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OFFICE DEPOT, INC.
2200 OLD GERMANTOWN ROAD
DELRAY BEACH, FLORIDA 33445
Registration No. 33-53579
SEC Rule 424(b) (3) and (c)
August 15, 1994
THIS SUPPLEMENT TO THE PROSPECTUS DATED MAY 19, 1994 (THE "PROSPECTUS") OF
OFFICE DEPOT, INC. ("OFFICE DEPOT") IS BEING PROVIDED TO PERSONS OR ENTITIES
WHO HAVE RECEIVED OR WILL RECEIVE OFFICE DEPOT COMMON STOCK IN CONNECTION WITH
ACQUISITIONS OF OTHER BUSINESSES, PROPERTIES OR SECURITIES IN BUSINESS
COMBINATION TRANSACTIONS AS DESCRIBED IN THE PROSPECTUS.
Ladies and Gentlemen:
Attached hereto as Exhibit A please find a copy of a Form 10-Q filed by
---------
Office Depot with the Securities and Exchange Commission on August 5, 1994
reporting financial and operational data for the quarter ended June 25, 1994.
Very truly yours,
/s/ Barry J. Goldstein
Barry J. Goldstein
Executive Vice President-
Finance, Chief Financial
Officer and Secretary
THIS LETTER AND THE ATTACHED FORM 10-Q SUPPLEMENT THE OFFICE DEPOT PROSPECTUS
DATED MAY 19, 1994 RELATING TO THE ACQUISITIONS OF OTHER BUSINESSES, PROPERTIES
OR SECURITIES IN BUSINESS COMBINATION TRANSACTIONS AS DESCRIBED THEREIN. A
COPY OF THIS LETTER AND THE ATTACHED FORM 10-Q SHOULD BE ATTACHED TO EACH COPY
OF THE PROSPECTUS.
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EXHIBIT A
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 25, 1994
------------------------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
------------------------ ---------------------
Commission file number 1-10948
--------------------------------------------------------
OFFICE DEPOT, INC.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 59-2663954
- -------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2200 Old Germantown Road, Delray Beach, Florida 33445
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(407) 278-4800
- -------------------------------------------------------------------------------
(Registrant's telephone number including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirement for the past 90 days.
Yes X No
----- -----
The registrant had 146,643,110 shares of common stock outstanding as of August
4, 1994.
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OFFICE DEPOT, INC.
INDEX
Page
Part I. FINANCIAL INFORMATION
Item 1 Financial Statements
------
Consolidated Statements of Earnings
for the 13 and 26 Weeks Ended June 25, 1994
and June 26, 1993 3
Consolidated Balance Sheets as of
June 25, 1994 and December 25, 1993 4
Consolidated Statements of Cash Flows
for the 26 Weeks Ended June 25, 1994
and June 26, 1993 5
Notes to Consolidated Financial Statements 6 - 8
Item 2 Management's Discussion and Analysis of
------ Financial Condition and Results of
Operations 9 - 12
Part II. OTHER INFORMATION 13 - 14
SIGNATURE 15
2
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OFFICE DEPOT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except per share amounts)
(Unaudited)
13 Weeks 13 Weeks 26 Weeks 26 Weeks
Ended Ended Ended Ended
June 25, June 26, June 25, June 26,
1994 1993 1994 1993
--------- -------- --------- ----------
Sales $ 905,177 $570,012 $1,924,548 $1,195,371
Cost of goods sold and occupancy costs 695,948 441,102 1,483,703 925,722
--------- -------- ---------- ----------
Gross profit 209,229 128,910 440,845 269,649
Store and warehouse operating
and selling expenses 137,939 87,311 295,164 182,244
Pre-opening expenses 1,972 1,955 3,231 3,560
General and administrative expenses 30,230 19,670 58,431 38,396
Amortization of goodwill 1,266 127 2,540 147
--------- -------- ---------- ----------
171,407 109,063 359,366 224,347
--------- -------- ---------- ----------
Operating profit 37,822 19,847 81,479 45,302
Interest expense, net 3,632 935 6,880 1,686
--------- -------- ---------- ----------
Earnings before income taxes 34,190 18,912 74,599 43,616
Income taxes 14,164 7,278 30,720 16,891
--------- -------- ---------- ----------
Net earnings $ 20,026 $ 11,634 $ 43,879 $ 26,725
========= ======== ========== ==========
Earnings per common and
common equivalent share $ 0.13 $ 0.08 $ 0.29 $ 0.19
========= ======== ========== ==========
Average common and common
equivalent shares 150,464 143,919 150,463 143,474
========= ======== ========== ==========
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OFFICE DEPOT, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
