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OfficeMax Reports Q4 Loss, Lower Sales

2/18/2009 09:44:00 AM Eastern

Naperville, Ill. — OfficeMax reported a $396 million net loss and a double-digit percent drop in sales for its fiscal fourth quarter, ended Dec. 27.

Total fourth-quarter sales dropped 14.3 percent to $1.88 billion compared with the fourth quarter of 2007. OfficeMax reported a net loss of $396.0 million for the quarter, compared with net income of $70.5 million in the previous year’s fourth quarter.

For the year, total sales decreased 9 percent to $8.27 billion compared with 2007. OfficeMax reported a net loss for the year of $1.67 billion, compared with income of $203.4 million in 2007.

Sam Duncan, chairman/CEO of OfficeMax, said, “Our fourth-quarter results reflect the deteriorating economic environment we operated in for both our contract and retail segments. However, we proactively reduced costs and focused on strong capital management. We are pleased with our improvements in working capital and our efforts to minimize expenditures, and are confident that our cash position and existing access to capital will carry us through this challenging economic environment.”

In its retail segment, sales decreased 9.7 percent to $929.2 million in the fourth quarter of 2008 compared with the prior year’s fourth quarter, reflecting a same-store sales decrease of 13.6 percent partially offset by sales from new stores.

Retail same-store sales for the fourth quarter of 2008 declined across all major product categories due to weaker small business and consumer spending.

For the full-year 2008, retail segment sales decreased 7.2 percent to $3.96 billion, compared with 2007, reflecting a same-store sales decrease of 10.8 percent, again partially offset by sales from new stores.

Retail segment operating loss was $83 million in the fourth quarter of 2008. The segment’s adjusted operating income was break even, compared with operating income of $39.1 million, or 3.8 percent of sales, in the fourth quarter of 2007.

For the full-year 2008, retail segment operating loss was $505.1 million in 2008. The segment’s adjusted operating income was $61.2 million, or 1.5 percent of sales, in 2008, compared with operating income of $173.7 million, or 4.1 percent of sales, in 2007.

OfficeMax ended 2008 with a total of 1,022 retail stores, consisting of 939 retail stores in the U.S. and 83 retail stores in Mexico.