Office Depot unveils its market makeover of 14 stores in Austin, Texas

BOCA RATON, Fla., 2018-Feb-01 — /EPR Retail News/ — Office Depot, Inc. (NASDAQ:ODP), a leading omnichannel provider of business services, products and technology, today (January 30, 2018) unveiled its market makeover of 14 stores in Austin, Texas, including a flagship location – “BizBox: Powered by Office Depot” – that integrate the company’s recently launched BizBox offering into its retail locations. The reimagined stores offer a first-of-its-kind suite of services for small business owners offered both online and in-store, along with flex workspaces in select stores. This is another step forward in the company’s strategic transformation from a traditional office products retailer to a broader business services platform.

BizBox is a one-stop-shop for entrepreneurs, offering end-to-end services to help small to mid-sized businesses start and grow their companies, including logo and website design, digital and social marketing, full-service copy and printing, finance and accounting services, payroll, HR, tech support, Centriq’s Asset Management software and more. The stores in the Austin market will offer face-to-face, one-on-one consultative support to help local businesses thrive.

A region ripe for growth, Austin serves as the first market for Office Depot’s innovative approach to a personalized, more omnichannel customer shopping experience. The company plans a phased approach to these makeovers as this is the next evolution of its retail transformation. The shift to a services-led retail shopping experience for customers will continue to unfold in its 1,400 stores across the country.

“Today is a key inflection point in the company’s transformation from a traditional office products retailer to a broader business services platform,” said Gerry Smith, chief executive officer for Office Depot, Inc. “Helping small and medium-sized business customers is core to our identity, but the reality is that our customers’ needs have changed. BizBox reflects our continued commitment to an omnichannel experience that addresses the challenges small businesses are facing today.”

The Austin retail stores offer digital services as well as a selection of traditional office products, and customers can expect a new look and feel in the upgraded locations, including:

  • Open Floor Plan with Dedicated BizBox Consulting Hubs – Entrepreneurs will have access to BizBox professionals and experts on-site to help identify services suited to their unique needs, streamlining operations and freeing up valuable time to focus on innovation and growth.
  • In-Store Networking – Open seating areas will encourage entrepreneurs to connect and discuss ideas and solutions alongside BizBox professionals.
  • Professional Tech Support in a Designated “Tech-Zone” – Professional tech support will be available to assist customers with everything from smartphone repairs to PC tune-ups, and more.

“As the ‘Silicon Hills’ of Texas, Austin is a strong market leader with five percent more small to medium-sized businesses than similar markets, boasting an estimated 2,400 new tech businesses in 2017 alone,” said Kevin Moffitt, senior vice president and chief retail officer for Office Depot, Inc. “Our research shows that Austin is the right market for us to test this new omnichannel approach, and customers are already impressed with how many ways we can partner with them and offer such a variety of services and solutions.”

This new business services platform builds upon Office Depot’s previously announced acquisition of CompuCom Systems, Inc. and strategic investment in Centriq Technology, Inc.

For more information and to sign up today, visit bizbox.com. To find the dedicated BizBox consultant near you in Greater Austin, visit officedepot.com/storelocator.

About Office Depot, Inc.

Office Depot, Inc. is a leading provider of office supplies, business products and services delivered through an omnichannel platform.

The company had 2016 annual sales of approximately $11 billion, employed approximately 38,000 associates, and served consumers and businesses in North America and abroad with approximately 1,400 retail stores, award-winning e-commerce sites and a dedicated business-to-business sales organization – with a global network of wholly owned operations, franchisees, licensees and alliance partners. The company operates under several banner brands including Office Depot®, OfficeMax®, BizBox, CompuCom®, Complete Office and Grand&Toy®. The company’s portfolio of exclusive product brands include TUL®, Foray®, Brenton Studio®, Ativa®, WorkPro®, Realspace® and Highmark®.

Office Depot, Inc.’s common stock is listed on the NASDAQ Global Select Market under the symbol “ODP.”

Office Depot, Foray, Ativa and Realspace are trademarks of The Office Club, Inc. OfficeMax, TUL, Brenton Studio, WorkPro and Highmark are trademarks of OMX, Inc. CompuCom is a trademark of CompuCom Systems, Inc. Grand&Toy is a trademark of Grand & Toy, LLC in Canada. ©2018 Office Depot, Inc. All rights reserved. Any other product or company names mentioned herein are the trademarks of their respective owners.

Contact:
Julianne Embry
561-438-1451
julianne.embry@officedepot.com

Danny Jovic
561-438-1594
danny.jovic@officedepot.com

Source: Office Depot, Inc.

Office Depot completes the acquisition of CompuCom Systems, Inc. and announces Q3 2017 results

  • Acquisition Combines World-Class IT Service Capabilities, Extensive Customer Base and Nationwide Footprint to Create a Powerful Omnichannel Growth Opportunity
  • Strengthens Core Business Through Immediate Cross-Selling Opportunities and Ability to Become a One-Stop Destination for Business Products and Services
  • Q3 2017 GAAP EPS from Continuing Operations of $0.19
  • Strong 2017 YTD Operating Cash Flow (1) in Excess of $400 Million
  • Plans to Host Investor Day in Early 2018 to Further Highlight New Strategic Direction

BOCA RATON, Fla., 2017-Nov-11 — /EPR Retail News/ — Office Depot, Inc. (“Office Depot,” or the “company”) (NASDAQ: ODP), a leading provider of office supplies, business products and services delivered through an omnichannel platform, today (November 9, 2017) announced the completion of the CompuCom Systems, Inc. (“CompuCom”) acquisition and results for the third quarter ended September 30, 2017, as well as highlights of the company’s new strategic direction. Office Depot will provide further detail on the company’s performance and strategy to become a services-driven company during its earnings conference call.

“I’m pleased that we were able to deliver strong cash flow in the third quarter as well as operating results that were in line with our updated outlook,” said Gerry Smith, chief executive officer of Office Depot. “Today also marks an important milestone as we have taken several important steps on a longer-term journey to transform Office Depot from a traditional provider of primarily office products into a broader product and business services platform. This transformation will leverage our stores, online presence and sales force to create a unique omnichannel platform that offers services, products and solutions focused on businesses of all sizes while generating recurring revenue growth.”

“It is imperative we start this journey now. The first step in this transformation was the strategic acquisition of CompuCom, which adds award-winning, enterprise managed workplace services capabilities to our portfolio. This acquisition was quickly followed by the launch earlier this week of BizBox, our new business services platform focused on small and medium-sized business owners. These are key building blocks to deepening our customer relationships and realizing our vision of becoming a services-driven company. Since I joined the company earlier this year, we have been creating the strategy and starting to make the necessary investments in people and capabilities to execute our plan and unlock the value of the new Office Depot.”

Consolidated Results

Reported (GAAP) Results

Total reported sales for the third quarter of 2017 were $2.6 billion compared to $2.8 billion in the third quarter of 2016, a decrease of 8%. Third quarter sales include the negative impact on both the Retail and Business Solutions Divisions from hurricanes Harvey, Irma and Maria, which disrupted operations in Puerto Rico and the southeastern United States where a heavy concentration of customers are located.

In the third quarter of 2017, Office Depot reported operating income of $108 million, net income from continuing operations of $98 million, or $0.19 per diluted share and total company net income of $92 million, or $0.17 per diluted share. Both net income from continuing operations and total company net income include a net tax credit of approximately $37 million associated with the reduction of the U.S. tax valuation allowance.

In the third quarter of 2016, the company reported operating income of $117 million, net income from continuing operations of $330 million, or $0.61 per diluted share and total company net income of $193 million, or $0.35 per diluted share. Both net income from continuing operations and total company net income include a net tax credit of approximately $240 million associated with the reduction of the U.S. tax valuation allowance.

For the year-to-date 2017 period, Office Depot reported operating income of $282 million compared to an operating income of $473 million for year-to-date 2016. Net income from continuing operations for year-to-date 2017 was $195 million, or $0.37 per diluted share, compared to net income from continuing operations of $624 million, or $1.13 per diluted share, for year-to-date 2016. The year-to-date 2016 results benefited from $250 million of operating income related to the Staples termination fee received in the second quarter of 2016 in addition to the benefit from the tax valuation allowance reduction stated above.

Adjusted (non-GAAP) Results (2)

Adjusted operating income for the third quarter of 2017 was $131 million compared to an adjusted operating income of $158 million in the third quarter of 2016. Adjusted net income from continuing operations for the third quarter of 2017 was $74 million, or $0.14 per diluted share, compared to adjusted net income from continuing operations of $89 million, or $0.16 per diluted share, in the third quarter of 2016.

  • Adjusted operating income for the third quarter of 2017 excludes charges and credits totaling $23 million, which were comprised of $15 million in restructuring charges, $6 million in OfficeMax merger-related expenses and $2 million in executive transition and acquisition-related expenses.
  • Adjusted net income from continuing operations in the third quarter of 2017 excludes the after-tax impact of these items.

For the year-to-date 2017 period, adjusted operating income was $351 million compared to an adjusted operating income of $360 million for year-to-date 2016. Adjusted net income from continuing operations for year-to-date 2017 was $196 million, or $0.37 per diluted share, compared to adjusted net income from continuing operations of $192 million, or $0.35 per diluted share, for year-to-date 2016.

Sale of International Businesses

As previously announced on July 28, 2017, the company completed the sale of its business in mainland China. The company’s sale of the remaining international operations in Australia and New Zealand remain subject to the buyer obtaining the necessary regulatory approvals.

The company’s retained sourcing and trading operations in Asia contributed $3 million in sales for the third quarter of 2017 and an operating loss of $1 million. These results are reported as an “Other” segment outside of the primary two operating segments.

Corporate Results

Corporate includes support staff services and certain other expenses that are not allocated to the company’s operating divisions. Unallocated expenses decreased to $22 million in the third quarter of 2017 compared to $29 million in the third quarter of 2016 primarily due to cost savings associated with the Comprehensive Business Review.

