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OfficeMax Fiscal Q1 Sales Drop 4%

5/21/2001 02:00:00 AM Eastern

Cleveland — Impacted by a continued slowdown in consumer and small-business spending for technology and furniture products, OfficeMax reported a 4 percent decline in sales for its fiscal first quarter. This percentage decrease applies only if the retailer’s Computer Segment and closed store sales are excluded from revenue recorded in the first quarter of 2000.

Last year’s revenue in the first quarter totaled $1.34 billion and included sales from the discontinued Computer Segment and 46 stores that were closed as of the first day of the recent quarter. Sales totaled $1.19 billion in this year’s first quarter. Same-store sales dropped 5 percent.

OfficeMax recorded a net loss of $16.6 million in the first fiscal quarter ended April 28, compared with a $2.1 million loss in the year-ago three months.

On a higher note, the retailer said per-store inventory decreases hit 17 percent year over year, while total inventory declines were 14 percent, compared with the first-quarter level of last year.

“We expect further gains in lowering inventory and working capital management as we continue to integrate additional product categories into our PowerMax distribution network,” said Michael Feuer, chairman/CEO.

As the retailer continues to ramp-up and integrate the network, it expects to dramatically enhance the merchandise replenishment to its store base and delivery centers, while at the same time reducing its overall inventory level.

“Over the past two years, we’ve made a significant investment in our infrastructure, which has positioned us well to weather this tough economic climate,” said Feuer.

“Our planned cutbacks for this year’s capital expenditures and reduced store openings, combined with many cost-and-expense control programs are expected to increase free cash flow to over $150 million for fiscal 2001. This would be an improvement of nearly $300 million over fiscal 2000 results.”

During the recent quarter OfficeMax opened six new stores and said it is on track to open a targeted number for the year of fewer than 25 superstores, down from 54 in the prior year.

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