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Staples.com Revenue Grows More Than 450 Percent for the Fourth Quarter and Year
     FRAMINGHAM, Mass.--(BUSINESS WIRE)--March 2, 2000--

           North American Same-Store-Sales Grow 10 Percent
                     For The Quarter And The Year

Revenue Rises 25 Percent For The Quarter, 24 Percent For The Year

Staples Inc. (NASDAQ:SPLS), the pioneer of the office superstore industry, today announced that its Retail and Delivery business earned net income of $331.3 million or $.70 per common share on a diluted basis for the year ended January 29, compared with $240.7 million or $.53 per common share earned on a diluted basis for the prior year. In the fourth quarter of 1999, the company earned net income of $129.2 million or $.28 per common share on a diluted basis, compared with $101.6 million or $.22 per common share reported for the same quarter in the prior year.

Historical data has been restated to reflect the merger with Quill Corporation and a three-for-two stock split in January 1999, and excludes store relocation and merger charges in 1998. Staples Retail and Delivery results exclude the retained interest in Staples.com.

"Staples continues to deliver strong financial performance and this quarter marks our seventh year - 28 consecutive quarters -- of meeting or beating Wall Street expectations," said Staples Chairman and Chief Executive Officer Thomas G. Stemberg. "Execution does make a difference. Finding great store locations, effectively displaying merchandise and controlling inventory and distribution are keys to our success. And we constantly listen to our customers to reinvent the shopping experience to offer the products and services they need at competitive prices."

Sales for the year rose 24 percent to $8.84 billion from $7.11 billion reported for fiscal year 1998. For the fourth quarter, sales rose 25 percent to $2.59 billion from $2.07 billion reported for the same period last year. Comparable store sales for the 938 stores open for more than one year and delivery hubs increased 9 percent for the year and increased 10 percent for the quarter.

Staples opened 23 new retail stores in the fourth quarter to end the fiscal year with 1,129 stores worldwide. Throughout the year, the company agreed to rent or purchase 18 Scotty's Home Centers locations to nearly double its presence in Florida, entered major markets such as Atlanta, and opened stores in new small and mid-sized markets. Staples also expanded its in-store offerings to consumers by adding special order furniture capabilities, pack and ship centers, payroll services and an increased depth of wireless products and services.

The company also made strides in integrating e-commerce into its retail stores, adding intranet special order kiosks in all its U.S. stores. In addition, Staples enhanced its PC business through build-to-order computer offerings from Compaq and Hewlett-Packard that enable customers to customize their own PC from Staples without the company carrying the inventory risk.

On the delivery side, Staples significantly improved service and efficiencies by rolling out three new multi-channel distribution centers to serve the company's contract, catalog and e-commerce customers and a multi-channel call center in Halifax, Nova Scotia and by adding 400 new trucks to its delivery fleet.

Staples continued to improve its European operations throughout the course of the year. A revised store format, tailored product assortment and a heavier emphasis on marketing have had a significant positive effect on same-store-sales. In addition, Staples acquired 42 office supply stores in Germany, the Netherlands and Portugal from Metro AG and launched its Quill brand in the United Kingdom.

About Staples

Staples Inc. is a $9 billion retailer of office supplies, furniture and technology to consumers and businesses from home-based businesses to Fortune 500 companies in the United States, Canada, the United Kingdom, Germany, the Netherlands and Portugal. Headquartered outside Boston, Staples invented the office superstore concept and today is the largest operator of office superstores in the world. The company has over 46,000 employees serving customers through more than 1,100 office superstores, mail order catalogs, e-commerce and a contract business. More information about the company is available at http://www.staples.com.

Certain information presented within this news release may constitute forward-looking statements. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, which are discussed in our most recent filings with the Securities and Exchange Commission. -0-

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                      STAPLES RETAIL AND DELIVERY
                     Combined Statements of Income
                     (Dollar Amounts in Thousands)

                            (Unaudited)
                          13 Weeks Ended        52 Weeks Ended
                       January 29, January 30, January 29, January 30,
                          2000        1999        2000        1999

Sales                   $2,587,754 $2,069,322  $8,842,460  $7,106,303
Cost of goods sold
 and occupancy
 costs                   1,924,812  1,541,671   6,647,769   5,384,202
  Gross profit             662,942    527,651   2,194,691   1,722,101

Operating and other
 expenses:

 Operating and selling     355,249    271,339   1,268,099     990,239
 Pre-opening                 2,508      2,241      16,485      13,836
 General and
  administrative            82,935     82,731     337,719     299,187
 Amortization of
  goodwill                   3,696        987      12,014       3,739
 Merger-related and
  integration costs             --         --          --      41,000
 Store closure charge           --     49,706          --      49,706
 Interest and other
  expense, net               6,744      2,391      17,183      17,342

 Total operating and
  other expenses           451,132    409,395   1,651,500   1,415,049

Income before equity
 in loss of
 affiliates, retained
 interest and income
 taxes                     211,810    118,256     543,191     307,052

Income tax expense          82,606     46,711     211,845     121,330
 Net income before
  minority interest        129,204     71,545     331,346     185,722
Minority interest               --         --          --         135
 Net income before
  retained interest
  in Staples.com           129,204     71,545     331,346     185,857
Loss related to
 retained interest
 in Staples.com             (9,078)      (285)    (15,628)       (487)
  Net income           $   120,126  $  71,260  $  315,718  $  185,370

Historical earnings
 per common share:

 Basic earnings per
  common share
   Historical net
    income per common
    share for the
    13 weeks ended
    January 29, 2000   $      0.26