Balance Sheet and Cash Flow

As of September 30, 2017, Office Depot had $0.8 billion in cash and cash equivalents and approximately $1.0 billion available under the Amended and Restated Credit Agreement, for total available liquidity of approximately $1.8 billion. Total debt was $282 million, excluding $781 million of non-recourse debt related to the credit-enhanced timber installment notes.

For the third quarter of 2017, cash provided by operating activities of continuing operations was $293 million and included the impact of $16 million in restructuring costs and $12 million in OfficeMax merger–related costs. Capital expenditures were $37 million in the third quarter of 2017, $3 million of which were related to the merger integration. Accordingly, free cash flow(3) of continuing operations was $256 million in the third quarter of 2017.

Year-to-date 2017 free cash flow(3) of continuing operations was $316 million, which comprised of $408 million in cash provided by operating activities of continuing operations less $92 million in capital expenditures.

During the third quarter, the company paid a quarterly cash dividend of $0.025 per share on September 15, 2017 for an aggregate of approximately $13 million.

Office Depot repurchased approximately 4 million shares at a total cost of $17 million in the third quarter of 2017. Since the share repurchase program began in May 2016, Office Depot has repurchased approximately 45 million shares, at a total cost of $166 million, for a weighted average price of $3.71 per share. At the end of the third quarter, $84 million remained available for repurchase under the current $250 million buyback authorization.

New Strategic Direction to Unlock Growth Opportunities

Following the appointment of Gerry Smith as chief executive officer, Office Depot began a strategic review with a focus on growing revenue and evaluating profitable growth opportunities. The result is a new strategic direction focused on better serving customers through the integration of business services and products via an omnichannel platform that leverages the company’s core competencies and assets. With millions of business customers and a unique last-mile advantage, the company believes introducing compelling service offerings will create a growing stream of recurring subscription-based revenue. The new strategic direction contains three areas of focus: Transform, Disrupt and Strengthen. A number of initiatives are already underway across the business.

Transform our Business

The first major step in the company’s transformation to create a business services platform was the acquisition of CompuCom, a market-leading provider of award-winning technology services, products and solutions. The acquisition combines CompuCom’s broad set of managed technology services and 6,000 certified technicians with Office Depot’s extensive customer base and last-mile advantage. Together, this combination will create a unique nationwide omnichannel offering in office supplies and end-to-end technology solutions focused on business customers, with the scale and credibility to stand apart from the competition.

The combined company expects to be well positioned to capture market share in the $25 billion, highly fragmented North American managed workplace service market by providing a comprehensive network of enterprise-level tech services and products to new and existing customers of all sizes. With minimal customer overlap, both companies’ sales teams can immediately begin cross-selling a full suite of products and services, with an incentive structure focused on driving services revenue. By creating a broader relationship with customers, Office Depot can become a more important vendor and the ideal business partner to provide customers the solutions they need.

The company has also identified a compelling opportunity to bring technology services to the historically underserved small and midsize business (SMB) market. Office Depot currently has access to nearly six million SMB customers within three miles of its approximately 1,400 stores. CompuCom’s existing SMB offering, Tech-ZoneTM, will be placed within Office Depot’s nationwide retail footprint to provide immediate scale and drive increased foot traffic for improved per-store profitability. With this strategy, Office Depot will be the first to offer customers technology solutions with national scale and local support across an omnichannel platform.

Disrupt for our Future

Beyond the CompuCom acquisition, Office Depot also has identified several additional innovative opportunities to leverage its key assets and disrupt traditional retail thinking. Earlier this week, the company announced the launch of BizBox, a new business services platform. BizBox provides start-ups and small business leaders access to the core services needed to start and grow their businesses through a convenient, monthly subscription. BizBox will simplify business decisions and operations for all small and medium-sized businesses.

BizBox core service offerings include website hosting and design, Centriq asset management, digital and social marketing, financing and accounting, CRM and HR/payroll support, in addition to technical services and support available from CompuCom. BizBox will be initially offered through an integrated online platform, which will be enhanced with new features and services based on customer feedback and demand, including introduction into retail stores.

Strengthen our Core

While the transformation toward a services-driven company is part of a multi-year strategy, Office Depot has a number of initiatives underway to strengthen its core business operations. The company has recently acquired several mid-market regional office products and janitorial supply companies in order to improve access to customers in select geographic markets within the United States and augment its presence in the cleaning and breakroom category. These acquisitions also add new selling models, supply chain capabilities and purchasing scale that the company plans to leverage across its existing operations.

Office Depot is also making investments in people and capabilities with a focus on improving customer experience and demand generation across sales channels. The company has recently added several senior leaders in marketing and merchandising with proven experience in services, demand generation and data analytics. Office Depot is also upgrading supply chain capabilities to drive both cost and performance improvements and generate additional working capital opportunities.

“Our new strategy is focused on building diverse and stable recurring service offerings that leverage our omnichannel platform, but most importantly it was created by listening to our customers and the solutions they need in order to run their businesses,” commented Gerry Smith. “We are moving quickly to make the necessary investments to successfully deliver on the strategy and believe it can ultimately unlock significant value to our shareholders as we position Office Depot for the future.”

Outlook (4)

Office Depot continues to expect total company sales in 2017 to be lower than 2016, primarily due to the impact of planned store closures, prior year contract customer losses, continued challenging market conditions, hurricane impacts and returning to a 52-week fiscal year. However, the company expects the rate of sales decline to improve in the fourth quarter of 2017 on a comparable 13-week basis based on implementation of new customer wins, customer retention efforts and growth from strategic business initiatives.

The company expects to be substantially complete with the OfficeMax integration and realize the majority of the synergy benefits by the end of 2017. Merger integration expenses are estimated to total approximately $40 million in 2017 and approximately $15 million in merger-related capital expenditures.

Office Depot’s cost saving initiatives that were part of the Comprehensive Business Review are expected to deliver over $250 million in annual benefits by the end of 2018, with about two-thirds of the total benefits anticipated to be realized by the end of 2017. The company continues to estimate it will incur approximately $125 million in costs to implement the Comprehensive Business Review cost saving programs, of which $90 million has been incurred since inception through the third quarter of 2017. Furthermore, the company expects to realize an additional $40 million of expected synergies from the CompuCom acquisition over the next two years.

As recently announced on October 3, 2017, Office Depot now expects adjusted operating income to be between $400 million and $425 million in fiscal 2017. The reduction reflects lower sales and traffic during this year’s Back-to-School season, higher supply chain costs related to planned consolidations, hurricane impacts and continued investments related to the company’s new direction to become a services-driven company.

Capital expenditures in 2017 are now expected to be approximately $125 million including investments to support the company’s critical priorities. Depreciation and amortization is still expected to be approximately $150 million in 2017.

Office Depot continues to anticipate free cash flow(3) from continuing operations to be more than $300 million in 2017.

The company anticipates a non-GAAP effective tax rate of approximately 41% in fiscal 2017, dependent on the mix and timing of income. As the company continues to utilize available tax operating loss carry forwards and credits, the estimated cash tax rate is expected to be approximately 15%.

On November 8, 2017, Office Depot completed the acquisition of CompuCom for approximately $940 million. The transaction was funded with a new $750 million 5-year senior secured term loan, the issuance of approximately 44 million shares of the company’s common stock and approximately $55 million of cash on hand. Office Depot expects to maintain substantial financial flexibility with low balance sheet leverage, strong liquidity, and positive free cash flow available for debt repayment, capital returns to shareholders and growth initiatives.

Due to the recent timing of the CompuCom acquisition, Office Depot has not yet determined the potential purchase accounting and other impacts to the consolidated financial statements or reportable segments for 2017 or future periods. In addition, the company is currently developing estimates of the necessary investments required to support the new strategic direction to transition to a services-driven business model over the coming years. As a result of these uncertainties, Office Depot will not be providing 2018 guidance at this time. However, the company does expect 2018 sales trends to continue to be impacted by store closures, lower store traffic, and ongoing competitive pressures, with an associated flow-through impact to profitability.

Office Depot plans to host an Investor Day in early 2018 to further highlight the company’s new strategic direction, 2018 guidance, operating initiatives and leadership team. Additional details on date and location will be provided closer to the event.

(1) Operating cash flow refers to cash flows from operating activities of continuing operations.

(2) Adjusted results represent non-GAAP measures and exclude charges or credits not indicative of core operations and the tax effect of these items, which may include but not be limited to merger integration, restructuring, acquisition, asset impairments and executive transition costs. Reconciliations from GAAP to non-GAAP financial measures can be found in this release as well as on the Investor Relations website at investor.officedepot.com.

(3) Free cash flow is defined as cash flows from operating activities of continuing operations less capital expenditures.

(4) The company’s outlook for 2017 included in this release, includes expected adjusted operating income, a non-GAAP number, which excludes charges or credits not indicative of core operations, which may include but not be limited to merger integration expenses, restructuring charges, executive transition costs, asset impairments, and other significant items that currently cannot be predicted. The exact amount of these charges or credits are not currently determinable, but may be significant. Accordingly, the company is unable to provide equivalent reconciliations from GAAP to non-GAAP for these financial measures.

About Office Depot, Inc.

Office Depot, Inc. is a leading provider of office supplies, business products and services delivered through an omnichannel platform.

The company had 2016 annual sales of approximately $11 billion, employed approximately 38,000 associates, and served consumers and businesses in North America and abroad with approximately 1,400 retail stores, award-winning e-commerce sites and a dedicated business-to-business sales organization – with a global network of wholly owned operations, franchisees, licensees and alliance partners. The company operates under several banner brands including Office Depot®, OfficeMax® and Grand & Toy. The company’s portfolio of exclusive product brands include TUL®, Foray®, Brenton Studio®, Ativa®, WorkPro®, Realspace® and Highmark®.

Office Depot, Inc.’s common stock is listed on the NASDAQ Global Select Market under the symbol “ODP.”

Office Depot is a trademark of The Office Club, Inc. OfficeMax is a trademark of OMX, Inc. ©2017 Office Depot, Inc. All rights reserved. Any other product or company names mentioned herein are the trademarks of their respective owners.

