OfficeMax Swings to Fourth-Quarter Profit
Office supplies retailer OfficeMax said Thursday it swung to a profit in the fourth-quarter from a year-ago period hurt by hefty costs and asset writedowns, and the company said improved vendor income and lower delivery costs helped boost margins in its contract segment.
Quarterly net income after paying preferred dividends totaled $57 million, or 76 cents per share, compared with a loss of $44.1 million, or 62 cents per share, during the year-ago period, which included a loss from discontinued operations of $20.5 million as well as higher rent and other costs.
Excluding one-time charges relating to a headquarters consolidation, the closure of a facility and severance, as well as a credit related to the 2004 sale of some assets, earnings for the latest quarter were 48 cents per share.
Revenue fell 8% to $2.26 billion from $2.46 billion in the prior-year quarter.
Analysts polled by Thomson Financial expected net income of 40 cents per share on higher revenue of $2.31 billion.
Contract segment sales fell 3.5% in the quarter due to fewer selling days but increased 2% when adjusted for the selling days. Retail same-store sales fell 0.4%. Same-store sales, or sales in stores open at least one year, are a key measure of industry performance.
Adjusted for its initiative to end mail-in rebates and provide instant rebates, same-store sales grew 2%, OfficeMax said.
For the year, earnings after paying preferred dividends totaled $87.7 million, or $1.19 per share, up from a loss of $78.1 million, or 99 cents per share, in 2005. Excluding items, profit totaled $159.2 million, or $2.10 per share, in the latest period, compared with adjusted profit of $23.6 million, or 24 cents per share, in 2005.
Revenue fell 2% to $8.97 billion, from $9.16 billion in 2005.