OfficeMax sees decline in 1Q income

NAPERVILLE, Ill. OfficeMax announced that total sales decreased 17% in the first quarter of 2009 to $1.9 billion compared to the first quarter of 2008. Net income decreased in the first quarter of 2009 to $13.1 million, or 17 cents per diluted share, from $62.4 million, or 81 cents per diluted share in the first quarter of 2008.

Sam Duncan, chairman and CEO of OfficeMax, said, "Although our financial results declined in the first quarter versus the prior year period, we continued to make improvements to our business and to contain costs. We believe the actions we have been taking significantly benefited our company's performance this quarter. We improved retail segment operating expense as a percentage of sales compared to the first quarter of 2008 as a result of reorganizing our management, more efficient execution, and tighter cost controls. Our efforts to streamline our business are enabling us to operate profitably and preserve cash and liquidity to carry us through this very challenging economic environment."

OfficeMax retail segment sales decreased 11.2% to $984.1 million in the first quarter of 2009 compared to the first quarter of 2008, reflecting a same-store sales decrease of 12.7%, partially offset by sales from new stores. Retail same-store sales for the first quarter of 2009 declined across all major product categories primarily due to weaker small business and consumer spending.

OfficeMax ended the first quarter of 2009 with a total of 1,020 retail stores, consisting of 939 retail stores in the U.S. and 81 retail stores in Mexico. During the first quarter of 2009, OfficeMax opened 6 retail stores in the U.S., and closed 6 stores in the U.S. and 2 in Mexico. For the full year 2009, OfficeMax expects to open up to 12 retail stores, and to close between 15 and 25 retail stores.

In the near-term, April sales trends, including the negative impact of the timing of the Easter holiday, are more unfavorable compared to the first quarter trends. With respect to the full year, given the projected weak economic outlook, OfficeMax remains cautious in its expectations for 2009. The company expects sales to decline in 2009 on a year-over-year basis as a result of the difficult economic environment. In addition, the company is cycling significant expense reductions completed in 2008. As a result of these factors, and based on the current outlook, OfficeMax expects continued deleveraging of costs and expenses for the remainder of 2009.