FORWARD LOOKING STATEMENTS

This communication may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements or disclosures may discuss goals, intentions and expectations as to future trends, plans, events, results of operations, cash flow or financial condition, or state other information relating to, among other things, Office Depot, based on current beliefs and assumptions made by, and information currently available to, management. Forward-looking statements generally will be accompanied by words such as “anticipate,” “believe,” “plan,” “could,” “estimate,” “expect,” “forecast,” “guidance,” “outlook,” “intend,” “may,” “possible,” “potential,” “predict,” “project,” “propose” or other similar words, phrases or expressions, or other variations of such words. These forward-looking statements are subject to various risks and uncertainties, many of which are outside of Office Depot’s control. There can be no assurances that Office Depot will realize these expectations or that these beliefs will prove correct, and therefore investors and stockholders should not place undue reliance on such statements.

Factors that could cause actual results to differ materially from those in the forward-looking statements include, among other things, the risk that Office Depot is unable to transform the business into a service-driven company or that such a strategy will result in the benefits anticipated, the risk that Office Depot may not be able to realize the anticipated benefits of the CompuCom transaction due to unforeseen liabilities, future capital expenditures, expenses, indebtedness and the unanticipated loss of key customers or the inability to achieve expected revenues, synergies, cost savings or financial performance, uncertainty of the expected financial performance of Office Depot following the completion of the CompuCom transaction, impact of weather events on Office Depot’s business, impacts and risks related to the termination of the attempted Staples acquisition, disruption in key business activities or any impact on Office Depot’s relationships with third parties as a result of the announcement of the termination of the Staples Merger Agreement; unanticipated changes in the markets for Office Depot’s business segments; the inability to realize expected benefits from the disposition of the European and other international operations; fluctuations in currency exchange rates, unanticipated downturns in business relationships with customers or terms with the company’s suppliers; competitive pressures on Office Depot’s sales and pricing; increases in the cost of material, energy and other production costs, or unexpected costs that cannot be recouped in product pricing; the introduction of competing technology products and services; unexpected technical or marketing difficulties; unexpected claims, charges, litigation, dispute resolutions or settlement expenses; new laws, tariffs and governmental regulations. The foregoing list of factors is not exhaustive. Investors and stockholders should carefully consider the foregoing factors and the other risks and uncertainties described in Office Depot’s Annual Report on Form 10-K, as amended, and Quarterly Reports on Form 10-Q filed with the U.S. Securities and Exchange Commission. Office Depot does not assume any obligation to update or revise any forward-looking statements.

Contact:
Richard Leland
561-438-3796
Investor Relations
Richard.Leland@officedepot.com 

Julianne Embry
561-438-1451
Media Relations
Julianne.Embry@officedepot.com

Source: Office Depot, Inc.

Office Depot launches new business services platform BizBox

BOCA RATON, Fla., 2017-Nov-08 — /EPR Retail News/ — Office Depot, Inc. (NASDAQ:ODP), a leading omnichannel provider of business services, products and technology today (November 7, 2017) announced the launch of BizBox (MyBizBox.com). This new business services platform will provide start-ups and small business leaders access to the core services needed to start and grow their businesses through a convenient subscription with monthly services starting at $99. BizBox will simplify business decisions and operations for all small and medium-size businesses.

The BizBox platform builds upon Office Depot’s previously announced acquisition of CompuCom Systems, Inc. and is an important part of the company’s strategic transformation from a traditional office products retailer to a broader business services platform.

“Office Depot has been a partner and resource for small business owners since 1986. We have the ability to reach nine million small business customers through our touch points around the country. Uniting this deep expertise with the world-class IT services of CompuCom will help solve customer problems in a way few others are doing right now,” said Gerry Smith, chief executive officer for Office Depot, Inc. “The BizBox platform is an essential element of our commitment to innovation. We are energized to expand a business ecosystem of services, products and technology that builds on our legacy of helping small business owners succeed in a modern economy.”

Whether navigating the waters of payroll and HR or embarking on a first-time digital campaign, BizBox members will have access to experts who help identify services suited to their unique needs, better streamlining operations and freeing up valuable time to focus on the real business of innovation and growth. End-to-end services include:

  • Accounting
  • Email Marketing and CRM
  • Payroll and HR
  • Search Marketing
  • Asset Management
  • Social Marketing
  • Legal Services
  • Logo Design
  • Website Creation and Hosting
  • Technical Services (available soon)

A recent Office Depot study of 1,500 small business and start-up owners shows that although digital services such as e-mail marketing, website creation and social marketing are seen as the top services needed to grow a business, many respondents aren’t using these services. Nearly one-third of established businesses in the survey do not have a website, and over half do not do any kind of social marketing at all.

“It’s not surprising small business owners and entrepreneurs aren’t always using the very services that would best help them drive growth. We know from talking to them every day they feel pulled in a million directions, and often don’t know where to turn for support for all their needs,” said Kevin Moffitt, chief digital officer for Office Depot, Inc. “BizBox is a platform designed to help reduce some of the stress and barriers that prevent entrepreneurs from turning their ideas into reality, and is the first service of its kind backed by the business expertise of a multi-billion-dollar enterprise.”

The BizBox platform will be enhanced with new features and services based on customer feedback and demand, including introduction into retail stores.

For more information and to sign-up today, please visit MyBizBox.com

About Office Depot, Inc.

Office Depot, Inc. is a leading provider of office supplies, business products and services delivered through an omnichannel platform.

The company had 2016 annual sales of approximately $11 billion, employed approximately 38,000 associates, and served consumers and businesses in North America and abroad with approximately 1,400 retail stores, award-winning e-commerce sites and a dedicated business-to-business sales organization – with a global network of wholly owned operations, franchisees, licensees and alliance partners. The company operates under several banner brands including Office Depot, OfficeMax and Grand & Toy. The company’s portfolio of exclusive product brands include TUL, Foray, Brenton Studio, Ativa, WorkPro, Realspace and Highmark.

Office Depot, Inc.’s common stock is listed on the NASDAQ Global Select Market under the symbol “ODP.”

Office Depot is a trademark of The Office Club, Inc. OfficeMax is a trademark of OMX, Inc. ©2017 Office Depot, Inc. All rights reserved. Any other product or company names mentioned herein are the trademarks of their respective owners.

Contact:
Julianne Embry
561-438-1451
julianne.embry@officedepot.com 

Sarah England
561-438-1448
sarah.england@officedepot.com

Source: Office Depot, Inc.

Office Depot to acquire IT services, products and solutions provider CompuCom Systems, Inc.

  • Adding Market-Leading Provider of World-Class IT Services with Approximately $1.1 Billion in Sales to Create a Powerful Omnichannel Tech Services Platform
  • Combines CompuCom’s Broad Set of Managed Technology Services with Access to Office Depot’s Extensive Customer Base and Last-Mile Advantage to Generate Substantial Growth Opportunities
  • Expects Over $40 Million in Estimated Annual Cost Synergies within Two Years; Acquisition to be Accretive in Year One
  • Attractive Free Cash Flow and Significant Financial Flexibility to Implement Office Depot’s New Strategy to Grow Recurring Business Services Revenue

BOCA RATON, Fla., 2017-Oct-06 — /EPR Retail News/ — Office Depot, Inc. (“Office Depot” or the “company”) (NASDAQ:ODP) today (October 3, 2017) announced it is pivoting the company from a traditional office products retailer to a broader business services and technology products platform. As the first step in this new strategic direction, the company has entered into a definitive agreement to acquire CompuCom Systems, Inc. (“CompuCom”), a market-leading provider of award-winning IT services, products and solutions that enable the digital workplace for enterprise, small and midsize businesses. The company also provided a preliminary estimate of third-quarter financial results and a lowered outlook for Office Depot’s stand-alone business for 2017.

“Technology is the office supply of the future,” said Gerry Smith, chief executive officer of Office Depot. “Today marks a significant milestone as we move to provide a unique business services platform for our current and future customers. Acquiring CompuCom is the first step in this new strategic direction. The combination of CompuCom’s enterprise IT services with our millions of customers and approximately 1,400 distribution points gives us the credibility and scale to build a sustainable platform and stand apart from the competition. The company will create value for shareholders from a diversified revenue base with a clear opportunity to grow higher value services and business-to-business revenues.”

Under the terms of the agreement, Office Depot will acquire CompuCom from Thomas H. Lee Partners, L.P. (“THL”), a premier private equity firm, for a total consideration of approximately $1 billion, which includes the repayment of CompuCom debt and issuance of new Office Depot shares. Following the transaction, THL will hold an equity position in Office Depot of approximately 8% of total shares outstanding.

Founded in 1987, CompuCom provides highly-rated managed IT services to businesses with over 5.1 million unique end users. CompuCom’s team of approximately 6,000 licensed technicians is the largest employee field technician workforce in North America, providing remote and onsite technology support. CompuCom procures, installs and manages the lifecycle of hardware and software for businesses, and offers IT support services including remote help desk, data centers and on-site IT professionals. CompuCom was positioned in the Leaders quadrant of Gartner’s® most recently released Magic Quadrant® for Managed Workplace Services, North America. CompuCom has established long-term relationships with hundreds of blue chip customers, including six of the top 10 Fortune 500 companies, and many small- and medium-sized businesses, including local franchises of national brands.

Compelling Market Opportunity

The combination represents a unique opportunity to bring world-class IT support services to all of Office Depot’s customers, particularly underserved small- and medium-sized businesses (SMBs).

