Revenue during the quarter went down marginally by 1.52 percent to $2,725 million from $2,767 million in the previous year period. Gross margin for the quarter expanded 26 basis points over the previous year period to 23.96 percent. Total expenses were 97.91 percent of quarterly revenues, down from 98.48 percent for the same period last year. This has led to an improvement of 57 basis points in operating margin to 2.09 percent.

Operating income for the quarter was $57 million, compared with $42 million in the previous year period.

However, the adjusted operating income for the quarter stood at $111 million compared to $83 million in the prior year period. At the same time, adjusted operating margin improved 107 basis points in the quarter to 4.07 percent from 3 percent in the last year period.

“I am very excited to assume the role of Chief executive officer and to inherit a business with such positive earnings trends. Office Depot delivered another year of improved profitability in 2016, exceeding the full-year adjusted operating income guidance, despite experiencing substantial business disruption related to the Staples acquisition attempt,” said Gerry Smith, newly appointed chief executive officer of Office Depot. “The company made significant progress against its 2016 critical priorities and achieved substantial integration synergies, thanks to the hard work, commitment and dedication of the management team and associates. I believe we can continue this momentum in 2017, as we focus on stabilizing the top line, implementing our cost saving programs and executing on the key initiatives of the three-year strategic plan.”

The company has spent $84 million cash to meet investing activities during the year as against cash outgo of $58 million in the last year.

The company has spent $475 million cash to carry out financing activities during the year as against cash outgo of $26 million in the last year period.

Cash and cash equivalents stood at $763 million as on Dec. 31, 2016, down 11.28 percent or $97 million from $860 million on Dec. 26, 2015.

Working capital drops significantly
Office Depot, Inc has witnessed a decline in the working capital over the last year. It stood at $942 million as at Dec. 31, 2016, down 28.47 percent or $375 million from $1,317 million on Dec. 26, 2015. Current ratio was at 1.46 as on Dec. 31, 2016, down from 1.48 on Dec. 26, 2015.

Cash conversion cycle (CCC) was almost stable at 21 days for the quarter, when compared with the last year period. Days sales outstanding were almost stable at 12 days for the quarter, when compared with the last year period.

Days inventory outstanding was almost stable at 30 days for the quarter, when compared with the last year period. At the same time, days payable outstanding was almost stable at 21 days for the quarter, when compared with the previous year period.