(Unaudited)
June 25, December 25,
1994 1993
---------- ------------
ASSETS
Current Assets
Cash and cash equivalents $ 79,960 $ 140,709
Receivables, net of allowances 186,716 188,241
Merchandise inventories 682,034 654,374
Deferred income taxes 30,486 26,166
Prepaid expenses and refundable income taxes 4,707 5,047
---------- ----------
Total current assets 983,903 1,014,537
Property and Equipment 420,837 350,573
Less accumulated depreciation and amortization 103,253 84,524
---------- ----------
317,584 266,049
Goodwill, net of amortization 197,933 200,535
Other Assets 28,222 23,844
---------- ----------
$1,527,642 $1,504,965
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 384,277 $ 404,643
Accrued expenses 125,893 130,941
Income Taxes 7,545 13,233
Current maturities of long-term debt 2,664 4,622
---------- ----------
Total current liabilities 520,379 553,439
Long-Term Debt, less current maturities 15,289 16,989
Deferred Taxes and Other Credits 2,360 5,478
Zero Coupon, Convertible, Subordinated Notes 358,085 350,298
Common Stockholders' Equity
Common stock - authorized 200,000,000 shares of
$.01 par value; issued 148,154,044 in 1994 and
147,198,056 in 1993 1,482 1,472
Additional paid-in capital 437,061 426,965
Foreign currency translation adjustment 634 383
Retained earnings 194,102 151,691
Less: 2,163,447 shares of treasury stock (1,750) (1,750)
---------- ----------
631,529 578,761
---------- ----------
$1,527,642 $1,504,965
========== ==========
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OFFICE DEPOT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Increase (Decrease) in Cash and Cash Equivalents
(In thousands)
(Unaudited)
26 Weeks Ended 26 Weeks Ended
June 25, June 26,
1994 1993
-------------- --------------
Cash flows from operating activities
Cash received from customers $ 1,903,143 $ 1,201,329
Cash paid for inventory (1,514,289) (895,702)
Cash paid for store and warehouse operating,
selling and general administrative expenses (342,151) (240,964)
Interest received 2,184 2,631
Interest paid (1,321) (542)
Taxes paid (40,096) (10,372)
----------- ------------
Net cash provided by operating activities 7,470 56,380
----------- ------------
Cash flows from investing activities
Capital expenditures-net (70,264) (34,983)
Cash acquired - 155
----------- -----------
Net cash used in investing activities (70,264) (34,828)
Cash flows from financing activities
Proceeds from exercise of stock options 6,920 5,252
Foreign currency translation adjustment 251 76
Payments on long- and short-term debt (3,658) (11,375)
Pre-acquisition S-Corporation distributions to
stockholders (1,468) (328)
----------- -----------
Net cash provided by (used) financing activities 2,045 (6,375)
----------- -----------
Net increase (decrease) in cash and cash
equivalents (60,749) 15,177
Cash and equivalents at beginning of period 140,709 131,578
----------- -----------
Cash and equivalents at end of period $ 79,960 $ 146,755
=========== ===========
Reconciliation of net earnings to net cash
provided (used) by operating activities
Net earnings $ 43,879 $ 26,725
Adjustments to reconcile net earnings
to net cash provided (used) by operating activities
Depreciation and amortization 22,561 13,548
Changes in assets and liabilities
Decrease in accounts receivable 1,525 32,607
(Increase) in inventory (27,660) (13,701)
Decrease (increase) in prepaid expenses and
other assets (9,588) 1,521
(Decrease) in accounts payable and other
liabilities (23,247) (4,320)
----------- -----------
Total adjustments (36,409) 29,655
----------- -----------
Net cash provided by operating activities $ 7,470 $ 56,380
=========== ===========
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OFFICE DEPOT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The interim financial statements as of June 25, 1994 and for the 13
and 26 week periods ended June 25, 1994 and June 26, 1993 are
unaudited; however, such interim statements reflect all adjustments
(consisting only of normal recurring accruals) necessary for a fair
presentation of the financial position and the results of operations
for the interim periods presented. The results of operations for the
interim periods presented are not necessarily indicative of the
results to be expected for the full year.
