Exhibit 99.1.1
CONTACTS:
Brian Turcotte
Investor Relations
561-438-3657
brian.turcotte@officedepot.com
Brian Levine
Public Relations
561-438-2895
brian.levine@officedepot.com
OFFICE DEPOT ANNOUNCES FOURTH QUARTER 2008 RESULTS
Delray Beach, Fla., February 24, 2009 —Office Depot, Inc. (NYSE: ODP), a leading global provider of office products and services, today announced results for the fiscal period ending December 27, 2008.
FOURTH QUARTER RESULTS1
Total Company sales for the fourth quarter decreased 15% to $3.3 billion. Total Company operating expenses, adjusted for Charges, increased by $42 million from the fourth quarter of 2007. EBIT, adjusted for Charges, was a loss of $210 million in the fourth quarter of 2008 or a negative 6.4% as a percentage of sales, compared to a positive $6 million or 0.2% as a percentage of sales in the prior-year period.
The Company reported a net loss of $1.54 billion in the fourth quarter of 2008, compared to earnings of $19 million in the same period of 2007. The loss per share on a diluted basis was $5.64 for the quarter, versus earnings per share of $0.07 in the fourth quarter of 2007. Adjusted for Charges, the Company reported a loss of $199 million and a loss per share on a diluted basis of $0.73 for the fourth quarter of 2008, versus earnings of $27 million and earnings per share of $0.10 in the same period one year ago.
The Charges are comprised of unusual items, including non-cash charges totaling $1.27 billion, or $4.54 per share recorded for goodwill and trade name impairments, and pre-tax charges totaling $167 million, or $0.37 per share for actions taken as part of the strategic business review announced in December 2008 and the plan announced in 2005.
Additional pre-tax charges taken in the fourth quarter related to the business downturn, primarily the impairment of North American Retail store assets, totaled $125 million.
In the fourth quarter of 2008, the Company’s cash flow from operations was $30 million and cash flow before financing activities was $4 million.
FOURTH QUARTER DIVISION RESULTS
North American Retail Division
Fourth quarter 2008 sales in the North American Retail Division were $1.4 billion, down 17% compared to the same period last year. Comparable store sales in the 1,207 stores in the U.S. and Canada that have been open for more than one year decreased 18% for the fourth quarter. Although it appeared that the rate of sales decline experienced in California had stabilized for the first nine months of the year, the
1 Includes non-GAAP information. Fourth quarter results include impacts of previously announced programs (“Charges”). Additional information is provided in our Form 10-K filing. Reconciliations from GAAP to non-GAAP financial measures can be found in this release, as well as on the corporate web site,www.officedepot.com, under the category Investor Relations.
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fourth quarter proved to be much more challenging. While Florida continues to be the Division’s most troubled market, it has been declining at a slower rate than the rest of the country.
The North American Retail Division had an operating loss of $119 million for the fourth quarter, a decline from the operating profit of $23 million in the same period of the prior year. The operating profit decline was driven by a number of factors including a non-cash asset impairment charge of $78 million; the flow through from the sales volume decline; and additional reserves for store closures, inventory and the Company’s private label credit card. Partially offsetting this decline was an improvement in product margins in the fourth quarter.
During the fourth quarter, Office Depot opened two new stores, closed 10, and relocated one store, bringing the total store count to 1,267. The Company also remodeled 11 stores in the quarter.
Inventory per store was $689 thousand at the end of the fourth quarter of 2008, down approximately 28% from the prior year. This decrease is a result of the Company’s ability to align inventory investment with sales levels in the current economic environment.
North American Business Solutions Division
Fourth quarter 2008 sales in the North American Business Solutions Division were $920 million, down 14% compared to the same period last year, driven by severe spending cuts by the Division’s customers.
The North American Business Solutions Division reported an operating loss of $28 million for the fourth quarter of 2008 compared to an operating profit of $1 million for the same period of the prior year. The decrease in operating profit during the fourth quarter of 2008 primarily relates to the flow through of the sales volume decline; increased bad debt reserves; and weaker customer and product mix. Partially offsetting this decline were the negative adjustments for lower vendor program support and inventory clearance reserves from the fourth quarter of 2007 that did not recur.
