Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - ODP Corp | d392071d8k.htm |
Exhibit 99.1
CONTACTS:
Brian Turcotte
Investor Relations
561-438-3657
brian.turcotte@officedepot.com
Brian Levine
Public Relations
561-438-2895
brian.levine@officedepot.com
OFFICE DEPOT ANNOUNCES SECOND QUARTER 2012 RESULTS
BOCA RATON, Fla., August 7, 2012 — Office Depot, Inc. (NYSE: ODP), a leading global provider of office supplies and services, today announced results for the fiscal quarter ending June 30, 2012.
SECOND QUARTER RESULTS 1
Total Company sales for the second quarter of 2012 were approximately $2.5 billion, down 7% compared to the second quarter of 2011. On a constant currency basis, second quarter 2012 sales were down approximately 5% versus prior year.
The Company reported a net loss, after preferred stock dividends, of $64 million or $0.23 per diluted share in the second quarter of 2012, compared to a net loss, after preferred stock dividends, of $29 million or $0.11 per share in the second quarter of 2011.
| • | Second quarter 2012 results included approximately $9 million of charges primarily related to restructuring activities and actions to improve future operating performance, and approximately $24 million related to a non-cash asset impairment charge. |
| • | Excluding the charges (after tax) and a $16 million tax benefit associated with a U.S. Internal Revenue Service ruling, the second quarter 2012 net loss, after preferred stock dividends, would have been approximately $40 million or $0.14 per share. |
| • | Second quarter 2011 results included approximately $20 million of charges primarily related to restructuring activities and other costs intended to improve efficiency and benefit operations in future periods. Excluding these charges (after tax), the net loss, after preferred stock dividends, would have been $17 million or $0.06 per share in the second quarter of 2011. |
“Although the second quarter was challenging from both a revenue perspective and a year-over-year results comparison due to significant non-recurring benefits in 2011, we continued to execute our key initiatives and increased gross margin for the fifth consecutive quarter,” said Neil Austrian, Chairman and Chief Executive Officer of Office Depot. “I’m pleased that the North American Business Solutions Division delivered a solid operating performance again this quarter.”
| 1 | Includes non-GAAP information. Second quarter 2011 and 2012 results include charges for restructuring actions and activities to improve future operating performance. The second quarter of 2012 also included a $16 million tax benefit associated with a U.S. Internal Revenue Service ruling and a $24 million non-cash asset impairment charge. Additional information is provided in our Form 10-Q for the fiscal quarter ending June 30, 2012. Reconciliations from GAAP to non-GAAP financial measures can be found in this release, as well as in the Investor Relations section of our corporate web site, www.officedepot.com, under the category Financial Information. |
Excluding charges, total company gross profit margin increased approximately 40 basis points in the second quarter of 2012 compared to the prior year period, with increases recognized in all three divisions.
Total Company operating expenses decreased by $6 million in the second quarter of 2012 compared to the prior year period. Total Company operating expenses in the second quarter of 2012, when adjusted for charges, would have decreased by $18 million versus the prior year period.
Earnings, before interest and taxes (EBIT), adjusted for charges, were a loss of $22 million in the second quarter of 2012, compared to EBIT, adjusted for charges, of $11 million in the prior year period.
The effective tax rate for the second quarter of 2012 was 20% compared to 27% for the same period in 2011. The second quarter 2012 rate includes a $16 million accrued benefit based on a ruling from the U.S. Internal Revenue Service allowing the Company to carry back certain accounting method changes to the 2009 tax year.
The Company ended the second quarter of 2012 with a use of free cash flow of $66 million, a $19 million decrease in usage from the prior year period.
SECOND QUARTER DIVISION RESULTS
North American Retail Division
The North American Retail Division reported second quarter 2012 sales of approximately $994 million, a decrease of 8% compared to the prior year. The decline in total sales reflects a decrease of approximately 200 basis points related to the closing of stores in Canada last year and additional closures in the U.S. since the second quarter of 2011, and another 200 basis point decrease from the calendar shift impacts in 2012 because 2011 was a 53 week fiscal period.