In February 1994, the Company issued 2,335,746 shares of common stock
in connection with the acquisitions of contract stationers L.E. Muran
Co. Inc. ("Muran") and Yorkship Press, Inc. ("Yorkship").
Additionally, in May 1994, the Company acquired all of the outstanding
stock of Midwest Carbon Company ("Midwest"), a Minneapolis based
contract stationer, and Silver's, Inc. ("Silver's"), a Detroit based
contract stationer. The Company issued 1,448,459 shares of common
stock in connection with the acquisitions of Midwest and Silver's.
These acquisitions were accounted for on a "pooling of interests"
basis and, accordingly, the accompanying financial statements have
been restated to include the accounts and operations of these
companies for all periods prior to their respective acquisition. The
interim financial statements should be read in conjunction with the
audited financial statements (not included herein) for the year ended
December 25, 1993 (which do not include any adjustments for the
accounting on a "pooling of interests" basis). Certain
reclassifications were made to prior year statements to conform with
1994 presentations.
2. In June 1994, the Company completed a three-for-two split of the
Company's common stock. All historical share and per share
information has been restated to reflect the stock split.
3. Average common and common equivalent shares utilized in computing
second quarter earnings per share include approximately 4,631,000 and
4,605,000 shares in 1994 and 1993, respectively, as a result of
applying the treasury stock method to outstanding stock options.
4. The Consolidated Statements of Cash Flows for the 26 weeks ended June
25, 1994 and June 26, 1993 do not include noncash financing
transactions of $3,186,000 and $3,880,000, respectively, relating to
additional paid-in-capital associated with tax benefits of stock
options exercised. In addition, the Consolidated Statements of Cash
Flows for the 26 weeks ended June 25, 1994 and June 26, 1993 do not
include noncash financing transactions of $7,787,000 and $3,775,000,
respectively, associated with accreted interest on convertible,
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subordinated notes. The distributions to stockholders included in the
Consolidated Statements of Cash Flows represent distributions to
stockholders of the acquired companies (which operated, for tax
purposes, as S-Corporations) prior to the acquisitions.
5. Included in the results of operations for the 13 and 26 week periods
ended June 25,1994 are the results of operations of the acquired
companies. Included in these results for the 13 and 26 week periods
ended June 25, 1994 are revenues of $16,271,000 and $48,355,000,
respectively, and net income of $668,000 and $1,748,000, respectively,
before the acquisitions were consummated. Following is a summary of
the effect of the restatement to the "poolings of interest" basis for
previously issued financial statements as of December 25, 1993 and for
the 13 and 26 week periods ended June 26, 1993.