International Division
The International Division reported a sales decrease of 15% in the fourth quarter of 2008 to $963 million, compared with the same period last year, while sales in local currency decreased by 4%. Sales in the Direct channel were down 7% in local currencies as a result of small- to medium-sized businesses reducing their discretionary expenditures and an increase in competitiveness within the channel. The Contract channel also experienced a contraction in customer spending resulting in a sales decline of 2% in local currencies. Retail sales were up 1% versus one year ago due to a third quarter of 2008 acquisition in Sweden.
Division operating profit was $10 million in the fourth quarter of 2008 compared to $60 million in the same period of the prior year. The decrease in operating profit is a result of the flow through from the sales volume declines, intangible asset write offs in Europe and Asia, higher costs and increased competition on key items, and unfavorable foreign exchange rates.
FULL YEAR RESULTS1
For the full year, sales decreased 7% to $14.5 billion. The GAAP loss for fiscal 2008 was $1.48 billion, compared to earnings of $396 million in fiscal 2007. The GAAP loss per share on a diluted basis was $5.42 in 2008, compared to diluted earnings per share of $1.43 in the prior year. Adjusted for Charges, the diluted loss per share for fiscal 2008 was $0.41, versus diluted earnings per share of $1.54 in 2007.
For the full year, EBIT, adjusted for Charges, was a negative $51 million, compared to a positive $551 million in 2007.
Capital expenditures for 2008 were $330 million. Capital expenditures for 2009 are estimated to be reduced to about $150 million, primarily reflecting a deceleration of the Company’s IT and supply chain initiatives and a reduction in retail store growth.
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Other Matters
The Company recognized about $165 million of pre-tax Charges related to the strategic business review announced in December of 2008. These Charges included expenses related to North American retail store and supply chain facility closures, headcount reductions, asset write downs and the rationalization of certain International businesses. The Company also recognized $2 million of pre-tax Charges related to the plan announced in 2005. During 2009, the Company expects to recognize approximately $186 million in additional Charges related to initiatives covered by this review and projects initiated under our 2005 restructuring program. The 2008 initiatives should benefit 2009 EBIT and cash flow by approximately $130 million and $105 million, respectively.
In addition to the cash flow benefits provided by the actions taken as part of the strategic business review, the Company is actively pursuing other internal sources of liquidity in 2009, including sale leasebacks of owned properties in the U.S. and Europe, the sale of certain accounts receivable in Europe, dividends from a joint venture, and tax refunds. In total, Office Depot is targeting over $400 million in cash benefit from internal initiatives in 2009.
At the end of December 2008, the Company had drawn $139 million on its asset-based loan (ABL) facility, and had $178 million in outstanding letters of credit against the facility, leaving it with $712 million of availability. With $712 million of ABL availability and $156 million in cash on hand at the end of December, Office Depot exited 2008 with $868 million in total available liquidity.
More information on the strategic business review is available in our Form 8-K filed with the Securities and Exchange Commission on December 10, 2008 and our Form 10-K filed on February 24, 2009.
Additional information on the Company’s full year results can also be found in our Form 10-K filed with the Securities and Exchange Commission on February 24, 2009.
Non-GAAP Reconciliation
A reconciliation of GAAP results to non-GAAP results excluding certain items is presented in this release and also may be accessed on the corporate website,www.officedepot.com, under the category Company Info.
Conference Call Information
Office Depot will hold a conference call for investors and analysts at 9 a.m. (Eastern Daylight Time) today. The conference call will be available to all investors via Web cast at http://investor.officedepot.com. Interested parties may contact Investor Relations at 561-438-7893 for further information.
About Office Depot
Every day, Office Depot is Taking Care of Business for millions of customers around the globe. For the local corner store as well as Fortune 500 companies, Office Depot provides products and services to its customers through 1,713 worldwide retail stores, a dedicated sales force, top-rated catalogs and a $4.8 billion e-commerce operation. Office Depot has annual sales of approximately $14.5 billion, and employs about 43,000 associates around the world. The Company provides more office products and services to more customers in more countries than any other company, and currently sells to customers directly or through affiliates in 48 countries.
