![]() ![]() This will result in a realized loss of approximately $40 to $45 million, of which $32 million has already been recognized. With that, they announced a deal to sell the Staples Printing Solutions group for $85 million. Staples announced a renewed focus on the core business markets.Staples announced 3 things that earned my respect and are now having me consider making an initial investment at these levels. If the total sum for this experiment and what I would consider the "stupid tax" is $319 million, it represents approximately 50% of the estimated $600 million annual Free Cash Flows. Secondly, and what we did not hear much of previously, Staples disclosed that they were responsible for a $69 million fee paid to lenders in order to set up the financing for the planned buy out. The rest of the conference call was actually inspiring to shareholders and potential shareholders.įirst and foremost, we found out the final damage from this breakup.Īs we have previously known, Staples is on the hook for the $250 million break up fee to Office Depot, which they state will be paid this week. I discussed this in my last Staples article, " Staples/Office Depot: Picking Up The Pieces." Simply put, the FTC and the Judge made the right call and Staples shareholders should be thankful. We did get a mention of Amazon Business, a division of Amazon (NASDAQ: AMZN ) being a competitor, someone who did not even register as a competitor on the market share comparisons as presented by the FTC. ![]() Sargent recited the reasons we have previously heard before, including that the FTC and the Judge failed to consider the retail market and only focused on the corporate Fortune 100 companies, and made the mistake of excluding the ink and toner business. The conference call started with the first 5 minutes dedicated to Staple's management discussing how disappointed they were that the FTC and the judge denied the buyout.Īs someone who has been against this poorly orchestrated financial bailout of Office Depot since day 1, it irritated me to hear Ron Sargent almost give the "poor sap" story of how they were wronged. Go ahead and listen to it if you have the time. Personally I found the most value from the conference call itself. Staples is merely managing the retail division while they figure out the next steps. As discussed before, the sole area of growth was the commercial business. Revenue is down due to the mediocre economy and overall slowing business. Nothing to write home about and more of the same. Non GAAP earnings were $.17 per share, same as year ago. GAAP earnings resulted in $.06 per share down from $.09 per share year prior. This was attributed to lower sales costs. Total business unit income was up slightly to $192 million from $189 million a year ago. Staples attributed this drop primarily to a slowdown in sales, along with some effects from currency moves. International operations fell 5.6% to $738 million from $782 million Q1 2015. Staples Retail & Online revenue fell 5.2% to $2.247 billion from $2.372 billion Q1 2015. The only bright spot was the slight gain in revenue for the corporate contract business to $2.116 billion from $2.108, an increase of. Staples announced Q1 2016 revenue of $5.101 billion, compared to $5.262 billion Q1 2015. This earnings call was of monumental importance, not for the Q1 2016 numbers themselves, but rather for the commentary of Staple's management for post Office Depot plans. On May 18th, Staples (NASDAQ: NASDAQ: SPLS) announced their first quarterly numbers post termination of the Office Depot (NASDAQ: ODP) transaction. ![]()
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