<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 24, 1994
-------------------------------------------------
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
----------------------- -----------------------
Commission file number 1-10948
--------------------------------------------------------
OFFICE DEPOT, INC.
(Exact name of registrant as specified in its charter)
Delaware 59-2663954
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2200 Old Germantown Road, Delray Beach, Florida 33445
(Address of principal executive offices) (Zip Code)
(407) 278-4800
(Registrant's telephone number including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirement for the past 90 days.
Yes /X/ No / /
The registrant had 149,124,129 shares of common stock outstanding as of
November 2, 1994.
1
<PAGE> 2
OFFICE DEPOT, INC.
INDEX
<TABLE>
<CAPTION>
Page
<S> <C>
Part I. FINANCIAL INFORMATION
Item 1 Financial Statements
Consolidated Statements of Earnings
for the 13 and 39 Weeks Ended
September 24, 1994 and September 25, 1993 3
Consolidated Balance Sheets as of
September 24, 1994 and December 25, 1993 4
Consolidated Statements of Cash Flows
for the 39 Weeks Ended September 24, 1994
and September 25, 1993 5
Notes to Consolidated Financial Statements 6 - 8
Item 2 Management's Discussion and Analysis of
Financial Condition and Results of
Operations 9 - 12
SIGNATURE 13
APPENDIX A 14
</TABLE>
2
<PAGE> 3
OFFICE DEPOT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
13 Weeks 13 Weeks 39 Weeks 39 Weeks
Ended Ended Ended Ended
Sept. 24, Sept. 25, Sept. 24, Sept. 25,
1994 1993 1994 1993
--------- --------- ---------- ---------
<S> <C> <C> <C> <C>
Sales $1,044,815 $727,018 $3,010,887 $1,958,336
Cost of goods sold and occupancy costs 801,277 562,508 2,314,812 1,512,291
---------- -------- ---------- ----------
Gross profit 243,538 164,510 696,075 446,045
Store and warehouse operating
and selling expenses 156,115 105,863 458,775 295,361
Pre-opening expenses 3,582 1,685 6,814 5,245
General and administrative expenses 32,156 23,013 92,955 64,650
Amortization of goodwill 1,266 426 3,803 574
---------- -------- ---------- ----------
193,119 130,987 562,347 365,830
---------- -------- ---------- ----------
Operating profit 50,419 33,523 133,728 80,215
Interest expense, net 3,224 1,546 10,458 3,490
---------- -------- ---------- ----------
Earnings before income taxes 47,195 31,977 123,270 76,725
Income taxes 19,784 12,663 50,504 29,555
---------- -------- ---------- ----------
Net earnings $ 27,411 $ 19,314 $ 72,766 $ 47,170
========== ======== ========== ==========
Earnings per common and
common equivalent share $ 0.18 $ 0.13 $ 0.48 $ 0.32
========== ======== ========== ==========
Average common and common
equivalent shares 152,443 147,776 152,400 146,186
========== ======== ========== ==========
</TABLE>
3
<PAGE> 4
OFFICE DEPOT, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
September 24, December 25,
1994 1993
------------- ------------
ASSETS
<S> <C> <C>
Current Assets
Cash and cash equivalents $ 62,741 $ 142,471
Receivables, net of allowances 270,413 201,989
Merchandise inventories 737,899 663,147
Deferred income taxes 31,985 26,166
Prepaid expenses and refundable income taxes 6,321 5,068
---------- ----------
Total current assets 1,109,359 1,038,841
Property and Equipment 467,784 354,943
Less accumulated depreciation and amortization 115,421 86,776
---------- ----------
352,363 268,167
Goodwill, net of amortization 196,898 200,714
Other Assets 33,531 26,518
---------- ----------
$1,692,151 $1,534,240
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 446,688 $ 412,491
Accrued expenses 157,908 132,704
Income taxes 16,740 13,242
Current maturities of long-term debt 9,161 7,193
---------- ----------
Total current liabilities 630,497 565,630
Long-Term Debt, less current maturities 14,890 18,149
Deferred Taxes and Other Credits 5,580 5,478
Zero Coupon, Convertible, Subordinated Notes 362,041 350,298
Common Stockholders' Equity
Common stock - authorized 200,000,000 shares of
$.01 par value; issued 150,883,333 in 1994 and
149,114,196 in 1993 1,509 1,491
Additional paid-in capital 458,260 439,766
Foreign currency translation adjustment (1,482) 383
Retained earnings 222,606 154,795
Less: 2,163,447 shares of treasury stock (1,750) (1,750)
---------- ----------
679,143 594,685
---------- ----------