Office Depot’s common stock is listed on the New York Stock Exchange under the symbol ODP and is included in the S&P 500 Index. Additional press information can be found at: http://mediarelations.officedepot.com.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS: The Private Securities Litigation Reform Act of 1995, as amended (the “Act”) provides protection from liability in private lawsuits for “forward-looking” statements made by public companies under certain
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circumstances, provided that the public company discloses with specificity the risk factors that may impact its future results. We want to take advantage of the “safe harbor” provisions of the Act. Certain statements made in this press release are ‘forward-looking’ statements under the Act. Except for historical financial and business performance information, statements made in this press release should be considered ‘forward-looking’ as referred to in the Act. Much of the information that looks towards future performance of our company is based on various factors and important assumptions about future events that may or may not actually come true. As a result, our operations and financial results in the future could differ materially and substantially from those we have discussed in the forward-looking statements made in this press release. Certain risks and uncertainties are detailed from time to time in our filings with the United States Securities and Exchange Commission (“SEC”). You are strongly urged to review all such filings for a more detailed discussion of such risks and uncertainties. The Company’s SEC filings are readily obtainable at no charge atwww.sec.gov and atwww.freeEDGAR.com, as well as on a number of other commercial web sites.
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OFFICE DEPOT, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
(Unaudited)
| | | | | | | | | |
| | | As of | | | As of | |
| | | December 27, | | | December 29, | |
| | | 2008 | | | 2007 | |
Assets | | | | | | | | |
| Current assets: | | | | | | | | |
| Cash and cash equivalents | | $ | 155,745 | | | $ | 222,954 | |
| Receivables, net | | | 1,255,735 | | | | 1,511,681 | |
| Inventories | | | 1,331,593 | | | | 1,717,662 | |
| Deferred income taxes | | | 196,192 | | | | 120,162 | |
| Prepaid expenses and other current assets | | | 183,122 | | | | 143,255 | |
| | | | | | | |
| Total current assets | | | 3,122,387 | | | | 3,715,714 | |
| Property and equipment, net | | | 1,557,301 | | | | 1,588,958 | |
| Goodwill | | | 19,431 | | | | 1,282,457 | |
| Other intangible assets | | | 28,311 | | | | 107,987 | |
| Other assets | | | 540,796 | | | | 561,424 | |
| | | | | | | |
| Total assets | | $ | 5,268,226 | | | $ | 7,256,540 | |
| | | | | | | |
| | | | | | | | | |
Liabilities and stockholders’ equity | | | | | | | | |
| Current liabilities: | | | | | | | | |
| Trade accounts payable | | $ | 1,251,808 | | | $ | 1,591,154 | |
| Accrued expenses and other current liabilities | | | 1,173,201 | | | | 1,170,775 | |
| Income taxes payable | | | 8,803 | | | | 3,491 | |
| Short-term borrowings and current maturities of long-term debt | | | 191,932 | | | | 207,996 | |
| | | | | | | |
| Total current liabilities | | | 2,625,744 | | | | 2,973,416 | |
| Deferred income taxes and other long-term liabilities | | | 585,861 | | | | 576,254 | |
| Long-term debt, net of current maturities | | | 688,788 | | | | 607,462 | |
| Minority interest | | | 4,883 | | | | 15,564 | |
| | | | | | | | | |
| Commitments and contingencies | | | | | | | | |
| | | | | | | | | |
