Office Depot 2002 Annual Report Download - page 26

Cautionary Statements
In December 1995, the Private Securities Litigation Reform Act of 1995
(the “Act”) was enacted by the United States Congress. The Act, as
amended, contains certain amendments to the Securities Act of 1933
and the Securities Exchange Act of 1934. These amendments provide
protection from liability in private lawsuits for “forward-looking” state-
ments made by public companies under certain circumstances, provided
that the public company discloses with specificity the risk factors that
may impact its future results. We want to take advantage of the “safe
harbor” provisions of the Act. In doing so, we have disclosed these forward-
looking statements by informing you in the following specific cautionary
statements of certain circumstances which may cause the information
in these statements not to transpire as expected.
This Annual Report contains both historical information and other informa-
tion that you can use to infer future performance. Examples of historical
information include our annual financial statements and the commentary
on past performance contained in our MD&A. While we have specifically
identified certain information as being forward-looking in the context
of its presentation, we caution you that, with the exception of informa-
tion that is clearly historical, all the information contained in this Annual
Report should be considered to be “forward-looking statements” as
referred to in the Act. Without limiting the generality of the preceding
sentence, any time we use the words “estimate,” “project,” “intend,”
“expect,” “believe,” “anticipate,” “continue” and similar expressions, we
intend to clearly express that the information deals with possible future
events and is forward-looking in nature.
Forward-looking information involves risks and uncertainties, including
certain matters that we discuss in more detail below and in our report
on Form 10-K, filed with the Securities & Exchange Commission. This
information is based on various factors and important assumptions about
future events that may or may not actually come true. As a result, our
operations and financial results in the future could differ materially and
substantially from those we have discussed in the forward-looking state-
ments in this Annual Report. In particular, the factors we discuss below
and in our Form 10-K could affect our actual results and could cause
our actual results in 2003 and in future years to differ materially from
those expressed in any forward-looking statement made by us or on our
behalf in this Annual Report. We believe that the following risk factors
should be considered by persons reading our Annual Report and Form
10-K and hereby qualify those filings by the inclusion of these caution-
ary statements regarding future performance:
Competition—Retail: We compete with a variety of retailers, dealers
and distributors in a highly competitive marketplace that includes such
competitors as high-volume office supply chains (so-called “office sup-
plies superstores”), warehouse clubs, computer stores, contract stationers
and well-established mass merchant retailers. Even grocery and drug-
store chains have begun to carry at least limited supplies of basic office
supplies and technology items, including printer supplies such as ink
cartridges and toner cartridges. Well-established mass merchant retailers
have the financial and distribution ability to compete very effectively
with us should they choose to enter the office superstore retail category,
Internet office supply or contract stationer business or substantially
expand their offering in their existing retail outlets. In addition, there is
substantial competition on the Internet from other merchants who may
or may not have a “brick and mortar” presence.There is a possibility that
any or all of these competitors could become more aggressive in the
future, thereby increasing the number and breadth of our competitors,
potentially having a material adverse effect on our business and results
of our operations.
Competition—Contract and Commercial: We compete with a
number of contract stationers, mail order and Internet operators and
retailers who supply office products and services to large and small
businesses, both nationally and internationally. In order to achieve and
maintain expected profitability levels, we must continue to grow this
segment of the business while maintaining the service levels and aggres-
sive pricing necessary to retain existing customers. There can be no
assurance we will be able to continue to expand our contract and com-
mercial business while retaining our base of existing customers, and any
failure to do so could have a material adverse effect on our profitability.
We are also working on various initiatives to improve margin levels in
this business segment, but there is no assurance that these initiatives
will prove successful. Some of our competitors operate only in the con-
tract and/or commercial channels and therefore may be able to focus
more attention on the business services segment, thereby providing for-
midable competition. Our failure to adequately address this segment
of our business could put us at a competitive disadvantage relative to
these competitors. In addition, we have reached maximum capacity in
some of our distribution centers that serve our contract and commercial
customers. The economic problems of the past several years have had an
adverse impact on a number of our contract and commercial customers,
resulting in some cases in cutbacks in expenditures of our existing cus-
tomers for office supplies and other items we sell to them.
Cautionary Statements for Purposes of the “Safe Harbor” Provisions
of the Private Securities Litigation Reform Act of 1995