<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
May 16, 2000
-----------------
STAPLES, INC.
----------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 0-17586 04-2896127
---------------------------------------------------------------
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
Five Hundred Staples Drive, Framingham, Massachusetts 01702
--------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (508) 253-5000
--------------
Not Applicable
------------------------------
(Former name or former address, if changed since last report)
<PAGE>
ITEM 5. OTHER EVENTS
On May 16, 2000, Staples, Inc. issued two press releases announcing
the financial results of the Staples Retail and Delivery and Staples.com
divisions for the fiscal quarter ended April 29, 2000. Attached hereto as
Exhibit 99.1 are the consolidated financial results of Staples, Inc. for the
fiscal quarter ended April 29, 2000. Attached hereto as Exhibit 99.2 and
Exhibit 99.3 are the combined financial results of Staples Retail and
Delivery and Staples.com, respectively, for the fiscal quarter ended April
29, 2000.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: May 19, 2000 STAPLES, INC.
By:/s/ John J. Mahoney
----------------------------
John J. Mahoney
Executive Vice President
and Chief Financial Officer
<PAGE>
STAPLES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
April 29,
2000 January 29,
(Unaudited) 2000
----------- -----------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents................................................... $ 651 $ 110,483
Short-term investments...................................................... 1,047 1,071
Merchandise inventories..................................................... 1,547,780 1,607,516
Receivables, net............................................................ 438,383 360,901
Deferred income taxes....................................................... 40,095 39,730
Prepaid expenses and other current assets................................... 84,912 73,750
---------- ----------
TOTAL CURRENT ASSETS................................................ 2,112,868 2,193,451
PROPERTY AND EQUIPMENT:
Land and buildings.......................................................... 336,445 328,994
Leasehold improvements...................................................... 463,060 442,119
Equipment................................................................... 581,078 547,309
Furniture and fixtures...................................................... 311,888 286,260
---------- ----------
TOTAL PROPERTY AND EQUIPMENT........................................ 1,692,471 1,604,682
Less accumulated depreciation and amortization.............................. 560,873 509,920
---------- ----------
NET PROPERTY AND EQUIPMENT.......................................... 1,131,598 1,094,762
OTHER ASSETS:
Lease acquisition costs, net of amortization................................ 67,000 68,832
Investments................................................................. 244,469 34,755
Goodwill, net of amortization............................................... 389,406 387,595
Deferred income taxes....................................................... -- 34,912
Other....................................................................... 35,383 31,769
---------- ----------
TOTAL OTHER ASSETS.................................................. 736,258 557,863
---------- ----------
$3,980,724 $3,846,076
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable............................................................ $ 842,113 $ 897,523
Accrued expenses and other current liabilities.............................. 528,562 545,162
Debt maturing within one year............................................... 27,498 12,219
---------- ----------
TOTAL CURRENT LIABILITIES........................................... 1,398,173 1,454,904
LONG-TERM DEBT ................................................................. 543,781 500,903
DEFERRED INCOME TAXES........................................................... 29,223 --
OTHER LONG-TERM OBLIGATIONS..................................................... 64,063 61,456
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value 5,000,000 shares
authorized; no shares issued ............................................. -- --
Common stock:
Staples RD Stock, $.0006 par value 1,500,000,000 shares
authorized; 472,312,364 shares issued and outstanding
at April 29, 2000 and 470,752,253 at January 29, 2000............... 283 282
Staples.com Stock, $.0006 par value 600,000,000 shares
authorized; 14,028,672 shares issued and outstanding at
April 29, 2000 and 13,626,093 at January 29, 2000................... 8 8
Additional paid-in capital.................................................. 1,213,611 1,196,512
Cumulative foreign currency translation adjustments......................... (5,164) (4,473)
Unrealized gain on investments.............................................. 100,718 6,651
Retained earnings .......................................................... 992,476 948,309
Less: treasury stock at cost, 15,571,243 shares at
April 29, 2000 and 13,668,743 shares at January 29, 2000.................. (356,448) (318,476)
---------- ----------
TOTAL STOCKHOLDERS' EQUITY...................................... 1,945,484 1,828,813
---------- ----------
$3,980,724 $3,846,076
========== ==========
</TABLE>
<PAGE>
STAPLES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
(UNAUDITED)
13 WEEKS ENDED
-----------------------------------
APRIL 29, MAY 1,
2000 1999
---------- ----------
<S> <C> <C>
Sales......................................................................... $2,555,786 $2,072,066
