OfficeMax Takes Q4 Hit

ITASCA, IL-On top of an accounting scandal, the subsequent loss of its CFO and then its CEO, and Friday’s suggestion by one of its major shareholders that the company be sold off in pieces, the beleaguered OfficeMax Inc. turned in weak numbers for its fiscal fourth quarter. All together—including its retail and other divisions—the company reported fourth-quarter 2004 net income of $700,000, or a loss of $.02 per share, but that figure included the net impact of the sale of its paper, forest products and timberland assets. Without those sales, OfficeMax would have seen Q4 2004 net losses of $24.2 million, or $0.30 per share. By contrast, in Q4 2003, the company reported net income of $6.9 million, or $.05 per share.

Same-store sales for the company’s retail division in the fourth quarter increased 0.4% compared with the same quarter a year before. Still, for the fourth quarter of 2004, OfficeMax Retail saw an operating loss of $16.9 million, compared with operating income of $6.1 million in the Q4 2003 and $26.8 million, after a restatement, in the third quarter of 2004.

These have been trying times recently for the number-three office supply retailer, which was bought in December 2003 by Boise Cascade Corp., a major paper company, for $1.2 billion (in 2004 the company sold its paper and forest products businesses, and assumed the name OfficeMax Inc.). In early 2005, the company sacked six employees for sending $3.3 million in bogus bills to a supplier. The scandal delayed release of OfficeMax’s Q4 earnings report, initially due in January, and obligated the company to restate its net earnings by more than $4 million for the first nine months of 2004.