.2
|
%
|
|
Operating expenses
|
|
|
785
|
|
|
|
22.2
|
%
|
|
|
44
|
|
|
741
|
|
|
|
20.9
|
%
|
|
Operating income
|
|
$
|
71
|
|
|
|
2.0
|
%
|
|
$
|
(44
|
)
|
$
|
115
|
|
|
|
3.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
46
|
|
|
|
1.3
|
%
|
|
$
|
(12
|
)
|
$
|
57
|
|
|
|
1.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
|
|
$
|
0.08
|
|
|
|
|
|
|
$
|
(0.02
|
)
|
$
|
0.10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
|
|
% of
|
|
|
Charges &
|
|
Adjusted
|
|
|
% of
|
|
|
Q1 2015
|
|
(GAAP)
|
|
|
Sales
|
|
|
Credits
|
|
(Non-GAAP)
|
|
|
Sales
|
|
|
Sales
|
|
$
|
3,877
|
|
|
|
|
|
|
$
|
—
|
|
$
|
3,877
|
|
|
|
|
|
|
Gross profit
|
|
|
937
|
|
|
|
24.2
|
%
|
|
|
—
|
|
|
937
|
|
|
|
24.2
|
%
|
|
Operating expenses
|
|
|
849
|
|
|
|
21.9
|
%
|
|
|
48
|
|
|
801
|
|
|
|
20.7
|
%
|
|
Operating income
|
|
$
|
88
|
|
|
|
2.3
|
%
|
|
$
|
(48
|
)
|
$
|
135
|
|
|
|
3.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
45
|
|
|
|
1.2
|
%
|
|
$
|
(27
|
)
|
$
|
71
|
|
|
|
1.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
|
|
$
|
0.08
|
|
|
|
|
|
|
$
|
(0.05
|
)
|
$
|
0.13
|
|
|
|
|
|
Amounts may not foot due to rounding
The Company recognizes deferred tax impacts in its US tax provision
for determining non-GAAP net income and earnings per share ("EPS"). The
change results from having accumulated non-GAAP earnings in that
jurisdiction for a 36 month period and the projection of future non-GAAP
earnings. This change has not been applied to the tax provision for
determining GAAP net income or EPS as the Company remains in a
cumulative loss for the 36 month period on a GAAP basis.
|
Sales Decline Reconciliation:
|
|
13 Weeks Ended
March 26, 2016
|
|
Reported (GAAP) sales decline
|
|
(9)%
|
|
Exclusion of foreign currency translation impact
|
|
(1)%
|
|
Exclusion of U.S. store closure impacts
|
|
(3)%
|
|
Adjusted Sales decline (excluding impact from foreign currency
translation
and U.S. retail store closures)
|
|
|
|
|
(4)%
|
Amounts may not foot due to rounding
|
OFFICE DEPOT, INC.
|
|
Store Statistics
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Q1 2016
|
|
|
|
|
|
North American Retail (NAR):
|
|
|
|
Stores opened
|
|
—
|
|
Stores closed
|
|
9
|
|
Total NAR (U.S.) stores
|
|
1,555
|
|
Total NAR square footage (in millions)
|
|
35.1
|
|
Average square footage per store (in thousands)
|
|
22.6
|
|
|
|
|
|
International Division Company-Owned:
|
|
|
|
Stores opened
|
|
2
|
|
Stores closed
|
|
—
|
|
Total International Company-Owned
|
|
149
|
|
|
|
|
|
International Division Franchisees & Licensees:
|
|
|
|
Stores opened
|
|
3
|
|
Stores closed
|
|
1
|
|
Total International Franchisees & Licensees
|
|
125
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20160426005413/en/
Source: Office Depot, Inc.
Office Depot, Inc.
Richard Leland, 561-438-3796
Investor
Relations
Richard.Leland@officedepot.com
or
Karen
Denning, 630-438-7445
Media Relations
Karen.Denning@officedepot.com