| Stockholders’ equity: | | | | | | | | |
| Common stock — authorized 800,000,000 shares of $.01 par value; issued and outstanding shares - 280,800,135 in 2008 and 428,777,625 in 2007 | | | 2,808 | | | | 4,288 | |
| Additional paid-in capital | | | 1,194,622 | | | | 1,784,184 | |
| Accumulated other comprehensive income | | | 217,197 | | | | 495,916 | |
| Retained earnings | | | 6,270 | | | | 3,783,805 | |
| Treasury stock, at cost — 5,938,059 shares in 2008 and 155,819,358 shares in 2007 | | | (57,947 | ) | | | (2,984,349 | ) |
| | | | | | | |
| Total stockholders’ equity | | | 1,362,950 | | | | 3,083,844 | |
| | | | | | | |
| Total liabilities and stockholders’ equity | | $ | 5,268,226 | | | $ | 7,256,540 | |
| | | | | | | |
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OFFICE DEPOT, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except per share amounts)
(Unaudited)
| | | | | | | | | | | | | | | | | |
| | | 13 Weeks Ended | | | 52 Weeks Ended | |
| | | December 27, | | | December 29, | | | December 27, | | | December 29, | |
| | | 2008 | | | 2007 | | | 2008 | | | 2007 | |
| Sales | | $ | 3,270,597 | | | $ | 3,866,927 | | | $ | 14,495,544 | | | $ | 15,527,537 | |
| Cost of goods sold and occupancy costs | | | 2,441,475 | | | | 2,844,391 | | | | 10,489,785 | | | | 11,024,639 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Gross profit | | | 829,122 | | | | 1,022,536 | | | | 4,005,759 | | | | 4,502,898 | |
| | | | | | | | | | | | | | | | | |
| Store and warehouse operating and selling expenses | | | 819,832 | | | | 851,985 | | | | 3,322,662 | | | | 3,381,129 | |
| Goodwill and trade name impairments | | | 1,269,893 | | | | — | | | | 1,269,893 | | | | — | |
| Other asset impairments | | | 202,520 | | | | — | | | | 222,379 | | | | — | |
| General and administrative expenses | | | 193,038 | | | | 183,546 | | | | 743,174 | | | | 645,661 | |
| Amortization of deferred gain on building sale | | | (1,689 | ) | | | (1,874 | ) | | | (7,308 | ) | | | (7,493 | ) |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Operating profit (loss) | | | (1,654,472 | ) | | | (11,121 | ) | | | (1,545,041 | ) | | | 483,601 | |
| | | | | | | | | | | | | | | | | |
| Other income (expense): | | | | | | | | | | | | | | | | |
| Interest income | | | 1,596 | | | | 3,228 | | | | 10,013 | | | | 9,440 | |
| Interest expense | | | (22,655 | ) | | | (13,093 | ) | | | (68,286 | ) | | | (63,080 | ) |
| Miscellaneous income, net | | | 7,214 | | | | 3,739 | | | | 25,731 | | | | 28,672 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Earnings (loss) before income taxes | | | (1,668,317 | ) | | | (17,247 | ) | | | (1,577,583 | ) | | | 458,633 | |
| | | | | | | | | | | | | | | | | |
| Income tax expense (benefit) | | | (129,306 | ) | | | (36,021 | ) | | | (98,645 | ) | | | 63,018 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Net earnings (loss) | | $ | (1,539,011 | ) | | $ | 18,774 | | | $ | (1,478,938 | ) | | $ | 395,615 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Earnings (loss) per common share: | | | | | | | | | | | | | | | | |
| Basic | | $ | (5.64 | ) | | $ | 0.07 | | | $ | (5.42 | ) | | $ | 1.45 | |
| Diluted | | | (5.64 | ) | | | 0.07 | | | | (5.42 | ) | | | 1.43 | |
| | | | | | | | | | | | | | | | | |
| Weighted average number of common shares outstanding: | | | | | | | | | | | | | | | | |
| Basic | | | 272,924 | | | | 272,204 | | | | 272,776 | | | | 272,899 | |
| Diluted | | | 272,924 | | | | 273,309 | | | | 272,776 | | | | 275,940 | |
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OFFICE DEPOT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
