Maybe we'll just call it OfficeMini.
In 2003, what was then Boise Cascade acquired OfficeMax in a $1.15 billion merger that offered, at least in theory, a more vertically integrated opportunity to push Boise's paper products through the supply chain.
Although management has reset its valuations to reflect current market values, it doesn't disclose (nor is it required to) what it believes that fair value is. But with OfficeMax swiping such a large piece off the books all at once, it has set the bar pretty low.
Undoubtedly, retailers of office supplies, staplers, push pins, and rubber bands are feeling the economic pinch just as much as anyone. Office Depot
Which calls into question whether Motley Fool Stock Advisor recommendation Staples
Staples is also going to be wrestling with the integration of Corporate Express, the business delivery service it recently acquired. While that should help it build out one of the growing parts of its business, large mergers of the sort seldom seem to go without a hitch. Just ask Boise Cascade.
Now without the impairment charge, OfficeMax would have earned $19.4 million based on operations, or $0.24 per share, on revenue that fell 7% to $1.98 billion. Where earnings beat analyst expectations, though, revenue fell short. That sounds good, but the company achieved those results through about $35 million in cuts in operating and selling, general, and administrative expenses. Whether it can continue to keep those costs low is highly debatable, and investors may wind up seeing their OfficeMax shares sporting a mini price tag well into the future.
For related Foolish articles: