Exhibit 99.1
OFFICEMAX, INC.
STATEMENT REGARDING FORWARD-LOOKING INFORMATION
The Private Securities Litigation Reform Act of 1995 (the "Act")
provides a "safe harbor" for "forward-looking statements" (as defined in the
Act). The Form 10-K to which this exhibit is attached, the Company's Annual
Report to Shareholders, any Form 10-Q or any Form 8-K of the Company, or any
other written or oral statements made by or on behalf of the Company may include
or incorporate by reference forward-looking statements which reflect the
Company's current view (as of the date such forward-looking statement is made)
with respect to future events, prospects, projections or financial performance.
The words "believe," "expect," "anticipate," "project," "plan," "intend," and
similar expressions, among others, identify "forward-looking statements." 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. These forward-looking statements are subject to certain
uncertainties and other factors that could cause actual results to differ
materially from those made, implied or projected in such statements. These
uncertainties and other factors include, but are not limited to the following:
- The Company faces intense competition from a variety of
retailers, dealers and distributors, including, other
high-volume office product chains that are similar in concept
to the Company in terms of store format, pricing strategy,
product selection and services; in addition, warehouse clubs
and mass merchant retailers like Wal-Mart as well as grocery
and drug store chains have increased their assortment of home
office merchandise, attracting additional back-to-school
customers and year-round casual shoppers; such competition,
from competitors with significant financial and distribution
capabilities, may reduce the Company's market share and profit
margins and may otherwise adversely affect the Company's
results of operations, financial condition and prospects;
- The Company faces increasing competition from Internet-based
merchandisers which have minimal barriers to entry; these
competitors include traditional retailers that sell through
the Internet, Internet sites that target the small business
market with a full line of business products or service
offerings and Internet sites that sell or resell office
products and business services;
- The Company relies heavily on its information systems for both
its traditional stores and OfficeMax.com; there could be
malfunctions or failures of the Company's information systems
that could disrupt business operations; and there could be
difficulties associated with implementation and upgrades of
the Company's information systems;
- Historically, an integral part of the Company's business plan
has been an aggressive store growth strategy; although the
Company has reduced the number of stores it
plans to open in 2002, it still must continue to open new
stores successfully; there can be no assurance, however, that
the Company will be able to find favorable store locations,
negotiate favorable leases, hire and train employees and store
managers and integrate the new stores in a manner that will
allow it to meet its expansion strategy;
- As the Company expands the number of its stores in existing
markets, sales at existing stores may be impacted;
- New stores typically take time to reach the levels of sales
and profitability of the Company's existing stores, and there
can be no assurance that new stores will be as profitable as
existing stores;
- There can be no assurance that the Company will be able to
maintain its relationships with its product and service
providers or other affiliates or that the Company's strategic
alliances or partnerships, such as those with Airborne Express
and EarthLink, will achieve anticipated results;
- If the Company's joint venture partner in Mexico exercises its
right to require the Company to purchase its joint venture
interest, the Company's liquidity may be adversely affected;
the Company is currently negotiating with its joint venture
partner for a longer term commitment but no assurances can be
given that such a commitment can be obtained and if obtained,
no assurances can be given as to the terms of such commitment;
in addition, when the Company's lease agreements for two of
its PowerMax distribution facilities expire in 2003 and 2004,
the Company will be required to purchase the facilities or
refinance the leases and no assurance can be given that at the
time such leases expire the Company will have sufficient
liquidity or capital resources to purchase such facilities or
refinance the leases;
- There can be no assurance that (1) the Company will not
require additional sources of financing as a result of
unanticipated cash needs, acquisitions or other opportunities
or disappointing operating results or (2) any additional funds
required by the Company will be available to the Company on
satisfactory terms;
- There is potential for rapid and significant changes in
technology which could affect the Company's operations;
- The Company's ability to increase its operating efficiency and
profitability is dependent on the Company maximizing the
benefits of its PowerMax distribution system and SAP
Enterprise Resource Planning computer system, including the
recent upgrade to SAP's R/3 4.6c release; there can be no
assurance that the Company will be able to maximize such
benefits and if such benefits are maximized, whether such
benefits will result in increased operating efficiency and
profitability;
- There are operating and financial risks related to managing
rapid growth and integrating acquired businesses including
demands on management and the Company's operational systems;
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- There can be no assurance that the Company's store redesign
will lead to increased sales; in addition, the Company's
results of operations may be negatively impacted by the costs
incurred to implement such redesign;
- The Company has substantially reduced its inventory over the
past two fiscal years, but no assurance can be given that such
reduction will result in increased profitability;
- Fluctuations in the Company's quarterly operating results have
occurred in the past and may occur in the future based on a
variety of factors such as new store openings with their
concurrent pre-opening expenses, the extent to which new
stores are less profitable as they commence operations, the
effect new stores have on the sale of existing stores in more
mature markets, the pricing activity of competitors in the
Company's markets, changes in the Company's product mix,
increases and decreases in advertising and promotional
expenses, the effects of seasonality, acquisition of contract
stationers and stores of competitors;
- In light of its current real estate strategy, the Company
anticipates that much of its revenue growth during fiscal 2002
and 2003 will be the result of increased same store sales; no
assurances can be given that the Company will be able to
achieve or maintain such increased same store sales;
- The Company continues to explore expansion internationally and
there are risks associated with international operations,
including lack of local business experience, foreign currency
fluctuations, language and other cultural barriers, political
and economic instability and, since the Company's existing
foreign operations are joint ventures not wholly-owned by the
Company, a lack of operating control;
- Over the past three fiscal years, the Company has taken
certain significant one-time charges against earnings for
store closings and associated inventory markdowns as well as
vendor and merchandise rationalization; there can be no
assurance that additional charges of this nature will not be
required in the future and if required, no assurance can be
given as to the size and nature of any such non-recurring
charges; if such charges are required, they could have a
materially adverse impact on the Company's financial position
or results of operations.
- The Company is largely dependent on the services of Michael
Feuer, the Company's Chairman and Chief Executive Officer, and
its senior management; the loss of Mr. Feuer or any of the
Company's other senior management could have a material
adverse impact on the Company;
- Strikes or other labor disruptions or weather conditions that
could adversely affect the Company's operations;
- The Company faces uncertainties relating to general economic
conditions, including the impact of such conditions on
consumer and business spending; and
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- A significant portion of the Company's operating expenses,
such as rent expense, advertising expense and employee
salaries, do not vary directly with the amount of its sales
and are difficult to adjust in the short term; in response to
the difficult retail environment over the past two fiscal
years, the Company took significant actions to reduce
operating expenses during those fiscal years; if economic
conditions do not improve in fiscal 2002, the Company may have
difficulty reducing expenses further without adversely
affecting the Company's business.
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