UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT: JANUARY 10, 2001
COMMISSION FILE NUMBER 1-10948
OFFICE DEPOT, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 59-2663954
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(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
2200 OLD GERMANTOWN ROAD, DELRAY BEACH, FLORIDA 33445
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(561) 438-4800
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT: N/A
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
99.1 Copies of slides presented at analysts meeting on January 10, 2001 by
Office Depot's CEO, Bruce Nelson.
ITEM 9. REGULATION FD DISCLOSURE
On January 10, 2001, Office Depot Inc.'s Chief Executive Officer, Bruce
Nelson, is meeting with investors and securities analysts in New York. Portion
of the audio of this meeting are being simultaneously Webcast at Office Depot's
Website at www.officedepot.com under "Company Information" and "Investor
Relations", both located at the top of the screen. This information will be
available for five (5) days following the Webcast. Interested parties may
contact Investor Relations at 561-438-1680 for further information. Attached to
this Form 8-K as Exhibit 99.1 are copies of presentation slides being provided
to attendees at the meeting. This filing is provided as a matter of information
only.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
OFFICE DEPOT, INC.
Date: January 10, 2001 By: /S/ DAVID C. FANNIN
David C. Fannin
Executive Vice President and
General Counsel
OFFICE DEPOT BUSINESS REVIEW
January 10, 2001
Slide 2
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS: Except for historical
information, the matters discussed in this meeting and in our press release
dated January 3, 2001 are forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995, as amended. Forward-looking
statements, including all of the projections and anticipated levels of future
performance, involve risks and uncertainties which may cause actual results to
differ materially from those discussed herein. These risks and uncertainties are
detailed from time to time by Office Depot in its filings with the United States
Securities and Exchange Commission, including without limitation its most recent
filing on Form 10-K, filed in March, 2000 and subsequent 10-Q filings, including
our most recent 10-Q, filed on October 31, 2000. You are strongly urged to
review such filings for a more detailed discussion of such risks and
uncertainties. The Company's SEC filings are readily obtainable at no charge at
www.sec.gov, www.10kwizard.com and at www.freeEDGAR.com as well as on a number
of other commercial Web sites. In addition to these prior cautionary statements,
you are cautioned that future performance may be impacted by a number of
additional matters referred to in this meeting and in our Press Release dated
January 3, 2001.
Slide 3
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OUR INITIAL BUSINESS REVIEW IS COMPLETE
o Comprehensive review of all of our businesses
o Focused on:
- core competencies and competitive advantages
- integrating our cross-channel knowledge of our customer base
- changing competitive environment
- under performing business segments and assets
- reducing complexity and improving efficiency
o Objective: establish Office Depot as a compelling place to work, shop and
invest
Slide 4
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SUMMARY OF CHARGES/ EXPENSE/CAPEX INVESTMENTS 2000 AND 2001
2000* 2001* 2001*
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Charge** Capital*** Expense***
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North American Retail $210 $25 $30
Business Service Group 10 30 15
Certain Investments in Internet Companies 45 ---- ----
International 20 ---- ----
Other 15 5 5
Total $300 $60 $50
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*All Figures are reported in millions and before taxes
**Figures shown represent the upper end of the range of charges and are subject
to final review by the Company's Auditors
***Capital and Expense items are estimates of incremental capital and expense
items for 2001 (beyond normal budget items) and are subject to change
Slide 5
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OUR PRIORITIES FOR 2001 AND BEYOND
o Restore the health, vitality and growth of our U.S. retail operations
o Grow our international business at double digit rates
o Grow our "best in class" electronic commerce business
o Build a world class warehouse and distribution network
Slide 6
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FINANCIAL FOCUS
o Cash
o RONA
o Shareholder value creation
Slide 7
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POSITION OFFICE DEPOT...