Comparable store sales in the 1,094 stores that have been open for more than one year, and aligned to match the same selling weeks, decreased 4% for the second quarter of 2012, a sequential improvement from the 6% decline in the first quarter of 2012. The decline in comparable sales of computers and related products largely explains the Division’s overall comparable sales decline for the second quarter of this year. Customers switching from laptop computers to tablets contributed to lower sales but improved product margins. Sales in Copy and Print Depot, office furniture and seating increased. Sales in the supplies category were flat, while sales of ink and toner increased slightly. Average order value was slightly negative in the second quarter and customer transaction counts declined approximately 3% compared to the same period last year.
The North American Retail Division reported an adjusted operating profit, excluding the store asset impairment charge of approximately $24 million, of $2 million in the second quarter of 2012, compared to an adjusted operating profit of $15 million in the same period last year, excluding approximately $12 million of charges related to store closures in Canada. This decline primarily reflects the negative flow-through effect of lower sales, promotional activity, the clearance of inventory in advance of receiving new products, and the absence in 2012 of benefits recognized in 2011 from removing recourse provisions in a private label credit card program. These factors were partially offset by a year-over-year gross margin improvement of approximately 80 basis points, lower payroll and general and administrative costs.
At the end of the second quarter of 2012, Office Depot operated 1,117 stores in the U.S. and Puerto Rico. The Division opened no new stores and closed six during the second quarter of 2012.
North American Business Solutions Division
The North American Business Solutions Division reported second quarter 2012 sales of approximately $796 million, a 1% decrease compared to the prior year.
2
Sales in the direct channel were essentially flat, compared to the same period in 2011. Sales in the contract channel decreased 1% but were essentially flat after considering a customer incentive change that positively impacted results last year. Contract channel sales to large accounts increased, while sales to public sector customers declined in the second quarter, reflecting their continued budgetary pressures. Sales to small- to medium-sized business customers increased slightly in the second quarter. By product category, sales increased in furniture, Copy and Print Depot, printers, promotional products, and cleaning and break room supplies, while total sales of office supplies were relatively flat compared to the second quarter of the prior year.
The North American Business Solutions Division reported operating profit of approximately $40 million in the second quarter of 2012 compared to $45 million in the second quarter of 2011. The unfavorable comparison to the prior year is impacted by approximately $10 million of benefits in 2011 that were identified as not likely to recur. Excluding that comparative impact, operating profit in 2012 benefited from approximately 60 basis points of higher gross margin and lower supply chain costs, partially offset by higher payroll costs to support the sales organization and a legal accrual.
International Division
The International Division reported second quarter 2012 sales of $717 million, a decrease of 13% in U.S. dollars and a decrease of 6% in constant currency compared to the prior year. The second quarter of 2012 included fewer working days compared to the same period last year which contributed to the decline in sales in constant currency.
The European contract channel sales in constant currency decreased 2% overall with growth in the U.K. and Germany being offset by lower sales in other European countries. Contract channel sales in Asia increased versus the prior year. Second quarter 2012 sales in the direct channel were lower across the Division. This negative trend in direct sales continues to be an area of focus for the company with additional resources allocated to efforts to acquire and retain customers. The retail channel sales decreased in Europe and increased in Asia compared to the second quarter of 2011.
The International Division operating profit for the second quarter of 2012 was approximately $10 million, compared to $13 million in the same period of 2011. Included in these measures of Division operating profit are approximately $3 million of charges in 2012 and $6 million in the same period in 2011, primarily related to severance costs for restructuring activities in several European locations. These activities are intended to consolidate and streamline future operations. Excluding the charges in both periods, the remaining decrease in Division operating profit reflects the negative flow-through impact of lower sales, partially offset by reduced operating costs resulting from prior functional staff consolidation and restructuring activity.