$1,692,151 $1,534,240
========== ==========
</TABLE>
4
<PAGE> 5
OFFICE DEPOT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Increase (Decrease) in Cash and Cash Equivalents
(In thousands)
<TABLE>
<CAPTION>
39 Weeks Ended 39 Weeks Ended
September 24, September 25,
1994 1993
-------------- --------------
<S> <C> <C>
Cash flows from operating activities
Cash received from customers $ 2,951,341 $ 1,912,414
Cash paid for inventory (2,273,214) (1,479,548)
Cash paid for store and warehouse operating,
selling and general administrative expense (601,078) (343,058)
Interest received 3,588 3,768
Interest paid (2,067) (1,559)
Taxes paid (46,596) (14,149)
----------- -----------
Net cash provided by operating activities 31,974 77,868
----------- -----------
Cash flows from investing activities
Capital expenditures-net (114,754) (66,802)
Purchase of Eastman common stock 0 (20,001)
Cash acquired 0 (4,106)
----------- ------------
Net cash used by investing activities (114,754) (90,909)
----------- ------------
Cash flows from financing activities
Proceeds from exercise of stock options 11,162 6,917
Foreign currency translation adjustment (1,865) 219
Proceeds from long- and short-term borrowing 15,466 2,130
Distribution to shareholders (4,956) (3,178)
Payments on long- and short-term debt (16,757) (37,562)
----------- ------------
Net cash provided (used) by
financing activities 3,050 (31,474)
----------- ------------
Net decrease in cash and cash equivalents (79,730) (44,515)
Cash and equivalents at beginning of period 142,471 134,970
----------- ------------
Cash and equivalents at end of period $ 62,741 $ 90,455
=========== ============
Reconciliation of net earnings to net cash
provided (used) by operating activities
Net earnings $ 72,766 $ 47,170
Adjustments to reconcile net earnings
to net cash provided (used) by operating activities
Depreciation and amortization 35,659 21,828
Changes in assets and liabilities
Decrease (increase) in accounts receivable (68,424) 3,692
Increase in inventory (74,752) (15,240)
Increase in prepaid expenses and
other assets (15,370) (8,511)
Increase in accounts payable and other
liabilities 82,095 28,929
----------- ------------
Total adjustments (40,792) 30,698
----------- ------------
Net cash provided by operating activities $ 31,974 $ 77,868
=========== ============
</TABLE>
5
<PAGE> 6
OFFICE DEPOT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The financial statements as of September 24, 1994 and December 25,
1993 and for the 13 and 39 week periods ended September 24,
1994 and September 25, 1993 are unaudited; however, such interim
statements reflect all adjustments (consisting only of normal
recurring accruals) necessary for a fair presentation of the financial
position and the results of operations for the interim periods
presented. The results of operations for the interim periods
presented are not necessarily indicative of the results to be expected
for the full year.
In February 1994, the Company issued 2,335,746 shares of common stock
in connection with the acquisitions of two contract stationers, L.E.
Muran Co. Inc. ("Muran") and Yorkship Press, Inc. ("Yorkship").
In May 1994, the Company acquired all of the outstanding stock of
Midwest Carbon Company ("Midwest"), a Minneapolis based contract
stationer, and Silver's, Inc. ("Silver's"), a Detroit based contract
stationer. The Company issued 1,448,459 shares of common stock in
connection with the acquisitions of Midwest and Silver's.
Additionally, in August 1994, the Company acquired all the outstanding
stock of J.A. Kindel Company, Inc. ("Kindel"), a Cincinnati based
contract stationer, and Allstate Office Products, Inc. ("Allstate"), a
contract stationer in Tampa. The Company issued 1,916,009 shares of
common stock in connection with the acquisitions of Kindel and
Allstate. These acquisitions were accounted for on a "pooling of
interests" basis and, accordingly, the accompanying financial
statements have been restated to include the accounts and operations
of these companies for all periods prior to their respective
acquisition. The interim financial statements should be read in
conjunction with the audited financial statements (not included
herein) for the year ended December 25, 1993 (which do not include any
adjustments for the accounting on a "pooling of interests" basis).