Cost of goods sold and occupancy costs........................................ 1,946,139 1,577,313
---------- ----------
GROSS PROFIT.............................................................. 609,647 494,753
OPERATING AND OTHER EXPENSES:
Operating and selling....................................................... 419,357 315,320
Pre-opening................................................................. 7,983 4,508
General and administrative.................................................. 104,987 88,740
Amortization of goodwill.................................................... 3,572 2,287
Store closure charge........................................................ (7,250) --
Interest and other expense, net............................................. 6,139 1,416
---------- ----------
TOTAL OPERATING AND OTHER EXPENSES........................................ 534,788 412,271
---------- ----------
INCOME BEFORE INCOME TAXES................................................. 74,859 82,482
Income tax expense............................................................ 30,692 32,168
---------- ----------
NET INCOME................................................................ $ 44,167 $ 50,314
NET INCOME (LOSS) ATTRIBUTED TO:
Staples.com Stock........................................................... $(2,842) $ --
Staples RD Stock............................................................ 47,009 50,314
---------- ----------
$ 44,167 $ 50,314
========== ==========
BASIC EARNINGS PER COMMON SHARE
Historical net income per common share Staples, Inc. Stock................ $ 0.11
==========
Historical net income per common share - Staples RD Stock................. $ 0.10
==========
Historical net loss per common share - Staples.com Stock.................. $ (0.21)
==========
DILUTED EARNINGS PER COMMON SHARE
Historical net income per common share Staples, Inc. Stock................ $ 0.11
==========
Historical net income per common share - Staples RD Stock................. $ 0.10
==========
Historical net loss per common share - Staples.com Stock.................. $ (0.21)
==========
PRO FORMA EARNINGS PER COMMON SHARE CALCULATION FOR TRACKING STOCK:
BASIC EARNINGS PER COMMON SHARE
Pro forma net income per common share - Staples RD Stock................... $ 0.11
==========
Pro forma net loss per common share - Staples.com Stock................... $ (0.02)
==========
DILUTED EARNINGS PER COMMON SHARE
Pro forma net income per common share - Staples RD Stock................... $ 0.11
==========
Pro forma net loss per common share - Staples.com Stock.................. $ (0.02)
==========
</TABLE>
<PAGE>
STAPLES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLAR AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
(UNAUDITED)
13 WEEKS ENDED
-----------------------------------
April 29, May 1,
2000 1999
---------- ---------
<S> <C> <C>
Net income ............................................................... $ 44,167 $ 50,314
Adjustments to reconcile net income to net cash
(used in)/provided by) operating activities:
Depreciation and amortization.......................................... 50,677 34,456
Store closure charge................................................... (7,250) --
Expense from 401K and PARS stock contribution.......................... 3,192 4,625
Deferred income taxes benefit.......................................... (1,497) (2,800)
Change in assets and liabilities, net of companies acquired
using purchase accounting:
Decrease in merchandise inventories................................... 62,345 47,238
Increase in receivables............................................... (78,056) (100,995)
(Increase)/Decrease in prepaid expenses and other assets.............. (20,596) 11,278
Decrease in accounts payable, accrued
expenses and other current liabilities............................. (65,836) (41,760)
Increase in other long-term obligations............................... 1,749 526
--------- ---------
(55,272) (47,432)
--------- ---------
NET CASH (USED IN)/PROVIDED BY OPERATING ACTIVITIES....................... (11,105) 2,882
INVESTING ACTIVITIES:
Acquisition of property and equipment................................... (81,404) (60,623)
Acquisition of businesses, net of cash acquired ........................ -- (137,625)
Proceeds from sales and maturities of short-term investments ........... 34 10,572
Purchase of short-term investments...................................... -- (16,651)
Purchase of long-term investments....................................... (49,917) --
Acquisition of lease rights............................................. 335 656
Other .................................................................. (11,374) 2,553
--------- ---------
NET CASH USED IN INVESTING ACTIVITIES................................... (142,326) (201,118)
FINANCING ACTIVITIES:
Proceeds from sale of capital stock..................................... 8,926 9,973
Proceeds from borrowings................................................ 584,278 13,150
Payments on borrowings.................................................. (514,137) (11,914)
Purchase of treasury stock.............................................. (37,972) (19,779)
--------- ---------
NET CASH PROVIDED BY/(USED IN) FINANCING ACTIVITIES..................... 41,095 (8,570)
Effect of exchange rate changes on cash................................. 2,504 483
NET DECREASE IN CASH AND CASH EQUIVALENTS ................................ (109,832) (206,323)
Cash and cash equivalents at beginning of period ......................... 110,483 357,993
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD ............................... $ 651 $ 151,670
========= =========
</TABLE>
<PAGE>
STAPLES RETAIL AND DELIVERY
(A DIVISION OF STAPLES, INC.)