  • $25 Billion Opportunity: Together, Office Depot and CompuCom will be positioned to capture market share in a $25 billion, highly fragmented market as the first company to provide a nationwide, comprehensive network of enterprise-level tech services and products.
  • Targeted Small and Medium Business Model: The combined company will have an unmatched position in serving SMB customers by providing end-to-end award-winning IT services through its approximately 6,000 salaried, certified technicians nationwide and top-tier cloud and data centers. This model will fit within Office Depot’s omnichannel platform, particularly its last-mile footprint that offers access to nearly six million SMBs within three miles of its approximately 1,400 stores.
  • Expect Increased Traffic and Services Revenue Improving Store Profitability: CompuCom’s established SMB offering, Tech-Zone, will be placed within Office Depot’s nationwide retail footprint, providing immediate scale and driving traffic into Office Depot stores. Added services revenue and increased foot traffic will improve per-store profitability.
  • Immediate Cross-Selling Opportunity with Minimal Overlap: Both Office Depot and CompuCom sales teams can capitalize on minimal customer overlap to quickly begin cross-selling a full suite of products and services, with an incentive structure focused on driving services revenue.
  • Continued Focus on Core Enterprise Business: CompuCom will be the technology services platform for Office Depot, expanding CompuCom’s reach and enabling further efficiency initiatives in its core enterprise business focused on automation and innovation.
  • Enhanced Management Expertise: Since the arrival of Gerry Smith, who brings in-depth expertise in the technology sector, the company has added several senior leaders, including chief marketing officer, Jerri DeVard, chief legal officer, N. David Bleisch and chief merchant and services officer, Janet Schijns, who collectively bring proven experience in services and demand generation, in order to unlock the full value of this combination.

“Together with Office Depot we can create a distinctive offering for our enterprise and SMB customers and accelerate our growth,” said Dan Stone, chief executive officer of CompuCom. “The workplace has truly moved to a digital environment with the average worker having over four connected devices. Office Depot’s established brand and large national footprint will help to drive the expansion of our offerings to more markets and build on our client-focused success to welcome new customers seeking high-quality technology services and solutions.”

“We strongly believe in the compelling opportunity to create value for shareholders in this combination and look forward to supporting Office Depot in this next chapter,” said Soren Oberg, managing director at Thomas H. Lee Partners. “Office Depot is an ideal partner for CompuCom, as their strengths are highly complementary and, together, they will have a strong foothold in the fragmented managed services market and greater opportunities for growth.”

Financial Impact

Stephen Hare, chief financial officer of Office Depot added: “With this acquisition, we immediately add CompuCom’s significant, recurring revenue stream and proven service offerings to our platform, allowing us to quickly build scale. Together we will build deeper relationships with our business customers and provide the solutions they need, while generating long-term, sustainable value for our shareholders.”

The acquisition of CompuCom is expected to accelerate Office Depot’s ability to enhance shareholder value and pursue topline growth. While Office Depot intends to provide greater detail surrounding the long-term financial impact of the transaction during its next earnings call in November, Office Depot expects to:

  • Add approximately $1.1 billion of revenue
  • Deliver expected cost synergies of over $40 million within two years
  • Realize substantial revenue synergies over time as a result of the opportunity for CompuCom to access Office Depot’s multi-channel customer base

Office Depot has a demonstrated track-record of success in integrating acquisitions and delivering synergies, including over $750 million in cost savings from the OfficeMax acquisition alone.

Office Depot will finance the acquisition with new debt and the issuance of approximately 45 million shares of its common stock to THL. Office Depot expects to refinance CompuCom’s existing debt with a new term loan of approximately $750 million. Following the close of the transaction, Office Depot expects to maintain substantial financial flexibility with low balance sheet leverage, strong liquidity, and positive free cash flow available for debt repayment, capital returns to shareholders and growth initiatives.

Office Depot remains committed to returning capital to shareholders including its current cash dividend plan. The existing share buyback plan authorized by the Board of Directors remains in place.

Preliminary Q3 Results and Full-Year Outlook (3)(6)

Office Depot expects to report its third-quarter 2017 financial results in November. Based on a preliminary assessment, the company expects to report(5):

  • Total reported sales decline between 7-8% for the quarter including store closures.
    • Between 5-6% decline in comparable retail store sales.
    • Between 5-6% decline in constant currency sales within the BSD.
  • Adjusted operating income(2) between $125-$135 million for the quarter.
  • Free cash flow(4) from continuing operations of approximately $200 million for the quarter.
  • Approximately $750 million in cash and cash equivalents and approximately $1 billion available under the Amended and Restated Credit Agreement, for total available liquidity of approximately $1.75 billion. Total debt of approximately $285 million excluding non-recourse debt.

Office Depot expects to provide an updated long-term outlook, including the impact of the CompuCom acquisition, with the announcement of its third-quarter 2017 financial results, however the company has lowered its outlook for 2017.

Adjusted operating income(2) for fiscal 2017 is now estimated to be between $400-$425 million, excluding the impact of this transaction, compared to the previous estimate of approximately $500 million. Depreciation and amortization for the year is still estimated at $150 million with capital expenditures totaling $125 million compared to the previous estimates of $150 million for capital expenditures. Our updated guidance is driven by a number of factors, including:

  • Three hurricanes in the U.S. and Puerto Rico, where a significant concentration of our retail and BSD customers are located, particularly in Texas, Florida and Puerto Rico.
  • Lower sales and store traffic during this year’s back to school period, which is typically a strong season for Office Depot.
  • Temporary higher supply chain costs arising primarily from transition issues related to planned consolidation of vendors and warehouses.
  • Professional fees and other costs related to developing our strategy and transition to a broader omnichannel business services platform.

“We have moved quickly to make the necessary management and operational changes to address these performance issues, while investing in our services platform to prepare for this transaction with CompuCom,” commented Gerry Smith.

“We are focused on building stable and recurring service offerings that leverage our omnichannel platform and deliver the solutions our customers need, and strongly believe it can unlock significant value to our shareholders as we position Office Depot for the future.”

Approval Process

This transaction is subject to customary closing conditions, including required regulatory approvals. This transaction is not subject to a shareholder vote and is expected to close by the end of the year.

Advisors

Goldman Sachs & Co. LLC is serving as financial advisor to Office Depot. Wachtell, Lipton, Rosen & Katz is serving as legal counsel. Weil Gotshal & Manges LLP is serving as legal counsel to CompuCom.

Additional information regarding the CompuCom acquisition and accompanying presentation can be found on Office Depot’s website in the “Investor Relations” section.

(1) Source: Gartner “Magic Quadrant for Managed Workplace Services, North America” by Daniel Barros, Helen Huntley, Karen A. Hobert, January 30, 2017. Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.

(2) Adjusted amounts represent non-GAAP measures and exclude charges or credits not indicative of core operations and the tax effect of these items, which may include but not be limited to merger integration, restructuring, acquisition, asset impairments and executive transition costs.

(3) The company’s preliminary third quarter results and full-year outlook in this release include non-GAAP financial measures such as Adjusted Operating Income and free cash flow may exclude charges or credits not indicative of core operations. Office Depot is unable to provide preliminary results for comparable GAAP measures such as operating income, net income or net cash provided by operating income for the third quarter without unreasonable efforts because the exact amount of these charges or credits are not currently determinable until the closing procedures for the quarter is complete, but may be significant. Accordingly, the company is unable to provide reconciliations from GAAP to non-GAAP for these financial measures without unreasonable effort, although it is important to note that these charges or credits could be material to Office Depot’s third quarter results in accordance with GAAP.

(4) Free cash flow is defined as net cash provided by operating activities less capital expenditures. Capital expenditures exclude the purchase of the company’s previously leased head office.

(5) The estimates reflect Office Depot’s preliminary unaudited estimates and views on market trends observed year to date for 2017 and are based on information available as of the date hereof. Actual results and estimates may differ materially from the estimates and trends described above due to developments or other information that may arise between now and the time the financial results for the third quarter or fiscal year are finalized. These preliminary results should not be viewed as a substitute for our third quarter interim unaudited consolidated financial statements prepared in accordance with GAAP.

(6) Management of Office Depot believes that the presentation of non-GAAP financial measures such as Adjusted Operating Income and free cash flow enhances the ability of its investors to analyze trends in its business and provides a means to compare periods that may be affected by various items that might obscure trends or developments in its business. Non-GAAP measures help to evaluate programs and activities that are intended to attract and satisfy customers, separate from expenses and credits directly associated with merger, restructuring, and certain similar items. Our measurement of these non-GAAP financial measures may be different from similarly titled financial measures used by others and therefore may not be comparable. These non-GAAP financial measures should not be considered superior to the GAAP measures, but only to clarify some information and assist the reader.

About Office Depot, Inc.

Office Depot, Inc. is a leading provider of office supplies, business products and services delivered through an omnichannel platform.

The company had 2016 annual sales of approximately $11 billion, employed approximately 38,000 associates, and served consumers and businesses in North America and abroad with approximately 1,400 retail stores, award-winning e-commerce sites and a dedicated business-to-business sales organization – with a global network of wholly owned operations, franchisees, licensees and alliance partners. The company operates under several banner brands including Office Depot, OfficeMax and Grand & Toy. The company’s portfolio of exclusive product brands include TUL, Foray, Brenton Studio, Ativa, WorkPro, Realspace and Highmark.

Office Depot, Inc.’s common stock is listed on the NASDAQ Global Select Market under the symbol “ODP.”

Office Depot is a trademark of The Office Club, Inc. OfficeMax is a trademark of OMX, Inc. ©2017 Office Depot, Inc. All rights reserved. Any other product or company names mentioned herein are the trademarks of their respective owners.

About CompuCom

CompuCom Systems, Inc., a global company headquartered in North America, provides IT managed services, infrastructure solutions, consulting and products to Fortune 1000 companies committed to enhancing their end users’ experience. Founded in 1987, privately held CompuCom employs approximately 11,500 associates. For more information, visit www.compucom.com.

About Thomas H. Lee Partners, L.P.

Thomas H. Lee Partners, L.P. (“THL”) is a premier private equity firm investing in middle market growth companies, headquartered in North America, exclusively in four industry sectors: Business & Financial Services, Consumer & Retail, Healthcare, and Media, Information Services & Technology. Using the firm’s deep domain expertise and the internal operating capabilities of its Strategic Resource Group, THL seeks to create deal sourcing advantages, and to accelerate growth and improve operations in its portfolio companies in partnership with management teams.

Since its founding in 1974, THL has raised over $22 billion of equity capital, acquired over 140 portfolio companies and completed over 360 add-on acquisitions which collectively represent a combined enterprise value at the time of acquisition of over $200 billion.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy securities. The securities offered and sold in the private placement have not been registered under the Securities Act of 1933, as amended, or any state securities laws, and may not be offered or sold in the United States absent registration, or an applicable exemption from registration under the Securities Act and applicable state securities laws.