Certain reclassifications were made to prior year statements to
conform with 1994 presentations.
In September 1994, the Company signed a joint venture agreement with
Grupo Gigante, one of Mexico's leading retailers, to develop and
operate a chain of office products warehouse stores in Mexico. The
first stores are expected to open in Mexico in early 1995.
2. In June 1994, the Company completed a three-for-two split of the
Company's common stock. All historical share and per share
information has been restated to reflect the stock split.
3. Average common and common equivalent shares utilized in computing
third quarter earnings per share include approximately 4,092,000 and
4,937,000 shares in 1994 and 1993, respectively, as a result of
applying the treasury stock method to outstanding stock options.
6
<PAGE> 7
4. The Consolidated Statements of Cash Flows for the 39 weeks ended
September 24, 1994 and September 25, 1993 do not include noncash
financing transactions of $5,456,000 and $5,130,000, respectively,
relating to additional paid-in capital associated with tax benefits of
stock options exercised and $1,895,000 and $778,000, respectively,
relating to common stock and additional paid-in capital associated
with stock issued to the Office Depot Retirement Savings Plan. In
addition, the Consolidated Statements of Cash Flows for the 39 weeks
ended September 24, 1994 and September 25, 1993 do not include noncash
financing transactions of $11,743,000 and $5,698,000, respectively,
associated with accreted interest on zero coupon convertible,
subordinated notes. The distributions to stockholders included in
the Consolidated Statements of Cash Flows represent distributions to
stockholders of the aquired companies (which operated, for tax
purposes, as S-Corporations) prior to the acquisitions.
5. Included in the results of operations for the 13 and 39 week periods
ended September 24, 1994 are the results of operations of the acquired
companies. Included in these results for the 13 and 39 week periods
ended September 24, 1994 are revenues of $11,205,000 and $101,017,000,
respectively, and net income (loss) of $(292,000) and $3,015,000,
respectively, before the acquisitions were consummated. Following is
a summary of the effect of the restatement to the "poolings of
interest" basis for previously issued financial statements as of
December 25, 1993 and for the 13 and 39 week periods ended September
25, 1993.
OFFICE DEPOT, INC. AND SUBSIDIARIES
STATEMENT OF COMBINED RESTATED BALANCE SHEET
December 25, 1993
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Pooling
Office Depot Adjustments
(as previously for Acquired Combined
reported) Companies Restated
-------------- ------------ ---------
<S> <C> <C> <C>
Accounts receivable, net of allowance $ 165,182 $36,807 $ 201,989
Merchandise inventories 643,773 19,374 663,147
Other current assets 169,207 4,498 173,705
---------- ------- ----------
Total current assets 978,162 60,679 1,038,841
Property and equipment, net of
accumulated depreciation 262,144 6,023 268,167
Goodwill, net of amortization 200,462 252 200,714
Other assets 23,131 3,387 26,518
---------- ------- ----------
Total assets $1,463,899 $70,341 $1,534,240
========== ======= ==========
Accounts Payable $ 393,185 $19,306 $ 412,491
Other current liabilities 144,020 9,119 153,139
---------- ------- ----------
Total current liabilities 537,205 28,425 565,630
Long-term debt 366,527 1,920 368,447
Other non-current liabilities 5,478 5,478
Common stockholders' equity 554,689 39,996 594,685
---------- ------- ---------
Total liabilities and stockholders' equity $1,463,899 $70,341 $1,534,240
========== ======= ==========
</TABLE>
7
<PAGE> 8
OFFICE DEPOT, INC. AND SUBSIDIARIES
STATEMENT OF COMBINED RESTATED STATEMENTS OF EARNINGS
(In thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
13 Weeks Ended September 25, 1993
Pooling
Adjustments
for Acquired Combined
Office Depot (1) Companies Restated
---------------- ------------ --------
<S> <C> <C> <C>
Sales $659,925 $67,093 $727,018
Cost of goods sold and occupancy costs 512,548 49,960 562,508
-------- ------- --------
Gross profit 147,377 17,133 164,510
Store operating and selling expenses 96,018 9,845 105,863
Pre-opening expenses 1,685 - 1,685
General and administrative expenses 18,416 4,597 23,013
Amortization of goodwill 421 5 426
-------- ------- --------
Operating profit 30,837 2,686 33,523
Interest expense, net 1,398 148 1,546
-------- ------- --------
Earnings before income taxes 29,439 2,538 31,977
Income taxes 12,233 430 12,663
-------- ------- --------
Net earnings $ 17,206 $ 2,108 $ 19,314
======== ======= ========
Earnings per common and common
equivalent share $0.12 $0.13
======== ========
Average common and common
equivalent shares 142,077 147,776
======== ========
</TABLE>
<TABLE>
<CAPTION>
39 Weeks Ended September 25, 1993
Pooling
Adjustments
for Acquired Combined
Office Depot (1) Companies Restated
---------------- ------------ --------
<S> <C> <C> <C>
Sales $1,769,911 $188,425 $1,958,336
