UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: February 26, 2002
Commission file number 1-10948
OFFICE DEPOT, INC.
(Exact name of registrant as specified in its charter)
Delaware 59-2663954
---------------------------------- --------- --------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2200 Old Germantown Road, Delray Beach, Florida 33445
(Address of principal executive offices) (Zip Code)
(561) 438-4800
(Registrant's telephone number, including area code)
Former name or former address, if changed since last report: N/A
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
99.1 Copies of slides presented at investors and analysts meeting sponsored by
The Bear Stearns Companies Inc., on February 27, 2002 by Office Depot's Chairman
and CEO, Bruce Nelson and by its CFO, Charles Brown
ITEM 9. REGULATION FD DISCLOSURE
On February 27, 2002, Office Depot Inc.'s Chairman and Chief Executive Officer,
Bruce Nelson, and its Chief Financial Officer, Charles Brown, are meeting with
investors and securities analysts at a securities conference sponsored by The
Bear Stearns Companies Inc. Portions of the audio of this meeting are being
Webcast by Bear Stearns. Interested parties may contact Investor Relations at
561-438-1680 for further information. Attached to this Form 8-K as Exhibit 99.1
are copies of presentation slides being provided to attendees at the meeting.
This filing is provided as a matter of information only.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
OFFICE DEPOT, INC.
Date: February 26, 2002 By: /S/ DAVID C. FANNIN
David C. Fannin
Executive Vice President and
General Counsel
BEAR STEARNS
February 27, 2002
FORWARD - LOOKING STATEMENTS
You should be aware that except for historical information, the matters
discussed herein are forward-looking statements within the meaning of the
private securities litigation reform act, as amended. Forward-looking
statements, including projections and anticipated levels of future
performance, involve risks and uncertainties which may cause actual results
to differ materially from those discussed herein. You are urged to review our
filings with the SEC and our press releases from time to time for details of
these risks and uncertainties.
WHO ARE WE?
The World's Largest Seller of Office
Products and Services No one sells more office
products to more customers in more countries than
Office Depot
HOW DO WE DO IT?
o Percent of Total Company Revenues:
o North American Retail: 53%
o Business Services Group: 33%
o International Division: 14%
o E-Commerce: 14% (within BSG and International segments)
o 898 retail stores
o 859 North America
o 30 France
o 9 Japan
o 52 warehouses/cross docks
o 24 N.A. Warehouses
o 10 N.A. cross docks
o 18 International Whse's.
o 26 call centers
o Mail more than 300 million catalogs annually around the world
o 15 unique web sites around the world
o 48,000 world-wide employees
WHERE ARE WE?
Global Reach
Stores Warehouses Call Centers
------ ---------- ------------
USA 824 24 13
Canada 35 - -
Australia - 3 1
Japan 9 2 2
Austria - - 1
Belgium - 1 1
France 30 2 2
Germany - 3 -
Ireland - 1 1
Italy - 1 1
The Netherlands - 1 1
Switzerland - 1 1
United Kingdom - 3 2
JOINT VENTURES/LICENSEES
Stores Warehouses Call Centers
------ ---------- ------------
Mexico 61 2 2
Israel 23 1 -
Poland 15 3 1
Hungary 3 - 1
Thailand 2 - -
OUR BRANDS
Office Depot/ Office Depot.com
Viking Office Products
Viking Direct
4sure.com
Computers4sure.com
Office Place
Sands & McDougall
WHAT TYPES OF CUSTOMERS DO WE SERVE ?
o Retail: consumers, entrepreneurs, small companies
o Viking; OD Catalog; 4Sure.com: entrepreneurs, small companies, medium
businesses
o Contract: medium businesses and large corporations
o Internet: consumers, entrepreneurs, small companies, medium businesses, and
large corporations
2001 FINANCIAL SUMMARY
Revenues*
($ in millions)
1997: $8,109
1998: $9,007
1999: $10,306
2000: $11,613
2001: $11,154
4 year CAGR: 8%
2001 2000
---- ----
Quarter 1: $3,018 $3,066
Quarter 2 $2,554 $2,633
Quarter 3 $2,782 $2,823
Quarter 4 $2,800 $3,091
2001 growth: (4.0)%
* Revenues exclude one-time charges and credits
2001 FINANCIAL SUMMARY
Operating Profit*
($ in millions)
1997: $415
1998: $524
1999: $519
2000: $372
2001: $404
4 year CAGR: (0.7)%
2001 2000
---- ----
Quarter 1: $97 $157
Quarter 2 $81 $104
Quarter 3 $129 $73
Quarter 4 $97 $38
2001 growth: 8.6%
* Operating profit excludes one-time charges and credits
2001 FINANCIAL SUMMARY
Net Income/EPS*
1997: $0.65
1998: $0.82
1999: $0.86
2000: $0.70
2001: $0.79
2001 2000
---- ----
Quarter 1: $0.19 $0.29
Quarter 2 $0.15 $0.19
Quarter 3 $0.26 $0.14
Quarter 4 $0.19 $0.06
* Excludes one-time charges and credits
WHAT WE DO
|X| Office Depot sells more office products to more customers in more countries
than anyone else
|X| Reach customers of all sizes through different channels and brands
|X| Highly targeted by country, channel and customer
|X| Fully integrated across channels
|X| Leverage "bricks and clicks"
|X| Leverage logistics and distribution
|X| Leading e-commerce revenues/platforms
|X| Expansion in Europe from existing infrastructure
WHAT MAKES US DIFFERENT?
o People/culture
o Diversified, multi-channel offering/customers of all sizes
o Highly sophisticated, award winning e-commerce platform
o Fully integrated delivery/logistics network
o Highly profitable international business
o Significant growth opportunities
WHAT MAKES US DIFFERENT?