FORWARD LOOKING STATEMENTS

This communication may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements or disclosures may discuss goals, intentions and expectations as to future trends, plans, events, results of operations, cash flow or financial condition, or state other information relating to, among other things, Office Depot, based on current beliefs and assumptions made by, and information currently available to, management. Forward-looking statements generally will be accompanied by words such as “anticipate,” “believe,” “plan,” “could,” “estimate,” “expect,” “forecast,” “guidance,” “outlook,” “intend,” “may,” “possible,” “potential,” “predict,” “project,” “propose” or other similar words, phrases or expressions, or other variations of such words. These forward-looking statements are subject to various risks and uncertainties, many of which are outside of Office Depot’s control. There can be no assurances that Office Depot will realize these expectations or that these beliefs will prove correct, and therefore investors and stockholders should not place undue reliance on such statements.

Factors that could cause actual results to differ materially from those in the forward-looking statements include, among other things, the ability to consummate the transaction between Office Depot and CompuCom pursuant to the terms and in accordance with the timing described in this press release, the risk that Office Depot may not be able to realize the anticipated benefits of the transaction due to unforeseen liabilities, future capital expenditures, expenses, indebtedness and the unanticipated loss of key customers or the inability to achieve expected revenues, synergies, cost savings or financial performance after the completion of the transaction with CompuCom, the risk that the refinancing of CompuCom’s outstanding debt is not obtained on favorable terms, uncertainty of the expected financial performance of Office Depot following the completion of the transaction, impact of weather events on Office Depot’s business, impacts and risks related to the termination of the attempted Staples acquisition, disruption in key business activities or any impact on Office Depot’s relationships with third parties as a result of the announcement of the termination of the Staples Merger Agreement; unanticipated changes in the markets for Office Depot’s business segments; the inability to realize expected benefits from the disposition of the European and other international operations; fluctuations in currency exchange rates, unanticipated downturns in business relationships with customers or terms with the company’s suppliers; competitive pressures on Office Depot’s sales and pricing; increases in the cost of material, energy and other production costs, or unexpected costs that cannot be recouped in product pricing; the introduction of competing technology products and services; unexpected technical or marketing difficulties; unexpected claims, charges, litigation, dispute resolutions or settlement expenses; new laws, tariffs and governmental regulations. The foregoing list of factors is not exhaustive. Investors and stockholders should carefully consider the foregoing factors and the other risks and uncertainties described in Office Depot’s Annual Report on Form 10-K, as amended, and Quarterly Reports on Form 10-Q filed with the U.S. Securities and Exchange Commission. Office Depot does not assume any obligation to update or revise any forward-looking statements.

Contact:
Richard Leland
561-438-3796
Investor Relations
Richard.Leland@officedepot.com 

AnneMarie Mathews
305-733-9744
Media Relations
AnneMarie.Mathews@officedepot.com

Source: Office Depot, Inc.

Office Depot welcomes N. David Bleisch as its EVP, Chief Legal Officer and Corporate Secretary

Office Depot welcomes N. David Bleisch as its EVP, Chief Legal Officer and Corporate Secretary

 

Boca Raton, Fla., 2017-Sep-21 — /EPR Retail News/ — Office Depot, Inc. (NASDAQ:ODP), a leading provider of office supplies, business products and services delivered through an omnichannel platform, today ( September 20, 2017) announced N. David Bleisch, a distinguished law professional with more than 30 years of experience, has joined the company as Executive Vice President, Chief Legal Officer and Corporate Secretary.

Bleisch will lead the strategic direction of the legal organization and operations, as well as manage the regulatory and compliance matters for the company. He will report directly to Office Depot’s Chief Executive Officer Gerry Smith.

“David has been a trusted legal advisor for many years and has provided strategic legal solutions to key business issues within the organizations he’s worked for with an outstanding track record,” said Gerry Smith, Chief Executive Officer for Office Depot, Inc. “He is an experienced and knowledgeable leader in his field and we are thrilled to welcome him to Office Depot as the new Chief Legal Officer.”

David has broad expertise in securities compliance, enterprise risk management, corporate finance, antitrust, litigation, intellectual property management, government and regulatory affairs, investor relations, labor and employment issues, shareholder engagement, class action lawsuits and mergers and acquisitions.

Prior to joining Office Depot, Bleisch was Senior Vice President and Chief Legal Officer for The ADT Corporation, where he managed the legal, environmental, health and safety, government affairs and corporate governance matters. Earlier in his career, he served in several leadership roles at Tyco International before being appointed Vice President and General Counsel of Tyco Security Solutions, the largest operating segment of Tyco, comprised of ADT Worldwide, Tyco Security Products and Tyco Retail Solutions. During this time, he also managed the intellectual property legal group for all of Tyco’s operating segments worldwide.

“What I found most compelling about Office Depot is the energy and excitement around the company’s vision for innovation and continuous improvement,” said Bleisch. “I’m eager and excited to join the company at such a critical phase in its growth and development.”

Bleisch is filling the role vacated by Steve Calkins who was promoted to President, Business Solutions Division in May.

About Office Depot, Inc.

Office Depot, Inc. is a leading provider of office supplies, business products and services delivered through an omnichannel platform.

The company had 2016 annual sales of approximately $11 billion, employed approximately 38,000 associates, and served consumers and businesses in North America and abroad with approximately 1,400 retail stores, award-winning e-commerce sites and a dedicated business-to-business sales organization – with a global network of wholly owned operations, franchisees, licensees and alliance partners. The company operates under several banner brands including Office Depot, OfficeMax and Grand & Toy. The company’s portfolio of exclusive product brands include TUL, Foray, Brenton Studio, Ativa, WorkPro, Realspace and Highmark.

Office Depot, Inc.’s common stock is listed on the NASDAQ Global Select Market under the symbol “ODP.”

Office Depot is a trademark of The Office Club, Inc. OfficeMax is a trademark of OMX, Inc. ©2017 Office Depot, Inc. All rights reserved. Any other product or company names mentioned herein are the trademarks of their respective owners.

Contact:

AnneMarie Mathews
561-438-6710
annemarie.mathews@officedepot.com

Source: Office Depot, Inc.

Office Depot collaborates with Elementum to fortify its omnichannel operations

Boca Raton, Fla., 2017-Sep-08 — /EPR Retail News/ — Office Depot, Inc. (NASDAQ:ODP), a leading provider of office supplies, business products and services delivered through an omnichannel platform, today announced it is collaborating with Elementum to fortify its omnichannel operations, providing the company the ability to deliver products and services at unparalleled velocity and scale across all customer channels. The implementation of Elementum will provide comprehensive operational visibility, enabling Office Depot to act quickly, proactively and flexibly across global functions.

“Utilizing Elementum is a game-changer for our operations and performance,” said Gerry Smith, chief executive officer of Office Depot, Inc. “With this sophisticated technology, we will transform our company, as we fully leverage this tremendous asset to better serve our existing customers and seek new opportunities.”

Elementum provides new levers to manage global operations with industry leading cloud-based collaboration capabilities, as well as comprehensive, global visibility across every segment of business operations: procurement, logistics, manufacturing, and inventory management. Now, Office Depot teams will be able to interact proactively across functions as issues arise, while Elementum’s Situation Room provides executives with a central “Mission Control” from which to see and manage production, shipping and inventory based on data aggregated from all Elementum apps. These capabilities will help differentiate Office Depot in the world of eCommerce and ever-changing customer expectations.

Specific benefits of the Elementum solution at Office Depot include managing full-scale operations with global context to shrink lead times and ensure material availability; as well as proactively adjusting to issues in real time to deliver on-time and prevent stockouts. In addition, the technology will accelerate decision-making among cross-functional teams.

“Reaching customers is not about slashing costs; it’s about creating a frictionless experience that captivates them. I am impressed with Office Depot’s commitment to transformation, and it inspires me to team up with businesses that invite big change. This partnership with Office Depot is exactly what Elementum stands for: empowering companies to deliver exceptional customer experiences,” said Nader Mikhail, founder and CEO of Elementum.

Click here for b-roll.

About Elementum
Imagine fumbling around in a dark room for your keys, but everything you knock over costs you 100 million dollars. That’s how the product economy runs today: an endless series of expensive stopgaps to compensate for operational uncertainty. Companies are forced to make huge bets based on blind guesswork, resulting in inefficient cash conversion and disappointed customers. That’s why Elementum is building the Product Graph™ — a digital representation of the global product economy to provide businesses with an enlightened perspective into their operations. An open, constantly growing ecosystem, the Graph shines light on the flow of over $500B worth of global commerce and seamlessly connects cross-enterprise operations, enabling companies to meet customers’ product needs with speed, efficiency, and integrity. Elementum is the engine that fuels businesses and empowers brands to delight customers. For more information, visit us at www.elementum.com.

About Office Depot, Inc.
Office Depot, Inc. is a leading provider of office supplies, business products and services delivered through an omnichannel platform.

The company had 2016 annual sales of approximately $11 billion, employed approximately 38,000 associates, and served consumers and businesses in North America and abroad with approximately 1,400 retail stores, award-winning e-commerce sites and a dedicated business-to-business sales organization – with a global network of wholly owned operations, franchisees, licensees and alliance partners. The company operates under several banner brands including Office Depot, OfficeMax and Grand & Toy. The company’s portfolio of exclusive product brands include TUL, Foray, Brenton Studio, Ativa, WorkPro, Realspace and Highmark.

Office Depot, Inc.’s common stock is listed on the NASDAQ Global Select Market under the symbol “ODP.”

Office Depot is a trademark of The Office Club, Inc. OfficeMax is a trademark of OMX, Inc. ©2017 Office Depot, Inc. All rights reserved. Any other product or company names mentioned herein are the trademarks of their respective owners.

AnneMarie Mathews
Office Depot, Inc.
561-438-6710
annemarie.mathews@officedepot.com

Rob Cheng
Elementum
650-265-7991
rob@elementum.com

SOURCE: Office Depot, Inc.