The movement in exchange rates had a minimal impact on International Division operating profit in the second quarter of 2012 compared to the same period in 2011.
Other
Office Depot’s Latin American joint venture, Office Depot de Mexico, reported second quarter 2012 sales of $260 million, a decrease of 4% in U.S. dollars but an increase of 11% in constant currency versus the prior year. The joint venture added two stores during the second quarter for a total of 252 stores and distribution facilities in Mexico, Central America and Colombia. Second quarter 2012 net income was approximately $10 million with 50% of that amount included in Office Depot’s miscellaneous income. Reported earnings in U.S. dollars for the second quarter of 2012 reflect negative foreign currency translation impacts as well as additional costs incurred associated with store expansion.
Other Matters
At the end of the second quarter of 2012, the Company had $423 million in cash and cash equivalents on hand and availability under the Amended and Restated Credit Agreement of $729 million, for a total of $1.2 billion in available liquidity. Additionally, the Company has approximately $50 million available under an accounts receivable factoring agreement in Europe that is available but has not been used.
3
Additional information on the Company’s second quarter results can be found in our Form 10-Q filed with the Securities and Exchange Commission on August 7, 2012. Additional information on the Company’s second quarter results can also be found in the Investor Relations section of our corporate website, www.officedepot.com, under the category Financial Information.
Non-GAAP Reconciliation
A reconciliation of GAAP results to non-GAAP results excluding certain items is presented in this release and also may be found in the Investor Relations section of our corporate website, www.officedepot.com, under the category Financial Information.
Conference Call Information
Office Depot will hold a conference call for investors and analysts at 9:00 a.m. (Eastern Time) today. The conference call will be available to all investors via Web cast at http://investor.officedepot.com. Interested parties may contact Investor Relations at 561-438-0278 for further information.
About Office Depot
Office Depot provides office supplies and services through 1,680 worldwide retail stores, a field sales force, top-rated catalogs and global e-commerce operations. Office Depot has annual sales of approximately $11.5 billion, employs about 39,000 associates and serves customers in 60 countries around the world.
Office Depot’s common stock is listed on the New York Stock Exchange under the symbol ODP. Additional press information can be found at: http://mediarelations.officedepot.com and http://socialpress.officedepot.com/.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS: The Private Securities Litigation Reform Act of 1995, as amended, (the “Act”) provides protection from liability in private lawsuits for “forward-looking” statements made by public companies under certain circumstances, provided that the public company discloses with specificity the risk factors that may impact its future results. We want to take advantage of the “safe harbor” provisions of the Act. Certain statements made in this press release are forward-looking statements under the Act. Except for historical financial and business performance information, statements made in this press release should be considered forward-looking as referred to in the Act. Much of the information that looks towards future performance of our company is based on various factors and important assumptions about future events that may or may not actually come true. As a result, our operations and financial results in the future could differ materially and substantially from those we have discussed in the forward-looking statements made in this press release. Certain risks and uncertainties are detailed from time to time in our filings with the United States Securities and Exchange Commission (“SEC”). You are strongly urged to review all such filings for a more detailed discussion of such risks and uncertainties. The Company’s SEC filings are readily obtainable at no charge at www.sec.gov and at www.freeEDGAR.com, as well as on a number of other commercial web sites.
