The ODP Corporation has announced results for the second quarter ended June 26, 2021. The Second quarter 2021 highlights are as follows:
- Total reported sales of $2.3 billion, up 6% versus last year
- GAAP operating loss includes charges of $122 million, including $114 million of non-cash asset impairment charges related to goodwill and intangibles at CompuCom, largely related to the continued effects of the COVID-19 pandemic on current business conditions, which led to a GAAP operating loss of $78 million and a net loss of $88 million, or $(1.62) per share, compared to an operating loss of $456 million and a net loss of $439 million, or $(8.19) per share, in the prior year.
- Adjusted operating income of $44 million, up from $10 million in the second quarter of 2020; and adjusted EBITDA of $93 million, up from $59 million in the second quarter of 2020
- Adjusted net income of $28 million, or adjusted diluted earnings per share of $0.51, versus adjusted net loss of $4 million or $(0.07), respectively in the prior year
- Operating cash flow of $(11) million and adjusted free cash flow of $(13) million, versus $(8) million and $(7) million, respectively in the prior year
- $1.7 billion of total available liquidity including $691 million in cash and cash equivalents
“Our success in delivering improved results this quarter reflects the meaningful progress we’ve made on all of our initiatives to unlock shareholder value,” said Gerry Smith, CEO of The ODP Corporation. “Simultaneously, demand for our core products and services grew in the quarter as customers and more businesses and schools returned to work and to in-class learning.”
“These factors helped drive continued strong results in our Retail Division, which serves as the `home office and school supply headquarters’ choice for customers, and improving performance in our Business Solutions Division (BSD). Combined with our low cost model approach, we delivered a 6% increase in revenue and more than tripled our adjusted operating income compared to last year, putting us in a position of strength as we enter the second half of 2021.”
“We also continued to advance our digital platform business, adding key new team members and making progress on our technology platform development. We have attracted industry-leading talent and are building out the capabilities of our new platform, placing us in an excellent position to drive future value in the large and growing business commerce market.”
“Finally, we’re also moving forward with our plans to separate ODP into two, highly-focused, pure-play companies. The improving market dynamics continue to reflect the growth opportunities for both businesses, and we remain excited about their future prospects. We have modified our plan for the separation, and we remain on-track with our initiatives to complete this transformation in the first half of 2022,” he added.
Second Quarter Division Results
Business Solutions Division (BSD)
- Reported sales were $1.1 billion in the second quarter of 2021, up 12% compared to the same period last year. Stronger demand from B2B customers, including those in the public and education sector, positively impacted sales results as these customers continue to recover from conditions related to the pandemic
- Revenue performance was driven by an increase in sales through the Company’s B2B contract channel, partially offset by lower sales in its eCommerce channel
- BSD generated stronger year-over-year demand for core supply products and services; adjacency categories remained at 44% of BSD sales, flat to the first quarter of 2021
- Operating income was $31 million in the second quarter of 2021 compared to $13 million in the prior year period
Retail Division
- Reported sales were $914 million in the second quarter of 2021, flat with the prior year period despite 169 fewer retail outlets at the end of the second quarter, as compared to the prior year, due to planned closures of underperforming stores. The Company closed 55 stores in the quarter and had 1,091 stores at quarter end
- Retail drove strong year-over-year demand in core supply categories, workspaces and technology products. Increased store traffic, sales per shopper, and conversion rates all contributed to strong sales in the quarter
- Operating income was $44 million in the second quarter of 2021, up 144% over the same period last year, representing a 290 basis point margin improvement
CompuCom Division
- Reported sales were $222 million in the second quarter of 2021, up 4% compared to the prior year period. Stronger product sales contributed to the year-over-year revenue performance
- CompuCom reported $3 million operating income in the second quarter of 2021, compared to $4 million operating income in the prior year period
Source: ODP
