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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: October 30, 2004

 

Commission File Number: 0-17586

 

STAPLES, INC.

(Exact name of registrant as specified in its charter)

 

Delaware

04-2896127

(State or other jurisdiction of
Identification No.)

(I.R.S. Employer
Identification No.)

 

 

 

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 497,903,303 shares of Staples common stock outstanding as of November 12, 2004.

 

 


 

STAPLES, INC. AND SUBSIDIARIES
FORM  10-Q
October 30, 2004
TABLE OF CONTENTS

 

Part I – Financial Information:

 

 

 

Item 1. Financial Statements (unaudited):

 

Consolidated Balance Sheets

 

Consolidated Statements of Income

 

Consolidated Statements of Cash Flows

 

Notes to Consolidated Financial Statements

 

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

 

Item 3. Quantitative and Qualitative Disclosures about Market Risk

 

 

 

Item 4. Controls and Procedures

 

 

 

Part II – Other Information

 

 

 

Signature

 

 

 

Exhibit Index

 

 

2


 

PART I - FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

STAPLES, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Dollar Amounts in Thousands, Except Share Data)

 

 

 

October, 30
2004
(Unaudited)

 

January 31,
2004

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

1,113,492

 

$

457,465

 

Short-term investments

 

528,816

 

934,275

 

Receivables, net

 

477,068

 

410,330

 

Merchandise inventories, net

 

1,633,774

 

1,465,989

 

Deferred income taxes

 

95,672

 

96,247

 

Prepaid expenses and other current assets

 

134,321

 

114,598

 

Total current assets

 

3,983,143

 

3,478,904

 

 

 

 

 

 

 

Property and equipment:

 

 

 

 

 

Land and buildings

 

636,938

 

601,063

 

Leasehold improvements

 

746,069

 

692,837

 

Equipment

 

1,112,821

 

1,045,605

 

Furniture and fixtures

 

586,627

 

533,104

 

Total property and equipment

 

3,082,455

 

2,872,609

 

Less accumulated depreciation and amortization

 

1,549,113

 

1,367,308

 

Net property and equipment

 

1,533,342

 

1,505,301

 

 

 

 

 

 

 

Lease acquisition costs, net of accumulated amortization

 

43,350

 

44,227

 

Intangible assets, net of accumulated amortization

 

219,132

 

209,541

 

Goodwill

 

1,290,395

 

1,202,007

 

Other assets

 

82,709

 

63,066

 

Total assets

 

$

7,152,071

 

$

6,503,046

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

1,394,355

 

$

1,110,631

 

Accrued expenses and other current liabilities

 

891,640

 

822,453

 

Debt maturing within one year

 

192,948

 

190,150

 

Total current liabilities

 

2,478,943

 

2,123,234

 

 

 

 

 

 

 

Long-term debt

 

565,575

 

567,433

 

Deferred tax liability

 

2,432

 

7,563

 

Other long-term obligations

 

171,529

 

141,916

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

Preferred stock, $.01 par value, 5,000,000 shares authorized; no shares issued

 

—

 

—

 

Common stock, $.0006 par value, 2,100,000,000 shares authorized; issued 538,138,918 shares at October 30, 2004 and 527,121,843 shares at January 31, 2004

 

323

 

316

 

Additional paid-in capital

 

2,158,908

 

1,933,379

 

Cumulative foreign currency translation adjustments

 

113,332

 

81,002

 

Retained earnings

 

2,566,839

 

2,209,302

 

Less: treasury stock at cost, 40,534,442 shares at October 30, 2004, and 27,927,347 shares at January 31, 2004

 

(905,810

)

(561,099

)

Total stockholders’ equity

 

3,933,592

 

3,662,900

 

Total liabilities and stockholders’ equity

 

$

7,152,071

 

$

6,503,046

 

 

See notes to consolidated financial statements.

 

3


 

STAPLES, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(Dollar Amounts in Thousands, Except Per Share Data)
(Unaudited)

 

 

 

13 Weeks Ended

 

39 Weeks Ended

 

 

 

October 30,
2004

 

November 1,
2003

 

October 30,
2004

 

November 1,
2003

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$

3,830,466

 

$

3,434,763

 

$

10,371,873

 

$

9,353,830

 

Cost of goods sold and occupancy costs

 

2,734,250

 

2,477,418

 

7,469,347

 

6,924,325

 

Gross profit

 

1,096,216

 

957,345

 

2,902,526

 

2,429,505

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Operating and selling

 

605,503

 

555,545

 

1,722,896

 

1,577,832

 

Pre-opening

 

2,923

 

2,314

 

6,761

 

5,961

 

General and administrative

 

153,748

 

130,422

 

436,734