OfficeMax 2007 Annual Report Download - page 9

Download and view the complete annual report

Please find page 9 of the 2007 OfficeMax annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 124

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124

Employees
On December 29, 2007, we had approximately 36,000 employees, including approximately
10,500 part-time employees.
ITEM 1A. RISK FACTORS
Cautionary and Forward-Looking Statements
This Annual Report on Form 10-K contains forward-looking statements. Statements that are not
historical or current facts, including statements about our expectations, anticipated financial results
and future business prospects, are forward-looking statements. You can identify these statements
by our use of words such as ‘‘may,’’ ‘‘will,’’ ‘‘expect,’’ ‘‘believe,’’ ‘‘should,’’ ‘‘plan,’’ ‘‘anticipate’’ and
other similar expressions. You can find examples of these statements throughout this report,
including ‘‘Item 7, Management’s Discussion and Analysis of Financial Condition and Results of
Operations’’ of this Form 10-K. We cannot guarantee that our actual results will be consistent with
the forward-looking statements we make in this report. We have listed below some of the inherent
risks and uncertainties that could cause our actual results to differ materially from those we project.
We do not assume an obligation to update any forward-looking statement.
Intense competition in our markets could harm our ability to maintain profitability.
Domestic and international office products markets are highly and increasingly competitive.
Customers have many options when purchasing office supplies and paper, print and document
services, technology products and solutions and office furniture. We compete with worldwide
contract stationers, office supply superstores, mass merchandisers, wholesale clubs, computer and
electronics superstores, Internet merchandisers, direct-mail distributors, discount retailers,
drugstores, supermarkets and thousands of local and regional contract stationers. In addition, an
increasing number of manufacturers of computer hardware, software and peripherals, including
some of our suppliers, have expanded their own direct marketing efforts. The other large office
supply superstores have increased their presence in close proximity to our stores in recent years
and are expected to continue to do so in the future. In addition, many of our competitors have
expanded their office products assortment, and we expect they will continue to do so. In recent
years, two package delivery companies have established retail stores that compete directly with us
for copy, printing, packaging and shipping business, and offer a limited assortment of office
products and services similar to the ones we offer. We anticipate increasing competition from our
two domestic office supply superstore competitors and various other competitors, including the two
package delivery companies, for print-for-pay and related services. Print-for-pay and related services
have historically been a key point of difference for OfficeMax stores and are expected to become an
increasingly more important part of our future strategies. Any or all of our competitors may become
even more aggressive in the future. Increased competition in the office products markets, together
with increased advertising, has heightened price awareness among end-users. Such heightened
price awareness has led to margin pressure on office products and impacted the results of both our
Retail and Contract segments. In addition to price, competition is also based on customer service,
the quality and breadth of product selection, and convenient locations. Some of our competitors are
larger than us and have greater financial resources, which affords them greater purchasing power,
increased financial flexibility and more capital resources for expansion and improvement, which may
enable them to compete more effectively than we can.
We may be unable to open and remodel stores successfully. Our business plans include
the opening and remodeling of a significant number of retail stores. For these plans to be
successful, we must identify and lease favorable store sites, develop remodeling plans, hire and
train associates and adapt management and systems to meet the needs of these operations. These
5