Cost of goods sold and occupancy costs 1,373,634 138,657 1,512,291
---------- -------- ----------
Gross profit 396,277 49,768 446,045
Store operating and selling expenses 266,587 28,774 295,361
Pre-opening expenses 5,245 - 5,245
General and administrative expenses 50,487 14,163 64,650
Amortization of goodwill 558 16 574
---------- -------- ----------
Operating profit 73,400 6,815 80,215
Interest expense, net 2,979 511 3,490
---------- -------- ----------
Earnings before income taxes 70,421 6,304 76,725
Income taxes 28,216 1,339 29,555
---------- -------- ----------
Net earnings $ 42,205 $ 4,965 $ 47,170
========== ======== ==========
Earnings per common and common
equivalent share $0.30 $0.32
========== ==========
Average common and common
equivalent shares 140,487 146,186
========== ==========
</TABLE>
(1) As previously reported with certain reclassifications to conform
with 1994 presentations.
8
<PAGE> 9
Item 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Sales increased 44% from $727,018,000 in the third quarter of 1993 to
$1,044,815,000 in the third quarter of 1994; and from $1,958,336,000 for the
first nine months of 1993 to $3,010,887,000 for the first nine months of 1994,
an increase of 54%. Comparable store sales increased 23% for the third quarter
of 1994 and 29% for the first nine months of 1994. The balance of the sales
increase was attributable to the 61 new stores and the one contract stationer
warehouse opened subsequent to the third quarter of 1993. The Company opened
16 stores in the third quarter of 1994, bringing the total number of stores
open at the end of the third quarter to 384, compared with 323 stores at the
end of the third quarter of 1993. Additionally, Eastman Office Products
Corporation was acquired in September of 1993, therefore, its results of
operations are included for two weeks in the first nine months of 1993 versus
the full 39 weeks in 1994. The Company also operated 24 contract stationer and
delivery warehouses at the end of the third quarter of 1994 compared to 23
contract stationer and delivery warehouses (including the 8 warehouses acquired
in the poolings) at the end of the third quarter of 1993. Comparable store
sales in the future may be affected by competition from other stores, the
opening of additional stores, the expansion of contract stationer business in
existing markets, and general market conditions.
Gross profit as a percentage of sales was 23.3% during the third quarter of
1994, 22.6% during the comparable quarter in 1993, and 23.1% for the first
nine months of 1994, as compared with 22.8% for the first nine months of
1993. The increases were primarily a result of leveraging occupancy costs
through higher average sales per store and purchasing efficiencies gained
through vendor volume discount programs that have increased as purchasing
levels have continued to increase. These gains were partially offset by lower
gross margins resulting from an increase in sales of lower margin business
machines and computers. Gross profit as a percentage of sales is generally
higher in the contract stationer business than the retail store's as a
result of significantly fewer business machines and computers being sold
through the contract stationer's.
Store and warehouse operating and selling expenses as a percentage of sales
were 14.9% and 15.2% for the third quarter and first nine months of 1994,
respectively, as compared with 14.6% and 15.1% for the third quarter and first
nine months of 1993, respectively. Store and warehouse operating expenses
consist primarily of payroll and advertising expenses. While the majority of
these expenses vary proportionately with sales, there is a fixed cost component
to these expenses such that, as sales increase within a given market area,
store and warehouse operating and selling expenses should decrease as a
percentage of sales. This benefit may not be fully realized, however, during
periods when a large number of new stores or warehouses are being opened, as
new stores and warehouses typically generate lower sales than the average
mature facility, resulting in higher operating and selling expenses as a
percentage of sales. In addition, contract stationers incur somewhat higher
operating expenses than the retail stores. This percentage is also affected
when the Company enters large metropolitan market areas where the advertising
costs for the full market must be absorbed by the
9
<PAGE> 10
small number of stores initially opened. As additional stores or
warehouses are opened in these large markets, advertising costs, which
are substantially a fixed expense for a market area, should decrease
as a percentage of sales. The Company has also continued a strategy
of opening stores and warehouses in existing markets. While
increasing the number of facilities increases operating results in
absolute dollars, this may have the effect of increasing expenses as a
percentage of sales since the sales of certain existing stores in the
market may initially be adversely affected.
