Exhibit 99.1
Headquarters: 3605 Warrensville Center Rd., Shaker Heights, OH 44122-5203
Mailing Address: P.O. Box 228070, Cleveland, OH 44122-8070
OfficeMax, Inc.
NEWS RELEASE FOR IMMEDIATE RELEASE
For media & investor inquiries:
Steve Baisden
Manager, Investor &
Public Relations
(216) 471-3441
investor@officemax.com
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OFFICEMAX DOMESTIC SAME-STORE SALES UP MORE THAN NINE PERCENT THROUGH THE
FIRST FIVE WEEKS OF THE CURRENT QUARTER, GROWTH CONTINUES TO EXCEED COMPANY'S
EXPECTATION OF MID-SINGLE DIGITS
CLEVELAND - June 5, 2003 - OfficeMax, Inc. (NYSE: OMX) shareholders were told
today at their annual meeting that the Company's domestic same-store sales are
up more than nine percent through the first five weeks of the current quarter,
which continue to exceed its planned expectation of mid-single digits. The
Company said these gains are being fueled by increases in both same-store
customer transactions and the average amount per transaction.
Michael Feuer, OfficeMax's chairman and chief executive officer, said, "This
positive trend, which began to accelerate in late April as the conflict in Iraq
started to wind down, continues to build momentum as small businesses and
consumers seem to have gained some degree of confidence about the future
outlook. We've capitalized on this, albeit slight, improvement in sentiment
through our enhanced merchandise in-stock position as a result of our new
infrastructure platform including supply chain management programs and
protocols, a focus on improved customer-centric store execution and marketing
initiatives that drive sales while protecting gross margin."
The Company's second quarter, comprised of May through July, is traditionally
the slowest period of the year as customers turn more to outdoor activities,
including vacations, and spend less time in the office. OfficeMax said it uses
this slower period, which has historically resulted in an operating loss, to
prepare the Company's stores for the high volume third and fourth quarters that
include back-to-school, holiday and the January back-to-business selling
seasons. OfficeMax typically generates the vast majority of its full-year
earnings during the second half of the year.
Mr. Feuer said that the Company is buoyed by recent trends and remains confident
about its previously announced full-year guidance of overall sales at somewhat
above $5 billion, with comparable-store sales in the mid-single digit range. On
a generally accepted accounting principles (GAAP) basis, this would produce
earnings of 47 to 50 cents per diluted share, or 28 to 30 cents using a tax rate
of approximately 40 percent, which would be more than three times its fiscal
year 2002 pro-forma results. Mr. Feuer noted, "The Company's previously
announced decision to accelerate its remodeling program is proceeding as planned
and OfficeMax expects to complete approximately 210 of its 250 remodels before
we enter the higher volume second half starting with back to school. Although
there is some incremental expense in the second quarter for this `fast-track'
program, we believe that the benefits in the second half of this year will more
than outweigh the costs. Based on this progress and recent sales trends, the
Company is on track to achieve current second quarter guidance of mid-single
digit comparable-store sales gains that will result in a 19 percent improvement
over last year's seasonal loss to approximately $0.22 per share on a GAAP basis,
or $0.13 per share using a 40 percent tax rate."
SHAREHOLDERS ELECT THE COMPANY'S SLATE OF DIRECTORS, APPROVE COMPANY BONUS PLAN
OfficeMax also announced that its shareholders overwhelmingly voted, with more
than 90 percent in favor, to re-elect three current directors, Michael Feuer,
Lee Fisher and Jerry Sue Thornton, and elect a new board member, Edwin J.
Holman, president and chief operating officer of Bloomingdale's, to serve
two-year terms on its board. Shareholders also approved the Company's Annual
Incentive Bonus Plan for officers and key employees.
# # #
ABOUT OFFICEMAX
OfficeMax serves its customers through nearly 1,000 superstores, e-commerce Web
sites and direct-mail catalogs. The Company has operations in the United States,
PAGE 2 OF 2
OFFICEMAX, INC.
SHAREHOLDER MEETING
JUNE 5, 2003
Canada, Puerto Rico, the U.S. Virgin Islands and Mexico. In addition to offering
office products, business machines and related items, OfficeMax superstores
feature CopyMax and FurnitureMax, store-within-a-store modules devoted
exclusively to "print-for-pay" services and office furniture. The Company also
reaches customers in the United States with an offering of over 40,000 items
through its award winning e-commerce site, OfficeMax.com, its direct-mail
catalogs and its outside sales force, all of which are serviced by its three
PowerMax distribution facilities, 17 delivery centers and two national customer
call and contact centers.