Office Depot, Inc. to roll out same-day delivery in Atlanta, GA and Los Angeles, CA and Ft. Lauderdale/Miami, FL

Boca Raton, Fla., 2017-Aug-09 — /EPR Retail News/ — Office Depot, Inc. (NASDAQ:ODP), a leading provider of office supplies, business products and services delivered through an omnichannel platform, today (August 7, 2017) announced same-day delivery powered by Deliv–a leading crowdsourced, last-mile logistics company providing same-day delivery and returns for omnichannel retailers, local businesses and e-commerce companies–is launching on August 28 in Atlanta, Georgia and Los Angeles, California; and on September 6 in Ft. Lauderdale/Miami, Florida. The same-day delivery service is designed to better meet customer expectations as the omnichannel shopping experience continues to expand.

“With our new same-day delivery and our omnichannel approach, we are utlizing our retail stores as assets and part of our supply chain to give our customers the best possible experience,” said Gerry Smith, chief executive officer of Office Depot, Inc.

Customers who shop on officedepot.com will have the option of scheduled same-day delivery between 8 a.m. and 11 a.m., 11 a.m. to 2 p.m., 2 p.m. to 5 p.m. or 5 p.m. to 8 p.m., depending upon the time of day they shop. For a limited time, Office Depot plans to waive the delivery fee as an introductory offer.

“Retail is undergoing a rapid transformation,” said Kevin Moffitt, senior vice president and chief digital officer at Office Depot, Inc. “To exceed our customers’ increasing expectations, we continue to enhance our omnichannel shopping experience. Adding same-day delivery capabilities to our growing in-store pickup and ship-from-store programs allows us to better leverage our retail locations as distribution hubs, and serve our customers faster and more efficiently.”

Deliv’s technology enables Office Depot customers to select the delivery times and locations that work best for them while being able to track their purchases in real-time.

“Office Depot is now providing businesses with the type of service customers expect,” said Daphne Carmeli, chief executive officer and founder at Deliv. “I am pleased that Deliv was chosen as its partner to power this new offering.”

By the end of 2017, same-day delivery is expected to roll out in several additional markets.

Click here for b-roll.

About Office Depot, Inc.
Office Depot, Inc. is a leading provider of office supplies, business products and services delivered through an omnichannel platform.

The company had 2016 annual sales of approximately $11 billion, employed approximately 38,000 associates, and served consumers and businesses in North America and abroad with approximately 1,400 retail stores, award-winning e-commerce sites and a dedicated business-to-business sales organization – with a global network of wholly owned operations, franchisees, licensees and alliance partners. The company operates under several banner brands including Office Depot, OfficeMax and Grand & Toy. The company’s portfolio of exclusive product brands include TUL, Foray, Brenton Studio, Ativa, WorkPro, Realspace and Highmark.

Office Depot, Inc.’s common stock is listed on the NASDAQ Global Select Market under the symbol “ODP.”

Office Depot is a trademark of The Office Club, Inc. OfficeMax is a trademark of OMX, Inc. ©2017 Office Depot, Inc. All rights reserved. Any other product or company names mentioned herein are the trademarks of their respective owners.

Source: Office Depot, Inc.

Office Depot enters exclusive licensing agreement with Centriq Technology to develop unique business application

BOCA RATON, Fla. & SAN FRANCISCO, 2017-Jun-24 — /EPR Retail News/ — Office Depot, Inc. (NASDAQ:ODP), a leading provider of office products, services, and solutions, announced it is entering into an exclusive licensing agreement with Centriq Technology, Inc., to develop a unique business application utilizing their award-winning asset management platform.

“This exclusive agreement with Centriq is the first step in showing that we are moving toward a strategic transformation of our company outside of the traditional retail model,” said Gerry Smith, chief executive officer of Office Depot, Inc. “Centriq’s unique technology platform has many applications and we will leverage that technology to provide new services and an interactive sales experience for our customers beyond the traditional modes of selling paper, ink and toner.”

Centriq’s current application was named a game-changer as a home management resource. Centriq Home, available for iOS and Android, connects homeowners to product manufacturers for a greatly improved product experience. Centriq creates a single, comprehensive and personalized user guide for everything in their home. Support content, troubleshooting and parts and accessories purchases are available with a simple click. Users are also able to get rapid, on-site help from top-rated professionals, and access specific, highly relevant content from the Emmy-winning series, “This Old House” and “Ask This Old House,” directly through the app.

Office Depot will work with Centriq to develop a business to business version of their current app that will enable businesses to better manage their assets whether it be a printer, PC or another device all in one place. “The benefit for businesses is efficient management of their assets and retention of that knowledge all in the palm of their hand,” added Smith. “Through game-changing applications like this, we will differentiate Office Depot and provide value for our customers.”

“We couldn’t imagine a better partner than Office Depot for Centriq,” said James Sheppard, co-founder of Centriq. “We are delighted that they are licensing our core technology for their exciting vision to transform their business and industry.” Office Depot will also be a minority investor in Centriq, as it seeks to leverage emerging technologies to bring innovative solutions to the millions of small, medium and large customers it services today.

About Centriq:

Centriq is an early stage technology company that was founded in January 2015 by former digital innovation executives from Salesforce.com who were tired of the hassles of being a homeowner. Centriq is privately funded and is headquartered in the San Francisco Bay Area. Visit www.centriqhome.com for more information, and download the free app on Google Play or the App Store.

About Office Depot, Inc.

Office Depot, Inc. is a leading provider of products, services, and solutions for every workplace – whether your workplace is an office, home, school or car.

The company had 2016 annual sales of approximately $11 billion, employed approximately 38,000 associates, and served consumers and businesses in North America and abroad with approximately 1,400 retail stores, award-winning e-commerce sites and a dedicated business-to-business sales organization – with a global network of wholly owned operations, franchisees, licensees and alliance partners. The company operates under several banner brands including Office Depot, OfficeMax and Grand & Toy. The company’s portfolio of exclusive product brands include TUL, Foray, Brenton Studio, Ativa, WorkPro, Realspace and Highmark.

Office Depot, Inc.’s common stock is listed on the NASDAQ Global Select Market under the symbol “ODP.”

Office Depot is a trademark of The Office Club, Inc. OfficeMax is a trademark of OMX, Inc. ©2017 Office Depot, Inc. All rights reserved. Any other product or company names mentioned herein are the trademarks of their respective owners.

Contact:
AnneMarie Mathews
561-438-6710
Media Relations
AnnMarie.Mathews@officedepot.com

Centriq Technology, Inc.
James Sheppard
888-567-8118
Media Relations
media@centriqhome.com

Source: Office Depot, Inc.

Office Depot expands its North American business with senior executive appointments

BOCA RATON, Fla., 2017-May-31 — /EPR Retail News/ — Office Depot, Inc. (NASDAQ:ODP), a leading provider of office products, services, and solutions, today (May 30, 2017) announced the appointment of several senior executives to align with the Company’s focus to grow its North American business.

Steve Calkins has been named President, Business Solutions Division, focused on serving Office Depot’s B2B customers. With Office Depot since 2003, Calkins has been the Company’s Executive Vice President and Chief Legal Officer since August 2016. Prior to that, he held various executive leadership roles in operations for over five years, including having responsibility for the Company’s contract sales business and Canadian operations. Having already been successful in these roles, he brings a wealth of knowledge and relationships that will support the continued momentum currently underway and drive expansion in adjacencies and services among B2B customers.

Troy Rice has been named President, Retail Division, focusing on our B2C customers. With a background of nearly 30 years in the retail industry, Rice, will maintain responsibility for setting the strategic direction of the Company’s retail offerings while transforming the customer experience. In addition, he will oversee the Copy and Print business. Rice was previously Executive Vice President and Chief Operating Officer, and has been with Office Depot since April 2014. Prior to joining Office Depot, Rice held various executive leadership roles with Toys “R” Us and The Home Depot.

“With our Company’s revenue evenly split between the retail and delivery businesses, it is imperative that we have strong leadership to meet our customer needs in both of these key business segments,” said Gerry Smith, Chief Executive Officer for Office Depot, Inc. “Both Steve and Troy have significant experience leading these businesses which will allow us to better leverage our integrated multi-channel business model and continue to execute against our strategic initiatives.”

Additionally, Michael Allison, formerly Executive Vice President and Chief People Officer, recently has assumed the new role of Executive Vice President, Chief Administrative Officer. With Office Depot since 2006, Allison is utilizing his significant company and industry experience as he continues to oversee Human Resources, Communications, Loss Prevention and Events, and has added responsibilities for IT, Real Estate and Construction.

Kevin Moffitt, currently Senior Vice President, eCommerce, will assume the expanded role of Chief Digital Officer, leading eCommerce and all digital-related activities for the Company. Moffitt, who has been with the company since 2012, will build on his more than 20 years of experience creating integrated, customer-centric digital experiences. Reporting to Steve Calkins, he will be responsible for transforming Office Depot’s digital platforms, driving digital strategy and innovation and accelerating the company’s online and mobile growth.

In addition, John Gannfors has recently joined Office Depot as Executive Vice President, Transformation and Strategic Sourcing. Gannfors is leading the company’s Transformation Office, process improvement and strategic sourcing areas where he will be responsible for procurement, driving business process improvements across the organization and executing on various efficiency and cost savings opportunities. He most recently spent nearly 10 years as Vice President, Global Supply Chain and Chief Procurement Officer, Data Center Group, at Lenovo. Prior to joining Lenovo, he spent approximately 12 years in various leadership roles at Dell.

Rounding out the company’s executive team are Stephen Hare, Executive Vice President and Chief Financial Officer, and Timothy Beauchamp, Executive Vice President, Supply Chain.

“I am confident that with these leaders in place, we have the optimal structure and expertise to support and expand our customer base and focus on growing our North American business to position Office Depot for long-term future success,” added Smith.

About Office Depot, Inc.

Office Depot, Inc. is a leading provider of products, services, and solutions for every workplace – whether your workplace is an office, home, school or car.