People
o Culture/values
o Respect for the individual
o Fanatical customer service
o Excellence in execution
o Commitment to diversity
o Focus on making Office Depot the most compelling place to work
and shop
HOW DO WE GROW?
Differentiate
|X| Position our brand around people, knowledge and support
|X| Training investment funded through payroll reductions
|X| In-store experience
|X| Stores within stores
|X| Call centers/sales reps
|X| Customer segment/product categories
|X| Use technology to deliver product information and content (knowledge)
HOW DO WE GROW?
Target
|X| Focus marketing dollars on activities with the highest potential to deliver
profitable sales
|X| " the right mix of media"
|X| Newspaper inserts
|X| Television/radio
|X| Sports marketing
|X| Direct mail
|X| Catalog
|X| One-to-one marketing/messaging
|X| Extensive knowledge of our customers
|X| Sophisticated data warehouse capabilities
HOW DO WE GROW?
Integrate
|X| Coordinate activities across business units and functions to increase sales
productivity and create lasting relationships with our customers
|X| Grow customer loyalty
|X| Multi-channel buyers spend more and more loyal and therefore most
valuable...
|X| When customers shop all three channels, they tend to be more
loyal, generate better margins and spend 3 to4X more.
|X| When a large ODP catalog customer is assigned a contract sales rep, we
sales increase5X without a dramatic impact on margin
|X| When phone/fax customers are moved online average spend increases 30%
WHERE DO WE GROW?
|X| North America
|X| Europe
|X| Asia
|X| Australia
|X| Japan
U.S. Office Product Market Is Large and Still Growing
o Since 1995 steady 5% annual compounded growth
o Future growth expected to be in 2% - 4%
WHERE DO WE GROW?
North America
|X| Stores
|X| Existing comp store base
|X| New store growth
|X| New formats
|X| Stores in stores
|X| E-commerce/catalog
|X| One-to-one marketing
|X| 4Sure.com
|X| Contract
|X| Grow market share
INTERNATIONAL MARKETPLACE
o Market size estimated to be larger than the U.S.
o Market growing faster than GDP
o More fragmented than the U.S.
SIGNIFICANT POTENTIAL FOR INTERNATIONAL GROWTH
|X| Existing profitable international platform
|X| 12 years of doing business outside the U.S.
|X| International markets growing faster than GDP and more fragmented than U.S.
|X| Viking catalog/delivery leadership position in 8 countries
|X| Super store leadership in France
|X| ODP Business Services Division now in 4 new European countries
JAPAN
o Second largest office supplies market in the world
o Highly fragmented, thousands of small players
o No significant office supply retailer
o High potential/high risk
o Two brands - Viking/Office Depot
HOW DO WE GROW INTERNATIONALLY?
|X| Existing markets
|X| Penetrating current customer base
|X| New channels and brands
|X| New Countries
|X| Switzerland
|X| Spain
|X| Scandinavian countries
|X| Expand joint venture partnerships
|X| Central America
HOW DO WE GROW?
E-commerce Leadership
|X| Fifteen distinct Web sites in ten countries around the world
|X| $1.6 billion in worldwide revenues in 2001
|X| Profitable
|X| Fully integrated across systems/delivery networks
|X| Small business, contract and tech savvy customers
|X| Award winning
|X| Highly targeted to customers needs
HOW DO WE GROW?
E-commerce Leadership in 2001
|X| Added 500,000 new small business customers to officedepot.com
customer base
|X| Increased conversion rate of registrants from 48% in 1999, to 55% in 2000
to 63% in 2001
|X| Ranked as 4th fastest website in Nov/Dec 2001 by Nielsen
|X| Ranked #1 office products site by DMA
|X| Grew affiliate program to over 12,000 customers
WHY INVEST?
|X| Growth not limited to US
|X| Strong balance sheet
|X| P/E expansion
|X| Relentless focus on improvement
|X| Consistency of performance
|X| Communication to capital markets
|X| Commitment to grow shareholder value
IMPROVING PERFORMANCE
o Sequential improvement in retail comps
o Gross margins increasing across all channels
o Operating costs essentially flat vs. last year
o Improving returns on capital
o Free cash flow growing
o Solid balance sheet
o Stock price rising, still under valued
FOCUS ON FINANCIAL STRATEGIES/GOALS
o Earnings growth
o Cash flow
o Capital expenditures
o RONA
o ROE
INVESTMENT HIGHLIGHTS
o Stable industry
o Multi-channel breadth
o Global footprint
o Growth opportunities
o Improving performance
o Cost management
o Solid focus on financial goals