OFFICE DEPOT, INC. AND SUBSIDIARIES
STATEMENT OF COMBINED RESTATED BALANCE SHEET
December 25, 1993
(In thousands)
(Unaudited)
Pooling
Office Depot Adjustments
(as previously for Acquired Combined
reported) Companies Restated
--------- --------- --------
Accounts receivable, net of allowance $ 165,182 $ 23,059 $ 188,241
Merchandise inventories 643,773 10,601 654,374
Other current assets 169,207 2,715 171,922
---------- --------- ----------
Total current assets 978,162 36,375 1,014,537
Property and equipment net of
accumulated depreciation 262,144 3,905 266,049
Goodwill, net of amortization 200,462 73 200,535
Other assets 23,131 713 23,844
---------- --------- ----------
Total assets $1,463,899 $ 41,066 $1,504,965
========== ========= ==========
Accounts Payable $ 393,185 $ 11,458 $ 404,643
Other current liabilities 144,020 4,776 148,796
---------- --------- ----------
Total current liabilities 537,205 16,234 553,439
Long-term debt 366,527 760 367,287
Other non-current liabilities 5,478 - 5,478
Common stockholders' equity 554,689 24,072 578,761
---------- --------- ----------
Total liabilities and stockholders' equity $1,463,899 $ 41,066 $1,504,965
========== ========= ==========
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OFFICE DEPOT, INC. AND SUBSIDIARIES
STATEMENT OF COMBINED RESTATED STATEMENTS OF EARNINGS
(In thousands, except per share amounts)
(Unaudited)
13 Weeks Ended June 26, 1993
Pooling
Adjustments
for Acquired Combined
Office Depot (1) Companies Restated
---------------- --------- --------
Sales $527,871 $42,141 $570,012
Cost of goods sold and occupancy costs 409,103 31,999 441,102
-------- ------- --------
Gross profit 118,768 10,142 128,910
Store operating and selling expenses 81,525 5,786 87,311
Pre-opening expenses 1,955 - 1,955
General and administrative expenses 16,461 3,209 19,670
Amortization of goodwill 122 5 127
-------- ------- --------
100,063 9,000 109,063
-------- ------- --------
Operating profit 18,705 1,142 19,847
Interest expense, net 900 35 935
-------- ------- --------
Earnings before income taxes 17,805 1,107 18,912
Income taxes 6,944 334 7,278
-------- ------- --------
Net earnings $ 10,861 $ 773 $ 11,634
======== ======= ========
Earnings per common and common
equivalent share $ 0.08 $ 0.08
======== ========
Average common and common
equivalent shares 140,136 143,919
======== ========
26 Weeks Ended June 26, 1993
Pooling
Adjustments
for Acquired Combined
Office Depot (1) Companies Restated
---------------- --------- --------
Sales $1,109,986 $85,385 $1,195,371
Cost of goods sold and occupancy costs 861,086 64,636 925,722
---------- ------- ----------
Gross profit 248,900 20,749 269,649
Store operating and selling expenses 170,569 11,675 182,244
Pre-opening expenses 3,560 - 3,560
General and administrative expenses 32,071 6,325 38,396
Amortization of goodwill 137 10 147
---------- ------- ----------
206,337 18,010 224,347
---------- ------- ----------
Operating profit 42,563 2,739 45,302
Interest expense, net 1,581 105 1,686
---------- ------- ----------
Earnings before income taxes 40,982 2,634 43,616
Income taxes 15,983 908 16,891
---------- ------- ----------
Net earnings $ 24,999 $ 1,726 $ 26,725
========== ======= ==========
Earnings per common and common
equivalent share $ 0.18 $ 0.19
========== ==========
Average common and common
equivalent shares 139,691 143,474
========== ==========
(1) As previously reported with certain reclassifications to conform
with 1994 presentations.
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Item 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Sales increased 59% from $570,012,000 in the second quarter of 1993 to
$905,177,000 in the second quarter of 1994; and from $1,195,371,000 for the
first six months of 1993 to $1,924,548,000 for the first six months of 1994, an
increase of 61%. Comparable store sales increased 31% for the second quarter
of 1994 and 32% for the first six months of 1994. The balance of the sales
increase was attributable to the 58 new stores and the 8 contract stationer
warehouses acquired or opened subsequent to the second quarter of 1993. The
Company opened eight stores and closed two stores in the second quarter of
1994, bringing the total number of stores open at the end of the second quarter
to 368, compared with 313 stores at the end of the second quarter of 1993. The
Company also operated 22 contract stationer and delivery warehouses at the end
of the second quarter of 1994 compared to 14 contract stationer and delivery
warehouses (including the 6 warehouses acquired in the poolings) at the end of
the second quarter of 1993. Comparable store sales in the future may be
affected by competition from other stores, the opening of additional stores,
the expansion of contract stationer business in existing markets, and general
conditions.