 Diluted earnings per
  common share
   Historical net
   income per common
   share for the
   13 weeks ended
   January 29, 2000    $      0.26


Pro forma earnings per
 common share for
 tracking stock
 and S-Corporation
 conversion:

 Basic earnings per
  common share
   Pro forma net income
    per common share   $      0.26 $     0.16  $     0.69   $    0.43

 Diluted earnings
  per common share
   Pro forma net
    income per
    common share       $      0.26 $     0.15  $     0.67   $    0.41





                      STAPLES RETAIL AND DELIVERY
                        Combined Balance Sheets
                     (Dollar Amounts in Thousands)

                                            January 29,  January 30,
                                                2000         1999
ASSETS
Current Assets:
  Cash and cash equivalents                 $   110,483  $   357,993
  Short-term investments                          1,071       17,428
  Merchandise inventories                     1,607,516    1,340,432
  Receivables, net                              360,901      221,836
  Deferred income taxes                          39,730       75,261
  Prepaid expenses and other current
   assets                                        72,172       50,117

   Total current assets                       2,191,873    2,063,067

Property and Equipment:
  Land and buildings                            328,994      231,378
  Leasehold improvements                        442,119      372,451
  Equipment                                     533,771      399,153
  Furniture and fixtures                        286,260      239,755

   Total property and equipment               1,591,144    1,242,737
  Less accumulated depreciation and
   amortization                                 508,810      403,462

   Net property and equipment                 1,082,334      839,275

Other Assets:
  Retained interest in Staples.com               16,254        1,962
  Lease acquisition costs, net of
   amortization                                  68,832       75,127
  Goodwill, net of amortization                 387,595      148,201
  Deferred income taxes                          34,912       28,735
  Other                                          31,769       22,814

   Total other assets                           539,362      276,839

                                            $ 3,813,569  $ 3,179,181

LIABILITIES AND GROUP EQUITY
Current Liabilities:
  Accounts payable                          $   897,523  $   794,427
  Inter-business payable to Staples.com     $    23,660
  Accrued expenses and other current
   liabilities                                  537,696      438,226
  Debt maturing within one year                  12,219       32,594

   Total current liabilities                  1,471,098    1,265,247

Long-Term Debt                                  500,903      205,015
Other Long-Term Obligations                      61,456       52,033
Group Equity                                  1,780,112    1,656,886

                                            $ 3,813,569  $ 3,179,181




                     STAPLES RETAIL AND DELIVERY
                   Combined Statements of Cash Flows
                     (Dollar Amounts in Thousands)

                                                     (Unaudited)
                                                   52 Weeks Ended
                                             January 29,   January 30,
                                                  2000        1999
Operating Activities:
  Net income                                   $ 315,718   $ 185,370
  Adjustments to reconcile net income
   to net cash (used in)/provided by
   operating activities:
  Minority interest                                    -        (135)
  Retained interest in loss of Staples.com        15,628         487
  Depreciation and amortization                  173,093     126,870
  Merger-related and integration costs                 -      41,000
  Store closure charge                                 -      49,706
  Expense from 401K and PARS stock
   contribution                                   18,374      12,764
  Deferred income tax (benefit)/expense           29,265     (55,569)
  Change in assets and liabilities, net of
   companies acquired using
   purchase accounting:
   Increase in merchandise inventories          (221,463)   (211,052)
   Increase in receivables                      (112,980)    (15,993)
   Increase in prepaid expenses and other
    assets                                       (27,861)     (8,806)
   Increase in accounts payable, accrued
      expenses and other current liabilities     110,474     273,195
   Increase in other long-term obligations         7,747       9,597

                                                  (7,723)    222,064

  Net cash used in operating activities          307,995     407,434

Investing Activities:
  Acquisition of property and equipment         (342,615)   (348,957)
  Acquisition of businesses, net of cash
   acquired                                     (244,021)    (13,500)
  Proceeds from sales and maturities of
   short-term investments                         32,927      10,338
  Purchase of short-term investments             (16,651)    (22,913)
  Proceeds from sales and maturities of
   long-term investments                               -      18,995
  Purchase of long-term investments                    -      (2,545)
  Capital contributions to Staples.com           (29,920)     (2,449)
  Acquisition of lease rights                       (549)    (37,182)
  Other                                           (1,875)      1,208

  Net cash used in investing activities         (602,704)   (397,005)

Financing Activities:
  Proceeds from sale of capital stock             46,503      63,996
  Proceeds from borrowings                     1,589,779     392,261
  Payments on borrowings                      (1,308,311)   (417,323)
  Purchase of dissenting shareholder
   S-Corporation stock                                 -     (48,102)
  Purchase of treasury stock                    (310,238)     (7,892)
  Inter-business advance from Staples.com         27,940           -
  Dividends to shareholders of acquired S-Corp         -     (15,904)

  Net cash provided by/(used in)financing
   activities                                     45,673     (32,964)

  Effect of exchange rate changes on cash          1,526        (560)

Net decrease in cash and cash equivalents       (247,510)    (23,095)
Cash and cash equivalents at beginning of
 period                                          357,993     381,088

Cash and cash equivalents at end of period     $ 110,483   $ 357,993

*T

     --30--kc/bos*

     CONTACT: Staples Inc.
              Media Contact:
              Shannon Lapierre, 508-253-8468
              shannon.lapierre@staples.com
              or
              Investor Contact:
              Bonnie Monahan, 508-253-7963
              bonnie.monahan@staples.com

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