COMBINED BALANCE SHEETS
(DOLLAR AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
April 29,
2000 January 29,
(Unaudited) 2000
----------- -----------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ....................... $ 651 $ 110,483
Short-term investments .......................... 1,047 1,071
Merchandise inventories ......................... 1,547,780 1,607,516
Receivables, net ................................ 438,383 360,901
Inter-business receivable from Staples.com ...... 100,208 --
Deferred income taxes ........................... 40,095 39,730
Prepaid expenses and other current assets ....... 83,257 72,172
----------- -----------
TOTAL CURRENT ASSETS ........................ 2,211,421 2,191,873
PROPERTY AND EQUIPMENT:
Land and buildings .............................. 336,445 328,994
Leasehold improvements .......................... 463,060 442,119
Equipment ....................................... 563,194 533,771
Furniture and fixtures .......................... 311,888 286,260
----------- -----------
TOTAL PROPERTY AND EQUIPMENT ................ 1,674,587 1,591,144
Less accumulated depreciation and amortization .. 558,095 508,810
----------- -----------
NET PROPERTY AND EQUIPMENT .................. 1,116,492 1,082,334
OTHER ASSETS:
Retained interest in Staples.com ................ -- 16,254
Lease acquisition costs, net of amortization .... 67,000 68,832
Investments ..................................... 5,055 --
Goodwill, net of amortization ................... 389,406 387,595
Deferred income taxes ........................... -- 34,912
Other ........................................... 35,383 31,769
----------- -----------
TOTAL OTHER ASSETS .......................... 496,844 539,362
----------- -----------
$ 3,824,757 $ 3,813,569
=========== ===========
LIABILITIES AND GROUP EQUITY
CURRENT LIABILITIES:
Accounts payable ................................ $ 842,113 $ 897,523
Inter-business payable to Staples.com ........... -- 23,660
Accrued expenses and other
current liabilities ............................ 510,806 537,696
Debt maturing within one year ................... 27,498 12,219
----------- -----------
TOTAL CURRENT LIABILITIES ................... 1,380,417 1,471,098
LONG-TERM DEBT ................................... 543,781 500,903
DEFERRED INCOME TAXES ............................ 29,223 --
INVESTMENT IN CAPITAL DEFICIENCY
OF STAPLES.COM .................................. 4,337 --
OTHER LONG-TERM OBLIGATIONS ...................... 64,063 61,456
DIVISIONAL NET WORTH:
Preferred stock, $ .01 par value-authorized
5,000,000 shares; no shares issued ............. -- --
Common stock:
Staples RD Stock, $ .0006 par value 1,500,000,000
shares authorized; 472,312,364 shares issued and
outstanding at April 29, 2000 and
470,752,253 at January 29, 2000 ............... 283 282
Additional paid-in capital ...................... 1,168,258 1,153,784
Cumulative foreign currency
translation adjustments ........................ (5,167) (4,473)
Unrealized gain on investments .................. (38) (44)
Retained earnings ............................... 996,048 949,039
Less: treasury stock at cost,
15,571,243 shares at April 29, 2000
and 13,668,743 shares at
January 29, 2000 ............................... (356,448) (318,476)
----------- -----------
TOTAL DIVISIONAL NET WORTH .................. 1,802,936 1,780,112
----------- -----------
$ 3,824,757 $ 3,813,569
=========== ===========
</TABLE>
<PAGE>
STAPLES RETAIL AND DELIVERY
(A DIVISION OF STAPLES, INC.)
COMBINED STATEMENTS OF INCOME
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
(UNAUDITED)
13 WEEKS ENDED
---------------------------
April 29, May 1,
2000 1999
------------- ------------
<S> <C> <C>
Sales ............................................ $ 2,480,423 $ 2,060,374
Cost of goods sold and occupancy costs ........... 1,885,532 1,568,291
------------- ------------
GROSS PROFIT ................................ 594,891 492,083
OPERATING AND OTHER EXPENSES:
Operating and selling .......................... 378,456 311,528
Pre-opening .................................... 7,983 4,508
General and administrative ..................... 91,496 86,486
Amortization of goodwill ....................... 3,572 2,287
Store closure charge ........................... (7,250) --
Interest and other expense, net ................ 6,054 1,401
------------- ------------
TOTAL OPERATING AND OTHER EXPENSES .......... 480,311 406,210
------------- ------------
INCOME BEFORE INCOME TAXES .................... 114,580 85,873
Income tax expense ............................. 46,978 33,490
------------- ------------
NET INCOME BEFORE RETAINED INTEREST
IN STAPLES.COM ............................... 67,602 52,383
Loss related to retained interest
in Staples.com .................................. (20,593) (2,069)
------------- ------------
NET INCOME .................................... $ 47,009 $ 50,314
============= ============
BASIC NET INCOME PER COMMON SHARE
Historical net income per common share ......... $ 0.10
=============
DILUTED NET INCOME PER COMMON SHARE
Historical net income per common share ......... $ 0.10
=============
PRO FORMA NET INCOME PER COMMON SHARE FOR TRACKING STOCK:
BASIC NET INCOME PER COMMON SHARE
Pro forma net income per common share ......... $ 0.11
============
DILUTED NET INCOME PER COMMON SHARE
Pro forma net income per common share ......... $ 0.11
============
</TABLE>
<PAGE>
STAPLES RETAIL AND DELIVERY
(A DIVISION OF STAPLES, INC.)
