OfficeMax 4Q Earnings Plummet 90 Percent

Monday, March 14th 2005, 10:01 am
By: News On 6

ITASCA, Ill. (AP) _ OfficeMax Inc. reported a 90 percent drop in fourth-quarter earnings Monday, reflecting weak holiday sales and other issues facing the nation's third biggest office products retailer.

The company said it earned $700,000 for the October-December period, which translated into a net loss of 2 cents per common share because of other financial considerations. A year earlier, OfficeMax earned $6.9 million, or 5 cents per share.

Results were boosted by the sale of its paper, forest products and timberland assets. Without such items, the Itasca-based company would have had a net loss of $24.2 million.

Revenue increased 14 percent to $2.69 billion from $2.35 billion, reflecting the December 2003 acquisition of the office-products business by the company, then named Boise Cascade Corp.

OfficeMax, which trails Staples Inc. and Office Depot Inc. in the office produts retailing business, has been struggling to overcome a poor recent performance marked by sluggish sales, an accounting scandal and the departure of three top-level officials in the past two months.

The company has fired six employees this year for sending $3.3 million in phony bills to a supplier over a two-year period. The scandal delayed release of the earnings report, initially due out weeks ago, and reflected a lowering of net earnings by more than $4 million from the first nine months of 2004.

OfficeMax also announced two personnel moves in connection with the recent departure of several executives.

The company named as treasurer John Jennings, who had been vice president of investor relations with Caremark Rx Inc. since 2003. It also hired Randy Burdick as chief information officer. Burdick previously was with Hewlett-Packard Co. since 1999 as group information officer and vice president of supply chain operations in its Compaq division.

Full-year net earnings were $173.1 million, or $1.77 per share, compared with a profit of $8.3 million, which translated to a loss of 8 cents per share, a year ago. Revenues rose to $13.3 billion from $8.2 billion.