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OfficeMax Q1 Sales, Comps Climb

5/13/2003 09:46:00 AM Eastern

Cleveland - OfficeMax's fiscal first quarter sales increased to $1.23 billion, up from $1.18 billion in the same three months last year, with domestic comp-store sales rising 5 percent.

Sales in domestic stores for the three months, ended April 26, hit $1.2 billion, compared with $1.1 billion year on year.

OfficeMax net income, however, dropped to $9.8 million in the first quarter, down from $63.5 million in the same period a year earlier. Last year's first quarter earnings benefited from a tax refund of $57.5 million in cash.

'Our first quarter results are further evidence of the company's ability to drive sales by continuing to increase both same-store customer transactions and the average amount per transaction,' said Michael Feuer, chairman/CEO.

'Since the end of April, sales have resumed a more robust upward trend, with second quarter comparable-store sales off to a very strong start, currently running above the double-digit threshold,' Feuer said. 'We believe that, in part, these recent sales results are reflective of a positive, post-war sales bounce back.'

Net income for OfficeMax's domestic stores hit $9.2 million, down from $62.7 million in the same quarter last year. Net income for the retailer's international business was $622,000, compared with $774,000 in the same period a year ago.

OfficeMax reported cash of $76 million and no seasonal short-term borrowings at the end of the first quarter. This is down from $118 million in short-term borrowings for the comparable period a year ago. Based on current estimates, the retailer anticipates ending the fiscal year with virtually no debt for the second consecutive year.

Annualized inventory turns for the first quarter hit 3.8, compared with 3.6 year on year. The company has an inventory turn goal of 4.1 for the fiscal year.

OfficeMax anticipates year-over-year improvement continuing in the second fiscal quarter, with comp-store sales in the mid-single-digit range. Traditionally, the second quarter is the company's slowest sales period of the year.

'OfficeMax is in its best position in recent memory for a very strong second half of the year and sustained growth through [the following two fiscal years],' said Feuer.