4
OFFICE DEPOT, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
(Unaudited)
| June 30, | December 31, | June 25, | ||||||||||
| 2012 | 2011 | 2011 | ||||||||||
| Assets |
||||||||||||
| Current assets: |
||||||||||||
| Cash and cash equivalents |
$ | 422,679 | $ | 570,681 | $ | 374,155 | ||||||
| Receivables, net |
809,353 | 862,831 | 954,264 | |||||||||
| Inventories |
1,122,007 | 1,146,974 | 1,253,231 | |||||||||
| Prepaid expenses and other current assets |
154,171 | 163,646 | 174,217 | |||||||||
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| Total current assets |
2,508,210 | 2,744,132 | 2,755,867 | |||||||||
| Property and equipment, net |
971,930 | 1,067,040 | 1,119,505 | |||||||||
| Goodwill |
61,683 | 61,899 | 64,448 | |||||||||
| Other intangible assets |
32,169 | 35,223 | 39,569 | |||||||||
| Deferred income taxes |
41,689 | 47,791 | 42,669 | |||||||||
| Other assets |
341,631 | 294,899 | 312,966 | |||||||||
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| Total assets |
$ | 3,957,312 | $ | 4,250,984 | $ | 4,335,024 | ||||||
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| Liabilities and stockholders’ equity |
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| Current liabilities: |
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| Trade accounts payable |
$ | 906,103 | $ | 993,636 | $ | 950,108 | ||||||
| Accrued expenses and other current liabilities |
875,005 | 1,010,011 | 1,046,185 | |||||||||
| Income taxes payable |
7,698 | 7,389 | 5,825 | |||||||||
| Short-term borrowings and current maturities of long-term debt |
35,527 | 36,401 | 79,987 | |||||||||
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| Total current liabilities |
1,824,333 | 2,047,437 | 2,082,105 | |||||||||
| Deferred income taxes and other long-term liabilities |
391,056 | 452,313 | 543,511 | |||||||||
| Long-term debt, net of current maturities |
639,028 | 648,313 | 652,692 | |||||||||
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| Total liabilities |
2,854,417 | 3,148,063 | 3,278,308 | |||||||||
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| Commitments and contingencies |
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| Redeemable preferred stock, net (liquidation preference – $396,851 in June 2012, $377,729 in December 2011, and $368,516 in June 2011) |
378,751 | 363,636 | 355,979 | |||||||||
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| Stockholders’ equity: |
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| Office Depot, Inc. stockholders’ equity: |
2,911 | 2,864 | 2,860 | |||||||||
| Common stock—authorized 800,000,000 shares of $.01 par value; issued shares – 291,075,840 in June 2012, 286,430,567 in December 2011 and 285,951,029 in June 2011 |
||||||||||||
| Additional paid-in capital |
1,131,044 | 1,138,542 | 1,148,979 | |||||||||
| Accumulated other comprehensive income |
194,829 | 194,522 | 266,723 | |||||||||
| Accumulated deficit |
(547,007 | ) | (539,124 | ) | (660,346 | ) | ||||||
| Treasury stock, at cost – 5,915,268 shares in June 2012 and December and June 2011 |
(57,733 | ) | (57,733 | ) | (57,733 | ) | ||||||
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| Total Office Depot, Inc. stockholders’ equity |
724,044 | 739,071 | 700,483 | |||||||||
| Noncontrolling interests |
100 | 214 | 254 | |||||||||
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| Total equity |
724,144 | 739,285 | 700,737 | |||||||||
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| Total liabilities and equity |
$ | 3,957,312 | $ | 4,250,984 | $ | 4,335,024 | ||||||
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5
OFFICE DEPOT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
| 13 Weeks Ended | 26 Weeks Ended | |||||||||||||||
| June 30, | June 25, | June 30, | June 25, | |||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Sales |
$ | 2,507,150 | $ | 2,710,141 | $ | 5,379,959 | $ | 5,683,101 | ||||||||
| Cost of goods sold and occupancy costs |
1,761,086 | 1,916,089 | 3,750,721 | 4,010,861 | ||||||||||||
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| Gross profit |
746,064 | 794,052 | 1,629,238 | 1,672,240 | ||||||||||||
| Store and warehouse operating and selling expenses |
613,537 | 646,663 | 1,291,547 | 1,339,880 | ||||||||||||
| Recovery of purchase price |
— | — | (68,314 | ) | — | |||||||||||
| Fixed asset impairment |
23,861 | — | 41,755 | 669 | ||||||||||||
| General and administrative expenses |
167,313 | 163,500 | 345,207 | 329,326 | ||||||||||||
