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: July 31, 2004
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 497,573,195 shares of Staples common stock outstanding as of August 13, 2004.
STAPLES, INC. AND SUBSIDIARIES
FORM 10-Q
July 31, 2004
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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July 31, |
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January 31, |
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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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$ |
876,740 |
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$ |
457,465 |
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Short-term investments |
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394,101 |
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934,275 |
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Receivables, net |
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401,377 |
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410,330 |
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Merchandise inventories, net |
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1,591,150 |
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1,465,989 |
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Deferred income taxes |
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97,934 |
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96,247 |
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Prepaid expenses and other current assets |
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98,751 |
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114,598 |
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Total current assets |
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3,460,053 |
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3,478,904 |
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Property and equipment: |
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Land and buildings |
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612,154 |
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601,063 |
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Leasehold improvements |
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716,695 |
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692,837 |
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Equipment |
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1,079,600 |
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1,045,605 |
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Furniture and fixtures |
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555,337 |
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533,104 |
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Total property and equipment |
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2,963,786 |
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2,872,609 |
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Less accumulated depreciation and amortization |
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1,467,777 |
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1,367,308 |
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Net property and equipment |
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1,496,009 |
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1,505,301 |
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Lease acquisition costs, net of accumulated amortization |
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44,162 |
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44,227 |
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Intangible assets, net of accumulated amortization |
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206,031 |
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209,541 |
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Goodwill |
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1,202,007 |
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1,202,007 |
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Other assets |
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59,947 |
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63,066 |
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Total assets |
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$ |
6,468,209 |
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$ |
6,503,046 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Accounts payable |
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$ |
1,171,873 |
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$ |
1,110,631 |
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Accrued expenses and other current liabilities |
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684,318 |
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822,453 |
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Debt maturing within one year |
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181,799 |
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190,150 |
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Total current liabilities |
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2,037,990 |
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2,123,234 |
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Long-term debt |
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553,992 |
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567,433 |
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Deferred tax liability |
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9,528 |
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7,563 |
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Other long-term obligations |
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154,862 |
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141,916 |
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Stockholders’ equity: |
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Preferred stock, $.01 par value, 5,000,000 shares authorized; no shares issued |
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— |
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— |
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Common stock, $.0006 par value, 2,100,000,000 shares authorized; issued 534,735,417 shares at July 31, 2004 and 527,121,843 shares at January 31, 2004 |
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321 |
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316 |
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Additional paid-in capital |
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2,090,875 |
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1,933,379 |
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Cumulative foreign currency translation adjustments |
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71,937 |
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81,002 |
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Retained earnings |
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2,357,969 |
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2,209,302 |
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Less: treasury stock at cost, 37,192,042 shares at July 31, 2004, and 27,927,347 shares at January 31, 2004 |
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(809,265 |
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(561,099 |
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Total stockholders’ equity |
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3,711,837 |
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3,662,900 |
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Total liabilities and stockholders’ equity |
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$ |
6,468,209 |
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$ |
6,503,046 |
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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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26 Weeks Ended |
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July 31, |
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August 2, |
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July 31, |
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August 2, |
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Sales |
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$ |
3,089,252 |
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$ |
2,827,779 |
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$ |
6,541,407 |
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$ |
5,919,067 |
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Cost of goods sold and occupancy costs |
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2,218,567 |
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2,067,698 |
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4,735,097 |
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4,446,909 |
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Gross profit |
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870,685 |
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760,081 |
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1,806,310 |
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1,472,158 |
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Operating and other expenses: |
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Operating and selling |
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531,796 |
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486,131 |
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1,117,393 |
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1,022,287 |
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Pre-opening |
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2,155 |
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2,409 |
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3,838 |
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3,647 |
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General and administrative |
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138,545 |
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125,360 |
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282,987 |
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251,866 |
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Amortization of intangibles |
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1,861 |
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1,943 |
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