Office Depot, Inc. (ODP) has reported a 633.33 percent jump in profit for the quarter ended Sep. 24, 2016. The company has earned $44 million, or $0.08 a share in the quarter, compared with $6 million, or $0.01 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $89 million, or $0.16 a share compared with $92 million or $0.17 a share, a year ago.

Revenue during the quarter dropped 6.89 percent to $2,836 million from $3,046 million in the previous year period. Gross margin for the quarter contracted 24 basis points over the previous year period to 25.60 percent. Total expenses were 95.87 percent of quarterly revenues, down from 97.34 percent for the same period last year. This has led to an improvement of 147 basis points in operating margin to 4.13 percent.

Operating income for the quarter was $117 million, compared with $81 million in the previous year period.

However, the adjusted operating income for the quarter stood at $158 million compared to $161 million in the prior year period. At the same time, adjusted operating margin improved 29 basis points in the quarter to 5.57 percent from 5.29 percent in the last year period.

"During the third quarter we made substantial progress on the opportunities identified in our new three year strategic plan," said Roland Smith, chairman and chief executive officer for Office Depot. "We announced a deal to sell our business in Europe and have a process underway to sell substantially all of the remaining international businesses. We also realigned our organization to create a more efficient and effective operating structure that is focused on aggressively implementing a number of growth and profitability initiatives in our North American business. We are recovering quickly from the disruption caused by the protracted Staples acquisition attempt, and I’m very pleased with both our progress and financial results. Importantly, I believe we have the right strategy in place to deliver shareholder value."

For fiscal year 2016, Office Depot, Inc. projects adjusted operating income to be in the range of $450 million to $470 million.

The company has spent $57 million cash to meet investing activities during the nine month period as against cash outgo of $55 million in the last year period.

The company has spent $404 million cash to carry out financing activities during the nine month period as against cash outgo of $18 million in the last year period.

Cash and cash equivalents stood at $801 million as on Sep. 24, 2016, down 16.39 percent or $157 million from $958 million on Sep. 26, 2015.

Working capital declines

Office Depot, Inc. has witnessed a decline in the working capital over the last year. It stood at $1,078 million as at Sep. 24, 2016, down 21.49 percent or $295 million from $1,373 million on Sep. 26, 2015. Current ratio was at 1.46 as on Sep. 24, 2016, down from 1.52 on Sep. 26, 2015.

Cash conversion cycle (CCC) has decreased to 11 days for the quarter from 49 days for the last year period. Days sales outstanding went down to 30 days for the quarter compared with 36 days for the same period last year.

Days inventory outstanding has decreased to 26 days for the quarter compared with 63 days for the previous year period. At the same time, days payable outstanding went down to 46 days for the quarter from 50 for the same period last year.