| | | | | | | | | |
| | | 52 Weeks Ended | |
| | | December 27, | | | December 29, | |
| | | 2008 | | | 2007 | |
Cash flow from operating activities: | | | | | | | | |
| Net earnings (loss) | | $ | (1,478,938 | ) | | $ | 395,615 | |
| Adjustments to reconcile net earnings (loss) to net cash | | | | | | | | |
| provided by operating activities: | | | | | | | | |
| Depreciation and amortization | | | 254,099 | | | | 281,383 | |
| Charges for losses on inventories and receivables | | | 140,058 | | | | 109,798 | |
| Net earnings from equity method investments | | | (37,113 | ) | | | (34,825 | ) |
| Goodwill and trade name impairments | | | 1,269,893 | | | | — | |
| Other asset impairments | | | 222,379 | | | | — | |
| Compensation expense for share-based payments | | | 39,561 | | | | 37,738 | |
| Deferred income tax provision | | | (108,099 | ) | | | (1,022 | ) |
| Gain on disposition of assets | | | (13,443 | ) | | | (25,190 | ) |
| Other operating activities | | | (7,612 | ) | | | 2,927 | |
| Changes in assets and liabilities: | | | | | | | | |
| Decrease in receivables | | | 133,162 | | | | 25,909 | |
| Decrease (increase) in inventories | | | 249,849 | | | | (191,685 | ) |
| Net increase in prepaid expenses and other assets | | | (16,986 | ) | | | (12,342 | ) |
| Net decrease in accounts payable, accrued expenses and other long-term liabilities | | | (178,554 | ) | | | (176,921 | ) |
| | | | | | | |
| Total adjustments | | | 1,947,194 | | | | 15,770 | |
| Net cash provided by operating activities | | | 468,256 | | | | 411,385 | |
| | | | | | | |
| | | | | | | | | |
Cash flows from investing activities: | | | | | | | | |
| Acquisitions, net of cash acquired, and related payments | | | (102,752 | ) | | | (48,036 | ) |
| Capital expenditures | | | (330,075 | ) | | | (460,571 | ) |
| Purchase of assets held for sale and sold | | | (38,537 | ) | | | — | |
| Proceeds from disposition of assets and other | | | 120,632 | | | | 129,182 | |
| Dividends received | | | — | | | | 25,000 | |
| Restricted cash for pending transaction | | | (6,037 | ) | | | (18,100 | ) |
| Release of restricted cash | | | 18,100 | | | | — | |
| | | | | | | |
| Net cash used in investing activities | | | (338,669 | ) | | | (372,525 | ) |
| | | | | | | |
| | | | | | | | | |
Cash flows from financing activities: | | | | | | | | |
| Net proceeds from exercise of stock options and sale of stock | | | | | | | | |
| under employee stock purchase plans | | | 503 | | | | 29,332 | |
| Tax benefit from employee share-based exercises | | | 89 | | | | 18,266 | |
| Acquisition of treasury stock under approved repurchase plans | | | — | | | | (199,592 | ) |
| Treasury stock additions from employee related plans | | | (944 | ) | | | (11,201 | ) |
| Debt issuance costs | | | (40,793 | ) | | | — | |
| Proceeds from issuance of borrowings | | | 139,098 | | | | 177,413 | |
| Payments on long- and short-term borrowings | | | (284,204 | ) | | | (6,292 | ) |
| | | | | | | |
| Net cash provided by (used in) financing activities | | | (186,251 | ) | | | 7,926 | |
| | | | | | | |
| | | | | | | | | |
Effect of exchange rate changes on cash and cash equivalents | | | (10,545 | ) | | | 2,616 | |
| | | | | | | |
| | | | | | | | | |
| Net increase (decrease) in cash and cash equivalents | | | (67,209 | ) | | | 49,402 | |
| Cash and cash equivalents at beginning of period | | | 222,954 | | | | 173,552 | |
| | | | | | | |
| Cash and cash equivalents at end of period | | $ | 155,745 | | | $ | 222,954 | |
| | | | | | | |
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OFFICE DEPOT, INC.