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| Operating profit (loss) |
(58,647 | ) | (16,111 | ) | 19,043 | 2,365 | ||||||||||
| Other income (expense): |
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| Interest income |
955 | 242 | 1,322 | 841 | ||||||||||||
| Interest expense |
(17,703 | ) | (18,831 | ) | (32,181 | ) | (36,818 | ) | ||||||||
| Loss on extinguishment of debt |
(41 | ) | — | (12,110 | ) | — | ||||||||||
| Miscellaneous income, net |
3,967 | 6,988 | 12,946 | 14,333 | ||||||||||||
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| Loss before income taxes |
(71,469 | ) | (27,712 | ) | (10,980 | ) | (19,279 | ) | ||||||||
| Income tax expense (benefit) |
(14,082 | ) | (7,596 | ) | (3,092 | ) | 6,227 | |||||||||
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| Net loss |
(57,387 | ) | (20,116 | ) | (7,888 | ) | (25,506 | ) | ||||||||
| Less: Net earnings (loss) attributable to the noncontrolling interests |
(5 | ) | (2 | ) | (9 | ) | 22 | |||||||||
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| Net loss attributable to Office Depot, Inc. |
(57,382 | ) | (20,114 | ) | (7,879 | ) | (25,528 | ) | ||||||||
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| Preferred stock dividends |
6,899 | 9,213 | 15,115 | 18,426 | ||||||||||||
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| Net loss available to common stockholders |
$ | (64,281 | ) | $ | (29,327 | ) | $ | (22,994 | ) | $ | (43,954 | ) | ||||
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| Net loss per share: |
||||||||||||||||
| Basic |
$ | (0.23 | ) | $ | (0.11 | ) | $ | (0.08 | ) | $ | (0.16 | ) | ||||
| Diluted |
$ | (0.23 | ) | $ | (0.11 | ) | $ | (0.08 | ) | $ | (0.16 | ) | ||||
6
OFFICE DEPOT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
| 26 Weeks Ended | ||||||||
| June 30, | June 25, | |||||||
| 2012 | 2011 | |||||||
| Cash flows from operating activities: |
||||||||
| Net loss |
$ | (7,888 | ) | $ | (25,506 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
| Depreciation and amortization |
101,622 | 104,111 | ||||||
| Charges for losses on inventories and receivables |
32,850 | 29,326 | ||||||
| Loss on extinguishment of debt |
13,377 | — | ||||||
| Recovery of purchase price |
(58,049 | ) | — | |||||
| Pension plan funding |
(58,030 | ) | — | |||||
| Fixed asset impairment |
41,755 | 669 | ||||||
| Changes in working capital and other |
(197,478 | ) | (256,598 | ) | ||||
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| Net cash used in operating activities |
(131,841 | ) | (147,998 | ) | ||||
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| Cash flows from investing activities: |
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| Capital expenditures |
(62,471 | ) | (60,429 | ) | ||||
| Acquisition, net of cash acquired |
— | (72,667 | ) | |||||
| Recovery of purchase price |
49,841 | — | ||||||
| Release of restricted cash |
8,570 | 46,509 | ||||||
| Proceeds from assets sold and other |
20,624 | 7,615 | ||||||
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| Net cash provided by (used in) investing activities |
16,564 | (78,972 | ) | |||||
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| Cash flows from financing activities: |
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| Proceeds from exercise of stock options |
1,130 | 623 | ||||||
| Share transactions under employee related plans |
(208 | ) | (650 | ) | ||||
| Preferred stock dividends |
— | (18,426 | ) | |||||
| Payment for noncontrolling interests |
(551 | ) | (1,262 | ) | ||||
| Loss on extinguishment of debt |
(13,377 | ) | — | |||||
| Debt related fees |
(7,867 | ) | (9,945 | ) | ||||
| Debt retirement |
(250,000 | ) | — | |||||
| Debt issuance |
250,000 | — | ||||||
| Net payments on other long- and short-term borrowings |
(11,198 | ) | (9,333 | ) | ||||
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| Net cash used in financing activities |
(32,071 | ) | (38,993 | ) | ||||
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| Effect of exchange rate changes on cash and cash equivalents |
(654 | ) | 12,640 | |||||
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| Net decrease in cash and cash equivalents |
(148,002 | ) | (253,323 | ) | ||||
| Cash and cash equivalents at beginning of period |
570,681 | 627,478 | ||||||
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| Cash and cash equivalents at end of period |
$ | 422,679 | $ | 374,155 | ||||
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7
OFFICE DEPOT, INC.
