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Earnings Calls: 
OfficeMax First Quarter Earnings Call
Author: Rozalina Destanova
123jump.com
Last Update: 4:38 AM EDT May 15 2008


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Sales declined to $2.3 billion, reflecting the weaker US economy, deliberate focus on profitable sales and the negative impact of the Easter holiday shifting to Q1 2008 from Q2 last year. Bottom line net income increased to $63.3 million or 81 cents per share. Retail operating income was reduced by about $10 million from the 77 stores opened last year due to occupancy and operating costs on lower sales. Capital expenditures for 2008 are expected to total between $200 million and $220 million.


Investors Question and Answers

 
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Don Civgin: We look at that constantly and where we have opportunities to pare back and be more prudent with our capital, we do that. As we sit here today, the fact that we have spent less than 25% of that in the first quarter does not lead me to think that that is not still a realistic number for us. It is a good working assumption. If we have opportunities to cut it back, where we find investments that do not pan out when we look at the actual numbers, we will do that.

Steve Chick (J.P. Morgan): Could you expand on the tax rate and the reversals?

Don Civgin: The reversal was about $8.5 million which was the predominant reason that the rate was what it was compared to either last year or what we would expect on a going forward trend. The rate we have talked about in the past, which is in the upper 30’s is a reasonable run rate for us given the mix of international activities we have and so forth. It was an unusually low quarter from a tax rate.

Steve Chick (J.P. Morgan): In terms of contract delivery segment sales were down 5.5% for the quarter and without Easter it sounds like that would have been down 4.5%. At your analyst conference you said that with international that you are expecting or trends were low single digit declines. It seems like the decline got worse towards the quarter end. Can you clarify that?

Don Civgin: I do not remember exactly what we said at the investor day. I think the answer is it was about what we expected and I would not say it was materially different than what we were seeing in the first half of the quarter.
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