GAAP to Non-GAAP Reconciliations
A reconciliation of GAAP financial measures to non-GAAP financial measures and the limitations on their use may be accessed on the corporate website,www.officedepot.com, under the category Company Info. Certain portions of those reconciliations are provided in the following tables.($ in millions, except per share amounts)
| | | | | | | | | | | | | | | | | | | | | |
| Q4 2008 | | GAAP | | | % of Sales | | | Charges | | | Non-GAAP | | | % of Sales | |
| Gross Profit | | $ | 829.1 | | | | 25.4% | | | $ | 15.8 | | | $ | 844.9 | | | | 25.9% | |
| Operating Expenses | | $ | 2,483.6 | | | | 76.0% | | | $ | (1,421.3 | ) | | $ | 1,062.3 | | | | 32.5% | |
| Operating Loss | | $ | (1,654.5 | ) | | | (50.6)% | | | $ | 1,437.1 | | | $ | (217.4 | ) | | | (6.6)% | |
| Net Loss | | $ | (1,539.0 | ) | | | (47.1)% | | | $ | 1,340.1 | | | $ | (198.9 | ) | | | (6.1)% | |
| | | | | | | | | | | | | | |
| Diluted Loss Per Share | | $ | (5.64 | ) | | | | | | $ | 4.91 | | | $ | (0.73 | ) | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| Q4 2007 | | GAAP | | | % of Sales | | | Charges | | | Non-GAAP | | | % of Sales | |
| Gross Profit | | $ | 1,022.5 | | | | 26.4% | | | $ | 0.1 | | | $ | 1,022.6 | | | | 26.4% | |
| Operating Expenses | | $ | 1,033.6 | | | | 26.7% | | | $ | (13.6 | ) | | $ | 1,020.0 | | | | 26.3% | |
| Operating Profit (Loss) | | $ | (11.1 | ) | | | -0.3% | | | $ | 13.7 | | | $ | 2.6 | | | | 0.1% | |
| Net Earnings | | $ | 18.8 | | | | 0.5% | | | $ | 7.8 | | | $ | 26.6 | | | | 0.7% | |
| | | | | | | | | | | | | | |
| Diluted Earnings Per Share | | $ | 0.07 | | | | | | | $ | 0.03 | | | $ | 0.10 | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| YTD 2008 | | GAAP | | | % of Sales | | | Charges | | | Non-GAAP | | | % of Sales | |
| Gross Profit | | $ | 4,005.7 | | | | 27.6% | | | $ | 15.9 | | | $ | 4,021.6 | | | | 27.7% | |
| Operating Expenses | | $ | 5,550.7 | | | | 38.3% | | | $ | (1,452.8 | ) | | $ | 4,097.9 | | | | 28.2% | |
| Operating Loss | | $ | (1,545.0 | ) | | | (10.7)% | | | $ | 1,468.7 | | | $ | (76.3 | ) | | | (0.5)% | |
| Net Loss | | $ | (1,478.9 | ) | | | (10.2)% | | | $ | 1,366.2 | | | $ | (112.7 | ) | | | (0.8)% | |
| | | | | | | | | | | | | | |
| Diluted Loss Per Share | | $ | (5.42 | ) | | | | | | $ | 5.01 | | | $ | (0.41 | ) | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| YTD 2007 | | GAAP | | | % of Sales | | | Charges | | | Non-GAAP | | | % of Sales | |
| Gross Profit | | $ | 4,502.9 | | | | 29.0% | | | $ | 0.3 | | | $ | 4,503.2 | | | | 29.0% | |
| Operating Expenses | | $ | 4,019.3 | | | | 25.9% | | | $ | (38.2 | ) | | $ | 3,981.1 | | | | 25.6% | |
| Operating Profit | | $ | 483.6 | | | | 3.1% | | | $ | 38.5 | | | $ | 522.1 | | | | 3.4% | |
| Net Earnings | | $ | 395.6 | | | | 2.5% | | | $ | 28.2 | | | $ | 423.8 | | | | 2.7% | |
| | | | | | | | | | | | | | |
| Diluted Earnings Per Share | | $ | 1.43 | | | | | | | $ | 0.11 | | | $ | 1.54 | | | | | |
| | | | | | | | | | | | | | |
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OFFICE DEPOT, INC.
