Officemax (NYSE:OMX)
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From May 2019 to May 2024

OfficeMax Inc. (OMX) swung to a fourth-quarter loss amid $429.1 million in write-downs as the No. 3 office-supply retailer forecasted a continued drop in sales.

The company "is cautious in its expectation for 2009," as Chairman and Chief Executive Sam Duncan said sales-to-date this year have declined slightly greater than the 14% seen in the fourth quarter.

OfficeMax is cutting new-store openings and suspending remodelings, executives said during a conference call to discuss the results.

"We continue to make the tough decisions necessary to conserve our cash in order to weather these conditions," Duncan said during the call.

Cash-preservation efforts will include doing away with matching contributions for the company's defined benefit retirement plan and dropping merit pay increases.

Lower sales and weak consumer spending have forced other steps by OfficeMax to boost liquidity, including suspending its quarterly dividend, eliminating jobs and delaying its store-remodeling program until economic conditions improve.

OfficeMax reported a net loss of $396 million, or $5.21 a share, compared with year-earlier net income of $70.5 million, or 92 cents a share. Excluding items such as the write-down and a prior-year divestiture gain, earnings fell to 2 cents from 65 cents.

Revenue dropped 14% to $1.88 billion.

Analysts polled by Thomson Reuters were looking for earnings of 15 cents a share on revenue of $1.94 billion.

Gross margin slipped to 24.2% from 25.6%.

The office-products retailer could post another loss for its current fiscal year, given the ongoing softness it is seeing, analysts said.

Near-term liquidity does appear ample to weather the storm, "so long as we see some economic recovery towards the end of 2009," said J.P. Morgan retail analyst Christopher Horvers in a research note.

The company's contract segment - its business-to-business office-products distributor - swung to a loss as revenue dropped 18% amid a 15% decline in the U.S., thanks to weak corporate account sales. OfficeMax's retail division also saw red ink, reporting a 10% decline in revenue as same-store sales fell 14%.

Last month, OfficeMax tapped former Circuit City Stores Inc. (CCTYQ) Chief Financial Officer Bruce H. Besanko for that same role.

Shares of OfficeMax, which closed at $4.17 on Tuesday, their lowest level since late October, were recently up 8 cents, or 1.9%, to $4.25.

-By Karen Talley, Dow Jones Newswires; 201-938-5106; karen.talley@dowjones.com