GAAP to Non-GAAP Reconciliations
We report our results in accordance with accounting principles generally accepted in the United States (“GAAP”). We also review certain financial measures excluding impacts of transactions that are beyond our core operations (“non-GAAP”). A reconciliation of GAAP financial measures to non-GAAP financial measures and the limitations on their use may be accessed in the “Investor Relations” section of our corporate website, www.officedepot.com. Certain portions of those reconciliations are provided in the following tables.
($ in millions, except per share amounts)
| Q2 2012 |
GAAP | % of Sales |
Charges | Non-GAAP | % of Sales |
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| Gross profit |
$ | 746.1 | 29.8 | % | $ | — | $ | 746.1 | 29.8 | % | ||||||||||
| Operating expenses |
$ | 804.7 | 32.1 | % | $ | (32.5 | ) | $ | 772.2 | 30.8 | % | |||||||||
| Operating profit (loss) |
$ | (58.6 | ) | (2.3 | )% | $ | 32.5 | $ | (26.1 | ) | (1.0 | )% | ||||||||
| Income (loss) available to common shareholders |
$ | (64.3 | ) | (2.6 | )% | $ | 24.2 | $ | (40.1 | ) | (1.6 | )% | ||||||||
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| Diluted earnings (loss) per share |
$ | (0.23 | ) | $ | 0.09 | $ | (0.14 | ) | ||||||||||||
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| Q2 2011 |
GAAP | % of Sales |
Charges | Non-GAAP | % of Sales |
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| Gross profit |
$ | 794.1 | 29.3 | % | $ | 0.5 | $ | 794.6 | 29.3 | % | ||||||||||
| Operating expenses |
$ | 810.2 | 29.9 | % | $ | (19.6 | ) | $ | 790.6 | 29.2 | % | |||||||||
| Operating profit (loss) |
$ | (16.1 | ) | (0.6 | )% | $ | 20.1 | $ | 4.0 | 0.1 | % | |||||||||
| Income (loss) available to common shareholders |
$ | (29.3 | ) | (1.1 | )% | $ | 12.8 | $ | (16.5 | ) | (0.6 | )% | ||||||||
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| Diluted earnings (loss) per share |
$ | (0.11 | ) | $ | 0.05 | $ | (0.06 | ) | ||||||||||||
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| YTD 2012 |
GAAP | % of Sales |
Charges | Non-GAAP | % of Sales |
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| Gross profit |
$ | 1,629.3 | 30.3 | % | $ | — | $ | 1,629.3 | 30.3 | % | ||||||||||
| Operating expenses |
$ | 1,610.3 | 29.9 | % | $ | (10.7 | ) | $ | 1,599.6 | 29.7 | % | |||||||||
| Operating profit |
$ | 19.0 | 0.4 | % | $ | 10.7 | $ | 29.7 | 0.6 | % | ||||||||||
| Income (loss) available to common shareholders |
$ | (23.0 | ) | (0.4 | )% | $ | 12.5 | $ | (10.5 | ) | (0.2 | )% | ||||||||
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| Diluted earnings (loss) per share |
$ | (0.08 | ) | $ | 0.04 | $ | (0.04 | ) | ||||||||||||
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| YTD 2011 |
GAAP | % of Sales |
Charges | Non-GAAP | % of Sales |
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| Gross profit |
$ | 1,672.2 | 29.4 | % | $ | 0.5 | $ | 1,672.7 | 29.4 | % | ||||||||||
| Operating expenses |
$ | 1,669.8 | 29.4 | % | $ | (27.9 | ) | $ | 1,641.9 | 28.9 | % | |||||||||
| Operating profit (loss) |
$ | 2.4 | — | % | $ | 28.4 | $ | 30.8 | 0.5 | % | ||||||||||
| Income (loss) available to common shareholders |
$ | (43.9 | ) | (0.8 | )% | $ | 27.7 | $ | (16.2 | ) | (0.3 | )% | ||||||||
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| Diluted earnings (loss) per share |
$ | (0.16 | ) | $ | 0.10 | $ | (0.06 | ) | ||||||||||||
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8
OFFICE DEPOT, INC.