Gross profit as a percentage of sales was 23.1% during the second quarter of
1994, 22.6% during the comparable quarter in 1993, and 22.9% for the first six
months of 1994, as compared with 22.6% for the first six months of 1993. The
increases were primarily a result of leveraging occupancy costs through higher
average sales per store and purchasing efficiencies gained through vendor
volume discount programs that increased as purchasing levels continued to
increase. These gains were partially offset by lower gross margins resulting
from an increase in sales of lower margin business machines and computers.
Gross profit as a percentage of sales is generally higher in the contract
stationer portion of the business than the retail store portion as a result of
significantly fewer business machines and computers being sold through the
contract stationer portion.
Store and warehouse operating and selling expenses as a percentage of sales
were 15.2% and 15.3% for the second quarter and first six months of 1994,
respectively. These percentages were comparable with the same periods in 1993.
Store and warehouse operating expenses consist primarily of payroll and
advertising expenses. While the majority of these expenses vary proportionately
with sales, there is a fixed cost component to these expenses such that, as
sales increase within a given market area, store and warehouse operating and
selling expenses should decrease as a percentage of sales. This benefit may
not be fully realized, however, during periods when a large number of new
stores or warehouses are being opened, as new stores and warehouses typically
generate lower sales than the average mature facility, resulting in higher
operating and selling expenses as a percentage of sales. In addition, contract
stationers incur somewhat higher operating expenses than the retail stores.
This percentage is also affected when the Company enters large metropolitan
market areas where the advertising costs for the full market must be absorbed
by the small number of stores initially opened. As additional stores or
warehouses are opened in these large markets, advertising costs, which are
substantially a fixed expense for a market area, should decrease as a
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percentage of sales. The Company has also continued a strategy of opening
stores and warehouses in existing markets. While increasing the number of
facilities increases operating results in absolute dollars, this may have the
effect of increasing expenses as a percentage of sales since the sales of
certain existing stores in the market may initially be adversely affected.
Pre-opening expenses increased slightly from $1,955,000 in the second quarter
of 1993 to $1,972,000 in the comparable period in 1994, and decreased from
$3,560,000 in the 26 week period ended June 26, 1993 to $3,231,000 in the
comparable 1994 period. Pre-opening expenses currently are approximately
$125,000 per store and are predominately incurred during a six-week period
prior to the store opening. These expenses consist principally of amounts paid
for salaries and supplies. Since the Company's policy is to expense these
items during the period in which they occur, the amount of pre-opening
expenses in each quarter is generally proportional to the number of new stores
or warehouses being opened.
General and administrative expenses have decreased as a percentage of sales
from 3.5% in the second quarter of 1993 to 3.3% in the comparable period in
1994, and from 3.2% in the first six months of 1993 to 3.0% in the comparable
period in 1994. General and administrative expenses include, among other
costs, site selection expenses and store management training expenses, and
therefore vary with the number of new store openings in that quarter and the
next quarter. The Company's commitment to improving the efficiency of its
computer systems resulted in an increase in general and administrative expenses
in the first half of 1994; however, the Company believes the systems investment
will provide benefits in 1995 and beyond. General and administrative expenses
also increased with the acquisitions of the contract stationers, as this
portion of the office products industry typically has a higher general and
administrative expense component than the retail stores' portion.
Additionally, there are some duplicative expenses incurred as a result of the
acquisitions. These increases have been offset by a decrease in general and
administrative expenses as a percentage of sales for the Company's retail store
operations, primarily as a result of the Company's ability to increase sales
without a proportionate increase in corporate expenditures.
