OfficeMax 3Q sales drop 9.5%

NAPERVILLE, Ill. OfficeMax announced total sales for the third quarter ended Sept. 27, decreased 9.5% to $2.1 billion. The company reported a net loss of $432.7 million, or $5.70 per diluted share.

The third quarter of 2008 included a non-cash charge of $735.8 million (pre-tax) for impairment of the Lehman Bros. Holdings guaranteed installment note and a pre-tax charge of $18.2 million for impairment of the interest receivable related to the Lehman Note, neither of which is considered indicative of core operating activities. Excluding these two items, adjusted net income was $28 million, or 36 cents per diluted share, compared to net income of $49 million, or 64 cents per diluted share in the third quarter of 2007.

"In the third quarter, we operated in a weaker selling environment than in the third quarter of 2007 for both our contract and retail segments," stated chairman and ceo Sam Duncan. " ... Nonetheless, our success in continuing to lower expenses was offset by reduced sales volumes that deleveraged fixed costs in both the contract and retail segments, resulting in lower profitability. While we recorded a non-cash impairment charge related to one-half of our timber installment notes, we continue to believe that there will be no adverse impact on our operations or liquidity from the Lehman bankruptcy. Our cash flow from operations and access to capital remain solid and, we believe, will help us continue to pursue our turnaround plan initiatives during the challenging economic environment."