GAAP to Non-GAAP Reconciliations (Continued)
| Q2 2012 | Q2 2011 | |||||||
| Cash Flow Summary |
||||||||
| Net cash used in operating activities |
$ | (38.5 | ) | $ | (53.4 | ) | ||
| Net cash used in investing activities |
(17.2 | ) | (28.4 | ) | ||||
| Net cash used in financing activities |
(5.5 | ) | (39.6 | ) | ||||
| Effect of exchange rate changes on cash and cash equivalents |
(4.9 | ) | 1.4 | |||||
|
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|
|
|
|||||
| Net decrease in cash and cash equivalents |
$ | (66.1 | ) | $ | (120.0 | ) | ||
|
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|
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|
|||||
| Free Cash Flow |
||||||||
| Net cash used in operating activities |
$ | (38.5 | ) | $ | (53.4 | ) | ||
| Less: Capital expenditures |
27.9 | 31.8 | ||||||
|
|
|
|
|
|||||
| Free Cash Flow |
$ | (66.4 | ) | $ | (85.2 | ) | ||
|
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|
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| Cash Flow Before Financing Activities |
||||||||
| Net decrease in cash and cash equivalents |
$ | (66.1 | ) | $ | (120.0 | ) | ||
| Less: Net cash used in financing activities |
(5.5 | ) | (39.6 | ) | ||||
|
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|
|
|
|||||
| Cash Flow Before Financing Activities |
$ | (60.6 | ) | $ | (80.4 | ) | ||
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|
|||||
| YTD 2012 | YTD 2011 | |||||||
| Cash Flow Summary |
||||||||
| Net cash used in operating activities |
$ | (131.8 | ) | $ | (148.0 | ) | ||
| Net cash provided by (used in) investing activities |
16.6 | (78.9 | ) | |||||
| Net cash used in financing activities |
(32.1 | ) | (39.0 | ) | ||||
| Effect of exchange rate changes on cash and cash equivalents |
(0.7 | ) | 12.6 | |||||
|
|
|
|
|
|||||
| Net decrease in cash and cash equivalents |
$ | (148.0 | ) | $ | (253.3 | ) | ||
|
|
|
|
|
|||||
| Free Cash Flow |
||||||||
| Net cash used in operating activities |
$ | (131.8 | ) | $ | (148.0 | ) | ||
| Less: Capital expenditures |
62.5 | 60.4 | ||||||
|
|
|
|
|
|||||
| Free Cash Flow |
$ | (194.3 | ) | $ | (208.4 | ) | ||
|
|
|
|
|
|||||
| Cash Flow Before Financing Activities |
||||||||
| Net decrease in cash and cash equivalents |
$ | (148.0 | ) | $ | (253.3 | ) | ||
| Less: Net cash used in financing activities |
(32.1 | ) | (39.0 | ) | ||||
|
|
|
|
|
|||||
| Cash Flow Before Financing Activities |
$ | (115.9 | ) | $ | (214.3 | ) | ||
|
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|
|||||
Free cash flow is calculated as net cash provided by (used in) operating activities less capital expenditures.
