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: November 8, 2007
Commission
file number 1-10948
OFFICE
DEPOT, INC.
(Exact
name of registrant as specified in its charter)
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Delaware
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59-2663954
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(State
or other jurisdiction of
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(I.R.S.
Employer
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incorporation
or organization)
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Identification
No.)
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2200
Old Germantown Road, Delray Beach, Florida
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33445
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(Address
of principal executive offices)
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(Zip
Code)
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(561)
438-4800
(Registrant’s
telephone number, including area code)
Former
name or former address, if changed since last report: N/A
ITEM
8.01 OTHER
EVENTS
Attached
hereto as Exhibit 99.1.1 is Office Depot, Inc.’s news release dated November 8,
2007, announcing the results of its Audit Committee’s independent review of its
vendor program accounting.
ITEM
9.01. FINANCIAL
STATEMENTS AND EXHIBITS
Exhibit
99.1.1 News
release of Office Depot, Inc. issued on November 8, 2007.
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.
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OFFICE
DEPOT, INC.
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Date:
November 8, 2007
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By:
Elisa D. Garcia C.
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/s/
Elisa D. Garcia C.
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Executive
Vice President, General Counsel
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and
Corporate Secretary
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CONTACTS:
Brian
Turcotte
Investor
Relations
561-438-3657
brian.turcotte@officedepot.com
Brian
Levine
Public
Relations
561-438-2895
brian.levine@officedepot.com
OFFICE
DEPOT ANNOUNCES RESULTS OF INDEPENDENT REVIEW OF
VENDOR
PROGRAM ACCOUNTING
Delray
Beach, Fla., November 8, 2007 --
Office
Depot, Inc. (NYSE: ODP), a leading global provider of office products and
services, today announced the findings from an independent review by the Audit
Committee of the Company’s accounting for certain vendor program
funds.
The
review, which arose from a whistleblower complaint, revealed that during the
period beginning in the third quarter of 2006 through the second quarter of
2007
funds due or received from vendors previously recognized in the current quarter
should have been deferred into later periods. The anticipated impact of these
errors will reduce gross profit, operating profit, net earnings and earnings
per
share in prior quarters and will result in related amounts being recognized
in
future periods. The Company currently estimates that it will reduce diluted
earnings per share by $0.02 in Q3 2006, $0.03 in Q4 2006, $0.01 in Q1 2007,
and
$0.02 in Q2 2007. The diluted EPS impact of approximately $0.07 per share will
be recognized beginning in the second half of 2007 and in decreasing amounts
in
years from 2008 through 2010. These errors are non-cash adjustments to our
previously reported results. The Company intends to file an amended Annual
Report on Form 10-K/A for the fiscal year 2006 and amended Quarterly Reports
on
Form 10-Q/A for the first and second quarters of 2007, and preparation of those
documents is now underway.
The
Company will file a Form 12b-25, Notification of Late Filing, with the
Securities and Exchange Commission relating to the 2007 third quarter Form
10-Q.
The Company anticipates making all necessary filings and releasing its 2007
third quarter financial results by the end of November. A subsequent press
release will be issued to announce a date for the release of the Company’s third
quarter 2007 results.
On
October 29, 2007, Office Depot announced that its Audit Committee initiated
an
independent review principally focused on the accounting for certain vendor
program funds. The Audit Committee, with the assistance of independent legal
counsel and forensic accountants, assessed the timing of recognition of certain
vendor program arrangements. The investigation revealed errors in timing of
vendor program recognition and included evidence that some individuals within
the Company’s merchandising organization failed to provide Office Depot’s
accounting staff with complete or accurate documentation of future purchase
or
performance conditions in certain vendor programs that would have required
recognition of the related vendor funds to be deferred into future periods.
The
anticipated impacts of correcting these errors is presented below.
As
a
result of the investigation, the Company has identified this to be a material
weakness in its internal controls and is taking actions to remediate the
deficiencies identified, including the termination of four employees within
the
Company’s merchandising organization.
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2006
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2007
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|||||||||||||||
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(Decrease)
/Increase
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Q3
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Q4
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Q1
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Q2
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Future
Periods1
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|||||||||||
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EPS
- Diluted
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$
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(0.02)
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$
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(0.03)
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$
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(0.01)
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$
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(0.02)
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$
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0.07
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|||
| 1 |
The
impact on diluted earnings per share in future periods of $0.07
was
calculated using historical information related to the weighted
average
number of common shares outstanding and the effective tax rate;
actual
amounts may vary.
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While
the
Company expects to report the impacts described above, there can be no assurance
that the final adjustments that are made as part of the restatement will not
differ materially from these estimates. Additional
information will be available in the Company’s Form 12b-25.
About
Office Depot
Office
Depot provides more office products and services to more customers in more
countries than any other company.
Incorporated
in 1986 and headquartered in Delray Beach, Fla., Office Depot has annual sales
of over $15.4 billion, and employs approximately 52,000 associates around the
world. Currently, the Company sells to customers directly or through affiliates
in 43 countries.
Office
Depot is a leader in every distribution channel -- from retail stores and
contract delivery to catalogs and e-commerce. As of June 30, 2007, Office Depot
had 1,186 retail stores in North America and another 369 stores, either
company-owned, licensed or franchised, in other parts of the world. Office
Depot
serves a wide range of customers through a dedicated sales force, telephone
account managers, direct mail offerings, and multiple web sites. With $4.7
billion in online sales during the last twelve months, the Company is also
one
of the world’s largest e-commerce retailers.
Office
Depot’s common stock is listed on the New York Stock Exchange under the symbol
ODP and is included in the S&P 500 Index. Additional press information can
be found at:http://mediarelations.officedepot.com.
CAUTIONARY
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS: Except for historical
information, the matters discussed in this press release are forward-looking
statements within the meaning of the Private Securities Litigation Reform Act
of
1995, as amended. Forward-looking statements, including without limitation
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 (“SEC”) made from time to time. You are strongly urged to review all
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
and at www.freeEDGAR.com,
as well as on a number of other commercial web sites.