COMBINED STATEMENTS OF CASH FLOWS
(DOLLAR AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
(UNAUDITED)
13 WEEKS ENDED
---------------------
April 29, May 1,
2000 1999
--------- ---------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income .............................................. $ 47,009 $ 50,314
Adjustments to reconcile net income to net cash
(used in)/provided by operating activities:
Retained interest in loss of Staples.com ............ 20,593 2,069
Depreciation and amortization ....................... 48,259 34,385
Store closure charge ................................ (7,250)
Expense from 401K and PARS stock contribution ....... 3,192 4,625
Deferred income taxes (benefit)/expense ............. (1,497) (2,800)
Change in assets and liabilities, net of
companies acquired using purchase accounting:
Decrease in merchandise inventories ................ 62,345 47,238
Increase in receivables ............................ (78,056) (100,995)
(Increase)/Decrease in prepaid expenses and
other assets ...................................... (20,519) 11,027
Decrease in accounts payable, accrued
expenses and other current liabilities ............ (76,126) (42,499)
Increase in other long-term obligations ............ 1,749 526
--------- ---------
(47,310) (46,424)
--------- ---------
NET CASH (USED IN)/PROVIDED BY OPERATING ACTIVITIES ..... (301) 3,890
INVESTING ACTIVITIES:
Acquisition of property and equipment ................. (77,058) (60,519)
Acquisition of businesses,
net of cash acquired ................................. -- (137,625)
Proceeds from sales and maturities
of short-term investments ............................ 34 10,572
Purchase of short-term investments .................... -- (16,651)
Purchase of long-term investments ..................... (5,055) --
Capital contribution to Staples.com ................... -- (104)
Acquisition of lease rights ........................... 335 656
Other ................................................. (11,374) 2,553
--------- ---------
NET CASH USED IN INVESTING ACTIVITIES (93,118) (201,118)
FINANCING ACTIVITIES:
Proceeds from sale of capital stock ................... 7,049 9,973
Proceeds from borrowings .............................. 584,278 13,150
Payments on borrowings ................................ (514,137) (11,914)
Purchase of treasury stock ............................ (37,972) (19,779)
Repayment of inter-business advance from
Staples.com .......................................... (27,940) --
Inter-business advance to Staples.com ................. (30,195) (1,008)
--------- ---------
NET CASH USED IN INVESTING ACTIVITIES
FINANCING ACTIVITIES ................................. (18,917) (9,578)
Effect of exchange rate changes on cash ............... 2,504 483
--------- ---------
NET DECREASE IN CASH AND CASH EQUIVALENTS ............... (109,832) (206,323)
Cash and cash equivalents at beginning of
period ................................................ 110,483 357,993
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD .............. $ 651 $ 151,670
========= =========
</TABLE>
<PAGE>
STAPLES.COM
(A DIVISION OF STAPLES, INC.)