Pre-opening expenses increased from $1,685,000 in the third quarter of 1993 to
$3,582,000 in the comparable period in 1994, and increased from $5,245,000 in
the 39 week period ended September 25, 1993 to $6,814,000 in the comparable
1994 period. Pre-opening expenses currently are approximately $125,000 per
store and are predominately incurred during a six-week period prior to the
store opening. These expenses consist principally of amounts paid for salaries
and supplies. Since the Company's policy is to expense these items during the
period in which they occur, the amount of pre-opening expenses in each quarter
is generally proportional to the number of new stores or warehouses being
opened.
General and administrative expenses have decreased as a percentage of sales
from 3.2% in the third quarter of 1993 to 3.1% in the comparable period in
1994, and from 3.3% in the first nine months of 1993 to 3.1% in the comparable
period in 1994. General and administrative expenses include, among other
costs, site selection expenses and store management training expenses, and
therefore vary with the number of new store openings in that quarter and the
next quarter. The Company's continuing commitment to improving the efficiency
of its computer systems resulted in an increase in general and administrative
expenses during 1994; however, the Company believes the systems investment will
provide benefits in 1995 and beyond. General and administrative expenses also
increased with the acquisitions of the contract stationers which historically
had a higher general and administrative expense component than the retail
stores. Additionally, there are some duplicative expenses incurred as a result
of the acquisitions. These increases have been offset by a decrease in general
and administrative expenses as a percentage of sales for the Company's retail
store operations, primarily as a result of the Company's ability to increase
sales without a proportionate increase in corporate expenditures.
The Company incurred net interest expense of $3,224,000 and $10,458,000 in the
third quarter and first nine months of 1994, respectively, compared with
$1,546,000 and $3,490,000 for the comparable periods in 1993. The increase in
interest expense is primarily related to the $185,000,000 raised in November
1993 via a public offering of zero coupon, convertible, subordinated notes.
The Company recorded goodwill amortization of $1,266,000 in the third quarter
of 1994 as compared with $426,000 in the 1993 comparable quarter, and
$3,803,000 in the first nine months of 1994 compared with $574,000 in the first
nine months of 1993. The increase in goodwill amortization was attributable to
the contract stationer acquisitions which occurred in the second and third
quarters of 1993. The effective income tax rate increased from 39% for the
first nine months of 1993 to 41% for the first nine months of 1994 primarily
due to nondeductible goodwill amortization as well as the effect of acquiring
companies which had no provision for income taxes because they were organized
as S-Corporations (as defined under income tax regulations).
10
<PAGE> 11
LIQUIDITY AND CAPITAL RESOURCES
Since the Company's retail sales are substantially on a cash and carry basis,
cash flow generated from operating stores provides a source of liquidity to the
Company. Working capital requirements are reduced by vendor credit terms,
which allow the Company to finance a portion of its inventory. The Company
utilizes private label credit card programs which allow the Company to expand
its retail sales without the burden of additional receivables because the
programs are administered and financed by financial services companies. All
credit card receivables sold to the financial service company under one program
were sold on a recourse basis.
Sales made from the contract stationer warehouses are made under standard
commercial credit terms, where the Company carries its own receivables. As the
Company expands into servicing additional large companies in the contract
stationer portion of its business, it is expected that a greater portion of the
Company's receivables will be carried.
