Office Depot is the world's leading reseller of office supplies, with annual sales of nearly $13 billion. The company, founded in 1986 and headquartered in Delray Beach, FL, conducts business in 22 countries and employs nearly 50,000 people worldwide.
Office Depot is an industry leader in every distribution channel - from retail stores and contract delivery to catalogs and e-commerce. The company is the world's number two online retailer - on target to generate $2.5B in sales for FY'03.
In North America, Office Depot has more than 870 retail stores in addition to a national business-to-business delivery network supported by 24 delivery centers, more than 60 local sales offices and 13 regional call centers. 

Fourth Quarter Results

Total Company sales for the fourth quarter grew 7% to $3.7 billion compared to the fourth quarter of 2004. Excluding the 53rd week of 2005, sales for the quarter increased 2% from the same period last year.

Net earnings for the quarter were $106 million compared to $52 million in the same quarter of the prior year, and diluted earnings per share were $0.34 in the fourth quarter of 2005 versus $0.17 in the same period a year ago. The fourth quarter 2004 and 2005 results include the effects of charges related to asset impairments, exit costs and other operating items which are more fully described in our Form 10-K filed today with the Securities and Exchange Commission. Fourth quarter charges in 2005 had a $0.09 per diluted share negative impact on results, and net charges identified in the fourth quarter of 2004 had a $0.12 per diluted share negative impact on results. Without these charges and the benefits of having a 53rd week of sales, our fourth quarter 2005 net earnings were $117 million(1) or $0.38 per share(1). This is an increase of 31% compared to an adjusted earnings per share for fourth quarter in the prior year of $0.29(1).

For the quarter, gross profit as a percentage of sales was 31.1%, down from 31.8% in the same period last year. Negative gross margin impact was primarily attributable to a decline in the International Division as gross margin was relatively consistent with the same quarter in the prior year for both the North American Retail and North American Business Solutions Divisions.

Total operating expenses, as a percentage of sales, were 27.4% for the quarter, and 28.9% in the fourth quarter of 2004. Fourth quarter charges negatively impacted operating margin by 120 basis points in the current quarter, as compared to 100 basis points in the same quarter of the prior year. Improvements were realized in both general and administrative expenses as well as store and warehouse operating and selling expenses, driven by advertising cost efficiencies, increased sales leverage from the 53rd week, and lower warehouse costs.

Operating profit for the quarter was $137 million as compared to $103 million in the fourth quarter of the prior year. Fourth quarter charges, negatively impacted operating results by $45 million in 2005 as compared to $33 million in the fourth quarter of 2004.

Return on invested capital for the year was 9.5%, compared to 10.6% in the same period of the prior year. Charges in 2005 negatively impacted the calculation of our current return on invested capital by 310 basis points, and charges in 2004 negatively impacted the calculation of ROIC in the prior period by 60 basis points.