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OfficeMax Q3 Sales Off 1%

10/19/2004 09:26:00 AM Eastern

Boise, Idaho — Hampered by hurricanes in the southeastern United States — which caused temporary retail store closures, lost sales and an estimated $3 million in lost income — the retail segment of the Boise Cascade Office Solutions business, namely the OfficeMax office supplies chain, recorded a 1 percent dip in third-quarter sales on a pro forma basis, hitting $1.14 billion.

Same-store pro forma sales were 1 percent higher than the year-ago third quarter, while overall retail segment third-quarter sales were 18 percent above the $966.7 million recorded in the second quarter.

Boise Cascade, which began reporting financial results of its Office Solutions retail segment last December when it acquired OfficeMax, said retail segment operating income moved into the black, coming in at $25.1 million for the third quarter, ended Sept. 30, compared with a $5.4 loss in the second quarter of 2004. Operating margin was 2.2 percent in the third quarter, compared with a negative 0.6 percent the preceding three months.

Consolidated third quarter Boise Cascade sales jumped 73 percent, hitting $3.7 billion, compared with $2.1 billion in the same three months a year earlier, due primarily to the acquisition of OfficeMax. Net income increased to $61.1 million, up from $32.9 million in the same quarter in 2003.

For the nine months, sales climbed to $10.6 billion from $5.9 billion, while net income reached $175 million, compared with $1.4 million, during the same period last year.

Last July, Boise Cascade announced the $3.7 billion sale of its paper, forest products and timberland assets to affiliates of Boise Cascade LLC, a new company formed by Madison Dearborn Partners LLC. Targeted completion date is the end of October.

When the transaction with Madison Dearborn closes, Boise Cascade will change its name to OfficeMax, and will continue to operate office products distribution as its principal business. OfficeMax will be a publicly held company with corporate headquarters in Itasca, Ill., while Boise Cascade LLC will be a privately held company operating from headquarters here.