The ODP Corporation has announced results for the first quarter ended March 27, 2021. The highlights include:

  • Total reported sales of $2.4 billion, down 13% versus last year
  • GAAP operating income of $55 million and net income of $53 million, or $0.95 per diluted share, versus $80 million and $45 million, or $0.84 per diluted share, respectively in the prior year
  • Adjusted operating income of $91 million, down from $108 million in the first quarter of 2020; and adjusted EBITDA of $138 million, down from $157 million in the first quarter of 2020
  • Adjusted net income of $68 million, or adjusted earnings per share of $1.21, versus $66 million or $1.21, respectively in the prior year
  • Operating cash flow of $86 million and adjusted free cash flow of $79 million, versus $188 million and $173 million, respectively in prior year
  • $1.7 billion of total available liquidity including $753 million in cash and cash equivalents

“It’s an exciting day for ODP, as we mark the continued evolution of our B2B pivot and digital transformation, drove solid quarterly results, and took the next step in unlocking shareholder value,” said Gerry Smith, chief executive officer of The ODP Corporation.

“We delivered our value proposition to customers at home, in the office, and through our Retail channel, which experienced strong demand, including a 35% year-over-year increase in our buy online, pick-up in store (BOPIS) offering. While COVID-19 conditions continued to impact our contract channel, we did achieve one of our highest levels of net new customer wins and are encouraged by the increased business activity and traction exiting the quarter,” he added.

“The significant progress on our B2B pivot and digital transformation initiatives have us well positioned for the future. Our digital platform business integrated BuyerQuest, our new procure-to-pay (P2P) platform, and we advanced our collaboration with Microsoft. Additionally, the supplier community continues to gain interest as they realize the broad capabilities and reach of our new digital platform. In all, we are well on our way to pursue future growth in the large and growing business commerce market.”

“Also, as we described in a separate release, we’re taking an important step to unlock shareholder value by planning a tax-free spin-off of our B2B businesses, creating two, independent, publicly-traded companies. As separate companies, we believe all stakeholders will benefit from the increased strategic focus and flexibility, aligned capital structures and growth profiles, which will enhance our prospects for long-term value creation. In support of our strategy, we are happy to announce that our Board has authorized a new $300 million stock repurchase program,” he added.

First Quarter Division Results

Business Solutions Division (BSD)

  • Reported sales were $1.1 billion in the first quarter of 2021, down 16% compared to the same period last year
  • Demand in the eCommerce channel increased 3% with growth in certain adjacency product sales, which comprised 44% of total BSD revenues in the quarter
  • Operating income was $17 million in the first quarter of 2021 compared to $40 million in the prior year period

Retail Division

  • Reported sales were $1.0 billion in the first quarter of 2021, down 10% versus the prior year period, but up sequentially from $951 million in the fourth quarter of 2020. Planned closures of underperforming stores drove the reported decline with 149 fewer retail outlets at the end of the first quarter as compared to the prior year. The Company closed 8 stores in the quarter 
  • Operating income was $100 million in the first quarter of 2021, up 15% over the same period last year

CompuCom Division

  • Reported sales were $196 million in the first quarter of 2021, down 17% compared to the prior year period. The year-over-year decrease was due primarily to lower services volumes related to the COVID-19 outbreak and other factors, as well as lower billed service revenues as a result of the malware incident
  • CompuCom reported $1 million operating loss in the first quarter of 2021, compared to $3 million operating income in the prior year period
  • The Company continues to make progress on its plan for a value-maximizing sale of its CompuCom Division to maximize CompuCom’s full potential and drive forward its future value and success

B2B Pivot and Digital Transformation Progress

The Company recently established its new technology business, announced its digital transformation leadership team, acquired one of the leading Procure-to-Pay software companies, and entered into a collaboration with Microsoft corporation. During the quarter, the Company’s new technology platform business integrated BuyerQuest, its new leading P2P eProcurement software platform, launching new customers and growing its pipeline of new business opportunities. Furthering its collaboration with Microsoft, in April, the Company’s digital technology business successfully completed a live technical demonstration of the platform at an industry technology conference, representing an important step as the Company prepares for a full launch to Microsoft’s Business Central customers scheduled for late 2021. The Company continues to generate strong interest from suppliers as they begin to recognize the expansive reach and innovative capabilities of the new digital platform.

Source: ODP Corporation