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OfficeMax Q2 Falls Short Of Analyst Expectations

For the second quarter of 2013, OfficeMax reported an operating loss of $900,000 versus operating income of $23.1 million in the 2012 period, and a net loss available to OfficeMax common shareholders of $10 million, or 12 cents per diluted share, versus net income of $10.7 million, or 12 cents per diluted share, year over year.  The company said that adjusted operating income was $10.8 million compared to $21 million in the prior-year quarter, and adjusted net income available to OfficeMax common shareholders was $1.8 million, or two cents per diluted share, compared to $9.5 million, or 11 cents per diluted share, in the 2012 period.

Analysts polled by Thomson Reuters expected adjusted earnings per share of three cents.

The adjusted figures exclude the impact of changes in foreign exchange rates, the financial effects of stores closed and opened, and the difference in the number of business days in the quarter compared to the same quarter last year.

In the OfficeMax Retail Segment, comparable store sales decreased on a local currency basis by 3.6%, which reflected a U.S. Retail operations comp decrease of 3.7%, and a Mexico retail operations comp decrease of 3.4%. The company stated that the decreases were due primarily to slower store traffic and lower technology product category sales.

Retail segment sales in the second quarter decreased 5.6% to $683.4 million versus the 2012 period. Total sales were $1.53 billion compared to $1.6 billion in the 2012 second quarter.

“Sales declined in the second quarter, which impacted profitability compared to the prior-year period,” said Ravi Saligram, president and CEO of OfficeMax.  “We continue to implement cost reduction measures to align our expenses with our revenue base and expect second-half profit performance to improve versus the first half.  Further, we’re pleased to have received additional cash proceeds from our Boise investment in July, bolstering our strong balance sheet. In spite of secular challenges and an uneven economic recovery, we remain committed to restoring sales growth by evolving our business model to focus more on services, innovating new products and categories, growing our adjacencies, and building our omnichannel capabilities.”