as a
COMPELLING PLACE
- To Work
- To Shop
- To Invest
Slide 8
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THREE COMPELLING REASONS TO INVEST IN ODP
o North American Retail
o Delivery Business...E-commerce
o International
Slide 9
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NORTH AMERICAN RETAIL
o Growth opportunities still exist in North American Retail
o Transform store model from convenience to destination
o Increase leverage of "Bricks and Clicks"
o Create compelling place to shop
Slide 10
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DOMESTIC BUSINESS SERVICES GROUP
o Second largest business segment
- Contract, Office Depot catalog, Viking direct mail and domestic
internet
o Rapidly growing
o Strong future growth characteristics
- Supplies focused
- Competitive advantages
- Fully integrated
Slide 11
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DOMESTIC BUSINESS SERVICES GROUP
Priorities:
o Improve warehouse efficiency/leverage
- Reduce complexity o Improve contract profitability
o Invest in E-commerce
Slide 12
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WORLDWIDE E-COMMERCE
o Total 2000 worldwide sales near $1 billion
- $1.5 billion in 2001 and $2.5 billion by 2003
o Rapidly growing/profitable
o Strategically integrated
Slide 13
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E-COMMERCE - PUBLIC SITE
www.officedepot.com
o Over 1 million Web registrants
o 32,000 - 33,000 new web customers/month
o 75%- 80% new to ODP
o 75,000 customers/month use site to locate stores
o Cannibalization - catalog to Web
o increase purchases by 30%
o more loyal
o 60%/40% split
Slide 14
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E-COMMERCE - PRIVATE SITE
BSDnet.officedepot.com
o Corporate customers
- 100,000 companies connected to BSD Net
- 600,000 users at desks
o Growing
- Adding 900 new companies each week
- Adding 4-5,000 new users each week
o Competitive advantage
- 40% contract sales through Web
Slide 15
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WORLDWIDE E-COMMERCE STRATEGY
o Best in class Websites
o Integrate with best eProcurement solutions
- Ariba, CommerceOne, Metiom, etc.
- Office Depot the easiest to implement - Best Partner
o Develop strategic alliances
- eMarketplaces - new
o 40 connected (150 in Progress) + Bank of America, Sabre, Chase.com, etc.
- Small business portals
o AOL - Netscape Business; Microsoft - Bcentral
o Develop business services
- 18 partners connected
Slide 16
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OD.COM BUSINESS SERVICES
(photo of Business Services screen on Website)
Slide 17
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INTERNATIONAL OVERVIEW
o Retail, contract and catalog operations in 16 countries outside of North
America
o 29 ODP owned retail stores in France and Japan
o Joint venture and licensing arrangements in 5 countries
- 97 Office Depot retail stores
Slide 18
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INTERNATIONAL PERFORMANCE
International sales as % of total
- ---------------------------------
o 2000: 13%
o 1999: 13%
o 1998: 11%
International operating profit as % of total
- --------------------------------------------
o 2000: 21%
o 1999: 17%
o 1998: 18%
Slide 19
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INTERNATIONAL
o Fastest growing segment
o Highly profitable
o Highest return on sales %
o Highest RONA
o Free cash flow positive
Slide 20
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INTERNATIONAL
o Invest for the future
- Build out global E-commerce infrastructure
- Open new country in Europe in 2001
- Launch ODP contract in four new countries in 2001
- Expand warehouse distribution
o Europe
o Japan
- Grow retail - add new stores
o France
o Japan
Slide 21
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THE NETHERLANDS (WEBSITE PHOTO ONLY)
Slide 22
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GERMANY (WEBSITE PHOTO ONLY)
Slide 22
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CAPEX, CASH, BALANCE SHEET
o $300 million capital allocated in 2001
- $60 million result of review
o $200 + million free cash flow in 2001
- Slight improvement in inventory turns
o $150 million cash at year-end 2000
- Approximately $380 million revolver debt
o $150 million cash by year-end 2001
- Approximately $150 million revolver debt
Slide 23
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OFFICE DEPOT...
A compelling place to invest
o Global leadership
o Strong balance sheet
o Future growth platforms
o Under-valued