The Company incurred net interest expense of $3,632,000 and $6,880,000 in the
second quarter and first six months of 1994, respectively, compared with
$935,000 and $1,686,000 for the comparable periods in 1993. The increase in
interest expense is primarily due to $185,000,000 raised in November 1993 via
a public offering of zero coupon, convertible, subordinated notes.
The Company recorded goodwill amortization of $1,266,000 in the second quarter
of 1994 as compared with $127,000 in the 1993 comparable quarter, and
$2,540,000 in the first six months of 1994 compared with $147,000 in the first
six months of 1993. The increase in goodwill amortization was attributable to
the contract stationer acquisitions which occurred in the second and third
quarters of 1993. The effective income tax rate increased from 38.7% for the
first six months of 1993 to 41.2% for the first six months of 1994 primarily
due to nondeductible goodwill amortization as well as the effect of acquiring
companies which had no provision for income taxes because they were organized
as S-Corporations (as defined under income tax regulations).
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LIQUIDITY AND CAPITAL RESOURCES
Since the Company's retail sales are substantially on a cash and carry basis,
cash flow generated from operating stores provides a source of liquidity to the
Company. Working capital requirements are reduced by vendor credit terms,
which allow the Company to finance a portion of its inventory. The Company
utilizes private label credit card programs which allow the Company to expand
its retail sales without the burden of additional receivables because the
programs are administered and financed by financial services companies. All
credit card receivables sold to the financial service company under one program
were sold on a recourse basis.
Sales made from the contract stationer warehouses are made under standard
commercial credit terms, where the Company carries its own receivables. As the
Company expands into servicing additional large companies in the contract
stationer portion of its business, it is expected that a greater portion of the
Company's receivables will be carried.
In the second quarter of 1994, the Company added 8 stores and closed 2 stores.
As stores mature and become more profitable, and as the number of new stores
opened in a year becomes a smaller percentage of the existing store base, cash
generated from operations will provide a greater portion of funds required for
new store fixed assets, inventories and other working capital requirements.
Cash generated from operations will be affected by an increase in receivables
carried without outside financing, and an increase in inventory at the stores
and warehouses as the Company continues to enhance its assortment in computers,
business machines and furniture. These have resulted in net cash provided by
operating activities of $7,470,000 and $56,380,000 in the first six months of
1994 and 1993, respectively. Capital expenditures are also affected by the
number of stores and warehouses opened or acquired each year and the increase
in computer and other equipment at the corporate office required to support
such expansion. Cash used in investing activities (primarily capital
expenditures, including the acquisition of the corporate headquarters for $16
million and store real estate) was $70,264,000 and $34,828,000 in the first six
months of 1994 and 1993, respectively. The Company's cash flow is also
affected by financing activities, primarily the exercise of stock options and
payment on its long-term debt. This activity resulted in a net cash provided
(used) by financing activities of $2,045,000 and ($6,375,000) for the first six
months of 1994 and 1993, respectively.
During the six months ended June 25, 1994, the Company's cash balance decreased
approximately $60,749,000 and long- and short-term debt decreased by
approximately $3,658,000. The decrease in cash was primarily attributable to
payments for fixed assets and inventories for new stores as well as payments
for inventory mix changes resulting from an increase in business machines and
computer sales.
The Company plans to open approximately 45 to 50 additional stores during the
remainder of 1994. Management estimates that the Company's cash requirements,
exclusive of pre-opening expenses, will be approximately $1,200,000 for each
additional store. In addition, management estimates that each new store will
require pre-opening expenses of approximately $125,000.
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The Company has a credit agreement with its principal bank and a syndicate of
commercial banks to provide for a working capital line of $200,000,000. The
credit agreement provides that funds borrowed will bear interest, at the
Company's option, at either 3/4% over the LIBOR rate or at a base rate linked
to the prime rate. The Company must also pay a fee of 1/4% per annum on the
unused portion of the credit facility. The credit facility expires in
September 1996. In addition to the credit facility, the bank has provided a
lease facility to the Company under which the bank has agreed to purchase up to
$15,000,000 of equipment from the Company and lease such equipment back to the
Company. As of June 25, 1994, there were no borrowings outstanding under the
working capital line and the Company has utilized approximately $5,000,000 of
this lease facility.