In the third quarter of 1994, the Company added 16 new stores. As stores
mature and become more profitable, and as the number of new stores opened in a
year becomes a smaller percentage of the existing store base, cash generated
from operations will provide a greater portion of funds required for new store
fixed assets, inventories and other working capital requirements. Cash
generated from operations will be affected by an increase in receivables
carried without outside financing, and an increase in inventory at the stores
and warehouses as the Company continues to enhance its assortment in computers,
business machines and furniture. These have resulted in net cash provided by
operating activities of $31,974,000 and $77,868,000 in the first nine months of
1994 and 1993, respectively. Capital expenditures are also affected by the
number of stores, warehouses, and other facilities opened or acquired each year
and the increase in computer and other equipment at the corporate office
required to support such expansion. Cash used in investing activities
(primarily capital expenditures, including the acquisition of the corporate
headquarters for $16 million and store real estate) was $114,754,000 and
$90,909,000 in the first nine months of 1994 and 1993, respectively. The
Company's cash flow is also affected by financing activities, primarily the
exercise of stock options and payment on its long-term debt. This activity
resulted in a net cash provided (used) by financing activities of $3,050,000
and ($31,474,000) for the first nine months of 1994 and 1993, respectively.
During the nine months ended September 24, 1994, the Company's cash balance
decreased approximately $79,730,000 and long- and short-term debt decreased by
approximately $1,291,000. The decrease in cash was primarily attributable to
payments for fixed assets and inventories for new stores as well as payments
for inventory mix changes resulting from an increase in business machines and
computer sales.
The Company plans to open approximately 35 to 40 additional stores during the
remainder of 1994. Management estimates that the Company's cash requirements,
exclusive of pre-opening expenses, will be approximately $1,200,000 for each
additional store. In addition, management estimates that each new store will
require pre-opening expenses of approximately $125,000.
11
<PAGE> 12
The Company has a credit agreement with its principal bank and a syndicate of
commercial banks to provide for a working capital line of $200,000,000. The
credit agreement provides that funds borrowed will bear interest, at the
Company's option, at either 3/4% over the LIBOR rate or at a base rate linked
to the prime rate. The Company must also pay a fee of 1/4% per annum on the
unused portion of the credit facility. The credit facility expires in
September 1996. In addition to the credit facility, the bank has provided a
lease facility to the Company under which the bank has agreed to purchase up to
$15,000,000 of equipment from the Company and lease such equipment back to the
Company. As of September 24, 1994, there were no borrowings outstanding under
the working capital line and the Company has utilized approximately $4,000,000
of this lease facility.
The Company's management is continually reviewing its financing options.
Although the Company has the ability to finance its planned expansion through
1994 from cash on hand, funds generated from operations, and funds borrowed
under the Company's credit facilities, the Company will also consider
alternative financing, such as the issuance of equity, debt or convertible
debt, if market conditions make such alternatives financially attractive for
funding the Company's short-term or long-term expansion. The Company has
acquired its contract stationer businesses with cash and newly issued common
stock. The Company's financing requirements in the future will be affected by
the number of new stores, delivery centers and contract stationer warehouses
opened or acquired.
12
<PAGE> 13
SIGNATURE
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 thereunto duly authorized.
OFFICE DEPOT, INC.
------------------
(Registrant)
Date: November 4, 1994 By:/s/ BARRY J. GOLDSTEIN
--------------------------------
Barry J. Goldstein
Executive Vice President-Finance
and Chief Financial Officer
13
<PAGE> 14
EXHIBIT INDEX
-------------
Exhibit Sequentially
Number Exhibit Numbered Page
- - ------- ------- -------------
27 Financial Data Schedule
(for SEC filing purposes only)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF OFFICE DEPOT, INC. FOR THE QUARTER ENDED SEPTEMBER 24,
1994, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> DEC-26-1993
<PERIOD-END> SEP-24-1994
<CASH> 62,741
<SECURITIES> 0
<RECEIVABLES> 274,806
<ALLOWANCES> 4,393
<INVENTORY> 737,899
<CURRENT-ASSETS> 1,109,359
<PP&E> 467,784
<DEPRECIATION> 115,421
<TOTAL-ASSETS> 1,692,151
<CURRENT-LIABILITIES> 630,497
<BONDS> 376,931
<COMMON> 1,509
0
0
<OTHER-SE> 677,634
<TOTAL-LIABILITY-AND-EQUITY> 1,692,151
<SALES> 3,010,887
<TOTAL-REVENUES> 3,010,887
<CGS> 2,314,812
<TOTAL-COSTS> 2,780,401
<OTHER-EXPENSES> 96,758
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 10,458
<INCOME-PRETAX> 123,270
<INCOME-TAX> 50,504
<INCOME-CONTINUING> 72,766
<DISCONTINUED> 0
<EXTRAORDINARY> 0
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