The company had 2016 annual sales of approximately $11 billion, employed approximately 38,000 associates, and served consumers and businesses in North America and abroad with approximately 1,400 retail stores, award-winning e-commerce sites and a dedicated business-to-business sales organization – with a global network of wholly owned operations, franchisees, licensees and alliance partners. The company operates under several banner brands including Office Depot, OfficeMax and Grand & Toy. The company’s portfolio of exclusive product brands include TUL, Foray, Brenton Studio, Ativa, WorkPro, Realspace and Highmark.

Office Depot, Inc.’s common stock is listed on the NASDAQ Global Select Market under the symbol “ODP.”

Office Depot is a trademark of The Office Club, Inc. OfficeMax is a trademark of OMX, Inc. ©2017 Office Depot, Inc. All rights reserved. Any other product or company names mentioned herein are the trademarks of their respective owners.

Contact:
AnneMarie Mathews
561-438-6710
Media Relations
annemarie.mathews@officedepot.com

Richard Leland
561-438-3796
Investor Relations
richard.leland@officedepot.com

Source: Office Depot, Inc.

Office Depot closes sale of its business in South Korea to Excelsior Capital Asia

BOCA RATON, Fla., 2017-Apr-30 — /EPR Retail News/ — Office Depot, Inc. (NASDAQ: ODP) today (April 26, 2017) announced that it has closed on the sale of its business in South Korea to Excelsior Capital Asia. Office Depot had previously disclosed its intention to sell substantially all of its international businesses under a process that began in 2016.

“This transaction follows on the recently announced agreement to sell our businesses located in Australia and New Zealand,” said Gerry Smith, chief executive officer for Office Depot. “We are now one step closer to achieving our goal of divesting substantially all of our international businesses in order to focus on the growth opportunities available in the North American market.”

Excelsior Capital Asia, a Hong Kong and Korea based direct investment firm, invests throughout Asia on behalf of major Korean institutions, pension funds and private family offices.

About Office Depot, Inc.

Office Depot, Inc. is a leading provider of products, services, and solutions for every workplace – whether your workplace is an office, home, school or car.

The company had 2016 annual sales of approximately $11 billion, employed approximately 38,000 associates, and served consumers and businesses in North America and abroad with approximately 1,400 retail stores, award-winning e-commerce sites and a dedicated business-to-business sales organization – with a global network of wholly owned operations, franchisees, licensees and alliance partners. The company operates under several banner brands including Office Depot, OfficeMax and Grand & Toy. The company’s portfolio of exclusive product brands include TUL, Foray, Brenton Studio, Ativa, WorkPro, Realspace and Highmark.

Office Depot, Inc.’s common stock is listed on the NASDAQ Global Select Market under the symbol “ODP.”

Office Depot is a trademark of The Office Club, Inc. OfficeMax is a trademark of OMX, Inc. ©2017 Office Depot, Inc. All rights reserved. Any other product or company names mentioned herein are the trademarks of their respective owners.

FORWARD LOOKING STATEMENTS

This communication may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements or disclosures may discuss goals, intentions and expectations as to future trends, plans, events, results of operations, cash flow or financial condition, or state other information relating to, among other things, Office Depot, based on current beliefs and assumptions made by, and information currently available to, management. Forward-looking statements generally will be accompanied by words such as “anticipate,” “believe,” “plan,” “could,” “estimate,” “expect,” “forecast,” “guidance,” “intend,” “may,” “possible,” “potential,” “predict,” “project,” “propose” or other similar words, phrases or expressions, or other variations of such words. These forward-looking statements are subject to various risks and uncertainties, many of which are outside of Office Depot’s control. There can be no assurances that Office Depot will realize these expectations or that these beliefs will prove correct, and therefore investors and stockholders should not place undue reliance on such statements.

Factors that could cause actual results to differ materially from those in the forward-looking statements include, among other things, impacts and risks related to the termination of the Staples acquisition, disruption in key business activities or any impact on Office Depot’s relationships with third parties as a result of the announcement of the termination of the Staples Merger Agreement; unanticipated changes in the markets for Office Depot’s business segments; the inability to realize expected benefits from the disposition of the European operations; fluctuations in currency exchange rates, unanticipated downturns in business relationships with customers or terms with the company’s suppliers; competitive pressures on Office Depot’s sales and pricing; increases in the cost of material, energy and other production costs, or unexpected costs that cannot be recouped in product pricing; the introduction of competing technology products and services; unexpected technical or marketing difficulties; unexpected claims, charges, litigation, dispute resolutions or settlement expenses; new laws, tariffs and governmental regulations. The foregoing list of factors is not exhaustive. Investors and stockholders should carefully consider the foregoing factors and the other risks and uncertainties described in Office Depot’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission. Office Depot does not assume any obligation to update or revise any forward-looking statements.

SOURCE: Office DEPOT®

Contacts:

Office Depot, Inc.
Richard Leland, 561-438-3796
Investor Relations
Richard.Leland@officedepot.com
or
Karen Denning, 630-438-7445
Media Relations
Karen.Denning@officedepot.com

Office Depot to sell its business in Australia and New Zealand to Platinum Equity

BOCA RATON, Fla., 2017-Apr-20 — /EPR Retail News/ — Office Depot, Inc. (NASDAQ: ODP) today announced that it has reached an agreement to sell its business in Australia and New Zealand to Platinum Equity. Office Depot had previously disclosed its intention to sell substantially all of its international businesses under a process that began in 2016.

“I’m very pleased that we were able to reach a favorable agreement to sell the Australia and New Zealand businesses to Platinum Equity,” said Gerry Smith, chief executive officer for Office Depot. “The proceeds from this transaction will further enhance our financial flexibility as we focus on our strategic initiatives to grow our North American business.”

Platinum Equity is a leading global private equity firm with a highly specialized focus on business operations and more than 20 years’ of experience acquiring and operating businesses that have been part of large corporate entities.

The transaction is subject to regulatory approval in each country and is expected to close within the next several months.

Goldman, Sachs & Co. acted as Office Depot’s exclusive financial advisor on the transaction.

About Office Depot, Inc.
Office Depot, Inc. is a leading global provider of products, services, and solutions for every workplace – whether your workplace is an office, home, school or car.

The company had annual sales of approximately $11 billion, employed approximately 38,000 associates, and served consumers and businesses in North America and abroad with approximately 1,400 retail stores, award-winning e-commerce sites and a dedicated business-to-business sales organization – with a global network of wholly owned operations, franchisees, licensees and alliance partners. The company operates under several banner brands including Office Depot, OfficeMax and Grand & Toy. The company’s portfolio of exclusive product brands include TUL, Foray, Brenton Studio, Ativa, WorkPro, Realspace and Highmark.

Office Depot, Inc.’s common stock is listed on the NASDAQ Global Select Market under the symbol “ODP.”

Office Depot is a trademark of The Office Club, Inc. OfficeMax is a trademark of OMX, Inc. ©2017 Office Depot, Inc. All rights reserved. Any other product or company names mentioned herein are the trademarks of their respective owners.

FORWARD LOOKING STATEMENTS

This communication may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements or disclosures may discuss goals, intentions and expectations as to future trends, plans, events, results of operations, cash flow or financial condition, or state other information relating to, among other things, Office Depot, based on current beliefs and assumptions made by, and information currently available to, management. Forward-looking statements generally will be accompanied by words such as “anticipate,” “believe,” “plan,” “could,” “estimate,” “expect,” “forecast,” “guidance,” “intend,” “may,” “possible,” “potential,” “predict,” “project,” “propose” or other similar words, phrases or expressions, or other variations of such words. These forward-looking statements are subject to various risks and uncertainties, many of which are outside of Office Depot’s control. There can be no assurances that Office Depot will realize these expectations or that these beliefs will prove correct, and therefore investors and stockholders should not place undue reliance on such statements.

Factors that could cause actual results to differ materially from those in the forward-looking statements include, among other things, impacts and risks related to the termination of the Staples acquisition, disruption in key business activities or any impact on Office Depot’s relationships with third parties as a result of the announcement of the termination of the Staples Merger Agreement; unanticipated changes in the markets for Office Depot’s business segments; the inability to realize expected benefits from the disposition of the European operations; fluctuations in currency exchange rates, unanticipated downturns in business relationships with customers or terms with the company’s suppliers; competitive pressures on Office Depot’s sales and pricing; increases in the cost of material, energy and other production costs, or unexpected costs that cannot be recouped in product pricing; the introduction of competing technology products and services; unexpected technical or marketing difficulties; unexpected claims, charges, litigation, dispute resolutions or settlement expenses; new laws, tariffs and governmental regulations. The foregoing list of factors is not exhaustive. Investors and stockholders should carefully consider the foregoing factors and the other risks and uncertainties described in Office Depot’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission. Office Depot does not assume any obligation to update or revise any forward-looking statements.

SOURCE: Office DEPOT® | OfficeMax®

Office Depot, Inc.
Richard Leland, 561-438-3796
Investor Relations
Richard.Leland@officedepot.com
or
Karen Denning, 630-438-7445
Media Relations
Karen.Denning@officedepot.com

Office Depot, Inc. reports improved profitability in 2016

  • Q4 2016 GAAP Diluted EPS from Continuing Operations of $0.10 versus $0.06 in Q4 2015
  • Realizes $700 Million in OfficeMax Integration Synergies
  • Completes Sale of European Business

BOCA RATON, Fla., 2017-Mar-06 — /EPR Retail News/ — Office Depot, Inc. (“Office Depot,” or the “company”) (NASDAQ: ODP), a leading global provider of office products, services, and solutions, today ( March 1, 2017) announced results for the fourth quarter and full year ended December 31, 2016.

“I am very excited to assume the role of CEO and to inherit a business with such positive earnings trends. Office Depot delivered another year of improved profitability in 2016, exceeding the full-year adjusted operating income guidance, despite experiencing substantial business disruption related to the Staples acquisition attempt,” said Gerry Smith, newly appointed chief executive officer of Office Depot. “The company made significant progress against its 2016 critical priorities and achieved substantial integration synergies, thanks to the hard work, commitment and dedication of the management team and associates. I believe we can continue this momentum in 2017, as we focus on stabilizing the top line, implementing our cost saving programs and executing on the key initiatives of the three-year strategic plan.”

