SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended: November 1, 2003
Commission File Number: 0-17586
STAPLES, INC.
(Exact name of registrant as specified in its charter)
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Delaware |
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04-2896127 |
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(State or other
jurisdiction of |
(I.R.S. Employer |
Five Hundred Staples Drive, Framingham, MA 01702
(Address of principal executive office and zip code)
508-253-5000
(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 requirements for the past 90 days.
Yes ý No o
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
Yes ý No o
The registrant had 495,146,743 shares of Staples common stock outstanding as of November 13, 2003.
STAPLES, INC. AND SUBSIDIARIES
FORM 10-Q
November 1, 2003
TABLE OF CONTENTS
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. Quantitative and Qualitative Disclosures about Market Risk |
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2
PART I - FINANCIAL INFORMATION
STAPLES, INC. AND SUBSIDIARIES
(Dollar Amounts in Thousands, Except Share Data)
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November
1, |
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February
1, |
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(Unaudited) |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
1,048,571 |
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$ |
596,064 |
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Receivables, net |
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408,862 |
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364,419 |
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Merchandise inventories, net |
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1,619,294 |
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1,555,205 |
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Deferred income taxes |
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133,197 |
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96,229 |
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Prepaid expenses and other current assets |
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103,619 |
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105,559 |
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Total current assets |
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3,313,543 |
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2,717,476 |
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Property and equipment: |
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Land and buildings |
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583,265 |
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524,730 |
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Leasehold improvements |
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670,039 |
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621,713 |
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Equipment |
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1,015,070 |
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951,439 |
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Furniture and fixtures |
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512,290 |
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472,935 |
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Total property and equipment |
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2,780,664 |
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2,570,817 |
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Less accumulated depreciation and amortization |
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1,304,468 |
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1,123,065 |
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Net property and equipment |
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1,476,196 |
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1,447,752 |
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Lease acquisition costs, net of accumulated amortization |
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44,818 |
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51,450 |
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Intangible assets, net of accumulated amortization |
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211,478 |
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216,391 |
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Goodwill |
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1,209,785 |
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1,207,824 |
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Other assets |
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69,074 |
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80,495 |
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Total assets |
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$ |
6,324,894 |
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$ |
5,721,388 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Accounts payable |
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$ |
1,276,506 |
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$ |
1,092,172 |
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Accrued expenses and other current liabilities |
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762,008 |
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755,483 |
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Debt maturing within one year |
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3,608 |
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327,671 |
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Total current liabilities |
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2,042,122 |
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2,175,326 |
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Long-term debt |
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735,165 |
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732,041 |
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Deferred income taxes |
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27,700 |
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50,267 |
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Other long-term obligations |
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133,606 |
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104,862 |
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Stockholders’ equity: |
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Preferred stock - authorized 5,000,000 shares of $.01 par value; no shares issued |
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— |
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— |
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Common stock -
authorized 2,100,000,000 shares of $.0006 par value; |
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314 |
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299 |
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Additional paid-in capital |
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1,886,994 |
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1,484,833 |
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Cumulative foreign currency translation adjustments |
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62,678 |
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11,481 |
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Retained earnings |
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1,997,414 |
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1,719,091 |
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Treasury stock at cost - 27,927,201 shares at November 1, 2003, and 27,724,578 shares at February 1, 2003 |
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(561,099 |
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(556,812 |
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Total stockholders’ equity |
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3,386,301 |
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2,658,892 |
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Total liabilities and stockholders’ equity |
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$ |
6,324,894 |
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$ |
5,721,388 |
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See notes to consolidated financial statements.
3
STAPLES, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(Dollar Amounts in Thousands, Except Per Share Data)
(Unaudited)
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13 Weeks Ended |
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39 Weeks Ended |
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November 1, |
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November 2, |
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November 1, |
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November 2, |
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Sales |
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$ |
3,484,784 |
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$ |
3,089,725 |
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$ |
9,500,068 |
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$ |
8,260,966 |
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Cost of goods sold and occupancy costs |
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2,497,117 |
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2,286,911 |
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6,982,528 |
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6,200,272 |
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Gross profit |
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987,667 |
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802,814 |
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2,517,540 |
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2,060,694 |
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Operating and other expenses: |
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Operating and selling |
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585,867 |
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471,805 |
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1,665,867 |
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1,317,421 |
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Pre-opening |
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2,314 |
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2,393 |
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5,961 |
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6,625 |
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General and administrative |
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130,422 |
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120,006 |
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382,289 |
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325,788 |
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Amortization of intangibles |
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2,076 |
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— |
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5,962 |
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— |
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Interest and other expense, net |
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3,854 |
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5,406 |
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15,679 |
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10,159 |
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Total operating and other expenses |
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724,533 |
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599,610 |
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2,075,758 |
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1,659,993 |
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Income before income taxes |
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263,134 |
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