OfficeMax 2012 Annual Report Download - page 2

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RAVI SALIGRAM
President and
Chief Executive Officer
March 2013
We continue to launch value-added services for our
business customers and plan to open our first new
format prototype store in early 2013.
Gaining Momentum
Our long-term objectives remain to achieve peak
operating margins, restore top-line growth and improve
return on invested capital. A fundamental plank of the
strategic plan is leveraging the talents of our people. In
2012, we bolstered our team through hiring, promoting
and developing team members throughout the
organization. Our team’s sense of purpose and passion
for the business will continue to propel us forward. I am
immensely proud that OfficeMax has been named one
of the 2013 World’s Most Ethical Companies by the
Ethisphere Institute for the second consecutive year.
I am also very pleased that OfficeMax and Office Depot
have agreed to combine our companies in a merger of
equals aimed at building a stronger, more efficient
competitor able to meet the growing challenges of a
rapidly changing industry. The Boards of Directors of
both companies unanimously approved a definitive
merger agreement in February 2013. The transaction is
expected to close by the end of calendar year 2013,
subject to stockholder approval from both companies,
the receipt of regulatory approvals and other customary
closing conditions.
Thank you for your ongoing support as we continue the
successful execution of our Road to Success.
2012 was a year of tangible progress for OfficeMax.
An unrelenting focus on our “Road to Success”
strategic plan resulted in meaningful margin
improvement, despite the absence of economic
tailwinds.
Strengthening the Foundation
As part of our strategic plan, we committed to
strengthen our foundation in 2012. The plan is built on
three pillars: operational turnaround, balance sheet
management, and disruptive and innovative moves.
We made significant progress on the operational
turnaround of our core business this year.
>> To counteract a lackluster economy and sector
weakness in technology, we aggressively pursued store
network optimization, continued to focus our innovation
efforts and refined our technology offering.
>> We achieved profitable growth within our Contract
business, recording the highest net win-to-loss sales
metric in the U.S. in five years. Our team gained
traction in key product and service adjacencies and
expanded our small and medium business sales unit.
The launch of our new name – OfficeMax Workplace
– enables us to better convey our value proposition.
>> Our Digital team remained focused on transforming
our e-commerce properties. Targeted investments to
enrich content and improve the user experience have
positively impacted performance. Our enhancements,
including a new search engine, drove double-digit traffic
and sales growth on OfficeMax.com for the year.
We also simplified our balance sheet, creating greater
clarity for investors. The non-recourse Lehman-backed
timber notes liability was extinguished, and we reduced
our unfunded pension liability. We also generated
strong cash flow from operations and a significant
increase in earnings per share; and we were pleased to
reinstate a quarterly dividend. In early 2013, we
monetized a portion of our Boise investment.
As part of driving innovative and disruptive moves,
emphasis was placed on high-margin services to build
on our foundation of ImPress®Print and Document
Services and Ctrlcenter® computer services.
Dear Shareholders:
Sincerely,
This letter is not an offer to sell any securities or the solicitation of any vote by or on behalf of OfficeMax or Office Depot or their respective directors and
executive officers. Investors should read the registration statement on Form S-4 to be filed by Office Depot that will include a Joint Proxy Statement of
OfficeMax and Office Depot that also constitutes a prospectus of Office Depot. These documents will contain important information concerning the merger
and can be obtained for free at the SEC’s website or, as applicable, by contacting OfficeMax Investor Relations at 263 Shuman Blvd., Naperville, Illinois 60563
or by calling 630-864-6800, or by contacting Office Depot Investor Relations at 6600 North Military Trail, Boca Raton, Florida 33496 or by calling 561-438-3657.