Cash flow before financing activities is calculated as the net increase (decrease) in cash and cash equivalents less net cash provided by (used in) financing activities.
9
OFFICE DEPOT, INC.
DIVISION INFORMATION
(Unaudited)
North American Retail Division
| Second Quarter | First Half | |||||||||||||||
| (Dollars in millions) |
2012 | 2011 | 2012 | 2011 | ||||||||||||
| Sales |
$ | 993.9 | $ | 1,080.1 | $ | 2,213.4 | $ | 2,400.7 | ||||||||
| % change |
(8 | )% | (2 | )% | (8 | )% | (2 | )% | ||||||||
| Division operating profit (loss) |
$ | (21.6 | ) | $ | 3.0 | $ | 22.8 | $ | 61.0 | |||||||
| % of sales |
(2.2 | )% | 0.3 | % | 1.0 | % | 2.5 | % | ||||||||
North American Business Solutions Division
| Second Quarter | First Half | |||||||||||||||
| (Dollars in millions) |
2012 | 2011 | 2012 | 2011 | ||||||||||||
| Sales |
$ | 796.4 | $ | 803.3 | $ | 1,624.1 | $ | 1,609.6 | ||||||||
| % change |
(1 | )% | (2 | )% | 1 | % | (3 | )% | ||||||||
| Division operating profit |
$ | 40.5 | $ | 45.0 | $ | 83.0 | $ | 61.2 | ||||||||
| % of sales |
5.1 | % | 5.6 | % | 5.1 | % | 3.8 | % | ||||||||
International Division
| Second Quarter | First Half | |||||||||||||||
| (Dollars in millions) |
2012 | 2011 | 2012 | 2011 | ||||||||||||
| Sales |
$ | 716.9 | $ | 826.7 | $ | 1,542.4 | $ | 1,672.8 | ||||||||
| % change |
(13 | )% | 6 | % | (8 | )% | — | % | ||||||||
| % change in constant currency |
(6 | )% | (5 | )% | (3 | )% | (5 | )% | ||||||||
| Division operating profit |
$ | 9.7 | $ | 13.1 | $ | 24.9 | $ | 40.4 | ||||||||
| % of sales |
1.4 | % | 1.6 | % | 1.6 | % | 2.4 | % | ||||||||
10
OFFICE DEPOT, INC.
SELECTED FINANCIAL AND OPERATING DATA
(Unaudited)
Selected Operating Highlights
| 13 Weeks Ended | 26 Weeks Ended | |||||||||||||||
| June 30, 2012 |
June 25, 2011 |
June 30, 2012 |
June 25, 2011 |
|||||||||||||
| Store Statistics |
||||||||||||||||
| United States and Canada: |
||||||||||||||||
| Store count: |
||||||||||||||||
| Stores opened |
— | 4 | 1 | 5 | ||||||||||||
| Stores closed |
6 | 14 | 27 | 21 | ||||||||||||
| Stores relocated |
3 | 4 | 8 | 6 | ||||||||||||
| Total U.S. and Canada stores |
1,117 | 1,131 | 1,117 | 1,131 | ||||||||||||
| North American Retail Division square footage: |
26,218,055 | 27,132,220 | ||||||||||||||
| Average square footage per NAR store |
23,472 | 23,990 | ||||||||||||||
| International Division company-owned: |
||||||||||||||||
| Store count: |
||||||||||||||||
| Stores opened |
2 | 1 | 3 | 3 | ||||||||||||
| Stores closed |
— | 6 | — | 7 | ||||||||||||
| Stores acquired |
— | — | — | 40 | ||||||||||||
| Total International company-owned stores |
134 | 133 | 134 | 133 | ||||||||||||
11