Consolidated Results

Reported (GAAP) Results

Total reported sales for the fourth quarter of 2016 were $2.7 billion compared to $2.8 billion in the fourth quarter of 2015, a decrease of 2%. Sales for the full year 2016 were $11.0 billion, a decline of 6% compared to the prior year. Fourth quarter and full year sales benefited from the impact of a 53rd week in fiscal 2016 of approximately $143 million.

In the fourth quarter of 2016, Office Depot reported operating income of $57 million and net income of $80 million, or $0.15 per diluted share. Net income from continuing operations was $55 million, or $0.10 per diluted share. The fourth quarter of 2016 was favorably impacted by approximately $15 million of operating income from the additional 53rd week, primarily in the North American Retail Division.

In the fourth quarter of 2015, the company reported operating income of $42 million and net income of $15 million, or $0.03 per diluted share. Net income from continuing operations was $31 million, or $0.06 per diluted share.

For the full year 2016, Office Depot reported operating income of $531 million compared to operating income of $183 million in the prior year period, and net income from continuing operations of $679 million, or $1.24 per diluted share in 2016, compared to net income from continuing operations of $92 million, or $0.16 per diluted share in the full year 2015.

Adjusted (non-GAAP) Results (1)

Adjusted operating income for the fourth quarter of 2016 was $111 million compared to an adjusted operating income of $83 million in the fourth quarter of 2015. Adjusted net income from continuing operations for the fourth quarter of 2016 was $59 million, or $0.11 per diluted share, compared to adjusted net income from continuing operations of $35 million, or $0.06 per diluted share, in the fourth quarter of 2015.

  • Adjusted operating income for the fourth quarter of 2016 excludes special charges and credits totaling $55 million, which were comprised of $30 million in restructuring charges, $13 million in expenses related to the Office Depot/OfficeMax merger, $6 million in non-cash asset impairment charges and $6 million in executive transition costs.
  • Adjusted net income from continuing operations in the fourth quarter of 2016 excludes the after-tax impact of these items.

For the full year 2016, adjusted operating income was $471 million, compared to adjusted operating income of $438 million in the full year 2015. The full year 2016 adjusted net income from continuing operations was $251 million, or $0.46 per diluted share, compared to adjusted net income from continuing operations of $222 million, or $0.40 per diluted share in the full year 2015.

Sale of European Business

As previously announced on September 23, 2016, Office Depot reached a deal to sell its European business and the sale was successfully completed on December 31, 2016. Following the closing, the company’s European business is no longer part of the company’s ongoing operations. See the U.S. Securities and Exchange Commission (the “SEC”) Current Report on Form 8-K filed on January 5, 2017 for additional information.

The company’s international businesses located in Australia, New Zealand, South Korea and mainland China continue to be actively marketed for sale and are reported as discontinued operations, with the expectation that the divestiture process will be completed in 2017. The company currently plans to retain its sourcing and trading operations in Asia and the results for these operations are reported as an “Other” segment outside of the North American segments. These ongoing sourcing and trading businesses contributed $18 million in sales and $1 million in operating income for the full year 2016.

Corporate Results

Corporate includes support staff services and certain other expenses that are not allocated to the company’s operating divisions. Unallocated expenses increased to $31 million in the fourth quarter of 2016 compared to $21 million in the fourth quarter of 2015 driven primarily by executive transition costs and the impact of the 53rd week of approximately $3 million.

Balance Sheet and Cash Flow

As of December 31, 2016, Office Depot had $0.8 billion in cash and cash equivalents and approximately $1.0 billion available under the Amended and Restated Credit Agreement, for total available liquidity of approximately $1.8 billion. Total debt was $387 million, excluding $798 million of non-recourse debt related to the credit-enhanced timber installment notes.

For the full year 2016, the company generated $492 million of cash provided by operating activities of continuing operations, including the $250 million Staples termination agreement fee, partially offset by $122 million in acquisition-related expenses, $113 million in OfficeMax merger–related costs and $47 million in restructuring costs. Capital expenditures were $111 million in 2016, $27 million of which were related to the merger integration. Free cash flow(2)from continuing operations for the full year 2016 was $380 million.

Office Depot paid a quarterly cash dividend of $0.025 per share on December 15, 2016 for approximately $13 million. For the full year, the company paid approximately $26 million in dividends.

During the fourth quarter, the company repurchased approximately 14 million shares at a total cost of $51 million. As of December 31, 2016, Office Depot had repurchased approximately 37 million shares in 2016 at a total cost of $132 million, with $118 million remaining available for repurchase under the current $250 million buyback authorization.

Outlook (3)

Office Depot expects total company sales in 2017 to be lower than 2016, primarily due to the impact of store closures, prior year contract customer losses, one less selling week and continued challenging market conditions. However, the company expects the rate of sales decline to improve throughout 2017 based on improvements in customer retention, implementation of new customer wins and continued growth in the contract channel sales pipeline.

The company closed 123 retail stores in 2016, of which 72 stores were part of the second phase of the retail optimization plan announced in the third quarter of 2016. The company expects to close approximately 75 stores in 2017.

Through the end of 2016, Office Depot has achieved over $700 million in annual synergy benefits from the OfficeMax integration. The company continues to expect total annual run-rate merger synergy benefits of more than $750 million, with the majority of the remaining benefits expected to be achieved by the end of 2017. Merger integration expenses are expected to total approximately $45 million in 2017 with approximately $25 million in capital expenditures.

As part of the new cost saving program announced last year, the company expects to deliver over $250 million in annual benefits by the end of 2018 with about half of those benefits anticipated to be realized in 2017. In addition, the company estimates it will incur up to approximately $125 million in one-time costs and capital expenditures to implement the cost saving programs, with the majority of these costs incurred through 2017.

The company continues to expect to achieve approximately $500 million in adjusted operating income in fiscal 2017, a comparable year-over-year increase of about 10%, excluding the $15 million estimated 53rd week operating income benefit in 2016.

In 2017, capital expenditures are expected to be approximately $200 million including investments to support the company’s critical priorities and the Store of the Future test format. The company anticipates having about 100 stores converted to this new format by the end of 2017. Depreciation and amortization is expected to be approximately $150 million in 2017.

Office Depot anticipates free cash flow(2) from continuing operations to be more than $300 million in 2017.

The company anticipates an estimated cash tax rate of 15% as the company continues to utilize available tax operating loss carry forwards and credits and a non-GAAP effective tax rate of approximately 41% in fiscal 2017, dependent on the mix and timing of income.

(2) Free cash flow is defined as net cash provided by operating activities less capital expenditures.

(3) The company’s outlook for 2017 included in this release, excludes charges or credits not indicative of our core operations, which may include but not be limited to merger integration expenses, restructuring charges, asset impairments, and other significant items that currently cannot be predicted. The exact amount of these charges or credits are not currently determinable, but may be significant. Accordingly, the company is unable to provide equivalent reconciliations from GAAP to non-GAAP for these financial measures.

About Office Depot, Inc.

Office Depot, Inc. is a leading global provider of products, services, and solutions for every workplace – whether your workplace is an office, home, school or car.

The company had annual sales of approximately $11 billion, employed approximately 38,000 associates, and served consumers and businesses in North America and abroad with approximately 1,400 retail stores, award-winning e-commerce sites and a dedicated business-to-business sales organization – with a global network of wholly owned operations, franchisees, licensees and alliance partners. The company operates under several banner brands including Office Depot, OfficeMax and Grand & Toy. The company’s portfolio of exclusive product brands include TUL, Foray, Brenton Studio, Ativa, WorkPro, Realspace and HighMark.

Office Depot, Inc.’s common stock is listed on the NASDAQ Global Select Market under the symbol “ODP.”

All trademarks, service marks and trade names of Office Depot, Inc. and OfficeMax Incorporated used herein are trademarks or registered trademarks of Office Depot, Inc. and OfficeMax Incorporated, respectively. Any other product or company names mentioned herein are the trademarks of their respective owners.

FORWARD LOOKING STATEMENTS

This communication may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements or disclosures may discuss goals, intentions and expectations as to future trends, plans, events, results of operations, cash flow or financial condition, or state other information relating to, among other things, Office Depot, based on current beliefs and assumptions made by, and information currently available to, management. Forward-looking statements generally will be accompanied by words such as “anticipate,” “believe,” “plan,” “could,” “estimate,” “expect,” “forecast,” “guidance,” “intend,” “may,” “possible,” “potential,” “predict,” “project,” “propose” or other similar words, phrases or expressions, or other variations of such words. These forward-looking statements are subject to various risks and uncertainties, many of which are outside of Office Depot’s control. There can be no assurances that Office Depot will realize these expectations or that these beliefs will prove correct, and therefore investors and stockholders should not place undue reliance on such statements.

Factors that could cause actual results to differ materially from those in the forward-looking statements include, among other things, impacts and risks related to the termination of the Staples acquisition, disruption in key business activities or any impact on Office Depot’s relationships with third parties as a result of the announcement of the termination of the Staples Merger Agreement; unanticipated changes in the markets for Office Depot’s business segments; the inability to realize expected benefits from the disposition of the European operations; fluctuations in currency exchange rates, unanticipated downturns in business relationships with customers or terms with the company’s suppliers; competitive pressures on Office Depot’s sales and pricing; increases in the cost of material, energy and other production costs, or unexpected costs that cannot be recouped in product pricing; the introduction of competing technology products and services; unexpected technical or marketing difficulties; unexpected claims, charges, litigation, dispute resolutions or settlement expenses; new laws, tariffs and governmental regulations. The foregoing list of factors is not exhaustive. Investors and stockholders should carefully consider the foregoing factors and the other risks and uncertainties described in Office Depot’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission. Office Depot does not assume any obligation to update or revise any forward-looking statements.

Contact:
Richard Leland
561-438-3796
Investor Relations
Richard.Leland@officedepot.com

Karen Denning
630-438-7445
Media Relations
Karen.Denning@officedepot.com

Source: Office Depot, Inc.