‘Max profit down in busy month

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OfficeMax has seen its Q1 net income plummet from last year, when results still included the company’s paper, forest products and timberland assets.

Quarterly net income fell to $2.6 million, or EPS of $0.02, down from $59.1 million, or EPS of $0.61, on the same basis last year.

Earnings from continuing operations came to $19.7 million, or EPS of $0.20, excluding a $8.7 million severance charge.

Sales fell 34 per cent to $2.3 billion, from $3.5 billion a year ago, mainly because of lost sales from Boise Building Solutions and Boise Paper Solutions, which were sold in October of last year.

The troubled retailer later established a pre-tax additional reserve of $9.8 million against its Q1 results, which stems from information that was received after issuing the results, and relates to an ongoing 2003 legal dispute.

In separate news, OfficeMax has settled its proxy contest with shareholder K Capital over the election of directors at its annual shareholders meeting last month.

K Capital, which is OfficeMax’s third largest shareholder, has agreed to withdraw its candidate for election to the board in exchange for an OfficeMax concession for an additional independent candidate at the end of June, and to give "active consideration in good faith" to candidates proposed by K Capital for the position.

OfficeMax’s newly-appointed president/CEO Sam Duncan said: "We are pleased that this dispute has been resolved and that OfficeMax will be able to spare its shareholders a costly and disruptive proxy contest." (see ‘Great expectations’, page 29)