SEC REGULATION G
This news release includes non-GAAP earnings per share expectations for the
Company's full fiscal year ending Jan. 24, 2004 and fiscal second quarter ending
July 26, 2003. Also included are the results for the comparative periods in
fiscal 2002. For the full year, these results include the effect of a normalized
tax provision of approximately 40 percent excluding a change in the Company's
valuation allowance for deferred tax assets. The effect of a normalized tax
provision would have a similar impact on the second quarter estimates. This
information is included to provide estimated and actual operating results on a
more comparable basis to OfficeMax's historical operating results, its industry
peers and estimates projected by securities analysts. Below is a reconciliation
of the Company's GAAP earnings per share results and estimates to the non-GAAP
measures presented in this release:
(In 000's except EPS data)
- --------------------------
52 Weeks 13 Weeks
--------------------------------------------------------------- ---------------------------------------------
(Estimated) (Actual) (Estimated) (Actual)
Ending Ended Ending Ended
Jan. 24, 2004 EPS Jan. 25, 2003 EPS July 26, 2003 EPS July 27, 2002 EPS
--------------------- ----------------- ------------- ------ ------------- -------- ------------- ------
GAAP Net income
(loss) $ 59,000 to $ 63,000 $ 0.47 to $ 0.50 $ 73,724 $ 0.59 $ (27,000) $ (0.22) $ (33,362) $ (0.27)
Income tax benefit - - (57,500) (0.46) - - - -
Estimated tax
(provision)
benefit (23,600) to (25,200) (0.19) to (0.20) (6,489) (0.05) 10,800 0.09 13,178 0.11
---------------------------------------- ---------------------- ------------- ----- --------------------
Non-GAAP net
income (loss) $ 35,400 to $ 37,800 $ 0.28 to $ 0.30 $ 9,735 $ 0.08 $ (16,200) $ (0.13) $ (20,184) $ (0.16)
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Weighted Average
number of
common shares
outstanding 126,250 125,109 124,750 123,920
Note: Statements in this news release, other than those concerning historical
information (including information incorporated by reference), contain
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Any information in this news release that is not
historical information is a forward-looking statement which may be identified by
the use of language such as "may," "will," "should," "expects," "plans,"
"anticipates," "estimates," "believes," "thinks," "continues," "indicates,"
"outlook," "looks," "goals," "initiatives," "projects," or similar expressions.
These statements are likely to address the Company's growth strategy, future
financial performance (including sales, gross margin and earnings), strategic
initiatives, marketing and expansion plans, and the impact of operating
initiatives. The forward-looking statements, which speak only as of the date the
statement was made, are subject to risks, uncertainties and other factors that
could cause actual results to differ materially from those stated, projected or
implied in the forward-looking statements. These risks and uncertainties include
those described in Exhibit 99.1 of the Company's Annual Report on Form 10-K for
the fiscal year ended January 25, 2003, and in other reports and exhibits to
those reports filed with the Securities and Exchange Commission. You are
strongly urged to review such filings for a more detailed discussion of such
risks and uncertainties. The Company's filings with the Securities and Exchange
Commission are available at no charge at www.sec.gov and www.freeEDGAR.com, as
well as on a number of other web sites including OfficeMax.com, under the
investor information section. These risks and uncertainties also include the
following: risks associated with general economic conditions (including the
effects of the continuing hostilities in Iraq and Afghanistan, additional
terrorist attacks and hostilities, the stock market decline, currency
devaluation, slower than anticipated economic recovery and declining employment
rate or other changes in our customers' business environments, including an
increase in bankruptcy filings); increasing competition that includes office
supply superstores, wholesale clubs, contract stationers, computer and
electronics superstore retailers, Internet merchandisers and mass merchandisers,
as well as grocery and drug store chains; the result of continuing FAS 142
assessments; and the impact of the adoption of EITF 02-16 and FIN 46 along with
other new accounting pronouncements. The foregoing list of important factors is
not exclusive. The Company undertakes no obligation to publicly update or revise
any forward-looking statements, whether as a result of new information, future
events, or otherwise.