The Company's management is continually reviewing its financing options.
Although the Company has the ability to finance its planned expansion through
1994 from cash on hand, funds generated from operations, and funds borrowed
under the Company's credit facilities, the Company will also consider
alternative financing, such as the issuance of equity, debt or convertible
debt, if market conditions make such alternatives financially attractive for
funding the Company's short-term or long-term expansion. The Company has
acquired its contract stationer businesses with cash and newly issued common
stock. The Company's financing requirements in the future will be affected by
the number of new stores, delivery centers and contract stationer warehouses
opened or acquired.
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PART II. OTHER INFORMATION
Items 1-3 Not applicable.
Item 4 Submission of Matters to a Vote of Security Holders
At the Annual Meeting of Stockholders of Office Depot, Inc.
held on May 18, 1994, the nominees for election as Directors of
the Corporation were elected without opposition.
A vote of the common stock with respect to this election,
without giving effect to the subsequent three-for-two split,
was:
Number of Shares
Nominee For Withheld
------- --- --------
Mark D. Begelman 82,978,476 744,527
Dennis Defforey 81,540,089 2,182,914
David I. Fuente 82,645,661 1,077,342
W. Scott Hedrick 82,985,494 737,509
John B. Mumford 82,946,666 737,085
Peter J. Solomon 82,867,550 854,453
Alan L. Wurtzel 82,983,016 739,987
The number of shares of broker non-votes for the election of Directors was
none.
The following proposals of the Board of Directors were submitted for adoption.
The board proposals were adopted by the votes indicated (which constituted the
affirmative vote of more than one-half of the shares voting).
RESOLVED, that based upon the recommendation of the Board of Directors of the
Corporation, the amendment to the Office Depot, Inc. Stock Option and Stock
Appreciation Rights Plan increasing by 2,500,000 the number of shares of the
Corporation's Common Stock, par value $0.01 per share, available for issuance
upon exercise of options granted to certain employees of the Corporation and
its subsidiaries is hereby approved and adopted.
For the proposal: 77,867,805 Shares
Against the proposal: 5,649,004 Shares
Abstaining: 206,194 Shares
The number of shares of broker non-votes in the above proposal was none.
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RESOLVED, that based upon the recommendation of the Board of Directors of the
Corporation, the amendments to the Office Depot, Inc. Directors Stock Option
Plan (i) increasing by 100,000 the number of shares of the Corporation's Common
Stock, par value $0.01 per share (the "Common Stock"), authorized for issuance
pursuant to the plan and (ii) providing that each director who is not otherwise
an employee of the Corporation or its subsidiaries shall receive options to
purchase 7,500 shares of Common Stock each year is hereby approved and adopted.
For the proposal: 71,037,588 Shares
Against the proposal: 12,444,156 Shares
Abstaining: 241,259 Shares
The number of shares of broker non-votes in the above proposal was none.
RESOLVED, that based upon the recommendation of the Board of Directors of the
Corporation, the appointment of Deloitte & Touche as independent public
accountants to audit the Corporation's consolidated financial statement for the
fiscal year ending December 31, 1994 is hereby approved and adopted.
For the proposal: 83,568,909 Shares
Against the proposal: 38,548 Shares
Abstaining: 115,546 Shares
The number of shares of broker non-votes in the above proposal was none.
Items 5-6 Not applicable.
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SIGNATURES
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 thereunto duly authorized.
OFFICE DEPOT, INC.
------------------
(Registrant)
Date: August 5, 1994 By: /s/ Barry J. Goldstein
---------------------------------
Barry J. Goldstein
Executive Vice President-Finance
and Chief Financial Officer
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