GAAP to Non-GAAP Reconciliations (Continued)
| | | | | | | | | |
| | | Q4 2008* | | | Q4 2007 | |
Cash Flow Summary | | | | | | | | |
| Net cash provided by (used in) operating activities | | $ | 30.5 | | | $ | (43.4 | ) |
| Net cash provided by (used in) investing activities | | | (22.7 | ) | | | (98.4 | ) |
| Net cash provided by (used in) financing activities | | | (242.8 | ) | | | 179.7 | |
| Effect of exchange rate changes on cash and cash equivalents | | | (3.8 | ) | | | (2.0 | ) |
| | | | | | | |
| Net increase (decrease) in cash and cash equivalents | | $ | (238.8 | ) | | $ | 35.9 | |
| | | | | | | |
| | | | | | | | | |
Free Cash Flow | | | | | | | | |
| Net cash provided by (used in) operating activities | | $ | 30.5 | | | $ | (43.4 | ) |
| Less: Capital expenditures | | | 52.3 | | | | 126.6 | |
| | | | | | | |
| Free Cash Flow | | $ | (21.8 | ) | | $ | (170.0 | ) |
| | | | | | | |
| | | | | | | | | |
Cash Flow Before Financing Activities | | | | | | | | |
| Net increase (decrease) in cash and cash equivalents | | $ | (238.8 | ) | | $ | 35.9 | |
| Less: Net cash provided by (used in) financing activities | | | (242.8 | ) | | | 179.7 | |
| | | | | | | |
| Cash Flow Before Financing Activities | | $ | 4.0 | | | $ | (143.8 | ) |
| | | | | | | |
| | | | | | | | | |
| | | FY 2008 | | | FY 2007 | |
Cash Flow Summary | | | | | | | | |
| Net cash provided by (used in) operating activities | | $ | 468.3 | | | $ | 411.4 | |
| Net cash provided by (used in) investing activities | | | (338.7 | ) | | | (372.5 | ) |
| Net cash provided by (used in) financing activities | | | (186.3 | ) | | | 7.9 | |
| Effect of exchange rate changes on cash and cash equivalents | | | (10.5 | ) | | | 2.6 | |
| | | | | | | |
| Net increase (decrease) in cash and cash equivalents | | $ | (67.2 | ) | | $ | 49.4 | |
| | | | | | | |
| | | | | | | | | |
Free Cash Flow | | | | | | | | |
| Net cash provided by (used in) operating activities | | $ | 468.3 | | | $ | 411.4 | |
| Less: Capital expenditures | | | 330.1 | | | | 460.6 | |
| | | | | | | |
| Free Cash Flow | | $ | 138.2 | | | $ | (49.2 | ) |
| | | | | | | |
| | | | | | | | | |
Cash Flow Before Financing Activities | | | | | | | | |
| Net increase (decrease) in cash and cash equivalents | | $ | (67.2 | ) | | $ | 49.4 | |
| Less: Net cash provided by (used in) financing activities | | | (186.3 | ) | | | 7.9 | |
| | | | | | | |
| Cash Flow Before Financing Activities | | $ | 119.1 | | | $ | 41.5 | |
| | | | | | | |
Free cash flow is calculated as net cash provided by (used in) operating activities less capital expenditures.
Cash flow before financing activities is calculated as the net increase (decrease) in cash and cash equivalents less net cash provided by (used in) financing activities.
*Quarterly amounts have been conformed to full year presentation.
9
Office Depot, Inc.