COMBINED BALANCE SHEETS
(DOLLAR AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
APRIL 29,
2000 JANUARY 29,
(UNAUDITED) 2000
----------- ----------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ......................... $ -- $ --
Prepaid expenses and other current assets ......... 1,655 1,578
Inter-business receivable from Staples RD ......... -- 23,660
----------- ----------
TOTAL CURRENT ASSETS ........................... 1,655 25,238
EQUIPMENT:
Equipment ......................................... 17,884 13,538
Less accumulated depreciation ..................... 2,778 1,110
----------- ----------
NET EQUIPMENT .................................. 15,106 12,428
OTHER ASSETS
Investments ....................................... 239,414 34,755
----------- ----------
$ 256,175 $ 72,421
============ ==========
LIABILITIES AND DIVISIONAL NET WORTH
CURRENT LIABILITIES:
Accrued expenses and other
current liabilities............................... $ 17,756 $ 7,466
Inter-business payable to Staples RD .............. 100,208 --
----------- ----------
TOTAL CURRENT LIABILITIES ...................... 117,964 7,466
DIVISIONAL NET WORTH:
Common stock:
Staples.com Stock, $ .0006 par value
600,000,000 shares authorized;
14,028,672 shares issued and outstanding
at April 29, 2000 and 13,626,093 at
January 29, 2000 ............................... 8 8
Additional paid-in capital ........................ 78,231 75,604
Cumulative foreign currency
translation adjustments .......................... 3 --
Unrealized gain on investments .................... 100,756 6,695
Accumulated deficit ............................... (40,787) (17,352)
----------- ----------
TOTAL DIVISIONAL NET WORTH ..................... 138,211 64,955
----------- ----------
$ 256,175 $ 72,421
============ ==========
</TABLE>
<PAGE>
STAPLES.COM
(A DIVISION OF STAPLES, INC.)
COMBINED STATEMENTS OF OPERATIONS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
(UNAUDITED)
13 WEEKS ENDED
----------------------
April 29, May 1,
2000 1999
---------- ----------
<S> <C> <C>
Sales .................................................. $ 75,363 $ 11,692
Cost of goods sold and occupancy costs ................. 60,607 9,022
---------- ----------
Gross profit ....................................... 14,756 2,670
OPERATING AND OTHER EXPENSES:
Operating and selling ................................ 33,248 3,683
Site development costs ............................... 7,653 518
General and administrative ........................... 13,491 1,845
Interest and other expense, net ...................... 85 15
---------- ----------
TOTAL OPERATING AND OTHER EXPENSES ................. 54,477 6,061
---------- ----------
LOSS BEFORE INCOME TAXES ............................ (39,721) (3,391)
Income tax benefit ................................... (16,286) (1,322)
---------- ----------
NET LOSS ........................................... $(23,435) $ (2,069)
========== ==========
NET LOSS ATTRIBUTED TO (NOTE A):
Staples.com Stock ................................ (2,842) --
Staples RD Stock ................................. (20,593) (2,069)
---------- ----------
$(23,435) $ (2,069)
========== ==========
BASIC NET LOSS PER COMMON SHARE
Historical net loss per common share .............. $ (0.21)
==========
DILUTED NET LOSS PER COMMON SHARE
Historical net loss per common share .............. $ (0.21)
==========
PRO FORMA NET LOSS PER COMMON SHARE FOR TRACKING STOCK:
BASIC NET LOSS PER COMMON SHARE
Pro forma net loss per common share ............... $ (0.02)
==========
DILUTED NET LOSS PER COMMON SHARE
Pro forma net loss per common share ............... $ (0.02)
==========
</TABLE>
<PAGE>
STAPLES.COM
(A DIVISION OF STAPLES, INC.)
COMBINED STATEMENTS OF CASH FLOWS
(DOLLAR AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
(UNAUDITED)
13 WEEKS ENDED
-----------------------
April 29, May 1,
2000 1999
---------- ----------
<S> <C> <C>
OPERATING ACTIVITIES:
Net loss .............................................. $(23,435) $ (2,069)
Adjustments to reconcile net loss
to net cash provided by (used in)
operating activities:
Depreciation and amortization ........................ 2,418 71
Change in assets and liabilities:
Increase in prepaid expenses
and other assets ................................... (77) 251
Increase in accounts payable, accrued
expenses and other current liabilities ............. 10,290 739
---------- ----------
12,631 1,061
---------- ----------
NET CASH USED IN OPERATING ACTIVITIES ................. (10,804) (1,008)
INVESTING ACTIVITIES:
Acquisition of property and equipment ................. (4,346) (104)
Purchase of long-term investments ..................... (44,862) --
---------- ----------
NET CASH USED IN INVESTING ACTIVITIES ................. (49,208) (104)
FINANCING ACTIVITIES:
Net proceeds from sale of capital stock ............... 1,877 --
Repayment of inter-business
advance to Staples RD ................................ 27,940 --
Proceeds from borrowings from Staples RD .............. 30,195 1,008
Capital contributions from Staples RD ................. -- 104
---------- ----------
NET CASH PROVIDED BY FINANCING ACTIVITIES ............. 60,012 1,112
NET (DECREASE) INCREASE IN CASH AND
CASH EQUIVALENTS ...................................... -- --
Cash and cash equivalents
at beginning of period ................................ -- --
---------- ----------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD ...................................... $ -- $ --
========== ==========
</TABLE>
