Office Depot, Inc. Announces Completion of CompuCom Acquisition and Transformation Towards a Services-Driven Company in Conjunction with Third Quarter 2017 Results

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 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.
more detail at:  http://investor.officedepot.com/phoenix.zhtml?c=94746&p=irol-newsArticle&ID=2315745

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