DIVISION INFORMATION
(Unaudited)
North American Retail Division
| | | | | | | | | | | | | | | | | |
| | | Fourth Quarter | | Year-to-Date |
| (Dollars in millions) | | 2008 | | 2007 | | 2008 | | 2007 |
| Sales | | $ | 1,387.3 | | | $ | 1,667.7 | | | $ | 6,112.3 | | | $ | 6,813.6 | |
| % change | | | (17)% | | | | (3)% | | | | (10)% | | | | —% | |
| | | | | | | | | | | | | | | | | |
| Division operating profit (loss) | | $ | (119.3) | | | $ | 23.5 | | | $ | (29.2) | | | $ | 354.5 | |
| % of sales | | | (8.6)% | | | | 1.4% | | | | (0.5)% | | | | 5.2% | |
North American Business Solutions Division
| | | | | | | | | | | | | | | | | |
| | | Fourth Quarter | | Year-to-Date |
| (Dollars in millions) | | 2008 | | 2007 | | 2008 | | 2007 |
| Sales | | $ | 919.8 | | | $ | 1,064.7 | | | $ | 4,142.1 | | | $ | 4,518.4 | |
| % change | | | (14)% | | | | (4)% | | | | (8)% | | | | (1)% | |
| | | | | | | | | | | | | | | | | |
| Division operating profit (loss) | | $ | (28.2 | ) | | $ | 0.8 | | | $ | 119.8 | | | $ | 220.1 | |
| % of sales | | | (3.1)% | | | | 0.1% | | | | 2.9% | | | | 4.9% | |
International Division
| | | | | | | | | | | | | | | | | |
| | | Fourth Quarter | | Year-to-Date |
| (Dollars in millions) | | 2008 | | 2007 | | 2008 | | 2007 |
| Sales | | $ | 963.5 | | | $ | 1,134.6 | | | $ | 4,241.1 | | | $ | 4,195.6 | |
| % change | | | (15)% | | | | 12% | | | | 1% | | | | 15% | |
| % change in local currency sales | | | (4)% | | | | 2% | | | | (2)% | | | | 6% | |
| | | | | | | | | | | | | | | | | |
| Division operating profit | | $ | 10.0 | | | $ | 59.6 | | | $ | 157.2 | | | $ | 231.1 | |
| % of sales | | | 1.0% | | | | 5.3% | | | | 3.7% | | | | 5.5% | |
Division operating profit excludes Charges from the Division performance, as those Charges are evaluated at a corporate level.
Office Depot, Inc.
SELECTED FINANCIAL AND OPERATING DATA
(Unaudited)
Other Selected Financial Information
(In thousands, except operational data)
| | | | | | | | | |
| | | 52 Weeks Ended | | 52 Weeks Ended |
| | | December 27, 2008 | | December 29, 2007 |
| Cumulative share repurchases under approved repurchase plans ($): | | $ | — | | | $ | 199,592 | |
| | | | | | | | | |
| Cumulative share repurchases under approved repurchase plans (shares): | | | — | | | | 5,702 | |
| | | | | | | | | |
| Shares outstanding, end of quarter | | | 274,862 | | | | 272,958 | |
| | | | | | | | | |
| Amount authorized for future share repurchases, end of quarter ($): | | $ | 500,000 | | | | | |
Selected Operating Highlights
| | | | | | | | | | | | | | | | | |
| | | 13 Weeks Ended | | 52 Weeks Ended |
| | | December 27, 2008 | | December 29, 2007 | | December 27, 2008 | | December 29, 2007 |
| Store Statistics | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| United States and Canada: | | | | | | | | | | | | | | | | |
| Store count: | | | | | | | | | | | | | | | | |
| Stores opened | | | 2 | | | | 12 | | | | 59 | | | | 71 | |
| Stores closed | | | 10 | | | | 2 | | | | 14 | | | | 7 | |
| Stores relocated | | | 1 | | | | 2 | | | | 7 | | | | 3 | |
| Total U.S. and Canada stores | | | 1,267 | | | | 1,222 | | | | 1,267 | | | | 1,222 | |
| | | | | | | | | | | | | | | | | |
| North American Retail Division square footage: | | | 30,672,862 | | | | 29,790,082 | | | | | | | | | |
| Average square footage per NAR store | | | 24,209 | | | | 24,378 | | | | | | | | | |
| Inventory per store (end of period) | | $ | 689,000 | | | $ | 960,000 | | | | | | | | | |
| International Division company-owned: | | | | | | | | | | | | | | | | |
| Store count: | | | | | | | | | | | | | | | | |
| Stores opened | | | — | | | | 5 | | | | 2 | | | | 26 | |
| Stores closed | | | — | | | | 1 | | | | 1 | | | | 3 | |
| Stores acquired | | | — | | | | — | | | | 13 | | | | — | |
| Total International company-owned stores | | | 162 | | | | 148 | | | | 162 | | | | 148 | |
