On Thursday, May 3, office supply retailer OfficeMax
- Net sales grew a whopping 0.5%, as did same-store sales in the retail segment. The best the CEO could muster was that "our results for the first quarter showed moderate improvement."
- Gross margins fell, but operating and net margins increased significantly, leading to a bottom-line profit.
- While diluted earnings posted positive, they were significantly below analyst expectations and operating cash flow stayed in the red.
- OfficeMax carries a lowly one-star rating in Motley Fool's CAPS community. Rival Staples
(NASDAQ:SPLS) carries a more favorable four stars, while Office Depot(NYSE:HAS) weighs in at three stars. Don't forget that your favorite office supplies can also be found at Target(NYSE:TGT) (three stars) and Motley Fool Inside Value recommendation Wal-Mart(NYSE:WMT) (two stars).
(Figures in thousands, except per-share data)
Income Statement Highlights
Avg. Est. |
Q1 2007 |
Q1 2006 |
Change |
|
---|---|---|---|---|
Sales |
$2,460,000 |
$2,436,253 |
$2,423,537 |
0.5% |
Net Profit |
-- |
$58,539 |
($25,087) |
N/A |
EPS |
$0.93 |
$0.76 |
($0.37) |
N/A |
Diluted Shares |
-- |
75,744 |
70,833 |
6.9% |
Get back to basics with a look at the income statement.
Margin Checkup
Q1 2007 |
Q1 2006 |
Change* |
|
---|---|---|---|
Gross Margin |
25.58% |
25.86% |
(0.28) |
Operating Margin |
4.52% |
(0.35%) |
4.87 |
Net Margin |
2.40% |
(1.04%) |
3.44 |
Margins are the earnings engine.
Balance Sheet Highlights
Assets |
Q1 2007 |
Q1 2006 |
Change |
---|---|---|---|
Cash + ST Invest. |
$139,645 |
$76,644 |
82.2% |
Accounts Rec. |
$559,708 |
$546,490 |
2.4% |
Inventory |
$1,018,035 |
$914,497 |
11.3% |
Liabilities |
Q1 2007 |
Q1 2006 |
Change |
---|---|---|---|
Accounts Payable |
$781,030 |
$743,680 |
5.0% |
Long-Term Debt |
$1,819,622 |
$1,854,550 |
(1.9%) |
The balance sheet reflects the company's health.
Cash Flow Highlights
Q1 2007 |
Q1 2006 |
Change |
|
---|---|---|---|
Cash From Ops. |
($80,393) |
$71,945 |
(211.7%) |
Capital Expenditures |
$28,124 |
$23,321 |
20.6% |
Free Cash Flow |
($108,517) |
$48,624 |
(323.2%) |
Find out why free cash flow is a Fool's best friend.
Related Foolishness:
- Warren Buffett's Priceless Investment Advice
- A Turnaround to the Max
- 70 Times Better Than the Next Microsoft
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